Commodity in focus is Cocoa, prices have surged for the fourth consecutive session, surpassing $9,000 a tonne for the first time ever due to a supply crisis in West Africa. Chocolate producers struggle to procure grains, leading to a 11.5% increase in cocoa futures. The surge in prices is causing candy manufacturers to produce new products with less expensive ingredients, affecting Europe, the world’s largest chocolate-consuming region. The crunch is primarily felt in Europe.
Oil prices in energy commodities remained stable, despite gains in the previous session. Traders weighed the risk of Ukraine’s attacks on Russian oil refineries amid the ongoing Israel-Gaza conflict.
The Joint Ministerial Monitoring Committee of OPEC+ is set to meet next week, and changes to the production cuts agreement are unlikely until the end of the second quarter of this year. Uncertainty over Venezuelan supply persists as the current sanction relief ends in April 2024, and some buyers, including India, have started cutting oil purchases from the country.
U.S. natural gas futures rose 2% against a weaker U.S. dollar, with Freeport LNG predicting two of its three trains will remain out of service for testing and repairs through May. After the maintenance work is completed, Freeport LNG expects its production capacity to increase by 10% from 15M metric tons/year to around 16.5M tons/year by June.
European natural gas prices fell, reaching intra-day highs of EUR29/MWh due to concerns over tightening supplies. The European gas market remains well-supplied, with tanks at 59% full compared to a seasonal average of around 42%. Analysts at ANZ noted that further disruptions are likely, despite Europe’s higher gas inventories.
Silver, platinum, and gold prices rose due to a weaker U.S. dollar and the Federal Reserve’s signal of potential rate cuts. The non-interest-bearing bullion surged to new all-time highs above $2,200 an ounce, adding around 10% to its value since mid-February.
Demand for gold from central banks, particularly China, has driven the rally, offsetting selling pressure from gold-backed ETFs. J.P. Morgan Commodities Research notes that macro backing to the current gold rally is lacking and likely needs to come soon to avoid a near-term unwind.
Stocks to watch include Perimeter Solutions SA (+16%), Galiano Gold (+15%), NioCorp Developments (+13%), Taseko Mines (+8%), Compass Minerals International (-17%), Smith-Midland (-12%), American Battery Technology (-9), and Atlas Lithium (-7%).
Recent Commodity Price Movements
Energy
Crude oil (CL1:COM) -0.01% to $81.94.
Natural Gas (NG1:COM) +1.92% to $1.82.
Metals
Palladium (XPDUSD:CUR) -0.53% to $999.50.
Platinum (XPTUSD:CUR) +0.17% to $904.05.
Gold (XAUUSD:CUR) +0.93% to $2,191.75.
Copper (HG1:COM) -0.14% to $4.00.
Agriculture
Corn (C_1:COM) -0.13% to $437.16.
Wheat (W_1:COM) +0.06% to $555.32.
Cotton (CT1:COM) +1.14% to $93.07.
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Spot gold was trading -0.3% lower at $2,176.89 an ounce as markets awaited the release of U.S. CPI data, which could influence the Federal Reserve’s policy path. A hotter-than-expected reading could delay the central bank’s easing cycle. Low interest rates help bullion by reducing the opportunity cost of holding the zero-yielding asset. A mixed tone prevailed across commodity sectors, with China’s economic growth concerns affecting bulks and supply concerns supporting industrial metals. Commodity Snapshot Commodity Snapshot Commodity Snapshot
Natural gas and crude oil prices were trading in the green, while oil prices fell earlier due to persistent demand concerns in China. NS Trading president Hiroyuki Kikukawa said that concerns over weak demand in China outweighed the extension of supply cuts by OPEC+. Mixed US jobs data prompted some traders to adjust positions. However, losses will be capped by increased geopolitical risk, with the possibility of a ceasefire in the Hamas-Israel war and conflict expansion in Russia and its neighbors. Europe remains the most impacted region, as oil product shipments from Asia have fallen since January. OPEC+’s voluntary production cut agreement could tighten the market as demand recovers from its seasonal lull.
Natural gas and crude oil prices were trading in the green, while oil prices fell earlier due to persistent demand concerns in China. NS Trading president Hiroyuki Kikukawa said that concerns over weak demand in China outweighed the extension of supply cuts by OPEC+. Mixed US jobs data prompted some traders to adjust positions. However, losses will be capped by increased geopolitical risk, with the possibility of a ceasefire in the Hamas-Israel war and conflict expansion in Russia and its neighbors. Europe remains the most impacted region, as oil product shipments from Asia have fallen since January. OPEC+’s voluntary production cut agreement could tighten the market as demand recovers from its seasonal lull.
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