Commodity Trader’s Almanac 2013
It is impossible to predict the future. That is why we rely on seasonal and historical analysis to help understand, or better yet, to remind us what price trends have occurred in the past and how often these trends perform. These patterns typically occur as a direct result of perennial supply and demand changes year after year. Every year has differences, from changes in monetary and fiscal policies to global macroeconomic situations to presidential election year cycles to extreme weather and other exogenous events.
2013 promises to be a dynamic year for commodity markets. No matter which party is elected, energy reform will likely be on the slate. Currently, we lack a national policy on â€œfrackingâ€ procedures, the process by which water and chemicals are injected into the earth to extract oil and natural gas. As of June 2012, policy decisions are in individual states’ legislative hands. If we do see a shift toward more cleaner burning fuels, then natural gas may see ramped-up production, creating a shift in fossil fuel demand.
The first half of 2012 left the U.S. in a serious weather situation, wreaking havoc on farmers and ranchers. Earlier than normal hot and dry conditions reduced yields in corn and soybeans as well as creating massive wildfires throughout Colorado. The global economy, hurt by a European debt crisis and economic contraction in China, was partially to blame for decelerated U.S. economic growth. As a result, in June 2012, Ben Bernanke lowered the Federal Reserve’s estimated gross domestic production (GDP) at 1.9 % to 2.4% from a previous estimate of 2.4% to 2.9%. The decelerating pace of job growth in the U.S. led the Federal Reserve to reaffirm and commit to keeping a near-zero interest rate policy through 2014. They even expanded their bond buying program, called â€œOperation Twist,â€ which was designed to add liquidity to the faltering financial system.
We believe we will have the perfect storm for continued volatility for stocks, bonds, safe haven instruments like gold and silver, agricultural markets, as well as foreign currencies in 2013 as a result of this ongoing global economic situation and the severe drought that has devastated the U.S. corn and soybean crops. The seasonal analysis provided in the Commodity Traders Almanac 2013 will likely prove to be a very valuable resource for active traders in these markets.
|May 30, 2020
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