Close: London Session | Forex, Metals, Oil, Agriculture August 24, 2020

I think Tropical Storm Laura will be stronger than most say and impact cotton, natural gas, and crude regions in the Gulf. Of more importance to US cotton production has been the extreme California record heat and Texas dryness that could lower production in future USDA reports. Corn is suffering more because of excellent crop conditions in pretty much all corn belt states except for Nebraska and Iowa, where conditions are below average. However, if cotton prices (BALB) rally on this scenario early this week, it will be more psychology than anything else.
On the demand side, a lower need for ethanol is hurting corn as 40% of domestic supply is used as input for ethanol plants. Nevertheless, cotton prices are really at the mercy of the China-US trade Agreement, or not and global crops are doing pretty well in China, Pakistan, and India. At the same time, both storms are due to impact some of the Gulf coast cotton crop. Sugar prices at the Vashi wholesale market ruled unchanged tracking weak sentiments at upper level.
Its need for corn has never been higher. The Bombay Sugar Merchants Association spot rates (₹/quintal): S-grade 3,282-3,362 and M-grade 3,400-3,512.

less This past week, the US Dollar saw some strength against its major peers as it outperformed the Euro, Australian Dollar and New Zealand Dollar. The US dollar fell to a seven-month low against the Canadian dollar last week (~CAD1.3135) and looks poised to push through it, even if not today. Ultimately, this is a market that is reacting to the US dollar more than anything else, and as the US dollar got a bit of a lift. On Friday, the oil markets lost territory after the markets received negative data about the state of the United States Labor Market, and after the US dollar posted gains.
Currencies on the other hand have been much less exciting, with these markets stuck in consolidation against the US Dollar after seeing several days of impressive gains. less The S&P 500 initially pulled back during the trading session on Friday, as the US dollar rallied rather significantly. Similar commentary that echoes the FOMC minutes about the outlook for growth and YCC could risk denting market mood, perhaps boosting the anti-risk US Dollar and Japanese Yen (FXY).
The Nasdaq 100 initially fell during the trading session on Friday, as we had seen a bit of US dollar buying. Gold prices may likewise find near-term support as the risk-on backdrop weighs on the defensively-minded US Dollar and feeds demand for anti-fiat assets. That document boosted the dollar last week but may have been dated.

… more Hubert is an independent gold and silver analyst who specializes in fractal analysis and the fundamentals of gold and silver . Later on in 2008, he began researching areas of the gold and silver market that, curiously, the majority of the precious metal analyst community have left unexplored. Just like gold it is looking very bullish, and just like gold it will soon surpass its all-time high. Gold has just recently made an all-time high, and is obviously the gold standard when it comes to being a fiat alternative.
Typically, when silver outperforms gold, it adds “beta” and leads to good things for precious metals. If you had some exposure to gold and / or silver this year, you probably are patting yourself on the back. Silver alone has gained 54% in the last year, while gold has rallied almost 28%. At present, it carries about 70 per cent weight for gold and 30 per cent for silver. We’ve already seen some movements in commodities that are outsized, including silver and gold (as measured by GLD and SLV).
If the current fractal continues to follow the 70s fractal, then we could see gold continue to multiples of its current all-time high.

For the second half of the year, Diamondback Energy has covered more than 95% of its estimated oil production with crude oil hedges at decent prices. With oil production largely stabilized, I think Diamondback Energy’s earnings growth will be driven in large part by the increase in oil prices. Storms bearing down on the Gulf of Mexico, shutting over half its oil production, lifted crude oil prices. The company has a variety of oil production assets, however, and it also recently partook in several major oil discoveries in Block 58 off the coast of Suriname.
The company is depending mainly on the price of oil it receives for its production of oil in Gabon. The two storms have shut down 58% of the U.S. Gulf of Mexico oil output and is driving oil prices higher. At one point, oil demand fell to close to 40 mbpd – almost 40 percent of global oil production. One specific example of this is India, where oil imports remain down 36.4% year over year, in the world’s third-largest oil importer.
Not only did the company suffer from record low oil prices, but its realized prices internationally averaged a $5.5/barrel discount to Brent crude. I believe this can potentially power the company’s production for several years, even if oil prices continue to hover in the $40s a barrel range.

As well as an executive order against TikTok, Mr Trump has also signed a similar executive order against WeChat which experts have hypothesised could have severe consequences for Apple. Lawsuit TikTok could file a lawsuit against the Trump administration as soon as today over the executive order banning transactions with the app in the U.S. As well as TikTok, Mr Trump is also taking action via executive order against Chinese messaging platform WeChat, making similar allegations against it as against TikTok.
The news comes after reports that TikTok is preparing to legally challenge President Trump’s executive order banning transactions between the popular short-form video app and parent ByteDance. In a statement to Fox News announcing the new initiative, a campaign official for the former vice president said “Trump’s failures have superseded partisanship”. President Trump has expedited the use of plasma from people with Covid antibodies, and some reports have been subsequently denied about allowing emergency use of the AstraZeneca/Oxford vaccine.
As well, the Trump administration pressuring the FDA to authorize a blood plasma treatment currently under investigation has lifted all markets. less The Dow Jones today can pop higher after the Trump administration announced plans to fast-track a potential groundbreaking treatment for COVID-19. Doing so would be risky because these trades would make large additional gains if the US$ rebound were to be postponed for a month or two.
Roubini, the chief executive of Roubini Macro Associates Inc., said the recovery on Wall Street doesn’t reflect the real economy: he said.

Delta said its resumed service would include daily flights from Seattle to Tokyo, Seoul, Beijing and Shanghai.

As I pointed out in last week’s article, carbon dioxide emissions in the Asia Pacific region are more than double the combined emissions of the U.S. and the EU. Last week’s trade talks between the UK and the EU failed to make much headway. Then, one of the most influential ECB members at the time, Bernard Coeure, suggested that a strong EUR may weigh on inflation. EU trade chief fights to keep his job after pandemic stumble.Rogue planets could outnumber the stars in the Milky Way.
If we look back in time, the ECB hinted that EUR is too strong at 1.20 for the first time in 2017. The future of EU Trade Commissioner Phil Hogan hung in the balance after he attended a golf-society dinner in his native Ireland in a possible breach of lockdown rules.
Prime Minister Boris Johnson has reportedly taken over education policy after a messy week around exam scores. Read the view Ireland s Golfgate can reveal a more responsive EU The Irish public are outraged about an elite golf jolly that flouted Covid-19 restrictions. You can hardly blame Boris Johnson for wanting to move past the recent exam fiasco and get kids back to school, writes Bloomberg Opinion’s Therese Raphael.
Thus far, no real progress has been made, negotiators from the EU confirmed last week.