China’s formidable $5.9 trillion stock market has been left in the dust recently as Chinese speculation has been giving global raw commodity markets one heck of a ride this past month or so. Metal futures, food & fiber futures, and grains have all turned up with trends from being stagnant since early 2015.
Everything from eggs, to cotton…even steel rebar has been surging as the speculation bug in China has been catching on. There is no joke when mentioning “eggs” because when compared to the stock market, the dairy staple has indeed been a better investment in China with egg futures climbing 27% so far this year.
Mark Mobius, executive chairman for the Templeton Emerging Markets Group, shared his fundamental view of the Chinese commodity futures market by stating, “We have already seen how both commodity prices and the commodity stock prices went down too far, beyond realistic assessments.” Mobius adds, “We can now expect movement on the upside to be extreme in percentage terms.”
The trends for most of the commodity futures markets has turned up with the exception of cattle futures and coffee. With the dizzying speculation going on in China’s commodity futures markets, it seems only a matter of time before these markets are discovered too.
ALL COMMENTARY IS CONSIDERED OPINION & VIEWS FROM THE AUTHOR AND NOT A SOLICITATION OF ANY SECURITIES. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION.