Negative Metals Momentum, Other Commodities Mixed, Sugar May Pop
Saxo Bank | Sep 12, 2013 09:03AM ET
Saxo Bank's momentum indicator currently paints a very mixed picture following what was generally a positive month in August. The metals sector led the way in terms of negative momentum with industrial metals being closely followed by precious metals this week. The energy sector is generally positive but as geo-political tensions have faded, so too has the momentum for both crude oils (WTI and Brent). Meanwhile, gasoline has already turned lower as demand begins to taper off following the end of the US driving season.
Agriculture - Eyes on USDA report
The agriculture sector is showing the same degree of uncertainty with no clear overall direction at the moment. Investors interested in the key crops of soybeans, corn and wheat keenly await the monthly crop report from the US Department of Agriculture, due later today. The report is expected to provide insight into the degree to which the heat in August reduced production estimates, particularly for corn and soybeans.
Sugar rallies on Brazilian production issues
Sugar put in a significant rally during the past week on signs of reduced production in Brazil, the world's largest producer and exporter. Having failed to make a new low during the late August sell-off the subsequent rally on the back of this supply news has taken the price back to important resistance at 17.78 cents per pound on the April contracts (Ticker: SBH4). A break above 17.87 cents per pound could signal an extension of the rally, initially towards 18.54 cents per pound. This level could finally confirm a potential turn in the downtrend which has lasted for two years now.
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