Open: New York Session | Forex, Metals, Oil, Agriculture October 01, 2020



Raw sugar futures closed up on ICE on Wednesday as the front-month October contract expired and traders noted the largest delivery ever for the exchange at 2.62 million tonnes. MARKET NEWS Chicago soybean futures rose for a second session to trade near its highest since early March as strong demand from China tightened U.S. supplies. Soybeans stocks were also lower than expected by 53 million bu. This year’s final corn & bean stocks were sharply lower than the USDA’s previous month’s levels & the trade’s estimates.
Instead, corn’s final carryover was measured at 1.995 billion, 255 million bu. Russia, one of the world’s largest exporters of wheat, competes with France, Ukraine and other major producers for supplies to Africa, the Middle East and elsewhere. Our concerns about delayed livestock marketing because of Covid, reduced DDGs availability & reduce wheat/sorghum feeding on high prices were factors.


Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.19 per cent down at 93.70. FOREX: The dollar fell to a nine-day low, as robust U.S. data and hopes for U.S. fiscal stimulus left investors confident enough to seek out riskier currencies. MARKET NEWS Gold rose, as an easing dollar and signs of progress in talks for fresh U.S. stimulus measures bolstered the metal’s appeal. The silver markets fell significantly during the trading session on Wednesday, which is a bit telling considering that the US dollar also fell.
Gold rose, boosted by an easing dollar and increased investor confidence that there will be further U.S. fiscal stimulus measures. The US Dollar index fell for a third straight day to 93.7 as riskier currencies rebounded on improved sentiment. The rupee strengthened by 22 paise to 73.54 against the US dollar in opening trade on Thursday, as positive domestic equities and weak American currency buoyed investor sentiments.
The US dollar got sold off a bit during the trading session, so that helps the idea of crude oil going higher. The US dollar subsequently fell on the announcement with the fall continuing in Asia and early European trading. All major G7 currencies were up against the US dollar, including gold.


Sandstorm owns a 4.2% copper stream and a 52% silver stream on Chapada, an open-pit copper and gold mine in Brazil. In 2002 when gold was $300 per ounce, MAM recommended to its investors to put 50% of their investment assets into physical gold stored outside the banking system. However, the company is apparently in talks with Royal Gold (RGLD) for a potential syndicated silver stream transaction with Hindustan Zinc (HNDZY). However, if precious metals, in general, are rising, the volatility can make silver a little bit more difficult to hang onto in comparison to gold.
The GoldSwitzerland Division was created to facilitate the buying and storage of physical gold and silver for private investors, companies, trusts and pension funds. Tracking gold, silver too slipped 1.7% to US$ 23.87 an ounce and was on track for its first monthly contraction since March, falling more than 16%. Sandstorm Gold (SAND) shares have declined by 9.41% over the past three months after the company reported weak Q2 2020 financial results.
Keep in mind that the silver market tends to be much more volatile than gold, so do not expect it to act the same. For 2021, the mine is estimated to produce between 51,000-56,000 tons of copper and 70,000-75,000 ounces of gold. Ongoing payments would be made at 20% of the spot silver price, with an additional 30% payment for silver above $35/oz.


The long-term demand for oil tankers and rates depends largely on the demand for oil, and more specifically, oil transport. Crude oil inventories fell by 2 million bbl to 492.4 million bbl while distillate stocks fell by 3.2 million bbl. Longer term, the BP Energy Outlook 2020 says that global oil demand may have already peaked in 2019 and that oil consumption may never recover to the pre-pandemic levels. Due to the oil price collapse in the spring, and the contango oil futures pricing structure, as much as 10% of the VLCC fleet was used as floating storage.
US crude oil inventories dropped 1.98 million barrels last week, more than the 1.57 million forecast.
In “normal” times, a 1% increase in global crude oil market growth would have implied an additional demand of about 25 VLCCs, according to Straitship Brokers. I have worked in the areas of oil refining, natural gas production, synthetic fuels, ethanol production, butanol production, and various biomass to energy projects. Refiners and oil producers have been dismissing staff, slashing spending and reducing production to cope with weak prices and a global glut of fuel.
The top U.S. oil refiner is cutting 12% of its workforce amid continued declines in fuel consumption due to the COVID-19 pandemic, it said. Oil prices fell as rising coronavirus cases dampened the demand outlook.

United States

less After the presidential debate on Tuesday between Donald Trump and Joe Biden, many observers see a win for former vice president Biden. Under President Trump, Iowa’s ethanol production has risen from 4.1 billion gallons during President Obama’s last year in office to 4.23 billion gallons in 2019. Citing hate speech rules, it also moved Wednesday to remove Trump campaign ads suggesting that immigrants could be a significant source of coronavirus infections.
After the presidential debate on Tuesday between Donald Trump and Joe Biden, many observers see a win for former vice president Biden. Additional fiscal stimulus could be just around the corner in the US after US Treasury Secretary Steve Mnuchin said that talks are progressing very well. It would take huge additional stimulus and clarity which comes following the US elections to boost stalling growth. The bank, two sources said, will nominate Daniel Bassan, current UBS investment bank head in Brazil, to the post.
We could emerge on Election Eve with Mr. Biden polling ahead by no more than four points, putting President Trump within striking distance in the Electoral College. Sean Trende argues that Trump s boorish behavior was a strategy intended to deflect from policy realities that give him little chance to win a normal debate. House Democrats have tabled a $2.2 trillion stimulus package while Mnuchin has countered with a $1.5 trillion stimulus package.


President Lagarde even opened the door for considering make-up strategies, where the ECB would allow inflation overshooting for some period following the recent years of too low inflation. Thus, the next policy move is still not likely before the December meeting, though ECB speeches could turn dovish earlier on. Expecting higher inflation The main message was that the world today is different than it was in 2003, when the ECB’s current strategy was last revised.
Here’s a more comprehensive explanation from a professor of EU law: Commission: letter of formal notice sent to UK re the internal market bill and the withdrawal agreement. This morning the European Union announced it was starting legal proceedings against the U.K. over Prime Minister Boris Johnson’s plan to breach the terms of the Brexit divorce deal. Reading between the lines suggests that TLTROs at sweetened terms will be preferred over rate cuts, which supports our thinking on the ECB’s next policy steps.
Five Things Follow Us Get the newsletter More bad news for jobs, all stimulus hope still not lost, and the EU calls in the lawyers.
Those include a string of EU and US Markit manufacturing PMIs, and US inflation data. When the ECB president mentions overshooting, it is more likely to end up in the final document. However, the was just a formal procedure requiring the UK to simply respond within one month to the EU’s complaint.