Supply Concerns Are Driving Coffee Prices Upwards, Palladium Demand Eroded By Hawkish Fed And Rallying USD, Hopes Of Gas Tax Holiday Strengthen

Supply Concerns Are Driving Coffee Prices Upwards, Palladium Demand Eroded By Hawkish Fed And Rallying USD, Hopes Of Gas Tax Holiday Strengthen

Summary:

  • Palladium Prices at 6 month lows.
  • WTI Crude Prices falling.
  • Brazil lagging their historical harvesting average.

Read next: NGAS Futures Closed At Two Month Lows, Cotton Prices Falling, Global Wave Of Monetary Policy Tightening Puts Gold Prices under Pressure 

WTI crude oil prices falling with demand expectations

WTI crude oil futures fell almost 6% on Wednesday, hitting their lowest levels in almost a month amidst concerns that rising US interest rates that are aimed at controlling inflation levels could likely cause a recession and therefore a slowdown in demand. In addition, there are expectations that President Joe Biden will call for a gas tax holiday in an attempt to drive fuel prices down.

However, there are still concerns around supply, with the Russian oil embargo due to the war in the Ukraine and OPEC unable to pump more oil due to underinvestment.

Supply Concerns Are Driving Coffee Prices Upwards, Palladium Demand Eroded By Hawkish Fed And Rallying USD, Hopes Of Gas Tax Holiday Strengthen - 1 WTI Crude Aug ‘22 Futures Price Chart

Coffee futures prices rising due to supply concerns

Coffee prices were trading at their highest price since June 9th on Wednesday due to continuing concerns around tight supplies. The coffee prices remain supported by limited flows from Central America and Brazil, with Brazil (the top grower) behind its historical harvest average. In addition, one of Brazil’s largest growing areas is expected to see a drought.

Supply Concerns Are Driving Coffee Prices Upwards, Palladium Demand Eroded By Hawkish Fed And Rallying USD, Hopes Of Gas Tax Holiday Strengthen - 2 Coffee Sep ‘22 Futures Price Chart

Palladium prices at 6 month lows

Palladium is trading at its lowest price in 6 months on Wednesday, this price drop comes in the wake of the hawkish Fed’s 75 basis point interest rate hike and a sharp rally in the US Dollar both of which have kicked the demand for the metal. In addition, there are concerns around the demand for the metal from the top consumer, China as Covid-19 lockdowns are re-imposed.

Supply Concerns Are Driving Coffee Prices Upwards, Palladium Demand Eroded By Hawkish Fed And Rallying USD, Hopes Of Gas Tax Holiday Strengthen - 3 Palladium Sep ‘22 Futures Price Chart

Sources: finance.yahoo.com, tradingeconomics.com

Rebecca Duthie

Rebecca Duthie

Remote Editor and writer Intern
FXMAG.COM

Rebecca has a bachelors degree in Investment Management, a Post Graduate Diploma in Financial Planning and is currently enrolled in a Masters program in International Management with a Specialization in International Finance.