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SIP Nordic – Råvaruguiden – juni 2012

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SIP Nordic - RåvaruguidenRåvaror och Grexit

Det spekuleras vilt i medierna om ett potentiellt Grekiskt utträde ur EU, även kallat Grexit. Det debatteras fram och tillbaka om hur troligt detta scenario är. Frågan jag ställer mig är hur detta kommer påverka råvaror och i synnerhet ädelmetallen guld.

De senaste veckorna har debatten kring den grekiska krisen eskalerat igen. Valet för några veckor sedan, där politikerna misslyckades att sätta ihop en regering, ökade oroligheten för att Grekland inte kommer att kunna fullfölja de budgetåtaganden som den förra regeringen klubbat igenom. Nyvalet i mitten av juni kommer att vara mycket viktigt, inte enbart för den europeiska ekonomin utan också för den framtida utvecklingen för råvaror.

Grexit - Grekland lämnar euron?Man kan lugnt säga att ECB har en tuff sommar framför sig med en potentiell Grexit men också sämre utsikter för bland annat Spanien och Italien.

‘Att ECB måste trycka nya pengar är nog inte en dålig gissning, något som kommer att kunna straffa euron och som i sin tur kommer att påverka råvarorna.

En svagare euro kontra dollarna har historiskt sett en negativ påverkan på bland annat ädelmetallerna guld och silver. Många kommer säkert ihåg förra årets skriverier om USAs dåliga ekonomi som fick dollarna att falla och guldet att klättra upp till nivåer kring 1900$/oz. Nu ser vi det omvända.

Den europeiska krisen har till och med fått de allra mest pessimistiska att tro på en EUR/USD kurs kring 1.00 (nu kring 1.25). Det är alltså ingen dålig gissning att guld kan falla om EUR/USD också faller. Som bilden nedan visar har Guld haft en stark koppling till EUR/USD den senaste tiden.

Diagram över valutorna Euro/USD vs guld

Detta grundar sig i att om dollarn blir starkare jämfört med andra valutor blir guld dyrt att investera i för utländska investerare. Självklart är det så att är många fler faktorer än dollarkursen som styr guldpriset men jag kommer i alla fall hålla koll på kursen den närmaste tiden.

Råvaror – Energi

Brent olja

Brent - Oljeprisets utveckling - November 2010 till maj 2012

  • Brentoljan är nu för första gången i år nere på negativa siffror. Drygt 3% ned för året.
  • Under maj månad har Brent-oljan tappat nästan 13%.
  • En viktig faktor är den stärkta dollarn kontra andra valutor vilket pressar priset på oljan.
  • Rekordhöga lagernivåer driver ned priset. Oroligheterna i mellanöstern som drev upp oljepriset i början av året verkar nu vara utraderade.
  • Säljare av olja blir fler och fler vilket i kombination av en stärkt dollar och höga lagernivåer kan tala för ett fortsatt fall i oljepriset. $100 är en viktig nivå.

Framtida oljepris - Brent

Naturgas

Prisutveckling på naturas från november 2010 till maj 2012

  • Naturgas fortsätter att stiga. Under maj månad har naturgas stigit ytterligare 5%.
  • Under april-maj har priset på naturgas ökat med nästan 14%.
  • För året är dock naturgas ned drygt 20%.
  • Lagren av naturgas väntas öka under 2012 med 26 %.
  • Trots stora naturgaslager ökar priset på naturgas vilket dels kan förklaras av att temperaturen i USA spås ligga under det normala i juni och juli.

Framtida naturgaspris - Prognoser sammanställda av Bloomberg

Råvaror – Metaller

Guld

Prisutveckling på guld från november 2010 till maj 2012.

  • Guld fortsätter att tappa under maj. Under maj månad är guld ned ca. 6%.
  • Sedan i slutet av februari har guld tappat drygt 12% och ligger nu +-0 för året.
  • Reuters publicerade i april sin guldundersökning. Där förutspås en guldkurs som fluktuerar i ett stort spann men som ligger något över dagens nivåer vid årets slut.
  • En starkare dollar kontra andra valutor, med euron i spetsen, bidrar till kräftgången i guldpriset.
  • Olika centralbanker med Mexiko, Ryssland och Sydkorea i spetsen köpte under 2011/2012 455 ton guld. Det största inköpet sedan 1964.

Framtida guldpris - Prognos den maj 2012

Silver

Silverpriset, utveckling sedan november 2010

  • Silvers kraftiga uppgång under jan-feb raderades under maj månad.
  • Efter en nedgång på över 10% i maj är nu silver +-0 för året.
  • Silverproduktionen väntas öka 4% under 2012.
  • Överskottet av silver väntas i slutet av 2012 bli smått otroliga 5060 ton.
  • Den europiska kreditkrisen i kombination med rädsla för minskad kinesisk tillväxt bidrar till de negativa sentimenten i silver.
  • Att dollarn stärkts mot euron bidrar även till den fallande trenden.

Framtida silverpris - Analytiker i maj 2012

Platina

Utveckling för pris på platina - 2010 till 2012

  • Likt de andra ädelmetallerna är platina ned under maj månad. Nedgången stannade vid knappa 11%.
  • För året är platina upp knappa 2%.
  • Platina fortsätter at handlas till en billigare kurs än guld. Analytikerna spår dock att platina kommer vara den dyrare av de två vid slutet av året.
  • Den starka dollarn sätter även här käpparna i hjulet på platinapriset.
  • Efter strejken vid Rustenburggruvan i Sydafrika ökar nu lagren av platina samtidigt som efterfrågan minskar.

Framtida pris på platina

Koppar

Kopparpriset - Utveckling 2010 - 2012

  • Kan tyckas tjatigt men även koppar tappade under maj månad. Nedgången med nästan 14% raderar ut hela årets uppgång.
  • Kopparinventarierna ligger på låga nivåer och lagren av koppar räcker endast i tre veckor.
  • Samma siffra väntas sjunka till 2.8 under 2013 vilket kan trycka upp kopparpriset ytterligare.
  • Den största risken ligger i att Kina, med 40% av världskonsumtionen, står inför en minskande tillväxt.

Framtida kopparpris - Prognoser från analytiker

Zink

Utveckling på zinkpriset 2010 - 2012

  • Den tunga månaden för metaller gäller även för zink. Zink är under maj månad ned ca. 8%. För året är zink upp drygt 3,5%.
  • Zinklagrena är mer än fulla vilket kan komma att pressa priset ytterligare.
  • Kina är återigen en viktig bricka i spelet. En minskad tillväxt i Kina kommer troligtvis ha en betydande effekt på zinkpriset. Kina står för 43% av världens konsumtion.
  • Det uppskattas att nuvarande zinktillgång skulle räcka 9,1 veckor, 2,6 veckor längre än 2011.

Framtida zinkpris - Prognoser

Nickel

Nickelprisets utveckling år 2010 till 2012

  • Nickel presterade sämst av alla basmetaller under 2011.
  • Nickel fortsätter sin kräftgång under 2012. I maj backade nickel över 8% och är för året ned nästan 9%.
  • Nickelmarknaden är mättad med ökande lager.
  • Produktionen väntas överstiga konsumtionen under 2012. Mängden tillgänglig nickel väntas dock minska under 2013 och i kombination med ett bättre marknadsläge spår analytikerna ett högre nickelpris under 2013.
  • Nuvarande nickelnivåer räcker för 9,1 veckors konsumtion. Ca en vecka högre än 2011.

Framtida nickelpris - Konsensusprognoser

Råvaror – Jordbruk

Socker

Utveckling på sockerpriset under 1,5 år

  • Socker startade året starkt, till följd av dåliga och torra väderförhållandena i världens största sockerproducerande land, Brasilien.
  • Sedan mars faller dock socker kraftigt. Indien producerar och exporterar socker i hög fart vilket resulterat i att socker under mars-maj tappat nästan 24%.
  • I Indien, som öppnat för obegränsad export, spås rekordskördar.
  • Genomsnittspositionen är fortsatt lång men säljarna börjar nu bli fler och fler.

Framtida sockerpriser - Konsensusprognoser

Bomull

Prisutveckling på bomull - Diagram över 2010 till 2012

  • Bomull är för året ned ca 26% där merparten av nedgången kom i maj. I maj föll bomullspriset med närmare 20%.
  • Rekordexport av bomull från Indien pressar priset.
  • Trots att bomullspriset fallit kraftigt under 2012 är det fortfarande nästan dubbelt så högt som priset för några år sedan. Fallhöjden är således stor.

Prognoser - Framtida pris på bomull

Majs

Diagram - Prisutveckling på majs 2010 - 2012

  • Majspriset är under maj månad ned över 14% vilket också motsvarar årsnedgpngen i majs.
  • Den kommande skörden vänats vara av mycket god kvalitet.
  • För att den negativa trenden i majs ska brytas krävs fortsatt torka i USA. Regnväder är dock att vänta under sommamånaderna.
  • Statistik som visar USA-exporten av majs ökar kraftigt. Kina importerar nu rekordstora mängder majs.

Prognoser på framtida majspris - Maj 2012

Vete

Prisutveckling på vete - 2010 - 2012

  • Vetepriset är under maj månad upp nästan 7% till följd av torra väderförhållanden i USA, Kina och Europa.
  • För året är dock vete ned dryga 1%.
  • Spekulanterna har under maj månad skiftat tro. Antalet korta positioner har minskat kraftigt.

Framtida pris på vete - Maj 2012

Apelsinjuice

  • Priset på apelsinjuice fortsätter att falla som en sten. Under maj månad är priset apelsinjuice ned 26%.
  • Det finns fortfarande fallhöjd i kursen då apelsinjuice har stigit med nästan 70 % sedan 2009.
  • Skörden I Florida är mycket god till följd av frostfria väderförhållanden. Samtidigt visar rapporter att efterfrågan på apelsinjuice minskar vilken kyler av priset.

Prisutveckling på apelsinjuice (FCOJ)

[box]Denna uppdatering är producerat av SIP Nordic och publiceras i samarbete och med tillstånd på Råvarumarknaden.se[/box]

Ansvarsbegränsning

Detta produktblad utgör endast marknadsföring och har sammanställts av SIP Nordic Fondkommission AB.

Innehållet ger inte fullständig information avseende det finansiella instrumentet. Investerare uppmanas att del av prospekt och slutliga villkor, vilka finns tillgängliga på: www.rbsbank.se/markets, innan ett investeringsbeslut tas.

Förekommande exempel är simulerade och baseras på SIP Nordics egna beräkningar och antaganden, en person som använder andra data eller antaganden kan nå andra resultat. Administrativa avgifter och transaktionsavgifter påverkar den faktiska avkastningen.

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Analys

Metals price forecast: Lower Before Higher

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SEB - analysbrev på råvaror

Lower before higher

SEB - Prognoser på råvaror - Commodity

The world is slowing down along with fiscal and monetary tightening. The rapid rise in interest rates this year will work with a lag so the slowdown in the real economy is likely to continue. We expect metals prices to ease along with that. The continued deterioration in the Chinese property market is likely structural with growth shifting towards higher value sectors including green energy and EVs. Chinese credit expansion has started. Stronger demand for metals like copper, nickel and aluminium is likely to emerge in H2-23. Strong prices for metals over the coming decade due to sub-par capex spending over the past decade is likely.

Bjarne Schieldrop, Chief analyst commodities at SEB
Bjarne Schieldrop, Chief analyst commodities, SEB

Weakening macro and weakening demand. The world is now in the grip of a tightening craze amid inflation panic which was the result of the stimulus boom ignited by Covid-19 panic. The US expanded its M2 monetary base by 30% of GDP during the stimulus boom. Donald Trump earlier clamped down on immigration from Mexico/Latin America. Rampant consumer spending on capital goods together with an ultra-tight labor market then led to intense inflation pressure in the US. But also, in many other countries which also stimulated too much. The US is ahead of the curve with respect to interest rate hikes. The USD has rallied, forcing many central banks around the world to lift rates to defend their currencies as well as fighting their own inflationary pressures. The Japanese central bank has refrained from doing so and has instead intervened in the yen currency market for the first time since 1998. The year 2022 will likely be the worst selloff in global government bonds since 1949 as interest rates rise rapidly from very low levels. This is taking place following a decade where the world has been gorging on ultra-cheap debt. There is clearly a risk that something will break apart somewhere in the financial system as the world gallops through this extreme roller coaster ride of stimulus and tightening. On top of this we have and energy crisis in Europe where natural gas prices for year 2023 currently is priced at 700% of normal levels. War in Ukraine, risk for the use of nuclear weapons, an enduring cool-down of the Chinese property market and continued lock-downs in China due to Covid-19 is adding plenty of uncertain elements.

Downside price risks for metals over the coming 6-9 months. The significant rise in rates around the world will work with a lag. There can be up to a 12-month lag from rates starts to rise to when they take real effect. Continued economic cool-down in the economy is thus likely. Chinese politicians seem unlikely to run yet another round of property market-based stimulus. As such there are clearly downside risks to global economic growth and industrial metals prices over the coming 6 months.

China may be a “White Swan Event” in H2-23 onward. LME’s China seminar in London on Monday 24 October this year was very interesting. The brightest spot in our view was Jinny Yang, the Chief China economist at ICBC Standard Bank. She stated that China may turn out to be a “white swan event” in H2-2023. Further that the Chinese economy now is on a decade long type of transition period. Away from property focused growth. With a shift instead to technology and innovation, telecoms and energy transition, consumer demand side economy and higher value and more advanced sectors. The property market will be a fading sector with respect to growth. Chinese politicians are fully committed to the energy transition. No slowdown in there. Credit expansion has already started. The real effect of that will emerge in H2-23. The new growth focus will be different from before. But it will still imply lots of metals like aluminium, copper, nickel, zinc, cobalt, manganese, and other special metals. There will be less copper for pipes and wiring for housing but there will be more copper for EVs, Solar power, Wind power and power networks etc.

Copper: Struggling supply from Chile, rising supply from Africa while Russian exports keeps flowing to market. The Chinese housing market normally accounts for 20% of global copper demand. So, slowing Chinese housing market is bad for copper. Russian exports keep flowing to SE Asia where it is re-exported. Good supply growth is expected from Africa in 2023. Supply from Chile is struggling with falling ore grades, political headwinds, and mining strikes. Demand is projected to boom over the coming decades while investments in new mines have been sub-par over the past decade. So strong prices in the medium to longer term. But in the short-term the negative demand forces will likely have the upper hand.

Nickel: Tight high-quality nickel market but surplus for low-quality nickel. There is currently a plentiful supply of low-grade nickel with weak stainless-steel demand and strong demand for high quality nickel for EV batteries. The result is a current USD 5-6000/ton price premium for high-quality vs. low-quality nickel. High-quality LME grade nickel now only accounts for 25% of the global nickel market. Over the coming decade there will be strong demand growth for high-quality nickel for EV batteries, but high-quality NiSO4 will take center stage. The price of high-quality nickel over the coming decade will depend on how quickly the world can ramp up low-grade to high-grade conversion capacity.

Aluminium: Russian production and exports keeps flowing at normal pace to the market through different routes. Supply from the western world set to expand by 1.3 m ton pa in 2023, the biggest expansion in a decade. Demand is projected to grow strongly over the decade to come with energy transition and EVs being strong sources of demand. Western premiums likely to stay elevated versus Asian premiums to attract metal. Increasing focus on low carbon aluminium. But weakness before strength.

SEB commodities price forecast:

SEB commodities price forecast

Chinese credit cycle vs industrial metals. Chinese credit expansion has already started.

Chinese credit cycle vs industrial metals
Source: SEB calculations, data from Blberg

This report has been compiled by SEB´s Commodity Research, a division within Skandinaviska Enskilda Banken AB (publ) (”SEB”), to provide background information only.

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Analys

Europe’s energy policy unravels a potential advantage for US energy over Europe

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WisdomTree
WidsomTree

The clock is ticking for Europe to shield its economy amidst the current energy crisis. The cost of electricity across the European bloc is nearly 10 times the 10-year average in response to Russia cutting back natural gas supplies in retaliation to sanctions. There has been a substantial increase in the share of supply of Liquidifies Natural Gas (LNG) and alternative suppliers as a direct replacement of waning Russian gas supply.

Figure 1: Natural gas flows in the European market, first half 2022 versus first half 2021

Karta hur importen av naturgas till Europa har förändrats
Source: Bruegel, WisdomTree as of 6 September 2022. Please note: Arrows width indicates size of 2022 flow.

European leaders are racing to come up with a plan on energy intervention in the power markets. One of the measures being touted is imposing an energy windfall tax on oil and gas profits to help households and businesses survive this upcoming winter season. The plan is to re-channel these unexpected profits from the energy sector to help domestic consumers and companies pay these high bills. The windfall tax on the oil and gas companies should be treated as a “solidarity contribution,” according to European Commission (EC) President, Ursula von der Leyen.

Imposing a windfall tax on those profiting from the war

A windfall tax would impose a levy on the revenues generated by non-gas producing companies when market prices exceed €200 per megawatt hour (Mwh) and redistribute excess revenues to vulnerable companies and households. There has been greater consensus among other European Union (EU) countries on the windfall tax compared to other parts of the European Commission’s 5-point plan. This includes – setting a price cap on Russian gas, a mandatory reduction in peak electricity demand, funding for ailing utility companies, a windfall tax on fossil fuel companies and changes to collateral requirements for electricity companies. The EC’s plan will need to meet the approval of the bloc before being enforced. The most controversial issue remains the Russian price cap – aimed at penalising Russia for weaponising energy.

Coordinated energy policy needed despite different energy mix across EU bloc

There are major differences between member states based on those that rely on coal, nuclear or renewable power owing to which imposing a one energy policy will be challenging. Austria, Hungary, and Slovakia, known to import large amounts of Russian gas are against the price cap on Russian gas. On the other hand, a number of  EU countries including France, Italy, and Poland, support a cap, but argue it should apply to all imported forms of the fuel, including LNG. Germany is undecided but fears the disagreements on the price caps risk spoiling EU unity. Spain, a big generator of wind and solar power was quick to draw criticism of the proposed €200/Mwh as it does not correspond to the real costs and fails to support electrification and the deployment of renewables.

In the US, various Senators including Senate Finance Chair Ron Wyden, have proposed legislation that would double the tax rate of large oil and gas companies excess profits. However, given the current political climate it seems increasingly unlikely that these proposals would gain any traction in Congress.

Europe’s energy policy likely to put a strain on capex in the near term

Since the oil price plunge from 2014 to 2016 alongside climate change awareness and Environmental Social and Governance (ESG) mandates, the energy sector saw a sharp decline in capital expenditure (capex). Since then, capex in the global energy sector has failed to attain the levels last seen at the peak in 2014. While capex trends in Europe’s energy sector had begun to outpace that of the US, driven mainly by a rise in the share of spending on clean energy, we believe the impending energy crisis and energy policy including the national windfall levies in Europe are likely to disincentivise capex in Europe compared to the US over the medium term. High prices are encouraging several countries to step up fossil fuel investment, as they seek to secure and diversify their sources of supply.

Source: Bloomberg, WisdomTree as of 31 August 2022.

The divergent energy policies and prevalent supply situations in the US and Europe opens up a potential opportunity in the energy sector. The energy sector has been the unique bright spot in global equity markets in 2022 posting the strongest earnings results in H1 2022. Despite its strong price performance, the US energy sector trades at a price to earnings (P/E) ratio of 8x and has a dividend yield of 3%. In September 2008, the energy sector had a 12.5% weight in the S&P 500 and was the fourth largest sector by market capitalisation in the world’s largest economy and equity market. Fast forward to today, the energy sector accounts for only 4% of the S&P 500 Index. While the future trajectory is greener, the world has come to terms with the fact that we will require oil and gas in the interim in order to fulfil our energy requirements. Investment is increasing in all parts of the energy sector, but the main boost in recent years has come from the power sector – mainly in renewables and grids – and from increased spending on end-use efficiency. As Europe plans to reduce its reliance on Russian energy supply, it will become more reliant on US LNG imports. This should fuel further investment in the US energy sector in the interim.

Aneeka Gupta, Director, Macroeconomic Research, WisdomTree

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Analys

Agricultural commodities could offer a hedge against inflation

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WisdomTree
WidsomTree

Agricultural commodity prices have been buoyed higher by rising grain and oilseed prices. At a time, when global equities have sold off by nearly 13.88% amidst soaring inflation and tightening liquidity conditions, agricultural commodities are up 26.8%. There are a plethora of supply side issues emanating from the war that are likely to continue to drive prices higher – the rise of protectionism, higher fertiliser costs, changing biofuel mandates and adverse weather conditions to name a few. The Russia-Ukraine war has had ripple effects from disrupting supply chains to raising fertiliser costs.

Rising protectionism buoys agricultural commodities higher

The war-related disruptions have also given rise to protectionism. To cite a few examples in 2022– India, the world’s third largest wheat producer, announced it would restrict wheat exports to manage domestic supplies of the grain, which led to a sharp rise in wheat prices. Indonesia also announced an export ban on palm oil on April 28, but the ban was lifted on May 19 after hundreds of farmers rallied to protest the move. In a tight oil-seeds markets, the initial announcement led soybean oil, an alternative to palm oil, sharply higher.

Source: WisdomTree as of 7 June 2022

Higher biofuel blending mandates to bolster demand for corn and soybean oil

Changes in the biofuel blending mandates are also poised to increase demand for agricultural commodities. The US is home to the world’s largest biofuel market. The Biden administration is ordering refiners to boost the use of biofuels such as corn-based ethanol. The US Environmental Protection Agency (EPA) is requiring refiners to mix 20.63 billion gallons of renewable fuels into gasoline and diesel this year, marking a 9.5% increase over last year’s target. This will put pressure on refiners to blend more biofuel into their gasoline production this year, resulting in a net positive impact on the biofuels industry. Grains such as corn stand to benefit owing to their high starch content and relatively easy conversion to ethanol. Amidst waning stockpiles of diesel, Brazil is also considering increasing the biodiesel blend to 15% from 10% (i.e. the amount of soybean oil blended into trucking fuel). This has the potential to bolster demand for soybeans at a time when soybeans are already in short supply due to droughts in South America and US plantings trail last year’s pace.

Rising fertiliser costs are weakening demand, in turn lowering yields

The Russia-Ukraine conflict has caused disruptions in fertiliser production and material price increases, which has put farmer margins and agricultural yields at risk elsewhere, driving the prices of most agricultural commodities higher. Russia and Ukraine account for a significant share of the global fertiliser trade. Russia produces 9% of global nitrogen fertiliser, 10% of global phosphate fertiliser, and 20% of global potash fertiliser. It exports more than two thirds of its production of each product. Belarus produces an additional 17% of global potash and exports most of it.

Owing to its high soil quality, Argentina tends to use less fertilisers, but Brazil (the world’s largest importer of fertilisers) of which 85% of its needs are imported, is likely to feel the impact more. Russia alone accounts for 25% of Brazil’s total fertiliser imports. Farmers can also plant more soybeans, which require less fertilisers than corn. The US and global corn balance are set to continue to tighten, which suggests that the current high price environment is set to linger. The high prices and low availability of fertilisers is making farmers reduce usage and is also resulting in lower fertiliser prices similar to the trend witnessed back in 2008.

Ammonia prices
Source: Bloomberg, WisdomTree as of 27 May 2022.

Speculative positioning garnering momentum among agricultural commodities 

According to data from the Commodity Futures Trading Commission (CFTC), net speculative positioning in agricultural commodities has risen considerably since the covid pandemic. Tighter supply coupled with stockpiling by national governments concerned about food security has led to a rise in agricultural commodity prices. Not only has net speculative positioning on agricultural commodities risen versus its own history but also in comparison to other commodity subsectors, as illustrated in the chart below:

Speculative positions
Source: WisdomTree, CFTC, Bloomberg as of 25 May 2022.

Adverse weather conditions impact agricultural commodities

El Niño and La Niña are the warm and cool phases of a recurring climate pattern across the tropical Pacific—the El Niño-Southern Oscillation, or “ENSO” for short. The pattern shifts back and forth irregularly every two to seven years, and each phase triggers predictable disruptions of temperature, precipitation. The current La Niña has been around since October 2021. It has been responsible for the South American droughts, milder weather in Southern parts of US and heavy rainfalls across the Pacific Northwest. There is a 51% chance La Niña could continue into the December to February period, with those odds down from last month’s forecast of 58% according to the US climate prediction centre. The waters across the equatorial Pacific Ocean are expected to stay cool or be close to normal between June and September, which means the influence on weather patterns won’t be enough to disrupt tropical storms and hurricanes in the Atlantic.  

Conclusion

Agricultural commodities have posted a strong performance in 2022. Yet there remain plenty of factors that could drive the performance of this commodity subsector even higher. Agricultural commodities are unique owing to their high dependence on weather conditions that make them volatile but also offer diversification benefits.

Aneeka Gupta, Director, Macroeconomic Research, WisdomTree

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