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7/28/2019 Commodity Call Jul13 (1).pdf
1/18
ANZ RESEARCH
COMMODITY CALL
10 JULY 2013
INSIDE
Summary 1Macro Backdrop 2
Charts of the Month 3
Commodity Calls 4Feature Note 7
Trade Ideas 9Commodity Prices 10
CFTC Table 11
Calendar Heatmap 12
Forward Curves 13Moving Averages 14
Forecasts 15Contacts 16
Disclaimer 17
CONTRIBUTORS
Mark PervanGlobal Head of Commodity Strategy
+61 3 8655 9243
Paul DeaneSenior Agricultural Economist+613 8655 9078
Victor ThianpiriyaCommodity Strategist
+65 6681 [email protected]
Natalie Rampono
Commodity Strategist+613 8655 9258
SEASONAL DEMAND PASSING
June was a volatile month for commodity prices, with significant headwinds
from China and the US undermining risk appetite for commodities. Despite
these headwinds, our proprietary ANZ-CCI ended the month only mildly lower,
with stronger energy, iron ore markets offsetting weaker precious and base
metals. Looking forward, we expect commodity markets to experience false
starts this month as early signs of a bottom in prices begin to emerge. But any
upside will likely be short-lived. Blurring the picture is the passing of a peak in
seasonal demand and an unclear position for Chinas near-term growth outlook.
In addition, the perception and eventual withdrawal of USD liquidity from global
financial markets will likely generate some uncertainty for commodity moves.
FEATURE ARTICLES
This month, we have two feature articles. The first is a review of our
commodity price forecasts, where weaker China demand and fragile investor
sentiment has prompted downward price revisions. The second note looks at
the outlook for Indonesian wheat imports. Indonesia is Australias largest buyer
of wheat and looks set to overtake Egypt as the worlds largest wheat importer
within the next five years.
KEY TRADES
Long WTI/Brent spread divergent demand & declining stocks to support WTI
Short iron ore weaker capesize rates & seasonal slowdown in China
ANZ CHINA COMMODITY INDEX
FIGURE 1. RECENT BOUNCE JUST A FALSE START
380
400
420
440
460
480
500
Jan Mar May Jul Sep Nov Jan Mar May Jul
ANZ CCI
Points
Period in Reference
-- 2013 -->-- 2012 -->
Source: ANZ Commodity Strategy
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MACRO BACKDROP
SEASONAL DEMAND PASSING
False starts expected as less negative datatriggers relief rallies
Passing peak in seasonal demand and unclearChina outlook continue to blur the picture
Oil to hold up better as unpredictable supplyoutages emerge
June was a volatile month for commodity prices, with
significant headwinds from China and the US
undermining risk appetite for commodities. Precious
metals were the worst performers, hit by a double
whammy of a severe credit crunch in China and the US
Federal Reserve confirming an earlier timeframe for
easing its asset purchase program. Base metals also fell,impacted by weaker manufacturing in China and further
uncertainty regarding demand. Despite these headwinds,
our proprietary ANZ-CCI ended the month only mildly
lower, held up by energy, iron ore and cotton markets.
Stronger physical trade or increased supply risks appear
to be the underlying support for these markets.
We expect commodity markets to experience false starts
this month as early signs of a bottom in prices begin to
emerge. Investors have priced in a lot of the downside
for China, with record high speculative net shorts in
markets like copper and we think less negative or
encouraging data could trigger relief rallies. But anyupside will likely be short-lived. Blurring the picture is the
passing of a peak in seasonal demand and an unclear
position for Chinas near-term growth outlook.
Although liquidity tightness in China has started to ease,
funding costs are unlikely to return to normal levels any
time soon. If Chinas central bank continues to tighten
market liquidity despite a softer growth and inflation
outlook, growth risks could be to the downside in Q3 and
Q4. Were already seeing this play out in commodity
markets like coal, with rising expectations of defaults as
a series of contracts are renegotiated lower. Banks
appear to be taking a particularly hard line on commoditytrading activity since the start of the year, following a
rapid rise in non-participant commodity-based financing
over 2012.
Chinas property market is also vulnerable. Recent
property investment curbs to control prices dont appear
to be working, with home prices and sales up in June.
This could further induce property controls, but we feel
this may accentuate the problem. Nearer-term,
commodities continue to remain sensitive to Chinas
manufacturing outlook. The latest PMIs suggest
momentum is slowing, which is also pressuring our
proprietary ANZ global lead indicator (ANZ-GLI).However, this has been partially offset by modest
improvements in the US and Japanese manufacturing
sectors.
We think the ANZ GLI will continue to grind lower this
month, with a collapse in Asian (ex-Japan) net capital
inflows, coinciding with near-term Fed tapering
expectations. US data has recently surprised on the
upside, supporting the case for Fed asset tapering, with
and global bond markets have re-priced for higher rates
across the yield curve. The perception and eventual
withdrawal of USD liquidity from global financial markets
should be negative for exchange-traded commodities,
especially gold.
Oil could continue to hold up better than other
commodity markets. Rising tensions in Egypt and
potentially other regions in the Middle East should
support a USD 5-10/bbl geopolitical risk premium. A re-
established positive correlation with equity markets could
also make oil more sensitive to macro-economic data and
earnings results. This may prompt greater divergence
between US oil and Brent oil benchmarks. However, with
record high speculative net long positioning in oil, the
market would also be vulnerable to some profit-taking.
In contrast, agricultural leveraged fund positioning has
moved net short for the first time in 18 months. Fund
outflows were particularly aggressive in grain markets in
the past month, a key factor behind grains being one of
the worst performing commodity markets. A warmer and
drier weather outlook in the US Mid West, improving US
corn yield prospects, and higher than expected corn
planting area, were behind the sell-off. The market had
expected US corn plantings in 2013 to be around 2
million acres below 2012, as cool, wet weather early in
the year delayed corn and soybean plantings. However, a
USDA report indicated the area planted to corn in the US
this season was 97.4 million acres, slightly above last
year. Looking forward, given the large price falls in the
past month, we expect grain prices to stabilise until there
is more clarity on US corn yields.
FIGURE 2. PRICE MOVEMENTS IN JUNE
(15) (10) (5) 0 5 10
Palladium
Silver
Gold
Corn
Platinum
Wheat
Aluminium
Lead
Copper
Nickel
Coking Coal
Soybean
Zinc
Palm Oil
China Hot Roll
Thermal Coal
ANZ CC ISugar
Brent Oil
Cotton
WTI Oil
Iron ore
M/M %
Hard/Energy
Ags/Softs
ANZ CCI
Source: ANZ Commodity Strategy
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CHARTS OF THE MONTH
FIGURE 3.COMMODITIES TRACKING EMERGING
MARKET DECLINE IN RISK APPETITE
FIGURE 4. TURNING POINT FOR BALTIC FREIGHT
RATES & SEASONAL DEMAND
(5.0)
(4.0)
(3.0)
(2.0)
(1.0)
0.0
1.0
2.0
3.0
05 06 07 08 09 10 11 12 13
Emerging mkts Devp'd mkts ANZ CCI
Dev'n 12m trend
divergence
RISK APPETITE & ANZ CCI
500
1,000
1,500
2,000
2,500
3,000
3,500
Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13
Baltic Dry Index Capesize Panamax
points
turning point?
BALTIC FREIGHT INDICES
Sources: Bloomberg, ANZ Commodity Strategy Sources: Bloomberg, ANZ Commodity Strategy
FIGURE 5. NO RESPONSE IN COKING COAL PRICESAFTER RECENT IRON ORE PRICE BOUNCE
FIGURE 6. MIDDLE EAST POLITICAL RISK BUOYS
SPECULATIVE OIL NET LONGS TO RECORD HIGHS
80
100
120
140
160
180
200
Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13
100
150
200
250
300
350
Iron Ore Price Hard Coking Coal Price (RHS)
USD/t USD/t
no coking coal
recovery
IRON ORE & COKING COAL PRICE
100
120
140
160
180200
220
240
260
280
300
Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13
WTI Net Long Brent Net Long
mbbls
record highs
CFTC NON-COMMERCIAL OIL POSITIONS
Sources: Bloomberg, ArgusCoal, ANZ Commodity Strategy Sources: Bloomberg, ANZ Commodity Strategy
FIGURE 7. GOLD/SILVER RATIO TRENDING HIGHER
AS SILVER MARKETS UNDERPERFORMFIGURE 8. US CORN CROP CONDITION NOTABLY
BETTER THAN AT THIS POINT IN 2012
30
40
50
60
70
80
90
05 06 07 08 09 10 11 12 13
Gold price/Silver price 5-year average
times
57
current ratio - 65
gold expensive
gold cheap
GOLD/SILVER PRICE RATIO
20
30
40
50
60
70
80
May Jun Jul Aug Sep
2010 2011 2012 2013
% GOOD TO EXCELLENT CONDITION
Sources: Bloomberg, ANZ Commodity Strategy Sources: NASS, ANZ Commodity Strategy
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COMMODITY CALLS
COMMODITY COMMENTS Bearish Neutral Bullish
ENERGY
Oil markets should hold up in July. However, bouts of profit-taking could be apparent as oil prices become overvalued.
Oil has held up much better than other commodities despite weaker China growth and expectations of US Fed asset
tapering. We still expect US oil markets to outperform Brent near-term. While both contracts tend to move in a similar
direction, an uneven global economic recovery and divergent demand trends should continue to support a better
performing US crude market. We also expect market participants will continue to factor in declining US stocks as
domestic transportation bottlenecks are alleviated. Although, supply shocks could emerge from geopolitical risks in
the Middle East and the onset of the US hurricane season.
The Brent/WTI spread hit a two and a half year low of USD4.5/bbl in June and we think is at risk of falling to a
discount. We also expect the steeply backwardated WTI curve to be maintained. WTI has recently re-established a
strong positive correlation with US equities and a lift in earnings following recent improved US data flows should buoy
the outlook for US oil consumption this year. Markets have been pencilling in easing transportation bottlenecks to the
US Gulf Coast. The return of the Tulsa East refinery, the start of a new 250kbbls/day CDU at Whiting and the start orramp ups of several new pipelines should occur near-term. As a result, inventories at Cushing should experience
draws near-term. A more active hurricane season is also on the cards, and could prompt a tighter supply outlook.
Demand fundamentals look less favourable for Brent. The onset of slower seasonal demand in the third quarter and
unclear position for Chinas near-term growth outlook could be a drag. North Sea production should return to normal
following maintenance, but any supply outages during the third quarter shoulder period will be closely monitored by
the market. Saudi Arabia also continues to raise production to maintain market share, which could offset some of the
supply losses from rising Middle East tensions and tighter Russian supplies. Although, rising geopolitical risk sentiment
stemming from turmoil in Egypt and potential regional supply shocks will likely support oil markets more generally.
BULKS
Bulk markets were mixed in June with stronger iron ore prices offsetting weaker coal prices. The divergingperformance of iron ore and coking coal was an interesting dynamic with iron ore gaining on the backdrop of flat to
weaker steel and coking coal prices. Reports of shipment defaults in thermal coal are also a shot across the bow that
all is not well, and with seasonal demand now declining, we expect bulk prices to consolidate or even weaken off
already low bases in the months ahead.
Rallying Baltic Capesize rates propped up iron ore prices in the past month as traders bet the bottom in prices had
passed. We think the bounce is just that, with prices likely to ease in the coming month as seasonal demand wanes.
Freight rates are still high, but have lost their upward momentum suggesting traders have had enough for the time
being. Chinese port stocks have also gained 7-8% in the past month suggesting the increased buying activity is going
into opportunistic inventory rebuilding rather than better demand. In the absence of stronger steel prices (not
apparent right now) spot iron ore prices should retrace back towards the USD110-115/t range in the short term.
Coking coal looks in worse shape decoupling from firmer iron ore prices over June. A flat steel market hasn't helped,
with ultra skinny steel mills margins making it very difficult to accept higher iron ore and coking coal prices at thesame time. Higher coal export volumes out of Australia looks a little misleading, but shows the pricing leverage steel
mills have at the moment - taking higher volumes at lower prices. In fact, rising supply in a weak market is fuelling
further price declines. Although prices now look distressed (for producers), stronger steel prices will be needed to
change the mood. This doesn't look likely in the next few months.
Thermal coal is defying logic, with prices dipping heavily into the cost curve. We estimate 30% of the seaborne
industry is losing money at current prices - most of it, Australian output. A falling Aussie dollar is not helping, with
high cost Australian producers delaying closure decisions on the mild positive currency impact. Reports of shipment
defaults highlight the negative tone of the market - and flags even lower prices in the short term. This could also
create an overhang of supply into the fourth quarter blunting a price pick up from stronger winter demand. Mild
support could come from reports Japan is increasing thermal power capacity, but better news has to come from the
bigger "growing" markets of China and India to re-ignite stronger prices.
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COMMODITY CALLS
COMMODITY COMMENTS Bearish Neutral Bullish
BASE METALS
Base metals could experience relief rallies as signs of a bottom in prices emerge. But these will be short-lived, with
the view on China still uncertain. Demand has been underwhelming and sentiment will likely remain cautious with
investors keeping a wary eye on tight credit conditions and rising property prices. Recent tight supply conditions and
higher premiums should start to ease as the traditional seasonal peak in demand passes and supply outages are
brought back online. Global LME inventories are still blurring the picture with inventory financing deals keeping levels
inflated and delayed delivery schedules. We think Chinese inventory moves should be a better guide of real demand
with a pull-back in local financing deals removing the non-commercial influence.
The volatility in copper prices will likely continue near-term. There could be some upside from greater copper imports
in June, after the Shanghai/LME differential reached the widest levels in 3 years. Domestic inventories are also posting
ongoing declines, down 30% to 173,000 tonnes since early April. However, LME warehouse delays continue to blur the
picture, with copper importers being forced to queue for already bought deliveries, as reflected by sticky near-record
high LME copper cancelled warrants. As a result, global LME stockpiles remain inflated near 10-year highs. Recentsupply tightness should also subside, with the return of Freeports Grasberg production to full capacity and
commencement of Rio Tintos 430ktpa Oyu Tolgoi copper concentrate shipments from Mongolia.
A crackdown on financial applications for high energy consumers or heavy polluting companies in China could see
more upside in aluminium, zinc and lead markets. Stockpile positions suggest lead is tighter than zinc while
aluminium markets continue to be pressured by overcapacity and near-record high stocks. Nickel probably has the
greatest potential for a short term rally, after two months of posting the biggest price declines. About 45% of global
nickel producers are operating below current prices and we expect global nickel producers (ex-China) will begin to cut
back output. That said, prices should remain under pressure with Chinas nickel pig iron (NPI) producers still operating
at full capacity. The average cost for Chinese NPI production is estimated to be below USD13,000/t and supplies have
been encouraged by ongoing declines for raw material costs (particularly coking coal).
PRECIOUS METALS
Precious metals declined sharply in June. Spot gold fell 12% in the month, taking losses for the calendar year to 26%.
Silver wasnt spared, also down 12%, but has fared worse than gold with the latest months moves taking silver losses
this year to 35%. Declines in platinum and palladium, down 8% and 10% respectively rounded off a difficult month
for the precious metals complex. Going forward, we think investor sentiment towards these markets will remain
negative. The ongoing capital flows into developed markets is boosting the USD and US interest rates, both of which
reduce the investment appeal of precious metals. And speculative net long position in both gold and silver are at
historical lows of 4.0%-4.5% of open interest, flagging lack of confidence short term.
Interestingly, physical gold demand in China remains strong and the onshore-offshore price differential has improved
to around USD30/oz, from USD18/oz in late May. Chinese demand remains robust, and imports for the first 5 months
of 2013 are almost double year-ago levels. However, India should continue to see weak import volumes amid higher
import duties and restrictions on gold consignments. These factors saw Indian gold imports reportedly fall to 31.5mtin June from 162mt in May, according to a government source. However, while we expect this to persist for some
months, we should see a pick up in volumes as we approach the wedding season starting in November.
We continue to see further near-term downside for gold. Technically, the market is still trying to establish a base, and
the style of further dips and rebounds should be closely monitored. We are biased lower in the near-term and are
targeting prices sub-USD1,150/oz, but look for a recovery in coming quarters. We expect gold to recover mildly from
these levels towards the end of the year and stabilise around USD1,300/oz. Selling by gold-backed exchange traded
funds (ETFs) have added the equivalent of 12.5% to global annual gold supplies in 2013 so far. This is one dynamic
that must subside before the market can stage any real recovery.
Platinum and palladium markets are supported by supply issues in South Africa, as workers undertook industrial
action related to pay disputes. Immediate concerns may have been alleviated as Amplats announced the return of
workers, though wage negotiations are set to continue over the next few weeks and could be a source of near-term
volatility. Gold and silver are highly vulnerable to short-covering, though we expect the style of these moves to beshort, sharp and unsustained as the near-term fundamental picture remains negative.
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COMMODITY CALLS
COMMODITY COMMENTS Bearish Neutral Bullish
GRAINS
Despite old crop corn prices remaining resilient, new crop prices have fallen sharply in the past fortnight. December
2013 corn future prices have fallen 14% from the high in mid-June, resulting in prices closing below the psychological
barrier of 500USc/bu in the past week. Given the extent of these falls, we expect prices to stabilise near term, with
markets unlikely to fall further until there is more clarity on US corn yields. A main concern at present with the US
corn crop is its development is running behind in some areas. Slightly warm and drier conditions are needed, but such
weather forecasts are also unfriendly to prices. This is the exact scenario markets are grappling with. The two week
weather outlook in the US Mid West is for average or slightly higher temperatures while rainfall forecasts centred on
Iowa are for drier than normal conditions conditions all favourable for rapid growth. While forecasting skill is lower
further out, the weather outlook looks similar through to early August, but importantly, large spikes in temperature
are not expected. Overall, with the greatest chance that weather remains benign for the US corn crop over the next
six weeks, prices are still at risk of correcting further. We anticipate new crop corn prices will fall another 10% in
August as the current weather risk premium built into prices washes out of the market.
For wheat, supply dynamics look decidedly different. Uncertainties surrounding global supply have reduced
significantly in the last month, with winter wheat harvest well underway throughout the northern hemisphere. As a
result CBOT wheat prices have declined 8% in the last five weeks and are expected to remain under pressure as
harvest continues. In key US Hard Red Winter (HRW) producing states, harvest is well over half complete. More
broadly across the US, 57% of US winter wheat was harvested by 7 July, a slightly slower pace than the 5 year
average. In contrast, new wheat supply from the Black Sea region is hitting export markets slightly ahead of normal.
Over 25% of the Ukraines winter wheat crop has already been harvested, while Russias harvest in the south started
two weeks ahead of schedule. While export supply will increase from the region this month, peak supply will be most
apparent in August and September. This is also likely to coincide with markets becoming more comfortable with spring
wheat yields and the state of the US corn crop. Assuming global weather for grain crops remains benign, these factors
should all conspire to push wheat prices another 5-10% lower by September.
SOFTS
Sugar prices look set to remain under pressure in coming months as peak supply from Brazil and Australia hits the
market. But with prices testing close to 16USc/lb, the question facing market participants is how far will prices fall
below this in Q3? In our view, a further 10% fall cannot be ruled out, but a more dramatic decline looks unlikely. One
factor behind recent USD sugar price weakness has been the fall in the Brazilian Real (BRL). Dire sentiment towards
emerging market economies and commodities in the past two months has driven the BRL 11% lower against the US
dollar. With early signs the worst of the negative sentiment has passed, the same currency headwinds for sugar prices
are unlikely to be repeated in the coming two months. Similarly, the impact of an early and dry start to Brazils crush
this season will wane in the months ahead. Early season trends in Brazils centre south crush saw mills in the region
extract over 60% more recoverable sugar. But with full season growth likely to be only 15% y/y, this trend will fade,increasing the need for sugar to price itself more competitively against ethanol.
After a period of range bound trading, volatility in the cotton market should increase over the next quarter. Chances
of an upside breakout above 90USc/lb rest on a weather driven event. With the US crop already in less than ideal
condition in Texas, ongoing dryness and a further deterioration in yield prospects in the US is likely to be the main
avenue for such a catalyst. Aside from weather concerns, we expect ICE cotton futures to remain capped below
90USc/lb. At this level or higher, profitability for Chinese spinning mills importing cotton becomes marginal. Also if
prices persist above this level for a sustained period, cotton risks losing market share to synthetic fibres in some
countries. This would increase the risk of downgrades to global cotton demand for 2013-14, pushing ending stocks
higher. As to downside price risks, we have materially increased the chance that prices will fall below 80USc/lb in
coming months. Investor positioning is extreme, with CFTC net long spec positions up to 36% of open interest,
leaving risks prices will fall if this segment of the market decides to liquidate. Further we think a slowdown in Chinas
imports in the second half will reduce the existing global price distortions from Chinas cotton policies, providing lesssupport to global cotton prices.
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FEATURE NOTE
COMMODITY PRICE REVISIONS
Weaker China demand and fragile investorsentiment has prompted a price revision
Biggest downgrades have been made toprecious metals and coal
Price will fall 9% in 2013 but rise 5% in 2014as investors look to re-enter off a low base
We have downgraded our commodity price forecasts by
an average 4.5% in 2013 and 5.5% in 2014 adjusting
for a weaker China demand outlook and in some cases,
an inelastic supply response. Abrupt selling by
investment funds has also prompted a lower short-term
price outlook, particularly for the precious metals. Ourbiggest downgrades have been to precious metals and
coal. In most cases, prices will decline further in the
coming quarter, before recovering in the fourth. We
now expect prices to fall an average 9% in 2013 and
rise 5% in 2014.
Commodity markets have struggled over the past three
months as confidence over the short term China
demand outlook deteriorates. Strangely, the data
hasnt been terrible, but the market appears to be
struggling to adjust to a more pragmatic leadership
regime. There is however growing risks that the hands-
off approach is creating additional stress, withtightening credit supply hamstringing key heavy
industry demand. This, along with recent downgrades
to our China GDP forecasts, is a key reason for our
more cautious price outlooks.
Another headwind has been heightened expectations of
tapering of US quantitative easing (QE). This has
manifested itself in a stronger US dollar (negative for
commodities) and a broad asset rotation out of US
bonds and global commodity markets into a better
returning US equity market. The improved
accompanying US data flow has largely been ignored
(by commodity markets), with the leverage being lostto the much more dominate, but poorer performing,
China market. We think this dynamic has largely played
out, but cant see it unwinding or reversing in the short
term.
Supply dynamics have surprised us on the negative
side, with loss-making industry participants unwilling to
wind-back or idle capacity. This is mainly showing up in
the coal and base metal markets, where pledged supply
agreements or government support is making it hard or
not necessary to reduce supply. Inventory levels have
also swelled. The biggest drag is being felt in coal,
nickel and steel. Visible copper stocks also look high,but reports of sharp draw-downs in hidden Chinese
ports stocks may be masking tighter conditions.
Our biggest downgrades have been made to precious
metals down an average 8% over 2013/14. The
strong negative sentiment swing in the past fewmonths has triggered additional technical selling in a
market which is always vulnerable to momentum
trading. Gold and silver are also playing a slightly
different tune to other commodities, much more
sensitive to the asset rotation out of safe-haven US
bond markets and the liquidation of large exchange
traded fund positions. We still see short term weakness
in prices down to the mid USD1,100/oz range, but
expect prices to rebound back towards the
USD1,450/oz range by mid 2015.
Our other big downgrades are in coal and nickel down
an average 7% over the next two years. The coalmarket is being hamstrung by weaker Chinese demand
and stronger Chinese supply. The additional rub, is
inelastic high cost Australian coal supply, which is
ramping up, rather than winding-down, output in a bid
to leverage a flat unit cost structure. Nickel continues
to feel the brunt of substitution to Chinese Nickel Pig
Iron and excess stainless steel supply. US oil is one
market we have upgraded as better domestic demand
and easing supply bottlenecks trigger a firmer view.
FIGURE 9. COMMODITY PRICE FORECASTS
Calendar Year - Avg 2012 2013F 2014F 2015F 2016F
Copper USD/lb 3.61 3.33 3.60 3.27 2.90
Aluminium USD/lb 0.92 0.84 0.91 1.00 1.0
Lead USD/lb 0.94 0.97 1.02 1.08 1.04
Nickel USD/lb 7.95 6.96 7.69 7.89 7.78
Zinc USD/lb 0.88 0.86 0.97 1.04 1.03
Gold USD/oz 1669 1367 1355 1455 1510
Silver USD/oz 31.2 23.1 22.8 25.3 27.0
Platinum USD/oz 1552 1469 1525 1646 1653
WTI Crude USD/bbl 94 97 108 101 93
Brent Crude USD/bbl 112 106 111 106 98
Iron Ore USD/t 129 126 123 118 113
Coking Coal USD/t 210 157 166 179 180
Thermal Coal USD/t 95 85 90 98 10
Change in forecasts 2012 2013F 2014F 2015F 2016F
Copper % - -3.8 -3.7 -1.1 -
Aluminium % - -5.2 -5.1 - -0.1
Lead % - 0.0 - -
Nickel % - -8.1 -6.8 -4.9 -3.7
Zinc % - -3.6 -2.5 -2.5 -0.7
Gold % - -5.5 -7.4 -7.1 0.5
Silver % - -8.1 -10.4 -9.0 -0.7
Platinum % - -6.7 -9.7 -3.7 -0.9
WTI Crude % - 1.1 4.7 4.5 1.2
Brent Crude % - -2.2 -1.8 - -
Iron Ore % - -5.6 -3.7 -2.6 -0.
Coking Coal % - -5.3 -10.1 -4.0 -0.7
Thermal Coal % - -5.7 -9.3 -6.3 -3.5
Average -4.5 -5.5 -3.7 -0.9
3
4
-
2
Source: Bloomberg, ANZ Commodity Strategy
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FEATURE NOTE
INDONESIAN WHEAT IMPORTS TO JUMP
Indonesian wheat import volumes to surpriseon the upside over the next 12 months
A widening price disparity between rice andwheat, the curbing of flour imports and high
food inflation in Indonesia will drive above
trend import growth
Australia will see another record year ofwheat exports to Indonesia, with volumes
forecast to reach 5 million tonnes (mt) per
annum for the first time
Wheat imports by Indonesia, the worlds second ranked
importer by volume, are set to accelerate sharply. Weforecast Indonesian wheat imports to jump 15% y/y,
implying volume growth of around 1mt over the next
12 months. For Australia, we expect this to mean
another record year for wheat exports to Indonesia
hitting 5mt per annum for the first time. Factors driving
this stronger than normal growth include:
a widening price disparity between rice and wheat; the curbing of flour imports by Indonesia; high food (non-cereal) CPI and fuel inflation inIndonesia;
and new domestic flour milling capacity.A widening price differential between Indonesian rice
and Australian wheat in H2 2013 will be a key catalyst
in driving wheat demand in Indonesia. Seasonal factors
should keep Indonesian rice prices supported, while
global wheat prices are expected to still fall further
between now and the Australian harvest as northern
hemisphere grain supply increases. We expect to see
the price spread widen to USD500/t by late Q3, a level
more consistent with the first half of 2012.
Current high food inflation in Indonesia also favours
higher wheat consumption in the months ahead. FoodCPI is running at 11%, driven by rising fruit, vegetable,
fish and meat prices. However price rises in
cereal/grain CPI have been more subdued (Figure 10).
Further, petrol retail prices increased by 44% and
diesel prices by 22% on the 22 June. This is the first
increase in transport fuel prices in Indonesia in five
years. With higher fuel prices and non-cereal food CPI
sweeping through the Indonesian economy, consumers
are likely to be particularly cost conscious, favouring
consumption of wheat noodles at the expense of other
food items.
A continuation of the higher tariff on flour imports intoIndonesia is expected to continue to curb wheat flour
imports over the next 12 months. In December 2012,
Indonesia imposed a temporary 20% safeguard duty on
imported wheat flour lasting for 200 days, with expiry
on 20 June. While no official announcement has beenmade, the expectation is the government will
indefinitely extend the higher tariff.
This will be a positive for Australian grain demand, as
the measure has effectively shut a small, but
significant, supplier of Black Sea wheat into Australias
largest wheat market. In the three years prior to 2013,
Turkeys flour exports to Indonesia were the equivalent
of 45,000 tonnes of wheat exports per month. Since
the implementation of the tariff, Turkeys flour imports
have been negligible to Indonesia.
Consistent with an expected large jump in wheat
imports, the Indonesian flour milling industry is adding
new capacity. Over the course of 2013, the completion
of four new flour mills is expected to add 25% to
current capacity. This large increase in capacity will
keep mill utilisation rates under pressure in Indonesia.
Even with our forecast of Indonesia importing 7.5mt of
wheat over the next 12 months, utilisation rates for the
Indonesian flour mill industry are likely to fall back to
66% of installed capacity, a 4 percentage point decline
compared with 2012-13.
First published as a Commodity Insight on July 2
Indonesia wheat imports to jump sharply
FIGURE 10. JUNE INDONESIAN FOOD CPI
(5)
0
5
10
15
20
25
Fruits
Vegetables
Food
Meat
Fish
Eggs/Milk
Cereals
Fats/Oils
y/y %
S
ource: CEIC, ANZ Research.
7/28/2019 Commodity Call Jul13 (1).pdf
9/18
ANZ Commodity Call / 10 July 2013 / 9 of 18
TRADE IDEAS
OIL (initiated 2nd July 2013)
We think US WTI markets will continue to outperform
Brent near-term and have initiated a long WTI, short
Brent spread trade, targeting an USD0.50/bbl
premium. While both contracts tend to move in a
similar direction, an uneven global economic recovery
and divergent demand trends with the US economy
improving and uncertainty in China should continue
to support a better performing US crude market. We
also expect market participants to continue to
factoring in for declining US stocks at Cushing, as
domestic transportation bottlenecks are alleviated
from increased pipeline and refinery capacity nearby.
Long WTI (CL2), short Brent (CO2)
Entry: Buy WTI @ USD98/bblSell Brent @ USD103/bbl
Target: +USD0.50/bbl
Stop Loss: -USD10/bbl
Timeframe: 3 months
FIGURE 11. US CUSHING STOCKS & WTI PRICE
10
15
20
25
30
35
40
45
50
10 11 12 13
70
75
80
85
90
95
100
105
110
115
Cushing Oil Stocks Oil Price (RHS)
mbbls USD/bbl
Sources: Bloomberg, ANZ Commodity Strategy
IRON ORE (initiated 10th July 2013)
We think iron ore prices will fall near-term, tracking
Baltic Capesize freight rates with a 1-2 week lag. The
capesize market is expected to fall after a strong run
rate in June up 60%. A slowdown in seasonal
demand is already being reflected in the freight rates,
which is down 9% since the beginning of July. We arealso cautious on Chinas steel market, with a little too
much steel output produced in the first quarter -
showing up in high steel inventories. This means we
may see sightly weaker steel output in the second half
as domestic steel mills run down steel stocks.
Short Nov13 Iron ore Swap (TIOX3)
Entry: Sell current @ USD117/t
Target: USD110/t
Stop Loss: USD120/t
Timeframe: 2 months
FIGURE 12. PHYSICAL IRON ORE PRICE & BALTICCAPESIZE INDEX
105
110
115
120
125
130
135
J F M A M J J A
1,200
1,300
1,400
1,500
1,600
1,700
1,800
1,900
2,000
2,100
2,200
Iron Ore Price Baltic Capesize Index (RHS)
USD/t Points
9%
Sources: Bloomberg, ANZ Commodity Strategy
7/28/2019 Commodity Call Jul13 (1).pdf
10/18
ANZ Commodity Call / 10 July 2013 / 10 of 18
COMMODITY PRICES (% CHANGE)
LONDON METALS EXCHANGE (UDS/lb, USD/t) LONDON METALS EXCHANGE (kt)
Aluminium 0.93 2,059 0.9 8.5 9.6 (7.0) (0.9) (1.2)
(4.1)
(14.7)
(1.7) (1.7)
(5.3) (8.7) (10.8) (22.9) (7.8)
(2.0)
(0.1) (3.8) (3.8)
(1.2) (1.7) (3.0) (6.6) (1.2) (4.0) (4.6) (4.0)
(13.5)
(0.5) (6.1)
(4.3) (16.3)
(2.3) (3.2) (0.4) (0.5)(1.5)
(6.3) (11.6)
(6.9) (4.0) (8.7) (6.9)
(14.8) (16.6)
(2.1) (2.9) (11.5)
(0.6) (1.3) (5.9)
(0.2)
(6.9) (8.5)
(1.8) (10.5)
(13.1) (10.4)
(10.7) (11.3) (13.6) (12.4)
(10.9) (8.2) (18.5) (17.9) (18.5) (12.0) (11.3)
(2.5) (2.5) (3.7) (16.1) (3.7)
(1.5) (2.5)
(4.6)
(3.9) (15.4) (15.7) (38.3) (15.7)
(3.1) (15.2) (16.4) (36.5) (16.4) (1.8) (12.1) (6.7) (0.5)
(4.2) (14.5) (14.9) (36.3) (14.9) (2.2) (10.3) (8.0) (2.1)
(2.0) (3.0)
(5.3) (14.3)
(5.3)
(3.6)
(12.1) (16.3) (2.8)
(2.8) (4.0) (13.8) (25.7) (3.5)
(1.9) (1.2) (21.8) (3.9) (6.0) (18.0) (35.4) (3.6)
(3.0) (0.4) (19.2) (2.2) (7.2) (9.8) (2.2)
(15.2) (17.7) (17.7) (27.3) (15.2) (12.7)
(2.1)
0.9 Aluminium 5,148 1.2 5.7 2.3
Copper 3.72 8,208 2.0 8.0 8.7 3.8 Copper 387 17.5 57.4 57.4 22.2 20.8
Nickel 8.28 18,258 4.4 14.5 16.4 7.4 Nickel 151 5.1 15.5 29.2 60.0 6.3
Zinc 0.97 2,143 7.9 15.1 15.3 2.0 4.6 Zinc 1,197 2.6 21.4 42.5
Lead 1.09 2,409 4.8 9.5 26.6 12.2 4.0 Lead 290
Tin 11.26 24,829 0.8 22.1 36.4 6.2 Tin 13 4.5 13.4 13.4 46.0 4.7
SHANGHAI (RMB/t) SHANGHAI (kt)
Copper 58,900 2.4 5.3 8.1 3.4 Copper 197 2.3 25.9 9.6
Aluminium 14,880 Aluminium 425 30.6 49.8
Zinc 16,200 2.9 6.9 8.2 1.3 3.2 Zinc 323 3.9 7.5 1.1 3.9
Lead 14,975 1.2 0.0 1.4
COMEX (USD/t) COMEX
Copper 8,246 1.9 8.7 9.3 2.4 Copper 74.5 4.5 31.1 53.0 5.3
OIL & GAS - US DOE (mbbls)
Gold (USD/oz) 1,678 1.2 4.1 0.1 Crude 372 3.3 9.6 3.3Gold (AUD/oz) 1,626 3.1 6.6 1.3 1.6 Gasoline 234 3.7 17.3 12.6 1.0 3.7
Silver (USD/oz) 31.8 4.8 0.0 13.5 4.9 Distillate 130 4.5 9.9 4.3 4.5
Platinum (USD/oz) 1,736 8.6 12.5 23.2 4.4 12.8 Refinery utilisation (%) 84.2 1.7
Palladium (USD/oz) 763 11.0 24.6 29.9 6.8 8.3
CBOT (US/bu)
OIL & GAS (USD/bbl) Wheat 762 2.1 15.2 1.9
WTI Cushing (US) 96.6 3.8 14.4 3.5 5.2 Corn 723 4.1 12.5 6.2
Brent Crude (UK) 116.7 4.5 9.3 4.0 4.3 Soybeans 1,488 7.4 20.8 8.8
Tapis (Asia) 122.9 5.1 8.8 4.2 0.1 7.7 Soybean Oil (US/lb) 52.5 5.7 7.9 0.1 5.1
Gasoil 0.5% (Sing) 133.7 5.2 6.7 5.1 1.3 9.2 Soybean Meal (USD/st) 437 6.7 35.9 9.5
Fuel Oil 180cst (Sing USD/t) 654.3 3.2 5.4 6.9 KCBOT (US/bu)
THERMAL COAL (FOB USD/t) HRW 810 1.1 11.8 0.7
Newcastle 77.7 -13.6 MGE (US/bu)
Richards Bay 73.4 HRS 845 0.5 0.4 0.4
Qinhuangdao 99.5 ASX (AUD/t)
Wheat 297 6.1 41.4 5.3
EURONEXT Liffe (/t)
COKING COAL (USD/t) Wheat 211 2.2 9.2 26.0 2.5
Australia FOB 134.3 EURONEXT Paris (EUR/t)
China CIF 144.5 Wheat 242 23.1
India CIF 149.3 Corn 230 11.9
STEEL (USD/t) Rapeseed 470 3.0 12.4 5.4
HRC US (Short ton) 583 0.0 1.3 0.0 ICE Winnipeg (CAD/t)
HRC Russia 583 9.4 14.2 5.0 9.4 Canola 638 9.5 6.5 5.8 19.5 10.3
HRC China 603 8.6 13.2 7.6 8.6
OTHER METALS
Uranium (USD/lb) 43.8 1.2 1.7 ICE NY (US/lb)
Alumina (USD/t) 346 4.2 6.7 9.8 8.3 4.2 Sugar #11 18.2
Cobalt (USD/lb) 12.8 7.6 11.1 Coffee 142
Molybdenum (USD/lb) 11.4 3.4 Cocoa 2,227 0.2 0.3
Coke (USD/t) 280 Cotton 82 9.3 17.0 7.5 8.9
Iron Ore Spot (USDt) 155 27.5 35.0 Security 7.0 EURONEXT Liffe (USDD/t)
Sugar 497
Coffee 2,069 8.3 7.3 10.2 6.2
Baltic Freight Rate 740 9.5 Cocoa (/t) 1,452 1.8 2.1
Baltic Capesize 1,484 7.2 23.3 2.5 MDEX (MYR/t)
Baltic Panamax 657 Crude Palm Oil 2,547 5.6 6.3 6.4
AUD/USD - Aussie 1.032 S&P 500 1,512 3.5 8.4 7.8 12.0 3.1
NZD/USD - Kiwi 0.840 0.0 2.6 2.9 0.6 1.4 CRB Index 303 3.0 3.9 3.0
DXY - USD trade weighted 79.7 1.4 S&P GSCI Agri Index 457 3.3 4.0 4.1
EUR/USD - Euro 1.352 3.5 5.9 9.4 2.0 3.6 LME Metals Index 3,583 2.5 10.0 12.0 2.7
USD/JPY - Yen 93.6 6.6 17.1 19.4 21.5 7.3 Market Volatility Index (VIX 13
12 MTH1 MTH 3 MTH 6 MTH YTDSPOT6 MTH 12 MTH YTD KEY INDICESKEY CURRENCIES SPOT 1 MTH 3 MTH
12 MTH YTD
FREIGHT SPOT 1 MTH 3 MTH 6 MTH 12 MTH YTD
SPOT 1 MTH 3 MTH 6 MTH
6 MTH 12 MTH YTD
SOFTS/PALM
OTHER SPOT 1 MTH 3 MTH
6 MTH 12 MTH YTD
ENERGY SPOT 1 MTH 3 MTH 6 MTH 12 MTH YTD
AGRICULTURE SPOT 1 MTH 3 MTH
12 MTH YTD
PRECIOUS METALS SPOT 1 MTH 3 MTH 6 MTH 12 MTH YTD
SPOT 1 MTH 3 MTH 6 MTH6 MTH 12 MTH YTD INVENTORIESBASE METALS SPOT 1 MTH 3 MTH
(2.1) (3.0) (15.7) (21.4) (2.7)
(5.0)
(0.4) (19.2) (8.9) (54.4) (6.3) (13.1) (1.2)
(29.3) (49.8)
(8.4) (10.9) (21.8) (20.7) (59.4) (11.0) (19.1)
(1.8) (0.8) (2.4) (4.4) (1.4)
(0.5) (3.8)
(1.0) (1.3) (3.2) (0.8) (5.5) (10.7)
(4.4)
(2.9) (29.7) (12.5) (26.2) (3.0)
Note: Prices as of 5 July 2013
Sources: Bloomberg, globalCOAL, FIS, ANZ Commodity Strategy
7/28/2019 Commodity Call Jul13 (1).pdf
11/18
ANZ Commodity Call / 10 July 2013 / 11 of 18
CFTC DATA
SPOT 1 WK 1 MTH 3 MTH 6 MTH 12 MTH SPOT 1 WK 1 MTH 3 MTH 6 MTH 12 MTH
GOLD (t) WTI CRUDE OIL (mbbls)
Long 500 492 524 602 619 577 Long 424 402 394 391 352 334
Short 403 390 352 258 141 150 Short 92 93 108 99 107 134
Net Position 97 102 172 344 478 427 Net Position 332 309 286 292 245 201
Open Interest 2,416 2,161 2,152 2,012 1,851 2,085 Open Interest 1,770 1,809 1,745 1,732 1,473 1,433
SILVER(t) NATURAL GAS (1000 mmbtu)
Long 5,682 5,346 5,111 5,678 6,041 4,559 Long 3,125 3,145 3,464 3,619 2,447 2,434
Short 4,800 5,090 4,652 4,654 1,160 2,736 Short 4,131 3,978 4,081 4,154 4,085 3,360
Net Position 882 256 459 1,025 4,880 1,823 Net Position (1,005) (832) (617) (535) (1,638) (926)
(322) (358) (149) (307) (150)
(207) (91) (120) (74) (97) (10) (1,077) (1,391)
(333) (406) (328) (398) (344) (106)
(200) (157) (136) (195) (173) (149)
(1,127) (493) (651) (405) (529)
Open Interest 30,578 30,350 31,236 30,177 27,461 24,710 Open Interest 14,284 14,430 15,331 14,994 11,937 11,554
COPPER(kt) RBOB GASOLINE (m gallons)
Long 509 532 440 553 516 429 Long 2,964 2,914 3,383 4,614 4,169 3,542
Short 831 890 589 860 410 579 Short 1,405 1,382 1,515 1,083 1,207 669
Net Position 106 Net Position 1,559 1,532 1,868 3,530 2,962 2,872
Open Interest 1,947 2,036 1,896 2,053 1,664 1,539 Open Interest 11,244 11,804 12,011 13,773 12,150 11,609
SPOT 1 WK 1 MTH 3 MTH 6 MTH 12 MTH SPOT 1 WK 1 MTH 3 MTH 6 MTH 12 MTH
CBOT WHEAT (m bu) ICE SUGAR(kt)
Non-Com Long 547 551 549 585 518 609 Non-Com Long 11,494 11,210 11,399 10,299 9,268 8,700
Non-Com Short 754 642 669 659 615 442 Non-Com Short 10,910 11,221 12,476 11,690 6,457 4,163
Net Non-Com Position 167 Net Non-Com Position 584 2,811 4,538
Index Long 894 899 949 924 1,069 1,114 Index Long 16,117 16,544 16,951 16,510 14,969 14,020
Index Short 124 113 180 183 150 127 Index Short 1,228 1,601 1,180 935 1,190 1,486
Net Index Position 770 786 769 741 919 988 Net Index Posit ion 14,890 14,943 15,771 15,575 13,779 12,534
Open Interest 2,555 2,385 2,686 2,919 2,742 2,709 Open Interest 49,334 49,901 53,049 49,551 44,507 40,492
CBOT CORN (m bu) ICE COFFEE (kt)
Non-Com Long 1,620 1,771 1,870 1,851 1,526 1,416 Non-Com Long 708 726 726 761 622 477
Non-Com Short 1,494 1,206 1,109 1,057 615 393 Non-Com Short 1,041 1,132 1,054 1,159 966 583
Net Non-Com Position 126 565 761 793 911 1,023 Net Non-Com Position
Index Long 2,115 2,137 2,195 2,243 2,036 2,153 Index Long 988 989 1,011 993 829 799
Index Short 223 215 294 313 176 238 Index Short 40 41 59 63 42 122
Net Index Position 1,892 1,922 1,900 1,929 1,860 1,914 Net Index Position 948 948 953 930 787 677
Open Interest 8,390 8,195 8,833 9,477 7,644 7,977 Open Interest 3,270 3,280 4,000 3,891 3,520 3,762
CBOT SOYBEANS (m bu) ICE COCOA (kt)
Non-Com Long 346 365 376 327 317 291 Non-Com Long 654 686 737 625 522 379
Non-Com Short 546 522 512 521 490 440 Non-Com Short 268 256 250 449 184 301
Net Non-Com Position Net Non-Com Position 386 429 487 175 338 78
Index Long 777 813 762 747 899 1,000 Index Long 354 353 352 369 372 393
Index Short 90 94 140 164 227 229 Index Short 10 10 17 40 5 50
Net Index Position 687 719 622 583 671 771 Net Index Position 345 343 335 329 368 343
Open Interest 3,713 3,853 4,229 3,904 3,785 5,529 Open Interest 1,997 1,993 2,405 2,201 2,182 1,936
CBOT SOYBEAN OIL (kt) ICE COTTON (k bales)
Non-Com Long 2,975 3,000 2,989 3,184 2,819 3,316 Non-Com Long 8,260 8,261 7,911 10,359 6,918 6,049
Non-Com Short 4,103 3,493 3,640 3,589 3,347 2,408 Non-Com Short 839 770 1,271 1,096 2,225 3,825
Net Non-Com Position 909 Net Non-Com Position 7,421 7,491 6,640 9,263 4,692 2,224
Index Long 2,602 2,549 2,745 2,678 3,030 2,755 Index Long 7,513 7,512 7,799 8,265 7,464 7,824
Index Short 100 98 301 300 206 465 Index Short 236 196 363 933 536 376
Net Index Position 2,502 2,451 2,444 2,378 2,824 2,290 Net Index Position 7,277 7,317 7,436 7,332 6,927 7,447
Open Interest 9,996 9,899 10,804 10,439 9,372 10,650 Open Interest 22,062 21,704 27,478 32,424 24,403 25,805
AGRICULTURE SOFTSACTUAL ACTUAL
ENERGYMETALSACTUAL ACTUAL
Note: Data as of 2 July 2013
Sources: Bloomberg, globalCOAL, FIS, ANZ Commodity Strategy
7/28/2019 Commodity Call Jul13 (1).pdf
12/18
ANZ Commodity Call / 10 July 2013 / 12 of 18
CALENDAR HEATMAP
CHINA UNIT PERIOD MARKET ACTUAL PREVIOUS DATE
Foreign Direct Investment (FDI) % y/y APR 6.2 0.4 5.7 16-May
Exports % y/y JUN 3.7 -3.1 1.0 10-Jul
Imports % y/y JUN 6.0 -0.7 -0.3 10-Jul
Producer Price Index (PPI) % y/y JUN -2.6 -2.7 -2.9 9-Jun
Consumer Price Index (CPI) % y/y JUN 2.5 2.7 2.1 9-Jun
New Yuan Loans RMB bn MAY 815 667 793 9-Jun
Money Supply - M2 % y/y MAY 15.9 15.8 16.1 9-Jun
Fixed Asset Investment (FAI) % YTD y/y MAY 20.5 20.4 20.6 9-Jun
Retail Sales % y/y MAY 12.9 12.9 12.8 9-Jun
Industrial Production % y/y MAY 9.4 9.2 9.3 9-Jun
Leading Index % m/m APR - 99.6 99.6 1-Jul
PMI Manufacturing Points JUN 50.1 50.1 50.8 1-Jul
US UNIT PERIOD MARKET ACTUAL PREVIOUS DATE
FOMC Rate Decision % MAY 0.25 0.25 0.25 2-May
GDP % q/q 1Q 2.4 1.8 2.4 30-May
Vehicle Sales (Total) '000,000s JUN 15.5 15.9 15.2 4-Jun
Retail Sales (Less Autos) % y/y MAY 0.3 0.3 0.0 13-Jun
Producer Price Index (PPI) % y/y MAY 1.4 1.7 0.6 14-Jun
Industrial Production % m/m MAY 0.2 0.0 -0.4 14-Jun
Uni of Michigan Confidence Points JUN 84.5 82.7 84.5 14-Jun
NY Empire Manufacturing % y/y JUN 0.0 7.8 -1.4 17-Jun
Consumer Price Index (CPI) % y/y MAY 1.4 1.4 1.1 18-Jun
Building Permits '000s MAY 975 974 1005 18-Jun
Housing Starts '000s MAY 950 914 856 18-Jun
Philadelphia Fed % y/y JUN -2.0 12.5 -5.2 21-Jun
Leading Indicators % y/y MAY 0.2 0.1 0.8 21-Jun
Durable Goods Orders % y/y MAY 3.0 3.6 3.6 25-Jun
Dallas Fed % y/y JUN -1.5 6.5 -10.5 25-Jun
New Home Sales '000s MAY 460 476 466 26-Jun
Chicago PMI Points JUN 55.0 51.6 58.7 28-Jun
ISM Manufacturing Points JUN 50.5 50.9 49.0 2-Jul
Factory Orders % y/y MAY 2.0 2.1 1.3 3-Jul
Change in Nonfarm Payrolls '000s JUN 165 195 195 5-Jul
EURO-ZONE UNIT PERIOD MARKET ACTUAL PREVIOUS DATE
GDP % y/y 1Q -0.1 -0.2 -0.6 15-May
Economic Confidence Points MAY 89.4 89.4 88.6 30-May
Consumer Price Index (CPI) % y/y MAY 1.1 1.2 1.0 31-May
Industrial Production % y/y APR -1.2 -0.6 -1.4 12-Jun
Zew Survey (Econ Sentiment) Points JUN - 30.6 27.6 18-JunUnemployment Rate % y/y MAY 12.3 12.2 12.1 1-Jul
PMI Manufacturing Points JUN 48.7 48.8 48.7 1-Jul
Retail Sales % y/y MAY -1.9 -1.0 -1.0 3-Jul
ECB Refinancing Rate % MAY 0.50 0.50 0.50 4-Jul
JAPAN UNIT PERIOD MARKET ACTUAL PREVIOUS DATE
Consumer Confidence Points MAY 44.7 45.7 44.5 10-Jun
GDP % QoQ 1Q 0.9 1.0 0.9 10-Jun
BoJ Target Rate % JUN 0.1 0.1 0.1 11-Jun
Machine Tool Orders % y/y MAY -7.4 -7.4 18-Jun
Industrial Production % y/y MAY -2.4 -1.0 -3.4 28-Jun
Tankan Lge Manufacturers Index Points 2Q 3.0 4.0 -8.0 1-Jul
Vehicle Sales % y/y JUN - -15.8 -7.3 1-JulLeading Index Points MAY 101.2 110.5 107.7 5-Jul Note: Blue is stronger than expected (+5%), orange is weaker than expected release (-5%).Source: Bloomberg, ANZ Commodity Strategy
7/28/2019 Commodity Call Jul13 (1).pdf
13/18
ANZ Commodity Call / 10 July 2013 / 13 of 18
FORWARD CURVES
2,350
2,400
2,450
2,500
2,550
2,600
2,650
1M3M 6M 1Y 2Y
MYR/t PALM OIL
1,750
1,800
1,850
1,900
1,950
2,000
2,0502,100
2,150
2,200
2,250
1M3M6M 1Y 2Y 3Y
USD/t ZINC
76
78
80
82
84
86
88
1M3M6M 1Y 2Y 3Y
US/lb COTTON
13,000
13,500
14,000
14,500
15,000
15,500
16,00016,500
17,000
17,500
18,000
1M3M6M 1Y 2Y 3Y
USD/t NICKEL
16.0
16.5
17.0
17.5
18.0
18.5
19.0
19.5
20.020.5
1M3M6M 1Y 2Y 3Y
US/lb RAW SUGAR
80.0
80.5
81.0
81.5
82.0
82.5
83.0
83.5
84.0
84.5
85.0
1M 3M 6M
Points USD DXY
90
92
94
96
98
100
102
104
106
108
1M3M6M 1Y 2Y 3Y
USD/bbl BRENT
1,300
1,350
1,400
1,450
1,500
1,550
1,600
1M 3M 6M 1Y
USD/oz PLATINUM
650
670
690
710
730
750
770
790
1M3M 6M 1Y 2Y
US/bu CHICAGO WHEAT
1,700
1,800
1,900
2,000
2,100
2,200
2,300
2,400
1M3M6M 1Y 2Y 3Y
USD/t ALUMINIUM
82
84
8688
90
92
94
96
98100
102
104
1M3M6M 1Y 2Y 3Y
USD/bbl WTI
105
110
115
120
125
130
135
140
1M 3M 6M 1Y
USD/t IRON ORE
6,500
6,700
6,900
7,100
7,300
7,500
7,700
7,900
8,100
8,300
1M3M6M 1Y 2Y 3Y
USD/t COPPER
1,200
1,250
1,300
1,350
1,400
1,450
1,500
1M3M 6M 1Y 2Y
US/bu SOYBEANS
670
680
690
700
710
720
730
740
750
760
770
1M 3M 6M 1Y
USD/oz PALLADIUM
1,200
1,250
1M 3M 6M
CNY/t COKING COAL
TBC
110
120
130
140
150
160
170
180
1M3M6M 1Y 2Y 3Y
USD/lb COFFEE
450
500
550
600
650
700
1M3M6M 1Y 2Y 3Y
US/bu CORN
3,100
3,200
3,300
3,400
3,500
3,600
3,700
3,800
3,900
4,0004,100
1M 3M 6M 1Y
CNY/t CHINA REBAR
18.0
20.0
22.0
24.0
26.0
28.0
30.0
32.0
1M3M6M 1Y 2Y 3Y
USD/oz SILVER
2,150
2,200
2,250
2,300
2,350
2,400
1M3M 6M 1Y 2Y
USD/t COCOA
1,100
1,200
1,300
1,400
1,500
1,600
1,700
1,800
1M3M6M 1Y 2Y 3Y
USD/oz GOLD
2,000
2,050
2,100
2,150
2,200
2,250
2,300
2,350
2,400
1M3M6M 1Y 2Y 3Y
USD/t LEAD
767880828486889092949698
100102
1M 3M 6M 1Y
USD/t NEWC THERMAL COAL
Note: Prices as of 5 July 2013Sources: Bloomberg, globalCOAL, FIS, ANZ Commodity Strategy
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ANZ Commodity Call / 10 July 2013 / 14 of 18
MOVING AVERAGES
1,700
1,800
1,900
2,000
2,100
2,200
2,300
2,400
2,500
2,600
Jan-10Oct-10 Jul-11 Apr-12 Jan-13
ZINCUSD/t
70
80
90
100
110
120
130
140
Jan-10Oct-10 Jul-11 Apr-12 Jan-13
THERMAL COALUSD/t
6,000
6,500
7,000
7,500
8,000
8,500
9,000
9,500
10,000
Jan-10Oct-10 Jul-11 Apr-12Jan-13
COPPERUSD/t
1,600
1,800
2,000
2,200
2,400
2,600
2,800
3,000
Jan-10Oct-10 Jul-11 Apr-12 Jan-13
LEADUSD/t
1,100
1,300
1,500
1,700
1,900
Jan-10Oct-10 Jul-11 Apr-12 Jan-13
GOLDUSD/oz
400
450
500
550
600
650
700
750
800
850
Jan-10 Oct-10 Jul-11 Apr-12
PALLADIUMUSD/oz
12
18
24
30
36
42
48
Jan-10 Oct-10 Jul-11 Apr-12 Jan-13
SILVERUSD$/oz
100
140
180
220
260
300
Jan-10 Oct-10 Jul-11 Apr-12 Jan-13
USD/lb COFFEE
70
80
90
100
110
120
130
Jan-10Oct-10 Jul-11 Apr-12 Jan-13
BRENTUSD/bbl
350
400
450
500
550
600
650
700
750
800
850
Jan-10 Oct-10 Jul-11 Apr-12 Jan-13
CORNUS/bu
1,900
2,100
2,300
2,500
2,7002,900
3,100
3,300
3,500
3,700
Jan-10Oct-10 Jul-11 Apr-12Jan-13
COCOAUSD/t
60
80
100
120
140
160
180
200
220
Jan-10Oct-10 Jul-11 Apr-12 Jan-13
COTTONUS/lb
800
1,000
1,200
1,400
1,600
1,800
Jan-10Oct-10 Jul-11 Apr-12 Jan-13
SOYBEANSUS/bu
80
100
120
140
160
180
200
Jan-10 Oct-10 Jul-11 Apr-12 Jan-13
USD/t IRON ORE
400
500
600
700
800
900
1,000
Jan-10Oct-10 Jul-11 Apr-12Jan-13
WHEATUS/bu
3,200
3,400
3,600
3,800
4,000
4,200
4,400
4,600
4,800
5,000
Jan-10Oct-10 Jul-11Apr-12Jan-13
USD/t HOT ROLLED STEEL
100
150
200
250
300
350
Jan-10 Oct-10 Jul-11 Apr-12 Jan-13
COKING COALUSD/t
70
75
80
85
90
95
100
105
110
115
Jan-10 Oct-10 Jul-11 Apr-12 Jan-13
WTIUSD/bbl
2,000
2,400
2,800
3,200
3,600
4,000
Jan-10 Oct-10 Jul-11 Apr-12 Jan-13
PALM OILMYR/t
15
17
19
21
23
25
27
29
31
33
35
Jan-10 Oct-10 Jul-11 Apr-12 Jan-13
US/lb SUGAR
1,600
1,800
2,000
2,200
2,400
2,600
2,800
Jan-10Oct-10 Jul-11 Apr-12 Jan-13
USD/t ALUMINIUM
12,000
14,000
16,000
18,000
20,000
22,000
24,000
26,000
28,000
30,000
Jan-10Oct-10 Jul-11 Apr-12Jan-13
NICKELUSD/t
72
74
76
78
80
82
84
86
Jan-10 Oct-10 Jul-11 Apr-12 Jan-13
USD DXYPoints
1,300
1,400
1,500
1,600
1,700
1,800
1,900
Jan-10 Oct-10 Jul-11 Apr-12 Jan-13
PLATINUMUSD/oz
Note: Prices as of 5 July 2013Sources: Bloomberg, globalCOAL, FIS, ANZ Commodity Strategy
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ANZ Commodity Call / 10 July 2013 / 15 of 18
ANZ PRICE FORECASTS
ANZ FORECAST TABLE
COMMODITY Unit Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 2013F 2014F 2015F 2016F LT
BASE METALS
Aluminium USD/lb 0.85 0.78 0.82 0.85 0.88 0.91 0.93 0.85 0.99 1.02 1.03 1.0
Copper USD/lb 3.41 3.05 3.25 3.40 3.60 3.65 3.65 3.40 3.60 2.97 2.85 2.80
Nickel USD/lb 7.53 6.25 6.60 6.90 7.40 7.90 8.00 6.90 8.00 7.85 7.70 7.50
Zinc USD/lb 0.85 0.82 0.85 0.88 0.92 0.99 1.01 0.88 1.03 1.04 1.02 1.00
Lead USD/lb 0.95 0.93 0.95 0.97 1.00 1.02 1.05 0.97 1.07 1.07 1.02 1.00
Aluminium USD/t 1,880 1,720 1,810 1,870 1,940 2,010 2,050 1,870 2,180 2,250 2,270 2,200
Copper USD/t 7,510 6,730 7,160 7,500 7,940 8,050 8,050 7,500 7,940 6,550 6,280 6,170
Nickel USD/t 16,590 13,780 14,550 15,210 16,310 17,420 17,640 15,210 17,640 17,310 16,970 16,530
Zinc USD/t 1,860 1,820 1,870 1,940 2,030 2,180 2,230 1,940 2,270 2,290 2,250 2,200
Lead USD/t 2,090 2,040 2,090 2,140 2,200 2,250 2,310 2,140 2,360 2,360 2,250 2,200
PRECIOUS METALS
Gold USD/oz 1,599 1,235 1,150 1,300 1,330 1,360 1,380 1,300 1,400 1,500 1,500 1,450
Platinum USD/oz 1,572 1,327 1,390 1,450 1,490 1,530 1,560 1,450 1,590 1,680 1,625 1,480
Palladium USD/oz 772 659 690 735 770 800 820 735 825 810 765 700
Silver USD/oz 28.5 19.7 18.5 21.6 22.3 22.8 23.2 21.6 23.9 26.5 27.0 26.5
ENERGY
WTI NYMEX USD/bbl 98 97 100 105 107 109 110 105 108 97 93 90
Dated Brent USD/bbl 109 102 103 105 108 112 114 105 112 102 98 95
Uranium USD/lb 42 40 40 42 44 46 48 42 50 62 65 7
BULKS
Iron ore Spot (CIF China, fines) USD/t 137 117 112 120 123 125 122 120 120 116 115 100
Iron ore Contract (FOB Aust, fines) USD/t 138 125 105 104 110 111 112 104 110 110 105 90
Coking coal - Premium hard USD/t 165 172 145 145 155 165 170 145 175 180 180 175
Coking coal - Semi-soft USD/t 117 119 105 105 112 120 124 105 128 133 134 130
Low Val PCI coal USD/t 124 141 116 115 120 127 130 115 133 138 139 135
Newc Thermal Coal (Spot) USD/t 88 78 82 86 88 91 92 86 95 103 105 9
Newc Thermal Coal (JPY Contract) USD/t 115 95 95 95 95 92 92 95 92 98 105 9
OTHER METALS
Alumina (contract) USD/t 234 215 226 234 242 251 256 234 273 281 284 276
Molybdenum USD/lb 10.8 10.4 10.8 11.0 11.5 12.0 12.5 11.0 13.0 14.5 14.8 15.0
Cobalt USD/lb 12.0 14.6 14.5 14.5 14.8 14.9 15.1 14.5 15.2 15.6 15.8 15.0
AGRICULTURE
Corn US/bu 711 600 527 473 544 551 491 578 520 550 550 550
Wheat US/bu 742 699 632 599 638 637 680 668 658 661 661 661
Soybeans US/bu 1,437 1,389 1,300 1,200 1,185 1,116 1,104 1,331 1,150 1,150 1,150 1,150
Cotton US/lb 90 93 83 87 90 88 88 88 90 92 95 95
Sugar US/lb 18 17 16 17 17 17 17 17 17 20 20 2
Palm Oil MYR/t 2,473 2,354 2,400 2,400 2,400 2,400 2,400 2,407 2,400 2,400 2,450 2,450
0
0
5
5
0
Note 1:
Base/precious metals, energy and bulk forecasts are end of period prices; Agriculture forecasts are average prices
Note 2: Historical data are actuals
Sources: Bloomberg, ANZ Commodity Strategy
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ANZ Commodity Call / 10 July 2013 / 16 of 18
ANZ CONTACTS
ANZ COMMODITY RESEARCH
Mark Pervan Global Head of Commodity Research +61 3 8655 9243 [email protected]
Paul Deane Senior Agricultural Economist +61 3 8655 9078 [email protected]
Natalie Rampono Commodity Strategist +61 3 8655 9258 [email protected]
Victor Thianpiriya Commodity Strategist +65 6681 8869 [email protected]
ANZ ASIA RESEARCH
Tim Riddell Head of Global Markets Research, Asia +65 6681 8718 [email protected]
7/28/2019 Commodity Call Jul13 (1).pdf
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