Good morning,
DXU9 97.845 +0.094 GCQ9 1420.2 +0.9 ESU9 3025.50 +1.00 CLU9 56.28 +0.08
For most markets, it is a quiet beginning to what is shaping up to be a very active week. US/China trade negotiations resume, the Federal Reserve meeting and US manufacturing and employment data all flood the calendar this week. Equities, oil and gold are all hovering around unchanged levels today. The exception to the relative calmness in the markets can be seen in the grain markets, where prices have moved higher in decent volumes.
The US corn and soybean farmers just can’t catch a break this year. From the well known issues trying to get the crops planted, they are now facing hot and dry conditions for the late planted and under developed crops. The fields have switched from being flooded, to now being parched. In a strange twist of fate, rain is definitely needed now in many areas. This week has some cooler temperatures to help alleviate the stress, but precipitation is desired. Wheat prices are trading higher, in a combination of winter wheat harvest coming to an end, along with global demand for wheat on the rise. Hot and dry conditions in Russia and Europe are expected to diminish the size of the wheat crops in those areas. This reduced supply from competitors, along with increased demand for wheat from the feed community is supporting US prices.
Cotton futures are lower today, probably in a bout of profit taking, following a sharp rally in front of the trade meetings this week. Now that that the meetings are here, this could be a case of buy the rumor, sell the fact. Sugar continues to bounce from the lows of the recent trading range. Friday’s COT report from the CFTC showed funds aggressively piling in to speculative short positioning, pushing the size of the short to the highest levels since 2011. India’s plans last week to increase domestic inventories and not flood teh4 export market also supports prices.
As mentioned, oil, gold and copper are all around unchanged levels today, awaiting developments later in the week. The market is expecting the Federal Reserve to lower short term interest rates, for the first time since 2008, by 25 basis points. Probably of as much interest as the actual cut will be the press conference that follows, as the market looks for clues to see how aggressive of an easing campaign the Fed may be on. Odds are they will play it safe, and say they are data dependent going forward. Friday’s employment data, while an important gauge of the economy, may not carry as much weight for the Fed as there will be another report before the Fed meets again. Of course, any news on the trade front can spark movement in many markets.
Rest up with today’s apparently quieter markets. This week has the potential to be very action packed!
Technical Moving Averages:
Product 50 day 100 day 200 day
SX9 902.25 905.25 924.00
CZ9 438.25 413.25 406.75
WU9 511.75 487.00 511.75
KWU9 457.75 448.75 492.00
MWU9 548.75 547.25 569.50
SMZ9 319.0 316.4 319.1
BOZ9 28.41 28.94 29.56
CLU9 57.06 59.49 58.34
GCQ9 1366.2 1333.9 1309.4
LHV9 77.120 81.180 74.550
LCV9 107.205 111.425 113.190
KCU9 103.00 100.25 108.15
CCU9 2457 2384 2341
CTZ9 65.72 70.21 72.86
SBV9 12.35 12.60 12.96
JOU9 104.30 109.75 121.50
HGU9 268.75 278.85 278.30
Have a good day,
Mike
Michael Clifford
141 W Jackson Boulevard
Ste 1065
Chicago, IL 60604
Trean Group, LLC
312-604-6404