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What is causing the current liquidity crisis in commodity markets?

Over the past few months, macro investors have been pulling inflation hedges – especially commodity ETFs – as central banks began hiking rates. The scale of margin calls that we’ve seen from the immense volatility this year has also wiped out a lot of the available cash, especially in gas and power markets. A good metric for market liquidity is aggregate open interest across futures. The oil market is currently at around 60% of its high from the middle of 2021.

Under these circumstances, it's good to have a few different diversified sources of liquidity and keep your mind open to proxies. That could mean hedging with benchmark contracts rather than those at specific delivery points that are better aligned with your exposure – you can close the differential between your hedges and exposures by trading basis swaps, which are often more liquid than fixed price swaps.

Corteva Agriscience signs agreement to acquire the Stoller Group, one of the largest independent biological products companies in the sector

"Corteva" and "Stoller Group" announced today that Corteva signed a definitive contract to acquire Stoller, based in Houston, one of the largest independent Biological companies in the industry. With operations and sales in more than 60 countries and revenue forecast for 2022 of more than $400 million, Stoller brings immediate scale and profitability, with EBITDA margins that will be added to those of Corteva.