General news

  • The strength of the Euro remains a key focus ahead of the ECB’s monetary policy meeting, which is to be held on Thursday; if the Euro strengthens further, exporters and dollar earners in industrials, consumer staples and healthcare could begin to feel under pressure
  • Data indicates that Chinese growth has exceeded forecasts, putting China’s economy on track for its first annual acceleration since 2010
  • Volvo has announced that all its models as of 2019 will have electric motors



  • Last month saw international food prices soar to a 2-year high as a result of higher wheat, meat and dairy product prices
  • The trade tensions between the US and Mexico appear to be pushing American grain towards other markets as Mexico line up new suppliers; the shift now means that Mexico is no longer the biggest buyer of corn from the US
  • US corn prices hit a year’s high last week following dry weather in the US cornbelt; US corn has now risen 5% since the start of July, with CBOT soybeans now at a 4-month high
  • Oman has lifted the ban on importing poultry from several countries including the Netherlands, Denmark, Germany and Austria, following restrictions in the aftermath of an outbreak of the HPAI virus in Europe in November 2016
  • Brazil’s meat processors have lowered forecasts for the nation’s chicken and pork production and sales as companies struggle to recover from the ongoing investigation into claims that food inspectors were bribed to evade safety checks
  • Butter prices remain high as a result of what is being dubbed a European butter shortage. It’s being driven rising demand (supported by a) the current home-making boom in the UK, b) studies which indicate there may not be as strong of a link between butter and cardiovascular disease and butter, and c) the recent bad publicity over the health concerns associated with some vegetable oil based products) and declining milk production. The knock on effect of this can be felt across industries such as the French baking sector, which is looking at increasing the price of items that depend on butter, and by UK companies including Anchor and Lurpak that have warned that the UK may “not have enough butter at Christmas”
  • A steep decline in sugar and oil prices over the past 6 months has diminished the hope of financial recovery for several Brazilian mills and could threaten new dealmaking in the sector
  • The growing global appetite for beef, chicken and other forms of protein has enabled Cargill, the world’s largest agricultural supplier, to rake in its highest annual profit in 6 years. The increase in demand has most notably been supported by the steadily rising population and household incomes in emerging markets, which has provided new demand for meat
  • Last week saw China sign a substantial deal with the US for imports of soybeans, beef and pork, despite Trump’s warning of issuing trade sanctions against the country. Prices and shipment dates have however yet to be specified so the impact this deal could have on markets cannot yet be fully assessed
  • Latest consumption figures from Barry Callebaut, the cocoa industry’s leading player, suggest that there are signs that global demand may be picking up following 2016’s cocoa price surge which prompted chocolate makers to use less cocoa, and the general consumer trend of increasing health consciousness. The increase in demand has been supported by bumper cocoa crops from the Ivory Coast and Ghana which have pushed prices lower
  • The price of Chinese pork is expected to rise over the coming summer months as consumption gradually increases over the holiday period and supply recovers at a slow pace following small-scale farmers leaving the business as a result of rising environmental standards and land costs



  • Although the end of June saw iron ore being pushed into a bull market for the first time in 3 months, many Australian miners believe that the price of iron ore will fall to $47 a tonne by 2019 as a result of declining demand for steel production. In the same report, the Australian Department of Industry, Innovation and Science forecasts that iron ore will average $62 a tonne in 2017, falling to $48 a tonne in 2018
  • The past week has seen Chinese imports of iron ore rise 15% from a year ago thanks to higher steel prices, which have led to an increase in demand. China is on course to import a record amount of iron this year as its mills turn to the seaborn market to secure supplies for steel production
  • Data indicates that China churned out record levels of steel and aluminium last month as producers rushed to cash-in on higher prices which rallied following Beijing’s announcement it was to crack down on the output of low-grade metal. This could have the potential to further fuel concerns that China would export more metal, furthering global oversupply and tensions with the US following its accusations that China was flooding international markets
  • As the popularity and production of electric vehicles prepares to ramp up, there are rising concerns regarding the environmental footprint the mining of raw materials (including lithium, cobalt and nickel) for the batteries might have, and how to best manage the eventual disposal and recycling of spent batteries. With the popularity and necessity of electric vehicles being driven by the need to improve how “green” our approach to road transport is, it is crucial that the energy intensity of manufacturing these cars is carefully managed




  • The Scottish government has awarded consent to a new onshore wind project in South Kyle (East Ayrshire and Galloway); the farm is to feature 50 turbines with a combined capacity of 170MW
  • Centrica is to begin work on a new 50MW gas-fired, fast response peaking plant in Peterborough this week; the power station has secured a contract for delivery in 2020/21 and is expected to help meet local energy demand whilst supporting the changing way in which electricity in generated
  • Ofgem’s senior partner for improving regulation has indicated that compared to the power and transport sectors, the decarbonisation of the heat sector is likely to be the biggest challenge in the UK’s environmental policy, not because of technical limitations, but due to the impact that the transition would have on the consumer; the fact that the decarbonisation of domestic heat will in many instances require changes to consumers’ homes and appliances, it is likely to make it a much harder sell, unlike the power sector where most changes take place upstream away from the eye of the customer, and the transport sector where there is already an appetite for switching to electric vehicles
  • The national grid has significantly scaled back its forecasts for the build-up of storage capacity stating that although initial growth is expected to be strong, deployments are likely to taper off as the market becomes saturated
  • National Grid’s Future Energy Scenarios report indicates that gas will continue to be a critical part of the UK’s energy system; this belief is predominantly founded on the fact that gas currently provides double the amount of energy output than electricity meaning that moving towards an entirely electric future devoid of gas would be a huge step
  • A House of Lords committee has launched a new inquiry into the implications that Brexit could have on the UK’s energy security; issues to be discussed include the maintaining of the single energy market on the island of Ireland, the implications of withdrawing from Euratom and how to fund the UK’s energy infrastructure investment and energy research post-Brexit
  • A new anaerobic digestion (AD) plant is to open in Dagenham to support TfL’s clean air action plan through the generation of biomethane for gas-powered vehicles; the facility should be able to recycle more than 1m tonnes of food waste by the end of 2017




  • The question as to when the US fracking spree will start slowing down is becoming an increasingly important one; as fracking becomes increasingly cheap thanks to improved technology and practices. Many analysts believe that any fall in shale output will not happen until 2018 at the earliest as long-term investment and supply deals continue to be struck indicating that investors are continuing to see long-term opportunities
  • Andy Hall, the energy hedge fund manager renowned for his success in predicting price moves, has renounced his long-held faith in a significant recovery in oil prices. Up until now, Hall rarely wavered from his long term view that prices would recover in order to stimulate enough supply to meet growing demand in emerging markets and to offset output declines in ageing fields, But the oil bull has now changed his position on the basis that he feels that OPEC’s supply cut was too small and that by having “talked up” the market they enabled US shale drillers to lock in new financing when prices briefly rallied  
  • Consultants are forecasting that the US is likely to quadruple its oil exports over the next 3 years, making the US’s export volumes greater than those of most OPEC members; this is likely to seriously challenge OPEC’s efforts to curb production and supply
  • Although most analysts believe that US crude exports are to continue to increase overtaking production levels from major OPEC countries, the US will continue to depend on imports of oil from countries such as Canada and Saudi Arabia in order to supply heavier grades of oil to its refineries; these refineries are configured to heavier grade oil than the sweet crude which flows from Texas and North Dakota
  • Saudi Aramco and Shell, two of the world’s largest oil companies, have hit back against predictions that electric vehicles threaten a collapse in demand for hydrocarbons and expressed their concerns that the withdrawal of investment in fossil fuels too soon could threaten global energy security; both companies acknowledge the fact that there is a shift underway but reaffirmed their belief that oil and gas would remain indispensable for the coming decades and that the transition would be progress and should not be committed to prematurely
  • Latest data from the IEA indicates that OPEC’s compliance with its own oil supply cuts fell in June, indicating that some members have “opened the taps”; in conjunction with the increasing production in the US, the data is further support for the argument that OPEC may need to do more over the coming months to help the floundering crude prices
  • Brent is now holding above $49 and heading for its six successive day of gains, with both Brent and WTI up 0.3% to $49.07 and $46.68, respectively; the rally following crude’s tumble to below $50 comes thanks to reports that US crude inventories fell by more than 8m barrels last week, the largest drop since September of last year


  • Qatar Petroleum has announced its plans to increase production dramatically from its North Field in the Persian Gulf; this increase could create a global LNG glut, reducing the price and potentially fuelling the tensions between Qatar and its Middle Eastern neighbours
  • As South Korea shifts from coal and nuclear towards renewables and LNG, there is the potential that the growing supply of LNG over the coming years (expected to grow by almost 50% from 2015 to 2020) could be “soaked up” by South Korea’s power generation; this shift in fuel mix comes thanks to the newly elected left-wing President Moon Jae-in, who has put environmental protection at the heart of energy policymaking following rising concerns over air pollution and nuclear safety