Good morning,
DXU9 98.020 -0.288 GCZ9 1516.3 +8.9 ESU9 3021.50 +9.75 CLV9 55.14 +0.05
Apologies in advance here for a brief report. Tied up at the trading desk here this morning.
The equity market continues to extend higher overnight, as the positive trade rhetoric and the accommodative tones from the ECB are keeping the flows driving into stocks. Even with the good vibes in equities, and positive trade tones keeping thoughts of a super aggressive easing campaign from the Fed at bay, gold continues to hold above the $1500 level. It had another test last night, and has bounced $10 off the lows. Oil prices are hanging around the $55 level, which is the middle of the trading range, in a market that makes numerous trips to both extremes.
The agricultural space is positive today, having received support from yesterday ahead of the WASDE report, from the hope provided from the promising headlines about trade. Hog futures were also limit bid on the prospects of China being a big buyer and cotton continued its march higher as well. The WASDE didn’t really bring too many surprises (data on current data attachment), with some light revisions lower to yields and production for corn and soybeans, but not as low as what the market was expecting to see. In cotton, both domestic and global production was moved down, along with US exports and world consumption forecasts. Domestic inventories for cotton were left unchanged, but global inventories were raised. The report was pretty uneventful for wheat, with downgrades to production for certain countries coming in as expected for the most part. There were some minor changes to the composition of US wheat exports, but the overall number wasn’t changed.
Sugar futures continue to work its way higher, albeit slowly, from the lows made in August. An expected glut of sugar is expected to become a deficit in 2019-20. This is causing spec fund positions to book some profits on a missive short position. Coffee futures are back to correcting lower again this morning, following a small up day yesterday. The main driver in coffee at the moment is the hot and dry weather in Brazil, which has persisted most of September thus far and is remains in the extended forecast. Orange juice futures were down sharply yesterday, as the production and inventory numbers from the report were above market expectations.
This afternoon brings an updated look at fund positioning from the CFTC with the COT reports. Keep in mind that the data is collected as of Tuesday, so any major position changes following WASDE (or the alleged tone change with China) won’t be reflected in these numbers.
Again, sorry this is so short today. Have a great weekend!
Technical Moving Averages:
Product 50 day 100 day 200 day
SX9 884.75 886.25 915.25
CZ9 401.25 410.00 403.75
WZ9 491.75 498.50 511.25
KWZ9 429.25 449.50 484.00
MWZ9 525.25 542.50 565.25
SMZ9 304.7 310.1 316.1
BOZ9 28.75 28.52 29.40
CLV9 56.15 57.47 56.98
GCZ9 1481.2 1408.4 1362.5
LHZ9 67.420 73.095 70.535
LCZ9 108.805 110.490 114.615
KCZ9 102.60 102.45 106.70
CCZ9 2349 2385 2354
CTZ9 61.06 64.92 69.94
SBH0 12.70 13.07 13.47
JOX9 103.65 105.30 116.90
HGZ9 263.65 268.70 275.65
Thanks,
Mike
Michael Clifford
141 W Jackson Boulevard
Ste 1065
Chicago, IL 60604
Trean Group, LLC
312-604-6404