US Stock Market Overview – Stock Rally Led by the Nasdaq; Microsoft and Semis Drive the Gains

US stocks moved higher on Monday, as traders anticipated a deal between the White House and Congressional Democrats. Most sectors in the S&P 500 index were higher, led by Healthcare. Real-estate bucked the trend. The Nasdaq hit a fresh new record high, led by gains in Microsoft and the Semis. The VIX volatility index hit a fresh 5-month low at 22, before rebounding into the close to settle near 24.40. Apple shares continued to rally climbing nearly 3% on Monday after notching up a 14% gain last week.

Manufacturing in the US accelerated the most in 16-months, which is a forward-looking index. This helped buoy US yields which in turn help the US dollar rebound. The dollar rebounded putting pressure on precious metals, but oil and natural gas rallied helping to buoy the energy space. Natural gas prices surged 16% on Monday on a warm weather forecast. Microsoft confirmed that it would work out a deal to purchase Chinese company TikTok from Byedance. President Trump said that he would want part of the sale to come to the American People. This enraged some businesses in China.

ISM Manufacturing Accelerates by the Fast Pace in 16-months

U.S. manufacturing expanded in July at the fastest pace since March 2019. The Institute for Supply Management reported that its manufacturing index rose to 54.2 last month from 52.6. Expectations were for a reading of 53.6. The ISM’s measure of production increased in July to 62.1, the highest level since August 2018, and a gauge of orders climbed to 61.5, which was the strongest since September of that year. Customer inventories fell to 41.6 in July, the lowest this year and showing that stockpiles were shrinking at a faster pace. Factory inventories also declined after barely growing a month earlier.

Natural Gas Price Prediction – Prices Surge More than 16% on Warm Weather Forecast

Natural gas prices broke out on Monday, as short were squeezed out of the market. Warmer than normal weather which is expected to cover most of the mid-west and east coast over the next 6-10 and 8-14 days generated a surge in prices that buoy natural gas more than 15%. There is one tropical stork in the Atlantic but it is moving up the east coast and will not generate a disturbance to natural gas installations.

Technical Analysis

Natural gas prices surged higher rising 16.5% on Monday. Support is seen near a downward sloping trend line that comes in near 1.92. Resistance is seen near the May 2020 highs at 2.50. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Medium term momentum is positive as the MACD (moving average convergence divergence) histogram prints in the black with an upward sloping trajectory which points to higher prices.

Demand Rises in Latest Week

Demand rises across all domestic sectors, with power generation reaching a summer high. Total U.S. consumption of natural gas rose by 0.9% compared with the previous report week, according to data from the EIA. Natural gas consumed for power generation climbed by 0.7% week over week, reaching 43.6 Bcf/d on Monday, the highest level so far in summer 2020. Industrial sector consumption increased by 1.3% week over week. In the residential and commercial sectors, consumption increased by 0.6%. Natural gas exports to Mexico decreased 0.9%.

Gold Price Prediction – Prices Consolidate Near All-time Highs as the Dollar Rebound

Gold prices consolidated near all-time highs, as the dollar started to rebound after tumbling for 7-consecutive weeks. US yields moved higher following a report from the Institute of Supply management which showed that manufacturing expanded at the fasted rate since March of 2019. The rebound in yields buoyed the greenback capping upward momentum for the yellow metal.

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Technical analysis

Gold prices consolidated just below all-time highs following last week’s 3.5% rise.  Support is seen near the 10-day moving average near 1,927. Medium-term momentum has turned positive and continues to accelerate higher as the MACD (moving average convergence divergence) histogram is printing in the black with an upward sloping trajectory points to higher prices. Short-term momentum continues to flip flow back and forth between buy and sell signal. The fast-stochastic is printing a reading of 92 above the overbought trigger level of 80, which could foreshadow a correction. The RSI is printing a reading of 82, above the overbought trigger level of 70 which could foreshadow a correction.

ISM Manufacturing Rises More than Expected

U.S. manufacturing expanded in July at the fastest pace since March 2019. The Institute for Supply Management reported that its manufacturing index rose to 54.2 last month from 52.6. Expectations was for a reading of 53.6 median. The ISM’s measure of production increased in July to 62.1, the highest level since August 2018, and a gauge of orders climbed to 61.5, which was the strongest since September of that year.

US Stock Market Overview – Stocks Close Higher to Close out the Month on an Up Note

US stocks moved higher on Friday as the Nasdaq roared higher. Better than expected earnings from Apple, Amazon and Facebook helped buoy the Nasdaq. Apple shares soared more than 10% as iPhone 11 sales surged. Facebook was up more than 7%, as both the top and bottom-line beat expectations. All sectors in the S&P 500 index were lower, led down by losses in cyclicals. The technology was the best performing sector. Personal spending rose more than expected, and inflation ticked up slightly. Crude oil prices edged higher following news that the oil rig count declined by one rig.

Personal Spending Rose

Consumer spending, rose 5.6% last month after a record 8.5% jump in May as more businesses reopened. Expectations had been for consumer spending to rise by 5.5% in June. When adjusted for inflation, consumer spending increased 5.2% last month after surging 8.4% in May. Personal income dropped 1.1% last month after decreasing 4.4% in May. Wages increased 2.2% after rebounding by 2.6% in May. The saving rate fell to a still-high 19% from 24.2% in May.

Inflation edged higher in June

Monthly inflation ticked up in June, driven by food and energy goods and services prices, though the trend remained muted. The personal consumption expenditures (PCE) price index excluding the volatile food and energy components rose 0.2%, matching May’s gain. On a year over year basis, the core PCE price index increased 0.9% after rising 1.0% in May.

Stimulus Bill Hits a Road Block

Negotiators on the next coronavirus relief bill hit a roadblock Friday and have not been able to reach a middle ground. Underscoring the gulf between Democrats and Republicans as they try to boost an economy. The current $600 per week enhanced federal unemployment benefit lapses on 7/31. After last-ditch efforts to pass an extension failed Thursday, the Senate left for the weekend.

Natural Gas Price Prediction – Prices Declined as ISAAIS Heads Eastward

Natural gas prices moved lower on Friday declining by 2.5%. This followed news from Baker Huges that oil and gas rig counts were unchanged in the current week. Hurricane ISAAIS now appears to be headed to the east coast of Florida and up the coast and is unlikely to hit any of the natural gas installations in the Gulf of Mexico. Two storms are located off the coast of Africa, neither are expected to become a tropical storm according to NOAA.

Technical Analysis

Natural gas prices moved lower on Friday declining by 2.5% after dropping 5.5% on Thursday. Prices closed through support near the 10-day moving average at 1.80, which is now seen as short term resistance. Resistance is seen near the 50-day moving average at 1.82. Target support is seen near the July lows at 1.65. Short term momentum has turned negative as the fast stochastic generated a crossover sell signal. Medium-term momentum is decelerating as the MACD (moving average convergence divergence) histogram prints in the black with a flattening trajectory which points to consolidation.

Supply rises Slightly

Supply increased in the latest week according to the EIA. The average total supply of natural gas rose by 0.1% compared with the previous report week. Dry natural gas production grew by 0.2% compared with the previous report week. Average net imports from Canada decreased by 2.1% from last week.

Gold Price Prediction – Prices Rise Closing the Week on an Up Note

Gold prices finished the week on an up note, rising slightly and closing the week up 3.5%. This came as the dollar finally rebounded after making a lower low, and closing down for the week. Personal spending increased for a second consecutive month according to a report on Friday from the Commerce Department. This followed Thursday GDP report that showed the US economy declined nearly 33% for the Q2.

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Technical analysis

Gold prices continued to rally, closing at an all-time. Prices rose by 3.5% for the week and finished on an up note.  Support is seen near the prior highs at 1,921 and then the 10-day moving average near 1,911. Medium-term momentum has turned positive and continues to accelerate higher as the MACD (moving average convergence divergence) histogram is printing in the black with an upward sloping trajectory points to higher prices. Short-term momentum has turned positive after recently turning negative. The fast-stochastic is printing a reading of 91 above the overbought trigger level of 80, which could foreshadow a correction. The RSI is printing a reading of 83, above the overbought trigger level of 70 which could foreshadow a correction.

Personal Spending Rose

Consumer spending, rose 5.6% last month after a record 8.5% jump in May as more businesses reopened. Expectations had been for consumer spending to rise by 5.5% in June. When adjusted for inflation, consumer spending increased 5.2% last month after surging 8.4% in May. Personal income dropped 1.1% last month after decreasing 4.4% in May. Wages increased 2.2% after rebounding 2.6% in May. The saving rate fell to a still-high 19% from 24.2% in May.

US Stock Market Overview – Stocks Close Mixed Ahead of Key Large Cap Tech Earnings

US stocks were mixed on Thursday ahead of earnings from the major large-cap tech stocks. After the closing bell, Apple, Amazon, Facebook, and Alphabet are scheduled to release financial results. Most sectors in the S&P 500 index were lower on Thursday led down by energy following a 5% decline in crude oil prices. Technology shares bucked the trend. US GDP tumbled declining nearly 33% year over year which weighed on the US 10-year yield. The yield closed below 55-basis points. US Jobless claims came out in line with expectations rising for the second consecutive week.

US Jobless Claims Rise for Second Consecutive Week

US jobless claims rose to 1.434 million, according to the Labor Department in line with expectations. This was the 19th straight week in which initial claims totaled at least 1 million and the second consecutive week in which initial claims rose after declining for 15 straight weeks.

Q2 GDP Contracts Sharply

Second-quarter GDP plunged the most in history contracting by 32.9% on a year over year basis according to the Commerce Department’s first reading on US growth. Economists had been looking for a drop of 34.7%, which means that despite the decline it was better than expected. With Q1 growth down 5% this number officially put the US economy in a recession. This news is not good for the incumbent President. No president in modern history has won reelection while there was a recession.

Personal consumption, subtracted 25% from the Q2 total, with services accounting for nearly all that drop. Prices for domestic purchases, known as the GDP deflator fell 1.5% for the period, compared with a 1.4% increase in the first quarter. The personal consumption expenditures price index dropped 1.9% after rising a tepid 1.3% in Q1. Excluding food and energy, the core PCE was off 1.1%.

Natural Gas Price Prediction – Prices Drop Following Inventory Report

Natural gas prices moved lower on Thursday as tropical storm Isaias formed in the Atlantic. The storm is headed toward the Gulf of Mexico but is expected to turn toward Florida. There is also a new disturbance that has moved off the coast of Africa, which has a 50% chance of becoming a tropical storm. The weather is expected to remain warmer than normal for the next 8-14 days. Inventories increased by slightly more than expected according to the Energy Information Administration.

Technical Analysis

Natural gas prices moved lower on Thursday dropping 5.5% and making a lower high and a lower low. Support is seen near the 10-day moving average at 1.80. Resistance is seen near the 50-day moving average at 1.82. Short term momentum has turned negative as the fast stochastic generated a crossover sell signal. Medium-term momentum is decelerating as the MACD (moving average convergence divergence) histogram prints in the black with a flattening trajectory which points to consolidation.

Inventories Grow by More than Expected

Natural gas in storage was 3,241 Bcf as of Friday, July 24, 2020, according to the EIA. This represents a net increase of 26 Bcf from the previous week. Expectations were for a 24 Bcf build according to survey provider Estimize. Stocks were 626 Bcf higher than last year at this time and 429 Bcf above the five-year average of 2,812 Bcf. At 3,241 Bcf, total working gas is within the five-year historical range.

Gold Price Prediction – Prices Slip Despite a Decline in the Greenback as GDP Tumbles

Gold prices broke a streak of 9-consecutive higher closes, declining slightly following the larger than expected decline in US GDP. The dollar index continued to decline, as US yields moved lower, with the 10-year yield closing below 55-basis points. The recent downward trend in the US dollar is likely to buoy the yellow metal

Technical Analysis

Gold prices eased on Thursday after rising for 9-consecutive days. Prices are poised to close at a new monthly all-time high breaking out. The last time this occurred in 2008, gold prices more than doubled rising from $700 per ounce to $1921 per ounce 4-years later. This would target more than 5,200 on gold. Support is seen near the breakout level at $1,921 and then the 10-day moving average at $1895. Short-term momentum has turned negative as the fast stochastic recently generated a crossover sell signal. The RSI has also turned over and is printing a reading of 80, above the overbought trigger level of 70 which could foreshadow a correction.

Q2 GDP Contracts Sharply

Second-quarter GDP plunged the most in history contracting by 32.9% on a year over year basis according to the Commerce Department’s first reading on US growth. Economists had been looking for a drop of 34.7%, which means that despite the decline it was better than expected. With Q1 growth down 5% this number officially put the US economy in a recession. This news is not good for the incumbent President. No president in modern history has won reelection while there was a recession.

US Stock Market Overview – Stock Rally Following Fed Decision; Pending Home Sales Surge

US stocks moved higher on Wednesday, following the Federal Reserve decision to keep interest rates unchanged. Fed Chair Powell in his testimony said that rates will remain at zero for a considerable period and the Fed will do everything in their power to buoy the US economy. All sectors in the S&P 500 index were higher led by gains in energy, Consumer staples was the worst-performing sector. Pending Home sales rose more than expected and the US Trade Deficit narrowed led by gains in exports.

Pending Home Sale Rise More than Expected

Pending home sales rose more than expected in May increasing by 16.6% and rising 6.3% year over year according to the National Association of Realtors. This beats the expectation for the monthly gain of 12.5%. It’s the second straight month of increases in contract activity. For 2020, existing home sales are expected to decline by only 3%. New home sales are projected to rise by 3%. The previous forecast for existing home sales in 2020 was down 7.7%, with new home sales up 1%.

US Trade Deficit Falls

The United States’ trade deficit fell sharply in June as exports rebounded following several months of decline. The goods trade deficit dropped 6.1% to $70.6 billion last month. Exports of goods accelerated 13.9% to $102.3 billion, eclipsing a 4.8% increase in goods imports to $173.2 billion. Goods imports fell in May to their lowest level since July 2010. The rebound in exports was led by a 144.1% surge in shipments of motor vehicles and parts. Exports of capital goods soared 11.0% and consumer goods jumped 12.6%.

The Fed Kept Rates Unchanged

The Federal Reserve kept interest rates unchanged which were widely expected. Along with keeping rates low, the Fed expressed its commitment to maintaining its bond purchases and the array of lending and liquidity programs. The post-meeting statement labeled the current state of growth as better than it was at the trough but still not up to par.

Natural Gas Price Prediction – Prices Rally Ahead of Inventory Report

 

Natural gas prices moved higher on Wednesday as tropical cyclone number 9, heads toward the Caribbean. The trajectory of the storm is pointing to landfall in the United States, with a target of the west coast of Florida. A shift to the west would put the storm on course to head toward natural gas installation which could generate a supply disruption. Traders now await the Energy Departments inventory report scheduled for Thursday. Expectations are for a 24 Bcf build according to survey provider Estimize. KNG exports increased week over week, reflecting an increase in demand.

Technical Analysis

Natural gas prices surged on Wednesday, rising nearly 2% as the August contract expired. The September contract ran into resistance near a downward sloping trend line that comes in near 1.90. A break of that would lead to a test of the July highs near $2. Support is seen near the 50-day moving average at 1.85 which was former resistance. Momentum remains positive as the MACD (moving average convergence divergence) index recently generated a crossover buy signal. The MACD histogram is printing in the black with an upward sloping trajectory which points to higher prices.

US LNG Exports Rise

US LNG exports increase week over week. Seven LNG with a combined LNG-carrying capacity of 25 Bcf departed the United States between July 16 and July 22, 2020, according to shipping data provided by the EIA.

Gold Price Prediction – Prices Hit Fresh All-time Highs Following Fed Meeting

The trend in gold prices continued on Wednesday in the wake of the Fed decision to keep rates unchanged. Gold prices rallied to new fresh all-time highs as traders continued to buy the yellow metal.  The post-meeting statement from Fed Chair Jerome Powell labeled the current state of growth as better than it was at the trough but still not up to par.

Technical Analysis

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Gold prices continued to rally to fresh all-time highs as the dollar continued to sink. Prices rose by 0.65% as the trend in gold prices continued to accelerate.  Support is seen near the prior highs at 1,921 and then the 10-day moving average near 1,879. Medium-term momentum has turned positive and continues to accelerate higher as the MACD (moving average convergence divergence) histogram is printing in the black with an upward sloping trajectory points to higher prices. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. The fast-stochastic is printing a reading of 93 above the overbought trigger level of 80, which could foreshadow a correction. This decline means that the acceleration in prices is slowing. The RSI also surged higher reflecting accelerating positive momentum and is printing a reading of 88, above the overbought trigger level of 70 which could foreshadow a correction.

The Fed Kept Rates Unchanged as Expected

The Federal Reserve kept interest rates unchanged which were widely expected. Along with keeping rates low, the Fed expressed its commitment to maintaining its bond purchases and the array of lending and liquidity programs. The post-meeting statement labeled the current state of growth as better than it was at the trough but still not up to par.

Natural Gas Price Prediction – Prices Rise as Tropical Depression 9 Forms

 

Natural gas prices moved higher on Tuesday bucking up against resistance. Fear of a tropical storm moving into the Gulf of Mexico generated higher prices and increasing volatility. Tropical depression number 9, has formed into the Atlantic and has a 90% chance of turning into a tropical cyclone in the next 48-hours according to the National Oceanic Atmospheric Administration. The weather is expected to remain warmer than normal on the coasts and cooler than normal in the mid-west according to NOAA.

Technical analysis

Natural gas prices moved higher on Monday climbing nearly 4%. Resistance is seen near the 50-day moving average at 1.80, while support is seen near the 10-day moving average at 1.73. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Medium-term momentum has also turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. The MACD histogram is printing in the black with an upward sloping trajectory which points to higher prices.

Injections into Storage are Slowing

Last week the EIA reported that net injections into storage totaled 37 Bcf for the week ending July 17, compared with the five-year average net injections of 37 Bcf and last year’s net injections of 44 Bcf during the same week. Working natural gas stocks totaled 3,215 Bcf, which is 436 Bcf more than the five-year average and 656 Bcf more than last year at this time.

Gold Price Prediction – Prices Rise to New Highs as Consumer Confidence Tumbles

Gold prices rallied to new fresh all-time highs on robust volume as traders continued to buy the yellow metal. Hedge funds continued to add to long position in futures and options while reducing short positions according to the CFTC. According to the latest commitment of trader’s report released for the date ending July 21, managed money increased long position in futures and options by 4.5K contracts while reducing short position by 2.5K contracts. The dollar continues to slide which helped buoy the price of the yellow metal.

Technical Analysis

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Gold prices continued to rally to fresh all-time highs and are poised to test higher levels. Support is seen near the prior highs at 1,921 and then the 10-day moving average near 1,863. Medium-term momentum has turned positive and continues to accelerate higher as the MACD (moving average convergence divergence) histogram is printing in the black with an upward sloping trajectory points to higher prices. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. The fast-stochastic is printing a reading of 94 above the overbought trigger level of 80, which could foreshadow a correction. The RSI also surged higher reflecting accelerating positive momentum and is printing a reading of 87, above the overbought trigger level of 70 which could foreshadow a correction.

US Consumer Confidence Tumbles

U.S. consumer confidence tumbled in July to a reading of 92.6 as coronavirus infections spread in many parts of the country. Most of the big declines came in states that have had huge increases in the number of new COVID-19 cases. There was a large decline in the expectations index reflected big drops in sentiment in Michigan, Florida, Texas, and California, all states that have seen a resurgence in coronavirus cases. This was down from a reading of 98.3 in June.

US Stock Market Overview – Stocks Rise Led by Technology Shares, Utitlies Bucked the Trend

US stocks moved higher on Monday, led by gains in the Nasdaq ahead of several key company’s earnings later in the week. Thursday will be a key day for the markets as Amazon, Apple, and Facebook are all scheduled to released financial results. Sectors in the S&P 500 index were mixed, led higher by technology, Utilities and energy bucked the trend. The dollar continued to head south, helping to buoy gold prices and the mining companies.

The VIX continued to ease, declining to 25.4, which is still well above the 2019 average. Durable goods orders moved higher on Monday, rising more than expected, but this failed to buoy US yields. Google announced that it will keep employees away from their offices until the summer of 2021. Under Armor received a Wells Notice from the SEC related to the companies accounting practices. The information was not referred to the Justice Department which means that it’s only civil and not criminal. The founder of the company Kevin Plank was named in the investigation. On Tuesday several key companies will release earnings results. This includes McDonald’s, Visa, Starbucks, Amgen, and Pfizer.

Durable Goods Orders Rise More than Expected

Durable goods orders increased 7.3% in June after rebounding 15.1% in May. Durable goods orders were driven by robust demand for motor vehicles, which accelerated 85.7% after increasing 28.8% in May. That offset a 462.3% plunge in civilian aircraft orders, leading to a 20% rise in orders for transportation equipment. Motor vehicles have a bigger weighting in the transportation category. Orders for transportation equipment surged 78.9% in May. Orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, jumped 3.3% last month. That was the biggest increase in these so-called core capital goods orders since July 2018 and followed a 1.6% rise in May.

Natural Gas Price Prediction – Prices Slide as Hanna Fades

Natural gas prices eased on Monday as Tropical Storm Hanna faded as it hit the Texas coast. There is one disturbance in the Atlantic which has a 70% chance of becoming a tropical stork according to NOAA. Tropical storm Gonzalo has also faded. The weather is expected to be warmer than normal for the next 2-weeks which should help buoy demand.

Technical Analysis

Natural gas prices declined on Monday dropping nearly 4% after running into resistance near the 50-day moving average at 1.81 on Friday. Support is seen near the 10-day moving average at 1.73. Medium-term momentum has recently turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line. The MACD histogram is printing in the black with an upward sloping trajectory which points to higher prices. Short term momentum has turned negative as the fast stochastic generated a crossover sell signal.

Demand Rises in Latest Week

Total U.S. consumption of natural gas rose by 1.0% compared with the previous report week, according to data from the EIA. Natural gas consumed for power generation climbed by 0.8% week over week. Industrial sector consumption remained unchanged, averaging 20.4 Bcf per day. In the residential and commercial sectors, consumption increased by 4.1%, but remains relatively low. Natural gas exports to Mexico decreased 0.7%.

Gold Price Prediction – Prices Hit All-time High and are Poised to Trend Higher

Gold prices continued to rally hitting fresh all-time highs after rallying more than 5% last. The dollar continues to slide which helped buoy the price of the yellow metal. US Durable goods orders came in stronger than expected, but this did not help buoy yields but failed to lift the greenback. Prices broke through the all-time highs of 1,921 and closed the session at 1,945. Prices are now poised to test the 2,000 level.

Technical Analysis

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Gold prices broke out hitting fresh all-time highs and are poised to test higher levels. Support is seen near the prior highs at 1,921 and then the 10-day moving average near 1,848. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) histogram is printing in the black with an upward sloping trajectory points to higher prices. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. The fast-stochastic is printing a reading of 95 above the overbought trigger level of 80, which could foreshadow a correction. The RSI also surged higher reflecting accelerating positive momentum and is printing a reading of 85, above the overbought trigger level of 70 which could foreshadow a correction.

Durable Goods Orders

Durable goods orders increased 7.3% in June after rebounding 15.1% in May. Durable goods orders were driven by robust demand for motor vehicles, which accelerated 85.7% after increasing 28.8% in May. That offset a 462.3% plunge in civilian aircraft orders, leading to a 20% rise in orders for transportation equipment. Motor vehicles have a bigger weighting in the transportation category. Orders for transportation equipment surged 78.9% in May. Orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, jumped 3.3% last month. That was the biggest increase in these so-called core capital goods orders since July 2018 and followed a 1.6% rise in May.

Temporary Slaughterhouse Closures Still Weigh on Organic Corn Demand

Organic corn prices remain soft and continue to feel the impact of higher imports and temporary loss of demand during April and early May. While demand has rebounded, the softness came just as imports surged creating an overhang that has yet to be worked off.

Organic chicken slaughter by weight has rebounded back to the levels that are consistent with this time of year. The 4-week moving average of organic chicken slaughter by weight has surged higher following a drop in April due to the closures of several slaughterhouses throughout the United States. In mid-April, there were three slaughterhouses in Pennsylvania alone that were closed due to the spread of COVID-19. Three months later, nearly all the slaughterhouses in the US are open or partially open.

The decline in organic chicken slaughter during April and early May led to a temporary halt in organic feed demand. While this has rebounded, it has yet to accelerated to catch up to retail sales demand for organic chicken. Mid-west merchandisers are saying that there is a plethora of supply on the interior of the US and they are looking for the coasts to increase demand and ship from the interior out to the coasts. Organic chicken slaughter by weight is down slightly more than 2% year over year for the first 28-weeks of 2020 compared to the same period in 2019.

While demand has been steady, the real catalyst for the decline in organic corn prices and other organic prices has been the volume of supply. Organic whole corn imports are projected to rise 35% year over year for the 2019/2020 season according to The Jacobsen. This compares to organic cracked corn imports which are forecast to decline approximately 3% year over year for the 2019/2020 season. Organic soybean imports are projected to decline by 12% year over year. Most of the increase in organic whole corn imports came from Argentina. One benefit of lower US domestic organic corn prices is that imports have become less competitive. This should reduce imports of organic whole corn during the 2020/2021 season allowing organic corn prices to stabilized and eventually grind higher.

US Stock Market Overview – Stocks Drop Ahead Large Tech Earnings

US stocks moved lower on Friday helping the Nasdaq notch up its second consecutive lower week. The Nasdaq was the worst-performing of the major indices during the week, despite some solid earnings from large-cap technology names. Next week the earnings parade will continue to Apple and Amazon reporting financial results. Most sectors in the S&P 500 index were lower on Friday, led down by technology, communications bucked the trend.

Gold prices hit a fresh 8-year high on Friday closing up the week more than 5%, and helping to buoy the mining sector. The dollar also moved lower for the week with the dollar index declining by 1.75%. Despite the downward movement in stocks for the week, the VIX volatility index barely changed rising 0.6% for the week and closing below 26. The VIX still remains elevated and is hovering above the 50-day moving average well above the 2019 average of 15. Optimism in the US jobs market is fading. President Trump is attempting to revamp his outlook on COVID, understanding that his poll numbers are fading as he fights for a second term as the US president.

Republicans Will Unveil Their Stimulus Package Next Week

Early in the week, Republicans will unveil their stimulus package proposal, which will then be debated as Friday’s deadline nears for the expiration of enhanced unemployment benefits. The current outlines shows that Senators want to add $100 per week onto standard unemployment benefits. This is in contrast to the House which wants $600 per week. The House goes on recess on July 31.

US Job Optimism is Fading Quickly

Job optimism in the US is fading. In April, 78% of those in households with a job loss thought they’d be temporary. Now, 47% think that lost job is definitely or probably not coming back, according to the latest poll from The Associated Press.

Natural Gas Price Prediction – Prices Rise as Tropical Storm Hanna Forms

Natural gas prices moved higher rising 1.25% on Friday and up more than 5% for the week. Tropical storm Hanna has now formed in the Gulf of Mexico and is headed directly for the Texas coast. There are some natural gas installations that will be impacted by the storm. Tropical storm Gonzalo is headed for the Caribbean and could make its way into the Gulf of Mexico. There is a new storm that has moved off the coast of Africa, but there is very little chance at the moment that it will form a tropical cyclone. Supply rose in the latest week according to a recent report from the Energy Information Administration.

Technical analysis

Natural gas prices rose 1.25% on Friday running into resistance near the 50-day moving average at 1.81. Support is seen near the 10-day moving average at 1.73. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line. The MACD histogram is printing in the black with an upward sloping trajectory which points to higher prices.

Supply Rose in the Latest Week

The average total supply of natural gas rose by 0.6% compared with the previous report week according to the EIA. Dry natural gas production grew by 0.9% compared with the previous report week as some production in the Appalachian Basin that was previously curtailed in mid-May began to return. Dry natural gas production is now 0.2% higher on average this week compared to this time last year when Hurricane Barry caused temporary shut-ins in the Gulf of Mexico. The average net imports from Canada decreased by 3.1% from last week.