Daily Close | Forex, Metals, Oil, Agriculture July 24, 2020



Mr. Scoville is a futures market analyst specializing in grains, softs, rice, oilseeds, and tropical products such as coffee and sugar. The combination of good export buying in general and the buying inside the US due to the Coronavirus has made the market short old crop Rice. Spring Wheat was developing under good growing conditions and futures prices closed lower. In the overnight electronic session the December Corn is currently trading at 335 ¾ which is a ¼ of a cent lower. US Cotton relies on export sales for the major part of its disappearance and the sales are not coming right now. New crop prospects appear solid for increased production in the coming year. There are ideas that the mills are covered into new crop, but little Rice is available from producers. This should be very conducive to the corn crop at this stage in the game. The Winter Wheat harvest is starting to get complete. Meanwhile crop conditions in 18 major states held steady from a week earlier, which was better than trade expected.


Johnny brought up the dollar milkshake theory proposed by Santiago Capital CEO Brent Johnson and the bets Johnson has made with Peter. Peter said it’s not so much that gold is going up, but the dollar is going down. They talked about the gold standard, inflation, the looming dollar crisis, presidential politics, and the foolishness of Modern monetary theory. Peter put his money where is mouth is and went double or nothing against the dollar. Brent and Peter went on to debate the future of the US dollar. Will the fiscal policy relaxation in the euro area be enough to relaunch the economy especially in the already-struggling states such as Italy or Portugal? Consequently, a weaker US Dollar could amplify XAU/USD’s rally. Source: Bloomberg Are the Sino-US tensions raising doubts about the dollar and sending the world into ‘real’ money? Brent says the dollar will go up this year. The fear of the recovery unraveling could send the US dollar to fresh lows.

The company’s net dollar retention rate is above 100%, a positive signal that indicates it is garnering more revenue from the same cohort over time, i.e., negative net churn.


We see that gold continues to push higher, and we are now around the same level gold was at during its peak in 2011. Then, it is imperative to take profit while gold and silver are going up to secure your gain and reduce the risk. Relative gold, which I shorten to rGold, is simply gold’s daily close divided by its 200dma. Yamana Gold’s production has been severely affected by the mines’ temporary suspension due to the COVID-19, and we should not take those results as face value. Most actively traded gold futures rallied 0.4% to $1,897.50 a troy ounce, climbing for the sixth consecutive session and eclipsing their August 2011 peak of $1,891.90. Silver is now about $23 per ounce after lagging gold for a long while. One new element that makes Yamana Gold a perfect candidate for the long term is that the silver price has recovered from its lethargic valuation. Both gold and silver surged dramatically higher this past week, propelled by torrents of investment capital deluging in.

While gold and now silver prices are shooting to the moon, and the other side, gold and silver miners are experiencing severe production disruptions that spoil somewhat any benefits. Gold’s attribute as an anti-fiat hedge may outshine other assets in this environment and push the precious metal higher. Gold trading less than 92% of its 200dma is extremely oversold, marking major correction bottomings. However, I expect initial support levels to hold and gold is likely to reach $2,000 within the next couple of months, in my view. Production of gold equivalent was down from the same quarter a year ago and sequentially. The second-quarter results have been lower despite the firm gold price that keeps on rising that just topped $1,900 per ounce today. Below is the gold production per producing mine in 2Q’20. This week warnings are flashing that gold and silver are entering that precarious state, where odds increasingly favor imminent selloffs. We remain heavily invested in GSMs because the Fed’s perpetual monetary base expansion should enable gold prices and GSMs to go substantially higher from here.

Gold and silver are powering higher on balance in secular bull markets that have been running for years. Note: The production per gold equivalent ounce does not include the pre-commercial ounces from Barnat Au Oz), which are included in the gold production above for Canadian Malartic mine. However, it is difficult to establish a solid short-term strategy with gold and silver experiencing such massive positive momentum.


Next week’s build is expected to be between 20 to 30 Bcf, further signaling a low probability that natural gas storage would reach tank top. Despite the pricing difference however, natural gas fundamental balance remains the tightest since 2016, which signals to us a very tight winter balance ahead. Following a series of bearish cooling demand revisions, natural gas prices held firm which led traders to believe that prices were starting to bottom. On Thursday, July 23, the Energy Information Administration reported an injection of 37 billion cubic feet of natural gas into storage across the United States. The odds favor a continuation of the upward trajectory of the natural gas futures market over the coming sessions. The short-term ProShares Ultra Bloomberg Natural Gas product (BOIL) offers double leverage on the upside in the energy commodity. In essence, we only really have to focus on natural gas storage balance from now to the end of August. According to Baker Hughes, the number of natural gas rigs operating in the United States as of July 24 was 68compared to 169last year at the same time.

The most direct route for a risk position in the natural gas market is via the futures and futures options that trade on the NYMEX division of the CME. In an article we published earlier this week, we noted that the bears were running out of time in trying to push natural gas prices even lower. So for those trying to time natural gas price rise, we think the October – December contracts are a better way of playing the price rally. Those turbines might be powered by wind, water or biomass, but in most of the developed world, they are powered by the carbon fuel we call natural gas. The price of natural gas tends to peak at the beginning of the withdrawal season each year when stocks decline. The price differential between natural gas for delivery in August 2020 and January 2021 is a function of both the high level of stockpiles and the energy commodity’s seasonality.

Open interest, the total number of open long and short positions in the natural gas futures market was flatlining around the 1.302 million contract level. EIA natural gas storage report today was also supportive with a build of 37 Bcf vs. our estimate of 30 Bcf. Natural gas is attempting to reverse the pattern of lower highs and lower lows that has been in place since early May. Natural gas is not running away on the upside any time soon; stockpiles are too high even though there are signs that production is slowing. The price of August natural gas futures rose from $1.605 on July 20 to a high of $1.818 on July 24 or 13.27%. The United States is the top producing country of natural gas in the world.

United States

News > World > Americas > US politics Close Donald Trump bought back another conspiracy theory on Wednesday. Former Trump national security adviser John Bolton has also said he might be willing to testify against Mr Barr. The Fed’s astoundingly-epic money printing since mid-March’s stock panic has catapulted stock markets to dangerous bubble valuations. On Tuesday, stocks rallied after Europe announced another huge stimulus package and threw more easy money at both Main Street and Wall Street. Last Thursday, Treasury Secretary Steven Mnuchin said that he and White House Chief of Staff Mark Meadows were looking over the “final details” for another stimulus bill. Being at the school, being on the campus is very important,” Mr Trump said. Demand for consumer staples is likely to stay constant, even if the US, or the global economy, sputters. The US weather situation is mixed, with good rains noted in the Southeast and good conditions in the Midsouth.

But even if things get that bad, GE will just be one amongst many companies to receive a lifeline from the Fed and the U.S. Treasury. While market participants are largely expecting for the Fed to keep rates unchanged, positive commentary on the outlook could boost expectations for future price growth. But Mr Trump, during his first of the day’s two planned media appearances, was focused on his predecessor, as he so often is. For example, one newsletter editor in mid-January 2000 said he was encouraged that the Fed was signaling that it wouldn’t be raising rates as aggressively as previously thought. He also added that a payroll tax holiday – vocally advocated for by US President Donald Trump – will not be included in the upcoming aid package. Mr Trump made the remarks as part of a congratulatory message he sent to Michael Flynn, the retired Army three-star general and his first White House national security adviser. The decision to remove the statues came after US president Donald Trump announced the deployment of federal law enforcement agents to the city on Wednesday.

Having said that, Mr. Mnuchin said that such a measure may appear in future legislation. “There’s never been anything like that around,” Mr Trump said of his conspiracy theory about the Obama administration. The 10,400 level is extremely important here, and if it breaks down the Nasdaq will very likely see a bigger pullback to roughly the 10,000-9,800 level. Trump critics, including many congressional Democrats, have accused the president and Attorney General William Barr of intervening in the probe and orchestrating a decision to drop the charges. Economic improvement in the US is in doubt as Coronavirus cases surged higher in states that had reopened.


Thus Boris Johnson will probably have to bail it out, whether he wants to or not.