Platinum Futures Recovering, RBOB Gasoline Futures, Concerns Around Demand For Wheat Futures

Summary:

• The Fed may slow down the pace of interest rate hikes.
• Hot and dry weather jeopardizes wheat growth.
• Rising demand vs Limited supplies for gasoline.

Platinum Futures

Following a break in the dollar gain after Fed Chair Jerome Powell suggested the possibility of reducing the pace of interest rate hikes amid contraction in the US economy, platinum futures touched $880 per tonne, recovering from a 22-month low of $844 recorded on July 14th. Foreign investors are enticed to purchase the dollar-denominated commodity by low-cost dollars. As the war in Ukraine rages and the West continues to impose economic sanctions on Russia, shipment interruptions from Russia are anticipated to keep the metal supplies lower. The Russian mining behemoth Nornickel's CEO and largest shareholder, Vladimir Potanin, was subject to sanctions earlier in June by the British government. Nornickel, with a 10% global output share, is the third-largest producer of platinum.

✕ Platinum Oct ‘22 Futures Price Chart

Chicago wheat futures

As a result of the hot and dry weather that jeopardized the yield in the ongoing harvests in the growing regions of North America and Europe, Chicago wheat futures inched up to $8 in August, lingering at levels not seen in a week. Traders are awaiting Friday's WASDE data to assess the potential impact of recession concerns on demand. Although grain supplies out of Black Sea ports continued, prices were still close to the six-month low of $7.5 reached earlier in the month and remained below levels before Russia's invasion of Ukraine. After an agreement between the Ukrainian and Russian delegations opened secure trade routes to ease the world food crisis, ships carrying Ukrainian grain resumed operations. It is anticipated that Ukraine will sell more than 20 million tonnes of grain that have reportedly collected in port silos since its invasion began on February 24 in addition to freeing up critical storage space for the next wheat harvest.

✕ Chicago Dec ‘22 Futures Price Chart

RBOB Gasoline Futures

As the market still needs to balance rising demand and limited supplies, gas and oil prices should increase through the end of the year, according to Goldman Sachs Group Inc. As industrial companies and power generators move away from more expensive natural gas, demand for crude is expected to increase. Consumption should increase as a result of the combination of relatively reduced prices and the ongoing reopening of economies. Lack of a gasoline and diesel inventory cushion at a time when refineries are entering their maintenance season worsens the supply outlook.

✕ RBOB Gasoline Sep ‘22 Futures Price Chart

Sources: finance.yahoo.com, tradingeconomics.com