Open: New York Session | Forex, Metals, Oil, Agriculture January 08, 2021



MARKET NEWS Chicago corn rose with the market set for a fifth week of gains, as concerns over supplies from key South American suppliers underpinned prices. The agriculture ministry said in a statement that agreements had been struck to guarantee the domestic supply of corn and cushion local prices against fluctuations in international markets. Soft wheat exports to destinations outside the EU totalled 797,000 tonnes in December, the sixth month of the 2020/21 season, the Refinitiv loading data showed.
Prices would be propelled by the soyoil market, with crop-stressing drought in South America squeezing global soybean supplies and China continuing its stockbuilding of commodities, they said. China continues to be a prominent customer, as U.S. corn shipments to the Asian buyer in November were record-high for any month at 1.28 million tonnes. Raw sugar futures on ICE closed 4% down on Thursday as investors cashed in gains after the sweetener hit a fresh 3-1/2-year high earlier in the session.
Wheat is planted on Argentina’s Pampas grains belt in June and July with harvesting in December and January. Coffee may speed its rally while cocoa may suffer more loss.


The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.03 per cent to 89.85. The riskier Aussie dollar was also little changed at 77.695 US cents after sliding 0.5 per cent in the previous session. In global markets, gold prices moved slightly lower today amid a stronger US dollar and higher yields. Gene comments on stock, bond, dollar, oil & gold markets, with a particular emphasis on monetary policy, technology issues and S&P intraday action.
Dollar “positioning is stretched and the backup in US yields has some investors nervous,” TD Securities analysts wrote in a client note. The dollar index was little changed at 89.841 in early Asian trading, after dipping to an almost three-year low of 89.206 on Wednesday. Image Source: Unsplash The black gold also draws support from the retracement in the US dollar from weekly highs. The euro was mostly flat at $1.22685 following Thursday’s 0.5 per cent drop.
The Sensex index now matches the S&P 500’s gain in dollar terms for the same period. This week has seen a bounce as much as 8 basis points, coinciding with a rally in the dollar.


Spot gold was about 0.1 per cent lower at $1,910.87 per ounce. February gold futures on MCX fell 0.3% to Rs 50,775 per 10 grams, in its second decline in three days. Note that compared to the August highs of Rs 56,200, gold prices are down about Rs 6,000 per 10 grams. Gold prices are trading down 0.5% at Rs 50,649 per 10 grams. Tracking flat global rates, gold prices today edged lower in Indian markets. In the previous session, gold had jumped 0.9% after crashing nearly Rs 1,200 per 10 grams on December 6.
Meanwhile, gold prices continue to maneuver lower after U.S. President Trump appeared to acknowledge President-elect Biden’s win following a day of chaos on Capitol Hill. With the assistance of Interpol, investigations are under way to determine the origin of the gold and legitimacy of certification papers provided by the men, the police said. Increased inflation expectations can often drive gold higher, but markets appear to be allocating capital to growth-driven assets.
Iron ore exports to China rose to 40.0 million tonnes from 34.44 million tonnes in November, data from the authority showed.


From a broad perspective, the American oil benchmark continues to draw support from Saudi Arabia’s unexpected decision to voluntarily cut oil output. Malaysian palm oil futures eased, tracking weaker rival soyoil, but the contract was set to rise a fourth consecutive week on a tight supply outlook ahead of industry data. Global crude oil benchmark Brent was trading higher by 0.17 per cent at $54.61 per barrel. The idea of “peak oil,” historically a reference to a fear that oil supply was running out, now means something entirely different.
REUTERS TECHNICAL ANALYSIS Q1 OUTLOOK 2021 – WANG TAO Crude, palm oil and base metals are expected to extend gains in next quarter. At the OPEC+ meeting held earlier this week, Saudi announced it will cut output by an additional 1 million barrels per day (bpd) in February and March. Under its “stated policies scenario,” the International Energy Agency estimates that oil demand will peak around 2030 and plateau.
A pickup in oil trading in the North Sea is also being seen as an indication of tighter supply in spite of rising Russian exports. Ambitious green policies—from politicians and even the newly climate-conscious oil companies—suggest the world is moving at warp speed away from fossil fuels. More fiscal support implies prospects of faster economic recovery, which bodes well for the higher-yielding oil.

United States

Outside of the US, international equity markets have staged nice rallies over the first three trading days of the year. Markets now await the US jobs report and Baker Hughes weekly rigs count data for near-term trading opportunities in the prices. Philadelphia Fed President, Patrick Harker, hinted that the Fed could start to roll back the number of bond purchases it performs as soon as the end of this year. Moving onPresident Donald Trump said he would turn his focus toward the transition to the incoming Biden administration in a video message published last night.
Five Things Follow Us Get the newsletter It’s jobs day, Trump to focus on a smooth transition, and some good news on vaccines. The Chicago Fed’s Charles Evans said “some type of tapering” was possible late this year or early next, but he’s waiting until mid-2021 to get a clearer picture. Indeed, HSBC reckons that inflation and the bond market will “decouple” under the Fed’s new approach, with modest increases being absorbed by a decline in real yields.
Denmark has a strong vaccination pace and catching up to the total vaccinations per capita in the US and UK while the rest of EU falls far behind. “For a bearish view on Treasuries to be right, the Fed effectively has to indicate higher rates ahead of its stated forward guidance.”But… “For a bearish view on Treasuries to be right, the Fed effectively has to indicate higher rates ahead of its stated forward guidance.


Adding supply to the mix It is (hopefully) a weak assumption that vaccination efficiency will be kept at this low rate across the EU and US. The EU will LAG UK and US in terms of reaching peak supply due to a weaker purchase policy, but a much better utilization rate in e.g. The European Union secured an extra 300 million doses of the Pfizer vaccine as governments in the region introduce even tighter lockdown measures. EU and US are unlikely to vaccinate enough to reach herd immunity in 2021 in either of the three scenarios.
Since there is currently no vaccination data on an aggregate EU basis we use the data from Germany as proxy for the EU as a whole. the European Union, so let’s turn our attention to something a little more tangible: that is, when can we expect risk-groups to be vaccinated? Your moment of zen.Compare and contrast, law enforcement responses to two DC protests.How Neil Sheehan got the Pentagon Papers.Oh, and Brexit is done.
Brexit becomes trucker nightmare as red tape ties up drivers. The EU approved the vaccine on the 23rd with a simultaneous EU-wide roll-out on the 27th (albeit Hungary and Germany started on the 26th).
That figure will drop to 12% in 2035, or less if there is a deeper divide between the EU and Britain.