After more than four years of record highs, many international investors continue to avoid betting on commodities, due to the low remuneration of prices. More than that, these investors' money went from commodities to stocks. But a US consultancy suggests that what has been happening in recent years is likely to change.
According to the Stewart-Peterson consultancy, based in the US state of Wisconsin, corn would be one of the first commodities to show recovery.
“The cure for low prices is always low prices themselves. What can drive prices up? Many commodities, such as corn, are priced below the cost of production. End users are purchasing the product at bargain prices. When the stock market reaches a peak, then investors will leave company shares to invest in commodities”, says a text from the consultancy.
The Stewart-Peterson analysis points out that in 2017 the market experienced an accelerated pricing of American company shares due to the perception of a more business-friendly government in the United States, but the rise in these shares would be very close to an end.
“If one takes a look at this year's earnings it suggests unbridled enthusiasm. At some point, we will reach the top. It's that old story: 'buy the rumor, sell the fact'”, suggests the consultancy.
The text also concludes that, in fact, what really prepares the recovery in commodity prices is demand, which has grown systematically in recent years.
Source: Agrolink
