Its been a while since my return from Brazil, and all I can say for now is that cmmodities traders and speculaters need only look at the oil price for direction as it seems all other fundamentals do not count. In the last month or so, we see freight rates at record highs, rice has gone past 1000$ and while its down now to 800 levels, once gets the feeling that prices could go anywhere...while most tell me prices are likely to trend down in the coming weeks/months, watch the weather, watch India, watch the crop numbers towards the end of the year to get a feel for where we are headed.
I'm personally more concerned about the longer term...water...land...productivity....as the short terms seems driven by sentiment and the flow of hot money that suddenly see commodities as a viable place to park money.
Its largely sentiment driven, with the sudden launch of commodity funds, zero coupon bond like investment vehicles and a plethora of unit trusts, funds etc seemingly only adding to the sentiment factor.
Watch this space, once again I promise more, as my work takes me back to coffee, rice, coal, iron ore and steel and the global shipping that oils the wheels of commerce.
PS Do not forget the fundamentals, as when the fund decide to exit, this is all we will have...and pay attention to the physical trades and not just the paper trades.....and don't forget inflation...seems we have been cursed b y "interesting times"!
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