WTI Crude Futures Trading Close To January Lows, Potential For Favourable Weather Driving Coffee Futures Down, Palladium Futures
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Summary:
- WTI crude futures fell amidst concerns around weak demand.
- Potential rain in Brazil driving coffee futures down.
- Strong US dollar.
WTI Crude Oil trading close to January lows
WTI crude futures were trading close to January's lows around $87 per barrel on Wednesday due to ongoing worries about slowing global growth and therefore weak demand. Weak customs statistics from the world's largest importer, China, and new coronavirus-related limitations in a number of cities raised the possibility of significant economic harm and decreased gasoline usage. In addition, lingering worries about global economy and the prospect of protracted tighter financial conditions continued to depress mood. With Saudi Arabia foreshadowing more action, OPEC+ surprisingly agreed to cut supply by 100,000 barrels per day beginning in October, providing a floor under prices.
WTI Crude Oil Futures Price Chart
Coffee Futures fell amidst favourable weather potential
As the attention remained on the weather in top producer Brazil, Arabica coffee futures on the ICE were trading down marginally from an almost six-month high hit on August 25. The setback has been exacerbated by the likelihood of rain in some regions of Brazil's coffee-growing regions over the upcoming few weeks, but dealers said there are still questions about whether there will be enough moisture to support development of coffee buds and cherries after some early flowering. As of August 31st, 672,585 bags of ICE-certified arabica were in stock, up from a 23-year low of 571,580 bags on August 15th, according to the most recent data.
Coffee Dec ‘22 Futures Price Chart
Shortage of Palladium remains
The strongest US dollar in nearly seven weeks, rising interest rates, and slowing GDP all contributed to the decline in palladium futures prices, which dropped below $1,780 per ounce. It is anticipated that central banks would keep raising interest rates to keep inflation from soaring even when the economy is slowing. Furthermore, despite the price increase and supply chain disruptions, demand for palladium, which is used in auto catalysts for gasoline-powered vehicles, has not yet returned to its pre-pandemic levels. Even so, there is still a shortage on the palladium market.
Palladium Dec ‘22 Futures Price Chart
Sources: finance.yahoo.com, tradingeconomics.com
