Despite the USD’s reversal, now on its 4th down day, precious metals have started the week on the same negative note as Friday. Traders will listen to Fed speakers for indication on the direction of interest rates. Copper reversed overnight, after reaching multi-week highs, on the first increase of LME stocks in several sessions. Middle East tension = US/Russia tension, which supports Palladium.
* Oil: Potential impact from sanctions against Iran seem to fade, while OPEC says global demand is rising. Rig in the US continue to increase
* NatGas: testing important technical levels. A break of $2.845 (June) may bring in unexpected buyers.
May 17 is the deadline for a NAFTA announcement. Whether something is done or not, it will be a catalyst for movement in ags, especially Corn. Trade talks with China are very important also, with even the TPP back on the table! Traders will look to the Crop Progress Report this afternoon so judge the direction of the US crop, as it catches up to a normal planting pace. ABIOVE says 2018 Brazil’s soybean production will surpass the US’s.
* Cotton: reading conflicting views on impact of rain forecast in TX. Markets say it will help the crop.
* Coffee: big crop coming, but critical weather period is few weeks away, which should support prices.
* Cocoa: Continues to be bought on pullbacks. CoT shows many speculators still on the sidelines
* Sugar: BRL is down 15.5% vs USD since January, adding to negative picture. Only rising energy prices (ethanol) can soften Sugar’s fall.
Attention is on cash prices, with Beef coming down, but still at a premium to futures, while the opposite is happening with Pork, where the market expects cash to go higher as weights decline.
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