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03 October 2020
Big Picture Long-Term Video October 2nd 2020
Eoin Treacy’s view
A link to this week’s Big Picture Long-Term video is posted in the Subscriber’s Area.
Pelosi Optimistic on Relief, Says Trump’s Illness Alters Dynamic
This article by Billy House for Bloomberg may be of interest to subscribers. Here is a section:
“This kind of changes the dynamic,” Pelosi said on MSNBC Friday. “Here, they see the reality of what we have been saying all along.”
She said she was optimistic that a bipartisan bill can emerge.
The stimulus negotiations have made some halting progress over the past two months, but the two sides remain far apart on how much of a boost to provide and where it should be directed. Democrats in the House on Thursday passed a $2.2 trillion package — down from the $3.4 million plan they passed in May — as their offer in the latest talks. Mnuchin has proposed a plan of about $1.6 trillion.
The negotiations are taking place amid signs the U.S. economy is struggling to recover from pandemic-induced shutdowns. Job gains slowed in September and many Americans quit looking for work, suggesting the economic recovery is downshifting. Americans’ incomes fell in August by the most in three months after the government’s supplemental unemployment benefits expired, the Commerce Department reported Thursday.
Eoin Treacy’s view
The PPP moratorium on firing workers expired on Wednesday. That event was greeted with a large number of headline-grabbing layoffs announcements. The continued pace of job growth despite the layoffs got less attention. The big question for markets is when a fiscal deal will be agreed.
Fertilizer Prices Reach Decade High Amid Import Probe
This article by Justina Vasquez for Bloomberg may be of interest to subscribers. Here is a section:
Prices spiked after U.S. fertilizer firm Mosaic Co. petitioned the U.S. Department of Commerce and U.S. International Trade Commission in June, saying that fertilizer imports from Morocco and Russia were unfairly subsidized. That prompted an investigation and raised the prospect of countervailing duties. The two countries are the largest sources of the commodity for the U.S. in the most recent crop year, through June.
The U.S. imported more than 2 million metric tons of phosphate fertilizers from Morocco last year, valued at $729.4 million, according to an International Trade Administration report citing U.S. Census Bureau figures. Imports from Russia totaled more than 767,000 metric tons and were worth $299.4 million.
Russia’s largest producer, PhosAgro PJSC, recently said it stopped shipping products to the U.S. due to the investigation and is rerouting those volumes to Canada, Brazil and Russia.
The value of U.S. purchases from the fertilizer import market fell 57% from the end May to the end of July, according to U.S. Census Bureau data, sending a supply shock through the industry and driving up domestic prices.
“Russian and Moroccan suppliers have slowed imports to the U.S., and that’s tightened up supply and also contributed to rising prices,” Alexis Maxwell, research director at Bloomberg’s Green Markets, said in a phone interview.
The import slowdown means Mosaic now holds more than 90% of the production market for phosphates in the U.S. — increasing the influence of the Tampa, Florida-based company, she said.
Eoin Treacy’s view
There has been a great deal of rationalisation in the fertiliser and agricultural chemicals sector over the last decade. Heading into the peak in 2008 there were widely publicised fears that the world would run out of food and a lot of money was spent on increasing production. The end of the commodity bull market drove a process of rationalisation. It also encouraged major producers to flood the market with supply to drive out competition.
Eoin’s personal portfolio: investment position increased October 2nd
Eoin Treacy’s view
One of the most commonly asked questions by subscribers is how to find details of my open traders. In an effort to make it easier I will simply repost the latest summary daily until there is a change.
In the Bit We Trust: It’s Time to Put Juniors to Work!
Thanks to a subscriber for this report from Haywood Securities which may be of interest. Here is a section:
Notwithstanding the volatility of the equity markets and commodity price projections, the fundamental paradigm continued under investment in the mining sector over the last decade remains an overriding factor that clouds the industry’s supply side outlook. This factor is particularly topical given the cash being generated by the sector due to better operational stewardship and as of recent, elevated commodity prices. However, the simple fact remains that discoveries supporting industry performance are made through the drill bit, and fundamentally require the ‘boots-on-the-ground’ facilitated by the junior exploration segment. As a result, we look for continued investor interest in the precious metals equities, including the junior exploration and development space, as investment capital filters downstream into higher risk opportunities supported by a renewed interest in grassroots exploration programs, further top-down industry consolidation, and the development of new projects to support the longer-term production pipelines of larger industry participants.
Eoin Treacy’s view
Many of the world’s most prolific gold producing countries are very well explored. That means just about all visible surface mineralisation has already been located. What is much less well understood is how much gold is available to be found below the ground.
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