Commodity Corner: Morning Markets

Good morning,


DXU9  96.940  +0.123                       GCQ9  1426.4  -0.3                                                                 ESU9  2984.50  +7.50                       CLU9  56.37  +0.61


Oil grasps the limelight this morning, in a continuation of the story from Friday where a UK tanker was seized by Iran.  Oil prices recovered from lower levels in the late trade on Friday, and gapped higher from Friday’s settle in the trade overnight.  The prices are still substantially below levels seen last week, and the market will be watching for further escalation of the tensions.  The dollar is firmer today, aided by a clarification from the Fed on comments made midweek, which had the market thinking the Fed may very well cut rates by 50 basis points at next week’s meeting.  The clarification that an insurance cut is likely, and that it would be 25 bps, had fixed income markets pull back late Friday and supported the dollar.  Gold prices are still holding a bid, not only with the Middle East tensions, but with the unrest in Hong Kong as well.  Fed officials are now in the quiet period ahead of next week’s meeting, so there shouldn’t be any comments hitting the tapes. 


The grain markets are lower today, having survived the excessive heat that swept across the country.  Rain showers both preceded and followed the heat front, alleviating some of the stress.  Forecasts for this week appear picture perfect for crop development, so prices are working lower.  This afternoon brings an updated look on crop conditions and progress.  Weather will be the dominant input for the grains, aside from a completed trade deal, for the next couple of weeks before the market focuses on the planting re-survey from the USDA and the August WASDE. 


Cotton continues higher with the bounce observed on Friday, following prices trading at a 3 year low on Thursday.  The renewed hope of a trade deal, initiated with reports that the US and China would resume phone talks, provided support to a market expecting an abundant harvest.  Coffee futures are continuing to leak lower, following Friday’s trade, as the colder weather in Brazil is not thought to have enough frost to risk damage to the crops.


The calendar is looking like a relatively quiet economic week, data wise.  The highlight will come on Friday, with the first look at 2Q GDP figures.  The Middle East, the outcome of the UK election and positioning in front of a shift to US monetary policy should be the drivers for the market this week.       


Technical Moving Averages:

Product               50 day                100 day               200 day

SX9                       896.25                   907.50                   924.75

CZ9                      433.25                   411.50                   406.25

WU9                    507.00                   486.25                   513.75

KWU9                  455.25                   450.25                   495.50

MWU9                549.25                   549.25                   572.00

SMZ9                   317.9                     316.7                     319.2

BOZ9                   28.30                     29.06                     29.62

CLU9                    57.62                     59.61                     58.77

GCQ9                   1354.0                   1328.5                   1304.4

LHQ9                   83.995                   88.585                   84.905

LCQ9                    106.140                 111.050                 112.275

KCU9                   102.10                   100.35                   108.60

CCU9                   2442                       2374                       2332

CTZ9                    66.12                     70.68                     73.15

SBV9                    12.37                     12.67                     12.99

JOU9                    104.20                   110.65                   122.65

HGU9                  269.20                   280.05                   278.65


Have a good day,




Michael Clifford


141 W Jackson Boulevard                             

Ste 1065                                                              

Chicago, IL 60604                                              

Trean Group, LLC