Commodity prices fall

There are many explanations for this: signs of intervention by the CFTC, expectations (or reality) of recession, massive liquidation of funds to neutral positions; it could be that none, or all of them, are valid.

Friday, September 5, 2008

For now it is best to list the components of commodities: soft, grains, energy and metals.

The rise is explained by all with the exception of soft commodities: coffee, sugar, cotton, and lumber (there are exceptions such as cacao and orange juice). The story is the same for the recent 30% drop: all soft and depressed commodities are the only ones showing signs of life.

The metals chart can be used to argue in the global construction demand (for copper, iron, and steel) argument. By dismantling the story that the global demand for capital goods will continue to grow in a recession, the index is trying to decide between a wider lateral behavior or to continue with the current strategy: sell.

More on this topic

Commodities Projections for 2018

October 2017

The World Bank projects that the price of a barrel of oil will rise to $56, metal prices will stabilize, gold prices will tend to rise and agricultural prices will increase, due to a decline in supply.

From a report by the World Bank:

WASHINGTON, October 26 - Oil prices are forecast to rise to $56 a barrel in 2018 from $53 this year as a result of steadily growing demand, agreed production cuts among oil exporters and stabilizing U.S. shale oil production, while the surge in metals prices is expected to level off next year, the World Bank said on Thursday.

Global Food Prices - August 2016

September 2016

Except for cereals, in August prices rose for all commodities covered by the FAO food price index, led by dairy, oils and sugar.

From a statement issued by the Food and Agriculture Organization:

 The FAO Food Price Index* (FFPI) averaged 165.6 points in August 2016, up 3 points (1.9 percent) from July and almost 7 percent above the corresponding period last year.

Agricultural Commodity Prices will be Maintained

January 2012

The European Commission (EC) predicts that for the next eight years the prices of agricultural commodities will remain high.

According to a report by the EC, global food demand, the development of the biofuel sector and the a drop in crop production are contributing factors.

Agricultural Prices in the Coming Years

January 2011

FAO´s outlook for agricultural development during the decade 2010 - 2019 portends higher prices of products and agricultural commodities.

The average crop prices over the next ten years for commodities is projected to be higher than the levels of the past decade, before the 2007 – 2008 peak, both in real and nominal terms (adjusted for inflation).

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