Open: London Session | Forex, Metals, Oil, Agriculture September 29, 2020



The U.S. corn crop was 15% harvested, the USDA said, behind the five-year average of 16% and the average analyst estimate of 17%. The union has said output of white sugar was likely to fall by 15% in 2020 to around 1.2 million tonnes. MARKET NEWS Chicago soybean futures lost ground, with the market dropping for six out of seven sessions, as a rapid pace of U.S. harvest pressured prices. Russia, one of the world’s biggest wheat exporters, has said it could set the grain export quota for January-June 2021 if there is a need to secure domestic supplies.
Raw sugar and arabica coffee futures fell more than 3% on Monday as Brazil’s currency fell to the lowest value against the U.S. dollar in more than four months. The corn harvest lagged slightly as producers focused on soybeans. COLUMN-Crop Watch: Home run for Indiana corn but huge letdown for Illinois soy: Braun The Illinois soybeans were the third of 16 U.S. But the fourth field, the Indiana corn, finished on a very strong note.


Gene comments on stock, bond, dollar, oil & gold markets, with a particular emphasis on monetary policy, technology issues and S&P intraday action. The Mexican peso is in focus, the same as in 2016, but the Aussie dollar and Japanese yen could also get triggered. The 1.8 trillion-euro deal struck between EU leaders last summer isn t really a done deal as we warned you.


Gold is setting up for a strong rally over the next year, as market volatility has been elevated and will likely be elevated for the remainder of the year. They key problem for gold futures holders is that the shape of the futures curve is essentially almost always contango – or futures are priced above spot. The key tie-in to gold here is this: investors tend to view gold as a safe commodity. Gold tends to rally over the next 12 months when we see outsized market volatility.
How the math essentially works out is that at today’s interest rates, gold futures are in about 2% per year of contango. Historically speaking, environments like these tend to see higher gold prices over the next year. I believe that gold is set to rally over the next 12 months due to fairly strong economic relationships. As the market return shrinks, investors are likely to shift capital into gold for additional returns. As I read the market, we would need to see the price of gold conclusively break beneath the current lows for this trend to be broken.
One of the key fundamental relationships I’m relying on at this point is the link between investing in gold as a safe haven and global market volatility.


Next year is probably going to be one of the better years for natural gas prices, after very weak prices in 2020 help rebalance the market. Source: Cabot Oil & Gas An increase to a $0.15 per share quarterly dividend could probably be supported in the long term. While there are significant fluctuations in average natural gas prices from year-to-year, the longer-term average appears to be sticking in the mid-$2 range. Natural Gas [BCF] 865 $2.45 $2,119 Total Revenue $2,119 Cabot indicated that a maintenance capex budget for 2021 would be slightly less than 2020’s $575 million capex budget.
The long-term average for natural gas prices appears likely to be somewhere between 2020 and 2021. For example, the average price for natural gas from 2016 to 2020 is expected to end up around $2.66. Malaysian palm oil futures rose on concerns over supply disruption following a fresh two-week lockdown in parts of the country’s largest palm oil producing state. Brent crude futures, the global oil benchmark, fell 0.40 per cent to $42.26 per barrel.

United States

In 2016, the polls predicted a win by Hillary Clinton and when a Trump victory became increasingly likely, Dow futures dropped 750 points in premarket trading on election night. The polls show the Democratic candidate former Vice President Joe Biden comfortably in the lead but two late September polls show more voters in Florida and Arizona favoring Trump. Wall Street rallied to close sharply higher on Monday as investors sought bargains among sectors hardest-hit by the coronavirus recession, now limping toward its ninth month.All three major US.
One final argument for a muted reaction is that markets are already positioned for Trump to do much better than his polls. Implied overnight volatility for the peso hit the highest intraday levels since June, with hours left before Donald Trump and Joe Biden lock horns. Okay, Pelosi might be senile, but she also is in deep denial if she thinks impeaching Trump is still a viable project. Biden is unable to take a decisive lead, and Trump is unable to make inroads.
Will Biden be able to hold up Trump’s bullying tactics and will there be any displays of cognitive decline, a criticism often touted by Trump supporters.
This as the hopes of a stimulus deal crept higher with Pelosi and Mnuchin agreeing to continue talks. The country is deeply divided on everything from the perception of Trump, the economy, racial injustice, and the rush to replace Supreme Court Justice Ruth Bader Ginsburg.


China has revealed this true face by an abominable human rights record, underscored by its genocidal policy toward China’s Uighur minority in Xinjiang Province. The U.S. still leads China in Research and Development (R&D) spending, but Beijing has made great strides in this area as well.


No Cash | The EU s top court will today weigh in on the bloc s rules on nations limiting the use of cash payments. This is how China s ambitious commitment, which had indeed been a persistent EU demand, could change the future of our planet s climate. The final round of Brexit talks also continues on Tuesday, following a more conciliatory tone on Monday which boosted the pound. All Clear | London s major clearinghouses will be able to do business with banks in the EU next year, averting Brexit market disruption.
We also publish the Brexit Bulletin, a daily briefing on the latest on the U.K. s departure from the EU. Belarus Meeting | Emmanuel Macron agreed to meet the leader of the Belarusian opposition. Yet the EU is demanding an investigation (which is already under way in Russia anyway!) He has the ear of Chancellor Angela Merkel, who seems to share his fears. Some of the measures could come from the EU. Ireland s Civil War, the Troubles in Ulster, and the writhing over Brexit might all have been altered.