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Soft Commodity Bloodbath

April 16, 2024
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Anthony Clark
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Anthony Clark

Update note on the recent sell-off in global soft commodity markets & effects on South Africa softs

The soft commodity market has followed the sell-off seen recenlty in oil and hard commodities

What from a high of US$12.94 a bushel (a record ever high after concerns over Russian & Ukraine supplies due to the war) is down 36% to US$8.07 a bushel. This has dragged many other prices down with it like corn, soya and edible oils

In this note I give a background to events and the soft commodity markets

https://drive.google.com/file/d/1zGM-SwlWG6I_zq0Ee15qtpuno_ww57ng/view?usp=sharing

Some relief to hard pressed food producers especially the eggs and poultry sector will come from this pull back in price (if) they are maintained

 

I'd still not rush out and buy the food producers sector (I much prefer agriculture) but some of the crushing margin pressure on the sector will now start to ease in late-Q3 and into Q4 2022 (if) prices of softs remain subdued. They remain materially higher year on year BUT they are off their Russian/Ukraine war high of March 2022


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