Daily Close | Forex, Metals, Oil, Agriculture August 04, 2020



The iPath Series B Bloomberg Sugar Subindex Total Return ETN (SGG) and the Teucrium Sugar ETF product (CANE) track the price of world sugar futures higher and lower. Since local sugar cane production in Brazil is in local currency terms, a rising real tends to have a supportive effect on sugar futures price. CANE underperformed the sugar futures market because it holds a diversified portfolio of three sugar futures contracts. The Teucrium Sugar Fund (CANE) provides an alternative for those looking to participate in the sugar market without venturing into the futures arena.
Above the 12.95 level, the February peak at 15.90 cents is the critical level of technical resistance in the sugar futures market. The most direct route for a risk position in the sugar market is via the futures and futures options that trade on the Intercontinental Exchange. The falling dollar and level of central bank and unprecedented government stimulus support gains in the sugar futures market.
The world sugar futures contracts that trade on the Intercontinental Exchange reflect the free market price and the supply and demand fundamentals. The price of sugar fell to its lowest level since 2007 in April when it fell to 9.05 cents per pound. I last wrote about sugar on Seeking Alpha on May 15 after the price bounced from 9.05 cents to over 10 cents per pound. October sugar futures moved from 9.05 cents in late April to a high of 12.80 cents on August 3 or 41.4%.
On July 31, the active month October sugar futures contract rose above its short-term resistance level. The sugar price is also a function of the exchange rate level between the Brazilian real and the dollar. World sugar futures are a member of the soft commodities sector. During the period when nearby sugar futures rose 41.4% and CANE appreciated by 24%, SGG’s performance was in the middle. The impact of coronavirus and the recent low sugar price could lead to less output in the coming months.
A lower dollar and bounce in the real support gains in sugar. In that piece, I highlighted the price action in sugar following the global financial crisis in 2008. A declining dollar tends to support all commodities, and sugar is no exception. Since then, sugar has recovered and was trading at its highest level since March on August 3.


In the US, both monetary and fiscal stimulus measures have been unprecedented, resulting in a remarkable decline in the dollar and US real rates. If the gold price was simply an inverse of the dollar, then why is it not trading at $1300…which is where it was trading in June of 2018? The premium is a bit rich with a $34 per share premium being offered, translating into a near $3.1 billion premium in actual dollar terms. The demand for the U.S. dollar has far outstripped the increase in supply, causing a far lower aggregate price rise than anticipated by the QTM.
A falling dollar and rising real tends to be bullish for the price of the soft commodity. Do not fall for the simplistic, generalist view that the price of gold simply moves inversely to the U.S. dollar. The answer: Because changes to the relative value of the dollar only provide a tail or headwind for the gold price. The Canadian dollar traded sharply higher as oil prices turned positive after earlier losses.
At the same time, most other commodity prices rose to all-time or multiyear highs as the dollar index fell.
The U.S. Dollar Index is currently trading at about 93.50, which is the lowest level since June of 2018. On August 3, the index bounced to settle at 93.507, but the dollar has been trending lower since late March. Worse than that the Fed internationalized that pile, spreading the cancer out the world over, by turning the dollar into the ultimate carry-trade currency. Weakness in the U.S. dollar against a range of currencies supported commodities. In contrast, the New Zealand dollar failed to participate in the rally as dairy prices declined.
The US dollar resumed its slide on Tuesday in what may turn out to be a very short-lived recovery. The broad U.S. dollar fell to a two-year low at the end of the month. The best performing currency on Tuesday was the Australian dollar. The S&P GSCI Energy up was 2.6%, buoyed by a weaker U.S. dollar. Source: Bloomberg The Dollar mirrored Monday almost perfectly with a … The Brazilian real traded to a high of $0.65095 in 2011.


Despite gold prices at an all-time high, speculators have liquidated their net long positions in COMEX gold at a large pace, which we view as a healthy signal. The fact that gold’s spec positioning is not yet overstretched on the long side suggests that there is more upside before gold prices reach a peak. Alamos Gold sold 74.6K ounces of gold at an average realized price of $1,692 per ounce this quarter. The producers don’t buy gold and the swap dealers are hedged (long gold and short equivalent futures).
We discuss gold prices through the lenses of Aberdeen Standard Physical Gold Share (SGOL). The fact that spec sentiment toward gold is not yet overly bullish suggests more price upside ahead. If the momentum continues and gold price can trade above $2,000 per ounce, then AGI could eventually cross resistance at $11.50 and reach $13. ETF investor demand has exploded higher since March, driven by a very limpid narrative for owing gold. The company sold 74.6K ounces of gold at an average realized price of $1,692 per ounce.
Production has been cut by 50% sequentially after the gold mine was put on temporary care & maintenance since the last week of March. Interestingly, the COMEX gold spot price rallied by 6% over the reporting period, suggesting 1) the absence of momentum-based market participants and 3) the presence of short-term oriented traders. Alamos Gold produced 78.4K Au Oz this quarter, down 37.4% compared to the same quarter last year and down 29.2% sequentially.
The increase in ETF demand for gold has been substantial since late March, highlighting a very strong positive sentiment for the yellow metal. Source: SGOL Source: CFTC, Orchid Research The speculative community cut significantly its net long position in COMEX gold in the week to July 28, according to the CFTC. Thus, I expect the company to report a much higher gold production in Q3. SGOL made an all-time high on July 28, reflecting the remarkable bull run in the gold market.
Spot Gold prices settled above $2,000 for the first time in history today… If that were the case, then the price of COMEX gold should be significantly lower.
Stock picking continues to be the winning play for the US stock market, while “most boats are rising” in the gold stocks market! AISC was quite high due to the low gold production sold.


A – Upstream segment Combining oil and gas production, Exxon Mobil produced this second quarter, down year over year and down sequentially (please see graph history above). The result is that the price of oil and gas received by the company in the second quarter of 2020 was at a multi-year record low. With the CCT business, there’s no getting around the issue of weak aircraft builds for the next couple of years, nor weaker upstream oil & gas. From a supply perspective, bloated U.S. crude oil inventories have finally started to fall, while OPEC’s decision to ease production curbs offers them some flexibility should demand weaken further.
Oil and gas prices tumbled in March. However, due to growing volatility in the oil industry, I recommend trading short term a portion of your position regularly. CCT revenue declined 29%, with the company hit hard by both aerospace (down 41%) and oil/gas (down 24%), while industrial revenue declined a much more moderate 7%.
Below is the company’s production per region between liquids and natural gas in the 2Q’20. Exxon Mobil is one of my preferred long-term oil companies. Looking at some of CMCO’s other major markets, there are good reasons to remain concerned about the oil/gas market (about 10% of sales). Process markets were down 25%, with oil/gas down 30%, mining/cement down double digits and chemicals down double digits.

United States

Other major US stock market benchmarks like the Dow Jones and Nasdaq reflect similarly green but overall muted changes in performance. Today, leading semiconductor stock, Cirrus Logic Inc (CRUS), is falling sharply lower after reporting earnings that failed to impress Wall Street investors. Because now the Fed is not talking about injecting sterilized reserves into the money supply to create fictions of bank balance sheets. Daniel J. Ivascyn May 2020 Blog The Fed’s aggressive support may help keep markets functioning, hasten recovery and avoid longer-term damage.
At any time, the FED can get all of the banks’ money lent. Several countries have put restrictions on travel to and from the US as new Covid-19 cases continue to surge here. I expect Columbus McKinnon to modestly outgrow underlying U.S industrial investment growth as the company introduces more automated and automation-enabling products and gains share in newer verticals. With the rise of MMT And the Fed has done nothing so far to say that it has any cures for this disease other than mo’ money.
“Mad Money” host Jim Cramer suggested that Wall Street professionals are playing with amateur investors. On a government level, debt without productivity creates inflation, and the US government is now solidly on that path. Mr Trump stated his claim about the relative innocuousness of coronavirus on Saturday during a speech celebrating US Independence Day on Saturday. The Fed will finally do what Bernanke tried desperately to avoid, print helicopter money.
Elizabeth Warren on Tuesday had called on the SEC to look into tradingthat occurred prior to the Trump administration’s public announcement of the deal with Kodak.
But the FED knows that this will double the money supply within weeks. The US economy and labor market in particular will be a key focus tomorrow with non-manufacturing ISM and ADP scheduled for release. WisdomTree US Total Dividend ETF uses a market approach that focuses on dividend-paying companies within the US. I felt like you have to be on Wall Street and know these complex terms,” Hassel said.
He has been quoted in a variety of financial news publications, such as CNBC, the Wall Street Journal, and the New York Post. The market always paid a better return than the Fed’s 0.25%. MDA redomiciled in the US in order to better capture US government contracts, and then renamed itself Maxar Technologies.


Pro-Brexit supporters celebrating in Parliament Square, after the UK left the European Union on 31 January. Sir Iain claimed that the EU “want our money and they want to stop us being a competitor” and that the Withdrawal Agreement “sadly helps them”. Speaking of regulatory pressure, the ECB urged banks to delay paying dividends until next year to improve financial strength. He added that the provisions mean Britain would be “hooked into the EU’s loan book”.