Open: New York Session | Forex, Metals, Oil, Agriculture January 14, 2021

Agriculture

China, the world’s top soybean buyer, bought 100.33 million tonnes of the oilseed in 2020, up from 88.51 million tonnes in 2019, according to the General Administration of Customs. Prices for 11.5% protein wheat also rose by $4-$6 to $278-$285 as of Jan. 13, the consultancy said in a report. U.S. Department of Agriculture data suggests domestic corn and soybean stocks-to-use for 2020-21 at 10.6% and 3.1%, respectively, both seven-year lows. Bid-ask prices for 12.5% protein soft milling wheat added $4-$6 a tonne on Wednesday, reaching $280-$287 FOB Black Sea.
3 corn exporter and its top international supplier of soymeal livestock feed.

Currencies

Gene comments on stock, bond, dollar, oil & gold markets, with a particular emphasis on monetary policy, technology issues and S&P intraday action. In global markets, gold prices were lower today amid higher US Treasury yields and a stronger dollar. An increase in government debt triggered a move to stocks from bonds, pushing US Treasury yields higher and making the dollar more attractive. Media reports that President-elect Joe Biden is set to announce a generous stimulus package worth has boosted markets and the dollar.
At the interbank forex market, the domestic unit opened at 73.18 against the US dollar, registering a fall of 3 paise over its previous close. Bond yields and the dollar rose today after a report indicated that US President-elect Joe Biden plans a massive COVID-19 relief package of about US$ 2 trillion. Copper prices fell as the dollar ‘s rebound from three-year lows picked up pace, making greenback-priced metals more expensive to holders of other currencies.
Consistent foreign inflows have kept the rupee steady against the dollar.Dollar indexBouncing off the support at 90, the dollar index appreciated the last session and ended at 90.36. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose marginally by 0.04 per cent to 90.39. less More government money is better for the dollar – at least when it comes to fiscal stimulus.

Metals

China, the world’s top steel producer, imported 1.17 billion tonnes of iron ore in 2020, data from the General Administration of Customs showed on Thursday. Gold is traditionally used as a safe store of wealth, and investors rushed to hoard it as the pandemic swept through the global economy. In domestic markets, gold prices fell sharply with MCX February futures slumping below the Rs 49,000 level. Gold prices are trading down 0.8% at Rs 48,905 per 10 grams.
Gold (GLD) is trading -0.35% at the time of writing at $1838 after its recovery from Tuesday’s weekly low of $1811 runs out of steam around $1850. Gold was down 0.9% or Rs 450 to Rs 48,860 per 10 grams. **Only T Rowe Price had a long-term return forecast for gold. Medium tankers SILVER EBALINA and FOREVER HARMONY loaded from Ras Laffan (Qatar) and Jubail (Saudi Arabia) and are heading to Indonesia and Sri Lanka respectively.

Oil

The weekly report showed crude stocks fell by 3.2 million barrels to 482.2 million barrels, which exceeded expectations of a 2.3 million barrels drop in an initial Reuters poll. However, on a bearish note, the same report showed builds in both US gasoline and distillate stocks by 4.4 million barrels and 4.8 million barrels, respectively, which capped gains. Helping boost crude prices further was data showing a fifth straight week of US crude stocks drawdown according to the Energy Information Administration (EIA).
less The West Texas Intermediate crude oil market initially rallied during the trading session, but turned around to form a shooting star after the inventory numbers came out mixed. The oil market has been supported bullish data from China which has shown a significant rise in imports of cruse oil in 2020 in spite of the coronavirus pandemic. Front month WTI futures contract also saw little movement as it traded at $52.98/bbl, just $0.07/bbl higher during the same time period.
A drawdown in U.S. crude stocks for the fifth consecutive week however capped losses.
As of 09:00 GMT, the front month Brent futures contract was trading at $56.05/bbl, just $0.01 lower compared to yesterday s settle. If we do break above the 35 dollars level, then we need to take a look at a potential move towards the $60 level (OIL). Front month March WTI futures were down $0.41 at $53.10/bbl, with the other 49-month forward contracts traded between -$0.32 and $0.36.

United States

The Fed has also clearly allowed issuance to outpace purchases again in sharp contrast to Q2 last year when the Fed purchaess outpaced issuance by miles. But he also said he hasn t made up his mind whether to vote to convict Trump of inciting the riot that left five dead and damaged the Capitol. Central bank ownership of bonds as a % of the (current) eligible bond market size The Fed: Not limited by thresholds. less The Nasdaq 100 (NDX, QQQ) initially pulled back during the trading session on Wednesday only to turn around and show signs of strength yet again.
Traders said investors remained cautious and await the US stimulus details as President-elect Joe Biden will outline his massive fiscal stimulus plan. The Fed has for example increased it’s ownership ratio in TIPS markets markedly in 2020, despite having earlier refrained from manipulating that exact market too much. Fed Chair Jerome Powell’s speech later and read on the economy will be closely watched as the bond market starts to think about Fed tapering.
Trump s trial will be the first to extend beyond a president s time in office, creating a novel legal question that ultimately could require Supreme Court resolution. That gives the loans more potential upside than most Wall Street offerings in the year to come, fund managers said. “However, development around the possible impeachment of President Donald Trump is unlikely to have any meaningful impact on markets.

Europe

The potential consolidation comes as France, the European Union’s largest agricultural producer, is trying to embrace environmentally conscious farming practices while vying with cheaper grain suppliers such as Russia. Governments and supranational bodies such as the European Union and the African Development Bank issued almost all of 2020 s social bonds to fund pandemic healthcare and relief efforts. The owners wanted to get their art back to the continent before the U.K. left the EU s single market.
By now, I have built up excellent skills and experience in analyzing macroeconomic and political developments in Europe, the Eurozone and Germany, including ECB watching. Only five countries in the European Union saw their infection rate slowing down last week. The ECB is no longer a reliable cash machine for governments. Main focus: Europe, Eurozone, Germany and ECB.

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