Commodity Corner: Morning Comments

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





Michael Clifford


141 W Jackson Boulevard                             

Ste 1065                                                              

Chicago, IL 60604                                              

Trean Group, LLC