Agri Commodity Markets Research October 2022: Iced Coffee

The S&P GSCI Agriculture Index declined ‘only’ 1% MOM, but some commodities have been very volatile. Coffee futures led the decline, with ICE Arabica shedding a huge 17.5% MOM in a period where managed money dramatically reduced their long position. Recessionary concerns call into question global demand, while an improved Brazilian weather outlook boosts harvest potential for coffee and a number of other agri commodities. Meanwhile, a large 11% MOM move in Brent Crude was supportive for global vegetable oil markets (MDE-Bursa Palm Oil +12.1%, CBOT Soybean Oil +10% MOM). At the time of writing, the fate of the Black Sea grain deal remains extremely unclear, and with the terms of the current deal set to expire in late November, the chances of the deal not being renewed are high.

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