WASDE report to guide volatile grain markets
Head of Commodity Strategy
Global wheat prices have jumped during the past couple of months as the outlook for production in Europe, Australia, and the Black Sea region continued to deteriorate. Wheat, corn, and rapeseed production in these major production centers have been hard hit by extreme heat and lack of rain.
In Denmark, the warmest and driest summer since records began in 1874 has led to a 40% drop in output.
Chinese tariffs on US soybean imports, a recent worsening – from a strong base – of US crop conditions, and the aforementioned weather woes around the world have left the market desperate for solid data to provide some further price guidance. Later today at 18:00 CET, the US Department of Agriculture will release its monthly “World Agriculture Supply & Demand” report which provides the market data on yield, production, and stocks of the three major crops. Being the first report of the season to include field surveys of US crops, the August report traditionally tends to yield some wide price swings.
Latest Market Insights
Quarterly Outlook Q3 2022: The Runaway Train
- Winter is coming to the financial markets as central banks are tightening their grip. How spring will look is still a question.
European energy crisis: it will get worse before it gets betterThe winter in Europe will be tough, but whether the result is political chaos or sustainable, innovative solutions is still undecided.
A difficult and volatile quarter awaitsAs the year draws to an end, commodities continue to be at centre stage of the world with growth pockets political uncertainty.
The bright side: crises drive innovationThe positive spin on crises is that they come with solutions. It is worrisome that deglobalisation may be a response to this crisis.
Green transformation in China: renewable energy and beyondGoing green, China needs to span numerous energy sources to ensure stability, as every source comes with a challenge.
Asia: Intermittent solutions, but a faster renewable adoption curveAsian energy supply is being squeezed. This and the adoption of renewables may change the investment sentiment in the region.
FX: A Fed thaw needed to deliver a sustained USD turn lowerThe US Dollar can keep momentum when the Federal Reserve continues to tighten, leaving the rest to play to their drum.
Autumn can become ugly for equities and bond holders. Comfort for Dollar longsTechnical analysis suggests that equities could face a tough Q4 as could fixed income. US Dollar positions could provide some upside.
The next stock market sector to watch, with stocks going nuclearAs the world scrambles to find affordable, sustainable energy, nuclear is getting attention from politicians and investors alike.
The crypto space is getting cold when the hype disappearsCryptocurrencies face a winter of their own as retail investors and governments are asking tough questions.