Commodity Corner: Morning Comments

Good morning,


DXU9  96.850  +0.305                       GCQ9  1415.5  +2.0                                                               ESU9  3020.50  +3.25                        CLQ9  59.49  -0.09


The markets remain quiet in front of today’s reading in the US on June Retail Sales.  A slight decline from last month’s data is expected.  The dollar has a good bid today, which is putting some pressure on commodity prices.  Oil is off slightly, with another rejection of a trade above $60 taking place yesterday, aided by oil producers and refiners getting operations going again following Tropical Storm Barry.  Grains were firm early yesterday on the hot weather, with corn trading at a 5 year high and soybeans at a 1 year high, but rotated lower as the remnants of Barry are expected to bring some relief to the corn belt.  Funds were in liquidating some length in corn and wheat, while adding slightly to a soybean short.  Improving crop conditions, as reported yesterday afternoon, along with the stronger dollar are weighing on prices in the overnight trade.  Cotton had a large rally yesterday, in part driven up on storm concerns from Barry.  It also was correcting from a sharp sell-off following Thursday’s WASDE report.  Sugar traded at a 6 week low, and has moved below the $12 level, which has been the bottom of the trading range for some time.  Sugar prices traded down on concerns about large deliveries taking place with the expiring August contract.  Cocoa prices were down at the lowest levels in 7 months pushed down by demand concerns, as it was reported European cocoa grindings fell for the first time in 2 years.  Gold prices remain positive, above the $1400 level, in spite of the stronger dollar today.  Market participants are treading the waters very cautiously, with so much uncertainty surrounding the various markets, and gold benefits from the great unknown out there.


There are some potential items that may bring some volatility to the markets.  Treasury Secretary Mnuchin said talks with China can resume this week.  Anything which provides clues on the Fed’s monetary policy stance.  The Middle East is always ripe for tension.  Last but not least, President Trump and his Twitter account.  As the markets continue to chop around, marking time for the next market moving event, be aware of the moving  average levels listed below for numerous products, as these levels can serve as support and resistance areas.   The next major event for the markets appears to be the next Fed meeting, on July 31.            


Technical Moving Averages:

Product               50 day                100 day               200 day

SX9                       892.00                   909.50                   925.00

CZ9                      429.00                   410.00                   405.25

WU9                    502.50                   486.00                   514.75

KWU9                  453.25                   451.75                   498.25

MWU9                549.00                   550.75                   573.75

SMZ9                   316.9                     316.9                     319.2

BOZ9                   28.27                     29.20                     29.68

CLQ9                    58.01                     59.64                     59.02

GCQ9                   1343.3                   1325.3                   1300.3

LHQ9                   85.015                   88.445                   84.860

LCQ9                    106.190                 111.360                 112.415

KCU9                   100.85                   100.25                   108.75

CCU9                   2433                       2369                       2326

CTZ9                    66.96                     71.11                     73.42

SBV9                    12.41                     12.75                     13.00

JOU9                    103.70                   111.45                   123.60

HGU9                  269.90                   280.95                   278.90


Have a good day,