2016-04-21

Commodity Futures Boom

Has the market truly turned or is this another liquidity induced bubble?

ZH: One Commodity Trader Writes: "What Is Happening Has Absolutely No "Reasonable" Explanation"
This is way past insane, ridiculous, etc…

The “fundamental” reasons people are trying to ping to this are simply a nice “window dressing”…

There is nothing else that can explain this other than you know what?

Here comes my Very-REAL Conspiracy Theory: the stupid FED and other Central Bankers around the world acting in unison to artificially raise inflation so that they can hopefully get out of the F’ing mess they got themselves into with this low/negative rate BS. Call me crazy, and I am not a “conspiracy theorist” – but what is happening has absolutely no “reasonable” explanation. So I have to think outside the box…

The FED and other Central Banks have already destroyed the equity and other macro-financial markets… it is now turn for the commodities markets…

I am serious … I really am… I wish I was just being sarcastic… but pause for a moment and think about what is written above…

What explains the move in Crude? Ok, I could try and put some sort of “rationality” on the initial move from $26 - $40 (as crazy as it was), but the action in the oil market since Sunday’s “about face” in Doha? No way anything other than pure, simple and outright manipulation can explain these last 3 days of action in the crude oil market… nothing…

How about the fact that the main drag on the inflation figures has been what? What? FOOD & ENERGY…

So is it so crazy to think that Central Bankers all got together in early 2016 and came up with the following equation???

ARTIFICIALLY RAISE COMMODITY VALUATIONS = HIGHER ARTIFICIAL INFLATION = CLAMORING FOR RATES TO BE RAISED = CENTRAL BANKS HAVING A “SUCCESSFUL” END TO THE CLUSTERFCK THEY GOT THEMSELVES AND THE REST OF ALL OF US INTO WITH THEIR “ZIRP” AND “NIRP” EXPERIMENTS…

The Chinese have noticed the commodities boom as well and shorts are being blown out.

iFeng: 大宗商品暴涨根本停不下来 大佬做空亏5亿
Why rose for commodities, the market is given three factors: first, the dollar decline is caused by a direct factor in commodity prices; Second, manufacturing seasonal rebound in March after entering China, increased demand for commodities; s Third, the market expect major central banks easing policy is nearing completion, with respect to commodity commodity currencies start bargain-hunting.

Suppliers Newswire analyst Qin Executive believes that the current futures market on soft commodity markets, cotton and sugar futures have received many positive support, or is expected to become the new darling of funds. Mainly due to extreme weather and tight supply and strong demand caused . From the supply point of view, the market pressure to reduce supply shortages and frequent messages, in particular the recent shortage of top agencies will increase annual forecast supply of sugar, which is significantly more than expected. Secondly, renewed speculation of extreme weather, the impact of El Nino La Nina may exceed, at least the existence of such a tendency in the market expected.

A new era of agricultural futures analyst Wang Chengjiang that although global cereal yield year after year, global grain stocks to the highest level for nearly 30 years, a serious oversupply, from the supply side, agricultural bear no foundation shaken, but this does not prevent the market price to build a base . "Because of high inventories old crop factor, already included in the prices of agricultural products among Current financial dollar factors, wheeled and spillover effects of fluctuations in commodity bull market, as well as the probability of occurrence of La Niña in the second half of the increase, would be sufficient to trigger a rebound trend fill empty formula, it will be the first stage of agricultural prices. yield weather patterns threaten to convert once, the bull market will start the main upward move in commodity assets recently become a configurable time period in order to feed meal, oil, represented by agricultural products, future trends upside potential is huge. rewrote the record high hog prices recently, in March rebound population data, which means growth in demand has the potential to feed distal end, these positive market signals to be dig. "
The conclusion is its probably a wave of liquidity:
Phoenix Securities believes that the second half of 2014, with the continued loose monetary policy, a lot of liquidity is released. At the same time, China stocks, bonds, property and even the futures market, all have been hit by a huge amount of funds. Sluggish real economy, financial assets need to seek to meet the requirements, is the root cause of these phenomena, in a surge in investor must maintain rational.

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