Written Commentary
The Ghost in the Machine Q1 2024
March 19, 2024
Welcome to the Q3 2022 edition of the Ghost in the Machine
Welcome to the latest edition of the Ghost In The Machine, as another tumultuous year draws to a close, and the tragic and terrible war in Ukraine, numerous geopolitical tensions, the energy crisis, and central bank efforts to rein in inflation via aggressive rate hikes serve to heighten uncertainty, and raise the risk of recession.
The pandemic, the enormous current economic turbulence and accompanying cost pressures have spurred many companies, above all those in the commodity and energy sectors, into fast tracking digitalization projects both to save costs and to gain a competitive edge, we take a deeper dive into the potential benefits, and highlight the key distinction between ‘digitization’ and ‘digitalization’.
Covid-19 made us that much more aware of how important shipping is to the smooth functioning of the global economy, and now with the move to decarbonize the sector moving into centre stage, there are very real risks from not moving fast enough on ‘carbon tax’ to accelerate the shipping transition. Shipping container availability and pricing is a key driver of inflation, often serving as a key leading indicator of future price trends.
The disruption from the war in Ukraine has focussed on grains supply, above all wheat, and rather less on oilseeds, despite the importance of the Black Sea region in export terms, so what has been the impact and what are the prospects.
There is also a closer look at potential for the emerging ‘cultured cooking oils’ sector.
What are the prospects for the sugar market in the 2022/23 season, above all in Brazil and India, with a good deal of uncertainty around energy related demand, and potential changes to government policy following Lula’s election victory.
The immediate focus in terms of Europe’s energy crisis is how it will navigate the winter season, but German industry is facing major challenges in the longer term in terms of its competitiveness, is there a risk of ‘Japanification’?
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
