Open: New York Session | Forex, Metals, Oil, Agriculture December 17, 2020



However, Chinese corn prices surged this year as stockpiles dwindled, forcing the country to scoop up large quantities of foreign corn, especially from the United States. Only a fraction of Brazil’s corn sales went to China last year, or 68,550 tonnes, according to Brazilian government data. The export subsidies are designed to increase shipments from the world’s second biggest sugar producer, reducing brimming inventories. COLUMN-Will China boost corn output or become a permanent importer?


The authors highlight four “channels of dollar transmission” to explain the negative correlation between the dollar’s strength and the growth of the global economy. Finally, dollar trade invoicing is more widespread in emerging market economies than in advanced economies (right-hand panel). In any case, a dollar depreciation against a wide basket of currencies in 2021 would likely be welcome by emerging economies. Axi’s chief global market strategist Stephen Innes added that inflation would push the dollar lower and gold higher.
A devaluation of the dollar tends, of course, to negatively affect competitiveness in relation to dollarized economies on the part of those who have their currencies appreciated. Dollar-denominated crude contracts typically rise on a weakening dollar as they become relatively cheaper for buyers holding other currencies. The fourth channel of dollar transmission is via foreign trade. Furthermore, a weakening US dollar has helped boost oil prices as it makes it cheaper for buyers holding other currencies.
Meanwhile, the US dollar also set a 2-1/2-year low against other major currencies on Thursday. After reaching a peak against other currencies in March this year, the dollar fell by almost 15% until the beginning of December.


(Source: Gruyere Mine, Gold Road Resources & Gold Fields JV) While the recent correction in Gold Fields has been quite violent, the fundamental picture remains intact. In terms of FY2019 costs, Harmony Gold, Galiano Gold, and Resolute Mining had average all-in sustaining costs of $1,112/oz in FY2019, more than 20% above the industry average. Based on conservative estimates, Salares Norte should pour first gold by Q2 2023 and produce over 300,000 ounces of gold that year.
Gold is heading higher, and we gold bulls have the world’s major central banks and profligate governments to thank for that. When gold keeps establishing new highs, then it’s a key indicator of gold’s ongoing strength. The Gold Analyst offers quality technical and fundamental analysis of the price of gold to help educate readers in their investment decisions. Despite just a 14% correction in the gold (GLD) price, Gold Fields is down more than 40% from its highs, significantly underperforming its benchmark.
We also discuss the cross-currents that are truly the drivers for gold and gold stocks. This translates to a 5.7% compound annual production growth rate for Gold Fields, one of the highest growth rates among million-ounce producers. Gold is winding up to set new all-time high record prices next year.


Source: goodfone The United States Oil Fund (USO) is the commodity fund which is tied to the price of WTI crude oil. After all, this means low oil demand… First, according to the same EIA data, in November global oil supply rose 1.5 mb/d to 92.7 mb/d. Centennial’s share price is fairly optimistic at the moment, pricing in $50 WTI oil and several years of production growth already. WTI crude oil prices are extending gains beyond 46.24, the former resistance level that held persistently last week.
less Crude oil prices aimed higher on Wednesday, propelled by the latest EIA inventory report. Inventories fell by some 3.1 million barrels in the week ended December 11; far higher than earlier analyst expectations of a 1.9 million barrel decline. It is essentially pricing in several years of mid-single digits production growth and $50 WTI oil already. At that production and a share price of $1.70, Centennial would be trading at a 3.4x EBITDAX multiple with roughly $50 WTI oil.
So, in my opinion, in the near future it is reasonable to expect continued growth in oil production in the United States.
Apparently, the current oil price is already expensive enough for shale production in the United States to begin to intensify.

United States

The Federal Reserve intends to continue buying Treasury bonds and mortgage-backed securities to help keep long-term bond rates low, according to news reports on the Fed’s latest statement. Bond buying by the Fed has an indirect influence on stock prices, as it pushes up bond prices and suppresses bond yields, which drives investors towards equities. He pointed out that the Fed is still buying $40 billion per month of mortgage-backed securities when the housing market is doing really well.
The vast majority of Fed officials still currently expect that interest rates will be kept at their near-zero level for three years. Photographer: Victor J. Blue/BloombergThe New York Stock Exchange, Nasdaq s biggest rival, said exchange rules shouldn t be used to make changes that limit investors choices. The last thing the Fed wants is longer rates to climb, which will discourage fund flows into equities. While no one expected the Fed to lower the federal funds rate below zero, many expected an extension of the QE program to be announced.
US stock futures are trading higher today, indicating a positive opening for Wall Street indices. Here you can see the continued rise in the 10-year Treasury Note Yield Index (TNX), which is Wall Street’s favorite benchmark for the prevailing market rate of interest. Fed Chair Powell’s comment in June that “…we’re not even thinking about thinking about raising rates…” underscores that low rates are here to stay.


navy ships and fighter jets come into close proximity quite regularly with patrols from China, as Beijing builds military bases on reclaimed reefs. “China is very serious about achieving this goal,” she said, citing President Xi Jinping’s personal endorsement.


The U.K. and EU are heading for a final battle over fishing rights as Brexit talks reach a climax, with officials cautiously predicting a trade deal within days. European Commission President Ursula von der Leyen said Britain and the European Union moved closer to a new trade deal, but two issues remain unsolved. The pound is trending higher on expectations that a Brexit trade deal could still be in the cards. British Prime Minister Boris Johnson said he hoped the union would support a deal that respected Britain’s sovereignty.
Brexit talks are ongoing with Barnier noting that talks are showing good progress. Some of that activity will have to move after the end of this year, when transitional arrangements agreed at the time of Britain’s departure from the European Union expire. Global Headlines Macron infected | French President Emmanuel Macron has become the latest leader to test positive for Covid-19. Brexit continues dominating sterling’s trading, overwhelming other developments such as central bank action on both sides of the pond.
EU and UK negotiators remain quiet – and that is a positive sign of progress. President Tsai Ing-wen’s decision in August to allow imports of U.S. pork containing ractopamine, which is banned in the European Union and China, has roiled Taiwan politics.