Counteracting dynamics rule commodity markets

by: Casper Burgering , Georgette Boele , Hans van Cleef , Nadia Menkveld

Some counteracting dynamics dictate price trends in commodity markets. In gold, a lower US dollar supports prices, while the prospect of less monetary easing or even tightening by central banks makes gold less attractive. In the oil market, production cuts by OPEC are – to some extend – being counteracted by a US production recovery. In the steel market, demand is robust and this should result in higher prices. But given the abundant steel supply, any significant price increase in steel is dampened. Dry weather is making the soybean market worried over future supply, and this triggered a price increase over the last month. But the increase of the areal in soybean (at the cost of wheat), a good harvest and sufficient supply has tempered price gains.

Monthly-Commodity-Update-July-2017-final.pdf (273 KB)