As October comes to an end, it is likely going to be known for government shutdowns which lasted the first half of the month and bitter infighting between political parties as they position for their initiatives and direction.
But at the end of the month, it was obvious that something else has happened in October. Commodity markets have become apathetic with prices seeing very little movement and seemingly have lost nearly all sense of direction. What started as lack of trade interest due to the absence of information that comes from government bean counters if you will, ended the month with the lack of interest by noncommercial or investment traders in the market.
Investment traders rely on a market to deliver sizable returns, and in order to produce returns the market needs to see movement. Overall most energy and ag commodity markets posted very little evidence that active price shifts are redeveloping after government agencies have gone back to work.
November ethanol futures for example ended October with a 1-cent-per-gallon price shift, closing at $1.784 a gallon. The previous month posted double-digit moves. Front month RBOB gasoline and corn futures markets also posted lack of direction and sluggish changes in the month.
It is uncertain if trade interest will redevelop in these markets over the near future, but without active noncommercial interest in the market, these commodity markets may continue to stabilize, and stable is boring and uninteresting to investment traders.
Rick Kment can be reached at email@example.com
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