Open: New York Session | Forex, Metals, Oil, Agriculture November 17, 2020



ICE sugar speculators cut their net long position by 954 contracts to 190,429 in the week, and cotton speculators cut net their long positions by 3,667 contracts to 53,209. Last month, high demand from importers and worries about a delay in winter wheat sowing had pushed Ukraine’s milling wheat export prices to the highest in two seasons. Raw sugar prices on ICE surged to an 8-1/2-month high on Monday, boosted by nearby supply tightness, while cocoa futures were also sharply higher.
The U.S. soybean crop was 96% harvested, the USDA said, ahead of the five-year average of 93% and matching an average of expectations from 10 analysts surveyed by Reuters. Farmers in Russia, one of the world’s largest exporters of the grain, have been sowing winter wheat in dry soil this year, increasing risks for the 2021 crop. Cocoa speculators trimmed their net short position by 503 contracts to 6,275 in the week ended Nov. 10. The company, which posted its second consecutive quarterly profit, attributed results to higher crude palm oil (CPO) prices and lower losses in its sugar sector.
MARKET NEWS Chicago soybean futures rose about 1% to their highest in more than four years as tightening supplies in key exporting countries and strong demand buoyed the market. The U.S. Department of Agriculture on Nov. 10 made historically large cuts to the U.S. corn and soybean harvests. Ivory Coast, the world’s top cocoa producer, has entered the mid-November to March dry season, when downpours are scarce.


Dollar index After encountering a key near-term resistance at 93, the dollar index began to decline. MARKET NEWS Gold prices eased as market optimism over a second possible COVID-19 vaccine countered a subdued dollar and concerns over rising coronavirus cases globally. The rupee appreciated by 24 paise to 74.38 against the US dollar in opening trade on Tuesday, tracking positive domestic equities amid improved risk appetite. Gene comments on stock, bond, dollar, oil & gold markets, with a particular emphasis on monetary policy, technology issues and S&P intraday action.
FOREX: The euro climbed against the dollar, helped by optimism over another coronavirus vaccine, while the Chinese yuan hit its highest against the U.S. currency since June 2018. Forex dealers said a weak dollar overseas supported the local unit. We see more downside in USD/NOK than EUR/NOK ahead as we expect the dollar to weaken. If you’re reading this from your home office in a comfy suburb in the United States, the dollar may serve your interests just fine.
Citigroup says dollar may drop 20% next year on vaccines. We see more downside in USD/NOK than EUR/NOK as we expect the dollar to weaken.


Trading SAND is highly recommended right now, while the gold price has entered a necessary period of consolidation that I see continuing until gold reach around $1,750 per ounce. Uptrend scenario The uptrend may be expected to continue, while the gold market is trading above support level 1848,20, which will be followed by reaching resistance level 1933,15. It was a mixed bag with low gold equivalent production and a record gold price, which boosted revenues.
Downtrend scenario A downtrend will start as soon, as the gold market drops below support level 1884, which will be followed by moving down to support level 1864. Downtrend scenario A downtrend will start as soon, as the gold market drops below support level 1848,20, which will be followed by moving down to support level 1780. Downtrend scenario A downtrend will start as soon, as the gold market drops below support level 1933, which will be followed by moving down to support level 1848.
The feasibility study forecasts average annual production of 142,000 ounces of gold for 11 years at a cash cost of US$550 per ounce and all-in sustaining costs of $630/oz.
We see Gatos Silver as an exciting new player among pure-play silver mining stocks, well-positioned to benefit from rising silver prices with overall solid fundamentals. Hence, Sandstorm Gold has not fared wonderfully while gold price explodes to the upside in 2020. Overall, we see the price of silver climbing over the next year which can support positive sentiment among mining stocks and Gatos Silver.


This has implications for oil producers in the North Sea, West Africa and the US, as these regions produce crude oil similar in quality to Libyan oil. As the global recovery continues, oil demand will rise and oil inventories should be reduced further from their current high levels. Figure 1 shows that oil prices usually rise in tandem with lower global oil inventories. There is no agreement on when oil demand could peak, but expectations weigh on oil companies’ plans to explore for and develop new resources.
India, the world’s third biggest oil importer and consumer, depends on foreign purchases for over 80% of its oil needs. less WTI crude oil prices moved higher alongside risk assets after Moderna said its coronavirus vaccine was tested 94.5% effective in preventing the disease. Demand remains a major drag for oil prices, which appeared to be capped by escalating pandemic risk and a lack of immediate vaccine solutions. While the spot price of crude oil remains troubled by renewed lockdowns and rising production, energy companies have seen a strong recovery.
The nation’s oil and gas output has been stagnant for years, forcing it to raise reliance on imports to meet rising fuel demand. While weaker global oil prices have been beneficial, the pickup in demand has been slow.

United States

After two months of ups/downs, SPX finally made another double-bottom breakout move last week and closed with a new all-time high. All the evidence showed that the US economy is in a strong V-shaped recovery and the recovery will continue in the following months. The economy could be hot for several more quarters, but unless we got back to something resembling full employment with inflation firming up, the Fed won’t go there. Vanguard Global ex-US Real Estate (NASDAQ:VNQI) jumped 4.5%, extending the previous week’s rally and closing near the best level since early March.
Since the election, new highs on the NYSE and the Nasdaq have steadily increased, while new lows have significantly shrunk. Too much attention has been put into the 2020 US presidential election recently and all the major media ignored the US economy. Last time, a resurgence in COVID-19 cases in the US in late June was probably one of the major factors dragging down sales.
Under previous regimes, one could have imagined the Fed quickly getting an itchy finger, and wanting to move sooner rather than later on the hikes. It means that the US may have two types of coronavirus vaccines available for emergency use as early as December. Our recent picks are all focused on the stocks which were beaten-down hard but may make huge moves once the US economy recovers.


One catalyst other than growing defaults could be PBOC efforts to arrest and reverse gains in the Yuan, which would directly lower the value of CHIQ.


Her comments suggest that the ECB does not see a big need to push yields much lower from the current levels. Further, the ECB could ease the burden on bank profitability stemming from negative deposit rates by lifting the tiering multiplier. Instead, Lagarde replied with one of her best speeches of the presidency in the one year she sits at the helm of the ECB. Markets have paused for breath this morning, however, with the FTSE down 0.5% due to GBP gaining ground and increasing pressure on a Brexit trade deal.
Lagarde commented last week that the Pandemic Emergency Purchase Programme (PEPP) and the Targeted Longer-Term Refinancing Operations (TLTROs) would be the main tools for adjusting monetary policy.
What is interesting is that Lagarde took another rate cut off the table but vowed for more easing. As mentioned earlier, the ECB ruled out a further cut of the deposit facility rate. As such, the ECB vowed to act now, during the second wave of the pandemic, as decisive as it did during the first wave. Albania and North Macedonia have waited more than a decade to start talks aimed at joining the EU to raise living standards.Third time lucky?
“At the same time, you see the direction of EU energy and climate policy.