soft commodities

Summary:

  • NGAS prices in the US reached their highest summer levels since 2008.
  • Economic uncertainty around cotton demand persists.
  • Gold futures amidst hawkish central banks.

NGAS supply concerns persist

Pressure from record domestic supply levels and waning weather-driven demand as the weather turned cooler kept US natural gas contracts around a 12-week low. In the first eight months of 2022, natural gas output in the US is anticipated to have increased by around 4% from a year earlier, hitting a record high of 101 Bcf/d in late September. Additionally, the protracted outage at the Texas Freeport LNG export facility has already decreased US natural gas use for months, leaving more gas for US utilities to add to reserves in preparation for the next winter. A series of heat waves across the US raised the need for cooling at a time when there was an increase in demand for US LNG exports due to worries about shortages in Europe. At the same time, natural gas prices in the US reach

Natgas Fought Back And Now Have A Solid Position! Iron And Copper Are Out Of Fashion!?

COT: Copper short doubles in week of broad fund selling | Saxo Bank

Ole Hansen Ole Hansen 16.05.2022 13:44
Summary:  Our weekly Commitment of Traders update highlights futures positions and changes made by hedge funds and other speculators across commodities and forex up until last Tuesday, May 10. A week that saw continued risk off as the combination of high rates and potential recession as inflation surges kept stocks under pressure while lifting bond yields and the dollar. Commodities hurt by the prospect for lower growth, most critically in China, saw broad selling with funds cutting their exposure to a 21 month low. Focus on copper with funds doubling their short position ahead of a potential easing of lockdowns in China Saxo Bank publishes weekly Commitment of Traders reports (COT) covering leveraged fund positions in commodities, bonds and stock index futures. For IMM currency futures and the VIX, we use the broader measure called non-commercial. Link to latest report This summary highlights futures positions and changes made by hedge funds across commodities and forex up until last Tuesday, May 10. A week where a continued sell off in global stocks pushed the S&P 500 below 4,000 for the first time in more than a year while US bond yields climbed to a fresh cycle high. Financial markets have become increasingly challenged by a combination of high rates and a potential recession as inflation surges. In addition the wind has come out of the commodity bull market with China, a major consumer, paying an increasingly high price for its Covid Zero Policy. Adding to this continued dollar strength, and most asset classes from bonds and stocks to cryptos and commodities remain under pressure, and speculators in commodities and forex have adjusting their positions accordingly.  Commodities The Bloomberg Commodity Spot index dropped 3.1% on the week with losses in energy (-4%), industrial metals (-6.1%), precious metals (-2.5%) and softs (-3.7%) while grains managed a small plus led by wheat. Overall hedge funds and money managers responded to these changes by cutting bullish bets across the 24 major futures tracked in this by 9% to a 21 month low at 1.68 million lots, a 25% reduction since the recent peak in late February.  Twenty out of 24 commodity futures tracked in this update traded lower on the week with eighteen of those seeing positions being reduced with four commodities seeing position levels drop to the lowest in at least a year. Latest updates on crude oil, gold and wheat can be found in our daily Quick Take here Energy: Crude oil continued rangebound trading behavior triggered a small amount of net selling of WTI and Brent. The combined long at 410k lots remains near a cycle low with the current price action being high on uncertainty and low on trading signals. The product space was mixed with gas oil and gasoline seeing net reductions while the net long in NY Diesel rose by 20%.Metals: The exodus out of metals, both precious and industrial continued, and the combined long at just 49k lots across the five futures contract tracked, was the lowest in almost three years. Gold, still holding above its 200-day moving average last Tuesday saw its net long reduced for a fourth week to a three-month low at 73.9k lots with most of the 9k reduction being driven by long liquidation, and not fresh short selling. In silver speculators held a neutral position following an 89% slump in the net long to just 1.7k lots, with the bulk of the reduction being by short sellers looking for an even deeper slump.In copper, the net short doubled to a two-year high at 17.7k lots as the price drop extended towards key support at $4/lb. China lockdowns have been the main catalyst behind the recent 25% decline in the Bloomberg Industrial Metal Index. It highlights the potential risk of a price reversal once lockdowns start to ease, a bounce that may now receive some additional momentum from the hedge funds covering some of their short position.Agriculture: The whole sector, except wheat, got caught up in the strong dollar risk off move with the biggest reductions seen in soybeans, sugar, corn and cocoa. In grains, the net long across the six futures contract tracked in this was reduced for a third week, this after reaching a 12-year high last month. Surging wheat prices only managed to attract a small amount of buying, and despite an overriding bullish outlook due to global weather woes and Ukraine war, the net long in Chicago and Kansas wheat remains muted at 58k lots.ForexContinued broad dollar strength drove a 5% increase in the gross dollar long against ten IMM futures and the Dollar Index. However, the muted $1.2 billion increase to $22.8 billion, a four- month high, was caused by speculators (wrongly as it turned out) trying to buy EURUSD ahead of €1.05 support. This action triggered 22.9k lots or $3 billion equivalent of euro buying which helped flip the position back to a net long, just days before the break below force fresh long liquidation.What is the Commitments of Traders report? The COT reports are issued by the U.S. Commodity Futures Trading Commission (CFTC) and the ICE Exchange Europe for Brent crude oil and gas oil. They are released every Friday after the U.S. close with data from the week ending the previous Tuesday. They break down the open interest in futures markets into different groups of users depending on the asset class. Commodities: Producer/Merchant/Processor/User, Swap dealers, Managed Money and otherFinancials: Dealer/Intermediary; Asset Manager/Institutional; Leveraged Funds and otherForex: A broad breakdown between commercial and non-commercial (speculators) The reasons why we focus primarily on the behavior of the highlighted groups are: They are likely to have tight stops and no underlying exposure that is being hedged This makes them most reactive to changes in fundamental or technical price developments It provides views about major trends but also helps to decipher when a reversal is looming
Drivers Don't Want To Pay More For Petrol. Crude Oil Price: the latest upward momentum? | FxPro

Drivers Don't Want To Pay More For Petrol. Crude Oil Price: the latest upward momentum? | FxPro

Alex Kuptsikevich Alex Kuptsikevich 17.05.2022 12:17
Crude oil has added 15% since last Wednesday, rising to $112/bbl WTI and $113/bbl Brent. Both grades reached new two-month highs on Tuesday morning, despite a decidedly bearish news backdrop. Since early April, WTI has seen a sequence of higher highs and higher lows A sharper than previously estimated slowdown in China and not yet agreed package with Russian Crude oil phased embargo was met with buying in Crude, despite those suggesting lower demand and higher supply. Since early April, WTI has seen a sequence of higher highs and higher lows. Oil’s dip under the uptrend line last week only encouraged buyers, kick-starting the latest upward momentum. Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM This is the third time Brent has reached that horizon, from which it has rolled back in April and early May. A consolidation above $114 could signal a new buying wave and quickly take prices to the $120 area - near the late March peaks. It should not be surprising if WTI becomes more expensive than the heavier Brent in a few weeks In this case, the North Sea Brent lags behind the US WTI as the supply-demand balance favours the latter. It should not be surprising if WTI becomes more expensive than the heavier Brent in a few weeks, restoring the historic balance broken by tight OPEC+ quotas and once rampant US production. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM Nevertheless, be prepared that the oil rally that started from lows in April 2020, culminating in the war events in Ukraine, is coming to an end. The global economy and energy consumption are slowing to recover while the cartel continues to raise quotas. Temporarily, due to lower investment in production in previous quarters, OPEC has not kept pace with production increases. Still, this balance will change sooner rather than later, promising to keep the price from rising.
The Governor Of The Central Bank Of Finland Thinks CBDC Is The Solution To The Problem

The Commodities Feed: US gasoline tightness | ING Economics

ING Economics ING Economics 18.05.2022 07:45
Your daily roundup of commodities news and ING views Learn more on ING Economics Energy The oil market has seen a partial recovery in early morning trading today, after Brent settled more than 2% lower yesterday. Reports that the US is looking to ease some sanctions against Venezuela contributed to yesterday’s weakness, with it thought that the easing could see a partial resumption of Venezuelan oil to Europe. Any increase is likely to be rather limited, at least in the short term.   There are growing concerns over the refined products market. What started out as a tight middle distillate market appears to be spreading into the gasoline market, at least for the US. At a time when US gasoline inventories should be building ahead of the driving season, inventories instead have declined for most of this year. These are now below the low end of the 5-year range.  Gasoline demand should only increase over the coming months and, in the absence of a pick up in refinery runs, the gasoline market is likely to continue to tighten. The tighter gasoline market appears to have also contributed to a narrowing in the WTI/Brent discount, given the  need for higher US refinery runs, which should be supportive for US crude demand. Gasoline stocks in the ARA region of Europe are more comfortable, and are at least at a decade high for this time of the year. Given the tightness on the US East Coast and more comfortable European stock levels, we would expect to see a pick-up in European gasoline flows to the US East Coast in order to help alleviate some of this tightness. API numbers released overnight confirm the tightening in the market. US crude oil inventories are reported to have fallen by 2.4MMbbls, whilst stock levels at Cushing, the WTI delivery hub, fell by 3.1MMbbls. It was the gasoline market which saw the largest decline, with stocks falling by 5.1MMbbls over the last week. EIA numbers will be released later today. The EU carbon market saw some strength yesterday, with the market breaking above EUR91/t. The European Parliament’s Environmental Committee voted yesterday on reforms to the EU ETS. The committee agreed on the need for more aggressive carbon emission reduction targets. The committee would like to see emissions covered by the ETS fall by 67% by 2030 from 2005 levels, this compares to the initial proposal for a 61% reduction. In order to achieve this, the committee has  recommended that the amount of emission allowances should be reduced by 4.2% in the first year the reform starts, and then this reduction should increase by 0.1% each year through until 2030. The committee also wants to see the phasing out of free allowances between 2026 and 2030, and the full implementation of  the EU Carbon Border Adjustment Mechanism (CBAM) by 2030, which would be 5 years earlier than currently proposed. In addition,  the Environmental Committee wants to phase out free allocations for the aviation  sector  by 2025, which would  be 2 years earlier than the Commission had proposed. The proposal will also see maritime transport included in the ETS from 2024, which would cover 100% of intra-EU routes, and 50% of emissions from extra-EU routes coming in and out of the EU initially. Finally, the committee also agreed on the implementation of another emission trading  system for commercial buildings and transport, which would start in 2025, whilst private buildings and transportation will be excluded  from this new ETS until at least 2029. This latest proposal will be put to a vote  in parliament next month, after which negotiations between member states will likely start. Metals Latest reports that Shanghai might start relaxing its two-month lockdown after three days of zero community transmission, along with better-than-expected retail sales and consumer spending data from the US, were constructive for risk assets yesterday. Most base metals settled higher on the day, with LME aluminium closing more  than 2% up. Shrinking LME inventories have provided some support  to aluminium. The latest LME data shows that on-warrant inventories for the metal fell for an eighth consecutive day to a new record low of 230kt yesterday. Turning to steel, and China Iron & Steel Association (CISA) said that China will keep its restrictions on new steel capacity intact and would push for more mergers and acquisitions within the industry. Due to ongoing Covid-related restrictions, steel demand has remained under pressure recently, but this should improve as the Covid situation improves. Mysteel expects China’s steel demand over 2H22 to rise by 10% compared to 1H22, whilst YoY growth is expected to hit 15% in 2H22. This growth is expected  to be supported by local government policies. Agriculture CBOT wheat continued to trade firm yesterday, even after India relaxed its stance with its recently announced export ban on wheat. New directives from the Indian government indicate that the restrictions will not apply to wheat shipments that have already been handed over to the customs department for clearance and loadings. However, the export restrictions will still apply to wheat sales where the shipments are not yet finalised through the issuance of irrevocable LoC. Reuters reported that only around 400kt of wheat (out of around 2.2mt of wheat currently at ports) would be eligible for relief and likely to be exported. The relaxation is unlikely to provide much relief to the global market. TagsWheat Oil Metals Gasoline EU carbon Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Podcast: BoJ losing control. Geopolitical risks for Tesla

Fed hawks may not let the equity rally extend! | MarketTalk: What’s up today? | Swissquote

Swissquote Bank Swissquote Bank 18.05.2022 10:58
The US equity markets rallied yesterday after taking over a positive session from the Europeans. However, the US retail sales data didn’t necessarily hint at slowing spending, and Jerome Powell didn’t say things that investors would normally like to hear. Powell’s words didn’t hit the investor appetite immediate, but mixed activity in US futures hint that appetite may not remain as strong in the coming sessions. In the FX, the US dollar eased from two-decade highs. Gold trades around the $1800 mark and crude oil bumps into solid topsellers approaching above the $115pb   The EURUSD rebounded past the 1.05 and Cable traded past 1.24. Yet, prospects of higher US rates, and the positive divergence between the Fed and other central banks should prevent the dollar from falling significantly. Eurozone’s final inflation data is due today, and should confirm a rise to 7.5% in April, an eye-watering number which should keep the European Central Bank (ECB) hawks and the euro bulls alert, and help the single currency consolidate its latest gains against the US dollar. Gold trades around the $1800 mark and crude oil bumps into solid topsellers approaching above the $115pb. On the earnings front, the US retailers reveal mixed earnings but they all agree on one thing: inflation impacts activity. Watch the full episode to find out more! 0:00 Intro 0:22 Market update 2:06 Jerome Powell is decided to bring inflation down! 2:48 High EZ inflation to keep euro bulls alert 3:41 ...but the dollar may not ease much! 4:42 Gold under the pressure on rising rates 5:31 Crude oil bumps into topsellers past $115pb 6:47 US retailers reveal mixed results, but agree that inflation is an issue Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020.
Oil dips ahead of OPEC+, gold flat

Oil falls on Venezuala and EU, gold dips | Oanda

Jeffrey Halley Jeffrey Halley 18.05.2022 15:30
Venezuela/Europe send oil lower Overnight, oil prices touched multi-week highs until the US announced it was starting a process, potentially leading to an easing of sanctions on Venezuela. That immediately saw oil reverse all its impressive intraday gains and both Brent crude and WTI finished slightly lower on the day. The EU effectively allowing European importers to pay for Russian gas via roubles should take the edge off European gas prices and flow through to oil prices. Brent crude finished 1.05% lower at USD 112.70 a barrel, having tested USD 116.00 intraday. WTI, by contrast, finished just 0.10% lower at USD 113.60 a barrel, having also tested USD 116.00 intraday. Prices are unmoved in Asia. Tight API inventory data and soaring diesel prices in the US have combined to send WTI to a premium over Brent and is likely to limit the downside for both contracts, Venezuela, or not. Tonight’s official crude inventory data dump will now be closely watched, and sharp falls in gasoline and distillates inventories could increase the WTI premium over Brent crude. Brent crude has resistance at USD 116.00 and support at USD 111.50 a barrel. WTI has taken resistance at USD 116.00 a barrel as well, with support at USD 111.50. Any progress on Venezuela’s supply returning to international markets is potentially a game-changer and should mean the top of my longer-term range, at USD 120.00 a barrel, remains intact. Gold’s price action doesn’t inspire confidence Despite the US dollar falling heavily overnight, and risk sentiment rising generally, gold prices fell 0.53% to USD 1815.00 an ounce overnight, easing to USD 1814.50 in Asia. US yields climbing higher may have played a part, but the direction of the US dollar has been more important of late. When gold falls as the US dollar falls heavily, we should all take that as a warning sign, suggesting lower prices are the path of least resistance. As such, I believe gold’s downside risks have ratcheted higher. Support lies at USD 1789.00, followed by USD 1780.00 an ounce. Failure of the latter suggests a deeper correction to USD 1700.00. That move could occur quite quickly if USD 1780.00 fails. Gold has resistance at USD 1836.00, followed by the 200-DMA at USD 1836.80, and then USD 1850.00 an ounce. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Commodities: Prices Are Rising, Heatwaves In US And China Affects The Production Of Cotton

The Commodities Feed: Another week passes with no EU ban | ING Economics

ING Economics ING Economics 20.05.2022 08:36
Your daily roundup of commodities news and ING views Tank farm for storage of petroleum products in Volgograd, Russia Energy It appears that another week will pass with the EU still unable to agree on a Russian oil ban. While it is taking longer than expected to come to an agreement, we believe that member states will eventually come to a deal. How much of an impact this will have on the market will depend on how watered down the final agreement is relative to the proposal. The effectiveness of the ban will also depend on the actions of countries outside the EU. Bloomberg reports that China is looking to potentially buy Russian crude for its strategic reserves. Although this shouldn’t come as too much of a surprise if China is set to increase its share of Russian oil purchases. The significant discounts available for Russian crude will prove very tempting for some buyers, like China and India. Self-sanctioning will already be affecting Russian oil flows to the EU, even in the absence of an official oil ban. This has left the EU to look elsewhere for alternative supplies, and whilst the US is an obvious candidate (given the expectation of relatively strong supply growth), we could in fact see US crude exports coming under pressure given the narrowing that we have seen in the WTI/Brent discount. The July WTI/Brent discount narrowed to less than US$2/bbl at one stage this week, after starting the month at more than a US$4/bbl discount. Inventories continue to point towards a tightening of the refined products market in Europe. The latest data from Insights Global show that gasoil inventories in the ARA region fell by 31kt over the week to 1.55kt, leaving inventories at multi-year lows. However, the big move over the week was in European gasoline inventories. Gasoline stocks in ARA fell by 342kt to 1.05mt. This decline over the week has seen gasoline inventories fall from more than a 5-year high to just below the 5-year average. Singapore also saw a further tightening in light distillate stocks over the week, with inventory levels declining by 815Mbbls to 13.74MMbbls, leaving them hovering just above the 5-year average. Clearly, the tightness that we are seeing in the US gasoline market is spreading into other regions. And given that the driving season is still ahead of us, we would expect to see further declines in inventories, which should prove supportive for gasoline prices over the summer. Read next: Altcoins: What Is Litecoin (LTC)? A Deeper Look Into The Litecoin Platform| FXMAG.COM European gas prices came under pressure yesterday. TTF fell by more than 3.7%, which saw the market settling at its lowest levels since the start of the war. European gas storage continues to improve due to strong LNG inflows. Storage in Europe is almost 41% full at the moment compared to a 5-year average of around 44% for this stage of the year. The gap between current inventories and the 5-year average continues to narrow. Assuming we go through injection season with no significant disruption to Russian gas flows, Europe should enter the next heating season with a comfortable inventory. However, this is a big assumption, and the risk of disruption is likely to continue to keep the market trading at historically high levels. US natural gas prices also came under pressure yesterday, selling off almost 2.7%. Weekly storage data shows that US gas storage increased by 89Bcf over the week, which was slightly higher than the 5-year average of 87Bcf. Agriculture The latest data from the Indian Sugar Mills Association shows that sugar production in India has increased to around 34.9mt so far this season. The association reported that around 116 sugar mills were still operating as of 15 May. ISMA maintained its export estimate at around 9mt for the current year, with around 8.5mt of export sales already made. The food ministry reported that sugar exports have increased to around 7.5mt as of 18th May, already surpassing last year’s 7.2mt of exports. The ministry estimates that around 3.5mt of sugar equivalent would be diverted to ethanol this year and expects this to grow with targets of around 6mt by 2025. Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM Read this article on THINK TagsSugar Russian oil ban Natural gas Gasoline shortage Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more Follow FXMAG.COM on Google News
What Do We Learn From New York Climate Week? What Should Companies Pay Attention To Considering Sustainability?

Green Energy Stocks To Dominate Markets In The Near Future? | America's growing bioenergy market needs clearer monitoring and more innovation | ING Economics

ING Economics ING Economics 20.05.2022 00:00
Bioenergy is a crucial pathway to net-zero emissions by 2050. The bioenergy market in the US has been growing and diversifying, with strong growth potential seen in carbon capture and storage (CCS), renewable diesel, and renewable natural gas. Addressing the environmental impact of bioenergy needs clear monitoring and more innovative solutions Bioenergy is a form of renewable energy derived from organic material   Bioenergy, a form of renewable energy derived from organic materials (or biomass), will play a pivotal role in helping the world achieve net-zero emissions by 2050. With a wide range of application options in sectors such as transport, heating, and electricity, bioenergy is forecast to account for 19% of total energy supply in 2050 and will contribute to 13% of the emissions reduction between 2020 and 2030 under the International Energy Agency's (IEA) Net-Zero Emissions (NZE) scenario. Emissions reductions by mitigation measure in the Net-Zero Emissions scenario, 2020-50 Source: International Energy Agency   In the US, the development of bioenergy has been accelerating and expanding. In the transport sector, the US is home to the world’s largest biofuels market, and the demand for biofuels in North America is expected to grow more than any other region through 2026 under the IEA’s baseline scenario. Growth will continue to be led by a diversification of biofuels supply beyond conventional ethanol, as advanced biofuels like renewable diesel and renewable natural gas (RNG) keep gaining momentum. Sustainable aviation fuels (SAFs) are another point of growth; these will be covered in a later article. Biofuel demand growth by region in the baseline scenario, 2021-2026 Source: International Energy Agency   But the deployment of and investment in bioenergy is rising in other sectors as well, led by mounting action from corporates and investors across sectors to decarbonise their businesses and portfolios. So, let's take a look at the growth prospects of various bioenergy applications in the US, as well as the challenges they face.   Examples of bioenergy-related corporate climate strategies: Oil and gas: ExxonMobil identifies biofuels as one of its core solutions for its net-zero ambition. The company announced in early 2022 that it would acquire a 49.9% stake in Biojet AS, a Norwegian biofuels company, to receive up to three million barrels of biofuels per year. ExxonMobil is also investing $125m in California-based Global Clean Energy to purchase up to five million barrels per year of renewable diesel. Petrochemicals: Dow sees the creation of a circular economy through recycling and using bio-based materials as a focus area to accelerate sustainability. The company is expanding an agreement with Fuenix Ecogy Group to ramp up circular plastics production. It has also signed agreements with Gunvor Petroleum Rotterdam and Texas-based New Hope Energy to purify pyrolysis oil feedstocks derived from plastic waste. Power: Southern Company last year took ownership of the Meadow Branch Landfill Methane Recovery Facility, the renewable natural gas facility located in Tennessee, to strengthen its RNG capacity as part of the company’s strategy to achieve net-zero emissions by 2050. Biofuels: Federal policies will have a net positive effect on US production this year The main federal policy to support the US biofuels market is the renewable fuel standard (RFS), which requires refiners to blend certain volumes of biofuels in gasoline each year. The RFS benefited biofuels production – especially that of fuel ethanol – in the past, although in recent years the RFS has become more susceptible to policy uncertainty. The Environmental Protection Agency (EPA), which is in charge of setting RFS mandates, last December proposed to retroactively lower biofuel mandates for 2020 and 2021 but set 2022 requirements slightly above pre-pandemic levels. This will put pressure on refiners to blend more biofuel into their gasoline production this year, resulting in a net positive impact on the biofuels industry. Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM In addition, the EPA has proposed the rejection of all outstanding small refinery exemption (SREs) waivers pending for the 2016-20 compliance years. SREs give small refiners that process less than 75,000 barrels per day (bpd) of oil and can demonstrate economic hardship caused by the RFS an exemption from complying with the rules. If implemented, this decision would substantially raise the demand for biofuel credits. A federal policy that will specifically boost the production of ethanol is the Biden administration's plan to allow E15 gasoline, a fuel that uses a 15% ethanol blend, to be sold between June and September. E15 gasoline is typically banned in summer due to worries about air pollution. E15 consumption is low also because of retail availability, automobile compatibility, and safety concerns. But heightened oil prices amid the Russia-Ukraine war have made the case for more E15 gasoline sales to ease prices. State level policies are a powerful addition At the state level, California’s low-carbon fuel standard (LCFS), the backbone of a carbon intensity-based cap-and-trade system, has been playing a substantial role in incentivising biofuels production in and near the state. The LCFS aims to achieve a 20% reduction in the carbon intensity of California’s transportation fuel pool by 2030, with compliance standards set for each year. Carbon intensity (CIs) based on composite of gasoline and diesel fuels under the LCFS Source: California Air Resources Board   Since last year, LCFS credits (supply) generated from low-carbon fuels have increasingly outgrown LCFS deficits (demand), which has led to a 23% fall from the record high LCFS price of $206/metric ton to $158/metric ton in March 2022. This is mainly because the demand for gasoline and LCFS credits has not recovered from the pandemic, whereas the production of low-carbon fuels keeps growing steadily. The biggest driver of recent LCFS credit generation is renewable diesel, followed by electricity, which has been boosted by the continuing adoption of electric vehicles. LCFS total credits and deficits for all fuels reported Note: Cumulative bank refers to total number of banked credits Source: California Air Resources Board LCFS credit generation by fuel type *Hydrogen, Renewable Naphtha, Propane, Innovative Crude & Low Complexity/Low Energy Use Refining, etc.. Note: Project based credits are issued post verification and may not be included. Source: California Air Resources Board   It remains to be seen whether this deficit trend will be temporary or permanent; we also don't know how the expected implementation of similar programmes in adjacent jurisdictions will alter the LCFS system in California. In addition to the Clean Fuels Program in Oregon which is already in place, Washington State is expecting to implement its Clean Fuel Standard in 2023 and a federal fuel standard is set to come into force in Canada in the same year.  Other US states including New Mexico, Colorado, Minnesota, and states in the Northeast and Midwest are also in various stages of developing LCFS-style systems. These programmes will provide effective additions to the federal RFS programme in driving biofuels demand. Renewable diesel takes the lead in advanced biofuel deployment The production of biomass-based diesel – namely biodiesel and renewable diesel – has taken off in the US and is set to increase further. Of the two, biodiesel dominates the bio-based diesel market, but renewable diesel is seeing faster growth. This is partly because renewable diesel is compatible with existing distribution infrastructure and engines. With the same composition as fossil diesel, renewable diesel does not have a blending limit, whereas biodiesel typically accounts for up to 20% of fossil diesel in the US, because of insufficient regulatory incentives despite higher blends being available. Read next: Altcoins: What Is Litecoin (LTC)? A Deeper Look Into The Litecoin Platform| FXMAG.COM Renewable diesel’s ability to lower carbon intensity, particularly in trucking and aviation, has prompted several US refineries to invest in greenfield projects and/or convert traditional plants to process renewable diesel. Refineries set to complete conversion between 2022-23 include Marathon Petroleum’s Martinez refinery in California, CVR Energy’s Wynnewood refinery in Oklahoma, and HollyFrontier’s Cheyenne plant in Wyoming, etc. Planned renewable diesel capacity in the US is expected to reach 6bn gallons by 2025, up from less than 2.4bn gallons estimated for 2021. One major challenge to the growth of both biodiesel and renewable diesel is feedstock availability and costs. It is estimated by Bloomberg New Energy Finance (BNEF) that the demand for bio-based diesel feedstock will more than double from 2020 to 38.3bn pounds (17.4bn kilograms) in 2022, and soar to over 64bn pounds (19bn kilograms) in 2024. Prices for bio-based diesel feedstock have also climbed since 2020, causing some companies to postpone their renewable diesel projects. US estimated bio-based diesel feedstock use and implied future demand from capacity additions Source: Bloomberg New Energy Finance   In the long term, despite the growth momentum for bio-based diesel, the Energy Information Administration forecasts that bio-based diesel will remain a small part of the diesel market, accounting for less than 8% of US diesel production in 2050. This is partially due to competition from food consumption and electric vehicles (EVs), which will be discussed in a later section. Nevertheless, that 8% still translates into roughly 0.23mn bpd of production, a considerable absolute amount. RNG to see demand build up in the power sector Another promising advanced biofuel which is set for growth is renewable natural gas (RNG), or biogas that has been upgraded to replace fossil gas. RNG production capacity in the US increased at a compound annual rate of 35% between 2017 and 2021, thanks to $1.7bn of investment from oil and gas companies. Looking forward, RNG demand is projected to jump from 0.2 trillion cubic feet (Tcf) today to between 2.3 and 3.2 Tcf in 2040, according to BNEF. The fuel is forecast to be capable of displacing 6-12% of the US natural gas demand. RNG can be produced from various sources. Landfill has the strongest supply and cost advantage – most landfill RNG projects can be economical at $10/MMBtu or lower; landfill accounts for more than 60% of the RNG credits generated under the RFS and more than 90% of the RNG credits under the LCFS. In contrast, RNG produced from manure is more costly – at $30/MMBtu or higher – but remains attractive under the LCFS as it offers one of the lowest carbon intensities of less than -300 gCO2e/MJ. Importantly, although RNG demand from transportation dominates now, the majority of demand for RNG by 2040 will come from the power sector. In California, where the LCFS is advanced, RNG already contributes to 98% of natural gas used for transportation, mostly in municipal buses and trucking. The can add risks to future project returns if the produced RNG cannot be contracted in time. There is a potential in the long term for more RNG to be used in shipping, though it will encounter competition from other biofuels or synthetic fuels. RNG producers are starting to pivot their focus away from the transport sector. Archaea Energy is aiming to sell its RNG to natural gas utilities through long-term offtake agreements. The company plans to allocate 65% of its RNG production to non-transport applications. Admittedly, electricity generation from RNG today is more expensive than from conventional gas and the contribution of RNG to the grid is limited. Yet demand is likely to be sustained in the future, driven by climate commitments from commercial/residential customers and precuring requirements set for utilities. California now mandates utility company SoCalGas to increase RNG’s share of gas deliveries from 4% in 2021 to 12.5% by 2030. ­Oregon passed legislation to allow RNG to account for 30% of a utility’s purchases by 2045; the state is also letting utilities recover prudently incurred costs to meet the target. A handful of other states are considering similar policies. Outlook for US renewable natural gas demand Source: Bloomberg New Energy Finance   The favourable outlook for RNG/biogas can also augment the production of bio-fertilisers, which can be generated from the waste from biogas production. This will help meet the rising demand for bio-fertilisers in the US, spurred by growing preferences for organic food, as well as concerns over the likely harmful effects of chemical fertilisers on both health and the environment. US to pioneer in BECCS development The US is poised to lead the deployment of bioenergy with carbon capture and storage (BECCS) technology, a high-potential application of bioenergy. BECCS involves converting biomass to heat, electricity, or liquid fuels while capturing and storing the CO2 that is emitted during the conversion process. Since the growing of plant biomass absorbs CO2, BECCS can achieve net negative emissions when the emitted CO2 from bioenergy generation is permanently stored. Indeed, the UN's Intergovernmental Panel on Climate Change highlighted in its most recent report the need for carbon removal technologies for the world to reach net-zero emissions. The US is already a front-runner in CCS – it is home to 36 of the 71 new CCS projects added worldwide during the first nine months of 2021. On top of this, several BECCS networks are emerging in the Midwest thanks to lower costs of bioethanol production. Summit Carbon Solutions, for instance, is progressing with a project to link more than 30 ethanol biorefineries across Iowa, Minnesota, Nebraska, North Dakota, and South Dakota. With a total potential capturing capacity of 8 Mtpa, the network would be the largest of its kind globally. Valero Energy and BlackRock are partnering with Navigator Energy Services to develop an industrial-scale CCS network that would connect biorefineries and other industrial plants across five Midwest states. The challenges facing bioenergy The use of bioenergy is not without controversy. The main challenge is the negative impact of bioenergy generation from excessive land use. From an environmental point of view, growing feedstocks such as soybeans and corn can lead to more deforestation, degradation of soil, and harmful changes to ecosystems. From a social point of view, despite yield growth potentials, the more feedstock is used for biofuels, the less there will be for food production. This has been exacerbated by the Russia-Ukraine war, which has disrupted the global food supply chain as both countries are major exporters of several leading crops. Hence, concerns have arisen in the US that the increasing use of crops for biofuels will limit food supply and add pressure to food prices. To tackle the problem in the long term, there needs to be a switch away from conventional, food-based biofuel feedstocks to advanced biofuels which use non-food crops, municipal solid waste, and agricultural and forest residues. The IEA forests that 60% of the global bioenergy supply in 2050 will need to come from sources that do not need dedicated land use to achieve net-zero emissions. Accelerating advanced biofuel production requires stronger incentives compared to those for conventional biofuels. In the US, the federal Biomass Crop Assistance Program provides financial assistance to producers of advanced biofuel feedstock. The Biden administration has also included in its FY23 budget $245m to accelerate the R&D of next-generation biofuel technologies. Another challenge is that the traditional use of bioenergy (burning wood or traditional charcoal) remains controversial as it can cause more emissions and deforestation. The EU still categorises bioenergy as green in its Taxonomy, but has strengthened the criteria to exclude certain forms of wooden biomass from qualifying as “renewable”. In the US, the EPA sees bioenergy as a cleaner fuel, while also recognising its negative potential if not managed well. Moreover, bioenergy-based solutions face scepticism that the supply chain – which involves biomass growing, transportation, storage, and processing – can emit more CO2 and harm the environment. That is why more precise monitoring and reporting of life-cycle emissions along a bioenergy technology’s supply chain needs to be in place. Finally, competing low-carbon technologies can complicate the growth of bioenergy. In the transport sector, the massive adoption of EVs will be a major threat to the demand for biofuels. As mentioned above, RNG developers are expanding their business footprint to the power sector, though these developers will likely encounter competition from renewable energy. Nonetheless, biofuels are still likely to maintain their niche in transportation, especially in heavy-duty trucks and aeroplanes, as it will be challenging for EVs to provide long-haul services without a step-change in technology. Global bioenergy supply in the Net-Zero by 2050 Scenario, 2010-50 Source: International Energy Agency Read this article on THINK TagsUnited States Renewables Net zero Energy Transition Biofuels Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more Follow FXMAG.COM on Google News
Forex: XAU/USD Is Rising For The 3rd Day In A Row!

What's Going To Be Gold Price (XAUUSD)? Gold – Back in favour? | Oanda

Craig Erlam Craig Erlam 19.05.2022 23:53
Or just a blip? Gold has very much fallen out of favour over the last month as it fell 10% on the back of coming within a whisker of $2,000. But has something changed? We’ve seen plenty of risk aversion in the markets over the last 24 hours, with stock markets falling heavily, and rather than being particularly supportive for the dollar, it’s gold that has performed well which hasn’t really been the case in recent weeks. Read next: Altcoins: What Is PancakeSwap (CAKE)? A Deeper Look Into The PancakeSwap Platform| FXMAG.COM Perhaps that’s because higher inflation and therefore interest rate expectations have been behind all of the gloom in the markets, which is typically bullish for the dollar. Whereas the last 24 hours seem to have seen a shift. Rather than interest rates, it’s economic fears that are driving the negativity in the markets. Higher inflation is squeezing margins which means higher prices. And the Fed has gone from anticipating a soft landing, to softish and now just a safe one. That shouldn’t fill anyone with confidence. And maybe that’s why we’re seeing investors move back towards gold. Of course, we’ve seen plenty of big sentiment swings in the markets, especially this year, so that could change. But it’s possible that gold may be back in favour. The first test of this comes around $1,850 which has been support and resistance in the past and coincides with the upper end of the 55/89-period SMA on the 4-hour chart. This is followed by $1,875-1,900, a break of which would be a strong signal. A break back below $1,800 on the other hand would suggest quite the opposite unless accompanied by very positive economic news which seems unlikely at this point. Read next: Altcoins: What Is Litecoin (LTC)? A Deeper Look Into The Litecoin Platform| FXMAG.COM This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Follow FXMAG.COM on Google News
The Gold Market Is Volatile, There Are Two Possible Developments

(XAUUSD) Gold Prices Rise In The Wake Of Concerns Around U.S Economic Slowdown, Crude Oil Prices Rally In Response To Increasing Demand And Concerns Around Supply, Cotton Prices

Rebecca Duthie Rebecca Duthie 20.05.2022 17:01
Summary: The post-covid world and the war in the Ukraine caused Crude Oil to rally. Gold futures are on the rise amidst concerns around economic slowdown of the US economy. Cotton prices fall marginally despite concerns around increasing demand and tightening supply. Read next: The UN Is Stepping In To Help Wheat Exports, Platinum Prices Experiencing Volatility and The West Turns To Asia For RBOB Gasoline Supply  XAUUSD Gold prices rally Gold prices pushed up past $1.830 on Friday, the gain comes in the wake of the softening U.S economic data amid the hawkish Federal Reserve and its continuing aggressive monetary policy. The soft economic data has raised concerns around economic growth. The hawkish Fed will continue to hike interest rates despite fears of economic slowdown which is causing the US Dollar to weaken and pushing treasury yields lower. Investors are turning to gold as a hedge against the growth concerns, ultimately driving the gold price up. Gold Jun ‘22 Futures Price Chart WTI Crude Futures Crude Oil Futures pushed above $112 on Friday amidst concerns around demands returning to a normal level as China eases their COVID-19 lockdowns and the embargo in Russian oil looming simultaneously occurring as fears of economic slowdown heighten. The post-covid world is seeing average driving mileage increasing in the U.S causing an increase in demand, as well as the EU pushing the ban on Russian oil to be certain by the end of the month. Crude Oil Jun ‘22 Futures Price Chart Cotton futures Cotton futures prices have faced downward momentum over the past week. However, the prices are still high, the raised prices come in the wake of rising demand and tightening supplies. Cotton Jul ‘22 Futures Price Chart Read next: More Expensive Coffee!? Weather Conditions In South America Can Limit Crops. (WTI) Crude Oil Price Recovering, Palladium Prices Rise Amidst Concerns Around Supply  Sources: tradingeconomics.com, finance.yahoo.com
COT Futures Charts: Soft Commodities Speculator bets mixed

COT Futures Charts: Soft Commodities Speculator bets mixed

Invest Macro Invest Macro 22.05.2022 12:32
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday May 17th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. Soft Commodities market speculator bets were mixed this week as five out of the eleven softs markets we cover had higher positioning this week while six markets saw lower positions. Leading the gains for the soft commodities was Sugar (9,445 contracts) and Soybeans (9,039 contracts) with Wheat (7,120 contracts), Coffee (5,932 contracts) and Corn (2,835 contracts) also showing a positive week. Meanwhile, leading the declines in speculator bets this week were Soybean Meal (-10,832 contracts) and Lean Hogs (-8,595 contracts) with Live Cattle (-4,773 contracts), Soybean Oil (-4,295 contracts), Cotton (-2,443 contracts) and Cocoa (-2,463 contracts) also coming in with lower bets on the week. Data Snapshot of Commodity Market Traders | Columns Legend May-17-2022OIOI-IndexSpec-NetSpec-IndexCom-NetCOM-IndexSmalls-NetSmalls-Index WTI Crude 1,730,665 0 325,637 7 -363,869 95 38,232 69 Gold 555,756 30 175,360 33 -206,879 65 31,519 48 Silver 144,534 11 16,114 38 -24,841 75 8,727 0 Copper 189,483 19 -24,408 25 23,059 75 1,349 33 Palladium 9,114 13 -3,215 3 3,621 97 -406 20 Platinum 65,926 32 2,203 7 -6,697 96 4,494 25 Natural Gas 1,118,417 8 -115,012 44 64,340 51 50,672 100 Brent 176,861 21 -34,867 53 32,127 47 2,740 46 Heating Oil 349,618 31 6,455 52 -32,434 37 25,979 88 Soybeans 709,144 24 183,647 73 -156,937 33 -26,710 26 Corn 1,548,438 29 473,743 91 -424,756 11 -48,987 15 Coffee 206,106 0 38,487 72 -40,949 32 2,462 13 Sugar 825,281 6 196,630 77 -245,374 22 48,744 68 Wheat 326,651 8 28,806 57 -26,020 23 -2,786 98   CORN Futures: The CORN large speculator standing this week came in at a net position of 473,743 contracts in the data reported through Tuesday. This was a weekly lift of 2,835 contracts from the previous week which had a total of 470,908 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 90.6 percent. The commercials are Bearish-Extreme with a score of 11.4 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 14.8 percent. CORN Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 38.1 42.2 9.3 – Percent of Open Interest Shorts: 7.5 69.6 12.4 – Net Position: 473,743 -424,756 -48,987 – Gross Longs: 589,352 653,039 143,508 – Gross Shorts: 115,609 1,077,795 192,495 – Long to Short Ratio: 5.1 to 1 0.6 to 1 0.7 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 90.6 11.4 14.8 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish-Extreme Bearish-Extreme NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -1.7 -0.1 8.0   SUGAR Futures: The SUGAR large speculator standing this week came in at a net position of 196,630 contracts in the data reported through Tuesday. This was a weekly advance of 9,445 contracts from the previous week which had a total of 187,185 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 77.0 percent. The commercials are Bearish with a score of 21.6 percent and the small traders (not shown in chart) are Bullish with a score of 68.1 percent. SUGAR Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 30.6 45.9 11.4 – Percent of Open Interest Shorts: 6.8 75.6 5.5 – Net Position: 196,630 -245,374 48,744 – Gross Longs: 252,752 378,422 94,457 – Gross Shorts: 56,122 623,796 45,713 – Long to Short Ratio: 4.5 to 1 0.6 to 1 2.1 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 77.0 21.6 68.1 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 1.7 -1.0 -3.5   COFFEE Futures: The COFFEE large speculator standing this week came in at a net position of 38,487 contracts in the data reported through Tuesday. This was a weekly increase of 5,932 contracts from the previous week which had a total of 32,555 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 72.1 percent. The commercials are Bearish with a score of 32.1 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 12.7 percent. COFFEE Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 24.0 54.0 4.1 – Percent of Open Interest Shorts: 5.3 73.9 2.9 – Net Position: 38,487 -40,949 2,462 – Gross Longs: 49,501 111,397 8,495 – Gross Shorts: 11,014 152,346 6,033 – Long to Short Ratio: 4.5 to 1 0.7 to 1 1.4 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 72.1 32.1 12.7 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish-Extreme NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -4.6 7.1 -21.6   SOYBEANS Futures: The SOYBEANS large speculator standing this week came in at a net position of 183,647 contracts in the data reported through Tuesday. This was a weekly rise of 9,039 contracts from the previous week which had a total of 174,608 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 72.6 percent. The commercials are Bearish with a score of 33.0 percent and the small traders (not shown in chart) are Bearish with a score of 25.9 percent. SOYBEANS Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 32.7 47.8 7.0 – Percent of Open Interest Shorts: 6.8 69.9 10.8 – Net Position: 183,647 -156,937 -26,710 – Gross Longs: 231,911 338,718 49,750 – Gross Shorts: 48,264 495,655 76,460 – Long to Short Ratio: 4.8 to 1 0.7 to 1 0.7 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 72.6 33.0 25.9 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -4.3 3.7 2.3   SOYBEAN OIL Futures: The SOYBEAN OIL large speculator standing this week came in at a net position of 96,301 contracts in the data reported through Tuesday. This was a weekly decline of -4,295 contracts from the previous week which had a total of 100,596 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 72.5 percent. The commercials are Bearish with a score of 23.8 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 93.4 percent. SOYBEAN OIL Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 31.1 46.1 10.6 – Percent of Open Interest Shorts: 5.2 77.7 4.9 – Net Position: 96,301 -117,724 21,423 – Gross Longs: 115,709 171,880 39,590 – Gross Shorts: 19,408 289,604 18,167 – Long to Short Ratio: 6.0 to 1 0.6 to 1 2.2 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 72.5 23.8 93.4 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish-Extreme NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 4.2 -7.1 21.4   SOYBEAN MEAL Futures: The SOYBEAN MEAL large speculator standing this week came in at a net position of 73,300 contracts in the data reported through Tuesday. This was a weekly decrease of -10,832 contracts from the previous week which had a total of 84,132 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 68.3 percent. The commercials are Bearish with a score of 30.6 percent and the small traders (not shown in chart) are Bullish with a score of 75.3 percent. SOYBEAN MEAL Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 28.6 47.3 13.9 – Percent of Open Interest Shorts: 8.4 75.2 6.3 – Net Position: 73,300 -100,729 27,429 – Gross Longs: 103,499 171,144 50,082 – Gross Shorts: 30,199 271,873 22,653 – Long to Short Ratio: 3.4 to 1 0.6 to 1 2.2 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 68.3 30.6 75.3 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -28.1 27.7 -14.2   LIVE CATTLE Futures: The LIVE CATTLE large speculator standing this week came in at a net position of 35,030 contracts in the data reported through Tuesday. This was a weekly lowering of -4,773 contracts from the previous week which had a total of 39,803 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 22.7 percent. The commercials are Bullish with a score of 70.8 percent and the small traders (not shown in chart) are Bullish with a score of 69.3 percent. LIVE CATTLE Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 35.6 39.2 10.8 – Percent of Open Interest Shorts: 24.0 49.7 12.0 – Net Position: 35,030 -31,417 -3,613 – Gross Longs: 107,168 117,903 32,549 – Gross Shorts: 72,138 149,320 36,162 – Long to Short Ratio: 1.5 to 1 0.8 to 1 0.9 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 22.7 70.8 69.3 – Strength Index Reading (3 Year Range): Bearish Bullish Bullish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -17.2 12.4 16.6   LEAN HOGS Futures: The LEAN HOGS large speculator standing this week came in at a net position of 7,765 contracts in the data reported through Tuesday. This was a weekly lowering of -8,595 contracts from the previous week which had a total of 16,360 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 15.2 percent. The commercials are Bullish-Extreme with a score of 90.3 percent and the small traders (not shown in chart) are Bullish with a score of 70.0 percent. LEAN HOGS Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 28.9 39.9 10.5 – Percent of Open Interest Shorts: 25.1 41.2 13.0 – Net Position: 7,765 -2,647 -5,118 – Gross Longs: 58,847 81,203 21,361 – Gross Shorts: 51,082 83,850 26,479 – Long to Short Ratio: 1.2 to 1 1.0 to 1 0.8 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 15.2 90.3 70.0 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -41.1 42.7 8.5   COTTON Futures: The COTTON large speculator standing this week came in at a net position of 79,316 contracts in the data reported through Tuesday. This was a weekly decrease of -2,443 contracts from the previous week which had a total of 81,759 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 73.2 percent. The commercials are Bearish with a score of 24.9 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 85.4 percent. COTTON Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 45.1 34.6 9.2 – Percent of Open Interest Shorts: 6.0 79.4 3.5 – Net Position: 79,316 -90,872 11,556 – Gross Longs: 91,525 70,065 18,559 – Gross Shorts: 12,209 160,937 7,003 – Long to Short Ratio: 7.5 to 1 0.4 to 1 2.7 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 73.2 24.9 85.4 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish-Extreme NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -3.2 4.0 -12.1   COCOA Futures: The COCOA large speculator standing this week came in at a net position of 18,583 contracts in the data reported through Tuesday. This was a weekly fall of -2,463 contracts from the previous week which had a total of 21,046 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 35.8 percent. The commercials are Bullish with a score of 62.9 percent and the small traders (not shown in chart) are Bearish with a score of 47.4 percent. COCOA Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 29.9 44.5 5.7 – Percent of Open Interest Shorts: 23.5 52.6 4.0 – Net Position: 18,583 -23,668 5,085 – Gross Longs: 87,225 129,740 16,687 – Gross Shorts: 68,642 153,408 11,602 – Long to Short Ratio: 1.3 to 1 0.8 to 1 1.4 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 35.8 62.9 47.4 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -17.7 19.0 -14.9   WHEAT Futures: The WHEAT large speculator standing this week came in at a net position of 28,806 contracts in the data reported through Tuesday. This was a weekly advance of 7,120 contracts from the previous week which had a total of 21,686 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 56.5 percent. The commercials are Bearish with a score of 22.7 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 98.3 percent. WHEAT Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 37.2 36.8 10.4 – Percent of Open Interest Shorts: 28.4 44.8 11.3 – Net Position: 28,806 -26,020 -2,786 – Gross Longs: 121,593 120,341 33,993 – Gross Shorts: 92,787 146,361 36,779 – Long to Short Ratio: 1.3 to 1 0.8 to 1 0.9 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 56.5 22.7 98.3 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish-Extreme NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 11.5 -15.2 9.7   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
Is The OPEC+ Decision Only Economic? Oil Is Caught Between Fears Of A Reduction In Demand

COT: Wheat and crude oil length jump | Saxo Bank

Ole Hansen Ole Hansen 23.05.2022 15:10
Summary:  Our weekly Commitment of Traders update highlights futures positions and changes made by hedge funds and other speculators across commodities and forex up until last Tuesday, May 17. A week where risk sentiment continued to swing between hot and cold, long end bonds held steady while the dollar showed signs of topping out. The commodity sector rallied strongly with gains in energy, grains and softs more than offsetting fading weakness in precious metals Saxo Bank publishes weekly Commitment of Traders reports (COT) covering leveraged fund positions in commodities, bonds and stock index futures. For IMM currency futures and the VIX, we use the broader measure called non-commercial. Link to latest report This summary highlights futures positions and changes made by hedge funds across commodities and forex up until last Tuesday, May 17. A week where risk sentiment continued to swing between hot and cold before the S&P 500 Index recorded a 2% gain on the week, long end bonds held steady while the dollar showed signs of topping out. The commodity sector rallied strongly with gains in energy, grains and softs more than offsetting fading weakness in precious metals.Latest across market updates on can be found in our daily Financial Market Quick Take here Commodities The Bloomberg Commodity Spot index jumped 5.6% on the week with risk sentiment seeing a revival supported by bouncing stocks and a softer dollar. Gains being led by energy and grains, the two strongest sectors based on current fundamentals. Most notable buying seen in crude oil, soybeans, wheat, sugar and coffee while precious and industrial metals remained challenged by the recent slump. Overall hedge funds responded to these developments by adding length for the first time in four weeks to 13 out of the 24 major commodity futures tracked in this with the combined net long rising 4% to 1.74 million lots. Energy: Money managers increased their bullish bets on WTI and Brent crude oil by 60k lots during a week where a tight product market, especially in the US, triggered a double digit rally in WTI while Brent returned to challenge resistance in the $115 area. The biggest weekly addition in six months lifted the combined net long in WTI and Brent to 469k lots, an 11-week high. Despite supporting price action, the ICE gas oil contract saw continued long liquidation with the net long slumping to a 17 month low at 73k lots, down 50% from the February peak. Metals: The metal sectors share of the total net exposure shrank to a three-year low at just 2% on a combination of net short positions being held in platinum, palladium and copper together with reduced bullish exposure in gold and silver.Speculators cut their net long in gold by 26% to an eight-month low at 54k lots while silver returned to neutral for only the second time in three years. The copper net-short stayed near a two-year high at 17.2k with short-covering being offset by long liquidation as the price rose by 2%. Highlighting the need for an even bigger bounce in order to force a change in the current weak sentiment towards copper and the industrial sector in general. The same goes for gold, which in order to turn more investor friendly, will need to break the next significant hurdle at $1868, the 38.2% retracement of the recent 210-dollar correction.Agriculture: In grains, the net long in Chicago wheat jumped by 71% to 26k lots, a 14 month high, after the price surged by 17% in response to US crop worries and after India’s export ban jolted the market. The soybean complex was mixed with buying of soybeans being offset by selling of meal and oil. In softs, funds increased their Arabica coffee net long by 51% to 29k lots, driven by short-covering, as the price jumped 11.5% on frost worries. Despite persistent worries about the outlook for production in Brazil following last year’s frost damage and current weather worries, the price has been loosing momentum in response to global demand worries. Read next: Altcoins: Ripple Crypto - What Is Ripple (XRP)? Price Of XRP | FXMAG.COM Forex In fx, speculators maintained an unchanged dollar long position in a week where profit taking reigned as the greenback lost ground against all the currencies tracking in this update. Overall the changes were very modest with net selling of the commodity currencies being offset by MXN and another week of euro buying. These changes effectively left the aggregate dollar long against nine IMM currency futures and the Dollar Index unchanged on the week at $22.9 billion.What is the Commitments of Traders report? The COT reports are issued by the U.S. Commodity Futures Trading Commission (CFTC) and the ICE Exchange Europe for Brent crude oil and gas oil. They are released every Friday after the U.S. close with data from the week ending the previous Tuesday. They break down the open interest in futures markets into different groups of users depending on the asset class. Commodities: Producer/Merchant/Processor/User, Swap dealers, Managed Money and otherFinancials: Dealer/Intermediary; Asset Manager/Institutional; Leveraged Funds and otherForex: A broad breakdown between commercial and non-commercial (speculators) The reasons why we focus primarily on the behavior of the highlighted groups are: They are likely to have tight stops and no underlying exposure that is being hedged This makes them most reactive to changes in fundamental or technical price developments It provides views about major trends but also helps to decipher when a reversal is looming Source: Saxo Bank Follow FXMAG.COM on Google News
Commodities: Prices Are Rising, Heatwaves In US And China Affects The Production Of Cotton

XAUUSD Prices Rise As Investors Turn To Safer Assets, Cotton Prices, NGAS Prices Still Rising As Concerns Around Supply Continue

Rebecca Duthie Rebecca Duthie 24.05.2022 11:29
Summary: Gold prices rose the past week in the wake of a weakening US Dollar. Concerns around cotton supply persist. NGAS prices are still rising as concerns around supply persist Read next: Demand For Brent Crude Oil Rises, Silver Prices Rise, Improved Corn Crop Eases Supply Concerns  Gold (XAAUSD) prices on the rise The US Dollar had a softer start to the week amidst concerns around a slowing economy and the possibility of a recession. On Tuesday U.S benchmark yields rose as equities rallied. Investors seem to be seeking safer investments such as gold as the market awaits the Fed Chairs comments on key economic data, such as, PCI and first quarter GDP. Therefore, the price of gold is rising. XAUUSD Jun ‘22 Futures Price Chart Cotton futures prices Cotton prices dropped from their 11 year peak of $158 in early may. There are still concerns around supply as the droughts in Texas continue and global protected supply numbers are also falling, whilst demand is remaining stable in the post-covid world. Cotton Jul ‘22 Futures Price Chart Increased demand for NGAS is pushing up the price There is a higher international and domestic demand for Natural gas, which is driving the price of the NGAS futures up. The world is experiencing an energy shortage in the wake of Russia’s war on Ukraine. However, higher production and exports (especially in the US) should help limit the upward price momentum going forward. NGAS Jun ‘22 Futures Price Chart Read next: ECB Offering The Euro Support (EUR/USD), Strengthening Of The Renminbi Supporting The EUR and GBP, SNB Turns Hawkish (EUR/CHF) - Good Morning Fore  Sources: finance.yahoo.com, tradingeconomics.com
Russia's Crude Oil Still Flows To Japan, Negative Trade Balance In Japan

What's The Future Of Energy Stocks? High Crude Oil Prices And No New Investments | Conotoxia

Conotoxia Comments Conotoxia Comments 24.05.2022 12:29
A paradox seems to be emerging in the oil market. Typically, high prices caused companies to increase investment so they could produce more, boosting their profits and meeting demand. Currently, this may not be the case. Investors were also concerned that high oil prices could reduce fuel consumption around the world Oil prices are still above the $100 per barrel mark, but oil production companies are not expected to invest in exploring new fields or starting new drills. Representatives of the world's largest company, Saudi Aramco, are even announcing that the world may face a serious supply crisis in the oil market. Energy companies may be afraid to invest in this sector in the face of pressure related to politicians' attitude toward energy transformation and renewable energy sources - Reuters reports. Thus, energy companies may keep their current profits to themselves instead of investing until regulations and laws lead to a reduction in their market share. This, in a way, may explain why OPEC may care about high oil prices and why the cartel is not increasing production to the levels it declared earlier. Additionally, investors were also concerned that high oil prices could reduce fuel consumption around the world. Moreover, at the annual economic summit in Davos, political and business representatives highlighted the risk of a global recession in the face of multiple threats. IMF Managing Director Kristalina Georgieva said she does not expect a recession in major economies, but cannot rule it out. Meanwhile, lingering concerns about tight global supply and hopes for a return of demand in China provided some support for oil prices as Shanghai prepares to reopen and lift restrictions. Read next: Altcoins: Ripple Crypto - What Is Ripple (XRP)? Price Of XRP | FXMAG.COM In contrast, rising oil prices and slowing economic growth will significantly constrain demand growth for the remainder of 2022 and into 2023, according to a May IEA report. In addition, prolonged restrictions in China, where the government is battling the spread of the Covid-19 virus, are causing a significant slowdown in the world's second-largest oil consumer. For the full year, global oil demand is forecast to average 99.4 mb/d in 2022, up 1.8 mb/d year-on-year. If refiners cannot keep up with the pace of demand growth, consumers could come under additional pressure With the easing of restrictions in China, increased summer car traffic and further increases in jet fuel prices, global oil demand will rise by 3.6 mb/d from its April-August low. If refiners cannot keep up with the pace of demand growth, consumers could come under additional pressure. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Forex service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 80.77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Follow FXMAG.COM on Google News
Declines At The Close Of The New York Stock Exchange, The Drop Leaders Were Nike Inc Shares

Global stocks retreat after rebound in previous session - 24.5.2022 | IFCMarkets

Ara Zohrabian Ara Zohrabian 24.05.2022 14:05
Todays’ Market Summary The Dollar weakening has halted Futures on three main US stock indexes are down Brent is edging lower currently as an agreement on Russian oil imports ban still escapes European Union though German economy minister says he expects EU embargo on Russian oil 'within days'. Gold prices are edging up currently Top daily news Equities are pointing down currently as US Treasury yields inch down while markets rebounded on Monday. Amazon slipped 0.03% amid reports it is planning to sublease some of its warehouse space because the pandemic-fueled surge in online shopping has slowed, Microsoft shares rose 3.2% outperforming market on Monday. Forex news Currency Pair Change EUR USD -0.32% GBP USD -0.04% USD JPY +0.37% AUD USD -0.36% The Dollar weakening has halted currently. The live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, lost 0.5% on Monday. EUR/USD joined GBP/USD’s continuing climbing Monday while the Ifo institute reported German business sentiment continued to improve in May. Both pairs are down currently. AUD/USD resumed its advancing yesterday while USD/JPY continued its climbing with the yen higher against the Greenback currently and Australian dollar retreating. Read next: Altcoins: Ripple Crypto - What Is Ripple (XRP)? Price Of XRP | FXMAG.COM Stock Market news Indices Change Dow Jones Index -0.59% Nikkei Index -1.14% Hang Seng Index -1.62% Australian Stock Index -0.58% Futures on three main US stock indexes are down currently ahead of U.S. manufacturing purchasing managers survey report at 15:45 CET with the yield on benchmark 10-year Treasury notes inching down to 2.841%. US stock market reversed the selloff yesterday as President Biden said that he was considering easing tariffs on China. The three main US stock index benchmarks booked daily gains in the range of 1.6% to 2.0% Monday led by mega-cap growth shares. European stock indexes are down currently after closing up Monday led by banking and mining shares while European Central Bank President Christine Lagarde surprised markets by stating about possible rate hike as early as July. Asian indexes are falling today with Hong Kong’s Hang Seng index leading losses while Markit reported Japan's manufacturing activity grew at the slowest pace in three months in May. Read next: Altcoins: Cardano (ADA) What Is It? - A Deeper Look Into Cardano (ADA) | FXMAG.COM Commodity Market news Commodities Change Brent Crude Oil -0.52% WTI Crude -1.31% Brent is edging lower currently as an agreement on Russian oil imports ban still escapes European Union though German economy minister says he expects EU embargo on Russian oil 'within days'. Prices advanced marginally yesterday. US West Texas Intermediate WTI added 0.01% but is lower currently. Brent gained 0.7% to $113.42 a barrel on Monday. Gold Market News Metals Change Gold +0.15% Gold prices are edging up currently. Spot gold yesterday closed up 0.39% at $1852.74 an ounce on Monday.
XAUUSD: A Technical Look At Gold Price

What's It Going To Be Drivers? Crude Oil Drifting, Price Of Gold Price (XAUUSD) Edges Higher | Oanda

Craig Erlam Craig Erlam 24.05.2022 14:19
Oil rally stalls Oil prices are relatively flat on Tuesday as global economic fears and the prospect of tighter restrictions in Beijing take some of the heat out of the rally. Brent and WTI are trading right at the upper end of the range they’ve been within the last couple of months, with tight supplies, easing restrictions in Shanghai and a potential EU ban on Russian oil imports driving the price higher. As has been the case for months now, there are so many countering forces in the market that it can be hard to keep up. Not to mention sentiment in the broader markets drastically changing from one day to the next. It’s quite a challenging market right now but one thing is clear, it’s still extremely tight and those pressures will keep prices elevated. Just not quite as much as it would if not for the recession warnings and Chinese Covid cases. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM Gold edges higher Gold is aiming for a fifth consecutive winning day on Tuesday as a softer dollar and slightly lower US yields have allowed for a recovery in the yellow metal. It is trading back above USD 1,850, with USD 1,875 and USD 1,900 being the next big tests. If USD 1,850 fails to hold as support, the next test below falls around USD 1,835, with USD 1,800 then being the key support below that. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Follow FXMAG.COM on Google News
When The Global Economy Recovers, We Can Expect Demand To Rebound

Crude Oil Rangebound, Gold Price (XAU/USD) Shines | Oanda

Ed Moya Ed Moya 24.05.2022 20:02
Oil looking for direction Oil prices remain directionless as energy traders try to assess how significant the deceleration in economic activity will be for the short-term crude demand outlook. The oil market remains tight but the COVID situation in China points to a gradual pickup in demand and that might keep this market rangebound a while longer. Saudi Prince Faisal bin Farhan noted that the kingdom has done what it can for global oil markets and that should mean production increases will remain slow. Oil prices will likely remain supported above the USD 100 level for the rest of the year. ​ ​ It looks like the only thing that will send oil back to the pre-COVID levels is demand destruction across the world’s largest economies and that probably won’t happen. WTI crude pared gains after a steady stream of weakening US economic data, but the overall outlook is still ok and a recession is unlikely until 2024. Gold Gold prices are surging as Treasury yields plunge following a wave of risk aversion that stemmed from disappointing earnings and deteriorating economic data from the US. ​ Non-interest bearing gold is a safe-haven again and it could be on the verge of a major breakout if prices can recapture the USD 1885 level. A peak in Treasury yields is in place and now the dollar looks like it is ready for a pullback as the ECB is ready to raise rates which is good news for the euro. ​ Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM There might be no stopping gold right now as the wall of worry on Wall Street continues to grow. ​ Gold should remain supported as inflationary pressures weigh further, China’s COVID situation remains a big unknown, and corporate America continues to slash outlooks. Follow FXMAG.COM on Google News This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Recession Fears Continue To Rattle the Commodity Markets - Brent Crude Oil, Silver Futures Touch 4-week lows, Corn Futures Reach 6-week Highs.

The Commodities Feed: Further US gasoline draws | ING Economics

ING Economics ING Economics 25.05.2022 08:37
Your daily roundup of commodities news and ING views Energy The oil market has traded firmer during the morning session in Asia. API numbers overnight were once again supportive for the market. Crude oil inventories are reported to have increased by 567Mbbls over the last week. However, there were continued product draws, with gasoline and distillate stocks falling by 4.22MMbbls and 949Mbbls respectively. The tightening in the US gasoline market will raise concerns over supply as we move into driving season. Tightness in the US is pulling in gasoline from elsewhere, including Europe, which is also looking increasingly tight. The US energy secretary has also not ruled out restricting petroleum exports, given rising prices. Up until now the US administration has been reluctant to go down this route and instead has focused on releases from the Strategic Petroleum Reserve.  Whilst these releases may offer some relief to crude oil prices, they may do little to ease gasoline shortages if the bottleneck is on the refining side. It’s looking unlikely that differences over an EU ban on Russian oil imports will be resolved at next week’s meeting of EU leaders. The Hungarian Prime Minister has reportedly said that meetings on 30 and 31 May would not be an appropriate place to discuss the ban, whilst the European Commission President has also made similar comments. Therefore, the uncertainty over a Russian oil ban looks as though it will hang over markets for quite a bit longer. We continue to believe that the EU will eventually agree on a ban and, assuming it is not too different to the current proposal, we would expect  the move to be supportive for prices, particularly over 2H22. Austrian Gas Grid Management (AGGM) announced the results of its recent purchase tender for natural gas for strategic reserves. The tender attracted 189 bids, which ended up seeing AGGM buying 7.7TWh of storage at an average price of EUR124.50/MWh including storage costs through until April 2023. This price is well above the current prompt price in Europe of around EUR85/MWh.  Austrian gas storage levels are well below average at the moment - inventories are 29% full compared to a 5-year average of almost 45% at this stage of the year. EU allowances saw somewhat of a recovery yesterday, following the weakness seen over the past week due to EU plans to sell EUR20b worth of allowances from the Market Stability Reserve. The Dec-22 contract rallied by 4% yesterday to settle at EUR81.32/t, although it is still some distance from the more than EUR92/t we saw it trading at early last week. The catalyst for yesterday’s move appears to be comments from an EU official who was more supportive about the role that financial institutions play in the EU carbon market. This comes after the EU Parliament’s Environment Committee supported a proposal to restrict speculative activity in the EU carbon market. Agriculture There appears to be a growing trend of protectionist measures taken by governments around the world, given concerns over food security and inflationary pressures. After India recently surprised the market with a ban on wheat exports, the Indian government has now announced that it will limit sugar exports to 10mt in the current 2021/22 season, which ends in September. India is set to be the third-largest sugar exporter this season, behind Brazil and Thailand. The announcement is somewhat surprising, given that India has had a very strong sugarcane crop this season. However, as reflected in the price action, the market is not too concerned at the moment about this export limit, given that most in the market have been expecting Indian sugar exports this season to total around 9mt, so below the export limit. The bigger concern is that we see other countries taking similar action when it comes to agricultural commodity exports. Apart from the action taken by India, Malaysia is also set to ban chicken exports, whilst Indonesia has gone back and forth on a palm oil export ban. Read this article on THINK TagsSugar Russian oil ban Oil Natural gas EU carbon Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Grains Sector Saw Continued Demand| Acceleration In The Sale Of Gold

Crude Oil And Price Of Gold (XAU/USD) Head Higher | Oanda

Jeffrey Halley Jeffrey Halley 25.05.2022 14:24
White House unnerves oil markets Oil prices continued to range trade overnight, finishing almost unchanged in New York. Asia, though, has seen both Brent crude and WTI rise. A couple of items seem to be behind the move. A sharp 4.20 million drop in gasoline inventories late in New York from the API Inventory data is likely supportive, with gasoline prices becoming a major issue in the US. Following on from that, White House officials explicitly refusing to say possible crude export restrictions were off the table appears to have spooked Asian suppliers. The last thing the world needs right now is US crude oil export restrictions with global supplies already tight. That saw both Brent crude and WTI spike 1.0% higher in early Asian trade, although those gains have eased as the session has gone on. Brent crude is 0.90% higher at USD 114.70 a barrel, and WTI is 0.65% higher at USD 110.90 a barrel. The White House likely needs to “clarify” its stance, least it creates unintended consequences by pushing crude prices higher. Brent crude, notably, is testing multi-week resistance today. Brent crude is testing resistance at USD 114.70 today, which is followed by USD 116.00, with support at USD 112.00. Failure of USD 116.00 could set up a retest test of my medium-term resistance at 120.00. ​ WTI is taking comfort from the White House stance and is sitting in a USD 108.00 to USD 112.00 a barrel range. Nevertheless, a topside breakout by Brent crude will almost certainly drag WTI higher as well, precisely what President Biden doesn’t want. Gold rises once again Gold had another decent overnight session, buoyed by lower US yields and a still-weakening US Dollar. Gold finished 0.69% higher at USD 1866.50 an ounce. In Asia, some US dollar strength has seen it weaken slightly by 0.40% to USD 1859.00 an ounce. Overall, although I acknowledge gold’s upward momentum, I remain sceptical of its longevity until it manages to hold on to material gains in the face of US dollar strength. Read next: (TRX) TRON USD Decentralised Blockchain Platform That Focuses On Entertainment And Content Sharing. Altcoins: A Deep Look Into The TRON Network | FXMAG.COM The technical picture continues to remain supportive, and it seems only a marked US dollar recovery will cap gold’s rally. Gold took out resistance at the double top at USD 1865.00 an ounce which becomes intraday support, followed by USD 1845.00 and USD 1840.00 an ounce. It should now target USD 1886.00, its 100-day moving average. That would open up a test of USD 1900.00, although I suspect there will be plenty of option-related selling ahead of that level. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Follow FXMAG.COM on Google News
Potential Frost Causing Concerns Around Coffee Supplies, Crude Oil Demand Is Expected To Rise, Palladium Price Falls Amidst Easing Concerns Around Supply And Demand

Potential Frost Causing Concerns Around Coffee Supplies, Crude Oil Demand Is Expected To Rise, Palladium Price Falls Amidst Easing Concerns Around Supply And Demand

Rebecca Duthie Rebecca Duthie 25.05.2022 16:05
Summary: Weather conditions could have an adverse effect on coffee crops. Expected demand for crude oil rises as supply grows tighter. Demand and supply concerns around Palladium are easing. Read next: XAUUSD Prices Rise As Investors Turn To Safer Assets, Cotton Prices, NGAS Prices Still Rising As Concerns Around Supply Continue  Coffee futures prices Coffee futures prices have been falling over the past week amidst easing concerns over the possibility of potentially crop damaging frost in Brazil. Last year the frost in Brazil damaged coffee crops and caused coffee prices to soar, which is keeping the market on edge during the upcoming winter season. Coffee Jul ‘22 Future Price Chart WTI Crude Oil futures prices rise As expected demand rises and supply grows weaker, the price of Crude oil rises. The new French minister said that those who are opposed to a new EU sanction on Russian oil imports could still be convinced. Further sanctions on Russian oil will tighten supplies further than they already are during a time where US demand is expected to rise as memorial day and the summer looms. WTI Crude Oil Jul Futures Price Chart Palladium futures prices decline in the wake of easing supply and demand concerns Concerns around palladium supplies along with demand are easing, causing the price to fall. Global demand is expected to rise by only 3% in 2022 as covid lockdowns and continuing supply chain bottlenecks will likely delay the chip supply recovery until at least 2023, undermining car production around the world. Palladium Jun ‘22 Futures Price Chart Read next: Demand For Brent Crude Oil Rises, Silver Prices Rise, Improved Corn Crop Eases Supply Concerns  Sources: tradingeconomics.com, finance.yahoo.com
What Does Jeffrey Halley (Oanda) Think About 100bps Rate Hike? Important News About Soft Commodities!

Easing Concerns Around Supply Drives The Price Of Both Wheat And Platinum Down, RBOB Gasoline Continues To Rise

Rebecca Duthie Rebecca Duthie 26.05.2022 11:17
Summary: Platinum prices are falling with demand. Russia opens safe corridors for forign exports in the Ukraine. RBOB Gasoline prices continue to rise. Read next: Potential Frost Causing Concerns Around Coffee Supplies, Crude Oil Demand Is Expected To Rise, Palladium Price Falls Amidst Easing Concerns Around Supply And Demand  Platinum futures Platinum prices are well below their $1154 high that was hit in March of this year, the supply of platinum is rising whilst demand is struggling to recover. The lockdowns in China have slowed or stopped auto sector production causing the demand for platinum to fall, however, according to platinum's top supplier, Nornickel, the partial recovery of the global sector could offset the lower consumption in China. The market is expecting to see a surplus of Platinum at the end of the year. Platinum Jul ‘22 Futures Price Chart Easing supply concerns driving Wheat prices down As supply concerns ease, the price of wheat futures are falling. Russia said they would open safe corridors daily for forign ships to leave both Black Sea ports as well as Sea of Azov ports, which will allow commercial shipping to resume in the Ukraine after 3 months of fighting. In addition the Indian government announced an embargo on Wheat exports to try to guarantee food security and to discourage farmers from selling wheat on the private market at higher prices. Wheat Jul ‘22 Futures Price Chart RBOB Gasoline prices The prices of RBOB Gasoline have been rising amidst concerns around supply and the expected increasing demand. US President Joe Biden may limit US Gasoline exports in an attempt to decrease the prices in the US. RBOB Gasoline Jun ‘22 Futures Price Chart Read next: XAUUSD Prices Rise As Investors Turn To Safer Assets, Cotton Prices, NGAS Prices Still Rising As Concerns Around Supply Continue  Sources: finance.yahoo.com, tradingeconomics.com
US Indices - S&P 500 And Nasdaq Decreased On Friday!

Crude Oil steady, Gold Price (XAU/USD) Dips As US Dollar (USD) Rises | Oanda

Jeffrey Halley Jeffrey Halley 26.05.2022 15:59
Oil markets slumber Oil prices had another comatose session by their standards, barely rising from the day before. Nevertheless, both Brent crude and WTI have held on to all their recent gains, suggesting the weaker side is the upside in prices for now. While China slowdown fears are receding in the minds of traders, for now, fears persist around the increasing tightness of the US diesel market, and I suspect not ruling out export controls has unnerved international markets, and rightly so. I expect prices to remain firm for the rest of the week, with the global data calendar fairly light. Brent crude rose 0.60% to USD 114.35 overnight, where it remains in an equally quiet Asian session. WTI rose 0.40% to USD 110.70, adding just 20 cents to USD 110.90 a barrel in Asia. Brent crude has resistance at USD 115.00 and USD 116.00 today, with support at USD 112.00. A rally through USD 116.00 could set up a retest test of my medium-term resistance at USD 120.00. ​ WTI is taking comfort from the White House stance and is sitting in a USD 108.00 to USD 112.00 a barrel range. Nevertheless, a topside breakout by Brent crude will drag WTI higher as well, allowing a test of the USD 115.00 to USD 116.00 resistance zone. Gold weakens on US dollar strength Gold fell by 0.70% to USD 1853.25 an ounce overnight, retreating another 0.45% to USD 1845.00 an ounce in Asia. As I have touched on before, the true test of gold’s underlying strength will be maintaining gains in the face of a US dollar rally. The fall by gold over the last 24 hours in the face of modest US dollar strength does not fill me with confidence. Further US dollar strength could see gold face one of its ugly downside shakeouts. Read next: Altcoins: Tether (USDT), What Is It? - A Deeper Look Into The Tether Blockchain| FXMAG.COM Gold has nearby support at USD 1842.00, followed by USD 1836.00 an ounce. Failure sees the possibility of a mini-capitulation by longs that could reach as far as USD 1780.00 an ounce. On the topside, gold has resistance at USD 1870.00, followed by USD 1886.00 an ounce, its 100-day moving average. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Follow FXMAG.COM on Google News
COT Week 21 Charts: Soft Commodities Speculator bets mostly lower led by Corn & Soybean Oil

COT Week 21 Charts: Soft Commodities Speculator bets mostly lower led by Corn & Soybean Oil

Invest Macro Invest Macro 28.05.2022 20:00
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday May 24th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. Soft Commodities market speculator bets were mostly lower this week as only three out of the eleven softs markets we cover had higher positioning this week while eight markets saw lower positions. Leading the gains for the soft commodities was Sugar (12,857 contracts) and Soybean Meal (8,607 contracts) with Soybeans (4,721 contracts) also showing a positive week. Meanwhile, leading the declines in speculator bets this week were Corn (-45,895 contracts) and Soybean Oil (-16,805 contracts) with Coffee (-1,415 contracts), Live Cattle (-12,283 contracts), Lean Hogs (-407 contracts), Cotton (-6,796 contracts), Cocoa (-10,000 contracts), and Wheat (-2,462 contracts) also coming in with lower bets on the week.   Speculator strength standings for each Commodity where strength index is current net position compared to past three years, above 80 is bullish extreme, below 20 is bearish extreme OI Strength = Current Open Interest level compared to last 3 years range Spec Strength = Current Net Speculator level compared to last 3 years range Strength Move = Six week change of Spec Strength Data Snapshot of Commodity Market Traders | Columns Legend May-24-2022 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index WTI Crude 1,711,863 0 334,761 11 -374,627 91 39,866 71 Gold 530,098 22 183,813 14 -211,947 82 28,134 37 Silver 146,456 13 14,103 26 -23,297 88 9,194 3 Copper 186,433 17 -19,633 28 19,288 73 345 27 Palladium 7,919 7 -3,472 2 3,800 98 -328 25 Platinum 65,824 32 1,485 5 -6,683 96 5,198 34 Natural Gas 1,107,496 6 -111,570 45 63,847 51 47,723 93 Brent 183,629 27 -39,289 45 37,488 56 1,801 34 Heating Oil 349,618 31 6,455 52 -32,434 37 25,979 88 Soybeans 729,900 28 188,368 72 -159,047 34 -29,321 21 Corn 1,544,885 29 427,848 85 -372,522 19 -55,326 11 Coffee 211,266 5 37,072 71 -38,484 34 1,412 4 Sugar 847,420 11 209,487 80 -255,450 20 45,963 65 Wheat 326,607 8 26,344 53 -24,339 25 -2,005 100   CORN Futures: The CORN large speculator standing this week totaled a net position of 427,848 contracts in the data reported through Tuesday. This was a weekly fall of -45,895 contracts from the previous week which had a total of 473,743 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 84.7 percent. The commercials are Bearish-Extreme with a score of 18.9 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 11.2 percent. CORN Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 36.5 42.5 9.1 – Percent of Open Interest Shorts: 8.8 66.7 12.7 – Net Position: 427,848 -372,522 -55,326 – Gross Longs: 563,850 657,258 140,433 – Gross Shorts: 136,002 1,029,780 195,759 – Long to Short Ratio: 4.1 to 1 0.6 to 1 0.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 84.7 18.9 11.2 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish-Extreme Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -8.7 10.1 -2.0   SUGAR Futures: The SUGAR large speculator standing this week totaled a net position of 209,487 contracts in the data reported through Tuesday. This was a weekly increase of 12,857 contracts from the previous week which had a total of 196,630 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 79.7 percent. The commercials are Bearish-Extreme with a score of 19.7 percent and the small traders (not shown in chart) are Bullish with a score of 64.7 percent. SUGAR Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 31.0 44.9 10.7 – Percent of Open Interest Shorts: 6.3 75.0 5.3 – Net Position: 209,487 -255,450 45,963 – Gross Longs: 262,661 380,523 90,969 – Gross Shorts: 53,174 635,973 45,006 – Long to Short Ratio: 4.9 to 1 0.6 to 1 2.0 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 79.7 19.7 64.7 – Strength Index Reading (3 Year Range): Bullish Bearish-Extreme Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -6.2 8.8 -19.5   COFFEE Futures: The COFFEE large speculator standing this week totaled a net position of 37,072 contracts in the data reported through Tuesday. This was a weekly fall of -1,415 contracts from the previous week which had a total of 38,487 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 70.9 percent. The commercials are Bearish with a score of 34.3 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 4.1 percent. COFFEE Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 22.0 54.1 3.9 – Percent of Open Interest Shorts: 4.5 72.3 3.2 – Net Position: 37,072 -38,484 1,412 – Gross Longs: 46,580 114,208 8,167 – Gross Shorts: 9,508 152,692 6,755 – Long to Short Ratio: 4.9 to 1 0.7 to 1 1.2 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 70.9 34.3 4.1 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -9.4 12.9 -33.9   SOYBEANS Futures: The SOYBEANS large speculator standing this week totaled a net position of 188,368 contracts in the data reported through Tuesday. This was a weekly gain of 4,721 contracts from the previous week which had a total of 183,647 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 71.6 percent. The commercials are Bearish with a score of 34.3 percent and the small traders (not shown in chart) are Bearish with a score of 21.5 percent. SOYBEANS Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 32.4 47.3 6.8 – Percent of Open Interest Shorts: 6.5 69.1 10.8 – Net Position: 188,368 -159,047 -29,321 – Gross Longs: 236,164 345,076 49,551 – Gross Shorts: 47,796 504,123 78,872 – Long to Short Ratio: 4.9 to 1 0.7 to 1 0.6 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 71.6 34.3 21.5 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -3.0 3.3 -2.9   SOYBEAN OIL Futures: The SOYBEAN OIL large speculator standing this week totaled a net position of 79,496 contracts in the data reported through Tuesday. This was a weekly decline of -16,805 contracts from the previous week which had a total of 96,301 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 60.6 percent. The commercials are Bearish with a score of 36.2 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 85.1 percent. SOYBEAN OIL Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 28.6 47.5 9.6 – Percent of Open Interest Shorts: 7.3 74.0 4.5 – Net Position: 79,496 -98,691 19,195 – Gross Longs: 106,705 177,213 35,857 – Gross Shorts: 27,209 275,904 16,662 – Long to Short Ratio: 3.9 to 1 0.6 to 1 2.2 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 60.6 36.2 85.1 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -12.0 12.2 -6.0   SOYBEAN MEAL Futures: The SOYBEAN MEAL large speculator standing this week totaled a net position of 81,907 contracts in the data reported through Tuesday. This was a weekly boost of 8,607 contracts from the previous week which had a total of 73,300 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 73.1 percent. The commercials are Bearish with a score of 26.6 percent and the small traders (not shown in chart) are Bullish with a score of 70.5 percent. SOYBEAN MEAL Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 28.5 46.5 13.6 – Percent of Open Interest Shorts: 5.7 76.6 6.2 – Net Position: 81,907 -108,388 26,481 – Gross Longs: 102,564 167,414 48,827 – Gross Shorts: 20,657 275,802 22,346 – Long to Short Ratio: 5.0 to 1 0.6 to 1 2.2 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 73.1 26.6 70.5 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -19.1 20.7 -27.9   LIVE CATTLE Futures: The LIVE CATTLE large speculator standing this week totaled a net position of 22,747 contracts in the data reported through Tuesday. This was a weekly fall of -12,283 contracts from the previous week which had a total of 35,030 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 7.9 percent. The commercials are Bullish-Extreme with a score of 83.0 percent and the small traders (not shown in chart) are Bullish with a score of 79.7 percent. LIVE CATTLE Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 33.7 41.3 11.5 – Percent of Open Interest Shorts: 26.1 48.8 11.7 – Net Position: 22,747 -22,153 -594 – Gross Longs: 99,928 122,357 34,015 – Gross Shorts: 77,181 144,510 34,609 – Long to Short Ratio: 1.3 to 1 0.8 to 1 1.0 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 7.9 83.0 79.7 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -36.5 29.0 27.5   LEAN HOGS Futures: The LEAN HOGS large speculator standing this week totaled a net position of 7,358 contracts in the data reported through Tuesday. This was a weekly reduction of -407 contracts from the previous week which had a total of 7,765 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 14.8 percent. The commercials are Bullish-Extreme with a score of 92.0 percent and the small traders (not shown in chart) are Bullish with a score of 64.8 percent. LEAN HOGS Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 28.3 41.7 10.2 – Percent of Open Interest Shorts: 24.6 42.3 13.3 – Net Position: 7,358 -1,239 -6,119 – Gross Longs: 55,555 81,805 19,958 – Gross Shorts: 48,197 83,044 26,077 – Long to Short Ratio: 1.2 to 1 1.0 to 1 0.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 14.8 92.0 64.8 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -36.4 40.7 -5.5   COTTON Futures: The COTTON large speculator standing this week totaled a net position of 72,520 contracts in the data reported through Tuesday. This was a weekly lowering of -6,796 contracts from the previous week which had a total of 79,316 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 68.9 percent. The commercials are Bearish with a score of 29.2 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 82.0 percent. COTTON Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 42.5 36.7 8.6 – Percent of Open Interest Shorts: 7.0 77.5 3.2 – Net Position: 72,520 -83,537 11,017 – Gross Longs: 86,947 75,106 17,532 – Gross Shorts: 14,427 158,643 6,515 – Long to Short Ratio: 6.0 to 1 0.5 to 1 2.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 68.9 29.2 82.0 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -6.8 7.7 -15.5   COCOA Futures: The COCOA large speculator standing this week totaled a net position of 8,583 contracts in the data reported through Tuesday. This was a weekly decline of -10,000 contracts from the previous week which had a total of 18,583 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 26.0 percent. The commercials are Bullish with a score of 72.7 percent and the small traders (not shown in chart) are Bearish with a score of 46.1 percent. COCOA Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 29.9 44.5 5.6 – Percent of Open Interest Shorts: 27.0 49.0 4.0 – Net Position: 8,583 -13,540 4,957 – Gross Longs: 89,159 132,424 16,784 – Gross Shorts: 80,576 145,964 11,827 – Long to Short Ratio: 1.1 to 1 0.9 to 1 1.4 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 26.0 72.7 46.1 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -30.0 32.2 -25.0   WHEAT Futures: The WHEAT large speculator standing this week totaled a net position of 26,344 contracts in the data reported through Tuesday. This was a weekly fall of -2,462 contracts from the previous week which had a total of 28,806 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 53.3 percent. The commercials are Bearish with a score of 25.1 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 100.0 percent. WHEAT Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 36.2 35.4 10.3 – Percent of Open Interest Shorts: 28.1 42.9 10.9 – Net Position: 26,344 -24,339 -2,005 – Gross Longs: 118,170 115,722 33,634 – Gross Shorts: 91,826 140,061 35,639 – Long to Short Ratio: 1.3 to 1 0.8 to 1 0.9 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 53.3 25.1 100.0 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 3.2 -4.4 3.2   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
When The Global Economy Recovers, We Can Expect Demand To Rebound

OPEC+ Meeting Takes Place This Week! BRENT Crude Oil Climbed Really High Last Week Reaching Over $119. Weaker US Dollar (USD) Let Metals Get Stronger | ING Economics

ING Economics ING Economics 30.05.2022 08:24
Your daily roundup of commodities news and ING views Tank farm for storage of petroleum products in Volgograd, Russia Energy Oil finished last week off strongly. ICE Brent settled above US$119/bbl, which took its gains for the week to more than 6%. Tightness in the refined products market continues to prove supportive for crude oil prices, as healthy refinery margins should see refiners maximize their run rates. Last week, there were also reports that the US administration was talking to the domestic industry to see whether they could bring back shut refining capacity in order to help improve refined product supply. Over the weekend, EU diplomats failed to come to an agreement on the EU’s proposed ban on Russian oil ahead of a 2-day summit with EU leaders starting today. There are reports that despite concessions provided to Hungary, which would exclude oil that flows through the Druzhba pipeline from the ban, Hungary is still blocking the agreement. Hungary wants EU funding in order to help them increase pipeline capacity from Croatia and also for refiners to be able to switch to alternative crude. Diplomats are expected to meet ahead of the summit today, however, it’s unlikely that members come to an agreement when they meet, given that talks have not progressed enough.   The latest positioning data show that speculators increased their net long positions in ICE Brent by 12,639 lots over the last reporting week, which left them with a net long of 197,072 lots. This is the largest position that speculators have held since early March. However, it is still some distance from the roughly 333k lots they held back in October last year. The move over the week was driven predominantly by fresh longs, with the gross long increasing by 8,831 lots. Given the move that we have seen in the market since last Tuesday, the current net-long position is likely to be even larger. OPEC+ are set to meet on Thursday to discuss their production policy for July. We continue to expect no change in the group’s approach and expect confirmation that they will increase output levels by a little over 400Mbbls/d over the month. However, as we have seen for several months now, it is unlikely that members will produce anywhere near their agreed output levels. Metals Base metals rebounded on Friday along with other risk assets. A weaker dollar last week offered a temporary boost to the metals complex. LME nickel jumped over 7% at one stage on Friday, which saw the market hit an intraday high of US$29,100/t (highest since May 9). Total open interest in the LME nickel market dropped to 161,884 contracts on Wednesday last week, the lowest since 2012. Over the weekend, Shanghai said it would remove ‘unreasonable curbs’ on businesses and manufacturers from 1 June. The city also unveiled fresh economic support measures. It is set to abolish the so-called whitelist, allowing more businesses to resume from 1 June; however, some doubt that workers will be able to leave their compounds to return to work from this week. Among the 50 policy measures announced by Shanghai officials, the city will cut some purchase taxes, issue more quotas for car plates, and subsidise electric vehicle purchases. These policy measures for Shanghai may provide some relief, but are unlikely to turn around the overall slowdown in demand.  The focus will be on how quickly economic activity improves following the easing of restrictions. More importantly, the scale of stimulus is an important factor to keep an eye on. Major base metal inventories have remained in a downward trajectory in the China onshore market after logistics improved, and are still low compared to historical levels. This suggests that markets have a relatively smaller pile of metal to work with if business returns to normality. However, as market dynamics move back towards a favourable import arb, the scale of import flows remains to be seen. Agriculture CBOT corn saw speculators liquidating longs over the last reporting week with a pick-up in US corn plantings. CFTC data shows that money managers reduced their net long position by 48,242 lots over the last week to 291,469 lots. The move was predominantly driven by longs liquidating. Money managers reduced gross longs by 30,976 lots over the week, whilst increasing fresh shorts by 17,266 lots. The speculative net long in CBOT corn has now dropped to the lowest level in more than six months. Read this article on THINK TagsRussian oil ban Russia-Ukraine Refined product Nickel China Covid Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Walt Disney Results Are Beyond  All Expectations. Large Chinese Company Fires More Than 9K Employees!!! Market Newsfeed - 11.08.2022

We Could Say High Prices Of Crude Oil, Metals And Other Commodities Are About Not Only Negative Effects, But Also About A Profit For Some People | Saxo Bank

Saxo Bank Saxo Bank 30.05.2022 12:42
Summary:  Commodities have seen hefty prices increases in the past two years, which is bad for inflation and for life in general but is one of very few asset classes where a profit can be made in very depressed markets.​ It’s hardly news that the cost of living – or inflation – is going up at a rate which the world hasn’t seen for decades. Food is getting more expensive, electricity is going up, it is more costly to buy and build stuff. In short, everything you want to do and consume costs (a lot) more than it did a year ago.There is one area – or in finance lingo, asset class – which is the root cause of this situation, and it has politicians and economists scratching their heads to find solutions: commodities. Commodities are the basic input to everything we do. It covers energy production, raw materials, metals, food, etc.When you look at commodities from a societal point of view, there isn't a lot of good news:“In short, what happens in the commodity sector is troubling. The Bloomberg Commodity Index is up 24% on the first quarter and if you look at average annual returns it has almost doubled since 2020,” says Ole Hansen, Head of commodity strategy at Saxo. In this quote, Hansen points to something interesting when dealing with an asset class like commodities, because it affects both the financial markets, and day-to-day life. When investing in an index, which is up that much in such a short time, you would usually be celebrating, but it isn’t always a good thing for commodities to climb so high, so fast.“Commodities are the basic input for everything we do, which means that when they get more expensive, so does everything else. Commodities need to find a more stable level for consumers and companies alike to feel comfortable, which no one is now,” says Hansen.As Hansen describes, surging commodity prices can have grave effects on society at large especially in less wealthy parts of the world, and its solution can be a self-fulfilling prophecy. “Most people will have to wind back on their spending. This will cause an economic slowdown, which hurts, but unfortunately seems to be the only cure right now against high inflation,” he says.The other edge While commodities need to become more stable for its societal impact, the asset class remains an enticing investment opportunity in a market where it seems like it is almost the only one you can look for a profit, even if there’s an economic slowdown. This is due to the supply and demand dynamics we are experiencing right now.Central banks are hiking rates to kill – or slow – the demand side, which is yet another reason why companies and thus equities are struggling. This should, in theory, also push the prices of commodities down, but then let’s turn our heads towards the supply side.Here, especially the Russian invasion of Ukraine, and the strict COVID-19 lockdowns in China, suppress the supply of many key commodities. This creates a dramatic imbalance between supply and demand, which means that even a global economic slowdown most likely wouldn’t bring it back to an equal footing.“If I had to pick one area to look for inspiration, it would be the metal industry. There’s a lot of amped up construction in China due to the lockdowns, which means that once they are lifted, the metal space could see a substantial increase in demand from them,” says Hansen.Queued up construction in China can push metal prices, which also could be a long play on the mining sector within equities."The equity market is probably the most difficult since the 2007-2009 financial crisis years due to a combined factor of persistently high inflation and equity valuation compression from higher interest rates. We believe that the world will be in a commodity super cycle and thus should be exposed to this through mining companies both short and long term. China's slowdown is just short-term noise. It changes nothing regarding mining companies over the coming years," says Peter Garnry, Head of Equity strategy.
US Inflation Data And Gold & Silver Benefit From Softer USD

S&P 500 (SPX) Rallied, So Did Nasdaq And Dow Jones (DJI), In Europe Sentiment Can Be Affected By Very High Crude Oil Price Caused And Russian Oil Ban | Oanda

Jeffrey Halley Jeffrey Halley 30.05.2022 12:55
Asian markets rally on positive Wall Street and China hopes S&P 500, Nasdaq And Dow Jones US markets closed out the week on another positive note after US data alleviated inflation fears and thus, future Fed tightening, and showed strength among US consumers still. Realistically, after such a positive week, it would have taken a lot to knock the FOMO gnomes of Wall Street off their path of bottom-picking nirvana. The S&P 500 rallied by 2.48%, while the Nasdaq leapt by an impressive 3.33%, with the Dow Jones climbed by 1.76%. The rally has continued in Asia, with Nasdaq futures 0.90% higher, with S&P 500 futures up 0.40%, and Dow futures edging 0.10% higher. US OTC markets are closed for Memorial Day. End Of COVID Restrictions? Asia is also turning in a positive performance, following the impressive New York close, and boosted by hopes that China’s Beijing and Shanghai hubs are reopening from virus restrictions and a package of stimulus measures released by the Shanghai local government. Nikkei 225 And CSI 300 Japan’s Nikkei 225 has coat-tailed the Nasdaq 2.10% higher today, with South Korea’s Kospi gaining 1.25%, and Taipei rallying by 1.60%. In mainland China, the Shanghai Composite is a more cautious 0.30% higher, with the CSI 300 rising by just 0.40%. The ever-optimistic Hong Kong, however, had leapt 2.50% higher, boosted by hopes of an Evergrande bond deal. Follow FXMAG.COM on Google News Metals In regional markets, Singapore is up just 0.20%, while Kuala Lumpur has fallen 0.25%, and Jakarta is 0.60% lower. A Goldman Sachs report suggesting metals prices have peaked is likely weighing on all three markets, as risk sentiment swings back to more growth-stock orientated markets. Bangkok has gained 0.65%, while Manila has rallied by 1.25%. Australian markets have also liked what they have seen with Wall Street and China, the ASX 200 and All Ordinaries climbing by 1.25% today. Read next: Altcoins: Tether (USDT), What Is It? - A Deeper Look Into The Tether Blockchain| FXMAG.COM Russian Oil Friday’s New York close and Asia’s rally today should be enough to lift European equity markets this afternoon, although the still simmering EU import ban on Russian oil and Brent crude above USD 120.00 a barrel will temper bullish animal spirits. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
US Economy, Black Gold, China And Strategic Petroleum Reserve | Gold

WTI And Brent (Crude Oil) Trade Really High, OPEC+ Is Expected Not To Support The Price. (XAUUSD) Gold Price Seems To Pausing And Resembling "The Calm Before The Storm" | Oanda

Jeffrey Halley Jeffrey Halley 30.05.2022 14:54
Brent crude rises above USD 120.00 The disconnect between energy prices and optimism in equity markets continues today in Asia. On Friday, oil prices surged once again, driven by an unrelenting squeeze on refined products, notably diesel and gasoline, globally, with the US driving season about to begin in earnest. Brent crude rose by 1.63% to USD 119.20 a barrel on Friday, rallying another 0.70% to USD 120.05 this morning. WTI rose by 0.85% to USD 115.10 a barrel on Friday, rallying another 0.83% higher to USD 116.05 in Asia today. Markets pricing in peak virus in Beijing and Shanghai are behind the rally in oil prices today, with a China reopening likely leading to increased oil consumption. Unlike recent times, markets seem unconcerned about oil moving back to March highs, emphasising how much pent-up risk-sentiment demand there appears to be out there. We can expect no solace from OPEC+ on production increases on Thursday. The grouping cannot pump to meet its present quotas as it is, and a 430,000 bpd increase is all we can expect. Additionally, the EU Russian oil import ban is still a work in progress and if it gets over the line this week, expect supplies to tighten again. As such, the risks are now increasing of a move towards the post-Ukraine highs we saw in February. Both Brent crude and WTI are at the top of my expected medium-term ranges at USD 120.00 and USD 115.00 respectively. A weekly close above these levels would be a major signal indicating more gains ahead. Brent crude’s next technical resistance is at USD 124.00 a barrel, and then USD 132.00, with support at USD 116.00. WTI has resistance nearby at USD 116.70 a barrel, with nothing afterwards until USD 127.00 a barrel. Support is at USD 115.00 and USD 113.00 a barrel. Gold trades sideways Gold seems determined to bore traders to death after another inconclusive overnight range-trading session. It finished Friday 0.13% lower at USD 1853.00 an ounce, before gaining 0.44% to USD 186.75 an ounce in Asia today. Gold’s price action continues to suggest caution, with the US dollar sell-off not translating to any meaningful gold strength. If global risk sentiment turns lower, gold could quickly follow. Gold has nearby support at USD 1840.00, followed by USD 1836.00 an ounce. Failure sees the possibility of a mini-capitulation by longs that could reach as far as USD 1780.00 an ounce. Gold has resistance here at USD 1862.00, ​ then USD 1870.00, followed by USD 1886.00 an ounce, its 100-day moving average. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Powell signals Fed needs to be nimble, Canada Inflation hits near 40-year high, bitcoin tries to hold USD20k

Some EU Governments Are Still In Favour Of Banning Russian Brent Crude Oil, Investors Turning To Silver As Demand For Safe-Haven Assets Rise, Corn Prices Fall Amidst Easing Supply Concers

Rebecca Duthie Rebecca Duthie 30.05.2022 15:52
Summary: Lockdowns in China ease causing demand for Brent Crude to rise. Silver prices increase as market participants seek safe-haven assets. Supply concerns around corn are easing. read next (XAUUSD) Gold Prices Rose For Second Consecutive Week, Concerns Around Crude Oil Supply Continues To Drive Price, Soybean Prices Rising  Brent Crude Oil prices continue to rise The combination of Beijing and Shanghai beginning to come out of Covid-19 restrictions over the weekend and the ongoing European discussions regarding banning crude oil imports from Russia are causing concerns around supply to tighten. On Monday and Tuesday an EU governments will use a summit to continue to argue in favour of an embargo on Russian crude. The prices of Crude oil are going into their sixth straight month of gains amidst the supply concerns, as demand begins to rise back up to pre-pandemic levels. Brent Crude Oil Price Chart Silver prices are still on the rise A weaker US Dollar continues to give room for the price of silver to rise. Amidst continuing geopolitical tensions and growing concerns regarding slower global growth, investors are turning more towards safe-haven assets. Silver is considered to be a hedge against inflation, the Fed is still expected to tighten monetary policy by raising interest rates further at their next two meetings. Silver Jul ‘22 Futures Prices Corn prices are falling The price of corn futures fell late in May, to the lowest value in almost six weeks amidst expectations of higher supply and the easing of trading restrictions between major producers. Beijing and Brazil reached an agreement to begin corn exports from Brazil to China, after years of talks. In addition, actual planting of corn exceeded market expectations. The easing of supply concerns is slowly driving the price of corn futures down. Corn Jul ‘22 Futures Price Chart Sources: finance.yahoo.com, tradingeconomics.com
Crude Oil Supply Problems Are Reflected In JP Morgan's Forecasts

Germany Meets Really High Inflation - How Will ECB And Euro (EUR) React? Bitcoin Has Increased, So Does Oil, DAX And FTSE | Swissquote

Swissquote Bank Swissquote Bank 31.05.2022 09:58
German inflation hit a fresh record high of 8.7% in May, above the 8.1% penciled in by analysts. The data gave a boost to the European Central Bank (ECB) hawks and helped the EURUSD extend gains to 1.0780. Crude oil extended rally as the European leaders finally announced their decision to partially ban the Russian oil. Can The EU Affect OPEC's Move? Bitcoin's Rally And people started asking, would the European decision to ban the Russian oil would impact the OPEC’s decision about production; would the OPEC nations pump more to replace the Russian oil for European exports? Elsewhere, the softish US yields help gold consolidate above 200-DMA, while other precious metals also gain, Bitcoin rallies above $31K and the US markets are back after a long-weekend break!   Watch the full episode to find out more! 0:00 Intro 0:25 German inflation hits record, revives ECB hawks 1:31 Europe announces to partially ban Russian oil, oil rallies 4:08 Go deeper: will EU decision affect OPEC strategy? 5:38 US LNG stocks extend rally 6:32 DAX, FTSE recover¨ 8:00 Precious metals update. Gold, platinum, palladium 9:07 Bitcoin rallies, but gains remain vulnerable Read next: Altcoins: Ripple Crypto - What Is Ripple (XRP)? Price Of XRP | FXMAG.COM Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. Follow FXMAG.COM on Google News  
Commodities: Prices Are Rising, Heatwaves In US And China Affects The Production Of Cotton

XAUUSD Prices Fall As The US Dollar Rebounds, Inflationary Pressures Driving Cotton Demand Down, NGAS Price Rising

Rebecca Duthie Rebecca Duthie 31.05.2022 12:29
Summary: The US Dollar’s rebound and stronger treasury yields have caused the price of gold to fall. Cotton prices are falling due to decreasing demand and improved supplies. NGAS on the rise again. Read next: Some EU Governments Are Still In Favour Of Banning Russian Brent Crude Oil, Investors Turning To Silver As Demand For Safe-Haven Assets Rise, Corn Prices Fall Amidst Easing Supply   XAUUSD price coming down off its recent recovery Gold prices began to rise late last week and on Monday, however, on Tuesday Gold prices fell in the wake of the US Dollar rebounding and stronger US Treasury yields. Gold has recovered some of the losses it faced earlier on in May due to the surging US Dollar. Concerns around a global recession and the chance of the Fed slowing or even stopping tightening monetary policy later on in the year has offered the precious metal some support. Gold Aug ‘22 Futures Price Chart Cotton prices falling due to lessening supply concerns Cotton prices are trading around 10% less than their May high, this is due to the prospect of higher supplies thanks to favourable weather in the largest growing regions. More than half of the crop had been planted by May 22nd and was ahead of schedule by this time, therefore offering hope for solid yields. In conjunction, demand for cotton seems to be weakening amidst inflationary pressures. Cotton Jul’22 Futures Price Chart Natural Gas Futures prices Natural Gas prices continue to rise, reaching closer to the peak hit last week. The near 14 year high for Natural Gas came with increased demand and concerns around supply, the price fluctuations are due to decreased demand as the weather changes, robust demand and slow output. NGAS Jul ‘22 Futures Price Chart Read next: Strong Investor Sentiment Toward The Euro Continues (EUR/USD), EUR/GBP Currency Pair, As China Ease Lockdowns The AUD Outlook Seems Positive (GBP/AUD, AUD/USD)  Sources: tradingeconomics.com, finance.yahoo.com
What Did Support GDP? | Should Eurozone Worry!? Energy Prices May Weaken Production

EU Reaches An Agreement On The Banning Of Russian Crude Oil, Coffee Prices Rise, Palladium Prices Decline Along With Supply Concerns

Rebecca Duthie Rebecca Duthie 01.06.2022 13:30
Summary: Crude Oil prices rise for sixth consecutive month. Coffee prices rise amidst supply concerns. Palladium prices fall along with demand Read next: XAUUSD Prices Fall As The US Dollar Rebounds, Inflationary Pressures Driving Cotton Demand Down, NGAS Price Rising  WTI Crude oil prices rise WTI Crude Oil enters the month of June going on their sixth consecutive month seeing price gains. The most recent gain comes in the wake of China’s easing of Covid-19 lockdown restrictions and the European Union's decision to partially ban Russian crude oil imports. The European Union has finally reached an agreement on the banning of Russian oil imports, the current decision ended with pipeline imports being allowed but seaborne imports being banned. This will cause some issues around supply, however, this most recent ban could pave the way for other crude oil producers to pump more crude into the markets. WTI Crude Oil Price Chart Coffee futures prices rising Coffee futures are trading at their highest price since mid April amidst a strong outlook for dryer conditions for the top producer in Brazil. The market has fears around a lower production in Brazil due to the continuation of La Niña, which reduces rainfall in Central-America. In addition, Colombian coffee exports slipped by 18% year to year. There were also signs pointing towards smaller global coffee supplies falling by 0.1%. Coffee Jul ‘22 Futures Price Chart Palladium Futures Palladium prices have fallen by almost 40% below their all time high of $3180 the reduction in price comes from a fall in concerns around supply and demand remains low. Global palladium demand is expected to increase by only 3% in 2022 as covid lockdowns and continuing supply chain bottlenecks will likely delay a recover in the chip supply until 2023 at the very least, undermining car production around the world.   Palladium Sep ‘22 Futures Price Chart Read next: (HPQ) HP Inc. Earnings Beat Market Expectations  Sources: finance.yahoo.com, tradingeconomics.com
What Does Jeffrey Halley (Oanda) Think About 100bps Rate Hike? Important News About Soft Commodities!

Wheat Prices Enter June On A Four Week Low Platinum Prices Rising Again, RBOB Gasoline Prices Reach New High

Rebecca Duthie Rebecca Duthie 02.06.2022 12:56
Summary: Wheat prices dropping as supply concerns ease. As China begins to lift covid-19 restrictions, demand for platinum is rising. RBOB gasoline prices rally in the wake of EU oil embargo. Read next: EU Reaches An Agreement On The Banning Of Russian Crude Oil, Coffee Prices Rise, Palladium Prices Decline Along With Supply Concerns  Wheat prices reach their lowest in four weeks Chicago wheat futures reached their lowest in four weeks on Thursday, as commodity traders carefully monitor the possible maritime trade corridors for Ukrainian wheat and fertilizers. The Russian president, Putin said that Russia was willing to open safe corridors to allow foreign ships to leave the both the Black Sea and the Sea of Azov ports, which would allow commercial shipping of Ukrainian grains after three months of war in the country, should western countries lift sanctions. In the United States there are higher projections for wheat in the future and in addition, the wheat prices remain supported thanks to India’s decision to impose a wheat embargo in an attempt to guarantee food security. Chicago Wheat Futures Price Chart Platinum Prices increased As China begins to re-open their economy after their covid-19 lockdown restrictions, the demand for platinum is increasing. Although the global outlook for metal use in car manufacturing will decline overall in 2022, concerns around supply and demand are still driving the price fluctuations of Platinum. Platinum Futures Price Chart RBOB gasoline RBOB Gasoline prices have risen to a new high at the start of the summer season. The latest rally comes in the wake of the European Union implementing a ban of seaborne oil imports from Russia, creating further concerns around supplies. RBOB Gasoline Futures Price Chart Read next: XAUUSD Prices Fall As The US Dollar Rebounds, Inflationary Pressures Driving Cotton Demand Down, NGAS Price Rising  Sources: finance.yahoo.com, tradingeconomics.com
In The Oil Market  Prices Are Rising Again And Gold Is Also Gaining

Demand For Safe-haven Assets Sends Gold Prices Rising, Saudi Arabia Indicates Plans To Increase Their Oil Output, Soybean Prices Are Volatile

Rebecca Duthie Rebecca Duthie 03.06.2022 12:37
Summary: On Friday the price of gold neared its one month high. Crude oil prices have jumped up and down over the past week. Supply may increase to meet demand. Read next: Wheat Prices Enter June On A Four Week Low Platinum Prices Rising Again, RBOB Gasoline Prices Reach New High  Gold prices rise again On Friday the price of gold neared its one month high. The price of gold has been elevated by the weakness of the US Dollar, putting gold on track for its third weekly gain. The dollar weakened overnight in the wake of data that showed US payroll rose less than expected in May. Therefore, U.S Dollar backed gold became more attractive to overseas buyers. The current geopolitical tensions and the chances of the global economy falling into a recession also increased demand for the safe-haven asset. XAUUSD Price Chart WTI Crude Oil prices. Crude oil prices have jumped up and down over the past week. The price has dropped slightly during trading on Friday in the wake of news that Saudi Arabia will increase its oil output. Saudi Arabia indicated to its allies in the West that it would increase its oil output to try to balance the fall the region is experiencing from its Russian oil embargo. WTI Crude Oil Price Chart Soybeans The price of soybeans have been volatile over the past two days. Late April saw Soybean prices hit record high prices amidst supply and demand concerns. A top palm oil producer based in Indonesia indicated that it would reinstate a requirement to allocate a certain amount to the domestic market as it lifts the most recent export embargo. However supply may increase to meet demand, however it will be tight. Soybeans Price Chart Read next: EU Reaches An Agreement On The Banning Of Russian Crude Oil, Coffee Prices Rise, Palladium Prices Decline Along With Supply Concerns  Sources: finance.yahoo.com, fxmag.com, tradingeconomics.com
COT Week 22 Charts: Soft Commodities Speculators Positions mostly lower led by Corn & Sugar

COT Week 22 Charts: Soft Commodities Speculators Positions mostly lower led by Corn & Sugar

Invest Macro Invest Macro 04.06.2022 21:40
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday May 31st and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. Soft Commodities speculator bets were mostly lower again this week as only three out of the eleven softs markets we cover had higher positioning this week while the other eight markets had lower positions. Leading the gains for the soft commodities was Coffee (5,943 contracts) and Lean Hogs (1,859 contracts) with Cocoa (1,570 contracts) also showing a positive week. Meanwhile, leading the declines in speculator bets this week were Corn (-23,648 contracts) and Sugar (-7,807 contracts) with Soybean Oil (-4,455 contracts), Wheat (-4,035 contracts), Live Cattle (-3,207 contracts), Soybeans (-2,290 contracts), Cotton (-1,836 contracts) and Soybean Meal (-1,153 contracts) also coming in with lower bets on the week. Strength scores (3-Year range of Speculator positions, from 0 to 100 where above 80 is extreme bullish and below 20 is extreme bearish) show that most of the softs markets are above their midpoints (50 percent) for the past 3 years as the soft commodities have been highly bid and have had strong speculator sentiment. Strength score trends (or move index, that show 6-week changes in strength scores) shows that despite most of the softs markets having high speculator strength scores, there has been a cool-off for these markets over the past six weeks. Live cattle and lean hogs have seen the most weakness over the past six weeks followed by Cocoa and Soybean Meal. Data Snapshot of Commodity Market Traders | Columns Legend May-31-2022 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index WTI Crude 1,787,928 9 332,976 10 -373,761 91 40,785 72 Gold 513,722 18 172,589 5 -200,056 95 27,467 32 Silver 147,301 14 13,997 15 -23,861 99 9,864 6 Copper 189,923 19 -18,025 29 15,425 70 2,600 40 Palladium 6,538 1 -3,133 4 3,221 95 -88 39 Platinum 67,964 35 2,363 7 -6,501 96 4,138 20 Natural Gas 1,115,815 7 -110,368 45 59,679 50 50,689 100 Brent 181,699 25 -40,872 43 38,941 58 1,931 35 Heating Oil 349,618 31 6,455 52 -32,434 37 25,979 88 Soybeans 753,373 34 186,078 71 -158,757 34 -27,321 25 Corn 1,564,217 32 404,200 82 -353,348 22 -50,852 14 Coffee 214,170 8 43,015 76 -45,757 28 2,742 17 Sugar 848,463 11 201,680 78 -240,752 23 39,072 56 Wheat 331,136 11 22,309 48 -18,647 33 -3,662 91   CORN Futures: The CORN large speculator standing this week resulted in a net position of 404,200 contracts in the data reported through Tuesday. This was a weekly reduction of -23,648 contracts from the previous week which had a total of 427,848 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 81.7 percent. The commercials are Bearish with a score of 21.6 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 13.8 percent. CORN Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 35.3 42.1 9.0 – Percent of Open Interest Shorts: 9.4 64.6 12.2 – Net Position: 404,200 -353,348 -50,852 – Gross Longs: 551,849 657,849 140,307 – Gross Shorts: 147,649 1,011,197 191,159 – Long to Short Ratio: 3.7 to 1 0.7 to 1 0.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 81.7 21.6 13.8 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -12.3 14.6 -3.7   SUGAR Futures: The SUGAR large speculator standing this week resulted in a net position of 201,680 contracts in the data reported through Tuesday. This was a weekly decline of -7,807 contracts from the previous week which had a total of 209,487 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 78.1 percent. The commercials are Bearish with a score of 22.5 percent and the small traders (not shown in chart) are Bullish with a score of 56.2 percent. SUGAR Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 30.6 45.1 10.5 – Percent of Open Interest Shorts: 6.8 73.5 5.9 – Net Position: 201,680 -240,752 39,072 – Gross Longs: 259,634 382,461 89,391 – Gross Shorts: 57,954 623,213 50,319 – Long to Short Ratio: 4.5 to 1 0.6 to 1 1.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 78.1 22.5 56.2 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -7.8 10.4 -20.9   COFFEE Futures: The COFFEE large speculator standing this week resulted in a net position of 43,015 contracts in the data reported through Tuesday. This was a weekly boost of 5,943 contracts from the previous week which had a total of 37,072 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 76.0 percent. The commercials are Bearish with a score of 27.7 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 17.4 percent. COFFEE Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 23.5 51.5 4.4 – Percent of Open Interest Shorts: 3.4 72.9 3.1 – Net Position: 43,015 -45,757 2,742 – Gross Longs: 50,242 110,322 9,389 – Gross Shorts: 7,227 156,079 6,647 – Long to Short Ratio: 7.0 to 1 0.7 to 1 1.4 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 76.0 27.7 17.4 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 1.0 -0.3 -9.0   SOYBEANS Futures: The SOYBEANS large speculator standing this week resulted in a net position of 186,078 contracts in the data reported through Tuesday. This was a weekly reduction of -2,290 contracts from the previous week which had a total of 188,368 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 70.9 percent. The commercials are Bearish with a score of 34.4 percent and the small traders (not shown in chart) are Bearish with a score of 24.9 percent. SOYBEANS Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 31.6 47.3 6.6 – Percent of Open Interest Shorts: 6.9 68.3 10.2 – Net Position: 186,078 -158,757 -27,321 – Gross Longs: 237,836 356,115 49,891 – Gross Shorts: 51,758 514,872 77,212 – Long to Short Ratio: 4.6 to 1 0.7 to 1 0.6 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 70.9 34.4 24.9 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -4.3 4.6 -3.6   SOYBEAN OIL Futures: The SOYBEAN OIL large speculator standing this week resulted in a net position of 75,041 contracts in the data reported through Tuesday. This was a weekly fall of -4,455 contracts from the previous week which had a total of 79,496 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 57.7 percent. The commercials are Bearish with a score of 40.2 percent and the small traders (not shown in chart) are Bullish with a score of 77.8 percent. SOYBEAN OIL Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 27.4 47.5 9.3 – Percent of Open Interest Shorts: 7.8 71.6 4.8 – Net Position: 75,041 -92,287 17,246 – Gross Longs: 105,091 181,857 35,597 – Gross Shorts: 30,050 274,144 18,351 – Long to Short Ratio: 3.5 to 1 0.7 to 1 1.9 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 57.7 40.2 77.8 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -19.3 21.0 -18.4   SOYBEAN MEAL Futures: The SOYBEAN MEAL large speculator standing this week resulted in a net position of 80,754 contracts in the data reported through Tuesday. This was a weekly decrease of -1,153 contracts from the previous week which had a total of 81,907 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 72.4 percent. The commercials are Bearish with a score of 26.1 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 81.4 percent. SOYBEAN MEAL Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 28.7 44.2 13.2 – Percent of Open Interest Shorts: 6.9 73.7 5.5 – Net Position: 80,754 -109,384 28,630 – Gross Longs: 106,453 163,966 48,928 – Gross Shorts: 25,699 273,350 20,298 – Long to Short Ratio: 4.1 to 1 0.6 to 1 2.4 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 72.4 26.1 81.4 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -23.4 23.7 -17.4   LIVE CATTLE Futures: The LIVE CATTLE large speculator standing this week resulted in a net position of 19,540 contracts in the data reported through Tuesday. This was a weekly decrease of -3,207 contracts from the previous week which had a total of 22,747 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 3.9 percent. The commercials are Bullish-Extreme with a score of 87.9 percent and the small traders (not shown in chart) are Bullish with a score of 78.4 percent. LIVE CATTLE Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 34.2 40.6 11.6 – Percent of Open Interest Shorts: 27.7 46.8 11.9 – Net Position: 19,540 -18,566 -974 – Gross Longs: 102,315 121,350 34,613 – Gross Shorts: 82,775 139,916 35,587 – Long to Short Ratio: 1.2 to 1 0.9 to 1 1.0 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 3.9 87.9 78.4 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -43.9 37.4 26.6   LEAN HOGS Futures: The LEAN HOGS large speculator standing this week resulted in a net position of 9,217 contracts in the data reported through Tuesday. This was a weekly rise of 1,859 contracts from the previous week which had a total of 7,358 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 16.8 percent. The commercials are Bullish-Extreme with a score of 90.9 percent and the small traders (not shown in chart) are Bullish with a score of 60.2 percent. LEAN HOGS Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 29.6 42.0 9.7 – Percent of Open Interest Shorts: 24.8 43.2 13.3 – Net Position: 9,217 -2,209 -7,008 – Gross Longs: 57,323 81,465 18,708 – Gross Shorts: 48,106 83,674 25,716 – Long to Short Ratio: 1.2 to 1 1.0 to 1 0.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 16.8 90.9 60.2 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -36.8 42.6 -11.8   COTTON Futures: The COTTON large speculator standing this week resulted in a net position of 70,684 contracts in the data reported through Tuesday. This was a weekly decline of -1,836 contracts from the previous week which had a total of 72,520 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 67.7 percent. The commercials are Bearish with a score of 30.7 percent and the small traders (not shown in chart) are Bullish with a score of 76.7 percent. COTTON Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 40.5 37.9 8.1 – Percent of Open Interest Shorts: 7.2 76.0 3.3 – Net Position: 70,684 -80,864 10,180 – Gross Longs: 85,974 80,446 17,230 – Gross Shorts: 15,290 161,310 7,050 – Long to Short Ratio: 5.6 to 1 0.5 to 1 2.4 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 67.7 30.7 76.7 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -9.2 10.1 -17.8   COCOA Futures: The COCOA large speculator standing this week resulted in a net position of 10,153 contracts in the data reported through Tuesday. This was a weekly boost of 1,570 contracts from the previous week which had a total of 8,583 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 27.6 percent. The commercials are Bullish with a score of 72.0 percent and the small traders (not shown in chart) are Bearish with a score of 38.2 percent. COCOA Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 30.4 43.0 5.5 – Percent of Open Interest Shorts: 27.1 47.7 4.2 – Net Position: 10,153 -14,322 4,169 – Gross Longs: 92,946 131,539 16,931 – Gross Shorts: 82,793 145,861 12,762 – Long to Short Ratio: 1.1 to 1 0.9 to 1 1.3 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 27.6 72.0 38.2 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -25.7 28.0 -25.8   WHEAT Futures: The WHEAT large speculator standing this week resulted in a net position of 22,309 contracts in the data reported through Tuesday. This was a weekly decline of -4,035 contracts from the previous week which had a total of 26,344 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 48.1 percent. The commercials are Bearish with a score of 33.1 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 91.4 percent. WHEAT Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 34.4 35.5 9.9 – Percent of Open Interest Shorts: 27.7 41.1 11.0 – Net Position: 22,309 -18,647 -3,662 – Gross Longs: 113,964 117,565 32,778 – Gross Shorts: 91,655 136,212 36,440 – Long to Short Ratio: 1.2 to 1 0.9 to 1 0.9 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 48.1 33.1 91.4 – Strength Index Reading (3 Year Range): Bearish Bearish Bullish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -1.2 2.5 -4.4   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
Recession Fears Continue To Rattle the Commodity Markets - Brent Crude Oil, Silver Futures Touch 4-week lows, Corn Futures Reach 6-week Highs.

Saudi Arabia Hike Brent Crude Oil Prices, Demand For Safe-haven Assets Is Supporting Silver Prices, Corn Prices At 8 Week Lows

Rebecca Duthie Rebecca Duthie 06.06.2022 13:12
Summary: Saudi Arabia hiked their crude oil prices for July. Hopes of higher corn supplies thanks to hopeful USDA reports and easing trade restrictions between the major producers. Increased demand for Silver as a safe-haven asset drives the prices up. Read next: Saudi Arabia Indicates Plans To Increase Their Oil Output (EUR/USD), ECB Plans To Start Tightening Monetary Policy Still Set For July (EUR/GBP), (USD/JPY, USD/CHF)  Brent Crude oil prices surge as Saudi Arabia Increase prices On Monday Saudi Arabia hiked their crude oil prices for July, driving the price of Brent crude oil up to almost $121 per barrel. This move tightened global supplies even after OPEC+ agreed to increase its output at a faster pace in the coming months. The premium for the barrels heading to the U.S remained steady, whilst the premiums for the barrels heading for Asia and Northwest European countries were raised by Saudi Arabia. Despite OPEC+ promises to increase its output by 50% than previously planned, there are still doubts around whether or not they can meet the demand as member countries are struggling to meet the demand. The price rise and the demand and supply concerns are happening in the peak of the U.S driving season and increased demand as China comes out of its Covid-19 lockdowns, and their economy starts again. Brent Crude Oil Futures Price Chart Silver prices rise again The price of silver reached the highest in a month, this comes in the wake of increased demand for the safe-haven asset. The increased demand is being caused by continuing geopolitical tensions, inflation and persistent concerns around slowing global growth. Silver Jul ‘22 Price Chart Corn prices low Corn futures are trading at eight week lows on Monday amidst strong hopes of higher supplies thanks to hopeful USDA reports and easing trade restrictions between the major producers. With planting progress strong and expectations for exports to resume from the Ukraine, prices are dropping. In addition, Brazil and Beijing came to a conclusion regarding beginning exports from Brazil to China. Corn Dec ‘22 Futures Price Chart Sources: finance.yahoo.com, tradingeconomics.com
(XAUUSD) Gold Should Be Bullish, NGAS Reaches Highest Price Since August 2008, Cotton Crop Planting Is Ahead Of Schedule

(XAUUSD) Gold Should Be Bullish, NGAS Reaches Highest Price Since August 2008, Cotton Crop Planting Is Ahead Of Schedule

Rebecca Duthie Rebecca Duthie 07.06.2022 13:41
Summary: Gold prices rising amidst market uncertainty. Natural gas futures rose to their highest price since August 2008. Demand for cotton is softening due to inflationary pressures and rising prices. Read next: Saudi Arabia Hike Brent Crude Oil Prices, Demand For Safe-haven Assets Is Supporting Silver Prices, Corn Prices At 8 Week Low  XAUUSD expected to rise Gold prices rose during early trading on Tuesday, this rally is expected to last as projections of an economic slowdown pave the way for higher gold prices. A strong mix of talks of a global recession, decades-high inflation and geopolitical tensions should increase the demand for gold due to its safe-haven properties. The rise in gold comes after two days of declining prices thanks to a stronger US Dollar and rising treasury yields. XAUUSD Price Chart Natural Gas facing declining production On Tuesday Natural gas futures rose to their highest price since August 2008, this comes in the wake of higher international demand and declining production. As the northern hemisphere goes into summer, the need for cooling has strengthened which has been a driver for rising prices in the short term. On a global scale, the war in the Ukraine has caused a global energy shortage. The European Union is calling on the U.S to increase their exports to Europe to help lessen the region's reliance on Russian gas. NGAS Jul ‘22 Futures Price Chart Demand for Cotton softens Cotton prices have fallen amidst hopes of higher supplies due to favourable weather conditions in the top growing regions. Cotton crop planting is ahead of schedule giving hope around strengthening yields. In addition, it seems that demand for cotton is softening due to inflationary pressures and rising prices. Cotton Oct ‘22 Futures Price Chart Sources: finance.yahoo.com, tradingeconomics.com
Oil extends decline, gold edges lower

Oil clutching to US 120, gold drifting | Oanda

Craig Erlam Craig Erlam 07.06.2022 18:39
Oil struggling to hold above USD 120 Oil is continuing to struggle around USD 120 on Tuesday, with Brent and WTI very slightly lower. We’ve seen USD 120 broken on a few occasions over the last week but each time it’s been quickly repelled in a sign of momentum starting to run a little thin. The fundamentals remain bullish for oil prices as China continues to reopen and the OPEC+ “production hike” does little to alleviate the tightness in the market. Still, it’s been a very strong run over the last month, with the price up more than 20% from the May lows. We could potentially see some profit-taking in the short-term but it’s hard to imagine it being too severe, barring significant growth downgrades or a surge in Covid cases in China. Gold consolidation continues As has so often been the case in recent weeks, gold is continuing to fluctuate around USD 1,850 today and showing little sign of a burst in either direction. It struggled once more around USD 1,870 on Friday, reinforcing it as a key area of resistance to the upside, while USD 1,830 continues to be the first line of support below. We may have to wait for the inflation data at the end of the week for an interesting move in either direction. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Oil clutching to US 120, gold drifting - MarketPulseMarketPulse
What Did Support GDP? | Should Eurozone Worry!? Energy Prices May Weaken Production

Coffee Supplies Remain Tight, Supply and Demand Concerns Are Easing For Palladium , WTI Crude Oil Nearing March High

Rebecca Duthie Rebecca Duthie 08.06.2022 13:39
Summary: Markets await the US crude inventory report. Disappointing Brazilian coffee supplies. Expectations that the palladium market will close in balance at the end of 2022 Read next: (XAUUSD) Gold Should Be Bullish, NGAS Reaches Highest Price Since August 2008, Cotton Crop Planting Is Ahead Of Schedule  WTI Crude Oil prices rising as supplies tighten further On Wednesday, WTI Crude oil futures prices are nearing the near 14 year high that was hit in March, this price rise comes in the wake of expected increase in demand as China comes out of lockdowns, tight global supplies and the summer driving season in the US. The markets are also awaiting a report that will indicate the official US crude inventories, which is expected to have fallen, highlighting the tightness in crude supplies, globally. The CEO of global commodities trader, Trafigura said that the energy markets were in a “critical” state due to sanctions placed on Russian oil inlight of their invasion of the Ukraine which has just built on already tight supplies which were created by years of under-investment. WTI Crude Jul ‘22 Futures Price Chart Coffee prices volatile amidst changing supply and demand concerns Coffee futures prices hit a peak on June 1st amidst general real strength and concerns over tight supplies. Coffee dealers indicated to traders that the market is well supported by limited flow from Brazil and Central America, the top Brazilian grower lagging on its historical average. The concerns around coffee supplies and demand are driving the futures prices. Coffee Sep ‘22 Futures Price Chart Palladium prices are normalising Palladium prices have been falling consistently over the past week due to easing concerns around both demand and supply. The world's largest palladium producer, Nornickel, expects the palladium market to close in balance at the end of 2022. The company also promised they would continue producing in order to meet its obligations, despite logistic obstacles. In addition, global supply demand is expected to increase by only 3% in 2022 as Covid-19 lockdowns and continuing supply chain bottlenecks will likely delay recovery of chip supplies until at least 2023, thus undermining car production. Palladium Sep ‘22 Futures Price Chart Sources: finance.yahoo.com, tradingeconomics.com
Concerns Around Increasing Demand and Tightening Supply For Platinum, RBOB Gasoline, West Is Unlikely To Ease Sanctions On Russia Causing Wheat Supply Concerns Persist

Concerns Around Increasing Demand and Tightening Supply For Platinum, RBOB Gasoline, West Is Unlikely To Ease Sanctions On Russia Causing Wheat Supply Concerns Persist

Rebecca Duthie Rebecca Duthie 09.06.2022 11:39
Summary: Sanctions on Russia and protests in South Africa are causing problems for platinum exports. As shortage concerns continue, the price of wheat futures continue to rise. Read next: Coffee Supplies Remain Tight, Supply and Demand Concerns Are Easing For Palladium , WTI Crude Oil Nearing March High  Platinum faces a future of tight supplies Platinum futures rose above $1000 per tonne during the trading week, the highest price in over 2 months. The price rise comes in the wake of concerns around tight supplies and the demand recovery for the biggest platinum consumer, China. China’s platinum consumption is due to increase as the government lifts most of the Covid-19 health restrictions in Shanghai and announced support measures to help boost the economy. In addition, supply chain issues are persisting as the war in Eastern Europe continues and more sanctions are being placed on Russia, the top exporter of platinum. South Africa’s production of platinum is also set to fall amidst risks of extended strikes, as workers continue to protest for wage-negotiations. Platinum Jul ‘22 Futures Price Chart West unlikely to ease sanctions on Russia, wheat supply concerns persist As shortage concerns continue, the price of wheat futures continue to rise. The expectations of higher trading activity from Ukraine remained low as the west is unlikely to relax the sanctions on Russia, meaning Putin is unlikely to open Ukrainian ports and allow trade. Investors are remaining alert to any possible changes in India's export ban that was passed in May, following news that India’s government may allow exporters to ship some of the wheat that is currently stuck in cargos. Wheat Sep ‘22 Futures Price Chart RBOB Gasoline Prices of RBOB gasoline continue to rise as the concerns around energy supplies persist, globally. The continuing sanctions on Russia, is causing supply insecurity as the US enters into its summer driving season, driving demand up. RBOB Jul ‘22 Futures Price Chart Read next: (XAUUSD) Gold Should Be Bullish, NGAS Reaches Highest Price Since August 2008, Cotton Crop Planting Is Ahead Of Schedule  Sources: finance.yahoo.com, tradingeconomics.com
Coffee: Brazil And Columbia Are Reducing The Production

(XAUUSD) Gold Prices Falling In The Run-Up To US Inflation Data Release, NGAS Prices Fall But Remain Elevated, Coffee Prices

Rebecca Duthie Rebecca Duthie 10.06.2022 11:12
Summary: US inflation data should offer the market guidance on the Federal Reserve's interest rate hike timeline. Natural gas futures prices dropped on Thursday as investors reacted positively to information from the EIA. Coffee futures prices remain supported by limited supplies and general real strength. Read next: Concerns Around Increasing Demand and Tightening Supply For Platinum, RBOB Gasoline, West Is Unlikely To Ease Sanctions On Russia Causing Wheat Supply Concerns Persist  (XAUUSD) Gold prices falling as US Dollar strengthens Gold futures prices eased on Friday in the wake of a strengthening US Dollar and rising Treasury yields weighed on the safe-havens appeal in the run-up to the release of US inflation data that should offer the market guidance on the Federal Reserve's interest rate hike timeline. The Fed is set to implement two more 50 basis point interest rate hikes at both its June and July meetings, following a move similar to the one in May, which has recently put pressure on gold. Meanwhile, global economic outlook risks that have arisen from the war in the Ukraine, persisting supply chain disruptions, high commodity prices and rising borrowing costs are all factors that are offering gold prices support. XAUUSD Aug ‘22 Futures Price Chart NGAS futures supported by rising demand and tight supplies Natural gas futures prices dropped on Thursday as investors reacted positively to information from the EIA showing that the natural gas storage is built primarily in line with expectations. NGAS prices faced heavy pressure earlier in the trading week after an explosion at the Freeport oil and gas export terminal in Texas, which is set to leave fuel supplies stranded in the domestic market despite the soaring international demand. Still, NGAS prices remained high this week amidst record demand for power in Texas, a fall in output and an intense rally for NGAS as Russia’s war on Ukraine sends energy markets scrambling. NGAS Jul ‘22 Futures Price Chart Coffee is supported by general real strength Coffee futures prices remain supported by limited supplies and general real strength. Coffee dealers indicated that the market remains well supported by a limited flow from both Central America and Brazil, with Brazil, who is the top harvester and grower, lagging their historical average. Coffee Sep ‘22 Futures Price Chart Sources: finance.yahoo.com, tradingecnomics.com  
COT Week 23 Charts: Soft Commodities Speculators Positions mostly higher lead by Soybean Meal & Live Cattle

COT Week 23 Charts: Soft Commodities Speculators Positions mostly higher lead by Soybean Meal & Live Cattle

Invest Macro Invest Macro 12.06.2022 15:46
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday June 7th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. The soft commodities market speculator bets were mostly higher this week as seven out of the eleven soft commodities markets we cover had higher positioning this week while four markets had lower contracts. Leading the gains for soft commodities markets was Soybean Meal (8,922 contracts) and Live Cattle (5,888 contracts) with Coffee (5,752 contracts), Cocoa (4,341 contracts), Soybean Oil (3,604 contracts), Wheat (1,572 contracts) and Lean Hogs (1,274 contracts) also showing a positive weeks. Meanwhile, leading the declines in speculator bets this week were Corn (-12,936 contracts) and Soybeans (-9,434 contracts) with Sugar (-6,277 contracts) and Cotton (-2 contracts) also registering lower bets on the week. Strength scores (3-Year range of Speculator positions, from 0 to 100 where above 80 is extreme bullish and below 20 is extreme bearish) show that Corn and Coffee are in extreme-bullish levels currently. On the opposite position, Live Cattle and Lean Hogs hold extreme-bearish levels while most of the other markets are in strong bullish positions between 50 percent and 80 percent. Strength score trends (or move index, that show 6-week changes in strength scores) shows that despite the strong strength scores in the blue chart previously, the trends have been cooling off mightily. This chart shows that only Coffee and Wheat have had rising scores over the past six weeks. Live Cattle and Lean Hogs have had strong declines in the trends over the past six weeks followed by Soybean Meal, Soybean Oil and Corn. Data Snapshot of Commodity Market Traders | Columns Legend Jun-07-2022 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index WTI Crude 1,790,618 10 328,256 8 -369,033 93 40,777 72 Gold 494,130 12 175,268 7 -199,886 95 24,618 18 Silver 148,294 15 17,404 5 -27,990 94 10,586 10 Copper 194,187 22 -3,714 40 879 60 2,835 42 Palladium 7,035 3 -3,461 2 3,581 97 -120 37 Platinum 65,295 31 5,933 12 -9,742 92 3,809 15 Natural Gas 1,127,731 10 -114,342 44 66,419 52 47,923 93 Brent 169,802 16 -36,098 51 34,208 50 1,890 35 Heating Oil 261,651 20 4,886 50 -24,428 45 19,542 66 Soybeans 760,444 35 176,644 68 -148,390 39 -28,254 23 Corn 1,557,167 31 391,264 80 -337,137 24 -54,127 12 Coffee 222,583 15 48,767 81 -51,363 23 2,596 16 Sugar 849,814 12 195,403 77 -234,496 24 39,093 56 Wheat 333,705 12 23,881 50 -19,863 31 -4,018 90   CORN Futures: The CORN large speculator standing this week equaled a net position of 391,264 contracts in the data reported through Tuesday. This was a weekly reduction of -12,936 contracts from the previous week which had a total of 404,200 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 80.0 percent. The commercials are Bearish with a score of 23.9 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 11.9 percent. CORN Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 33.4 43.2 8.8 – Percent of Open Interest Shorts: 8.3 64.9 12.3 – Net Position: 391,264 -337,137 -54,127 – Gross Longs: 520,783 673,039 137,311 – Gross Shorts: 129,519 1,010,176 191,438 – Long to Short Ratio: 4.0 to 1 0.7 to 1 0.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 80.0 23.9 11.9 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -13.6 15.7 -2.2   SUGAR Futures: The SUGAR large speculator standing this week equaled a net position of 195,403 contracts in the data reported through Tuesday. This was a weekly decline of -6,277 contracts from the previous week which had a total of 201,680 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 76.8 percent. The commercials are Bearish with a score of 23.7 percent and the small traders (not shown in chart) are Bullish with a score of 56.2 percent. SUGAR Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 29.7 45.1 10.6 – Percent of Open Interest Shorts: 6.7 72.7 6.0 – Net Position: 195,403 -234,496 39,093 – Gross Longs: 252,688 383,138 90,314 – Gross Shorts: 57,285 617,634 51,221 – Long to Short Ratio: 4.4 to 1 0.6 to 1 1.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 76.8 23.7 56.2 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -5.6 5.0 0.8   COFFEE Futures: The COFFEE large speculator standing this week equaled a net position of 48,767 contracts in the data reported through Tuesday. This was a weekly boost of 5,752 contracts from the previous week which had a total of 43,015 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 81.0 percent. The commercials are Bearish with a score of 22.6 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 16.0 percent. COFFEE Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 25.8 48.7 4.1 – Percent of Open Interest Shorts: 3.9 71.8 3.0 – Net Position: 48,767 -51,363 2,596 – Gross Longs: 57,417 108,343 9,164 – Gross Shorts: 8,650 159,706 6,568 – Long to Short Ratio: 6.6 to 1 0.7 to 1 1.4 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 81.0 22.6 16.0 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 6.0 -5.3 -11.4   SOYBEANS Futures: The SOYBEANS large speculator standing this week equaled a net position of 176,644 contracts in the data reported through Tuesday. This was a weekly reduction of -9,434 contracts from the previous week which had a total of 186,078 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 67.9 percent. The commercials are Bearish with a score of 39.2 percent and the small traders (not shown in chart) are Bearish with a score of 23.3 percent. SOYBEANS Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 30.2 47.3 6.5 – Percent of Open Interest Shorts: 7.0 66.8 10.2 – Net Position: 176,644 -148,390 -28,254 – Gross Longs: 229,895 359,587 49,303 – Gross Shorts: 53,251 507,977 77,557 – Long to Short Ratio: 4.3 to 1 0.7 to 1 0.6 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 67.9 39.2 23.3 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -8.3 8.8 -3.8   SOYBEAN OIL Futures: The SOYBEAN OIL large speculator standing this week equaled a net position of 78,645 contracts in the data reported through Tuesday. This was a weekly advance of 3,604 contracts from the previous week which had a total of 75,041 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 58.3 percent. The commercials are Bearish with a score of 38.5 percent and the small traders (not shown in chart) are Bullish with a score of 75.4 percent. SOYBEAN OIL Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 26.9 48.2 9.2 – Percent of Open Interest Shorts: 7.2 72.1 5.0 – Net Position: 78,645 -95,258 16,613 – Gross Longs: 107,372 192,493 36,684 – Gross Shorts: 28,727 287,751 20,071 – Long to Short Ratio: 3.7 to 1 0.7 to 1 1.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 58.3 38.5 75.4 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -18.9 17.2 -1.2   SOYBEAN MEAL Futures: The SOYBEAN MEAL large speculator standing this week equaled a net position of 89,676 contracts in the data reported through Tuesday. This was a weekly advance of 8,922 contracts from the previous week which had a total of 80,754 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 77.4 percent. The commercials are Bearish with a score of 23.0 percent and the small traders (not shown in chart) are Bullish with a score of 65.9 percent. SOYBEAN MEAL Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 28.3 43.9 12.2 – Percent of Open Interest Shorts: 4.8 74.2 5.5 – Net Position: 89,676 -115,261 25,585 – Gross Longs: 107,791 167,306 46,628 – Gross Shorts: 18,115 282,567 21,043 – Long to Short Ratio: 6.0 to 1 0.6 to 1 2.2 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 77.4 23.0 65.9 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -14.8 14.0 -1.2   LIVE CATTLE Futures: The LIVE CATTLE large speculator standing this week equaled a net position of 25,428 contracts in the data reported through Tuesday. This was a weekly increase of 5,888 contracts from the previous week which had a total of 19,540 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 11.3 percent. The commercials are Bullish-Extreme with a score of 80.2 percent and the small traders (not shown in chart) are Bullish with a score of 77.6 percent. LIVE CATTLE Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 35.5 40.5 11.5 – Percent of Open Interest Shorts: 26.9 48.7 11.9 – Net Position: 25,428 -24,212 -1,216 – Gross Longs: 104,585 119,324 33,798 – Gross Shorts: 79,157 143,536 35,014 – Long to Short Ratio: 1.3 to 1 0.8 to 1 1.0 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 11.3 80.2 77.6 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -45.0 38.3 27.7   LEAN HOGS Futures: The LEAN HOGS large speculator standing this week equaled a net position of 10,491 contracts in the data reported through Tuesday. This was a weekly gain of 1,274 contracts from the previous week which had a total of 9,217 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 18.2 percent. The commercials are Bullish-Extreme with a score of 89.8 percent and the small traders (not shown in chart) are Bullish with a score of 58.1 percent. LEAN HOGS Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 30.3 41.7 9.9 – Percent of Open Interest Shorts: 24.9 43.3 13.6 – Net Position: 10,491 -3,090 -7,401 – Gross Longs: 59,207 81,583 19,271 – Gross Shorts: 48,716 84,673 26,672 – Long to Short Ratio: 1.2 to 1 1.0 to 1 0.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 18.2 89.8 58.1 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -23.8 27.8 -8.7   COTTON Futures: The COTTON large speculator standing this week equaled a net position of 70,682 contracts in the data reported through Tuesday. This was a weekly decline of -2 contracts from the previous week which had a total of 70,684 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 67.7 percent. The commercials are Bearish with a score of 31.0 percent and the small traders (not shown in chart) are Bullish with a score of 73.4 percent. COTTON Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 40.9 37.7 8.2 – Percent of Open Interest Shorts: 7.5 75.7 3.6 – Net Position: 70,682 -80,347 9,665 – Gross Longs: 86,609 79,718 17,332 – Gross Shorts: 15,927 160,065 7,667 – Long to Short Ratio: 5.4 to 1 0.5 to 1 2.3 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 67.7 31.0 73.4 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -7.1 7.6 -12.1   COCOA Futures: The COCOA large speculator standing this week equaled a net position of 14,494 contracts in the data reported through Tuesday. This was a weekly lift of 4,341 contracts from the previous week which had a total of 10,153 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 31.8 percent. The commercials are Bullish with a score of 68.6 percent and the small traders (not shown in chart) are Bearish with a score of 29.8 percent. COCOA Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 31.4 43.9 5.2 – Percent of Open Interest Shorts: 26.3 50.1 4.0 – Net Position: 14,494 -17,823 3,329 – Gross Longs: 89,997 125,905 14,861 – Gross Shorts: 75,503 143,728 11,532 – Long to Short Ratio: 1.2 to 1 0.9 to 1 1.3 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 31.8 68.6 29.8 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -10.0 11.3 -14.6   WHEAT Futures: The WHEAT large speculator standing this week equaled a net position of 23,881 contracts in the data reported through Tuesday. This was a weekly advance of 1,572 contracts from the previous week which had a total of 22,309 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 50.1 percent. The commercials are Bearish with a score of 31.4 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 89.6 percent. WHEAT Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 32.9 34.8 10.4 – Percent of Open Interest Shorts: 25.7 40.8 11.6 – Net Position: 23,881 -19,863 -4,018 – Gross Longs: 109,678 116,146 34,706 – Gross Shorts: 85,797 136,009 38,724 – Long to Short Ratio: 1.3 to 1 0.9 to 1 0.9 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 50.1 31.4 89.6 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 2.9 -3.5 1.2   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
The Cost Of Living Crisis Is Dampening Demand And Threatens Big Companies Like Apple

Brent Crude Oil Prices, Silver Prices Hit Lowest Price In Four Weeks, Corn Prices Rise Amid Supply Concerns

Rebecca Duthie Rebecca Duthie 13.06.2022 12:48
Summary: Rising covid cases in China and 40-year high US Inflation. The global economic outlook remains dim due to the rising borrowing costs, the war in Ukraine, high commodity prices and ongoing supply disruptions. Failed talks between Russia and Ukraine puts corn supplies under pressure. Read next: (XAUUSD) Gold Prices Falling In The Run-Up To US Inflation Data Release, NGAS Prices Fall But Remain Elevated, Coffee Prices  Brent Crude prices fall for third session Brent crude oil futures prices have fallen on Monday for their third session as investors have been monitoring the covid situation in China and have remained concerned that rising inflation may hinder growth and negatively impact the demand for oil. Major cities in China are fighting rising covid-19 cases with officials warning of “ferocious” Covid spread in Beijing. In addition, U.S inflation hit a 40-year high of 8.6% last month, which increases the likelihood of more aggressive interest rate hikes from the FED. On Saturday US Fuel prices went above $5 per gallon, extending the surge in fuel costs that is driving rising inflation. Goldman Sachs indicated on Friday that energy prices needed to increase further before achieving a destruction in demand that is sufficient for market rebalancing. Brent Crude Oil Price Chart Silver prices reaches its lowest level in 4 weeks Investors' worries around the global economic outlook and a more hawkish attitude from the Federal Reserve have been strengthening, pushing silver prices down to its lowest level in four weeks. The global economic outlook remains dim due to the rising borrowing costs, the war in Ukraine, high commodity prices and ongoing supply disruptions. The Fed is due to continue tightening its monetary policy during the coming week after US inflation reached 41-year highs during May, in addition the ECB and RBA have also chosen a more hawkish path as inflation shows no signs of peaking. Silver Jul ‘22 Futures Price Chart Corn Prices rising amidst concerns around supply. Corn prices reached nearly eight week highs in the wake of new concerns around grain supplies. Talks failed between two of the major corn suppliers, Russia and the Ukraine around the resuming of Ukrainian exports despite the Turkish efforts to negotiate a safe passage for grain stuck at the Black Sea Ports. Russian President Putin said free shipment depended on an end to sanctions on Russia. Corn Dec ‘22 Futures Price Chart Sources: finance.yahoo.com, tradingeconomics.com
Declines At The Close Of The New York Stock Exchange, The Drop Leaders Were Nike Inc Shares

Gold (XAUUSD) Prices Are Falling, Expectations Of Cooling NGAS Demand, Cotton’s Demand Weakening

Rebecca Duthie Rebecca Duthie 14.06.2022 11:32
Summary: Gold prices are under pressure from a rallying US Dollar. NGAS prices have dropped as expectations of cooling demand strengthened as the summer season approaches. Inflationary pressures and re-imposed Chinese lockdowns vs Cotton prices Read next: Brent Crude Oil Prices, Silver Prices Hit Lowest Price In Four Weeks, Corn Prices Rise Amid Supply Concerns  XAUUSD prices falling in the wake of broad market sell-off On Tuesday Gold futures are trading at around four-week lows after falling nearly 3% during Monday's trading session. Gold prices remain under pressure from a rallying US Dollar and Treasury yields as investors are bracing themselves for more aggressive monetary policy tightening from the Federal Reserve Bank. Aggressive interest rate hikes have also instilled fears of a recession in the US economy which drove further selling and forced liquidation across the financial markets, including with gold. XAUUSD Price Chart Natural Gas demand falling as the summer season approaches Natural gas prices dropped in the past two trading sessions in the wake of investors' expectations of cooling demand strengthened as the summer season approaches. In addition, a recent explosion at a major Texas LNG terminal has made room for more natural gas to enter the market, due to the facility being offline for at least another 3 weeks. The extra supply in the market could bridge the gap between the current inventory levels and the 5-year average, which has been one of the driving forces behind the quarters natural gas rally. NGAS Futures Price Chart Demand weakening for Cotton Cotton futures prices are trading near 2-month lows due to expectations of higher supply and weaker demand. Cotton demand is expected to decrease due to inflationary pressures and the largest consumer, China re-imposes covid-19 lockdowns. Cotton Futures Price Chart Sources: finance.yahoo.com, tradingeconomics.com
When The Global Economy Recovers, We Can Expect Demand To Rebound

WCU: Commodities drop as inflation battle heats up | Saxo Bank

Ole Hansen Ole Hansen 17.06.2022 15:22
Summary:  The commodity sector traded lower in a week where central banks took centre stage after several rate hikes were announced in an ongoing effort to curb runaway inflation. Most notably the 75 basis point hike from the US FOMC, a strong move that raised the prospect of this action also hurting global growth, and with that demand for commodities. Responding to these developments, the Bloomberg Commodity Index recorded its biggest weekly loss in three months, with all sectors (apart from grains) suffering setbacks. Central banks took centre stage this past week after they announced rate hikes in an ongoing effort to curb runaway inflation. The 75-basis point rate hike – and promises of more to follow – announced by the FOMC on Wednesday, added to an ongoing rout in global stocks and bonds. In fact, global equities were headed for their steepest weekly decline in two years after the SNB (Swiss National Bank) and BoE (Bank of England) joined in, thereby adding to concerns that tighter monetary policies could undermine the post-Covid global economic recovery.The price recent price actions and changes seen in bonds and stocks have gone straight to the history books. An example being the S&P 500 which, in five out of the last seven trading days, has seen more than 90% of its stocks decline. Since 1928, we have not seen such an overwhelming display of selling. Together with the rout in Cryptos and blockchains, this was indeed a week where investors had trouble finding a haven, with some commodities being the exception. Global growth worries helped push the Bloomberg Commodity index to its biggest weekly loss in three months, with all sectors (apart from grains) suffering setbacks. The most notable decline was seen in the energy sector after a prolonged outage at a major LNG (Liquid Natural Gas) plant triggered a selloff in US natural gas, with more being available for domestic consumption. Inadvertently, the disruption in US gas supplies to Europe and Russia turning down the taps to Germany and Italy, saw European gas prices jump by more than 50%. A development which, together with already record high prices for diesel and gasoline, once again highlight Europe as the epicentre of growth concerns – mostly stemming from Russia’s war in Ukraine. Meanwhile, crude oil and fuel products refused to be dragged into the narrative of lower growth – leading to lower demand and lower prices. The current level of market tightness driven by supply issues is simply too big of a factor to ignore. As a result, we are seeing low availability of fuels into the peak summer demand season. Along with this, we are seeing a continued surge in the margins refineries earn from their production of fuels, especially diesel – the fuel that keeps the world and economies on the move. Being such an important input to the global economy, a small weekly loss amid rising growth fears from aggressive central bank rate hikes highlights the current predicament of tight supplies, driven by years of lower investments. These have been caused by historically bad returns, high volatility and uncertainty about future demand, ESG (Environmental, Social, Governance) and the green transformation. Several OPEC+ members, for various reasons, included those mentioned are close to being maxed out. With spare capacity being increasingly concentrated among a few Middle East producers, the prospect for a continued rise in demand over the coming years will be challenging.Sanctions against Russia and other multiple disruptions have led to the OPEC+ group trailing its own production target by more than 2.5 million barrels per day. The risk of even tighter markets was highlighted by the IEA (International Energy Agency) in their monthly update when it said that world oil supply will struggle to meet demand in 2023. A post-Covid resurgent Chinese economy and tighter sanctions on Russia being the main reasons and, despite emerging growth clouds, the Paris-based agency still expect demand to accelerate by 2.2 million barrels per day to 101.6 million barrels per day, only 0.3 million barrels per day above a recent forecast from the US Energy Information Administration.Following several failed attempts to break resistance in the $125 per barrel area, Brent instead went looking for support at lower prices. However, once again, the setback proved very shallow, with support being found ahead of $115 – a previous resistance-turned-support level.Industrial metals suffered a fresh setback as the Bloomberg Industrial Metal Spot Index hit a fresh low for the year – down 28.5% since the March record peak. The peak came just before Covid-19 outbreaks in China (the world’s top consumer of metals) helped trigger a sharp reversal. Between May and early June, the index went through a small recovery phase as China began lifting Covid-related restrictions, thereby boosting the prospect for growth initiatives. However, renewed lockdowns in Shanghai, the prospect of restrictions potentially not being lifted until next year as well as renewed focus on a central bank-driven global growth reversal helped send the sector sharply lower this week.Aluminium dropped to an 11-month low after US data stoked recession fears. This was while copper drifted lower towards key support in the $4 per pound ($8900 per tons) area, thereby setting up the potential for a challenge at a level from where prices have bounced on several occasions during the past fifteen months. As long as inventory levels in exchange monitored warehouses continue to fall, as opposed to rising given the current softness, we maintain our long held bullish view on the direction of the sector.A break in copper below the mentioned levels may trigger a temporary downward push which, in our opinion and using Fibonacci’s retracement numbers, could trigger a downward extension to $3.86 or in a worst-case scenario drop of around 12% to $3.50. Source: Saxo Group Precious metals: Gold and silver traded lower this week but well above levels that otherwise could be expected, given the adverse movements seen across other markets – most notably the dollar and US treasury yields both rising in response to the FOMC 75 basis point rate hike. However, as we highlighted in our most recent update gold has increasingly been showing signs of disconnecting from its normal strong inverse correlation with US real yields. Based on ten-year real yields at 0.65%, up from –1% at the beginning of the year, some will argue that gold trades too expensive by around 300 dollars.While rising dollar and yields in recent weeks have acted as a drag on gold, thereby raising discussions about its inflation hedging credentials, it is safe to say that other supporting drivers are currently at play. The most important being the risk of current central bank actions driving a hard landing, meaning that a US recession could emerge before inflation is being brought under control – thereby creating a period of stagflation, periods which historically has been bullish for gold.We believe that hedges in gold against the rising risk of stagflation, traders responding to the highest level of inflation in 40 years and turmoil in stocks and cryptos are some of the reasons why gold has not fallen at the pace dictated by rising real yields. With that in mind, we are watching what investors do (not what they are saying) through the ETF (Exchange Traded Fund) flows. During the past week, total holdings in bullion-backed ETFs have seen a small decline of less than 0.25% – again, a development highlighting investor maintaining exposure to offset the tumultuous conditions seen across other markets and sectors.Our long held bullish view on gold and silver has been strengthened by developments this past week. We still see the potential for gold hitting a fresh record high during the second half, as growth slows and inflation continues to remain elevated. The weekly chart shows that if $1,780 support is broken, there is no strong support before around $1,670 while a daily close above $1,880 is needed to change the current rangebound market behavior. Source: Saxo Group Source: WCU: Commodities drop as inflation battle heats up | Saxo Group (home.saxo)
COT Week 24 Charts: Soft Commodities Speculators Positions mostly lower led by Sugar & Cocoa

COT Week 24 Charts: Soft Commodities Speculators Positions mostly lower led by Sugar & Cocoa

Invest Macro Invest Macro 18.06.2022 14:18
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday June 14th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. The soft commodities market speculator bets were mostly lower this week as just three out of the eleven soft commodities markets we cover had higher positioning this week while eight markets had lower speculator bets. Leading the gains for soft commodities markets was Corn (8,511 contracts) and Live Cattle (7,316 contracts) with Soybeans (6,023 contracts) also showing a positive week. Meanwhile, leading the declines in speculator bets this week were Sugar (-24,920 contracts) and Cocoa (-17,863 contracts) with Soybean Oil (-5,247 contracts), Cotton (-4,427 contracts), Wheat (-3,446 contracts), Lean Hogs (-3,105 contracts), Coffee (-1,882 contracts) and Soybean Meal (-845 contracts) also registering lower bets on the week. Strength scores (3-Year range of Speculator positions, from 0 to 100 where above 80 is extreme bullish and below 20 is extreme bearish) show that Corn (81.1 percent and bullish-extreme) is at the highest level of the softs currently followed by Coffee and Soybean Meal. On the downside, Lean Hogs (14.8 percent) and Cocoa (14.3 percent) are in bearish-extreme levels and have the weakest speculator strength scores at the moment. Strength score trends (or move index, that calculate 6-week changes in strength scores) shows that Coffee and Wheat have the only rising scores over the past six weeks. Cocoa leads the trends on the downside with a -39.1 percent trend change followed by Live Cattle (-17.9 percent) and Lean Hogs (-16 percent). Data Snapshot of Commodity Market Traders | Columns Legend Jun-14-2022 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index WTI Crude 1,715,674 0 302,946 0 -341,654 100 38,708 70 Gold 497,456 13 154,598 0 -178,569 100 23,971 15 Silver 151,978 18 14,005 0 -22,047 100 8,042 0 Copper 187,247 17 -13,797 32 10,287 67 3,510 46 Palladium 7,740 6 -4,057 0 4,354 100 -297 27 Platinum 66,613 33 2,214 7 -6,793 96 4,579 26 Natural Gas 1,053,265 0 -123,485 42 74,310 54 49,175 96 Brent 171,026 17 -36,389 50 34,601 51 1,788 33 Heating Oil 268,199 23 8,475 55 -28,686 41 20,211 68 Soybeans 754,428 34 182,667 70 -155,663 37 -27,004 25 Corn 1,521,565 25 399,775 81 -344,196 23 -55,579 11 Coffee 202,656 0 46,885 79 -48,399 25 1,514 5 Sugar 800,806 1 170,483 72 -198,006 31 27,523 42 Wheat 336,890 13 20,435 46 -18,089 34 -2,346 98   CORN Futures: The CORN large speculator standing this week was a net position of 399,775 contracts in the data reported through Tuesday. This was a weekly increase of 8,511 contracts from the previous week which had a total of 391,264 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 81.1 percent. The commercials are Bearish with a score of 22.9 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 11.1 percent. CORN Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 34.2 44.6 9.2 – Percent of Open Interest Shorts: 7.9 67.2 12.8 – Net Position: 399,775 -344,196 -55,579 – Gross Longs: 519,685 678,186 139,407 – Gross Shorts: 119,910 1,022,382 194,986 – Long to Short Ratio: 4.3 to 1 0.7 to 1 0.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 81.1 22.9 11.1 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -13.0 15.2 -2.8   SUGAR Futures: The SUGAR large speculator standing this week was a net position of 170,483 contracts in the data reported through Tuesday. This was a weekly decrease of -24,920 contracts from the previous week which had a total of 195,403 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 71.7 percent. The commercials are Bearish with a score of 30.6 percent and the small traders (not shown in chart) are Bearish with a score of 41.9 percent. SUGAR Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 29.1 47.6 10.1 – Percent of Open Interest Shorts: 7.8 72.3 6.7 – Net Position: 170,483 -198,006 27,523 – Gross Longs: 233,102 380,876 80,955 – Gross Shorts: 62,619 578,882 53,432 – Long to Short Ratio: 3.7 to 1 0.7 to 1 1.5 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 71.7 30.6 41.9 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -6.4 7.3 -9.0   COFFEE Futures: The COFFEE large speculator standing this week was a net position of 46,885 contracts in the data reported through Tuesday. This was a weekly decline of -1,882 contracts from the previous week which had a total of 48,767 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 79.3 percent. The commercials are Bearish with a score of 25.3 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 5.1 percent. COFFEE Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 27.3 49.4 4.4 – Percent of Open Interest Shorts: 4.2 73.3 3.6 – Net Position: 46,885 -48,399 1,514 – Gross Longs: 55,397 100,060 8,883 – Gross Shorts: 8,512 148,459 7,369 – Long to Short Ratio: 6.5 to 1 0.7 to 1 1.2 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 79.3 25.3 5.1 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 5.3 -4.9 -8.0   SOYBEANS Futures: The SOYBEANS large speculator standing this week was a net position of 182,667 contracts in the data reported through Tuesday. This was a weekly boost of 6,023 contracts from the previous week which had a total of 176,644 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 69.8 percent. The commercials are Bearish with a score of 37.1 percent and the small traders (not shown in chart) are Bearish with a score of 25.4 percent. SOYBEANS Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 30.5 49.3 6.6 – Percent of Open Interest Shorts: 6.3 69.9 10.2 – Net Position: 182,667 -155,663 -27,004 – Gross Longs: 229,930 371,675 50,027 – Gross Shorts: 47,263 527,338 77,031 – Long to Short Ratio: 4.9 to 1 0.7 to 1 0.6 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 69.8 37.1 25.4 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -2.4 2.9 -3.3   SOYBEAN OIL Futures: The SOYBEAN OIL large speculator standing this week was a net position of 73,398 contracts in the data reported through Tuesday. This was a weekly fall of -5,247 contracts from the previous week which had a total of 78,645 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 54.8 percent. The commercials are Bearish with a score of 43.4 percent and the small traders (not shown in chart) are Bullish with a score of 64.6 percent. SOYBEAN OIL Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 26.3 50.9 9.1 – Percent of Open Interest Shorts: 7.4 73.4 5.5 – Net Position: 73,398 -87,101 13,703 – Gross Longs: 102,073 198,015 35,202 – Gross Shorts: 28,675 285,116 21,499 – Long to Short Ratio: 3.6 to 1 0.7 to 1 1.6 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 54.8 43.4 64.6 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -15.9 14.5 -1.0   SOYBEAN MEAL Futures: The SOYBEAN MEAL large speculator standing this week was a net position of 88,831 contracts in the data reported through Tuesday. This was a weekly fall of -845 contracts from the previous week which had a total of 89,676 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 76.9 percent. The commercials are Bearish with a score of 23.3 percent and the small traders (not shown in chart) are Bullish with a score of 67.5 percent. SOYBEAN MEAL Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 27.6 43.8 12.7 – Percent of Open Interest Shorts: 4.5 73.6 5.9 – Net Position: 88,831 -114,735 25,904 – Gross Longs: 106,273 168,517 48,694 – Gross Shorts: 17,442 283,252 22,790 – Long to Short Ratio: 6.1 to 1 0.6 to 1 2.1 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 76.9 23.3 67.5 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -6.0 2.6 29.3   LIVE CATTLE Futures: The LIVE CATTLE large speculator standing this week was a net position of 32,744 contracts in the data reported through Tuesday. This was a weekly gain of 7,316 contracts from the previous week which had a total of 25,428 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 20.4 percent. The commercials are Bullish with a score of 72.1 percent and the small traders (not shown in chart) are Bullish with a score of 72.7 percent. LIVE CATTLE Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 36.9 40.6 11.3 – Percent of Open Interest Shorts: 24.9 51.6 12.3 – Net Position: 32,744 -30,120 -2,624 – Gross Longs: 100,918 110,947 30,976 – Gross Shorts: 68,174 141,067 33,600 – Long to Short Ratio: 1.5 to 1 0.8 to 1 0.9 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 20.4 72.1 72.7 – Strength Index Reading (3 Year Range): Bearish Bullish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -17.9 15.4 10.5   LEAN HOGS Futures: The LEAN HOGS large speculator standing this week was a net position of 7,386 contracts in the data reported through Tuesday. This was a weekly lowering of -3,105 contracts from the previous week which had a total of 10,491 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 14.8 percent. The commercials are Bullish-Extreme with a score of 93.7 percent and the small traders (not shown in chart) are Bullish with a score of 57.2 percent. LEAN HOGS Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 29.7 43.9 9.9 – Percent of Open Interest Shorts: 25.8 43.8 13.8 – Net Position: 7,386 202 -7,588 – Gross Longs: 57,305 84,837 19,098 – Gross Shorts: 49,919 84,635 26,686 – Long to Short Ratio: 1.1 to 1 1.0 to 1 0.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 14.8 93.7 57.2 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -16.0 20.7 -15.1   COTTON Futures: The COTTON large speculator standing this week was a net position of 66,255 contracts in the data reported through Tuesday. This was a weekly lowering of -4,427 contracts from the previous week which had a total of 70,682 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 64.9 percent. The commercials are Bearish with a score of 33.8 percent and the small traders (not shown in chart) are Bullish with a score of 71.8 percent. COTTON Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 41.1 41.6 9.2 – Percent of Open Interest Shorts: 7.9 79.5 4.5 – Net Position: 66,255 -75,657 9,402 – Gross Longs: 81,941 82,992 18,322 – Gross Shorts: 15,686 158,649 8,920 – Long to Short Ratio: 5.2 to 1 0.5 to 1 2.1 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 64.9 33.8 71.8 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -11.0 11.9 -19.5   COCOA Futures: The COCOA large speculator standing this week was a net position of -3,369 contracts in the data reported through Tuesday. This was a weekly fall of -17,863 contracts from the previous week which had a total of 14,494 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 14.3 percent. The commercials are Bullish-Extreme with a score of 85.8 percent and the small traders (not shown in chart) are Bearish with a score of 31.5 percent. COCOA Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 29.0 45.5 5.9 – Percent of Open Interest Shorts: 30.1 45.5 4.8 – Net Position: -3,369 -126 3,495 – Gross Longs: 90,712 142,236 18,389 – Gross Shorts: 94,081 142,362 14,894 – Long to Short Ratio: 1.0 to 1 1.0 to 1 1.2 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 14.3 85.8 31.5 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -39.1 42.0 -32.3   WHEAT Futures: The WHEAT large speculator standing this week was a net position of 20,435 contracts in the data reported through Tuesday. This was a weekly reduction of -3,446 contracts from the previous week which had a total of 23,881 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 45.6 percent. The commercials are Bearish with a score of 33.9 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 98.2 percent. WHEAT Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 31.3 38.0 10.7 – Percent of Open Interest Shorts: 25.3 43.4 11.4 – Net Position: 20,435 -18,089 -2,346 – Gross Longs: 105,566 128,087 36,114 – Gross Shorts: 85,131 146,176 38,460 – Long to Short Ratio: 1.2 to 1 0.9 to 1 0.9 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 45.6 33.9 98.2 – Strength Index Reading (3 Year Range): Bearish Bearish Bullish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 0.6 -5.5 17.9   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
The Oil Market Opened Today With A Gap, What Happen Next?

Oil moves higher, gold range-trades | Oanda

Jeffrey Halley Jeffrey Halley 21.06.2022 12:17
Oil prices start reversing the Friday slump As I outlined above, oil futures have started reversing the Friday price slump as speculative capitulation collides with the reality of tight energy markets in the real world. Brent crude held USD 112.00 overnight, finishing 0.92% higher at USD 114.05 a barrel. It has added another 0.85% to USD 115.15 a barrel in Asian trading today. WTI held USD 108.50 overnight, finishing 0.20% higher at USD 110.05 a barrel. It has jumped 1.20% higher to USD 111.50 a barrel in Asian trading.   Friday’s falls have bought my six-month support lines back into focus. On Brent crude, that is at USD 107.00 a barrel today, just below its 100-day moving average (DMA) at USD 107.95. Ahead of this, it has support at USD 112.00, with resistance at USD 116.00 a barrel. WTI’s six-month support line is at USD 106.25 a barrel, just ahead of its 100-DMA at 105.25. It has interim support at USD 108.50, and resistance at USD 112.50 a barrel.   Of the two, WTI looks the more vulnerable, having fallen further and closed closer to its multi-month support zone. If the US cuts federal fuel taxes this week, or US housing data is very soft, that could be enough to tip the scales lower. It is hard to see either contract moving lower than USD 100.00 a barrel given the state of the physical market. From a technical perspective, I would like to see one of either contract tracing out a couple of daily closes below the longer-term support lines and the 100-DMAs, before reassessing my longer-term bullish outlook.   Gold range continues It was another wax-on, wax-off day for gold overnight thanks to US markets being closed. It edged 0.11% lower to USD 1839.00 an ounce. In Asia, it has gained slightly by 0.12% to USD 1840.60 an ounce as comatose trading conditions continue.   Despite the noise of the past week, it remains anchored in the middle of its one-month range. The overnight price action shows that the inverse correlation to the US dollar is as strong as ever.   Gold has resistance at USD 1860.00 and USD 1880.00, the latter appearing an insurmountable obstacle for now. Support is at USD 1805.00 and then USD 1780.00 an ounce. Failure of the latter sets in motion a much deeper correction, while I would need to see a couple of daily closes above USD 1900.00 to get excited about the upside. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Oil moves higher, gold range-trades - MarketPulseMarketPulse
Investing In Gold? XAUUSD - Can Gold Price Reach $1700!? | FxPro

Investing In Gold? XAUUSD - Can Gold Price Reach $1700!? | FxPro

Alex Kuptsikevich Alex Kuptsikevich 21.06.2022 11:45
Despite attempts at rebounding equity markets, moderate pressure on gold has persisted for the third consecutive trading session. This pressure is directly linked to rising long-term bond yields on US debt and several other developed countries. Bonds and gold work like communicating vessels: rising real long-term yields draw capital to the debt markets away from gold. Over the last two years, the inverse correlation between gold and US 10-year Treasury yields has been very strong: gold prices peaked in August 2020, while yields rose from 0.5%. Last week, when the 10-year Treasury yield was rising temporarily to 3.5%, it tested the $1800 area. However, there are several essential points to understand in this correlation. First, the 10-year Treasury yields touched 11-year highs last week, while gold has retreated only to the levels last seen at the start of the year. In other words, an active capital outflow from gold only occurs when yields decline sharply, whereas the long-term trend favours the shiny metal. This correlation can easily be explained by inflation, which eats into the purchasing power of money in the long term. Secondly, 10-year yields are not so much influenced by short-term Fed interest rates as economic growth forecasts. Increased chances of a recession in the foreseeable future have dampened long-term yields. In addition, there are signs that the upward movement in UST yields was too fast, setting up a corrective pullback in the near term. In our opinion, the potential danger for gold is a further tightening of the Fed’s tone, i.e. hints of new steps of a 75-point rate hike and a willingness to keep rates above inflation. But so far, we have seen a significant outperformance of inflation over key rates, and comments from FOMC members indicate a willingness to stop with a tightening in the 3.5-4.0% area, with no attempt to ride out inflation and a reversal to a rate cut as early as 2024. Such outlooks are keeping long-term bond yields in check and, at the same time fuelling interest in a strategy of buying gold during intense downturns. Locally, creeping upward bond yields are working for sellers of gold. This also has a bearish signal in the form of consolidation below the 200-day moving average. However, gold’s resilience drew attention when markets overestimated expectations of a rate hike from 50 to 75 points and multiple buying gains on dips under the 200-day moving average since December last year.
The Gold Market Is Volatile, There Are Two Possible Developments

NGAS Futures Closed At Two Month Lows, Cotton Prices Falling, Global Wave Of Monetary Policy Tightening Puts Gold Prices under Pressure

Rebecca Duthie Rebecca Duthie 21.06.2022 15:46
Summary: Natural gas futures prices are dropping. As the dollar strengthens and global monetary policy tightening continues, the price of gold remains under pressure. Cotton demand expected to decrease as supplies are set to increase. Read next: Brent Crude Oil Prices At 5 Week Lows, Silver Prices Affected By Aggressive Monetary Policy, New Concerns Around Corn Supplies  NGAS futures closed at two month lows Natural gas futures closed at their lowest level in two months in the wake of rising domestic inventories. Freeport LNG indicated that it did not expect the terminal to return to full operations until late 2022, however, partial operations could return within three months. The recent explosion at one of the largest US natural gas export terminals is keeping the US supplies, despite ever rising international demand, which is releasing the domestic price pressure. NGAS Jul ‘22 Futures Price Chart   Gold prices falling amidst a wave of monetary policy tightening The price of gold remains under pressure from rising treasury yields and a strong US Dollar. Gold prices fell around 2% last week amidst a global wave of monetary tightening which aimed at bringing inflation down, the wave was led by the Federal Reserve's 75 basis point hike. The gold prices fell due to the fact that investors tend to shy away from the non-yielding metal as interest rates rise. Gold Aug ‘22 Futures Price Chart Cotton demand weakens as supply rises Cotton futures were trading at almost 4 week lows on prospects of higher supplies and weaker demand. Demand for cotton is seemingly weakening across the world as inflationary pressures resume and as the world’s largest cotton consumer, China, re-enters into Covid-19 lockdowns. In addition, the production is due to increase in both Egypt and other West African countries, whilst demand is expected to drop from Vietnam, Mexico and Bangladesh. Cotton Oct ‘22 Futures Price Chart Sources: finance.yahoo.com, tradingeconomics.com
Supply Concerns Are Driving Coffee Prices Upwards, Palladium Demand Eroded By Hawkish Fed And Rallying USD, Hopes Of Gas Tax Holiday Strengthen

Supply Concerns Are Driving Coffee Prices Upwards, Palladium Demand Eroded By Hawkish Fed And Rallying USD, Hopes Of Gas Tax Holiday Strengthen

Rebecca Duthie Rebecca Duthie 22.06.2022 13:07
Summary: Palladium Prices at 6 month lows. WTI Crude Prices falling. Brazil lagging their historical harvesting average. Read next: NGAS Futures Closed At Two Month Lows, Cotton Prices Falling, Global Wave Of Monetary Policy Tightening Puts Gold Prices under Pressure  WTI crude oil prices falling with demand expectations WTI crude oil futures fell almost 6% on Wednesday, hitting their lowest levels in almost a month amidst concerns that rising US interest rates that are aimed at controlling inflation levels could likely cause a recession and therefore a slowdown in demand. In addition, there are expectations that President Joe Biden will call for a gas tax holiday in an attempt to drive fuel prices down. However, there are still concerns around supply, with the Russian oil embargo due to the war in the Ukraine and OPEC unable to pump more oil due to underinvestment. WTI Crude Aug ‘22 Futures Price Chart Coffee futures prices rising due to supply concerns Coffee prices were trading at their highest price since June 9th on Wednesday due to continuing concerns around tight supplies. The coffee prices remain supported by limited flows from Central America and Brazil, with Brazil (the top grower) behind its historical harvest average. In addition, one of Brazil’s largest growing areas is expected to see a drought. Coffee Sep ‘22 Futures Price Chart Palladium prices at 6 month lows Palladium is trading at its lowest price in 6 months on Wednesday, this price drop comes in the wake of the hawkish Fed’s 75 basis point interest rate hike and a sharp rally in the US Dollar both of which have kicked the demand for the metal. In addition, there are concerns around the demand for the metal from the top consumer, China as Covid-19 lockdowns are re-imposed. Palladium Sep ‘22 Futures Price Chart Sources: finance.yahoo.com, tradingeconomics.com
When The Global Economy Recovers, We Can Expect Demand To Rebound

Demand Is Decreasing For Platinum, RBOB Gasoline, Supply Concerns Around Wheat Are Easing

Rebecca Duthie Rebecca Duthie 23.06.2022 15:20
Summary: India may reintroduce wheat exports. Fresh lockdowns in China are weighing on metal demand Wheat prices drop as supply concerns ease Chicago wheat futures prices have been falling over the past week in the wake of news of an improved outlook as Russia produced a record-high amount of wheat. A higher supply from the world's top exporter eased shortage concerns amidst the European and North American harvesting season. In addition, India's food ministry said it may reintroduce wheat exports to Indonesia, however that is dependent on availability.   Wheat Sep ‘22 Futures Price Chart Platinum prices are declining with demand Platinum futures are down almost 20% from their 8-month high hit in March, as a stronger US Dollar and an aggressive Federal Reserve weakened the demand for Metals which in turn has weighed on Metal prices. In addition, vehicle production is expected to drop in the wake of aggressive monetary policy tightening and increased fears of slowing economic growth. Also, the lockdowns in China are weighing on the demand from the top consumer. Platinum Jul ‘22 Futures Price Chart RBOB Gasoline The price of gasoline has experienced volatility over the past week as concerns around supply continue to drive the price up whilst talks of President Joe Biden introducing a gas tax holiday are driving the prices down. RBOB Gasoline Jul ‘22 Futures Price Chart Sources: finance.yahoo.com, tradingeconomics.com
The Price Of Gold (XAU/USD) Confirmed The Bullish Attitude

Rising Interest Rates Are Inhibiting The Demand For Gold And Silver, Concerns Around A Recession Are Driving Brent Crude Oil Prices Down

Rebecca Duthie Rebecca Duthie 24.06.2022 12:25
Summary: Aggressive central banks inhibiting metal demand. Fears of a slowing economy are sending brent crude oil into its second consecutive week of declines. Read next: Demand Is Decreasing For Platinum, RBOB Gasoline, Supply Concerns Around Wheat Are Easing  Demand for gold declining as interest rates rise Gold futures declined on Friday and were set to decline for their second consecutive week in the wake of stronger expectations that major central banks will continue to raise interest rates aggressively in an attempt to control inflation, which subdued the demand for metals. The Chairman of the Federal Reserve, Jerome Powell reiterates that his commitment to fighting 40-year high inflation is ‘unconditional.’ Gold is usually viewed as a hedge against inflation and as a safe-haven asset during times of economic crisis, however as interest rates rise, so too does the opportunity cost of holding gold. Gold Aug ‘22 Futures Price Chart Brent Crude Oil facing second consecutive week of declines Brent Crude is on track to decline for the second straight week on Friday in the wake of concerns around aggressive monetary policy tightening and the effects it will have on the global economy and the demand for oil. US manufacturing and services PMIs released on Thursday came in well below expectations which increased fears of a slowing US economy. In addition, investors are remaining cautious amidst signs that global crude oil and fuel supply remains tight. Brent Crude Oil Futures Price Chart Silver prices on the decling As the Federal Reserve and other major central banks continue to rise interest rates in an attempt to tackle rising inflation and risking a global recession, the price of silver is falling. Silver is usually viewed as a hedge against inflation and as a safe-haven asset during times of economic crisis, however as interest rates rise, so too does the opportunity cost of holding silver. Silver Jul ‘22 Price Chart Sources: finance.yahoo.com, tradingeconomics.com
COT Week 25 Charts: Soft Commodity Speculator bets slightly lower led by Corn & Sugar

COT Week 25 Charts: Soft Commodity Speculator bets slightly lower led by Corn & Sugar

Invest Macro Invest Macro 25.06.2022 15:28
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday June 21st and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. The soft commodities market speculator bets were mostly lower this week as six out of the eleven soft commodities markets we cover had higher positioning this week while five markets had lower contracts. Leading the gains for soft commodities markets was Live Cattle (7,378 contracts) and Cocoa (6,674 contracts) with Soybean Meal (6,540 contracts), Lean Hogs (4,673 contracts) and Coffee (2,486 contracts) also showing positive speculator contract changes for the week. Meanwhile, leading the declines in speculator bets this week were Corn (-19,606 contracts) and Sugar (-7,372 contracts) with Soybean Oil (-5,868 contracts), Soybeans (-4,288 contracts), Wheat (-1,368 contracts) and Cotton (-210 contracts) also registering lower bets on the week. Strength scores (3-Year range of Speculator positions, from 0 to 100 where above 80 is extreme bullish and below 20 is extreme bearish) show that Coffee (81 percent) and Soybean Meal (80.6 percent) are in extreme bullish positions as of the latest data release. On the downside for strength scores is Lean Hogs (19.9 percent) which is just on the edge of being in a bearish extreme position and then Cocoa (20.9 percent) which is the next lowest. Strength score trends (or move index, that calculate 6-week changes in strength scores) shows that Coffee (14.5 percent) and Soybean Meal (6.3 percent) have the highest trends as of the latest data. The overall effect of this chart shows how most of the soft commodities markets have really cooled off after really strong speculator sentiment since the start of the year. Data Snapshot of Commodity Market Traders | Columns Legend Jun-21-2022 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index WTI Crude 1,658,636 0 289,502 0 -323,915 100 34,413 64 Gold 500,276 14 163,287 4 -186,929 96 23,642 14 Silver 145,356 12 18,419 7 -27,250 93 8,831 4 Copper 187,170 17 -20,938 27 18,928 72 2,010 37 Palladium 7,641 6 -4,046 0 4,511 100 -465 17 Platinum 64,946 30 1,491 6 -6,397 96 4,906 30 Natural Gas 1,030,971 0 -130,869 39 85,977 58 44,892 86 Brent 173,098 18 -38,010 47 36,052 53 1,958 36 Heating Oil 268,818 23 9,564 56 -28,204 41 18,640 63 Soybeans 745,494 32 178,379 68 -152,968 38 -25,411 28 Corn 1,512,152 23 380,169 79 -326,474 25 -53,695 12 Coffee 192,832 0 49,371 81 -52,348 22 2,977 20 Sugar 779,773 0 163,111 70 -181,280 34 18,169 30 Wheat 320,326 6 19,067 44 -15,407 38 -3,660 91   CORN Futures: The CORN large speculator standing this week reached a net position of 380,169 contracts in the data reported through Tuesday. This was a weekly fall of -19,606 contracts from the previous week which had a total of 399,775 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 78.6 percent. The commercials are Bearish with a score of 25.4 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 12.1 percent. CORN Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 33.3 44.7 9.3 – Percent of Open Interest Shorts: 8.2 66.3 12.9 – Net Position: 380,169 -326,474 -53,695 – Gross Longs: 504,174 675,580 140,912 – Gross Shorts: 124,005 1,002,054 194,607 – Long to Short Ratio: 4.1 to 1 0.7 to 1 0.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 78.6 25.4 12.1 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -11.6 12.6 1.1   SUGAR Futures: The SUGAR large speculator standing this week reached a net position of 163,111 contracts in the data reported through Tuesday. This was a weekly fall of -7,372 contracts from the previous week which had a total of 170,483 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 70.1 percent. The commercials are Bearish with a score of 33.8 percent and the small traders (not shown in chart) are Bearish with a score of 30.3 percent. SUGAR Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 29.1 49.2 9.0 – Percent of Open Interest Shorts: 8.2 72.4 6.7 – Net Position: 163,111 -181,280 18,169 – Gross Longs: 227,142 383,646 70,240 – Gross Shorts: 64,031 564,926 52,071 – Long to Short Ratio: 3.5 to 1 0.7 to 1 1.3 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 70.1 33.8 30.3 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -4.9 7.5 -18.9   COFFEE Futures: The COFFEE large speculator standing this week reached a net position of 49,371 contracts in the data reported through Tuesday. This was a weekly gain of 2,486 contracts from the previous week which had a total of 46,885 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 81.5 percent. The commercials are Bearish with a score of 21.7 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 19.8 percent. COFFEE Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 30.3 47.6 4.4 – Percent of Open Interest Shorts: 4.7 74.7 2.8 – Net Position: 49,371 -52,348 2,977 – Gross Longs: 58,442 91,789 8,425 – Gross Shorts: 9,071 144,137 5,448 – Long to Short Ratio: 6.4 to 1 0.6 to 1 1.5 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 81.5 21.7 19.8 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 14.5 -17.0 19.8   SOYBEANS Futures: The SOYBEANS large speculator standing this week reached a net position of 178,379 contracts in the data reported through Tuesday. This was a weekly decrease of -4,288 contracts from the previous week which had a total of 182,667 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 68.5 percent. The commercials are Bearish with a score of 37.9 percent and the small traders (not shown in chart) are Bearish with a score of 28.1 percent. SOYBEANS Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 30.3 50.5 6.6 – Percent of Open Interest Shorts: 6.4 71.0 10.0 – Net Position: 178,379 -152,968 -25,411 – Gross Longs: 226,191 376,155 49,215 – Gross Shorts: 47,812 529,123 74,626 – Long to Short Ratio: 4.7 to 1 0.7 to 1 0.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 68.5 37.9 28.1 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 1.1 -1.6 2.5   SOYBEAN OIL Futures: The SOYBEAN OIL large speculator standing this week reached a net position of 67,530 contracts in the data reported through Tuesday. This was a weekly reduction of -5,868 contracts from the previous week which had a total of 73,398 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 50.9 percent. The commercials are Bearish with a score of 48.9 percent and the small traders (not shown in chart) are Bullish with a score of 52.0 percent. SOYBEAN OIL Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 25.0 52.9 8.4 – Percent of Open Interest Shorts: 7.6 73.0 5.7 – Net Position: 67,530 -77,869 10,339 – Gross Longs: 96,861 205,007 32,564 – Gross Shorts: 29,331 282,876 22,225 – Long to Short Ratio: 3.3 to 1 0.7 to 1 1.5 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 50.9 48.9 52.0 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -22.0 24.5 -29.5   SOYBEAN MEAL Futures: The SOYBEAN MEAL large speculator standing this week reached a net position of 95,371 contracts in the data reported through Tuesday. This was a weekly advance of 6,540 contracts from the previous week which had a total of 88,831 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 80.6 percent. The commercials are Bearish with a score of 20.7 percent and the small traders (not shown in chart) are Bullish with a score of 60.0 percent. SOYBEAN MEAL Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 27.5 42.8 11.8 – Percent of Open Interest Shorts: 3.9 72.6 5.7 – Net Position: 95,371 -119,799 24,428 – Gross Longs: 110,934 172,823 47,533 – Gross Shorts: 15,563 292,622 23,105 – Long to Short Ratio: 7.1 to 1 0.6 to 1 2.1 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 80.6 20.7 60.0 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 6.3 -6.1 2.6   LIVE CATTLE Futures: The LIVE CATTLE large speculator standing this week reached a net position of 40,122 contracts in the data reported through Tuesday. This was a weekly advance of 7,378 contracts from the previous week which had a total of 32,744 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 29.7 percent. The commercials are Bullish with a score of 60.4 percent and the small traders (not shown in chart) are Bullish with a score of 76.7 percent. LIVE CATTLE Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 37.1 39.7 11.4 – Percent of Open Interest Shorts: 22.6 53.6 12.0 – Net Position: 40,122 -38,641 -1,481 – Gross Longs: 102,557 109,561 31,589 – Gross Shorts: 62,435 148,202 33,070 – Long to Short Ratio: 1.6 to 1 0.7 to 1 1.0 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 29.7 60.4 76.7 – Strength Index Reading (3 Year Range): Bearish Bullish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 0.4 -3.9 8.8   LEAN HOGS Futures: The LEAN HOGS large speculator standing this week reached a net position of 12,059 contracts in the data reported through Tuesday. This was a weekly lift of 4,673 contracts from the previous week which had a total of 7,386 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 19.9 percent. The commercials are Bullish-Extreme with a score of 89.9 percent and the small traders (not shown in chart) are Bearish with a score of 49.7 percent. LEAN HOGS Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 31.6 43.4 10.2 – Percent of Open Interest Shorts: 25.2 45.0 15.0 – Net Position: 12,059 -3,041 -9,018 – Gross Longs: 59,031 80,955 18,981 – Gross Shorts: 46,972 83,996 27,999 – Long to Short Ratio: 1.3 to 1 1.0 to 1 0.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 19.9 89.9 49.7 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -4.7 9.2 -18.1   COTTON Futures: The COTTON large speculator standing this week reached a net position of 66,045 contracts in the data reported through Tuesday. This was a weekly decrease of -210 contracts from the previous week which had a total of 66,255 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 64.7 percent. The commercials are Bearish with a score of 35.5 percent and the small traders (not shown in chart) are Bullish with a score of 54.2 percent. COTTON Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 42.4 39.7 8.3 – Percent of Open Interest Shorts: 8.0 77.6 4.8 – Net Position: 66,045 -72,681 6,636 – Gross Longs: 81,410 76,251 15,830 – Gross Shorts: 15,365 148,932 9,194 – Long to Short Ratio: 5.3 to 1 0.5 to 1 1.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 64.7 35.5 54.2 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -10.0 11.7 -26.7   COCOA Futures: The COCOA large speculator standing this week reached a net position of 3,305 contracts in the data reported through Tuesday. This was a weekly boost of 6,674 contracts from the previous week which had a total of -3,369 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 20.9 percent. The commercials are Bullish-Extreme with a score of 81.2 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 12.0 percent. COCOA Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 30.3 43.9 4.2 – Percent of Open Interest Shorts: 29.2 45.5 3.7 – Net Position: 3,305 -4,856 1,551 – Gross Longs: 93,606 135,958 12,977 – Gross Shorts: 90,301 140,814 11,426 – Long to Short Ratio: 1.0 to 1 1.0 to 1 1.1 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 20.9 81.2 12.0 – Strength Index Reading (3 Year Range): Bearish Bullish-Extreme Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -17.4 21.3 -41.9   WHEAT Futures: The WHEAT large speculator standing this week reached a net position of 19,067 contracts in the data reported through Tuesday. This was a weekly reduction of -1,368 contracts from the previous week which had a total of 20,435 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 43.9 percent. The commercials are Bearish with a score of 37.8 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 91.4 percent. WHEAT Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 32.1 39.1 10.4 – Percent of Open Interest Shorts: 26.2 44.0 11.5 – Net Position: 19,067 -15,407 -3,660 – Gross Longs: 102,924 125,399 33,167 – Gross Shorts: 83,857 140,806 36,827 – Long to Short Ratio: 1.2 to 1 0.9 to 1 0.9 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 43.9 37.8 91.4 – Strength Index Reading (3 Year Range): Bearish Bearish Bullish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -3.4 3.4 1.3   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
Recession Fears Continue To Rattle the Commodity Markets - Brent Crude Oil, Silver Futures Touch 4-week lows, Corn Futures Reach 6-week Highs.

G7 Leaders Discussed A Price Cap On Russian Brent Crude Oil, China Eases Covid-19 Restrictions, Corn Prices Are Trading At 2 Week Lows

Rebecca Duthie Rebecca Duthie 27.06.2022 12:50
Summary: G7 leaders discussed a price cap on Russian oil. Fears of a recession eased in the wake of China’s easing of lockdown restrictions and testing measures. Recession prospects weighing on demand for corn. Read next: Rising Interest Rates Are Inhibiting The Demand For Gold And Silver, Concerns Around A Recession Are Driving Brent Crude Oil Prices Down  Prospects of tighter supply of Brent Crude oil weighed on markets Brent Crude prices are sitting at around $113 on Monday as recession fears put downward pressure on Brent prices. In addition, traders are monitoring any news from the G7 summit which is taking place in Germany ahead of talks between the US and Iran to revive the nuclear deal made in 2015. G7 leaders discussed a price cap on Russian oil, which will work through the imposition of restrictions on both shipping and insurance and allowing only the transportation of Russian crude and petroleum products that are sold below an agreed threshold. However, the thought of even more supply tightness weighed on the market, with the G7 leaders still determined to find ways to cut Russia's war against Ukraine Funding. Brent Crude Oil Price Chart Silver prices bounce back Silver prices bounced back somewhat on Monday as fears of a recession eased in the wake of China’s easing of lockdown restrictions and testing measures. However, silver prices remain under threat from further monetary policy tightening, with both the Federal Reserve and the European Central Bank (ECB) expected to raise interest rates further. Silver Jul ‘22 Futures Prices Corn Prices at 2 week lows Corn is trading at 2 week lows on Monday, as favourable weather and weaker demand prospects weighed on prices, temporarily turning the attention away from war disruptions at Black Sea Ports. Fears of demand come from recession prospects. Corn Dec ‘22 Futures Price Chart Sources: tradingeconomics.com, finance.yahoo.com
Commodities: Prices Are Rising, Heatwaves In US And China Affects The Production Of Cotton

Gold Prices Struggle To Hold Monday’s Gains, Concerns Around NGAS Supplies Are Easing, Cotton - A Recession Sensitive Commodity

Rebecca Duthie Rebecca Duthie 28.06.2022 13:18
Summary: UK, US, Japan and Canada all ban Russian gold imports. NGAS domestic inventories are rising. Favourable weather conditions are causing more hope of solid Cotton yields in top growing regions. Read next: G7 Leaders Discussed A Price Cap On Russian Brent Crude Oil, China Eases Covid-19 Restrictions, Corn Prices Are Trading At 2 Week Lows  Gold prices trading at 2 week lows The price of gold is trading at almost 2 week lows on Tuesday, this comes in the wake of continuous elevated US treasury yields. The metal struggled to hold onto Monday’s gains that came in the wake of the UK, US, Japan and Canada all officially banning the imports of Russian gold, the move has been viewed by the markets as largely symbolic as Russia’s exports to the west have already dried up. Although gold is widely considered as a hedge against inflation and economic uncertainties, higher interest rates raise the opportunity cost of holding non-yielding bullion. Gold Aug ‘22 Futures Price Chart NGAS price recovery Natural Gas prices rose again, however they remain under pressure due to rising domestic inventories and milder temperatures which weighed on the demand for cooling. In addition, the most recent EIA report showed that US utilities injected more cubic feet of gas into underground storage than was expected. NGAS Jul ‘22 Futures Price Chart Cotton prices due to be impacted by a recession Cotton futures prices dropped to 9 month lows in the wake of growing recessionary concerns and increased prospects of a lower demand. Cotton is known to be a recession sensitive commodity, thus, cotton prices are set to be impacted by major banks’ rising interest rates in an attempt to fight inflation and the slowdown in both consumption and economic activity. In addition, favourable weather conditions are causing more hope of solid yields in top growing regions. Cotton Oct ‘22 Futures Price Chart Sources: finance.yahoo.com, tradingeconomics.com
Russia's Crude Oil Still Flows To Japan, Negative Trade Balance In Japan

Tighter Supply Concerns For WTI Crude Oil, Coffee Prices At 2 Week Lows, Palladium Prices Are Rising With Expectations Of Increasing Demand

Rebecca Duthie Rebecca Duthie 29.06.2022 09:46
Summary: WTI Crude Oil prices have been rallying as investors weigh concerns over ongoing supply tightness over a potential slowdown in demand. Concerns around dry weather conditions in Brazil may lead to lower coffee yields. Palladiums prices rise in the wake of China easing covid restrictions in China WTI Crude Oil Prices are rising as concerns around supply outweigh demand concerns WTI Crude Oil prices have been rallying as investors weigh concerns over ongoing supply tightness over a potential slowdown in demand. Industry data reflected that Crude inventories declined last week worse than the market has expected. In addition the US crude benchmark jumped 2% in the previous session in the wake of reports that major producers UAE and Saudi Arabia are at (or very close to) near term limits, whilst simultaneously unrest in Ecuador and Libya which threaten to tighten supply further. This comes before an OPEC+ meeting this week, where the group is expected to stick to its policy of modest output increases. WTI Crude Oil Aug ‘22 Futures Price Chart Coffee prices downside may be limited Arabica Coffee futures are trading at around 2 week lows as coffee production improved. In addition, the USDA projected global coffee production to rise in their 2022/23, mainly due to Brazil’s arabica crop entering the on-year of the biennial production cycle. However, concerns around dry weather conditions in Brazil may lead to lower coffee yields and limit the downside in coffee prices. Coffee Sep ‘22 Futures Price Chart Palladium Prices Rise Palladium Futures have risen to around 2 week highs after they rebounded from 6 month lows that we hit in mid-June in the wake of China’s decision to lift covid restrictions in Shanghai which lifted hopes of a recovery in metal demand. China is the largest consumer of palladium, and accounts for 26% of the total global consumption. In parallel, traders expect major central banks to ease back from aggressive monetary tightening due to easing inflation and disappointing macroeconomic figures, raising expectations of a recovery in global economy and in turn consumer spending.   Palladium Sep ‘22 Futures Price Chart Sources: finance.yahoo.com, tradingeconomics.com
Wheat Prices Supported By Increased Importer Demand, Weaker Demand Is Plunging Platinum Prices, RBOB Gasoline

Wheat Prices Supported By Increased Importer Demand, Weaker Demand Is Plunging Platinum Prices, RBOB Gasoline

Rebecca Duthie Rebecca Duthie 30.06.2022 23:01
Summary: Platinum prices plunged amidst prospects of a weaker demand for the metal Wheat prices touched four-month lows on June 27th but have since recovered somewhat. Prospects of a recession could cause a decrease in oil demand are driving oil prices down. Platinum prices plunged on Thursday Platinum prices plunged amidst prospects of a weaker demand for the metal outweighed the fear of tighter supplies. As major central banks all over the world continue to raise interest rates in an attempt to control inflation despite the possibility of a recession, a slowdown in economic activity (including vehicle production) is inevitable. As the war in the Ukraine shows no signs of slowing, global platinum supplies are expected to remain subdued. Platinum Oct ‘22 Futures Price Chart Wheat prices supported by increased importer demand Wheat prices touched four-month lows on June 27th but have since recovered somewhat, supported by increased demand from importers. In the wake of a muted demand period, state tenders from Bangladesh, Jordan and signs of future tenders from Egypt all contributed to lifting buying expectations. However, currently there is a record supply of wheat from Russia and a strong harvest that was stronger than expected in North America. Investors continue to monitor the possibility of seaborne exports from Ukraine, after Italian Prime Minister Draghi hinted that trade corridors may open soon. Wheat Sep ‘22 Futures Price Chart RBOB Gasoline Oil futures prices fell on Thursday in the wake of a weekly increase in U.S gasoline and distillate supplies raising worries over the demand outlook, and major oil producers are expected to remain on track to boost production in August. The market uncertainty over future OPEC+ output and recession fears which could cause a decrease in oil demand are driving oil prices down. RBOB Gasoline Jul ‘22 Futures Price Chart Sources: finance.yahoo.com. tradingeconomics.com
Gold Futures Fell To Near 7 Week Lows, Investors Weighing Supply v Demand For WTI Crude, Platinum Prices

Gold Futures Fell To Near 7 Week Lows, Investors Weighing Supply v Demand For WTI Crude, Platinum Prices

Rebecca Duthie Rebecca Duthie 01.07.2022 17:23
Summary: Fed policymakers are signaling yet another 75 basis point rate increase in July. WTI is bullish. Platinum Prices are at 19 month lows. Read next: https://www.fxmag.com/commodities/wheat-prices-supported-by-increased-importer-demand-weaker-demand-is-plunging-platinum-prices-rbob-gasoline  Gold Futures near 7 week lows. Gold prices neared near 7 week lows on Friday as a strong dollar continued on its path to dampening demand for bullion, whilst a broader market sentiment in risk assets pushed investors to liquidate their gold positions to offset losses in their other holdings. Fed policymakers indicated during this week a commitment to controlling inflation even at the risk of a recession, signaling yet another 75 basis point rate increase in July. Gold is normally considered as a hedge against inflation and economic uncertainty, however higher interest rates increase the opportunity cost of holding non-yielding bullion. Gold Aug ‘22 Futures Price Chart Investors weigh tight supply on the backdrop of falling demand WTI Crude Oil WTI crude oil futures dipped and bounced back during the Friday trading day as investors weighed a tightening supply on the backdrop of recession prospects and a slowing economy causing a decline in demand. Earlier this week OPEC+ agreed to stick to its output strategy, increasing production by 648,000 barrels per day in July and August, despite signs that the physical crude market remains very tight. In addition, factors added to the bullish outlook for crude include supply outages in Libya and expected shutdowns in Norway. WTI Crude Oil Aug ‘22 Futures Price Chart Platinum prices at 19 month lows Platinum prices plunged amidst prospects of a weaker demand for the metal that outweighed the fear of tighter supplies. As major central banks all over the world continue to raise interest rates in an attempt to control inflation despite the possibility of a recession, in the wake of aggressive monetary policy, a slowdown in economic activity (including vehicle production) is inevitable. As the war in the Ukraine shows no signs of slowing, global platinum supplies are expected to remain subdued. Platinum Oct ‘22 Futures Price Chart Sources: finance.yahoo.com, tradingeconomics.com, fxmag.com
COT Week 26 Charts: Soft Commodities Speculators bets drop sharply led by Corn, Soybeans & Sugar

COT Week 26 Charts: Soft Commodities Speculators bets drop sharply led by Corn, Soybeans & Sugar

Invest Macro Invest Macro 02.07.2022 18:20
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday June 28th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. The soft commodities market speculator bets were sharply lower this week as just two out of the eleven soft commodities markets we cover had higher positioning this week while nine markets had lower contracts. Leading the gains for soft commodities markets was Lean Hogs (4,228 contracts) and Cocoa (3,034 contracts) as the only markets showing positive weeks. Meanwhile, leading the declines in speculator bets this week were Corn (-52,067 contracts), Soybeans (-41,186 contracts) and Sugar (-40,402 contracts) with Soybean Oil (-22,612 contracts), Live Cattle (-12,287 contracts), Wheat (-11,388 contracts), Cotton (-9,655 contracts), Coffee (-4,171 contracts) and Soybean Meal (-1,446 contracts) also registering lower bets on the week. Strength scores (measuring the 3-Year range of Speculator positions, from 0 to 100 where above 80 percent is extreme bullish and below 20 percent is extreme bearish) show that Soybean Meal (80 percent) is leading the speculator strength positions at an extreme bullish score. Coffee (78 percent) and Corn (72 percent) are the next highest in strength scores. Live Cattle (14 percent) is the lone extreme bearish market with Cocoa (24 percent) coming in as the next lowest. Strength score trends (or move index, that calculate 6-week changes in strength scores) shows the trends for soft commodities are on the downside with eight out of the eleven markets showing negative trends. Soybean Oil (-34 percent) and Wheat (-28 percent) are leading the negative scores currently. The only markets with positive scores this week are Coffee (6 percent), Lean Hogs (9 percent) and Soybean Meal (12 percent). Data Snapshot of Commodity Market Traders | Columns Legend Jun-28-2022 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index WTI Crude 1,651,566 0 299,692 3 -327,938 99 28,246 55 Gold 497,005 13 157,693 2 -182,007 98 24,314 16 Silver 135,775 3 10,891 0 -18,485 100 7,594 0 Copper 182,352 14 -30,696 20 31,197 81 -501 22 Palladium 7,765 6 -3,825 1 4,441 100 -616 8 Platinum 68,232 36 -1,306 2 -3,381 100 4,687 27 Natural Gas 987,740 0 -129,419 40 90,840 60 38,579 71 Brent 173,920 19 -42,677 40 41,434 62 1,243 26 Heating Oil 269,168 23 7,508 53 -25,743 44 18,235 62 Soybeans 653,337 11 137,193 56 -106,705 52 -30,488 20 Corn 1,338,054 0 328,102 72 -274,110 33 -53,992 12 Coffee 194,896 2 45,200 78 -47,147 26 1,947 9 Sugar 734,324 0 122,709 62 -132,877 43 10,168 20 Wheat 291,041 0 7,679 29 -1,871 57 -5,808 80   CORN Futures: The CORN large speculator standing this week came in at a net position of 328,102 contracts in the data reported through Tuesday. This was a weekly reduction of -52,067 contracts from the previous week which had a total of 380,169 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 71.9 percent. The commercials are Bearish with a score of 32.9 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 12.0 percent. CORN Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 32.4 44.6 9.4 – Percent of Open Interest Shorts: 7.9 65.1 13.4 – Net Position: 328,102 -274,110 -53,992 – Gross Longs: 433,710 597,265 125,886 – Gross Shorts: 105,608 871,375 179,878 – Long to Short Ratio: 4.1 to 1 0.7 to 1 0.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 71.9 32.9 12.0 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -18.6 21.4 -2.9   SUGAR Futures: The SUGAR large speculator standing this week came in at a net position of 122,709 contracts in the data reported through Tuesday. This was a weekly lowering of -40,402 contracts from the previous week which had a total of 163,111 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 61.8 percent. The commercials are Bearish with a score of 43.0 percent and the small traders (not shown in chart) are Bearish with a score of 20.4 percent. SUGAR Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 28.7 49.2 9.1 – Percent of Open Interest Shorts: 12.0 67.3 7.7 – Net Position: 122,709 -132,877 10,168 – Gross Longs: 210,575 361,005 66,813 – Gross Shorts: 87,866 493,882 56,645 – Long to Short Ratio: 2.4 to 1 0.7 to 1 1.2 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 61.8 43.0 20.4 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -15.2 21.3 -47.7   COFFEE Futures: The COFFEE large speculator standing this week came in at a net position of 45,200 contracts in the data reported through Tuesday. This was a weekly decrease of -4,171 contracts from the previous week which had a total of 49,371 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 77.9 percent. The commercials are Bearish with a score of 26.5 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 9.5 percent. COFFEE Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 28.5 49.4 4.1 – Percent of Open Interest Shorts: 5.3 73.6 3.1 – Net Position: 45,200 -47,147 1,947 – Gross Longs: 55,545 96,232 8,006 – Gross Shorts: 10,345 143,379 6,059 – Long to Short Ratio: 5.4 to 1 0.7 to 1 1.3 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 77.9 26.5 9.5 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 5.8 -5.6 -5.2   SOYBEANS Futures: The SOYBEANS large speculator standing this week came in at a net position of 137,193 contracts in the data reported through Tuesday. This was a weekly lowering of -41,186 contracts from the previous week which had a total of 178,379 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 55.9 percent. The commercials are Bullish with a score of 51.7 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 19.5 percent. SOYBEANS Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 29.3 52.5 5.9 – Percent of Open Interest Shorts: 8.3 68.9 10.5 – Net Position: 137,193 -106,705 -30,488 – Gross Longs: 191,380 343,227 38,323 – Gross Shorts: 54,187 449,932 68,811 – Long to Short Ratio: 3.5 to 1 0.8 to 1 0.6 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 55.9 51.7 19.5 – Strength Index Reading (3 Year Range): Bullish Bullish Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -14.1 15.0 -6.4   SOYBEAN OIL Futures: The SOYBEAN OIL large speculator standing this week came in at a net position of 44,918 contracts in the data reported through Tuesday. This was a weekly reduction of -22,612 contracts from the previous week which had a total of 67,530 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 35.9 percent. The commercials are Bullish with a score of 63.7 percent and the small traders (not shown in chart) are Bearish with a score of 44.4 percent. SOYBEAN OIL Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 22.7 55.7 8.4 – Percent of Open Interest Shorts: 10.3 70.4 6.1 – Net Position: 44,918 -53,225 8,307 – Gross Longs: 82,491 202,343 30,416 – Gross Shorts: 37,573 255,568 22,109 – Long to Short Ratio: 2.2 to 1 0.8 to 1 1.4 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 35.9 63.7 44.4 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -34.2 38.6 -48.9   SOYBEAN MEAL Futures: The SOYBEAN MEAL large speculator standing this week came in at a net position of 93,925 contracts in the data reported through Tuesday. This was a weekly lowering of -1,446 contracts from the previous week which had a total of 95,371 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 79.8 percent. The commercials are Bearish with a score of 23.2 percent and the small traders (not shown in chart) are Bearish with a score of 42.3 percent. SOYBEAN MEAL Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 27.3 43.5 11.4 – Percent of Open Interest Shorts: 3.3 72.8 6.0 – Net Position: 93,925 -114,869 20,944 – Gross Longs: 106,995 170,250 44,567 – Gross Shorts: 13,070 285,119 23,623 – Long to Short Ratio: 8.2 to 1 0.6 to 1 1.9 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 79.8 23.2 42.3 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 11.5 -7.4 -33.0   LIVE CATTLE Futures: The LIVE CATTLE large speculator standing this week came in at a net position of 27,835 contracts in the data reported through Tuesday. This was a weekly fall of -12,287 contracts from the previous week which had a total of 40,122 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 14.3 percent. The commercials are Bullish with a score of 76.2 percent and the small traders (not shown in chart) are Bullish with a score of 79.2 percent. LIVE CATTLE Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 35.0 39.4 11.2 – Percent of Open Interest Shorts: 25.1 49.1 11.5 – Net Position: 27,835 -27,080 -755 – Gross Longs: 98,030 110,513 31,369 – Gross Shorts: 70,195 137,593 32,124 – Long to Short Ratio: 1.4 to 1 0.8 to 1 1.0 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 14.3 76.2 79.2 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -9.0 5.9 9.9   LEAN HOGS Futures: The LEAN HOGS large speculator standing this week came in at a net position of 16,287 contracts in the data reported through Tuesday. This was a weekly gain of 4,228 contracts from the previous week which had a total of 12,059 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 24.5 percent. The commercials are Bullish-Extreme with a score of 84.8 percent and the small traders (not shown in chart) are Bullish with a score of 50.1 percent. LEAN HOGS Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 32.9 41.6 9.7 – Percent of Open Interest Shorts: 24.2 45.5 14.5 – Net Position: 16,287 -7,339 -8,948 – Gross Longs: 61,378 77,472 18,100 – Gross Shorts: 45,091 84,811 27,048 – Long to Short Ratio: 1.4 to 1 0.9 to 1 0.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 24.5 84.8 50.1 – Strength Index Reading (3 Year Range): Bearish Bullish-Extreme Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 9.3 -5.5 -19.9   COTTON Futures: The COTTON large speculator standing this week came in at a net position of 56,390 contracts in the data reported through Tuesday. This was a weekly reduction of -9,655 contracts from the previous week which had a total of 66,045 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 58.6 percent. The commercials are Bearish with a score of 41.9 percent and the small traders (not shown in chart) are Bearish with a score of 46.8 percent. COTTON Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 41.4 40.3 7.6 – Percent of Open Interest Shorts: 9.3 75.6 4.5 – Net Position: 56,390 -61,856 5,466 – Gross Longs: 72,622 70,585 13,385 – Gross Shorts: 16,232 132,441 7,919 – Long to Short Ratio: 4.5 to 1 0.5 to 1 1.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 58.6 41.9 46.8 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -14.6 17.0 -38.7   COCOA Futures: The COCOA large speculator standing this week came in at a net position of 6,339 contracts in the data reported through Tuesday. This was a weekly lift of 3,034 contracts from the previous week which had a total of 3,305 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 23.8 percent. The commercials are Bullish with a score of 77.4 percent and the small traders (not shown in chart) are Bearish with a score of 20.2 percent. COCOA Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 30.2 44.3 4.5 – Percent of Open Interest Shorts: 28.1 47.1 3.7 – Net Position: 6,339 -8,708 2,369 – Gross Longs: 91,654 134,441 13,610 – Gross Shorts: 85,315 143,149 11,241 – Long to Short Ratio: 1.1 to 1 0.9 to 1 1.2 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 23.8 77.4 20.2 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -12.0 14.6 -27.2   WHEAT Futures: The WHEAT large speculator standing this week came in at a net position of 7,679 contracts in the data reported through Tuesday. This was a weekly decrease of -11,388 contracts from the previous week which had a total of 19,067 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 29.0 percent. The commercials are Bullish with a score of 57.0 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 80.3 percent. WHEAT Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 30.9 40.8 10.1 – Percent of Open Interest Shorts: 28.3 41.5 12.1 – Net Position: 7,679 -1,871 -5,808 – Gross Longs: 89,989 118,839 29,465 – Gross Shorts: 82,310 120,710 35,273 – Long to Short Ratio: 1.1 to 1 1.0 to 1 0.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 29.0 57.0 80.3 – Strength Index Reading (3 Year Range): Bearish Bullish Bullish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -27.5 34.3 -15.7   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
Eyes On Iran Nuclear Deal: Oil Case. Gold Price Is Swinging

Concerns Over Tight Supplies Is Driving Brent Crude Oil Prices Up, Silver Prices Falling, Favourable Weather, Weak Demand & Tight Supplies - Factors Driving Corn Prices

Rebecca Duthie Rebecca Duthie 04.07.2022 15:54
Summary: Concerns around tight Brent supplies outweighed concerns around a global recession dampening demand. Silver prices falling in the wake of an aggressive Fed. Traders weighed weak demand and favourable weather prospects against fears of tight supplies. Read more: Gold Futures Fell To Near 7 Week Lows, Investors Weighing Supply v Demand For WTI Crude, Platinum Prices  Brent Crude Oil prices are up on Monday Brent crude oil prices are up on Monday as concerns around tight supplies outweighed concerns around a global recession dampening demand. A Reuters survey showed that output from 10 OPEC members fell during June. In addition, exports from Libya also declined below expected levels and Norway's daily output is expected to decline due to a planned strike by Norwegian energy sector workers. Brent Crude Futures Price Chart Silver prices reaching 2 year lows Silver prices have been consistently declining to prices not seen since July of 2020, as they close in toward the $20 per-ounce mark. The price declines come in the wake of aggressive monetary policy tightening by the Federal Reserve to try to control high inflation levels which caused investors to turn away from the non-yielding metal. The Fed has reiterated their commitment to fighting inflation, setting expectations for a back-to-back 75 bps interest rate hike in July. Silver Sept ‘22 Futures Price Chart Investors weighing weak demand and favourable weather against tight supply fears Corn prices hovered around $7.5 per bushel as traders weighed weak demand and favourable weather prospects against fears of tight supplies. More corn crop has been planted than the March recordings, the crop flourished in its early stages of development after a late start to planting, this is due to the wet and cool conditions around most of the Midwest. Meanwhile, traders are watching the weather forecasts for the coming weeks as the corn enters its pollination phase which will determine the yields during the harvest that starts in September. At the same time, aggressive monetary tightening is raising fears of economic slowdown and demand destruction is causing concerns around demand for the grain. Corn Dec ‘22 Futures Price Chart Sources: tradingeconomics.com, finance.yahoo.com
When The Global Economy Recovers, We Can Expect Demand To Rebound

NGAS Prices See Relief, Cotton Prices Drop As Recession Fears Heighten, Gold Prices Drop As Hawkish Central Banks Continue

Rebecca Duthie Rebecca Duthie 05.07.2022 16:41
Summary: Cotton is at its lowest price since last September. Rising inventories causing Natural gas to close at its lowest level since mid-March. Gold prices falling as central banks continue with aggressive monetary policy tightening. Read next: https://www.fxmag.com/commodities/concerns-over-tight-supplies-is-driving-brent-crude-oil-prices-up-silver-prices-falling-favourable-weather-weak-demand-tight-supplies-factors-driving-corn-prices  NGAS prices dropping in the wake of rising inventories Rising inventories causing Natural gas to close at its lowest level since mid-March. The US domestic market has gained an additional 2 bcf of NGAS per day since the explosion at Freeport LNG, according to the company it is expected to return to partial operational capacity in October. During the week ended 24th June, the extra fuel gave utilities the opportunity to inject 82 bcf into underground storage, according to EIA, which beat the median estimate of 74 bcf. NGAS Aug ‘22 Futures Price Chart As major central banks continue with aggressive monetary policy tightening, Gold is falling Gold prices fell below the $1,800 mark during Tuesday's trading day in the wake of pressures from imminent interest rate hikes by major central banks and a strong US Dollar. The Federal Reserve bank confirmed market expectations for an extended monetary policy tightening path, with some policy makers even advocating for another 75bps hike in July in an attempt to lower consumer prices. Simultaneously, the European Central Bank (ECB) has also pledged to start raising interest rates in July and is expected to bring its deposit interest rate into the positive side during the third quarter. In addition, tighter financial conditions amongst major economies increased fears of a global recession, pushing investors towards the safety of the dollar and prompting a broad decline in commodity prices. Gold Aug ‘22 Futures Price Chart Cotton prices impacted by slowing economies Cotton is at its lowest price since last September in the wake of heightened fears of a recession amidst lower demand prospects. The inflation sensitive commodity is due to be negatively impacted by the slowdown of economic activity and consumption As major global central banks are raising rates to fight inflation. In addition, adding to the weighing on the prices is a better crop outlook as favorable weather conditions boosted hopes of good yields in top growing regions. Cotton Oct ‘22 Futures Price Chart Sources: finance.yahoo.com, tradingeconomics.com
The Oil Market Opened Today With A Gap, What Happen Next?

WTI Crude Prices Recover On Wednesday, Supply Prospects Of Coffee Are Improving, Palladium Prices

Rebecca Duthie Rebecca Duthie 06.07.2022 11:47
Summary: WTI crude oil prices rose in the wake of fears that a recession could hurt demand were balanced by continuous concerns around supply. Arabica coffee prices were down from a three-week high on Wednesday. Palladium supply concerns weighed against demand concerns. Read next: Exxon (XOM) Price Falls In the Wake Of Declining Energy Prices  WTI Oil prices have been falling since mid-June WTI crude oil futures prices rose above during Wednesday's trading day after falling more than 8% and closing below the key level on Tuesday in the wake of fears that a recession could hurt demand were balanced by continuous concerns around supply. Wednesday Crude price was also attributed to (by some analysts) bargain hunting and short-coverings. Tight supply concerns were highlighted by OPEC’s Secretary general who announced on Tuesday that the oil industry was “under siege” in the wake of years of underinvestment, he also added that the shortages could be eased if Venezuelian and Iranian crude oil supplies were allowed. At the same time, crude prices have been falling since mid-June in the wake of recessionary concerns causing poor demand prospects. WTI Crude Oil Aug Futures Price Chart Coffee prices down as supply prospects improve Arabica coffee prices were down from a three-week high on Wednesday in the wake of both positive global outlook of improved production and a bearish macroeconomic environment. Although supplies are expected to improve, prospects of tight supply remain as concerns around dry weather conditions in Brazil continue. Coffee Sep ‘22 Futures Price Chart Traders weighing supply vs demand on Palladium Traders are currently trying to balance fears of tight supply with weak demand prospects, setting the Palladium metals price above its 1-month low hit on 4th July. Continuous aggressive monetary policy tightening from the Federal Reserve has strengthened prospects of a recession and has dampened demand. In addition, new Covid-19 cases in the world's largest Palladium consumer sparked fears for the imposition of tighter lockdown measures. On the supply side, disruptions of imports from Russia continue as the war in the Ukraine continues and trade restrictions continue to be imposed from the west onto Russia. Palladium Sep ‘22 Futures Price Chart Sources: finance.yahoo.com, tradingeconomics.com
What Does Jeffrey Halley (Oanda) Think About 100bps Rate Hike? Important News About Soft Commodities!

Platinum Prices Drop In The Wake Of Slower Demand Prospects, RBOB Gasoline Prices, Wheat Prices Below Pre-Russian Invasion Levels

Rebecca Duthie Rebecca Duthie 07.07.2022 11:36
Summary: Recession and new covid-19 cases in China driving platinum prices lower. Chicago wheat futures prices rose in the wake of an increase in buying. Read next: WTI Crude Prices Recover On Wednesday, Supply Prospects Of Coffee Are Improving, Palladium Prices  Platinum Prices at 20 month lows Platinum prices had fallen to their lowest price in almost 20 months in the wake of lower demand expectations outweighed lower supply fears. The contraction in the US economy was more than expected amidst the Federal Reserve's aggressive monetary policy which is aimed at curbing surging inflation has raised the concerns around an economic downturn. In addition, fresh new covi-19 cases in China’s eastern provinces weighed further on the outlook for demand and growth. Platinum Oct ‘22 Futures Price Chart Wheat prices lower than pre-Russian invasion levels Chicago wheat futures prices rose in the wake of an increase in buying from bargain buyers in the wake of the prices plummeting in the second half of June. Meanwhile, investors expectations around a large sum of Ukrainian Wheat entering the market any time soon are growing pessimistic. Wheat prices are still below pre-Russian invasion levels, as strong crops world wide added to the price pressures for agricultural commodities amidst recession fears. Wheat Sep ‘22 Futures Price Chart RBOB Gasoline Prices tanked this week Gasoline prices fell earlier this week in the wake of an increase in supply into the US underground reserves, this drove gas prices lower and oil giants’ profits higher as well. RBOB Gasoline Aug ‘22 Futures Price Chart Sources: finance.yahoo.com, tradingeconomics.com
Recession Fears Continue To Rattle the Commodity Markets - Brent Crude Oil, Silver Futures Touch 4-week lows, Corn Futures Reach 6-week Highs.

Aggressive Fed Increases The Opportunity Cost OF Holding Silver, WTI Crude Oil Prices, Corn: Traders Weigh Weak Demand & Tight Supply

Rebecca Duthie Rebecca Duthie 08.07.2022 13:07
Summary: Aggressive Fed turning investors away from silver Lower demand prospects outweigh tight supply concerns for WTI Crude Oil. Commodity traders are watching weather in top growing corn regions. Read next: Platinum Prices Drop In The Wake Of Slower Demand Prospects, RBOB Gasoline Prices, Wheat Prices Below Pre-Russian Invasion Levels  Silver Prices hitting July 2020 lows. Silver prices are staying below the $20 mark per ounce, a level that has not been seen since July 2020. The price decline comes in the wake of the Federal Reserve’s committing to aggressive monetary policy tightening and raising interest rates further, this move causes investors to short the non-yielding metal. The Fed has set markt expectations for back-to-back 75 bps rate hikes in July. This move has Put a floor under prices where lingering concerns about slowing economic growth, mainly in Europe, as surging gas prices threaten the outlook for the Euro bloc. Silver Sep ‘22 Futures Price Chart Lower demand prospects outweigh tight supply concerns for WTI Crude Oil The price of crude futures are expected to close low on Friday as concerns around a global recession and its impact on the demand for crude oil outweighs the concerns around tight-supplies. The US oil benchmark has declined by 5% this week, tracking a broader decline in commodity markets in the wake of restrictive monetary policy among major economies threatening a global recession. Crude prices are still up 35% this year as global economic recovery coincided with Russia’s invasion in the Ukraine. WTI Crude Aug Futures Price Chart Corn prices Corn futures prices are currently hovering as the market weighs up favourable weather conditions and weak demand over tighter supply prospects. Weather conditions in top corn growing regions are being watched closely by traders. On the demand side, the combination of weak economic global data and aggressive monetary tightening from central banks is raising fears of a economic slowdown. Corn Dec ‘22 Futures Price Chart Sources: finance.yahoo.com, tradingeconomics.com
COT Week 27 Charts: Soft Commodities Speculators bets go lower led by Corn, Sugar & Cocoa

COT Week 27 Charts: Soft Commodities Speculators bets go lower led by Corn, Sugar & Cocoa

Invest Macro Invest Macro 09.07.2022 16:18
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday July 5th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. The soft commodities market speculator bets headed lower this week as just three out of the eleven soft commodities markets we cover had higher positioning this week while the other eight markets had lower speculator contracts. Leading the gains for soft commodities markets was Soybean Meal (2,019 contracts) and Coffee (1,587 contracts) with Wheat (705 contracts) also having a positive week. Meanwhile, leading the declines in speculator bets this week were Corn (-67,397 contracts) and Sugar (-39,197 contracts) with Cocoa (-13,454 contracts), Soybeans (-11,702 contracts), Soybean Oil (-10,237 contracts), Live Cattle (-7,806 contracts), Cotton (-5,845 contracts) and Lean Hogs (-1,080 contracts) also registering lower bets on the week. Strength scores (measuring the 3-Year range of Speculator positions, from 0 to 100 where above 80 percent is extreme bullish and below 20 percent is extreme bearish) show that Coffee (79.3 percent) and Soybean Meal (80.9 percent) are leading this week with Soybean Meal just above the bullish extreme level (80 percent). On the lower side, Live Cattle (4.5 percent) and Cocoa (10.7 percent) are the lowest strength scores and are both in bearish extreme levels this week. Strength score trends (or move index, that calculate 6-week changes in strength scores) shows once again this week how much the softs sentiment has cooled off after a scorching start to the year. Lean Hogs (8.6 percent), Coffee (8.4 percent) and Soybean Meal (7.8 percent) are the only markets that have had a gain of strength scores over the past six weeks. On the downside, Soybean Oil (-29.9 percent), Sugar (-25.9 percent) and Wheat (-23.4 percent) are leading the downtrends among the soft commodities markets. Data Snapshot of Commodity Market Traders | Columns Legend Jul-05-2022 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index WTI Crude 1,637,862 0 280,523 0 -304,217 100 23,694 48 Gold 498,210 13 145,660 0 -165,585 100 19,925 0 Silver 140,463 7 5,139 0 -11,622 100 6,483 0 Copper 183,331 15 -31,796 19 31,340 81 456 28 Palladium 7,373 5 -3,410 4 4,104 98 -694 4 Platinum 72,895 44 -2,734 0 -1,670 100 4,404 23 Natural Gas 977,507 0 -130,519 39 91,950 60 38,569 71 Brent 166,711 13 -38,514 47 37,309 55 1,205 26 Heating Oil 264,269 21 6,486 52 -22,775 47 16,289 55 Soybeans 638,675 7 125,491 52 -93,638 56 -31,853 17 Corn 1,331,035 0 260,705 63 -207,441 42 -53,264 12 Coffee 193,731 1 46,787 79 -49,139 25 2,352 14 Sugar 713,245 0 83,512 54 -85,255 52 1,743 10 Wheat 288,754 0 8,384 30 623 61 -9,007 64   CORN Futures: The CORN large speculator standing this week totaled a net position of 260,705 contracts in the data reported through Tuesday. This was a weekly reduction of -67,397 contracts from the previous week which had a total of 328,102 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 63.3 percent. The commercials are Bearish with a score of 42.4 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 12.4 percent. CORN Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 29.7 46.5 9.2 – Percent of Open Interest Shorts: 10.1 62.1 13.2 – Net Position: 260,705 -207,441 -53,264 – Gross Longs: 395,713 618,691 122,652 – Gross Shorts: 135,008 826,132 175,916 – Long to Short Ratio: 2.9 to 1 0.7 to 1 0.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 63.3 42.4 12.4 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -21.4 23.5 1.2   SUGAR Futures: The SUGAR large speculator standing this week totaled a net position of 83,512 contracts in the data reported through Tuesday. This was a weekly decrease of -39,197 contracts from the previous week which had a total of 122,709 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 53.8 percent. The commercials are Bullish with a score of 52.0 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 10.0 percent. SUGAR Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 26.8 50.7 9.1 – Percent of Open Interest Shorts: 15.1 62.7 8.9 – Net Position: 83,512 -85,255 1,743 – Gross Longs: 191,390 361,892 65,138 – Gross Shorts: 107,878 447,147 63,395 – Long to Short Ratio: 1.8 to 1 0.8 to 1 1.0 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 53.8 52.0 10.0 – Strength Index Reading (3 Year Range): Bullish Bullish Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -25.9 32.3 -54.7   COFFEE Futures: The COFFEE large speculator standing this week totaled a net position of 46,787 contracts in the data reported through Tuesday. This was a weekly gain of 1,587 contracts from the previous week which had a total of 45,200 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 79.3 percent. The commercials are Bearish with a score of 24.7 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 13.5 percent. COFFEE Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 28.4 49.2 4.5 – Percent of Open Interest Shorts: 4.2 74.6 3.3 – Net Position: 46,787 -49,139 2,352 – Gross Longs: 54,965 95,332 8,800 – Gross Shorts: 8,178 144,471 6,448 – Long to Short Ratio: 6.7 to 1 0.7 to 1 1.4 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 79.3 24.7 13.5 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 8.4 -9.7 9.4   SOYBEANS Futures: The SOYBEANS large speculator standing this week totaled a net position of 125,491 contracts in the data reported through Tuesday. This was a weekly reduction of -11,702 contracts from the previous week which had a total of 137,193 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 52.4 percent. The commercials are Bullish with a score of 55.6 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 17.2 percent. SOYBEANS Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 29.8 51.8 5.9 – Percent of Open Interest Shorts: 10.2 66.4 10.9 – Net Position: 125,491 -93,638 -31,853 – Gross Longs: 190,571 330,584 37,700 – Gross Shorts: 65,080 424,222 69,553 – Long to Short Ratio: 2.9 to 1 0.8 to 1 0.5 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 52.4 55.6 17.2 – Strength Index Reading (3 Year Range): Bullish Bullish Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -19.1 19.5 -4.3   SOYBEAN OIL Futures: The SOYBEAN OIL large speculator standing this week totaled a net position of 34,681 contracts in the data reported through Tuesday. This was a weekly fall of -10,237 contracts from the previous week which had a total of 44,918 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 29.0 percent. The commercials are Bullish with a score of 72.5 percent and the small traders (not shown in chart) are Bearish with a score of 28.1 percent. SOYBEAN OIL Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 20.8 57.1 7.3 – Percent of Open Interest Shorts: 11.3 67.7 6.2 – Net Position: 34,681 -38,614 3,933 – Gross Longs: 75,794 208,440 26,452 – Gross Shorts: 41,113 247,054 22,519 – Long to Short Ratio: 1.8 to 1 0.8 to 1 1.2 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 29.0 72.5 28.1 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -29.9 36.0 -56.9   SOYBEAN MEAL Futures: The SOYBEAN MEAL large speculator standing this week totaled a net position of 95,944 contracts in the data reported through Tuesday. This was a weekly gain of 2,019 contracts from the previous week which had a total of 93,925 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 80.9 percent. The commercials are Bearish with a score of 24.3 percent and the small traders (not shown in chart) are Bearish with a score of 21.3 percent. SOYBEAN MEAL Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 28.3 42.5 10.6 – Percent of Open Interest Shorts: 4.0 71.0 6.3 – Net Position: 95,944 -112,761 16,817 – Gross Longs: 111,776 167,821 41,885 – Gross Shorts: 15,832 280,582 25,068 – Long to Short Ratio: 7.1 to 1 0.6 to 1 1.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 80.9 24.3 21.3 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 7.8 -2.3 -49.2   LIVE CATTLE Futures: The LIVE CATTLE large speculator standing this week totaled a net position of 20,029 contracts in the data reported through Tuesday. This was a weekly decrease of -7,806 contracts from the previous week which had a total of 27,835 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 4.5 percent. The commercials are Bullish-Extreme with a score of 85.1 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 83.7 percent. LIVE CATTLE Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 33.8 39.7 11.0 – Percent of Open Interest Shorts: 26.7 47.1 10.8 – Net Position: 20,029 -20,591 562 – Gross Longs: 94,773 111,320 30,936 – Gross Shorts: 74,744 131,911 30,374 – Long to Short Ratio: 1.3 to 1 0.8 to 1 1.0 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 4.5 85.1 83.7 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -3.4 2.1 4.0   LEAN HOGS Futures: The LEAN HOGS large speculator standing this week totaled a net position of 15,207 contracts in the data reported through Tuesday. This was a weekly reduction of -1,080 contracts from the previous week which had a total of 16,287 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 23.3 percent. The commercials are Bullish-Extreme with a score of 86.1 percent and the small traders (not shown in chart) are Bearish with a score of 49.8 percent. LEAN HOGS Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 32.1 41.0 9.0 – Percent of Open Interest Shorts: 24.3 44.2 13.7 – Net Position: 15,207 -6,194 -9,013 – Gross Longs: 62,222 79,268 17,491 – Gross Shorts: 47,015 85,462 26,504 – Long to Short Ratio: 1.3 to 1 0.9 to 1 0.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 23.3 86.1 49.8 – Strength Index Reading (3 Year Range): Bearish Bullish-Extreme Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 8.6 -5.9 -15.0   COTTON Futures: The COTTON large speculator standing this week totaled a net position of 50,545 contracts in the data reported through Tuesday. This was a weekly lowering of -5,845 contracts from the previous week which had a total of 56,390 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 54.8 percent. The commercials are Bearish with a score of 46.1 percent and the small traders (not shown in chart) are Bearish with a score of 37.6 percent. COTTON Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 40.7 41.6 7.1 – Percent of Open Interest Shorts: 11.7 72.9 4.8 – Net Position: 50,545 -54,576 4,031 – Gross Longs: 70,871 72,524 12,397 – Gross Shorts: 20,326 127,100 8,366 – Long to Short Ratio: 3.5 to 1 0.6 to 1 1.5 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 54.8 46.1 37.6 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -14.0 17.0 -44.4   COCOA Futures: The COCOA large speculator standing this week totaled a net position of -7,115 contracts in the data reported through Tuesday. This was a weekly decline of -13,454 contracts from the previous week which had a total of 6,339 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 10.7 percent. The commercials are Bullish-Extreme with a score of 91.0 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 14.8 percent. COCOA Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 29.9 46.4 4.6 – Percent of Open Interest Shorts: 32.1 44.7 4.0 – Net Position: -7,115 5,287 1,828 – Gross Longs: 94,360 146,524 14,461 – Gross Shorts: 101,475 141,237 12,633 – Long to Short Ratio: 0.9 to 1 1.0 to 1 1.1 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 10.7 91.0 14.8 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -15.4 18.3 -31.4   WHEAT Futures: The WHEAT large speculator standing this week totaled a net position of 8,384 contracts in the data reported through Tuesday. This was a weekly rise of 705 contracts from the previous week which had a total of 7,679 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 30.0 percent. The commercials are Bullish with a score of 60.6 percent and the small traders (not shown in chart) are Bullish with a score of 63.7 percent. WHEAT Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 30.2 41.9 9.2 – Percent of Open Interest Shorts: 27.3 41.7 12.4 – Net Position: 8,384 623 -9,007 – Gross Longs: 87,094 121,006 26,674 – Gross Shorts: 78,710 120,383 35,681 – Long to Short Ratio: 1.1 to 1 1.0 to 1 0.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 30.0 60.6 63.7 – Strength Index Reading (3 Year Range): Bearish Bullish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -23.4 35.5 -36.3   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
The European Commission Proposal On Emergency Power Supply

Recession Fears Are Affecting Brent Crude Prices, Silver Price vs A Hawkish Federal Reserve, Corn At 8-Week Highs

Rebecca Duthie Rebecca Duthie 11.07.2022 16:00
Summary: Fears of a global recession are expected to dampen energy demand. Aggressive Fed prospects driving silver demand down. Hot weather conditions affecting corn growing prospects. Read next: Aggressive Fed Increases The Opportunity Cost OF Holding Silver, WTI Crude Oil Prices, Corn: Traders Weigh Weak Demand & Tight Supply  Concerns around demand driving Brent Crude Oil Prices down Brent Crude Oil futures fell during Monday trading after posting a loss last week in volatile trading in the wake of fears around a global recession and new COVID 19 virus restrictions in China, both of which outweighed fears around supply. Fears of a global recession are expected to dampen energy demand and continue to rule over market sentiment as major central banks continue to fight inflation through aggressive monetary policy interest rate hikes. In addition, a new omicron variant of COVID-19 has been discovered in Shanghai and has heightened fears of further restrictions. At the same time, market participants remain unsure about the western nations plans to cap Russian oil prices as Russian President Vladimir Putin warned that further sanctions could lead to "catastrophic" consequences within the global energy market. Brent Crude Oil Futures Price Chart Silver prices hover around $20 per ounce Silver prices are still sitting around the $20 per ounce mark, a level that has not been seen since July 2020. The price drop comes in the wake of stronger bets of a more aggressive Federal Reserve to increase interest rates in an attempt to reign in sky-high inflation. Silver is normally used as a hedge against inflation, however as treasury yields rise, the opportunity cost of holding silver rises. Silver Sep ‘22 Futures Price Chart Corn futures rose to 8-week highs Corn Futures have risen on Monday to 8-week highs and not far from the 10 year high hit in April. The price rose in the wake of concerns around tighter supplies amid an already short supply market that has been caused by the Russia-Ukraine war. Hot weather conditions in the US and European growing belt have nullified the price drop during the last trading week. At the same time, Chinese import demand also increased. Corn Dec ‘22 Futures Price Chart Sources: finance.yahoo.com, tradingeconomics.com
Commodities: Prices Are Rising, Heatwaves In US And China Affects The Production Of Cotton

Demand Is Rising For NGAS, Strong Supply Prospects For Cotton, Investors Turn To The US Dollar As An Inflation Hedge Instead Of Gold

Rebecca Duthie Rebecca Duthie 12.07.2022 16:01
Summary: Noord Stream pipeline maintenance causing supply concerns. Decreased cotton consumption from top clothing makers. Gold futures touching near 9 month lows. Read next: Recession Fears Are Affecting Brent Crude Prices, Silver Price vs A Hawkish Federal Reserve, Corn At 8-Week Highs  NGas Prices driven by increased demand Natural Gas futures are recovering from a 3 month low experienced earlier in July, supported by strong international and domestic demand. As the weather gets hotter and demand for cooling increases, the demand for NGas strengthens whilst routine maintenance on the Noord Stream pipeline are contributing to driving prices higher. NGAS Aug’22 Futures Price Chart Strong Cotton supply prospects Cotton prices have been falling in the wake of lower demand prospects as China adopted new Covid-19 curbs adding to global shutdown concerns already in place which have been caused by aggressive monetary policy tightening by major central banks. At the same time, USDA cut the world production expectations for cotton by 450,000 bails for June due to decreased consumption from Bangladesh and Mexico. Cotton supplies are looking strong going forward. Cotton Oct ‘22 Futures Price Chart Gold futures Gold futures are hovering around 9-month lows on Tuesday in the wake of investors choosing the US Dollar as a hedge against inflation and risks around a recession over gold. Expectations that the Federal Reserve will continue to tighten monetary policy by aggressively raising interest rates have also put pressure on gold prices as a stronger than expected US jobs report and upcoming US inflation data could bolster the Feds plans. Gold Aug ‘22 Future Price Chart Sources: finance.yahoo.com, tradingeconomics.com
Recession Fears Continue To Weigh On The Commodity Market: Coffee, Palladium & WTI Crude

Recession Fears Continue To Weigh On The Commodity Market: Coffee, Palladium & WTI Crude

Rebecca Duthie Rebecca Duthie 13.07.2022 14:23
Summary: WTI Crude Prices falling. Concerns about weakening coffee demand. Fears of fresh Covid lockdown measures in China persist. Read next: Demand Is Rising For NGAS, Strong Supply Prospects For Cotton, Investors Turn To The US Dollar As An Inflation Hedge Instead Of Gold  WTI Crude Oil Falling WTI Crude futures tumbled around 8% during Tuesday's trading day as traders continued to weigh weakening demand, recession fears and China’s most recent covid-19 outbreaks. In addition investors are awaiting the latest US Inflation data release which could bolster the Federal Reserve's aggressive monetary policy tightening and thus heighten fears of a recession. At the same time US crude inventories have reportedly risen by 4.76 million barrels during the previous trading week. WTI Crude Oil Futures Aug Price Chart Coffee Prices have been falling Coffee Futures have been trading lower amidst fears that the economic slowdown will negatively affect demand whilst supply remains stable. Coffee exports have risen, however Brazil is behind their year-on-year harvest. Coffee Sep ‘22 Futures Price Chart Palladium prices 35% down Palladium prices are 35% down from their all time high hit in March earlier this year in the wake of new concerns around weak demand from China which has overshadowed the persisting fears around tight supplies. A new omicron variant found in China has heightened fears of fresh Covid lockdown measures in Shanghai which could further damage economic growth and put a dent in the demand for the metal from the world's largest consumer. Palladium Sep ‘22 Futures Price Chart Sources: finance.yahoo.com, tradingeconomics.com
Platinum Prices Touchine 22-month Lows, RBOB Gasoline, Wheat Consumption Expected To Decrease

Platinum Prices Touchine 22-month Lows, RBOB Gasoline, Wheat Consumption Expected To Decrease

Rebecca Duthie Rebecca Duthie 14.07.2022 14:17
Summary: The market expects lower demand for Platinum. Wheat Futures are approaching near four-month lows. Expensive Gasoline prices are keeping summer drivers off the road. Read next: Recession Fears Continue To Weigh On The Commodity Market: Coffee, Palladium & WTI Crude  Platinum prices are falling Platinum futures are touching 22 month lows as prospects of lower demand outweighed prospects outweighed supply concerns. Higher than expected US inflation data increased expectations of tighter and more aggressive monetary policy. In addition, the fresh new Covis cases in China are causing demand expectations to fall. Supplies are also expected to remain low as supply shipments from Russia disruptions continue. In addition, during June Britain sanctioned the chief executive and principal shareholder of Nornickel, Vladimir Potanin. Nornickel is the 3rd largest producer of the metal. Platinum Oct ‘22 Futures Price Chart Wheat supplies are expected recover Wheat Futures are approaching near four-month lows, and extending is move away from pre-Russian invasion levels receiving support from a stronger supply outlook. The combination of a forecast that reflected a decrease in consumption for the rest of the world for the 2022/23 marketing year as well as new data from the USDA’s supply and demand report pointed to a sharp increase in the supply, exports, and ending stocks of wheat in the United States. At the same time, concerns around a worldwide recession led the consumption estimated to be revised downward. Chicago Wheat Sep ‘22 Futures Price Chart RBOB Gasoline Expensive Gasoline prices are keeping more drivers off the road in the US than at the height of the pandemic. Gasoline demand tumbled last week, below the same week in 2020 and to the lowest (seasonally) since 1996. The numbers now paint a clearer picture of demand faltering amid mounting concerns over a wider economic slowdown. RBOB Gasoline Aug ‘22 Futures Price Chart Sources: finance.yahoo.com, tradingeconomics.com
Oil extends decline, gold edges lower

Crude Oil's Reaction To The US Inflation, Gold Demand Assumption

Craig Erlam Craig Erlam 13.07.2022 21:34
Crude slides as recession risks build The US inflation data caused shockwaves throughout financial markets, with oil also sliding on the back of the release. A recession is now the primary bear case for crude given the tightness in the market and it’s clear here as much as anywhere how serious the economic risk is being taken. Both Brent and WTI are now back below USD 100, down around 20% over the last month, and they may well remain below there which would have been inconceivable in mid-June. Central banks are in panic-tightening mode and the inflation data isn’t easing up. Throw in more Chinese Covid restrictions and the market will start to look far more balanced, just not in the way anyone wanted. Will gold demand soon return? Gold has recovered the post-CPI release losses after threatening at one stage to break below USD 1,700. While this may come as a relief to some, it may not last considering the moves we’ve seen in interest rate expectations, yields and the dollar. The yellow metal is looking pretty vulnerable at the minute but if a recession becomes the base case, that may change. It is a safe haven after all and there may come a point where the economy buckles under the weight of inflation and interest rates and gold will increasingly find itself in demand. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Crude slumps on inflation, gold recovers - MarketPulseMarketPulse
COT Week 28 Charts: Soft Commodities Speculators bets drop lower led by Corn, Coffee & Soybeans

COT Week 28 Charts: Soft Commodities Speculators bets drop lower led by Corn, Coffee & Soybeans

Invest Macro Invest Macro 16.07.2022 16:15
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday July 12th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. Weekly Speculator Changes COT soft commodities speculator bets were mostly lower this week as five out of the eleven soft commodities markets we cover had higher positioning while the other six markets had lower net speculator contracts. Leading the gains for soft commodities markets was Sugar (22,357 contracts) and Lean Hogs (9,852 contracts) with Soybean Meal (4,453 contracts), Cocoa (2,935 contracts) and Live Cattle (1,870 contracts) also showing increasing net positions on the week. The markets leading the declines in speculator bets this week were Corn (-13,549 contracts) and Coffee (-12,479 contracts) with Soybeans (-10,372 contracts), Cotton (-7,860 contracts), Soybean Oil (-4,893 contracts) and Wheat (-3,745 contracts) also seeing lower speculator net positions on the week. The latest data for the soft commodities markets (especially strength trends further below) shows how much the softs sentiment has cooled off after a super-hot start to the year.   Data Snapshot of Commodity Market Traders | Columns Legend Jul-12-2022 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index WTI Crude 1,612,803 0 268,328 0 -294,526 100 26,198 52 Gold 542,493 26 118,121 0 -137,788 100 19,667 0 Silver 142,259 9 3,204 0 -9,612 100 6,408 0 Copper 172,037 6 -26,295 23 27,061 78 -766 21 Palladium 6,474 1 -2,802 7 3,252 93 -450 18 Platinum 75,615 48 -5,911 0 1,235 100 4,676 27 Natural Gas 969,204 0 -131,603 39 94,195 61 37,408 69 Brent 171,950 17 -38,388 47 36,619 54 1,769 33 Heating Oil 266,330 22 6,728 52 -22,853 47 16,125 54 Soybeans 611,751 1 115,119 49 -87,284 57 -27,835 24 Corn 1,333,199 0 247,156 62 -196,533 44 -50,623 14 Coffee 195,810 2 34,308 68 -35,166 37 858 0 Sugar 701,144 0 105,869 58 -115,779 46 9,910 20 Wheat 288,182 0 4,639 25 5,041 67 -9,680 60   Strength Scores Strength Scores (a normalized measure of Speculator positions over a 3-Year range, from 0 to 100 where above 80 is extreme bullish and below 20 is extreme bearish) show that Soybean Meal (83.4 percent) positions lead the strength scores in the soft commodity markets and are currently in a bullish extreme position. Coffee (68.5 percent) comes in as the next highest soft commodity market in strength scores followed by Corn (61.6 percent) and Sugar (58.4 percent). On the downside, Live Cattle (6.8 percent) and Cocoa (13.5 percent) come in at the lowest strength levels currently and are both in extreme bearish levels. Strength Statistics: Corn (61.6 percent) vs Corn previous week (63.3 percent) Sugar (58.4 percent) vs Sugar previous week (53.8 percent) Coffee (68.5 percent) vs Coffee previous week (79.3 percent) Soybeans (49.2 percent) vs Soybeans previous week (52.4 percent) Soybean Oil (25.8 percent) vs Soybean Oil previous week (29.0 percent) Soybean Meal (83.4 percent) vs Soybean Meal previous week (80.9 percent) Live Cattle (6.8 percent) vs Live Cattle previous week (4.5 percent) Lean Hogs (34.0 percent) vs Lean Hogs previous week (23.3 percent) Cotton (49.8 percent) vs Cotton previous week (54.8 percent) Cocoa (13.5 percent) vs Cocoa previous week (10.7 percent) Wheat (25.1 percent) vs Wheat previous week (30.0 percent) Strength Trends Strength Score Trends (or move index, calculates the 6-week changes in strength scores) show that Lean Hogs (17.3 percent) leads the past six weeks trends for the soft commodity markets this week. Soybean Meal (10.9 percent) and Live Cattle (3.0 percent) round out the only other positive movers in the latest trends data. Soybean Oil (-30.2 percent) and Wheat (-23.0 percent) lead the downside trend scores currently while the next markets with lower trend scores were Soybeans (-21.6 percent) and Corn (-20.1 percent) followed by Sugar (-19.7 percent). Strength Trend Statistics: Corn (-20.1 percent) vs Corn previous week (-21.4 percent) vs Sugar previous week (-25.9 percent) Coffee (-7.5 percent) vs Coffee previous week (8.4 percent) Soybeans (-21.6 percent) vs Soybeans previous week (-19.1 percent) Soybean Oil (-30.2 percent) vs Soybean Oil previous week (-29.9 percent) Soybean Meal (10.9 percent) vs Soybean Meal previous week (7.8 percent) Live Cattle (3.0 percent) vs Live Cattle previous week (-3.4 percent) Lean Hogs (17.3 percent) vs Lean Hogs previous week (8.6 percent) Cotton (-17.9 percent) vs Cotton previous week (-14.0 percent) Cocoa (-14.0 percent) vs Cocoa previous week (-15.4 percent) Wheat (-23.0 percent) vs Wheat previous week (-23.4 percent) Individual Markets: CORN Futures: The CORN large speculator standing this week was a net position of 247,156 contracts in the data reported through Tuesday. This was a weekly decrease of -13,549 contracts from the previous week which had a total of 260,705 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 61.6 percent. The commercials are Bearish with a score of 43.9 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 13.9 percent. CORN Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 28.8 46.8 9.3 – Percent of Open Interest Shorts: 10.3 61.6 13.1 – Net Position: 247,156 -196,533 -50,623 – Gross Longs: 384,324 624,590 123,773 – Gross Shorts: 137,168 821,123 174,396 – Long to Short Ratio: 2.8 to 1 0.8 to 1 0.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 61.6 43.9 13.9 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -20.1 22.3 0.1   SUGAR Futures: The SUGAR large speculator standing this week was a net position of 105,869 contracts in the data reported through Tuesday. This was a weekly increase of 22,357 contracts from the previous week which had a total of 83,512 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 58.4 percent. The commercials are Bearish with a score of 46.2 percent and the small traders (not shown in chart) are Bearish with a score of 20.1 percent. SUGAR Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 26.9 50.5 9.0 – Percent of Open Interest Shorts: 11.8 67.0 7.6 – Net Position: 105,869 -115,779 9,910 – Gross Longs: 188,691 354,173 62,937 – Gross Shorts: 82,822 469,952 53,027 – Long to Short Ratio: 2.3 to 1 0.8 to 1 1.2 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 58.4 46.2 20.1 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -19.7 23.7 -36.0   COFFEE Futures: The COFFEE large speculator standing this week was a net position of 34,308 contracts in the data reported through Tuesday. This was a weekly decline of -12,479 contracts from the previous week which had a total of 46,787 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 68.5 percent. The commercials are Bearish with a score of 37.3 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 0.0 percent. COFFEE Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 25.0 52.7 4.4 – Percent of Open Interest Shorts: 7.5 70.6 3.9 – Net Position: 34,308 -35,166 858 – Gross Longs: 49,003 103,113 8,550 – Gross Shorts: 14,695 138,279 7,692 – Long to Short Ratio: 3.3 to 1 0.7 to 1 1.1 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 68.5 37.3 0.0 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -7.5 9.6 -18.6   SOYBEANS Futures: The SOYBEANS large speculator standing this week was a net position of 115,119 contracts in the data reported through Tuesday. This was a weekly lowering of -10,372 contracts from the previous week which had a total of 125,491 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 49.2 percent. The commercials are Bullish with a score of 57.5 percent and the small traders (not shown in chart) are Bearish with a score of 24.0 percent. SOYBEANS Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 28.1 51.3 6.3 – Percent of Open Interest Shorts: 9.2 65.6 10.9 – Net Position: 115,119 -87,284 -27,835 – Gross Longs: 171,610 313,986 38,675 – Gross Shorts: 56,491 401,270 66,510 – Long to Short Ratio: 3.0 to 1 0.8 to 1 0.6 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 49.2 57.5 24.0 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -21.6 21.3 -0.9   SOYBEAN OIL Futures: The SOYBEAN OIL large speculator standing this week was a net position of 29,788 contracts in the data reported through Tuesday. This was a weekly decrease of -4,893 contracts from the previous week which had a total of 34,681 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 25.8 percent. The commercials are Bullish with a score of 76.3 percent and the small traders (not shown in chart) are Bearish with a score of 22.5 percent. SOYBEAN OIL Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 18.9 59.3 6.9 – Percent of Open Interest Shorts: 10.8 68.0 6.3 – Net Position: 29,788 -32,200 2,412 – Gross Longs: 69,825 219,399 25,642 – Gross Shorts: 40,037 251,599 23,230 – Long to Short Ratio: 1.7 to 1 0.9 to 1 1.1 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 25.8 76.3 22.5 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -30.2 36.0 -55.3   SOYBEAN MEAL Futures: The SOYBEAN MEAL large speculator standing this week was a net position of 100,397 contracts in the data reported through Tuesday. This was a weekly lift of 4,453 contracts from the previous week which had a total of 95,944 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 83.4 percent. The commercials are Bearish with a score of 20.7 percent and the small traders (not shown in chart) are Bearish with a score of 34.4 percent. SOYBEAN MEAL Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 27.9 43.0 10.4 – Percent of Open Interest Shorts: 2.6 73.2 5.5 – Net Position: 100,397 -119,787 19,390 – Gross Longs: 110,774 170,710 41,383 – Gross Shorts: 10,377 290,497 21,993 – Long to Short Ratio: 10.7 to 1 0.6 to 1 1.9 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 83.4 20.7 34.4 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 10.9 -5.4 -47.0   LIVE CATTLE Futures: The LIVE CATTLE large speculator standing this week was a net position of 21,899 contracts in the data reported through Tuesday. This was a weekly gain of 1,870 contracts from the previous week which had a total of 20,029 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 6.8 percent. The commercials are Bullish-Extreme with a score of 82.5 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 84.0 percent. LIVE CATTLE Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 34.3 41.1 11.6 – Percent of Open Interest Shorts: 26.2 49.5 11.3 – Net Position: 21,899 -22,536 637 – Gross Longs: 92,671 111,204 31,321 – Gross Shorts: 70,772 133,740 30,684 – Long to Short Ratio: 1.3 to 1 0.8 to 1 1.0 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 6.8 82.5 84.0 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 3.0 -5.4 5.6   LEAN HOGS Futures: The LEAN HOGS large speculator standing this week was a net position of 25,059 contracts in the data reported through Tuesday. This was a weekly rise of 9,852 contracts from the previous week which had a total of 15,207 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 34.0 percent. The commercials are Bullish with a score of 73.7 percent and the small traders (not shown in chart) are Bullish with a score of 53.3 percent. LEAN HOGS Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 34.1 39.6 9.8 – Percent of Open Interest Shorts: 21.2 48.2 14.1 – Net Position: 25,059 -16,735 -8,324 – Gross Longs: 66,221 76,851 19,114 – Gross Shorts: 41,162 93,586 27,438 – Long to Short Ratio: 1.6 to 1 0.8 to 1 0.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 34.0 73.7 53.3 – Strength Index Reading (3 Year Range): Bearish Bullish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 17.3 -17.2 -6.8   COTTON Futures: The COTTON large speculator standing this week was a net position of 42,685 contracts in the data reported through Tuesday. This was a weekly decline of -7,860 contracts from the previous week which had a total of 50,545 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 49.8 percent. The commercials are Bullish with a score of 51.3 percent and the small traders (not shown in chart) are Bearish with a score of 31.4 percent. COTTON Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 38.3 43.5 6.7 – Percent of Open Interest Shorts: 14.1 69.5 5.0 – Net Position: 42,685 -45,740 3,055 – Gross Longs: 67,517 76,796 11,861 – Gross Shorts: 24,832 122,536 8,806 – Long to Short Ratio: 2.7 to 1 0.6 to 1 1.3 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 49.8 51.3 31.4 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -17.9 20.6 -45.2   COCOA Futures: The COCOA large speculator standing this week was a net position of -4,180 contracts in the data reported through Tuesday. This was a weekly boost of 2,935 contracts from the previous week which had a total of -7,115 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 13.5 percent. The commercials are Bullish-Extreme with a score of 87.9 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 17.3 percent. COCOA Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 29.6 46.2 4.6 – Percent of Open Interest Shorts: 30.9 45.5 3.9 – Net Position: -4,180 2,102 2,078 – Gross Longs: 90,985 141,970 14,013 – Gross Shorts: 95,165 139,868 11,935 – Long to Short Ratio: 1.0 to 1 1.0 to 1 1.2 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 13.5 87.9 17.3 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -14.0 16.0 -21.0   WHEAT Futures: The WHEAT large speculator standing this week was a net position of 4,639 contracts in the data reported through Tuesday. This was a weekly reduction of -3,745 contracts from the previous week which had a total of 8,384 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 25.1 percent. The commercials are Bullish with a score of 66.8 percent and the small traders (not shown in chart) are Bullish with a score of 60.2 percent. WHEAT Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 29.2 42.5 9.5 – Percent of Open Interest Shorts: 27.6 40.7 12.9 – Net Position: 4,639 5,041 -9,680 – Gross Longs: 84,206 122,406 27,418 – Gross Shorts: 79,567 117,365 37,098 – Long to Short Ratio: 1.1 to 1 1.0 to 1 0.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 25.1 66.8 60.2 – Strength Index Reading (3 Year Range): Bearish Bullish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -23.0 33.7 -31.2   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
The Commodities Feed: US gasoline demand falls

UK Oil Benchmark Fell 5%, Price Of Silver Reaching July 2020 Lows, Corn Commodities

Rebecca Duthie Rebecca Duthie 18.07.2022 16:31
Summary: Corn commodities and the agricultural market. OPEC+ and Saudi ministers. Aggressive Fed driving silver demand down Brent Crude Oil prices Investors are trying to deal with tighter supplies as risk appetite has seemingly returned to the markets, driving the price of Brent crude up. Ministers in Saudi Arabia insisted that future policy decisions would be made in accordance with the August 3rd OPEC+ meeting and with keeping market dynamics in mind. In addition, Libya indicated their oil ports and fields will begin functioning again and electricity output will increase after months of outages. Diesel and Gasoline demand fell during the first half of July in India due to seasonal rainfalls. The UK oil benchmark fell 5% and has been on the decline since the middle of June due to growing recession concerns. Brent Crude Oil Futures Price Chart Silver affected by aggressive monetary policy tightening Silver prices have been falling to their lowest level since July 2020 amidst concerns around demand in China and an aggressive monetary policy tightening Federal Reserve who are committed to fighting sky-high inflation. The reiteration from the Fed around their determination to control sky-high inflation has expectations for a July interest rate hike set at 75 basis points. Silver Sep ‘22 Futures Price Chart Corn Commodities falling to 5 week lows Corn commodities have been extending their decline to almost 5 week lows tracking a broader decline within the agricultural commodity market. Corn production forecasts for the 2022/2023 years were revised upwards by 45 million bushels in the United States due to greater harvesting and planting areas. Corn Dec ‘22 Futures Price Chart Sources: finance.yahoo.com, tradingeconomics.com
Powell signals Fed needs to be nimble, Canada Inflation hits near 40-year high, bitcoin tries to hold USD20k

Concerns Around Russia Halting Gas Flows To Europe Are Growing, Rebounding Cotton Prices, Gold Prices Threatened By Ongoing Economic Uncertainty

Rebecca Duthie Rebecca Duthie 19.07.2022 14:12
Summary: NGAS prices are rising amidst supply concerns. Risk of gold experiencing further declines. India’s monsoon season and cotton prices. Read next: IBM Beat Market Earnings Expectations For Their Second Quarter  Natural Gas Prices Rise NGAS futures have risen to levels that have not been seen in more than a month, amidst a demand that has been driven by weather, whilst simultaneously the uncertainty around supply of gas in the Eurozone kept demand for US LNG exports supported. In Europe, fears have been growing around the possibility that Russia will cut gas flows to the continent and jeopardize the EU’s goal to fill 80% of their storage capacity by the next winter season. Reuters has recently reported that Russia's Gazprom has informed its European customers that it cannot guarantee gas supplies due to 'extraordinary' circumstances, a move that Europe describes as retaliation for sanctions imposed on Moscow for invading Ukraine. NGAS Aug ‘22 Futures Price Chart Gold Futures Close To one year lows Gold prices have been remaining close to its lowest levels in almost a year and have been facing constant downward pressure from aggressive US monetary policy tightening and a stronger US Dollar which became increasingly more attractive than the non-yielding metal in serving as a hedge against ongoing economic uncertainty. Gold futures also struggled to hold their intraday gains on Monday despite the dollar’s retreat, which was considered as a technical weakness by analysts and in fact could increase the risk of gold experiencing further declines. Gold Aug ‘22 Futures Price Chart Cotton prices rebounded Cotton prices have rebounded since touching nine-month lows on July 14th as speculators in the commodity market took advantage of the lower prices and the monsoon season in India, the top producer. At the same time investors continue to digest the USDA’s July supply and demand report. Cotton Oct ‘22 Futures Price Chart Sources: finance.yahoo.com, tradingeconomics.com
S&P 500 Amongst Major Indexes That Are Rising, Markets Are Waiting For Thursdays ECB Policy Decision

S&P 500 Amongst Major Indexes That Are Rising, Markets Are Waiting For Thursdays ECB Policy Decision

Rebecca Duthie Rebecca Duthie 20.07.2022 23:47
Summary: S&P 500 supported by tech stocks Euro in focus Read next: WTI Crude Oil Prices Are Under Pressure, Coffee Prices Supported By Drier Weather Conditions, Palladium Futures  S&P 500 ends Tuesday in the green The positive earnings from both Tesla and Netflix that were reported on Thursday and Wednesday respectively has offered support to many tech stocks, driving the S&P 500 and other Tech stocks into the green. This move followed a rally on Tuesday that saw an overall increase of 2% across major indexes. Investors will remain focused on the corporate earnings season in the coming days and weeks, which, despite concerns around a global recession, expectations around this earnings season have been almost completely rewritten. S&P 500 Price Chart Euro Stole headlines on Wednesday European Central Bank’s (ECB) monetary policy decision due on Thursday. The Euro is still facing uncertainty regarding high inflation in the Eurozone and how the ECB plans to tackle it, in addition as the Noord Stream 1 opens after its routine maintenance period, there are still concerns as to whether Russia will open the gas taps. The recovery of the Euro against the dollar could be reflecting a possible market inflection point. The Euro has recovered half of its July losses so far, this could mean a turn around against the Dollar for many other major currencies aswell. The Euro stole the headlines on Wednesday as both Bloomberg News and Reuters reported that the market could see an outsized interest rate yield rise from the European Central Bank on Thursday. Sources: FXmag.com, finance.yahoom.com
Powell signals Fed needs to be nimble, Canada Inflation hits near 40-year high, bitcoin tries to hold USD20k

Platinum Futures Nearing 21-month Lows, Wheat, RBOB Gasoline Prices Falling

Rebecca Duthie Rebecca Duthie 21.07.2022 14:49
Summary: Weaker demand prospects for platinum outshine supply concerns. Russian grain and fertilizers will not be sanctioned by the US. RBOB Gasoline. Read next: Altcoins: renBTC (RENBTC) - What Is It? - A Deeper Look Into the renBTC (RENBTC) Platform  Platinum Prices are hitting 21 month lows Platinum prices are nearing 21 month lows as concerns around weakening demand outshone supply concerns. Higher than expected inflation numbers drove up expectations for more aggressive monetary policy tightening and heightened fears of a global economic recession. In addition, the demand from the top-consumer, China, is expected to fall in the wake of newly imposed lockdown regulations, which is also expected to hurt economic activity. At the same time, supply from Russia is expected to remain subdued due to the war in the Ukraine. Platinum Oct ‘22 Futures Price Chart Wheat futures prices returning to normal levels Chicago Wheat futures hit a one week high on July 20th but have since returned down to somewhat normal levels that were seen before Russia invaded the Ukraine amidst prospects of higher supplies. USDA forecasts show the levels predicted that supply, exports and ending stocks in the US are going to increase sharply and a decrease in consumption around the world. In addition, strong Russian harvest and lower export taxes expectations aided in the bearishness, this eased shortage relief when the US announced that Russian grains and fertilizers will not be sanctioned. Chicago Wheat Sep ‘22 Futures Price Chart RBOB Gasoline Gasoline futures fell to levels that have not been seen since April 25th, this fall comes in the wake of concerns around weakening demand. In addition, according to the EIA, domestic inventory levels increased well above market expectations. Gasoline consumption levels are standing around those of the first year of the pandemic, but lower than every year going back to 2000. RBOB Gasoline Aug ‘22 Futures Price Chart Sources: finance.yahoo.com, tradingeconomics.com
Recession Fears Continue To Rattle the Commodity Markets - Brent Crude Oil, Silver Futures Touch 4-week lows, Corn Futures Reach 6-week Highs.

The West Is Trying To Control Brent Crude Prices, Global Corn Supply Concerns, Fed Gears Up For Another Interest Rate Hike

Rebecca Duthie Rebecca Duthie 25.07.2022 15:41
Summary: Concerns around a demand-shifting global recession continue. Concerns around global supply of corn have been somewhat alleviated. China demand concerns and aggressive interest rate hikes. Read next: Altcoins: GALA (GALA) - What Is It? - A Deeper Look Into the GALA (GALA) Platform  Brent Crude Oil Futures Brent crude prices rose from their daily lows of about $103 to around $104 per barrel as concerns about a demand-draining global recession were dispelled by a tight global market and the potential for further supply disruptions. The West is developing a strategy to control the price of Russian crude as retaliation for Moscow's invasion of Ukraine. Additionally, despite the fact that a top US energy envoy expressed confidence that major producers have spare capacity and are likely to increase supplies, Biden was unable to win a commitment from Arab leaders to pump more oil. A persistent worry that an aggressive tightening from major central banks could plunge economies into a recession and consequently affect oil consumption kept prices in check. Brent Crude Futures Price Chart Corn Prices Following the USDA weekly report that indicated a steady state of the U.S. crop in its crucial pollination phase, alleviating concerns about global supplies, corn futures held close to the 8-month low level below $6 per bushel. Additionally, the agency maintained its rating of 64 percent of the American corn crop as being in good to exceptional condition from the previous week. The report also noted that while dryness lingers in western regions despite expectations for rising temperatures, weekend rainfall in the eastern Midwest benefitted crops. The USDA increased its predictions for global maize ending inventories to 313.0 million tons in its monthly report published on July 12th, an increase of 2.5 million tons from last month's forecasts. Corn Sept ‘22 Futures Price Chart Silver Futures As persistent concerns about demand in China and aggressive tightening by major central banks to control sky-high inflation continue to scare investors away from the non-yielding metal, silver stabilized around $18.7 an ounce, staying close to its lowest level since July 2020. Following a similar move in June, the Federal Reserve is widely anticipated to deliver a 75 basis point rate increase this week, raising borrowing costs to their highest level since 2019. Additionally, the ECB increased policy rates by 50 basis points last week, which was more than expected, and the BoE is likely to do the same thing the following week. The dollar has been pushed higher by safe-haven movements brought on by uncertainty in global growth. Silver Sep ‘22 Futures Price Chart Sources: finance.yahoo.com, tradingeconomics.com
Commodities: Prices Are Rising, Heatwaves In US And China Affects The Production Of Cotton

NGAS Prices Rising, Cotton Demand Falling, Gold Prices Rising As Recession Fears Rise

Rebecca Duthie Rebecca Duthie 26.07.2022 11:22
Summary: Cooling demand increases as summer progresses. Low cotton demand driving prices down. Recents dollar weakening drives gold price upward/ Read next: Altcoins: Filecoin (FIL) - What Is It? - A Deeper Look Into the Filecoin (FIL) Platform  Natural Gas US natural gas futures surged beyond the $8.8/MMBtu threshold, edging closer to a 14-year high of $9.5/MMBtu achieved in early May on expectations of a growing need for cooling as the country's weather continues to be hotter than typical. The optimistic prognosis is further boosted by the soaring global demand. Due to turbine problems, Russia's Gazprom announced it will decrease flows via the Nord Stream pipeline, providing only 33 million cubic meters per day, or about 20 percent of its capacity, forcing European consumers to find alternative sources of energy. Additionally, utilities only added 34 billion cubic feet (bcf) of natural gas to underground storage last week, significantly less than the 47 bcf median market expectation, according to the most recent EIA weekly inventory data. NGAS Aug ‘22 Futures Price Chart Cotton futures trading near 10-month lows The price of cotton futures on the ICE traded close to a 10-month low of 100 cents a pound as traders weighed concerns about poor demand against the possibility of lower production. Amid prospects of dry weather in Texas, the most recent USDA supply and demand report indicated reduced forecasts for output, exports, and ending stocks in the US for the 2022–2023 year compared to projections made last month. In addition, the pink bollworm pest, another major threat to cotton crops in India, attacked in Punjab and Haryana earlier than predicted this year as a result of the lack of moisture during the early stages of the planting season. Fears of a global economic slowdown are expected to reduce demand for non-essential clothes and fabric products. Cotton Oct ‘22 Futures Price Chart Gold prices rise along with recession fears After losing 0.4 percent the day before, gold increased to about $1,725 an ounce on Tuesday as recessionary fears increased. The safe-haven metal gained from recent weakening in the dollar and US Treasury yields. This week, the US Federal Reserve is anticipated to deliver a further rate increase of 75 basis points, taking the lead in the worldwide fight against inflation that some feared might push the greatest economy on the planet into recession. As monetary conditions become more constrained and threaten to affect global demand, other significant central banks are anticipated to join the US central bank in raising interest rates quicker. Recent figures from the US and Europe already indicate that economic activity is weakening, while China narrowly avoided a second-quarter loss. In the meantime, gold prices stayed about Gold Aug ‘22 Futures Price Chart Sources: finance.yahoo.com, tradingeconomics.com
Palladium Prices Falling Amidst Weaker Demand Prospects, WTI Crude Oil Stockpile Inventory Came In Below Expectations, Coffee Futures

Palladium Prices Falling Amidst Weaker Demand Prospects, WTI Crude Oil Stockpile Inventory Came In Below Expectations, Coffee Futures

Rebecca Duthie Rebecca Duthie 27.07.2022 17:14
Summary: Palladium prices are falling. US crude stockpile inventory came in lower than expected. Coffee output expected to come in lower. Read next: Altcoins: Harmony (ONE) - What Is It? - A Deeper Look Into the Harmony (ONE) Platform  Palladium prices drop amidst weaker demand prospects Palladium prices held steady near the six-month low of $2000 per tonne as expectations of a weaker demand overcame concerns about a supply shortage. As a result of increasing interest rates around the world, frequent lockdowns in China, a major customer, and other factors, the market for the metal is expected to fall. Concerns about supply disruptions from Russia, the metal's largest supplier, continue to exist on the supply side as the conflict in Ukraine shows no indications of coming to an end. Vladimir Potanin, a Russian tycoon who owns a 36% share in Nornickel, the largest palladium manufacturer in the world, was recently sanctioned by Britain. Palladium Sep ‘22 Futures Price Chart WTI Crude Oil prices On Wednesday, WTI crude futures oscillated back around $95.7 per barrel as traders considered inventory levels against a backdrop of doubt on the demand outlook. Government statistics confirmed Tuesday's industry reports that US crude oil stockpiles dropped by more than 4 million barrels last week, far more than the median estimate of a million barrel loss. Additionally, the draw in gasoline supplies of 3.3 million barrels substantially above forecasts of a 0.9 million barrel reduction. Concerns that a transition to oil would be forced by decreased gas supplies from Russia to Germany through the Nord Stream 1 pipeline support the optimistic sentiment. The White House announced the sale of an additional 20 million barrels of oil from strategic reserves on the supply side. Last but not least, caution prevailed amid ongoing worries over a potential impending recession ahead of the Federal Reserve's anticipated 75 bps rate hike later in the day. WTI Crude Oil Futures Sep Price Chart Coffee Futures Due to limited stocks and ongoing worries about declining coffee yields in top producer Brazil, Arabica coffee futures on the ICE were trading above the $2 per pound threshold. According to the most recent data, ICE-monitored coffee inventories have reached a 23-year low of 712,817 bags. Given the bullish outlook for the commodity, additional upward momentum could be anticipated this year. Coffee recently hit a nearly 10-year high of $2.6. From a previous projection of a +1.2 mln bag surplus, the International Coffee Organization (ICO) has reduced its global 2020/21 supply estimate to a deficit of -3.13 mln bags. Additionally, ICO downgraded its projections for worldwide output while highlighting stronger global consumption. Coffee Sep ‘22 Futures Price Chart Sources: finance.yahoo.com, tradingeconomics.com
Recession Fears Continue To Rattle the Commodity Markets - Brent Crude Oil, Silver Futures Touch 4-week lows, Corn Futures Reach 6-week Highs.

Commodities: Poor Corn Crop Supporting Prices, Brent Crude Prices, Silver Prices Rising

Rebecca Duthie Rebecca Duthie 01.08.2022 14:46
Summary: OPEC+ meeting on Wednesday. Corn crop health is poor. Silver prices are rising. Read next: Altcoins: Harmony (ONE) - What Is It? - A Deeper Look Into the Harmony (ONE) Platform  Brent Crude Oil prices After dropping for two consecutive months, Brent crude futures dipped around $103 per barrel on Monday as a deteriorating forecast for global demand overcame indications of continued supply constraints. The world's top oil importer, China, surprisingly experienced a decline in factory activity in July as a result of Covid-19 flare-ups and a dimming global outlook, according to official data released over the weekend. The US economy contracted for the second consecutive quarter, according to data released last week. Rising inflation and additional monetary tightening are projected to keep growth in check. Libya's oil minister, Mohamed Oun, told Bloomberg that after a string of interruptions, the nation's production had returned to normal at 1.2 million barrels per day. Markets are now anticipating the OPEC+ meeting on Wednesday, where it is anticipated that it will maintain its policy of moderate supply increases in the face of capacity limitations and underinvestment in oil fields, maintaining the tight global supply. Brent Crude Oil Futures Price Chart Poor corn crop health After the USDA's weekly report revealed poor crop health amid heatwaves in the Midwest and plains, corn futures increased to a 1-week high of almost $6 per bushel. The agency gave the U.S. maize crop a satisfactory to exceptional condition rating of 61%, far below than experts' expectations and down from 64% a week earlier. The crop that will be harvested in September is likely to suffer from the hot, dry weather that was present during key corn pollination. However, despite higher supply predictions from the USDA for 2022–2023 and negative demand prospects brought on by rising recession fears, corn is still close to its 8-month low of $5.9 set on July 5th. Corn Dec ‘22 Futures Price Chart Silver prices rising Following other precious metals, silver prices increased above $20 per ounce after the Federal Reserve continued its tightening course with a 75 basis point increase in interest rates at its July meeting. The action increased the momentum of major central banks' tightening policies since inflation in the biggest economies in the world has not yet peaked. The ECB increased policy rates by 50 basis points, which was more than predicted, and the BoE is likely to do the same thing the following week. Prices are still very close to the $18.1 two-year low that was reached earlier this month as worries about an economic downturn drove investors to the US dollar. Silver Sep ‘22 Futures Price Chart Sources: tradingeconomics.com, finance.yahoo.com
The EU And The UK Want To Tackle Soaring Energy Prices, Bank Of England Has To Digest UK Jobs Market Data, Bitcoin's Decent Performance Ahead Of The US Inflation Data

NGAS Prices Remain Elevated, Cotton Shortage Anticipated By Companies, Gold Supported By Dropping Dollar

Rebecca Duthie Rebecca Duthie 02.08.2022 17:18
Summary: NGAS prices remain supported by increasing demand expectations. Indian cotton crops are threatened. Falling US Dollar and lower Treasury yields supporting gold prices. Read next: 5 Cryptocurrencies To Keep A Watch On: Axie Infinity (AXS), SHIBA-INU (SHIB), Klaytn (KLAY), Sandbox (SAND), Chronoly (CRNO)  NGAS demand expected to fall US natural gas futures continued to decline below the $8/MMBtu barrier due to pressure from record supply levels as domestic producers profited from higher prices. Still, strong domestic and foreign demand continues to sustain the NYMEX complex's fundamentals. Prices have been supported by expectations of an increase in cooling demand due to the United States' above-average temperatures and by Europe's sustained strong demand despite a 20 percent reduction in Nord Stream pipeline gas flows. For refusing to accept its demand for payment for natural gas in Russian rubles, Russia has already stopped exports to Denmark, Finland, Bulgaria, the Netherlands, and Poland and cut supply to Germany. Natural Gas Sep ‘22 Futures Price Chart Companies are anticipating a cotton shortage Due to active buying from weavers, cotton futures on ICE reached 102 cents per pound, the highest level in more than 2 weeks. As companies anticipate a shortage of cotton yarn during the current cotton season, which runs until September 2022, higher production in the fabric and apparel segments and slower production in the spinning mills encouraged purchase. Additionally, the USDA noted decreased projections for US output, exports, and ending stocks for the years 2022–2023 in its July monthly report due to the possibility of dry weather in Texas. The pink bollworm pest, which this year attacked earlier than anticipated in Punjab and Haryana due to the lack of rainfall in the early part of the planting season, is another threat to cotton crops in India. Despite the fact that the global recession is expected to reduce demand for luxuries like apparel and fabric goods, cotton is still 35 percent below the 11-year high of 158 cents/pound reached in May. Cotton Oct ‘22 Futures Price Chart Gold demand boosted by low treasury yields and a falling dollar Tuesday saw gold trading above $1,770 per ounce and hanging at its best levels in four weeks as demand for bullion was boosted by a dropping dollar and low Treasury yields. The Federal Reserve may hike interest rates less aggressively in the upcoming months as a result of recent weakness in US economic statistics, which pressured the dollar and US yields while raising gold prices. As fresh US data continue to show an economic slowdown, this trend is anticipated to last throughout August. Demand for gold as a safe haven was also fueled by weaker manufacturing statistics across major economies and escalating tensions between China and the US before US House Speaker Nancy Pelosi's visit to Taiwan. Gold Dec ‘22 Futures Price Chart Sources: finance.yahoo.com, tradingeconomics.com
Palladium Prices Touching Two-Week Highs, OPEC+ Increasing Crude Supply Of WTI Crude Oil, Coffee Supply Outlook Seemingly Poor

Palladium Prices Touching Two-Week Highs, OPEC+ Increasing Crude Supply Of WTI Crude Oil, Coffee Supply Outlook Seemingly Poor

Rebecca Duthie Rebecca Duthie 03.08.2022 15:15
Summary: EIA data due later today. Concerns around shipping Palladium from Russia persist. ICO downgraded its projections for worldwide output while highlighting stronger global consumption. Read more: 5 Cryptocurrencies To Keep A Watch On: Axie Infinity (AXS), SHIBA-INU (SHIB), Klaytn (KLAY), Sandbox (SAND), Chronoly (CRNO)  WTI Crude Oil After it was revealed that OPEC+ would only increase crude supply by 100,000 bpd for the following month, WTI crude futures reversed early losses to rise more than 1% to $96 per barrel. While in Saudi Arabia last month, US President Joe Biden urged OPEC to enhance production, but due to capacity issues and some member states' failure to achieve output targets, it seemed unlikely that there would be a large increase in supplies. In July, OPEC increased its daily oil production by 310,000 barrels, with only Saudi Arabia and the UAE reportedly having some remaining production capacity. EIA data that will be made public later today should shed some light on how a downturn in the economy would affect demand. WTI Crude Oil Sep ‘22 Futures Price Chart Palladium touching two-week highs Palladium futures increased to their highest level in over two weeks, approaching $2100 a tonne, as significant dollar-denominated commodity buying increased in response to a halt in the dollar's rally. After the Fed chair reduced expectations for more large rate hikes while lifting the interest rate as widely anticipated, the US dollar stayed near 2-month lows. As the situation in Ukraine shows no signs of ending, worries about shipping problems from Russia, the metal's primary supplier, continue to exist. Vladimir Potanin, a Russian tycoon who owns a 36% share in Nornickel, the largest palladium manufacturer in the world, was recently sanctioned by Britain. Palladium Spe ‘22 Futures Price Chart Coffee supply outlook seemingly poor Due to limited stocks and ongoing worries about declining coffee yields in top producer Brazil, Arabica coffee futures on the ICE were trading above the $2 per pound threshold. According to the most recent data, ICE-monitored coffee inventories have reached a 23-year low of 712,817 bags. Given the bullish outlook for the commodity, additional upward momentum could be anticipated this year. Coffee recently hit a nearly 10-year high of $2.6. From a previous projection of a +1.2 mln bag surplus, the International Coffee Organization (ICO) has reduced its global 2020/21 supply estimate to a deficit of -3.13 mln bags. Additionally, ICO downgraded its projections for worldwide output while highlighting stronger global consumption. Coffee Dec ‘22 Futures Price Chart Sources: finance.yahoo.com, tradingeconimics.com
Crude Oil Supply Problems Are Reflected In JP Morgan's Forecasts

Crude Oil And Gold: Let's Have A Look At Jeffrey Halley's Commentary - 05/08/22

Jeffrey Halley Jeffrey Halley 05.08.2022 13:58
Oil prices slump overnight Although OPEC+ was a damp squib, rising recession fears saw oil prices slump once again overnight after a negative global outlook from the Bank of England policy meeting. Both Brent crude and WTI have now comprehensively broken lower through their 200 DMA’s, a negative technical development. Although Saudi Arabia continues raising prices for their crude grades to Asian and US customers in the real world, futures markets suggest this may be a last hurrah. Brent crude slumped by 3.55% to USD 93.55 a barrel overnight. WTI fell by 3.10% to USD 88.00 a barrel. In Asia, the overnight dip in prices has been irresistible to local buyers, sending Brent crude 0.75% higher to USD 94.25 and WTI 1.00% higher to USD 88.90 a barrel. Brent crude broke below its 2022 uptrend at USD 109.00 in early July, and it seems unlikely we will see USD 110.00 Brent again this year, barring Eastern European shocks. The 200-DMA at USD 98.35 is the initial resistance, followed by USD 102.50 a barrel. Support is at USD 93.55, and failure clears the road to USD 90.00 a barrel. Failure of USD 90.00 could trigger another wave of capitulation selling. WTI’s 2022 trendline failed at USD 108.35 in early July, never to be seen again. US recession fears continue to weigh on WTI prices. Resistance lies at USD 95.20 barrel, the 200-DMA, followed by USD 102.00. Support is at USD 87.50 and then USD 82.00 a barrel. As noted in earlier newsletters, the avalanche of USD 200.00 a barrel, end of the world Brent crude forecasts, proved an uncannily accurate indicator of the impending peak in oil prices. Gold rallies, did I just say that? My four days away in Bali have seen gold’s impressive recovery rally continue. Overnight gold rose an impressive 1.45% to USD 1791.50 an ounce, edging to USD 1792.00 an ounce in Asian trading. It continues to benefit from a weaker US dollar, in turn, driven by falling US bond yields, as markets continue to price in peak inflation and a US recession. Notably, gold prices based, mid-July, at critical long-term support at USD 1680.00 an ounce. The ensuing rally remains a powerful bullish technical pattern which seems to be now attracting plenty of interest. Gold should remain well supported on dips to USD 1775.00 now, with a test of USD 1800.00 imminent. ​ Gold’s technical picture suggests it will continue grinding towards the USD 1900.00 region in the coming weeks. Until such a time as bond markets decide that inflation will be stickier than anticipated and yields start to rise again. The first test of that will come in the form of the US Non-Farm Payrolls this evening. A soft US payroll number, though, will likely support gold’s upward momentum, as it is likely to result in another bout of US dollar weakness as yields fall. My last commentary closes with a bullish outlook on gold; who would have thought? And with that, dear readers, all I can say is thank you very much; you’ve been a wonderful audience. Jeff has left the building……. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Oil slides, gold rally continues - MarketPulseMarketPulse
Gold Retreated From It’s Daily Highs, Concerns Around WTI Crude Demand Continue, Tight Coffee Supplies Driving Prices

Gold Retreated From It’s Daily Highs, Concerns Around WTI Crude Demand Continue, Tight Coffee Supplies Driving Prices

Rebecca Duthie Rebecca Duthie 05.08.2022 18:22
Summary: A higher than anticipated payroll report prompted market movements. Continued concerns around the demand for crude oil amidst economic recession fears. Coffee Futures. Gold Futures retreat from daily highs The combination of a stronger dollar and rising Treasury yields caused gold to retreat from its daily highs of $1,795 an ounce to roughly $1,760 on Friday. Market movements were prompted by a payroll report that was higher than anticipated, which opened the door for the Federal Reserve to take an assertive posture to temper an overheating economy. Persistent worries about a worldwide economic slowdown and heightened US-China tensions over Taiwan acted as a floor under prices. Gold Dec ‘22 Futures Price Chart WTI Crude Oil futures WTI crude futures were trading close to $89 a barrel, slightly up from the 6-month low of $87.5 recorded on Thursday, but still on track to lose over 10% weekly and erase all the gains brought about by Russia's invasion of Ukraine. There are growing worries that the demand would be significantly impacted by a worldwide economic recession. Official data revealed that US gasoline demand plummeted significantly below pre-Covid seasonal norms last week, while US crude inventories unexpectedly increased. Additionally, there are indications that supply is increasing because Libya's oil production increased for a second consecutive week. The decline this week also occurred in spite of Saudi Arabia hiking oil prices to record levels for Asian consumers and OPEC's decision to only slightly increase oil supply for September while announcing "severely constrained" spare capacity. WTI Crude Sep Futures Price Chart Coffee stocks limited Due to limited stocks and ongoing worries about declining coffee yields in top producer Brazil, Arabica coffee futures on the ICE were trading above the $2 per pound threshold. According to the most recent data, ICE-monitored coffee inventories have reached a 23-year low of 712,817 bags. Given the bullish outlook for the commodity, additional upward momentum could be anticipated this year. Coffee recently hit a nearly 10-year high of $2.6. From a previous projection of a +1.2 mln bag surplus, the International Coffee Organization (ICO) has reduced its global 2020/21 supply estimate to a deficit of -3.13 mln bags. Additionally, ICO downgraded its projections for worldwide output while highlighting stronger global consumption. Coffee Dec ‘22 Futures Price Chart Sources: finance.yahoo.com, tradingeconomics.com
Forex: XAU/USD Is Rising For The 3rd Day In A Row!

The Goldilocks report

Craig Erlam Craig Erlam 05.08.2022 22:06
There’s no such thing as a quiet week in the markets these days and this week has undoubtedly been no different. The jobs report was always expected to be the highlight but the Bank of England gave it a good run for its money on Thursday, hiking by the most in 27 years while putting out some pretty dire economic forecasts. It would appear we have very little to look forward to for the next couple of years here in the UK. While I believe other central banks are slowly gravitating toward the economic reality of soaring energy costs, high and widespread inflation, and rapidly rising interest rates, the BoE has very much been at the forefront of accepting the country’s fate. That’s probably as much a reflection of the fundamental shortcomings as much as anything but the latest forecasts really were especially bleak and may make some other countries, particularly across Europe, a little nervous. The US may already be in a technical recession, depending on your definition, but the economy is still in very good shape. The jobs report is expected to show that once more today, with 250,000 jobs forecast to have been added last month leaving the unemployment rate at 3.6%. The question everyone is asking though is what constitutes an ideal jobs report. That may seem a silly question, but having drifted back into a “bad news is good news” environment where more rate hikes are to be feared as they may cause a recession but a recession is ok as it means potentially fewer rate hikes, it’s no longer that straightforward. With that in mind, perhaps the goldilocks report is one in which payrolls are strong but not overly so (so in line with forecasts), unemployment remains low but wage growth moderates a little. That would certainly fit the narrative of not a real recession while a slight moderation of wage growth could help build a case for inflation indicators easing, allowing for slower hikes into the end of the year. Of course, there are many other factors at play but with oil 20% off its highs and supply chains improving, the Fed may feel that pressures are abating. Of course, a decline in the headline figure is what it ultimately wants to see and there’ll be a couple of opportunities at that before the next meeting in September. Bitcoin only gets a mild lift from the Blackrock deal There was, what has become, a rare good news headline for bitcoin on Thursday after Coinbase was chosen to provide crypto services to Blackrock’s clients. This is a big show of support for an asset class that’s had a frankly terrible year so far. But clearly, there remains strong demand for cryptos which bodes well for the future. In the near-term, it’s not provided much of a lift which is perhaps a little surprising given how much the space has craved some more positive headlines recently but perhaps that’s a sign of the environment. Bitcoin continues to trade around USD 23,000, with a break above USD 25,000 now the next big test to the upside. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. The Goldilocks report - MarketPulseMarketPulse
Forex: XAU/USD Is Rising For The 3rd Day In A Row!

XAUUSD: Oh No! Something Made Gold Price Unable To Climb Above $1,800!

InstaForex Analysis InstaForex Analysis 08.08.2022 11:41
Relevance up to 08:00 2022-08-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   According to the latest weekly gold survey, prices cannot rise above $1,800 an ounce. Some market analysts said Friday's employment report killed hopes for gold to break the $1,800 level anytime soon.     Ahead of the latest survey results, the US Bureau of Labor Statistics said 528,000 jobs were created in July. The data far exceeded the expectations of economists, who had forecast job gains of around 250,000. The report also notes a solid increase in wages. While some analysts continue to see upside potential, many are neutral and bearish. Retail investors remain firmly optimistic about gold. Last week, 16 Wall Street analysts took part in the gold survey. Among the participants, four analysts, or 24%, were bullish in the short term. At the same time, seven analysts, or 41%, were bearish. And six analysts, or 35%, voted neutral. In online polls on Main Street, 579 votes were cast. Of these, 379 respondents, or 65%, expected gold prices to rise this week. Another 124 voters, or 21%, announced a reduction, while 76 voters, or 13%, were neutral.     Economists believe the July jobs report has changed market sentiment as investors now expect the Federal Reserve to maintain its aggressive monetary stance in September. The CME FedWatch tool shows that there is more than a 70% chance of a 75 basis point move next month. Ahead of the employment report, markets estimated the likelihood of an aggressive move at 34%. Adrian Day, president of Adrian Day Asset Management, has a neutral view of gold prices during the week. Because the latest employment data will make gold investors more cautious. However, he added that he remains an optimist in the long term. Frank McGhee, precious metals dealer at Alliance Financial, is bearish as the precious metal can no longer fight the Fed. However, some analysts remain optimistic about the precious metal, noting that prices remain supportive. Jim Wyckoff said there is still technical bullish momentum in the market, which could lead to higher gold prices this week.   Read more: https://www.instaforex.eu/forex_analysis/318286
The European Commission Proposal On Emergency Power Supply

Brent Crude Oil Price Falls With Demand Prospects, Poor Corn Crop Health In the Midwest, Silver Futures

Rebecca Duthie Rebecca Duthie 08.08.2022 19:42
Summary: China’s oil purchases are down 9.5% compared to a year ago. Poor Corn Crop health in the wake of extreme weather conditions. Fed continuing to stress the importance of keeping inflation low. Read next: 5 Cryptocurrencies To Keep A Watch On: DYDX (dydx), IOTA (MIOTA), Fusion (FSN), Komodo (KMD), OKB (OKEx)  Brent Crude Oil prices dropping as demand prospects fall Amid a dimming demand picture, Brent crude futures were trading around the $94 per barrel level. Refiners lowered inventories amidst a slower-than-anticipated demand rebound, according to data released over the weekend, which revealed that China, the biggest crude importer in the world, purchased 9.5% less oil in July than a year earlier. Last week's US government results were followed by weak Chinese data that indicated rising US crude stocks and falling gasoline consumption. Nevertheless, encouraging US labor and Chinese export statistics reduced some worries about a world recession that would sap demand. Brent Crude Futures Price Chart Corn prices close to 8-month lows After the USDA's weekly report revealed poor crop health amid heatwaves in the Midwest and plains, corn futures increased to a 1-week high of almost $6 per bushel. The agency gave the U.S. maize crop a satisfactory to exceptional condition rating of 61%, far below than experts' expectations and down from 64% a week earlier. The crop that will be harvested in September is likely to suffer from the hot, dry weather that was present during key corn pollination. Corn prices, however, are still close to an 8-month low of $5.9 set on July 5th due to USDA predictions for greater supplies in 2022–2023 and negative demand outlook brought on by escalating recession fears. Corn Dec ‘22 Futures Price Chart Silver prices remain subdued Ahead of this week's US inflation reading, silver futures remained steady at the $20.1 per ounce level, following other bullion to move slightly higher with a decline in risk sentiment. Even still, prices stayed below the $20.3 one-month high set earlier in the month as hawkish views for the Fed increased in the wake of numerous policymakers stressing the importance of bringing inflation down. More than twice as many jobs were added in the US economy in July as analysts had predicted, and the unemployment rate surprisingly crept down to 3.5%. The data caused markets to speculate that the Fed will raise rates by 75 basis points for the third time in a row at its upcoming meeting, which attracted investors to the US dollar and away from bullion. Silver Sep ‘22 Futures Price Chart Sources: finance.yahoo.com, tradingeconomics.com
The Oil Market Opened Today With A Gap, What Happen Next?

Oil is tired of falling

InstaForex Analysis InstaForex Analysis 09.08.2022 15:05
Relevance up to 10:00 2022-08-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Strong statistics on American employment crossed out the hopes of pessimists for an early recession. Stock markets are growing by leaps and bounds, safe-haven assets are being sold, but the fall in oil suggests that not everything is so simple. Black gold still does not rule out a recession in the global economy. The 24% collapse of Brent from the levels of June highs is associated with fears about a slowdown in global demand. Fears that supply could increase due to Iran pushed the North Sea grade below $100 a barrel. According to Goldman Sachs, normalizing supply chains and eliminating other one-time factors will reduce US inflation to 4%, but after that, there will be a lot of excess heat in the economy, which will be very difficult to eliminate. The Fed will be forced to raise the federal funds rate above 4% and hold it there longer than currently expected. This will trigger a recession, but later. Probably in 2023. The oil market remains in an unsustainable deficit at current prices. They are too low to significantly reduce demand. The bank is forecasting Brent to rally to $110 in the third quarter. Dynamics of the stock market and oil     Fears that consumption will not be as strong as expected really dropped the futures quotes very much. The black gold market is on the verge of transition from a "bullish" conjuncture, backwardation, to a "bearish" contango. Spreads between nearby contracts narrowed over the week from $1.9 to $1.54 per barrel. In my opinion, a significant share of the negative about global demand has already been priced in, and factors such as a strong labor market, falling gasoline prices in the US, which will increase interest in buying cars and oil products, as well as the growth of Chinese oil imports to 8.79 million b/d, more than June's 4-year low, gives hope to Brent bulls. Another thing is that the supply may increase. Investors are actively discussing the possibility of a deal between the West and Iran, which is ready to throw an additional 1.5 million b/d of exports on the market, equivalent to 1.5% of world supply. This factor has so far been ignored by the market, so the signing of the agreement will be a real blow to fans of the North Sea variety.     As for ousting Russia, investors seem to have gotten used to the idea that this is unrealistic. Moscow is reorienting the flow of black gold from West to East. China and India accounted for 41.4% of Russian exports in July 2022 compared to 21.7% of the same month last year. At the same time, the appetites of Beijing and Delhi are beginning to fall—in the second month of summer, China purchased 843,000 b/d of oil from the Russian Federation, while in June and May, this figure reached 1.33 million b/d. Technically, a Wolfe Wave pattern was formed on the Brent daily chart. We take profits on the shorts formed on the rebound from $102.4 and use the rebound from the $89–91 convergence zone or break through the resistance at $97.2 per barrel for purchases.   Read more: https://www.instaforex.eu/forex_analysis/318434
The EU And The UK Want To Tackle Soaring Energy Prices, Bank Of England Has To Digest UK Jobs Market Data, Bitcoin's Decent Performance Ahead Of The US Inflation Data

Commodities: NGAS Declining Amidst Weaker Demand Prospects, Cotton Rising, Gold Futures Increasing

Rebecca Duthie Rebecca Duthie 09.08.2022 15:09
Summary: NGAS prices declining amidst prospects of declining demand. Market expectations set at 75 bps rate hike for September. Cotton futures rising to 2 week highs. NGAS Futures US natural gas futures continued to decline below the $8.0/MMBtu barrier, under pressure from expectations that collapsing demand will ease as a result of cooler weather and record output levels as domestic producers profited from higher pricing. The gloomy prognosis was also strengthened by a larger-than-expected build in gas storage last week. The week ending July 29th saw US utilities add 41 billion cubic feet of gas to storage, much exceeding the forecast of 29 bcf. Additionally, Freeport LNG, a significant Texas export terminal, has reached an agreement with regulators to resume operations in October. As the crucial Nord Stream 1 pipeline from Russia to Germany is now operating at 20 percent capacity, demand from Europe is still helping to support prices. For refusing to accept its demand for payment for natural gas in Russian rubles, Russia has already stopped exports to Denmark, Finland, Bulgaria, the Netherlands, and Poland and cut supply to Germany. Natural Gas Sep ‘22 Futures Price Chart Gold Futures As investors anticipated US inflation data later this week that could provide additional hints on the Federal Reserve's rate hike trajectory, gold traded just around $1,790 an ounce on Tuesday after varying between $1,765 and $1,795 over the previous four days. The annual inflation rate is anticipated to have decreased from 9.1 percent in June to 8.7 percent, and a large surprise to the downside might trigger a surge in gold prices. According to a New York Federal Reserve study released on Monday, American consumers' expectations for inflation over the next year and the next three years have significantly decreased. The US economy unexpectedly added 528,000 jobs in July, which is more than double the 250,000 jobs that economists had forecast, according to figures released last week. The Fed will deliver another 75 basis point rate boost in September, according to market expectations. Gold Dec ‘22 Futures Price Chart Cotton Futures Due to active buying from weavers, cotton futures on ICE reached 102 cents per pound, the highest level in more than 2 weeks. As companies anticipate a shortage of cotton yarn during the current cotton season, which runs until September 2022, higher production in the fabric and apparel segments and slower production in the spinning mills encouraged purchase. Additionally, the USDA noted decreased projections for US output, exports, and ending stocks for the years 2022–2023 in its July monthly report due to the possibility of dry weather in Texas. The pink bollworm pest, which this year attacked earlier than anticipated in Punjab and Haryana due to the lack of rainfall in the early part of the planting season, is another threat to cotton crops in India. Cotton Oct ‘22 Futures Price Chart Sources: finance.yahoo.com, tradingeconomics.com
Russia's Crude Oil Still Flows To Japan, Negative Trade Balance In Japan

Coffee Prices Supported By Limited Stocks, Palladium Futures Reaching 2-week Highs, Upbeat IEA Report For US Crude Stocks

Rebecca Duthie Rebecca Duthie 11.08.2022 13:21
Summary: IEA raised its global forecast for global oil consumption. Limited stocks and declining coffee yields. Palladium futures reaching 2 week highs. WTI Crude Oil As investors weighed a somewhat upbeat IEA report against a higher-than-anticipated rise in US stocks and the restart of oil flows on the Russia-to-Europe Druzhba pipeline, WTI crude futures were trading around the $92-per-barrel level. The International Energy Agency has increased its forecast for global oil consumption in 2022, citing increased gas-to-oil switching due to rising power and natural gas prices. The organization also predicts that by the beginning of next year, when the EU ban goes into effect, Russia's oil production will have decreased by close to 20%. On the other hand, according to EIA data, US crude stockpiles increased by 5.5 million barrels last week instead of the 73,000 barrels that analysts had predicted. Additionally, over the last four weeks, the US gasoline demand was 6% lower than it was a year ago. In the meantime, earlier this week, flows on the Russia-to-Europe Druzhba pipeline restarted, allaying some supply concerns. WTI Crude Sep ‘22 Futures Price Chart Coffee Futures Due to limited stocks and ongoing worries about declining coffee yields in top producer Brazil, Arabica coffee futures on the ICE were trading above the $2 per pound threshold. According to the most recent data, ICE-monitored coffee stocks hit a fresh 23-year low of 591,959 bags, which is the lowest level since 1999. Given the commodity's bright prognosis, more upward momentum could be anticipated this year. Coffee prices recently touched a nearly 10-year high of $2.6. From a previous projection of a +1.2 mln bag surplus, the International Coffee Organization (ICO) has reduced its global 2020/21 supply estimate to a deficit of -3.13 mln bags. Additionally, ICO downgraded its projections for worldwide output while highlighting stronger global consumption. Coffee Dec ‘22 Futures Price Chart Palladium Futures Palladium futures increased to their highest level in over two weeks, approaching $2100 a tonne, as significant dollar-denominated commodity buying increased in response to a halt in the dollar's rally. After the Fed chair reduced expectations for more large rate hikes while lifting the interest rate as widely anticipated, the US dollar stayed near 2-month lows. As the situation in Ukraine shows no signs of ending, worries about shipping problems from Russia, the metal's primary supplier, continue to exist. Vladimir Potanin, a Russian tycoon who owns 36% of Nornickel, the largest palladium manufacturer in the world, was recently sanctioned by Britain. Palladium Sep 22 Futures Price Chart Sources: finance.yahoo.com, tradingeconomics.com
Bank Of England Is Expected To Choose Between 50 and 75bp, Ethereum Arouses More And More Discussions As Merge Is Around The Bend

Higher Crude Oil Demand Is Expected! Some Countries Swaps Gas For Oil

Craig Erlam Craig Erlam 12.08.2022 13:55
Brent eyes $100 after mixed headline week The oil market has bounced back this week, with Brent once more flirting with triple-figures. There’s been a lot to digest this week, with Iran nuclear talks ongoing, US inventories rising, US output also rising, the Druzhba pipeline saga and the various forecasts. Even the forecasts themselves offered contrasting views, with OPEC downgrading demand growth and expecting the oil market to tip into surplus this quarter. The IEA, meanwhile, anticipates stronger demand growth due in part to the gas to oil switch as some countries react to sky-high prices. All things considered, the price moves highlight just how tight the market remains and how sensitive it therefore still is to spikes. A deal between the US and Iran could go some way to changing that but I think it’s clear traders are not banking on that given how the talks have gone until this point. A compelling bullish case for gold Gold is holding onto gains despite struggling to capture $1,800. The yellow metal briefly traded above here after the inflation data but it seems traders quickly changed their minds, with risk assets instead being favoured. The fact that it continues to hold onto the bulk of the gains without any significant correction may suggest there’s still an appetite for it, with slower tightening seen as a favourable outcome. This will be an interesting test for gold as $1,800 could represent an interesting rotation point from a technical perspective if there is no desire to see it above here but ultimately the case for bullish gold remains quite compelling. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Oil rebounds, gold consolidates - MarketPulseMarketPulse
What Does Jeffrey Halley (Oanda) Think About 100bps Rate Hike? Important News About Soft Commodities!

Platinum Futures Recovering, RBOB Gasoline Futures, Concerns Around Demand For Wheat Futures

Rebecca Duthie Rebecca Duthie 12.08.2022 16:47
Summary: The Fed may slow down the pace of interest rate hikes. Hot and dry weather jeopardizes wheat growth. Rising demand vs Limited supplies for gasoline. Platinum Futures Following a break in the dollar gain after Fed Chair Jerome Powell suggested the possibility of reducing the pace of interest rate hikes amid contraction in the US economy, platinum futures touched $880 per tonne, recovering from a 22-month low of $844 recorded on July 14th. Foreign investors are enticed to purchase the dollar-denominated commodity by low-cost dollars. As the war in Ukraine rages and the West continues to impose economic sanctions on Russia, shipment interruptions from Russia are anticipated to keep the metal supplies lower. The Russian mining behemoth Nornickel's CEO and largest shareholder, Vladimir Potanin, was subject to sanctions earlier in June by the British government. Nornickel, with a 10% global output share, is the third-largest producer of platinum. Platinum Oct ‘22 Futures Price Chart Chicago wheat futures As a result of the hot and dry weather that jeopardized the yield in the ongoing harvests in the growing regions of North America and Europe, Chicago wheat futures inched up to $8 in August, lingering at levels not seen in a week. Traders are awaiting Friday's WASDE data to assess the potential impact of recession concerns on demand. Although grain supplies out of Black Sea ports continued, prices were still close to the six-month low of $7.5 reached earlier in the month and remained below levels before Russia's invasion of Ukraine. After an agreement between the Ukrainian and Russian delegations opened secure trade routes to ease the world food crisis, ships carrying Ukrainian grain resumed operations. It is anticipated that Ukraine will sell more than 20 million tonnes of grain that have reportedly collected in port silos since its invasion began on February 24 in addition to freeing up critical storage space for the next wheat harvest. Chicago Dec ‘22 Futures Price Chart RBOB Gasoline Futures As the market still needs to balance rising demand and limited supplies, gas and oil prices should increase through the end of the year, according to Goldman Sachs Group Inc. As industrial companies and power generators move away from more expensive natural gas, demand for crude is expected to increase. Consumption should increase as a result of the combination of relatively reduced prices and the ongoing reopening of economies. Lack of a gasoline and diesel inventory cushion at a time when refineries are entering their maintenance season worsens the supply outlook. RBOB Gasoline Sep ‘22 Futures Price Chart Sources: finance.yahoo.com, tradingeconomics.com
Recession Fears Continue To Rattle the Commodity Markets - Brent Crude Oil, Silver Futures Touch 4-week lows, Corn Futures Reach 6-week Highs.

Brent Crude Oil Futures Prices Dropping, Silver Futures Falling, Poor Corn Crop Health Driving Prices

Rebecca Duthie Rebecca Duthie 15.08.2022 17:33
Summary: Brent futures prices falling. Dovish fed may be improbable. Corn crop health looks dim. Brent Crude Oil consumption outlook dampened On Monday, Brent oil futures dropped another 5% to roughly $93 per barrel, closing in on February lows of $91 reached earlier this year as worries about a protracted recession impacted on the outlook for energy consumption. China, the world's largest oil importer, saw industrial production growth fall short of forecasts, indicating a slow rebound from the stringent Covid lockdowns at the end of the second quarter. The OPEC anticipated a fall in oil consumption and an increase in oil production, which disputed the opposite views from the IEA citing gas-to-oil switching for power generation. The state-run IRNA reported that Iran could accept the EU's offer to renew the Iranian nuclear deal, giving rise to hopes for more shipments from Iran in the meantime. Brent Crude Oil Futures Price Chart Silver Futures falling despite indications of slowing inflation A strengthening dollar scared investors away from the non-yielding commodity, and silver futures slid from a peak of approximately $20.9 to a low of around $20 per ounce. Despite indications that inflation was slowing, the Federal Reserve's aggressive tightening agenda was still backed by the markets. Last week, a number of Fed policymakers noted that a dovish flip is improbable. For hints about the central bank's rate path, other speeches this week and the FOMC minutes release due on Wednesday are now widely anticipated. Silver Sep ‘22 Futures Price Chart Poor Corn crop health driving prices After the USDA's weekly report revealed poor crop health amid heatwaves in the Midwest and plains, corn futures increased to a 1-week high of almost $6 per bushel. The agency gave the U.S. maize crop a good to exceptional condition rating of 61%, significantly lower than experts' expectations and a drop from the previous week's rating of 64%. The crop that will be harvested in September is likely to suffer from the hot, dry weather that was present during key corn pollination. However, despite higher supply predictions from the USDA for 2022–2023 and negative demand prospects brought on by rising recession fears, corn is still close to its 8-month low of $5.9 set on July 5th. Corn Dec ‘22 Futures Price Chart Sources: finance.yahoo.com, tradingeconomics.com
Gold Struggles To Capitalize On Its Goodish Rebound

What Is "De-Dollarization"!? Ghana Is About To Start Buying Gold

InstaForex Analysis InstaForex Analysis 16.08.2022 14:08
Relevance up to 12:00 2022-08-17 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   The African nation announced last week that it would launch a domestic gold buying program in September. The central bank said it would pay for the precious metal at market prices but make payments online. Ghana's Vice President Dr. Mahamudu Bawumia said the new program represents a significant and sustainable addition to Ghana's foreign exchange reserves and will strengthen the country's balance of payments. The new program has been in development for over a year. In a June 2021 presentation, Bank of Ghana Governor Ernest Addison said the plan would allow the country to double its gold reserves over the next five years. The central bank said that, along with building foreign exchange reserves, the program will also support the national gold mining industry. Ghana is the largest gold producer in Africa and the sixth largest in the world. Last year, the country produced over 117 tons of gold. Ghana has become the latest central bank to announce plans to increase its gold reserves. Earlier this year, a World Gold Council survey showed that of 57 central banks, a quarter planned to add more gold to their foreign exchange reserves. Much of the demand comes from central banks in developing countries. Many economists and market analysts view the growing interest of central banks in gold as part of growing de-dollarization trend. Countries are trying to reduce their dependence on the US dollar.   Read more: https://www.instaforex.eu/forex_analysis/319032
The World’s Top Oil Exporter Expects Demand To Recover

Energy: What Could Make Crude Oil Price Reach Low Levels?

Craig Erlam Craig Erlam 16.08.2022 13:26
Two-way risk for oil as a decision on JCPOA nears? Oil prices are sliding once more after tumbling on Monday following some woeful Chinese data. The unexpected MLF rate cut from the PBOC may have further spooked traders as it’s unlikely to have any positive impact and just looked a little desperate. Throw in the country’s disappointing refinery data – with output falling to 12.53 million barrels per day – and things aren’t looking particularly good in the world’s second-largest economy. ​ It’s hard to say how much of a factor the Iran nuclear talks are as a deal looks both close and unlikely depending on who’s talking. It’s possible that with an agreement or not imminent, the potential for a deal is being priced in which creates two-way risk for the oil price if a final announcement does come this week. But the primary driver of the weakness, which could keep prices around $90 or lower is the threat of recession around the world and the Chinese lockdowns. Positive signs for gold? There’s been a lot of pushback in gold early this week, with the yellow metal trading in the red for a second day. This comes amid another day of gains for the US dollar even as yields remain relatively flat. The fact that gold isn’t shedding too much of its recent gains could be a positive sign over the medium term, although it would have to overcome what has become a strong barrier of resistance this past week. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Oil extends decline, gold edges lower - MarketPulseMarketPulse
Brent Crude Oil Stayed Quite Strong Yesterday Rising 0.7%, But In The Near Future Commodites May Be Endangered By (USD) US Dollar's Dominance And More

Oh My! Commodities Prices Are Affected By Stronger USD (US Dollar) And Chinese Data

ING Economics ING Economics 16.08.2022 15:43
Commodities have come under pressure. Poor macro data from China and a rebound in the USD have weighed heavily on the complex. Specifically for oil, the prospect of an Iranian nuclear deal is certainly not helping   Energy - edging closer to a nuclear deal Oil is under further pressure. ICE Brent settled more than 3% lower yesterday, whilst WTI broke below US$90/bbl. This weakness has carried through into early morning trading today. Weaker than expected Chinese data has raised demand concerns once again, not just for oil, but for the broader commodities complex. As mentioned in yesterday’s note, refinery activity in July fell to its lowest levels since March 2020, whilst apparent demand was down around 10% YoY. These demand concerns have coincided with a recovery in the USD, which surged yesterday. Prospects of an Iranian nuclear deal have only weighed further on the market. Iran has reportedly responded to the EU’s proposal for a resumption of the Iranian nuclear deal. And the Iranians expect to receive a response in the next couple of days. The Iranian foreign minister is of the view that a deal could be reached in the next few days, although it will require some ‘flexibility’ from the US. As for the US’ stance, they will reportedly relay their views directly to EU negotiators. A revival of the deal and lifting of oil sanctions could potentially see Iran increasing oil supply in the region of 1.3MMbbls/d over time, which would help to ease some of the expected tightness in the oil market over 2H23. While the short term outlook appears more negative, the longer term outlook is still somewhat constructive. US drilling activity is increasing, although the pace has been slower than we have seen in previous upcycles. US producers still seem to be relying on drilled but uncompleted wells (DUCs). The latest drilling productivity report released by the EIA yesterday shows that DUC inventory fell by 20 over July, to leave the total number of DUCs at 4,277- the lowest since at least December 2013. We have seen 25 consecutive months of declines in the DUC inventory, falling by 4,530 over that period. US producers have relied on DUCs to sustain production post Covid, however, given the low inventory, producers will be unable to rely on DUCs moving forward, instead we will need to see a further increase in drilling activity.   Hot weather in Europe has provided a boost to European natural gas prices. TTF settled almost 6.8% higher yesterday, whilst prices hit EUR230/MWh at one stage yesterday- levels we have not seen since early March. However, European gas storage continues to edge higher, reaching almost 75%, which is in-line with the 5-year average and well above the 62% seen at this stage last year. Assuming we do not see any further reductions in Russian gas flows, the EU should hit its target of having storage 80% full by 1 November. However, that is a big assumption to make in the current environment. Metals - power shortages in Sichuan province The announcement of an interest-rate cut from the People's Bank of China (PBoC) failed to stop a slide in the metals complex yesterday. Instead market participants continue to be concerned about the demand outlook, following the latest poor economic data from China, as well as the domestic Covid situation. A stronger USD only applied further pressure to metal markets. Whilst there are clear demand concerns, supply risks are growing. Sichuan province in China has ordered some industrial plants to halt activities from 15 August until 20 August, as heat waves have led to power shortages. The region has been struggling with high temperatures and dry weather since July, and relies heavily on hydro for power generation. According to the Shanghai Metals Market, around 390ktpa of capacity in Sichuan province has been affected by the power shortages. Turning to ferrous metals, the SGX’s most active iron ore contract fell close to 4% yesterday, given the weaker macro data from China. The latest data from the National Bureau of Statistics shows that crude steel output fell 6.4% YoY to 81.43mt in July, as demand from the property sector continues to worsen. Cumulatively, output fell 6.4% YoY to 609.3mt over the first seven months of the year. Shandong province (the third largest steel producing hub) in East China, plans to cap steel output at around 76mt in 2022, slightly lower than the 76.5mt produced last year. Agriculture - Russian grain exports off to a slow start The latest numbers from the Russian Grain Union shows that Russia exported 4.67mt of wheat in the season that began on 1 July, down 13% compared to a year earlier. It is also estimated that the number of nations buying Russian wheat has reduced from 43 a year ago to just 23. Total grain exports declined 12% YoY to 5.6mt over the same period. The USDA’s latest weekly crop progress report for the US shows that 90% of the winter wheat crop was harvested as of 14 August, compared to 86% a week ago and 97% at the same stage last season. For corn, the USDA rated 57% of the crop in good-to-excellent condition, down from 58% a week ago and 62% last year. 58% of the soybean crop was rated good-to-excellent, marginally down from 57% last year. Read this article on THINK TagsRussia Power shortages Oil Iran nuclear deal Aluminium Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Commodities: Prices Are Rising, Heatwaves In US And China Affects The Production Of Cotton

NGAS Prices Touching Near 14-year Highs, Cotton Futures Rising, Gold Futures Weighed Down By Hawkish Federal Reserve

Rebecca Duthie Rebecca Duthie 16.08.2022 16:32
Summary: NGAS futures are trading close to 14-year highs. Decreased supply vs lower demand for cotton. Gold futures falling. Demand for NGAS rising US Natural Gas futures were trading close to a 14-year high of $9.75/MMBtu reached in late July, supported by robust domestic and international demand. US Natural Gas futures were trading around this price. This summer's high temperatures in the US have been accompanied by many heatwaves, which has increased demand for air conditioners. Freeport LNG, meanwhile, announced that it started bringing in very small amounts of natural gas from pipelines and that it just reached an agreement with authorities to partially restart operations at its shut-down export terminal in Texas in October. More natural gas will be taken out of storage once flows resume, which will increase exports. The fact that the crucial Nord Stream 1 pipeline, which runs from Russia to Germany, is currently operating at 20% capacity just makes matters worse. Demand from Europe is still high. NGAS Sep ‘22 Futures Price Chart Cotton prices touching 7-week highs As traders weighed the chances of decreased supply against those of lower demand, cotton futures increased to levels above 120 USd/Lb, the highest in more than 7 weeks. According to the most recent USDA crop report, production for 2022–2023 will drop to 12.6 million bales, which would mark a decline from 2009–2010 levels. Additionally, the new output prediction is around 19% lower than 2021–2022. In the meantime, severe weather and pest attacks in important growing regions continue to threaten cotton crops in India, another key producer. Cotton Oct ‘22 Futures Price Chart Gold Futures weighed down by slowing GDP Expectations that the Federal Reserve would continue to rapidly raise interest rates despite evidence of softening inflation and slowing GDP caused gold prices to trade around $1,780 an ounce on Tuesday, down 1.3% from the previous session. Richmond Fed Bank President Thomas Barkin stated Friday in the most recent central bank commentary that the Fed will need to keep raising rates into "restrictive terrain" until he sees inflation persistently falling inside the target range for a considerable amount of time. Higher interest rates make owning non-yielding bullion more expensive, despite the fact that gold is regarded as a hedge against inflation and economic uncertainty. Gold Dec ‘22 Futures Price Chart Sources: finance.yahoo.com, tradingeconomics.com
Coffee Prices Supported By Concerns Around Low Supplies, Palladium Reaching 2-week Highs, WTI Crude Oil Futures Hitting Lowest Levels Since February

Coffee Prices Supported By Concerns Around Low Supplies, Palladium Reaching 2-week Highs, WTI Crude Oil Futures Hitting Lowest Levels Since February

Rebecca Duthie Rebecca Duthie 17.08.2022 16:56
Summary: WTI Crude prices under pressure. More upward momentum for coffee futures is expected. Palladium futures. WTI Crude Oil Futures A larger-than-expected drop in US crude stocks was more than offset by rising threats of a global recession and a potential increase in Iranian supply, which kept WTI crude futures under pressure at around $86 per barrel on Wednesday, the lowest since February. In response to a "final" draft agreement on renewing the 2015 nuclear agreement, the EU said on Tuesday that it was researching Iran's answer. Analysts predicted that a prospective deal might release approximately 2.5 million bpd of Iranian petroleum to the world markets. The potential of a worldwide economic slowdown, which may significantly affect energy demand, has also remained a concern for investors. Major central banks are expected to boost interest rates further to reduce inflation. According to a report from the industry, US crude stockpiles dropped by 448,000 barrels last week, compared to market expectations of a decline of 117,000 barrels. WTI Crude Oil Sep ‘22 Futures Price Chart Coffee predicted to rise due to low stocks Due to low stocks and ongoing worries about decreased coffee yields in leading producer Brazil, Arabica coffee futures on the ICE were trading at $2.2 per pound, a level not seen in a month. The most recent data showed that 571,580 bags—a new 23-year low—were held in ICE-monitored coffee stocks. Early in February, coffee prices rose to over a decade highs of $2.6; this year, more upward momentum may be anticipated. From an earlier projection of a 1.2 million bag surplus, the International Coffee Organization (ICO) has reduced its global supply estimate for 2021/22 to a shortfall of 3.13 million bags. Additionally, ICO downgraded its projections for worldwide output while highlighting stronger global consumption. Coffee Dec ‘22 Futures Price Chart Palladium reaching 2 week highs Palladium futures increased to their highest level in over two weeks, approaching $2100 a tonne, as significant dollar-denominated commodity buying increased in response to a halt in the dollar's rally. After the Fed chair reduced expectations for more large rate hikes while lifting the interest rate as widely anticipated, the US dollar stayed near 2-month lows. As the situation in Ukraine shows no signs of ending, worries about shipping problems from Russia, the metal's primary supplier, continue to exist. Vladimir Potanin, a Russian tycoon who owns 36% of Nornickel, the largest palladium manufacturer in the world, was recently sanctioned by Britain. Palladium Sep ‘22 Futures Price Chart Sources: finance.yahoo.com, tradingeconomics.com
What Does Jeffrey Halley (Oanda) Think About 100bps Rate Hike? Important News About Soft Commodities!

Break In The US Dollar Gain Is Supporting Platinum Prices, Wheat Prices Declining, RBOB Gasoline Prices Falling

Rebecca Duthie Rebecca Duthie 18.08.2022 13:10
Summary: Falling gasoline prices amidst recessionary fears. Strong wheat supply from top growing regions. Platinum prices rising amidst weaker dollar. Platinum futures recovering from 22-month lows Following a break in the dollar gain after Fed Chair Jerome Powell suggested the possibility of reducing the pace of interest rate hikes amid contraction in the US economy, platinum futures recovered from a 22-month low that was recorded on July 14th. Foreign investors are enticed to purchase the dollar-denominated commodity by low-cost dollars. As the war in Ukraine rages and the West continues to impose economic sanctions on Russia, shipment interruptions from Russia are anticipated to keep the metal supplies lower. The Russian mining behemoth Nornickel's CEO and largest shareholder, Vladimir Potanin, was subject to sanctions earlier in June by the British government. Nornickel, with a 10% global output share, is the third-largest producer of platinum. Platinum Oct ‘22 Futures Price Chart Strong Wheat supply driving prices down The strongest supply from significant growing regions caused Chicago wheat futures to decline to below $7.5 per bushel in mid-August, the lowest level since January. Following a pact between Russia and Ukraine for secure trade routes to ease the world food shortage, vessels carrying Ukrainian grain continued to operate without incident. It is anticipated that Ukraine will sell more than 20 million tonnes of grain that have reportedly collected in port silos since its invasion began on February 24 in addition to freeing up critical storage space for the next wheat harvest. Concerns over the impact of hot and dry weather on the crop were allayed elsewhere thanks to prospects of rain in the US corn belt. Meanwhile, the USDA raised the world's supplies upward in its most recent WASDE report, boosted by projections for record production in Russia and higher output from China and Australia. US supply projections were also upgraded because strong spring wheat more than made up for declining supplies of winter and durum wheat. Wheat Futures Price Chart RBOB Gasoline futures As a result of lower gas prices weighing on service station receipts, U.S. retail sales surprisingly remained constant in July. However, consumer spending began to pick up at the beginning of the third quarter, allaying concerns the economy was in a recession. However, falling petroleum prices gave consumers more money to spend on other items including furniture, electronics, appliances, building supplies, and gardening tools. RBOB Gasoline Sep ‘22 Futures Price Chart Sources: finance.yahoo.com, tradingeconomics.com
If OPEC+ Doesn't Apply A Significant Supply Cut, Crude Oil Prices Could Go Down

Energy: US Crude Oil Inventories Released By EIA Showed A Significant Fall!

ING Economics ING Economics 18.08.2022 15:06
The US saw large oil inventory declines over the last week. However, commodities are still struggling to find direction. A number of markets are trying to balance weaker demand with growing supply risks. This is particularly the case for metals, where yesterday another European smelter announced it would suspend operations due to high energy prices Source: Shutterstock Energy- large US crude inventory draw Yesterday’s EIA numbers provided some support to the oil market. However, sentiment remains largely negative, with lingering demand concerns and a potential Iranian nuclear deal casting a shadow over the market. The EIA reported larger than expected draws in crude and product. Over the last week, commercial crude oil inventories declined by 7.06MMbbls, which is the largest drawdown since mid-April. However, when SPR releases are taken into account, total US crude oil inventories fell by a significant 10.46MMbbls. The large decline in inventories was due to a substantial increase in crude oil exports over the week. Exports grew by 2.89MMbbls/d to hit a record 5MMbbls/d. This makes up for the weak export number last week, while the wider discount that we have seen in WTI/Brent for several weeks now should be supportive for US export volumes. On the products side, while a build of 766Mbbls was reported for distillate fuel oil, gasoline inventories fell by 4.64MMbbls. This fall was driven by stronger implied demand, which grew by 225Mbbls/d over the week. The more recent weakness that we have seen in pump prices appears to have provided some support to demand. Metals- more closures for European smelters Base metals came under further pressure yesterday, with the exception of LME aluminium, which managed to settle marginally higher on the day. This is after Norsk Hydro announced that it would suspend primary aluminium production at the Slovalco smelter in Slovakia due to surging power prices. The smelter had already reduced output late last year and early this year, which left it operating at 60% of its 175ktpa capacity. Separately, Hydro has also said that production will be affected at its Sunndal smelter in Norway due to strike action which is set to start on 22 August. The planned strike is estimated to idle around 20% of primary production capacity for four weeks starting from Monday. Hydro Sunndal has a capacity of 450ktpa. While supply risks continue to grow in the aluminium market (both in Europe and China), the market still seems more focused on the poorer demand story. Agriculture - Chinese imports off to a weak start in 2H22 The latest trade data from China’s Customs shows that corn imports fell 46% year-on-year to 1.5mt in July, while year-to-date imports are down 16.7% YoY to 15.1mt. Similarly, wheat imports also came under pressure, falling 11.7% YoY to 780kt over the month. Cumulative wheat imports declined 8.4% YoY to 5.7mt over the first seven months of the year. Weaker Chinese import demand has provided some relief to grain markets, which have had to deal with Ukrainian supply disruptions.  Read this article on THINK TagsPower shortages Oil EIA China demand Aluminium Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Brent And WTI Crude Oil Prices Flirting With $80 Level, Nord Stream Sabotaged

Gas prices finally drop but crisis still hits countries worldwide

InstaForex Analysis InstaForex Analysis 18.08.2022 20:16
Relevance up to 15:00 2022-08-19 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results.   The price of natural gas for Western Europe began to decline by about 1%, falling back from a 14-year high reached earlier this week. European consumers can thank climate experts who are predicting less hot weather in the near future. Reuters reports that strong demand for air conditioning systems should drop significantly over the next two weeks. The good news about weather conditions was enough for the price to finally start to fall, albeit slightly. This drop is occurring even despite the reduction in daily production volumes and the persistence of hotter weather on the West Coast and in Texas. US natural gas futures closed yesterday's trading session with a drop of 8.5 cents (0.9%), eventually reaching $9.244 per MMBtu. By the way, the futures closed at the highest level since August 2008 on Tuesday. On Thursday, the US Energy Information Administration (EIA) is expected to release its weekly report from the US Department of Energy, which will show the level of gas reserves in the country. Experts predict that US underground storage inventories rose during the reporting week, but not significantly. According to a Reuters poll of analysts, US gas inventories rose by 34 billion cubic feet in the week ending August 12. Last year, the figure was 46 billion cubic feet, according to a Reuters poll. However, the quotes will hardly show significant movements in the short and medium term. This worst energy crisis in decades is sprouting ever deeper, particularly after the collapse of natural gas supplies from Russian giant Gazprom to Europe. Gazprom's management has said that gas prices could rise even higher this winter, to $4,000 per 1,000 cubic meters, thus setting a new all-time record. The Nord Stream pipeline is only 20% efficient today, energy transit through Ukraine is only 38% efficient, and the Yamal-Europe pipeline is not operational because it has been under Russian sanctions since spring. In addition, even Norway today is unable to satisfy the appetite of its Western European partners, as it was forced to cut electricity exports to the EU due to the scheduled maintenance of its largest field, Troll. In addition, the record-breaking heatwave and nearly uninterrupted drought in August contributed to the skyrocketing gas prices. European wind power has proved to be completely pointless during periods of windless weather as it stands idle for most of the summer. A large solar power plant in Spain started up too late and has not yet lived up to its high expectations. The European countries abandoned coal and nuclear power in favor of the climate agenda which leaves little chance of resolving the long-lasting crisis that is growing in almost all spheres of life. It is clear that exorbitantly high and rapidly rising energy prices are destroying various sectors of European industry. Both fertilizer and aluminum production facilities are suffering. For example, Norsk Hydro ASA intends to close its aluminum plant in Slovakia next month because aluminum is one of the most energy-consuming metals to produce. Over the past year, Slovakia has lost about half of its zinc and aluminum smelting capacity due to production cuts. From now on, Hydro and other companies are shutting their plants down. Germany is trying to ease the gas supply crisis. The government urged citizens to reduce consumption and warned of forced rationing and even imposed a tax on gas use. In addition, German authorities made a deal to import LNG through two new terminals this week. The country is revisiting the idea of keeping its remaining nuclear reactors in operation after they are phased out this year, which will help reduce gas consumption by almost 3% next year.   Read more: https://www.instaforex.eu/forex_analysis/319325
BMO Capital Markets Lowered Its Price Forecast For The Next Two Years|Recession Fears Will Continue To Weigh On Silver

Bank Of Canada (BoC) Expects Silver Price To Reach $18!

InstaForex Analysis InstaForex Analysis 19.08.2022 13:49
Relevance up to 09:00 2022-08-21 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   There has been significant volatility in the silver market this year, but one Canadian bank believes the price action could get much worse. Since its peak in late February, silver prices have declined significantly. Despite the fact that silver outperformed gold last month, TD Securities analysts expect another down move. On Wednesday, the Canadian bank announced that it was taking a tactical short position in silver, expecting prices to drop to $18 an ounce over the next two months. Daniel Ghali, senior commodity strategist at TDS and author of the note, said silver continues to face headwinds. Growing fears of a global recession dampen industrial demand for silver; at the same time, its role as a monetary metal has diminished as central banks, led by the Federal Reserve, continue to raise interest rates. At the same time, TDS expects gold prices to push down the value of silver as the Federal Reserve tightens interest rates aggressively. Ghali added that the annual central bank symposium, which will be held next week in Jackson Hole, Wyoming, could be a catalyst for lower gold and silver prices. Markets are split roughly 50/50 depending on how much the US Central Bank raises interest rates next month. By 50 basis points or 75 basis points. On precious metals, the TDS was bearish as interest rates rose and the US dollar hit a 20-year high. In July, the bank announced a tactical short position in gold.   Read more: https://www.instaforex.eu/forex_analysis/319389
Gold Futures Decline, Cotton Reaching 7-week Highs, WTI Crude Futures

Gold Futures Decline, Cotton Reaching 7-week Highs, WTI Crude Futures

Rebecca Duthie Rebecca Duthie 19.08.2022 15:54
Summary: Cotton reached its highest levels in 7-weeks. Gold futures declining to 3-week lows. WTI crude falling as recessionary fears persist. Gold futures decline as Fed continues interest rate hiking Due to the US Federal Reserve's determination to maintain rising interest rates in order to reduce inflation, gold prices declined to a three-week low of $1,760 an ounce on Friday and were expected to conclude the week considerably lower. Due to the hawkish posture of the US central bank, the dollar has reached a one-month high against its main competitors, increasing the price of gold for buyers using other currencies. James Bullard, president of the St. Louis Fed Bank, stated in the most recent Fed commentary that he is considering supporting a third consecutive 75-basis point rate hike in September and that he is not yet prepared to declare that the economy has experienced the worst of the inflation spike. Gold Dec ‘22 Futures Price Chart WTI Crude trading lower amidst economic downturk fears As worries about a global economic downturn overcame indications of more solid short-term fuel demand, WTI oil futures traded lower at about $89 per barrel on Friday and are expected to decline by more than 3% this week. Commodity markets remained gripped by recessionary fears, and the US Federal Reserve planned to raise interest rates further higher to fight inflation. Investors weigh the gradual rise in Russian production against European Union import curbs on goods in December and the beginning of the following year. Oil prices fell to their lowest levels in six months this week as a result of efforts to resurrect the 2015 nuclear agreement, which could increase Iranian oil shipments by approximately 2.5 million bpd. The nation exported a record 5 million bpd of oil last week amid strong European demand, according to official data, which also showed that US crude inventories were declining and that gasoline demand was rising. This led to an increase in oil prices of roughly 4% over the previous two sessions. WTI Crude Futures Price Chart Cotton futures increased to 7-week highs As traders weighed the chances of decreased supply against those of lower demand, cotton futures increased to levels above 120 USd/Lb, the highest in more than 7 weeks. According to the most recent USDA crop report, production for 2022–2023 will drop to 12.6 million bales, which would mark a decline from 2009–2010 levels. Additionally, the new output prediction is around 19% lower than 2021–2022. In the meantime, poor weather and pest attacks in important growing regions continue to threaten cotton crops in India, another significant producer. Cotton Oct ‘22 Futures Price Chart Sources: finance.yahoo.com, tradingeconomics.com
Price Of Gold Is Now Bouncing Higher But Trend Remains Controlled By Bears

XAU/USD Technical Analysis and Trading Tips for August 19, 2022

InstaForex Analysis InstaForex Analysis 19.08.2022 17:38
Relevance up to 12:00 2022-08-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   Gold is giving way to its role as a defensive asset to the dollar, and the XAU/USD pair is declining for the 5th day in a row today. As of this writing, the pair is trading near 1753.00, close to the strong support level of 1748.00 (144 EMA on the weekly chart). Given the long-term upward trend of XAU/USD, it is logical to assume a rebound near this support level. In case of its breakdown, the key support level 1690.00 (200 EMA on the weekly chart) becomes the target, the breakdown of which will cause XAU/USD to enter the zone of a long-term bearish market.     If there is still a rebound near the current levels and the support level of 1748.00, then the signal for the resumption of long positions will be a breakdown of the important resistance levels of 1772.00 (200 EMA on the 4-hour chart), 1773.00 (200 EMA on the 1-hour chart), chart). In this case, a retest of the "round" resistance level 1800.00 is possible, which became a kind of "balance line" for the pair for a long time until the beginning of 2022.     The breakdown of the key resistance level of 1822.00 (200 EMA on the daily chart) will confirm the scenario for the resumption of the long-term bullish trend for XAU/USD. Support levels: 1748.00, 1700.00, 1690.00, 1682.00, 1670.00 Resistance levels: 1772.00, 1773.00, 1780.00, 1800.00, 1822.00, 1832.00, 1875.00 Trading Tips Sell Stop 1746.00. Stop-Loss 1761.00. Take-Profit 1700.00, 1690.00, 1682.00, 1670.00 Buy Stop 1761.00. Stop-Loss 1746.00. Take-Profit 1772.00, 1773.00, 1780.00, 1800.00, 1822.00, 1832.00, 1875.00   Read more: https://www.instaforex.eu/forex_analysis/319407
The Price Of Gold (XAU/USD) Confirmed The Bullish Attitude

XAU/USD: dollar demand prevails over gold demand

InstaForex Analysis InstaForex Analysis 19.08.2022 17:41
Relevance up to 12:00 2022-08-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. The dollar continues to strengthen, and the dollar index (DXY) ends the week with a decent gain. Yesterday DXY decisively broke through the local resistance level of 107.00 and, as of this writing, DXY futures are trading near 107.62, returning to the ascending channel on the daily DXY chart and heading towards the next "round" resistance level of 108.00. Our yesterday's forecast on this matter was justified, and now after the breakdown of the local multi-month high of 109.14, reached in mid-July, the mark of 110.00 will be the next growth target for DXY (the upper limit of this channel passes through it).     Due to the absence of important publications for the market in today's economic calendar, the emerging trend of strengthening the dollar today is likely to continue until the end of the trading day. Next week, market participants will be watching the Fed's annual economic forum in Jackson Hole, Wyoming, which will bring together representatives of the world's leading central banks and economists. Statements by representatives of central banks may have a significant impact on national currencies. As was the case in previous forums, Fed Chairman Jerome Powell is scheduled to speak at its opening (August 25). Undoubtedly, the main issue for market participants is the topic of tightening monetary policies by the world's leading central banks and their fight against galloping inflation. In the meantime, the dollar is successfully recovering the positions lost in the previous three weeks, also strengthening against the traditional defensive assets—the yen, the franc, and gold. As for this precious metal, its quotes are extremely sensitive to changes in the monetary policy of the world's leading central banks, especially the Fed. Gold does not bring investment income but is in active demand during geopolitical and economic uncertainty, and is a protective asset in the face of rising inflation. Now is just such a moment.     However, it seems that it is losing its role as a protective asset to the dollar. XAU/USD pair is falling today for the 5th day in a row, and as of this writing, it is trading near the 1753.00 mark, near the strong support level of 1748.00. In case of its breakdown, the key support level 1690.00 becomes the target, the breakdown of which will cause XAU/USD to enter the zone of a long-term bear market.   Read more: https://www.instaforex.eu/forex_analysis/319407
There Is An Opportunity To Sell Gold After Its Prices Dropped

Commodities Amid Turbulent Times | Gold, Silver And Crude Oil In Eyes Of Jason Sen (DayTradeIdeas) - 22/08/22

Jason Sen Jason Sen 22.08.2022 08:37
Gold Spot broke 1765 for a sell signal targeting 1740/35 this week. Silver breaks back below support at 2030/10 to turn the outlook negative again. WTI Crude crawls higher, but difficult to hold longs. We could reach strong resistance at 9460/9500. Shorts need stops above 9550. Remember when support is broken it usually acts as resistance & vice-versa. Update daily by 05:00 GMT Today's Analysis. Gold outlook negative so we are looking to sell at resistance on any bounce. First resistance at 1755/60. Unlikely but if we continue higher look for strong resistance at 1770/75. Shorts need stops above 1780. Prices are expected continue lower this week initially targeting 1740/35 then 1729/27 & perhaps as far as 1715/10. Silver collapsed from resistance at 2020/30 as expected hitting my targets of 1980, 1960/55 & 1920/15. Further losses are expected to 1880/70 & eventually a retest of the July low at 1820/10. A break below 1795 is the next sell signal. Gains are likely to be limited with first resistance at 1940/50. Shorts need stops above 1965. Se 2000/20. Shorts need stops above 2040. WTI Crude September minor resistance at 9150/9200 but above here we could reach strong resistance at 9460/9500. Shorts need stops above 9550. Holding minor resistance at 9150/9200 (in what is probably a bull flag pattern) targets 9070/50 then 8900. On further losses look for 8850/8800.
Russia's Crude Oil Still Flows To Japan, Negative Trade Balance In Japan

Commodities Prices Are Falling Due To Global Economic Slowdown Concerns: Brent Crude Oil, Silver Futures, Corn Futures

Rebecca Duthie Rebecca Duthie 22.08.2022 13:54
Summary: Brent crude extends previous weeks losses. Investors favour the US Dollar. Corn crop is suffering. Brent Crude Oil extends losses In response to US President Joe Biden's talks with European allies about restarting the 2015 nuclear deal, Brent crude futures dipped below $96 per barrel on Monday, extending losses from the previous week. According to Bloomberg, Biden discussed "ongoing negotiations" toward a nuclear accord with the heads of France, Germany, and the UK on Sunday, as well as "the need to strengthen support for partners in the Middle East region." Since June, the price of oil and other commodities has also fallen due to growing concerns about a slowdown in the world economy. Major central banks are doing this by aggressively raising interest rates to stifle the inflation that is out of control. The Sichuan province extended industrial power cuts and activated its highest emergency response on Sunday to address electricity shortages, endangering regional manufacturing output while top importer China continues to be beset by economic problems. Brent Crude Futures Price Chart Silver futures extend losses Silver futures dropped to the $19.1 per ounce level, on track to end the week 8% lower, and extended previous losses to a three-week low as investors favored the US dollar over non-interest-bearing bullion assets due to the Federal Reserve's promise to fight inflation. In light of the potential for further inflation in the US economy, St. Louis Fed President Bullard stated that he is considering raising interest rates by 75 basis points for a third time in a row. According to the minutes of the July FOMC meeting, the Fed will stop providing forward guidance and base its decisions solely on the most recent data. Policymakers also concurred that interest rates must continue to rise until they reach a restrictive monetary setting as opposed to the current neutral level. Silver Sep ‘22 Futures Price Chart Corn crop quality deteriorating After the USDA's weekly report revealed that the crop's quality was deteriorating amid heatwaves in the Midwest and plains, corn futures increased to a 1-week high. The agency gave the U.S. maize crop a good to exceptional condition rating of 61%, significantly lower than experts' expectations and a drop from the previous week's rating of 64%. The crop that will be harvested in September is likely to suffer from the hot, dry weather that was present during key corn pollination. However, despite USDA predictions for increased supplies in 2022–2023 and negative demand outlook brought on by rising recession fears, corn prices are still close to an 8-month low reached on July 5. Corn Dec ‘22 Futures Price Chart Sources: finance.yahoo.com, tradingeconomics.com
If OPEC+ Doesn't Apply A Significant Supply Cut, Crude Oil Prices Could Go Down

Reuters Found Out That Oil Prices Have Been Fluctuating Much More Significantly Than In The Previous Year!

InstaForex Analysis InstaForex Analysis 22.08.2022 14:03
Relevance up to 11:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.     Price volatility is a trader's bread and butter, but in the case of oil, volatility becomes excessive, alienating traders and making life difficult for many companies that routinely use oil price hedging to provide some price stability vital to their operations. According to Reuters analysis, oil prices have become so wild in their daily fluctuations that hedge funds are leaving the oil market en masse. And over the past seven years, their activity has fallen to the lowest level. So it turns out that volatility is only good up to a certain point, and that point seems to be a daily price range of five times the normal range. According to Reuters analysis, between February 24 and August 15 this year, the daily range of Brent crude averaged $5.64 per barrel. This is up from $1.99 a barrel last year.     The exit of speculators is only one of the problems with such high volatility in oil prices. The fact that food companies, for example, are hesitant to hedge against further price fluctuations affects their business. And it also affects the business of the oil industry itself. Oil companies fear capital expenditures due to excessive volatility in the oil markets. And as they exercise caution, these companies are postponing projects that could help rebalance the oil market. Speaking of the oil industry, it's not just the current volatility that's hindering potential production growth. There is also uncertainty about future demand as the transition momentum picks up. Predicting oil demand is becoming increasingly difficult amid events such as the famous Inflation Reduction Act that Congress passed earlier this month. With all these incentives to electrify transport and move towards renewable electricity generation, the future of oil demand is uncertain. One might argue that most major oil companies are actively involved in the energy transition, which could cloud the credibility of their forecasts for oil demand. However, the fact remains that many governments are determined to transition, no matter how much it costs, and this has a negative impact on oil demand. The recent push towards green energy in Europe and the US likely worsened the situation by clouding the demand outlook. However, it is clear to all that the oil demand right now is higher than many expected, especially as some utilities in Europe are switching from gas to oil due to prices. It turned out to be too much not only for speculators, but also for industry players in the oil market. What will happen in the future, as always, is impossible to say, but it is unlikely that the price situation will change soon. This means that the negative effect that this price volatility has on businesses across industries will continue, fueling the aforementioned fluctuations in oil prices. Businesses will continue to need energy, which is limited, but high energy prices will continue to threaten their growth prospects and that of their respective economies. In the meantime, governments will continue to invest money and create laws for a green energy transition, further discouraging the oil industry from doing something about the supply.   Read more: https://www.instaforex.eu/forex_analysis/319540
The Situation Around The World Force  Investors To Keep Precious Metals In Portfolios

What Do Gold Traders Expect From Jerome Powell's Speech During Jackson Hole Meeting?

Craig Erlam Craig Erlam 22.08.2022 14:55
Oil choppy as traders await JCPOA decision Oil prices are off more than 1% this morning as choppy trade continues. There remain many factors influencing the oil price right now from a tight market to a diminishing growth outlook and a potential Iran nuclear deal. The prospects for the latter could become clearer over the course of this week although that has been suggested many times this year and yet here we are. We could see WTI remain choppy around $90 and Brent hover above $92 for a little while longer yet. Gold pushed back further but faces a big test of support Gold remains on the backfoot amid a resurgent dollar as 10-year Treasuries continue to creep back towards 3% and the two-year hovers around its June highs. Traders are naturally looking for clarity from Powell’s Jackson Hole appearance later this week and seem to think it’s going to come in the form of hawkish warnings. That has dampened sentiment in the yellow metal which has been further pushed back from its recent peak above $1,800 and now trades around the 61.8% retracement level from its July lows to August highs. A good test for overall sentiment in gold. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Oil slips, gold under pressure - MarketPulseMarketPulse
Crude Oil Price:  A Crucial Event Takes Place In The Week Ahead

The Commodities Feed: Potential for OPEC+ supply cuts

ING Economics ING Economics 23.08.2022 09:25
Oil prices had a volatile day yesterday. Brent recouped almost all of its losses from earlier in the day after comments from the Saudi energy minister. Meanwhile, European natural gas prices continue to move higher Energy - possible OPEC+ action The Saudi energy minister has warned that the oil futures market is becoming increasingly disconnected from the physical market, which is not helped by the lack of liquidity and high volatility in the futures market.  The increased volatility has also meant that price discovery has become a lot more difficult for the market. The minister suggested that the divergence between the physical and paper market could force OPEC+ to take action by cutting oil production. It might be difficult to justify supply cuts when Brent is trading above US$90/bbl, but possibly the minister’s comments were an attempt to put a floor under the market. While the oil market is tight in the medium to long term, and there is limited spare capacity, our balance sheet shows that the oil market will be well supplied for the remainder of this year and into early next year. A return of Iranian supply would improve the supply/demand picture even further. European natural gas continues to strengthen. TTF rallied more than 13% yesterday, which saw it settle at almost EUR277/MWh, a record high settlement. Although on an intraday basis, the market traded higher back in March. The market continues to fret about supply following Gazprom’s announcement that it would stop flows along Nord Stream for 3 days to carry out maintenance at a compressor station. While EU gas storage continues to increase and is 77% full at the moment (not far from the EU target of 80% by 1 November), there are real concerns about how Russian gas flows will evolve as the region moves into winter. The uncertainty means that prices will likely remain elevated and volatile. Metals – European metal output declines Data from the International Lead and Zinc Study Group shows that the zinc market was in a surplus of 26kt in the first half of 2022, compared to a balanced market during the same period a year earlier. Total refined production fell 2.6%YoY to 6.8mt (largely due to declines from Europe), whilst consumption declined by 3%YoY to 6.7mt in the first six months of the year. Supply is likely to come under further pressure for the remainder of the year after more European smelter cuts were recently announced. The latest numbers from the International Aluminium Association (IAI) show that global daily primary aluminium output fell to 188.6kt in July, from 189.1kt a month earlier. Total monthly output stood at 5.85mt, up 2.1%YoY, while cumulative production remained largely flat at around 39.5mt over the first seven months of the year. Chinese output rose 3.3%MoM to 3.5mt last month, whilst Western and Central European output fell 10%YoY to 251kt in July. Global production is likely to come under further pressure in the months ahead due to the power issues in Sichuan province in China, along with further smelter cuts in Europe. Agriculture – Early feedback from crop tour suggests lower yields The USDA’s latest weekly crop progress report shows that 95% of the US winter wheat crop was harvested as of 21 August, up from 90% a week ago, but still down from year-ago levels of 99%. As for crop conditions for corn and soybeans, 55% of the corn crop was rated good-to-excellent, down from 57% a week ago and 60% last year, whilst 57% of the soybean crop was rated good-to-excellent, down from 58% a week ago. Early feedback from the Pro Farmer Midwest Crop Tour suggests that the US corn and soybean crop in parts of South Dakota is not in great condition due to dry weather, which is expected to weigh on yields.   Read this article on THINK TagsSaudi Arabia Russia-Ukraine OPEC+ Natural gas Aluminium Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Do We Have To Prepare For Explosion Of Crude Oil Prices?

Brent Crude Oil Prices Soared, Supported By Frailer US Dollar (USD) And Supply Concerns

ING Economics ING Economics 24.08.2022 08:25
ICE Brent rallied yesterday. A weaker USD coupled with a number of supply concerns has helped to push the market higher. Meanwhile, European natural gas prices have fallen from their highs Energy: further Kazakh oil supply concerns While the oil market digests comments from the Saudi energy minister that OPEC+ may need to cut output, the market is faced with yet further potential supply disruptions. The CPC terminal on the Black Sea, which exports Kazakh oil, is facing some bottlenecks, with only one of the three moorings at the terminal operating. Damage on the other two moorings was detected and repair work is expected to take several months. The CPC terminal has experienced a number of disruptions so far this year, which has weighed on volumes. Numbers released by the API overnight were fairly supportive. The API reported that US crude oil inventories declined by 5.63MMbbls over the last week, although, small builds were reported elsewhere. Cushing crude oil inventories increased by 679Mbbls, whilst gasoline and distillate fuel oil stocks grew by 268Mbbls and 1.05MMbbls respectively. European gas prices eased somewhat yesterday. And this is despite Freeport LNG announcing that the partial restart of its LNG facility on the US Gulf Coast will be delayed from October to mid-November. This announcement provided some relief to US natural gas prices, given that more gas will stay in the domestic market. However, it is not good news for Europe, which has been relying increasingly on LNG to make up for the shortfall in Russian supply. Metals: potential for further supply cuts Soaring energy prices in Europe continue to put pressure on industry. In recent weeks, we have seen a number of metal smelters announcing that they would shut down operations due to high energy prices. According to Bloomberg, Aluminium producer, Speira, has now warned that it may have to cut production at its German smelter to just 50% of capacity due to power costs. Speira has a capacity of 160ktpa, although is currently producing below this level. A decision on cuts will be made in September. The latest data from the World Steel Association shows that global steel output fell 6.5%YoY to 149.3mt in July, due to lower production from China and Europe. Cumulative crude steel production declined 5.4%YoY to 1.1 billion tonnes over the first seven months of the year. The EU produced 11.7mt of crude steel in July, down 6.7%YoY given the ongoing power crisis. Chinese steel production declined 6.4%YoY to 81.4mt last month, as industrial activity slowed due to the resurgence of covid cases in multiple regions, along with the worsening property market. Among other Asian nations, India’s steel output rose 3.2%YoY to 10.1mt in July, leaving YTD output at 73.3mt, up 8%YoY. Read this article on THINK TagsSteel Power shortages Oil Natural gas Aluminium Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
In Germany, The Next-Year Prices For Energy Are Astonishing! Why?

In Germany The Next-Year Prices For Energy Are Astonishing! Why?

Saxo Strategy Team Saxo Strategy Team 24.08.2022 09:03
Summary:  Equities were sold off on Monday, continuing a slide from their summer rally high, in the midst of position adjustments ahead of the Jackson Hole central banker event later this week. U.S. 10-year yields returned to above 3%. China cut its 5-year loan prime rates and plans to extend special loans to boost the ailing property markets. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I)  U.S. equities lost ground and continued to retrace from the high of the latest rally since mid-June.  The market sentiment has become more cautious ahead of Fed Chair Powell’s speech this Friday at the Jackson Hole symposium and a heavy economic data calendar, S&P 500 – 2.1%, Nasdaq 100 -2.7%.  The rise of U.S. 10-year bond yield back to above 3% added to the selling pressures in equities.  Zoom Video (ZM:xnas) fell 8% in after-hours trading as the company reported Q2 revenues and earnings missing estimates and cut its full year revenues guidance. U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas) Bonds were sold off as traders adjusted positions ahead of the Jackson Hole.  The treasury yield curve bear flattened with 2-year yields surging 8bps to 3.30% and 10-year yields climbing 4bps to 3.01%, above the closely watched 3% handle.  Hong Kong’s Hang Seng (HSIQ2) and China’s CSI300 (03188:xhkg) Hang Seng fell 0.6% while CSI300 climbed 0.7% on Monday. Chinese developers gained on today’s larger-than-expected cut in the 5-year loan prime rate and the Chinese authorities plan to provide special loans through policy banks to support the delivery of stalled residential housing projects, CIFI (00883:xhkg) +11.5%, Country Garden (02007:xhkg) +3.2%.  China extended EV waivers from vehicle purchase tax and other fees to the end of 2023, but the share price reactions of Chinese EV makers traded in Hong Kong were mixed.  Great Wall Motor (02333:xhkg) soared 11%, benefiting from launching a new model that has a 1,000km per charge battery while Nio (09866:xhkg) and Li Auto(02015:xhkg) fell 4.2% and 1.4% respectively. Xiaomi (01810:xhkg) dropped 3.3% after Q2 revenues -20% YoY and net profit -67% YoY, on lower smartphone shipments (-26% YoY).  Smartphone parts suppliers, AAC Technologies (02018:xhkg) and Sunny Optical (02382:xhkg) declined 5.6% and 4.2% respectively.  The share price performance of the four companies that will be added to the Hang Seng Index was mixed, Baidu (09888:xhkg) +0.9%, China Shenhua Energy (01088:xhkg) +2.1%, Hansoh Pharmaceutical (03692:xhkg) +3.2% but Chow Tai Fook Jewellery (01929:xhkg) -0.6%.  SenseTime (00020:xhkg) gained 4.2% as the company will replace China Pacific Insurance (02601:xhkg) -2.8% as a constituent company of the Hang Seng China Enterprises Index.  ENN Energy (02688:xhkg) plunged more than 14% after reporting H1 results below market expectations.  China retailer Gome (00493) collapsed 20% after resuming trading from suspension and a plan t buy from the controlling shareholder a stake in China property assets.  EURUSD falls below parity, eyes on 0.9500 The latest concerns on the European energy crisis weighed on the Euro which was seen sipping below parity to the US dollar. Higher US yields and gains in the US dollar also underpinned, taking EURUSD to lows of 0.9926. The European recession is coming hard and fast, and the PMIs today will likely signal increasing pressure on the region. Also on the radar will be Fed Chair Powell’s speech at the Jackson Hole later this week, with a fresh selloff in the pair likely to target 0.9500 next. USDCNH heading to further highs After PBOC’s easing measures on Monday, the scope for further yuan weakness has increased. USDCNH broke above 6.8600 overnight and potentially more US dollar strength this week on the back of a pushback from Fed officials on easing expectations for next year could mean a test of 7.00 for USDCNH. Still, the move in yuan is isolated, coming from China moving to prevent the yuan from tracking aggravated USD strength rather than showing signs of desiring a broader weakening. EURCNH has plunged to over 1-month lows of 6.8216 on the back of broader EUR weakness. Crude oil prices (CLU2 & LCOV2) Crude oil prices made a recovery overnight despite the strength in the US dollar. A global shift from gas to oil, from Europe to Asia, has taken a deeper hold amid gas shortage fears accelerating in the wake of another upcoming maintenance of the Nordstream pipeline. Diesel and refinery margins have also been supported as a result, with Asia diesel crack rising to its previous high of $63 amid low inventory levels. WTI futures reversed back to the $90/barrel levels and Brent were back above $96. Comments from Saudi Energy Minister threatening to dial back supply also lifted prices, but these were mis-read and in fact, focused more on the mismatch between the tightness in the futures and the physical market. Gold (XAUUSD) and Silver (XAGUSD) Gold broke below the key $1744 support and is now eying $1729, the 61.8% retracement of the July to August bounce. Dollar strength and a run higher in US yields weighed on the shine of the yellow metal, which has seen downside pressures since last week after touching the critical $1800-level. Hawkish Fed talk this week could further weigh on the short-term prospects for Gold. Silver also dipped below the key 19 handle, erasing most of the gains seen since late July.   What to consider? German year-ahead power prices hit a fresh record high German year-ahead power prices surged to EUR 700/MWh with Dutch TTF gas prices close to EUR 300/MWh. The surge came on the back of another leg higher in natural gas prices which rose over 8% in Europe amid concerns around the next scheduled 3-day maintenance of the Nordstream pipeline. It appears that demand destruction remains the most obvious but painful cure right now, along with a longer-term focus on ensuring a broad-based supply of energy from coal, gas, nuclear, solar, hydrogen, and more.  Australia and Japan services PMIs plunged into contraction Australia saw its services PMI drop to 49.6 in August in a flash print, from 50.9 in July. Manufacturing PMI, however, held up at 54.5, just weakening slightly from last month’s 55.7. The spate of rate hikes seen from Reserve Bank of Australia is likely taking its toll on demand and manufacturing. Meanwhile, prices remain elevated amid the persistent supply chain issues, and more rate hikes are still on the cards. Japan’s flash manufacturing PMI for August came in lower at 51.0 from 52.1 previously, nut stayed in expansion territory. Services PMI however plunged into the contraction zone below 50, coming in at 49.2 for a flash August print from 50.3 in July. The fresh COVID wave in Japan, although comes without any broad-based new restrictions, is impeding the services demand and will likely weigh on Q3 GDP growth. Europe and UK PMIs may spell further caution The Euro-area flash composite PMI and the UK flash PMI for August are both due to be released on Tuesday. Following a slide in ZEW and Sentix indicators for July, the stage is set for a weaker outcome on the PMIs too. July composite PMI for the Euro-area dipped into contractionary territory at 49.9, while the UK measure held up at 52.1. The surge in gas and electricity prices continue to weigh on GDP growth outlook, with recession likely to hit by the end of the year. China’s plan to provide loans to ensure delivery of presold residential projects is said to be of the size of RMB 200 billion Last Frida, Xinhua News reported that the PBoC, jointly with the Housing Ministry and the Ministry of Finance rolled out a program to make special loans through policy banks to support the delivery of stalled residential housing projects but the size of the program was not mentioned.   A Bloomberg report yesterday, citing “people familiar with the matter”, suggested the size of the support lending program could be as large as RMB 200 billion.  Beijing municipal government rolled out initiatives to promote hydrogen vehicles The municipal government of Beijing announced support for the construction of hydrogen vehicle refueling stations with RMB500 million for each station, aiming at building 37 new stations by 2023 and bringing the adoption of fuel-cell cars to over 10,000 units in the capital. Earlier in the month, the Guangdong province released a plan to build 200 hydrogen vehicle refueling stations by 2025. Since last year, there have been 13 provinces and municipalities rolling out policies to promote the development of the hydrogen vehicle industry.  Earnings on tap Reportedly there have been shorts being built up in Dollar Tree (DLTR:xnys) as traders are expecting that discount retailer missing when reporting this Thursday.   On the other hand, investors are expecting Dollar General (DG:xnys) results to come in more favourably, , which also reports this Thursday.  Key earnings scheduled to release today including Medtronic (MDT:xnys), Intuit (INTU:xnas), JD.COM (09618.xhkg/JD.xnas), JD Logistics (02615:xhkg), Kingsoft (02888:xhkg), and Kuishaou (01023:xhkg). Singapore reports July inflation figures today Singapore's inflation likely nudged higher in July, coming in close proximity to 7% levels from 6.7% y/y in June. While both food and fuel costs continue to create upside pressures on inflation, demand-side pressures are also increasing as the region moves away from virus curbs. House rentals are also running high due to high demand and delayed construction limiting supplies. The Monetary Authority of Singapore has tightened monetary policy but more tightening moves can be expected in H2 even as the growth outlook has been downwardly revised.     For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast Source: APAC Daily Digest: What is happening in markets and what to consider next – August 23, 2022
"Futures Market Is Disconnected From Underlying Fundamental Developments," Said The Saudi Energy Minister

"Futures Market Is Disconnected From Underlying Fundamental Developments," Said The Saudi Energy Minister

Saxo Strategy Team Saxo Strategy Team 24.08.2022 09:49
Summary:  US equities continued to push sharply lower yesterday as the strong US dollar is in focus as EURUSD dropped well below parity yesterday. US Treasury yields are playing their part in pressuring sentiment as the US 10-year yield benchmark rose above 3.00%. The next important event risk is this Friday’s Jackson Hole, Wyoming speech from Fed Chair Powell, as the Fed is expected to remind the market that it remains in full inflation-fighting mode, pushing back against the impression that it may be set to cut rates next year.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures extended their losses yesterday as the US 10-year yield moved above the 3% level and the Fed Funds futures curve moved lower across the whole curve (meaning less rate cuts expected next year). Markets are beginning to second-guess their aggressive bets in July on inflation cooling fast enough to warrant rate cuts next year as the galloping energy crisis makes it difficult for inflation to cool. Tangibles-driven themes such as commodities, logistics, energy storage and financials were the relative winners in yesterday’s session. S&P 500 futures are now in the support zone from before the last leg up that started on 10 August; we see the 4,100 level as the next level to watch on the downside and then the 100-day moving average at 4,085. Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I) Hang Seng Index and CSI300 were both down about 0.6%. A Bloomberg report yesterday, citing “people familiar with the matter”, suggested the size of the central bank and other authorities’ support lending program to developers could be as large as RMB 200bn. The reaction of the share prices of Chinese Property developers were mixed, Country Garden (02007:hkg) +3.1%, Longfor (00960:xhkg) -1.4%. Postal Savings Bank of China (01658:xhkg) plunged 5.5% after the Chinese bank reported net profit miss with a 10 bps y/y fall in net interest margin to 2.27% in H1. Gross loans grew 13% y/y in H1 but at a more tepid growth of 3% q/q.  Non-performing loans ratio overall was steady at 0.8% but mortgage NPL ratio climbed by 8 bps to 0.52%. US dollar rally following through The US dollar rally continued apace yesterday, as EURUSD traded well below parity and closed at its lowest level in nearly twenty years yesterday. GBPUSD has teased below 1.1760, its lowest level since a one-off pandemic-outbreak spike in early 2020, while other USD pairs are not yet at extremes of the cycle, including AUDUSD, still well above the sub-0.6700 lows of July, and USDJPY, which has not yet challenged the cycle high north of 139.00. There is clearly a reflexive situation at the moment in the US dollar, risk sentiment and US treasury yields. USDCNH Broad USD strength remains behind the weaker CNH in the USDCNH exchange rate as the CNH continues to rise versus, for example, the EUR, while the CNHJPY exchange rate trades near the important 20.00 area. Any more significant move in this critical exchange rate could quickly steal some of the focus away from the US dollar. The contrast between an easing PBOC (moving once again earlier this week) and tightening central banks nearly everywhere else is stark. The next important level for the pair is 7.00, with the range high of the last decade near 7.20. Crude oil prices (CLU2 & LCOV2) Crude oil prices made a sharp U-turn higher on Monday after the Saudi Energy Minister talked about a potential production cut after saying the futures market has become increasingly disconnected from underlying fundamental developments, a view that we share. His comment supported the market on a day where risk appetite generally took a knock from the stronger dollar and falling equity markets. A global shift from gas to oil, from Europe to Asia, has taken a deeper hold amid gas shortage fears accelerating in the wake of another upcoming maintenance of the Nord Stream 1 pipeline and heatwaves in China. Diesel prices trades higher supported by refinery margins, the so-called crack spread hitting seasonal highs around the world. Gold (XAUUSD) and Silver (XAGUSD) Gold broke below the key $1744 support on Monday before finding support at $1729, the 61.8% retracement of the July to August bounce. Dollar strength and a run higher in US yields weighed on the shine of the yellow metal, which has seen downside pressures since last week after touching the critical $1800-level. Hawkish Fed talk this week could further weigh on the short-term prospects for Gold. Silver also dipped below the key 19 handle, erasing most of the gains seen since late July. German year-ahead power prices hit a fresh record high German year-ahead power prices surged to EUR 700/MWh with Dutch TTF gas prices close to EUR 300/MWh. The surge came on the back of another leg higher in natural gas prices which rose over 13% in Europe amid concerns around the next scheduled 3-day maintenance of the Nord Stream 1 pipeline. It appears that demand destruction remains the most obvious but painful cure right now, along with a longer-term focus on ensuring a broad-based supply of energy from coal, gas, nuclear, solar, hydrogen, and more. US Treasuries (TLT, IEF) US treasury yields rose yesterday, with the 10-year benchmark closing above 3.00% for the first time in over a month yesterday. Rising yields are likely an important driver of weaker risk sentiment after the melt-up in the wake of the late July FOMC meeting, but practically, a move toward the cycle highs from June near 3.50% (in the lead-up to the FOMC meeting on June 16) is needed to seize the spotlight. The behavior of the treasury market in the wake of the Jackson Hole conference speech from fed Chair Powell this Friday is an important next step, particularly if Powell provides strong guidance on the pace or importance of the Fed’s balance sheet tightening (QT). What is going on? EURUSD falls below parity, eyes on 0.9500 The latest concerns on the European energy crisis weighed on the Euro which was seen sipping below parity to the US dollar. Higher US yields and gains in the US dollar also underpinned, taking EURUSD to lows in the low 0.9900’s this morning. The European recession is coming hard and fast, and the PMIs today will likely signal increasing pressure on the region. The next step for the US dollar is the Fed Chair Powell speech this Friday as discussed below. Australia and Japan services PMIs plunged into contraction Australia saw its services PMI drop to 49.6 in August in a flash print, from 50.9 in July. Manufacturing PMI, however, held up at 54.5, just weakening slightly from last month’s 55.7. The spate of rate hikes seen from Reserve Bank of Australia is likely taking its toll on demand and manufacturing. Meanwhile, prices remain elevated amid the persistent supply chain issues, and more rate hikes are still on the cards. Japan’s flash manufacturing PMI for August came in lower at 51.0 from 52.1 previously, nut stayed in expansion territory. Services PMI however plunged into the contraction zone below 50, coming in at 49.2 for a flash August print from 50.3 in July. The fresh COVID wave in Japan, although comes without any broad-based new restrictions, is impeding the services demand and will likely weigh on Q3 GDP growth. Palo Alto outlook remains strong The cyber security company reported last night Q4 revenue and EPS above estimates and Q1 outlook is slightly above estimates while the FY outlook is well above consensus estimates. Q4 networks billing growth was 44% vs est. 25% suggesting demand is accelerating and bolstering our view that the cyber security industry is a high growth and counter-cyclical industry in the years to come. Shares were up 9% in extended trading. Zoom shares were down 8% in extended trading The popular video conferencing software that rose to prominence during the pandemic is lowering its FY outlook relative to previous announcements. The slowdown in their business is due to slower enterprise growth which could be a function of Microsoft and other major technology companies that have entered the enterprise business for video conference. What are we watching next? Europe and UK PMIs may spell further caution. The Euro-area flash composite PMI and the UK flash PMI for August are both due to be released on Tuesday. Following a slide in ZEW and Sentix indicators for July, the stage is set for a weaker outcome on the PMIs too. July composite PMI for the Euro-area dipped into contractionary territory at 49.9, while the UK measure held up at 52.1. The surge in gas and electricity prices continue to weigh on GDP growth outlook, with recession likely to hit by the end of the year. USD and US Treasury yields as Jackson Hole Fed conference is the macro event risk of the week Friday The US dollar and yields are setting risk sentiment on edge as EURUSD has plunged well through parity. US Treasury yields have supported the USD rally with the entire curve lifting over the last couple of weeks and longer yields closing at new one-month highs. The Fed has pushed back consistently against the market’s pricing of a Fed turnaround to easing rates next year with partial success, as expectations for rate cuts have shifted farther out the curve and from higher levels. The next focus is this Friday’s Jackson Hole symposium speech from Fed Chair Powell, who is expected to stay on message and maintain credibility on fighting inflation after the two large 75 basis point hikes at the last two meetings. The Fed’s attitude toward quantitative tightening may be a focus in the speech as well, with the pace of QT supposedly set to pick up in coming weeks to $95B/month. So far, the QT has been slow out of the gates, with the balance sheet currently only some $115B smaller than at its mid-April peak. Earnings to watch Today’s earnings focus is on CATL and JD.com, with especially CATL being important as the world’s largest battery manufacturer to the car industry and thus pivotal for the electrification of the transportation sector. CATL is expected to report revenue growth of 126% y/y in Q2 as EV adoption is accelerating, but key risks ahead are rising input costs across lithium and energy. JD.com is expected to report 3% revenue growth in Q2 as growth is grinding to a halt on very weak consumer confidence in China. Today: CATL, Intuit, Medtronic, JD.com Wednesday: LONGi Green Energy, Royal Bank of Canada, PetroChina, Ping An Insurance Group, Nongfu Spring, Mowi, Nvidia, Salesforce, Pinduoduo, Snowflake, Autodesk Thursday: South32, Toronto-Dominion Bank, Fortum, Delivery Hero, AIA Group, China Life Insurance, CNOOC, CRH, Dollar General, Vmware, Marvell Technology, Workday, Dollar Tree, Dell Technologies, NIO Friday: Meituan, China Shenhua Energy, China Petroleum & Chemical Economic calendar highlights for today (times GMT) 0715-0800 – Eurozone Aug. Flash Manufacturing and Services PMI 0830 – UK Aug. Flash Manufacturing and Services PMI 1000 – UK Aug. CBI Trends in Total Orders and Selling Prices 1100 – ECB's Panetta to speak 1345 – US Aug. Flash Manufacturing and Services PMI 1400 – US Aug. Richmond Fed Manufacturing 1400 – Eurozone Aug. Flash Consumer Confidence 1400 – US Jul. New Home Sales 2300 – US Fed’s Kashkari (non-voter) to speak  Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: Financial Markets Today: Quick Take – August 23, 2022
The Organization Of Petrolum Exporting Countries May Decide To Cut Oil Production!

The Organization Of Petrolum Exporting Countries May Decide To Cut Oil Production!

Conotoxia Comments Conotoxia Comments 24.08.2022 10:34
WTI crude oil futures rose above the $93 per barrel level today. The price increase may be supported by both macroeconomic data and statements from Saudi Arabia and OPEC. The Organization of Petroleum Exporting Countries may decide to cut oil production in the event of a global recession, representatives of several countries in the alliance told The Wall Street Journal on Tuesday. OPEC and its partners, led by Russia, have been closely coordinating oil production volumes, especially since the initial impact of the coronavirus pandemic in the first half of 2020. The alliance's members will meet again on September 5 to set an oil production rate, according to the BBN news service. Meanwhile, crude inventories in the United States fell by 5.6 million barrels last week, according to data released by the American Petroleum Institute (API). The market consensus was for a much lower decline of 0.9 million barrels. The EIA's official government data will be released today. It is expected to reduce reserves by 933,000 barrels. Probably by a combination of the above two factors, oil prices rose almost 4 percent on Tuesday. Counting from the June peak, however, oil has lost about 25 percent, probably due to growing concerns that a global economic slowdown could dampen consumption. Does the Fed need to be aggressive? The U.S. dollar index rebounded on Wednesday to near 108.7 and rose again toward its highest level in 20 years. USD appreciation may have been influenced by comments from US Federal Reserve officials. Minneapolis Fed Chairman Neel Kashkari said that his biggest concern is that the extent of price pressures has been underestimated and that the central bank will have to be more aggressive for a longer period if inflation persists. This could mean tightening monetary policy even as the specter of a stronger brake on the economy looms. Kashkari added that the central bank may ease interest rate hikes when it becomes clear that inflation is heading toward 2 percent. Further clues about the Federal Reserve's action plans may emerge later this week, when Jerome Powell, chairman of the Fed, addresses the annual symposium in Jackson Hole. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Source: Oil rises in price, dollar rises in strength
Coffee Is In Danger As Its Suppliers Have Troubles With Crops

Coffee Is In Danger As Its Suppliers Have Troubles With Crops

Saxo Bank Saxo Bank 24.08.2022 12:30
Summary:  A zany day for US data as the August flash S&P Global Services PMI suggests a deepening contraction is afoot in the US services sector after an already weak July reading that contrasted with strength in the ISM Services survey for July. What are we supposed to believe. Elsewhere, crude oil has cemented its comeback with an extension higher yesterday and coffee is at risk of a further rise on supply woes. In equities, we look at the latest in the Tesla/Twitter saga, earnings ahead including NVidia after the close today, and an interesting company in the EV batter supply chain in Europe. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are found via the link Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: Crude oil bounce extends. Zany mismatch in US Services sector surveys
Saudi's Are Threatening To Reduce To Reduce Oil Supply!?

Saudi's Are Threatening The World By Reducing Oil Supply!?

Marc Chandler Marc Chandler 24.08.2022 12:57
Overview:  A simply dreadful flash US PMI stopped the dollar's four-day rally in its tracks. It followed news that the eurozone, Japan, and Australia's composite PMIs are below 50 boom/bust level. However, the dollar recovered, even if not fully as the market seemed unconvinced that the data could change Fed Chair Powell's message at Jackson Hole on Friday. A consolidative tone is evident today. Asia Pacific equities were mixed. China and Hong Kong fell more than 1% while South Korea, Australia, and India posted gains. Europe’s Stoxx 600 is off for the fourth consecutive session, the longest spill in a couple of months. US futures are straddling unchanged levels. The US 10-year yield is around 3.04%, little changed, while European benchmark rates are 2-4 bp higher. Japan’s 10-eyar yield edged up near 0.22% is once again drawing close to the cap. Gold is firm near $1750, but unable to build much on yesterday’s nearly $12 rally. October WTI is extending its rally since the Saudi’s threatened to reduce supply and Israel is pushing back against the US-Iran deal. US natgas fell 5% yesterday and is about 1.75% firmer today. The European natgas benchmark has jumped almost 7% today to recoup fully yesterday’s 6.5% pullback, which snapped a four-day rally. Iron ore rose 0.5%. It was the third advancing session, the longest rally this month. September copper is giving back about half of yesterday’s 1.2% gain. September wheat is up 2% to bring the gain to 9% since last Thursday.   Asia Pacific In addition to the usual corporate analysis and credit, ESG ratings and investment orientation have become increasingly important. However, the meaning of ESG and ratings not uniform. Arguably, it is where "organic" was a couple of decades ago, and it is still evolving. Some of dismissive and suggest it is a "woke” fad. Japan's Government Pension Investment Fund (GPIF), the largest pension fund in the world, reports that seven of the eight ESG funds it invests in beat the benchmarks in the fiscal year that ended in March. Over the past five years, it said that all eight funds have outperformed. Since US Pelosi's visit to Taiwan, a few other US elected officials have visited Taiwan. UK officials and Japanese officials have either visited or planned to visit Taipei. China has continued its aerial harassment of the island. and repeatedly crossing the median line in the Taiwan Straits. In a recent report, the Atlantic Council argued that one of the lessons from Ukraine, is that the US "strategic ambiguity" is not an effective deterrence, and that the US should be unequivocal in its support. These developments, alongside reports that US military advisors have been in Taiwan since before the 2020 election and the number of "misstatements" by President Biden that were clear signs of support that were "walked back", all play into the hardliners in Beijing who think the US is trying to change the status quo. Congress is considering a bill that would codify some of it. The US strategic ambiguity is ostensibly not about one-China but on how the US would respond to Beijing's use of military power to unite the country. This was not meant to deter China as the military planners would have to game out the US response no matter its declaratory policy. The chief function is to deter Taiwan from declaring independence unilaterally and dragging the US into a war of its making. However, Taiwan, as it stands now, is not a member of organizations based on state sovereignty, like the UN and IMF. The bill that is likely to get more attention in Q4 proposes to recognize Taiwan as an important non-NATO ally and seek to promote Taiwan's membership in international forums. Both sides are giving the other reason to think that they are trying to change the status quo. The dollar is in a narrow range against the Japanese yen today of around a third of a yen on either side of yesterday's settlement, which was slightly above JPY136.75. US yields are slightly softer, and the dollar is closer to session lows (~JPY136.35) in the European morning. The greenback can spend the North American session on the JPY136-handle. The Australian dollar is also in a narrow range as the market awaits fresh news. It has spent most of the local session and the European morning below yesterday's $0.6930 settlement. Meanwhile, the greenback has edged higher against the Chinese yuan. It made a marginal two-year high almost at CNY6.8680. In the past two week, the yuan has fallen by a little more than 2% against the dollar, which has risen broadly. The setting of the PBOC's reference rate today could be the first sign that officials want the market to go slowly. The dollar fix was at CNY6.8388, a wider than usual gap and below the market (Bloomberg survey) estimate for CNY6.8511. Of note, the US dollar did not make a new high against the offshore yuan today. Yesterday's high of almost CNH6.8850 held. Europe On top of the energy crisis, and extreme weather, an economy seemingly slipping inexorably toward a recession, while inflation is still accelerating, Italy's national election is a month away. The three-party alliance on the right continues to dominate drawing about 47% support. The Brothers of Italy remains the largest, accounting for a little more than half that support. Many observers assume that the success of the right reflects a shift in the Italian politics. However, the simpler explanation is the disarray of the center-left. The Democratic Party draws second highest support, less than half a percentage point (within the margins of error) of the Brothers of Italy. The problem is that the center-left has been unable to form a pact like the right has done. The once populist power, the Five Star Movement, the largest party in the current parliament, appears to have lost its way, a partly the cause and effect of its fragmentation. There are several other small groupings that would be more at home with the center-left but have been able to coalesce into an alliance. Still, it is notable that Brothers of Italy leader Meloni argued for more Europe in her debate with the Democratic Party leader Letta. Letta sounded like the nationalist, advocating a temporary price control for gas. Meloni backed an EU-wide cap, which Draghi supported. As Benjamin Franklin told the thirteen colonies on the east coast of the North American continent they prepared to fight against the greatest empire at the time, "hang together or hang separately."  Italy's 10-year premium over Germany is near 2.35%. It reached a two-year high in mid-June slightly above 2.40%. In late July, it also tested 2.40%. Italy offers around 100 bp more than Germany for two-year borrowing. The peak since the Covid panic in March 2020, was set late last month near 1.30%. The extra that is demanded from Italy is not about inflation. Italy's two-year breakeven (difference between the conventional yield and inflation-protected security) is about 4.40% compared with Germany's two-year breakeven near 7.10%. Italy's 10-year breakeven is slightly below 2.25%. Germany's is near 2.45%. Both report August's EU harmonized CPI next week. In July, Italy's inflation stood at 8.4%, just below Germany's 8.5%. Not only is Italian inflation lower than Germany's and is expected to remain so, but it is also growing faster. On a workday adjusted basis, the Germany economy grow 1.4% year-over-year in Q2. Italy expanded by 4.6%. The UK's online paper, The Independent, reported that UK imports from Russia have plummeted by nearly 97% since the invasion. They totaled GBP33 mln in June, it noted, citing data from the Office of National Statistics. The collapse reflected government sanctions and actions of companies seeking alternatives to Russian goods beyond the official sanctions. Today' s is Ukraine's Independence Day and marks the sixth month since the Russian invasion. Reports suggest the US will announce a new $3 bln arms package for Kyiv. The euro was squeezed to almost $1.0020 yesterday after the disappointing US data, but it was short-lived, and it finished the North Americans session near $0.9970. The single currency is in about a third of a cent range today and has not been able to resurface above $1.0, where there are large options that expire there tomorrow (2 bln euros) and Friday (1 bln euros). An expiry today for 720 mln euros at $0.9950 has likely been neutralized. Sterling traded in a broad range yesterday (~$1.1720-$1.1880) and exceeded both sides of Monday's range. However, the close was neutral, well within Monday's range, which set the tone for today's quiet session. Sterling has been confined to less than half a cent range above $1.1800. It settled near $1.1835 and has spent most of the Asian session and the European morning below it. The next level of support is seen in the $1.1760-80 band. America There can no explaining away the weakest composite US PMI since May 2020 and drop in new home sales five-times more than the median forecast in Bloomberg's survey. Yet did not seem to be bipolar as conventional wisdom has it, swinging between recession and inflation anxiety. The implied yield of the October Fed funds contract rose two basis points to 2.95%, unchanged on the week. Another way to look at it, the odds of a 75 bp hike in September stands at almost 60% compared with 52% at the end of last week and slightly less than 50% the prior week (August 12). Nor did equities recover from Monday's gap lower opening. Indeed, while the S&P 500 and NASDAQ largely traded within Monday's range, the Dow Industrials continued to sell off. It is approaching the (38.2%) retracement of the rally off the mid-July low (~30144) found near 32700. A similar retracement in the S&P 500 is near 4095. The NASDAQ found support near its retracement around 12350. The US reports the preliminary estimate of July durable goods orders. The real sector data has held up better than the survey data. One element of durable goods orders that may not be appreciated by economists yet is what appears to be a surge in US arms sales abroad. There seems to be a synchronized arms build-up and demand for US-made weapons is clear. Separately, today's report will be flattered by the jump in Boeing orders. The company reported 130 orders last month, the most since June 2021 after 50 orders in June. Of those orders 27 came from foreign companies up from 20 in June, and the most since January. On the other hand, its deliveries fell to 26 from 51, the least since February. The focus is on the Fed's Jackson Hole symposium that begins tomorrow. Fed Chair Powell is set to speak Friday (10 am ET). Some observers expect him to play up the element in the minutes that recognized the risk that the central bank would tighten too much. However, in the minutes, it was set up in contrast to the bigger risk that inflation getting embedded into business and household expectations. We recognize the market's penchant for reading/hearing a dovish twist to Powell and the Fed even though they are tightening policy faster than most observers had imagined even a few months ago. The pace of the balance sheet adjustment is also set to double starting next month. Separate from the FOMC minutes, the minutes from the discount rate meeting were reported yesterday, and both the Minneapolis and St. Louis Feds called for 100 bp hike in the discount rate before the July 26-27 FOMC meeting but did not convince their colleagues. Nine favored a 75 bp increase, while the KC Fed called for a 50 bp increase. George, the President of the KC Fed supported a 75 bp increases in the Fed funds target at last month's meeting.   The US dollar posted a big outside down day yesterday against the Canadian dollar, trading on both sides of Monday's range and settling below Monday's low. However, there has been no follow-through today and a consolidative tone is evident. It settled near CAD1.2955 and has spent no time below it so far today. It has been capped around CAD1.2985. With softer equities, we ae inclined to see the greenback push back above CAD1.3000 and see resistance near CAD1.3020-30. The US dollar fell yesterday for the second day against the Mexican peso. Its 0.80% drop was the most in nearly two weeks. Selling today has extended its loss to around MXN19.9365, a four-day low. Mexico reports CPI for the first half of August. It is expected have accelerated, with the year-over-year rate rising to 8.55% form 8.14%. The core rate is seen slightly above 7.8% from 7.75%. The central bank meets late next month and another 75 bp hike seems most likely.      Disclaimer   Source: New Recession Worry Stalls Dollar Express but Doesn't Derail It
The most important economic events of the week 08/29/2022 – 09/04/2022

Brent - Gas Oil (Diesel) Crack Spread Jump 55% This Month!

Ole Hansen Ole Hansen 24.08.2022 14:12
Summary:  Crude oil’s bounce from a six-month low has so far seen Brent crude oil return above $100 per barrel while WTI following a brief dip to the mid-80’s has turned higher to trade around $95 per barrel. With oil fundamentals still very supportive, the market seems to be realizing the energy market is not the best hedge against an economic slowdown, and it has raised the risk of a response from specualators who recently cut bullish oil bets to an April 2020 low. Crude oil’s bounce from a six-month low has so far seen Brent crude oil return above $100 per barrel while WTI following a brief dip to the mid-80’s has turned higher to trade around $95 per barrel. In our previous update we mentioned the fact that crude oil, in a downtrend since June, had started to show signs of selling fatigue as the technical outlook had started to turnmore price friendly while fresh fundamental developments added some support as well. After finding support below $94 per barrel, the 61.8% retracement of the December to March surge, Brent crude oil now trades back above its 200-day simple moving average with the next key upside hurdle being an area below $102.50 per barrel. Source: Saxo Group While the macro-economic outlook remains challenging due to the lower growth outlook and renewed dollar strength, recent developments within the oil market, so-called micro developments, have raised the risk of a rebound. The energy crisis in Europe continues to strengthen, with gas and power prices surging to levels that measured in dollars per barrel of crude oil equivalent equates to $470 and $1,050 per barrel respectively. The latest surge being driven by recent low-water level disruptions on the river Rhine and Gazprom announcing a three-day closure of the Nord Stream 1 pipeline due to maintenance, starting on August 31.  Should Gazprom (Putin) decide for geopolitical reasons to keep the pipeline shut after maintenance ends, the risk of further spikes remains, thereby extending the already wide price gap between gas and crude oil. A development that will further support an already very visible increase in demand for fuel-based product, especially diesel, at the expense of gas. This gas-to-fuel switch was specifically mentioned by the IEA in their August update as the reason for raising their 2022 global oil demand growth forecast by 380k barrels per day to 2.1 million barrels per day. Since the report was published the incentive to switch has increased even more, and the result being sharply higher refinery margins for diesel across the world, led by Europe which so far this month has seen the Brent – Gas Oil (diesel) crack spread jump 55%.  The trigger which eventually sent crude oil higher this week where comments from the Saudi Energy Minister flagging possible cuts to production amid an increased disconnect between falling futures markets and a physical market that has yet to show weakness. While his comment sent the ball rolling, yesterday’s API report gave it an extra spin, resulting in the rally back above $100 per barrel. A recovery at this point may force money managers to reassess their exposure in Brent and WTI with a potential short-squeeze brewing. During a three-week period to August 16 these speculative traders increased their gross short positions in Brent and WTI by 43k lots to 125k lots, while cutting gross longs by 61k lots to 403k lots, developments that has reduced the net long to 278k lots, the lowest since April 2020.          Later today the EIA publishes its weekly oil and fuel stock report and expectations for a bigger-than-expected draw in crude oil stocks has risen after the American Petroleum Institute reported a 5.6 million barrel drop together with small increases in gasoline and diesel stocks. Traders will also be watching implied gasoline demand which reached a high for the year in the previous week. Crude oil hungry refineries around the world, balking at buying Russian crude, helped drive US exports to a record 5 million barrels per day, and the market will be watching this pace as well as signs of a recovery in production which dipped 100k barrels per day during the previous reporting week.  The result of the EIA report will be published on my Twitter profile: @ole_s_hansen.    Source: Brent on watch for short squeeze above $100
In Germany, The Next-Year Prices For Energy Are Astonishing! Why?

Coffee Futures Trading At Highest Level Since June 22, Palladium Sees Lowest Prices In A Month, WTI Crude Oil Stockpiles Dropped

Rebecca Duthie Rebecca Duthie 24.08.2022 15:07
Summary: Fears around global supplies for crude oil persist. Increased anxiety around world coffee supplies. Worsening outlook for outlook for the auto industry weighing on palladium futures. WTI Crude Oil Futures After a report from the industry revealed another larger-than-expected drop in US crude stockpiles, adding to fears about a tightening global supply, WTI crude futures maintained their recent surge above $95 per barrel on Wednesday. US crude stockpiles dropped by 5.632 million barrels last week, according to a late-Tuesday API data; this was significantly more than the 900,000 barrel drop that analysts had predicted. Analysts anticipate a 933,000 barrel decline in the official EIA data that will be issued later in the day. Tuesday saw an almost 4% increase in oil prices after Saudi Arabia hinted at potential production curbs from OPEC+ to fend off negative pressure on prices. The price of petroleum is still down nearly 25% from its peak in June due to rising concerns that a global economic slowdown will reduce consumer spending as major central banks aggressively raise interest rates to fight inflation. Oil prices now face additional downside risks from the potential collapse of the 2015 nuclear agreement, which would increase Iranian oil shipments. WTI Crude Oil Futures Price Chart Coffee Futures Due to indications of severe dryness in top producer Brazil, Arabica coffee futures on the ICE were trading at their highest level since June 22. This increased anxiety over world supplies. According to Somar Meteorologia, Minas Gerais, which produces 30% of Brazil's arabica crop, had 0% of the normal amount of rain in the previous week. According to Maxar Technologies, the La Nina weather pattern is likely to persist through the end of the year. This suggests that Brazil will receive less rain through the end of the year, which could intensify the drought and put more strain on the country's coffee harvests. Coffee Dec ‘22 Futures Price Chart Palladium Futures Late in August, the price of palladium futures fell to its lowest level in a month, trading around $1,990 per ounce as the Fed's anticipated aggressive rate hikes increased demand for the US dollar and scared investors away from non-interest-bearing assets. The worsening prognosis for the auto industry put pressure on futures, which decreased demand for autocatalyst parts. Palladium Sep ‘22 Futures Price Chart Sources: finance.yahoo.com, tradingeconomics.com
Shell's Income In The First Half Of 2022 Is Bigger Than The Full Year 2021!

Shell's Income In The First Half Of 2022 Is Bigger Than The Full Year 2021!

Conotoxia Comments Conotoxia Comments 24.08.2022 15:58
Very high commodity prices caused by the war in Ukraine may have presented a major opportunity for the energy sector. Oil & gas companies were trying to meet the rapidly growing demand caused by the interruptions and halting of Russian gas and oil deliveries to Europe. How did energy companies perform? Shell Plc (SHELL) and BP Plc (BP) are Europe's largest petrochemical companies, extracting, processing and selling oil and natural gas. They control almost all stages of the extraction, processing and distribution process, which can be an advantage with high volatility in the fuel market. This way, companies are relatively well protected against the need for switching suppliers, partners' commissions and margin reduction. "With volatile energy markets and the continued need for action to combat climate change, 2022 continues to pose a huge challenge for consumers, governments and companies alike," - said CEO Ben van Beurden in a statement. However, despite "volatile energy markets," energy companies were able to make extraordinary gains. Shell reported a whopping $100.1 billion in Q2 revenue, up from $84.2 billion in Q1. To show magnitude, H1 2022 revenue is more than the revenue for the whole of 2021. BP, on the other hand, reported $67.9 billion in revenue against a forecast of $60.9 billion. The company's strong performance in oil refining and sales contributed to this spectacular beat in expectations, according to the company. Shell and BP's revenues rose 65.3% and 85.9% year-on-year, respectively. Other companies in the sector such as Chevron, Exxon and TotalEnergies also posted giant increases in revenues and profits. Earnings per share (EPS) were as high as $3.08 for Shell, almost 10% higher than the expected $2.80 EPS. BP surprised the market with $2.61 in earnings per share (EPS), significantly beating forecasts of $0.34 per share (a 658.5% surprise). Shell and BP increased their net profits by as much as 109.1 and 215.8% year on year. The extraordinary profits will be used for buybacks. Shell and BP announced that they spent $8.5 billion and $3.5 billion, respectively, on share buybacks in the first half of the year. Shell plans to spend another $6 billion and BP $3.5 billion for this purpose. BP additionally decided to raise its dividend by 10%. According to the Bloomberg news service, the buybacks are evidence that the war in Ukraine has brought significant profits to the sector. However, high fuel prices can pose the threat of a cost crisis and strangle the economy, as recent readings of energy prices and GDP changes in major economies have proven. The price of energy in Germany is now at record levels of more than 700 euros per MG of energy for next year, and according to the U.S. Bureau of Statistics, U.S. GDP in the second quarter once again recorded negative growth, this time at -0.9%. This could affect the future performance of the fuel giants.   Rafał Tworkowski, Junior Market Analyst, Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Source: Energy companies' earnings summary - record profits for the sector
The Threat Of Energy Crysis Made Japan Forget About Fukushima! 7 Nuclear Reactors Are Waiting For Restart

The Threat Of Energy Crysis Made Japan Forget About Fukushima! 7 Nuclear Reactors Are Waiting For Restart

Saxo Strategy Team Saxo Strategy Team 25.08.2022 10:11
Summary:  US Treasury yields climbed higher ahead of Jackson Hole, where the bar for hawkishness from Fed Chair Powell has been set high. USD gained modestly but the Japanese yen has been largely stable. Energy crisis threats are getting louder, and a re-embrace of nuclear power by Japan may just be the first step to long-term solutions. Crude oil rally was reignited, and coffee futures also extended gains on supply issues. Nvidia disappointment may bring more tech disappointment, but focus shifts to retailers reporting today. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I)  U.S. equities closed modestly higher, taking a pause after a 3-day decline, S&P 500 +0.29% to close at 4140, Nasdaq 100 +0.28%. Energy stock led as the WTI crude firmed up by 1.2%, following EIA data showing a fall in crude oil inventory, Apache (APA:xnys) +3.9%, Ceterra Energy (CTRA:xnys) +3.2%. Nordstrom (JWN:xnys) tumbled 20% and Macy (M:xnys) fell 4%, after the retailers lowered their earnings guidance the day before, citing slowdown in spending of shoppers. On the other hand, Peloton Interactive (PTON:xnas) jumped 20% on news that the sporting goods company plans to sell its products on Amazon (AMZN:xnas). Bed Bath & Beyond (BBBY:xnas) snapped a 5-day collapsing streak to bounce 18% on news of closing a new loan deal.  U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas) U.S. yields climbed throughout the session, with initial selling triggered by a massive 22bp jump in the yield of 2-year U.K. Gilts across the pond. Treasury yields continued to edge up after digesting that headline durable goods orders came in flat, below forecasts but looking less weak once stripping out the more volatile transportation and defense orders. The result of the 45-billion 5-year auction was weak. 2-year yields rose 9bps to close at 3.39% and 10-year yields climbed 5bps to 3.10%.  Hong Kong’s Hang Seng (HSIQ2) and China’s CSI300 (03188:xhkg) The news of 19 additional stimulus measures from China’s State Council coming out after the Hong Kong market close fueled buying in Chinese ADRs in the New York session, the NASDAQ Golden Dragon China Index +2.5%.  During the Hong Kong session, however, the equity markets slid, Hang Seng –1.2%, CSI 300 -1.9%. Chinese internet stocks were weak. Kuaishou (01024:xhkg) fell 8.1% in spite of reporting better-than-expected earnings as some traders attributed the fall to overhang of the stake of Tencent in the company. Meituan (03690:xhkg), another company that counts Tencent (00700:xhkg) a major shareholder, fell 2.7%. Chinese auto names dropped, led by XPeng (09868:xhkg) that tumbled 12.2%, followed by over 5% declines in other EV names.  The State Council backed newspaper, Economic Times, ran a piece saying that the special loans to developers initiative much talked about earlier this week was not to fuel speculation in properties but to ensure delivery of stalled presold residential units, Longfor (00960:xhkg) -3%, Country Garden(02007:xhkg) -3.9%.  The Stock Exchange of Hong Kong will be closed this morning due to a typhoon and is scheduled to resume trading in the afternoon.  Higher yields bring modest gains in USD With US 10-year yields going above 3.1%, there was a modest bump higher in US dollar which is now close to its cycle highs, recovering from the post-PMI lows. EURUSD trades close to parity, looking for further direction as Jackson Hole is awaited and the energy crisis related weakness seems to be priced in for now. Higher US yields however didn’t push up USDJPY considerable, but commodity currencies continued to face further pressure. NZDUSD was the weakest on the G10 board, and pressure aggravated this morning with Q2 NZ retail sales disappointing at -2.3% QoQ vs. expectations of 1.7% gains. Crude oil prices (CLU2 & LCOV2) Price action in crude oil intensified with Brent back above $101/barrel in Asian morning and WTI futures trading above $95. US crude oil stockpiles fell, with commercial inventories down 3.3m bbl last week, according to EIA data. This was driven by record exports of crude and refined oil, and comes despite a record 8m bbl SPR release and net imports rising by 0.9m b/d. Both technical and fundamental factors are turning supportive, and a potential short squeeze is brewing. Coffee futures extend gains Coffee, both Arabica and Robusta, rallying strongly for a third day as the supply outlook continues to deteriorate. The June high at $2.42 in Arabica the only level standing in the way for a push towards the Feb 11-year high at $2.605. Robusta stocks in Vietnam are expected to have dropped by 50% at end-September while arabica supplies have been hurt by weather conditions in Brazil, Colombia and Central America. What to consider? A weaker message from Powell could bring a risk rally While most of the Fed members lately have been consistent in their view on inflation and the need for more aggressive rate hikes, the bar for Powell has been set high. Market pricing for September rate hike has shifted towards 75bps with 60% odds, up from about 45% earlier in the week. Moreover, the market now prices in peak Fed funds rate at above 3.75%, which is pretty much in-line with the dot plot. Additionally, only about 37bps of easing is priced in for next year, and given the uncertain economic environment, Powell may chose to stay on the sidelines. Any hints on staying data-dependent or highlighting the risk of an economic slowdown may be viewed as dovish, and result in a risk rally. US durable goods data remains mixed July durable goods orders data disappointed on the headline but core orders came in above expectations, again suggesting resilience in the economy. Headline was unchanged m/m against expectations of 0.6% gain, with June’s print revised higher to 2.2% from 2.0% earlier. Excluding the volatile components such as transportation and defense, durable goods orders were up 0.3% and 1.2% respectively. Japan’s nuclear plans getting a leg up The threat of an energy crisis has prompted Japan to make headway on bring back nuclear power after more than a decade following the Fukushima disaster. Japan plans to restart seven more nuclear reactors from next summer onwards, and PM Kishida said that the government will also explore development and construction of new reactors as the country aims to avoid new strains on power grids that buckled under heavy demand this summer, and to curb the nation’s reliance on energy imports. Japan Tokyo CPI for August to show more price pressures Japan's Tokyo CPI for August is due on Friday morning, and it is likely to suggest further price pressures above the Bank of Japan's 2% target. Consensus expectations point toward another higher print of 2.7% y/y for the headline measure and 2.5% y/y on the core measure, signalling inflationary pressures will continue to question the Bank of Japan's resolve on the ultra-easy policy stance. Nvidia earnings may spell tech caution Nvidia (NVDA:xnas) reported Q2 revenue growing by 3% YoY and EPS $0.51, in line with expectations.  The company provided Q3 revenue guidance to be $5.9 billion, plus or minus 2%, missing the previous estimate of $6.92 billion. The share of the chip maker fell 4.5% in extended hours trading. China’s State Council rolled out 19 new stimulus measures to support the economy The crux of the new stimulus package consists of an incremental RMB300 billion financing from policy banks to provide equity-like capital for infrastructure projects and a new quota utilizing unused quota carried over from previous years to allow local governments to issue RMB500 billion special bonds by the end of October this year.  Emerging countries dominate in terms of nuclear capacity under construction According to the latest data released by the World Nuclear Association, the countries with highest nuclear capacity under construction are: China (23.3K MG), India (6.6K MG), Turkey (4.8K MG) and South Korea (4.2K MG). The United Kingdom is the first developed country in the list with 3.4K MG. France lags with only 1.6K MG, for instance. Nuclear energy is the subject of intense debate in several European countries. In our view, this is certainly one of the best options to support green transition and avoid a surge in the energy bill which will lead to lower purchasing power for longer.   For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: APAC Daily Digest: What is happening in markets and what to consider next – August 25, 2022  
Despite Lower Dependence On Russia, Asia Will Feel The Energy Crisis During The Higher Import Dependence

Despite Lower Dependence On Russia, Asia Will Feel The Energy Crisis During The Higher Import Dependence

Saxo Bank Saxo Bank 25.08.2022 10:43
Summary:  Asia has been vulnerable to rising energy prices, and will now face further headwinds in securing energy supplies as bidding wars with Europe heat up. Japan, China and South Korea are the biggest importers of LNG in the region, and Asia LNG prices have shot up to record highs, following the European gas prices higher. Power shortages in China and a re-embrace of nuclear in Japan are some of the early signals of what’s to come in the winter ahead. From energy prices to energy supply Despite lower dependence on Russian energy supplies, Asia won’t be spared from the winter energy crisis. Vulnerabilities stem from higher import dependence, which has been felt so far in higher fuel prices taking the headline inflation in the region to fresh highs. This has taken a heavy toll on the emerging and frontier markets, such as Sri Lanka, Bangladesh and Pakistan which have been pushed to the brink of a collapse. The next and the more severe risk is seen from shortage of energy supplies to Asia which raises the risk of blackouts, manufacturing halts, involuntary demand destruction, calculated energy rationing, depleting forex reserves and market volatility. The shortage of gas supplies in Europe from Russia is switching demand to LNG and dictating global spot LNG prices. Asia is losing LNG cargoes to Europe in a bidding war, and inflows to Asia are expected to drop for the rest of the year. The countries most exposed in Asia from the global shortage of energy supplies are Japan, China and South Korea. The International Energy Agency (IEA), which has forecast that Asian economies will account for almost half of global gas consumption to 2025, expects LNG to play a pivotal role in meeting rising gas demand in Asia. LNG bidding wars: Asia vs. Europe Asian spot LNG prices for the summer of 2022 are at their highest level on record, about 7x the average price in 2017-2021. India and China have posted some of the largest declines in LNG imports as the spot LNG inflows have largely evaporated. China's LNG imports in the first six months of 2022 are down more than 20% year on year, while India's spot LNG imports are down around 14% year on year. Japan and South Korea are also seeing declining LNG imports. Global exports have risen by just over 10 million tonnes to 234.83 million in the first seven months, even as LNG producers try to maximise output and minimise outages. Strategic shifts remain likely Much of the energy pain has been priced in for Europe, a lot may well be in store for EM assets. Meanwhile, there are reports that natural gas inventory levels in Europe are reaching near 80% capacity targets. LNG terminals in Poland may be coming online, and more countries like Germany itself may add LNG capacity as well. So even as Europe may survive the energy crisis, the same is hard to say for the weaker emerging markets. Demand destruction is possibly the only way forward in Europe and Asia. Several provinces and cities in China have issued plans for "orderly" electricity consumption in 2022 to prepare for the risk of insufficient power supply in peak summer, and Chinese Premier Li Keqiang has repeatedly called for maximizing domestic coal production and energy supply from all sources. In the medium-to-long term, the lack of fuel supply will pose a serious threat to EM fundamental factors as it may slow down urbanization and improvements in living standards. This suggests investments in LNG infrastructure will likely ramp up to counter that threat, especially in China which remains committed to LNG use. Meanwhile, Japan’s new strategic energy plan to 2030 envisions the share of LNG in the power mix to fall to 20% by 2030 from the current 37%. This means Asia will also diversify its energy sources and shift towards broader energy dependence on a variety of sources including the traditional coal and the renewable sources such as solar, hydro, wind, hydrogen etc. Japan’s re-embrace of nuclear is a first step towards more such measures to come in the region.   Source: Asia won’t be spared in the energy crisis
Oil’s outlook, gold steadies

XAUUSD: Price Of Gold Amid Jackson Hole Meeting | Crude Oil Prices

Ed Moya Ed Moya 24.08.2022 23:42
Oil poised to rise Despite global recession fears, oil prices are poised to be supported as energy investments have been depressed. â€‹ The tug-of-war between crude demand destruction and a plethora of drivers on why the oil market will remain tight should still suggest prices won’t fall much lower. Oil’s outlook still looks positive here as shale is not taking off, ESG constraints remain, and strong demand for refined product exports. ​ US stockpiles will likely continue to decline over the coming weeks over strong export demand. â€‹ Oil prices could surge over the next few weeks if OPEC+ is forced to cut output and if Iran nuclear deal talks falter again. â€‹ The Saudis don’t want to see oil prices disconnected from market fundamentals and that should suggest this oil market will remain very tight. â€‹ Crude prices dipped after the EIA crude oil inventory report showed a dip with exports and as gasoline demand reversed. â€‹ Optimism for an Iran nuclear deal revival is growing and that is also weighing on prices today. The longer-term outlook for oil is still much higher as the writing is on the wall for energy costs to be very high this winter especially as the risk for further disruptions remains elevated. â€‹ Energy traders saw prices get a boost after cracks were found with the key route for exporting crude from Kazakhstan to international markets. â€‹ It will take a month to replace the broken parts and they still have to find a contractor. Gold Gold firmed up after the dollar softened in what is a very low volume trading session. ​ Gold’s slide might not be over, but no one wants to aggressively be short right now. ​ Gold is forming its pre-Jackson Hole range and it looks like it could be in the $1740 to $1780 zone. Post Jackson Hole, traders should know enough as to whether the rise in yields continues and that will dictate what happens with gold. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Oil's outlook, gold steadies - MarketPulseMarketPulse
New Light On The History Of Cryptocurrency, Bitcoin's Downward Trend Without The Possibility Of Indicating The End

Nvidia Stocks Dived 4,5 % In The Afterhours Trading! Swissquote

Swissquote Bank Swissquote Bank 25.08.2022 12:13
Nvidia earnings released after the market close were in line with the downside-adjusted market expectations, but the current quarter sales forecast fell $1 billion short of expectations. Nvidia stock dived 4.5% in the afterhours trading, and brought forward the pricing of the ‘end of the chip shortage’. But, it is still too early to call the end of the rare chips, as chips for industrial use, cars and machineries remain difficult to find. Here is, as promised, more on that subject: https://medium.com/swissquote-educati... Elsewhere, stocks were flat yesterday. Even though the US futures are up this morning, the direction remains unclear, and conviction low before the much-expected Jerome Powell speech at the Jackson Hole meeting in the coming hours. The dollar is off the early-week peak, gold and Bitcoin consolidate, while crude oil is preparing to test the 200-DMA to the upside. Hence, energy stocks extend gains along with nat gas and nuclear stocks! Watch the full episode to find out more! 0:00 Intro 0:27 Nvidia’s sales forecast falls $1 billion short of expectations! 1:40 Is the chip shortage over yet? 2:40 Market update 3:56 Crude up, oil, nat gas & nuclear stocks race to the top 6:46 USD softer, EUR firmer before ECB minutes 8:00 Gold & Bitcoin traders await Powell speech for direction Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Nvidia #chip #shortage #Fed #Jerome #Powell #JacksonHole #enegry #crisis #crude #oil #natural #gas #nuclear #stocks #USD #EUR #ECB #minutes #XAU #Gold #Bitcoin #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH   Source: Nvidia upsets, again. But chip shortage is not over yet! | MarketTalk: What’s up today? | Swissquote
The Natural Gas Downside  Looks Supported By The 200-day SMA

US Herny Hub Natural Gas As The Biggest Component In The Bloomberg Commodity Index!

Ole Hansen Ole Hansen 25.08.2022 13:33
Summary:  US Henry Hub Natural gas has following a 160% year-to-date surge become the biggest component in the Bloomberg Commodity Index, and it highlights just how extreme market moves and developments have been during the past year across the commodity sector. In this we look at what it means and what investors in commodity tracking funds should be aware of US Henry Hub Natural gas (ticker: NG) has following a 160% year-to-date surge become the biggest component in the Bloomberg Commodity Index (BCOM), the first time this has occurred in the index’ +30 year history, and it highlights just how extreme market moves and developments have been during the past year across the commodity sector. The BCOM index which together with the S&P GSCI and DBIQ Optimum Yield Diversified Commodity Index belongs to the heavy weights within the global investment industry, tracks the performance of 23 major commodity futures targeting a one-third exposure in the main sectors of energy, metals and agriculture. The target weights are set once a year every January and if prices shift significantly during the year, a reweighting will not occur until the following January. The mentioned 160% year-to-date surge in US natural gas futures has more than doubled its weight to 17.2% from 8%, and in the process made it the biggest component in the BCOM index, more than double that of WTI and Brent combined. From a sector perspective, and given strong gains across the other energy components, especially fuel-based products, it has lifted the total energy exposure by 9.2% to 40.9%. All other sectors and sub-sectors share the reduction with the biggest seen in metals with industrial and precious down by a combined 7.5%. What it means?The BCOM index is likely to become more volatile with its performance increasingly dependent on developments within the energy sector, especially natural gas. Recently the price hit $10 per MMBtu before suffering a 10% setback due to a further delay of the restart of the Freeport LNG export plant which has been closed for months following an explosion. The expected restart will increase demand for US gas and with that slow the process of adding stockpiles before the winter extraction season starts in a couple of months’ time. The biggest threat to the energy sectors strong performance is the combination of a deep recession eroding demand and a peaceful solution to the war in Ukraine sending EU gas prices sharply lower in anticipation of flows from Russia normalizing. What should investors in commodity tracking ETF’s do?The short answer is nothing as the reasons for investing in tangible assets such as commodities has not changed. The other commodity tracking funds mentioned earlier, and which also include the CRB Index will all be affected depending on their individual exposure to natural gas. Overall, the BCOM has from the outset the largest exposure and is therefore the index impacted the most. From an investor perspective these types of futures tracking commodity funds remains a cheap solution to gain exposure to commodities. With natural gas being notoriously volatile some increased price swings on the index can be expected, and if the strong gains are being maintained we should expect a very active rebalancing next January where gainers will be sold, and losers bought in order to reset the target weights. Source: Bloomberg, Saxo Group   Source: NatGas surge weighs heavily in commodity indices
The Elasticity On Supply Of Fossil Fuels Is Low And The Green Transformation Is Accelerating Electrification

Green Transformation Being Inflationary In The Years To Come

Peter Garnry Peter Garnry 25.08.2022 13:44
Summary:  Central banks have been very late to the inflation game as the they have underestimated the effects from the stimulus during the pandemic. Supply chains and generally the supply side of the economy were expected to normalise much faster than what has been the case and our main thesis now is that if central banks focus too much on the core inflation a big mistake might be the outcome. Food and energy will be at the center of our crisis years with climate change and the green transformation being inflationary in the years to come. Investors should increasingly invest in the tangible world to offset these inflationary risks. The energy crisis will drive everything Around 30 central banks around the world have adopted inflation targeting using the headline inflation indices which in the US is the US Personal Consumption Expenditures Index and was officially announced in January 2012. The official targeting is the headline inflation indices, but many central banks and economist are often putting more weight on the core inflation indices. These indices remove energy and food from the price index. This practice is likely what made central banks react to slowly to current inflation impulse; remember, at Jackson Hole one year ago Jerome Powell said: “We have much ground to cover to reach maximum employment, and time will tell whether we have reached 2% inflation on a sustainable basis”. At that point US CPI and core CPI stood at 5.4% y/y and 4.3% y/y respectively. Core inflation indices remove the energy and food items because they are seen as volatile and mainly not driven by the trend change in overall prices, and the key assumption is also that they have temporary factors behind that will reverse later on (see quote below from Federal Reserve Bank of San Francisco). This argument was the same for our disrupted supply chains although in reality it has taken much longer than expected. “However, although the prices of those goods may frequently increase or decrease at rapid rates, the price disturbances may not be related to a trend change in the economy’s overall price level. Instead, changes in food and energy prices often are more likely related to temporary factors that may reverse themselves later.” Food and energy will add to inflation going forward Our team has written a lot about the physical world and lately we introduced indices of tangibles- vs intangibles-driven industry groups. We have shown many times how the world underinvested in the global energy and mining industry, and why this will haunt the world for years. Food and energy are also intertwined and connected which we have seen today with Yara International reducing its ammonia production in Europe to just 35% of potential production due to elevated natural gas prices. Lower ammonia production will lead to less fertilizer for farmers and thus lower food production, which again can lead to higher food prices. It should be clear by now, that ignore food and energy could be a grave mistake by central banks. Climate change will make global food production more volatile and push up prices, and the green transformation will for years keep energy prices elevated. Our main thesis is that the coming decade will in many ways be a replay of the 1970s as politicians will intervene in the economy to mitigate the pain from higher prices, but these decisions will only keep the nominal economy growing fast and thus keeping inflation and the readjustments going for longer. The Fed’s core inflation measure is currently at 0.4% m/m measured over six months suggesting a core inflation rate annualized at around 5% which means that short-term interest rates must be set much higher to tame inflation. The headline inflation is currently twice as high as the core inflation. PCE core CPI m/m | Source: Bloomberg Nominal wages will underpin inflation for a lot longer In this ECB paper from August 2002, the authors conclude that central banks should give substantial weight to the growth in nominal wages when monitoring inflation. If we look at nominal wage growth in the US the chart below shows the three-staged acceleration we have observed in the US economy since 2009. The first phase during 2009-2015 saw only 2% annualized wage growth as the economy was suffering from low demand in the subsequent years after the Great Financial Crisis. The second phase was the period 2015 to early 2020 where years of loose monetary policy and slowly healing economies lifted US nominal wage growth to 2.9% annualized. The third phase is the period from early 2020 until today and is driven by the extraordinary monetary and fiscal stimulus that were put in place after the global Covid pandemic broke out. The combined stimulus was on par with the post-WWII years and were unleashed into a global economy that in hindsight was much closer to a hard physical supply limit than understood at the time. Subsequently demand has been running much stronger than trend growth and as a result nominal wages have accelerated to 5.2% annualized growth rate. Indeed, it seems we have a serious problem on our hands where inflation become unanchored from 2%. US hourly earnings index | Source: Bloomberg Invest in the tangible world In an inflationary environment the tangible world must increase dramatically, so investors should invest in the tangible world to offset the inflation risk in order to preserve wealth in real terms. In our note from yesterday about the Tangible world is fighting back we highlight the industry groups that are part of the tangible world, but our theme basket performance overview also show which tangible parts are doing well which this year has been commodities, defence, renewable energy, logistics, and energy storage. Saxo clients can find the companies in each of these theme baskets on our trading platforms. Source: Core inflation is unofficially dead
The Biggest Two-week Drawdown In A Year As US Oil Inventories Lost 10 mln barrels!

The Biggest Two-week Drawdown In A Year As US Oil Inventories Lost 10 mln barrels!

Marc Chandler Marc Chandler 25.08.2022 14:20
Overview: It seems that many market participants had the same thing in mind, cut dollar longs before the Jackson Hole gathering. The Antipodeans lead the majors move, encouraged perhaps by China’s new economic measures, with around a 1% gain. The euro and sterling are up about 0.35% and are the laggards. Emerging market currencies are higher as well, with the notable exception of India and Turkey, which are nursing small losses. Equities are having a good day. All the major bourses, but India, rose in the Asia Pacific area, led by the 3.6% surge in HK. South Korea’s 25 bp hike did not prevent the Kospi from rallying over 1% today. The Stoxx 600 is up by about 0.3%, and US futures are 0.5%-0.6% better. European 10-year benchmark yields are 4-7 bp lower and the periphery is doing better than the core. The 10-year US Treasury yield is off a couple basis points to 3.08%. Gold is rising for the third consecutive session. Near $1765, it has retraced half of its losses since the mid-month high above $1800. October WTI is little changed after rallying 5% in the past two sessions. US oil inventories have fallen by about 10 mln barrels in the past two weeks, the biggest two-week drawdown in a year. The market also appears to be getting more skeptical that Iranian oil is going to come back soon. US natgas is giving back half of yesterday’s 1.5% gain, while Europe’s benchmark is up 8.7% on top of yesterday’s 10.8% increase. It is up by more than a quarter this week. China’s infrastructure plans did nothing for iron ore, which snapped a three-day advance by pulling back 0.5%. On the other hand, September copper has fully recovered yesterday’s 1.4% fall. September wheat is off for the first time in four sessions.  Asia Pacific Japan's government wants to double down on nuclear power. Prime Minister Kishida wants a committee of government ministers and outside advisers to consider calling for building new nuclear plants in its report due later this year. Before the Fukushima nuclear accident in 2011, nuclear power provided almost 30% of Japan's electricity. In 2020, nuclear power accounted for less than 5% of Japan's electricity. Russia's invasion of Ukraine, the volatility of the global energy market, and the need to boost sustainable growth favors nuclear power, according to this line of thinking. Japan's Ministry of Economy, Trade, and Industry is a strong proponent of developing nuclear power. Still, it is not an immediate solution of any problem. New, large-scale plans would take a decade or more to construct. Smaller nuclear plans, using the newest technology might not be operational until early 2040s, according to some estimates. Japan currently has seven nuclear plants operating. The prime minister wants more existing plants to re-open. A poll earlier this year found that for the first time since that 2011 accident a slim majority (53%) in Japan favor re-opening nuclear plants. Responding to a string of data which suggests that the Chinese economy may struggle to grow by even 3% this year, the State Council announced 19 measures yesterday to support the economy. The measures included almost CNY1 trillion (~$146 bln) of new borrowing/spending for state policy banks and local governments for infrastructure projects, and some deferment of payments due to the government. These measures plus the small rate cuts that have been delivered in the past week or so are seen as modest palliatives to what is increasingly a stressed economy. The NASDAQ Golden Dragon China Index of PRC companies that trade in the US jumped 2.5% yesterday, anticipating today's surge in Hong Kong's Hang Seng (~3.6%) and CSI 300 (~0.8%) The Chinese yuan is off about 1.7% so far this month. This is almost as much as it depreciated in the May-July period. While Chinese officials seem to have accepted the decline, they seem to be wary of unintended consequences. The PBOC's dollar fix yesterday and today was weaker than expected and some saw this as a warning shot. Consistent with this was a Reuters report that China's foreign exchange regulator warned several banks against shorting the yuan. There are at least two reasons why Chinese officials want to move gradually. First is that price pressures may be mounting and second is to avoid a vicious cycle of weaker yuan spurring capital outflows, which weakens the yuan. Foreign holdings of Chinese bonds (sovereign and policy bank bonds) appear to have fallen by a little more than 1% last month to CNY3.6 trillion (~$525.5 bln). The dollar is inside yesterday's range against the Japanese yen (~JPY136.15-JPY137.25). It has drifted to the lower end of the range in Europe. Yesterday's range was within Tuesday's range (~JPY135.80-JPY137.70). The greenback appears nesting as the market awaits Fed Chair Powell's comments at Jackson Hole tomorrow. Note that the US two- and 10-year yields are around two-month highs ahead of it. This has helped lift the greenback to around JPY137.70. Follow-through yield gains may be needed for it to re-challenge high set last month near JPY139.40. The Australian dollar is up over 1% to a seven-day high a little below $0.7000, which corresponds roughly to the (50%) retracement objective of the slide since the month's high on August 11 around $0.7135. Like China's rate cut, so too with the new spending announcement, many trade the Aussie as if it were a proxy sometimes for China. The intraday momentum indicators are stretched. Initial support is seen around $0.6960. The PBOC set the dollar's reference rate at CNY6.8536. The market (Bloomberg survey median) expected CNY6.8656. The dollar has largely been confined to yesterday's range. While it eased a little more than 0.10% against the onshore yuan, it slipped more than twice as much against the offshore yuan. Lastly, as expected South Korea's central bank delivered the expected 25 bp hike (lifting the seven-day repo rate to 2.5%). Headline CPI is running north of 6% and additional hikes are likely. The won rose by 0.5%, its second consecutive gain, after falling for the previous six sessions. Europe While Japan is pushing nuclear, Germany is set to boost coal-fired power generation this year. Steag GmbH will add 2.3 gigawatts to its system within three months to replace about a quarter of the natural gas it uses to generate electricity. More broadly, the government is planing to re-open 6.9 gigawatts of coal and 1.9 gigawatts of lignite and push back planned for another 15 years. Uniper SE, is set to re-start an 875-megawatt coal plant in northern Germany next week. Yesterday, the German government announced it will give preference to transport fuels by rail to accelerate the access of power plants. Berlin also announced some conservation measures, including a ban on heating private swimming pools, and some areas in public buildings. The minimum office temperature will be reduced to 66 Fahrenheit (19 Celsius) and banning most outside lighting for monuments and buildings. Economic Minister Habeck says the measures announced will reduce natural gas use by 2% (saving 10.8 bln euros) over the next two years. German economic news was less poor than expected today. The initial estimate of no growth in Q2 was revised to show 0.1% growth. Consumption and government spending were stronger than expected, but capital investment was considerably weaker. The IFO investor survey seemed surprisingly resilient. The current assessment slipped to 88.5 from 88.7 and expectations were practically unchanged too (80.3 vs. 80.4). The overall business climate metric stands at 88.5 (from 88.7). Still to come is the record of last month's ECB meeting and the market will be looking for more color on the new Transmission Protection Instrument. The euro is firm. After holding below parity yesterday, it popped up in Asia to poke slightly above $1.0030. The week's high was set Monday closer to $1.0045. Yesterday's push lower, the new 20-year low set Tuesday near $0.9900 held and sparked what appeared to be a short-covering bounce into the European close. We suspect that some euro bears moved to the sideline ahead of Jackson Hole. There are options for 2.5 bln euros that expire today at $1.00. Some of the buying may be to neutralize the option. Initial support is seen around $0.9980. Sterling is trading firmer, and like the euro, it has held below the week's high (almost $1.1880). It may make another run for it, but the momentum indicators are getting stretched. Yesterday, the Office of National Statistics showed that for the first time, the UK did not import fuel from Russia in June. Prior to Russia's invasion of Ukraine this year, Russia accounted for almost a quarter of UK's refined oil imports, 6% of crude imports, and almost 5% of its gas imports. America Despite the US five-year yield rising to its best level in nearly two months (~3.25%), the concession did little to induce participation in yesterday's $45 bln five-year note auction. It generated a full basis point tail, stopping at 3.23% and a poor bid-cover (2.3), Earlier yesterday, the re-opening of the two-year floating rate note with a $22 bln offering, also saw a weak bid-cover (2.57 vs. 3.13 last and a 3.2 average in the last 10 such auctions. We are tempted to write-off the lackluster participation to the summer and ahead of Chair Powell's speech on Friday. In addition to $110 bln in four-and eight-week bills to be sold today, the US Treasury also will sell $37 bln of seven-year notes. The yield has risen by almost 50 bp over the past month and still the concession may not be sufficient to draw strong demand. The next long maturity is not until September 12-13 and the re-opening of the 10-year note and 30-year bond. The US reports weekly jobs claims today, which appear to have stabilized recently around 250k. Yesterday's benchmark revisions added about 571k private sector jobs to the job growth reported in the year through March. This translates to an average of around 47.5k jobs a month. Also today, Q2 GDP revisions and the 0.9% contraction is expected to be shaved, with knock-on effects on productivity and unit labor costs later. The Kansas Fed's manufacturing survey is on tap too, but it is not a market mover. Lastly, the Atlanta Fed's GDPNow tracker sees Q3 growth at 1.4%, down from 1.6% previously.  Brazil's IPCA CPI measure for the first half of August fell to 9.6% year-over-year from almost 11.4% last month. The market had hoped for a slightly larger decline (Bloomberg median 9.49%). It was the first month-over-month decline since May 2020. It was the third consecutive drop in the year-over-year rate, which peaked at 12.2%. The full month's report is due September 9. It peaked at 12.13% in April and stood at 10.07% last month. The government has pushed through several anti-inflation measures, including caps on utility and fuel taxes and the effect was seen with a nearly 17% drop in gasoline prices and a 5.25% fall in transportation costs. The central bank meets on September 21. It hiked the Selic rate by 50 bp earlier this month to 13.75% and said it would review the need for a "residual adjustment" in September. The central bank may stand pat without declaring an end of the tightening cycle as price pressures remain elevated. In contrast, Mexico mid-August CPI accelerated more than expected with the headline rising to 8.62% from 8.14%. The core rate rose to 7.97% from 7.75%. Banxico hiked rates five times so far this year. The first three moves were half-point increments and the last two were 75 bp steps. It meets a week after the Fed next month. At the bare minimum it can be expected to match the US move but could go 75 bp even if the Fed does not. Today, Mexico is expected to shave its preliminary Q2 GDP rise of 2.0% and minutes from last month's meeting. After consolidating against the Canadian dollar yesterday, the US dollar has been sold today. It slipped marginally through CAD1.29 to meet the (50%) retracement objective of the rally that began off the August 11 low near CAD1.2730. The low was set in the European morning but was not confirmed by the intraday momentum indicators, a warning not to chase the greenback lower, at least immediately. Initial resistance is seen around CAD1.2950. The US dollar is easing against the Mexican peso for the fourth consecutive session, which followed a four-day gain last week. It is finding bids today around MXN1985, and a break could see a test on the MXN19.81-82 area that marked the low in late June and again near the middle of this month. The low for the year was set in late May around MXN19.4140.     Disclaimer   Source: Dollar Longs Pared as Jackson Hole Gathering is set to Start
When The Global Economy Recovers, We Can Expect Demand To Rebound

Platinum futures drop to their lowest level in a month, RBOB Gasoline, Wheat Futures Close To 10-month Lows

Rebecca Duthie Rebecca Duthie 25.08.2022 15:22
Summary: A hawkish Fed is causing investors to shy away from non-yielding assets. Ships transporting Ukrainian grain out of Black Sea ports continued to run without a hitch. RBOB Gasoline. Platinum Futures touching one-month lows Late in August, platinum futures experienced a decline to below $880 per ounce, the lowest level in a month, and followed other precious metals as hawkish comments from Federal Reserve policymakers boosted demand for the US dollar and scared investors away from non-interest-bearing assets. A global economic slowdown's effect on the auto industry's outlook, which lowered demand for autocatalyst components, also put pressure on prices. In July, car registrations were down year over year in the UK, Germany, and Italy, while declines were seen in the US and Canada according to June statistics. Platinum Oct ‘22 Futures Price Chart Wheat futures remain close to 10 month lows Late in August, with a lack of certainty over the weather in the US's growing regions, Chicago wheat futures eked out a small gain. Despite this, prices remained near to the 10-month low reached last week and were far lower than they were before Russia invaded Ukraine, as ships transporting Ukrainian grain out of Black Sea ports continued to run without a hitch. It is anticipated that Ukraine will sell more than 20 million tonnes of grain that are said to have collected in port silos since its invasion began on February 24 in addition to freeing up critical storage space for the next wheat harvest. Meanwhile, the USDA raised the world's supplies upward in its most recent WASDE report, boosted by projections for record production in Russia and higher output from China and Australia. The outlooks for US supplies were also upgraded because strong spring wheat more than made up for declines in winter and durum wheat. Wheat Futures Price Chart RBOB Gasoline According to AAA, the national average cost of gas in the United States has decreased for 70 days in a row to $3.89 a gallon. However, buyers shouldn't get complacent and believe that this streak will continue all the way to the end of the year. And one energy trader predicts that gas prices will rise once more, especially as we head into the fall and winter. RBOB Gasoline Sep ‘22 Futures Price Chart Sources: finance.yahoo.com, tradingeconomics.com
Forex: XAU/USD Is Rising For The 3rd Day In A Row!

Forex: XAU/USD Is Rising For The 3rd Day In A Row!

InstaForex Analysis InstaForex Analysis 25.08.2022 18:02
Relevance up to 13:00 2022-08-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Amid a weakening dollar and growing risks of a recession in the US and the global economy, gold quotes have again turned to growth. XAU/USD is rising for the 3rd day in a row today and is trading near 1764.00 as of this writing, in close proximity to the strong resistance level at 1766.00 (200 EMA on the 4-hour chart). In case of its breakdown, the important resistance level of 1775.00 (50 EMA on the daily chart) becomes the target, the breakdown of which will increase the probability of further corrective growth towards the key resistance levels of 1800.00, 1819.00 (200 EMA on the daily chart). Their breakdown will confirm the return of XAU/USD to the long-term bull market zone. In an alternative scenario, there will be a rebound from the resistance level of 1766.00, and the XAU/USD pair will resume its decline. The first signal to open short positions will be a breakdown of the important short-term support level of 1757.00 (200 EMA on the 1-hour chart). A breakdown of the key support level of 1690.00 (200 EMA on the weekly chart) will cause XAU/USD to enter the long-term bear market zone. Support levels: 1757.00, 1748.00, 1700.00, 1690.00, 1682.00 Resistance levels: 1766.00, 1775.00, 1800.00, 1819.00, 1832.00, 1875.00 Trading Tips Sell Stop 1755.00. Stop-Loss 1770.00. Take-Profit 1748.00, 1700.00, 1690.00, 1682.00 Buy Stop 1770.00. Stop-Loss 1755.00. Take-Profit 1775.00, 1800.00, 1819.00, 1832.00, 1875.00 Source: Forex Analysis & Reviews: XAU/USD Technical Analysis and Trading Tips for August 25, 2022
In The Morning US Dollar (USD) Was Up, British Pound And Euro Down | US Stocks: S&P 500 Gained Almost 2% Yesterday, Dow Jones Added 1.88%, Nasdaq Increased By 2%

The US Dollar Trades Near Cycle Highs Ahead Of The Speech

Saxo Strategy Team Saxo Strategy Team 26.08.2022 09:55
Summary:  Markets are steady ahead of a widely anticipated speech at the US Federal Reserve’s Jackson Hole, Wyoming conference from Fed Chair Jerome Powell, although he may do little more than remain on message on the Fed’s plans for tightening policy. The US dollar trades near cycle highs ahead of the speech, with US treasury yields having eased back a bit yesterday on a strong 7-year treasury auction. In Europe, power and natural gas prices continue their ascent from already dire levels, thereby supporting demand for fuel-based products.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures bounced back 1.4% to the 4,200 level in what seems to have been a technical move ahead of Jerome Powell’s keynote speech at Jackson Hole which is expected today. For equities the main question is how central banks are seeing structural in the years to come because that will be linked to the terminal rate the Fed sees as neutral for the economy and inflation. The US 10-year yield is trading around the 3.05% level this morning and we expect a quiet session in US equities unless Powell’s speech delivers a hawkish tone which could then erase yesterday’s gains. Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I) After staging an impressive bounce from the trough of a 2-month losing streak yesterday, Hong Kong equities opened higher before giving back much of its gains to end the morning session 0.7% higher. Yesterday’s 3.6% rally in the Hang Seng Index and 6% surge in Hang Seng TECH Index were fueled by initially chatters among traders about unverified progress on resolving the audit working papers access issue in the heart of the Chinese ADR delisting risk. During New York hours, the Wall Street Journal ran an article, suggesting that the U.S. and China are nearing a deal to allow American regulators to inspect in Hong Kong the audit working papers of Chinese companies listed in the U.S. The news sent Chinese ADRs soaring, the NASDAQ Golden Dragon China Index +6.3%. US dollar steady on the strong side ahead of Jackson Hole Yesterday saw some tactical chopiness in USD pairs, as the greenback sold off to support in places and criss-crossed parity in EURUSD terms before settling back to the strong side ahead of Fed Chair Powell’s speech at the Jackson Hole conference today. Powell is widely expected to stay on message on the Fed’s hopes to get ahead of the curve, but surprises are possible if his language is a bit more pointed than expected or he brings stronger guidance on the importance of QT, etc. Next event risks for the USD in the wake of today’s Powell speech (and July PCE inflation print as noted below) are next Friday’s payrolls/earnings report, the Sep 13 Aug. CPI data release, and then the Sep 21 FOMC decision. AUDNZD The Antipodean currency pair closed yesterday at its highest level since 2017 in a bid to escape the range that has prevailed since then, with a bit more range toward 1.1300 that stretches all the way back to 2013. If the pair can make a notable foray above these levels, it might suggest that traders are viewing the pair from a current account perspective, as Australia has been running record surpluses on its formidable complex of commodity exports, while New ZEaland is running unprecedented deficits on rising costs for energy imports. In the longer term perspective, AUDNZD has traded above 1.3500 as recently as 2011. Crude oil (CLV2 & LCOV2) Crude oil trades steady with Brent trading around $100 per barrel with a tightening supply outlook offsetting the recessionary drums that have been banging ever louder in recent weeks. Focus on today’s Jackson Hole speech from Fed Chair Powell and its potential impact on bond and currency markets, and with that the general level of risk appetite in the market. EU gas and power reached new peaks on Thursday on worries about Russian gas supplies following the upcoming 3-day maintenance supporting demand for crude-based products like diesel and heating oil. The prospect of a revived Iran nuclear deal still receiving some attention although a deal may only have a small immediate impact, small change compared with the soon to expire US SPR release program which saw 8 million barrels pumped into the market last week. In Brent, the next level of upside interest can be found at $102.50. Copper (COPPERUSDEC22) Copper has settled into a $3.55 to $3.73 range after making a steady recovery from the June/July +30% collapse. The primary focus remains on China and the government’s efforts to shore up its troubled property sector and its slowing economy in general. This past week we have seen rate cuts and the announcement of a 1 trillion-yuan economic stimulus program, including a 300-billion-yuan investment in infrastructure projects, which will boost the consumption of industrial metals, including copper. Above the current range copper may target $3.85/lb next but it will likely require a rally above $4/lb before speculators reverse the net short they have held since April. US Treasuries (TLT, IEF) US treasury yields fel back a few basis points, but the 10-year benchmark still trades above 3.00% today ahead of Fed Chair Powell’s speech. (More below – special focus on longer end of the yield curve on any QT guidance in the speech). A strong auction of 7-year treasuries yesterday helped bring support to the market after the weak 5-year auction the prior day. What is going on? ECB meeting minutes suggest another 50-basis points hike The meeting minutes point to another 50-basis point hike at the September 8 ECB meeting, a move that is actually more than fully priced in by the market. At the same time, the ECB minutes noted that it saw “no evidence of significant second round effects” in which wages drive an inflationary spiral. The central bank’s “TPI” or Transmission Protection Instrument meant to prevent peripheral sovereign yield spreads from widening excessively was widely discussed and is clearly a hot potato politically. An FT article noted that hedge funds have built up a nearly EUR 40 billion speculative short in Italian BTPs Additional hawkish Fed comments before we get to Powell Several Fed speakers were on the wires echoing the same message on inflation and more rate hikes. The markets are still holding their breath for what Powell has to say later today. James Bullard (2022 voter) reiterated his year-end target of 3.75% to 4% and market expectation is not too far from that now. Esther George (2022 voter) was more open about rates going above 4% but stayed away from a specific guidance for the September meeting. Patrick Harker (2023 voter) said rates need to be lifted into restrictive territory. Raphael Bostic (2024 voter) told the WSJ it's too soon to call inflation’s peak and that he hasn't decided yet on a 50 or 75bps rate hike next month. German business sentiment is not that bad in August The headline IFO Survey reading was out at 88.5 versus 86.8 expected and 88.6 prior. This is only a bit softer than the previous month. The same goes as well for the current conditions (out at 97.5 in August versus prior 97.7) and expectations (80.3, unchanged compared to July). Overall, business sentiment remains soft. But given the quick economic deterioration, it could have been much worse. We still expect sentiment to further fall in the coming months as the German economy sinks into a recession. The energy crisis is hitting consumers and companies very hard – thus leading to lower demand and corporate investment. Yesterday, Germany’s benchmark year-end power kept rising (+13% in one day) to a new record of EU725/MWH. So far, the German government has spent roughly €60bn to limit the impact of higher energy prices on households and corporations. This represents about 1.7% of GDP according to the calculations of the Belgium-based think tank Bruegel. In percentage of GDP, this is still much less than many other European countries (3.7 % of GDP for Greece, 2.8 % for Italy and 2.3 % for Spain, for instance). In any case, this is unsustainable, of course. The US and China are getting closer to resolve Chinese ADR audit papers inspection issue According to a Wall Street Journal article, Chinese securities regulators “are making arrangements for US-listed Chinese companies and their accounting firms to transfer their audit working papers and other data from mainland China to Hong Kong” and “would allow American accounting regulators to travel to Hong Kong to inspect the audit records”. It is important to note that an agreement has yet to be reached and the regulators on both sides remain silent about it so far. One of the hurdles to the proposed arrangement of transfer of audit working papers from the mainland to Hong Kong will be whether it can satisfy the US regulators, particularly the SEC Chair Gensler who has emphasized “full access”. If this turns out to happen, it will not only benefit the Chinese companies that are listed in the US but also sets the US and China in a more conciliatory mood at least in some financial matters, and shows case the uniqueness of the position of Hong Kong U.S. discount retailers reported mixed Q2 results, highlighting pricing pressures ahead Dollar General (DG:xnys) reported revenue growth of 9% y/y to $9.4bn, in line with the consensus estimate, and EPS of $2.98, +10.6% y/y, above the consensus estimate of $2.94.  Same-store sales in Q2 grew 4.6% y/y, above the consensus at +3.8%. In the company’s guidance for 2022, revenue growth was raised to +11% from previously +10.0-10.5% and the same-store-sales growth was raised to +4.0-4.5% from +3.0-3.5%. Q2 results from another discount retailer, Dollar Tree (DLTR:xnys) were however weaker, with revenue growth of 6.7% y/y to $6.77bn, slightly below the consensus estimate of $6.79bn.  EPS came in at $1.60, in line with expectations. Same-store-sale for the quarter was +4.9%, below the consensus estimate at +5.0%.  The company lowered its 2022 full-year EPS guidance to $7.10-$7.40 and said that 60% of the cut was due to cutting prices. The management said that they “expect the combination of this pricing investment at Family Dollar and the shoppers’ heightened focus on needs-based consumable products will pressure gross margins in the back half of the year”. The comments from Dollar Tree cast a shadow over the health of consumers in the US in general.  Meituan is scheduled to report Meituan (03690:xhkg) is scheduled to report Q2 results on Friday after the market close. Analysts are upbeat about the food and grocery delivery platform’s potential benefitting from the recovery of consumer demand amid the reopening and cost control initiatives.  The consensus estimate (as per the Bloomberg survey) for Q2 revenue is to grow 11% YoY to RMB48.59 billion and an adjusted net loss of RMB2.17 billion What are we watching next? The Kansas City Fed hosts its annual symposium in Jackson Hole This year’s theme is “Reassessing Constraints on the Economy and Policy”. The symposium will last until Saturady. Fed Chair Jerome Powell will speak today. Given the loosening of financial conditions since the June FOMC meeting, the market has been concerned that Powell will echo the pushback against the notion that the Fed knows that it is set to materially slow its pace of policy tightening after the September 21 FOMC rate decision (majority looking for another 75 basis points). Data dependency will likely be underlined in his speech, but any guidance on the Fed’s approach to QT could also garner considerable attention as longer treasury yields pull back higher toward the cycle highs from June. Softer July US PCE print would not derail Fed’s tightening After a softer CPI report in July, focus will turn to the PCE measure – the version of the CPI that is tracked by the Fed to gauge price pressures. Lower gasoline prices mean that PCE prints could also see some relief, although we still upside pressures to inflation given that energy shortages will likely persist and easing financial conditions mean that inflation could return. We would suggest not to read too much into a softer PCE print this week, as the stickier shelter and services prices mean that the 2% inflation target of the Fed remains unachievable into then next year. This suggests that the aggressive tightening by the Fed will likely continue, despite any likely softness in the PCE this week. Earnings to watch Today’s earnings focus is Meituan which is expected to see 11% y/y revenue growth with estimates expecting to see growth accelerating into Q3, so this will be the market’s focus in today’s earnings release. The latest stimulus efforts by the Chinese government and lifting of mobility restrictions could provide tailwind for the consumer into Q3. Today: Meituan, China Shenhua Energy, China Petroleum & Chemical Next week’s earnings releases: Monday: Fortescue Metals, Haier Smart Home, Foshan Haitian Flavouring, Agricultural Bank of China, BYD, Pinduoduo, Trip.com, DiDi Global Tuesday: Woodside Energy, ICBC, China Yangtze Power, Midea Group, Tianqi Lithium, Bank of Montreal, China Construction Bank, Bank of China, Great Wall Motor, COSCO Shipping, Partners Group, Baidu, Crowdstrike, HP Wednesday: MongoDB Thursday: Pernod Ricard, Broadcom, Lululemon Athletica, Hormel Foods Friday: BNP Paribas Economic calendar highlights for today (times GMT) 0800 – Italy Aug. Consumer/Manufacturing Confidence surveys 1230 – US Jul. Personal Income/Spending 1230 – US Jul. PCE Inflation 1400 – US Fed Chair Powell to speak at Jackson Hole, Wyoming 1400 – US Aug. Final University of Michigan Confidence Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: Financial Markets Today: Quick Take – August 26, 2022
Gold Indicated A Decrease In Prices, Does Gold Should Be Buy Or Sell Today?

Forex: Gold Prices Will Still Rise Before The Speech

InstaForex Analysis InstaForex Analysis 26.08.2022 13:14
Relevance up to 11:00 2022-08-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. According to one market strategist, gold prices will still rise even if Federal Reserve Chairman Jerome Powell is hawkish in his highly anticipated speech on Friday at the annual central bank symposium in Jackson Hole. Invesco Chief Global Market Strategist Kristina Hooper said there is no reason why investors should not expect Powell to signal that the central bank will maintain its aggressive monetary stance. However, Hooper reiterated that it was just talk. The hawkish stance in August does not prevent the central bank from changing interest rates at the next meeting on the decision on monetary policy on September 21. There is considerable uncertainty about the next move by the US central bank. Markets assume a 50/50 chance that the Federal Reserve will raise the federal funds rate by either 50 or 75 basis points. According to Hooper, the central bank will raise interest rates by 50 basis points, which will mean a turn in its monetary policy. The CME FedWatch tool showed that year-end interest rate forecasts will range from 3.75% to 4.00%. However, Hooper believes that by the end of the year, interest rates will rise to just 3% or even lower. One of the important long-term problems is the growing public debt and deficit. On Wednesday, President Joe Biden announced a program to write off student loans. The government will forgive up to $10,000 in federal student loans for borrowers with incomes of less than $125,000. At the same time, the government will waive up to $20,000 for Pell Grants recipients. The National Taxpayers Union estimates that the loan write-off program could cost the government more than $329 billion over ten years. With the central bank expected to start a slow reversal in September, analysts say the current price of gold could be an attractive entry point for investors. Even though interest rates will continue to rise, at least for now, investors still have other reasons to hold some precious metals. And while gold price performance has been disappointing for most of the year, investors should ignore short-term price action and focus on long-term potential. The most compelling reason to hold gold is diversification. Source: Forex Analysis & Reviews: What will gold prices be like under hawkish Powell?  
Commodities: Prices Are Rising, Heatwaves In US And China Affects The Production Of Cotton

Gold Prices Dip In the Wake Of Hawkish Fed Comments, Cotton Futures Trading Near 2-month Highs, Brent Crude Supplies Are Expected To Tighten

Rebecca Duthie Rebecca Duthie 26.08.2022 15:02
Summary: US economy shrank in the second quarter at a moderate rate. Reduced global cotton supplies. Brent crude futures rose. Gold prices dip In anticipation of US Federal Reserve Chair Jerome Powell's speech at the Jackson Hole symposium later in the day, gold prices dipped below $1,760 an ounce on Friday. Following a slew of hawkish comments from Fed officials, Powell is expected to reiterate the central bank's aggressive stance against rising inflation. However, the markets are still split on whether the Fed will deliver another supersized 75 basis point or a more modest half-percentage point rate hike in September. A final estimate revealed that the US economy shrank in the second quarter at a more modest rate, bolstering the case for additional monetary tightening and maintaining pressure on the bullion markets. Although analysts predict further volatility should Powell's words surprise markets, gold is expected to close the week with minimal change. Gold Dec ‘22 Futures Price Chart Cotton futures trade near 2-month highs Trading in cotton futures was relatively close to the nearly two-month high reached on August 16 as traders weighed the likelihood of reduced global supplies against a slowing in demand. The most recent USDA data stated that due to drought, particularly in Texas, which generally accounts for more than half of the US plantings, US production for 2022–2023 is predicted to drop to 12.6 million bales, which would be the lowest level since 2009–2010. The USDA also decreased its forecasts for global cotton consumption and production by 800,000 bales and 3.1 million bales, respectively. Heavy rains and bugs have severely damaged the cotton fields in India, another top producer, to the point where the government is now importing cotton. The projection of production this year has come down to 31.5 million bales while consumption is 34.5 million bales. Cotton Oct ‘22 Futures Price Chart Brent Crude supply tightening With a tightening supply forecast and hints of improving short-term fuel demand, Brent crude futures increased to almost $100 per barrel on Friday and were expected to end the week more than 3% higher. Official US data released on Wednesday revealed record crude and refined product exports last week along with a sustained fall in crude stocks. Additionally, traffic levels in the Asia Pacific, Europe, and North America increased significantly in the week leading up to August 24 according to TomTom's Congestion Index data. On the supply front, Saudi Arabia issued a warning that OPEC+ would reduce output to calm choppy markets. However, some OPEC sources told Reuters that such a move may not be imminent and that it would take place at the same time as Iranian oil returning to the international market. Brent prices, however, fell 1.9% on Thursday as negotiations to resurrect the 2015 nuclear deal between Iran and the West appeared to be moving forward. Brent Crude Futures Price Chart Sources: finance.yahoo.com, tradingeconomics.com
Commodities Condition After Fed Chair Powell's Speech

Commodities Can Weather Headwinds From An Economic Slowdown

Ole Hansen Ole Hansen 26.08.2022 15:07
Summary:  The commodity sector continues to recover with the Bloomberg Commodity Index clawing back more than half of what it lost during the June to July 20% correction. It supports our long-held view that commodities can weather headwinds from an economic slowdown with supply of key commodities being equally challenged. Gains this past week were seen across most sectors, led by agriculture and energy, the latter seeing rising demand diesel as the cost of gas continued its near vertical ascent. PLEASE NOTE: This update was written before Friday’s Jackson Hole speech from Federal Reserve Chair Jerome Powell The commodity sector continues to recover as the Bloomberg Commodity Index claws back more than half of what it lost during the June to July 20% correction. Gains were seen across most sectors, led by agriculture as weather woes lifted the cost of coffee and the three major crops – especially corn. Industrial metals received a boost from China’s continued efforts to support its weakening economy by announcing more stimulus policies that would pump billions into infrastructure projects. The energy sector was supported by surging gas prices driving up demand for diesel and Saudi Arabia flagging the risk that OPEC+ may cut production to stabilise volatile markets.In financial markets, the dollar reached a fresh 20-year high against the euro as Europe’s energy crisis continued to pressure the economic outlook for the region. US stocks tumbled and bond yields rose ahead of Friday’s eagerly awaited speech by Federal Reserve Chair Jerome Powell. In which, he was expected to reiterate his determination to bring down inflation by continuing to hike interest rates. Inflation-fighting measures, such as hiking interest rates and removing stimulus into a post-pandemic economic slowdown, was the main driver behind the recent correction in commodities. Overall, however, we maintain the view that commodities can weather headwinds from an economic slowdown with supply of key commodities being equally challenged. In the long term, support for commodities will be driven by underinvestment, urbanisation, the green transformation and deglobalisation. In the short term, prices are likely to be supported by the unfolding energy crisis in Europe, Russia-sanctions related supply disruptions, adverse weather raising fresh concerns about food supplies, and China’s efforts to support its economy.    Crude oil sellers having second thoughts While the macro-economic outlook remains challenging due to the lower growth outlook and recent dollar strength, crude oil and the product markets have nevertheless managed a strong rebound this past week. The energy crisis in Europe continues to strengthen, with gas and power prices surging to levels that measured in dollars per barrel of crude oil equivalent equates to $530 and $1,400 per barrel, respectively. The latest surge was driven by recent low-water level disruptions on the river Rhine and Gazprom announcing a three-day closure of the Nord Stream 1 pipeline due to maintenance, starting on August 31.Should Gazprom (President Putin) decide to weaponize supplies further and keep the pipeline shut after maintenance ends, the risk of further spikes remains – thereby extending the already wide price gap between gas and crude oil. A development that will further support an already very visible increase in demand for fuel-based product, especially diesel and later on this autumn also heating oil, at the expense of gas. This gas-to-fuel switch has supported the recent recovery with the US last week shipping a record amount of diesel to energy-starved customers looking for alternatives to Russian supplies.However, the trigger which eventually sent crude oil higher this week were comments from the Saudi Energy Minister and other OPEC members. These comments flagged possible cuts to production following a recent and growing disconnect between falling futures markets and a physical market that has yet to show weakness. A discrepancy we have noticed as well in recent weeks with crude oil futures being sold as a hedge against an economic slowdown with little focus on the physical market and its current price supportive supply and demand fundamentals.Having found support after retracing 61.8% of the December to March 111% surge, the Brent crude oil futures contract has now returned to $100 per barrel with trendline resistance, currently $102.25 preventing a further upside push. A continued recovery at this point may force money managers to reassess their exposure in Brent and WTI with a potential short-squeeze brewing. During a three-week period to August 16, speculative traders reduced their net long to 278k lots, the lowest since April 2020. Source: Saxo Group Rising grain prices and strong dollar re-ignite food supply worries. U.S. corn reached a two-month high and, together with more muted gains across the other major US traded crop futures, the Bloomberg Commodity Grain Index has now risen by 12% following the May to July correction which at least temporarily helped reduced worries about a global food crisis. However, with bad weather continuing to impact production and with Ukraine exports still well below previous years, the mentioned worries have started to re-emerge – not least considering the recent run up in the dollar which has only made matters worse for buyers of grains in local currencies.The latest run up in US corn has been supported by concerns that hot and dry weather in the Midwest during the final crop development period may limit the production outcome. The US is the biggest producer and exporter of corn – which is used in everything from animal feed to biofuels and sweeteners – and a poor US harvest will likely rekindle recent worries about food security that was driven by war, drought and the overall impact of climate change. In addition to the above and the mentioned slow pace of shipments from Ukraine, we are currently seeing drought in China threatening the local harvest which could lead to higher imports. Dryness within the European Union this summer has continued to drive production forecast lower.   Coffee prices surge on Brazil and Vietnam supply worries Both Arabica and Robusta coffee futures returned to strength, both rallying strongly on signs of a deteriorating supply outlook. Stockpiles in Vietnam – the world’s top supplier of the Robusta variety – are expected to halve by the end of September from a year earlier while stocks of the Arabica bean monitored by the ICE exchange has slumped to a 23-year low. Freak weather in South America during the past year has decimated the production outlook for Brazil, Colombia and Central America, while recent dryness and a continued surge in the cost of fertilizer have already started to raise concerns about next year’s crop. The Arabica futures contract paused after reaching the June high at $2.42 per pound, but the risk remains that it may push towards the 11-year high at $2.605 reached in February Industrial metals find support in China Industrial metals, led by steel, aluminum and zinc responded positively to news that the Chinese government has stepped up its efforts to support an economy damaged by repeated Covid lockdowns and a property market slump. China’s State Council announced a 1 trillion yuan ($146 billion) stimulus package with 300 billion going towards infrastructure projects, thereby doubling the amount the government has pledged towards project that will boost demand for industrial metals.Following a period of range trading between $3.55 to $3.73, High Grade Copper broke higher on Friday and may now target $3.85/lb next, but it will likely require a rally above $4/lb before speculators, having traded the metal with a short bias since April, start to reverse back to a net long. The primary focus remains on China and whether the mentioned stimulus measures will be strong enough to shore up enough support for the upside push to continue. Source: Saxo Group Gold trades steady despite fresh dollar and yield strength Gold managed a small bounce but overall, it continued its recent struggle amid headwinds from a stronger dollar and rising bond yields. Not least ahead of Friday’s Jackson Hole speech from Fed chair Powell with gold traders worried that a hawkish statement would provide additional strength to the dollar and yields, thereby further delaying gold's return to strength by potentially sending it below support at $1729. In a year where inflation has been surging higher, some investors may feel hard done by gold’s negative year-to-date performance in dollars but taking into account it had to deal with the biggest jump in real yields in more than 25 years and the dollar rising 10% against a broad basket of major currencies, its performance, especially for non-dollar investors remains acceptable. We maintain the view that the market is overly optimistic with the assumption that central banks can successfully bring inflation down to the levels currently being projected. Such a scenario would create a challenging outlook for interest rate and growth sensitive stocks, thereby raising the need for tangible assets such as gold and commodities in general to weather a period of low growth and high inflation. Natural gas, now the biggest component in the Bloomberg Commodity index The BCOM index together with the S&P GSCI and DBIQ Optimum Yield Diversified Commodity Index belongs to the heavy weights within the global investment industry for commodities. It tracks the performance of 23 major commodity futures targeting a one-third exposure in the main sectors of energy, metals and agriculture. The target weights are set once a year every January and if prices shift significantly during the year, a reweighting will not occur until the following January. However, an astonishing 160% year-to-date surge in US natural gas futures has more than doubled its weight to 17.2% from 8%, and made it the biggest component in the BCOM index for the first time ever – more than double that of WTI and Brent combined. From a sector perspective, it has helped lift the total energy exposure by 9.2% to 40.9%. All other sectors and sub-sectors have seen reductions with the biggest impacting industrial and precious metals by a combined reduction of 7.5%. These moves away from target weights will not be adjusted until next January. At which point, we may see some major activity as the rebalancing process would see selling of gainers, especially natural gas while the biggest losers will be bought.   Source: WCU: Weather woes and energy crisis lift commodities
Britain's Energy Industry Regulator Has Raised The Cap On Annual Electricity Bills. For What?

Britain's Energy Industry Regulator Has Raised The Cap On Annual Electricity Bills. For What?

Conotoxia Comments Conotoxia Comments 26.08.2022 16:55
Britain's energy industry regulator has raised the cap on annual electricity bills to keep up with the constantly rising cost of procuring electricity. The yearly bill will be capped at £3549 from October 1. That's a whopping 178% increase since last winter and an 80% increase from the current level.  An increase in the UK's price cap may occur in future quarters if demand is not met with a sufficiently large supply of fuels, especially gas.    According to estimates by consulting firm Auxilione, the price cap on electricity in the UK could rise to a staggering £7272 by April 2023. At the same time, Cornwall Insight estimates that a year from now, in August, the level could reach £6616.    Natural gas is a popular source of energy in Western Europe. Despite its small share in energy mixes, it is an essential source of heat in winter for most EU countries and helps quickly supply the electric grid when power generation from other sources drops. These two reasons are most likely behind such significant increases in electricity prices following the cut in Russian gas supply.  More quarters of record profits for energy companies?   BP and Shell are the most prominent Western European petrochemical companies in the natural gas market in terms of revenue. They rank No. 2 and No. 3 globally, respectively, and are among the most important suppliers of blue fuel to Europe, especially after the reduction of its supply from the East.   In the last quarter, BP and Shell announced record results, reporting $67.9 billion (85.9% year-on-year growth) and $100.1 billion (65.3% year-on-year growth) in revenue, respectively. However, it wasn't the strong sales growth that came as the biggest surprise to investors but the net profits, which amounted to $9.3 billion and $11.5 billion, respectively, due to significantly expanded margins.   The current market situation may indicate that the excellent performance will continue in the coming months due to the record price of natural gas and the stabilization of oil prices after the recent decline. Even if the consulting firms' estimates were halfway correct, this could mean a record price for fuel supplies for power generation and household heating.   BP and Shell, which serve much of the European market, may continue to face high demand. Despite the expected drop in production in the EU market and thus industrial demand, European countries still need to stockpile plenty of gas to fill their reserves for the upcoming winter.   European energy index prices have had their strongest week of increases in 2 months. In Germany alone, electricity prices have risen by 860% over the year. Even in France (which bases 74% of its power generation on nuclear power plants), energy prices have reached an annual increase of more than 950% after it was announced that some nuclear reactors would be temporarily halted for maintenance work. Rafał Tworkowski, Junior Market Analyst, Conotoxia Ltd. (Conotoxia investment service)   Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.   CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.   Source: Europe's energy crisis is getting worse every day - more record profits for the energy sector?
Droughts In China - Asia Is Forced To Buy Corn From The US. Prices Are Growing

Droughts In China - Asia Is Forced To Buy Corn From The US. Prices Are Growing

Saxo Strategy Team Saxo Strategy Team 29.08.2022 09:43
Summary:  The 8-minute speech from Powell focused on one message: no pivot to easing in 2023. The hawkish remarks sent U.S. equities sinking the most since June and down more than 3% across major indices. Policymakers in the ECB also sent out hawkish comments and brought a 75 basis point hike to the table at the September ECB meeting. The U.S. and China regulators announced a deal on audit work papers and removed for the time being the risk of compulsory delisting of Chinese companies from U.S. bourses. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I)  U.S. equities sank last Friday after Powell spent all his Jackson Hole speech on one thing: pushing back on the market’s speculation that the Fed would pivot and start easing next year.  The tech-heavy Nasdaq dropped 4.1%, leading the charge lower, Alphabet (GOOG:xnas) -6.4%, Amazon (AMXN:xnas) -4.8%, Nvidia (NVDA:xnas) -9.2%. Apple (AAPL:xnas) fell 2.8% after the U.S. Department of Justice announced working on a potential antitrust case against the company. S&P 500 had its worst day since June and plunged 3.4%, Dell Technologies (DELL:xnys) -13.5%, HP (HPQ:xnys) -8.9%. The post-Powell speech selloff capped off a two-week losing streak of the markets and turned major indices’ performance in August into the red.  Earlier in the week, the market sentiment was dampened by downbeat comments from the management of retailers on a glut of inventory and plans to cut prices.  U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas) After Fed Chair Powell’s hawkish comments about the need to keep raising rates until inflation is under control regardless of pains incurred to the economy and employment, the U.S. yield curve twisted and flattened, with the 2-year to 5-year yield rising by 3bps to 3.37%, 10-year nearly unchanged at 3.04%, and the 30-year yield falling by 5bps to 3.19%.  The money market continued to unwind the 2023 rate cut bet and the SOFR Dec 22-Dec 23 (SR3Z2 vs SR3Z3) spread narrowed to -24bps.  Weakness on the front ends began even before Powell’s comments as the market took notice of the ECB’s readiness to consider a 75bp rate hike in its meeting in September due to a deterioration in the inflation outlook.    Hong Kong’s Hang Seng (HSIQ2) and China’s CSI300 (03188:xhkg) Hang Seng Index, +1% last Friday and +2% for the week staged an impressive bounce from the trough of a 2-month losing streak on Thursday and continued to charge higher on the back of reports that the U.S. and China regulators were reaching a deal to avoid the delisting of Chinese companies from U.S. bourses due to disagreement on access to audit work papers.  Later on Friday after the Hong Kong market close, the U.S. and China regulators separately announced that an agreement had been signed and released some details.  Chinese ADRs opened higher in the U.S. session but finished the day 0.7% lower as being dragged down by the sharp decline in the U.S. equity market.  CSI 300 was little changed last Friday and was down 1% for the week.  With U.S. index futures continuing to decline this morning in Asia, the markets’ focus today is likely to be shadowed by the development in the U.S. markets rather than much follow-through from the confirmation of the U.S.-China deal on audit working papers.  Dollar’s post-Jackson Hole gains extend into Asia The dollar continued its run higher in the early Asian hours on Monday after a hawkish tone from Fed Chair Powell on Friday resulted in some volatility but eventual dollar bid. AUDUSD was the weakest in the Asian morning, sliding below 0.6900 amid volatile commodity prices. USDJPY broke above 138 to 1-month highs and USDCNH surged to 6.9000+ levels. EURUSD ended last week below parity and slid further lower to 0.9936 this morning with a tough week ahead as Nord Stream 1 maintenance will likely cause a step up in energy supply concerns. With corporate month end on Monday, and a UK holiday, the scope for further dollar gains remains. Crude oil prices (CLU2 & LCOV2) Crude oil prices ended last wee in gains on supply concerns taking centre stage again, primarily with Saudi Arabia flagging the risk that OPEC+ may cut production to stabilise volatile markets. Demand picture stabilized, and higher gas prices increased the gas-to-fuel switching demand. But oil prices eased in the Asian morning session with Brent futures back at $100/barrel and WTI futures below $93. A warmer winter in the early weeks is putting a lid on demand, and hawkish central bank messages have also hinted at slowdown concerns. Meanwhile, OPEC+ member states, including Iraq, Venezuela and Kazakhstan, suggested readiness within the 23-strong oil producing alliance to intervene and restore balance in the oil market. This is building up concerns on a potential OPEC cut at its Sept 5 meeting. Corn futures surging at Asia open US corn futures rose to a fresh 2-month high in early Asian hours, following last week’s gains supported by concerns that hot and dry weather in the Midwest during the final crop development period may limit the production outcome. USDA’s crop progress report found a 2% decline in the share of the crop rated good or excellent, with 55 percent of fields falling in those two categories. The rating was a new five-year low for this time of year and the second lowest rating since the drought year of 2012. This comes on top of slow shipments from Ukraine and drought in China. The world's fourth largest iron ore miner, Fortescue releases 2nd highest profit on record Fortuecue Metals (FMG) posted a 40% drop in full-year profits. Despite posting record shipments to China, the steep declines in iron ore prices saw the company record a A$6.2 billion profit, down from the A$10.35 billion last year. The result still marked Fortescue’s second-highest profit on record, with the company to pay a final dividend of A$1.21 per share, taking the total payout to A$2.07 (which is a 75% payout on NPAT). So what’s next for Fortescue, the world’s 4th largest iron ore miner? Fortescue sees iron ore shipments being 187m-192m tones in the year ahead (that's another record). Fortescue also overhauled its management and wants to accelerate its push into clean energy. Its clean energy business, Fortescue Future Industries aims to produce an initial 15 million tons a year of green hydrogen by 2030, to help sectors including heavy industry and long-distance transport, decarbonize. $600-$700 million will be spent on clean energy in the coming financial year. As we covered last week in our BHP interview, iron ore demand is likely to slow over the coming 30 years (that’s where Fortescue’s income comes from). Meanwhile, the world requires double the amount of green metals. So the question remains; can Fortescue diversify its business in time? Fortescue’s shares are up 21% from their July low, with investors hoping China infrastructure stimulus will support iron ore demand and boost the company’s earnings.   What to consider? Powell’s message at Jackson Hole gets serious While Powell still stayed away from clearly defining a rate path or the expected terminal rates for the Fed, his strong message did suggest that the fight against inflation is far from over. Powell reiterated that the decision on September 21st on whether the Fed will lift rates by 50bps or 75bps will be driven by the “totality” of data since the July meeting. That puts a great deal of emphasis on the US jobs report due on September 2nd, and the US CPI report due September 13th. There was also some emphasis on rates being held at the peak rate for some time, but there isn’t a substantial change to the market’s expectation of the Fed path yet, with cuts still seen for next year by the money markets. Other Fed speakers still see higher terminal rates Inflation remains the overarching theme in all the Fed talk, and no comfort is being taken from the softening in July inflation. Mester (2022 voter) accepted Fed hasn’t reached neutral rates yet, and said that rates need to go above 4% and held there for some time. Bostic (2024 voter) also suggested a higher terminal rate of 3.5-4.75% compared to what was reflected in the June dot plot, and said rates need to be held there for some time and rate cut talks are premature. The deal between U.S. and China on ADRs Market chatters about a deal between the U.S. and China regulators regarding the allowance to the U.S. regulators access to audit work papers of the auditors of Chinese companies listed on U.S. bourses first emerged last Thursday and the deal was announced by the U.S. and China regulators on Friday.  According to the Public Company Accounting Oversight Board (PCAOB), the agreement gives the U.S. regulator, “complete access to the audit work papers, audit personnel, and other information [the PCAOB] need[s] to inspect and investigate any firm ‘the [PCAOB] choose[s], with no loopholes and no exceptions. But the real test will be whether the words agreed to on paper translate into complete access in practice”. On the other hand, in its announcement and Q&As with reporters, China Securities Regulatory Commission emphasized “the principle of reciprocity” and that “the two sides will communicate and coordinate in advance to plan for inspections and investigations”. The materials such as audit work papers that the U.S. regulator need[s] access to will be obtained by and transferred through the Chines side.  The Chinese side will also take part in and assist in the interviews and testimonies of relevant personnel of audit firms requested by the U.S. side.” Meituan delivered solid Q2 results Meituan (03690:xhkg) reported a 16% YoY growth in revenues to RMB 51 billion, above market expectations across segments better performance.  Adjusted net profits turned positive to RMB 2.1 billion versus a loss of CNY 2.2 billion in Q1 and analyst consensus of an over RMB 2 billion loss.  The company’s food delivery business a strong recovery and the management said that the recovery continued into July and August, with order volumes rising in low-teens YoY in July and at about 20% YoY in August month to date. Soft US PCE confirms the CPI message Lower pump prices cooled price pressures in July, and this has been re-confirmed by the PCE print on Friday. Headline came in at 6.3% YoY (vs. 6.8% expected) while core was at 4.6% YoY (vs. 4.7% expected). The market reaction to these softer numbers was however restrained as the hawkish message from Powell at Jackson Hole took the limelight. The magnitude of the September rate hike still remains a coinflip, but the Fed members have refused to take comfort with the softer CPI print and continue to push for an aggressive fight against inflation. ECB speakers remain committed to inflation despite recession risks A host of ECB speakers on the weekend continued to push for aggressive rate hikes to fight inflation. Schnabel, speaking at Jackson Hole, said rates must be raised, even into a recession. Kazaks also emphasised on further front-loading of rate hikes after the 50bps rate hike announced by the central bank in July. In fact, there were hints of a 75bps rate hike. There were also some concerns on a weaker EUR, as that fuels further inflationary pressures and the benefit of cheaper exports is diminished by supply chain disruption. Villeroy said that the neutral rate should be reached before the end of the year while Kazaks said he would get there in the first quarter of next year. Australian retail trade surged to another record; with dining out and a winter clothing sprees fueling the charge  Australian retail sales data showed how resilient the Aussie consumer is, with retail spending rising for the 7th straight month, up 1.3% vs the +0.3% consensus expected. As electricity bills in Australia are at a record high, and likely to rise, people are layering up this Aussie winter, so retail spending surged to another new record high, A$34.7 billion in July. The Australian winter spending spree saw Department Stores sales surge 3.8% and clothing (footwear and personal accessory retailing) rocket up 3.3%. Australians are living through one of their coldest winters in history; as such spending rose the most in the coldest climates; Victoria and the ACT. Yet spending at cafes and restaurants remained strong, surging to yet another brand new record high (A$5 billion in July), up from 1.8% from the prior month. All this, is despite a softening Australian housing market and the quickest succession of rate hikes in history.   For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: APAC Daily Digest: What is happening in markets and what to consider next – August 29, 2022
European Central Bank - There Is A Need To Strengthen Measures That Curb Inflation

Global Recession Is Coming. Central Banks Want To Rein In Prices

Marc Chandler Marc Chandler 29.08.2022 12:26
The poor preliminary PMI readings, the ongoing European energy crisis, and the recognized commitment of most major central banks to rein in prices through tighter financial conditions are risking a broad recession. These considerations are weighing on sentiment and shaping the investment climate. Most high-frequency data due in the days ahead will not change this, even if they pose some headline risk.   What we have seen among some central bankers applies to market participants too  It is not so much that these central bankers are congenitally doves or hawks, but they are simply activists. Whether conditions warrant tighter or easier monetary policy, the activists lead the charge and are more aggressive than most of their colleagues in both directions. Similarly, some market participants are just extreme in their views. On the one hand, given that market returns are often characterized by fat tails, it makes sense that market views are not normally distributed. Hugging the median (there is rarely truly a consensus, despite the market jargon) draws little attention and is unlikely to promote sales of research products and newsletters.   On the other hand, depending on the corporate culture, there may be little incentive to take the risk of standing out from the crowd  It is as if some take Keynes to heart: "Worldly wisdom teaches that it is better for reputation to fail conventionally than to succeed unconventionally." Sometimes, corporate culture is broad enough to accept either approach, allowing the idiosyncrasies of the economist/analyst wider latitude. However, some are conditioned to fear being wrong that they do not let themselves be right. For them, being part of the crowd is safe. Being part of the consensus nearly always gets less pushback than being an outlier.   II Three high-frequency economic prints next week will likely move the markets whether they meet expectations or not: China's PMI, the eurozone's CPI, and the US employment report  These are the three biggest economies, and each is struggling to put it mildly. The data are unlikely to change this view but could impact the policy outlook. In addition, extreme weather aggravates existing challenges, including the energy crisis, supply chain disruptions, and inflation pressures.   The US, Japan, the eurozone, and Australia's preliminary composite PMIs fell below the 50 boom/bust level  Ironically, the UK's held slightly above, though the Bank of England of a recession that will extend into 2024. Where is China?   Its July composite stood at 52.5. It had been below 50 due to the lockdowns associated with its zero-Covid policy from March through May. It reached a 15-month high in June of 54.1.    In the US, we argued that back-to-back quarterly declines in output were a bit of a statistical quirk stemming from the challenge of managing inventories in the current economic environment and trade, to a lesser extent  While recognizing that a sustained economic contraction was likely, we did not think it actually had begun and expected policymakers to act accordingly.   In China's case, the economic data is consistent with growth  The median forecast in Bloomberg's survey sees the world's second-largest economy expanding by 3.4% quarter-over-quarter after a 2.6% contraction in Q2. However, Chinese officials are acting as if it were in a recession or will be shortly. It unexpectedly shaved its benchmark one-year medium-term lending facility rate and allowed lending prime rates to be cut. The larger (15 bp) cut in the five-year rate clearly reflected the ongoing concerns about the housing market. Beijing is using command functions and coordinating capabilities to push lending from banks to the property sector and new local government borrowing for infrastructure projects. It has accepted a weaker yuan against the US dollar. It fell to a new two-year low last week. The softer the PMI, the more the market will look for further easing, including reducing required reserves.   On August 31, the eurozone publishes its preliminary estimate of the month's CPI  Headline inflation accelerated to 8.9% in July, surpassing the US 8.5% pace. The median forecast in Bloomberg's survey is for the pace to tick up slightly to 9.0%. In addition, the core rate is seen edging up to 4.1% from 4.0%.  Many EMU members are helping struggling households by cutting the VAT on energy or other subsidies, but the price of energy is rising even quicker  While there is some debate over whether US inflation has peaked, there is less debate in Europe. Prices are still rising. Seasonal patterns may be distorted, but July's monthly change has been less than June since 2003. August's monthly CPI has increased more than July's since 2000, with the one exception of 2020 when it matched July's 0.4% decline. This month's inflation is expected to rise by 0.4% after the 0.1% increase in July. The weakness of the euro also risks boosting prices. The single currency is off about 2.5% this month after falling roughly 4.8% in the previous two months.  The European Central Bank meets on September 8  The swaps market is confident that even though the flash PMI warns that output is contracting, the ECB will continue to hike rates. Following the half-point increase in July, the market expects another 50 bp hike next month. More than that, the swaps market has about a 50% chance of a 75 bp move. Press reports confirmed that several ECB officials want to discuss a three-quarter point hike. That said, they do not appear in the majority. Not to get too far ahead of the game, but the market is pricing in around 85 bp of tightening in Q4 (two meetings, October 27 and December 15). The latest Bloomberg survey found a median forecast for the euro to finish the year at $1.02. This seems increasingly optimistic. A one-standard-deviation band around the year-end forward suggests a mathematical range of about $0.9430 to $1.0675. While the median is in the upper third of the range, our subjective idea would put it in the bottom third.  That brings us to the US August employment report on September 3, just before the long holiday weekend (Labor Day, US markets closed)  Recall that nonfarm payrolls rose about twice as much as expected in July, 528k. That the average growth in the first seven months was slightly above 470k. In the Jan-July period last year, the US grew about 555k jobs a month on average. However, that appears to have underestimated US job growth. In the benchmark revisions announced last week. The US added 571k more private sector jobs in the year through March, which translates into around 47.6k more a month.   The median forecast in Bloomberg's survey has crept up in recent days to 300k  The unemployment rate, which slipped to a new low of 3.5%, is expected to remain unchanged, while a 0.4% rise in average hourly earnings could see the year-over-year pace ticked back to 5.3% year-over-year. It was at 5.2% in June and July. By nearly any reckoning, that would still be a solid report and one that will likely encourage the Fed to deliver another 75 bp hike when it meets in late September.    Market sentiment has swung back and forth a bit over the likelihood of a third consecutive 75 bp hike  Despite the poor housing sector data and the dismal PMI, the Fed funds futures market finished last week discounting a little more than a 2/3 chance of a 75 bp instead of 50 bp. Such a move would lift the target to 3.00%-3.25%. The pricing suggests that Fed will likely slow the hikes going forward. The market is pricing in a year-end rate between 3.50% and 3.75%. The market is pricing in a strong probability of a hike in Q1 23 (~80% chance). This was unchanged from before Powell's speech at Jackson Hole. In the middle of last month, the Fed funds futures market had priced in 60 bp of cuts next year. That was the gap between the implied yield of the December 2022 Fed funds futures and the December 2023 contract. It finished last week near seven basis points., about two basis points less than before Powell's speech. III The dollar's two-week rally that began August 10-11 may not be over despite the volatility spurred by position adjusting around Powell's Jackson Hole speech Powell specifically warned that some pain will be associated with efforts to rein in inflation, which the Fed is committed to doing. That seems to suggest some economic weakness will not interfere with its course until inflation convincingly moves back towards its target. Other major central banks, but the Bank of Japan, have implied pretty much the same thing.   Dollar Index:  DXY rallied from a six-week low near 104.65 on August 10 to slightly above 109.25 on August 23. However, it stopped short of the mid-July high of almost 109.30. The sell-off before the weekend took it briefly through 107.60 to set a new low for the week before recovering to almost 108.90. The MACD is rising albeit more gently, but the Slow Stochastic is overextended and suggests that this leg up is getting long in the tooth. Still, the prospect of another healthy job report at the end of next week may deter a significant retreat. The pre-weekend low approached the minimum (38.2%) retracement of the leg up (~107.50).  Euro:  The euro recorded a new 20-year low near $0.9900 on August 23, seeming to complete the leg down that began on August 10 at around $1.0370. However, the Jackson Hole-related position adjustment saw it recover to $1.0090, which marginally surpassed the (38.2%) retracement objective (~$1.0080). The next retracement (50%) and the 20-day moving average are found in the $1.0135-40 area. Yet, the euro continues to struggle and settled nearly cent off its session highs before the weekend. The MACD descent has slowed, and the Slow Stochastic is moving sideways in oversold territory. Selling into upticks continues to be the preferred strategy. A significant low does not appear to be in place. Potential next week to toward $0.9800, maybe.   Japanese Yen:  The greenback reached JPY137.70 on August 23 and settled into a narrow range in dull dealing for the remainder of the week. Although the dollar traded on both sides of Thursday's range ahead of the weekend, it remained mired in the range established on August 23 (~JPY135.80-JPY137.70). The MACD looks constructive, but the Slow Stochastic is poised to turn lower. The US 2- and 10-year yields reached their highest level in two months, which underpins the dollar. Above the JPY137.70 area, the next resistance may be encountered near JPY138.20-40, but there is little standing in the way of another run at the JPY140 area.   British Pound:  Sterling posted a bearish outside down the day before the weekend by trading on both sides of Thursday's range and settling below Thursday's low. The Jackson Hole-related position adjustment stalled at $1.19, shy of the $1.1930 (38.2%) retracement target. It reversed low and fell to $1.1735, just above the two-year low on August 23 (~$1.1720). The MACD is trending lower, but the Slow Stochastic is moving sideways in oversold territory. The 2020 low slightly above $1.14 beckons, and there is little on the charts to prevent it. Sterling cannot sustain upticks even though its discount to the US on two-year yields has fallen from around 135 bp on August 9 to 45 bp in the middle of last week before finishing around 60 bp.   Canadian Dollar:  The US dollar had given back about half of the gains scored since August 11 (~CAD1.2730 to almost CAD1.3065) before Powell spoke at Jackson Hole. That retracement and the 20-day moving average converged around CAD1.2895. The sharp sell-off of US equities ahead of the weekend saw the greenback jump to almost CAD1.3045. The MACD is rising gently, while the Slow Stochastic has begun moving sideways near its highest level in two months near overbought. The poor price action in the S&P 500, with the upside gap on the weekly charts left unfilled before the breakdown to the lowest level since August 2, warns that the US dollar could challenge the CAD1.31 area in the coming days. The nearly two-year high was set on July 14 at around CAD1.3225. That may be the next important chart area.   Australian Dollar:  Like the Canadian dollar, the Australian dollar has recovered half of the losses seen in the latest leg down that began from the August 11 high near $0.7135 and bottomed on August 23 around $0.6855. The Aussie staged a key reversal from that low and closed above the previous day's high. That retracement objective was near $0.7000 and the next (61.8%), and it was briefly surpassed before the weekend and Aussie's reversal back to $0.6900 to take out the previous session's low.   The MACD is not generating a strong signal, while the Slow Stochastic is curling higher after dipping into oversold territory. A return to the $0.6855 area looks likely, and below that could see $0.6800, though a return to the two-year low set in mid-July near $0.6680 cannot be ruled out.   Mexican Peso:  The dollar forged a bottom against the peso in mid-August around MXN19.81-82. That is also roughly where the dollar bottomed in late June. The greenback bounced to MXN20.2665 and retreated last week to around MXN19.85. The momentum indicators are not generating strong signals, but the floor looks strong. In the face of the sharp US equity losses, and the broader risk-off mood, the peso was surprisingly resilient.  It rose by about 0.65% last week. Initial resistance may be near MXN20.06 and then MXN20.11-13. Latam currencies generally outperformed within the emerging market space last week. Four of the top five emerging market currencies were from Latam, led by the Chilean peso's 5.9% rally. The current intervention program runs out on September 30 but could be extended. The intervention to support the Chilean peso after it fell to record lows last month has given the currency a reprieve but could exacerbate the current account deficit, which reached 8.5% of GDP in Q2.   Chinese Yuan: The Chinese yuan slumped to two-year lows last week as policy divergence grew more acute with the latest Chinese rate cuts. More easing of monetary policy is expected, and there is some speculation that another cut in required reserves could materialize in early Q4. China's discount to the US on 10-year bonds rose for the fourth consecutive week, and at 37 bp, was the largest weekly close since June. The PBOC has fixed the dollar weaker than expected over the last few sessions, and the magnitude seems sufficient to suggest a warning from Chinese officials not to get too carried away. That seems similar in spirit to the reports that the State Administration of Foreign Exchange called a few banks last week and warned them about large speculative yuan sales. We suspect the message is that while a weaker yuan is acceptable, the current pace is not. The next objective is around CNY6.90, but the risk of a move to CNY7.0, which did not seem so likely a couple weeks ago, seems more so now.      Disclaimer   Source: The Week Ahead: Dollar Bulls Still in Charge
Commodities Condition After Fed Chair Powell's Speech

Commodities Condition After Fed Chair Powell's Speech

Ole Hansen Ole Hansen 29.08.2022 13:39
Summary:  Our weekly Commitment of Traders update highlights future positions and changes made by hedge funds and other speculators across commodities and forex during the week to August 23. A week that saw financial markets trade increasingly nervous with stocks selling off while the dollar and yields rose ahead of Friday’s speech by Federal Reserve Chair Jerome Powell. Developments that triggered fund selling in precious metals while energy and grains was in demand due to a tightening supply outlook Saxo Bank publishes weekly Commitment of Traders reports (COT) covering leveraged fund positions in commodities, bonds and stock index futures. For IMM currency futures and the VIX, we use the broader measure called non-commercial.   Link to latest report   This summary highlights futures positions and changes made by hedge funds across commodities and forex during the week to August 23. A week that saw financial markets trade increasingly nervous ahead of Friday’s Jackson Hole speech from Federal Reserve Chair Jerome Powell. Stocks sold off while the dollar and bonds yields rose in anticipation of a hawkish message. In the end that was exactly what Powell delivered on Friday when he cautioned about loosening monetary conditions prematurely while flagging the likely need for restrictive monetary policy for longer than the market had priced in to curb high inflation. Commodities The Bloomberg Commodity index rose 1.6% during the reporting week with concerns about the impact on demand from central banks hiking rates to curb economic growth being more than offset by concerns about a tightening supply outlook, especially across energy and key food commodities. Precious metals being the only sector struggling amid the mentioned dollar and yield strength. Overall hedge funds increased their exposure for a fourth consecutive week, this time by 13% to 1.1 million contracts, some 264k above the end of July low point.  Energy: Funds increased bets on rising crude oil prices for the first time in five weeks with the combined long in WTI and Brent being lifted by 22% to 338k lots. This in response to a near +8% rally during the week as the focus returned to a continued tight supply outlook with the gas-to-fuel switching providing an additional layer of support. While the combined gross long was increased by 20k lots, it was a 40k lots capitulation among short sellers that provided the main input to the change.Surging gas prices driving increased demand for diesel helped lift gas oil by 10% and the net long by 24% to 76.5k lots, still only half the 152k lots peak seen from last October. Natural gas traders cut their net short by 66% with the bulk of the change being driven by fresh longs being added. Metals: Precious metals saw renewed selling ahead of Jackson Hole with the stronger dollar and rising yields triggering a fresh round of short selling by funds. The result being a 34% reduction in the gold long to 30k while silver and platinum saw big increases in already established net short positions. Copper found support after China’s government announced fresh initiatives to support an economy struggling with Covid lockdowns and a property sector crisis. The result being a 71% reduction in the net short to -4.8k lots, an 11-week low. Agriculture: The grains sector, led by corn and soybeans, continued to recover from the June to July 25% correction. Buyers bought the sector for a fourth consecutive week with an improved fundamental outlook due to adverse weather in the US and China triggering fresh buying interest. The bulk of the 111k lots increase during this time has been driven by corn with the soybean complex also picking up steam while the two wheat contracts have seen net selling during this time.     Forex The forex market responded to a 1.6% increase in the Dollar index ahead of Jackson Hole by turning broad buyers albeit in small size of dollars against nine IMM currency futures. The two exceptions being GBP and CHF where short covering reduced the net short in both. The euro net short reached 44k lots or €5.5 billion, the highest since March 2020 when the market was in covid panic mode. Overall the gross dollar long reached a three week high at $18 billion, down 24% from last months peak and high for the year at $23.8 billion.   What is the Commitments of Traders report? The COT reports are issued by the U.S. Commodity Futures Trading Commission (CFTC) and the ICE Exchange Europe for Brent crude oil and gas oil. They are released every Friday after the U.S. close with data from the week ending the previous Tuesday. They break down the open interest in futures markets into different groups of users depending on the asset class. Commodities: Producer/Merchant/Processor/User, Swap dealers, Managed Money and otherFinancials: Dealer/Intermediary; Asset Manager/Institutional; Leveraged Funds and otherForex: A broad breakdown between commercial and non-commercial (speculators) The reasons why we focus primarily on the behavior of the highlighted groups are: They are likely to have tight stops and no underlying exposure that is being hedged This makes them most reactive to changes in fundamental or technical price developments It provides views about major trends but also helps to decipher when a reversal is looming   Source: COT: Crude oil and grains bought despite Jackson Hole jitters
PLF: Platinum Will Remain Trading In A Narrow Range

Bullish And Bearish Experts Voted. The Result Is Here!

InstaForex Analysis InstaForex Analysis 29.08.2022 16:54
Relevance up to 09:00 2022-08-31 UTC+2 The Fed's monetary policy remains aggressive, putting pressure on gold following the long-anticipated speech by Fed chairman Jerome Powell at the central bank symposium in Jackson Hole, Wyoming. Powell reiterated that interest rates hikes must continue as inflation remains the biggest threat to the economy. However, some analysts believe that falling inflationary pressure could prompt markets to price in less aggressive moves from the Federal Reserve, which would weaken the US dollar and give support to gold. According to the data released by the US Commerce Department on Friday, its core Personal Consumption Expenditures Index (PCE) increased by 4.6% in July, down from June's annual increase of 4.8%. The CME FedWatch Tool is showing that markets are currently split 50/50 on whether the Federal Reserve would increase interest rates by 50 or 75 basis points in September. A weekly survey by Kitco indicates that Wall Street is largely mixed on gold. Out of 16 surveyed experts, 6 (38%) were bullish, 6 were bearish, and 4 (25%) were neutral. Retail investors were more optimistic, with 53% of respondents seeing gold prices rise. 27% expected gold to drop, while 20% were neutral. In total, 561 votes were cast. Although market sentiment doesn't create a clear path for gold, US interest rates remain the most important factor for the precious metal. If inflation continues to decline, the Federal Reserve will begin to slow down the pace of interest rates hikes. Falling gold prices at the end of last week have led to mixed sentiment in the market. Colin Cieszynski, chief market strategist at SIA Wealth Management Inc, said he is bullish on gold next week as Powell's comments didn't add anything new to the current outlook. "He didn't really say much that was new and noteworthy enough to push treasury yields or USD higher in the short term," Cieszynski said. "The US dollar is looking exhausted technically as it is and due for a correction, which could take some of the recent pressure off of gold." Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   Source: Forex Analysis & Reviews: Gold faces difficulties after Jerome Powell's remarks in Jackson Hole
Recession Fears Continue To Rattle the Commodity Markets - Brent Crude Oil, Silver Futures Touch 4-week lows, Corn Futures Reach 6-week Highs.

Recession Fears Continue To Rattle the Commodity Markets - Brent Crude Oil, Silver Futures Touch 4-week lows, Corn Futures Reach 6-week Highs.

Rebecca Duthie Rebecca Duthie 29.08.2022 14:00
Summary: Investors weigh Brent crude supply against a prolonged economic slowdown. Silver futures fall in the wake of declining demand and rising interest rates. Poor corn crop drives prices. Brent Crude Oil holding steady heading into the week Following a 4.4% increase last week, Brent crude futures held steady above $100 per barrel on Monday as investors weighed supply-side concerns against concerns that a prolonged global economic slowdown may damage gasoline consumption. In an effort to calm the choppy markets, Saudi Arabia suggested last week that OPEC+ production might be reduced. Congo and Libya backed this idea. Fears of more oil flow disruption were fueled by violent confrontations between rival militias in Libya's capital, while delays at a crucial Kazakhstani crude export facility continued. Expectations of an immediate restart of Iranian oil shipments have been reduced as nuclear discussions between the US and Iran continue into next month. Fears of a recession have been rattling commodity markets since June, and oil is expected to decrease for a third consecutive month. Jerome Powell, the chair of the US Federal Reserve, emphasized the need for higher interest rates on Friday, even at the risk of some short-term economic hardship, and ECB leaders shared the same outlook. Brent Crude Futures Price Chart   Silver prices are touching 4 week lows The price of silver dropped to a 4-week low of 18.678 USD/t.oz due to declining demand and rising interest rates all across the world. As China and India take advantage of cheap oil and gas from Russia, while Europe is shifting back to coal as an energy option, progress toward green technology, such as the development of solar panels, has suffered a setback. The Inflation Reduction Act, however, will allocate $430 billion to renewable energy in the US. Additionally, a recession in the global economy is causing large consumers to buy less silver jewelry and buy less technology and cars. Store closings caused by Covid epidemics have caused China and India to decline. On the supply front, Latin America's silver production has recovered from the Covid-19 setback thanks to the region's largest producers, Mexico and Peru, who relaxed limitations before the rest of the world. Since its March peak, when Russia's invasion of Ukraine sparked a rally in precious metals, silver has fallen by almost 30%. Silver Sep ‘22 Futures Price Chart   Corn futures touching 6-week highs After the USDA reported poor crop conditions amid heatwaves in the Midwest and plains, corn climbed to a 6-week high. The organization gave a rating of 55% good to excellent for the US maize crop, down from 57% the week before. Regarding demand, the USDA reported that export inspections reached a total of 740,508 tonnes in the week ending August 18th, which was in line with market expectations. As a result of anticipating additional damage from the recent dry and hot weather, the European Union's crop monitoring service MARS reduced its production projections once more for summer crops throughout the union, including significant reductions in maize (corn). Corn Dec ‘22 Futures Price Chart Sources: finance.yahoo.com, tradingeconomics.com
Natural Gas Has Strong Support, Continuation Of The Downward Trend Is Unlikely

Natural Gas Prices Still Fell Besides Russia Shuts The Key Nord Stream Pipeline Down. Dependence Coming To An End?

Saxo Strategy Team Saxo Strategy Team 30.08.2022 09:18
Summary:  Markets traded mostly sideways yesterday as the US dollar’s advance was stymied and US yields pushed back slightly lower. China continues to allow its currency to trade toward the lows for the cycle versus the US dollar as the 7.00 area nears in USDCNH. The euro bobbed back up toward parity versus the US dollar yesterday as natural gas prices fell even as Russia shuts the key Nord Stream pipeline down for a purported few days of maintenance.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities stabilised yesterday following that knee-jerk reaction on Friday to the Jackson Hole presentations with S&P 500 futures touching and bouncing off the 50-day moving average closing above the critical 4,000 level. S&P 500 futures are trading around the 4,044 level this morning sandwiched between the 100-day moving average above this level and the 50-day moving average below suggesting a bigger move is shaping up in either direction. The next big shift in sentiment will be when we get the US August CPI print on 13 September as that is the key data point to shape expectations from current levels. Hong Kong’s Hang Seng (HSIQ2) and China’s CSI300 (03188:xhkg) Hong Kong and mainland China equities pulled back moderately, Hang Seng Index -0.9%. Tech names were weak. Hang Seng Tech Index plunged as much as 3% before bouncing off the lows to finish the morning session down 1.7%.  According to the Ministry of Industry and Information Technology, smartphone sales in China fell 2.9% YoY in the period between Jan and July. Despite reporting solid 1H results, China automaker, BYD (01211:xhg) slid 0.6%. In A-shares, mining stocks, gas, electric equipment, and auto parts underperformed, CSI 300 -0.5%. Pinduoduo (PDD:xnas), a leading Chinese eCommerce platform listed on Nasdaq reported strong 2Q results, showing stronger than peer gross merchandise value growth and better-than-expected margin improvement. US dollar and especially USDCNH The US dollar tried higher, but failed to follow through as risk sentiment stabilized and US Treasury yields eased back lower. The USDCNH rate, however, continues to push toward the high of the cycle, trading near 6.92 this morning. EURUSD trades near parity this morning after natural gas prices fell sharply in Europe yesterday and despite ECB Chief Economist Lane arguing for steady rate increases (pushing back against the pricing of a possible 75 basis point move at next week’s ECB meeting). Incoming data this week will be critical for USD direction. JPY weakness to bring back pressure on Bank of Japan USDJPY is back to testing its record July highs despite little change in money market pricing of the Fed rate path following Powell’s hawkish speech at Jackson Hole. The peak Fed funds rate is still priced in at 3.8%, while some of the Fed speakers have started to suggest 4%+ levels that may be needed to combat inflation. This brings the September dot plot in focus, but we get the jobs and CPI data before that as well. Any further upward re-pricing of the Fed path, if resulting in gains in US 10-year yields, could very well take USDJPY to new highs with Japanese yields still remaining capped due to the Bank of Japan’s yield curve control policy. If, however, US data underwhelms, the room on the downside for USDJPY is tremendous. Crude oil prices (CLU2 & LCOV2) Crude oil prices saw their best day in six weeks amid threats of a decline in supply from OPEC and production outages in Libya. Brent futures rose above $105/barrel although some softening was seen in Asia overnight, while WTI rose to $97/barrel. This follows news from last week that Kazakhstan’s exports of crude may be impacted for months because of damage to its port facility. Meanwhile, negotiations between Iran and the US over the revival of the 2015 nuclear deal could drag on for weeks, easing fears of an imminent surge in supply. Pro Farmer tour see lowest US corn production since 2019 The just completed Pro Farmer tour across the US grain belt helped drive corn futures in Chicago to a two-month high on Monday after the tour saw the US corn crop at 13.76 bn bushels, below USDA forecasts for 14.36 billion bushels. Pro Farmer predicted a soybean crop of 4.54 billion, in line with the USDA’s latest forecast. Wheat, supported by corn’s rally, touched its highest since July 12 despite news that Ukraine agricultural exports could rise to 6.5 million ton in October, double the volume in August.  The soybean vs corn ratio needs to stay low (favouring corn) ahead of the South American planting season in order to persuade farmers there to plant more of the fertilizer intensive crop. US Treasuries (TLT, IEF) US treasury yields eased lower yesterday. An interesting paper presented at the Jackson Hole conference at the weekend suggests that the Fed will have a hard time delivering on quantitative tightening without causing harm to financial market functioning, which could mean less supply of treasuries from the Fed if its shies away from reducing its balance sheet at the previously touted pace of $95 billion/month. Otherwise, incoming US data is the focus through the August CPI release on September 13. What is going on? Shell CEO warns of prolonged European gas crisis Shell CEO Ben van Beurden gave comments from Norway’s ONS conference, suggesting that Europe could face gas shortages for a number of winters. This disproves reports suggesting that Europe has already built reserves for the winter demand and reaffirms our belief that a move to broad-based energy supply will continue to be top of mind in the long run. In the near term, demand destruction appears to be the only possible solution, and Van Beurden stressed the need for efficiency savings as well as rationing. ECB Lane dials back on jumbo rate hike expectations ECB chief economist Lane was on the wires on Monday and hinted at a steady pace of rate hikes in a “step-by-step” manner rather than jumbo rate hikes. This appears to be a pushback against calls for a 75bps rate hike at the September meeting, as he made the case to allow the financial system to absorb the rate changes. Moreover, on inflation, Lane said long-term inflation expectations remain close to the two per cent target, while near-term inflation expectations are quite elevated. BYD reported 1H earnings at the high end of the preannounced range Chinese automaker BYD (01211) reported 1H revenue up 66% y/y to RMB 151bn. In terms of segments, auto revenue surged 130% y/y while mobile handset revenues contracted 4.8% y/y. Net profits jumped 206% to RMB 3.6bn, at the top end of the preannounced range of RMB 2.8-3.6bn. Volume growth (353K new energy passenger vehicles in 2Q, +265% y/y) beating market expectations despite two rounds of price increases in 2022 and supply chain disruptions. The company’s EV market share rose to 29% (vs 17% in 2021). Pinduoduo delivered Q2 results showing stronger than peer sales growth Pinduoduo (PDD:xnas), a leading eCommerce platform with strong penetration into agricultural products and online shoppers from rural areas, reported 1H total revenue up 36% y/y, far exceeding the 3% y/y consensus estimate. The company attributed the revenue growth to a recovery in consumption since mid-May, successful promotion campaigns, and 48-hour daily necessity supply packs for people facing lockdown. The company’s strong market position in rural areas and agriculture-related products also help it stand out from its rivals. In Q2, the company achieved a 20 %-point improvement in margin, reaching 33.5%, but the management cautioned investors that the margin compression was attributed to temporary cost savings early in the quarter and spending had increased since mid-May. Non-GAAP EPS came in at RMB 7.54, +161% y/y. Shares in Uranium companies and other nuclear-related companies are back in the spotlight Japan has signaled its openness to more nuclear power, at the same time, Tesla founder Elon Musk has applauded uranium as an energy alternative, during an energy conference in Norway. Uranium stocks moved higher as a result on Monday in the US, which boosted the Global X Uranium ETF up 7%, to its highest level since June 8. Shares in the Asia-Pacific region followed. Australian stocks saw the most significant moves given the country has the largest uranium reserves globally. Australia’s Paladin rose 11%, Deep Yellow 15% and Boss Energy 10%, while Rio Tinto (which owns a deposit) rose over 1%. Japan’s Mitsubishi Heavy Industries and Tokyo Electric Power gained 3%. Companies to watch in Europe, include Yellow Cake and Kazatomprom. What are we watching next? August U.S. job report is out on Friday There should not be a major surprise. The economist consensus expects a 300,000 payrolls increase in August and a stable unemployment rate at 3.5 % - this is a five-decade low. If this is confirmed, it all points to a healthy labor market (despite the moderate pace of job increases). Today, the U.S. government will also release July data on vacancies and quits. Expect job openings to remain elevated, thus pointing to resilient demand for labor. These figures are unlikely to play a major role at the September FOMC meeting since it is well-known that labor market data are lagged indicators. Inflation remains the main point of concern, as mentioned by Fed Chair Jerome Powell last week at Jackson Hole Symposium. August EZ CPI will be painfully high The consensus expects a new increase of 9 % year-over-year when the data will be released on Wednesday. This should convince European Central Bank (ECB) policy makers to raise borrowing costs by a sizable increase on September 8. At Jackson Hole, ECB’s executive board member Isabel Schnabel indicated the central bank has no other choice but to act with ‘determination’. This is a matter of credibility. According to Bloomberg, traders now price a 50 % chance of a 75-basis points rate hike in September. Earnings to watch Today’s earnings focus is China are lithium miners Tianqi Lithium and Ganfeng Lithium as the growth in electric vehicles sales is putting enourmous pressure on availability of lithium and prices of lithium carbonate. Baidu is another Chinese earnings release to watch today as the company’s footprint in online advertising will give insights into economic activity. Later in the US, earnings to watch are Crowdstrike in the cyber security industry and HP in computing hardware. Today: Woodside Energy, ICBC, China Yangtze Power, Muyuan Foods, SF Holdings, Shaanxi Coal, Midea Group, Tianqi Lithium, Ganfeng Lithium, Bank of Montreal, China Construction Bank, Bank of China, Great Wall Motor, COSCO Shipping, Partners Group, Baidu, Crowdstrike, HP Wednesday: MongoDB, Brown-Forman, Veeva Systems Thursday: Pernod Ricard, Broadcom, Lululemon Athletica, Hormel Foods Friday: BNP Paribas Fortis Economic calendar highlights for today (times GMT) 0700 – Spain Flash Aug. CPI 0830 – UK Jul. Net Consumer Credit 0830 – UK Jul. Mortgage Approvals 0900 – Euro Zone Aug. Confidence Surveys 1115 – ECB's Vasle to speak 1200 – Hungary Rate Decision 1200 – US Fed’s Barkin (Non-voter) to speak 1200 – Germany Aug. Flash CPI 1300 – US Jun. S&P CoreLogic Home Price Index 1400 – US Aug. Consumer Confidence 1400 – US Jul. JOLTS Job Openings 1500 – US Fed’s Williams (voter) to speak 1600 – ECB Speakers Holzmann and others 2030 – API's Weekly Crude and Fuel Stock Report 0130 – China Aug. Manufacturing/Non-manufacturing PMI Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: Financial Markets Today: Quick Take – August 30, 2022
The Macro Factors Have Driven The Dollar To These Levels

Markets Finally Catch Their Breath After The Speech As Dollar Stops Growing

Saxo Bank Saxo Bank 30.08.2022 11:31
Summary:  Today we look at the lackluster session yesterday as risk sentiment found relief after the brief wipeout in the wake of the Fed Chair Powell speech on Friday. Helping to ease pressure on sentiment were the USD halting its rise and US yields easing back lower. In commodities, we look at the latest on the natural gas situation in Europe as Russia is set to shut down a key pipeline for purported maintenance. The corn and wheat outlook, pressure on discretionary spending and related stocks due to soaring energy prices, upcoming earnings reports and more also on today's pod, which features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: High energy costs will crowd out discretionary spending
Investors Are Exposing Themselves To Global Energy Crisis!

Investors Are Exposing Themselves To Global Energy Crisis!

Peter Garnry Peter Garnry 30.08.2022 11:47
Summary:  Consumer discretionary stocks were part of the winners since the Great Financial Crisis, but with rising interest rates and soaring energy costs the consumer is getting taxed on credit and available income for discretionary consumption. These dynamics will intensify and worsen over the winter period in Europe and several sell-side firms are already cutting price targets on many consumer discretionary stocks. We identify the 10 largest global and European discretionary stocks so investors can understand their exposure to global energy crisis. Soaring energy costs are a massive tax on consumption In our recent equity note The tangible world is fighting back we highlighted how intangibles-driven industry groups had outperformed significantly since April 2008 until October 2020. Consumer discretionary stocks was part of this mega trend, but the global energy crisis and especially here in Europe is going be negative for consumer stocks going forward. Primary energy costs in percentage of global GDP has rising to 14% up from 6.5% in 2021 according to Thunder Said Energy. This is equivalent to 7.5%-points tax on GDP which must be offset by households by cutting down on other things. The most vulnerable parts of the economy are the activities that sits at the very top of the Maslow pyramid, so things such as media & entertainment and consumer discretionary. Global consumer discretionary stocks are down 13% after being down as much 20% in June this year relative to global equities since the peak in November 2021 when the Fed announced its pivot on monetary policy in the recognition that inflation was more sticky than initially thought. The initial underperformance was interest rate driven as the higher interest rates caused equity valuations to decline. Higher interest rates also impacts consumption through consumer loans etc., but the critical point to understand is that the energy crisis has not been fully priced into consumer discretionary stocks.  Consumer discretionary stocks have been one of the big winners since the Great Financial Crisis but with households under pressure we expect demand to cool dramatically and several sell-side firms have drastically cut their price targets on many European consumer discretionary companies. MSCI Consumer Discretionary / MSCI World | Source: Bloomberg Watch out for French luxury and the car industry When talk about which consumer discretionary companies that could be in trouble the European luxury industry is probably going to be the hardest hit industry. Next after is the global car industry where the big open question is whether the EV adoption is strong enough to shield Tesla from the demand destruction. The energy tax is bad for consumer stocks but good for global energy companies, so we have also highlighted the 10 largest energy companies in the lists below. The 10 largest global consumer discretionary stocks Amazon Tesla LVMH Home Depot Alibaba Toyota McDonald’s Nike Meituan Hermes International The 10 largest European consumer discretionary stocks LVMH Hermes International Christian Dior Volkswagen Inditex EssilorLuxottica Richemont Kering Mercedes-Benz BMW The 10 largest global energy stocks Exxon Mobil Chevron Reliance Industries Shell ConocoPhillips TotalEnergies PetroChina Equinor BP Petrobras   Source: Consumer stocks to be hit by historically high energy costs
Gas Tenders And Gazprom Is Ready To Discuss About The Supply

Energy: Natural Gas Prices May Be Going Up And Down - Nord Stream Stops Operating Due Maintenance. Crude Oil Prices May Change On September 5, When OPEC+ Meet

ING Economics ING Economics 30.08.2022 11:46
It was a volatile start to the week for energy markets. European natural gas prices sunk, whilst oil moved higher. The next week will be key for markets. For natural gas, we will need to see whether flows along Nord Stream restart later in the week following maintenance. For oil, OPEC+ will hold its monthly meeting on 5 September to discuss supply policy Corn prices have seen significant strength over the last week Energy: oil rallies on growing supply risks ICE Brent is now trading convincingly above US$100/bbl, after settling more than 4% higher yesterday. The market appears to be getting increasingly nervous about growing supply risks from Libya. This is after fighting broke out in the capital, Tripoli, in recent days. Until now there have been no reports that this fighting has impacted the oil supply. However, with Libya pumping around 1.2MMbbls/d, the market is somewhat nervous about potential supply disruptions. Although, given how volatile Libyan supply has been in recent years, one would think that there was some level of risk premium already priced into the market. In addition, market participants might be reluctant to short the market at the moment, given the uncertainty in the lead-up to the OPEC+ meeting on 5 September. This is particularly the case given that the Saudi energy minister said that the group may have to cut output, with a dislocation between the physical and paper market. Since then, a number of other OPEC members have backed Saudi comments. So, potentially, the next meeting could be quite interesting, although it will be difficult to justify cutting output when Brent is trading above US$100/bbl. However, we continue to believe that potential intervention from OPEC+ provides a floor to the market, which is not too far below the recent lows. European natural gas prices came under significant pressure yesterday. TTF settled almost 20% lower, although prices are still trading at more than EUR270/MWh. Following the higher prices run, it seems there has been some profit-taking. From a fundamental point of view, little has changed to justify the scale of the move. Although given the uncertainty and limited liquidity in the market, prices are likely to remain trading at elevated levels with a large amount of volatility. Possibly contributing to the weakness were reports that the European Commission will come up with a proposal to address the significant strength that we have seen in European power prices. Any action which caps power prices will limit the profitability of burning gas for power generation, which could possibly feed through to lower gas demand. At the moment, spark spreads provide little incentive for gas demand destruction from the power generation sector. Finally, Russian gas flows along Nord Stream are set to stop tomorrow (31 August) for three days of maintenance at a compressor station. The market will be eagerly watching to see if flows restart once maintenance comes to an end. Currently, Nord Stream is only operating at about 20% of capacity, and Gazprom has said that flows will return to these levels once the work is complete. If flows do restart when stated, it could provide a bit further downside to European prices in the immediate term. Metals: Fed hawkishness weighs on metals While the LME was closed for a holiday yesterday, prices in early morning trading today have come under pressure, with copper breaking below US$8,000/t. Sentiment in broader financial markets remains downbeat following the hawkish comments from the Fed at the end of last week. As for aluminium, Henan Zhongfu has restarted idled aluminium capacity in Sichuan province in China. The company shut down some of its capacity on 14 August due to power shortages. Large-scale industrials in the region have gradually started resuming operations, following an easing in emergency energy measures. This move should weigh on aluminium prices, although clearly there are still plenty of supply risks for the market, given the high energy price environment in Europe. Mysteel reported that Tangshan located in North China’s Hebei province aims to reduce crude steel output by 8.3mt (from last year’s level) in 2022. As per the latest target, Tangshan’s total crude steel output should not exceed 122.8mt this year, when compared to 131.11mt last year. Cumulatively, crude steel output rose 0.7% year-on-year to 74.7mt in the first seven months of the year. Agriculture: US corn concerns linger The USDA’s latest crop progress report shows that for the week ending 28 August, just 54% of the US corn crop is rated good-to-excellent, which is down from 60% at the same stage last year. Corn prices have seen significant strength over the last week, particularly after the Pro Farmer crop tour suggested that corn yields for the US crop will likely be lower than what the USDA is currently forecasting. Pro Farmer is expecting corn yields to average 168.1 bu/acre compared to the USDA’s forecast of 175.4bu/acre. As a result Pro Farmer expects US corn output to total 13.759 billion bushels, compared to the 14.359 billion bushels that the USDA is currently forecasting.   Canada is likely to see a strong recovery in crop production this year on the back of favourable weather and higher acreage due to stronger prices. In its first estimates for the year, Statistics Canada forecasts wheat production to increase by around 55% YoY to 34.6mt in 2022/23, although this is still lower than the 35.4mt produced in 2020/21. Corn production is estimated to increase by around 6% YoY to 14.8mt in 2022/23. Read this article on THINK TagsPower shortages Oil Natural gas Corn Aluminium Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Unchanging Situation Of Bitcoin And Yesterday's The Fed Decision

Fed Announced It Will Have No Pity For The Markets!

Swissquote Bank Swissquote Bank 30.08.2022 12:58
The US futures look better after the post-Powell selloff, but the market sentiment will likely remain morose after Powell’s clear declaration that the Federal Reserve (Fed) will have no pity for the markets, and continue tightening its policy until it puts inflation on a sustainable path toward its 2% policy target. At this point, it’s difficult to get a pricing that goes against the Fed. Happily for oil bulls, the Fed drama doesn’t concern the energy stocks, which had a good session yesterday thanks to firmer oil prices. The barrel of US crude advanced past the 200-DMA. The European nat gas futures however slumped 20% yesterday, as Germany said its gas stores are filling up faster than planned. But energy prices remain exorbitantly high, and governments are increasingly frustrated with the skyrocketing energy prices that hammer economies and households, while putting a lot of money in energy companies’ pockets. As a result, the European policymakers are now cooking new measures to stop the excessive rise in energy prices and decouple the price of gas from electricity. Investors will be watching how the energy companies will react to the measures. On the data front, Germany and Spain will release the latest inflation update today. The euro is making a great effort to throw itself above parity against the US dollar, and stronger than expected inflation figures could help boosting the European Central Bank (ECB) hawks, but the topside should remain limited. Special focus on Uber: is the company a good play in the long run, what are the short-term risks? Watch the full episode to find out more!   0:00 Intro 0:27 Equities under pressure 1:37 But energy stocks do well 2:17 European nat gas drops 20% on encouraging German news 2:48 European leaders will step in to bring energy prices lower 5:00 Eurozone inflation data in focus 7:59 Focus: Uber Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Energy #crisis #natural #gas #prices #crude #oil #energy #stocks #Exxon #OccidentalPetroleum #USD #EUR #inflation #ECB #hawks #Uber #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH   Source: Europeans preparing to intervene in energy markets! | MarketTalk: What’s up today? | Swissquote
The US Dollar (USD) Surrendered Earlier Gains And Remains Lower!

The US Dollar (USD) Surrendered Earlier Gains And Remains Lower!

Marc Chandler Marc Chandler 30.08.2022 13:12
Overview: Corrective pressures were evident yesterday and they extended today in Asia and Europe but seem to be running their course now. Market participants should view these developments as countertrend and be wary of waning risk appetites in North America today. Most Asia Pacific equities rallied earlier today, save China and Hong Kong. Europe’s Stoxx 600 has retraced most of yesterday’s losses and US futures are trading higher. Benchmark bond yields are softer with the US 10-year note yield off about 3.5 bp to below 3.07%. European yields are mostly 3-5 bp lower, but UK Gilts are pressured by reports that foreign investors were heavy sellers last month. The US dollar surrendered earlier gains yesterday and is mostly lower today. The Australian dollar is leading the charge, despite a much sharper than expected fall in building approvals. Among emerging market currencies, only the Philippine peso and Taiwanese dollar are failing to push higher. Gold is soft, despite the weaker greenback and lower yields. It is nursing losses for the third session. After a sharp 4.25% gain yesterday, October WTI is pulling back by around 1.75% today toward $95. US natgas is off 2%, while Europe’s benchmark has extended yesterday’s 19.5% drop with a further 6.6% slide today. China’s property sector woes are weighing on the steel sector and iron ore prices have fallen 8% over the past two sessions and is below $100 for the first time this month. December copper is off 1% after falling 2.3% yesterday. December wheat is paring yesterday’s 4.6% gain.  Asia Pacific Japan reported that its unemployment rate was unchanged in July at 2.6%. The job-to-applicant ratio unexpectedly ticked up to 1.29 from 1.27. The upticks in the yen, however, are more related to the pullback in US yields than the developments in the Japanese economy. Tomorrow, Japan reports July industrial output, and after the 9.2% surge in June, related to the lagged response to re-opening in Shanghai likely eased a bit. Retail sales offer the opposite trajectory. They fell a whopping 1.3% in June and likely stabilized in July, allowing for a small gain. In June apparel and general merchandise purchases were particularly weak. Rising interest rates are squeezing Australia's property market more intensely than expected. Building approvals plunged 17.2% in July, six-times more than the median forecast in Bloomberg's survey. The drop was driven by the private sector apartments rather than houses. The number of private sector approvals was the lowest since January 2012. The disappointment did prevent the Australian dollar from recovering today, amid the general pullback in the US dollar, but the odds of a 50 bp hike next week were shaved to around 65% from 70% yesterday. Rains in Sichuan have eased the energy emergency allowing large-scale industry to result production this week. The provincial government downgraded the emergency to level-one from level-two yesterday and several companies (including Toyota, Honda, and Foxconn) indicated a resumption of production. Cooler weather was also helping reduce household demand for electricity. Yet, Sichuan has gone from drought to flood. Reports suggest that nearly 325 mines, including 60 coal mines, with 5000 workers have been asked to take shutdown for precautionary reasons. Meanwhile, the zero-Covid policy has led to lockdowns in parts of Shenzhen. Softer US rates and a downside correction in the US dollar after reaching JPY139 yesterday has seen the greenback ease toward JPY138.15. The JPY137.95 area corresponds to a (38.2%) retracement of the dollar rally since before Powell spoke at Jackson Hole at the end of last week. We suspect the corrective pressure have been exhausted or nearly so and expect North American traders to buy the dollar the on the dip. Yesterday's low was slightly above JPY137.35. The Australian dollar took out a neckline of what may be a potential head and shoulder top yesterday but recovered to close above it (~$0.6850). Follow-through buying today has lifted it to around $0.6955. Here too, we think the short squeeze has nearly run its course in the European morning. The $0.6965-70 area may offer the nearby cap. For the fifth consecutive session, the PBOC set the dollar's reference rate lower than the market (median in Bloomberg's survey) expected, and the gap today (~249 pips) was the most since the Bloomberg survey began four years ago (CNY6.8802 vs. CNY6.9051). The PBOC seemed willing to accept an orderly decline of the yuan, especially given the divergence of monetary policy, but wants to avoid a vicious cycle. This was underscored by its announcement of a consultation period as it considers a news policy to require prior approval for companies wishing to sell long-term debt in offshore markets. At the same time, we read the fixing as a type of affirmation through negation, i.e., the PBOC's action acknowledges the strength of the demand for dollars. The dollar rose to a two-year high yesterday, after rising nearly 2% over the previous two weeks. Today, it slipped less than 0.1%. Europe Attention turns to eurozone's August inflation, ahead of tomorrow's aggregate report. Spain began with a 0.1% month-over-month increase that saw the harmonized year-over-year pace ease for the first time in four months. It slipped to 10.3% from 10.7%. However, the core rate rose to 6.4% from 6.1%. German states have reported, and they all showed of the year-over-year rate, even as the month-over-month change moderated to 0.2%-0.4%. The median forecast in Bloomberg's survey sees a 0.4% increase in the harmonized rate for an 8.8% year-over-year increase (from 8.5% in July). The risk is on the upside. With the surge in energy prices, the Bundesbank chief Nagel warned that Germany inflation could rise to over 10%. The EU is holding an emergency energy ministers meetings on September 9 to consider efforts to coordinate a response. The focus appears capping gas prices and/or decoupling electricity prices from gas prices. EU countries have already "spent" and estimated 280 bln euros on tax cuts or subsidies for energy. Quietly, the German two-year yield has doubled in the past two weeks from 0.53% on August 15 to 1.10% yesterday. The German yield has risen faster than comparable US yield. As a consequence, the US 2-year premium has fallen below 240 bp for the first time since early July. It recorded a three-year peak on August 5 a little more than 277 bp. One of the spurs to the more than 22 bp increase in the German two-yield over the past two sessions has been the push from some of the hawks for a 75 bp move at next week's ECB meeting. While it is noteworthy that it was not done via leaks to the press this time, as sometimes is has appeared in the past, and the market seems to think it is likely. The swaps market shows it be a little more than a 60% chance of materializing, up from about a 20% chance a week ago. Our own subjective assessment is that a steady series of 50 bp hikes is more likely to achieve a consensus than a jump to 75 bp and a return to 50 bp or even 25 bp. Given the fragile economic condition, and with little to gain from a larger move than cannot be achieved through the ECB's forward guidance, a stable, predictable course is likely preferable. That said, the provocative tactics of the hawks seems to be an attempt to deliver a fait accompli to the ECB. If they deliver a 50 bp hike, they will appear as dovish versus expectations and could pressure the euro lower in disappointment. The short-covering bounce in the euro began yesterday when the $0.9900 area held. There are a little more than 3 bln euros in options struck there that roll-off today. The gains maybe spurring demand related to 1.55 bln in options struck at $1.00 that expire tomorrow. The euro is at its best level since Powell spoke. Just prior to the Fed Chair's speech last week, the euro spiked to $1.0090. This area should provide a cap now. Sterling's recovery off yesterday's two-year low (~$1.1650) seems less inspired and has not been able to push above yesterday's high (~$1.1785). And even if it does, the upticks will likely be limited to the $1.18 area, which is the (61.8%) retracement of the decline since the high set before Powell spoke (($1.1900). The intraday momentum indicators are stretched by the gains of a little more than half a cent in the European morning. Separately, the decision by the Hungarian central bank is awaited. It is expected to hike the base rate by 100 bp today after hiking by 300 bp last month. This move will bring the base rate to 11.75%. It was at 2.4% at the end of last year.    America The two-year breakeven has now fallen slightly more than 25 bp over the past three sessions to about 2.70%. Over the three sessions, the nominal two-year yield has risen by a grand total of three basis points to 3.42%. The odds of a 75 bp hike next has edged to about 75% from about 66% before Powell spoke at Jackson Hole and gave no signal besides saying it could be 50 bp or 75 bp move. The difference, the 25 bp is coming in addition to the other anticipated moves. What this means is the market now sees the year-end Fed funds target closer to 3.75% rather than 3.50%. The implied yield of the March 2023 Fed funds futures is pricing in about an 80% chance of a hike in Q1, unchanged for the third consecutive session. The market also continues to price in 7-9 bp of easing by the end of next year as it has for the past five sessions. Ahead of the US jobs data, which are the highlight of the week, with the ADP estimate tomorrow, house prices, the Conference Board's consumer confidence, and the JOLTS report on job openings are featured today. While the Fed's Kashkari's comments about the stock market and the Fed's objective of tightening of financial conditions are really revealing anything new, the undiplomatic expression seemed to set the chins wagging. Equity prices are part of the financial conditions but so are interest rates, ease of credit, and asset prices more generally. House price inflation appears to be slowing and this alongside weaker financial asset prices are part of the process. Canada reports its Q2 current account surplus, which is reflecting the positive terms-of-trade shock. Consider that in 2019, before Covid, Canada recorded a C$47 bln current account deficit. With a Q2 surplus of C$6.8 bln expected, it would mean Canada has recorded a nearly C$11 bln current account surplus in H1 22. Tomorrow, Canada reports Q2 GDP and it is expected to have accelerated to around 4.4% form 3.1% in Q1. Still, even with today's modest gain, the Canadian dollar is off about 2.7% this year against the US dollar. The broader risk environment is a more important driver of the exchange rate. Mexico reports its July unemployment rate. It is expected to have ticked up to 3.53% from 3.35%. The market does not appear sensitive to this time series. Tomorrow, the central bank's inflation report is due, but it’s unlikely to impact expectations for a 75 bp hike late September. The US dollar set a new high for August near CAD1.3075 before pulling back toward CAD1.2990. Follow-through selling today has been limited to the CAD1.2970 area, just above CAD1.2965 retracement objective. The momentum indicators suggest that losses below that will be limited and instead the greenback could recover toward CAD1.3025. The Mexican peso's resilience is evident. It continues to trade well within this month's range. The dollar has built a base around MXN19.81 and has not closed above the 20-day moving average (~MXN20.0735) since August 2. However, further dollar losses today look limited.     Disclaimer   Source: Turn Around Tuesday Began Yesterday, Likely Ends before Wednesday
Crude Oil Price:  A Crucial Event Takes Place In The Week Ahead

Brent Crude Oil, WTI, Dutch TTF Gas And Henry Hub Situation. Shortly Gains And Long-Time Situation

Kim Cramer Larsson Kim Cramer Larsson 30.08.2022 14:04
Brent Crude oil has broken above its short-term falling trendline and seems to start reversing the down trend trading around the 0.382 retracement level at USD104.38. Next key resistance is 110.67-112.32, the latter is the 0.618 retracement of the June-August Bearish move. A close above those levels 120-125 is in the cards.If Brent oil drops back below the falling trend line the uptrend is likely to be reversed. If closing below 98.14 it is reversed and 90 is likely to be tested. RSI is still below 60 and needs to close above to underline the uptrend. Source: Saxo Group On the weekly chart we can see that Brent Oil retraced 0.382 of the bullish trend since 2020. RSI is testing its falling trend line and a close above is an indication of Brent resuming its medium- to long-term uptrend Source: Saxo Group WTI Lights Sweet Crude oil that broke out of its falling trendline last week is now in a confirmed uptrend (higher highs and higher lows). However, RSI has not yet confirmed the trend by closing above 60. Resistance at around USD100.23. If buyers can lift WTI above that level the big test is can it move above 55 and 100 SMA’s. If that scenario plays out a move to 0.618 retracement at around 109.18 is likely.If WTI closes below 91.13 the downtrend is likely to resume Source: Saxo Group WTI only retraced around 0.236 of the 2020 extreme low (where WTI oil went to minus 40.32) till (so far) 2022 peak. RSI is still above i.e. in positive sentiment and could test its falling trend line with in a week or so.If WTI loses steam and closes below 85.41 a bearish move to 75.27 and even 65.25 could be seen. Source: Saxo Group Dutch TTF gas has peaked out a few Euros below previous peak at EUR345 – at least short-term - and has since retraced. A correction down to around 240 which is the 0.382 retracement level and a test of the short-term rising trendline is likely. However, a correction down to test the medium-term (black) rising trendline is not unlikely before uptrend quite possibly resumes.RSI is at the time of writing below its rising lower trend line but there is no divergence indicating we could see higher price levels in coming weeks. Source: Saxo Group Henry Hub Gas is having trouble closing above USD10 and could be set for a correction. If breaking the steep rising trendline and drops below 8.87 a correction down to 8.23 is likely but could spike down to around 7.68-7.55 key support.RSI is at the time of writing breaking below its rising trendline and if closing below it support the correction picture. However, there is no divergence on RSI indicating higher levels after a possible correction. Source: Saxo Group   Source: Technical Update - Oil breaking falling trendline, building uptrend. Gas rejected at previous peaks but higher prices are in the cards
Is The OPEC+ Decision Only Economic? Oil Is Caught Between Fears Of A Reduction In Demand

Goldman Sachs Thinks It's A Good Time To Invest In Commodities

InstaForex Analysis InstaForex Analysis 30.08.2022 14:56
Goldman Sachs comments... Investment bank Goldman Sachs note that now is the perfect time to trade commodities. Goldman's analysts Sabine Schels, Jeffrey Currie and Damien Courvalin noted that investors should consider how to access commodities as stocks are likely to suffer even bigger losses. Nevertheless, Goldman Sachs considers recession fears exaggerated. According to analysts, oil is the commodity of last resort in an era of severe energy shortages, and the downturn in the entire oil complex provides an attractive entry point for long-term investments. A supply chain problem pushed oil prices to record highs in June. However, recent recession worries have prompted a pullback in prices due to fears of a slowdown in demand.   Jerome Powell Federal Reserve Chairman Jerome Powell's speech at the Jackson Hole symposium on Friday doubled down on those concerns as he remained hawkish and signaled that rates could stay high longer. Stocks fell in response to Powell's comments, with the Dow Jones Industrial Average falling more than 1,000 points on Friday and another 300 points on Monday.     According to the forecast of Goldman Sachs economists, the outlook for stocks is even more dire than expected. Stocks could take a hit as inflation remains high. And now is the time to return to commodities. They noted that commodities are the best asset class to hold late in the cycle when demand remains above supply. One of the obstacles may be further growth of the US dollar index, which is trading near 20-year highs. This makes buying goods in other currencies more expensive.   Relevance up to 09:00 2022-08-31 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320282
The Natural Gas Downside  Looks Supported By The 200-day SMA

NGAS Prices Touching Near 14-year Highs, Cotton Futures Trading Near Two-month Highs, Gold Futures Fall To Near One-month Lows

Rebecca Duthie Rebecca Duthie 30.08.2022 14:58
Summary: Heatwaves in the U.S and a pause in Gas flowing through the Noord Stream 1 pipeline. Gold’s appeal falling. Global cotton supplies look bleak. NGAS prices close to 14 year highs Following the expiration of the front-month September contract on Monday, US natural gas futures declined. Nevertheless, despite predictions for hotter weather and more cooling demand, prices are still very close to a more than 14-year high reached last week. As energy generators increase production to fulfill the demand for more cooling due to a string of heatwaves this summer across the US, demand from gas-fired power plants has reached all-time highs. The bullish outlook was further boosted by prospects of greater demand for US LNG supplies amid mounting worries about shortages in Europe. Russia's Gazprom announced that beginning on Wednesday, flows via the Nord Stream 1 pipeline to Europe would be stopped for three days. As a result of retracting earlier claims of an October restart and halting further upward momentum, Freeport LNG said that it will postpone the restart of its Quintana export project until November. NGAS Oct ‘22 Futures Price Chart A strong dollar is driving the demand for gold down Tuesday saw gold prices linger around $1,740 per ounce, near to the one-month low they reached the previous session, and under pressure from a strong dollar amid expectations that US interest rates will continue to rise. Federal Reserve Chair Jerome Powell emphasized the need to raise and hold rates at a restrictive level until inflation falls significantly in his speech at the Jackson Hole symposium. He added that doing otherwise may harm growth and weaken the employment market. Policymakers of the European Central Bank argued for a more forceful response to rising inflation over the weekend, and they are allegedly talking about increasing interest rates by 75 basis points in September. Higher interest rates increase the opportunity cost of storing non-yielding bullion, which reduces the appeal of gold, despite the fact that it is commonly seen as a hedge against inflation and economic uncertainty. Gold Dec ‘22 Futures Price Chart Cotton prices trading near two-month highs The price of cotton futures was trading close to a nearly two-month high reached on August 16 as traders weighed the likelihood of reduced global supplies against a slowing in demand. The most recent USDA data stated that due to drought, particularly in Texas, which generally accounts for more than half of the US plantings, US production for 2022–2023 is predicted to drop to 12.6 million bales, which would be the lowest level since 2009–2010. The USDA also decreased its forecasts for global cotton consumption and production by 800,000 bales and 3.1 million bales, respectively. Heavy rains and bugs have severely damaged the cotton fields in India, another top producer, to the point where the government is now importing cotton. Cotton Oct ‘22 Futures Price Chart Sources: finance.yahoo.com, tradingeconomics.com
In The Oil Market  Prices Are Rising Again And Gold Is Also Gaining

Gold Is Failing To Bounce Back, Crude Oil Prices Are Lower And Lower

Craig Erlam Craig Erlam 30.08.2022 16:14
Saudi Arabia reinforces support Oil prices are easing a little with Brent potentially settling around $100 and WTI a little below around $95. While there remain many moving parts in the oil market at the moment, the comments last week from Saudi Arabia have reinforced support below the current price. It seems OPEC+ isn’t interested in the oil price slipping much below $100 a barrel and while those warnings would be put to the test in the event of a nuclear deal, which still looks very challenging, or a global recession, the words alone could keep prices high for now. Gold failing to bounce back Gold continues to struggle in the aftermath of Powell’s comments on Friday, even though the dollar is falling on Tuesday and US yields are a little lower. The yellow metal continues to test $1,730 today, a sign that not all are on board with the recovery trade we’re seeing elsewhere. A significant break of $1,730 would be a real blow for gold, with the next area of notable support falling around $1,680-$1,700. A move back above $1,765 could get gold bulls excited once more but that may be easier said than done if trading over the last few sessions is anything to go by. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.   Source: Oil prices dip, gold under pressure
Further Decline In Gas Prices May Create The Foundation For EUR/USD Correction

Further Decline In Gas Prices May Create The Foundation For EUR/USD Correction

InstaForex Analysis InstaForex Analysis 30.08.2022 17:00
Relevance up to 14:00 2022-08-31 UTC+2 Currently, most investors are confident that the USD index rally will continue, and the trend in US stock indices will remain bearish. They also ignore the increase in the likelihood of a 75 bps increase in the ECB deposit rate in September to over 50%, and the reluctance of the VIX fear index to climb well above 25, signaling no panic in the stock market. Going against the crowd is always dangerous, there is a risk of being burned at the stake, but trends break at the very moment when the majority is sure that they are right. After Jerome Powell's speech at Jackson Hole, the Fed's position became more than transparent. Regardless of the further dynamics of inflation, the Central Bank intends to raise rates, as a pause in this process can turn into sad consequences. Entrenched high prices and a deep recession. The Fed is ready to sacrifice the labor market, so I would venture to assume that the August employment statistics are unlikely to dot the I. Everything will depend on inflation data on September 13. That's when it will become clear whether the rate will increase by 50 or 75 bps at the next FOMC meeting. This circumstance, in my opinion, transfers the initiative from the Fed to the ECB. Indeed, European inflation data is released earlier, and the Governing Council meeting is approaching. They are clearly worried about the fall in EURUSD, which accelerates energy prices, raises inflation expectations and pushes the eurozone into recession. Christine Lagarde and her colleagues must do something. And the best option seems to be a 75 bps increase in the deposit rate on September 8. Dynamics of European inflation expectations It is about such a step that the heads of the central banks of Austria and the Netherlands, Robert Holzmann and Klaas Knot, are talking about. Nevertheless, investors are used to seeing them as the main hawks of the Governing Council, and the statement by ECB chief economist Philip Lane that monetary policy should be tightened gradually to look at the reaction of the economy, brought down the EURUSD bulls' momentum. In fact, it was Lane who put forward the proposal to raise the deposit rate by 50 bps in July, although before that, he also talked a lot about gradualism. In my opinion, a further decline in gas prices against the backdrop of growing occupancy of European storage facilities and an increase in LNG imports from China, coupled with the acceleration of European inflation and the "hawkish" rhetoric of ECB officials, will create the foundation for EURUSD correction. The dollar in the current situation will be able to draw strength only in the fall of the S&P 500. However, the stock index is able to jump up in response to weak employment statistics in the US. Technically, on the 4-hour chart, the consolidation of EURUSD above the pivot point at 0.999 and moving averages indicates the seriousness of the intentions of the bulls. The longs formed on the break of resistance at 0.9985–0.9999 are kept and increased in case of updating the local high at 1.0055 or on a rebound from parity. Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Source: Forex Analysis & Reviews: Euro goes against the crowd
No To Hunger - Ships From Ukraine Arrived To Africa, Canada's Crops Feel Better

No To Hunger - Ships From Ukraine Arrived To Africa, Canada's Crops Feel Better

Saxo Strategy Team Saxo Strategy Team 31.08.2022 08:52
Summary:  US stocks move below the key 4,000 level for the first time since July, while also moving under the 50-day moving average, signifying the S&P500 could gain momentum to the downside and potentially retreat to the low set in June. Selling pressure in GBP ramps up, crude oil prices tumble from fresh highs, iron ore retreats below the key $100 level and could remain contained for the year ahead, meanwhile, coal prices remain in record territory. The first shipment of wheat out of Ukraine arrives in Africa. In company news, we cover the latest in the EV space, plus what the latest is from Crowdstrike, the cybersecurity giant. Here is what's happening in markets right now, and what to consider next. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) again on the back foot, being pressured lower US equities fell for the third straight day on Tuesday, with the S&P and the Nasdaq both falling 1.1%. Pressure fell upon equities last night for several key reasons; firstly the market had another reality check - rate rises will intensify. New York Fed President John Williams said on Tuesday restrictive policy will be needed to slow demand, and rate hikes have not achieved that yet. Over in Europe a policy makers said the ECB should make a 75 basis-point hike at its September meeting. All in all, this caused short-term rates, the US 2-year Treasury yield, to rise to its highest level in almost 15-years, as traders bet more rate hikes are coming. This pressured commodity prices, which pulled back on fears rate hikes will soften demand. On top of that OPEC+ didn’t discuss production cuts. So Oil fell ~6%. WTI settled around ~$91.64. As such, the Oil and Gas sectors fell 4%, adding the most weight to Tuesday’s drop. Secondly, equities were also pressured on fears that geopolitical tensions could escalate, after Taiwanese soldiers fired shots to ward off civilian drones flying close to islands near China. And Thirdly, equities are also facing end of month rebalancing; where investors typically take profits from top performers and buy laggards to bring their assets allocations into alignment. Noteworthy movers in US equities   Retailers Big Lots (BIG:xnys) and Best Buy (BBY: xnys) surged 11.8% and 1.6% respectively after reporting Q2 earnings that beat market expectations.  Big Lots’ narrower loss was attributed to margin improvements from cost controls. Likewise, Best Buy’s better-than-expected earnings was largely due to cost controls, as sales fell nearly 13% YoY in the quarter. The discount retailers indicated they’re copping the brunt of trade-downs, while they also warned about a pullback in consumer spending.  U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas)   Treasury yields were little changed on Tuesday, with the 2-year yield rising modestly by 2bps to 3.44% as the market continued to price in a 75bp Fed hike at the September FOMC.  The stronger JOLT job openings data and consumer confidence data, plus Fed officials’ reiteration of determination to bring inflation back under control contributed to the bids to the front end of the curve. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg)   Hong Kong and mainland China equities pulled back moderately, Hang Seng Index -0.37%. Tech names were weak.  Hang Seng Tech Index plunged as much as 3% before bouncing off the low to finish the day only 0.5% lower.  The news of Shenzhen and other cities stepping up pandemic control measures fuelled the risk-off sentiment that has already been hanging over the market.  Share prices of Chinese developers were broadly lower as mortgage repayment boycott cases increased to 103 cities and 347 development projects.  According to the Ministry of Industry and Information Technology, smartphone sales in China fell 2.9% YoY in the period between Jan and July.  Despite reporting solid 1H results, China automaker, BYD (01211:xhg) slid 0.5% following an exchange filing showing that Buffett’s Berkshire Hathaway reduced its stake in the company. Auto retailer, Zhongsheng (00881:xhkg) plunged by 7%.  In A-shares, mining stocks, gas, electric equipment, and auto parts underperformed. In U.S. trading, Hang Seng Index Futures tumbled 2.3% in a confluence of factors including Taiwanese soldiers on front-line islands firing shots at civilian drones believed flying from mainland China, a newswire report saying the U.S. regulator, PCAOB, selected Alibaba (BABA:xnys/09988:xhkg) for audit inspection commencing in September, Berkshire Hathaway reducing holdings in BYD, Covid-related lockdown concerns, and the continuous decline of the U.S. equity markets.  Compared to their closes in Hong Kong, ADRs of BYD fell by 4.2%, and Alibaba by 3.3%. Selling pressure in GBP ramps up Despite a relatively stable USD, pessimism built in sterling after Goldman Sachs hinted that peak inflation in the UK could reach 22% in early 2023 and downgraded its GDP forecast. GBPUSD touched lows of 1.1622 before settling around 1.1660. EURUSD was stable-to-stronger given the stabilising gas situation and the hawkish ECB rhetoric pushing for a jumbo rate hike at the September meeting again. EURGBP pushed higher to 0.8600, its strongest levels since early July.   Crude oil prices (CLU2 & LCOV2)   Crude oil was down over 6% after recording the best day in six weeks on Monday when Brent traded above $105/barrel. The reversal yesterday came on the back of a general improvement in risk appetite as European gas prices plunged. This will likely lower diesel prices, reducing the demand for oil. Fresh lockdown announcements in key Chinese cities also raised demand concerns. Meanwhile the supply situation looked better in the near-term amid reduced Iraq supply disruptions risk and rumours of a potential Iran agreement. Oil inventories also surprised with 593k barrel rise. Reports that OPEC+ not considering a production cut supported price action in the Asian morning hours, and WTI futures reversed to inch back above$92/barrel. Further volatility can be expected in European gas prices today, and that could spill over to crude oil as well, as Nord Stream 1 goes into maintenance.  Gold (XAUUSD)   Gold continues to have trouble finding direction amid a hawkish Fed speak but rising geopolitical tensions. A host of Fed speakers were on the wires yesterday, and all of them focused on inflation, suggesting aggressive action from the Fed will continue. Meanwhile, Taiwanese soldiers fired shots to ward off civilian drones flying close to islands near China, spooking fears that tensions could escalate. Strong US economic data both from consumer confidence and JOLTS jobs opening also bumped up the US 10-year yields, and Gold was seen dipping below the key 1729 support on Tuesday, coming in sights of the one-month lows.  First shipment of wheat out of Ukraine arrives in Africa   The first export of wheat from Ukraine since the invasion of Russia in February has arrived in Djibouti, east Africa. The 23,000-ton shipment is bound for Ethiopia which is struggling with ongoing drought and conflict. A recent agreement between Russia and Ukraine, mediated by the UN and Turkey, has allowed 50 ships to resume shopping grain around the world. Wheat harvest was also seen picking up in Canada as yields improved amid better weather conditions, helping to ease supply worries in the key agricultural crop.  What to consider?  US consumer confidence and JOLTS data came in better-than-expected   US consumer confidence rose to its highest level in three months to come in at 103.2 in August from 95.7 previously. Both the expectation index and present situation index saw improvements, rising to 75.1 (prev. 65.6) and 145.4 (prev.139.7), respectively. This could be partly driven by lower pump prices, but also signals that a healthy job market report may be coming this week. The 1-year ahead inflation expectation fell to 7.0% (prev. 7.4%), which was a seven-month low. Meanwhile, US JOLTS rose to 11.239mln in July, above the expected 10.45mln and previous 10.698mln, hinting that the labor market remains tight.  German CPI’s upside surprise, ECB still leaning towards front-loading   Germany CPI came in higher than expected at 7.9% YoY (vs. 7.5% prev and 7.8% expected) while the MoM print was slightly softer at 0.3% (vs. 0.9% prev and 0.4% expected). Food and energy price gains underpinned, but fuel rebate helped to take some pressure off. Meanwhile, ECB speakers continued to push for more front-loaded rate hikes, in contrast to ECB’s Lane calling yesterday for more step-by-step increases and signaling recession concerns yesterday. ECB’s Knot however clearly said he’s leaning towards a 75bp hike in September but he is open to a discussion, as did Muller. Wunsch also vouched for rates in restrictive territory, and Vasle (non-voter) said the September rate hike should exceed 50bps.  The Chinese Communist Party will hold its national congress on Oct. 16   The politburo meeting held on Tuesday decided to propose to the Central Committee of the 19th National Congress to schedule the next once-every-five-year National Congress of the Chinese Communist Party (the “CCP”) for Oct 16, 2022.  The 2,300-odd delegates attending the National Congress will elect the CCP’s Central Committee which consists of 205 full (voting) members and 170 alternate (non-voting) members. The full members of the Central Committee will elect among themselves the 25 members of the Politburo and the members of the Politburo will then choose among themselves the seven members of the Politburo Standing Committee, who are the highest leaders of the CCP.  The National Congress will review the CCP’s work over the past five years and formulate policy directions and action plans for the next five years.   Taiwan shot at drones flying close to its offshore islands    Taiwan’s authorities said in a statement Taiwanese soldiers fired shots in three incidents on Tuesday to ward off drones flying close to small offshore islands controlled by Taiwan. The statement did not identify where these civilian drones were from but said that the drones flew away in the director of Xiamen, a coastal city of mainland China. Taiwan’s President Tsai Ing-wen previously urged Taiwan’s military force to take “appropriate by necessary” actions to drive away civilian drones having been buzzing Taiwan’s military installations on its front-line islands.   Iron ore falls below the key $100 level   The key steel ingredient fell below $100 for the first time in five weeks, on signs of China’s steel industry worsening. Steel production will fall by more than 8 million tons in the second half, due to plans to restrict output in the key hub of Tangshan. This is according to Minmetals Futures. That cut in production equates to a decline of 10%. China’s steel industry is reeling amid a property crisis, that’s showing no promise of turning around any time soon. Authorities in Tangshan, near Beijing also decided to cut production at a recent meeting, Meanwhile a major steel maker, Angang Steel says it sees tough conditions persisting through the end of the year. This backs up BHP’s comments last week, where BHP’s CFO told Saxo in an one-on-one interview, that iron ore demand will remain limited in the year ahead, not able to outpace supply. This means iron ore pricing will remain capped. Coal prices are back at record highs, amid the energy crisis   With global electricity prices skyrocketing and likely to worsen, and nothing being resolvable, the coal price is being bid again, pushing it once again back to record territory. For consuemrs, unfortunately this means higher power bills, especially in those regions dependent on coal for electricity (India, China, Australia). With the coal futures price, and the spot coal price moving to higher levels, this supports future earnings and cashflows in coal companies. As such, many coal stocks are trading at record highs. Shares in Australia’s largest pure-play coal company Whitehaven Coal (WHC) hit a brand-new record all-time high yesterday, A$8.15, but today is facing selling pressure (profit taking perhaps). Other stocks that make money from Coal include BHP in Australia. In Asia, Bayan Resources, and Yankunang Energy, as well as Shaanxi Coal. Alibaba has been selected for audit inspection by the PCAOB   According to Reuters, Alibaba (BABA:xnys/09988:xhkg) has been selected, together with some others, by the Public Company Accounting Oversight Board (the “PCAOB”) for audit work inspection commencing in September.  Buffett’s Berkshire Hathaway reduces its stake in the Chinese EV maker BYD   Warren Buffett’s Berkshire Hathaway sold around 1.33 million shares of BYD (01211:xhkg) at an average price of HKD277.10, bringing its stake in BYD to 19.92% of the total issued H shares or 7.51% of the total issued share capital on Aug. 24.  Comparing the ending balance after the sale to the ending balance as of June 30 revealed in BYD’s interim results announcement released earlier this week, Berkshire Hathaway had previously undisclosed sale of 4.95 million shares since July.  Assuming the 4.95 million shares were sold at the average closing prices in July and August, Berkshire Hathaway cashed out a total of about HK$1.8 billion from the sale of these 6.28 million shares over the past two months which was similar to the aggregate cost that Berkshire Hathaway had initially paid for the whole amount of 7.73% stake (or 20.49% of H shares) in BYD. Covid cases resurface in 31 provinces in China   China’s southern technology hub, Shenzhen shut down the world’s largest electronics retailing marketplace in response to a surge of Covid cases. The cities of Dalian, Chengdu, Yiwu, and Sanya are also under some sort of restriction. Baidu reported inline Q2 results   Baidu’s (BIDU:xnys/9888:xhkg) revenue fell 5% YoY to RMB 29.65 billion, largely in line with consensus estimates. Its operating margin came in at 22%, contracting 5 percentage points YoY, due to sluggishness in the high-margin ads business and a revenue mix shifting toward lower-margin non-ads business.  Q2 Non-GAAP EPS increased 2% YoY to RMB15.79, well above analysts’ RMB9.82 median forecast.      American companies have a downbeat outlook on doing business in China   The US-China Business Council’s annual member survey showed that a record 21% of the 117 multinational companies headquartered in the US said they were downbeat on their business in China for the next five years, (according to those surveyed). 90% of respondents said their businesses were affected by lost sales and uncertainty over reliable deliveries.   China is set to tighten scrutiny of companies seeking to raise funds through issuing offshore bonds   According to a consultative draft document on the portal of the National Development and Reform Commission, China is planning to require companies that seek to issue bonds offshore to register, report and receive approval from the authorities for debts that have tenors exceeding one year.   China’s official PMIs are scheduled to be released today   The median forecasts of economists surveyed by Bloomberg expect China’s official NBS manufacturing PMI to edge up to 49.2 in August from 49.0 in July, while firmly remaining in contractionary territory. Heatwaves and drought-induced power curbs have caused Sichuan and Chongqing to shut-down manufacturing activities for six days and eight days in August respectively. The stepping up of pandemic controls in some cities could also affect the survey negatively. The median forecast for August official NBS non-manufacturing PMI is 52.2, down from last month’s 53.8 but remains in expansionary territory.   Crowdstrike, the cybersecurity giant reported better than expected results   Crowdstrike shares were higher after hours in the US, following a 0.7% rise in the regular session after reporting second-quarter results that topped analysts expectations, while it raised its forecasts for the year. The cyber security giant reported revenue rose to $535 million, up from the $337.7 million in the year-ago quarter. Annual reoccurring revenue grew 59% to $2.14 billion compared to the same time last year. This is a somewhat of a testament that cyber security is a defensive industry that is able to do well, regardless of economic conditions weakening. For a global look at markets – tune into our Podcast. Source: APAC Daily Digest: What is happening in markets and what to consider next – August 31, 2022
Taiwanese Soldiers Shooting At Civilian Drons And Other Factors Affecting  Stock Markets

Taiwanese Soldiers Shooting At Civilian Drons And Other Factors Affecting Stock Markets

Saxo Strategy Team Saxo Strategy Team 31.08.2022 10:06
Summary:  Whiplash in global sentiment as the US equity market ended yesterday on a sour note at new local lows, only to see the mood brighten considerably in Asia, perhaps in part due to a massive plunge in crude oil prices. Sentiment toward the euro has certainly improved this week, as the single currency posted strong gains nearly across the board yesterday on another steep drop in natural gas prices and fresh hawkish rhetoric from an ECB member ahead of next Thursday’s meeting.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures reversed hard yesterday after pushing through above the 100-day moving average closing below the 4,000 level at 3,987. The culprit was more hawkish comments from both the Fed and ECB on top of very strong JOLTS Job Openings supporting the view that the labour market remains tight, likely leading to more wage pressures. Also, the S&P CoreLogic house index for June showed that house prices slowed down significantly on m/m basis highlighting the negative impact from higher mortgage rates. S&P 500 futures are trading back above the 4,000 level this morning with the 50-day moving average sitting around the 4,017 level is a key support level to watch today. Hong Kong’s Hang Seng (HSIQ2) and China’s CSI300 (03188:xhkg) In U.S. trading the night before, Hang Seng Index Futures tumbled 2.3% in a confluence of factors including Taiwanese soldiers on front-line islands firing shots at civilian drones believed flying from mainland China, a newswire report saying the U.S. regulator, PCAOB, selected Alibaba (BABA:xnys/09988:xhkg) for audit inspection commencing in September, Berkshire Hathaway reducing holdings in BYD, Covid-related lockdown concerns, and the continuous decline of the U.S. equity markets. Hang Seng Index gapped down by nearly 2% at the Asian market open but managed to crawl back all the loss and turn to a gain of 0.5% at the time of writing. The tech space led the charge higher, Hang Seng Tech Index (HSTECH.I) surged by 2.4%. In A shares, CSI 300 reversed the downtrend in the morning and bounced to 0.8% higher. Surging euro take the single currency higher across the board The EURUSD exchange rate was stable-to-stronger as the EU continues to build natural gas supplies ahead of the winter and as the price for gas dropped sharply yesterday again. More hawkish comments from the ECB, this time from Nagel, who argued for “front-loading” rate hikes, also helped the euro higher. The Euro was higher across the board, with EURCHF surging nearly to 0.9800 and EURUSD staying above parity despite the USD strength elsewhere. The bigger level in the latter is toward the 1.0100 local range high and former range low. Next Thursday’s ECB will be critical for the euro outlook, with the market leaning for a 75 basis point hike. Selling pressure in GBP ramps up Pessimism built in sterling after Goldman Sachs hinted that peak inflation in the UK could reach 22% in early 2023 and downgraded its GDP forecast. GBPUSD touched lows of 1.1622 before settling around 1.1660.  EURGBP pushed higher to 0.8600, its strongest level since early July. Crude oil prices (CLU2 & LCOV2) Crude oil on track for a third monthly drop took a 7.5% tumble on Tuesday after recording the best day in six weeks on Monday. Both highlight a market suffering from low liquidity and lack of direction. Brent has returned to $100 with the slower growth and demand narrative once attracting sellers. In addition, a two-day plunge in EU gas prices also weighing on sentiment while new Covid infections and the worst heatwaves in decades in China added to the negative sentiment. On the supply side the Iraq turmoil is not having any impact on oil supplies while an Iran nuclear deal still lingers. Ahead of today’s EIA weekly stock report, the API last night reported a 600k barrels increase in oil stocks with big draws seen in gasoline and diesel. Further volatility can be expected in European gas prices over the coming days, and that could spill over to crude oil as well. EU Gas traders watch Nord Stream 1 and political initiatives to suppress power prices Dutch TTF benchmark gas which touched €350/MWh on Friday trades €270/MWh on the opening with focus on Gazprom’s announced 3-day closure of the NordStream 1 pipeline for maintenance, and whether it will reopen on September 3 or remain shut as part of Putin’s gas war against Europe. The closure coinciding with maintenance in Norway, including at the giant Troll fields. NordStream 1 currently supplies Europe with 33 mcm/day compared with its capacity of 167 mcm/day. A re-opening on September 3 could send prices tumbling further towards €200/MWh, a level still high enough to curb demand. Gas has also been losing altitude in response to rapidly filling storage sites, although daily flows will be needed throughout the winter, and signs the EU is preparing to intervene to dampen soaring power prices. Gold (XAUUSD) Gold remains troubled by the recent hawkish shift by the US Federal Reserve, but the downside pressure has eased a bit by a weaker dollar and geopolitical tensions. The price nevertheless trades below support-turned-resistance at $1729/oz with $1715/oz support preventing another attempt to challenge key support at $1680/oz. A host of Fed speakers were on the wires yesterday, and all of them focused on inflation, suggesting aggressive action from the Fed will continue. Meanwhile, Taiwanese soldiers fired shots to ward off civilian drones flying close to islands near China, spooking fears that tensions could escalate. What is going on? First shipment of wheat out of Ukraine arrives in Africa The first export of wheat from Ukraine since the invasion of Russia in February has arrived in Djibouti, east Africa. The 23,000-ton shipment is bound for Ethiopia which is struggling with ongoing drought and conflict. A recent agreement between Russia and Ukraine, mediated by the UN and Turkey, has allowed 50 ships to resume shopping grain around the world. Wheat harvest was also seen picking up in Canada as yields improved amid better weather conditions, helping to ease supply worries in the key agricultural crop. US consumer confidence and JOLTS data came in better-than-expected US consumer confidence rose to its highest level in three months to come in at 103.2 in August from 95.7 previously. Both the expectation index and present situation index saw improvements, rising to 75.1 (prev. 65.6) and 145.4 (prev.139.7), respectively. This could be partly driven by lower pump prices, but also signals that a healthy job market report may be coming this week. The 1-year ahead inflation expectation fell to 7.0% (prev. 7.4%), which was a seven-month low. Meanwhile, US JOLTS rose to 11.239mln in July, above the expected 10.45mln and previous 10.698mln, hinting that the labor market remains tight. German CPI’s upside surprise, ECB still leaning towards front-loading Germany CPI came in higher than expected at 7.9% YoY (vs. 7.5% prev and 7.8% expected) while the MoM print was slightly softer at 0.3% (vs. 0.9% prev and 0.4% expected). Food and energy price gains underpinned, but fuel rebate helped to take some pressure off. Meanwhile, ECB speakers continued to push for more front-loaded rate hikes, in contrast to ECB’s Lane calling for more step-by-step increases on Monday and signaling recession concerns yesterday. THe ECB’s Nagel argued for front-loading rate tightening and Knot clearly said he’s leaning towards a 75bp hike in September, but he is open to a discussion, as did Muller. Wunsch also vouched for rates in restrictive territory, and Vasle (non-voter) said the September rate hike should exceed 50bps. Pricing for the ECB meeting next Thursday closed yesterday around +65 basis points. Taiwan shot at drones flying close to its offshore islands Taiwan’s authorities said in a statement Taiwanese soldiers fired shots in three incidents on Tuesday to ward off drones flying close to small offshore islands controlled by Taiwan. The statement did not identify where these civilian drones were from but said that the drones flew away in direction of Xiamen, a coastal city in mainland China. Taiwan’s President Tsai Ing-wen previously urged Taiwan’s military force to take “appropriate by necessary” actions to drive away civilian drones having been buzzing Taiwan’s military installations on its front-line islands. Crowdstrike reports better than expected results Shares were higher in US extended trading, following a 0.7% rise in the regular session after reporting second-quarter results that topped expectations, while it also raised its forecasts for the year. The cyber security giant reported revenue rose to $535mn, up from $337.7mn last year. Annual recurring revenue grew 59% to $2.14bn compared to the same time last year. This is a somewhat of a testament that cyber security is a defensive industry, as it is able to somewhat thrive regardless of economic conditions weakening. Chinese lithium miners are seeing explosive growth Tiangqi and Ganfeng, two of the world’s largest lithium miners, both reported very strong results seeing net income increasing multiples times from last year as lithium carbonate prices have risen 80% this year in China driven by supply shortages of lithium and extremely rapidly growing demand for electric vehicles. What are we watching next? The EU will hold an emerging energy meeting on 9 September This happens while the EU is set to meet its gas storage filling goal (80 %) two months ahead of target. Germany, which is one of the largest European economies most dependent on Russian gas, is also on track to meet its national storage goal before the deadline expires. In recent weeks, the EU has scaled up efforts in order to avoid energy rationing this winter. On this emergency meeting, Spain is expected to propose that the entire EU apply the ‘Iberian exception’ to set electricity prices. In mid-April 2022, the European Commission agreed that Spain and Portugal create a temporary mechanism to decouple the price of gas from that of electricity for a period of 12 months. Concretely, the price of gas was capped to an average of €50 per megawatt-hour. This resulted in electricity bills being halved for about 40 % of Spanish and Portuguese consumers with regulated rates. This could be applied at the EU scale. The Chinese Communist Party national congress commences on Oct. 16 The politburo decided to propose to schedule the next once-every-five-year National Congress of the Chinese Communist Party (the “CCP”) for Oct 16, 2022.  The 2,300-odd delegates attending the National Congress will elect the CCP’s Central Committee which consists of 205 full (voting) members and 170 alternate (non-voting) members. The full members of the Central Committee will elect among themselves the 25 members of the Politburo and the members of the Politburo will then choose among themselves the seven members of the Politburo Standing Committee, who are the highest leaders of the CCP.  The National Congress will review the CCP’s work over the past five years and formulate policy directions and action plans for the next five years.  Today is the first report of US ADP Payrolls Change using new methodology The ADP Research Institute and Stanford Digital Economy Lab have revised the methodology for the ADP’s monthly employment report, arguing that the new report will offer a better view on the labor market, with breakdowns of weekly data for the prior month and more data on changes in pay. Only time will tell whether the market will begin to trust this data more than the official nonfarm payrolls “establishment” survey. Earnings to watch Today’s US earnings focus is MongoDB expected to report 42% y/y revenue growth in FY23 Q2 (ending 31 July) with operating profit getting very close to break-even. The database company has been running positive cash flow from operations over the past two quarters, but investors would like to see operating income (includes share-based compensation) break-even as well. Today: MongoDB, Brown-Forman, Veeva Systems Thursday: Pernod Ricard, Broadcom, Lululemon Athletica, Hormel Foods Friday: BNP Paribas Fortis Economic calendar highlights for today (times GMT) 0755 – Germany Aug. Unemployment Change/Rate 0800 – Poland Flash Aug. CPI 0900 – Eurozone Flash Aug. CPI 1200 – US Fed’s Mester (voter) to speak 1215 – US Aug. ADP Private Payroll change 1230 – Canada Jun. GDP 1345 – US Aug. Chicago PMI 1430 – EIA's Weekly Crude and Fuel Stock Report 2300 – South Korea Q2 GDP 0145 – China Aug. Caixin Manufacturing PMI Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: Financial Markets Today: Quick Take – August 31, 2022
Risk Appetite Across Markets Taking A Hit After Fed Chair Powell's Hawkish Speech

Risk Appetite Across Markets Taking A Hit After Fed Chair Powell's Hawkish Speech

Ole Hansen Ole Hansen 31.08.2022 14:10
Summary:  Crude oil’s bounce from a six-month low has faded fast with risk appetite across markets taking a hit after Fed chair Powell's hawkish speech once again raised concerns that the central banks aggressive stance towards combatting runaway inflation will drive down growth and demand for crude oil and fuel products. In addition, the energy market has to deal with long liquidation into a low liquidity market, reduce gas-to-fuel focus as EU gas prices drop as well as Iraq, Libya and Iran developments. Crude oil’s bounce from a six-month low has faded fast following Friday’s hawkish message from Jerome Powell, the Federal Reserve Chairman, which once again raised concerns that the central banks aggressive stance towards combatting runaway inflation would mean lower growth and with that lower demand for crude oil and fuel products. The battle between these macro concerns continues to battle with micro developments, the majority of which still point to tightness during the coming months. In Europe, the gas and power crisis continue with punitively high prices attracting substitution demand into fuel products like diesel and heating oil. In the short-term the price of gas into the autumn month will continue to be dictated by Russian flows, and not least whether Gazprom (and Putin) as announced will resume flows on the Nord Stream 1 pipeline following the three-day maintenance shutdown that ends at 0100 GMT on September 3. Other developments currently impacting the market: China’s continued battle with Covid infections which is currently found in 31 provinces, and which has led to fresh curbs being implemented, among others in two of southern China’s most economically vibrant areas. Deadly turmoil in Baghdad after Moqtada Al-Sadr, a prominent cleric, decided to resign from politics, thereby deepening a political crisis that has left the country without a government since last October’s election. For now, the clashes have not spread to oil-rich area and exports from one of OPEC’s biggest producers remain uninterrupted. Clashes in Libya’s capital Tripoli over the weekend which left at least 32 people dead have raised risks of a civil war in Libya, a very volatile producer which has seen its output swing between 0.7 and 1.2 million barrels per day during the past year. On the supply side, the market will be watching the impact of the EU embargo on Russian oil which will begin impacting supply from December and the 180-million-barrel release, at a rate of one million barrel per day, from US Strategic Reserves that look set to run until October 21. In the following months the US government plans to buy back 60 million barrels, a decision that is likely to be delayed given the prolonged war in Ukraine. Finally, an Iran nuclear deal has yet to be reached, but if successful it could lead to millions of barrels of on and offshore stored oil being released into the market. WTI Crude Oil: Following Monday’s short squeeze the subsequent sell-off has forced recently established longs to reduce their exposure. Developments that from a technical perspective have opened the risk of a return towards key support around the mid-August low at $85.5/b. Source: Saxo Group Lack of liquidity and speculative positions being wrongfooted have both added to the latest gyration which saw the biggest jump in six weeks on Monday being  followed by a near 9% two-day drop. In the week to August 23, hedge funds added 80k lots of crude oil and fuel exposure, the biggest weekly increase since January, and the latest tumble may have forced many too hastily exit those recently established and now loss-making positions.            With the summer holiday driving season winding up we are seeing gasoline refinery margins trading sharply lower while demand for diesel as a substitute for expensive gas has supported diesel margins, both in the US and especially in Europe. However, since Friday’s peak in EU gas prices we have seen softer but still elevated margins there as well.              The weekly oil and fuel stock report from the US Energy Information Administration will be watched closely given its frequency and with that the ability to provide an up-to-date snapshot of the current supply and demand situation across crude oil and fuel. Last night the API reported a 600k barrels increase in oil stocks and a combined 5.1 million barrels drop in gasoline and distillates stocks. The report will also provide the EIA’s assessment of production, which has been adjusted lower for the past two weeks to 12 million barrels a day, and somewhat short of the EIA’s latest end of year forecast of 12.45 million. Crude and distillates exports will also be watched after the combined figure hit a record last week. As per usual I will post the charts and tables on Twitter once the report has been released at 14:30 GMT.               Source: Oil drops as hawkish Fed drives fresh demand concerns
Coffee Is In Danger As Its Suppliers Have Troubles With Crops

WTI Crude Oil Prices Are Falling, Coffee Futures Trading Near 6-month Highs, Palladium Futures

Rebecca Duthie Rebecca Duthie 31.08.2022 14:48
Summary: Concerns around demand for crude oil is driving the prices down. Coffee futures trading higher amidst concerns around crop production. WTI Crude Oil prices on track to lose more than 8% in August WTI crude futures resumed their downward trend on Wednesday, falling to about $89 per barrel, continuing the loss from the previous session and putting them on track to lose over 8% of their value in August as concerns about tight monetary policy and Covid limits in China push energy demand downward. Since aggressive measures are required to stabilize consumer prices after the eurozone's inflation rate extended its record-high in August, ECB officials stated a 75 bps rate increase is being considered for their upcoming meeting. The Fed is also anticipated to maintain high borrowing costs for an extended period of time, even if doing so slows growth. New Covid outbreaks, which forced millions of people into stringent lockdowns in the key Chinese cities of Shenzhen, Guangzhou, and Dalian, added to concerns about sluggish economic activity in the world's largest oil importer after August PMI data showed contraction for the second consecutive month. Conflicts in Iraq kept markets on edge in terms of supply, but the country's oil production was mainly unaffected. WTI Crude Oil Futures Price Chart Palladium prices have risen overall in 2022 Since the start of 2022, palladium prices have climbed by 187.18 USD/t oz., or 9.89%, according to trading on a contract for difference (CFD) that monitors the benchmark market for this commodity. Palladium Dec ‘22 Futures Price Chart Coffee Futures As the attention remained on the weather in top producer Brazil, Arabica coffee futures on ICE were trading down marginally from an almost six-month high that was achieved on August 25. Concerns that there might not be enough moisture to sustain the development of coffee buds and cherries after some early flowering were allayed by the forecast for rain in Brazilian coffee regions over the following ten days. However, Maxar Technologies reported last week that the effects of La Nina are likely to persist through the end of the year. This suggests that Brazil will receive less rain through the end of the year, which could exacerbate the country's current drought and put additional strain on its coffee crops. After reaching a 23-year low of 571,580 bags on August 15, the most recent data showed that ICE-certified arabica stockpiles on August 29th remained at 663,874 bags, an increase of eight consecutive days. Coffee Dec ‘22 Futures Price Chart Sources: finance.yahoo.com, tradingeconomics.com
Price Of Gold Is Now Bouncing Higher But Trend Remains Controlled By Bears

The Oil Market Remains Volatile. The Value Of Gold Continues To Decline

Kenny Fisher Kenny Fisher 31.08.2022 15:28
Oil edges lower but Saudi comments are still supportive Oil prices are a little lower again for a second day after spiking earlier in the week. It’s a little indicative of the mood in the rest of the markets at the moment and the lack of certainty. Prices jumped earlier in the week as traders weighed up the potential for supply disruptions from Libya and Iraq, while the threats of production cuts from Saudi Arabia continued to echo. They’ve since pulled back amid reports that an OPEC+ cut is not under consideration next week and as broader risk markets turned south. Economic concerns remain and may ensure trade continues to be volatile. API also reported a small inventory build on Tuesday, while a small draw is expected from EIA later today. Given previous comments from Saudi Arabia, any significant pullback from $100 may be challenging. Gold is on the decline once more Gold is slipping again on Wednesday, this time aided by the dollar which is rallying once more. Traders are becoming increasingly convinced that the Fed will hike rates by 75 basis points next month, despite the improvement in the inflation data. The message is finally getting through from the Fed and barring another significant improvement in August and/or any sign of slack appearing in the labour market, it may now have to deliver. It’s worked so hard to convince traders that it must continue tightening aggressively that to then only do so by 50 basis points would seriously undermine trust in its communication and guidance. Policymakers have backed themselves into a corner and may now have to deliver. With $1,730 now broken, attention shifts back to $1,700 and $1,680. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
How Much Have European Governments Invested In Supporting Businesses And Consumers, The Demand For Copper And More

Record Energy Prices Are Worrying The World - Emergency Energy Meeting In Brussels

Christopher Dembik Christopher Dembik 01.09.2022 08:47
Summary:  The Czech Presidency of the Council of the European Union (EU) announced an emergency energy meeting will be held on 9 September in Brussels (Belgium). This aims to discuss concrete measures to tackle the energy crisis while power prices continue to reach record high. Last week, France 1-year forward electricity prices crossed for the first time ever the level of €1,000 per megawatt-hour (MWh). Before the crisis, anything above €75-100 per MWh was considered as expensive. Three main options are on the table : targeted compensatory measures for low-income households, applying the ‘Iberian exception’ to the entire EU (temporarily decoupling the price of gas from that of electricity) and reforming more fundamentally the European electricity market. There is no easy answer. Each of these options has downfalls. In our view, the energy crisis is here to stay. The world of cheap energy is over. We have entered into a brave new world of high inflation and high energy prices. An unbearable cost : According to the calculations of the Brussels-based think-tank Bruegel, EU governments have allocated almost €280bn to help companies and households to cope with higher energy bills since September 2021. In nominal terms, the largest European economies allocated the most funding (Germany €66bn, Italy €49bn and France €44bn). In percentage of GDP (which is a better way to compare), the financial cushion deployed is the largest in Greece (3.7 %), Lithuania (3.6 %) and Italy (2.8 %). This cannot last forever. Several countries are looking to reduce financial support. They want to implement a targeted approach to mostly help low-income households. In France, the government capped energy prices in 2022 (gas prices were frozen at the levels of Autumn 2021 and electricity prices increased only by 4 % this year for households). But this is costly (around €20bn – this is about half of the annual budget of the French ministry of Education). Based on current energy prices, expect the cost to be close to €40bn for this year. In light of higher interest rates and risks that massive financial stimulus further fuels inflation, we believe that many European governments will follow the pace of the French’s. They will decide to downsize the financial package aimed to cushion the energy crisis. On top of that, several EU countries are embattled with the need to bailout utilities at risk of insolvency (Germany’s Uniper and two Vienna municipal utilities, for instance). This is only unfolding now. Electricity market intervention is back on the agenda : Yesterday, the president of the European Commission (EC), Ursula Gertrud von der Leyen acknowledged the EU electricity market is no longer functioning. This is an understatement. There are mostly two options on the table. Both will be discussed at the upcoming emergency meeting of 9 September. The first option is to propose that the entire EU apply the ‘Iberian exception’ to set electricity prices. In mid-April 2022, the EC agreed that Spain and Portugal create a temporary mechanism to decouple the price of gas from that of electricity for a period of 12 months. Concretely, the price of gas was capped to an average of €50 per megawatt-hour. This resulted in electricity bills being halved for about 40 % of Spanish and Portuguese consumers with regulated rates. This could be applied at the EU scale. This is supported by Germany, Austria, Belgium, Spain and Portugal especially. However, this is far from being perfect. It led to significant leakage – basically a surge in power exports to France. In other words, a lot of the subsidy actually ends up in France. In addition, prices continue to increase at a speedy rate for 60 % of consumers. The second option is to separate the wholesale power market into two segments : a mandatory pool for low-variable cost technologies (wind, solar, nuclear, for instance) and a conventional market for fossil condensing plants. This proposal is pushed forward by Greece. This is a more fundamental reform of the EU electricity market. But there are several downsides, especially regarding how existing long-term contracts will be treated. Much more emergency meetings will be required before a coherent approach will be approved. Don’t expect major decisions to be announced next week. The nuclear option : In our view, the European energy crisis is an opportunity to rethink policy stance on nuclear power. Last week, several non-partisan organizations launched a petition to prevent Switzerland from leaving nuclear power in 2027, as scheduled. This decision was initially taken in the aftermath of the 2011 Fukushima crisis (Japan). According to the July data from the World Nuclear Association, France and the United Kingdom are the two main European countries with the most nuclear capacity under construction. But others don’t seem to embrace this option. In Germany, the Greens prefer to restart coal-fired power stations rather than rethinking the nuclear exit plan. This is puzzling. Nuclear power is not without issues (see corrosion issues in France nuclear reactors). But it guarantees energy independence and lower energy prices in the long-run. While Asia is embracing nuclear power (South Korea is reversing nuclear phaseout and China is accelerating its huge buildout in reactors, for instance), we fear that the EU will still be reluctant to bet on nuclear for ideological reasons. Like it or not, nuclear energy is our best option at the moment to reduce dependence on expensive fossil energy and move forward fast with the green transition. On the spot side, electricity prices continue to remain close to record high in France and Germany, respectively at 641 and 604€ per MWh. In contrast, they remain comparatively low in Spain and Portugal, around 200€ per MWh. This is roughly 10 times more than before the Covid, however. Source: EU Emergency Energy Meeting : A Never Ending Story
What Does Jeffrey Halley (Oanda) Think About 100bps Rate Hike? Important News About Soft Commodities!

Platinum Prices Drop To November 2020 Lows, US Gasoline Prices Falling, Wheat Prices Elevated

Rebecca Duthie Rebecca Duthie 01.09.2022 15:41
Summary: Elevated interest rates continue to drive platinum prices down. Supply concerns around wheat drive prices. US Gasoline prices fall to pre-Russia’s invasion of Ukraine levels. Platinum touching lowest levels since November 2020 As global interest rates are expected to continue rising and should remain high for a prolonged period of time, even if it slows growth, platinum futures extended losses to below $850 per ounce, closing in on their lowest level since November of 2020. They have also been tracking other precious metals lower. The fed funds rate has already increased by 225 basis points since March at the Federal Reserve, the most potent central bank in the world. Fed policymakers are now advocating for rises to continue at least until the level of 4% in early 2019. Additionally, despite expectations that they would subside in the second part of the year, ongoing shortages and supply chain problems hurt the auto industry and lower demand for autocatalyst components. Platinum Oct ‘22 Futures Price Chart Wheat futures remain elevated Chicago wheat futures saw a strong increase at the end of August after hitting a nine-month low in the middle of the month due to supply issues and increasing demand. According to government figures, Ukraine will harvest close to 20 million tonnes of wheat this year, down from 32.2 million the year prior as a result of weaker yields and the loss of farmed area to Russian forces during their invasion. Additionally, the nation intends to free up storage space for the upcoming harvest by selling the roughly 20 million tonnes of grain that are said to have collected in port silos since its invasion began on February 24. Meanwhile, US heatwaves cut corn harvests, further straining wheat supplies. Wheat Futures Price Chart RBOB Gasoline On Wednesday, wholesale gasoline prices in the United States plummeted to their lowest levels since before Russia invaded Ukraine, indicating that motorists in the world's largest energy consumer will soon witness cheaper pump prices. Markets for crude oil futures and gasoline have been kept in check by worries about a worldwide recession and a record level of emergency oil sales from national stockpiles. RBOB Gasoline Futures Price Chart Sources: finance.yahoo.com, tradingeconomics.com
Increases At The Close Of The New York Stock Exchange

Increases on the New York Stock Market. Fall In Raw Materials

InstaForex Analysis InstaForex Analysis 02.09.2022 08:42
At the close of the New York Stock Exchange, the Dow Jones rose 0.46%, the S&P 500 rose 0.30%, and the NASDAQ Composite fell 0.26%. The leading performer among the components of the Dow Jones index today was Johnson & Johnson, which gained 4.00 points or 2.48% to close at 165.34. Amgen Inc rose 5.20 points or 2.16% to close at 245.50. Merck & Company Inc rose 1.79 points or 2.10% to close at 87.15. The losers were Boeing Co shares, which lost 6.59 points or 4.11% to end the session at 153.66. Dow Inc. gained 2.04% or 1.04 points to close at 49.96, while Salesforce.com Inc shed 1.66% or 2.59 points to close at 153. .53. Leading gainers among the S&P 500 index components in today's trading were DXC Technology Co, which rose 7.75% to hit 26.70, General Holdings Inc, which gained 5.72% to close at 233.01, and also Moderna Inc, which rose 5.05% to end the session at 138.95. The losers were shares of NVIDIA Corporation, which lost 7.67% to close at 139.37. Shares of Hormel Foods Corporation shed 6.56% to end the session at 46.98. Quotes of Monolithic Power Systems Inc decreased in price by 6.11% to 425.47. Leading gainers among the components of the NASDAQ Composite in today's trading were Hempacco Co Inc, which rose 63.41% to hit 8.35, GigaCloud Technology Inc, which gained 61.43% to close at 23.65, and also shares of Virax Biolabs Group Ltd, which rose 58.69% to end the session at 5.57. American Virtual Cloud Technologies Inc was the biggest loser, shedding 52.17% to close at 0.22. Shares of Newage Inc lost 46.87% and ended the session at 0.12. Quotes of Okta Inc decreased in price by 33.70% to 60.60. On the New York Stock Exchange, the number of securities that fell in price (2231) exceeded the number of those that closed in positive territory (901), while quotes of 101 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,416 companies fell in price, 1,333 rose, and 244 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 1.20% to 25.56. Gold futures for December delivery lost 1.13%, or 19.55, to hit $1.00 a troy ounce. In other commodities, WTI October futures fell 3.54%, or 3.17, to $86.38 a barrel. Brent oil futures for November delivery fell 3.71%, or 3.55, to $92.09 a barrel. Meanwhile, in the Forex market, EUR/USD fell 1.11% to hit 0.99, while USD/JPY edged up 0.89% to hit 140.20. Futures on the USD index rose 0.91% to 109.65.         Relevance up to 04:00 2022-09-03 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/291092
The Price Of Gold (XAU/USD) Confirmed The Bullish Attitude

Gold And Employment. How The XAU/USD Pair Will Behave Today?

InstaForex Analysis InstaForex Analysis 02.09.2022 09:55
Early in the European session, Gold (XAU/USD) is trading at around 1,697. We can see the 2/8 Murray zone as strong support for gold. If the asset manages to consolidate above this level, we can expect a bullish acceleration towards the top of the downtrend channel which has been developing since August 22nd. Yesterday in the American session, XAU/USD fell to a low of 1,688.65, due to US initial claims for unemployment benefits, reaching the highest level since April. Another factor that could exert pressure on gold is expectations that the FED will raise its interest rate by 0.75% at its next meeting in September. In case gold breaks below 1,687, it could hit a 2021 low of around 1,675. A recovery above 1,702 and a consolidation above the downtrend channel would ease downside pressures. XAU/USD is trading above 2/8 Murray (1,687) and below the 21 SMA located at 1,717. Gold is expected to trade within this range in the coming hours pending US employment data. Nonfarm payrolls could give strong volatility to the market. In the next few hours, gold is expected to break and consolidate above 3/8 Murray (1,718). If the price of gold remains above this level, it could mean an acceleration to the upside and the metal could reach the top of the downtrend channel at around 1,730 which has been formed since early August. Since August 22nd, the eagle indicator is showing a slightly bullish signal and a positive divergence. If it consolidates above this level in the next few hours, it could continue to give gold a positive signal and the precious metal could reach the 200 EMA located at 1,755. In case gold breaks and consolidates below 1,685, we should avoid buying as the bearish cycle is likely to resume again and the price could reach the psychological level of 1,650. On the other hand, as long as gold trades above 2/8 Murray, it will be a buying opportunity with targets at 1,717, 1,735, and 4/8 Murray around 1,750.       Relevance up to 06:00 2022-09-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291104
Eyes On Iran Nuclear Deal: Oil Case. Gold Price Is Swinging

WTI Crude Oil On Track For Worst Weekly Decline In 4 Weeks, Silver Touching 2-year Lows, Coffee Futures

Rebecca Duthie Rebecca Duthie 02.09.2022 14:38
Summary: WTI oil is 30% down from its high. A hawkish fed causing investors to shy away from silver. Weather conditions causing concerns around coffee supplies. WTI Crude Oil weighed down by recessionary fears After falling more than 3% the previous day, oil prices increased by about 3% to over $89 per barrel on Friday amid expectations that OPEC+ will discuss output curbs at a meeting on Monday. However, due to worries about the recession and the effects of additional COVID lockdowns in China, WTI oil is on pace for its worst weekly decline in four weeks and is down more than 30% from its high. Investors are eagerly following the status of talks to revive the 2015 nuclear agreement on the supply side because a prospective agreement might unleash substantial flows from Iran. WTI Crude Futures Price Chart Silver futures reaching lows not seen in 2 years In September, silver futures dropped below $18 per ounce, reaching lows not seen in more than two years as the Federal Reserve's hawkish signals prompted investors to switch from metal to the US dollar. The dollar reached over 20-year highs as Fed Chair Jerome Powell highlighted the US central bank's aim of reducing inflation down to the 2% threshold and stated that borrowing costs will remain at a restrictive level for a protracted period even if it hampers GDP. Another factor adding to the flight from precious metals is that the European Central Bank is reportedly considering a larger 75 basis point rate hike to combat inflation at its policy meeting next week. The appeal of storing non-yielding bullion is diminished by increased interest rates, despite the fact that it is widely seen as a hedge against inflation and economic uncertainty. August is expected to end with silver down roughly 12%. Silver Dec ‘22 Futures Price Chart Concerns around Coffee supplies driving prices As the attention remained on weather in top producer Brazil, Arabica coffee futures on ICE were trading down marginally from an almost six-month high that was called on August 25th. Concerns that there might not be enough moisture to sustain the development of coffee buds and cherries after some early flowering were allayed by the forecast for rain in Brazilian coffee regions over the following ten days. However, Maxar Technologies reported last week that the effects of La Nina are likely to persist through the end of the year. This suggests that Brazil will receive less rain through the end of the year, which could exacerbate the country's current drought and put additional strain on its coffee crops. After reaching a 23-year low of 571,580 bags on August 15, the most recent data showed that ICE-certified arabica stockpiles on August 29th remained at 663,874 bags, an increase of eight consecutive days. Coffee Dec ‘22 Futures Price Chart Sources: finance.yahoo.com, tradingeconomics.com
The Natural Gas Downside  Looks Supported By The 200-day SMA

The Interruption Of Gas Supply Has Sent The Euro Downwards

InstaForex Analysis InstaForex Analysis 05.09.2022 13:29
The energy crisis in the EU continues to deepen amid Russia's full shutdown of the Nord Stream pipeline over the past weekend. The interruption of gas supply has sent the euro downwards once again. Early on Monday, the European currency lost 0.5% against the US dollar and hit a 20-year low at 0.9903. EUR/USD came under pressure following Russia's decision to extend maintenance of the Nord Stream pipeline. Gazprom shut down the pipeline indefinitely, citing an oil leak in one of its turbines. EU officials believe the technical issues are merely a pretext by the Kremlin to shut down gas exports to the European Union According to the West, Moscow is trying to impose an energy blockade on the EU at the beginning of the heating season in a last-ditch attempt to force EU to relax its sanctions against Russia. At the same time, the Kremlin has blamed Western sanctions imposed on Russia for the pipeline's shutdown. Russia is claiming that sanctions prevent Gazprom from keeping the Nord Stream's turbines running. On Saturday, Gazprom tried to alleviate EU concerns by stating that the company would increase natural gas exports to Europe via Ukraine. However, the West has deemed Gazprom's promises to be unreliable. Such an increase would not fully compensate for the shutdown of Nord Stream. Furthermore, this cannot be a permanent solution. Natural gas deliveries via Ukraine could be difficult due to the ongoing conflict between the two countries. This escalation of the gas war between Russia and the EU is forcing EU policymakers to seek solutions for the supply problem. The EU is worried that the shutdown of Nord Stream could send natural gas prices in Europe even higher. On Friday, EU energy ministers are set to present emergency measures to tackle rising energy prices. These measures would likely include natural gas price caps. Furthermore, EU politicians would push for a reduction in gas demand and consumption in the European Union. The ongoing energy crisis will be in the headlines this week, dimming the short-term prospects of the euro. As the gas conflict escalates, risks of an economic slowdown would rise. With the ECB preparing for another interest rate increase, the timing for these risks could not be worse. The ECB's policy meeting is scheduled to take place on Thursday. The EU regulator is now increasingly expected to carry out more aggressive policy measures after inflation in the eurozone reached 9.1%. However, with the EU facing a renewed threat of an energy collapse, recession, and a serious financial crisis, many analysts do not believe that ECB president Christine Lagarde will take a more hawkish step than in July. Earlier, the European Central Bank increased the key rate by 50 basis points to 0.5%. At the same time, the Federal Reserve hiked the rate by 75 basis points to 2.25-2.5%. The gap between EU and US interest rates could likely increase even further in September, as traders expect another 75 bps move by the Fed in September. It would be a third such increase in a row. "Everything is pointing to a lower euro," Carol Kong, senior associate for international economics and currency strategy at Commonwealth Bank of Australia said. "We've heard a great deal of negative news about the European economy, and I think the decline in the euro can continue this week." On the technical side, EUR/USD bears hold dominance in the market. The 7-week support line at 0.9880 is acting as an additional downside filter for the pair. EUR/USD must regain 1.0100 for bullish traders to return to the market.     Relevance up to 10:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/320805
Gas Tenders And Gazprom Is Ready To Discuss About The Supply

It's Said That Gazprom Could Compensate The Nord Stream 1 Shutdown By Rising Deliveries Via Ukraine

Craig Erlam Craig Erlam 05.09.2022 15:49
European stock markets are plunging at the start of the week following a day of mixed trade in Asia, with Gazprom’s announcement on Friday weighing heavily on the bloc. In the USA there is a bank holiday, Euro goes down as Nord Stream 1 is shut down A bank holiday in the US often results in relatively quiet trade everywhere else but that’s certainly not looking the case today. The decision not to restart gas flows via Nord Stream 1 after an oil leak was apparently discovered has created enormous uncertainty in Europe going into the winter. The euro slipped to a new 20-year low against the dollar in response to the shutdown. The decision conveniently came hours after the G7 agreed to an oil price cap and as countries announced they’re ahead of schedule in filling gas reserves. Many would argue it was only a matter of time until the decision was taken, with Europe having been squeezed over a number of months for one reason or another. There have been reports that Gazprom could increase deliveries via Ukraine as a result of the shutdown but it’s not clear whether this would be enough to offset the loss of Nord Stream 1. And considering Siemens has claimed that such a leak would not ordinarily affect the operation of a turbine and is easily fixed, you have to wonder whether Russia would actually take that decision. A painful winter lies ahead. A massive job for the incoming UK PM The UK will discover who its new Prime Minister will be today, with Liz Truss the standout favourite to win the run-off against Rishi Sunak. Whoever is victorious, the job facing them is enormous, with the economy facing a long recession and eye-watering inflation. Alleviating one while not exacerbating the other will be the first job for the incoming Prime Minister and it won’t be easy, to put it mildly. There’s a huge amount of pessimism around the UK at the moment, as evident by the pound, which looks on course to fall to its lowest level since 1985 against the dollar. Chinese headwinds strengthen China is also facing numerous headwinds going into the end of the year, with Covid once again creating huge uncertainty. Beijing’s commitment to its zero-Covid policy has created major challenges for the economy this year and with mass testing taking place over the weekend and lockdowns being extended in Chengdu, that’s going to persist. ​ The pressure is being felt in the yuan which fell for a sixth month in August and is continuing to fall against the dollar. That’s despite the best efforts of the PBOC which continues to set the yuan fix stronger than markets expect. To make matters worse, US President Biden is reportedly weighing up measures to limit US investment in Chinese tech firms. The US is becoming increasingly hawkish toward China and the latest move is another blow to its tech space. Major support being tested Bitcoin is continuing to show resilience around $20,000 but that’s really being put to the test as risk aversion sweeps through the markets once more. It’s down 1% so far today and trading a little below that crucial support level. A significant break at this point could be really damaging, with the following key level below here being the June lows around $17,500. Considering the outlook for risk appetite in the near term, it’s not looking good. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Risk aversion sweeps across Europe - MarketPulseMarketPulse
If OPEC+ Doesn't Apply A Significant Supply Cut, Crude Oil Prices Could Go Down

Crude Oil: What Is The Expected OPEC+ Decision On The Output?

Craig Erlam Craig Erlam 05.09.2022 16:02
OPEC+ meets after price cap announcement Today’s OPEC+ meeting has been somewhat overshadowed by all the talk of oil price caps and Nord Stream 1. The group is expected to leave output targets unchanged but it’s likely that a cut will be at least discussed which, if followed through on, would create more volatility and uncertainty at a time of considerable unease. The economic outlook and potential for a new nuclear deal have weighed on prices recently, much to the frustration of Saudi Arabia in particular. An output cut won’t make them any friends at a time when the world is facing a cost-of-living crisis already and the group has failed to keep up with demand this year. The more sensible option may be to hold this month and revisit in the future when there’s more clarity; something that is seriously lacking at this moment in time. ​ Gold holding up for now Gold is treading water at the start of the week even as the dollar rallies strongly once more. Traders are favouring the safety of the greenback this morning but that’s not damaging appeal for the yellow metal. It’s come under considerable pressure in recent weeks as yields have risen and the dollar has bounced back and it’s now trading around a key area of support, which may be why we’re seeing more resilience. While $1,700 looks like a psychological barrier, $1,680 is key. A break of that could signal further pressure on gold, especially if accompanied by more aggressive tightening from central banks. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Oil eyes OPEC and Nord Stream 1, gold steady - MarketPulseMarketPulse
Russia's Crude Oil Still Flows To Japan, Negative Trade Balance In Japan

Brent Crude Oil Prices In The Wake Of OPEC+ Surprise Agreement, Silver Futures Down, Corn Futures

Rebecca Duthie Rebecca Duthie 05.09.2022 17:48
Summary: G7 nations decide to cap Russian oil prices. Demand for silver is diminishing. Corn up throughout 2022. Brent Crude Oil Prices Following OPEC+'s surprise agreement on a modest oil production cut to sustain prices that have fallen due to concerns about a projected worldwide recession-driven decline in demand, Brent crude futures increased past the $96 per barrel threshold. In order to deal with macroeconomic headwinds and counter a potential production increase from Iran, the oil cartel will restrict output by 100,000 barrels per day beginning in October, or around 0.1% of world demand. The market action followed the G7 nations' decision to cap the price of Russian oil in order to limit Moscow's ability to finance its conflict in Ukraine. Brent Crude Oil Futures Price Chart Silver futures touched below $18 per ounce In September, silver futures dropped below $18 per ounce, reaching lows not seen in more than two years as the Federal Reserve's hawkish signals prompted investors to switch from metal to the US dollar. The dollar reached over 20-year highs as Fed Chair Jerome Powell highlighted the US central bank's aim of reducing inflation down to the 2% threshold and stated that borrowing costs will remain at a restrictive level for a protracted period even if it hampers GDP. Another factor adding to the flight from precious metals is that the European Central Bank is reportedly considering a larger 75 basis point rate hike to combat inflation at its policy meeting next week. The appeal of storing non-yielding bullion is diminished by increased interest rates, despite the fact that it is widely seen as a hedge against inflation and economic uncertainty. August is expected to end with silver down roughly 12%. Silver Dec ‘22 Future Price Chart Corn Futures up 10.43% Since the start of 2022, corn prices have climbed by 61.89 USd/BU, or 10.43%, according to trading on a contract for difference (CFD) that monitors the benchmark market for this commodity. Corn Dec ‘22 Futures Price Chart Sources: finance.yahoo.com, tradingeconomics.com