ISTANBUL
The positive trend in commodities markets continued last week ahead of interest rate decisions by top central banks.
After increases earlier this month, an upward trend was also observed last week in commodities market.
The markets are focused on the decisions of the US Fed, the European Central Bank, and the Bank of Japan, which are all set to announce interest rate decisions this week.
Expectations that the Fed will probably not raise interest rates was one of the important reasons for the gains on commodities markets.
News that the Chinese government is asking public banks to reduce deposit rates and expectations that the People’s Bank of China may lower some lending interest rates this month also fueled the upward trend.
Markets
Prices of precious metals rose last week, excluding palladium.
The price of gold was up 0.7%, silver 2.8%, and platinum 0.3%, while palladium dropped 7.1% to its lowest level since May 2019.
Palladium’s price declined on concerns of a global oversupply.
A fluctuating course was observed in base metals.
Copper ended the week with a gain of 1.2%, while lead was up 1.7% and zinc 3.6%, but aluminum fell 2.5% and nickel 1.6%.
The price of Brent oil dropped 1.7% while natural gas climbed 4.1%.
Despite supply concerns that emerged after Saudi Arabia announced the biggest production cut in recent years, ongoing global economic concerns played a large role in the decline in Brent oil prices.
Natural gas prices soared as US electricity suppliers’ demand due rose to increased air conditioning usage.
An upward trend was also seen in agricultural commodities last week.
Wheat gained 1.8%, soybeans 2.6%, and rice 7.5%, while corn dropped 0.7%.
Cotton tumbled 0.1%, while coffee rose 3.5% and sugar climbed 1.5%.
Cocoa, hitting its highest level since June 2016, ended the week with a gain of 4.9%.
Wheat prices soared after Ukraine said a huge dam was hit by Russian forces, causing a flood that threatened grain supplies.
Prospects for Australia’s wheat and barley production to fall by a third next year, and growing concerns over production as heavy rains in China damaged wheat, also led to a rise in wheat prices.
Decreased demand expectations due to increased corn planting in the US and falling oil prices pushed down corn prices.
With the decline in coffee exports from Vietnam in January-May, coffee supply shortages emerged and coffee prices jumped.
With the beginning of monsoon rains in India, concerns over production caused a climb in sugar prices, while sugar cane planting was delayed.
This situation also led to sugar supply concerns.
Concerns that monsoon conditions could harm production also caused cocoa prices to soar.
