The latest Market Talks covering Commodities. Published exclusively on Dow Jones Newswires throughout the day.
1538 ET - U.S. natural gas futures give back most of yesterday's gains with production recovering and market focus turning to the EIA's weekly storage report due on Thursday. Analysts in a Wall Street Journal survey expect a 75 Bcf inventory injection, which is smaller than the five-year average and would lower the storage surplus to 53 Bcf from 68 Bcf the previous week. Firm LNG demand and higher natural gas use for electricity as solar and wind generation weaken are supportive, Gelber & Associates says in a note. "Colder weather this weekend should also lift heating consumption, although the same cooldown removes air-conditioning demand farther south and leaves the national demand outlook mixed."Nymex natural gas settles down 2.6% at $3.198/mmBtu. (anthony.harrup@wsj.com)
1514 ET - Lean hog futures settled trading down 2.9% at 66.075 cents a pound. That brings the continuous contract to near its lowest close since early January 2024, according to data from FactSet. Pressure stemming from a hot CPI print this morning spanned commodities, including livestock. A higher USD index makes U.S. exports less attractive to buyers, while the expectation of higher interest rates to combat inflation experienced a resurgence. The conviction of markets that a rate hike is imminent faded as the day progressed, with the CME's FedWatch now showing a 66% chance of interest rates staying unchanged after the Oct. 28 Fed meeting. Live cattle settled down 0.5% to $2.2515 a pound. (kirk.maltais@wsj.com)
1504 ET [Dow Jones]--Canadian productivity is set to improve despite the trade war with the U.S. and after years of lackluster productivity growth, Oxford Economics' Tony Stillo argues. The economist says a long-overdue pickup in business capital expenditure, plus major public infrastructure investments and a growing boost from AI, should underpin stronger productivity growth in the coming decade. That is even with U.S. tariffs and trade policy uncertainty. Canada has seen an average 0.3% annually in real gross value added per worker over 2016-2025, but Canada is an inflection point and growth is expected to be 1.1% annually over 2026-2035, Stillo says. (robb.stewart@wsj.com; @RobbMStewart)
1407 ET - Gold and silver futures settle lower after U.S. consumer price inflation for September landed above estimates, increasing market expectations for a Fed interest-rate rise this month and pushing the U.S. dollar higher. Continuing attacks in the Persian Gulf add pressure by lifting oil prices, "sustaining the risk that energy-led inflation complicates the Fed's path," Kaynat Chainwala of Kotak Neo says in a note. Front month gold settles down 1.6% in New York at $4,084.80 a troy ounce. Silver falls 6.1% to $55.55 a troy ounce, its lowest close in almost 11 months. (anthony.harrup@wsj.com)
1318 ET - Tomorrow's weekly report from the EIA is expected to show an increase in the average daily production of ethanol in the U.S., according to analysts surveyed by Dow Jones. They forecast that average production may land anywhere from 1.065 million barrels a day to 1.095 million barrels a day. That's versus 1.053 million barrels a day reported by the EIA last week. The report is being released tomorrow, a day late due to the Columbus Day/Indigenous Peoples' Day holiday observed this past Monday. Most active corn futures on the CBOT are down 0.7%. (kirk.maltais@wsj.com)
1306 ET - The Intercontinental Exchange says that it will launch a suite of livestock futures to compete with similar offerings from the CME. This week, the ICE says that it will launch live cattle futures, feeder cattle futures, and lean hog futures. The contracts are scheduled to begin trading on Dec. 7, says ICE in a notice. Analysts see the new offering as a direct challenge to the CME's longstanding dominance in livestock futures. "The decision to enter livestock represents a significant competitive development, particularly as market participants evaluate execution costs, trading technology, liquidity, and alternative hedging opportunities," says PJ Quaid of StoneX in a note. In its notice, the ICE adds that June 2027 will be the first month that it will offer a physically delivered live cattle contract. (kirk.maltais@wsj.com)
1224 ET - Bitcoin and gold are two sides of the same coin, according to Steve Neamtz of Yorkville America in a note. He says bitcoin as 'digital gold" simply doesn't have the benefit of time in the market to determine how it may behave in the course of financial stress, whereas gold has had thousands of years to "demonstrate its value as a reserve asset." But both will work for investors attempting to hedge against currency debasement. "None of this requires picking a side," he says. "Central banks are buying gold on infrastructure that already exists; institutions are buying bitcoin on infrastructure still being built--the same debasement logic, two different stages." Bitcoin falls 1.9%, while gold is off 1.6%. (kirk.maltais@wsj.com)
1103 ET - The volatility of macroeconomics this year has made hedging using agricultural futures contracts more attractive for traders, says John Ricci, Global Head of Agricultural Products for the CME Group. "We're seeing things right now that we've not experienced before, and a lot of them are happening, unfortunately, at the same time," Ricci told the WSJ. This is one factor behind the exchange's push of its beef trims contract, which launched in July. Players who haven't traditionally been involved with agricultural futures now find themselves attempting to hedge risk using CME futures. Ricci says this is true for those in the meat packing and distribution industries, as well as energy companies in the case of corn or sorghum contracts. (kirk.maltais@wsj.com)
1027 ET - U.S. natural gas futures are lower with the market giving back most of the previous day's gains. Much of yesterday's rise was likely technically driven as the November contract bounced off the 20-day moving average at $3.10/mmBtu, Eli Rubin of EBW Analytics says in a note. A brief cold front expected in the Northeast at the weekend offers immediate-term physical upside, he says. "Gas prices may continue to test higher short term, but bearish long-term fundamentals in the most likely scenario are little changed." Nymex natural gas is off 3.1% at $3.182/mmBtu. (anthony.harrup@wsj.com)
1016 ET - Oil futures are higher as Houthi strikes on Saudi targets, attacks on shipping in the Strait of Hormuz and continuing Russia-Ukraine strikes keep the market on edge despite the amount of oil making it out of the Persian Gulf. "Traders will remain focused on oil flows coming out of the Middle East along with diesel supplies that are supposedly moving from Russia," Dennis Kissler of BOK Financial says in a note. "Near-term futures seem to be pricing in a higher probability of a major military conflict coming back to the Middle East." WTI is up 1.3% at $95.40 a barrel and Brent gains 0.2% to $105.91 a barrel. (anthony.harrup@wsj.com)
1012 ET - Winter wheat planting in the U.S. advanced over the past week, but remains behind the 5-year average pace, according to USDA data. In its Crop Progress report, the government says 51% of the expected U.S. winter wheat crop has been planted as of Oct. 11. That's up from 36% the prior week, but 7 points behind the 5-year average rate. This week's harvest progress matched trader expectations, says Joe Davis of Futures International in a note. "The lag leaves establishment dependent on favorable fall weather," says Davis. "Additional Plains rainfall could improve soil moisture but may temporarily slow planting activity." CBOT wheat falls 0.4%. (kirk.maltais@wsj.com)
1010 ET - Lean hog futures are down 1.5% in morning trading, sliding as pork product markets continue to show soft demand, says StoneX in a note. "While the slaughter and production metrics we report weekly aren't that different than a year ago, most price series for hogs and pork products are starkly different, and why the industry is spending so much time instead analyzing demand at the moment," says StoneX in its note. More pork products are hitting the retail markets as well, saturating them as demand stays light, says StoneX. Live cattle futures rise 0.1%.
Comments