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David Fuller and Eoin Treacy's Comment of the Day
Category - Precious Metals / Commodities

    World Hunger Hit 15-Year High as Virus Stifled Food Access

    This article from Bloomberg may be of interest to subscribers. Here is a section:

     

    “This is a wake-up call to the entire world,” David Beasley, executive director of the World Food Programme, said on a webcast on Monday. “We’re heading in the wrong direction. To think that we’re going to end hunger by 2030, that’s not even possible given the direction, trajectory we’re on now.”

    Between 720 million and 811 million people were undernourished last year, according to the UN, which used a mid-range of 768 million due to uncertainty of the pandemic’s impact. Most of those were in Asia. Roughly a third of all people lacked access to adequate food, a figure that rose by 320 million from a year earlier, about as much as in the previous five years combined.

    The report -- the first global assessment of food insecurity in the wake of the Covid-19 crisis -- was jointly produced by agencies including the Food and Agriculture Organization, the WFP, Unicef and World Health Organization.

    “Famine should be consigned to history, yet in multiple countries they loom again,” Unicef Executive Director Henrietta Fore said. “Millions of children are still struggling to access the nutritious and safe diets they need to grow, to learn, to develop and reach their full potential.”

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    U.S. Service Industries Expand at Slower Pace Than Expected

    This article from Bloomberg may be of interest to subscribers. Here is a section:

    The services index of inventories also shrank, indicating that supply chain constraints continue to hold back economic activity. Supplier delivery times remain elevated due to truck availability, slower rail services, port congestion and container shortages, Nieves said on a call with reporters.

    A separate gauge of inventory sentiment dropped to a record low, showing more service providers see their stockpiles as too lean. The index of prices paid for materials fell slightly, suggesting that while still elevated, the acceleration in cost pressures may be starting to cool.

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    Crop Prices Soar as Drought and Heat Grip U.S., Canada

    This article from Bloomberg may be of interest to subscribers. Here is a section:

    The water deficit could spur a further drop in crop ratings when the U.S. Department of Agriculture updates its weekly condition scores Monday afternoon, Paris-based adviser Agritel said in a note.

    Spring wheat in Minneapolis and canola trading on ICE Futures U.S. both rose for a seventh straight trading day, gaining as much as 4.1%.

    Corn settled the U.S. trading day up 5.4% at $5.4725 a bushel amid concerns over a lack of upcoming rains in key growing regions. Soy oil surged as much as 5.6%. The markets had plunged Friday after a U.S. Supreme Court ruling stoked concern that upcoming biofuel policy proposals could crimp demand for the crops used to make “green” liquid fuels.
    “Last week’s sell-off was overdone, especially on the Supreme Court ruling,” Arlan Suderman, chief commodities economist at StoneX, said in an email. “The market also took the weekend to assess rainfall over the past 10 days, and found it came up short for much of the northwestern crop belt. That added up to a buying opportunity in the eyes of many traders.”

    Soybeans and hard winter wheat both increased almost 4% in Chicago intraday trading.
    August hogs jumped by as much as 3%, buoyed by hopes China’s move to replenish pork reserves will translate to more exports of U.S. meat to Asia. American hog futures had dropped last week to the lowest levels since April, in part on worries that pork exports to China were set to fall as the herd there
    recovered.

    In other markets, arabica-coffee rose for the second day in a row on ICE Futures U.S. in New York amid a forecast for freezing temperatures in some Brazilian growing areas, according to weather forecaster Somar Meteorologia.

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    The Gold Digger

    Thanks to a subscriber for this report from Raymond James which may be of interest. Here is a section:

    The mining clock, is a concept originally introduced by Lion Securities and adopted by Investec. The clock on the right, gives us a sense of where we are in the mining cycle based on various liquidity indicators.

    In our opinion, the clock was positioned at 6:30 as of September 2020.
    Mining is one of the most cyclical industries on the planet, gains are very large on the upside, and losses are also magnified on the downside.

    Why is it important?
    We cover the Investec Mining Clock because it is crucial to know where we are in the mining cycle so we can properly plan for reaping the rewards the mining sector can give. Without a logic based system, investors end up doing the investment round trip making sizable money on paper only to see it vanish when the cycle turns.

    You can see that there are times to look, times to buy, and times to sell. Unfortunately, most investors sell when they should be looking, look when they should be buying, and buy when they should be selling. Bull markets create bear markets, and bear markets create bull markets. The ways you look at the market must change depending on whether a primary bull market or a primary bear market is at hand.

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    Tilting The Odds In Your Favour

    This promotional piece from Baillie Gifford may be of interest to subscribers. Here is a section:

    It may come as a surprise to learn that Tel Aviv (Israel), Vilnius (Lithuania), and Tallinn (Estonia) all rank in the top 50 cities in the world in Fintech. You may not yet have heard of many of their leading companies, but I’ll wager you will in the coming decade. Lithuania ranks number one in the world in terms of broadband speed and in the top five countries for Fintech innovation. Investment in the right infrastructure has given that country a head start it is not wasting.

    Access to capital and need for less of it in today’s capital-lite, ‘free money’ world means more and more entrepreneurs, the geniuses who will lead the exceptional companies of tomorrow, no longer feel anchored to the US. 20 years ago, fewer than 15 per cent of Chinese students studying abroad felt compelled to return home, filled with ideas but lacking the capital to fund their ambitions. Today closer to 80 per cent see a much more favourable environment in which to put their western education to profitable use domestically.

    Adding to the earlier comments on the popularity of the Hong Kong stock market, companies are increasingly eschewing an ADR listing entirely, preferring a Hong Kong local listing, with exchange regulators encouragingly supportive. For the Chinese company of the future, a dual listing may well mean H-shares (HK) and A-shares (mainland China).

    In a world obsessed with buybacks (at the wrong time) and cost-cutting (at the wrong time), we look for investment and expansion. Here, the US is no longer the world leader it once was.

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    The monumental challenge of trying to hit climate targets

    Thanks to a subscriber for this report from National Bank of Canada. Here is a section:

    India to Spend $9.1 Billion on Free Rice and Wheat for the Poor

    This article by Pratik Parija for Bloomberg may be of interest. Here is a section:

    India’s cabinet approved Wednesday an earlier proposal to distribute 20.4 million tons of free rice and wheat to people covered under the nation’s food program for five months ending November, according to a government statement.

    * Govt will spend 672.7 billion rupees ($9.1 billion) as subsidy for distribution of food grains to as many as 813.5 million people

    * The beneficiaries will get 5kg of rice or wheat per person per
    month: statement

    ** NOTE: The free allocation is in addition to the sale of same amount of subsidized food grain each month

    * NOTE: The announcement was made by Prime Minister Narendra Modi on June 7, before a formal approval by the nation’s cabinet on June 23

     

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    Raisi Victory Will Delay Return of Iran's Oil, Analysts Say

    This article from Bloomberg may be of interest to subscribers. Here is a section:

    The election of a conservative cleric as Iran’s president will probably hold up the lifting of U.S. sanctions on the Islamic Republic’s energy exports, said analysts including Sara Vakhshouri, president of SVB Energy International LLC.

    “The election of a hard-liner delays the expectation of a rapid return of Iranian oil,” she said.

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