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



Cotton mill use in the 2020/21 season is projected to recover by nearly 10% to 114 million bales, from the previous season’s estimate of 102 million bales. Cotton consumption from Bangladesh, Vietnam, and Turkey are forecast higher in the 2020/21 season, to approximately 7.3 million, 6.8 million, and 7 million, 480-pound bales. Cotton production in the 2020/21 season is forecast at approximately 117 Million 480-pound bales, a 5% decline compared to the 2019/20 season.
Cotton mill use by major consuming countries is forecast to recover in the 2020/21 season, thus I believe this will positively impact cotton futures. Cotton production from China is forecast to remain flat in the 2020/21 season, to approximately 5.8 MMT compared to the 2019/20 season where production estimates were 5.9 MMT. Supply is forecast lower in the 2020/21 season, demand is forecast to recover, and thus I believe cotton futures are set to rebound. During the planting season, 12.9 million hectares were reserved for cotton, a 2% increase on year, and nearly 90% of the area is under Bt cotton.
The global cotton supply chain was impacted by the rapid spread of the pandemic earlier this year, as major cotton consuming countries imposed nationwide lockdowns, thus impacting demand. Cotton imports are forecast higher from Bangladesh and Vietnam to 7.30 million, and 6.80 million, 480-pound bales respectively. Cotton futures in the 2019/20 season were negatively impacted by measures implemented, by major producing and consuming countries, to curb the pandemic.
Source: MacroTrends In the 2020/21 season, cotton mill use by all major countries is forecast to rebound. The projected decrease in output, from major growing countries and India’s top growing state, will have a positive impact on cotton futures during Q4 of 2020. If production projections are realized, the increase in output from India will impact cotton futures. As the year began, cotton futures performed relatively well and traded above $0.69 per pound.
Cotton mill use unexpectedly decreased from China, India, Pakistan, and Bangladesh, as the pandemic impacted consumer demand for textile and apparel. Source: MacroTrends Cotton futures have rebounded from their decline and are currently trading above $0.69 per pound. Cotton futures were relatively low during H1 of 2020, due to limited demand. Cotton is notably one of the world’s most traded commodities, produced for its fibre that is used as a textile raw material globally.
Open bolls were reported in both regions and Cotton fiber was discolored or else blown out of the bolls due to the rain and winds. The discolored Cotton is getting a chance to recover now as it has turned dry and the fiber can be naturally bleached by the Sun.


Valued at $4.75B (enterprise value), Iovance remains cheap in light of lifileucel’s multi-billion dollar prospects and patient investors will likely reap large rewards within a couple of years. The bank also said that “EM equity also has further upside as it could benefit from lower risks related to trade tensions, dollar downside and a more risk-friendly environment.” My recommendation to the average investors out there is to stay long, dollar cost average and avoid trying to time the market beyond using marginal percentages of your assets.
Although there may be hiccups and delays as lifileucel eases into the market, its multi-billion dollar prospect will be intact thanks to assumed market exclusivity and developmental know-how.
We also saw Made in China Model 3 vehicles get a decent price decrease, although the weaker US dollar so far in Q4 would offset some of those losses. Foreign governments and central banks could also redeem their dollar reserves in gold, and they started doing so in earnest in the 1960s and early 1970s. In the aftermath of World War II, the original Bretton Woods agreement established a world monetary order with the U.S. dollar as the reserve currency.
The whopping ten thousand dollar bang dished out for each of us was bound to move the economic needle. Importantly, the dollar was to be pegged to the price of gold. Within five years, Tinder went from zero revenue to a billion-dollar business as management focused on monetization. An investment in Vivo exposes investors to foreign exchange risk, the Brazilian Real. If the ECMWF-EPS or nicknamed King Euro is bearish, prices drop immediately.
The Brazilian Real has been very volatile throughout 2020.


Based on the relationship between ETF positioning and gold prices, the CME gold price looks fairly valued. Given the positive macro environment, we expect ETF investors to continue to accumulate gold, which should be supportive of gold prices and SGOL. We discuss gold prices through the lenses of the Aberdeen Standard Physical Gold Shares ETF (SGOL). Other reportable traders are vulnerable to take profit given their very long positioning, which could be negative for gold prices and SGOL.
In this context, we think that demand for hedges will remain strong in the near term, benefiting gold prices and SGOL. Other risk-on pair trades such as cyclicals vs defensives, copper vs gold, equity vs bonds had also outperformed, betting on a Democratic Sweep. The relationship between commercial positioning and gold prices is unclear based on data from 2015. Given the stretched positioning among this category, gold prices look vulnerable to some profit-taking.
Therefore, the actual results are slightly disappointing.In Q3, Taseko’s 75%-owned Gibraltar mine produced 28.9 million lb copper and 668,000 lb molybdenum. They appear to be excessively bullish toward CME gold, which is consistent with the strong bullish retail investor sentiment. Interestingly, the relationship between their positioning and gold prices is stronger than for money managers. We do not think that near-term changes in commercial positioning will materially impact gold prices and thus SGOL.
Source: CFTC, Orchid Research Producers reduced by the equivalent of 5 tonnes their net short position in CME gold in the week to October 20, according to the CFTC.
Source: Orchid Research ETF investors increased markedly their gold holdings by 30.76 tonnes in the week to October 23, according to our estimates. Although the average realized copper price increased by 23.5%, to $3/lb, the revenues experienced a notable 15.6% decline, from $78.1 million to $65.9 million. Gold ETF holdings are at a record high, highlighting a very bullish sentiment among ETF investors. In 1971, President Richard Nixon closed the gold window, effectively ushering in a new world monetary order based solely on the full faith and credit of the United States.
Over the first three months, 98.1 million lb copper was produced. While the molybdenum production increased by 4.5%, the copper production declined by 21.5% compared to Q2. This should push the COMEX gold spot price, which should, in turn, boost SGOL.


If oil stays at this level, then Centennial Resource might realize oil prices of close to $40 per barrel for both hedged and unhedged volumes. Since then, oil demand has recovered after several major economies lifted lockdowns and eased travel restrictions but oil prices are still well below this year’s peak. The global pandemic has pushed the world’s economy into a recession, decimated oil demand, and sent oil prices to historic lows in the second quarter. The weak oil prices have wreaked havoc with the oil producers, forcing companies to halt or scale back E&P work, reduce costs, and rein in expenses.
As mentioned earlier, the company sold its oil production at an average of less than $20 per barrel in the second quarter after commodity prices plunged. The company’s shares may remain subdued as oil prices struggle to hold their ground near $40 per barrel. This confirms that Centennial Resource managed to improve its financial health, despite facing low oil prices of around $40 per barrel.
For us, we think natural gas producers are the best ways to play this incoming natural gas rally. This includes companies like (PXD) or (EOG) who can not only generate profits and free cash flows at low oil prices but can also emerge stronger from the downturn. This is important since it formed the basis of my original analysis and thus indicates that the Extraction Oil & Gas bankruptcy has not materially derailed anything. **Whilst the oil and gas industry to which they service has high economic sensitivity, given the more stable nature of the midstream sub-industry, this was deemed to be average.
The company reduced its capital budget by 60% from the original guidance after oil prices crashed earlier this year. The WTI oil prices have also been hovering in around $38 to $42 a barrel range since early-June. That’s because Centennial Resource will likely realize higher oil prices in the future as compared to the second quarter. But an improvement in oil prices and the company’s financial health will fuel the stock’s recovery.
The oil price realization likely improved in the third quarter.
I thought Centennial Resource, a relatively young Permian Basin-focused independent oil producer, would also struggle this year. Those investors who can tolerate oil price swings might want to consider taking a closer look at this stock. Defensive investors, however, should stick with the well-established large-cap independent oil producers with a high-quality asset base and a strong balance sheet. We would even go as far as saying if EQT makes this deal happen, it would effectively become the OPEC of North America’s natural gas production.

United States

Fed Chair Ben Bernanke put his emphasis on creating a stock market rise during the recovery period that would provide a “wealth” effect that would drive on consumer spending. The Fed has operated a program of what I call “Interest rate welfare for government and stock market socialists” since 2008, and arguably since 2000. The market’s response was negative following the news of the setback: The response was exacerbated by a number of “Wall Street” analysts coming out bearish on Iovance’s stock.
Note: The company also does business with the US and Israeli governments which would not be affected too much by the slowdown in the commercial airline industry. Source: NASDAQ Tilray short interest page, seen here) As I have pointed out recently, a major reason why short interest has soared this year is because of massive dilution. Every time investors got concerned that the Fed might be backing off from its expansionary policy, the market weakened.
Since the NFLX show was released, the company also saw a 39% increase in its loyalty program, its highest number of sign-ups since 2015. In April/May of 2018, Match stock plunged 25 percent on the announcement that Facebook (NASDAQ:FB) would enter online dating (remember that?). We can’t imagine Trump would sit back and just let such a deal proceed, though if he doesn’t win next Thursday, he might not have a choice. Well, the Fed can keep rates low and stop T-bond prices from collapsing, simply by continuing to print money and buy bonds with it.
The company added 1.08 million (645k phones) net-new postpaid accounts, compared to -151k net losses last quarter and Wall Street consensus of -147k. The Bond Market Tells The Fed What To Do, Not Vice-Versa David J. Merkel, CFA — 2010-present, I run my own equity asset management shop, called Aleph Investments. With the 2020 election just days away, the Trump campaign is firing up the base with a pair of hilarious campaign ads – which are currently going viral.
The stock is presently trading slightly below its 52-week high which echoes resilience lately witnessed in Nasdaq price movement. But if it did happen, some questions to keep in mind: Would Jeff Zucker, Trump’s former top producer at “The Apprentice” and the head of CNN, remain in place? Without a stimulus package and with delayed election results, I think the SPY drops to retest $320 with a “lame duck” Trump administration. The US government bond market resembles a giant credit card.
Perhaps that is because the stock went from $5 to $7 as investors are digesting the chances of a Democratic sweep in the US being good for the industry.
Growth rates have been in a steady decline since the US economy peaked in the last quarter of 2018. A few years ago, people were reporting that Trump was going to resign in order to start his own competitor to Fox News.


Recently, it was announced that in an effort to please the EU antitrust watchdog, London Stock Exchange sold its stake in Milan’s Borsa Italiana stock exchange to Euronext. David Merkel is an investment professional, and like every investment professional, he makes mistakes.