{"id":3977,"date":"2018-10-31T14:51:54","date_gmt":"2018-10-31T18:51:54","guid":{"rendered":"https:\/\/www.fundamentalanalytics.com\/?p=3977"},"modified":"2018-10-31T14:51:54","modified_gmt":"2018-10-31T18:51:54","slug":"commodity-market-update-october-30-2018","status":"publish","type":"post","link":"https:\/\/www.fundamentalanalytics.com\/pt\/commodity-market-update-october-30-2018\/","title":{"rendered":"Commodity Market Update October 30, 2018"},"content":{"rendered":"

Energia<\/strong><\/p>\n

Crude Oil prices have dropped since the beginning of October because of the market’s expectation that Saudi Arabia will make up for lost supply from Iran and slowing world demand growth for crude oil.\u00a0 For example, the January Crude Oil contract price has decreased $7.25 from October 1\u00a0 to October 26 (Chart 1, black line).<\/p>\n

Chart 1<\/strong>\"\"<\/p>\n

Products refined from Crude Oil have dropped in price in tandem with Crude Oil prices.\u00a0 For example, the\u00a0 January RBOB Gasoline contract price decreased by over 30 cents per gallon (or $13.00 per barrel) from October 1 to October 26 (Chart 2, black line). This means that the finished product, Gasoline, dropped in price greater than the underlying raw material price, Crude Oil.<\/p>\n

Thus the spread between January Gasoline and January Crude Oil (the Crack Spread) reduced by $5.75 (Chart 3, black line).\u00a0\u00a0 This Crack Spread drop is understandable as the summer Gasoline driving season has ended and demand is decreasing.<\/p>\n

Chart 2<\/strong><\/p>\n

\"\"<\/p>\n

Chart 3\u00a0<\/strong><\/p>\n

\"\"<\/p>\n

In comparison, the January Heating Oil contract price decreased by only 11 cents per gallon (or $4.62 per barrel) from October 1 to October 26 (Chart 4, black line).\u00a0 Heating Oil dropped in price less than Crude Oil so the Heating Oil Crack spread widened by over $2.50 (Chart 5, black line).\u00a0 This Crack Spread increase is reasonable in that Winter Heating season has begun and demand for Distillates is at record levels for this time of the year.<\/p>\n

Consequently, we recommend consideration of being short Gasoline to Crude spreads and being long Heating Oil to Crude spreads.<\/p>\n

Chart 4<\/strong><\/p>\n

\"\"<\/p>\n

Chart 5<\/strong>\"\"<\/p>\n

Grains<\/strong><\/p>\n

Soybeans<\/strong><\/p>\n

Fundamentals continue to be bearish to price with another low FAS export sales report for the 2018-2019 market season.\u00a0 Weekly Export Sales\u00a0for the week ending October 18 reported soybeans exports at 213,700 ton (Chart 6, orange line).\u00a0 The sales number was below expectations of 300,000 \u2013 700,000 metric tons.<\/p>\n

Chart 6<\/strong><\/p>\n

\"\"<\/p>\n

Corn<\/strong><\/p>\n

Weekly Export Sales\u00a0for the week ending October 18 reported corn exports at 377,500 metric tons (Chart 7, orange line).\u00a0 The sales number was below expectations of 400,000 \u2013 800,000 metric tons.<\/p>\n

Soybeans and Corn prices dropped sharply on the poor weekly export sales.\u00a0 Large harvest advancements and a stronger dollar are adding to the downward seasonal pressure on prices.\u00a0 Producers are storing much of the crop\u00a0 \u00a0as they are not willing to sell at\u00a0 current low prices.\u00a0 With these pressures on prices we suggest consideration of short positions in both soybeans and corn.<\/p>\n

Chart 7<\/strong><\/p>\n

\"\"<\/p>","protected":false},"excerpt":{"rendered":"

Energy Crude Oil prices have dropped since the beginning of October because of the market’s expectation that Saudi Arabia will make up for lost supply from Iran and slowing world demand growth for crude oil.\u00a0 For example, the January Crude Oil contract price has decreased $7.25 from October 1\u00a0 to October 26 (Chart 1, black […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[1],"tags":[],"class_list":["post-3977","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/www.fundamentalanalytics.com\/pt\/wp-json\/wp\/v2\/posts\/3977","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.fundamentalanalytics.com\/pt\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.fundamentalanalytics.com\/pt\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.fundamentalanalytics.com\/pt\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fundamentalanalytics.com\/pt\/wp-json\/wp\/v2\/comments?post=3977"}],"version-history":[{"count":2,"href":"https:\/\/www.fundamentalanalytics.com\/pt\/wp-json\/wp\/v2\/posts\/3977\/revisions"}],"predecessor-version":[{"id":3986,"href":"https:\/\/www.fundamentalanalytics.com\/pt\/wp-json\/wp\/v2\/posts\/3977\/revisions\/3986"}],"wp:attachment":[{"href":"https:\/\/www.fundamentalanalytics.com\/pt\/wp-json\/wp\/v2\/media?parent=3977"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.fundamentalanalytics.com\/pt\/wp-json\/wp\/v2\/categories?post=3977"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.fundamentalanalytics.com\/pt\/wp-json\/wp\/v2\/tags?post=3977"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}