METALS
Gold breaking $1,300 for the first time in 2018. It was an important support level. USD continues to strengthen and the path of least resistance is down, also for Silver. Fewer housing starts is a negative for Copper also. The entire complex is on its hills with critical technical levels broken or near breakdown.
ENERGY
* Oil: EIA Stocks Report exp. -0.7M bbl. OPEC points to political unrest as the cause of recent spike, not lack of supplies.
* NatGas: Temps raising quickly above normal. Deliveries of NG to power plants is the highest since 2007 (Hightower)
GRAINS
Crop planting is fully caught up with normal pace and soybeans are sprinting ahead of it. Wheat crop conditions improved slightly. The latest reports from Brazil indicated a significant cut in Corn production due to persistent drought. NOPA Crush Report was stronger than expected yesterday, indicating that the appetite for soybean byproducts is stong. NAFTA negotiations “deadline” is approaching. Some see an extension in the cards.
SOFTS
* Cotton: drought in TX has receded from 44% to 33% of the planting areas. Some analysts have increased prod. estimates.
* Coffee: another bad day for BRL keeps a lid on potential rebounds.
* Cocoa: Major breakdown yesterday, yet fundamentals are still bullish. Is it a correction or a reversal?
* Sugar: similar to coffee, we are approaching “oversold” levels, where new buyers find value. Yet, weak BRL is a huge headwind.
LIVESTOCK
Attention is on cash prices, with Beef coming down, but still at a premium to futures, while the opposite is happening with Pork, where the market expects cash to go higher as weights decline.
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Abbreviations: bbl = barrels; BRL = Brazilian Real; CoT = Commitment of Traders report; K = 1,000; MoM = Month-over-Month; Px = price; USD = US Dollar; YoY = Year-over-Year; YTD = Year-to-Date.
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