METALS
Gold is bucking the trend by strengthening in the face of a stronger US Dollar. The struggles for the currencies of Argentina, Brazil, and Turkey may be pushing some to seek security in historic safe haven. China’s cut of tariffs on car import supports the industry, specifically Palladium and Platinum. New Home Sales Report (@9:00AM) will be a lagging indicator of US economic strength and a data point to gauge the demand for Copper.
ENERGY
* Oil: EIA Storage Report (@9:30) expected to show a draw, similar to yesterday’s API number, at -1.4M barrels
* NatGas: the situation is unchanged, with support coming from lower quantities in storage and high demand due to above average temperature.
GRAINS
The planting pace is strong, with Soybeans ahead of average pace with 56% in the ground already. Corn is 82% planted. Wheat conditions are unchanged with only 36% in good to excellent condition, due to the driest first quarter on record. Soybeans continue to hesitantly climb higher on the tenuous positive sentiment regarding trade with China. Argentina’s currency crisis may lead farmers there to hold on to their production as a hedge against hyperinflation, creating a potential supply squeeze.
SOFTS
* Cotton: 52% planted, ahead of 45% avg pace. Good rains this week, but concerns remain over subsoil moisture.
* Coffee: the first grumblings of Brazilian winter are popping up to support the price bounces.
* Cocoa: grinding lower on better weather forecast.
* Sugar: Global surplus expected at 11.1M mt vs 5.5 initially expected, yet strengthening Brazilian Real (BRL) is supporting the rally.
LIVESTOCK
* Beef packer margins are the highest in almost a year, which should slow down the drop in the cash cattle market. * Hog production still expected to be ~4% higher in Q2 and Q3 vs LY.
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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.
