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Jun 28, 2024 | 
research.rabobank.com | Carlos Mera |Michael Magdovitz |Paul Joules
The S&P GSCI Agriculture Index declined an astonishing 9.6% MOM, with steep losses across the grain and oilseed complex. Northern Hemisphere harvest pressure, US dollar strength (DXY +1.4% MOM), US-China trade war winds, and signs that Russian wheat yields may not be as bad as initially thought explain recent price action. However, risks still remain, especially since Black Sea rainfall continues to be patchy and La Niña waits around the corner. For softs, price action was mixed.
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May 24, 2024 | 
research.rabobank.com | Carlos Mera |Michael Magdovitz |Paul Joules
The S&P GSCI Agriculture Index increased 1.6% last month. Grain & oilseed prices found strong support as CBOT Wheat (+17%), Soybeans (+5.7%), and Corn (4.8%) all recorded month-on-month gains. Wheat futures are rallying off of dry Black Sea weather, which is curbing yield potential for the world’s cheapest suppliers. Meanwhile, production issues are also prominent for corn in Argentina, Ukraine, and the US (given acreage cuts).
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May 14, 2024 | 
research.rabobank.com | Carlos Mera |Michael Magdovitz |Paul Joules
Rabobank's price outlook based on the USDA's May WASDE.
Wheat – mildly bullish– global stocks seen falling to 9-year low, with Russian output down.
• US 2024/25 wheat production (1858m bu, +46m bu YOY) and ending stocks (766mbu, +78m bu YOY) both rose by slightly less than analyst expectations.
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Apr 26, 2024 | 
research.rabobank.com | Carlos Mera |Michael Magdovitz |Paul Joules
The S&P GSCI Agriculture Index has increased 2% in April, despite US dollar strength (+0.8%). For softs, the monstrous rallies in arabica (+20.4%), robusta (+23.5%), and London cocoa (+18.4%) offset losses in sugar (-14.2%). ICE Robusta rallied as recent and forecast dry weather in Vietnam raised additional concerns on top of already low stocks and the Red Sea crisis. The ICE Arabica rally seems to be largely driven by robusta’s improvement and exacerbated by fund buying.
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Apr 2, 2024 | 
research.rabobank.com | Carlos Mera |Michael Magdovitz |Paul Joules
In March, the S&P GSCI Agriculture Index rose 1.9% MOM. Likely, the index would have moved higher if not for US dollar strength (+0.8% MOM). For grains & oilseeds, most markets found support, with funds covering some of their mammoth net short position. The high probability of a return to La Niña in 2H 2024, the approaching (and usually volatile) US corn planting season, Black Sea escalation, and higher Chinese soy imports provide upside risk.
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Feb 28, 2024 | 
research.rabobank.com | Carlos Mera |Michael Magdovitz |Paul Joules
February marked another month of declines across most agri commodities, with the S&P GSCI Agriculture Index falling 1% MOM. Bearish sentiment is particularly prominent across the G&O space, where Non-Commercials are currently holding a record net short position, having surpassed the previous record held in May 2019. It didn’t take funds long to cover their shorts back then – just six weeks in fact – as delayed US plantings stoked fear back into the market.
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Feb 9, 2024 | 
research.rabobank.com | Carlos Mera |Michael Magdovitz |Paul Joules
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Jan 31, 2024 | 
research.rabobank.com | Carlos Mera |Michael Magdovitz |Paul Joules
2024 kicked off with a pronounced divergence between soft commodities, which averaged an 10% increase, and G&O markets, which declined an average of 3.5%. It’s not a huge surprise: the Red Sea crisis is bearish for grain and oilseed futures, as US and EU producers are being forced to lower prices to compensate for higher freight costs (and the contracts have physical delivery in origin).
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Jan 16, 2024 | 
research.rabobank.com | Michael Magdovitz |Paul Joules
Last Friday the USDA released a catalogue of data: the January WASDE, quarterly grain stocks, and Winter Wheat and Canola Seedings. The releases were largely bearish and confirmed the views held in our 2024 outlook (Buyers sail home on rising supplies) of higher-than-expected production and weaker demand. Consumers who have been disciplined are now being rewarded in terms of lower global G&O prices.
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Jan 9, 2024 | 
research.rabobank.com | Michael Magdovitz |Oscar Tjakra
The flood of global vegetable oil has slowed over recent months, courtesy of historically low prices and record biodiesel demand. Since April 2018, leading demand indicators such as POGO (the Palm Oil-Gas Oil price ratio) and the B-100 FOB Midwest vs on-highway Diesel price ratio have tilted in biodiesel’s favour. Biodiesel’s bargain status has accelerated global consumption of palm oil and soy oil, which account for over half of its feedstock.
