Commodity prices falling

Qazulight posted that lumber prices are falling. So are several other key commodities.…

Falling Commodity Prices Raise Hopes That Inflation Has Peaked
Oil, wheat, natural gas, lumber, corn and other raw materials ended a tumultuous quarter near or lower than March prices
By Ryan Dezember, the Wall Street Journal, July 4, 2022

A slide in all manner of raw-materials prices—corn, wheat, copper and more—is stirring hopes that a significant source of inflationary pressure might be starting to ease.

Natural-gas prices shot up more than 60% before falling back to close the quarter 3.9% lower. U.S. crude slipped from highs above $120 a barrel to end around $106. Wheat, corn and soybeans all wound up cheaper than they were at the end of March. Cotton unraveled, losing more than a third of its price since early May. Benchmark prices for building materials copper and lumber dropped 22% and 31%, respectively, while a basket of industrial metals that trade in London had its worst quarter since the 2008 financial crisis…

Traders and analysts say that some of the decline in commodity prices can be traced to the retreat of investors who piled into markets for fuel, metals and crops to hedge against inflation…Despite the pullbacks, some still see commodities as a safe bet amid a bad year for stocks and bonds. … [end quote]

Part of the drop in commodity prices is due to speculators. History has shown many speculative commodity bubbles and busts. So that’s definitely a factor to consider.

Part of the price drop is due to real factors. The drop in lumber and copper prices is caused by the slowdown in building due to a slowdown in China and the rise in mortgage rates in the U.S. The drop in natgas is due to a fire last month at one of the country’s largest exporters of liquefied natural gas which keeps more of the natgas in the U.S.

But an across-the-board drop in so many unrelated commodities at once looks like a harbinger of recession to me.$COPPER…




I will be the first to recommend your post.

I might be one of the few or the last.

People here are justifying their investments instead of discussing things based on their merits.

The USD appreciating creates a lot of pressure on commodity pricing.

Local “news” anchor the other day: “gas prices have fallen a bit, BUT THEY COULD GO UP AGAIN!!!”

Recall, in 2008, amid the “peak oil” media hysteria, prices ramped up aggressively, until Memorial Day. Continued to rise at a slow rate, until just after July 4. Then prices fell significantly.


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