The reputation of “king of goods†is not blown – in the process of continuous inflation and plunging, the leading attributes of crude oil are continuously strengthened. For agricultural products, the influence of crude oil can sometimes exceed the supply and demand relationship and become the new coordinate of the agricultural product market - almost all agricultural product futures varieties and oil price relations are so close.
At present, international oil prices seem to have signs of bottoming out. The agricultural products are also eager to try. However, some analysts pointed out that from a fundamental point of view, the two basic directions of operation are the same, and it is still too early to say. Moreover, there is a difference in the fluctuation range between the two, there is a difference in the time of the bottoming out, and agricultural product investors should grasp the rhythm.
Crude oil prices go together
Although less than the tightness between chemicals and crude oil, some research institutes say that the link between energy prices and agricultural product prices "is likely to be in the era of Malay carts." The linkages between the two include the increasing use of crops in the production of biofuels and the importance of crude oil and its by-products (fertilizers) as a production cost for farmers.
The person interviewed by the reporter explained that the drop in crude oil prices will directly lower the prices of gasoline, diesel, fertilizer, pesticides, agricultural film, herbicides, etc., which will reduce the production of agricultural products and the production and transportation costs of agricultural machinery, and drive agricultural products. The price has fallen. High oil prices have also led to a decline in the production profits of bio-energy such as fuel alcohol and biodiesel, which will definitely have an adverse impact on the prices of related agricultural products. Among the agricultural products producing fuel alcohol, corn accounts for 50%, sugar cane accounts for 40%, others have wheat, sugar beets, cassava, etc., and biodiesel involves soybean oil and palm oil . The lower prices of some agricultural products will also drive down the prices of other agricultural products, resulting in the overall low level of agricultural products.
For example, crude oil has a greater driving effect on grease. Recently, crude oil prices have fallen, suppressing the price of palm oil. Because palm oil is a relatively low-priced variety of oils and fats, it is generally used as a substitute for soybean oil, and is an important biofuel raw material in the world, especially in Europe.
The New Zealand Bank of International Investment Bank said that until 2015, the prices of food and crude oil were generally regressive, highlighting the strong correlation between the two. “In academic terms, the correlation coefficient between the two has been +0.92 since 1990, and since 2000 it was a higher +0.94.†The bank said it uses the monthly data released by the UN Food and Agriculture Organization as the food price. Benchmark.
According to the Bank of New Zealand, “low energy prices are good for producing more food, if other factors remain the same.†Bank of New Zealand said that more output means that food prices are lower.
At the same time, the sluggish crude oil price has also “weakened the ability of energy producers to pay higher prices for foodâ€. This factor is already evident, for example in the Russian agricultural market (although its impact has been hampered by sanctions and counter-sanctions).
Cheng Xiaoyong, assistant director of Baocheng Futures Finance Research Institute, said that from the linkage mechanism of crude oil and agricultural product prices, there are two paths of influence: First, there is an energy substitution relationship between crude oil and agricultural products, and agricultural products can be used as raw materials for manufacturing biofuels. Statistics show that bioenergy projects such as fuel ethanol and biodiesel form a cointegration relationship with the international crude oil futures market, that is, the three have a mechanism of relevance and mutual influence. Second, both crude oil and agricultural products can be used as a measure of inflation, so the two have similar effects in hedging inflation. Therefore, in the long run, there is also a positive correlation between crude oil prices and agricultural product prices.
Founder Midway Futures Researcher Yang Lina believes that the relationship between crude oil and agricultural products is mostly indirectly driven. First of all, crude oil is one of the most important commodities and the basic raw material for the production of many commodities. Therefore, crude oil fluctuations affect its production costs. Agricultural machinery and production materials used in agricultural product cultivation are related to fluctuations in crude oil prices, so they are also indirectly affected. influences. Secondly, crude oil has both commodity attributes and financial attributes. If the macroeconomic situation affects the demand for agricultural products, it will also have a linkage relationship with crude oil. Third, some agricultural products, such as oils, corn, sugar, etc., have emerged as a substitute for the downstream products of crude oil due to the rise of biofuel production, resulting in further close ties and increased linkage. Usually, the fluctuation of crude oil price fluctuation will affect the trend of related agricultural products, but the trend of agricultural products is difficult to form a reaction.
Agricultural products have greatly outperformed oil prices
However, since the end of 2014, the price linkage between the two has been broken, and the drop in oil prices far exceeds the decline in agricultural prices.
“In the past year and a half, food prices have outperformed crude oil prices,†Bank of New Zealand said. “From the perspective of food producers, he may not think so, because the price of food has also fallen. It’s just that food prices are far less than the price of oil.â€
The price ratio of food and crude oil has also changed. This price ratio of “lower-two times†in most of the period of 2005-2015 has returned to four times. Since the 1990s, the grain/oil price ratio has not been able to last longer than four times (the high point at that time was 10 times).
Cheng Xiaoyong said that in recent years, due to the global economic downturn and moderate inflation, both are in a simultaneous downward trend. However, as some agricultural products supply and demand relationship is squeezed out of inflation, its price may be firmer than crude oil, and the decline is different. Moreover, as crude oil prices fall, fuel ethanol and biodiesel have a disadvantage in terms of cost, resulting in a decline in biofuel production, which ultimately leads to a general high inventory of agricultural products.
"In recent years, the price trend of crude oil and agricultural products has been in the midst of a slowdown in the global economic development, but the linkage is weakened. The seasonality of supply and demand and commodities itself dominates the trend." Yang Lina analysis In recent years, the concept of biofuels has weakened. After the sharp drop in crude oil prices, the economics of biofuels produced by related products have deteriorated. Taking biodiesel as an example, biodiesel development is in the doldrum if there is no subsidy from the corresponding vegetable oil producing countries and mandatory policy support. Crude oil prices have been unsustainable. Affected by this, the linkage between crude oil and vegetable oil has been greatly weakened compared with the rise of the concept of biodiesel and the high crude oil price.
Difficult to get out of the independent bull market
Looking ahead to the market, market participants believe that due to the slowdown in global economic development, the trend of crude oil continues to be sluggish, while the supply of major producing countries is not easy to effectively reduce. The bottoming out of crude oil still needs the economic situation to turn warmer and demand to improve. In this process, agricultural products are more independent because they just need support and supply and demand changes.
Yang Lina said that, for example, palm oil has reduced production due to the impact of El Niño's climate, and the currency of the main producing country has depreciated. In this process, the magnitude of the change in the supply side has largely offset the adverse effects of the demand side, and the price performance is relatively strong, so the adverse impact of crude oil on it. There will be greater weakening, and changes in the relationship between supply and demand will become dominant. The degree of difference between crude oil and its price trend will be greatly different in the stage performance. However, in terms of long-term changes, the basic direction of operation is still consistent, but the fluctuation range, there is a difference in the bottom-up time.
For the bulls of agricultural products, the recent mood has relaxed because oil prices are rebounding. Yesterday, Brent crude once broke through 35 US dollars per barrel, a sharp rebound from the low of 27.10 US dollars on January 20.
The rebound in energy prices may have helped stimulate demand for cereals, which has caused US ethanol gasoline prices to fall again below gasoline prices. “Before starting on Friday, gasoline prices once again exceeded the price of ethanol gasoline, making ethanol gasoline once again considered a 'discounted' gasoline, which puts positive pressure on the refining of ethanol,†said broker CHSHedging.
But TreggCronin of HaloCommodity, a US grain broker, said, "It is difficult to see a sustained rebound in food prices before oil prices fall to the bottom."
Cheng Xiaoyong said that because the consumption substitution and inflation environment are not suitable for the rise of crude oil and agricultural products prices, coupled with the weak economic growth of oil-producing countries, they are even more reluctant to cut production capacity, crude oil prices continue to be low, and the cost of agricultural products is reduced and bioenergy The weakening of the substitution is also difficult to get out of the independent bull market.
At present, international oil prices seem to have signs of bottoming out. The agricultural products are also eager to try. However, some analysts pointed out that from a fundamental point of view, the two basic directions of operation are the same, and it is still too early to say. Moreover, there is a difference in the fluctuation range between the two, there is a difference in the time of the bottoming out, and agricultural product investors should grasp the rhythm.
Crude oil prices go together
Although less than the tightness between chemicals and crude oil, some research institutes say that the link between energy prices and agricultural product prices "is likely to be in the era of Malay carts." The linkages between the two include the increasing use of crops in the production of biofuels and the importance of crude oil and its by-products (fertilizers) as a production cost for farmers.
The person interviewed by the reporter explained that the drop in crude oil prices will directly lower the prices of gasoline, diesel, fertilizer, pesticides, agricultural film, herbicides, etc., which will reduce the production of agricultural products and the production and transportation costs of agricultural machinery, and drive agricultural products. The price has fallen. High oil prices have also led to a decline in the production profits of bio-energy such as fuel alcohol and biodiesel, which will definitely have an adverse impact on the prices of related agricultural products. Among the agricultural products producing fuel alcohol, corn accounts for 50%, sugar cane accounts for 40%, others have wheat, sugar beets, cassava, etc., and biodiesel involves soybean oil and palm oil . The lower prices of some agricultural products will also drive down the prices of other agricultural products, resulting in the overall low level of agricultural products.
For example, crude oil has a greater driving effect on grease. Recently, crude oil prices have fallen, suppressing the price of palm oil. Because palm oil is a relatively low-priced variety of oils and fats, it is generally used as a substitute for soybean oil, and is an important biofuel raw material in the world, especially in Europe.
The New Zealand Bank of International Investment Bank said that until 2015, the prices of food and crude oil were generally regressive, highlighting the strong correlation between the two. “In academic terms, the correlation coefficient between the two has been +0.92 since 1990, and since 2000 it was a higher +0.94.†The bank said it uses the monthly data released by the UN Food and Agriculture Organization as the food price. Benchmark.
According to the Bank of New Zealand, “low energy prices are good for producing more food, if other factors remain the same.†Bank of New Zealand said that more output means that food prices are lower.
At the same time, the sluggish crude oil price has also “weakened the ability of energy producers to pay higher prices for foodâ€. This factor is already evident, for example in the Russian agricultural market (although its impact has been hampered by sanctions and counter-sanctions).
Cheng Xiaoyong, assistant director of Baocheng Futures Finance Research Institute, said that from the linkage mechanism of crude oil and agricultural product prices, there are two paths of influence: First, there is an energy substitution relationship between crude oil and agricultural products, and agricultural products can be used as raw materials for manufacturing biofuels. Statistics show that bioenergy projects such as fuel ethanol and biodiesel form a cointegration relationship with the international crude oil futures market, that is, the three have a mechanism of relevance and mutual influence. Second, both crude oil and agricultural products can be used as a measure of inflation, so the two have similar effects in hedging inflation. Therefore, in the long run, there is also a positive correlation between crude oil prices and agricultural product prices.
Founder Midway Futures Researcher Yang Lina believes that the relationship between crude oil and agricultural products is mostly indirectly driven. First of all, crude oil is one of the most important commodities and the basic raw material for the production of many commodities. Therefore, crude oil fluctuations affect its production costs. Agricultural machinery and production materials used in agricultural product cultivation are related to fluctuations in crude oil prices, so they are also indirectly affected. influences. Secondly, crude oil has both commodity attributes and financial attributes. If the macroeconomic situation affects the demand for agricultural products, it will also have a linkage relationship with crude oil. Third, some agricultural products, such as oils, corn, sugar, etc., have emerged as a substitute for the downstream products of crude oil due to the rise of biofuel production, resulting in further close ties and increased linkage. Usually, the fluctuation of crude oil price fluctuation will affect the trend of related agricultural products, but the trend of agricultural products is difficult to form a reaction.
Agricultural products have greatly outperformed oil prices
However, since the end of 2014, the price linkage between the two has been broken, and the drop in oil prices far exceeds the decline in agricultural prices.
“In the past year and a half, food prices have outperformed crude oil prices,†Bank of New Zealand said. “From the perspective of food producers, he may not think so, because the price of food has also fallen. It’s just that food prices are far less than the price of oil.â€
The price ratio of food and crude oil has also changed. This price ratio of “lower-two times†in most of the period of 2005-2015 has returned to four times. Since the 1990s, the grain/oil price ratio has not been able to last longer than four times (the high point at that time was 10 times).
Cheng Xiaoyong said that in recent years, due to the global economic downturn and moderate inflation, both are in a simultaneous downward trend. However, as some agricultural products supply and demand relationship is squeezed out of inflation, its price may be firmer than crude oil, and the decline is different. Moreover, as crude oil prices fall, fuel ethanol and biodiesel have a disadvantage in terms of cost, resulting in a decline in biofuel production, which ultimately leads to a general high inventory of agricultural products.
"In recent years, the price trend of crude oil and agricultural products has been in the midst of a slowdown in the global economic development, but the linkage is weakened. The seasonality of supply and demand and commodities itself dominates the trend." Yang Lina analysis In recent years, the concept of biofuels has weakened. After the sharp drop in crude oil prices, the economics of biofuels produced by related products have deteriorated. Taking biodiesel as an example, biodiesel development is in the doldrum if there is no subsidy from the corresponding vegetable oil producing countries and mandatory policy support. Crude oil prices have been unsustainable. Affected by this, the linkage between crude oil and vegetable oil has been greatly weakened compared with the rise of the concept of biodiesel and the high crude oil price.
Difficult to get out of the independent bull market
Looking ahead to the market, market participants believe that due to the slowdown in global economic development, the trend of crude oil continues to be sluggish, while the supply of major producing countries is not easy to effectively reduce. The bottoming out of crude oil still needs the economic situation to turn warmer and demand to improve. In this process, agricultural products are more independent because they just need support and supply and demand changes.
Yang Lina said that, for example, palm oil has reduced production due to the impact of El Niño's climate, and the currency of the main producing country has depreciated. In this process, the magnitude of the change in the supply side has largely offset the adverse effects of the demand side, and the price performance is relatively strong, so the adverse impact of crude oil on it. There will be greater weakening, and changes in the relationship between supply and demand will become dominant. The degree of difference between crude oil and its price trend will be greatly different in the stage performance. However, in terms of long-term changes, the basic direction of operation is still consistent, but the fluctuation range, there is a difference in the bottom-up time.
For the bulls of agricultural products, the recent mood has relaxed because oil prices are rebounding. Yesterday, Brent crude once broke through 35 US dollars per barrel, a sharp rebound from the low of 27.10 US dollars on January 20.
The rebound in energy prices may have helped stimulate demand for cereals, which has caused US ethanol gasoline prices to fall again below gasoline prices. “Before starting on Friday, gasoline prices once again exceeded the price of ethanol gasoline, making ethanol gasoline once again considered a 'discounted' gasoline, which puts positive pressure on the refining of ethanol,†said broker CHSHedging.
But TreggCronin of HaloCommodity, a US grain broker, said, "It is difficult to see a sustained rebound in food prices before oil prices fall to the bottom."
Cheng Xiaoyong said that because the consumption substitution and inflation environment are not suitable for the rise of crude oil and agricultural products prices, coupled with the weak economic growth of oil-producing countries, they are even more reluctant to cut production capacity, crude oil prices continue to be low, and the cost of agricultural products is reduced and bioenergy The weakening of the substitution is also difficult to get out of the independent bull market.
We provide some different purity of Alumina Ceramic Tube, like 95%, 99%, 99.5% and 99.7% that it related to the specia requirement and application.
We are capable of dealing with customized service via fine grinding, maching, polishing according to clients' drawing, specification and practical samples.
Alumina Ceramic Tube
Alumina Ceramic Tube,Alumina Ceramic Thermocouple Tube,Dry Pressing Alumina Ceramic Tube,Industrial Ceramic Alumina Tube, Alumina Ceramic Bushing, Alumina Ceramic Sleeve, Alumina Ceramic Pipes
Jinghui Industry Ltd. , https://www.ceramictek.com