USD strength not abating as news from Japan and Europe aren’t helping their currencies. Consequently, Gold maintains a weaker stance, while Silver shows some resilience. Platinum following precious metals lower, while Palladium is directionless since March. Copper reacted to China’s denial of trade deficit reduction, indicating that trade talks are relevant even here, at least in the short term.
* Oil: Despite the weaker close, the uptrend is intact. Storage report on Wed. showed draws well below expectations in both crude and gasoline.
* NatGas: 106Bcf was injected vs 105 exp.
Soybeans are swinging with the leaks from China-US trade talks. China did confirm that it will stop its sanctions against US sorghum (a substitute for corn), which is supporting Corn prices. Weekly export sales were decent, but not impressive. NAFTA is still critical. The long-term weather forecast showed normal temps and slightly above normal rain for the grain belt in the US. Argentina’s latest soybean report indicated another cut of 2M mt.
* Cotton: better weather is counter-acted by strong exports.
* Coffee: the “value” level finds confirmation with recent rebound
* Cocoa: the intraday swings have been brutal on very little news. A report showed that Ghana’s gov’t may have purchased a massive amount of product well ahead of schedule (bearish).
* Sugar: potential for short-covering and dryness in Brazil may add strength to the short-term rebound.
* Cattle: weekly exports were weak but still stronger YoY, +14%
* Hogs: gets additional support from strong exports, but watch out for trade agreements updates.
Abbreviations: bbl = barrels; BRL = Brazilian Real; CoT = Commitment of Traders report; K = 1,000; MoM = Month-over-Month; Px = price; USD = US Dollar; YoY = Year-over-Year; YTD = Year-to-Date.
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