Michael Ferrari PhD

Recent Posts

ISO crop expectations provide support for world sugar futures

The No.11 market saw the strong surge that we have been anticipating this week, with ICE March-16 futures closing Tuesday’s session up 10.88% at 14.0 and May-16 up 8.31% at 13.82. 

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aWhere @SOLVE

Last week I was fortunate enough to participate in the inaugural SOLVE conference, held at the Massachusetts Institute of Technology. In the words of the conference organizers, ‘Solve’s mission is to inspire extraordinary people to work together to solve some of the world’s toughest problems.’ The event was organized around four pillars: Fuel, Make, Cure and Learn.

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Supply Side Support in Orange Juice Futures

Last week, the USDA National Agricultural Statistics Service (NASS) released a decrease in their domestic orange production estimate for 2015/16; this follows their reduction in 2014/15 output as well, so the orange juice futures market may be moving towards a supportive pricing structure in 2016. The chart below (from barchart.com) shows activity over the last five days for November-15 futures; with today’s trading exhibiting a 6% increase from yesterday.

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ENSO and the Global Soft Commodity Markets

aWhere has been discussing the potential impacts of the current El Niño event on global agricultural soft commodity prices for several months, and we believe l that we are at the start of a shift in some of these markets as we look to 2016.  The current positive phase El Niño has been described not only as the strongest El Niño since the 1997-98 event, but possibly the strongest over the last 50 years.  While it is difficult, if not impossible, to forecast a market bottom (see first futures snapshot from FinViz below), our analysis points to the current weather pattern coupled with broader macroeconomic themes as support for a constructive pricing regime in 2016, notably world sugar.

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India's Southwest Monsoon and the Risk to Commodities

In anticipation of this year’s Southwest Monsoon in India, many agricultural commodity risk managers are closely tracking the daily weather forecasts. Now that we are in the second week of June and the onset is slightly behind the “normal” schedule, there is a heightened level of uncertainty.

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El Nino Vs. Sugarcane: Good or Bad News for Commodities Sector?

With all of the recent news of a depressed market in the commodity sector, agricultural commodity analysts have been presented with a cause for concern as three major meteorological agencies (Australia’s Bureau of Meteorology, NOAA and the Japan Meteorological Agency) all confirmed that the El Nino that has been in a weak phase for the better part of the past year is finally showing signs of strengthening. 

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