THE WORLD IS NOT SHORT OF MONEY, NOT SHORT OF CONSUMERS AND NOT SHORT OF GREED AND FEAR.


So, with most investors out of commodities, one would expect the respective commodity S&D’s to play a more important part on their respective values, but one can’t ignore that the inflow we had in the past year could return, especially as other traditional assets may not perform well.


When we look at crude, the supply is still lower than demand. When we look at corn, wheat, soy complex, supply is expected to increase, but weather issues remain a major concern.


With all these short-term events, investors are seeing stock markets falling, the value of most currencies against the dollar falling, expectation of lower general demand and therefore the appetite to invest in many commodities has taken a big hit, including agriculturals.


In the past weeks we had a strong general long liquidation by investors in agri commodities, as much as 36% from December 2021, but almost 45% from the peak in mid-April 2022.


With soaring inflation and higher interest rates, the IMF downgraded world growth again and expect the major economies to show little growth in 2023.


As we are dealing with extraordinary events, there is a vast number of predictions on how economies will perform from now, how long the major economies will take to return to a more normal path and therefore what kind of consumption we will have.


When we look at sugar, we are expecting a minor surplus, but we are yet to see Brazil CS increasing their Agri yields. India is expected to release more sugars into the market, but the market needs it.


The world is not short of money, not short of consumers and not short of greed and fear. The question is on what to invest, for how long, how (long or short) and what are the risks involved.


Commodities have seen a strong set back in value, but are still on average higher than past years. On the other hand, the costs have rising, supply hasn’t necessarily increased much and the world population is growing, demanding more food!


Would many nations take a more long-term view and support stock build-up, just in case of another major supply disruption? Food for thought!


Alberto Peixoto E: albertopeixoto@apcommodities.london T: +44(0) 7570 714 981


9 | ADMISI - The Ghost In The Machine | Q2 Edition 2022


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24