Initial reaction to employment report is negative for rates and USD, therefore stronger Gold/Silver. It’s a short-term catalyst to support the rebound inside the well-known 2018 consolidation the metals are in. How long will it last? Minutes or days? Industrial metals are affected by the “cold” trade war with China. Supply data for Copper showed a global surplus. Shanghai exchange storage was also higher (a negative).
* Oil: Very resilient prices. Massive storage injections (+6M bbl) and a weaker USD can’t seem to knock it down.
* NatGas: Storage injection of 62 Bcf vs 51 exp. Total storage is still 40% below last year and ~29% below the 5-year average
Trade negotiations with China are top of mind. A report from China showed intentions to plant more beans. Yet, the increase would be marginal. Wheat tour estimated the Kansas yield at 37 bushels/acre vs. 40 avg and 48 last year. Production could be the lowest since 1989. Export sales for all products yesterday were good, but within expectations.
* Cotton: Cotlook raised global surplus to127K mt from 16K. Trade talks matter here also.
* Coffee: Textbook technical break is without fundamentals legs, now losing steam. * Cocoa: Ivory Coast received 75% less rain than normal in April (Barchart-Speedwell Weather).
* Sugar: Given ample global supplies, currencies can play a bigger role to gain on the margins. Brazil’s is tanking, which makes sugar from there even cheaper
* Cattle: Slaughter up 2.2% YoY. Packer margins at 6-month high
* Hogs: Slaughter up 2.9% YoY… Trade talks are front+center.
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