Close: London Session | Forex, Metals, Oil, Agriculture November 25, 2020

Agriculture

Corn futures prices are nearly 20% higher than they were for Thanksgiving 2018 and 2019, and almost 25% higher than Thanksgiving 2017. Soybeans tend to follow a pattern where prices begin to decline in the July-August time frame, continuing through “February break,” before reaching their seasonal highs in the summer. The farmers who raise those animals, rely on a steady supply of feed grains, such as corn, soybean meal and wheat to produce and bring those animals to market.
Similarly, there is a seasonal trend in the supply of soybeans, influencing price and producing patterns along the way. Corn futures are trading at the highest price since a recent peak of about $4.60 in June 2019. Over two decades ago Jay got his start at the Kansas City Board of Trade in the Wheat Futures pit. If capital gains are on the table, enjoy the sugar rush. With soybeans, harvest begins in September and continues through October into mid-November.

Currencies

This reveals that adjusted earnings for the year rose half a dollar to $1.26 per share, as that number is quite ”clean”, not excluding large stock-based compensation expenses. Yesterday’s losses were initially extended, with the euro climbing to $1.1930 and the Australian dollar near $0.7375 before the beleaguered greenback bounced back. This year, so far, the fear of recession and an anticipated flight to safety has stabilized the strength of the dollar as the greenback is considered a safe-haven asset.
But the losses of the yellow metal were capped by a weaker dollar that made the bullion cheaper for investors using other currencies. Also, a presumed dovish Treasury Secretary Janet Yellen means the likelihood of a weaker dollar that may help our exports but will mean higher oil prices. Likewise, operating losses decreased on a dollar value basis YoY, illustrating the increasing benefits of scale on the operating leverage of the business.
Therefore, monetary policy decisions will not boost the dollar as they did over the last couple of years. One of the primary constraints for emerging market stocks has been the strength of the U.S. dollar. To refresh your memory, emerging market stocks and the U.S. dollar have shared an inverse relationship historically. During that same time period, both gold and silver were lower and the U.S. dollar traded in a sideways channel.

Metals

The Gold Analyst offers quality technical and fundamental analysis of the price of gold to help educate readers in their investment decisions. In other words, if Gold prices stay flat, year over year, we would expect Barrick shares to decline by 10%. The first is the depletion which in general requires Gold price to rise by about 10% a year to keep Barrick stock price flat. Demand recoveryGold jewellery demand may recover in Q4 (December 2020 quarter), if prices remain at the same level or drop further says, Somasundaram PR, Managing Director, World Gold Council.
Gold prices have dropped 14 per cent and silver 23 per cent from the highs in August. On Wednesday, the prices of gold dropped close to its lowest level since July 17 as President-elect Joe Biden started the formal transition to the White House. 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.
Gold prices for the latest contract on MCX are trading up by 0.3% at Rs 48,735 per 10 grams. Barrick Gold (GOLD) is no exception. The 22k gold price, which was trading at ₹51,411/10 gram in August, is now at ₹44,861, as per data from IBJA.

Oil

Oil (OIL) prices continue to bound higher focusing on the prospect of a viable vaccine improving future demand, whilst shrugging off near term concerns of building crude supplies. The crude oil demand has picked up after bottoming in Q2-2020 while oil supplies from the major oil-producing countries, including the US and OPEC+, have remained low. Further improvement in oil prices will give a boost to the earnings and cash flows of oil producers. Production has fallen from June even though Chinese oil companies have increased their spending to reduce the decline rate in their oil fields.
That’s because the oil price environment has improved in the past few weeks which bodes well for all of FENY’s holdings in general and the oil producers in particular.
Overall, the oil majors and the independent oil and gas producers represent more than 60% of FENY’s net assets. The tanker transported a fuel oil cargo from Ventspils, Latvia to Shuqaiq, arriving on 23 November, according to oil analytics firm Vortexa. less WTI crude oil prices registered a two-day gain of 6.8% as investors cheered a string of positive vaccine developments that brightened the prospects for economic normalization.
For example, there is a seasonal trend in the demand for heating oil, pushing prices higher when demand goes up and lower when demand subsides. Oil rose as the market shrugged off an industry report showing U.S. crude stockpiles rose more than expected.

United States

If the Fed’s liabilities were made a medium of exchange, the inflation rate would rise and inflationary expectations would move ahead of actual inflation. He said the 10-year yield could move back towards 1% if the Fed does not increase the longer end purchases. A year of ups and downs in the market re-emphasized to Elizabeth Brozek the importance of a savings cushion, rather than of getting involved in trading. Its barely a month since Donald J Trump warned us the stock market would crash if Biden won the election.
“The best metaphor is Secretary Mnuchin took down the guardrails they put up, and year end is a sharp turn and that is dangerous,” said Reinhart. We identify two tail risks for long term Treasury investors: (1) a huge new debt financed fiscal package and (2) a major change in the Fed’s modus operandi. Earlier this week, enterprise cloud computing player Nutanix (Nasdaq: NTNX) reported its first-quarter results that surpassed market expectations.
Some theorize now that the Fed could hold off on the bond program, if it knows Yellen is a strong advocate for other stimulus. Since (NYSE: PFE) and (NASDAQ: MRNA) released their COVID-19 vaccine news, the S&P 500 is up nicely, hitting an all-time closing high for this bellwether index. In doing so, FENY does a decent job of fairly representing the US energy market which is dominated by a few big names.

Europe

The European Commission failed to properly consider conflicts of interest when it appointed a division of BlackRock to help develop green banking rules, the European Union watchdog said. Vaccine optimism, EU governments starting to ease lockdown restrictions and more US political clarity have driven stocks firmly higher across the start of the week. In Europe, German Chancellor Angela Merkel is proposing further tightening of the country’s restrictions while French President Emmanuel Macron said he will gradually lift a nationwide lockdown from Saturday.
However, news that Macron is easing lockdown restrictions after claiming that the second wave has passed is keeping the mood buoyant and risk assets in demand. IBM announced the job cuts in Europe earlier in November during a meeting with European union leaders. IBM announced the job cuts in Europe earlier in November during a meeting with European Union leaders. Sterling has been trading around two month highs as optimism for a Brexit deal grows.
European Commission President Ursula von der Leyen said the coming days will be decisive for Brexit talks.
Talks are aimed at bringing positions closer in controversial issues, with less than six weeks to the post-Brexit transition period ends. However, it’ll hardly be an interest rate cut, but rather a change of the scope of the ECB’s special pandemic emergency purchase programme, PEPP.

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