Supply constraints drive resource realignment
Differentiation between commodities by supply
Table of contents
Executive Summary 3
2010 Commodities price forecasts 5
S&P GSCI Enhanced Commodity Index and strategies’ total returns 5
Current trading recommendations 6
Price actions, volatilities and forecasts 7
2010 Issues and Outlook: Resource realignment 8
Oil: A slow developed markets recovery amid an emerging markets revolution 12
World oil demand: A slow developed markets recovery amid an emerging markets revolution 12
World oil supply: On the sustainability of higher growth 16
2010: The world oil market rebalances 17
2011: Pricing demand destruction 17
Rolling our long Heating Oil short Fuel Oil trade 18
Natural gas: Lowering our forecast on the back of delayed production declines 20
Base metals: Urbanization is broadly supportive but extraction generates differentiation 27
Precious metals: US Fed on hold leaves gold room to run 36
Agriculture: It’s still all about weather, but ongoing structural demand shifts in corn should prove supportive 43
Livestock: Economic recovery suggests rising meat demand amid tighter supplies 48
Commodities in a nutshell