We kicked off the day with Business Inventories, Export Prices MoM & YoY, Import Prices MoM & YoY, Retail Sales MoM & YoY, Retail Sales Ex Autos MoM, and Retail Sales Ex Gas/Autos MoM at 7:30 A.M., NAHB Housing Market Index and Retail Inventories Ex Autos MoM at 9:00 A.M., 42-Day Bill Auction at 10:30 A.M., Fed Kugler Speech at 1:45 P.M., API Energy Stocks at 3:30 P.M.

Photo by Jesse Gardner on Unsplash

Gold futures closed higher after nearby futures set a record high on Monday at $2,436/oz. Funds continue to put money in the gold market as the US dollar continues to lose purchasing power, but so far, record and near-record prices have found limited commercial selling. Last week’s Commitment of Traders report showed that for the week ending July 9, funds bought 13,000 contracts against commercial selling of 6,800 contracts. The Tue-Tue price changed was +37.10, While gold prices have yet to reach levels that are high enough to stimulate significant commercial selling. Near Term Heat/Dryness Confined to North/West US & Canada; Sustained Heat Absent Elsewhere; Thunderstorms Hit IA, IL and Southern WI Lat Night: The Central US forecast is broadly favorable in that additional rain is forecast eastern Midwest and mid-South over the next three days and as Central US temps moderate beginning Tuesday. NOAA’s 6-10 day temp probability has readings above 90 degrees July 16-25 will be confined to far southern and western US and pockets of the Dakotas. Temps elsewhere are projected in the 70’s & 80’s. Last night’s storms were intense in E IA, IL, and Southern WI. Otherwise, additional showers across the E Corn Belt will be welcomed. Heavy rain in TX, LA, and the Southeast will begin to ease moisture deficits, which have become massive in the Carolinas and VA. Global corn markets ended weaker on Monday as concern over worsening US-China relations increase and Midwest weather forecast lacked widespread heat into late July. The market is prepped for higher US yield and rising US end stocks in USDA’s August WASDE. The US corn crop on Sunday was rated at 68% good-to-excellent, unchanged from the prior week. Ratings were down week-over-week in all states but IL, IN, MO, ND, and WI. Traders were braced for a 1-2% gain in good-to-excellent ratings which will likely spur a short covering bounce on Tuesday US corn is cheap in the world market. Black Sea drought shows no sign of ending and even with a state holiday, basis offers were up 8 cents. Amid enlarged export demand, a complete reassessment of the trade’s US and world balance sheet is underway if US fails to cross the 180 BPA threshold this year. Managed funds are now short 360,000 contracts which is viewed as excessive. And the extended range forecast model calls for heat returning to the Central US beyond July 25^th . Weather and yield potential are at a critical juncture, as well as managed fund activity. And overall, it is no secret that world ag markets are deeply oversold. Ride Turnaround Tuesday.

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