Palladium Prices Falling Amidst Weaker Demand Prospects, WTI Crude Oil Stockpile Inventory Came In Below Expectations, Coffee Futures
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Summary:
- Palladium prices are falling.
- US crude stockpile inventory came in lower than expected.
- Coffee output expected to come in lower.
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Palladium prices drop amidst weaker demand prospects
Palladium prices held steady near the six-month low of $2000 per tonne as expectations of a weaker demand overcame concerns about a supply shortage. As a result of increasing interest rates around the world, frequent lockdowns in China, a major customer, and other factors, the market for the metal is expected to fall. Concerns about supply disruptions from Russia, the metal's largest supplier, continue to exist on the supply side as the conflict in Ukraine shows no indications of coming to an end. Vladimir Potanin, a Russian tycoon who owns a 36% share in Nornickel, the largest palladium manufacturer in the world, was recently sanctioned by Britain.
Palladium Sep ‘22 Futures Price Chart
WTI Crude Oil prices
On Wednesday, WTI crude futures oscillated back around $95.7 per barrel as traders considered inventory levels against a backdrop of doubt on the demand outlook. Government statistics confirmed Tuesday's industry reports that US crude oil stockpiles dropped by more than 4 million barrels last week, far more than the median estimate of a million barrel loss. Additionally, the draw in gasoline supplies of 3.3 million barrels substantially above forecasts of a 0.9 million barrel reduction. Concerns that a transition to oil would be forced by decreased gas supplies from Russia to Germany through the Nord Stream 1 pipeline support the optimistic sentiment. The White House announced the sale of an additional 20 million barrels of oil from strategic reserves on the supply side. Last but not least, caution prevailed amid ongoing worries over a potential impending recession ahead of the Federal Reserve's anticipated 75 bps rate hike later in the day.
WTI Crude Oil Futures Sep Price Chart
Coffee Futures
Due to limited stocks and ongoing worries about declining coffee yields in top producer Brazil, Arabica coffee futures on the ICE were trading above the $2 per pound threshold. According to the most recent data, ICE-monitored coffee inventories have reached a 23-year low of 712,817 bags. Given the bullish outlook for the commodity, additional upward momentum could be anticipated this year. Coffee recently hit a nearly 10-year high of $2.6. From a previous projection of a +1.2 mln bag surplus, the International Coffee Organization (ICO) has reduced its global 2020/21 supply estimate to a deficit of -3.13 mln bags. Additionally, ICO downgraded its projections for worldwide output while highlighting stronger global consumption.
Coffee Sep ‘22 Futures Price Chart
Sources: finance.yahoo.com, tradingeconomics.com
