Daily Close | Forex, Metals, Oil, Agriculture November 27, 2020



General Comments: Winter Wheat markets were lower on what appeared to be speculative selling as world market prices held at higher levels. The market in Russia has remained high on limited supply as farmer hold the Wheat back due to the drought. Funds shaved of 5,000 corn and expectations of a slowdown in demand as buyers do not seem to be willing to pay these price levels for 2021. USDA said that net Upland Cotton export sales were 354,700 bales this year and 38,500 bales next year.
Reports indicate that some Cotton could have been damaged in Georgia and the Carolinas and into eastern Virginia due to the excessive rains caused by the hurricanes. General Comments: Cotton closed lower on what appeared to be speculative selling. Overnight News: The southern Great Plains should get dry weather.


A weak dollar has been supporting oil price as it makes the dollar-denominated commodity less expensive for foreign buyers. Source: Bloomberg The dollar tumbled for the 3rd week in the last 4, having plunged almost non-stop since the election… Moreover, the improving prospect for the smooth transition of President-elect Joe Biden to White House has been weighing on the U.S. dollar. The Dollar fell again.


There aren’t many major silver miners in the world, and only a handful are primary silver producers that derive over half their revenues from silver. So silver’s ongoing correction won’t give up its ghost until gold’s does, and silver stocks’ next bull-market upleg is waiting on silver’s own. According to the Silver Institute, only 29% of all the silver mined worldwide in 2019 came from primary silver mines. The higher miners’ percentage of quarterly revenues derived from silver production, the more responsive their stock prices are to silver price action.
For half-year-reporting silver miners where Q3 was an interim quarter, those implied silver revenues can be divided by implied gold-plus-silver sales. It is mostly calculated by multiplying companies’ quarterly silver outputs by silver’s average price in Q3, then dividing those results by quarterly revenues. But even if these gold-driven silver and silver-stock corrections haven’t fully run their courses yet, traders need to stay abreast of the silver miners’ fundamentals.
Their silver output can be used to gauge relative silver purity. The silver miners’ stock prices naturally mirror and amplify the underlying moves in the metal they mine, which overwhelmingly drives their profitability. The silver miners’ stocks have been grinding lower on balance since early August in a healthy correction. The silver miners’ recently-reported Q3’20 results showed huge fundamental improvements from the prior quarter, which suffered widespread national lockdowns.
This was my 18th quarter in a row analyzing how the world’s biggest and best silver miners are faring fundamentally. They reveal how much it costs the SIL-top-15 silver miners to blast their metal loose from the earth and process it. The leading and dominant one is the SIL Global X Silver Miners ETF, which is this tiny sector’s best benchmark. Silver miners are at the mercy of gold. Then each company’s quarterly silver and gold production in ounces is shown, followed by their year-over-year changes from Q3’19.
The rare primary silver miners’ silver-purity percentages are highlighted in blue. SIL’s super-volatile price action this year reflects the wild ride silver stocks have had. That left silver stocks extremely overbought, thus due for a correction to rebalance sentiment. Their stock prices usually show the highest leverage to silver.


If OPEC, with an eye on the current oil price, decides to start increasing production, it is likely that there will be a correction in the oil market. Below are the global average oil equivalent prices realized by ConocoPhillips (crude oil, natural gas, NGL, etc.). In my opinion, the current oil price already suggests that OPEC will definitely postpone the increase in oil production. The answer is obvious – because of the oil market: Source: TradingView The oil market began to skyrocket after the announcement of effective vaccines against coronavirus.
Otherwise, Russian oil companies will not be able to increase oil production for several more months.
This signals that the oil market is tightening and demand is robust, paving the way for an oil rally. The company is a long-term oil investment comparable to my oil supermajors’ group, such as Exxon Mobil (NYSE: XOM) or Chevron (NYSE: CVX). The global average oil equivalent price decreased by 54.3% from a year ago but has recovered significantly sequentially. The global average oil price that the company realized this quarter was $30.94, or 34.3% down from the same quarter last year.
The global average oil equivalent price decreased by 34.3% from a year ago. The main drivers for this expected growth are a continued increase in oil & gas production, which is a major source of demand. Oil equivalent production was 1,066K Boep/d (excluding Libya with only 1K boep/d) in the third quarter, down 22% from a year ago and up 34% sequentially. But at the current oil price the chances of such a decision are already lower than, for example, a month ago.
This is because the oil market is currently in a state of backwardation, where later-dated contracts are cheaper than near-term contracts, for months. However, the outbreak of the Covid-19 pandemic has reduced demand in key industries such as manufacturing, oil & gas and construction over the near term. In the overnight electronic session, the January crude oil is currently trading at 4504 which is 67 points lower. Market participants also expect that OPEC+ may delay oil output rise.
I want to remind you that Russian energy companies form 35% of the RSX’s portfolio, and they are, in turn, mainly represented by oil companies. Further, the drop in inventories supported the spike in oil price. Oil prices improved significantly from the preceding quarter.

United States

Cloudflare (NYSE:NET), which provides digital infrastructure and security, genomic diagnostics group, Veracyte (NASDAQ:VCYT) and provider of conversational AI, Nuance Communications (NASDAQ:NUAN) head the list of businesses in the fund. This also comes after President Trump controversially ordered the Pentagon earlier this month to initiate adrawdown of troops in Afghanistan and Iraq of up to 2,500 from each nation. Today, Wall Street continues to use Zacks research including the Zacks Rank and Zacks Equity Research, which combines the best of quantitative and qualitative analysis.
Stock symbols are listings from companies’ primary exchanges, with the majority of the SIL top 15’s outside the US. Half-year reporting is common outside the US, and Q3s are off-cycle quarters seeing shorter updates. Interestingly, as the week progressed, Nasdaq caught up with Small Caps early-week outperformance, stalling the ‘rotation’ trend. I wonder how Donald Trump will manage a self-pardon like the one he gave to Michael Flynn.
Unheard of in the days when all Wall Street could say was “Buy”.


With the recent crackdown by Beijing on Hong Kong, this advantage may be under some question as to the terms under which these businesses may operate. Beijing doesn’t accept criticism.