The USD has shaken off the Fed and the employment data and is headed toward a 5-month high. Gold’s rebound is starting to look like a bear flag. Without significant political issues on the forefront (yet – wait for May 12?), sentiment is bearish for precious metals. Interesting to see industrial metal prices back at mid-December 2017 levels. A down “trend” that was anything but, with 5-15% swings in either direction affected by uncertainty in the market due primarily to global trade war spats.
* Oil: market digested bearish news with a rally… that’s very bullish. Some are looking at Iran’s deal as the underlying driver. May 12 is around the corner
* NatGas: Warm temperatures covering the country. Px near channel breakdown.
Attention shifting to NAFTA negotiations this week, after China talks disappointed. Pressure is on the oilseed complex, which is more heavily dependent on exports. Better weather in Argentina is also alleviating some of the fear there. Planting progress this afternoon should show Corn ~30% planted and Beans ~10% both still behind average planting pace. Soybean Meal showed a record long position by speculator on the CoT report.
* Cotton: weather is credited for recent rally, with Texas in focus.
* Coffee: Steam of mini-rally is out, but it may begin a longer term consolidation heading into summer. Interesting: Nestle acquires rights to market Starbucks Coffee.
* Cocoa: strong start to the week, as supplies come in below expectations.
* Sugar: similarly to coffee, the short-term rebound seems over. Weakness in Brazilian Real is discouraging for the bulls.
The overarching theme is unchanged: large meat production is met with strong demand, with supply expected to be the winner. Then there are NAFTA talks that could nudge in either direction.
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