Open: New York Session | Forex, Metals, Oil, Agriculture November 03, 2020

A member of the National Guard plays a trumpet during a flag rai


Traders sold 2.5 million tonnes of corn compared with 4.4 million tonnes on the same date last year. By state, ratings declined in Kansas, the top winter wheat producer, where 28% of the crop was rated good to excellent, down from 29% a week earlier. Midweek rains and very wet corn curbed activity in Ohio, but the favorable forecast for the next several days should make for a strong week of harvest. Wheat exports fell to 10.6 million tonnes from around 11 million.
But fears of political turmoil after Saturday’s disputed presidential election in the world’s top cocoa growing region kept farmers away from plantations and slowed purchases. The Ohio producer expects to finish the subject corn field this week. The firm lowered its corn production forecast to 14.762 billion bushels from 14.942 billion previously. Corn Rally Sparks Green Fuel Rethink by Chinese Energy Giant Millions of hungry pigs in China are setting off a chain reaction in the fuel market.
Even when sugar-wrapped with “defending against the unmistakable Russian thirst for power, and Chinese ambitions for global supremacy”.


The safe-harbour yen has also ground higher in recent weeks and it was steady at 104.72 yen per dollar through the Asia session. The dollar is back to being higher against what I’d consider leading currencies, Brazil’s (nearing record low) and India’s (multi-month low). The opposite is true if Trump beats Biden – a less likely outcome that may result in a stronger US Dollar and weaker gold prices. That helped Mexico’s peso strengthen 3.8% in October and hit 20.87 pesos a dollar last week, its strongest level in more than seven months.
Gene comments on stock, bond, dollar, oil & gold markets, with a particular emphasis on monetary policy, technology issues and S&P intraday action. But with battleground states too close to call and with the prospect of either a Trump victory or an inconclusive result likely to support the dollar, selling was limited. Since then, whatever’s been leaning has been leaning toward the rising dollar “stuff”; or at least no longer in the reflationary direction.
The lira has plumbed a series of record lows, and fell Monday to its all-time weakest level of 8.42 a dollar. Most of that flowed into hard-currency bonds, or those denominated in currencies like the dollar. That may boost demand for liquid hedges, of which the US Dollar and Treasuries are the traditional go-to options.


In the third quarter of 2020, the Brucejack Mine produced of gold, and the company sold at an all-in sustaining cost of of gold sold. This action brought the stock market back alive after this year’s March crash, biggest beneficiary is gold, silver, and mining stocks. In global markets, gold prices were steady today after a sharp rise in the previous session as investors remained cautious ahead of the US presidential elections. Source: Bloomberg, DailyFX Technically, gold prices came off the all-time high (US$ 2,075) in early August and have since entered a three-month pullback.
Meanwhile, safe-haven assets including gold haven’t seen a surge in demand, either, with the metal finishing Friday with its worst two-month decline since July 2018. Tracking this volatility, gold prices in domestic markets edged lower. However, gold and silver sold were lower than what was produced. Note that gold prices are now down Rs 6,000 in Indian markets from their August highs.
The company indicated an AISC of per ounce on a by-product basis ($878 per ounce in 3Q’19), which means that the silver production is part of the costs.
The free cash flow generation has improved significantly with the gold price, which has jumped exponentially.


This assumes a negative $5 oil differential, resulting in a realized net price of $32 per barrel for Continental’s oil production. At a longer-term oil price of $40 WTI oil, I’d value Continental at approximately $13 to $14 per share. Thus an oil price above $37 WTI oil would allow Continental to work on paying down its debt and/or invest in growth capex. Marathon Petroleum Corporation (MPC) operates the nation’s largest refining system with more than 3 million barrels per day of crude oil capacity across 16 refineries.
On a year-over-year basis, crude stocks are 51 million barrels higher… Gasoline stocks are 6 million barrels higher… And distillate stocks are 37 million barrels higher. If WTI oil went back to $50, Continental could potentially generate $700 million in positive cash flow with a maintenance capex budget. It can maintain production levels (if it chooses to do so) and generate $130 million in positive cash flow at high-$30s WTI oil.
The Organization of the Petroleum Exporting Countries (OPEC) and Russia imposed a record oil output cut in April to support prices as the COVID-19 pandemic shrank demand. Malaysian palm oil futures rose 2%, snapping a four-session losing streak, as expectations of a drop in October inventories and a rise in rival edible oils underpinned prices. Jitters ahead of the election, concerns that European lockdowns will crimp the world economy, and a tumble in oil prices prompted the decline.

United States

After a dismal five-days last week, stocks started the week of the US presidential election higher, and markets have continued their momentum into this morning’s European session. The yuan is also in the headlights – steady on Tuesday but expected to move with the election news because a re-elected Trump could stoke Sino-US tension. less Election Day is finally here – four more years for President Donald Trump or a victory for rival Joe Biden? Many expected the industrials sector to thrive under Trump, with his promises to “make America great again,” to bring manufacturing jobs home, and to impose tariffs on foreign competition.
BREAKING: Biden’s campaign manager just said “Under no scenario will Donald Trump be declared a victor on election night” They have no say in that process. President Trump was elected on an anti-trade agenda in 2016, and promised that tariffs and protectionist measures could restore the US manufacturing sector.
That means we should get indications of coming easing policies from Fed officials a few weeks before the blackout period, likely reacting to higher yields. Now, with the US presidential election just around the corner, will its outcome determine what is to come for XAG/USD and the ‘red metal’? “A surprise Trump victory could reignite fears of tariffs,” said Mizuho chief Asia foreign exchange strategist Ken Cheung in Hong Kong. “President Trump’s trade war against China didn’t achieve the central objective of reversing a US decline in manufacturing, economic data show,” reads the report.


On the other hand, moving more capital and labor into the ICT sector, as Beijing clearly hopes to do, could raise the economy’s overall productivity if done right. Beijing’s heavy-handed tactics on its periphery, especially against the Uighur minority in Xinjiang, could also trip up potential areas of cooperation like climate change. An October report from S&P Global highlighted that about a third of global polysilicon, used to make solar panels, came from Xinjiang last year.
Overall, Beijing’s dual-circulation strategy is a risky bet for a country that has thrived on an integrated global trading system.
Beijing’s new plan to offset all this, memorialized in its obscure-sounding “dual-circulation” strategy, is twofold. Last week, the 19th Central Committee of the Communist Party of China (CPC) completed its fifth plenary session in Beijing. WSJ explains how Beijing is pouring money into high-tech chips as it wants to become self-sufficient.


French President Emmanuel Macron has announced tough restrictions requiring people to remain inside their homes while restaurants, bars and shops deemed nonessential close. Goldman Sachs said only ‘in-office essential’ employees would be allowed to work from its London office after UK PM Boris Johnson announced the new lockdown measures. Perhaps BoJo has finally discovered ‘the secret’ for why these tactics were so effective in Asia: It’s much easier to test and trace when mandatory means mandatory.
Another Bangladeshi protest leader on Monday was cited in AP as saying protests would not cease until Macron apologizes and recants his remarks. Buying DGB22 outright requires a relatively strong view that ECB/The Danish Central Bank will cut rates within the foreseeable future. PM Boris Johnson recently rolled out a system of coronavirus restrictions with three standalone tiers. The EU – under U.S. pressure – was forming a Greater Europe that would eventually include all the states of Europe, except Russia.
Traders might be betting on more fiscal and then the pre-committed QE expansion by ECB on the December meeting. In the UK, the government’s test-and-trace system has been a notable blemish for BoJo, despite pouring more than $15.5 billion into it. Westbindung anchors us firmly in NATO and the EU and ties us closely to Washington, Brussels, Paris and London.