Close: London Session | Forex, Metals, Oil, Agriculture October 28, 2020



High-fructose corn syrup, corn starch, corn oil, and lysine are direct corn products. The Teucrium Corn ETF product (CORN) tracks the price of three actively traded corn futures contracts that trade on the CME’s CBOT division. Even though crude oil and gasoline prices have been stable over the past months, ethanol’s price has moved higher with the corn futures market. Corn’s all-time high on the CBOT futures market came in 2012 when a drought lifted the price of nearby futures to $8.4375 per bushel.
Wet milling separates corn into starch (syrup, ethanol, and corn starch), germ (OIL), and gluten (animal feed). CORN holds a blend of three actively traded CBOT corn futures contracts. The Teucrium Corn Fund (CORN) provides an alternative for market participants looking to participate in the agricultural product. Since the most volatility tends to occur in the nearby contract, CORN tends to underperform the price of the nearby futures on the upside and outperform during downside corrections.
The derecho lit a bullish fuse in the corn market as it took the price of grains and oilseeds higher over the past three months. The total number of open long and short positions in the CBOT corn futures market has been rising with the price even as the 2020 harvest ends.


The dollar index rose, with implied volatility gauges in the euro and the yen hitting multi-month highs ahead of next week s U.S. elections. The Australian dollar has traded on both sides of yesterday’s range, but so far, it remains, as it has this week, within the range seen before the weekend (~$0.7100-$0.7160). Gold is used as both a hedge against the loss of purchasing power of a weaker dollar and for pullbacks in equity portfolios, the note said.
During Bretton Woods the U.S. dollar was the world reserve currency, backed by gold at a fixed parity of $35 per troy ounce. For the third consecutive session, the US dollar is making higher highs. The ICE U.S. Dollar Index, which measures the greenback against a basket of currencies, gained 0.4% as investors worried about fresh lockdowns. The Canadian dollar remains among the most sensitive of the majors to the shift in risk appetites. The dollar rose for the fourth day out of five, boosted by rising Treasuries.
The dollar, too, has caught a bid and is firmer against most of the world’s currencies but the Japanese yen. The dollar closed at five-months highs yesterday (~BRL5.7060) and may test BRL5.80 today.


Magnet processed 456,000 tonnes at an average grade of 2.98 grams per tonne gold vs. 486,900 tonnes processed at 1.98 grams per tonne gold in fiscal Q1 2020. The plant processed 734,000 tonnes at 1.34 grams per tonne gold vs. 685,000 tonnes at 0.76 grams per tonne gold in the year-ago period during the quarter. In 2002 when gold was $300 per ounce, MAM recommended to its investors to put 50% of their investment assets into physical gold stored outside the banking system.
The note continues, adding with gold currently in the low $1,900s per ounce, it could be at $2,300 per ounce next year. The Gold Analyst offers quality technical and fundamental analysis of the price of gold to help educate readers in their investment decisions. Because gold serves as the backstop of the international financial system, the global distribution of gold influences the balance of power. Storing gold with allies provides safety, but when political ties weaken, storing gold abroad becomes a hazard.
All of Germany’s official gold reserves have been accumulated in between 1951 and 1968, but Germany hardly ever redeemed dollars for gold at the U.S. Treasury.
Gold rose to a record high of $2063 per ounce in early August and was trading at over $1900 per ounce on October 27. Global Investors’ head trader Michael Matousek said that there would be limited trading activity before the election and gold could be stuck in a tight price range.


A collapse in crude oil prices has forced most oil and gas producers to drastically cut costs by laying off thousands of employees and cutting down on drilling. less Oil prices are getting battered as the American Petroleum Institute (API) reports a large crude oil build, and the coast gets prepared for Hurricane Zeta. Higher oil prices generate a higher GDP due to the fact that Canada is a big exporter of oil products. Predicated on a rebound in gasoline demand and constrained shale supply, U.S. oil prices could rise to $65 per barrel late next year, the bank’s report predicts.
I have worked in the areas of oil refining, natural gas production, synthetic fuels, ethanol production, butanol production, and various biomass to energy projects. Natural gas producer EQT said on Tuesday it will buy U.S. oil major Chevron’s assets in the Appalachian basin for $735 million. That type of growth implies strong increases in the consumption of natural gas, crude oil, gasoline and bulk commodities.
The American Petroleum Institute said stockpiles of U.S. crude rose by 4.6 million barrels in the past week, exceeding consensus forecasts of 1.1 million barrels, Mr. Martinsen said. We also expect additional global demand for vegetable oil from the growth of biofuels,” said Chief Executive Officer Greg Heckman. The company reported a smaller-than-expected quarterly loss on Tuesday and forecast sequential growth in active frac fleets, as producers restore oil volumes, driven by an uptick in prices.

United States

Market sentiments were also weighed after U.S. President Donald Trump acknowledged that a coronavirus economic relief package will only likely come after the November 3 election. “When I said that I think Trump is going to win in 2016, I also said that if you think 2016 is weird, just wait for 2020,” said Gundlach. Election uncertainty also has market players hesitant to make big moves despite the earnings parade coming down Wall Street. Wall Street futures were lower, mirroring global shares, on concerns over possible strict lockdown measures due to the rapidly increasing coronavirus cases in the U.S. and Europe.
In the US, the economic outlook is also clouded because prospects for a new fiscal stimulus package has been delayed, perhaps until next year. less The Trump administration last month announced plans to cut the number of refugees allowed to enter the United States to the lowest level in 40 years. A Trump win would likely allow most or all of them to move forward; if Biden wins, he’ll likely have a different view on some of the changes.
Recent opinion polls have continued showing President Donald Trump trailing behind challenger Joe Biden, yet the surprise from four years ago is on investors’ minds. Stock market participants were cautious ahead of the US presidential elections scheduled to be held next week on November 3. As noted several times recently, let’s also see what emerges from the US election in terms of the EM FX response, and CNY as the biggest domino in particular.


Chinese EV manufacturers are expected to start expanding overseas, while Beijing already controls a large part of the global EV supply chain, beginning with critical minerals processing. All three measures are policy levers, short of intervention, which Beijing uses as it deems necessary. Having supported EV manufacturers and sales over the past few years, Beijing now looks to expand its presence outside China. Yesterday, Beijing announced its third policy adjustment that impacts the yuan.
The “market” close should be X….but the PBOC applies the CCF and says it is Y, which is always stronger.


Lockdowns German Chancellor Angela Merkel will push for tougher curbs, including shutting bars and restaurants until the end of November, when she meets with regional leaders today. This new spike in coronavirus cases comes as the latest ECB monetary policy decisions and press conference hove into view tomorrow. Merkel is expected to meet with regional leaders and announce the lockdown. Merkel has pledged to do all she can to avoid imposing another lockdown as strict as the one that hammered Europe’s biggest economy in the second quarter.
Meanwhile, European Commission President Ursula von der Leyen is expected to release a set of proposals later on Wednesday ahead of a Thursday conference call with EU leaders. Today French President Emmanuel Macron will address the nation and will also announce a lockdown. Given the speedy economic deterioration, all eyes are turning to central banks again, especially the ECB that is due to meet tomorrow. The country is also wrapped up in a spat with Turkey on several fronts, a boycott of its products by some Muslim states, and the Brexit negotiations.
Taking no chances | Ericsson is stockpiling equipment ahead of Brexit to ensure it can meet growing demand from Britain s next-generation wireless networks. The outage on Friday paralyzed the ECB’s Target2 payments system, which provides the plumbing that allows money to flow across the bloc’s single market.