Mexico CIty — Welcome to La Estrategia del Día (The Daily Strategy), the number one News podcast in Mexico, Colombia and other Latin American countries, as per Chartable and Spotify charts.
This Thursday we are going to talk about the returns on orange juice, Germán Larrea, the owner of Grupo México, wants to buy a Spanish mining company, the political chaos in Argentina is getting more complicated and, in the corporate world, Walmart wants to deliver your groceries in a driverless car.
Good morning, let’s talk about the returns on orange juice futures; Grupo México, the company owned by the owner of Cinemex, has reached the final in the bidding for a Spanish copper mining company; Argentina is experiencing a chaotic political situation; and in the corporate world, Walmart wants to deliver your groceries in a driverless car and has already started testing it.
What We Are Talking About
Who doesn’t enjoy an orange juice after the national holidays? Well, others who also love it, but frozen, are investors; it seems that this commodity is leaving them with a very good taste in their mouths so far this year. Our reporter specializing in financial markets, Estephanie Suárez, reports that orange juice futures are experiencing significant growth, and are expected to show very good returns by the end of 2021. Let’s go one sip at a time: a futures contract is the most popular way to invest in commodities, raw materials. It is an agreement to buy or sell a commodity, in this case frozen orange juice, at a specific future date and price. In other words, by buying orange juice futures you agree to pay a certain price within a month. If, by the time the date arrives, the price is worth more or less than the agreed price, the agreed price must be respected. That said, orange juice futures have had an excellent year. So much so that their return of 19.35% is higher than the S&P BMV/IPC of the Mexican Stock Exchange, the Nasdaq and the S&P 500, all of the latter with returns of 16, 17 and 18% respectively. An analyst consulted by BloombergLínea.com stated that the market is seeing a good moment to hedge against this commodity. Now, why the good performance? Extreme weather changes -frosts, droughts- made the market nervous and if this factor kills crops: less orange, less supply and higher demand. Fun fact: Around 73.3 million tons of oranges are produced in the world annually.
In Other News:
And talking of commodities, on Wednesday Bloomberg News reported that Grupo México, the company owned by German Larrea, one of Mexico’s richest men and who also owns Cinemex, is among the final bidders competing to acquire a Spanish copper mining company named Matsa, which is owned by Trafigura, one of the world’s largest commodities operators. According to this exclusive report, a winning bidder is yet to emerge, but Grupo Mexico, which would buy the Spanish company through its mining unit Southern Copper, has entered the last leg of the fight with Canadian company Hudbay Minerals.
In other latitudes, we cannot help but look at Argentina, which yesterday experienced a chaotic day in the highest spheres of the government of President Alberto Fernández by way of one of the leaders in the region who maintains one of the best relations that Mexico’s President Andrés Manuel López Obrador can boast with his counterparts. Briefly, what is going on? The government suffered a disbandment; with more than five officials resigning from the cabinet after the government suffered a considerable defeat in last weekend’s legislative elections, and in view of this, negative economic and financial effects and greater uncertainty are expected, which could bring exchange rate pressures to the country. This chaos comes three days before the Summit of the Community of Latin American and Caribbean States (ECLAC), which will be held here in Mexico this Saturday and which President Fernández was planning to attend, but given the local context, there may be a last minute change. Follow all our coverage of what is happening in Argentina at BloombergLinea.com.
One for the Road
Now imagine ordering groceries online and having them delivered by a driverless car. That’s what Walmart wants to do by teaming up with Ford and self-driving startup Argo to launch a fully autonomous delivery service in at least three U.S. cities: Miami, Austin and Washington, D.C. Ford is providing the hardware, with its Escape hybrid models; Argo is providing the technology; and Walmart... the grocery bags in the trunk. Seriously. This is the retail giant’s latest effort to inject technology into all its processes, but autonomous vehicles is something it is particularly interested in, as it is testing some with General Motors, Alphabet’s Waymo and other startups. The autonomous delivery business has a potential valuation of $1 billion.
See you Next Time!
Follow the rest of the most relevant information on BloombergLínea.com, and have a great Thursday.
This was The Strategy of the Day. Written and narrated by Jimena Tolama and produced by Arturo Luna. Have a very productive day!
