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
Thanks,
Mike
Michael Clifford
141 W Jackson Boulevard
Ste 1065
Chicago, IL 60604
Trean Group, LLC
312-604-6404