corn news

Summary:  The Crimea bridge blast last weekend destroyed a key supply route for Moscow’s forces in southern Ukraine. Putin was quick to retaliate by raining missiles over Kyiv and other cities after condemning the act as terrorism done by Ukrainian special services. This places the UN brokered grain deal in jeopardy with negotiations taking place now to extend it by a year. Elsewhere, OPEC+ cut output by 2 million barrels per day despite Western nations protests. The Crimea bridge blast last weekend destroyed a key supply route for Moscow’s forces in southern Ukraine. Putin was quick to retaliate by raining missiles over Kyiv and other cities after condemning the act as terrorism done by Ukrainian special services. He did not spare the port of Odesa, which is considered one of the key grain export ports that Russia has agreed to allow normal export operations to continue via the Black Sea. The bombings has continued for over a week now with central Kyiv being hit by kamikaze drones early yesterday while heavy fighting is still happening at the war front in southeastern Ukraine.Escalating tensions between Russia and Ukraine might see potential risk on grain supply. Prices in wheat (ZWZ2) and corn (ZCZ2) have gained as much as 7.5% and 3.3% respectively after the Kyiv bombings even though these moves look small compared to the ones we saw in the earlier part of this year. To provide some numbers, Ukraine is currently one of the world’s leading exporter of grain. We have the breakdown below:Percentage of global exportsSunflower oil – 46%  Corn – 12%   Wheat – 9% Rapeseed – 20%Barley – 17%UN brokered Grain DealEven though there is an existing UN-brokered deal to allow Ukraine to export grain via the Black Sea, this would expire in November and with tensions escalating between the two nations, there is a risk that this will not be extended a further year. The last time grain exports ceased due to the Russian invasion saw grain prices skyrocket as much as 60%. The market consensus is that it currently expects that the deal would be extended after some changes to the terms – primarily allowing a Russian pipeline to reopen to transport its ammonia fertilizer to Ukraine’s Odessa port for shipment.  However, the move to boost Russia’s export revenues to fund the war indirectly might not sit well with US and Europe which has recently approved a Russian oil price cap to limit export revenue in Russia. U.N. aid chief Martin Griffiths and senior U.N. trade official Rebeca Grynspan has travelled to Moscow last week to discuss this issue.OPEC+ CutJust as we thought supply side constraints were subsiding, we are now facing a possibility that commodity inflation might persist due to political uncertainties. Last week, OPEC+ made a key decision to slash oil output by 2 million barrels per day despite Western nations protesting the move as short sighted, perhaps prioritizing their agenda that maintaining oil revenue is more important than the global inflation problem or crippling Putin’s war now. This sent WTI crude oil rallying as much as 9% with rapid short covering as market was positioned with recessionary risk in mind. Oil has since given back some of those gains. The diverging interest of US and Saudi, both key oil producers globally can create instability in energy supplies.The FedThe US inflation breakdown in the month of September has shown lower inflation from energy while key drivers now are mostly from the demand/services side ( rent, medical, services and food). Because of this, the Fed has been relentless in utilizing every opportunity to reinforce their hawkishness with terminal fed funds rate now at 4.9%. If energy and agriculture prices start rising rapidly once again, this will provide the Fed even more ammunition to stay on the course despite some initial data that shows jobs growth is starting to cool off with vacancies falling 1 million in August. If supply constraints do not resolve, the combination of both demand and supply side factors does not bode well for equities and risk assets.    What trades to consider?Watch for the negotiation outcomes between UN and Russia regarding the grain export agreement set to be out by November. Strained relations between Ukraine and Russia might make negotiations tougher and the terms of the deal less favourable. Grains tradable on Saxo include Wheat futures (ZWZ2) and Corn futures (ZCZ2).The output cut by OPEC+ could trigger the start of a possible supply tightening cycle to support oil prices given weak global demand. The US – Saudi relationship souring could also lead to further price instability with volatility set to rise and possible retaliation from US by increasing their supply. Another bright spark is China reopening even though the recent Chinese Communist Party Congress indicated that China is not doing away with its Covid Zero policy in the near term. To trade, we have both Light Sweet Crude Oil (CLZ2) and Brent Crude (LCOZ2) futures.Lastly, if supply side inflation returns, the Fed might have no choice but to accelerate their rate hike cycle. To express this, USDCNH might be a trade to look at given China’s easing cycle is still ongoing to prop up the property market while the risk reward ratio looks more favourable as compared to USDJPY which has moved substantially and BOJ now jawboning the pair’s appreciation.   Wheat December Futures Corn December Futures Oil December Futures USDCNH Source: https://www.home.saxo/content/articles/commodities/st-note-supply-side-inflation-risks--wheat-corn-oil-and-the-fed-18102022

Summary:  Today we note the remarkable continued rise in US treasury yields as the 10-year Treasury benchmark reached 4.25%, and the perhaps equally remarkable lack of significant impact on risk sentiment and the US dollar from this latest surge in yields. We also look at the latest on natural gas, plummeting cotton prices and gold, FX themes, the busy calendar ahead for equity earnings and macro data and central bank meetings next week and more on today's pod, which features Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-oct-21-2022-21102022

While European natural gas prices strengthened yesterday, the market has been under pressure for much of the last week as milder weather and growing storage ease immediate supply concerns. Recent price weakness could provide some support to demand, which could leave the market more vulnerable in 2023 In this article Energy - negative gas prices during an energy crisis Metals – LME copper on-warrant inventories fall Agriculture – UNICA reports higher cane crush Energy - negative gas prices during an energy crisis The oil market has come under pressure in early morning trading today and this follows a relatively bearish API release overnight. The API reported that US crude oil inventories increased by 4.52MMbbls over the last week, quite a bit more than the roughly 1.5MMbbls build the market was expecting. In addition, Cushing crude stocks are reported to have increased by 740Mbbls. On the products side, gasoline inventories fell by 2.28MMbbls, whilst distillates stocks increased by 635Mbbls. The more widely followed EIA report will be released later today. The Saudi energy minister this week has continued to defend the recently announced OPEC+ supply cuts, saying that the gloomier macro outlook justified the action taken by the group. The energy minister also criticised the use of emergency stockpiles by  importers in an attempt to lower oil prices. The minister warned that drawing down on these stockpiles now could be “painful” in the months ahead. Given the price action since OPEC+ announced cuts, some could argue that it has helped to stabilise prices in the immediate term. However, with cuts set to last until the end of 2023, the market is expected to tighten over the course of next year. It may be surprising that in the middle of an energy crisis (specifically in natural gas), that we have seen moments of negative gas prices this week. At the start of this week, we briefly saw TTF next hour prices fall into negative territory as milder than usual weather across Europe means weaker heating demand, whilst EU storage continues to increase with it now close to 94% full. Weakness in spot prices has weighed on much of the forward curve, although, TTF prices early next year are still trading above EUR140/MWh, compared to day ahead prices of around EUR40/MWh. The risk with the sell-off in the European gas market is the potential that demand starts to pick-up. Already there are reports that fertilizer producers in Europe are easing curtailments, given the recent weakness that we have seen in gas prices. If this is part of a broader trend that we see in European demand, it makes it increasingly difficult for Europe to rebuild storage to comfortable levels ahead of the 2023/24 winter. In the US, natural gas prices in West Texas moved into negative territory, with pipeline maintenance work in the region limiting takeaway capacity at a time when natural gas output in the Permian region is growing. Next day prices at the Waha hub reportedly fell to negative $2/MMBtu on Tuesday. Metals – LME copper on-warrant inventories fall The latest data from the LME shows that on-warrant stocks for copper continued to decline for a third consecutive day, hitting the lowest level since April. Total on-warrant inventories decreased by 4.3kt over the day to 58kt, whilst the decline since early October has been even more impressive, falling by almost 79kt. The cash/3m spread has strengthened as a result - with it trading at a backwardation of US$133/t earlier this week, up from a backwardation of a little over US$40/t earlier this month. The latest data from the World Steel Association (WSA) shows that global steel output rose 3.7% YoY to 151.7mt in September. The majority of the increase came from Asia and the Middle East. Meanwhile cumulative output over the first nine months of the year fell 4.3% YoY to 1,405mt.  Chinese steel production gained 17.6% YoY and 3.7% MoM to total 87mt in September. Year-to-date Chinese steel output is down 3.4% YoY to total 781mt. Agriculture – UNICA reports higher cane crush The latest fortnightly report from UNICA shows that sugar mills in Brazil’s Center-South region crushed more cane in the first half of October than last year, although cumulative output still lags last season after a delayed start to crushing. UNICA reported that sugar cane crushing in the region increased 40.5% YoY to 27.7mt over the first half of October, whilst cumulative crushing so far this season is down 5.9% YoY to total 458.7mt. Sugar production increased 59% YoY to 1.8mt in 1H October, with around 48.3% of cane allocated to sugar production. Cumulative sugar output is down 7.3% YoY, to total 28.2mt. TagsSugar Steel OPEC+ Natural gas Copper   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Summary:  WATCH our three-minute video. Wheat prices are rising in anticipation of some traders and investors expecting higher food prices, with Russia exiting the Ukraine gain deal and threatening to cut off Ukraine’s wheat supply from the world. We explore the three elements to watch, from commodities, stocks to ETFs. Including the US' biggest wheat producer, General Mills, Australia's biggest grain seller, GrainCorp, as well as why fertilizer stocks and poultry companies including Tyson Foods perhaps could be of interest. Wheat prices (ZWZ2) rose 5.7% in anticipation of traders expecting food prices to pick up, after Russia exited the Ukraine gain deal and threatened to cut off Ukraine’s wheat supply from the world.What do you need to know? Typically, the globe relies on the Black Sea region for a quarter of annual wheat and barley exports, a fifth of global corn and the bulk of its sunflower oil. So, Russia’s termination of the Black Sea deal means farmers could face a possible lack of storage space with wheat and corn nowhere to go, plus fertilizers, which farmers rely on to grow crops could be cut off, meaning the fertilizer market will also likely once again focus on supply concerns. Here are the three agricultural elements to perhaps watching; Firstly - We will be watching Wheat and corn prices, as well as watching agricultural companies including General Mill (GIS), GrainCorp (GNC), Elders (ELD), as well as Fertilizers companies including CF industries (CF), Archer Daniels (AMD), who on sell such commodities and may be expected to sell goods at premium given supply could perhaps be cut short. Secondly - We will also be watching ETFs like – Invesco DB Agricultural Fund (DBA), iShares MSCI Global Producers ETF (VEGI) and Betashares Global Agricultural Companies ETF (FOOD). Thirdly - we will also be watching the flow on effects of the rising cost of wheat. It not only makes bread more expensive, but also the cost of chicken will likely rise, given Wheat is the biggest cost growing a chicken (75% of its costs). So if wheat prices continue to rise, farmers and sellers will likely be forced to hike their prices. So, it could be worth watching companies like Tyson Foods (TSN) who is one of the largest processors and sellers of chicken, mutton and beef in the US. In Australia there is Inghams (ING), who focused on producing and selling of poultry. Both Tyson Foods and Inghams shares are 8% up off their October low Note, this is a developing story. We will cover the latest developments here. Or please follow our head of commodity strategy, Ole Hansen.  For a global look at markets – tune into our Podcast.       Source: https://www.home.saxo/content/articles/equities/traders-expect-higher-agricultural-prices-after-russia-exits-gain-deal-31102022

Summary:  Our weekly Commitment of Traders update highlights future positions and changes made by hedge funds and other speculators across commodities and forex during the week to Tuesday, October 25. A week where financial markets received a boost from speculation the Fed was considering a pause. The dollar traded softer with commodities predominantly trading in the black with exceptions being soft commodities and not least wheat where short selling accelerated just ahead of today's price spike on renewed Ukraine supply worries Saxo Bank publishes weekly Commitment of Traders reports (COT) covering leveraged fund positions in commodities, bonds and stock index futures. For IMM currency futures and the VIX, we use the broader measure called non-commercial. Link to latest report What is the Commitments of Traders report? The COT reports are issued by the U.S. Commodity Futures Trading Commission (CFTC) and the ICE Exchange Europe for Brent crude oil and gas oil. They are released every Friday after the U.S. close with data from the week ending the previous Tuesday. They break down the open interest in futures markets into different groups of users depending on the asset class. Commodities: Producer/Merchant/Processor/User, Swap dealers, Managed Money and otherFinancials: Dealer/Intermediary; Asset Manager/Institutional; Leveraged Funds and otherForex: A broad breakdown between commercial and non-commercial (speculators) The reasons why we focus primarily on the behavior of the highlighted groups are: They are likely to have tight stops and no underlying exposure that is being hedged This makes them most reactive to changes in fundamental or technical price developments It provides views about major trends but also helps to decipher when a reversal is looming   Financial Markets Daily Quick TakeSaxo Market Call Daily Podcast This summary highlights futures positions and changes made by hedge funds across commodities and forex during the week to Tuesday, October 25. A week where financial markets received a boost from speculation the Fed was considering a pause to assess to the economic impact of already implemented rate hikes and quantitative tightening measures. Both the S&P and especially the Nasdaq traded higher ahead of earnings from the big technology companies while bond yields climbed and the dollar traded softer. Commodities traded predominantly in the black led by energy and industrial metals with heavy and continued selling of softs and wheat being the main outliers. Commodities The Bloomberg Commodity index traded up 1% on the week with strength in crude oil and industrial related metals attracting fresh buying from speculators. Overall, however, the combined net long held by money managers across the 24 major commodity futures tracked in this report remains relatively low at 1 million contracts compared with 2.2 million around the time of the Russian invasion of Ukraine. A slump that has been driven by the current lack of trends and strong momentum across many commodities, as well as concerns about the short-term outlook as the markets continue to focus on a slowing global economy. Biggest changes made by funds this past were buying of crude oil, soybean meal and corn, as well as cattle and hogs while sellers concentrated their efforts in gold, wheat, sugar and cocoa. Energy Speculators maintained a relative low conviction rate regarding the short term direction of crude oil with the 4% rally during the reporting week only attracting 34k lots of net buying, thereby only part reversing the 57k lots that was net sold in the previous week. Selling of natural gas continued during the reporting week with the front month contract briefly dipping below $5/MMBtu. The result being another small increase in the net short held across four Henry Hub related futures and swap contracts to -86k lots, a 31-month high.  Metals Gold, trading unchanged on the week, nevertheless saw increased short selling in response to another and failed attempt to break below $1615 suppor. As a result the net short jumped by 61% to 33k lots, just 8k lots below the near four-year high reached a few weeks ago. Silver, together with platinum and copper all saw net buying, not least platinum which during the past month has seen its discount to gold narrow by 100 dollars to around 700, the narrowest spread since July 2021.  Agriculture  In grains, four weeks of net selling was almost reversed as buyers added soymeal and soy oil length amid price gains of 3.4% and 5.1% respectively. Together with additional buying of corn these more than offset continued selling of CBOT wheat driving the net short up by 63% to 36k lots, a 28-month high. The latest selling occurring during a week where global demand worries attracted more attention than a rapidly expanding drought situation across the US grain belt, and also before Russia over the weekend announced that they were pulling out of a deal that has allowed Ukrainian grain exports from Black Sea ports.As a result wheat futures (ZWZ2) in Chicago surged as much as 7.7% to $8.93 on the Monday opening. Since the UN and Turkey supported grain corridor opened three months ago Ukraine has shipped more than 9 million tons of foodstuff and it has helped ease tight world supplies and control global food costs. Food exports from Ukraine also includes corn and sunflower oil and reduced supply of those has lifted corn futures (ZCZ2) in Chicago by 2.5% to trade near resistance at $7/bu and soybean oil futures by 1.8%.   Soft commodities witnessed another awful week with net selling hitting all four contracts, not least coffee and cotton, now down 33% and 45% respectively from their early 2022 peaks. The coffee net long was reduced by 75% to 3k lots, the lowest bullish conviction in almost two year primarily driven by an increase in the gross short position. A similar development was seen in cotton where global demand worries and another week of selling helped attract fresh short selling, resulting in the overall net long being cut by 40% to 13k lots, a 28-month low.  Forex In forex, flows remained mixed during a week that saw the dollar index trade softer by 1% after recently hitting a 20-year high. Overall the gross dollar long against nine IMM currency futures and the Dollar index rose by 5% to $15 billion, primarily driven by heavy JPY selling as the under siege currency dropped 2.3% towards the important 150 level. Elsewhere, a recovering Sterling saw net selling driven by a combination of gross longs being reduced and fresh short selling. The euro net long reached a four month high at 48k lots on a combination of fresh longs and reduced short participation. Since late August speculators have net bought €12 billion after flipping their euro exposure from a 48k lots short to a 48k lots long.     Source: https://www.home.saxo/content/articles/commodities/cot-wheat-short-jumps-ahead-of-latest-ukraine-supply-worry-31102022

Summary:  Today we look at whether the US October jobs (and earnings!) report later today will extend or disrupt the powerful market reaction to Fed Chair Powell's hawkish FOMC press conference on Wednesday. We also look at the impact of a very dovish Bank of England meeting and the market thumbing its nose at the BoE's rate guidance next year. We also look at crude oil, gold, copper & cotton, stocks to watch including a huge positive beat from SocGen this morning. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting an on FX Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.       Source: https://www.home.saxo/content/articles/podcast/podcast-nov-4-2022-04112022

Summary:  Our weekly Commitment of Traders update highlights future positions and changes made by hedge funds and other speculators across commodities and forex during the week to Tuesday, November 1, the day before Fed Chair Powell sent shivers across markets. Ahead of the meeting speculators cut bullish dollar bets to a 15-month low, in commodities buying was concentrated in crude oil, natural gas, copper and soybeans with gold, sugar and coffee seeing continued selling Saxo Bank publishes weekly Commitment of Traders reports (COT) covering leveraged fund positions in commodities, bonds and stock index futures. For IMM currency futures and the VIX, we use the broader measure called non-commercial. Link to latest report What is the Commitments of Traders report? The COT reports are issued by the U.S. Commodity Futures Trading Commission (CFTC) and the ICE Exchange Europe for Brent crude oil and gas oil. They are released every Friday after the U.S. close with data from the week ending the previous Tuesday. They break down the open interest in futures markets into different groups of users depending on the asset class. Commodities: Producer/Merchant/Processor/User, Swap dealers, Managed Money and otherFinancials: Dealer/Intermediary; Asset Manager/Institutional; Leveraged Funds and otherForex: A broad breakdown between commercial and non-commercial (speculators) The reasons why we focus primarily on the behavior of the highlighted groups are: They are likely to have tight stops and no underlying exposure that is being hedged This makes them most reactive to changes in fundamental or technical price developments It provides views about major trends but also helps to decipher when a reversal is looming   Financial Markets Daily Quick TakeSaxo Market Call Daily Podcast This summary highlights futures positions and changes made by hedge funds across commodities and forex during the week to Tuesday, November 1. The day before the FOMC delivered its fourth consecutive 75 basis rate hike in this cycle while pouring cold water on the markets hope for a slowdown after Fed Chair Powell said there is still some way to go and that incoming data means will help determine the “ultimate level” that the Fed funds reaches. In the reporting week prior to the meeting technology stocks had sold of on disappointing earnings while the dollar and US Treasury yields traded softer. The commodity sector was mixed with gains in industrial metals and grains being partly offset by softness elsewhere.  Commodities The Bloomberg Commodity traded higher on the week with a small 0.6% gain reflecting a mixed market where gains in industrial metals and especially the grains sector was being offset by losses in softs and livestock. The energy sector traded lower with losses in natural gas and gas oil disguising an otherwise strong week for crude oil.Speculators where net buyers of commodities with length being added to 13 out of the 24 commodity futures tracked in this, led by and concentrated in crude oil, natural gas , copper and soybeans. Selling was concentrated across the softs sector where all four contracts continued to be sold. Energy Speculators raised bullish crude oil bets by a combined 38k lots to 426k lots, an 18 week high. In the week both WTI and Brent rallied by more than 3% in response to OPEC+ production cuts and renewed optimism about demand in China, developments that helped attract fresh longs, primarily into Brent. Small profit taking reduced the net length in gas oil and gasoline. In natural gas a 7% price drop triggered profit taking among short sellers resulting in the net short falling by 21% to -68k lots.    Metals Money managers were net sellers of gold for a third week ahead of last week's FOMC meeting. The 17% increase to -39k lots took the net short back to near a four-year high, just ahead of a volatile few trading days where anotherr downside rejection at $1615 support helped trigger a strong short covering rally ahead of the weekend. Short covering reduced the silver net short by 43% to 3.4k lots, platinum length was added for a fifth week taking the net long to 13.3k lots and highest since March. Copper buyers sensing support from developments in China helped flip the net back to a long position of 5.3k lots and highest since June.  Agriculture  The grains sector saw net buying for a second week lifting the combined long across six grains and soy contracts to a 19-week high at 553k lots. The bulk of the buying was led by the soybeans, soy meal and oil contracts with corn seeing a small increase in the net long. The 8% jump in wheat on Ukraine export worries did not alter the overall bearish view held by funds. Selling into strength they lifted the net short in Chicago wheat to -37k lots, the biggest short bet since the depth of the pandemic panic in June 2020. The four major softs commodities continued to see heavy net selling, this week being led by 48% reduction in the sugar long to 44k lots. The cocoa net short extended to -43.7k lots and not far from a five-year high, a development that increasingly could trigger a sharp rebound should the technical and/or fundamental outlook turn more friendly. Weeks of coffee selling continued resulting in the net flipping back to a net short of -10.4k lots for the first time in 25 months. A similar situation in cotton where nine weeks of continued selling has taken the net close to neutral at just 5.4k lots.    Forex In forex, flows turned decisively against the dollar, a day before Fed Chair Powell delivered his hawkish comments which only managed to trigger some temporary dollar strength. Before this reporting week, the Greenback had increasingly been losing steam against several of the nine IMM forex futures tracked in this report. The bulk of the net dollar selling had up until recently been mostly against the euro which since late August has seen €19 billion of net buying, reversing the net position from a 48k lots short to a 106k long. This past week buying accelerated with the net long jumping 41% to a 17 month high. Combined with an aggressive 24% reduction in the JPY net short and a 250% jump in the MXN net long, the combined dollar long ended up being reduced by 59% to just $5 billion, the weakest belief in a stronger dollar since August last year.     Source: https://www.home.saxo/content/articles/commodities/cot-crude-oil-and-copper-bought-gold-sold-ahead-of-fomc-07112022

Summary:  Commodity markets maintain a commanding lead over asset classes, such as bonds and stocks, as we head towards the final few weeks of trading in 2022. China lockdowns remain a temporary concerns for crude oil and other China-centric commodities while others like copper, silver and gold have enjoyed the softer dollar and the FOMC showing willingness to slow its pace of rate hike. We take a look at some of the key battlefields that may end up determine the direction commodities will travel into 2023. Commodity markets maintain a commanding lead over asset classes, such as bonds and stocks, as we head towards the final few weeks of trading in 2022. A year that, despite several headwinds, has yielded strong returns – with the Bloomberg Commodity Total Return index trading up close to 20% on the year. Following on from a strong finish to 2021 – driven by a post-Covid surge in demand for goods fuelled by a wall of fiscal stimulus and coordinated monetary support – the year started on tear. With demand rising strongly at a time of under-investments, the attention abruptly turned to supply worries following the Russian invasion of Ukraine. Sanctions against Russia and risk to supply of key food commodities from Ukraine led to price spikes across all commodity markets, not least energy, grains and metals. As a result of this, the Bloomberg Commodity Total Return index spiked by more than 25% during the first quarter before spending the following months slowly deflating. However, despite numerous headwinds, such as the strongest dollar rally in years, rolling Covid related lockdowns in China and central banks hiking rates in order to kill inflation at the expense of growth, the commodity sector has performed very well, as demonstrated by the near 20% year-to-date return. Heading into 2023, four major themes will help determine the direction of the market: The depth of an incoming recession currently being priced in by the market through the most inverted US yield curve since the early 1980s A recession forcing the US Federal Reserve to change its focus from rate hikes to economic support, potentially before inflation has reached a satisfactory low level, thereby supporting a reversal of the dollar and Treasury yields. A reopening in China leading to a stimulus fuelled recovery in demand for industrial metals and energy. The duration of the war in Ukraine and its potential impact on supply of key commodities from crude oil and gas to wheat and key industrial metals. Recession versus tight supply The risk of an economic downturn at a time of tight supply of several major commodities will be one of the key battlegrounds that, together with the strength of a post-Covid recovery in China, will help determine the direction of commodities in 2023. Following months of aggressive rate hikes, the US Federal Reserve is now signalling a slowing pace of future rate hikes – with the eventual peak rate being determined by incoming data. The US bond market is already telling the Fed that it may have overdone the monetary tightening, with the yield spread between the 3-month treasury bill versus the 10-year treasury note tumbling to a twenty-year low at minus 64 basis point. An inverted level of this magnitude has only been seen prior to three previous recessions. Short-term interest rates have been driven higher by the Fed’s actions to raise the overnight Fed Fund rates, while longer-dated bond yields are lower on the prospect of slower growth (or even a recession) together with anchored long-term inflation. You can read more in this fixed income update from my colleague Redmond Wong in Hong Kong. Source: Bloomberg & Saxo Commodities have seen a strong November so far as the Bloomberg Commodity index trading up 3.4%, with gains being led by industrial and precious metals. This is despite the daily news of a worsening situation in China, where local officials battling with a record number of Covid cases are once again under pressure to implement President Xi’s strict and increasingly unpopular Covid zero policy. In order to support the economy, the People’s Bank of China, stepped in Friday and cut banks reserve requirement ratio by 0.25%. While the energy sector has struggled amid a seasonal slowdown in demand that was increased by the developments in China, other markets, especially precious metals, have found support from the drop in long-end yields and a dollar which has softened by almost five percent this month. Driven by a lower-than-expected US CPI print earlier this month, emerging weakness in US economic data and the publishing of the minutes from the recent Federal Reserve meeting which discussed moderating the pace of future rate hikes. Cycle low in gold, silver and copper? Following developments that have supported a strong rebound in gold, silver and copper, as well as the 170 dollar rally from what increasingly looks like a cycle low around $1615, gold spent the past week consolidating before finding support in the $1735 area. Overall, Saxo maintains its long-held bullish view on gold, and with that more so for silver. This is primarily driven by a combination of an incoming economic slowdown and major repricing as the market realises long-term inflation will settle at a higher level than the sub 3% currently being priced in. However, with a continued lack of buying interest from ETF investor and increased competition from bonds as yields drop, a further gold extension above the important $1800 area will likely require further declines in the yields and the dollar or some other catalyst that sees a run to safety. A technical update from Kim Cramer, our Technical Analyst, can be found here. Grains sector weakness led by wheat At the bottom of the performance table, we find the grains sector. Grains are heading for a monthly loss, primarily driven by weakness in wheat prices in the US and Europe. The weakness is driven by a continuation of the Ukraine grains corridor and a bumper Russian crop looking for a home around the world. Speculators have responded to the general weakness by cutting the total net long across the six major grains futures contract to a three-month low at 430k contracts. According to the latest Commitments of Traders Report covering the week to November 15, speculators had the biggest one-week clear-out of corn longs since August 2019. Meanwhile, the wheat net short extended to a 27-month high at 47k contracts with soybeans and soymeal also suffering setbacks.   Crude oil troubled by China lockdowns and recession worries Crude oil trades lower for a third consecutive week as demand fears, especially from an increasingly locked down China, weigh on sentiment. A G7-sponsored price-cap plan on Russian oil looks dead in the water as EU countries struggle to agree on a level – the result being either no cap or a level so high that it will not have any meaningful impact on supply, led alone Russia’s response. The 12-month futures spread in WTI and Brent have both weakened to the lowest backwardation since last December, reflecting a market concerned about recession and a seasonal slowdown in demand hurting the front month contracts. In addition, the fact that the market is not pricing in a premium for oil ahead of the December 5 EU embargo on Russian seaborne crude exports highlights the impact of a sharp slowdown in China – the world’s biggest importer of crude oil. Middle East producers have seen spot premiums for key Persian Gulf graded oil, decline sharply after commanding elevated premiums since the invasion of Ukraine when many buyers started to look elsewhere than Russia, thereby lifting demand for Mideast crude. The slowdown in demand from China will be temporary but having unsuccessfully fought Covid outbreaks with lockdowns for months, the prospect for an improvement looks month away. This is unless Chinese officials start following the 20-point plan to ease Covid Zero policies that were issued earlier this month by the health authorities. Brent trades near the lower end of its established range, but with multiple uncertainties related to demand and supply, the prospect of a downside extension seems limited in our opinion. Source: Saxo   Source: https://www.home.saxo/content/articles/commodities/commodities-torn-between-recession-and-tight-supply-focus-25112022

Summary:  Today we look at how the market is absorbing the news of widespread protests in China against Covid policies there, from lower yields to lower crude oil prices. That combination offers strong support for the Japanese yen, while Apple risks a further haircut on the risk of widening production disruptions. It is worth noting that corn prices in China are diverging from prices elsewhere, also on Covid policy disruptions. Elsewhere, we consider the status of "de-globalization" (or is it re-globalization?), and look at incoming earnings and macro calendar events for the week ahead. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com. Source: https://www.home.saxo/content/articles/podcast/podcast-nov-28-2022-28112022

Summary:  Risk sentiment rebounded yesterday, even as US treasury yields rose further and closed at their highest level in more than a week. Markets are on tenterhooks ahead of the US November CPI print later today as traders recall the explosion higher in risk sentiment in the wake of the October CPI release last month, where the reaction function may have been about extreme short-term option exposure as anything else. The same volatility risk is present over today’s release. What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equity markets rebounded yesterday even as US treasury yields edged higher on the day, as traders nervously recall the heavy volatility around the US CPI releases of recent months, particularly the October CPI release on November 10, which saw an explosion higher in US equities of over 5% on the day after softer-than-expected numbers. Today’s release is complicated by the upcoming FOMC meeting tomorrow. The key downside area for the S&P 500 Index remains 3900-10 the cash index, with the equivalent area around 11,430 in the Nasdaq 100 Index. A sharp rise in the VIX yesterday despite the positive session suggests traders are scrambling to protect themselves with short-term options over the key event risks of the coming couple of days, which aggravates the volatility risk further. Hong Kong’s Hang Seng (HIZ2) and China’s CSI300 (03188:xhkg) Hang Seng Index advanced 0.4% after Hong Kong lifted all travel restrictions for visitors arriving the city and relaxed the QR code scanning requirements for residents.  Local Hong Kong catering and retailer stocks surged 5% to 12%. In A-shares, the CSI300 index was little changed. Lodging, tourism and catering stocks outperformed. FX: USDJPY teased 138 ahead of US CPI release The US dollar was mostly sideways ahead of the big flow of key data and central bank meetings later in the week, but a run-up in US treasury yields and higher oil prices yesterday drove a weaker JPY across the board again, with USDJPY nearly reaching 138.00 before pulling back slightly. The US dollar is set to key off the US CPI release today. EURUSD remained capped below the key 1.06 handle, where a break above, for example, on soft data and an indifferent FOMC meeting on Wednesday, possibly opening the doors to 1.08. Crude oil (CLF3 & LCOG3) Crude oil trades higher for a second day after last week's heavy losses on demand concerns. Prices were underpinned by further easing of China’s restrictions despite concerns earlier in the week from a rapid surge in cases. Despite reports that the Keystone pipeline was being partially reopened, it remains completely shut on Monday which suggests a potential drop in storage levels at Cushing, Oklahoma, the WTI delivery hub. The market awaits news from Russia on whether it will make good on its threat to cut supply to price cap supporters, while the focus will also turn to US CPI today and the FOMC decision tomorrow, as well as monthly oil market reports from OPEC today and IEA Wednesday. First level of resistance in Brent at $80.50 and $75 in WTI. Gold (XAUUSD) and silver (XAGUSD) await CPI report Both metals trade steady while awaiting today’s key US CPI print and tomorrow’s FOMC meeting. Having been rejected on a couple of occasions above $1800, the outcome of these will likely determine whether the metal will break higher to signal a strong start to 2023 or whether investors will book some profit ahead of the quiet period before year-end. In such a case, the current strength of the market will be tested with focus on support at $1765 and not least $1735. Silver meanwhile trades near an eight-month high with half an eye on copper as the potential driver for additional strength. US 10-year treasury benchmark rebounds further (TLT:xnas, IEF:xnas, SHY:xnas) In a thin-volume session ahead of the CPI report on Tuesday and the FOMC on Wednesday, yields on Treasuries closed the day higher, with the US 10-year benchmark closing 4 bps up to 3.61% and nearly 10 bps above intraday lows. The auction of USD 32B of 10-year notes, awarded at 3.625%, 3.7bps cheaper than at the time of the auction, was the worst since 2009.  The one, three, and five years ahead consumers’ inflation expectations in the New York Fed’s Consumer Expectations Survey fell to 5.2%, 3%, and 2.3% in November from 5.7%, 3.1%, and 2.4% respectively in October. What is going on? Stronger UK GDP growth but clouded energy outlook, expect more volatility Some respite was seen in UK’s growth trajectory as October GDP rose 0.5% M/M after being down 0.6% M/M last month’s due to the holiday for Queen’s funeral and a period of national mourning. However, the UK may already be in a recession and the outlook remains clouded which suggests there isn’t enough reason for the Bank of England to consider anything more than a 50bps rate hike this week. Energy debate continues to run hot and create volatility in gas prices, after weaker wind generation led to talks of refiring the reserve coal plants, but the request was cancelled later Monday as wind generation rose. The situation continues to highlight the vulnerability of the energy infrastructure due to lack of baseload, and a bigger test probably lies ahead in 2023. NY Fed consumer expectations survey shows slowing inflation, but... NY Fed’s Survey of Consumer Expectations indicated that respondents see one-year inflation running at a 5.2% pace, down 0.7 percentage point from the October reading. Expectations 3yrs ahead fell to 3.0% from 3.1% and expectations 5yrs ahead fell to 2.3% from 2.4%. However, it is worth noting that inflation expectations remain above the Fed’s 2% target and unemployment and wage data was reportedly steady. Corn (ZCH3) advances following biggest clear-out of longs since 2019  Corn futures in Chicago trade higher for a third day, as dry and hot weather conditions in Argentina, an important Southern Hemisphere producer, stresses the crop. In addition, the USDA on Friday cut the global supply outlook for corn due to a smaller crop in Ukraine, and from where supply could slow after Russian attacks on energy infrastructure have affected cargo loading at the Black Sea ports. Renewed support for corn emerged just after money managers in the week to December 6 sliced their corn net long by 37% to 120k lots, lowest since Sept 2020 and biggest one-week reduction since March 2019. Novozymes shares in focus following acquisition news Yesterday should have been a celebration day for Novozymes shareholders according to management as the enzymes manufacturer announced a $12.3bn acquisition of food flavouring manufacturer Chr. Hansen. However, Novozymes shares traded down 15% so the shares will be in focus this morning. The main question is whether regulators will allow the two companies to merge given their respective size and possible market power in the food ingredients business. What are we watching next? US November CPI to likely to trigger considerable volatility Last month’s softer US CPI report was a turning point in the markets and inflation expectations have turned markedly lower since then. Consensus is looking for another softer report in November, with the headline rate expected at 7.3% YoY, 0.3% MoM (from 7.7% YoY, 0.4% MoM in October) while the core, ex-Food & Energy reading is expected to show a steady rise of 6.1% YoY and 0.3% MoM (from 6.3% YoY, 0.3% MoM in October). While a case can be made for further disinflationary pressures, given lower energy prices, easing supply constraints and holiday discounts to clear excess inventory levels, the PPI report on Friday indicated that goods inflation could return in the months to come and wage inflation also remains strong. Easing financial conditions and China’s reopening can be the other key factors to watch, which could potentially bring another leg higher in inflation especially if there is premature easing from the Fed. Shelter inflation will once again be key to watch, which means clear signs of inflation peeking out will continue to remain elusive. Several central bank meetings this week The U.S. Federal Reserve (Wednesday), the Bank of England (Thursday) and the European Central Bank (Thursday) are expected to hike interest rates by 50 basis points each this week. Less than two weeks ago, Fed Chairman Jerome Powell said a December rate-hike slowdown is likely. But the hawkish tone should remain based on the latest Non Farm Payroll and Producer Prices reports which indicated that inflation remains high and broad-based. In the eurozone, this is a done-deal that the central bank will hike rates by 50 basis points. Pay attention to the updated economic forecasts (Is a recession the new baseline for 2023?) and to any indication regarding the expected quantitative tightening process. In the United Kingdom, the money market overwhelmingly believes (78%) that the Bank of England will hike its rate by 50 basis points to 3.5% this week. Only a minority (22%) foresees a larger increase, to 3.75%. Earnings to watch This is a quiet period in the earnings season, though a couple of interesting names are reporting this week, with former high-flyer Adobe up on Thursday. Adobe has something to prove as the US software company has seen a negative share price reaction on its past five earnings releases. Trip.com, China's leading online travel agency, reports on Wednesday and investors will judge the result on the company's outlook for Q4 and ideally 2023 as China's reopening is raising the expected travel demand in China for 2023. Read more here. Tuesday: DiDi Global Wednesday: Lennar, Trip.com, Nordson, Inditex Thursday: Adobe Friday: Accenture, Darden Restaurants Economic calendar highlights for today (times GMT) 1000 – Germany Dec. ZEW Survey 1030 – UK Bank of England Financial Stability Report 1100 – US Nov. NFIB Small Business Optimism 1330 – US Nov. CPI 2230 – Australia RBA Governor Lowe to Speak 2350 – Japan Q4 Tankan Survey 0005 – New Zealand RBNZ Governor Orr before Parliamentary Committee 2130 – API's Weekly Crude and Fuel Stock Report During the day: OPEC’s Monthly Oil Market Report Source: Financial Markets Today: Quick Take – December 13, 2022 | Saxo Group (home.saxo)

Summary:  Our weekly Commitment of Traders update highlights future positions and changes made by hedge funds and other speculators across commodities and forex during the week to Tuesday, December 27. A week that saw speculators showing a continued and broad interest in adding exposure to commodities, led by oil, gold and corn. The dollar short extended further as the euro long reached a 23-month high Saxo Bank publishes weekly Commitment of Traders reports (COT) covering leveraged fund positions in commodities while in forex we use the broader measure called non-commercial. Link to latest report What is the Commitments of Traders report? The COT reports are issued by the U.S. Commodity Futures Trading Commission (CFTC) and the ICE Exchange Europe for Brent crude oil and gas oil. They are released every Friday after the U.S. close with data from the week ending the previous Tuesday. They break down the open interest in futures markets into different groups of users depending on the asset class. Commodities: Producer/Merchant/Processor/User, Swap dealers, Managed Money and otherFinancials: Dealer/Intermediary; Asset Manager/Institutional; Leveraged Funds and otherForex: A broad breakdown between commercial and non-commercial (speculators) The reasons why we focus primarily on the behavior of the highlighted groups are: They are likely to have tight stops and no underlying exposure that is being hedged This makes them most reactive to changes in fundamental or technical price developments It provides views about major trends but also helps to decipher when a reversal is looming   Financial Markets Daily Quick TakeSaxo Market Call Daily Podcast This summary highlights futures positions and changes made by hedge funds across commodities and forex during the week to Tuesday, December 27. A week that despite seeing activity grind to a near halt ahead of yearend saw speculators showing a continued interest in adding exposure to commodities, led by oil, gold and corn, while the yield on 10-year US Treasuries climbed. Developments both driven by an improved outlook for demand in China as the economy reopens following months of lockdown restrictions. The Nasdaq dropped 2.3% as it headed towards a 33% annual slump while continued selling of the dollar primarily benefitted the euro and the Japanese yen. Commodities The Bloomberg commodity index traded higher by 1.3% during the reporting week as it headed for another strong yearly gain, not least driven by tight markets keeping most futures contracts in a state of backwardation. While the Bloomberg Spot index ‘only’ delivered a 6.8% return last year, the tightness and with that elevated backwardations especially during the first half of the year helped drive the BBG Total Return index, which included the positive carry of selling (rolling) an expiring contract at a higher price than where the next month was bought, to an annual return of 16%. During the reporting week all but one of the 24 major commodity futures tracked in this saw net buying, resulting in the combined net long rising by 16% to 1.4 million lots, a six-month high. Two-thirds of the increase was driven by fresh longs being added while the remaining third was driven by traders cutting back on short positions. With all sectors getting bought with natural gas the only exception, the driver behind these developments has to be found in overall macroeconomic developments, most notably the weaker dollar and emerging optimism about the demand outlook in China.   Energy Bullish bets across all five crude oil and fuel products rose, driven by a combination of fresh longs being added and reduced short positions. Biggest change was seen in Brent where a 44% jump, the biggest in 17 months, lifted the net long to 144k lots, a seven-week high. The continued collapse in natural gas, despite the pre-Christmas winter freeze, helped boost the net short by 63% to 59k.Crude oil futures ended a volatile 2022 close to unchanged after having traded within the widest range since 2008. Another volatile year undoubtedly lies ahead with multiple uncertainties still impacting supply and demand. The two biggest that potentially will weigh against each other in the short term remain the prospect for a recovery in Chinese demand being offset by worries about a global economic slowdown. Covid fears, inflation fighting central banks, lack of investments into the discovery of future supply, labour shortages and sanctions against Russia will also play its part in the coming months. Metals   The gold long reached 67.3k contracts, and highest since early June, primarily driven by short sellers scaling back exposure in frustration over the yellow metals ability to weather a fresh rise in US bond yields. While gold has yet to make a decisive break to the upside the sentiment has nevertheless changed from a sell-into-strength to a buy-into-weakness market.Having closed 2022 near unchanged despite massive headwinds from a stronger dollar and surging treasury yields, the outlook for 2023 looks more price friendly with recession and stock market valuation risks, an eventual peak in central bank rates combined with the risk of inflation not returning to the expected sub-3% level by yearend all adding support. In addition, the de-dollarization seen by several central banks last year, when a record amount of gold was bought, look set to continue, thereby providing a soft floor under the market. As always, the dollar and yield movements will be a key focus while in the short term the market will look ahead to Wednesday’s FOMC minutes and Friday’s US job report.  Read next:Twitter Did Not Pay $136,260 Rent, Microsoft Reported Its Worst Quarterly Results In Years| FXMAG.COM Agriculture The prospect of a reopening in China giving demand a boost helped drive continued demand for key crops with speculators raising bullish bets across the six main grain and soy contracts to a four-week high at 429k contracts, well below the April peak at 819k contracts when panic buying in the aftermath of the Russian invasion of Ukraine saw prices surge higher. The change was primarily driven by a 40% boost to the corn net long to 159k contracts while the soymeal long reached 130k contracts, just shy of the 2018 record at 134k. In softs, the sugar net long jumped to 258k contracts to a 16-month high and not far from the peaks in 2016 (286k) and 2021 (270k) which both ended up signaling months of subsequent selling. The cocoa position flipped back to a small net long after 19k contracts were added in a week that saw the price jump 5.4%.   Forex Speculators was leaving 2022 behind holding the biggest dollar short since July 2021. Against nine IMM futures and the Dollar Index, the gross dollar short reached $7.4 billion with a $19.6 billion equivalent long in the euro being partly offset by short, albeit reduced, positions in JPY, AUD, CAD and MXN. The additional length being added to the euro long occurred ahead of Thursday’s Golden Cross when the 50-day simple moving average crossed above the 200-day. The 3% increase lifted the net long to a 23-month high at 146k contracts.    Source:COT: Funds loaded up on commodities ahead of yearend | Saxo Group (home.saxo)

The USDA’s latest WASDE report was constructive for grain markets with US ending stocks for corn, soybeans and wheat all coming in below expectations. Global balances were less supportive, with stocks mostly in line or above market expectations US corn balance tightens The USDA revised US corn production estimates lower by around 200m bushels to 13.73b bushels for 2022/23. This revision lower was primarily due to lower acreage. Both domestic and export demand were lowered, which saw total use lowered by 185m bushels. However, weaker demand was not enough to offset lower supply. US ending stocks for 2022/23 were reduced from 1.26b bushels to 1.24b bushels, which was also below market expectations of around 1.31b bushels. In addition to these supportive WASDE numbers, the USDA also released its quarterly grain stocks report yesterday, which showed that US corn stocks stood at 10.8b bushels on 1 December 2022, down 7% year-on-year and also below what the market was expecting. The global corn balance saw a marginal tightening. 2022/23 global ending stocks were lowered from 298.4mt to 296.4mt. Meanwhile, the market was expecting a number closer to 298mt. Lower opening stocks and revisions lower to global production numbers were the reasons for the lower ending stocks. Global corn production estimates were lowered to 1,156mt (-5.9mt) with poor weather conditions in both Argentina (-3mt) and Brazil (-1mt). Meanwhile, global demand estimates were also revised down to 1,165.5mt from 1,170.6mt. Corn supply/demand balance Source: USDA, ING Research US soybean stocks below expectations The USDA decreased production estimates for US soybean by 70m bushels to 4.28b bushels because of lower yields. Yield estimates were cut from 50.2 bushels/acre to 49.5 bushels/acre. Lower output and little change in demand meant that 2022/23 ending stocks were cut from 220m bushels to 210m bushels. This was a surprise for the market, with expectations that ending stocks would exceed 230m bushels. As for the separate quarterly grains report, the USDA reported that soybean inventories on 1 December 2022 stood at 3.02b bushels – 4% lower YoY. This was also lower than the more than 3.3b bushels expected. However, the global soybean balance saw some easing. The USDA revised up its 2022/23 global ending stocks from 102.7mt to 103.5mt, largely due to higher beginning stocks. Expectations in the lead-up to the report were for ending stocks to come in below 102mt. The increase comes despite expectations of lower global output. This was driven by Argentina, where crop estimates were reduced by 4mt to 45.4mt, due to lower area and early season heat and dry weather conditions. Soybean supply/demand balance Source: USDA, ING Research Fewer surprises for wheat The USDA decreased its US wheat ending stock estimates for 2022/23 from 571m bushels to 567m bushels as higher domestic use offset the sharp rise in beginning stocks. The number came in below the 580m bushels expected. Output estimates were left unchanged. There were two other USDA releases which were also important for the wheat market. Firstly, the quarterly grains report showed that US wheat stocks stood at 1.28b bushels on 1 December 2022, down 7% YoY and also below the 1.34m bushels expected. Secondly, the winter wheat and canola seedings report from the USDA estimates the 2023 winter wheat area at 37m acres, up 11% YoY and also above the roughly 34.5m acres expected. This appears to have been enough to dampen some of the more bullish numbers in the other two reports. Although, it is important to note that crop progress reports at the end of last year showed that the condition of this planted US winter wheat was not great.  Looking at the global market, the USDA left both production and demand estimates largely unchanged. Global ending wheat stocks for 2022/23 increased slightly from 267.3mt to 268.4mt, leaving it slightly above market expectations of around 268mt. Wheat supply/demand balance Source: USDA, ING Research Read this article on THINK TagsWASDE Grains Agriculture Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Summary:  U.S. equities charged higher with the S&P 500 rising above its 200-day moving average despite bond yields surging higher on profit-taking. The four biggest U.S. banks reported Q4 earnings, beating expectations but the weaker outlook for net interest income and higher provision for credit losses weighed on share prices initially before reversing and finishing the session higher. Stocks in Hong Kong and mainland China gained as the Chinese Government took up “special management shares” in local units of Alibaba and Tencent. The Japanese Yen strengthened to 127.87 against the dollar on mounting speculation on BOJ policy adjustment at this week’s meeting.   What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) gained as bank stocks bounced U.S. equities opened lower as shares of banking stocks initially got hit by disappointing guidance on net interest income and credit loss provision, despite reporting Q4 earnings beating expectations. Shares of JP Morgan, (JPM:xnys), Bank of America (BAC:xnyg), Citigroup (C:xnys), and Wells Fargo (WFC:xnys) recovered fully from early losses and more, having finished Friday between 1.7% and 3.3% higher. Consumer discretionary names gained, with Target (TGT:xnys) and Amazon.com (AMZN:xnas) each rising around 3%. The S&P 500 Index edged up 0.4% to close at 3999.09, breaking to the upside its 200-day moving average (currently at 3981.22). The Nasdaq 100 Index rose 0.7% to 11,541.48, above its 100-day moving average (currently at 11523.33). Tesla (TSLA:xnas) fell 0.9% after the EV giant cut prices in the U.S. and Europe. Share of General Motors (GM:xnys) slipped 4.8% and Ford (F:xnys) plunged 5.3%. Delta Airlines (DAL:xnys) declined 3.5% on Q1 guidance which was below analyst estimates. Yields on US Treasuries (TLT:xnas, IEF:xnas, SHY:xnas) jumped on profit-taking Yields on Treasuries bounced from their lows and finished the Friday session cheaper on profit-taking. Selling concentrated in the front end and saw the yields on the 2-year jump 9bps to 4.23%. Yields on the 10-year rose 6pbs to 3.50%. The 2-10 year curve went more inverted at -73bps. The University of Michigan survey’s inflation expectations came in mixed. A softer print in the 1-year inflation expectation, falling to 4.0% Y/Y in January from 4.4% Y/Y in December was offset by the ticking of 5-year inflation expectation to 3.0% Y/Y from 2.9% Y/Y a month ago. Hong Kong’s Hang Seng (HIF3) and China’s CSI300 (03188:xhkg) continued to rally Hong Kong and mainland Chinese stocks rallied last Friday afternoon. Hang Seng Index gained 1%, bringing its advance to nearly 10% since the beginning of the year. China’s CSI 300 climbed 1.4% last Friday and gained 5.2% so far in 2023. Within the Hang Seng Index, healthcare and consumer stocks gained the most. Wuxi Biologics (02269:xhkg), up 6.4%, was the best performer, followed by Chow Tai Fook Jewellery (01929:xhkg), up 4.8%. Hang Seng TECH Index gained 1.5% on further signs that the regulatory crackdown against Chinese internet platform companies is being replaced by institutionalized and hopefully more predictable supervision and regulation. The Chinese authorities have taken up “special management shares” in local units of Alibaba (09988:xhkg), up 1.7%, and Tencent (00700.xhkg), up 2%. Didi is reportedly to gain approval for relaunching its ride-hailing app at app stores. The People’s Bank of China has reportedly drafted an action plan to help “quality” property developers to strengthen their balance sheets. Trade in shares of Chinese developers was mixed. The three Chinese state-own oil companies traded in Hong Kong advanced between 1% and 2% on higher oil prices. NetEase, rising 4.7%, stood out among China internet names. Australia’s share market is a touch away from a record high; gold stocks charge in 2023 The Australian share market (ASXSP200.I) opened 0.5% higher on Monday with interest rates sensitive stocks charting the most, in anticipation of the Fed’s likely downshift in policy following on from last week's roll over in monthly CPI. The Aussie share market is trading at a two week highs, just a puff or 2.6% from its record high. The most momentum in 2023 is from the Mining sector, up 9%, in anticipation of higher earnings from China’s reopening. Gold stocks are the biggest shiners this with the most momentum, in anticipation of a higher gold price as global growth moderates, while the US dollar and bond yields retreat. At Saxo, we believe Gold may be likely to have a correction in the shorter term, but in 2023 gold should see a strong year of buying amid appetite from global central banks, as our head of Commodity Strategy mentioned.  Silver Lake Resources, De Grey Mining , Remelius Resources, up 18-23% so far in 2023. FX: JPY takes centre stage this week The Japanese yen gained by over 3% against the USD last week, moving from highs o f132.87 to lows of 127.46 on Friday. The yen was also stronger on all the crosses amid Bank of Japan’s unscheduled bond buying operations as the markets continued to test the policy yield cap of 0.5%. USDJPY and yen crosses will remain key this week as well as BOJ meets for the first time this year and speculation about a further policy tweak is rife. EURUSD gained to 1.080+ levels amid better growth prospects for Eurozone and a dovish bent in US CPI and Fed communications that has shifted the February rate hike pricing towards 25bps. AUDUSD has been basking in China’s reopening glory, testing 0.7000, but Australia’s employment data will be key this week. GBPUSD also has a host of UK data from CPI to retail sales to labor market to consider which could bring the 200DMA of 1.2000 in focus. Crude oil (CLG3 & LCOH3) opens steady after last week’s gains Crude oil prices were steady in the Asian morning hours after recording over 8% gains last week on China’s reopening optimism. WTI traded near $80/barrel while Brent was close to $85.50. China’s road traffic levels are continuing to rebound from record low levels following the easing of COVID-19 restrictions. A congestion index comprising the 15 cities with the most vehicles registrations has risen by 31.3% vs a week earlier. China’s crude oil imports rose to 48mt in December, up by 2.8% m/m. Meanwhile, increased import quotas by China saw oil demand pick up in the physical market. Sentiment was also bolstered by expectations of the Federal Reserve slowing its interest rate hikes, following lower than expected inflation. Higher inventory levels were to be expected, driven by the late December cold blast reducing exports while temporarily shutting down some refineries. Iron ore (SCOA) reverses amid China pledging crackdown Iron ore fell in Singapore back to $120.90 a ton from highs of $126 last week after China’s National Development and Reform Commission (NDRC), the top economic planner, said in a statement on Sunday that it would crack down on illegal activities including spreading false information, hoarding and price gouging to keep the iron ore market stable. Corn (ZCH3) closes the week with strong gains following the US crop output report Corn prices recorded their biggest weekly gain since August as droughts curb the world’s supply buffer. The US Department of Agriculture unexpectedly cut its outlook for US domestic production and available stocks of both corn and soybeans, a sign that an ongoing drought from last year may continue to underpin prices. The worst Argentinian drought in 60 years also led to a downgrade in the outlook for soybeans and corn production, some of that being partly offset by an expected bumper harvest in Brazil. Corn prices were up over 3% in the week and Soybeans up over 2%. Read next: The UK Economy Expects A Slightly Fall In Inflation, Expected To Fall By 0.1%| FXMAG.COM What to consider? U.S. bank Q4 earnings beat but guidance on interest income and credit loss provision disappoint The four largest commercial banks in the U.S., JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo reported Q4 earnings beating analyst expectations. Q4 profits grew 6% at JPMorgan and 2% at Bank of America and fell 21% at Citigroup and 50% at Wells Fargo from a year ago. Revenues at JPMorgan Chase, Bank of America, and Citigroup in Q4 came in above analyst estimates while those at Well Fargo missed. Despite the overall solid earnings and revenues, provisions for credit losses were higher than expected and the outlooks guided by the management of these large banks on net interest income were weaker than analyst estimates. JPMorgan Chase made a provision for credit losses at USD 2.3 billion, above the street estimate of USD 2.1 billion.  JPM is guiding net interest income of $73bn in 2023, below the USD74.4 billion analyst estimate. CEO Jamie Dimon says there is still a lot of uncertainty around the impact of the macro headwinds and that the bank’s macroeconomic outlook has deteriorated modestly. Bank of America guided below expectations net interest income at USD 14.4 billion in Q1 2023. Wells Fargo reported a negative surprise on credit provisions ($57mn vs est. $860mn). Wells Fargo’s CFO is also saying that the bank is preparing for the economy to worsen. Bank of Japan prepares to buy more Japanese Government Bonds The Bank of Japan again broke its daily record for Japanese government bond purchases Friday as yields defied its 0.5% cap, in a sign of the rising market pressure for another policy tweak by the central bank as it meets this week in its first meeting of 2023. The BOJ bought roughly 10 trillion yen ($78 billion) in JGBs over the past two days, with a 5 trillion yen purchase on Friday topping the high it had just set Thursday and is preparing to purchase more Japanese government bonds on Monday, according to the Nikkei. China’s exports declined 9.9% Y/Y in December; the import volume of iron ore grew while copper shrank In U.S. dollar terms, China’s exports in December fell 9.9% Y/Y in December, further decelerating from the -8.9% in November but slightly better than the -11.1% feared as per the survey by Bloomberg. In real terms, that is, after adjusting for inflation in export prices, the decline in exports was deeper. The fall in exports was most notable to the European Union, which fell 17.9% Y/Y in December versus -9.3% in November. Export to the US shrank 18.4% Y/Y in December, negative but having improved from -24.7% Y/Y in November. On the other hand, exports to ASEAN grew by 6.6% Y/Y in December, accelerating from 5.9% in November. Imports shrank 7.5% Y/Y in December, less negative than -10.6% Y/Y in November and above the consensus estimate of -10.0%. The improvement however was largely a result of the base effect. In volume terms, the import of crude oil slowed to 4.2% Y/Y in December from 11.8% in November. Coal imports rebounded to almost flat in December from a fall of 7.8% Y/Y in November. Iron ore imports grew 5.6% Y/Y in December, reversing from a 5.8% decline in November. Copper import shrank 12.7% Y/Y versus a rise of 5.8% a month ago. Tesla cut prices in the US and Europe Tesla cut prices across models in the U.S., including shedding the price of its baseline Model Y lower by almost 20% and its high-performance Model 3 by 14%. The price reduction may allow buyers to entitle to federal tax credits. Telsa is also cutting prices in Germany, France, and other European countries by about 13%. Recently, Telsa has cut prices in China. China took up “special management shares” in Alibaba and Tencent The Chinese authorities have taken up “special management shares” also known as “golden shares” in local units of Alibaba and Tencent (00700.xhkg) apparently to exert influence over business decisions far beyond the around 1% equity stake that otherwise represents under normal situations. Investors generally welcome the move as it tends to signal that the Chinese authorities are shifting from a less predictable and heavy-handed crackdown on internet platform companies to more institutionalized, consistent, and predictable regulation and supervision of the industry.  Comments from the Davos forum on watch The World Economic Forum’s annual meeting kicks off in Davos, Switzerland this week. The theme this year is “Cooperation in a Fragmented World’, suggesting deglobalisation trends remain key to watch as has been a regular theme at Saxo. The meeting brings together heads of nineteen central banks and 56 finance ministers. Comments on key global issues, ranging from inflation to recession, as well as energy and food crisis will remain on watch. Geopolitical crisis will also constitute a key discussion as the war in Ukraine rages on and US-China tensions may come back in focus.   For a global look at markets – tune into our Podcast.   Source: Market Insights Today: U.S. bank Q4 earnings beat but weaker outlook; Yen surged on BOJ policy adjustment speculation; US holiday - 16 January 2023 | Saxo Group (home.saxo)

Summary:  US equity markets ended last week on a high note, as the US S&P 500 Index closed above its 200-day moving average and within a point of the psychologically pivotal 4,000 level as Q4 earnings season is now under way. The currency market could steal the limelight this week as a pivotal Bank of Japan is up on Wednesday. Will Governor Kuroda declare victory on bringing inflation back to Japan and shift policy again, triggering a further spike in the Japanese yen?   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities continue to toy with key resistance levels as Q4 earnings season got underway on Friday, dipping intraday but ending the week on a high note, just one point shy of the psychologically important 4,000 level in the S&P 500 index (cash index, the future trades clear of 4k), which is also just above the 200-day moving average and near other technical levels. Today is a market holiday in the US, but through next week’s heavy calendar of megacap earnings reports, traders will watch whether the market can clear this key resistance area and make a bid to surpass the December pivot highs near 4,100 for the cash index. The Nasdaq 100 index has more work to do, still trading almost 600 points below its 200-day moving average and the December pivot highs above 12,100. Hong Kong’s Hang Seng (HIF3) and China’s CSI300 (03188:xhkg) The CSI300 surged over 2%, led by pharmaceuticals, computing, and nonbank financials. Expectations of reacceleration of economic activities as a result of reopening and relaxation of regulation continued to boost market sentiment. Corporate filing information showed that The Chinese authorities had recently taken up “special management shares” also known as “golden shares” in local units of Alibaba and Tencent (00700.xhkg) apparently to exert influence over business decisions far beyond the around 1% equity stake that otherwise represents under normal situations. Investors generally welcome the move as it tends to signal that the Chinese authorities are shifting from a less predictable and heavy-handed crackdown on internet platform companies to more institutionalized and predictable supervision of the industry. By mid-day Monday, Alibaba and Tencent each gained about 1% and the Hang Seng Index advanced 0.7%. FX: JPY takes centre stage this week as BoJ to meet Wednesday The Japanese yen gained over 3% against the USD last week, moving from highs of 132.87 to lows of 127.46 on Friday. The yen was also stronger on all the crosses amid Bank of Japan’s unscheduled bond buying operations as the markets continued to test the policy yield cap of 0.5% ahead of the BoJ meeting this week and speculation of further policy tightening (more below). The US dollar was also broadly weaker, as EURUSD posted marginal new cycle highs overnight above 1.0870. AUDUSD has found a bid of late on anticipation of China’s reopening, testing 0.7000 overnight but reversing back a bit lower into early European trading today. Australia’s employment data will be key on Thursday. GBPUSD will focus on the host of UK data, from labour market data tomorrow morning, to the CPI release on Wednesday and Retail Sales data on Friday. Crude oil (CLG3 & LCOH3) trades softer after last week's strong gains Crude oil prices were steady to softer in early Monday trading after recording over 8% gains last week on China’s reopening optimism.  China’s road traffic levels are continuing to rebound from record low levels following the easing of COVID-19 restrictions. A congestion index comprising the 15 cities with the most vehicles registrations has risen by 31.3% vs a week earlier. Meanwhile, increased import quotas by China saw oil demand pick up in the physical market. Sentiment was also bolstered by expectations of the Federal Reserve slowing its interest rate hikes, following lower than expected inflation. Shale executives looking to substantially increase drilling would need US oil prices to climb to $89 a barrel, according to the latest energy survey by the Federal Reserve Bank of Kansas City. OPEC and IEA release their monthly oil market reports on Tuesday and Wednesday. Gold and copper trades softer following last week's surge Gold together with copper has been the in-demand commodities at the start of the year on China demand recovery hopes and not least the softer dollar and bond yields as the market adjust lower their expectations for future US rate hikes. Gold reached an eight-month high and copper a six-month high overnight before running into some light profit-taking. With RSIs on both in overbought territory, the underlying strength of both metals will sooner or later be tested, and the dollar probably holds the key. Hence the importance of Wednesday’s BoJ meeting, the outcome of which may trigger a major move in USDJPY (see below). Gold demand in India may suffer a temporary setback as traders adapt to near record prices. In addition, we have yet to see demand for ETF’s, often used by long-term focused investors, spring back to life with total holdings still hovering near a two-year low. US Treasury yields rebounded slightly Friday (TLT:xnas, IEF:xnas, SHY:xnas) After trading near the cycle lows of late last year into 3.40% for the 10-year benchmark on benign inflation data last week and a series of very strong auctions for especially longer-dated US Treasuries, the 10-year yield rebounded toward 3.50%. US treasury markets are closed for a holiday today. Read next: The UK Economy Expects A Slightly Fall In Inflation, Expected To Fall By 0.1%| FXMAG.COM What is going on? Iron ore loses heat, falling 4.5% after China accuses parties of price gouging The key steel making ingredient, iron ore (SCOA) fell 4.5% to $119.85 in Asia today, after China’s top economic planner, the National Development and Reform Commission (NDRC), said its cracking down on illegal activities such as hoarding and price gouging as it attempts to keep the iron ore price stable, after the iron ore price had risen 65% from October. Still iron ore inventory levels are lower than they were a year ago, when China’s economy was effectively in lockdown. Shares of iron ore majors, however, remained near their record highs with investors remembering that China has made such accusations in the past, and the iron ore price has recovered. BHP ended slightly higher, closing around record high territory, Rio fell slightly from its records while Fortescue Metals fell 2%. Corn (ZCH3) closed last week with strong gains following the US crop output report Corn prices recorded their biggest weekly gain since August as droughts curb the world’s supply buffer. The US Department of Agriculture unexpectedly cut its outlook for US domestic production and available stocks of both corn and soybeans, a sign that an ongoing drought from last year may continue to underpin prices. The worst Argentinian drought in 60 years also led to a downgrade in the outlook for soybeans and corn production, some of that being partly offset by an expected bumper harvest in Brazil. Corn prices were up over 3% in the week and Soybeans up over 2%. Part of the rally being driven by wrongfooted speculators who ahead of the report had cut bullish corn bets by 24%. Hedge funds opened their 2023 accounts by aggressively cutting exposure across the agriculture sector With energy also being sold, the latest COT report covering the week to January 10 saw buying being concentrated in just a few metal contracts led by copper and gold. Overall, the gross long across the 24 major commodity futures tracked in our weekly update fell by 15% to 1,194,000 contracts, the biggest one-week drop in six months. The changes were in line with price development across the different sectors with gains in precious (0.6%) and industrial metals (1.7%) being offset by losses in energy (-3.9%) grains (-2.7%), softs (-3%) and livestock (-1.5%). What are we watching next? Bank of Japan meeting on Wednesday shaping up as major event risk The recent news flow and rumor mill sees the Bank of Japan announcing further tweaks to its policy this Wednesday at its meeting, with a further JPY surge on Friday a clear sign that the market sees the meeting as a major event risk. As well, the Bank of Japan again broke its daily record for Japanese government bond purchases Friday as yields defied its 0.5% cap. The BOJ bought roughly 10 trillion yen ($78 billion) in JGBs over the past two days, with a 5 trillion yen purchase on Friday topping the high it had just set Thursday and is preparing to purchase more Japanese government bonds today, according to the Nikkei Somewhat ironically, the anticipated further widening of the BoJ’s yield-curve-control “band” (de facto more of a “cap”) on 10-year JGB’s this week or at a future meeting comes as long yields are dropping sharply elsewhere, accentuating the tightening of spreads between Japanese yields and those in, for example, Europe and the US. Earnings to watch The Q4 earnings season continues this week, with a relatively light schedule before next week’s mother lode of mega-cap earnings reports.  The key uncertainty is credit quality in 2023 as it is linked to the degree of a recession, or even whether there will be a recession at all in the US economy. Overall, the Q4 earnings season is likely going to see an extension of value and tangible companies performing better than intangible-driven companies. Interesting names this week include a former high-flyer like Netflix, which has achieved a more than 100% rally of its 2022 lows coming into this week’s report, even if it trades at under 50% of its peak valuation back in late 2021. Tuesday: Sartorius Stedim, Morgan Stanley, Goldman Sachs, Interactive Brokers Wednesday: EQT, Charles Schwab, PNC Financial Services, Kinder Morgan Thursday: Procter & Gamble, Netflix Friday: Investor, Sandvik, Ericsson, Schlumberger Economic calendar highlights for today (times GMT) US Markets Closed for Martin Luther King, Jr. Holiday 1300 – Poland Dec. Core CPI 1500 – UK Bank of England Governor Beaily to testify on financial stability 2330 – Australia Jan. Westpac Consumer Confidence 0200 – China Dec. Industrial Production/Retail Sales/Q4 GDP Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Financial Markets Today: Quick Take – January 16, 2023 | Saxo Group (home.saxo)

The oil market rallied yesterday partly driven by supply concerns related to the halting of operations at the Ceyhan export terminal. However, these worries should subside with Turkey ordering the restart of flows to the terminal Source: Shutterstock Energy- Ceyhan terminal restart Turkey yesterday ordered the restart of oil flows to the Ceyhan export terminal after flows were suspended as a precaution following the devastating earthquake which hit Turkey and Syria. The terminal ships around 1MMbbls/d of Azerbaijani and Iraqi crude oil from the Mediterranean. The suspension had raised supply concerns, however, the quick restart should ease those worries. The latest numbers from the API show that US crude oil inventories fell by 2.2MMbbls last week, while crude stocks at the WTI delivery hub, Cushing, increased by a modest 178Mbbls. The numbers were more bearish for refined products, with gasoline and distillate fuel oil inventories increasing by 5.3MMbbls and 1.1MMbbls respectively. The EIA will release its weekly inventory numbers later today. The EIA released its monthly Short Term Energy Outlook yesterday, in which it increased US crude oil production estimates for 2023 marginally from 12.41MMbbls/d to 12.49MMbbls/d, while output was expected to grow by a little more than 590Mbbls/d YoY. For 2024, crude oil production estimates were lowered from 12.81MMbbls/d to 12.65MMbbls/d, which leaves YoY growth at a fairly modest 160Mbbls/d. Metals - China continues to boost gold reserves The People’s Bank of China increased its gold reserves by about 15 tonnes in January, a third consecutive month of increases, to a total of 2,025 tonnes. In November and December, China added a combined 62 tonnes of gold. Before reporting gold reserves for November, China hadn’t reported any increases since September 2019. For nickel, the preliminary estimates from the US Geological Survey (USGS) show that global nickel mine production rose 21% YoY to 3.3mt in 2022, compared to 2.73mt in 2021. Most of the additions came from Indonesia (+54% YoY, 1.6mt) followed by the Philippines (330kt) and Russia (220kt). For Indonesia, the significant rise in production was mainly due to the ongoing commissioning of NPI and stainless steel projects. For lead, the Shanghai Metals Market (SMM) reported that a primary lead smelter in Hunan province had closed for maintenance for the week with operations set to resume next week. An estimated 2,000 tonnes of primary lead output is expected to be impacted in February due to the ongoing maintenance of the smelter. Agriculture – Brazil's soybean harvest slows There are reports that regular rains in Brazil will continue to weigh on the pace of the domestic soybean harvest. According to CONAB, so far, Brazil has harvested 9% of its 2022/23 soybean crop, down from 17% in the same period a year ago. Brazil is expected to harvest a record soybean crop of 153mt this season, up from 126mt last season. The issue with the slow pace of soybean harvesting is that it could delay safrinha corn plantings. Read this article on THINK TagsUS oil production Soybeans Oil Nickel Gold EIA Corn Ceyhan   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

The commodity complex has come under pressure in recent days, with more hawkish talk from some US Fed officials. Recent data from the US suggests the Fed may have to hike by more than expected US Federal Reserve building in Washington, DC Energy - Natural gas continues to weaken European natural gas prices continue to come under pressure, with TTF falling below EUR50/MWh on Friday and trading at its lowest levels since August 2021. Forecasts for milder than usual weather for large parts of Europe over the next week have put pressure on prices, whilst the imminent restart of Freeport LNG certainly wouldn’t have helped sentiment. However, we are likely getting to levels where the market should find some form of support. Coal-to-gas switching levels are not too far away and so if we see much more weakness this is likely to stimulate some demand from the power generation sector.  The latest data from GIE shows that European gas storage is a little more than 63% full, above the 5-year average of 44% and well above the 31% seen at this stage last year. US natural gas prices also weakened further, trading down to their lowest levels since September 2020. This weakness comes despite the progress made with the restart of the Freeport LNG export plant. Milder than usual weather over large parts of the US is weighing on heating demand. This has meant that the gap between current US storage and the 5-year average is widening. As for oil, prices came under renewed pressure last week, with ICE Brent falling by almost 4% over the week. A raft of strong data in recent weeks has raised expectations for a more hawkish Fed, which has weighed on the bulk of risk assets. There is very little on the calendar for the oil market this week, apart from the usual weekly EIA inventory data, which will be delayed by a day due to a public holiday in the US on Monday. Metals - Lead exchange stocks in China surge The latest data from Shanghai Futures Exchange (ShFE) shows that weekly inventories for metals posted another week of gains as of Friday. Lead weekly stocks jumped by 52% WoW to 77,216 tonnes (highest since September 2022) over the last week. Among other metals, zinc stocks rose 15% WoW to 121,413 tonnes (highest since June), while aluminium inventories climbed 8% WoW to 291,416 tonnes at the end of last week. The latest data from Zambia’s Finance Ministry shows that copper production reached 763.3kt (its lowest since 2015) in 2022, a decline of 4.7% YoY. The decline came despite the government’s aim to boost mining output for copper to 2mt by 2026. The latest statements from Ukraine’s Justice Ministry suggest that the nation’s top anti-corruption court has ordered the seizure of a key alumina plant linked to United Co. Rusal International and more than 300 assets linked to Deripaska. The Mykolayiv alumina refinery has been offline since early March 2022, following Russia’s invasion. The refinery could produce about 1.76mt of alumina annually. Agriculture – Sugar spread strength There are reports that the Indian government has decided not to allow further sugar exports this season beyond the already approved 6mt. There have been growing concerns for several weeks now that the government would not allow further exports, given worries over the domestic crop. The government will once again evaluate the domestic balance in March, at a time when cane crushing nears its end before deciding on exports. The move does raise concerns over tightness in the global market, which is reflected not only in the strength in the flat price, but also the March/May spread, which is trading in deep backwardation of more than USc1.60/lb. Worries over tightness should ease once the CS Brazil harvest gets underway in the second quarter. The Rosario Grains Exchange expects corn shipments in Argentina to fall by 40% YoY between March and June as severe drought impacted crop plantings this season. The exchange projects corn shipments to total just 8.7mt in these four months, as only 19% of the estimated area (7.3m hectares) was planted in the initial weeks. Previously the exchange trimmed its corn production estimates to 42.4mt for the second time following severe drought conditions, much lower than initial expectations of 55mt. Recent numbers from Ukraine’s Agriculture Ministry show that farmers harvested 53.9mt of grain from 98% of the expected area as grain harvests near completion. The wheat harvest stood at 20.2mt, whilst farmers harvested 26.5mt of corn from 94% of the expected area in 2022. Read this article on THINK TagsSugar Oil Natural gas Corn Copper Aluminium Alumina Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more