Daily Close | Forex, Metals, Oil, Agriculture May 17, 2021



Commodities, such as wheat, gold, and oil, tend to be highly correlated to inflation; when they rise in price, the costs of goods and services generally increase as well. In the overnight electronic session, the July corn is currently trading at 646 ¼ which is 2 ½ cents higher. Brazil is attempting to establish a bigger market share with corn and sugar-based ethanol.


less They were sorely disappointed when non-farm payrolls and retail sales came out well under expectations, but so far the dollar’s losses have been limited. Euro and sterling are our favorite currencies this week as we look for EUR/USD to test 1.22 and GBP/USD to hit 1.42. In the euro area, Spain ended their curfew last Sunday.


That includes energy for miner demand, miner power consumption, pool power consumption, and node power consumption. Gold prices had just started to test a trend-line projection, and that projection landed very near the 38.2% retracement of the 2018-2020 major move. Gold prices were even so courteous as to offer bulls another shot at re-entry, pulling back to support at that neckline of resistance just a couple of weeks later. Gold prices were in varying stages of pullback whilst sticking within a bearish trend channel.
less Gold prices have spent more than nine months in a retracement. To put this into relative scope, when Gold topped on August 7th, Bitcoin was trading below $12,000. An update on gold and the commodity market.


Domestic jet fuel production gained 89 kbd vs. the last report to 1.344 million bpd, while gasoline production gained 442 kbd WoW to a level of 9.588 million bpd. On the USGC, which boasts 53% of US refining capacity, the most valuable of the marquis products is gasoline with a current spot price of 208.43 cents per gallon. The Strategic Petroleum Reserve, a bunch of crude oil sloshing around in caves, is essentially useless when people need gasoline to get to work yesterday.
Retailers in Brazil asked to reduce the ethanol required to blend into gasoline, saying smaller production in the current season has reduced biofuel supplies and increased prices. But, same as last week s analysis, that story remains more about gasoline and returning normalcy to PADD 1 markets. Russia and other countries made public their plans to boost their production capacity, to make the most of their oil resources while they can. For that emergency, to get gasoline quickly to Georgia so people would stop filling Ziplocs with it, Biden helped by waiving the Jones Act.
Vessel Movements US DIESEL IMPORTS: last week saw 2.4 million barrels of diesel imported on 13 vessels. On the Crude Oil front, is another market that is weighing in on supply and demand. In the overnight electronic session, the June crude oil is currently trading at 6508 which is 29 points lower. We have OPEC+ member countries establishing their market share with Iran back in the picture. The other vessel, TORM ATLANTIC (9433509), was loaded in Houston, Texas and arrived in Rio de Janeiro on May 10.

United States

With the Fed actively trying to stoke inflation, the five-year breakeven inflation rate is elevated. US JET FUEL IMPORTS: last week there were 1.6 million barrels of jet fuel imported into the US. But the five-year inflation rate starting in five years’ time is only at 2.3%, right on top of the Fed’s target. Regardless, after a week of diminished diesel imports, this week will see about 430,000 bpd imported, about a third of which emanated from the US.
We think breakeven rates of inflation should come to reflect the Fed’s new paradigm as the recovery develops. Matthew Yglesias suggests some things Biden can do to alleviate food and energy inflation, even if the Fed can t (and shouldn t) be bothered with such niceties. less Image: Bigstock Wall Street saw tumultuous trading last week with the Dow Jones and the S&P 500 dropping 1.1% and 1.4%, respectively. less The first manufacturing data for May came out this morning with the release of the New York Fed’s Empire State Manufacturing Survey.
This is followed by ULSD, which is priced at 201.645 cents/gallon, and jet fuel as the lowest priced molecule at 180.37 cents/gallon. The tech-heavy Nasdaq Composite Index declined 2.3% last week. He has been quoted in a variety of financial news publications, such as CNBC, the Wall Street Journal, and the New York Post. Many forecasts along Wall Street, at the Federal Reserve, and in the White House expect it to do just that.