Daily Close | Forex, Metals, Oil, Agriculture October 07, 2020



Wheat is used as both a feed for animals (soft-red wheat), as well as higher quality wheat made into bread and foods (hard-red wheat). Source: NOAA The arrows of global crop stress (red) illustrate developing crop stress for wheat in Russia and perhaps expanding soon into the western Plains where planting is beginning. It also covers the commodities market daily focusing on in-depth technical developments in GOLD, CRUDE OIL, SILVER, CORN & WHEAT. On the Corn front, the market rallied on talk of lower U.S. supply and higher export demand.
The weather has a huge impact on global wheat production. Wheat is grown throughout the world with the US and Europe accounting for more than 50% of global production. Wheat is a hardy crop that goes dormant in winter and then grows in the spring when soils thaw out. Also, the funds remain net-long and China’s holiday, Golden Week that started last Friday, October 1st, still had rumors persist that China was buying U.S. corn and soybeans yesterday.
Please see this special video here about Hurricane Delta and markets such as cocoa, wheat, natural gas, and more. Hot and dry weather in the Corn Belt the rest of the week should ramp up harvest to even better numbers. Over the last five years or so, there has been a glut of wheat in the world. In the overnight electronic session, the December corn is currently trading at 388 ½ which is 3 ½ cents higher. Ideas are that most of the Cotton crops in the region escaped any major damage that the previous storms could have brought.
There was no major Chinese demand, but China and Turkey were the best buyers of US Cotton. Dry weather in Argentina, Brazil, and the Black Sea were supportive.


My expectation is that the value of the dollar will continue to decline over for some time now. Mr. Rupkey’s dire picture of the trade situation, mentioned above, only reinforces the belief that the decline in the dollar will not be minimal. This represents a 9.3 percent decline in the value of the dollar. As I have reported recently, this is not good news for the value of the U. S. dollar. We’ve now seen evidence of manufacturing and service sector weakness in the month of September that could justify a deeper correction in the Australian dollar.
The trajectory of reduction in dollar cost per kilowatt-hour for batteries was somewhat flattening in recent years. That is, the value of the dollar will be under substantial pressure. The dollar has been dropping in value this year. It reached a near term peak in strength on March 19, as the U. S. Dollar Index (DXY) closed at 102.82. Stocks and Bond Yields are marginally higher, gold and the dollar flat… And 10Y Yields moved higher…
Stephen Roach, of Yale University and formerly from Morgan Stanley, has even predicted that the dollar may fall by as much as 35 percent. All dollar amounts discussed in this article are in USD, while numbers cited in its financial reports are in HKD. The Fed will never let my precious portfolio drop a single dollar!) The same was true for the Canadian dollar which rallied despite a steep drop in IVEY PMI. This morning, October 7, 2020, the dollar index stood at 93.60.
Simply put, the US is not about to sacrifice the euro-dollar / petro-dollar and its commercial hegemony just to satisfy domestic pleading for negative rates.
The mainstream thinking is that Japan and the Euro bloc are farther along in their socialization of debt (i.e. On March 19, it cost $1.0680 to purchase one Euro. On October 7, it took $1.1780 to buy a Euro. Dollar-based retention rate was 99%.


News that a second round of COVID-related stimulus would have to wait until after the election shook risk appetite on Tuesday, but it also dealt a blow to gold. less Since the last FOMC meeting on Sept 16th, gold has been the biggest loser while the USD managed modest gains… Gold (GLD) tumbled and Treasury prices dropped back to March levels. Either way, it looks as though a gold breakout has been put on pause for the time being. While a catalyst would be required for such a move, gold’s medium and longer-term outlooks remain encouraging.
Consequently, gold could seep lower to test support around the $1,850 level. Gold, however, has not been convinced. Silver is noticeably less abundant to the market at $23.40 than it was at $24.40.


Check out our 4Q-2020 fundamental and technical crude oil forecast for comprehensive insight on where oil prices might head going forward. But now as the price of Exxon breaks down below $35, the price relationship becomes much more advantageous to Exxon if oil prices go up. But now with the price under $35, it approaches the historical value, i.e., if oil prices go up, Exxon’s price should follow. Crude oil price action has oscillated back and forth between critical technical support and resistance levels over recent trading sessions amid conflicting bullish and bearish headlines.
But does this really make a difference in the global scheme of things with respect to a potential bull market in natural gas (UNG) and crude oil (UCO)? At HFI Research Natural Gas, we give you guidance on natural gas fundamentals, weather, and set-ups to help you navigate the dangerous natural gas market. This brings the 100-DMA back into focus as a potential support level before the September lows come back into focus as a potential downside objectives for crude oil bears.
I have said a dividend cut is likely within the next 2 quarters unless oil prices break higher. The sharp spike by oil prices propelled the commodity 10% higher above the $40.00-mark, but after failing to reclaim the 50-day moving average, selling pressure has since resumed. Back in August when hurricane Laura was getting prepared to make an impact, natural gas prices shot up higher into the weekend.
Over most of the last 15 years, Exxon’s price and oil prices have maintained a fairly close relationship. Then starting in 2015, Exxon’s price took a big divergence upward relative to the price of oil. So, how much of this downward trend was due to removal and how much due to oil prices? Oil prices remain volatile as the sentiment-linked commodity swings aggressively in response to changes in trader risk appetite. This will translate into US oil production averaging 9.0 million barrels per day in 2021 while capacity to move and process it will be bordering on 13.5 million barrels/day.
For readers investing or trading natural gas or natural gas equities, don’t be blinded by the incoming moves.
Exxon is a buy under $35 if you think oil prices will reach $50 by the end of 2021. But the storm would later impact the demand side via subdued LNG exports. Now based on what we know right now about the storm’s trajectory, it’s likely that LNG exports could be out for a few days. Exxon is selling 15 oil fields in the North Sea and should collect about $1 billion for them by Q1 2021.

United States

For example, fiscal stimulus negotiations, in addition to Trump health updates and election speculation, have largely caused markets to whipsaw. They are open to increasing monetary stimulus but that’s unlikely unless stocks crash because of a second US virus wave or sudden deterioration in President Trump’s health. Then at 9:54 pm, Trump tweeted that airlines would be getting stimulus funds they desperately need before the election. US-China trade dispute: Would US-China trade disputes significantly impact TCL’s export capabilities from China to other countries, especially the US?
less The last two weeks visualized… (8th squeeze in last 9 days), instantly erasing all of yesterday’s shock losses from Trump’s ‘no-deal’ tweets… In addition to being the top 3 market leader in China and the US, TCL also entered into many European, Asian, and other emerging markets with impressive growth. Source: Bloomberg Interestingly, despite The Fed promising that rates are on hold for pretty much ever, the market’s expectations for Dec 2021 have shifted hawkishly higher…
Even a sharp reduction in the unemployment rate, which dropped below the 8% mark ahead of the US Presidential election, caught many by surprise. (its last 12-month net profit around HKD$1.25 billion, equivalent to USD$161 million) In the US market, TCL Smart TV primarily uses Roku. Given that Fed chief Powell earlier yesterday warned of the importance of more stimulus, this was a shock to markets here.
Trump’s vital signs, including oxygen saturation, are all normal, and Trump hasn’t needed any supplemental oxygen since his blood-oxygen level dropped below 94% on Friday. (New York Times) Two sides of DC: Those threatened by Covid are unimpressed by Trump s bravado (Guardian) What would a city designed by women look like? The Fed is signaling that its focus is shifting from free money for financiers to funneling new money directly to households. Today few Americans are concerned as to whether President Trump had a closer relationship with Russia at any point before his election than he leads on.
Easy money in the US has made it easy for emerging market governments to borrow cheaply. It claimed President Donald Trump broke the law during a phone call with the Ukrainian president when he threatened to withhold military aid in exchange for a political favor. President Trump tweeted against a stimulus on Tuesday, but that could just be a negotiating tactic.
As for the thought of Russia’s meddling in the 2016 election or whether Trump colluded with the Russians, by now most people seem to have made up their mind.
U.S. companies in the midst of the coronavirus pandemic unveiled their steepest dividend cuts in the second-quarter since 2009, according to a Wall Street Journal analysis. The Fed can’t create low-risk, high-profit investment opportunities, not can it make poor credit risks into good credit risks.


This comes nearly a week after French President Emmanuel Macron issued statements suggesting Turkish involvement in transferring Syrian mercenaries to the war theater. “It is a very serious new fact, which changes the situation.” Macron’s office later said after talks with Russia’s Putin that according to a statement. The proposal is expected during a meeting of 27 EU foreign ministers scheduled for next Monday.