It's been a strange year, where the world seems to be accelerating forward on the back of global vaccination programs. 

This past week has been a rollercoaster across all markets, rather than a slow journey upwards. Uncertainty and volatility seem to be the current words related to market events. 

It seems odd that we are already discussing a weather market in March, when usually these discussions begin over the summer. It's true that southern hemisphere crops are increasingly needed to meet consumption requirements, however we're already looking at the weather forecasts in Texas to anticipate what the plantings might be... 

The last WASDE was ignored by many markets as the report left corn and soybean stocks unchanged while maintaining planting projections. Today, all eyes will be on the USDA's acreage report out on March 31st. In the meantime, markets are likely to continue with the violent up and down movements. 

However, regulators are readying themselves to stop speculation from becoming the driving force across commodity markets. 

For us, we are more concerned about the consumption picture rather than production. This picture shared by one of our agents in Pakistan speaks for itself:

The sharp drop in consumption of manufactured goods is remarkable, especially in a country that will export more than 85% of its raw cotton, as confirmed by the USDA report of last week. 

On the physical market, the yo-yo movements experienced by the markets have encouraged spinners to fix portions of their open contracts, but remain reluctant to buy more for the time being. 

The final vote by US Congress on the stimulus package worth 1,900 billion dollars has enabled the greenback to regain strength over a basket of currencies, particularly the euro, where poor vaccine distribution is causing fears of less sustained recovery in growth than the rest of the world. 

The latest movements in commodities markets are a reminder that price movements are not an exact science, even though in the medium term we continue to favor a reduction in basis and a rise in prices.