• The CPO market has dropped sharply in recent weeks amid mounting concerns over sluggish demand
• We argue that the slide in prices is overdone and is amplified by lack of clarity on key industry events
• We recommend that investors buy into th...
• The USDA’s 1 September stocks report notes tightening balances in corn and wheat, easing in soybeans
• Our calculations reveal a significant decline to 551mbu in 2012/13 end-season corn inventory
• We view any decline in grains prices as tempora...
• Our SCORE indicator shows the Risk seeking event was short-lived; it is now in Risk neutral territory
• We close out all positions in our portfolio and await market direction
• When markets stabilise, we expect silver and sugar to outperform the...
• ETF: Investors go ‘risk on’ with strong inflows to oil and precious-metal funds
• CFTC: The most bullish speculative re-positioning was in energy and precious-metal contracts ...
• Catching the tailwind - We believe there is further upside to commodity prices, even though the complex has already reacted positively to the latest round of quantitative easing (QE3) by the Fed. In the previous two rounds of easing (QE1 and QE2),...
Sugar markets head lower as concerns about production ease
• The market is now poised for a third consecutive year of surplus in 2012/13
• We lower our sugar forecast for 2012 but maintain an appreciating bias into 2013
• ETF: Gold and oil funds see strong inflows; commodity index flow continues uptrend
• CFTC: Copper and precious metals see big increase in bullish sentiment, agriculture a mild reduction...
• US stimulus gives the green light to position for a commodity rally
• Continue to hold COMEX silver and LME copper call-option positions
• Enter long positions on NYMEX WTI, ICE cotton, LME lead and NYMEX palladium
Hold on to long call-option positions on LME copper and COMEX silver
• Close out soybean/corn spread trade as underlying fundamental motives weaken
• We were stopped out on Arabica coffee and raw sugar trades as markets oversold ...
• ETF: Large inflow into agricultural index funds; inflows into precious metals continue
• CFTC: 2.8% increase in commodity complex net spec; speculators most bullish on cocoa...
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The world economy is in transition. Global growth rates are picking up, but transition means elevated risks and volatility.
In terms of global implications, all eyes will be on the US and China, with the US normalising monetary policy and China rebalancing its economy.
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