Commodities Focus: The calm before the storm - ags markets warrant attention
Tracey Allen and Ruhani Aggarwal discuss their latest fundamental and price assessment for agricultural markets through 2022-23. Grain prices are consolidating around costs of production after one of the largest ever positioning washouts on record through June-certainly more abrupt, increasing risks of a late summer recovery. With one go the warmest Northern Hemisphere summers on record threatening production potential across Western Europe, and Ukrainian agricultural exports flowing well below capacity indefinitely, agricultural markets warrant close attention. Price forecasts through 3Q22 have been marked-to-market, prompting lower revisions for grains, palm, sugar and cotton markets, amid a tighter fundamental environment. The forecast profile continues to embed a fundamentally driven recovery through end 3Q22 into 4Q22 - reflecting the physical tightness in exploitable supplies, as material supply side downgrades are realized, and consumer demand emerges after a hiatus. Investor flows post-holiday season will also be important to monitor. This podcast was recorded on 12 August 2022. This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4178532-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.