About China's massive food hoarding and further rising energy prices will result in even higher food prices in the near term.The benchmark, CRB Commodity Index, ended the week 4,6% higher and therefore made new highs.Oil-related futures ended their correction and surged higher. Natgas is still the most bullish play in town, as we warned you in The Kuemmerle Report over three weeks ago, with a long natgas setup.The commodity bull market is still intact and buying opportunities look in most markets much more lucrative than selling signals.Here is my latest playbook:If energy prices keep rising at that pace - inflation will become even worseLast week we saw crude oil up 8% and natural gas up over 16%. In a single week! Natgas also surpassed the 7$ mark and is now at hemispheres we haven’t see

During the last weeks, I got many questions about how I judge the forward curve of commodities, as well as the importance of contangos and backwardation. So here is what I’m looking for in the forward curve.Let’s start with a simple definition of both forward curve structures: Contango and backwardation are terms used to define the structure of the forward curve. When a market is in contango, the forward price of a futures contract is higher than the spot price. Conversely, when a market is in backwardation, the forward price of the futures contract is lower than the spot price. Generally speaking, market participants view a backwardation as a bullish sign for the market. That’s simply because buyers are ready to bid a higher price to get earlier delivery and therefore a sign of strong und

The benchmark, CRB Commodity Index, ended the week 1,3% higher.Energy had another extraordinary week, while refined oil products seem to outperform the basis crude oil product. Natgas also recovered quite strongly. Metals were weak and continued their downtrend. Grains and Softs were mixed and driven by their own market dynamics. Crypto was down again, driven by tighter financial conditions, a trend that should continue as well.Here is my latest playbook:Realyields at the brink of turning positive again10Y Realyields ended the week at -0,03% and could soon turn positive again for the first time since January 2020. Here you can see the correlation between Realyields and the CRB commodity index. We can say that there isn’t a significant correlation between both. What we can say is that

Biden bought himself time until the next winter with his 1 million bpd SPR #oil release over the next 6 months.A thread about what needs to happen in the meanwhile, to get this supply deficit solved.If the administration can't solve it - the next winter will be much worse...1. Ramp up oil production in the US. Nevertheless, there are structural issues with that goal. Like not enough drilling activity, low investments into the sector over many years and companies that use the newly generated cash flow to increase shareholder value vs. investing more.2. Get a nuclear deal done with Iran. Such a deal would have probably a direct impact on the supply situation. Without sanctions, Iran would be able to produce 500 to 750k bpd more.Rystadt currently estimates that this could replace 75% of the c

The benchmark, CRB Commodity Index, ended the week 2,5% higherThe energy was once again the biggest winner of the week. Natgas touched the 9$ mark for the first time since 2008!Metals were once again on the winning side, as Realyields slipped slightly. Grains and Softs were both mixed, but we have to talk about Oats and Coffee, as they both rallied hard over the week. The liquidity-driven asset crypto was also down.Oats catch a bid (again)I’m a big believer in a long-term oat bull market, simply because demand especially from younger generations just keeps growing and on the other side production stays limited, especially as Russia is also a big producer of oats. Nevertheless, the two most important exporters are Canada and Finland, accounting for as much as 60% of all export volume.From a

Big Rail Strike Averted // Inflation stays sticky after all — markets panic // & more The benchmark, CRB Commodity Index, ended the week 1,8% lower Welcome to another 115 people that subscribed to the Commodity Report during the last week, bringing the total subscriber count up to 2.182 people! Big rail strike averted Probably the best news of the week was that a rail strike in the US was averted after both parties agreed on a deal including higher wages and benefits for rail workers. The deal includes a 24% wage increase over five years, including 14,1 % effective immediately as well as five annual $1.000 payments, according to the National Carriers’ Conference Committee. According to the Bureau of Labor Statistics, there are currently 150.000 people working in the

Is there delusion in the copper market? // Commodities continue to mean revert // Resilient Bitcoin Welcome to another 64 people who subscribed to the Commodity Report during the last week, bringing the total subscriber count up to 2.649. Is there delusion in the copper market? Inventories of copper in warehouses run by exchanges such as the LME do not provide a complete picture of copper stocks in the supply chain since many industrial users will hold their own reserves of the metal. But visible stocks can have a significant influence on sentiment in the market. It’s just striking how negative the financial markets are about this industry, yet the physical market is so tight. The general macro view is very disconnected from the underlying physical fundamentals of the copper

The benchmark, CRB Commodity Index, ended the week -0,9% lower.The energy was mixed with gasoline up and natgas down. The volatility in the energy sector remains huge, but the momentum remains strong.Metals were all lower while Realyields surged further and economic momentum seems to slow down further and further.Grains were mixed with wheat as the biggest winner after the latest WASDE report was getting published on Thursday (I cover the topic in The Kuemmerle Report)Softs were mixed as well, many commodities here are consolidating, while orange juice broke out to the downside. Last but not least it was a horrible week for crypto. BTW If you would like to see more commodity and macro content like this - consider following me on Twitter @lukaskuemmerle Here are my latest observations:Liqui