Open: New York Session | Forex, Metals, Oil, Agriculture February 16, 2021

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Agriculture

MARKET NEWS Chicago wheat futures rose to a one-week high, gaining more than 2%, as frigid temperatures in key U.S. growing areas raised worries about global supplies. White sugar futures on ICE rose on Monday, boosted by gains in global equity markets and crude oil, while London cocoa prices also climbed. Optimism faded in recent sessions, however, as the U.S. government projection of domestic corn supply was heavier than predicted. Ivory Coast, the world’s top cocoa producer, is in its dry season, which runs from mid-November to March, when downpours are scarce.
Prices rose anew in November as home builders hammered through mild weather.

Currencies

Dollar index The dollar index closed flat last session at 90.48. The Swiss franc and the British pound were up 0.1% against the U.S. dollar and the euro was flat against the U.S. dollar, with 1 euro buying $1.21. The rupee (INR) posted a marginal gain of 6 paise last session as it ended the session at 72.69 versus last Friday‚Äôs close of 72.75 against the dollar (USD). The dollar fell to a three-week low, sterling hit an almost three-year high and commodity currencies rose as vaccination progress added to investors’ recovery hopes.
The dollar index, which represents the value of the greenback against a basket of six currencies, slipped 0.3%. The dollar looks weak and the rupee is trading above support levels, hinting at possible appreciation in INR. The resulting price action has been risk supportive, with stocks extending record highs and the US Dollar broadly under pressure. Despite the retracement, the black gold continues to draw support from escalating Middle-East tensions, covid vaccine-driven economic optimism and broad-based US dollar weakness.
While this tug of war between the diminishing need for safety and higher returns on Treasuries occupies the dollar, sterling has its reasons to rise. Broadly speaking, weakness in the anti-risk US Dollar certainly helped propel both crude oil and copper prices upward.

Metals

Gold prices today edged higher after a 3-day fall but struggled to push significantly higher amid flat global rates. In global markets, spot gold prices were flat today as US Treasury yields rose to their highest levels since March. The market did crash in 2008, and Gold and gold stocks did as well. >> Fabrice Drouin Ristori on Twitter is an independent investment analyst and studies the gold and silver market and their future role in the international monetary system.
S&P 500 futures pointed to a strong start to the trading week, the 10-year Treasury yield was at 1.243%, oil rose and gold gained. He follows regularly since 1970 the gold, silver and foreign exchange markets. Gold prices for the latest contract on MCX are trading up by 0.4% at Rs 47,428 per 10 grams. He follows and analyzes the gold and silver markets since 2008. Fabrice shares his thoughts on the economy, stock markets, geopolitics, gold and silver. Gold prices are trading up by 0.4% at Rs 47,418 per 10 grams.

Oil

Germany’s 2020 oil imports down 3.4% German crude oil imports in 2020 fell 3.4% the COVID-19 pandemic and related lockdowns hit industrial activity, official data showed. They refinery shutdowns in the world’s fourth-biggest oil importer are another potential hit after the pandemic led to the evaporation of crude demand over the last year. Oil refineries and gas production in the region are badly hit, while pipeline operators have declared force majeure, helping to push spot prices to “crazy” levels.
Oil volumes fell to 83.0 million tonnes from 86.0 million in 2019, monthly statistics from the BAFA foreign trade office showed. Further bolstering crude oil prices has been the extreme cold weather in the state of Texas. To view the full Middle East crude oil report click here (link to be pasted in Eikon search) You can access the full report here. Backwardation, means the current value is higher than prices for later months and encourages traders to draw down oil supplies and sell promptly.
GASC said it wanted at least 30,000 tonnes of soyoil and 10,000 tonnes of sunflower oil and the deadline for offers was Thursday.
The equity rally appears undeterred by the rise in interest rates or the surge in oil prices. WTI crude oil appears overbought.

United States

Nasdaq Futures are trading up by 52 points, while Dow Futures are trading higher by 186 points. US stock futures are trading higher today indicating a positive opening for Wall Street indices. US stock futures are trading higher today, indicating a positive opening for Wall Street. But the Trump administration s removal of independent scientists from advisory panels at the Environmental Protection Agency also pushed scientists to take action. Last fall, several prominent scientific journals including The New England Journal of Medicine, Nature, and Science also broke with tradition and ran editorials critical of Trump.
The US 10-year benchmark yield is near 1.24%, almost nine basis points higher than a week ago. Among the things that most inflamed scientists was Trump s rejection of the wide body of research establishing climate change, which he has called a hoax. A significant crash or bear market (on the scale of 1929, 1937, and 2007) requires a preceding economic expansion, Fed tightening, and issues in the banking system.
Iran is threatening to end the voluntary participation in snap inspections of its nuclear work unless the US lifts sanctions. Vaccine rollout milestones in the US and UK likely contributed to ongoing bets of economic recovery from the coronavirus pandemic.

Europe

In the U.K., Prime Minister Boris Johnson is drawing up plans to gradually ease curbs, saying he wants the current lockdown to be the last. Chancellor Angela Merkel is being pushed to ease Germany s lockdown, with business representatives holding a protest today in Berlin. The tender indicated shipment from main supply regions such as the European Union could take place over March 21-31 and during the whole of April. The EU remains the laggard among its peers, but the mix of fewer infections and more inoculations is encouraging.

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