Silver Futures Weighed Down By Hawkish Fed, Brent Crude Oil Demand Outlook Weakened, Corn Futures

Summary:

• Demand for silver continues to weaken.
• Increasing macro headwinds have investors concerned about a deteriorating outlook for demand.

Silver Futures dampened by hawkish fed

Spot silver prices declined to below $19.3 an ounce in the second week of October, retreating significantly from the three-month high of $21.1 reached on October 4th and tracking the decline in US Treasury notes as expectations of an increasingly hawkish Federal Reserve continue to dampen demand for non-interest-bearing bullion investments. After the stronger-than-expected September jobs data and comments from Fed policymakers emphasizing the need to lower inflation, hopes that the US central bank could slow the pace of upcoming rate hikes were dashed. Members of the ECB board have also maintained that borrowing prices must be restricted since markets are currently underestimating inflation, which might last until 2025. ✕ Silver Dec ‘22 Futures Price Chart

Brent Crude Oil futures

As investors balanced a weaker prognosis for the global economy against tighter supply, Brent crude futures were trading around the $91 per barrel mark. Increasing macro headwinds, such as high inflation, tighter financial conditions, Russia's invasion of Ukraine, and the ongoing coronavirus outbreak, have investors concerned about a deteriorating outlook for demand. Any upward movement has also been constrained by the US Federal Reserve's active tightening drive against inflationary excess, a stronger dollar, and China's restrictions brought on by the Coronavirus. As OPEC and its allies, including Russia, decided to further reduce output before the European Union oil embargo, rising concerns about tighter global supplies acted as a floor beneath prices.

✕ Brent Crude Oil Futures Price Chart

Corn Futures

In the second week of October, Chicago corn futures remained close to the $6.9 per bushel level after the most recent World Agricultural Supply and Demand Estimates (WASDE) revealed reducing worldwide stockpiles. The USDA also predicted decreased exports and a tighter supply within the country. Iran, Japan, and Vietnam had their import predictions cut, while the EU and the US had theirs lifted. In other developments, it has been claimed that China is considering beginning to purchase corn from Brazil, bypassing US grain growers. Investors are concerned about the world's food supply this winter due to the ongoing unpredictability surrounding the Russo-Ukrainian War. The price of corn is still close to the three-month high ($7.0 per bushel) set on October 10.

✕ Corn Dec ‘22 Futures Price Chart

Sources: finance.yahoo.com, tradingeconomics.com