André Malraux said that it was necessary to "transform experience into consciousness". Many therefore legitimately thought that COVID 19 would have a lasting impact on people's minds, allowing the emergence of a fundamentally different world "from within". However, looking at the efforts made many players to keep the world of 'before', we can perhaps doubt that those changes will be forthcoming. 

Three weeks after the elections, the US has still not declared a winner. Whatever the outcome, the ongoing legal battle has overshadowed the achievements of a free trade agreement called RECP (Regional Comprehensive Economic Partnership), which may change the existing economic balances. Indeed, fifteen states have decided to come together in a free trade zone around China. Among them are a number of traditional allies of the United States, Japan, South Korea, New Zealand, Australia and ASEAN members. The speed with which this agreement was signed demonstrates the concern of many states about the future of world trade. 

The finely crafted, and expertly negotiated DOHA Round has not withstood the Pandemic and neither the Trump Administration’s efforts to undermine it, as they reject or approve WTO agreements based on whether they suit US interests. For some, trade multilateralism paved the way to future economic turmoil and hardships. 

Interestingly, the Cancun meeting of 2003 sounded the death rattle for direct state export subsidies, most notably in the US. Many African states strongly argued against these export subsidies that were considered very unfair and they achieved a shakeup of the famous boxes. Today we consider that the cotton market is stabilising thanks to the subsidies that states pay to support the cotton market. Indeed, at what price level would the market be without the CCI in India and their MSP program, or without the considerable Chinese state purchases to support prices at the most opportune moment? 

It is reassuring to note that prices are steadily firming, even as a many market analysts are taking on a more bearish tone. After the recent elections, American farmers are starting to realise that carryover stocks are historically very high and will weigh on prices when the new harvest arrives. 

The next WASDE report will have to acknowledge the drop in American, Pakistani and Indian productions to a level more in line with reality. Consumption will no doubt also have to be revised downwards once again to take into account the new lockdown measures that have been imposed throughout Europe and now into the US. 

Until the new President of The US is appointed, the dollar will struggle to recover and could continue to lose ground. It would not be surprising to see it end the year at around 1.20 against the euro if the ongoing battle over the presidency continues beyond December 14th. 

The market could continue its consolidation over the coming weeks as the potentially bearish liquidation of the December 2020 deadline is no longer on the cards.