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>Don’t get fooled by the tight inventory narrative While many copper bulls continue to write about the low copper inventories I would like to inform you once again that there is simply no correlation between copper inventories and the price of the industrial metal.</li><li>If you want to be precise - you could even make the case that excessive lows in the LME copper inventory data actually mark cyclical highs in the price of the brownish metal.</li><li>US Leading Economic Index's recession signal deepens in March, Conference Board reports: “The US LEI fell to its lowest level since November of 2020, consistent with worsening economic conditions ahead,” says CB's senior manager for business cycle indicators.</li></ul>

Don’t get fooled by the tight inventory narrative While many copper bulls continue to write about the low copper inventories I would like to inform you once again that there is simply no correlation between copper inventories and the price of the industrial metal.If you want to be precise - you could even make the case that excessive lows in the LME copper inventory data actually mark cyclical highs in the price of the brownish metal.US Leading Economic Index's recession signal deepens in March, Conference Board reports: “The US LEI fell to its lowest level since November of 2020, consistent with worsening economic conditions ahead,” says CB's senior manager for business cycle indicators.

Don’t Get Fooled by the Tight Inventory Narrative - Economic Situation Continues to Worsen

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>The S&amp;P 500 is approaching the 4165-4200 area; we continue to believe this will cap upside in 2023, but we also acknowledge that a move to 4300-4325 is possible</li>
<li>Considering limited upside in both scenarios, we continue to recommend shifting to defensives, particularly Health Care (XLV), Utilities (RYU, XLU), Consumer Staples (XLP), and precious metals miners (GDX)</li>
<li>10-Year and 30-Year Treasury yields testing short-term resistance while the US dollar (DXY) tests support at $101-101.50.</li>
</ul>


The S&amp;P 500 is approaching the 4165-4200 area; we continue to believe this will cap upside in 2023, but we also acknowledge that a move to 4300-4325 is possible
Considering limited upside in both scenarios, we continue to recommend shifting to defensives, particularly Health Care (XLV), Utilities (RYU, XLU), Consumer Staples (XLP), and precious metals miners (GDX)
10-Year and 30-Year Treasury yields testing short-term resistance while the US dollar (DXY) tests support at $101-101.50.


Favor Defensives as S&P 500 Tests 4165-4200; Buys in Consumer Staples & Europe/UK Telecomm

<ul><li>As the new season commences in April, Brazil is predicted to manufacture 40.3 million tonnes of sugar, marking the second highest yield ever recorded.</li><li>This is primarily due to the favorable climate conditions and the sufficient capitalization of mills, allowing for the proper care of crops.</li><li>As per a report by Job Economia, mills are likely to concentrate on sugar production, reducing ethanol production, since the cost of sugar futures is at its highest in over six years.</li></ul>

As the new season commences in April, Brazil is predicted to manufacture 40.3 million tonnes of sugar, marking the second highest yield ever recorded.This is primarily due to the favorable climate conditions and the sufficient capitalization of mills, allowing for the proper care of crops.As per a report by Job Economia, mills are likely to concentrate on sugar production, reducing ethanol production, since the cost of sugar futures is at its highest in over six years.

Between Chilean Copper Woes & Brazilian Sugar Rush

<ul><li>Oil businesses fear lower prices and a shortage of workers The quarterly Dallas FED Energy survey showed some pretty interesting results.</li><li>First of all, business activity tanked and the uncertainty level of businesses rose.</li><li>The survey also highlighted which price small and large drilling companies need in order to produce oil without a loss.</li></ul>

Oil businesses fear lower prices and a shortage of workers The quarterly Dallas FED Energy survey showed some pretty interesting results.First of all, business activity tanked and the uncertainty level of businesses rose.The survey also highlighted which price small and large drilling companies need in order to produce oil without a loss.

Scary: Oil market business conditions are worsening fast - due to policy mistakes

<ul><li>Goldman Sachs jumps back into the supercycle boat Goldman Sachs expects a commodities supercycle driven by China and the capital flight from energy markets and investment this month after concerns triggered by the banking sector, the U.S. bank's head of commodities said.</li><li>"Historically, when you have this kind of scarring event, it takes months to get capital back ... We will still get a deficit by June and it will drive oil prices higher."</li><li>Jeff Currie, global head of commodities for Goldman Sachs, told the Financial Times Commodities Global Summit on Tuesday.</li></ul>

Goldman Sachs jumps back into the supercycle boat Goldman Sachs expects a commodities supercycle driven by China and the capital flight from energy markets and investment this month after concerns triggered by the banking sector, the U.S. bank's head of commodities said."Historically, when you have this kind of scarring event, it takes months to get capital back ... We will still get a deficit by June and it will drive oil prices higher."Jeff Currie, global head of commodities for Goldman Sachs, told the Financial Times Commodities Global Summit on Tuesday.

Goldman Sachs jumps back into the supercycle boat // Trafigura CFO sees more Volatility ahead

United States

Silver is the metallic element with the atomic number 47. Its symbol is Ag, from the Latin argentum, derived from the Greek ὰργὀς (literally "shiny" or "white"), and ultimately from a Proto-Indo-European language root reconstructed as *h₂erǵ-, "grey" or "shining". A soft, white, lustrous transition metal, it exhibits the highest electrical conductivity, thermal conductivity, and reflectivity of any metal. The metal is found in the Earth's crust in the pure, free elemental form ("native silver"), as an alloy with gold and other metals, and in minerals such as argentite and chlorargyrite. Most silver is produced as a byproduct of copper, gold, lead, and zinc refining.

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Silver (SILVER COMDTY)

Don’t Get Fooled by the Tight Inventory Narrative - Economic Situation Continues to Worsen

If you want to be precise - you could even make the case that excessive lows in the LME copper inventory data actually mark cyclical highs in the...

The Commodity Report

Favor Defensives as S&P 500 Tests 4165-4200; Buys in Consumer Staples & Europe/UK Telecomm

The $SPX is approaching the 4165-4200 area; we continue to believe this will cap upside in 2023. Considering limited upside, we continue to favor...

Vermilion Research

Between Chilean Copper Woes & Brazilian Sugar Rush

As the new season commences in April, Brazil is predicted to manufacture 40.3 million tonnes of sugar, marking the second highest yield ever recorded.

The Commodity Report

Scary: Oil market business conditions are worsening fast - due to policy mistakes

Oil businesses fear lower prices and a shortage of workers The quarterly Dallas FED Energy survey showed some pretty interesting result.

The Commodity Report

Goldman Sachs jumps back into the supercycle boat // Trafigura CFO sees more Volatility ahead

Goldman Sachs jumps back into the supercycle boat Goldman Sachs expects a commodities supercycle driven by China and the capital flight from energy...

The Commodity Report

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