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Food commodities rise but what about point of no return

The image highlights a sunny wheat field with a beautiful blue sky, to convey the message of food commodities.by InchCapital - Milan (Italy)

What’s news on ETFs?

In seconds, by the INCH platform, we analyzed 160 different categories for more than 1,070 ETFs. The list  based on the trend-momentum method highlights the strong interest for commodities still ongoing.

 

The image highlights the top six strongest certificates, ranked in according to the method based on trend and momentum.

InchCapital Platform – The image highlights the top six strongest certificates, ranked in according to the method based on trend and momentum.

 

As you can see in the image above, all ETFs on the first page are 3x leveraged; they precede 2x leveraged listed on the second page and so on. Therefore, the buyers are not only speculative and temporary and in all probability, they will be again in the next months.

In the light of the above, we go to see the trend of the main futures around the world, which we depict below by weekly bar charts, in order to have a broader temporal view:

 

The image highlights the top six strongest futures – weekly bar chart, ranked in according to the method based on trend and momentum.

InchCapital Platform – The top six strongest futures – weekly bar chart, ranked in according to the method based on trend and momentum.

 

The bullish trend in commodities is confirmed except for the hydrocarbon energy sector.

The various commodities indices of the INCH platform highlight the greater comparative strength of the Moody’s Commodities index compared to the two indices with the greatest presence of hydrocarbon energy such as Goldman Sachs future continuous and CRB Cash.

 

The image shows the Moody's Commodities Index - linear chart for eight years

InchCapital Platform – Moody’s Commodities Index – linear chart for eight years

 

The image shows the Goldman Sachs Commodities future continuous - linear chart for eight years

InchCapital Platform – Goldman Sachs Commodities future continuous – linear chart for eight years

 

The image shows the CRB Cash Index - linear chart for eight years

InchCapital Platform – CRB Cash Index – linear chart for eight years

 

The Moody’s index is also the strongest on the basis of intermarket analysis, as highlighted by the spread indicators versus the performance of the MSCI ACWI IMI TR (global equity) and JPM GBI (global bond) indices.

 

The image highlights Moody's Commodities index vs. MSCI ACWI IMI TR index - daily linear chart

InchCapital Platform – Moody’s Commodities index vs. MSCI ACWI IMI TR index – daily linear chart

 

The image shows Moody's Commodities index vs. JPM GBI index - daily linear chart

InchCapital Platform – Moody’s Commodities index vs. JPM GBI index – daily linear chart

 

Visual communication is immediate: right now commodities are the strongest financial market in the world: Why?

According to the latest UN publication, the world population, which was about 2.5 billion people in 1950, will reach in 100 years about 9.8 billion in 2050: it will multiply by about 4 times in 100 years compared to the previous 1950 years.

Accordingly, it is reasonable to expect that the demand for food commodities will be constant and growing, but the price to be paid, under current conditions, is very high and probably unsustainable.

As Greenpeace points out, in its latest study on meat consumption, in collaboration with the University of Tuscia in Viterbo, intensive farming in Italy absorbs about 40% of the entire annual national energy needs of agriculture sector.

It is also pointed out, again from this study, that in the Po Valley in Lombardy, most of the national intensive farms are concentrated and that this represents the second cause of pollution in that area. The air becomes increasingly vulnerable to aggressive agents in the area just considered the most polluted in Europe.

Greenpeace also highlights how Italy, home of the Mediterranean diet, is consuming more and more meat (see LIVE CATTLE third weekly bar chart above) and that Italians are gradually approaching a type of US diet.

Well then, given the situation and the prospects, we could ask ourselves: “May we have to switch to a vegetable type protein diet’? In fact, if we look at the trend of the soybean chart, the fifth in descending order highlighted in the image above, there is a long-strong interest in this vegetable alternative.

However, what do these two markets have in common besides proteins and the strong demand still ongoing? The answer lies in the growing global need to have more and more new large arable spaces available or to be used for intensive farming: the trees are paying the price of this growing need.

Is this trend sustainable? No it isn’t, in the latest United Nations report relating to 2020 it is once again pointed out that we got time in our side and that if humanity does not immediately adopt drastic and timely measures it is destined to reach the point of no return.

What we can make therefore? We can follow the advice of scientists like our Stefano Mancuso who, with his publications known worldwide, points out the scientific importance of preserving plants and trees. The game of the future of humanity will be played in seeking the stable balance between the plants and the world food problem.

Well and what about the time remaining? In times of crisis, every family cut costs to survive and have time to recover. For humanity might want to plant the greatest possible number of trees and accelerate all types of technological to reduce CO2 emissions: for the rest we pray and do not pollute everyone as best we can.

www.inchcapital.com – Author: Emanuele Cecere