We have turned neutral towards oil and grains prices from spot prices from bullish on a three-to-six month horizon and expect industrial metals to be the bright spot in the commodities complex over the remainder of H117.
We remain positive towards commodity prices over 2017, as the combination of improving supply and demand fundamentals and rising global inflation expectations will support prices. Commodities look particularly attractive relative to bonds and equities - especially US stocks - and we maintain our long-held view that real assets will outperform. Extreme valuations in bonds and equities, at a time...
Agricultural equities will broadly outperform benchmark equity indexes over the coming quarters, as they will benefit from higher average commodity prices and an expected increase in inflation. However, companies will face challenges due to increased operating costs and trade protectionism.
We believe Greencore's latest acquisition provides a platform for the Irish company to rapidly grow its operations throughout the US, particularly as major brands and grocery players turn towards manufacturing partnerships to keep costs low. The outlook for the US convenience market remains favourable, as busy millennial consumers and greater health-consciousness drives demand for fresh food...
Although sugar prices will remain supported over the coming months, we see limited upside from their current levels. We believe fundamentals are already priced in and already bullish sentiment will fail to support prices further.
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Thanks, BMI Research