Commodities took a sharp turn lower in the first week of May, beginning with a silver price collapse from US$50/oz back below US$35/oz – a move in excess of 30%, driven by higher margin requirements and a spectacular unwind of speculative longs. Seeing this, BMI’s Commodities Team focused its attention on Brent crude, upon which… [Read more]
Last week, my colleagues at Business Monitor highlighted potential for cotton to collapse. This view is playing out and there is room for prices to head even lower to support at USc150/lb. This bearish view was initially based on a combination of technical and fundamentals factors. In terms of fundamentals, although the market will remain… [Read more]
Much has been made over the potential impact of recent events in Japan on international rice markets. Given the importance of rice as a staple in Asia and increasing concern over food price inflation in emerging markets, this is of particular relevance. Japan, normally self-sufficient in rice, has seen swathes of coastal farmland devastated by… [Read more]
Commodity markets have bounced further since last week as some of the oversold momentum has continued to unwind. Moreover, equity markets bouncing and the US dollar is weakening against the euro, both of which will be positive commodities on a short-term basis. While my colleagues at Business Monitor see potential for a short-term bounce, and… [Read more]
Yesterday, my colleagues and I wrote about the domestic implications of Japan’s earthquake. Today, we look at some of the more salient external ramifications: Downside Risks For Base Metals… Base metals continue to correct in line with the view our Commodities team presented last week, but the earthquake in Japan has added additional downside pressure… [Read more]
I am pencilling in a correction in Crude Palm Oil (CPO) prices over the coming months, before a resumption of the long-term uptrend. The spectacular rally in CPO prices since mid-2010 has been underpinned by several dynamics. First and foremost, the rally in grain prices since the middle of last year has driven gains. Given… [Read more]
Inflationary pressures are of rising concern across both emerging (EM) and developed (DM) markets and are set to remain a key theme in 2011. While a robust economic recovery (in EM) and loose monetary policy (across the board) have been the primary drivers of this phenomenon, rising commodity prices have also played an important role… [Read more]