Open: New York Session | Forex, Metals, Oil, Agriculture January 22, 2021



Brazil’s agricultural statistics agency Conab projected the new coffee crop at between 43.8 million and 49.5 million 60-kg bags compared to the 63 million bags harvested in 2020. Dry weather and a disease causing beet yellowing transmitted by aphids ravaged crops in France, the EU’s largest sugar producing country. “Mills will still maximize sugar production — it is just that the amount of cane available for crushing is lower,” Czarnikow’s analyst Ana Zancaner said in a report.
A +50% rally in corn and soybeans since August helped attract a very elevated speculative long position, currently some 50% the two previous peaks in 2016 and 2018.


Limiting the downside are the weaker dollar, US stimulus hopes, Saudi Arabia’s unilateral production cuts and a continued strong investor demand for commodities, including oil. Note that gold prices have seen wild swings this year amid higher US bond yields, strengthening dollar and US stimulus announcement. EURGBP pulled back above the 0.8860 area that it had justbroken, while GBPUSD backed down below the 1.3700+ break level overnight, a level it took out yesterday.
The safe-haven dollar would drop when markets rise and fall if they return to gains. Until recently, such unassuming vehicles occupied an easily ignored niche within the multitrillion-dollar automotive industry.


The former Amplats and Kumba Iron Ore CEO joins Gold Fields at a time when surging gold prices have boosted Gold Fields earnings. Earnings are dominated by the bulk materials division, primarily iron ore and iron ore pellets, with minor contributions from iron ore proxies, including manganese and coal. Copper prices declined, hit by demand concerns over growing numbers of coronavirus cases in top user China ahead of the traditionally slow Lunar New Year holiday season next month.
Europe dipped slightly, but its copper smelting activity remained strong, satellite service SAVANT and broker Marex Spectron said in a joint statement on Thursday. Prices of copper have nearly doubled from last year’s lows and the red metal was one of 2020’s stand out performers. The state mining investment arm ZCCM-IH agreed on Tuesday to take on $1.5 billion in debt in exchange for full control of Mopani Copper Mines, previously majority-owned by Glencore. Vale is the world’s largest iron ore miner and one of the largest diversified miners, along with BHP and Rio Tinto.
The base metals division is much smaller, primarily consisting of nickel mines and smelters with a small contribution from copper. MARKET NEWS Gold fell as U.S. Treasury yields rose, though the metal was on course for its best week in five helped by hopes of a large U.S. stimulus. Gold prices are trading down by 0.3% at Rs 49,311 per 10 grams.


I have worked in the areas of oil refining, natural gas production, synthetic fuels, ethanol production, butanol production, and various biomass to energy projects. Another oil and gas agency reported a weekly crude stock build of 2.6 million bbl earlier this week. Oil and gas producers have been forced to cut budgets, restructure operations and reduce employees, to tackle the COVID-19 pandemic-led fallout in energy demand and prices. Malaysian palm oil futures slipped, putting them on course for a 5% weekly decline, as tepid January exports and weak prices of rival soyoil weighed on sentiment.
less It was no secret that leading up to Saudi Arabian Oil Co.’s IPO in 2019 that the company touted its low emissions compared to other producers. The global oil benchmark Brent crude slipped 1.37 per cent to $55.40 per barrel. I have over 20 years of international engineering experience in the chemicals, oil and gas, and renewable energy industries, and hold several patents related to my work.
It may be the oil market s worst-kept secret: Millions of barrels of Venezuelan heavy crude, embargoed by the U.S., have been going surreptitiously to China.
This could limit oil demand surge, which normally happens during the Lunar New year holidays. Fuel oil stocks showed a significant build, increasing by 246,000 mt to 1.37 million mt.

United States

Nasdaq Futures are trading down by 76 points (down 0.5%), while Dow Futures are trading down by 238 points (down 0.8%). Furthermore, the twin deficit hypothesis suggests that when the temporary increase in the savings ratio unwinds, the US trade deficit will also increase accordingly. The market will also be looking at US inventory data, which will be released today, delayed due to the US presidential inauguration and a public holiday on Monday. Inflation is at bay with the CPI growing at less than two percent, giving ample room for monetary expansion within the Fed’s dual mandate.
“That said, several Wall Street inflationistas have warned that inflation will stage a deceptive surge in the next couple of months. At this point, even Fed officials are being forced to admit that the unemployment rate for low-wage workers “is above 20%”. Intel reported strong Q4 earnings after the close while the US railroad company CSX Corp said volumes are improving from 2020 lows.
Today, Wall Street continues to use Zacks research including the Zacks Rank and Zacks Equity Research, which combines the best of quantitative and qualitative analysis. He has been quoted in a variety of financial news publications, such as CNBC, the Wall Street Journal, and the New York Post. The latest controversy with the company was reported last week by The Wall Street Journal.


Christine Lagarde yesterday said that the central bank might not use the entire stimulus package provoking fear that prices of European sovereigns would not be supported. German Chancellor Angela Merkel said it would be late September before everyone who wants to get vaccinated can get a shot. In the UK, Prime Minister Boris Johnson said the current lockdown could last until summer. This is a clear signal that investors are wary from negative yielding debt in the periphery if the support of the ECB is not clear.
The European Union has pledged to give six prospective members $85 million to buy Covid shots, but deliveries have been delayed. Output in the U.K. fell at the quickest pace since May, with Brexit delays adding to the pandemic-driven slowdown.