28-11-2012 14:32 PM | Viewed 2358 times

Commodity Outlook 2013

Agricultural markets are faced with the challenge of rebuilding global stocks next season given precariously balanced fundamentals. In order to achieve a build in stock levels in 2013, we expect prices - particularly in grain and oilseed markets - will need to move higher in Q1 to slow demand from its current pace. Higher prices during this period should also encourage increased global production, resulting in a rebalancing of fundamentals and a weaker price outlook for 2H 2013. The soft commodity markets offer more of a mixed bag in 2013, with a relatively neutral to bearish outlook for prices. Using the S&P Agri Index as a proxy for our commodity forecasts, we expect a decline in agricultural prices of around 10% between Q1 and Q4 2013. However, it is the lack of buffer stocks which leaves the market exposed to another season of extreme uncertainty and high volatility.

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