Detta borde inte komma så mycket av en överraskning: Att äta för mycket bacon kan orsaka cancer. Världshälsoorganisationen har nyligen sagt att om man äter för mycket bearbetat kött – till exempel behandlat griskött som bacon, skinka, korv och den vördnadsvärda varmkorgen – kan det orsaka cancer. WHO tillägger också att det förmodligen är cancerframkallande att äta för mycket rött kött/däggdjurs kött, inklusive nötkött, kalvkött, lamm och fläsk. Deras tillkännagivande bygger på en granskning av forskning och bevis av 22 forskare som förklaras i en artikel i The Lancet. Låt oss titta på varför Bacon fortfarande har betydelse som en investering.
Så kommer det att leda till ett hälsoinspirerat baconöverskott där restauranger och livsmedelsbutiker måste ge bort giftämnena? Skojar du?
För inte så länge sedan, hade vi en baconbrist. En rad faktorer hade samverkat för att pressa trycket på animaliepriserna, vilket resulterade i några av de största vinsterna för jordbruksråvarusegmentet under årtionden. På lämpligt sätt ser prisdiagrammet för USDA-fläskkött (köttet som används för att göra baconskivor) sedan juli 2014 ut som en skål. Priset har stigit över 170 procent sedan den femåriga botten i april 2015. Den enorma vinsten kanske inte är hållbar, men den långsiktiga trenden ser gynnsam ut för investerare.
Ökad efterfrågan från utlandet för amerikanskt nötkött, kyckling och fläsk innebär högre köttpriser i USA. Emellertid behöver investerare inte sitta idiotiskt och ta prisinflationen.
Stigande priser på nöt- och fläskkött
De bredaste råvarufonderna, som iShares S & P GSCI Commodity Indexed Trust (GSG), har inte exakt varit topputövare under de senaste åren. Det verkar som om all uppmärksamhet på råvarorna har gått in i boskapssektorn. Priserna på boskap fortsätter att öka till nya höjder.
På den korta sidan fortsätter torkan som började under 2012 att orsaka kaos på jordbrukssektorn. Det skickade flera kor till slakt tidigare än förväntat. Medan nedgången i nötköttpriserna under 2012 var välkommen, drog de resulterande mindre besättningarna upp priserna 2013 och 2104. Texas, som producerar 80% av landets nötkött, har nu den minsta besättningen på rekord under de senaste 63 åren.
Då är det den långsiktiga faktorn av stigande efterfrågan från Asien.
En rikare värld med en ökad befolkning kräver en större mängd protein i kosten och det betyder kött. Trots sin lägre (men växande) inkomst per capita, äter Kinas medborgare sex gånger mer fläsk än amerikaner och är nu världens största konsument av svin. Efterfrågan på nötkött i Japanfortsätter också att stiga, medan Indien har sett sin kycklingkonsumtion i de senaste åren. Dessa efterfrågan pressar bara upp värmen för priser.
Göra lite bacon
Sammantaget står boskapssektorn inför ett klassiskt utbuds/efterfråge problem, en som kan bestå i någon tid framöver. För investerare kan det innebära att man laddar upp på spel i produktsub-sektorn. VanEck Agribusiness ETF (MOO) och PowerShares DB Agriculture (DBA) är fortfarande de bästa jordbruksspelen. För investerare som tittar på boskapsspecifika satsningar finns det gott om individuella val.
Ett utmärkt val är iPath DJ-UBS boskap TR ETN (COW). Underbart kortnamn. COW spårar både levande nötkreatur och lean hog futures. Terminskontrakten är spridet över två konstanta löptider om tre månader och sex månader. COW tar ut bara 0,65% i förvaltningskostnader. ETN ger också negativ korrelation med S & P 500 som gör COW till en bra diversifierare. UBS E-TRACS CMCI boskap TR ETN (UBC) kan också användas.
Ett annat alternativ kan vara att satsa på köttproducenter som Hormel Food Corp. (HRL) och Tyson Foods, Inc. (TSN). Med tanke på deras produktlinjer och stora storlekar borde både HRL och TSN kunna jämföras med inkrementella prisökningar till konsumenterna. En annan potentiell vinnare kan vara kycklingproducenten Pilgrim’s Corp. (PPC). Högre priser har orsakat många amerikanska konsumenter att handla kyckling som sin huvudsakliga animaliska proteinkälla.
En icke-U.S. Företag att överväga är kinesisk grisproducent Tianli Agritech, Inc. (OINK).
Slutligen är den verkliga orsaken till stigande djurpriser kostnaden för råvaror. Teucrium Corn (CORN) ETF och Teucrium Soybean (SOYB) ETF tillåter investerare att dra nytta av stigande foderkostnader som kommer att sippra till boskapssektorn.
Poängen
En kombination av faktorer ökade kött- och fläskpriserna och bör fortsätta att göra det under överskådlig framtid. Ökad efterfrågan utomlands och trender till utvidgad användning (bacon som garnering på nästan allt) kommer att säkerställa att eventuella minskningar av hälsosynkande hushållskonsumtion mer än görs för. Och så vad om bacon kan orsaka cancer? Vill Du leva för alltid?
Spannmålspriserna återhämtar sig när Kina köper från USA
Börshandlade fonder som investerar i så kallade ”softs” har gått bra under senare tid. Spannmålspriserna återhämtar sig när Kina köper från USA, och nu signalerar de statliga kinesiska jättarna att de köpa amerikansk spannmål. Detta kan komma att underlätta handelsspänningarna mellan Peking och Washington D.C. Det är inte bara majs, utan även sojabönoroch vetesom lockar de kinesiska inköparna. Spannmålspriserna återhämtar sig när Kina köper från USA.
Detta gynnar börshandlade fonder som Teucrium Soybean Fund (NYSEArca: SOYB), Teucrium Corn Fund (NYSEArca: CORN) och Teucrium Wheat Fund (NYSEArca: WEAT). Det har även haft en positiv kursutveckling för iPath Series B Bloomberg Grains Subindex Total Return ETN (NYSEArca:JJGB). Det sista är ett börshandlat certifikat som ger exponering mot majs, sojabönor och vete.
Kina kommer sannolikt att köpa mer amerikanska sojabönor efter att Peking signalerat att statsfinansierade raffinerare och köpare av spannmål borde de köpa mer för att minska spänningarna mellan de två länderna, rapporterar Reuters. Kina lovade under helgen att öka importen från sin största handelspartner för att avvärja ett handelskrig som skulle kunna störa den globala ekonomin.
Världens största importör av sojabönor
Kina är världens främsta importör av soja, och amerikanska leveranser kommer att hjälpa den framväxande marknaden möta ökad inhemsk konsumtion. Den ökade importen skulle också bidra till att minska Kinas handelsöverskott mot Förenta staterna, vilket president Donald Trump har pekat på.
Sinograin vill köpa amerikansk soja
Kinas statliga spannmålsinköpare Sinograin återvände nyligen till den amerikanska sojabönsmarknaden för första gången sedan början av april. Sinograin har frågat om priserna på amerikanska sojabönor, vilka observatörer tolkade som ett tecken på att Pekings inköpsstopp på att köpa amerikanska varor har lyfts.
”Sinograin är på marknaden idag och ber amerikanska leverantörer att ställa priser för leverans av gammal grödor samt kommande skörd för leverans augusti och framåt” berättade en källa som arbetar på ett privat sojabönsföretag i Kina till Reuters. ”Det är ett tydligt budskap till även privata företag att det är okej att importera amerikansk spannmål.”
Sojabönor är USAs största jordbruksexport till Kina och uppgick till 12 miljarder dollar år 2017. Två andra källor avslöjade också för Reuters att den kinesiska statens spannmålsproducent Cofco skulle tillåtas att köpa amerikanska sojabönor igen. Dessa tecken på att förbättra relationerna verkar också för andra typer av spannmål.
US planting of wheat and corn are down as weak prices deter farmers. Soybeanand cotton planting rise as US farmers hope to continue last year’s increase in exports.
The latest USDA Prospective Planting report shows that farmers are responding to price signals from last year. Wheatplanting is down 8% to the lowest level since records began in 1919. Corn planting is expected to be down 4%. Both of these crops saw record high output last season, which sent wheat and corn prices tumbling 18% and 17% since June 2016. However, to move prices meaningfully higher, other countries will have to restrain planting and the gains in yields we have seen in recent years will have to abate.
Soybean on the other hand is expected to see a 7% rise in planting this season. Last year, a poor South American crop increased demand for US soybean and lent support to its price. US soybean exports rose 4.5% in 2016/17. Although prices have eased in the past month, US farmers are hoping to take further market share this season.
Cotton planting is expected to rise by 21%. That comes as cotton prices have increased 28% in the past year and US exports rose 44% in 2016/17. Cotton has been in a supply deficit for the past two years and US farmers appear to be banking on continued tightness. However, global cotton inventories ex-China have not fallen and remain around the average in the past 10 years. China’s surplus inventory has been declining as the country abandoned it stockpiling programme in 2014. However, China’s imports of cotton may remain restrictive. US farmers will have to rely on growth in imports elsewhere to absorb potential increased production.
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Nitesh Shah, Research Analyst at ETF Securities
Niteshis a Commodities Strategist at ETF Securities. Nitesh has 13 years of experience as an economist and strategist, covering a wide range of markets and asset classes. Prior to joining ETF Securities, Nitesh was an economist covering the European structured finance markets at Moody’s Investors Service and was a member of Moody’s global macroeconomics team. Before that he was an economist at the Pension Protection Fund and an equity strategist at Decision Economics. He started his career at HSBC Investment Bank. Nitesh holds a Bachelor of Science in Economics from the London School of Economics and a Master of Arts in International Economics and Finance from Brandeis University (USA).
ETF Securities Asset Allocation Research – A tactical play to political uncertainties
Highlights
For February, the tactical portfolio is reducing its allocation in US and French equities while overweighting Canada, India, Brazil, Russia and Turkey.
After two months underweighting most bonds except US investment grade, the tactical portfolio is taking a neutral position on rising interest rates and inflation expectations.
Within commodities, the portfolio tactically underweights nickel and tin, increasing allocation in corn and sugar while remaining neutral on energy and precious metals.
For February, the tactical portfolio is reducing its allocation in US and French equities while overweighting Canada, India, Brazil, Russia and Turkey.
After two months underweighting most bonds except US investment grade, the tactical portfolio is taking a neutral position on rising interest rates and inflation expectations.
Within commodities, the portfolio tactically underweights nickel and tin, increasing allocation in cornand sugarwhile remaining neutral on energy and precious metals.
Political uncertainties around the world are growing and may last longer than the market expects. While the divorce between the UK and the EU remains full of uncertainties, the German, French and Dutch elections are likely to add further uncertainty. Although we feel many elections pledges are unlikely to become a reality, the US may not be the trade partner the UK is seeking for as, since his inauguration, President Trump has been loosely delivering on what he has promised during his campaign. While market volatility has not picked-up yet, inflation is rising in the US, EU and UK, increasing the risk of central bank policy errors.
February 2017 positioning
Although very close to its lower band, the market volatility index (VIX) still stands between its historical average and its lower band, suggesting a more balanced tactical split between equities and bonds. The portfolio therefore has 45% in equities, 45% in bonds and 10% in commodities while its strategic benchmark holds 55% in equities, 35% in bonds and 10% in commodities.
Within the equity space, the CAPE (Cyclically Adjusted Price to Earning) valuation model suggests reducing allocation in the US and four European countries while overweighting Canada, Brazil, Russia, India and Turkey. European countries to underweight include France but also Italy, Denmark and, due to rising valuations, Sweden replacing the Netherlands this month. The US CAPE ratio is at its highest since December 2014, standing 47% above its 10-years median. For January positioning, the France CAPE ratio was also at its highest since 2007 before declining slightly this month. Among the countries at the other end of the spectrum, Brazil and Russia continue to show the largest differentials between their CAPE ratios and their respective 10-year medians, suggesting that these countries remain largely undervalued and justifying a tactical increase in their weights.
The below table highlights how our tactical positions have changed for the past three months compared to the strategic benchmark and our new positions for February.
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For November and December 2016, the bond model suggested to underweight most bond categories with the exception of US investment grade, as inflation expectations and interest rate expectations in the US and the EU were at a turning point. Last month, the model suggested returning to the strategic portfolio weights as both rates were rising in tandem. With the CDS (Credit Default Swap) of each bond hovering around its historical average, the tactical portfolio keeps a neutral position for February as well.
For commodities, the contrarian model is taking a complete shift for grains and softs from underweighting wheat, soybeans, cotton and coffee for January positioning to overweighting corn and sugar for February. While the model suggested underweighting copper, lead and overweighting zinc for January, it now suggests underweighting nickel and tin. The model has been tactically neutral on precious metals for the second consecutive month and shifts from overweight to neutral on energy.
Portfolio performance
The tactical portfolio still has the lowest level of volatility compared to a traditional balanced 60/40 portfolio, and the strategic benchmark, improving the Sharpe ratio by 35% on average to 0.44 compared to 0.37 for the 60/40 and 0.30 for the strategic portfolio.
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Whilst underperforming the 60/40 benchmark by 0.2%, the tactical portfolio outperforms its strategic benchmark by 0.6% per year since January 2005.
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With the exception of equities, each asset class in the tactical portfolio outperforms its counterpart in the 60/40 and strategic benchmarks. The bond component outperforms by 0.6% on average while the commodity component outperforms by 0.2%, illustrating the efficiency of our fundamental-based models in improving the risk/return profile of their respective asset class as well as the tactical portfolio.
In addition, the tactical portfolio provides higher protection from the downside risk with a maximum drawdown of -27.2% compared to -38.5% for the 60/40 and -39% for the strategic benchmark.
Finally, the portfolio recovers faster to its previous peak (2.42 years versus 3.25 years for both benchmarks).
Portfolio methodologies
Our strategic benchmark follows a long-only strategy with 60 investments across three asset classes: commodities (25), equities (28) and bonds (7). As illustrated below, the initial weights are based on the weighting methodology of:
The Bloomberg Commodity Index for commodities
The MSCI AC World Index for equities
The Barclays bond indices for bonds
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The strategic portfolio represents a balanced portfolio with 55%, 35% and 10% allocated in equities, bonds and commodities respectively. Every month, the strategic portfolio rebalances into the weights set by the above benchmarks.
Our tactical portfolio aims to outperform its strategic benchmark by applying fundamental-based models to reflect our expertise in each asset class and our views of the global economy. The tactical portfolio rebalances every month to a new set of weights determined by the models below:
The equity-bond relative trade modelsets the weights at the asset class level between equities and bonds while commodities will remain at 10% all the time
This communication has been issued and approved for the purpose of section 21 of the Financial Services and Markets Act 2000 by ETF Securities (UK) Limited (“ETFS UK”) which is authorised and regulated by the United Kingdom Financial Conduct Authority (the “FCA”).
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Shackles of La Niña removed from agricultural prices
The chances of a La Niña weather pattern developing have fallen, removing a potential weight on agricultural prices.
The US National Oceanic and Atmospheric Administration has downgraded the probability of a La Niña weather pattern this year to around 40% from above 70% when they made their assessment in June. Neutral conditions are favoured with a probability of about 55%-60%.
In February we published our analysis which showed that if a La Niña starts in the Northern Hemisphere Autumn/Winter, it would be supportive for the growing of wheat, corn, soybean, coffee and cocoa and hence it would be price negative. Now that the probability of that event has diminished, we believe that a source of negative price pressure has been removed.
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However, in the short term, prices of grains remain under pressure. Despite the poor EU wheat crop due to weather damage, we are likely to see record global wheat production this year as yields in the US and Russia have remained very strong. The Northern Hemisphere wheat harvest for 2016/17 is largely over and the winter wheat planting for the next season will now take place. Given the elevated stocks (outside of EU), we could see wheat planting reduce, which if confirmed will be price supportive during the 2017/18 crop.
Cornis also likely to see record global production in 2016/17. The US harvest is likely to be completed around November. Once again, if elevated stocks are confirmed, planting of next year’s crop, which will start in March 2017, is likely to be pared down.
Arabica coffee has been in a supply deficit for the past two years. The absence of a La Niña could mean a dryer Southern Hemisphere Summer which could continue the recent rally we have seen in coffee prices (up 10% in the past 3 weeks).
Nitesh Shah, Research Analyst at ETF Securities
Niteshis a Commodities Strategist at ETF Securities. Nitesh has 13 years of experience as an economist and strategist, covering a wide range of markets and asset classes. Prior to joining ETF Securities, Nitesh was an economist covering the European structured finance markets at Moody’s Investors Service and was a member of Moody’s global macroeconomics team. Before that he was an economist at the Pension Protection Fund and an equity strategist at Decision Economics. He started his career at HSBC Investment Bank. Nitesh holds a Bachelor of Science in Economics from the London School of Economics and a Master of Arts in International Economics and Finance from Brandeis University (USA).
