Data-Driven Commodity Research, The Commodity Report

The Commodity Report

Data-Driven Commodity Research

A unique newsletter about commodities and macro analysis in a weekly format.

Commodities

<ul><li>-30% // Cocoa Bubble Has Busted Just two weeks ago, the most-active contract hit a record of almost $12,000 a ton as the industry grappled with the fallout of severe supply shortages.</li><li>“It’s important to underscore that the recent downturn in cocoa prices is primarily a result of trading maneuvers, not a realignment of market fundamentals,” analysts at Fitch Solutions’ BMI unit said in a note, adding they expect volatility to persist.</li><li>Volatility spiked as bigger margin requirements spurred traders to close out positions, helping to drive aggregate open interest in cocoa futures to the lowest in more than a decade.</li></ul>

-30% // Cocoa Bubble Has Busted Just two weeks ago, the most-active contract hit a record of almost $12,000 a ton as the industry grappled with the fallout of severe supply shortages.“It’s important to underscore that the recent downturn in cocoa prices is primarily a result of trading maneuvers, not a realignment of market fundamentals,” analysts at Fitch Solutions’ BMI unit said in a note, adding they expect volatility to persist.Volatility spiked as bigger margin requirements spurred traders to close out positions, helping to drive aggregate open interest in cocoa futures to the lowest in more than a decade.

-30% // Cocoa Bubble Has Busted & Central Banks Buy Gold

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<ul>
<li>We continue to view the latest pullback as healthy/normal within the ongoing bull market, and it is quite possible that the lows have been established on MSCI ACWI (ACWI-US).</li>
<li>Upgrading EM to Market Weight; MSCI Emerging Markets, China (shanghai Composite) and Hong Kong (Hang Seng) Still Bottoming; we discussed buying in our February 23, 2024<em> Int'l Compass</em>
</li>
<li>Commodities all appear to be rolling over near resistance, which is what we discussed to watch for in our April 18, 2024 <em>Int'l Compass. </em>This has bullish implications for ACWI</li>
</ul>


We continue to view the latest pullback as healthy/normal within the ongoing bull market, and it is quite possible that the lows have been established on MSCI ACWI (ACWI-US).
Upgrading EM to Market Weight; MSCI Emerging Markets, China (shanghai Composite) and Hong Kong (Hang Seng) Still Bottoming; we discussed buying in our February 23, 2024 Int'l Compass

Commodities all appear to be rolling over near resistance, which is what we discussed to watch for in our April 18, 2024 Int'l Compass. This has bullish implications for ACWI


Upgrading Emerging Markets to Market Weight; China/Hong Kong Continue to Bottom; Energy Breakdowns

Energy Transition | AI | Shifting World Order, Mint Finance

Suhas Reddy

Energy Transition | AI | Shifting World Order

Deep Fundamental Analysis

Mint Finance

Mint Finance's investment research blends deep fundamental analysis with technical & quant insights. Investment strategies straddle across multiple asset classes with risk management embedded into every trade to deliver an outsized reward-to-risk ratio.

Mint Finance's research is centered around three key themes. First, energy transition and climate change. Second, artificial intelligence. Third, shifting world order with its impact across politics and monetary economics.

Macroeconomics

<ul>
<li>US Nonfarm Payrolls shows disappointing growth in jobs, much lower than the anticipated addition of 243,000 jobs.</li>
<li>April’s print is also lower than the average monthly gain of 242,000 jobs over the previous 12 months.</li>
<li>Unemployment rate comes in at 3.9%, marginally higher than analyst expectations of 3.8%.</li>
</ul>


US Nonfarm Payrolls shows disappointing growth in jobs, much lower than the anticipated addition of 243,000 jobs.
April’s print is also lower than the average monthly gain of 242,000 jobs over the previous 12 months.
Unemployment rate comes in at 3.9%, marginally higher than analyst expectations of 3.8%.


Surprise Weakness Job Growth Brings Rate Cut Closer

<ul>
<li>Chair Powell decided to maintain Fed fund rates at 5.25%-5.5% sticking to the much expected higher for longer strategy given the reverse direction of travel on rates.</li>
<li>Forget rate cuts. Those hopes are diminishing. US prediction markets are pricing a 40% chance of zero rate cuts this year.</li>
<li>Nonfarm Payroll numbers tomorrow will hint at the path of interest rate travel for the rest of the year. Continued strength will melt hopes of rate cuts further.</li>
</ul>


Chair Powell decided to maintain Fed fund rates at 5.25%-5.5% sticking to the much expected higher for longer strategy given the reverse direction of travel on rates.
Forget rate cuts. Those hopes are diminishing. US prediction markets are pricing a 40% chance of zero rate cuts this year.
Nonfarm Payroll numbers tomorrow will hint at the path of interest rate travel for the rest of the year. Continued strength will melt hopes of rate cuts further.


Strong US Payroll Will Completely Crush Rate Cut Hopes

<ul>
<li>While we are not yet out of the woods, we continue to see evidence that suggests the lows may be "in" for this pullback.</li>
<li>Last week (4/23/24 Compass) we discussed the possibility that further downside was limited on the S&amp;P 500 due to a multitude of reasons</li>
<li>We view the latest pullback to 100-day MA on SPX as healthy/normal within the ongoing bull market. Pullbacks to the 100-day provided ideal entry points throughout the 2021 bull market</li>
</ul>


While we are not yet out of the woods, we continue to see evidence that suggests the lows may be "in" for this pullback.
Last week (4/23/24 Compass) we discussed the possibility that further downside was limited on the S&amp;P 500 due to a multitude of reasons
We view the latest pullback to 100-day MA on SPX as healthy/normal within the ongoing bull market. Pullbacks to the 100-day provided ideal entry points throughout the 2021 bull market


Are the Lows "In" For This Pullback?; Market Dynamics Remain Bullish; Key Supports Holding

United States

Crude oil is a naturally occurring, unrefined petroleum product composed of hydrocarbon deposits and other organic materials. Crude oil can be refined to produce usable products such as gasoline, diesel and various forms of petrochemicals. It is a nonrenewable resource, also known as a fossil fuel, which means that it can't be replaced naturally at the rate we consume it and is therefore a limited resource.

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Crude Oil (CL1 COM COMDTY)

-30% // Cocoa Bubble Has Busted & Central Banks Buy Gold

-30% // Cocoa Bubble Has Busted Just two weeks ago, the most-active contract hit a record of almost $12,000 a ton as the industry grappled with the...

The Commodity Report

Upgrading Emerging Markets to Market Weight; China/Hong Kong Continue to Bottom; Energy Breakdowns

Upgrading Emerging Markets $EEM $VWO to Market Weight; China/Hong Kong Continue to Bottom $FXI $MCHI $KWEB; Lows Likely in on $ACWI; Commodities...

Vermilion Research

Surprise Weakness Job Growth Brings Rate Cut Closer

US employment growth in April cools down and comes in lower than expected, Unemployment rate slightly above expectations, equities rally while...

Mint Finance

Strong US Payroll Will Completely Crush Rate Cut Hopes

Fed maintains fund rates at 5.25%-5.5%, Despite high inflation Chair Powell stated that rate hikes are unlikely, Continued strength in the labour...

Mint Finance

Are the Lows "In" For This Pullback?; Market Dynamics Remain Bullish; Key Supports Holding

Are the Lows "In" for this Pullback?; Market Dynamics Remain Bullish (RS for defensives $XLP, $XLU, $XLV below October 2023 lows among many other...

Vermilion Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

-30% // Cocoa Bubble Has Busted & Central Banks Buy Gold

-30% // Cocoa Bubble Has Busted Just two weeks ago, the most-active contract hit a record of almost $12,000 a ton as the industry grappled with the...

The Commodity Report

Upgrading Emerging Markets to Market Weight; China/Hong Kong Continue to Bottom; Energy Breakdowns

Upgrading Emerging Markets $EEM $VWO to Market Weight; China/Hong Kong Continue to Bottom $FXI $MCHI $KWEB; Lows Likely in on $ACWI; Commodities...

Vermilion Research

Surprise Weakness Job Growth Brings Rate Cut Closer

​US employment growth in April cools down and comes in lower than expected, Unemployment rate slightly above expectations, equities rally while...

Mint Finance

Strong US Payroll Will Completely Crush Rate Cut Hopes

Fed maintains fund rates at 5.25%-5.5%, Despite high inflation Chair Powell stated that rate hikes are unlikely, Continued strength in the labour...

Mint Finance

Are the Lows "In" For This Pullback?; Market Dynamics Remain Bullish; Key Supports Holding

Are the Lows "In" for this Pullback?; Market Dynamics Remain Bullish (RS for defensives $XLP, $XLU, $XLV below October 2023 lows among many other...

Vermilion Research

US employment growth in April cools down and comes in lower than expected, Unemployment rate slightly above expectations, equities rally while...