Commodity Corner: Morning Comments

Good morning,


DXU9  98.030  -0.033                       GCZ9  1511.1  -4.6                                   ESU9  2926.00  +27.75                    CLV9  56.70  +0.57


The market continues to chop around, ahead of the Fed Summit at Jackson Hole, beginning tomorrow evening.  Fed Chairman Powell will give a speech Friday morning at 9 AM CDT.   The market is expecting some clues to be shed on where the Fed’s mind is at right now, in regards to monetary policy.  The market presently thinks another cut to short term rates is coming in September, and more in the months following.  But how many and what is the timing?  Most markets will have some reaction following this, even if it is a residual reaction created by another input, say a sharp move to the dollar, etc. 


Oil prices are higher today, driven up by a couple of inputs.  Yesterday afternoon, the API projected crude stocks fell by 3.45m bbl last week, when a drop of 1.5m is expected.  News of a US military drone being shot down over Yemen also put a bid into oil prices today.  This morning more data on production and inventories will be released. 


Gold prices are lower today, aided by the positive tone in equities and apparently not concerned with the news in Yemen.  Most in the market believe gold will have support at or below $1500, maintaining its safe haven status.  Gold prices will continue to be sharply influenced by global monetary policy decisions.  Thus Jackson Hole should have some relevance for gold.


Grain prices are mixed today, with corn and soybeans higher and wheat lower.  The first 2 days of the Pro Farmer’s Crop Tour have delivered (as expected) results showing the anticipated yields of this season’s crops behind last year and the 3 year averages (results from day 1 and 2 attached on data sheet).  Wheat prices are leaking lower, as the winter wheat harvest finishes up.  Wheat is lacking fresh inputs at the moment, and is  trading just over 20 cents above the contract lows. 


Coffee is up for the second consecutive day today, following a large decline over the past week.  Brazilian real weakness contributed to yesterday’s rally.   The real is actually higher today, so the follow through today would appear to be continued short covering.  The same holds true for orange juice, which is bouncing from oversold conditions as well.  Cotton prices are lower today, as it is being reported that President Trump is in no hurry for the trade deal with China to be completed.  Clearly bad for cotton, which is expecting a big harvest. 


Technical Moving Averages:

Product               50 day                100 day               200 day

SX9                       901.75                   895.50                   920.25

CZ9                      429.00                   414.00                   406.75

WU9                    506.00                   489.00                   505.50

KWU9                  440.25                   440.00                   478.50

MWU9                534.00                   538.50                   561.25

SMZ9                   313.6                     313.6                     317.9

BOZ9                   28.71                     28.71                     29.44

CLV9                      56.22                     58.67                     57.24                  

GCZ9                    1437.4                   1373.7                   1340.8

LHV9                    72.145                   79.150                   74.655

LCV9                    106.375                 109.105                 112.310

KCZ9                    105.40                   102.95                   109.10

CCZ9                    2430                       2407                       2357

CTZ9                    63.38                     67.75                     71.43

SBV9                    12.16                     12.39                     12.79

JOU9                    102.05                   105.25                   117.80

HGU9                  266.30                   273.75                   276.65






Michael Clifford


141 W Jackson Boulevard                             

Ste 1065                                                              

Chicago, IL 60604                                              

Trean Group, LLC