YouSaid · the spoken record

Lukas Kuemmerle

lines on the record: 55
first: 2022-04-07
most recent: 2022-04-07
sittings or episodes: 1
sources: podcast

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“Yeah, thanks, Jack, for giving me the opportunity. It was a pleasure to be on a show. People can look me up on a Twitter name at Lucas Kummale. You can also Google the Kumale report, which is the report I write for institutional, but also private investors which just want to get to know the commodity sector better to see what the latest trends are and where their latest opportunities are. So yeah, you can look this up and yeah.”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“I still see Bitcoin as a commodity because of its scarcity. We know that there will be mined maximum of 21 million bitcoins. And this makes the asset scarer. And it's also the reason for me to put the commodity Bitcoin to the commodity gold because of its scarcity for me. I know many people don't like to hear this, but for me, Bitcoin is still something like the digital gold for also younger generations. And yeah, so generally I would say that I'm a big friend of cryptocurrencies, but every asset class has its own time and the art is here to find the right. Timing to be in it and know when it makes more sense to be out of it”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“Yeah. I guess as you pointed out at the beginning, we're still quite young. And this makes it easier for us to grad the technology that actually is behind the whole cryptocurrency sector. I'm also a believer in long-term crypto currencies like Bitcoin, Ethereum, but less on those stable coins that I built on the actual technology. What I can't really do is take my analysis process and put it one-on-one from a commodity like coffee to Bitcoin because there are very much different market drivers that are in place there. Nevertheless,”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“Come back here to the same problem we have in the OS. We need to use the time that we have now from spring to autumn to make new deals with our allies, with Western countries. And yeah, we really have to use this time and get some deals done to change our exposure here away from Russia and search other partners in this area. Germany is also very reliant on its chemical industry. If you would just, for example, you cut Russian gas flows from today to tomorrow, this would have also high implications, many, many jobless people there. This would also cause some dramatic changes in the society. I just don't think that it's a realistic standpoint to cut this exposure from one day to another. Just put it that way.”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“First of all, Jack, I really can't answer the question of how high the prices would go if we really cut off all energy exposure we have to Russia. But what we actually have to talk about is what kind of solutions are here or which partners can Germany find to cut exposure from Russia, to put it, for example, to Saudi Arabia, which also have large gas flows. We know from the past how long it usually takes to get those contracts done. And I just don't think that Germany is able to get these deals done in a couple of days. I think that's a process that lasts at least months, I hope not years. But I think we all”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“I can understand the thinking and I kind of support it, but we also have to be realistic here and look how dependent Germany actually still is on Russian energy imports. And if you are realistic, you just can't cut off all the importance.”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, first of all, I think it's very depressing to see those price surges, but especially for households and people in society that have the least, they have to turn around every euro. To basically keep things going A tough spot, it's much more pricier to refill your car, it's much more priceier to use energy. If you, for example, look at heating, many households over here in Germany heat with gas as well. We saw that year to date the prices of Natural gas for consumers rose more than 75%, which is insane because we are just in April. So, yeah, we really feel the consequences that especially these Russian sanctions have. In the media, actually also today saw renewed Changes to put more restrictions on Russia and to ban even oil, coal, and natural gas imports towards Europe.”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“There's another aspect that makes the current commodity bull market so unique. Basically, in the past, you could have said if commodities going higher, the dollar is currently in the weaker spot. But you can do this anymore because the correlation is actually broken over the last year. So tough spot here. You spoke about the Brazilian real. This is also an observation I made is if you look at the year-to-date performance of currencies against the US dollar, you can actually see that those commodities that have high exposure towards commodities, like for example Brazil, Australia or even New Zealand and Canada, those currencies Performing much better against the US dollar. And yeah, and I think you can solely explain this with the reason that commodity prices are doing so well, which is benefiting the economies over there.”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“Important aspect here is that the correlation says that if these copper inventories get refilled again or restacked, that the actual copper price tends to move at least sideways, but more than often declines in price. So another technical observation I made here, which could be quite important in the future. And yeah, those are the two factors why I see a bearish case for copper, at least in the midterm, as you pointed out, the actual demand for copper over the long term is huge. If we can actually meet the current demand to build the economy and the world of the future, it's a whole nother question which I doubt as well. So please keep in mind that this is a medium forecast for me and not the long term.”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“Here, in the medium term, I'm bearish copper because of mainly two factors. The first one is that I believe in slowing economic momentum. And we saw more evidence of that with the inverting yield curve, which usually leads to a recession over the next 11, 12 months, something like that, which would, of course, slow down the demand for copper as well. This is the one factor that I see. So economic slowdown. On the other hand, there is an interesting correlation between copper inventories and the copper price itself. So we actually see right now, if you look at the LME copper inventories, that they are very much down over the last, yeah, I guess one year. It seems to me like there is already a bottoming process forming. But nevertheless, the fact is that inventories are very much down.”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, so basically we have a high correlation between shipping rates and or I must say between container shipping rates and the price of soft commodities. As I said before, this is mainly the reason that most, if not all soft commodities are transported by container ships, while for example crude oil or natural gas are transported by tanker, grains are transported by dry block shippers. And this is the reason why there is such a high correlation between container freight rates and the price of soft commodities. So basically you can say if we see weakness in container rates, this would for me also indicate that we do for reversal in soft commodity prices, namely here cotton, sugar, Some that I'm more bearish towards or Kokoa. Yeah. So this is definitely a correlation to keep in mind. Shipping rates and soft commod”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“Big factor also here are the renewed corona restrictions in China, which could to some extent, at least for now, cool down the shipping rate market a little bit because production is to a certain extent over there in China halted because of COVID restrictions, which could ease the market for now. And if you look at the container rates, This looks to me like this is also the case. But I really have to monitor this closely over a longer term basis. Yeah, for now, I think rates are really rolling over to the downside. Also, if you keep in mind that the economics will play its role in this environment. So, this could be another main factor that brings down container rates as well, slowing, slowing demand from the consumer for goods, but a pickup for demand in services would be another point that would sustain this weakness in container rates.”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“And what we can basically see is that the price of dry bulk shipping has come down a lot from its actual peak, but is still on elevated levels. So this is also kind of a supporting factor here when it comes to these commodity prices. The actual transport and shipping of this commodity is still very, very pricey, much pricier than it was before. And if you also look at these indcs from container shipping, this is also true there, but container shipping is a little bit more extreme because we still at the highs, it seems to me like container rates are Yeah, trying to roll over to the downside again, but we just, we can't forget at which extreme levels we are still here on the cost of shipping goods.”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, a very important topic when it comes to commodities. And here it's also important to differentiate between container shipping and dry bulk shipping. Have many commodities that are shipped by container, like for example frozen orange concentrate, like for example cocoa, coffee beans. But we also have components that are shipped with tribules, for example, many, many grains, almost all of them. And therefore there are different ways to measure the cost of shipping these things.”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“This was also my thesis back when we spoke last time, when we actually saw the peak in wheat prices. Now, no one knows if we see higher highs. From my standpoint, I do not think that we see higher highs on wheat prices. But I think happened there was that the market tried to price in that the whole crop from Russia and from Ukraine will be gone for the next year. And I think this reflected the price surge back then. But I think the market became a little bit more confident that this view was probably too extreme. And therefore, prices from wheed crashed back down and are still, I think we have to point this out again, are still on very elevated levels. But yeah, as I said before, I don't think that we will go much higher here in terms of wheat prices.”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, that's a good example, Jack. What I should also point out that In the future space, there are many ways to play those traits. I, for example, decided to go and short solely the soybean meal contract. You could, on the other hand, also say I just perform a spread trade, which would basically be the analogy of saying Bet on higher qualm prices, so I go long corn, and I also think that soybean prices will decline in value. So I go along corn, short soybean trade, and you just bet on the spread. This would be another way to perform such a trade. If you have the same thesis like I have here, as you can see, there are very much variations that you can play around in the futures world.”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“That fertilizer prices are going and going and going higher, then I think what happened here is just farmers realized it makes from an economic standpoint more sense to plant soybeans because I will need less Than planting corn. So, yeah, this is my thesis why we actually saw these changes in these reports and why I'm bearish on soybe”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“Which are based on natural gas. So there you have the connection again. Russia is the main exporter of natural gas. And you have nitrogen-based fertilizers, which are in the processing step made out of natural gas. There's the connection again. And if we now look at how much percentage of the operating cost need both grains, we just have to say that soybeans need around 18% of the operating costs come here from fertilizers. While if you look at corn prices, you have as much as 37%. So there's a huge difference. And if you were a farmer and you have to decide which one makes more sense to plant in terms of making money at the end of the year.”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“Yes, as we discussed earlier, the USDA last week released the planting process report for US farmers. And the main change from last year that we saw there was that farmers actually forecasting to plant much more soybeans than they will plant corn So basically, what we will see if this plays out like it should is that we will have much more soybeans at the end of next year than we will have corn. So from this standpoint, fundamental standpoint, this is actually bullish for corn prices and bearish for soybean prices. Now, of course, the next question that you probably have is why is this the case? So why do farmers do that? And this is just because fertilizer prices were also going exponential over the last years. And now together with sanctions on Russia, fertilizer prices were going up even more, especially granular fertilizers.”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“So Lucas, that is the technical reason for your short on soybean meal, but you also have a fundamental reason that involves the huge surge in the price of fertilizers and how that impacts farmers' decisions on which crops to plant. So what is your fundamental reason on your soybean meal short?”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“Believe you used that same technique on soybean meal. If you look at this chart in the blue line, it's the price of soybean meal, the candlestick black and blue is the time spread, the one year time spread for soybean meal. So the fact that the spread has been going down means it's still in backgradation, as you say, but it's not going, it's less in backgradation. It's going less into backgradation. And that for you is your signal, right?”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“Basically, what I'm doing with these charts is confirming breakouts. So if I see that commodity like, for example, natural gas, as we have here, is breaking up to the upside, I would like to confirm this breakout with the term structure. So what I'm looking is the one year spread is also breaking out to the upside. If that's the case, this is confirming to me the bullish bias. And it's basically another part of my analysis, my research that I'm doing to confirm trade. We also spoke earlier about risk management, which I should always tell listeners is place a stop. If I dare isn't working out as you expected, you always need to have a stop to. Yeah, protect your money. Everything I do is very much statistical driven and it's all about probabilities, but you have to play after your own rules to keep the money management going.”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“Yes, and I think things are maybe in a mild contango for the front month, but in the one year spread, which we can put up here, that would be May 22 minus May 2023, still in backwardation. So tell us what we're seeing here. I think in the red line is the price of natural gas. And then the blue, the candlestick is the spread.”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“And if you in a backwardation, like many commodities are right now, you actually make a rolling win. So you make a little bit of money. If you roll a contract into the next month. And this is particular also a big reason why commodity funds in this environment performing pretty good, but it should also be a warning sign to investors that things can change here real fast if these backgroundations switch back again into a contango.”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I think that's also a topic we should elaborate on because there are many commodity funds out there and also commodity ETFs which have a particular great performance over the last two years. But here it's really important to look at these ETFs and funds and look what is actually in them. And most of the times those ETFs are futures-backed. So basically the ETF is buying futures contracts. And this is what you get as an ETF. It's basically replicated. This works very, very good as a passive investment strategy as long as many commodities are in the background. Because if you are a futures traders trader and you have contracts, you are forced to roll these contracts into next month.”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“And what I was observing back then when we spoke first was that the spreads were at levels that usually lead to actually a decline in commodity prices because you can very good see if the premium on certain contracts is too high that speaks actually for too much pessimism. And too many buyers in the market, and this was actually really what happened back then because commodity prices were at this moment declining again.”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“Price here it gets. But what we currently see is in so many commodity markets, basically the whole energy sector, the whole grain sector and parts of the soft commodity sector is there are solely backgroundations because demand is really so, so high. And there are different ways to measure the extent of backgroundation. What I'm using therefore is I look at time spreads between futures contracts. What I'm using is looking at the first and the second futures contract, but I'm also looking at the current futures contract and the one one year in the future, which is basically a one-year time spread.”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, yeah, right. That's important to know for listeners. Yeah, you talked about the forward curve. It's also an important theme if you're a futures trader. What is the background? Backwardation is basically if the futures contract that you have right now is the highest in price value and the futures contract that comes next is cheaper than the current run. So basically means there are so many buyers in the market that want the nearest delivery possible so they are able to pay a higher premium on the forward contract just to get earlier delivery on the commodity. And if something like this appears in the forward curve, it's called a backwardation. If the forward curve is normal as we call it, then it's in the context. That means as long as the next futures contract is in the future.”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, Jack, I think you give me way too much credit here. Basically, what I saw was just human nature and human psychology. We saw maximum fear in the market, the sentiment in these markets was way over the top. So sorry, sorry.”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“And the reasons I didn't really get at the time, but they had to do with the certain spreads and particularly the shape of the forward curve. Can you explain what did you see in the forward curve of oil and natural gas that made you so bearish about a month ago and why are you cautiously bullish now? What's changed?”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“Which is how inflation is basically measured. But yeah, the invasion from Russia to the Ukraine was just a game changer because, yeah, both countries are just really important players in the commodity sector, both in the energy sector but also in the grain sector. And this, in my opinion, extended the current commodity bull market over an unknown time. So basically what I'm saying also is that if we see signs of a peace agreement or that things will get better on behalf of this dispute, that commodity prices will weaken again. But it's just so hard to forecast these political driven things.”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“So no one really has saw that coming that Russia will invade the Ukraine at the beginning of the year. So I guess this also catched many investors on the wrong foot. In terms of supply chain issues, which is a big topic in the commodity sector because many prices are also driven by supply chain factors, for example, trucking or shipping, we actually saw easing science. So, the congestion was getting less at the ports, freight rates came down a little bit to a certain extent, as did trucking rates. And we also saw a topping out process in the PPI producer price index, which was an encouraging sign. My belief was that inflation is actually topping out as well because it was basically just hard to beat the year on year comparisons.”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“Lucas, what was your view coming into the year on the price of commodities? Were you a commodity bear, a commodity bull? And how did Russia's invasion of Ukraine and the responding explosion in the price of commodities, how did that change your view?”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“A very good point. I mean, this is also something really more people have to speak about is basically risk management. So basically Which sounds simple, but it isn't. I do think that natural gas will go further up from here. A specific price target I haven't got. What I'm using from here on is a trading stop loss. So I'm a trend trader. I try to stay as long in the trade as I can and I try to ride a wave as high as I can. And if the trend changes and I get stopped out, then I get stopped out. But this is kind of my philosophy behind the trades I'm performing.”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“Another option I see to increase these inventories again is getting a deal done with IR in terms of a nuclear deal. This could supply as many as 750,000 barrels of oil more than currently. But yeah, as you can see, there are a few options that we have, but all of them are highly politically driven and I'm really not able to make a comment on how probable each of these options is right now.”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“Another way or another option for the US government to increase inventories again would be To get some better signs from the OPEC. Because over the last couple of months, they weren't even able to really meet their production goals. They changed in the last month. So they were able to meet those goals again and meet the production promises they made, which is basically a good sign. But we do not have, we can forget that the OPEC is an ally of Russia. They're working very close together in terms of OPEC+. And I guess here the OPEC really would not like to be to any extent political. And therefore, I really don't expect that OPEC will increase the production significantly from here on, even if they would be able to do it. Just to not upset Russia, basically.”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, basically, if we look at the US government, there are also some options they have to build up these inventories. I mean, the simplest one would be to just increase production again. But it currently looks like that's not happening because there are structural issues in the oil industry where we saw that just these low capex sector involved because all of the ESG hype that build it up over many, many years. And basically resulted into declining cash flows into the sector. Moreover, companies in the oil sector use then those profits they generated to increase the shareholder value in terms of repaying debt. Making stock buybacks or paying out higher dividends. So we have a problem here that we can't pick up the production in the US to the extent that we really need it right now.”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“I can tell you there's a really high probability that the US has to pay a higher price for oil to refill these stocks in the future. I guess the next four to six months will really show us what we can expect from the future because it's not only the US, it's also Europe. We really have to restock our inventories before the next autumn and winter comes. when we will be again reliant on these inventories to heat our homes basically”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“Great point, Jack. And also a concerning point. Last week, Biden announced that he will release some reserves from this strategic reserve SPR. I guess it was about a million barrels per day over a time frame of six months. Which is quite bearish in the short term for the forward futures contract, which I do in a few couple of months. I guess this was also the reason why we saw to some extent the decline in crude oil prices in the last week. But if you think about it, it's also quite bullish for contracts that are further in the future because if you release now oil from the SPR reserves, These reserves somehow have to get restocked again sometimes”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“Households need less oil to heat. And this is the time when you want to refill your tanks. So yeah, this is why the seasonality is looking like it looks like.”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“Depressed bikes are actually, if you look at the parts, more likely in periods of the buildup phase, which is from now on over the next six months. Why is this what the fundamental driver behind this is? I really can't tell you, Jack, but I know from a statistical point of view that it's just important and that it works. And this is also something in my thinking process. If I see something that really has an importance and that worked over many, many years, then it's something I really want to include into my analysis. And this is, for example, here also in the seasonality data of a natural gas. And the same is partially true for crude oil, basic thinking here again. Inventories get filled up when not too much crude oil is needed right now because we get now again back in to spring and summer, temperatures get warmer.”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“What you do as a consumer is you refill the tanks when it gets warmer because you need the storage, the natural gas, when it gets cold again. So yeah, you basically buy natural gas back in spring and summer because you need it in autumn and winter.”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, if we look at the seasonality of natural gas, we've seen clearly that we last week entered the buildup phase of the year, which lasts six months in general. This is a time where inventories in the US get built up again. So natural gas has to be bought and inventories have to get filled up again. Also, if you're a consumer, you buy natural gas in times when it's getting warmer and you fill up your tank in times when you don't have to heat. So that's just a basic knowledge.”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“That's basic economics, and it's actually what we're seeing right now natural gas. Terms why I'm more bullish on natural gas right now than on crude oil. It's just that we in a relative more stronger upward seasonality in natural gas than we are in crude oil. Moreover, the positioning data, which I'm looking at is quite bullish. And yeah, the sentiment around natural gas is also not quite as crowded as it is, for example, a crude oil right now. So basically, to say it in simple words, both energy sources right now are still attractive. But over the short term, so let's say three months, I still believe that we have better opportunities in natural gas market than in the crude oil market.”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“Of course, as we can clearly see, energy was the best performing sector year to date, but closely followed by the grain sector. Energy is still quite bullish. Explicit to say natural gas because my pattern is confirmed there. I see strong market fundamentals there right now. I see a huge demand for natural gas. We see especially the Russian crisis, which affects the price of this commodity a lot. If you look to Europe, where I'm based, we have big, big troubles to keep up with the demand because we would like to put some kind of embargo over Russian imports of natural gas, of oil, and also of coal So, yeah, we have to figure out how to keep demand meet. But as a good gets less and less available on the market is automatically pushes up the price of a commodity.”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“Bitcoin is actually also bullish for me right now, which actually sounds crazy to me because the underlying fundamental situation looks more like that we have a risk of, that we see draining liquidity, less liquidity in the market. Which actually should weaken the price of risk assets if you put Bitcoin into a basket of risk assets? But Bitcoin is still surprisingly stable at the current levels. And yeah, so for now, Bitcoin is still bullish for me.”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“Soft is also a very fascinating sector because almost every soft commodity has its own story. You can, for example, compare the market dynamics of the coffee market with the market dynamics of the Kokoa market or the sugar market. So very fascinating market, very diversified market. I'm currently very bullish on coffee as well. The rest of the two commodities, for example, orange juice, orange juice futures, something that I'm more bearish towards. We also have to point out that soft commodities are more the luxury type of commodities. So they also have to do with economic momentum, our economies more expanding, are people in other countries able to afford these luxury commodities.”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“Actually, if you talk about soybeans, which is the main product, you also have to talk about soybean oil and soybean meal. So basically, if you crush a single soybean, you get some amount of soybean oil and the other amount is crush, which gets transformed into meal, soybean meal. And for me, actually, soybean meal looks the most bearish right now. This is also a trade I'm currently performing to the downside.”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“Soybeans actually really knew, but bearish thesis here because we saw last week a new release news release from the USDA pointing out that farmers switching actually from planting more corn rather than soybeans simply because of the fact that they have much less of a fertilizer exposure so you need more fertilizers to plant corn to plant soybeans. And this will, of course, lead to a higher yield of soybeans in the future. And therefore, I think that soybeans is slightly bearish right now. And on the other hand, corn is slightly more bullish right now.”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT
“Platinum palladium are for me. I see the use case more in the industrial area as well. Platinum and palladium prettiest for building catalyzers in the automotive industry and therefore I'm still slightly bearish towards them but there's one point we have to really point out here is that Russia is the main supplier to the world They account for about 40% of total palladium so of course this metal is highly news driven right now yeah”
2022-04-07 · Forward Guidance · Bullish Commodities? Not So Fast | Lukas Kuemmerle · IDENTIFIED FROM THE TRANSCRIPT