Business Monitor International (BMI)’s Commodities Team believes that La Niña weather patterns are likely to return at the end of 2011. The US National Weather Service warned on September 8 that La Niña, the weather condition that caused volatility in commodity markets at the beginning of 2011, has already returned and should strengthen by the… [Read more]
While soft commodity markets including sugar, cocoa and coffee will all be sensitive to supply threats in the short-to-medium term given that all of these markets are tight by historical standards, I am keeping a particularly close eye on cocoa. On one hand, the West African main crop has made a strong start since October,… [Read more]
This week Mark Schaltuper is joined by Cedric Chehab, Head of Commodities Research at BMI, to discuss the outlook for the commodity complex. With macroeconomic headwinds in the making, how will cyclical commodities perform relative to grains and softs, and what are the risks of gold forming a bubble?
I expect soft commodity markets to continue trading in a volatile fashion over the coming weeks driven chiefly by their own specific supply and demand dynamics, rather than wider macro-developments. My key thoughts are as follows: The cocoa market will likely to remain volatile and I do not rule out continued gains in the coming… [Read more]
Regular readers will know that I have held a cautiously bearish view with regard to London cocoa since early-March. Indeed, at the time, I highlighted that a combination of factors could see cocoa prices move to multi-year trendline support around the GBP1,850/tonne from a level of about GBP2,100/tonne, implying a potential correction of about 15-20%…. [Read more]
The global commodity complex rallied for the most of March, but I question whether this move can turn into a sustained bounce. Indeed, I believe that the rally came on the back of a confluence of short-term factors. However, over the medium term, fundamentals still point towards further weakness for commodities. Given the magnitude of… [Read more]
