Platinum Closes At Lowest Level Since November 2020, Wheat Futures, RBOB Gasoline Expected To Decline

Summary:

• Platinum futures weighed down by rising interest rates.
• Concerns around wheat supply persist.
• American refineries to overproduce fuel in an effort to replenish low stockpiles of diesel and heating oil.

Platinum futures

As global interest rates are expected to continue rising and should remain high for a prolonged period of time, even if it slows growth, platinum futures extended losses to below $850 per ounce, closing in on their lowest level since November of 2020. They have also been tracking other precious metals lower. The fed funds rate has already increased by 225 basis points since March at the Federal Reserve, the most potent central bank in the world. Fed policymakers are now advocating for rises to continue at least until the level of 4% in early 2019. Additionally, despite expectations that they would subside in the second part of the year, ongoing shortages and supply chain problems hurt the auto industry and lower demand for autocatalyst components.

✕ Platinum Oct ‘22 Futures Price Chart

Wheat futures rising

After Russian President Putin condemned the UN-brokered agreement with Ukraine to construct a secure corridor for grain transport along the Black Sea, Chicago wheat futures continued to rise in September, lingering near levels last seen in July. The remarks sparked worries about potential interruptions from one of the world's top exporters, risking weaker supply and altering global stock outlooks that kept wheat prices high from March to May. In order to free up storage space for the upcoming harvest, Ukraine anticipates selling more than 20 million tonnes of grain that are said to have collected in port silos since its invasion began on February 24.

✕ Wheat Futures Price Chart

RBOB Gasoline expected to decline

According to analysts and traders, wholesale gasoline prices are anticipated to continue declining in the upcoming months as American refineries overproduce fuel in an effort to replenish low stockpiles of diesel and heating oil. The amount of distillate products in stock in the United States, which also includes jet fuel, is at its lowest point in more than ten years. Due to the great demand for such products in Europe and internationally and the lack of refining capacity to supply that demand, manufacturing margins have remained high. The demand for gasoline has also been high, but it is declining as the U.S. driving season comes to an end. In order to refill low middle distillate inventories, independent U.S. refiners said early this year that they would keep operating at high rates even if gasoline consumption decreased.

✕ RBOB Gasoline Oct ‘22 Futures Price Chart

Sources: finance.yahoo.com, tradingeconomics.com