Well then… just as we discussed back in early April, cocoa has done exactly what it said on the tin. It’s now pushed up to 4,800 per tonne – a tidy 60% rally in a little over a month. Not bad for something most people wouldn’t recognise unless it came wrapped in foil.
And it wasn’t alone. Copper’s up around 20%, aluminium about 10%, soybeans around 5%, corn roughly 10%, and wheat has put in a solid 15% move. All of them flagged early. All of them largely ignored.
Now, what did the fashionable stuff do while all this was going on?
Oil dropped about 20%. Gold? Flat as a pancake.
Funny old game isn’t it.
With the agricultural markets, weather has been the main culprit – and my old friend El Niño has been front and centre again. Regular readers will know I’ve always had a soft spot for trading weather patterns. They’re far more honest than politicians, if nothing else.
In the metals space, aluminium has been driven by supply disruptions linked to the Strait of Hormuz situation, while coppers had its own squeeze thanks to a shortage of sulphuric acid – not helped by China deciding to restrict exports of a key refining input. Real issues. Real constraints. Proper supply-and-demand stuff.
Of course, most people aren’t terribly interested in these “unfashionable” markets. They prefer the noise – bombs, headlines, and whatever mood happens to be drifting out of Washington on any given day. But the truth is, these quieter markets are moving for tangible reasons, not theatre.
Equities, meanwhile, have been dragged higher by a handful of AI darlings. If you’ve been on that horse, well done – but let’s not kid ourselves, it’s a crowded trade now. And crowded trades have a nasty habit of ending badly.
As for EUR/USD, nothing dramatic. We’re still stuck in a broad range. Some call it consolidation near the highs; others say it’s banging its head on the ceiling. We’ll see. For now, the dire warnings about the U.S. economy haven’t quite shown up in the numbers, while Europe… well, you have to squint a bit harder to find the same optimism.
Speaking from this side of the Atlantic, it’s not exactly inspiring. The UK looks like it’s drifting, Europe feels divided, and policy direction is – at best – muddled. It doesn’t exactly fill one with confidence in the euro.
Interest rate expectations aren’t helping either. Europe looks set for higher rates, while in the U.S., there’s constant pressure for cuts – though with tensions in the Gulf, that may have to wait.
Which brings us neatly to the Persian Gulf. There’s a lot of noise, but not much clarity – and that’s often when things get interesting, or dangerous. Trump may want a quick resolution – especially with his meeting with China just around the corner – but it’s not entirely clear who he’s negotiating with, or whether anyone is truly in control on the other side.
The IRGC, in particular, appears to be operating to its own script – saying one thing, doing another. History suggests that makes any lasting agreement… optimistic, shall we say. Add in ideological factors, and the usual levers of pressure don’t quite work as expected.
Meanwhile, nobody really knows how the situation around the Strait of Hormuz will unfold, or when normal shipping resumes. And that uncertainty is exactly why I’ve been looking elsewhere – away from the obvious, away from the noise, and into markets driven by something a bit more grounded.
It may feel uncomfortable stepping outside your usual patch. But diversification isn’t just a theory – it’s a tool. And right now, it’s working.
If an old man like me can still find opportunities in the overlooked corners of the market… what’s stopping you?
Please note the political opinions expressed above are those of the author himself, and do not necessarily reflect the opinions of JP Fund Services AS.
The post Not only did Cocoa deliver, but some “unfashionable” trades did well too first appeared on JP Fund Services.
The post Not only did Cocoa deliver, but some “unfashionable” trades did well too appeared first on JP Fund Services.
The post Not only did Cocoa deliver, but some “unfashionable” trades did well too first appeared on trademakers.