Daily Close | Forex, Metals, Oil, Agriculture October 19, 2020



less General Comments: Winter Wheat markets were higher and made new highs for the move again last week. 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. About quarter of Argentine growing areas are affected by the dry weather right now.


As many firms with defined benefit plans can attest, the dollar value of the pension obligations can exceed the assets held in the pension. The other major wildcard for the period will be the sharp decline in the US dollar, as Tesla is generating more revenue outside of the US. While I acknowledge that $13.5/share undervalues RESI by a dollar or two at least, RESI doesn’t have much leverage with a sub-scale operation and leveraged balance sheet. We can estimate that a billion dollar valuation for Crunchyroll would result in a revenue multiple of about 3.5x.
Dollar values are in millions except per share amounts. Not to be outdone, you can buy a Google Nest Mini from Target for a dollar less. It’s certainly the worst outcome for the dollar. Euro was one of the strongest currencies on Monday but the move was driven almost entirely by short-covering. We still believe that the path of least resistance for the euro is lower and Friday’s PMI reports could be the catalyst that sends EUR/USD to 1.15.


Note: The company’s gold price realized is severely discounted because New Gold has a gold stream obligation with Royal Gold (NASDAQ:RGLD) on Rainy River. The gold production numbers were better this quarter, and it was a relief after the weak production numbers of the second quarter. Image: Rainy River mine Courtesy: Royal Gold Canadia-based New Gold, Inc. (NYSEMKT:NGD) released its production for the third quarter of 2020 on October 13, 2020. Gold equivalent production for 2020 is between Source: NGD PR As I said already in my preceding article, New Gold has achieved a great turnaround these past few months.
Details per metal comparing the 2Q and the 3Q: New Gold is producing gold, silver, and copper. The company indicated that the produced and sold 61,726 GEOs (63,004 ounces of gold, and 102,814 ounces of silver) for the third quarter. New Gold’s B3 rating is constrained by its (454 thousand GEOs in 2019), (just two mines), , and to volatile gold and copper prices.
Silver looks even better than gold, leading the market, up by roughly 2%. Gold production was lower compared to the same quarter a year ago, especially for Rainy River. The New Afton mine produced and sold 49,179 GEOs (15,955 ounces of gold and 18.2 million pounds of copper) for the quarter. Before diving into gold production in detail, it is important to indicate that the company cash position at the end of September was A healthy level. However, this quarter’s big news is the price of gold that reached over $1,900 per ounce.
We can see the Rainy River produced a good amount of gold this quarter. The gold price realized in 3Q’20 was per Au Oz and per Cu Lbs. Below is the quarterly gold production for both mines since 4Q’17. Furthermore, the company enjoyed a record high price of gold. Source – Buy gold, silver, miners/GSMs, Bitcoin and other inflation proof or resistant assets. Gold looks relatively constructive here and is looking to break above $1,920 resistance.
The investment thesis is quite sensitive when it comes to New Gold. The silver production has not been indicated.


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. In essence, oil consumption in China will be the first and best barometer of just how much global oil demand will return once the COVID-19 pandemic is behind us. For readers investing or trading natural gas or natural gas equities, don’t be blinded by the incoming moves. It probably also helped that the OPEC+ group committed to a balance in the oil and gas market, which pushed crude prices higher on Monday.
Given the changing environment in which we live and invest, this combination is befitting of a thoughtful investment in the oil and gas space.
Institutional investors, if and when they are investing in oil and gas, will be looking at this, along with returns. Instead, I prefer to place more calculated bets outside the oil and gas sector at this moment. Canadian natural gas production also has steeply declined since 2018, resulting in lower net exports to the US. The oil and gas industry is in survival-of-the-fittest mode.
According to COP’s 2019 ESG report, their resource base included 15 billion barrels of oil equivalent with an average cost of supply of $30 per barrel. China’s implied oil demand is coming in stronger than expected and higher year-over-year. Other notable comments from executives in the survey: • “Sustained oil prices of $50 per barrel would kick things off again.” On the demand side, LNG exports and Mexico gas exports alone will be ~4 to ~5 Bcf/d higher y-o-y. With the acquisition, as one of the largest U.S. oil independents, their output will be second only to Occidental Petroleum’s (OXY), according to a Wall Street Journal article.
Meanwhile, nothing is more emblematic of the oft-quoted statement that “data is the new oil” than the recent ouster of (XOM) from the DJIA while the index added (CRM). While this is a very “crude” way of doing it, it has worked in the past and is one of many signs we watch. At $50 WTI, dividend growth, balance sheet strength, and additional distributions are the next priorities, in that order.
A sign of the times is another acquisition in the U.S.’s most prolific oil-producing Permian Basin.

United States

The company’s share price has risen sharply since Trump’s election and has more than doubled, even though Twitter has not increased its revenues since November 2018. The company plays in the massive domestic real estate market of ~$2T in the US, which has seen COVID-related tailwinds as people rush to relocate across the country. So in the short term and ahead of the US election expect to see some short-term weakness for this stock. Twitter (NYSE:TWTR), Oracle (NYSE:ORCL), and Caterpillar (NYSE:CAT) are companies where I see double-digit upside potential, and the re-election of President Trump could release this potential.
His market analysis can also be read in most major financial publications, including the Wall Street Journal. But if we look at other solar companies like Jinko Solar (NYSE:JKS) or Canadian Solar (NASDAQ:CSIQ), its EV/revenue ratio is reasonably in line with these two companies. Trump’s goodwill toward Oracle could make the company more immune to government regulation efforts.
Ultimately, depending on allegations of voter fraud, Trump may contest the election and escalate it all the way to the Supreme Court, in a rerun of Gore vs Bush.
Wall Street banks suffered from an onslaught of new regulation, as well as depressed trading volumes as Federal Reserve bond-buying suppressed market volatility. Based in Walla Walla, Washington, Banner Corporation (NASDAQ:BANR) is a $14.4 billion asset holding company and parent to both Banner Bank and Islanders Bank. That Twitter will reach the expectations is at least more likely if Donald Trump wins the election.
Since the election of Donald Trump, the share price has risen by more than 55 percent. But as I said in the introduction, the re-election of Trump has consequences from which some companies could benefit. In addition, the Boston Fed is working with researchers at the Massachusetts Institute of Technology to build a “hypothetical” digital currency oriented for central bank use. The Commission announced in late September that it would explore changes ‘to ensure a more orderly discussion’ following a heated first debate between Trump and Biden.
Twitter, Oracle, and Caterpillar are companies where I see double-digit upside potential that could be realized if Trump is re-elected. Wells Fargo CEO Charlie Scharf explained, “Our third quarter results reflect the impact of aggressive monetary and fiscal stimulus on the US economy. !” Democrats like to tout the stock market performance under Obama as a counterpoint to Trump’s boasting. The Contrafund has a ~6.4% allocation invested in three payment systems: traditional credit card companies (V) and (MA) and somewhat less traditional and e-commerce oriented (NASDAQ:PYPL).
More action by the Fed may be needed, she said, and policymakers will carefully monitor incoming data.


BoJ in 2013, and ECB in 2014); therefore, analysts have included the central banks’ asset growth differential as one of the key drivers of currencies. ECB member Holzmann said despite the virus outbreak, there’s no need yet for more easing but comments from other policymakers suggests otherwise. ECB President Lagarde said they haven’t run out of tools and ECB de Guidos confirmed that recent data shows the recovery losing momentum. In the third quarter, sales of Daralex, a treatment for multiple myeloma, grew 44% to $1.1 billion as a result of share gains in the U.S. and European Union.
An additional variance of concern is the Brexit deadline which is fast approaching, with diminishing hopes that a deal will be reached between Europe and the United Kingdom.