Friday, July 10, 2020

EIA: Natural Gas Weekly Update

Cooling Degree Days up, LNG shipments down and much, much more.

From the Energy Information Administration:
for week ending July 8, 2020   |  Release date:  July 9, 2020  

In the News:
EIA’s updated State Energy Data System shows which states had the most consumption and production in 2018
EIA updated its State Energy Data System (SEDS) on June 26 with data for 2018. SEDS provides comprehensive energy information, including the consumption, production, and price of natural gas, for all 50 states and the District of Columbia.

Texas had the highest level of natural gas consumption in 2018 at 12.2 billion cubic feet per day (Bcf/d). The industrial sector is the largest consuming sector in Texas. The state has a significant amount of oil and natural gas extraction and processing that uses natural gas as fuel and a large chemicals industry that uses natural gas for heat, power, and feedstock. Texas also has the second-largest population of any state, contributing to its demand for power generation—42% of which was natural gas-fired in 2018—to meet cooling demand. The other high-consuming states also tend to have large populations (for example, California, Florida, and Pennsylvania) and/or high concentrations of natural gas-intensive industries (for example, Louisiana, California, and Pennsylvania).

Hawaii used the least amount of natural gas of any state in 2018 at 9 million cubic feet per day (MMcf/d). The sources of supply for Hawaii’s natural gas are synthetic natural gas (SNG) created from naphtha, imported liquefied natural gas (LNG), and renewable natural gas (RNG) produced locally from biomass. These sources are expensive, leading Hawaii to have the highest average natural gas price in the nation in 2018.

Hawaii’s average delivered end-use natural gas price was $34.29 per million British thermal unit (MMBtu) in 2018, compared with the national average of $5.71/MMBtu. Aside from Hawaii, natural gas in 2018 was most expensive in Alaska and states in New England where infrastructure constraints can lead to wholesale natural gas price spikes in periods of peak demand during the winter months. Natural gas prices were cheapest in regions close to the Permian Basin, which is in West Texas and Southeast New Mexico, and offshore Gulf of Mexico production (Louisiana and Mississippi). The state with the cheapest natural gas was Oklahoma, where the price averaged $3.71/MMBtu.
Marketed natural gas was produced in 33 states in 2018. Texas had the highest level of marketed natural gas production at 21.5 Bcf/d, followed by Pennsylvania with 17.0 Bcf/d. Much of Texas’s natural gas is associated natural gas that comes from crude oil-focused production. In Pennsylvania, most natural gas production is from wells focused on producing natural gas and hydrocarbon gas liquids....
....U.S. LNG exports decrease week over week. Seven liquefied natural gas (LNG) vessels (three from Cameron, two from Sabine Pass, and one each from Cove Point and Corpus Christi) with a combined LNG-carrying capacity of 25 Bcf departed the United States between June 18 and June 24, 2020, according to shipping data provided by Marine Traffic....

And at Maritime Logistics Professional:
US LNG Exports at 20-month Low

Convexity Maven: Heaven, Hell, The Fed and Inflation

From Harley Bassman, the Convexity Maven:
Let’s be perfectly clear, I am not about to violate the first and third Commandments by implying the Federal Reserve (FED) is divine; that said, one must wonder if the common parlance of “the almighty US Dollar”, which is in conflict with the second Commandment,will direct some folk South in the afterlife.

No matter –if a thirty-five-year career as a mortgage derivatives trader has not already condemned me to a slow ride down the Styx, then I am likely safe to pen a Commentary about the FED exercising its absolute power over the financial system.

A clever eye will notice that I did not say “U.S. financial system”, and this was intentional. Since the USD still maintains its reserve currency status garnering perhaps two thirds of international trade, domestic FED policy is effectively Global monetary policy.Today,I consider the implications of the FED’s newly stated “guidance”, and a few investment ideas that feed directly from its policies.
Across the spectrum, it has become an inconvenient truth that facts contrary to one’s opinion are bothersome.Two such facts that receive no respect are: 1) Fiat currency created by the Central Bank at a rate greater than economic growth will eventually lead to inflation; and 2) The yield level of risk-free interest rates will have an impact upon the value of other assets

Supporters of Modern Monetary Theory rest their heads upon the soft pillow of the FED’s balance sheet -maya bars-exploding over the past decade while the Consumer Price Index (CPI) has barely pulsed a heartbeat.This is utter nonsense; just because I have never been struck by lightning does not encourage me to swing a five-iron in a thunderstorm. Of course,the excessive creation of fiat currency leads to inflation;if it didn’t, I can assure you there would be a shelf of books detailing such miracles over the past five thousand years of recorded history.

The lack of inflation should not distract one from recognizing that our financial economy is presently overwhelmed by too much debt, both public and private; this is what necessitated the FED’s introduction of an alphabet soup of asset support/purchase programs.

GDP = Money * Velocity= Price * Quantity

There are only two ways to resolve a debt crisis –either default or inflate with the caveat that inflation is simply a slow-motion default. (Yes, strong real GDP growth can also extinguish debt, but let’s stipulate this avenue as closed.

So far, old school FED economics has not worked as planned.Despite a massive increase in Money(M2), the Velocity of money has declined at a similar pace.

Ever so clever, the FED seeks to increase Monetary Velocity via Financial Repression to create inflation that will depreciate nominal debt to de-lever both the public and private balance sheets.

The FED reduced its overnight interest rate target to near zero at the start of the Great Financial Crisis (GFC), but this could not halt the decline in the Velocity of money. A possible explanation is that risk takers (both businesses and investors) were uncertain how long they could cheaply fund their activities....
....MUCH MORE (9 page PDF)

All of which is why, dear reader, we post this chart from time to time:

The money released by Fed machinations isn't turning over. It is getting stuck in the financial system.
Helicopter money for financiers is all well and good but it doesn't address the problem.
(it's the same picture for MZM and M2)

See also:
Redistributing Wealth Upward
Fed Rate Cut: Chairman Powell Just Showed President Trump Why You Should Be Careful What You Wish For

And from 2010:
Modern Economists Misinterpret Quantitative Easing

Recently from Mr. Bassman:
Convexity Maven: When The Fed Will Lose Control
The Convexity Maven Rages Against The Fed (and potentially Professor Shiller too)
Convexity Maven: "I Picked the Wrong Week...”

"QE Unwind Speeds Up: Fed’s Assets Drop $85 Billion. Four-Week Total -$248 Billion. Big Chunk in a Short Time"

From Wolf Street, July 9: 

Repos & dollar liquidity swaps on their way out. SPVs declined. Hardly any corporate bonds & ETFs purchased. MBS flat. Treasuries ticked up.
OK, this balance-sheet shrinkage, now in its fourth week, is going faster than I’d expected. Total assets on the Fed’s balance sheet for the week ended July 8, released this afternoon, dropped by -$85 billion, the fourth week in a row of declines. This brought the four-week total drop to -$248 billion:
Back on April 9, when markets were just emerging from chaos after the Fed had thrown $1.5 trillion at them in the span of four weeks, Fed Chair Jerome Powell said in a webinar at Brookings that “when private markets are once again able to perform their vital functions of channeling credit and supporting economic growth, we will put these emergency tools away.”

This matched what he and other Fed officials had said in the year or so before the Crisis, that at the “next crisis,” they would throw all the Fed’s might at the problem up front, and then they’d back off, rather than let QE drag on for years. And they did.

By peak-QE in early June, the Fed had increased its assets by $2.86 trillion. It has since then whittled this increase down by $248 billion. Note the systematic front-loading then tapering the asset purchases and letting assets top out at $7.16 trillion, and then letting them decline, now down to $6.92 trillion:
Assets by category....

Thursday, July 9, 2020

The Clamshell Currency Of Pismo Beach, California

From Hakai Magazine:
In early March 1933, a man walked into the Hi-Way Cigar Store in Pismo Beach, California, and laid a huge clamshell on the counter. “Gimme a box of cigars,” he said. That day, the clam was paying.

It might sound like a weird dream, but we have a smattering of evidence that something like this actually happened. The evidence is in the form of a shell inscribed with the words “Good for one dollar on demand at Hi-Way Cigar Store”—one of 19 similar shells that survive in a special collection at Pismo Beach City Hall. This strange currency was dated March 1933; its roots lie in the Great Depression.

In an era of economic turmoil, thousands of banks were failing and Americans’ trust in the institutions had evaporated. Fearing that their money was no longer safe at the bank, many people had emptied their accounts and stashed dollars at home—which, unfortunately, further undermined the banks. To redress the situation, President Franklin Delano Roosevelt declared a nationwide bank holiday, from March 6 to March 9, 1933, during which withdrawals were frozen. This gave his administration a chance to stabilize the banking system.

The thought of having to go for four days without readily available cash shocked Americans. Around the country, businesses began issuing IOU-style notes or ersatz dollars—often called scrip currency—in the form of metal or wooden tokens so that everyday transactions could continue even when retailers couldn’t easily issue change to customers. In Pismo Beach, however, locals turned to a different resource: the shells of the Pismo clam, a large, edible clam once plentiful in the coastal waters of central California....

A somewhat not-at-all related story:

The King Of Hard Currency

There is always opportunity.

From A Blast From the Past:
It was a typhoon, or so it’s said, that cast up David O’Keefe on Yap in 1871, and when he finally left the island 30 years later, it was another typhoon that drowned him as he made his way home to Savannah.

Between those dates, though, O’Keefe carved himself a permanent place in the history of the Pacific. So far as the press was concerned, he did it by turning himself into the “king of the cannibal islands”: a 6-foot-2, red-haired Irishman who lived an idyllic tropical existence, was “ruler of thousands” of indigenous people, and commanded “a standing army of twelve naked savages.” (“They were untutored, but they revered him, and his law was theirs.”) [New York Times; New York Tribune; Watchman & Southron] It was this version of O’Keefe’s story that made it to the silver screen half a century later in the forgettable Burt Lancaster vehicle His Majesty O’Keefe (1954), and this version, says scholar Janet Butler, that is still believed by O’Keefe’s descendants in Georgia. [Butler pp.177-8, 191]

The reality is rather different, and in some ways even more remarkable. For if O’Keefe was never a king, he certainly did build the most successful private trading company in the Pacific, and—at a time when most Western merchants in the region exploited the islanders they dealt with, then called in U.S. or European warships to back them up—he worked closely with them, understood them and made his fortune by winning their trust and help. This itself makes O’Keefe worthy of remembrance, for while the old sea-captain was most assuredly not perfect (he had at least three wives and several mistresses, and introduced the Yapese to both alcohol and firearms), he is still fondly recalled on the island. It doesn’t hurt, so far as the strangeness of the story goes, that O’Keefe ingratiated himself on Yap by securing a monopoly on the supply of the island’s unique currency: giant stone coins, each as much as 12 feet in diameter and weighing up to four and a half tons.

But wait; we’re getting ahead of ourselves. Let’s start with the convoluted history that brought O’Keefe to Yap.

So far as it is possible to tell, the captain was born in Ireland around 1823, and came to the U.S. as an unskilled laborer in the spring of 1848. [Butler pp.26-7]  This date strongly suggests that he was one of more than a million emigrants driven from Ireland by the potato famine that began in 1845, but—unlike the many Irish who landed in New York and stayed there—O’Keefe continued traveling, eventually washing up in Savannah in 1854. After working on the railroads, he went to sea and worked his way up to be captain of his own ship. During the Civil War, it is said, he worked as a blockade runner for the Confederacy. [Butler pp.76-8; Hezel]

Whatever the truth, O’Keefe did flourish briefly in the Reconstruction period before the hot temper he was noted for landed him in serious trouble. As captain of the Anna Sims, moored in Darien, Georgia, he got into a violent argument with a member of his crew. The sailor hit O’Keefe with a metal bar; O’Keefe retaliated by shooting the man through the forehead. He spent eight months in jail charged with murder before winning an acquittal on the ground of self-defense, and at around the same time—it was now 1869—he married a Savannah teenager named Catherine Masters. [Butler pp.33-4, 79-80]

O'Keefe's story was given the Hollywood treatment in the 1950s – a version that considerably exaggerated  his role on Yap and indulged all the usual South Sea island stereotypes.What drove O’Keefe from Georgia remains a minor mystery. Family tradition holds that he knocked a second crewman into the Savannah River some months later; fearing he had drowned the man, O’Keefe signed up to join the steamer Beldevere, fleeing to Liverpool, Hong Kong and the Pacific. [Butler p.80]  Yet there seems to be no evidence that this fight actually occurred, and it’s just as likely that fading fortunes drove the Irishman to desperation. One historian points out that, by 1870, O’Keefe had been reduced to running day excursions up the coast for picnickers. [Hezel]
In any event, the captain left Savannah, and little seems to have been heard from him until he popped up in Hong Kong late in 1871, writing to send his wife a bank draft for $167 and vowing that he’d be home by Christmas—a promise that he failed to fulfill. The next Catherine O’Keefe heard from her husband was when he wrote requesting that she send him the Master’s certificate he needed to skipper a ship—a sure sign that he was staying put in the Pacific. By early 1872 O’Keefe was in Yap, a little archipelago of connected islets in the Carolines. [Hezel]
There were good reasons for liking Yap. The island lies just above the Equator in the western part of the Pacific and was well placed for trade, being within sailing distance of Guam, the Philippines, Hong Kong and the East Indies (Indonesia). The people there were welcoming at a time when those on other islands were still killing foreigners. And Yap was extremely fertile. Coconut trees abounded, which made the place attractive to dealers in copra (dried coconut flesh, an important source of lamp oil), while the lagoons teemed with sea cucumbers—bêche-de-mer, a noted Asian delicacy.
According to traditional accounts, O’Keefe came to Yap more or less by chance—washed ashore in a typhoon and found and nursed to health by a Yapese man named Fanaway, who taught him something of the local language. [Butler pp.38, 95, 167-8]  That version of events is certainly what his family believed, but local tradition suggests that O’Keefe actually came to Yap to trade, arriving in a Hong Kong junk named Catherine in honor of his wife, and simply liked the place so much he stayed. [Hezel]  Whichever story is correct, though, it did not take him long to shrug off family ties. Catherine O’Keefe was never actually abandoned—her husband continued to send her substantial sums once or twice a year, and the last draft drawn on his business in Yap was received in Savannah as late as 1936. [Butler p.143]  O’Keefe’s letters home, though, quickly became less and less affectionate, the closings moving within months of his arrival from “Your loving husband” through “Good bye, yours truly” to a frankly discouraging “Yours as you deserve.” [Butler pp.85-6]

It is not difficult to understand why Catherine, miles away in the United States, soon faded in her husband’s memory. Life in the Pacific was less than idyllic at first; O’Keefe, who was employed for his first few years by the Celebes South Sea Trading Company, was sent on a dangerous mission to the Hermit Islands in search of bêche-de-mer, losing so many of his men to fever that he never again sailed to Melanesia. Soon after that, he lost his job when his boss was killed by an ax blow to the head on Palau, and he spent the remainder of the 1870s struggling to build up a business of his own. That meant establishing a network of trading stations in the face of competition, recruiting European agents of dubious reliability on the waterfronts of Hong Kong and Singapore, and slowly adding sailing vessels to his fleet: the Seabird in 1876, the Wrecker in 1877, the Queen in 1878 and the Lilla in 1880. [Hezel]...

"European gas storage surplus to be absorbed as injections slow

From S&P Global Platts, "Commodity Tracker: 5 charts to watch this week":
....4: European gas storage surplus to be absorbed as injections slow

European gas storage surplus being absorbed
What’s happening? Key to the European gas supply-demand balance in the coming month is the rate of storage injections given the already high level of fullness across the continent. EU stocks are currently more than 80% full, leaving only limited space for injection with three months of the traditional injection season left. However, injection rates have slowed significantly over recent weeks, giving some respite to a market that had been under significant price pressure.

What’s next? If injection continues at current rates, there is an expectation that the current surplus of storage over last year’s level could be absorbed by August. Lower injection rates come as European gas prices have risen from their mid-May lows, making the seasonal storage play less attractive. Ukraine also remains an option for traders looking to find a storage home for their gas, despite planned maintenance on a pipeline from Slovakia potentially making it more difficult for traders to flow gas to Ukraine to make the most of the country’s cheap storage and vast spare capacity....

Logistics/Shipping: "Reading into the Cosco, Alibaba tie-up"

Could be big, could be nothing.
From Splash 24/7:
News carried on this site on Tuesday that Chinese state-run shipping giant Cosco Shipping has entered into an agreement with e-commence conglomerate Alibaba and its fintech affiliate Ant Group to collaborate on blockchain applications in shipping has sparked plenty of conjecture about the scope and aims of the collaboration. Splash columnist Kris Kosmala takes a closer look at the deal.

The joint initiative of Cosco and Alibaba, as well as the related agreement between Alibaba and China Merchants Ports (CMPort) bodes well for innovation in supply chain execution. Alibaba’s experience in digitalising supply chain transactions is comparable to that of Amazon with the exception of deep integration into the financial sphere of commerce, where Alibaba has established an enviable lead over its US-based competitor. 
Shippers won’t have any patience for competition
It was well understood that both companies have an opportunity to inject new thinking into the technology domain of the carriers associated with the GSBN and TradeLens initiatives. The financial expertise of Ant will be important to integrate in one place the transaction of sending a physical box of goods and settling all financial aspects of that shipment.

There are some that view the Cosco and Alibaba initiative as a competition to the Maersk/IBM TradeLens platform....

Possibly also of interest:
Shipping: Every Link In The Global Trade Supply Chain That Blockchain Could (maybe) Transform

Gartner: Industry will need to replace 90% of blockchain platforms by 2021
 Rising Stars in Transportation and Logistics
Shipping: French Giant CMA CGM Looking to Expand Logistics Business with Investment in CEVA Logistics
Shipping: Carriers Fear Becoming the "Uber Drivers of the Sea" (but quants to the rescue?)
Shipping: Freight Forwarder Flexport: "...Digitizing The Entire International Shipping Process"
"10 Startups Making Ocean Container Shipping Easier"
Shipping: "Amazon vs Maersk: The clash of titans shaking the container industry"
"TEU Tokens and Blockchain Could Shape the Future of Container Shipping"
"Maersk Tankers invests in quantitative hedge fund CargoMetrics"
Shipping: Despite $300 Million Revenue Hit From Cyber Attack Maersk Is Upbeat
Shipping: "The True Implications of the Technology Revolution"
Shipping: Following Maersk,"Now CMA CGM signs with Alibaba for online booking of container space"
Shipping: A Warning To Freight Forwarders, The Good Times Are Over
Shipping: "Amazon Enters Trillion Dollar Ocean Freight Business" (AMZN)
Shipping: Maersk, Alibaba Team Up To Offer Space On Container Ships.    

Heads-up: "Floating movie theater with socially distant boats coming to Paris river"

Paris river?
Sometimes New Yorkers can seem so provincial.
It's called the Bièvre, duh.

From The New York Post:
Forget drive-ins — this is a movie you can swim to.

A floating movie theater where people can watch from socially distant boats is coming to the Seine river in Paris next week.

The “Cinéma sur l’Eau” — or cinema on the water — will be held July 18 to celebrate the start of Paris Plages, an annual city-run program that creates temporary beaches in the French capital during the summer.

Film buffs will be able to enjoy the free screening from the comfort of 38 electric boats that can hold two to six people each, with social distancing practices in place to make sure those onboard are family or friends.

Parisians can enter a raffle for those seats from Tuesday through July 15....

Okay, maybe not the Bièvre.

"Agricultural union says Italian olive oil farmers lost 2 billion euros due to coronavirus"

That seems like a pretty big whack.
From PoAndPo Agrifish, July 5:
A dramatic drop-off in demand for Italian olive oil amid the coronavirus pandemic has put the owners of more than 400,000 olive growers of all sizes at risk of financial collapse, Italy's main agricultural union Coldiretti said in a study released Friday.

Coldiretti said that farmers cultivating some 250 million olive plants all across Italy have so far lost a combined 2 billion euros (2.25 billion U.S. dollars) due to the crisis.

Coldiretti studied the impact on the nation's olive growers together with researchers from Unaprol, the country's largest association of olive growers.

Coldiretti and Unaprol said the worldwide economic slowdown combined with the national coronavirus lockdown and the ensuing lack of tourism dealt an economic blow to farmers.

The study said lower demand has pushed prices as much as 44 percent lower....

Singapore Oil Trader ZenRock Said To Be Winding Down By August

From Bloomberg, July 7:
Troubled Singapore-based oil trader ZenRock has plans to wind down its business, with employees across offices in the city-state and China set to depart by August, according to people with knowledge of the matter.

ZenRock Commodities Trading Pte Ltd. is among a handful of trading houses in the spotlight after oil’s historic plunge earlier this year, which has sparked feuds with international lenders and accusations of dishonest deals in Asia’s commodities hub.

The company is expected to hand over responsibilities to a judicial manager, said the people, who asked not to be identified as the information is private. KPMG LLP was named interim judicial manager in May, just as ZenRock was raided by police following the allegations it used the same oil cargo to obtain more than one bank loan, according to court documents seen by Bloomberg.

Those accusations form part of its tussle with HSBC Holdings Plc, which has an exposure of almost $49 million to the trader. The company owed more than $166 million to six lenders as of April 17. It traded more than 15 million tons of oil and petroleum products last year and posted a revenue of $6.15 billion in 2018, compared with $1.24 billion in 2016, based on information on the website of Singapore’s accounting regulator....

"Singapore banks seen facing lingering default risk in oil sector"
Singapore's Hin Leong May Have Knocked Société Générale Out Of the Commodity Financing Business
ZenRock: "Singapore Oil Trader Involved in ‘Dishonest’ Deals, HSBC Says"
Commodities Traders: Following On the Hin Leong Fraud The Spotlight Turns to Singapore's ZenRock
Exhibiting none of the qualities connoted by Zen or by rock....

Head Of NY Fed's Trading Desk Says If Markets Continue Improving, "Fed's Purchases May Stop Entirely"

You have been warned. (a few times now)

From ZeroHedge, July 8:
In our morning wrap today, we reminded readers of something we pointed out first last week, namely that for all the intraday turmoil, stocks have gone nowhere since the Fed's balance sheet started shrinking modestly in mid-June:
This morning, Miller Tabak picked up on this observations, writing that "Maybe we’re wrong.  Maybe the flattening out of the growth of the Fed’s balance sheet is a short-term phenomenon... and they will start growing it once again." But the correlation between stocks and the Fed's balance sheet "has been an excellent indicator. Ignore it at your own peril."

You are not wrong at all, MT, and as we show every time there is an update to the Fed's POMO schedule, the buying has indeed continued to slow down, in fitting with the Fed's latest FOMC announcement that the Fed will buy about $80BN in Treasurys each month, a very far cry from the $75 billion per day the Fed bought from March 19 until April 1.
Needless to say, the Fed's role in setting pretty much every asset price is well known to our readers, and for those who are new here, here is a good recap from Rabobank's Michael Every:
... markets are, almost across the board, totally divorced from reality. Facts no longer matter to them, almost as if they were not facts.
Bloomberg today reports some members of the Trump White House have been pushing for the US to break Hong Kong’s USD currency peg by not letting HK banks used the USD, as punishment for Beijing’s imposition of the draconian new national security law. Yes, this is only some members, and neither Pompeo nor President Trump have apparently yet been given the option to approve. However, this is a nuclear bomb being assembled on the table in front of us pointed directly at Hong Kong and US-China relations…and the reaction in the Hang Seng today was to rise 0.3% at time of writing.
How can this be the case? Because we have post-modern markets. Don’t like facts? Ignore them; and do so knowing that central banks are using their enormous powers to over-rule them. The virus is airborne? So we will buy more assets! The HKD peg is under real threat, politically? So we will buy more assets! Truly, nothing means anything except what that power dictates.
As central banks and Jean-Luc Picard both like to say, “Make it so!”
Why is the Fed doing this? Simple: because it can, and because it has to, as a market crash would lead to the unraveling of today's hyperfinancialized civilization as we know it.
if the core argument that the unthinkable on Hong Kong can’t happen as that would mean US stocks would go down (heaven forfend!), be aware that right up until the post-modernists run central banks, the central banks will be the full post-modern anyway. The Fed is not going to set US foreign policy, but it would have to react to it – so why not buy stocks if needed in a geopolitical crisis? Clarida yesterday said there are no limits to how much the Fed can buy, after all, even if he did not say stocks. But stocks, corporate bonds, junk bonds, mortgage bonds, government bonds – these are all just words, aren’t they? Rightly, and in more ways than one, think about the power.
So far so good; the only concern is what happens when the Fed's tapers its direct market intervention, i.e., purchases of various assets, including both Treasurys and MBS, as well as more recently, corporate bonds and ETFs. And just one thing could prompt Powell to ease back on the Fed's market intervention - the arrival of sharply higher inflation, or failing that, indications that the economy is starting to recover (which eventually results in inflation).

And this is the Fed's - and the market's - Catch 22: the worse things get economically, the better it is for markets as the Fed will intervene even more aggressively; and vice versa, the stronger the economy the tighter financial conditions will get until we get a Q4 2018-type crash. That's really all there is to "fundamental analysis" today.

Which is why today's remarks by Daleep Singh, the head of the NY Fed's Markets Group (aka the de facto head of the Plunge Protection Team), was notable. In a speech titled "The Fed’s Emergency Facilities: Usage, Impact, and Early Lessons", Singh addresses the Fed's recent crossing of the Rubicon when it started purchasing corporate bonds/ETFs, and referring to the following chart of the Fed's quasi-illegal activities undertaken in collaboration with the Treasury to avoid being blocked by the Fed's Section 13(3)...
July 6
Chart Mania: "QE Unwinds: Fed’s Assets Drop for 3rd Week, Another -$76 Billion. 3-Week Total: -$163 Billion"
July 8 
"Rabobank: The Key Question Is Why China Decided To Jump-Start Its Stocks Now?"
June 22
Wolf Richter: " I, Who Hates Shorting, Just Shorted the Entire Stock Market. Here’s Why":
....Either way though, he also gifted us with this lovely little Easter Egg:
Fed Ends QE, Total Assets Drop. Liquidity Injection Ends
by Wolf Richter • Jun 18, 2020
That reduction in support for risk assets will take a will to play out, maybe August which would set up first a bond and then an equity decline going into September - October.
Something that some very big money wishes to see happen.

EIA Natural Gas Storage Report July 9

First up, the estimates going into the  report from FX Empire:
...NatGasWeather says, “For today’s EIA weekly storage report, survey averages favor a build of +56-58 Bcf, slightly smaller than the 5-year average of +68 Bcf. It was hotter than normal over much of the eastern 2/3 of the U.S., while cooler than normal over most of the West. We expect +53 Bcf, a touch to the bullish side.”

Bloomberg analysts are looking for an injection ranging from 55 Bcf to 62 Bcf, with a median of 59 Bcf. A Reuters poll predicts a range of 51 Bcf to 65 Bcf with an average of 58 Bcf and the Wall Street Journal forecasts a range of 51 Bcf to 63 Bcf with a median of 57....
And the report from the Energy Information Administration:
...Working gas in storage was 3,133 Bcf as of Friday, July 3, 2020, according to EIA estimates. This represents a net increase of 56 Bcf from the previous week. Stocks were 685 Bcf higher than last year at this time and 454 Bcf above the five-year average of 2,679 Bcf. At 3,133 Bcf, total working gas is within the five-year historical range....
Finally the price action following the release plus the previous four days (30-minute bars);

It appears some folks perceived the year's first real warm spell to be hotter than it actually was.
Bidding up into the release and selling off on the real numbers.
(as a side note I had a friend who was able to retire very young by watching winter temperatures outside the NYMEX to see if the traders would feel chilly when they walked in and bid natty up in response)

Huh, Apparently The Wirecard Crew Were Even More Psychopathic Than Previously Surmised (Russian nerve gas?)

Ms Warrell is Defence and Security Editor at the Financial Times, the other two broke the Wirecard story.
(along with other FT scribes in Asia, the Middle East and Germany)
From the Financial Times:

Vanished chief operating officer of fraud-hit payments group hinted at secret service links
Wirecard executive Jan Marsalek touted secret documents about the use of a Russian chemical weapon in the UK, as he bragged of ties to intelligence services to ingratiate himself with London traders. 
The documents, which have been reviewed by the Financial Times, included the formula for novichok, the world’s deadliest nerve agent....
The U.S. now has an unrelated investigation going as well.

Canada Pension Plan Investment Board: "Disrupting the Dairy Industry?"

CPP Investments runs C$409.6 Billion as of the March report.
From Pension Pulse, July 8th 3:29pm:
Today, pioneering animal-free dairy maker, Perfect Day, announced the expansion of its Series C to $300 million through a new tranche led by Canada Pension Plan Investment Board (CPP Investments). This follows an initial $140 million C round shared late last year, which was met with excitement and additional inbound interest after production breakthroughs in the company’s proprietary flora-made dairy proteins:
Over the past several months, the company has doubled its ability to produce its hallmark protein, while substantially reducing costs several years ahead of expectations. These production milestones — coupled with an enlarged Series C round led by $50 million from CPP Investments’ Thematic Investing group, and bolstered by long-time supporters Temasek and Horizons Ventures — mark the beginning of a new chapter for the Bay Area startup. Perfect Day’s flora-made protein also recently achieved a major regulatory milestone in the successful completion of FDA’s review of its Generally Recognized As Safe (GRAS) status.

“We never doubted we’d reach this point, we just didn’t expect to get here so quickly,” said Ryan Pandya, co-founder and CEO of Perfect Day. “And, thanks to our world-class team and investors, we’re not planning to take our foot off the pedal anytime soon. The coronavirus pandemic has shown just how fragile our food system is. We’re committed to building real change that prioritizes diversity, agility, and resilience.”

While the dairy industry has experienced a supply glut in the face of COVID-19, driven by long production cycles, centralized manufacturing, and limited processing facilities, Perfect Day holds a unique advantage. By producing dairy proteins through fermentation in microflora instead of cows, the company and its partners can quickly increase or decrease production depending on demand, and can allocate a stable protein supply to where it is needed most. Perfect Day also plans to build a turnkey network of localized animal-free dairy protein producers and processors to avoid unnecessary supply chain bottlenecks.

“This marks the first investment into Thematic Investing’s new Climate Change Opportunities strategy, which will focus on innovative companies that are well positioned to respond to the challenges posed by climate change,” said Leon Pedersen, Managing Director, Head of Thematic Investing, CPP Investments. “Sustainable technologies like Perfect Day are poised to capture structural shifts in industrial practices, physical resources and consumer preferences for environmentally conscious options, which are well-suited to our long-term investing approach. We look forward to building our partnership with the company and its management team.”

“We’re grateful for the continued support of our investors from all over the world,” said Perumal Gandhi, co-founder of Perfect Day. “But, of course, our mission is about much more than money. We continue to believe the next generation of protein will be driven by production speed, price, and taste, and we’ll have several exciting updates to share in the months ahead as our commercial partners start to build momentum.”

About Perfect Day

Founded in 2014 by CEO and co-founder, Ryan Pandya, and co-founder, Perumal Gandhi — Perfect Day is on a mission to revolutionize how dairy products are made to create a kinder, greener world. Instead of relying on cows, the Bay Area startup utilizes fermentation in microflora to create proprietary ‘flora-made’ dairy protein. Perfect Day’s ingenious animal-free protein can be used across a range of products — from ice cream and milk to cheese and butter — to deliver the same taste and texture of dairy with none of the environmental, animal welfare or food safety concerns. Foods made with Perfect Day protein can be labeled as vegan and lactose-free and are coming soon to a fridge near you as the company expands its network of food and dairy manufacturing partners. For more information, visit or follow along on Facebook, Twitter, Instagram and LinkedIn.

About CPP Investments

Canada Pension Plan Investment Board (CPP Investments™) is a professional investment management organization that invests around the world in the best interests of the more than 20 million contributors and beneficiaries of the Canada Pension Plan. In order to build diversified portfolios of assets, investments in public equities, private equities, real estate, infrastructure and fixed income are made by CPP Investments. Headquartered in Toronto, with offices in Hong Kong, London, Luxembourg, Mumbai, New York City, San Francisco, São Paulo and Sydney, CPP Investments is governed and managed independently of the Canada Pension Plan and at arm’s length from governments. At March 31, 2020, the Fund totalled $409.6 billion. For more information, please visit or follow us on LinkedIn, Facebook or Twitter.
I must admit, when I first saw this announcement on LinkedIn, it seemed a bit cheesy (pun intended).

Then I took the time to watch a presentation where Perumal Gandhi (Co-founder) and Ryan Pandya (Co-founder and CEO) from Perfect Day talked about non-dairy dairy products at Slush 2017.

I embedded it below and think you should all take the time to watch it.....
....MUCH MORE, including the vid.

Chartology: The Energy Select Sector SPDR Fund (XLE)

Slope of Hope has a very minimalist comment on the XLE chart pattern, consisting of the headline and nothing else.
We'll add a bit after the chart:

XLE Heading for Painville


XLE close July 8: $36.23 down 0.03 (-0.08%)

Checking in with Thomas Bulkowski for his comments on island reversals—those four daily prints that poke above the red line, with a gap up and a gap down defining the island:
....Island Reversal Identification Guidelines
Price trendTops have price trending upward to the island; bottoms have price trending downward.
ShapeGaps separate a price island from the mainland.
GapsTwo gaps must share some or all of the same price.
VolumeHigh on the day price makes the second gap.
DurationThe island can be one day to several months long.
Important Bull Market Results for Island Reversals
Overall performance rank for up/down breakouts (1 is best): 35 out of 56 (bottoms)/38 out of 53 (tops)
Break even failure rate for up/down breakouts: 31%; 32%
Average rise/decline: 32%; 13%
Throwback/pullback rate: 54%; 55%
Percentage meeting price target for up/down breakouts: 79%; 60%

Capital Markets: "The Dollar is Sold through CNY7.0 as Chinese Equities Continue to Rally"

From Marc to Market:
Overview: Investors continue to clamor into risk assets. Led by Chinese shares, the MSCI Asia Pacific Index pushed higher for the third session this week to new five-month highs. Europe's Dow Jones Stoxx 600 is trying to snap a two-day decline with the help of better than expected revenues for its largest tech company. US shares are little changed after yesterday's 0.8% rally in the S&P 500 and new record high close in the NASDAQ. Bonds are sidelined. Asia Pacific yields edged higher, but mostly flat in Europe. The US 10-year benchmark is hovering around 65 bp. The dollar is on its back foot, trading heavily against most major and emerging market currencies. Sterling and the Swedish krona led the majors with a 0.20-0.25% gain through the European morning. The dollar punched below CNY7.0 for the first time in almost four months. Gold is holding above $1800 an ounce and looks set to push higher above $1818 seen yesterday. Oil is little changed as the August WTI contract is confined to a narrow range (~$40.60-$41.00)

Asia Pacific
As widely anticipated, China's CPI firmed to 2.5% in June from 2.4%.
This was in line with expectations. Food prices are still an important culprit. They are up over 11% year-over-year. The 81.6% increase in pork prices accounts for 2.05 percentage points of CPI. Non-food prices rose 0.3% year-over-year. Producer prices showed somewhat less deflation. PPI fell 3% year-over-year after a 3.7% decline in May. We anticipate more stimulus, but it may be targeted rather than broadly delivered.

Japan reported core machinery tool orders rose 1.7% in May. It follows a 12% slump in April. Economists had projected another decline. The rise in new orders was driven by the service sector, which underscores the weakness in the manufacturing sector seen in other economic reports. Manufacturing orders fell.

Home loan values fell by 11.6% in Australia. This was more than twice the decline expected by the median forecast in the Bloomberg survey. It is the third decline in the past four months. Meanwhile, tensions are rising between Australia and China. It suspended the extradition treaty with Hong Kong while seeking to draw Hong Kong residents that want to flee in light of the new security lows, and have begun strengthening its ability to resist Beijing's cyber attacks....

Wednesday, July 8, 2020

"CVC Capital hits €21B close on Europe's largest buyout fund"

A personal bookmark for now.
From PitchBook, July 6:
CVC Capital Partners has reportedly closed its eighth flagship buyout fund on around €21.3 billion (about $24.1 billion), making it Europe's largest buyout fund to date.

The vehicle, which tore through its initial €17.5 billion target, is the first European mega-fund—vehicles with more than $5 billion in commitments—to reach a close since the COVID-19 crisis began.
The close could mark a rebound for European PE fundraising activity, which saw a significant drop in Q1 with just €10.9 billion raised across 20 vehicles, according to PitchBook’s Q1 European breakdown report....MORE

Bulk Shipping: Japan to Close 100 Coal Fired Power Plants (bets big on Mozambique LNG)

First up, one more reason to fade the record rally in the Baltic Dry and/or the bulkers.
From Splash 24/7, July 3:

Shipping reacts to Japan’s decision to shut 100 coal power plants
News yesterday that the Japanese government is looking to shutter 100 out of its 140 remaining coal-fired power stations has received a mixed reaction from shipping analysts.

Japan is to target the most inefficient 100 coal power plants for closure in the coming decade. The country relies on coal for nearly one third of its energy and it remains one of the most important destinations for coal seaborne trade. Japan is the world’s third largest coal importer after India and China.

The Asian nation’s decision to cut its reliance on coal comes as Europe is also significantly weening itself off the polluting raw material. Moreover, coal use this year around the world has dropped noticeably thanks to the spread of the coronavirus pandemic. Seaborne thermal coal trade has slipped back to 2018 levels, sliding 7% in the first five months of the year.
While coal is not going away for now, makeup of 
the ships that carry the commodity is changing
“Overall, the global demand picture for coal is far from positive, as more environmentally friendly energy sources like natural gas and renewables continue to make inroads, especially in Western countries,” commented Ralph Leszczynski, global head of research at Banchero Costa.  ...

And from OilPrice, also July 3:

Japan Bets Big On Mozambique LNG
In partnership with the business sector, the Japanese government will invest some $14.4 billion (1.5 trillion yen) in liquefied natural gas development in Mozambique, the Nikkei Asian Review reported.

According to the report, the money will fund the development of a gas field in the African country to produce some 12 million tons of LNG annually, beginning in 2024. As part of the deal, trading major Mitsui & Co. and Japan Oil, Gas and Metals National Corp. will together buy a 20-percent stake in the field.

Three Japanese private banks will provide most of the debt funding for the project, and the state-owned Japan Bank for International Cooperation will supply $3 billion in loans.

Another report also mentions $3 billion to be provided in debt financing for the Mozambique LNG project in which Mitsui & Co. is a minority partner with 20 percent to French Total, which operates the project. Part of the $14.4 billion may go into this particular project....

"Fuel cell trucks enroute from Korea to Switzerland"

Royal Bank of Canada analyst Richard Spak got off a great line when he initiated Nikola a couple days ago:
"It’s ‘Still More of a Business Plan Than a Business.’"
He rated it a Hold and threw a $46 price target on NKLA.
On Wednesday the stock closed at $54.03 up $13.80 (+34.30%)
From FreightWaves:

Fleet expected to grow to 1,600 trucks by 2025
Hyundai Motor Co. (OTC: HYMTF) is shipping the first 10 of its mass-produced Xcient hydrogen-powered fuel cell heavy-duty trucks from South Korea to Switzerland, where fleets will take possession in September.

Hyundai plans to ship 50 trucks by the end of the year and 1,600 by 2025.
While startup Nikola Motors (NASDAQ: NKLA) plans Class 8 fuel cell truck production from a new plant south of Phoenix in 2023, Hyundai revealed plans with Swiss company H2 Energy and a prototype at the IAA Commercial Vehicle Show in Hanover, Germany in September 2018.

Switzerland is the launching point for the zero-emission Xcient because it is exempt from the Swiss road tax on trucks weighing more than 3.5 tons. Without the tax, fuel cell truck hauling costs per kilometer is on par with a diesel truck.

A Hyundai-H2 Energy joint venture was formed in 2019. It will lease the Xcient to commercial truck operators on a pay-per-use basis. That means commercial fleet customers make no initial investment.

Hyundai’s business case calls for using green hydrogen generated from hydropower. Switzerland is among the leaders in hydropower. That means it can deliver sufficient green energy for hydrogen production. Once operating in Switzerland, Hyundai plans to expand it to other European countries.

Xcient for real
“Xcient Fuel Cell is a present-day reality, not a mere future drawing board project,” said In Cheol Lee, Hyundai Motor executive vice president and head of the Commercial Vehicle Division....

One more from RBC's Spak on NKLA via Barron's "His $46 price target is based on his 2028 sales and earnings estimates, discounted back at a rate of 15% to today’s value."

"India-Pakistan: Some Quiet On The Northern Front"

From StrategyPage, July 7:
China has become the ultimate fiscal lifeline for Pakistan. Decades of deficits, growing corruption, excessive defense spending and military domination have left Pakistan broke and few willing to give or lend enough cash to keep Pakistan solvent. A recent example of how this works was seen when despite the economic recession and a public debt crisis (no one will lend to Pakistan anymore), the Pakistani defense budget was increased twelve percent for 2020, with annual spending now $7.85 billion. Spending on dealing with covid19 has averaged about $100 million a month and by the end of the year military spending will be at least five times what was spent on covid19. The India defense budget is also up (13.6 percent more) in 2020 to $66 billion.

The only economic relief available to Pakistan is China and its CPEC (China-Pakistan Economic corridor). CPEC is a vast Chinese investment and construction effort that depends on vigorous support of the Pakistani military to succeed. China needs the Pakistani military to keep Islamic terrorists and tribal separatists from attacking Chinese construction projects. Pakistan also helps China by keeping Indian forces occupied in Kashmir and the northwest Indian portion of the Pakistani border.

Northwest India (Ladakh State) is the current hot spot because India has been building roads to the border and threatening to take back the portion of Kashmir Pakistan illegally, according to the agreement that established the India-Pakistan border after the British left in 1947, seized from India. Pakistan signed that agreement but had second thoughts as it was being implemented. Pakistan urged Pakistani Pushtun tribes in the area to “liberate” Kashmir from the Hindus and managed to grab about half of the disputed area. This dispute has remained unresolved ever since and led to several wars with India. Pakistan always lost but India never sent troops into Pakistan-occupied Kashmir. The current Indian leader is openly questioning the wisdom of that policy.

India controlling all of Kashmir is a major economic threat to China, which has invested over $10 billion to build a highway and rail line from China to the Pakistani coast and it goes through Pakistani occupied Kashmir. This link is part of the Chinese OBOR/BRI (belt and road project) which aims to revive the ancient Silk Road that for thousands of years was the main economic link between East Asia and the rest of Eurasia. The Pakistani portion is called CPEC and has costing China at least $62 billion (so far). Indian threats to the Kashmir road-rail link are minor compared to the problems China is having with Islamic terrorist and tribal violence against CPEC projects as well as the high levels of corruption in Pakistan which are also damaging CPEC projects. This is driving up costs while lowering quality and slowing progress. But China also claims ownership of much Indian territory so helping Pakistani keep what they have grabbed is considered something of professional courtesy. At the same time, the Pakistani military has gained an ally they cannot abandon or say no to.

In June China revived the border war over Pangong Lake, which is largely in Tibet and patrolled by a small Chinese naval force. This is the longest lake in Asia and part of the 134-kilometer long lake extends 45 kilometers into the Indian Ladakh region. China is using its usual “sneak, grab and stay” tactics to slowly move the border into territory long occupied by India. The portion of the lake shore in dispute has no native population. The only people who visit the area are soldiers from India or China.....

"China's Great Firewall descends on Hong Kong internet users"

From The Guardian, July 8:

Residents rush to erase digital footprints as law gives police powers over online activity
At midnight on Tuesday, the Great Firewall of China, the vast apparatus that limits the country’s internet, appeared to descend on Hong Kong.

Unveiling expanded police powers as part of a contentious new national security law, the Hong Kong government enabled police to censor online speech and force internet service providers to hand over user information and shut down platforms.

Many residents, already anxious since the law took effect last week, rushed to erase their digital footprint of any signs of dissent or support for the last year of protests. Charles Mok, a pro-democracy lawmaker who represents the technology sector, tweeted: “We are already behind the de facto firewall.”

Hong Kong is facing a dramatic decline of one of its most important advantages – a free and open internet – a defining trait that sets it apart from mainland China where Facebook, Twitter, Google and most major foreign news sites are blocked.

The prospect of Beijing-style internet controls – where residents are not just restricted but monitored and punished for what they post online while companies are forced to censor their platforms – is worrying for citizens, activists and businesses in Hong Kong.

The law gives authorities the power to demand individuals and service providers remove content, or access to content deemed threatening to national security. Noncompliance can result in fines and imprisonment for company staff or individuals. Police investigating national security cases can surveil communications and confiscate electronic devices....

It's the job of Radio Free Asia and its parent, the U.S. Agency for Global Media to break through the great firewall, now isn't it?

Via Aeolus 13 Umbra:
The 1971 Radio Free Europe (RFE) Public Service Announcement (PSA), “The IN Sound from Outside,” features Peter, a young Hungarian expatriate who fled his native country’s Communist government following the 1956 Revolution and subsequent Soviet military occupation. He runs up the steps to his radio studio and, with his coat coolly draped on his shoulders, introduces The Drifters’ “On Broadway.”....MUCH MORE
See, here's the thing, by law anyone doing business in or into China has to give up any information the Chinese Communist Party apparatchiks request.
It's the problem with TikTok, it's the problem with Huawei, it's the problem with Google and Apple in Hong Kong/China.
It's the law:
How the state runs business in China"
.... The author rather blithely skips over the National Security Law.
Here via China Law Translate:

There is not a lot of wiggle room in Article 7
Article 7: All organizations and citizens shall support, assist, and cooperate with national intelligence efforts in accordance with law, and shall protect national intelligence work secrets they are aware of.
The State protects individuals and organizations that support, assist, and cooperate with national intelligence efforts.
All means all, including foreign companies operating in China.
Ditto articles 14:
Article 14: National intelligence work institutions lawfully carrying out intelligence efforts may request that relevant organs, organizations, and citizens provide necessary support, assistance, and cooperation.
And 16:
Article 16: When national intelligence work institutions staff lawfully perform their tasks in accordance with relevant national provisions, with approvals and upon the presentation of relevant identification, they may enter relevant restricted areas and venues; may learn from and question relevant institutions, organizations, and individuals; and may read or collect relevant files, materials or items.
And then there's The Cybersecurity Law and the Foreign NGO Law (2016) and the Counter-espionage Law (2014) and all worded vaguely enough that the laws can mean whatever the Party and the authorities want them to mean.

Making a bit of a straw man argumentum ad absurdum, the top Canadian spinmeister for one of the companies subject to the National Security Law said:

‘At Huawei, we’re not attaching laser beams to the heads of sharks’
—Alykhan Velshi, Vice President, Corporate Affairs, Huawei Technologies Canada, Markham, Ont.
Letter to the Editor, Maclean's Magazine, published July 23, 2019

Personally I think laser-enhanced sharks would be kind of cool, it's the required handing over of data should the Chinese government request it that gives one pause.

Apparently quite a few folks who want to make nicey-nice with ZTE or Huawei are not aware of this.
Last seen in July 1's "How to Respond To China's Claim That The New Hong Kong Security Law Applies To Actions Everywhere In The World". 

"Could a US$14 billion Australian solar farm provide a fifth of Singapore’s energy?"

From the South China Morning Post, July 6:
  • Singapore firm Sun Cable plans to provide a fifth of the city’s energy through an undersea cable linked to a solar farm 3,800km away in Australia.
  • Experts – and billionaire backers – say that’s not as crazy as it might sound, even if it is commercially risky
Deep in the Australian desert, the world’s largest solar farm is being built.
Its aim is ambitious: much of the power generated will be exported 3,800km to Singapore  via a high-voltage, direct current submarine cable slung across the sea floor.
The farm, estimated to cost at least A$20 billion (US$13.7 billion), will have an array of 10-gigawatt solar panels spread across 15,000 hectares and will be supported by a 22GWh storage plant. Sun Cable, the Singapore firm behind the project, hopes it can produce up to 20 per cent of the country’s energy requirements.

About 95 per cent of Singapore’s electricity is generated from natural gas, with most coming from imported liquid natural gas (LNG). Singapore’s leaders have said the country will ramp up its solar energy output.
The finer details of who will buy the power on the Singapore end have not been confirmed, but iSwitch, one of Singapore’s top electricity retailers and the country’s largest green retailer, has shown a keen interest.

Andrew Koscharsky, chief commercial officer at iSwitch, said Singapore’s appetite for clean energy    was growing and that the plan was a “win-win” for everyone.
“If you said to me a year ago that Singapore would have 350 megawatts of solar installed by 2020, I would have thought ‘no way in the world’ – but here we are. It’s been achieved,” he said. “Now, the next target is 2,000 megawatts by 2030. This is incredibly ambitious, but projects like Sun Cable are going to help us get there.”....

May 22
BP Smacks Exxon Upside Head With New Green Hydrogen Scheme (can SunCable to Singapore be far behind?)
A couple of the approaches being talked about, make hydrogen in Australia and send it to Singapore or use submarine electrical cable to carry (solar) electricity to Singapore.*

"GRAINS-Wheat futures jump as global production estimates shrink"

From Reuters Africa:
* CBOT wheat nears one-month high
* Corn, soybeans touch one-week lows
* Traders keep eyes on U.S. crop weather (New throughout, adds start of U.S. trading, changes byline/dateline, previous PARIS/SYDNEY)
By Tom Polansek 
CHICAGO, July 8 (Reuters) - U.S. wheat futures jumped on Wednesday on short-covering and concerns about tightening global supply estimates, traders and analysts.
Prices for soft red winter wheat approached a one-month high at the Chicago Board of Trade, while the neighboring corn and soybean markets were mixed.

“Wheat’s the big winner,” said Don Roose, president of broker U.S. Commodities in Iowa....

Three months of Chicago wheat action via FinViz:


September's 517'2 +22'0

December's 523'0 +21'0

Today in Sand: Valuing One Of The Planet's Most Important Resources

Some fond memories when thinking silica.

From the American Geophysical Union's EOS, July 8:

To Protect the World’s Sand, We Need to Know How to Measure It 
New research provides a more accurate model that coastal managers and engineers can use to account for sand transport over time.
Sand is one of the most valuable natural resources in the world, with up to 50 billion metric tons mined each year. 
Credit: rusm/E+/Getty Images
Sand is such a sought-after resource that by volume, the amount we use is second only to water. Sand is crucial for manufacturing cement, glass, and asphalt and even everyday items like paper and toothpaste. And an increasing portion of the 40–50 billion metric tons of sand mined each year comes from the world’s beaches, which are in turn threatened by rising sea levels due to climate change.

The smooth, round grains of quartz in desert sand are useless for many of our sand needs—we require rougher stuff, like the crushed corals and shells that make up the carbonate sands of tropical beaches. That means managing and accounting for this valuable sand will become more critical in the coming years, but according to a recent study published in Scientific Reports, we have been measuring carbonate sand all wrong. The study proposes a new, updated method that takes carbonate sand’s sought-after variety in shape and size into account.

“Our new method will help to estimate more accurately the sediment transport of carbonate sands in tropical environments,” said Ana Vila-Concejo, an associate professor at the University of Sydney School of Geosciences and coauthor of the paper. “This can directly translate into more accurate coastal management of eroding sandy coasts.”

A Fortuitous Collaboration
From her research on sand hydrodynamics, Vila-Concejo long suspected that carbonate sand transport models were inaccurate, but she could never convince her students to tackle the problem of making better-suited models. Then, Amin Riazi, at the time an early-career research assistant with Eastern Mediterranean University, sent her an email out of the blue. “He had exactly the right skills and was interested in pursuing this research,” Vila-Concejo said.

“As I was discussing the topic with Prof. Vila-Concejo, I realized that surprisingly, and contrary to plenty of studies on other sand types, there is a lack of research related to the settling velocity and the drag coefficient of carbonate sands,” said Riazi, now an assistant professor at the University of Cyprus. He traveled to the University of Sydney for a short research stay, and the two got to work on the carbonate sand problem.

Carbonate Sand Is a Drag
Most equations for sediment transport are based on experimental results from smooth silicate sands, making them a poor fit for beaches, where most of the sand is made up of small bits of shell and coral.
Most equations for sediment transport are based on experimental results from smooth silicate sands, making them a poor fit for beaches, where most of the sand is made up of small bits of shell and coral. Because carbonate sands have more irregular shapes, they have larger drag coefficients than desert sand and move more erratically through the water. This drag, in turn, makes individual grains’ settling velocity much more variable, effectively spreading out the sand grains over a wider distance when they are suspended in water....

Previously in sand:
Trouble in Frac Land (SLCA) 
This follows on the news that Carbo Ceramics Inc., with a large exposure to Chesapeake, issued its own going concern warning on November 11.
There was a time when sand was the new new thing. From 2012 into 2014 silica replaced silcon on the lips of the au courant crowd:

SLCA U.S. Silica Holdings, Inc. monthly Stock Chart 

But, as recounted elsewhere (September 22, 2015, immediately before the resurgence):

Signposts: The Bull Market In Sand Is Over   
Ineffable, inconsolable sadness.
...We were on the story from the publicly traded get-go (almost), going back to April 2012's "What the Frack? U.S. Silica Up 24% since Feb. 1 IPO (SLCA)". Followed by "Commodities: "Midwest Sees a Sand Rush"". In 2013 growth was so good that a little Ouroboros turnabout was fair play, "More Natural Gas Needed For Frack Sand Suppliers"
By 2014 they were fine, strapping businesses:
"Sand: The Hot New Investment Opportunity" (SLCA)
State of Sand, 2014
What the Frac: "The Past Year’s Hottest IPO Is… " (EMES; SLCA)
From MoneyBeat:
The hottest initial public offering from 2013 isn’t a cloud technology stock, or a biotech company with a promising cancer drug.

The company behind the top-performing IPO in the past 18 months digs sand.

Through Friday, sand-mining company Emerge Energy Services LP has rallied 462% since its debut on May 8, 2013, for the biggest share-price gain since its IPO among companies that went public last year, according to Dealogic....
Having concluded that oil and gas were just a passing fad, this is what we were posting the month Emerge came public:
The Internet of Things: Huggies App Sends You a Tweet Whenever Your Kid Pees...
The Ethics of Torturing Robots
British Psychologists Bashing British Psychiatrists
Shaman               Witch Doctor
Psychologist            Psychiatrist
I so wish I were kidding.
By January of this year we knew it was ending:
What the Frack: "Good Times Run Out for Sand Producers"
with, maybe a bit of forced jollity in March:
Basic Materials: What's New In the Sand Business? (SLCA; EMES)
But there was nothing new, it's sand.
Great timing eh, posting stupid pictures of shamans and witch doctors when the hottest IPO of the year came out and then later calling the bottom, at...the...bottom, and just a few months before the group started a run to a triple,

Fortunately the stock we've been pitching, NVIDIA also a bit better than tripled but still, doing this stuff out in public can be a little embarrassing.

See also: Equities: "Being fluent at swearing is a sign of healthy verbal ability"--UPDATED" from the same British Psychological Society that supplied the Shaman/Witch Doctor pics.

Or maybe "Feeling Like You're an Expert Can Make You Closed-minded" also from the BPS and which we linked to a month after the Death of Equities Sand post.

May 17, 2019

Sand from Greenland’s Melting Ice Sheet Could Bring in Business
August 10, 2019
What's New In Sand: Breakthrough!!
"A World Built on Sand and Oil"
We too have experienced the allure of sand.
Usually at the beach but on the blog as well.... 
"Inside the deadly world of India’s sand mining mafia"
Sand, more interesting than one might suspect....
The World Is Running Out of Sand (Elon Musk to the rescue!)