Close: London Session | Forex, Metals, Oil, Agriculture June 11, 2021

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Agriculture

The year’s PNW dryness cut white wheat’s crop by 18 million to 202 million, the low- est output since 2015’s 185 million bu. which cut corn’s ending stocks by 150 million to 1.107 billion bu., 100 million less than expected. These smaller ending stocks also impacted corn’s 2021/22 stocks by a similar amount to 1.357 billion bu. Image Source: Unsplash On the Corn front, yesterday’s USDA report was friendly to corn but bearish for soybeans. Image Source: Unsplash The USDA did up corn’s 2020/21 ethanol June demand, but the amount was 75 million bu.
Even with corn and soybeans ahead of schedule, the carryover market is tight in the U.S. and South America. higher US winter wheat output didn’t startle this market, but no change in the US spring wheat size did catch some off guard given the N Plains drought. In the overnight electronic session, the July corn is currently trading at 692 which is 7 cents lower. Interestingly, corn’s current old-crop stocks-to-use level slipped from 8.45% to 7.37% this month.
Weekly corn exports were not as favorable as some traders had hoped for.

Currencies

less As we move into the second half of 2021, interest rates and the dollar continue to shape the outlook. Of course, much of the debate focuses on whether rates and the dollar continue to miss the bigger picture. At the interbank foreign exchange market, the rupee opened at 72.97 per dollar as against its previous close of 73.06. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.27 per cent to 90.31.
However, depreciation bias was limited as the dollar and US Treasury yields were weak for this week, he added. These declines were especially sharp among those with incomes in the top third, who account for more than half of the dollar volume of retail sales. Many signs are pointing towards it – emerging markets rising with the dollar on the defensive, for example. The index so far survives above the 90.00 neighbourhood, which has emerged as a tough barrier for dollar bears. “We think the selloff in dollar rates will be slower and more gradual once we hit 2% for the 10-year.
On a weekly basis, the rupee fell 8 paise against the US dollar.

Metals

In a recent Twitter thread, Gayed argued that market crashes and bear markets over the last few decades have been preceded by weakness in lumber relative to gold. >> Fabrice Drouin Ristori on Twitter is an independent investment analyst and studies the gold and silver market and their future role in the international monetary system. Nearly every major crash, correction, and bear markets has historically been preceded by weakness in Lumber relative to Gold.
Even with the recent volatility in prices, gold remains among the best-performing commodities this year to combat the fallout from the coronavirus pandemic. A fractal volume transaction analysis of the Silver market from March last year up to recent data shows a strong supply zone at US$27.50. He is well known for combining technical, fundamental and sentiment analysis into one accurate conclusion about the gold market. He follows regularly since 1970 the gold, silver and foreign exchange markets.
He follows and analyzes the gold and silver markets since 2008. Fabrice shares his thoughts on the economy, stock markets, geopolitics, gold and silver.
As well he is publishing his bi-weekly comprehensive for his numerous international readers focusing on Gold, Silver, Mining, commodities and cryptocurrencies.

Oil

Oil prices rose on expectations of a recovery in fuel demand in the United States, Europe and China as rising vaccination rates lead to an easing of pandemic curbs. Photo: christian hartmann/Reuters Oil prices wavered early Friday, with Brent crude oil, the global benchmark, up 0.3% at $72.71 a barrel. less Oil prices got hit hard on a Bloomberg headline that the U.S. lifted sanctions on Iranian oil. Brent crude futures, the global oil benchmark, rose 0.35 per cent to USD 72.61 per barrel.
Oil prices have rebounded in recent months, easing some pressure on Aramco, but it would still need to borrow to meet its commitments, analysts said. That leaves room for OPEC+ to boost crude oil production by 1.4 mb/d above its July 2021-March 2022 target to meet demand growth. In the meantime, the oil price comeback is solid as the global inflation trade is heating up and demand is coming back faster than anticipated. At the same time, the world has finally burned off the glut of oil it built up when pandemic restrictions grounded flights and shut factories and restaurants last spring.
World oil supply is expected to grow at a faster rate in 2022, with the U.S. driving gains of 1.6 mb/d from producers outside the OPEC+ alliance. It last sold $8 billion in conventional bonds in November when oil prices were floundering due to the coronavirus pandemic.

United States

U.S. inflation data: Source: DailyFX economic calendar Widespread inflation across many products would cause greater concern of an overheating economy and may lead to intervention from the Fed. While other central banks may move the interest rate levels on the back of changes in inflation only, the Fed must consider the labour market too. First, the confidence markets have in the Fed’s ability to control inflation without creating tectonic shifts in asset markets may be diminishing.
There are a few possible reasons for this: Does this mean the bond market is supportive of the Fed and it’s policy of a brief spout of high inflation? While supporting financial markets may not be part of the Fed’s mandate, the central bank has become increasingly conscious of market movements in recent times. Photo: Ting Shen for The Wall Street Journal To be sure, many analysts are expecting Treasury yields to tick up as U.S. economic growth and inflation pick up.
The bulls went on a roller coaster ride in the wake of the US inflation data and a speech by ECB President Christine Lagarde. While inflation is rising, now at 3.8% on an annualised basis, the Fed is behind on securing jobs for the American people. But it’s still premature to conclude that a hotter inflation regime that persists is now an enduring feature of the US economy. The Fed’s current stance is that inflation is likely to be transitory.

China

Chinese tech stocks have been hit particularly hard amid investor concerns about a regulatory crackdown from Beijing.

Europe

Soft red’s yields in ECB were slightly higher while the SE had lightly lower yields resulting in this variety being up just 3 million bu to 335 million. Next week, the European Union will start approving member nations’ spending plans as part of the bloc’s €673 billion pandemic recovery package. In their first face-to-face meeting, Biden and U.K. Prime Minister Boris Johnson were eager to re-establish the special Anglo-American relationship, even though Johnson described the term as cliched.
Under the surface though, simmering tensions related to the U.K. s split from the European Union threaten to sour the mood at the seaside venue.
Market participants likely shifted their focus to sterling on the heels of a Reuters report according to which the UK struck a deal on fisheries with the EU. But these are crowded areas: In 2019, the EU already cleared €3.2 billion for developing batteries, three-quarters of which went to “core” countries. The Pentagon’s research money may have fostered the internet, but EU “cohesion” funds spent in the South failed to boost productivity.
Merkel s successor at the helm of the conservatives, Armin Laschet, will continue the energy transition, Kemfert said. Airlines Want to Scrap EU s Compensation Rules They had to pay more than $12 billion in refunds during lockdowns last year. Photo: Alberto Sibaja/Zuma Press To be sure, the EU’s green agenda has provided a welcome backdoor for some vertical bets.

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