Apr 2, 2017 - Weekly Commodity: Strong dollar, Crude inventories, Opec and USDA report the main topics last week

Strong dollar was a key factor in commodity markets the last week along with Crude oil inventories, OPEC statement and USDA Prospective Planting report. Overall we could see a rather bearish market as a result but if we look at commodities separately, we got a mixed picture.

The Crude oil bears felt the pain when WTI closed above key resistance $50 despite rising inventories as OPEC sources mentioned potential extension of production cut. The expected seasonal decline in inventories in April supported the surge.

Grains had an important week as traders were waiting for USDA Prospective Planting report . Soybeans were sold of heavily due to increase in planned planted area, while Wheat couldn’t get too much upside momentum. Corn, one of the most shorted grain was a different story, as massively closed up the last week testing the earlier broken uptrend line.

Precious metals were led by gold selling which is in correction mode after failed to break above 200 day moving average and the main reason of the weakness is the strengthening dollar, while medium term the European elections (France, Germany) as well as the Brexit theme along with Greece could bring support. Technically a double top is forming and could be traded aggressively at relatively low risk.

Among soft commodities Sugar continued to suffer due to expected sharp recovery in Indian production and still pending theme of Indian imports. On the other side Cocoa found support and seems to be gradually trending higher from the multiyear lows reached earlier this year.

 WTI chart

Corn chart

Sugar chart

Good Luck and remember to watch your risk and be consistent

Mr. Tech Man

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