Agriculture
SOURCE Our proprietary system CLIMATE PREDICT (above) shows the developing La Nina (dry weather (red) for West African cocoa) helping cocoa prices soar. While short-term conditions for corn and soybeans have deteriorated, long term this good weather will be bearish. A weak La Nina will bring good harvest weather for Canada and most of the Midwest corn belt. Harvest pressure in Canada and the US come later in September and October could cause corn (CORN), soybeans (SOYB), and Wheat (WEAT) to sell-off.
About half of the Argentine Wheat belt is too dry and wire reports indicate that production in the worst areas could be 50% of normal. While Australia should have a great wheat harvest, weather issues could be developing in Argentina. Cocoa prices (NIB) are soaring on a six-week dry spell that looks to continue in West Africa. Russian Winter Wheat yields have improved over time as harvesters move into areas that had better growing conditions.
The drought in Iowa the last month or so has finally taken its toll on corn and soybean crops. That’s been helping to lower corn and soybean crop prospects. The market is still reacting to which way Wheat prices are going here and overseas. Spring Wheat was developing under good growing conditions in both the US and Canada. Minneapolis Spring Wheat seems to have a lot of selling near the 530 September level and this has kept the futures market in a sideways trend. It is still dry in France and Russia and now Spring Wheat areas of Russia are being affected.
31, 2020 2:54 PM ET|| Includes: CORN, NIB, UNG, WEATby: James RoemerJames Roemer Hedge Fund Analyst, Commodities, natural resourcesbestweatherinc.comSummaryAs I predicted, nat gas (UNG) has fallen after Hurricane Laura. General Comments: Winter Wheat markets were higher last week but lower on Friday. Trends in the Winter Wheat markets have been up.
About half of the Argentine Wheat belt is too dry and wire reports indicate that production in the worst areas could be 50% of normal. While Australia should have a great wheat harvest, weather issues could be developing in Argentina. Cocoa prices (NIB) are soaring on a six-week dry spell that looks to continue in West Africa. Russian Winter Wheat yields have improved over time as harvesters move into areas that had better growing conditions.
The drought in Iowa the last month or so has finally taken its toll on corn and soybean crops. That’s been helping to lower corn and soybean crop prospects. The market is still reacting to which way Wheat prices are going here and overseas. Spring Wheat was developing under good growing conditions in both the US and Canada. Minneapolis Spring Wheat seems to have a lot of selling near the 530 September level and this has kept the futures market in a sideways trend. It is still dry in France and Russia and now Spring Wheat areas of Russia are being affected.
31, 2020 2:54 PM ET|| Includes: CORN, NIB, UNG, WEATby: James RoemerJames Roemer Hedge Fund Analyst, Commodities, natural resourcesbestweatherinc.comSummaryAs I predicted, nat gas (UNG) has fallen after Hurricane Laura. General Comments: Winter Wheat markets were higher last week but lower on Friday. Trends in the Winter Wheat markets have been up.
Currencies
Peter said at some point the market is going to call the Fed’s bluff and ultimately the dollar is going to be destroyed. less The Canadian Dollar gained against its southern counterpart to start the week, sending USD/CAD to its lowest point since early January. That said, upcoming event risk and high-impact data releases facing the US Dollar later this week may strongarm the direction of EUR/USD over the near-term. This is a highly significant climb, and therefore it has become a lot harder to make the argument that the Aussie dollar is “undervalued” at this point.
In his podcast, Peter Schiff said this policy will simply speed up the destruction of the dollar and the economy. A falling dollar and record levels of government and central bank stimulus and liquidity are rocket fuel for the metal. less The Euro is trading back at two-year highs against its US Dollar peer as EUR/USD price action spikes into the 1.19-handle. A declining dollar is bullish for the prices of precious metals.
The rise in mergers and acquisitions as well as the recent weakness in dollar led to a spike in the S&P 500 Index. Source: Bloomberg The dollar was pummeled for the 5th straight month to its lowest since May 2018… Banks usually took 65 cents on the dollar to whatever the proved reserve value was. (Note: all dollar figures are in Canadian dollars, unless otherwise noted) Lately, I have been very interested in the cannabis sector. However, the euro was unfazed because the main focus this week is the US dollar.
So the average dollar per patient . ULA (United Launch Alliance), which is a joint venture between Lockheed Martin and Boeing (BA), recently won a multi-billion-dollar Pentagon contract to launch national security space missions.
Yet, they both compete in the rough and tumble, trillion-dollar auto manufacturing business.
In his podcast, Peter Schiff said this policy will simply speed up the destruction of the dollar and the economy. A falling dollar and record levels of government and central bank stimulus and liquidity are rocket fuel for the metal. less The Euro is trading back at two-year highs against its US Dollar peer as EUR/USD price action spikes into the 1.19-handle. A declining dollar is bullish for the prices of precious metals.
The rise in mergers and acquisitions as well as the recent weakness in dollar led to a spike in the S&P 500 Index. Source: Bloomberg The dollar was pummeled for the 5th straight month to its lowest since May 2018… Banks usually took 65 cents on the dollar to whatever the proved reserve value was. (Note: all dollar figures are in Canadian dollars, unless otherwise noted) Lately, I have been very interested in the cannabis sector. However, the euro was unfazed because the main focus this week is the US dollar.
So the average dollar per patient . ULA (United Launch Alliance), which is a joint venture between Lockheed Martin and Boeing (BA), recently won a multi-billion-dollar Pentagon contract to launch national security space missions.
Yet, they both compete in the rough and tumble, trillion-dollar auto manufacturing business.
Metals
Gold price increased this quarter to $1,711 per oz, and silver was $16.00 per ounce. When the gold and silver markets are rallying, silver’s attraction for speculators causes far greater price volatility. One word about the gold price realized: The company has indicated $1,766 per ounce in the presentation, but mentioned $1,711 per ounce in the press release. 19,753 19,651 18,123 20,479 18,159 Gold price realized 1,304 1,309 1,472 1,481 1,583 Silver price realized 15.57 – – 17.32 16.90 Source: Company release and Morningstar.
The average gold price this quarter was up to per ounce from the year-ago quarter. However, Royal Gold and two smaller streamers, Osisko Gold Royalties (NYSE:OR) and Sandstorm Gold (NYSE:SAND), are the three that I consider useful trading tools. At the end of last week, the ratio was at the average level as silver’s rally caused it to catch up with the gold market. In both metals, mining shares tend to magnify the price movement in the gold and silver market.
Osisko Gold Royalties posted a revenue of US$30.08 million in the second quarter of 2020, down 69.4% from the same quarter a year ago and down 20% sequentially. Silver’s break to the upside launched a bull market in the precious metal that has been playing catch up with gold. Silver and gold have a lot more than bullish price trends going for them these days. As the variance in the ratio in 2020 highlights, silver tends to outperform gold on the upside and underperform on the downside on a percentage basis.
However, revenues were boosted by the price of silver and gold. The silver-gold ratio is a measure of the number of ounces of silver value in each ounce of gold value. Aside from breaking through technical resistance, silver took the leadership role in the precious metals arena from gold. The precious metal with a reputation and nickname as “gold’s sibling,” started the year at just under $18 per ounce. Source: Bloomberg Copper and Crude had a strong month, gold ended flat, silver the big winner…
However, the stock has nearly doubled since March, and valuation is now a problem, especially if the gold price is almost plateauing after a huge run-up. The current environment creates an almost perfect bullish storm for gold and silver. The bullish price action in the silver market is likely to continue.
The average gold price this quarter was up to per ounce from the year-ago quarter. However, Royal Gold and two smaller streamers, Osisko Gold Royalties (NYSE:OR) and Sandstorm Gold (NYSE:SAND), are the three that I consider useful trading tools. At the end of last week, the ratio was at the average level as silver’s rally caused it to catch up with the gold market. In both metals, mining shares tend to magnify the price movement in the gold and silver market.
Osisko Gold Royalties posted a revenue of US$30.08 million in the second quarter of 2020, down 69.4% from the same quarter a year ago and down 20% sequentially. Silver’s break to the upside launched a bull market in the precious metal that has been playing catch up with gold. Silver and gold have a lot more than bullish price trends going for them these days. As the variance in the ratio in 2020 highlights, silver tends to outperform gold on the upside and underperform on the downside on a percentage basis.
However, revenues were boosted by the price of silver and gold. The silver-gold ratio is a measure of the number of ounces of silver value in each ounce of gold value. Aside from breaking through technical resistance, silver took the leadership role in the precious metals arena from gold. The precious metal with a reputation and nickname as “gold’s sibling,” started the year at just under $18 per ounce. Source: Bloomberg Copper and Crude had a strong month, gold ended flat, silver the big winner…
However, the stock has nearly doubled since March, and valuation is now a problem, especially if the gold price is almost plateauing after a huge run-up. The current environment creates an almost perfect bullish storm for gold and silver. The bullish price action in the silver market is likely to continue.
Oil
With valuations still completely disconnected with oil market fundamentals, we think investors should be positioned to take advantage of the oil bull market. Cash flow outspend was enormous, to say the least, and if capex was kept in-line with cash flow, US oil production would have been flat. So, if the export fuel price exceeds the domestic price, then the government pays to the oil companies, thus stimulating supplies to the domestic market. Source: EIA, HFI Research The reason is that July US oil production rebounded back to ~11.3 mb/d following a near-complete return of shut-in production.
As a result, people are seriously underestimating just how significant the recent decline in US oil production really is.
The coldest winters for US natural gas and heating oil regions usually occur with a negative QBO and a La Nina. At $40/bbl WTI, US shale oil production will fall below ~10 mb/d by second half 2021. This material change in capex spending will dramatically alter the future of the US oil production trajectory. The only way for US shale to reverse the incoming decline is if oil prices shoot up.
Nonetheless, I can’t fully exclude a scenario where the Ministry successfully pushes the changes to the tax regulations without any kind of “compensation” for Russian oil companies. As I’ve already mentioned in my article about Gazprom Neft (OTCQX:GZPFY), the Russian Ministry of Finance seriously plans to increase taxes for Russian oil companies. To sum up, I can’t say that I’m a fan of Rosneft, but some investors who prefer giant oil majors may find Rosneft an attractive option for long-term investing.
Rosneft, in fact, is leading the improvised alliance of oil majors who want the existing tax regime to be left unchanged. In the opposite situation (like now), oil companies have to pay into the Russian budget. Until of course, the $100/bbl oil days were over and companies realized that RBLs were a double-edged sword. Mitsui’s total share in LNG production across these facilities adds up to 10 million tons per annum. In 2021, the agency predicts a twofold growth in EBITDA – up to 1.5-1.7 trillion at an average price per barrel of $50.
But Mitsui’s projections show it could be able to reap 200-220 billion yen in annual operating cash flows from the LNG business alone. SOURCE: NOAA VEGGIE INDEX Argentina developing dryness is typical for La Nina As for natural gas (UNG)? Oil/gas is likely to be weaker for longer, and nVent management has commented that they expect the business to remain “off peak” for “at least a couple of years”.
As a result, people are seriously underestimating just how significant the recent decline in US oil production really is.
The coldest winters for US natural gas and heating oil regions usually occur with a negative QBO and a La Nina. At $40/bbl WTI, US shale oil production will fall below ~10 mb/d by second half 2021. This material change in capex spending will dramatically alter the future of the US oil production trajectory. The only way for US shale to reverse the incoming decline is if oil prices shoot up.
Nonetheless, I can’t fully exclude a scenario where the Ministry successfully pushes the changes to the tax regulations without any kind of “compensation” for Russian oil companies. As I’ve already mentioned in my article about Gazprom Neft (OTCQX:GZPFY), the Russian Ministry of Finance seriously plans to increase taxes for Russian oil companies. To sum up, I can’t say that I’m a fan of Rosneft, but some investors who prefer giant oil majors may find Rosneft an attractive option for long-term investing.
Rosneft, in fact, is leading the improvised alliance of oil majors who want the existing tax regime to be left unchanged. In the opposite situation (like now), oil companies have to pay into the Russian budget. Until of course, the $100/bbl oil days were over and companies realized that RBLs were a double-edged sword. Mitsui’s total share in LNG production across these facilities adds up to 10 million tons per annum. In 2021, the agency predicts a twofold growth in EBITDA – up to 1.5-1.7 trillion at an average price per barrel of $50.
But Mitsui’s projections show it could be able to reap 200-220 billion yen in annual operating cash flows from the LNG business alone. SOURCE: NOAA VEGGIE INDEX Argentina developing dryness is typical for La Nina As for natural gas (UNG)? Oil/gas is likely to be weaker for longer, and nVent management has commented that they expect the business to remain “off peak” for “at least a couple of years”.
United States
So, if the Fed’s goal is to prop up the stock market, to prevent the stock market from coming down, then they need more inflation. The Fed, stock splits, and inflation have been often seen in the headlines of this historic month in the market. That means that the Fed will likely hold interest rates at zero for a significant amount of time – probably years – even if CPI runs above 2%. Last week, Fed Chairman Jerome Powell told the world the US central bank is prepared to tolerate higher inflation levels.
But one unique problem that the US faces is the higher number of vulnerable people of all ages, since Americans are among the least healthy populations among developed nations. As Peter put it – the Fed has effectively raised its inflation target, but we don’t actually know what that target is. “Many find it counterintuitive that the Fed would want to push up inflation. What the Fed has done with all of its prior monetary stimulus is to create a situation where the Fed can never actually fight the inflation that it creates.
That’s why the Fed is now saying we’re going to let inflation run hotter – because they have no choice.
Let’s recognize that the Fed has produced a liquidity machine that has pushed select indices to all time highs with most gains coming from a few tech stocks. The ultimate irony of this is that the Fed allowing money to lose value, allowing people’s savings and wages to lose purchasing power, is not good for the economy. I say select stocks because the internal picture keeps showing dreadful weakness underneath, even in the almighty Nasdaq: All of which brings me to a historic irony.
Kamala Harris) and rallied their base around the theme of defunding police and would need to effectively adopt Trump’s policy after 3 months as a reaction to polls. with a hearing about the DOJ’s unusual reversal in the case, before deciding whether to allow the Trump administration to withdraw its charges against the president’s former close aide. McKesson’s delivery prowess along with the clear demand for its products was clearly seen in the first quarter especially in the pharmaceutical & specialty solutions in the US.
Yet another consecutive weekend of deadly gun violence has rocked Chicago, as President Trump continues to go after Democrat-run cities with his restore law-and-order emphasis. But it’s not good for the economy.” The bottom line is the Fed can’t fight inflation. During the month of August, Trump was as much as 25 points behind and investors took Biden’s election for granted (we cautioned this may be premature).
As I already briefly mentioned, the company is highly dependent on the US economy, which makes it a somewhat predictable stock. Former Fed chairs Janet Yellen and Ben Bernanke were both big Phillips Curve advocates despite the fact the theory never worked even according to Fed studies.
But one unique problem that the US faces is the higher number of vulnerable people of all ages, since Americans are among the least healthy populations among developed nations. As Peter put it – the Fed has effectively raised its inflation target, but we don’t actually know what that target is. “Many find it counterintuitive that the Fed would want to push up inflation. What the Fed has done with all of its prior monetary stimulus is to create a situation where the Fed can never actually fight the inflation that it creates.
That’s why the Fed is now saying we’re going to let inflation run hotter – because they have no choice.
Let’s recognize that the Fed has produced a liquidity machine that has pushed select indices to all time highs with most gains coming from a few tech stocks. The ultimate irony of this is that the Fed allowing money to lose value, allowing people’s savings and wages to lose purchasing power, is not good for the economy. I say select stocks because the internal picture keeps showing dreadful weakness underneath, even in the almighty Nasdaq: All of which brings me to a historic irony.
Kamala Harris) and rallied their base around the theme of defunding police and would need to effectively adopt Trump’s policy after 3 months as a reaction to polls. with a hearing about the DOJ’s unusual reversal in the case, before deciding whether to allow the Trump administration to withdraw its charges against the president’s former close aide. McKesson’s delivery prowess along with the clear demand for its products was clearly seen in the first quarter especially in the pharmaceutical & specialty solutions in the US.
Yet another consecutive weekend of deadly gun violence has rocked Chicago, as President Trump continues to go after Democrat-run cities with his restore law-and-order emphasis. But it’s not good for the economy.” The bottom line is the Fed can’t fight inflation. During the month of August, Trump was as much as 25 points behind and investors took Biden’s election for granted (we cautioned this may be premature).
As I already briefly mentioned, the company is highly dependent on the US economy, which makes it a somewhat predictable stock. Former Fed chairs Janet Yellen and Ben Bernanke were both big Phillips Curve advocates despite the fact the theory never worked even according to Fed studies.
China
Officials in Beijing have warned that barring WeChat would cause Chinese consumers to “abandon” the iPhone, since it wouldn’t be able to run WeChat.
Europe
This bearish technical scenario could be ignited by a fundamental catalyst like risk of a second wave threatening the EU economic recovery. The Bahamas and Cayman Islands banned the entry of cruise liners, while the EU is closed to most foreigners.
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