Global Commodities Strategy

  • A decisive push above USD19,000/tonne by nickel prices illustrates renewed impetus for H114 rally and USD22,000/tonne looks attainable in the coming weeks. We continue to forecast weakness in H214 as we expect Indonesia's incoming government to water down the country's nickel ore export ban.

  • Gold and silver prices will remain choppy in Q214 due to ongoing geopolitical tension in eastern Ukraine. Prices will trend lower in H214 and we expect gold to move below USD1,200/oz before the end of the year.

  • We expect increasing divergence in the price performance of different industrials over the next 12 months. We are most bearish towards iron ore and copper and in contrast, expect lead and tin to outperform.

  • Brent crude prices will edge lower in the coming months as Ukraine-Russia tensions fail to restrict oil supply and shipments from Libya moderately improve. USD100/bbl will provide a floor to prices.

  • We expect wheat prices to outperform the rest of the grains complex over the coming months, due to relatively poor US soil conditions and comparative market tightness.

  • We generally expect softs prices to average higher in 2014 than 2013, due to a combination of poor weather in key growing areas and strengthening global demand.

  • We believe that coffee is the only soft that will see lower average prices in 2018 than in 2014.

Into A New Range
Three-Month LME Nickel, USD/tonne (Weekly, RSI Below)
  • A decisive push above USD19,000/tonne by nickel prices illustrates renewed impetus for H114 rally and USD22,000/tonne looks attainable in the coming weeks. We continue to forecast weakness in H214 as we expect Indonesia's incoming government to water down the country's nickel ore export ban.

  • Gold and silver prices will remain choppy in Q214 due to ongoing geopolitical tension in eastern Ukraine. Prices will trend lower in H214 and we expect gold to move below USD1,200/oz before the end of the year.

  • We expect increasing divergence in the price performance of different industrials over the next 12 months. We are most bearish towards iron ore and copper and in contrast, expect lead and tin to outperform.

  • Brent crude prices will edge lower in the coming months as Ukraine-Russia tensions fail to restrict oil supply and shipments from Libya moderately improve. USD100/bbl will provide a floor to prices.

  • We expect wheat prices to outperform the rest of the grains complex over the coming months, due to relatively poor US soil conditions and comparative market tightness.

  • We generally expect softs prices to average higher in 2014 than 2013, due to a combination of poor weather in key growing areas and strengthening global demand.

  • We believe that coffee is the only soft that will see lower average prices in 2018 than in 2014.

Into A New Range
Three-Month LME Nickel, USD/tonne (Weekly, RSI Below)
Global Commodities Strategy
Entry Date Entry Level Gain/(Loss) Rationale
AGRICULTURE
- - - - -
ENERGY
- - - - -
METALS
Bearish Sept 2014 LME copper 30-Apr-2014 6,635 -0.15% Market to loosen as Chinese import demand growth slows and global refined production picks up.
Source: BMI, Bloomberg

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This article is tagged to:
Sector: Commodities, Country Risk
Geography: Global, Vietnam, China, Philippines
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