00:00Well, in the X sector, the one I look at, all of them are starting to trend in a proper
00:06way.
00:06And it's all kind of been in the sort of low price environment from which they were coming out.
00:12As we started learning more about the conflict, the disruption in the Strait of Hormuz and how long will it
00:19take.
00:20So I would say corn, wheat, soybeans on the grain side, as we see that fertilizer impact.
00:30Being the most relevant for those type of commodities.
00:33Rob Carolyn just emailed in.
00:35He wants to know about El Nino in the drought.
00:37Is it drought-based?
00:38It's moving prices right?
00:40Paul, ready for this?
00:41Yeah, go.
00:42In the softs.
00:43Softs.
00:43That's how we do it.
00:44Well, El Nino is another risk that developed in the last two months or three months where meteorologic agencies started
00:53to be very confident about this coming in the next month.
00:57And then gaining some strength over the period of the next six months.
01:04Some meteorologic agencies are expecting very strong or record El Nino.
01:09And El Nino, just to clarify, it's the degree level of sea surface in the Pacific Ocean, the degree of
01:16it.
01:16And whenever it reaches to two degrees, that's where we kind of say that there is an El Nino.
01:22And if there is deviation, if there is more than two degree warming happening in the Pacific Ocean, then that
01:28will characterize it as a strong El Nino.
01:30Now, what El Nino brings with it is this abnormal weather patterns.
01:34Abnormal weather patterns across the globe where you can see drought in the India, around India, around Southeast Asia, Australia.
01:46And you typically see some sort of high level of precipitation in South America, in Brazil, and Colombia, and those
01:53countries.
01:54So the bottom line, because softs are very much concentrated around the production of softs, are very much concentrated around
02:02the equator, right?
02:04And they would have kind of this bigger impact on the yields coming from this strong or moderate El Nino.
02:13It's really early to tell how strong and significant this weather pattern would be as it's developing.
02:22But from what we know now, the factual data is that the temperature in the Pacific Ocean is the warmest
02:29at the moment when we compare it with any observable historical period in the past at this moment.
02:37So that probably tells us that there is a relatively high probability and likelihood that this system will develop over
02:45the summer months and going forward.
02:47All right, I'm looking at some of the eggs here.
02:49I can do that in my GLCO screen, the global commodity screen.
02:52It's my savior.
02:53It's the only thing I know about commodities.
02:54I got soybeans up 15% year to date.
02:56I got wheat up 23%.
02:58Cotton's up 18%.
03:00Sugar down 5%.
03:02What's going on with sugar?
03:04Yeah.
03:04And we think that's a lagger in this case.
03:06I think sugar, there is a lot of news and expectations about the crop in sugar, especially in Brazil.
03:15Where do we grow sugar, by the way?
03:16Remind me.
03:16In Brazil.
03:17Brazil is the largest producer, marginal producer.
03:20All right.
03:20About two-thirds of what Brazil produces is being exported.
03:23The second biggest producer is India.
03:26However, in India, about everything that's being produced in India is being consumed domestically.
03:31Okay.
03:32Whenever there is a bumper crop, that's where India gets into the market and starts exporting.
03:37The risk there is that in the last strong Al Nino, which was in 2015, 2016, production in India fell
03:46by about 30%.
03:47And India came into the market aggressively importing sugar, and that kind of spiked the prices.
03:54I got just a minute here.
03:55I'm going to take a chance.
03:56From your Armenia, Georgia down to Armenia over to Azerbaijan, I think Americans are clueless about the importance of the
04:04Caspian Sea.
04:06We're absolutely clueless about it.
04:09I think it's a lake, Paul.
04:11I don't know.
04:11But it's not like Lake Erie or Lake Erie, it's like ginormous.
04:16Tell us the importance of the Caspian Sea to the Eastern Mediterranean and the Stan nations.
04:22Well, it's a little bit of a segue, but yes, Caspian Sea is very important.
04:26We do segways.
04:26Yeah.
04:27We call them segways, so go.
04:30It's very much relevant, but more for the energy complex.
04:34And part of my research agenda that I look at as we're going in the segways, I look at the
04:41uranium.
04:42And Kazakhstan is the biggest producer of uranium.
04:46And over the last four years since 2022, really the development of the trans-Caspian kind of route has developed
04:55as an alternative route rather than exporting uranium through Russia,
05:00as typically Kazakhstan would do that.
05:03But Azerbaijan is a big oil and gas producer, and so the Caspian importance is there, and it kind of
05:11connects.
05:12Yeah.
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