Supply Concerns Are Driving Coffee Prices Upwards, Palladium Demand Eroded By Hawkish Fed And Rallying USD, Hopes Of Gas Tax Holiday Strengthen
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Summary:
- Palladium Prices at 6 month lows.
- WTI Crude Prices falling.
- Brazil lagging their historical harvesting average.
WTI crude oil prices falling with demand expectations
WTI crude oil futures fell almost 6% on Wednesday, hitting their lowest levels in almost a month amidst concerns that rising US interest rates that are aimed at controlling inflation levels could likely cause a recession and therefore a slowdown in demand. In addition, there are expectations that President Joe Biden will call for a gas tax holiday in an attempt to drive fuel prices down.
However, there are still concerns around supply, with the Russian oil embargo due to the war in the Ukraine and OPEC unable to pump more oil due to underinvestment.
WTI Crude Aug ‘22 Futures Price Chart
Coffee futures prices rising due to supply concerns
Coffee prices were trading at their highest price since June 9th on Wednesday due to continuing concerns around tight supplies. The coffee prices remain supported by limited flows from Central America and Brazil, with Brazil (the top grower) behind its historical harvest average. In addition, one of Brazil’s largest growing areas is expected to see a drought.
Coffee Sep ‘22 Futures Price Chart
Palladium prices at 6 month lows
Palladium is trading at its lowest price in 6 months on Wednesday, this price drop comes in the wake of the hawkish Fed’s 75 basis point interest rate hike and a sharp rally in the US Dollar both of which have kicked the demand for the metal. In addition, there are concerns around the demand for the metal from the top consumer, China as Covid-19 lockdowns are re-imposed.
Palladium Sep ‘22 Futures Price Chart
Sources: finance.yahoo.com, tradingeconomics.com
