Daily Close | Forex, Metals, Oil, Agriculture October 02, 2020



These areas are trying to plant the next Winter Wheat crop but the dry weather and the dry soils are keeping farmers out of the fields. The trade is watching the weather and growing conditions around the world as well as the world Wheat price. Harvest conditions are good right now amid moderate temperatures and dry weather. World demand for US Wheat depends mostly on lower prices for US Wheat to compete with Russia, Europe, and other sellers and a weaker US Dollar.
In the overnight electronic session, the December corn is currently trading at 381 ¼ which is 1 and ½ of a cent lower. On the Corn front, the market is easing after the rally based on stocks on Wednesday. General Comments: Cotton closed a little higher in range trading. General Comments: Winter Wheat markets closed lower.


For each period, I estimate the dollar value of Walgreens’ US prescription drug market share benefiting from growth realized via VillageMD. The value of the US dollar: the US Dollar Index (DXY) was 99.13 on February 26; it was 99.02 on May 27; and it was 93.71 on October 1. Source: Bloomberg The Dollar erased about half of last week’s gains this week… This was clearly enough to satisfy FX traders as they did not sell the dollar after the jobs report.
One Euro cost $!.0884 on February 26; the Euro cost $1.1100 on May 27; and the Euro cost 1.1748 on October 1. Source: O’Shaughnessy A dollar invested in the S&P 500 in 1964 was worth over $150 by October 2017. The dollar fell, huzzah?! The ECB can’t allow the euro to fall lest it begin putting upward pressure on rates as carry trades unwind.


Excess ETF-share supply or demand relative to silver’s own must be directly shunted into the underlying global physical silver market. Once a year it publishes comprehensive data on global silver supply and demand in World Silver Survey reports. Silver-ETF-share buying and selling really moves silver prices at the margin because it is the most volatile source of silver demand by far. Most silver usage is relatively stable year after year, as evident in the Silver Institute’s annual data.
The mission of silver exchange-traded funds is to track silver price action. Led by momentum-chasing millennial traders, unprecedentedly-huge amounts of stock-market capital deluged into the dominant SLV iShares Silver Trust silver ETF. The world authority on silver’s fundamentals is the venerable Silver Institute. In Q1’20 hosting that rare stock panic, the world’s major silver miners reported average all-in sustaining costs of $13.45 per ounce. Ahead of mid-March’s brutal stock panic driven by governments’ heavy-handed national lockdowns to slow the spread of COVID-19, silver was inconspicuously grinding higher.
The global silver market is tiny, further amplifying the price impacts of material capital flows. That stock panic totally rebooted silver psychology. Its initial gains were big and fast, with silver blasting 19.4% higher in the first four trading days out of that deep nadir! Traders rush to buy silver when they grow bullish and excited, catapulting its price far higher.
But the supply and demand for ETF shares is independent from silver’s own, leading to constant imbalances that must be addressed. But when they get bearish or worried for any reason, they drop silver like a bad habit forcing steep plunges. That covered 2019, where SLV exited holding 362.6m ounces of physical silver bullion in trust on behalf of its shareholders. Silver’s strong post-panic gains to that point were fueled by heavy differential SLV-share buying.
But silver-ETF silver demand is radically volatile. Silver has certainly lived up to its wildly-volatile reputation this year.
Herd psychology has an unusually-strong influence on silver price levels.


On the Natural Gas Front, the market has been trading lower, however, more risk premium is going to move this market with fears of the two tropical waves. We also write daily and weekly reports, covering key variables in U.S. natural gas market (supply, demand, storage, prices and more). In the overnight electronic session, the November natural gas is currently trading at 2.522 which is 1 ½ of a cent lower. This breakdown consists of hotel exposure (4.2% of loans), restaurant loans (1.5%), travel and tourism loans (0.2%), gaming loans (0.2%), and a few oil/gas lending relationships (0.2%).
On the Crude Oil Front, the market is heavy trading lower with more pandemic fears. In the overnight electronic session, the November crude oil is currently trading at 3736 which is 136 points lower. Although South Africa and oil dependent countries such as Nigeria, Angola and Gabon are likely to contract, Ghana, Kenya, Rwanda, and several others are expected to grow this year.

United States

Obviously, should the company fail to compete effectively, management’s forecast to claim more than 50% of the US prescription drug market will likely go “right down the toilet”. Certainly, one of the key “things” that I hope they are right about is being able to capture 50%+ of the US prescription drug market. With the news that Donald Trump has COVID-19 and it’s not an asymptomatic post-hoc positive but rather a real diagnosis, the markets reacted badly to the news.
Around the time the news broke, planespotters on social media reported two Boeing E-6B Mercury planes flying on either side of the US mainland’s coasts. Along with Trump, Melania Trump, and Hope Hicks, GOP Chairwoman Ronna McDaniel, the president of Notre Dame University, one junior staffer, and one reporter have also tested positive. President Trump and the First Lady tested positive for coronavirus, sending stocks sharply lower. As mentioned, the balance of central bank liquidity swaps peaked on May 27, and the following movements on the Fed’s balance sheet seemed to change.
However, stocks recovered by the end of the day as investors shrugged off Trump’s positive coronavirus test. If inflation rates, fueled by infinite levels of Fed support, start ticking up, it could trigger another leg lower for tech and other growth sectors. During this time the Fed also added $33.6 billion in mortgage-backed securities. From May 27 through September 30, the Fed’s portfolio of securities rose by $513.5 as the Fed steadily added to its outright holdings of Treasuries and mortgage-backed securities.
While Trump with his lies, rudeness, and incoherence may not be good for the stock market his absence is even worse. Forecast the US prescription drug market size for FY ’20 – FY ’25. Since then the Fed has added just over $2,900.0 billion or $2.9 trillion to its securities portfolio. The strong close by U.S. equity markets on Wednesday in the wake of Trump’s debate performance was your first clue.
The Fed added $58.9 billion in U. S. Treasury securities to its portfolio between September 2 and September 30.
The real actions of the Fed began in the last full banking week in February. Breakeven rates on TIPS are back to pre-COVID-19 levels, but still not near the 2% mark required to even get the Fed’s attention at this point. Come Tuesday if they remain relatively healthy, the rally in stocks should resume as this reaffirms President Trump’s laissez-faire attitude towards the virus. They see the constant dialogue between House Speaker Pelosi and Treasury Mnuchin as signs that a new coronavirus stimulus deal can be achieved.


In short, Beijing wanted to cultivate high-quality domestic manufacturers and to establish a domestic supply chain ecosystem.


We noted in the Q4 GBP forecast that EU-UK trade negotiations were just one of three Sterling drivers for the next three months. Other EU leaders may also opine on negotiations so traders should be wary of potential ‘tape bombs’ all weekend. GBP/USD has crept higher all week, mainly on better EU/UK trade sentiment, and eyes the three-week high around 1.3010.