RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

*Commodities, Commodities, Commodities – The commodity rally is broadening vs the equity rally.  Agriculture joins the mix with Corn and Soybeans +3.00% and Soybeans +0.73% and +3.2% on the week.  Metals caught a strong bid yesterday, consolidating gains this morning. 

*Key events today include US Jobless Claims and Q2 GDP (2nd estimate) due out at 7:30am CST

*The highlight of today with Fed Chairman Jerome Powell’s speech at the Jackson Hole Economic Symposium at 8:00am CST        

-Powell largely expected to move the goal posts on the Fed’s 2% inflation target, allowing inflation to run a little above expectations

-Largely expected to have a “lower for longer” outlook on interest rates

*Commodities broaden their rally as Agriculture prices begin to climb

Global Equities
*US is largely in a holding pattern this morning, following another record day in the SP500 and NASDAQ

*Europe traded lower across the board in the overnight led by the IBEX in Spain -0.84%

*China’s Shanghai Index is up +0.64%

Top Market Movers Overnight

Agricultures
*Soybeans continue their climb to 931’0 bushel – remain bullish of US Farm Products. 950-960 remains and upside target for beans in coming weeks – well done

* Lean Hogs are in a developing “bearish to bullish” transition.  Oct Hogs are trading at 55.575 with immediate upside potential to 60-62.50

*Agriculture markets begin to price in the prospect for Chinese demand as the key driving force behind the rally

Metals
*Gold and Silver staged strong rallies yesterday – consolidating those gains this morning ahead of Fed Chair Powell’s speech

*Gold has potential to re-test 2000-2020 in coming weeks

*We still largely contend that both Gold and Silver remain largely “range bound”, and that traders should continue to hold a bullish bias

Energy
*Laura makes landfall, but has been downgraded to a Cat 2 vs yesterday’s Cat 4. 

*Crude Oil and RBOB trade lower as its being reported western Texas Oil operations are likely to continue

*Energy is likely to fall into a “buy pocket” before another test of higher levels.  Long side trade still

*Natural Gas, similar to Energy – looking for a 2-3 day correction before a window opens for a Long side trade

Conclusion-
You must have Commodities as a part of your portfolio as Powell looks to run the economy and inflation “Hot” in coming quarters.  A weaker Dollar and a “lower for longer” outlook on interest are contributing factors to our commodity outlook, along with an improved economic backdrop over the next 12 months, specifically in China (The World’s largest consumer of commodities). 

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John Caruso

Senior Market Strategist
Follow John on Twitter @JCarusoRJO. John began his career at Wilshire Quinn Capital, a Wealth Management Firm based out of Los Angeles, California. Prior to becoming a broker he did some individual trading on his own, where he first began to study and interpret different market strategies and ideas. In 2006 John moved over to Lind-Waldock where he began to service clients as a professional broker. He joined RJO Futures in 2011. Click here to sign-up for John Caruso's Trading Coach Insights. Daily information and insight on all futures marketsin ranging from metals to equities.
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