Commodities Briefing: Hard and Soft

Commodities Briefing: Hard and Soft

Commodities Briefing: Hard and Soft

$GLD, $SLV, $CU, $OIL, $CORN, $WEAT, $SOY

Crude Oil and Metals

Commentary: These commodities look stable in here. PE

NYMEX WTI Crude at 67.65 could trade in the 68.50-66.00 range near term. Long term support is seen, which if holds is Bullish WTI Crude could move to 70 or higher medium term.

ICE Brent Crude at 72.66 will range trade within 71-73 for now, it is trading along the long term support, only a bounce could take it higher now. Failure to hold above this support makes it vulnerable for a fall longer run.

Gold at 1216.10 looks limited to 1200-1210. Seeing more of trade below 1225 before the precious Yellow metal shows new Bullishness

Copper at 2.7320 looks ranged within 2.70-2.85 for now. While support holds some upside is possible. A clear break below 2.70, if seen would turn the Red metal Bearish to 2.60.

 

Agriculture Commodities

Chicago Board of Trade (CBOT) agriculture commodities closed lower on the week ended 10 August, with Soybean futures dropping over 4%, after the USDepartment of Agriculture (USDA) raised its outlook for yield and production in its monthly crop report.

The most active Corn contract for December delivery fell 12.5c weekly, or 3.25%, to 3.7175 bu.

September Wheat delivery went down 9.5c, or 1.71%, to 5.4675 bu.

November Soybean dropped 40.5c, or 4.49%, to 8.6175 bu, on the week.

On the week, CBOT Corn futures fell over 12c, which occurred following Friday’s Bearish USDA World Agricultural Supply and Demand Estimates (WASDE) report release. USDA in its 1st estimate pegged US Corn yield at 178.4 bu/acre, a new record. This is also well above what was expected in the August report.

Agriculture analysts noted that the world Corn balance sheet was little changed via record US yield. World major exporter stocks and use remain tight. And yield changes from July to August are poor indicators of changes thereafter.

Wheat futures fell sharply on the week, both in the US and Europe. The break was driven entirely by higher than expected U.S Corn and Soybean yields presented in USDA’ s August report.

Wheat data Friday was not as Bullish as expected, but some measure of EU and Black Sea export rationing lies ahead. Major exporter stocks and use was lowered fractionally in the August WASDE.

And objective US spring Wheat yield surveys will not be included until September. Funds hold a near record large Long position in Chicago, and so a correction was due.

Interior cash prices in Russia are rising quickly as harvest ends. The next leg of the Bull market will be driven by exhausted surpluses in the EU and Black Sea, and a substantial shift in world demand to the US, this will happen in late Y 2018.

Soybean futures collapsed in late week trade on Bearish USDA reports. USDA estimated the US Soybean yield of 51.6 bu/acre, up 3.1 bu from WASDE’ s July forecast, and the largest August forecast on record.

WASDE analysts increased their estimates for Soy crush and exports amid larger supplies but could not offset the significantly larger yield figure.

Year end 2018/19 Soybean stocks swelled to a record large 785-M bu. The trade has been discussing large yield potential for weeks but seeing the big supply numbers in print sent the market sharply lower.

Have a terrific week

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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