Q1
EDITORS NOTE Q1 EDITION
Sugar prices have reached lofty levels to start the year, despite what appears to be a less challenging production environment, we take a closer look at the supply and demand outlook dynamics.
2023
War, Shipping, Ghost Ships, Sanctions, Gold, Central Banks, Liquidity, Inflation, ESG, Greenwashing, Green hushing, Sugar, Grains, Oilseeds, Commodity Options, Skew.
Welcome to the Q1 edition of the Ghost In The Machine, as the first anniversary of the Russian invasion of Ukraine has passed, and an end to the tragic and devastating war does not appear to be in sight.
Western governments have sought to impose onerous sanctions on trade with Russia, above all on oil and gas exports. But as is often the case, efforts to circumvent sanctions tend to proliferate, in this case, this has seen the emergence of a fleet of Russian ‘ghost ships’.
US wheat exports have been in decline for decades, but could production be increased to help fill gaps due to lower Black Sea output?
Central bank gold purchases soared in 2022, but will this continue in 2023, and what factors might sustain their demand?
ESG investment products had a torrid year in 2022, and while a good many column inches have been devoted to ‘greenwashing’, this is now giving way to ‘green hushing’, referring to companies deliberately underreporting their sustainable practices.
There has been a persistent upside skew to the pricing of grains and oilseeds options since 2007, ostensibly flying in the face of the ‘efficient market hypothesis’, so what factors might be in play to drive this skew?
Markets have been in a tussle with major central banks on the outlook for inflation and what this implies in terms of their respective ‘terminal rates’ since mid-2022, but risk asset appetite has often appeared to be at odds with upward adjustments to rate expectations. A closer look at the fluctuations in the balance sheets of the BoJ and PBoC, rather than those of the Fed and ECB appears to be necessary.
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2 | ADMISI - The Ghost In The Machine | Q1 Edition 2023 THE GHOST IN THE MACHINE
EDITORS IN CHIEF Eddie Tofpik
E:
eddie.tofpik@
admisi.com Marc Ostwald
E:
marc.ostwald@admisi.com
PRODUCTION & CIRCULATION CREATIVE DESIGN Alfred Michelin
MARKETING Alfred Michelin
Simrat Kaur Sounthe
ADM CONTRIBUTORS Alan Bush
Eddie Tofpik Dominic Enston Howard Jenkins Marc Ostwald Mark Soderberg
EXTERNAL CONTRIBUTORS Alberto Peixoto Erik Norland
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