vw EDITORS NOTE


THE GHOST IN THE MACHINE


EDITORS IN CHIEF Eddie Tofpik


E: eddie.tofpik@admisi.com Marc Ostwald


E: marc.ostwald@admisi.com


PRODUCTION & CIRCULATION


Energy, copper, soybeans, sugar and IMO2020


Welcome to the December 2018 edition of the Ghost In The Machine, which again looks at a very broad range of topics, with energy, copper, soybeans and sugar the focal points in terms of commodities, as well as Germany, China’s shadow banking system, the power of social media, outlooks for 2019, and more on IMO2020 from a legal and regulatory perspective.


As the sun sets on the Merkel era in Germany, we take look at the challenges the country faces, both economically and structurally. The Oil market’s steep fall has caught many by surprise, a closer look at its impact on positioning suggests some respite may not be too far off. The big default on the NASDAQ power markets opens up a number of questions about the post-GFC shift to Central Counterparty Clearing Houses (CCP), above all in relation to capital adequacy. We delve into the complex world of China’s shadow banking system, above all commodity secured financing, with specific focus on copper.


Commercial players often bemoan the role of commodity funds, but they are now an integral part in most commodity markets. The furore over the ban imposed on the Iceland Orangutan TV advert is a reminder of the power of social media in broad terms, but also in commodity market price formation. As 2019 approaches, the Fed policy outlook is starting to shift, and the year ahead may, above all be transformational. Are sugar markets on the turn after a difficult couple of years? Soybean trade has been heavily dominated by China/US trade tensions, but a broader perspective is needed in terms of the medium-term outlook.


Finally, on behalf of all the editorial team and all at ADM ISI, Season’s Greetings and the best wishes for a prosperous 2019 to all our readers.


Simrat Kaur Sounthe


CREATIVE DESIGN Simrat Kaur Sounthe


ADM CONTRIBUTORS Alan Bush Andy Ash


Eddie Tofpik


Howard Jenkins Lauren Judd Marc Ostwald


Rohan Ziegelaar


EXTERNAL CONTRIBUTORS Alberto Peixoto Beth Bradley Blu Putnam


Terry Roggensack Wole Olufunwa


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2 | ADMISI - The Ghost In The Machine | November/December 2018


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