Silver retreating from its five-month high, Brent crude dropping as COVID-19 cases in China surge, Corn futures

Summary:

• Silver futures are declining as investors weigh the Fed’s aggressiveness to fight inflation.
• Concerns over covid-19 related lockdowns in China are weighing on Brent crude.
• Corn futures up more than 12% in 2022.

Silver down from a 5-month high

As investors continued to assess the outlook on the Fed's aggressiveness to fight inflation, silver futures declined to below $20.7 per ounce, continuing its retreat from the five-month high of $21.7 hit on November 14th. This decline was pressured by a new rally for the US dollar. The expectation of higher interest rates not only increased the opportunity cost of keeping non-interest-bearing bullion assets, but also decreased demand for industrial silver used as electricity conductors, paralleling the reduction for copper. On the other hand, due in part to looming supply worries, silver futures are still 16% above the 14-month low of $18 per ounce reached on September 1st. In the last 18 months, inventories at the COMEX in New York have decreased by 70% to just over 1 million tonnes, while those at the London Bullion Market Association have decreased for 10 consecutive months to a record-low 27.1 thousand tonnes.

✕ Silver Dec ‘22 Futures Price Chart

Brent Crude Oil dropped for its fourth consecutive session

On Monday, Brent oil futures dropped below $87 a barrel for the fourth consecutive session due to worries that China might tighten its import restrictions and that major central banks will keep rising interest rates. Over the weekend, China announced the first Covid-related fatalities in six months, and on Monday, localized lockdowns were enacted in some locations as the world's largest oil importer battled resurgent Covid breakouts. Investors were also concerned that tighter financial circumstances might cause the world economy to enter a recession, which would harm demand for energy. However, investors continued to be wary of the very ambiguous supply outlook heading into the winter, with the European Union due to limit Russian crude exports starting in December and OPEC anticipated to maintain tight oil markets.

✕ Brent Crude Futures Price Chart

Corn futures

Since the start of 2022, corn prices have climbed by 71.34 USd/BU, or 12.03 percent, according to trading on a contract for difference (CFD) that monitors the benchmark market for this commodity.

✕ Corn Futures Price Chart

Sources: finance.yahoo.com, tradingeconomics.com