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- INTEREST37.00%-1.00
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- October 13, 202619°
- BIST10012,151-0.94%
- USD49.220.00%
- EUR55.21+0.28%
- GOLD4,195.90-0.48%
- INTEREST37.00%-1.00
- BITCOIN82,706-1.16%
- October 13, 202619°
Coffee surges 12.1% to peak in commodity markets; gold falls, oil rises
Global commodity markets saw coffee prices soar 12.1% last week, while gold slipped 1.3%. Brent crude ended a four-week downtrend with a 5.5% jump.
Supply concerns, weather events, and climatic impacts drove sharp gains across commodity markets last week, while precious metals diverged negatively due to mounting geopolitical tensions. Gains in agricultural commodities and base metals stood out during the period.
In precious metals, per ounce prices fell 1.3% for gold, 3.9% for silver, and 0.6% for platinum, while palladium gained 0.5%.
Escalating tensions in the Middle East and the US Federal Reserve minutes highlighting risks that could require ‘hawkish’ steps boosted the dollar and bond yields, increasing the opportunity cost of holding gold and sending its price lower for the week.
Reports that the jump in oil prices could pull forward the timing of Fed rate hikes also pressured precious metals. Forecasts of falling demand for fossil-fuel vehicles and rising demand for electric vehicles have triggered heavy selling in palladium this year. Analysts said investors seized the extreme pullback in palladium as a buying opportunity.
Dwindling stocks pushed base metal prices higher. In base metals, over-the-counter prices per pound rose 1.2% for copper, 2.3% for nickel, 1.9% for zinc, 2.1% for aluminum, and 1.1% for lead last week. Concerns that aluminum supply disruptions will persist amid Middle East conflicts drove aluminum prices higher.
Declining copper and aluminum inventories in China also supported prices of those metals. Zinc prices rose on supply fears after reports of a fire at a large zinc smelter operated by South Korean miner Young Poong Corporation. Indonesia’s move to cap nickel export quotas also boosted nickel prices.
Brent crude jumped over 5%. In energy markets, Brent crude gained 5.5% per barrel, while natural gas traded on the New York Mercantile Exchange fell 2.8% per MMBtu. Brent snapped a four-week losing streak as tensions flared again in the Middle East and the US launched attacks on Iran.
Rising oil prices, fueled by concerns that the regional peace process may not be durable, are expected to shape the inflation outlook and, in turn, expectations for central bank monetary policies. A build in US natural gas inventories, meanwhile, pushed natural gas prices lower.
Russia-Ukraine tensions lifted wheat. In agricultural markets, Chicago Board of Trade per bushel prices rose 4.2% for rice, 3.6% for soybeans, 6.6% for wheat, and 4.3% for corn. On the US-based Intercontinental Exchange, pound prices gained 12.1% for coffee, 0.1% for sugar, and 5.7% for cotton.
Cocoa prices surged 18.6% per ton to end the week. Escalating tensions between Russia and Ukraine drove gains in wheat, corn, and rice prices. Wheat soared after reports that Russia restricted wheat shipments via the Don-Azov Canal and the US Department of Agriculture cut its wheat production forecast.
Forecasts of declining global rice and corn stockpiles also contributed to the uptrend in corn and rice prices. Soybean prices found support from US drought concerns and strong demand from China.
Coffee prices hit $3.57 per pound, the highest in about six months, amid supply concerns from weather events in Brazil and Vietnam and expectations of dwindling global coffee stocks. Coffee is the leading product grown in both South America and Southeast Asia. Brazil is the world’s top producer and exporter of arabica coffee, while Vietnam holds that position for robusta.
Reduced flowering of coffee trees points to lower yields. That outlook is lifting coffee prices. El Niño’s impact is expected to persist through the first quarter of 2027, further boosting price expectations for the upcoming season.
Heavy rains damaging crops in West Africa and forecasts that El Niño will hurt production heightened cocoa supply concerns, triggering sharp price increases. Meanwhile, drought fears in the US are also influencing cotton prices. Forecasts of below-average monsoon rains in India are further pushing cotton prices higher.
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