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With no change in ECB policy the Euro confirmed the negative reversal pattern, which in turn is supporting the USD further. Short-term implications continue to be negative for precious metals. Industrial metals are back on the defensive, as good production data and a milder political climate, pressure Copper and PGM’s.
* Oil: storage data was bearish, putting another dent in the bullish case. Yet, China refinery downsizing (-10%) is supportive and export pace is strong. * NatGas: the draw in storage was bigger than expected, but the mid-term weather forecast is non-threatening.
Planting in the US is making good progress this week. Expectations for Monday’s report are above 15% of corn planted. S. American harvest also moving quickly. Brazil effectively done, while Argentina around 50% complete. There, soybean yields are terrible, leading to even more negative harvest projections. Bean Oil at the lowest level in 2 years! Stats Canada will publish their production numbers this morning and it will influence Wheat. Trade talks are still running in the background.
* Cotton: another excellent week for exports, running well-ahead of USDA’s projections. Weather remains problematic. * Coffee: Attempting another technical breakout after the one-day reversal. Yet, there is no threat to production at this time. * Cocoa: brutal reversal yesterday and follow through today, on profit-taking after the steep rally. * Sugar: The downtrend is not over, but we are starting to see the first reductions in global production forecasts.
* Cattle: “Seasonally, the market is positive into May but then declines into summer” (D. Roose). * Hogs: Exports were strong yesterday, but don’t lose sight of NAFTA and China changes.