Daily Close | Forex, Metals, Oil, Agriculture June 03, 2021

The sugar index increased 6.8% largely due to harvest delays and concerns over reduced crop yields in Brazil, the world’s largest sugar exporter. Mexican crop conditions in central and southern areas are called good with rains, but earlier dry weather might have hurt production. There are forecasts for hot and dry weather in just about all major US growing areas this week. It has key holdings in corn, soybeans, sugar, coffee, wheat and lean hogs with double-digit exposure each.
Ideas are that Cotton demand can hold strong with production problems noted elsewhere in the world, especially in India. Stress to trees could return if the dry weather continues as is in the forecast. Cotton growing conditions have improved with rains reported in West Texas and the Delta.

On the other hand, a swelling US current-account deficit has many fretting about a weakening dollar and perhaps its imminent demise as the world’s reserve currency. Some experts think the dollar is too expensive such that non-US assets are increasingly attractive, causing capital to rotate out of US fixed-income and equity markets. A hardening U.S. dollar sent gold prices tumbling back below the closely watched $1,900 level.

Gold, despite being an inflation hedge, fell because the greenback fell more, now at $1876 per ounce. August-dated gold lost $36.60, or 1.9%, to settle at $1,873.30 an ounce.

Adding to the malaise before the opening, crude prices inched up because inventories appeared to have fallen because OPEC countries had failed to boost production as expected last month. Oil hit a 15-mo high before Saudi Arabia added fuel to the fire by raising prices for Asia customers. But President Joe Biden made us remember the melting Arctic this week when he un-rang his predecessor s dinner bell inviting oil companies to drill there. Not drilling for oil there is a terrific first step, but the U.S. can do much more, writes Bloomberg s editorial board.
Several oil drilling projects in Africa were canceled by US majors. July-dated crude lost 2 cents, or 0.03%, to settle at $68.81 per barrel. This complements the US Weekly Gasoline Import Forecast that is emailed and posted to Eikon each Tuesday. Gasoline stockpiles, on the other hand, unexpectedly rose.

less Today the proverbial whatever hit the fan after joblessness and payroll data fed the fear of inflation. less In this edition of Central Bank Watch, we’ll review the speeches made over the past week by various Federal Reserve policymakers, including the Fed Chair himself. The Nasdaq fared the worst, settling with a triple-digit drop as inflation fears keep investors rotating out of tech stocks. The impact on stocks was high with only shares traded before the US data came out, mostly in Europe and Asia, spared falling.
Someday these bees might sting.Further Markets-on-Edge Reading: The Fed is backing away from corporate bonds, but the market is forever warped. This is the behavior of a market lulled to complacency by the smoke of endless Fed stimulus. They will play catch-up on price drops tomorrow or with their ADRs unless Wall Street reverses course. Research from our team of in-house analysts has been quoted by The Wall Street Journal, Bloomberg, MarketWatch, USA Today, Kitco, Reuters, US News & World Report, CNBC, and more.
The stock’s price-to-earnings ratio is 79 compared with 34 for Advanced Micro Devices (NASDAQ:AMD). But the story for Nvidia Corp. (NASDAQ:NVDA) is different.

Zev Chafets A top Brexit supporter now wants to encourage immigration from the EU to help fill a labor shortage.