Feeder Cattle saw contract highs, up 10.5% for the week with corn lower by 7.77% and wheat down 1.21%. July platinum rose 8.2% supported by a huge 72,469 ounces single day inflow to ETF holdings on Wednesday. Platinum ETF holdings now expanded 5.9% year-to-date. Palladium ETF holdings significant volatility in daily flows with holdings 4.6% higher year-to-date. June WTI oil settled with a weekly loss for the first in five weeks, down 5.5% for the week. Gold June futures settled below the $2,000 mark, the first finish below the $2,000 mark, The Bloomberg commodity index dropped 2.1% (down 6.4% y-t-d).

Week Ending April 21, 2023

Commodities

“High interest rates, volatile prices and the war in Ukraine have made it significantly more expensive to finance commodity trade, forcing the industry to hunt for an extra $300bn to $500bn in working capital to keep raw materials moving around the world. Changing trade patterns have made the global flow of raw materials less efficient and more costly to finance and are also likely to push up the price of commodities for consumers, according to… McKinsey. ‘Since the end of 2020, we have seen a doubling of the working capital requirements in the commodity trading sector,’ said Roland Rechtsteiner, McKinsey partner and lead author of the report. ‘We could see a similar increase by the end of next year, if [further] changes in trade flows materialize.’”

January 29 – Financial Times (Leslie Hook)

Weekly Commodity Highlights

• Bloomberg Commodities Index dropped 2.1% (down 6.4% y-t-d).
• Spot Gold declined 1.1% to $1,983 (up 8.7%).
• Silver fell 1.0% to $25.08 (up 4.7%).
• WTI crude dropped $4.65, or 5.6%, to $77.87 (down 3%).
• Gasoline sank 8.3% (up 6%),
• Natural Gas rose 5.6% to $2.23 (down 50%).
• Copper dropped 2.9% (up 5%). Wheat fell 2.8% (down 15%),
• Corn dropped 3.2% (down 9.3%).
• Bitcoin sank $3,300, or 10.9%, this week to $27,170 (up 64%).

COT on Commodities

Money managers in commodities covering the week to April 18 when the BCOM rose 1.5%, saw net buying from managed money accounts across 24 of 28 major futures tracked in this, led by crude oil, natural gas, copper, platinum, soybeans and corn via Ole S Hansen @Ole_S_Hansen

Metals

COT on metals in week to April 18: The managed money gold long saw another albeit small reduction in the net long in the wk to April 18 when XAU got rejected at $2050. The 3.3k lots reduction to 134k was led by the first increase in the gross short in a 23% increase in six weeks. The 9% jump in platinum supported the biggest one-week jump in longs since Sept 2019. The net rose 12.8k to 18.4k and CTA’s chasing the positive momentum is likely to have continued until Friday when #XPT closed at a 13-mth high. via Ole S Hansen @Ole_S_Hansen

Lithium

“Chile’s President Gabriel Boric said… he would nationalize the country’s lithium industry, the world’s second largest producer of the metal essential in electric vehicle batteries, to boost its economy and protect its environment. The shock move in the country with the world’s largest lithium reserves would in time transfer control of Chile’s vast lithium operations from industry giants SQM and Albemarle to a separate state-owned company.”

April 21 – Reuters (Alexander Villegas and Ernest Scheyder)

Copper

Highlights

• Copper for May delivery HGK23 declined by 5 cents, or 1.1%, to $3.98 per pound, with prices down 3.1% for the week.
• COT: The copper long jumped 230% to 19.8k lots in response to the (failed) upside break, highlighting a market where traders worry about missing the break, but also how failure turns to immediate long liquidation and with that fresh price weakness as seen on Thurs and Friday
• “The copper industry isn’t letting tightening credit and slowing growth kill the buzz heading into one of its biggest annual gatherings. Underpinning the quiet confidence of executives, bankers and traders drifting into the Chilean capital for Cesco Week are the lowest stockpiles of the metal in 18 years — standing at less than a week’s worth of consumption.” April 17 – Bloomberg (James Attwood)
• Softer Chinese copper imports were ignored by traders with record Chinese first quarter iron ore imports and a 22% jump in Chinese oil imports as the true measures of the status of the Chinese economy.
• Strong credit growth in China underscored the country’s authorities’ intentions to stimulate infrastructure construction.
• Copper is entering the strongest Chinese demand season of the year. Outside that pressure from fear of a financial crisis which could trip up the global economy.
• Another sign of improving demand for copper came from a Bloomberg story indicating that operating rates at copper rod production facilities rose by 12.5% over the prior month.
• London Metal Exchange showed inventories fell to 56,000 tonnes, the smallest amount since 2005.
• The Shanghai Futures Exchange, which lost over one-third since their peak in February.
• Top producer Chile magnifying low supply from Peru due to political turmoil.
• Chile’s state-owned Codelco said the output in 2023 is estimated to sink as much as 7% after the 10.6% decline in 2022.
• The copper trade is concerned the US will implement fresh sanctions against China and tensions between the US and China could drift toward trade war status.
• Demand favors the bull camp and supply factors favor the bear camp.
• “A copper deficit is set to inundate global markets throughout 2023 — and one analyst predicts the shortfall could potentially extend throughout the rest of the decade. The world is currently facing a global copper shortage, fueled by increasingly challenging supply streams in South America and higher demand pressures. Copper is a leading pulse check for economic health due to its incorporation in various uses such as electrical equipment and industrial machinery. A copper squeeze could be an indicator that global inflationary pressures will worsen…” February 6 – CNBC (Lee Ying Shan)
• “Widespread anti-government protests are disrupting copper output in Peru, the world’s second-biggest producer, triggering predictions of a further surge in prices for the metal which has already rocketed in recent months as China’s resource-hungry economy reopens. Demonstrators demanding early elections and the resignation of President Dina Boluarte have thrown up roadblocks across the country and attacked mines, causing production slowdowns and closures in the Latin American nation’s copper operations, which account for about 10% of global supply.” February 7 – Financial Times (Joe Parkin Daniels and Harry Dempsey)

• Commodity trader Trafigura and Goldman Sachs last year both warned that global copper stocks have fallen to record lows with current inventories enough to supply world consumption for just 4.9 days
• Analysts at Goldman Sachs Group Inc. predict copper will hit a record high of $11,000 a ton within 12 months, while BNP Paribas says prices will drop to $6,465 a ton by the middle of next year as the market swings into a huge surplus.
• Glencore estimates a supply shortfall of 50 million tonnes in 2023.

Technical

Copper followed through with its break to the upside out of the pennant through the 50wma after it rebounded sharply off the tenkan and failed three times there in the past month. A bullish weekly hammer formed on copper prices, suggesting demand above $4.00. Rebounding from the two-week low of $3.98 touched on April 4th. The flattening Weekly Kijun acted as a magnet with the cloud twist. We closed right at the bottom of the previous bull flag from 2021. Copper had been a leader in the risk on movement for commodities.

Precious Metals

• Spot Gold declined 1.1% to $1,983 (up 8.7%).
• Silver fell 1.0% to $25.08 (up 4.7%).

Gold

Highlights

• Gold futures for June delivery GCM23 fell by $28.60, or 1.4%, to settle at $1,990.50 per ounce. Based on the most-active contract, that was the first finish below the $2,000 mark, as well as the lowest settlement, since March 31, according to Dow Jones Market Data. For the week, prices fell 1.3%.
• Gold futures fell sharply reacting to higher yields and a stronger dollar Friday.
• Gold consolidating its rally over $2000 which started back in the first half of March, and from a technical viewpoint this puts it in a bullish posture. The banking crisis has eased, but it has not gone away entirely, and the pressure to raise rates seems to be softening, despite concerns expressed by Fed members that inflation is still too strong.
• Russian gold mining production region posted a 10% decline in production in their 1st quarter
• Gold ETF holdings Thursday saw a large inflow of 32,740 ounces.
• China PMI suggests growth in the Chinese economy that should provide a boost to consumption of gold jewelry, among other things.
• “Violet Zhu, a Shanghai-based electronic components exporter, has been attending jewellery auctions and chatting on social media forums on the subject this year, looking to invest in rubies and diamonds. ‘I don’t have the brain for stock investments, and I am waiting to redeem mutual fund products once they break even. But in the meantime, I have been continuously buying gems,’ says Zhu. Zhu says she is searching for oddly-shaped rubies of higher grades… She is not alone. Jewellery and precious metals consumption in China soared 37.4% in March from a year earlier underpinning a 13.6% jump for the quarter…” April 18 – Reuters (Winni Zhou and Tom Westbrook)
• “Gold prices hit their highest level of the year, driven by bets that inflation will remain sticky despite recent declines. The most actively traded gold-futures contract rose to $2,055.30 a troy ounce, up 13% year to date. That also put it within striking distance of its record high, reached in the summer of 2020. Some investors value gold as a hedge against inflation, expecting the precious metal to hold up in value if other assets fall.” April 13 – Wall Street Journal (Hardika Singh
• Gold caught the bid with safe haven flows.
• The bull case in gold fundamental headwinds of rising rates, periodic fears of global slowing.
• Goldman earlier in March labeled gold as “the” investment hedge of preference and predicting gold to trade to $2050.
• Gold and silver will continue to see money flows from residual global bank contagion fears but a significant slide in implied US treasury yields this week adds a secondary supportive force for the bull camp.
• Gold is highly sensitive to the rates outlook as higher interest rates raise the opportunity cost of holding non-yielding bullion and vice versa.

“Traders quip that one of the few things to rally during bear periods is volatility. Add gold to the list. Its price has leapt about 7% so far in March to one-year highs of just under $2,000 per ounce. With investors dumping stocks and corporate bonds, money has flowed into both government bonds and gold. Interest in the yellow metal seems odd, given that price inflation in the US and elsewhere may well have peaked. And gold offers no income to investors… So what explains the renewal of interest? Well, gold does offer a safe haven, particularly for retail investors worried that their money may not be safe in a bank.””

March 24 – Financial Times

Technical

Gold futures successfully back tested the median after another rejection at the Tenkan (orange) moved towards the flat cloud and twist. Needs to get impulse off this ABC so double bottom gains more weight and it follows silver break higher. The yellow metal is consolidating after it accelerated after breaking the weekly triangle higher. Gold has bounced after support at its uptrend line since the August 2021 bottom and Kijun. To be bullish we need to stay above the triangle. Murrey Math resistance, watch Fibs & Chikou.

PBOC Buying Gold

• China boosted its gold reserves for a fifth straight month, extending efforts by the world’s central banks to boost their holdings of the precious metal.
• The People’s Bank of China raised its holdings by about 18 tons in March. Total stockpiles now sit at about 2,068 tons, after growing by about 102 tons in the four months before March. Nations have been building up stockpiles of bullion amid heightened geopolitical risks and high inflation. – Bloomberg April 7
• PBOC in December added to its gold reserves for a second straight month, adding 30 tonnes of gold worth. Brings China’s holdings to a total of 2,010 tons.
• PBOC in November added 32 tonnes of gold worth around $1.8 billion to its reserves, the first time it has disclosed an increase since September 2019.
• China has the world’s sixth-largest official national gold reserves after countries including Russia, Germany and the United States, which is the biggest with 8,133.5 tonnes
• The World Gold Council (WGC) said in October that central banks globally bought 399 tonnes of gold in the third quarter of 2022, by far the most ever in a single three-month period.

Silver

Highlights

• Silver futures for May delivery SIK23 declined by 32 cents, or 1.2%, to $25.06 per ounce, losing 1.6% for the week.
• Silver market had seemingly delinked from gold, it appears to have come back into with moderate declines.
• The weakness in silver is unfolding despite very favorable Silver Institute deficit predictions earlier this week, signaling the silver market is focused on spillover fear from big picture macroeconomic selling of physical commodities.
• Silver is mostly missing out on flight to quality buying interest with Gold and the Swiss France dominating.
• Signs of low supply had supported prices, as New York’s COMEX inventories fell 70% in the last 18 months to just over 1 million tonnes. London Bullion Market Association stockpiles fell for the 10th straight month to a record-low 27.1 thousand tonnes in November.

Technical

Silver bounced off the bottom trend line and was energizes in the sphere of influence. Back over 50wma after spitting tenkan, now providing support after reversed. Closing under outer channel which is now resistance. Major support is 50wma and tenkan.

Industrial Metals

The London Metal Exchange at the end of 2022 showed the smallest available warehouse stockpiles in at least 25 years. Available inventories of aluminum fell 72% decline, zinc shrank by 90%.

“After a substantial stretch when battery makers were desperate for mineral supplies, the shoe is suddenly on the other foot. In the past few months, previously red hot cobalt and lithium prices have cooled dramatically. The chill is coming from both sides: supply and demand. Supply bottlenecks are easing while China’s demand for electric vehicles, and global demand for many consumer electronics, have ebbed as well. Cobalt has fallen out of favor the most: prices in February were down 61% from January last year… Lithium carbonate prices rose rapidly for most of last year, but the metal has seen a sharp correction of 21% since November. China’s EV subsidy cut in December is a big factor…”

February 28 – Wall Street Journal (Megha Mandavia)

Tin

“Tin jumped the most in nine months after a key mining region in Myanmar, the world’s third-biggest supplier, moved to curtail digging of the material used in electronics and cans. An economic planning committee in a northern area of the country controlled by the United Wa State Army — Myanmar’s largest ethnic armed organization — ordered a general halt to mining operations…”

April 17 – Bloomberg:

Aluminum

Highlights

• Aluminum futures closing price of LME Aluminum 3-Month contract stood at USD 2,431.00 per tonne as on 20th April, 2023. The LME Aluminum Cash Settlement contract edged higher modestly from $2,381.00 a day before to $2,410.00 per tonne.
• The LME Aluminum stocks declined over the previous day to close at 572,275 tonnes on 20th April, 2023, as compared with 573,575 a day before.
• China’s annual aluminum production in 2022 increased by 4.5% from a year earlier to a record high of 40.21 million tonnes thanks to newly launched capacity and softened power supply constraints. 
• China has been taking significant steps to boost its economy and end the strict coronavirus-induced regime, lifting the outlook for metal demand and overshadowing global recession concerns.
• On the supply side, last year’s output cuts at key European smelters, including Alcoa’s San Ciprian smelter and Hydro’s plant in Slovakia, lent further optimism to bulls.
• Global inventories now stand at just 1.4 million tons, down 900,000 tons from a year ago and the lowest since 2002.

• Aluminum hit an all-time high of around 4,100 USD/T in March 2022 in the aftermath of Russia’s invasion of Ukraine. Aluminum is down roughly 40% from that record high in March amid persistent fears of a demand-sapping global recession triggered by an aggressive tightening campaign from major central banks.
• In 2022 Aluminum and zinc on the LME had their worst year since 2018, with prices down 15% and 16%, respectively.
• Tin was the worst performer, falling by more than a third and registered the biggest annual decline since at least 1990.
• The world’s top aluminium producer, China’s primary aluminium production in November climbed 9.4% from a year earlier with 3.41 million tonnes as looser power restrictions allowed some regions to ramp up output and as new smelters started operation.
• China is the biggest producer, accounting for 60% of production, followed by Russia and then Europe and the U.S.
• On the supply side, LME has decided against banning Russian metal from trading and storing in its warehouses because many traders are still planning to buy the metal in 2023.
• The car industry is the world’s largest aluminum consumer, with nearly 67 million vehicles per year, according to SkyQuest.

Technical (Alcoa)

We analyze Alcoa as a surrogate to Aluminum given its high beta relationship and more liquid aspect as an investment vehicle. $AA retested the 50Wma and 50% confluence after earnings. From there the Chikou rebalanced it closed under the tenkan. We have support below at 2/8 sphere of influence under the tenkan confluence.

Agricultural Commodities

Managed money demand for soft commodities extended to a third week with a tight supply outlook supporting a 7.3% rally in sugar (+2% to 220k lots) and 8.3% in #coffee (+125% to 21.8k lots). Short covering reduced the cotton short by 14% to 14.8k lots.

Rice

“From China to the U.S. to the European Union, rice production is falling and driving up prices for more than 3.5 billion people across the globe, particularly in Asia-Pacific – which consumes 90% of the world’s rice. The global rice market is set to log its largest shortfall in two decades in 2023, according to Fitch Solutions. And a deficit of this magnitude for one of the world’s most cultivated grains will hurt major importers, analysts told CNBC. ‘At the global level, the most evident impact of the global rice deficit has been, and still is, decade-high rice prices,’ Fitch Solutions’… Charles Hart said.”

April 18 – CNBC (Lee Ying Shan)

Lumber

Lumber prices were a leading indicator of the supply-chain problems and inflation that followed pandemic lockdowns. They are a leading indicator for the strength of the home building industry.

The CME is attempting the replace the random length with the physical futures, but they have yet to achieve the critical mass necessary for success.

The existing legacy contract is freight on board (FOB) originating in Prince George, BC. It’s a reflection of the mill price of western spruce pine fir lumber, which legacy 110,000 board feet futures contract is derived from. The new mini lumber is FOB Chicago, so the premium of $105 represents the additional from delivering to the mill in Chicago. That’s the reason the premium in the mini. Secondly, the new contract has the ability for producers to deliver western SPF, eastern SPF, domestic and Canadian Doug Fir, and U.S. Hem Fir. Depending on the species and delivering mill, the FOB is anywhere from $80 to $105 premium to the legacy contract delivered to Chicago. Lastly, the new contract is sunset out of existence with the official and permanent expiration on May 15, 2023.

Greg Kuta, the President of Westline Capital Strategies,

Highlights

• Chicago lumber futures moved sharply lower after spitting the weekly Kijun. For now, they are trying to bottom above the $400 per thousand feet mark as persistent fears of a demand-sapping global recession prompted some profit-taking after a massive rally drove prices to an over three-month high in early February. 
• Prospects of interest rate hikes continued to depress real estate activity. Stubbornly high inflation and a tight labor market have raised worries that the Federal Reserve will keep rates elevated even after the recent turmoil in the banking sector.
• Fundamentals in the lumber complex had supported tight supplies and prospects of a rebound in-home construction and demand recovery.
• The benchmark remains down roughly 70% since its May 2021 peak of around $1,700, when supply chain issues compounded strong demand.
• Worth noting that before 2018, the price never eclipsed $493.50.
• In January 2023, nearby March random-length lumber futures were sitting at the $417.70 level, with the new physical futures at $525.00.
• In March 2020, random-length lumber futures fell to $251.50 per 1,000 board feet as the global pandemic gripped markets across all asset classes. When commodities exploded higher over the following months lumber rose to $1,711.20 as supply chain and other issues created a shortage. In an almost perfect bullish storm for the lumber market, historically low interest rates caused a housing boom, increasing the demand for lumber when supplies were low. 
• The Federal Reserve’s aggressive tightening cycle has briefly pushed 30-year mortgage rates to levels not seen since 2001, leading to slower home construction and souring sentiment among homebuilders.
• The war in Ukraine and the tightening sanctions against Russia and its ally Belarus, which account for more than 10% of the global export of lumber, had squeezed global supplies.

Grains

For the first quarter of the year, CBOT wheat fell 12.8%, with corn down 2.9% and soybeans down 1.4%.

Wheat

Highlights

• Wheat prices are down in all 3 classes with KC and MGEX down $.06 – $.09, while KC was able to recover closing steady to down $.02. Both May-23 Chicago and MGEX traded down to 4 week lows.
• May-23 KC inverse to Chicago recovered closing at $1.79, still well below its recent all time high of $2.01.
• Confidence is increasing that the US southern plains will benefit from its best rains in months by this time next week.
• The on-going drought in the Southern plains and elevated risk the BSGI will expire in just over a month had stimulated the short covering surge.
• Ukraine’s Ag. Minister states 1 mil. hectares of spring grains have been planted down from 1.53 mil. HA YA. Nearly 57% of the grain planted so far has been barley. Spring wheat planting at 169.2k HA is actually up from 164.4 YA.
• IKAR forecasts Russian 2023 wheat production in 2023 at 84 mmt, while exports should reach 41 mmt. Their export forecast is down from 46 mmt for the 2022 crop. Most private Russian wheat forecast are running in the mid 80’s mmt, however the Russian Ag. Ministry is only forecasting production at 78 mmt.
• The BAGE reports they expect wheat acres to reach 6.7 mil. HA in 2023, up from 6.1 mil. YA.
• USDA estimated US 2023 all wheat acres near 49.85 vs 48.85 expected and 49.5 Forum and 45.73 ly
• USDA estimated US March 1 wheat stocks near 946 mil bu vs 934 expected and 1,029 ly
• The all wheat acreage figure of 49.86 mil. was 1.17 mil. above the average trade est. and at the upper end of the range of estimates.
• The winter wheat acreage est. was revised up by 1.2 mil. from Jan-23 to 37.5 mil., 4.2 mil. above YA and the highest since 2015.
• The level of abandonment will be likely be significantly above the historical average without soaking rain soon in the US Southern plains.
• Spring wheat acres 10.57 mil. were 325k below expectations and the lowest in over a decade.

Technical

Wheat resistance is now the tenkan and the 50 and 61.8% Fibs. It had been drawn higher by the flat weekly cloud which unraveled the shorts which when done we sailed back through 0/8 like butter. The contract keeps failing to stabilize after it continued its sharp impulsive collapse. This came about after a failure at retesting the 8/8 move and high after it spat 8/8, and the minimum target. It had completed a measured 4/8 correction off highs then broke key support at 38% then 50% and 50wma confluence in the freefall.

Corn

Highlights

• Corn deferred contracts were down $.09 – $.10, while spot May-23 closed only $.00 ½. Firm basis continue to support bull spreads as farmers are tightening their grip on old crop supplies in the face lower prices.
• Threat of Brazilian imports seem to be weighing on corn and soybean valuations. Given the extended wait times at SA ports however, this does little to solve the US tightness in the short term.
• May’s inverse over July surged to a new high at $.48 ½ exceeding the YA high of $.45. In 2021 that same spread peaked at $.73 over July on FND. Strength that year was fueled by strong Chinese buying.
• May held its 100 day MA at $6.57 ¼. For the week May-23 was down only $.03, while Dec-23 was down $.12.
• The BAGE held their Argentine production forecast steady at 36 mmt, vs the USDA forecast of 37 mmt. Harvest advanced only 2% in the past week to 15% complete.
• South Korea’s MFG purchased 69k mt of feed wheat from SA origin, likely Brazil, at $267/mt for Sept delivery. South Korean Nonghyup Feed also purchased 137k tons of feed corn at $268/mt CF for Aug/Sept delivery.
• Ukraine official state that with the BSGI in doubt their access to the Danube River ports will be critical to their agricultural exports.
• Of the 2.190 mmt of corn China imported in March, roughly 22.5%, 495k mt were from the US.
• COF showed cattle inventories at 96% of YA, just above expectations of 95%.
• It appears China isn’t taking any chances on the Black Sea Grain deal being extended beyond mid-May as they are estimated to have roughly 1 mmt of corn purchases on the books from Ukraine.
• USDA estimated US March 1 corn stocks near 7,401 mil bu vs 7,470 expected and 7,758 ly
• USDA estimated US 2023 corn acres near 91.99 Vs 90.88 expected and 91.0 Forum and 88.58 ly
• USDA pegged quarterly corn stocks at 7.401 billion bushels, the smallest for March 1 in nine years. Looking ahead to this spring, the USDA projected 2023 corn plantings at 92 million acres, up 4% from 2022.

Technical

Corn May-23 closed back above the 100 day MA, while coming within $.00 ½ of the April high of $6.68 ½. However again it remains under the Kijun after the 7/8 fail to close under the weekly cloud and under the 50wma. Earlier in the year Corn had topped out at the highest since 2012 in Chicago at +1/8 and corrected with impulse back to break the Tenkan which it swiftly did a spit of a spit after bouncing off 720, which also the price successfully retested the high from April 2021. From here we saw Tenkan fail again. Which is back where we are. Corn May-23 violating support at $6.45. Next support is at $6.37.

Soybeans

Highlights

• The soybean complex lower across the board, soybeans down $.12 – $.20, soybean meal down $4 – $6, while soybean oil was 90 – 100 lower. May-23 premium to July has reached $.38 today, just shy of the $.39 ½ high made in early April. May-23 made a new low for the month. Next support is at $14.77 ½.
• US soybean prices remain $90 – $95/mt over Brazil, threatening additional imports.
• Shipping data from Brazil shows just over 79k mt of soybeans have been booked for shipment to the US. Earlier this week the $100+/mt premium for US soybeans was the highest since 2004. Brazilian harvest likely surpassed 90% this week.
• The BAGE lowered their Argentine production forecast another 2.5 mmt to 22.5 mmt, well below the official USDA est. of 27 mmt. Harvest has reached 17%, up from 4% LW. Argentina’s soybean crush in March reached 2.1 mmt, down from 2.9 mmt YA, however well above the 1.5 mmt crushed in Feb-23. In the 3rd preferred currency program Argentine farmers to date have only sold 832k mt, well below the 2.05 mmt sold in Dec, and the 4.76 mmt sold last Sept.
• Of the 6.85 mmt of soybeans China imported in Mch-23, 4.83 mmt were from the US, a jump of 43% from Feb. Imports from Brazil fell 42% to only 1.67 mmt as harvest was delayed. Spot board crush margins continue to soften up closing this week at $.84 bu., closing in on last summer low.
• In an effort to reduce their reliance on huge soybean imports China has proposed a 3-year plan to cut soybean meal feed rations to 13% from 14.5% YA.
• Brazilian Pres. Lula met with Chinese leader Xi in Beijing last week. In a joint statement the 2 countries acknowledge that cooperation in agricultural trade is strategically significant. Both sides pledged to promote agriculture, trade, and supply chain resiliency while also working to strengthen environmental protections to deal with climate change.
• USDA estimated US March 1 soybean stocks near 1,685 mil bu vs 1,742 expected and 1,932 ly
• USDA estimated US 2023 soybean acres near 87.50 vs 88.42 expected and 87.5 Forum and 87.45 ly
• The government projected 2023 plantings of the oilseed at 87.5 million acres, up only slightly from 2022 and near the low end of estimates in a Reuters poll of analysts. The USDA also reported March 1 soy stocks at 1.685 billion bushels, down 13% from a year ago.

Technical

Soybeans after it rejected new lows at the bottom of trendline finally got the legs to break above the 50wma, however that has all unraveled. May-23 made a new low for the month, next support is at $14.77 ½. The 50 wma and the tenkan are above the Kijun providing heavy resistance in the cloud. We sit above the January breakup. May-23 soybeans violated 100-day MA support at $14.95 last week. The weekly cloud and Murray mingle around the $14.9/bushel benchmark. May-23 soybeans broke thru the $15 level while also violating support at its 50 MA and settling right at its 100 MA at $14.92 ½.

Recall beans broke down from the bull pennant framed by +4/8 and +1/8 with the Kijun unable to sustain support right at the breakout. Support at the 50wma gave way to under the futures pivot at $15/bushel benchmarks and at the close of the week was a magnet to the recovery bounce. Pressure came from futures spitting the Weekly +4/8 over $17.50/bushel three times. The market needs to rebalance that energy.

Energy

For complete Oil and Natural Gas Coverage please visit our dedicated publications ‘Around the Barrel’ and ‘Into the Vortex.’ – Weekly Analysis and Outlook for Energy Traders and Investors

BDI Freight Index

For a Complete Macro and Micro Market Overview Visit TC Traders Market Weekly:

Five Factors in a Constructive Strategy for Investing in Commodities

Investing in commodities is something that needs to be done within a constructive strategy to understands risks and opportunity. There are many factors to consider individually depending on one’s access, location and financial position. Five factors to consider are monitoring the market, monitoring supply and demand dynamics, diversification, long-term focus and dollar cost averaging.

Focus on yourself and what YOU CAN INFLUENCE, set your trading plan and goals in be set for 2023.

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