Not so Outrageous Commodity Predictions
Saxo Bank published their annual “outrageous predictions” for 2025. I actually found a few theses that I don’t even find that outrageous in their directionality. For example:
“The crypto market quadruples to more than USD 10 trillion, the US dollar falls 20% against major currencies and 30% versus gold.”
The market is currently heavily long the USD - it is basically THE consensus trade at the moment. We see opportunities on the short side emerging going into 2025.
“A strong reflationary impact in China and the world, outperformance of EM relative to DM and China in particular, higher commodity prices globally, a stronger Chinese renminbi.”
By now, it has become clear that the current stimulus that the Chinese government has injected into the economy is not enough to lift up the boat. News from China around additional stimulus will remain a major driver of copper and agriculture prices in our opinion as well.
“Crude oil slumps in price, a boon for airlines, chemical, paint and tire manufacturers and freight and logistics companies. But the market balances quickly and oil prices stabilise, as higher cost suppliers, especially in North America, shut down expensive shale oil production.”
The structural direction of the price of oil seems to be down.
Winner Winner Chicken Dinner
According to new data by S&P Global, demand for chicken meat will outpace the demand for pork by 2027. While pork demand will stagnate or even slightly fall, chicken but also beef demand will be driven by India as well as large parts of Africa.
This trend would be driven by rapid income growth and urbanization, alongside chicken's cultural adaptability.
A major tailwind for prices at the moment is, once again, the winding of Chinese demand - due to economic woes.
Once again, Brazil is positioned best and plays a major role in meeting that demand. The agricultural powerhouse is the largest chicken exporter, followed by the US (with quite a gap though).
In Other News…
After two easy winters in a row - this years’ early winter is colder - resulting in more usage for natural gas as a heating product.
On the other hand, this is not only a phenomenon in the EU. Over in the US, we see similar weather patterns, which will normalize again during the next two weeks - easing heating demand.
This week, look out for the following:
WASDE Report on Monday
OPEC Meeting on Tuesday
CPI data on Wednesday
Research Service
If you’re an institutional investor, check out our research products for commodity-related futures or equities here.
Till next Monday, Lukas
If you have any questions in the meantime, please feel free to contact me via X or Mail.