Open: New York Session | Forex, Metals, Oil, Agriculture October 07, 2020



U.S. cotton exports to China hit a seven-and-a-half-year high in August, while corn shipments to the Asian country reached an all-time record. MARKET NEWS Chicago wheat futures slipped from their five-year high hit in the last session, but losses were limited by concerns over dry weather in key exporting nations. Now that further help is definitely not on the way they’ll have to keep eating their already meager seed corn while cutting back on pretty much everything.
Raw sugar futures on ICE rose 2% on Tuesday to a seven-month top as weather worries in several producing regions reduce expectations for a supply surplus in 2020-21. The “weed” in question is a commodity product with unproven branding power that may end up being no more profitable than corn. 2 and 3 items in August, was less than half that of soybeans, emphasizing the importance of the oilseed in the trade relationship. Others like corn ethanol have served a useful purpose and essentially are obsoleting themselves.
But the combined export value of cotton and corn, the No.


The dollar held gains against most currencies after U.S. President Donald Trump abruptly cancelled talks on economic stimulus with Democrat lawmakers, heightening demand for safe-haven assets. Amid rising uncertainties surrounding the US presidential election and the fiscal stimulus package, haven demand may underpin US Dollar’s strength. Given rally in US Treasuries this year, and the modest dollar depreciation against other likely reserve currencies, valuation can account for increase in South Korea’s reserves.
The market’s big struggle right now, its driving narrative, is between COVID-19 and the prospects of a new, multi-trillion dollar round of stimulus. The President had said Nancy Pelosi wasn’t negotiating in good faith and the market responded accordingly, with stocks selling off and the US Dollar back on the bid. Gene comments on stock, bond, dollar, oil & gold markets, with a particular emphasis on monetary policy, technology issues and S&P intraday action.
If the US dollar starts to rally again, that will more than likely work against the value of crude oil, as it would other commodities. Hence, the company might easily earn a dollar or two per share, or even more than this, for the year 2020. The dollar is seeing yesterday’s gains trimmed against the major currencies, but has pushed above the JPY106 level, which it has not closed above in almost a month. The decision boosted risk aversion and the U.S. dollar, which rose by 0.2% against a basket of rival currencies.


Look at the major gold producers like Newmont Corp. (NYSE:NEM), Barrick Gold (NYSE:GOLD), and imagine how many spin-offs they would require based on what Gold Resource is saying. This gold mine is capable of producing over 200,000ozAu per year, and using a $1,800/oz gold price, would generate $15+ million in annual royalty revenue. The Gold Analyst offers quality technical and fundamental analysis of the price of gold to help educate readers in their investment decisions.
Kumtor, which accounts for the bulk of Kyrgyz gold output, is owned by Canada’s Centerra Gold. The world’s second-biggest consumer of the precious metal imported around 11 tonnes of gold in September, down from 27 tonnes a year ago, the source said. Many of the biggest movers in commodities this year, including gold and other precious metals, will continue to take the spotlight as the year draws on. Osisko has come to an agreement to spin out its 100%-owned Cariboo gold project and other assets into a new company called Osisko Development Corp.
The market did not like the story, and the stock dropped as much as 8% yesterday on the news, while most of the other gold miners were trading higher.
On the technical aspect of trading, Reuters’ technical analyst Wang Tao predicted that spot gold prices might slide back down to $1,847.57 an ounce. Domestic gold prices fell for the second day, tracking a decline in global rates after US President Donald Trump suspended stimulus talks with Democrats.


According to a US oil and gas agency, commercial crude stocks in the country increased by 951,000 bbl in the week ending the 2nd of October. Hydrogen Double-Decker Buses Arrive in Europe s Top Oil City Aberdeen, Scotland, is best known as a base for some of the world s top oil companies. Malaysian palm oil futures firmed on lower production outlook amid wet weather and tightening coronavirus restrictions, but weaker crude and soyoil capped gains. Markets foresee US crude oil stockpiles will rise by 0.4 million barrels this week, which will mark the first increase in four weeks.
Leading oil and gas companies, including BP and Royal Dutch Shell, want to sell large parts of their portfolios to prepare for a shift towards renewable energy. Six offshore oil and gas fields shut down on Monday because of the strike, cutting the country’s output capacity by 8 per cent. Oil prices fell, pressured by a larger than expected rise in U.S. crude inventories.
A further deviation between crude oil prices and implied demand data may prove to be a bearish catalyst. A string of crude oil inventory reports to be released by the US Energy Information Administration (EIA) later today are important too. Oil prices were also boosted after Norway s labour union planned to expand its ongoing strike from October 10, which would hit four additional fields.

United States

BEFORE THE BELL U.S. stock index futures rose after President Donald Trump’s abrupt call to end stimulus talks sent Wall Street tumbling in the previous session. U.S. stock index futures rose after President Donald Trump’s abrupt call to end stimulus talks sent Wall Street tumbling in the previous session. Meanwhile, market sentiments also turned bearish after U.S. President Donald Trump dashed hopes for a fourth stimulus package after abruptly halting negotiations until after the elections.
Yesterday Mr. Trump announced that he was walking away from any negotiation with Democrats and was willing to wait until the election for any possibility of a stimulus bill. Trump said on social media that he has instructed representatives to stop negotiating on a deal until after the Presidential election, and disagreed with Powell’s take on the economy. That lasted until the news came from President Trump that the stimulus negotiations were done until the election.
The big news on Wednesday is President Trump’s decision to hold off on additional stimulus until after the US election. US President Trump announced the cancellation of talks for the next stimulus deal yesterday. White House-watchers and Wall Street insiders opined that Trump’s abrupt move was likely a negotiating tactic, not the end of the stimulus road. Trump tweeted yesterday afternoon that another COVID relief bill would only go through after the election, sending stocks tumbling.


U.K. Foreign Secretary Dominic Raab yesterday refused to rule out boycotting the Beijing Winter Olympic Games in 2022 over alleged abuses by China of its Uighur Muslim minority.


Even if the ECB’s forward guidance clearly states that rates are expected to remain at their present or lower levels, further rate cuts are not among the preferred tools. Instead, the ECB has already gone around cutting rates by lowering the TLTRO rate, and can cut that rate further, if needed. Lagarde herself has stated that the central bank considers other policy tools to be more effective than another rate cut. Economic recovery already experiencing some setbacks ECB will ease again in December Recent comments from the ECB have not illustrated a central bank in a hurry to ease further.
If the U.K. and EU are within decent distance of each other, they could decide to outline a deal, but agree that a new implementation period is needed.
The number of Covid-19 cases has shot up, new restrictions are being introduced, the recovery is experiencing bumps and the important US elections and Brexit deadlines are approaching. EU member states are pushing for an “independent international investigation” following Duterte’s presidency in 2016. The ECB has also been happy with the Targeted Longer-Term Refinancing Operations (TLTROs), and is likely to provide further easing via them.
less Recently, the EU Parliament adopted a resolution denouncing the state of human rights and press freedom in the Philippines. We continue to expect the ECB to boost the Pandemic Emergency Purchase Programme (PEPP) by another EUR 500bn at the December meeting.