Close: London Session | Forex, Metals, Oil, Agriculture July 29, 2021

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Agriculture

Over the last three years, the yield per hectare of Indian cotton has dropped below 500 kg per hectare despite a rise in the area under the fibre crop. Australia tops the list, getting 2,0171 kg of cotton per hectare, followed by China (1,879 kg), Brazil (1,803 kg) and Turkey (1,645 kg), respectively. “India cotton yield is low since no new seed technology has been introduced since 2006. Bt seeds make up over 95 per cent of the area under cotton India, which accounts for over 40 per cent of the total global area.
CCPC data show that Maharashtra has the highest area under cotton at 41.84 lh, but its yield is the lowest among all States below 350 kg. “Countries such as Australia, Brazil and the US have gone five generations ahead of India in cotton seed technology,” the official said. According to the multinational firm official, farmers are not showing any interest in non-GM cotton since they have to spend more on spraying pesticides and insecticides.
According to the CCPC, cotton closing stocks, last season were 120.95 lakh bales, and for the current season, they have been estimated at 97.95. “There is no demand from farmers for non-GM cotton seed,” he said. “We got the best out of the genetically-modified cotton during 2013-14, but after that yield has stagnated.

Currencies

The U.S. dollar remained under pressure for another day even after the Federal Reserve monthly policy meeting; it helps gold prices underpinned. The dovish Fed-induced weakness in the US Treasury yields and the dollar is main underlying reason behind the persistent upbeat mood around gold price. The EURUSD pair initially reacted by dropping to 1.1770, but the market immediately reversed course and the dollar began to decline against all major currencies, including the euro.
Meanwhile, the rebound in Chinese stocks has lifted the overall market mood, exacerbating the pain in the safe-haven dollar while benefiting gold price. The dovish Fed outcome smashed the US dollar alongside the Treasury yields, reviving gold buyers. These developments took a toll on the U.S. dollar, and the greenback suffered for another day. The biggest reaction in the capital markets is the setback in the dollar, which is softer against nearly all currencies through the European morning.
He is also Chairman of SchiffGold, his precious metals dealer, Euro Pacific Asset Management, and Euro Pacific Bank, his brokerage firm for international clients. Image Source: Pixabay The U.S. Dollar Index (DXY) extended its loss for the third consecutive session on Wednesday. So, if we get a beat in the largest European economy’s GDP, we could expect the euro to gain some strength and a bump up in equities.

Metals

Many mining investors are overly focused on gold but something like 60% of all exploration dollars go into gold. Although, what has taken me by surprise has been the rather lackluster price action in the precious metal, despite the two variables for Gold becoming increasingly bullish. Gold imports in June quarter increased multi-fold to 121 tonnes against just 13 tonnes in the peak of Covid pandemic in the same period last year. That being said, given recent price action, perhaps the cryptocurrency has taken some of the shine away from gold.
Gold bulls also draw support from the renewed optimism on a potential US infrastructure stimulus deal. Gold prices are trading up 0.8% at Rs 47,960 per 10 grams. Gold price forecast remains bullish as it extended its gains for the second consecutive session. Traders now await the US advance Q2 GDP report for the next direction in gold price. Now while I don’t look at Bitcoin in isolation, I do look at it for its relevance and possible implication in other markets that I watch, such as gold.
Unlike prior periods of above average inflation, gold now faces greater competition to grab the attention of portfolio managers.

Oil

The largest single reason for this monthly decline is a dramatic drop in Chinese export volumes as refiners run out of oil product export quotas. At $62.53 per barrel, the group’s worldwide realized liquids prices were 155.2% above the year-earlier levels while natural gas prices were up 123.3%. Then you have Saudi Arabia overnight raising prices for oil which is also a sign of very strong demand. During a six-year stretch at ConocoPhillips, Robert ran a team of engineers in Scotland working on oil and gas projects in the North Sea.
In the Oil Products segment, the Anglo-Dutch super-major reported an adjusted income of $1.3 billion, 46.1% lower than the year-ago period. The oil major’s operating cash flow rocketed 392.3% from the year-earlier level to $12.6 billion. Cathryn Spain, a senior harbor master, sees the river s revival in the vessel traffic she helps direct on the Thames every day. It comes into the port here, then it can go onto a smaller vessel and be taken up into central London, which is really good news for the port.
Shell’s upstream volumes averaged 2,262 thousand oil-equivalent barrels per day (MBOE/d), down 6.3% from the year-ago period. The September WTI contract is up by more than 1% for the second day as prices push above $73 a barrel.

United States

The Bank also noted that the economy had made significant progress on the employment and inflation goals set by the Fed. The US economy is expected to expand by 8.6% in Q2 vs. a 6.4% growth recorded in the first quarter. Nasdaq Futures are trading down by 8 points (down 0.1%) while Dow Futures are trading up by 90 points (up 0.3%). less A discussion of market volatility, inflation, Fed, and commodities. Of its dual mandate – maximum employment and price stability – the Fed is currently focused on the former, overlooking the sharp rise in inflation in recent months.
less Yesterday’s press conference by Fed Chair Jerome Powell after a two-day FOMC meeting disappointed the market. There’s customers that love these companies, they want them to thrive,” Tenev told CNBC’s Andrew Ross Sorkin on Thursday ahead of the stock trading app’s Nasdaq debut. As traders in the US started waking up to this news, the Wall Street Journal followed up with another, even more explosive, report.
Every month, the Fed buys up to $80 billion in treasury securities and $40 billion in mortgage-backed securities. Overall, this report shows continued robust quarter-to-quarter growth in the US economy.

China

The bounce in China stocks in today’s session appears linked to reports that Beijing is trying to calm fears following the government’s regulatory crackdown. less The rout in China equities accelerated in recent weeks amid Beijing’s increasingly aggressive regulatory crackdown on its domestic businesses. Beijing asserted that systemic risks “do not exist in the A-share market overall,” in a front-page commentary on the state-owned Security Times on Wednesday.
First, outside of some general narrative, it is not clear what is Beijing’s end game. The PBOC provided additional liquidity.

Europe

Regionally, Asia Pacific is responsible for the largest share of carbon dioxide emissions, with more than double the combined emissions of the U.S. and the EU. By now, I have built up excellent skills and experience in analyzing macroeconomic and political developments in Europe, the Eurozone and Germany, including ECB watching. His feature articles have been published on: FXstreet.com, Thestreet.com, Action forex, Forex TV, Istockanalyst, ForexFactory, Fxtraders.eu, Insidefutures.com, etc.
Main focus: Europe, Eurozone, Germany and ECB.

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