. Daily Commodity Analysis - U.S. Navy races, Gold steadies, COP28 showdown, Corn turmoil.

Daily Commodity Analysis – U.S. Navy races, Gold steadies, COP28 showdown, Corn turmoil.

Daily Commodity Analysis – U.S. Navy races, Gold steadies, COP28 showdown, Corn turmoil.

12 Dec 2023

Introduction

Explore the latest developments in the commodity market with our detailed analysis covering key sectors like crude oil, gold, natural gas, and corn. From geopolitical events impacting oil prices to the intricate dance of gold with inflation data, we bring you insights into the forces shaping these markets. Additionally, delve into the ongoing COP28 climate summit, where critical debates on fossil fuels are unfolding. Our technical overviews and trade suggestions provide a valuable resource for investors navigating these dynamic landscapes. Stay informed about market trends, price movements, and global events influencing commodities.

Markets In Focus Today – Crude

“Cruise Missile Strike on Tanker Ship: U.S. Military Responds to Yemeni Attack”

An anti-ship cruise missile launched from Houthi-controlled Yemen hit the Norwegian-flagged tanker STRINDA, causing a fire and damage. Fortunately, there were no casualties reported. The attack occurred about 60 nautical miles north of the Bab al-Mandab Strait, connecting the Red Sea and the Gulf of Aden, at approximately 2100 GMT. The U.S. Navy destroyer USS MASON responded to the tanker’s distress call and is providing assistance. The STRINDA, a chemical tanker owned by Mowinckel Chemical Tankers, loaded with vegetable oil and biofuels in Malaysia, was en route to Venice, Italy. The vessel was able to move under its own power after the attack. The Houthi group, aligned with Iran, has been involved in the Israel-Hamas conflict, attacking vessels in crucial shipping lanes and launching drones and missiles at Israel. The Houthis recently declared their intent to target all ships heading to Israel, irrespective of nationality. This incident follows a series of attacks in international waters, including the seizure of a British-owned cargo ship with ties to an Israeli company. The United States and Britain have condemned these attacks, attributing support to the Houthis to Iran. Saudi Arabia has urged the U.S. to exercise restraint in responding to these incidents.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 72.41 | Negative Crossover | Bearish
  • MA 20 : 74.24 | Negative Crossover | Bearish
  • MA 50 : 77.98 | Negative Crossover | Bearish

Simple :

  • MA 10 : 72.63 | Negative Crossover | Bearish
  • MA 20 : 74.34 | Negative Crossover | Bearish
  • MA 50 : 79.59 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 39.03 | Neutral Zone | Neutral

Stochastic   Oscillator : 25.31 | Neutral Zone | Neutral

Resistance   And Support Levels :

  • R1 : 81.48 R2 : 84.18
  • S1 : 72.74 S2 : 66

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Limit Buy : 69 | Take Profit : 66 | Stop Loss : 71

Gold

“Gold Prices Hold Steady Below $2,000 as Investors Await CPI Data and Federal Reserve Meeting”

Gold prices experienced minimal movement on Tuesday, with the precious metal consolidating after a sharp decline from record highs. The pullback came as markets awaited crucial U.S. inflation data and the Federal Reserve’s interest rate decision. Gold, which recently fell below the coveted $2,000 per ounce level, retreated from its earlier record highs of over $2,100 per ounce as market expectations for a Fed interest rate cut by March 2024 diminished. Signs of resilience in the U.S. economy fueled speculation that the Fed might maintain higher interest rates for an extended period, prompting the drop in gold prices. Spot gold showed a modest increase of 0.2% to reach $1,986.24 per ounce, while gold futures expiring in February rose by 0.4% to $2,001.40 per ounce by 00:12 ET (05:12 GMT). Investor attention now turns to the U.S. Consumer Price Index (CPI) inflation data scheduled for later in the day. Although expectations suggest a slight easing of inflation in November, it is still anticipated to remain above the Fed’s 2% annual target. The subsequent focus will be on the Federal Reserve’s interest rate decision on Wednesday, where any signals about the trajectory of rates in 2024 will be closely monitored. Gold’s performance has been closely tied to signals from U.S. monetary policy in recent months, reflecting the impact of higher interest rates on the attractiveness of gold as an investment. In the realm of industrial metals, copper prices saw a modest rise on Tuesday after concerns about an economic slowdown in China, the top copper importer, led to significant losses earlier in the week. Copper futures for March delivery increased by 0.3% to $3.7945 per pound after a 1.4% loss in the previous session. China’s recent disinflation and worries about sustained economic deceleration have raised concerns about copper demand, with attention now focused on upcoming Chinese economic indicators, including industrial production data scheduled for Friday.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 2008.69 | Negative Crossover | Bearish
  • MA 20 : 2004.23 | Negative Crossover | Bearish
  • MA 50 : 1978.25 | Positive Crossover | Bullish

Simple :

  • MA 10 : 2022.58 | Negative Crossover | Bearish
  • MA 20 : 2008.01 | Negative Crossover | Bearish
  • MA 50 : 1966.57 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 46.86 | Neutral Zone | Neutral

Stochastic   Oscillator : 8.46 | Neutral Zone | Neutral

Resistance   And Support Levels :

  • R1 : 2052.82 R2 : 2082.09
  • S1 : 1984 S2 : 1931

Trade Suggestion : Limit Buy : 1984 | Take Profit : 1935 | Stop Loss : 1955

NATURAL GAS

“COP28 Reaches Crucial Juncture: Intense Debates and Decisions on Fossil Fuels”

As the COP28 climate summit in Dubai nears its scheduled conclusion on Tuesday, tensions escalate among nearly 200 countries regarding the potential inclusion of fossil fuel phase-out language in the final agreement. U.N. Secretary-General Antonio Guterres emphasizes the need for a deal that expedites the reduction of coal, oil, and gas use to avert catastrophic climate impacts. Recognizing the challenges faced by nations in transitioning away from fossil fuels, Guterres underscores that not all countries are expected to eliminate their use simultaneously. He highlights the imperative for substantial financial support to assist developing nations in transforming their energy systems. South African Environment Minister Barbara Creecy, speaking on Sunday, underscores the gap between climate action ambitions and the means to implement changes, emphasizing the necessity for financial mechanisms to support these efforts. A coalition of over 100 countries, including major oil and gas producers like the United States, Canada, Norway, the European Union, and climate-vulnerable island nations, advocates for an agreement explicitly calling for the phasing out of fossil fuels—a historic proposal in U.N. climate summits. Canadian Environment Minister Steven Guilbeault expresses frustration with the opposition led by the Organization of the Petroleum Exporting Countries (OPEC) to include explicit language on fossil fuels in the agreement. Guilbeault recognizes the complexity of this transition but insists it is not a reason to avoid action. The high consensus threshold required for any deal at U.N. climate summits necessitates agreement from all participating countries. This process aims to ensure global unity in addressing climate change, to be implemented through national policies and investments. Saudi Arabia, perceived as a key opponent to the fossil fuel phase-out language, remains silent on the matter. However, a Saudi representative states that the COP28 deal should prioritize reducing emissions rather than targeting specific energy sources. Despite the push for renewable energy transition, fossil fuels still contribute to approximately 80% of global energy production. OPEC and OPEC+ members, including Russia, Iraq, and Iran, reportedly resist the inclusion of a fossil fuel phase-out in the COP28 agreement. The United Arab Emirates, a major oil producer and summit host, calls for compromise among countries to achieve a deal addressing fossil fuels. Singapore’s environment minister Grace Fu acknowledges progress in some areas but notes the need for significant work to bridge gaps on critical issues. With the summit potentially extending beyond its scheduled end date, the global community closely watches the outcome of these negotiations.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 2.46 | Negative Crossover | Bearish
  • MA 20 : 2.58 | Negative Crossover | Bearish
  • MA 50 : 2.72 | Negative Crossover | Bearish

Simple :

  • MA 10 : 2.46 | Negative Crossover | Bearish
  • MA 20 : 2.61 | Negative Crossover | Bearish
  • MA 50 : 2.87 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 25.14 | Neutral Zone | Neutral

Stochastic   Oscillator : 20.00 | Neutral Zone | Neutral

Resistance   And Support Levels :

  • R1 : 3.09 R2 : 3.27
  • S1 : 2.52 S2 : 2.11

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Limit Buy : 2.3900 | Take Profit : 2.11 | Stop Loss : 2.5054

CORN

Corn Market Faces Significant Decline on “Red Monday”

The corn market experienced a decrease ranging from 1 ¾ to 5 ¼ cents as the week commenced. March futures showcased a range of 7 ¾ cents throughout the day, ultimately closing 3 cents lower than the daily low. Weekly Export Inspections data indicated the shipment of 711,733 MT of corn in the week ending 12/07. Although lower than the previous week’s 1.2 MMT, it surpassed the 517k MT recorded during the same week last year. The USDA reported the season’s total at 9.18 MMT, contrasting with 7.17 MMT at the equivalent point in the previous season. Milo exports for the week stood at 340k MT, a substantial increase from the 120k MT of the previous week and the 4k MT during the corresponding week last year. Year-to-date milo shipments reached 1.426 MMT, a notable contrast to the 357k MT during the 22/23 season. The USDA’s monthly World Agricultural Supply and Demand Estimates (WASDE) report indicated a 25 million bushel increase for the U.S. corn export program. This adjustment led to a reduction in carryout, bringing it down to 2.131 billion bushels. Global corn adjustments reflected a 1.3 MMT increase in corn production, with Russia and Ukraine both contributing +1 MMT, Egypt adding +200k, and Canada decreasing by -200k MT, resulting in a total of 1.222 billion MT. Closing prices for March 24 Corn were at $4.81 1/2, down 4 cents. Nearby Cash closed at $4.51 3/8, reflecting a decrease of 3 1/2 cents. May 24 Corn closed at $4.94, down 3 1/2 cents, and Jul 24 Corn closed at $5.03 1/2, experiencing a decline of 2 1/2 cents.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 4.76 | Negative Crossover | Bearish
  • MA 20 : 4.78 | Negative Crossover | Bearish
  • MA 50 : 4.88 | Negative Crossover | Bearish

Simple :

  • MA 10 : 4.76 | Negative Crossover | Bearish
  • MA 20 : 4.76 | Negative Crossover | Bearish
  • MA 50 : 4.89 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 45.76 | Neutral Zone | Neutral

Stochastic   Oscillator : 61.21 | Neutral Zone | Neutral

Resistance   And Support Levels :

  • R1 : 490 R2 : 512
  • S1 : 470 S2 : 440

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Limit Buy : 470 | Take Profit : 440 | Stop Loss : 480

Elsewhere In The Commodity Market

Front Month Comex Silver for December delivery faced its sixth consecutive decline, losing 19.80 cents per troy ounce or 0.86%, settling at $22.773. This prolonged downward trend, amounting to a $2.726 or 10.69% decrease over the last six sessions, marks the lengthiest losing streak since September 8, 2023, when the market experienced a decline for seven consecutive sessions. The settlement value recorded today is the lowest since November 13, 2023. Reflecting a 12.53% decrease from its 52-week high on May 4, 2023, at $26.035, the current value also stands 13.84% higher than its 52-week low of $20.005 on March 8, 2023. While down 1.93% from 52 weeks ago, the commodity has seen a 12.53% drop from its 2023 settlement high on May 4, 2023, while being up by 13.84% from its settlement low on March 8, 2023. Historically, it is down by 53.24% from its record high of $48.70 on January 17, 1980. Month-to-date, it registers a decline of 9.96%, and year-to-date, there is a decrease of $1.089 or 4.56%. All prices are calculated based on the settlement price of the current front-month contract.

Key Economic Events & Data Release Today:

7:00PM(IST)-USD-CPI m/m