METALS
The most striking aspect of the US’s exit out of the JCPOA is not the impact on Iran, but on the relationship between the US and the rest of the world powers, namely EU, Russia and China. Meanwhile, North American Gold ETF’s inflows are at the highest in 7 months. There are also mining production drops for gold and PGM’s in South Africa. Palladium finds support from tension with Russia to which the Middle-East mess isn’t helping.
ENERGY
* Oil: Iran says exports won’t be significantly affected thanks to continued work with Europe and Asia. US storage showed a 2.2M draw vs -0.7M exp.
* NatGas: spiked over an injection of 89Bcf vs 91 exp., showing unexpected bullish energy for small news.
GRAINS
WASDE showed a perfect QRS on the Corn and Beans “electrocardiogram” with prices spiking for a “beat” before returning to normal. The biggest surprise was the drop in world ending stocks for Corn as China continues to empty its national reserves (159M mt vs 186 exp.!). Global stocks were down in Beans and Wheat also. US Beans ending stocks were also lower to 415M bu. from 460 prev. and 535 average exp. Overall storage levels are still good, but the trends are changing.
SOFTS
* Cotton: USDA increased the US 18/19 ending stocks while lowering production due to the drought. Exports unchanged. Global stocks were also marginally lower.
* Coffee: recent projection has Brazil’s production at 55M bags.
* Cocoa: chart shows reversal potential, but with indecision. Rain in W. Africa’s forecast is positive for production
* Sugar: you can add China to the list of over-producing global suppliers. Bears in control.
LIVESTOCK
USDA lowered 2018 meat production while increasing total production for 2019 and expects strong US exports next year.
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