Commodity markets are in a 'super squeeze' higher prices may continue - Earnplify

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Commodity markets are in a ‘super squeeze’ higher prices may continue

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September 15, 2021
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Oil is the most traded commodity in the world, with about 100 million barrels traded every day. Even when the fundamentals we all know (demand and supply) don’t change, the possibility that they might crank the gears that determine oil prices. Fear of missing out, fear of the unknown and the opportunity to pocket a profit can also become self-fulfilling prophecies, leading to even bigger spikes. Silver, often referred to as “poor man’s gold,” is another precious metal with significant trading volume. It holds a unique position in the commodities market due to its dual role as both an industrial metal and a store of value, like gold. Silver
is the second precious metal on our list, and is another element that has been highly sought after for thousands of years.

  1. The rural masses bear the brunt of these surging prices especially women who constitute nearly 8o% of the Agricultural workforce which is their principal livelihood activity.
  2. Forecast rain is expected to improve yields in the US midwest, and Brazil and Argentina are expecting crops to return to normal levels.
  3. Some metal prices reached all-time highs in March amid concerns about supply disruption, while inventories reached historically low levels.

Those who access this site do so on their own initiative, and are therefore responsible for compliance with applicable local laws and regulations. The release does not constitute any invitation or recruitment of business. By understanding common scam tactics and following the tips outlined in this article, you can protect yourself from falling victim to fraudulent schemes and become a more informed trader. This article will look into the top strongest currencies and how they fit into the ever-changing global financial landscape. In this article, we look at the Elliott Wave theory and how it can help analyse markets to anticipate price fluctuations by observing and recognising recurrent wave patterns.

Below are the rankings of the top ten highest volume commodity contracts that traded in the U.S. in 2021, according to calculations by the Futures Industry Association. The value of shares, ETFs and ETCs bought through an IG share trading account can fall as well as rise, which could mean getting back less than you originally put in. She noted that in spite of China’s property crisis, steel production has continued, fueling demand for iron ore and coking coal, which are integral to steelmaking. “Large-scale mining projects can take years, and the last decade has seen a lack of investment in exploration and production for key energy transition materials,” the report said. View the latest top stories from our trusted partners, with a focus on today’s futures and commodity markets. The Most Active Futures page lists the commodity contracts with the greatest volume for the day.

Fitch Solutions on 7 July forecast Brent to average $105 in 2022, up from average $71 in 2021 as supply tightness in the market is expected to persist. Swiss investment bank UBS forecast gold to average $1,700/ounce by end of this year due to higher interest rates and falling inflation. When selecting commodity markets to trade, a number of metrics can assist us in making the best choices. Please ensure you fully understand the risks and take care to manage your exposure. Deteriorating government revenue in Egypt and worsening financial conditions could also have negative spill over effects for other emerging countries in the region, such as Ethiopia or Sudan. Insecurity and worsened financial conditions would damage the confidence of foreign investors, in turn making it more difficult for emerging countries to finance their debt.

Live cattle (price change: 11%, data from Trading Economics)

“The super squeeze could be deeper, or more prolonged if geopolitical, climate change or energy transition related supply disruptions are larger than expected,” he added. Geopolitical risks include the ongoing Israel-Hamas conflict in Gaza and the Ukraine war, which have hampered global trade, as seen in shipping disruptions from the recent Houthi attacks in the Red Sea. CFD trading may not be suitable for commodity trading strategy everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved. Trading Economics predicts that the price of cotton will rise from its current level of $101 per pound to $114 over the next year. Despite the current supply constraints, demand is expected to be subdued due to the global economic slowdown.

China is one of the world’s largest importers of commodities and energy – from oil, copper to iron ore and nickel. The supply-and-demand fundamentals for commodities can change liquidity. For example, if there is a sudden shortage of a commodity, and the price begins to move higher, it will attract speculative buying. On the other hand, if a market is unexpectedly hit with a huge supply, speculative selling will often appear. The scale of impact on Egypt’s economy will depend on how long the security crisis lasts, as the country has resources to withstand a short-term drop in shipping fees. However, prolonged disruptions would cause more serious problems as Egypt would face dwindling foreign exchange reserves, slowing growth and rising inflation.

Trade Deficit and Surplus

The list of symbols included on the page is updated every 10 minutes throughout the trading day. However, new stocks are not automatically added to or re-ranked on the page until the site performs its 10-minute update. Logged in users have the option to select a tab (Energies, Grains, etc.), select any view, then save that page as the default page to open next time you come to the Highs/Lows page.

Agricultural subsidies – particularly US subsidies – can also have an effect on prices. Corn production is currently heavily subsidised in the States, which provides a strong incentive for production and helps maintain global supplies. However, the price of crude oil is most affected by global supplies, with the Organisation of the Petroleum Exporting Countries (OPEC) exerting a significant influence. OPEC supplies around 40% of oil globally, and sets production quotas for member countries.

Value of leading imports and exports commodities traded worldwide in 2021, by sector

Commodities with high volume are often the markets of choice for day traders and many large traders. This information has been prepared by IG, a trading name of IG Australia Pty Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument.

69% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the https://bigbostrade.com/ high risk of losing your money. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 66% of retail investor accounts lose money when trading CFDs with this provider.

The Top 9 Commodities by Traded Volume in 2023

Production disruptions would also impact upstream industries in the production network and could cause temporary deficits of components or manufactured goods. In turn, this would add to the higher inflationary pressures across Europe. Companies are also likely to face greater pressure on their profit margins as slower economic and consumer income growth make it more difficult to fully pass on cost increases to the end consumer. While risks remain, one analyst is of the view that commodity markets are still “adequately supplied” for the most part. The world’s pursuit of a net-zero carbon future is fueling demand for energy transition metals such as copper and nickel, Bloxham pointed out.

Most Active Futures

India, the second largest wheat exporter, banned exports after crops were hit by the hottest weather in over a century. If you’re considering trading in commodities, here are the top 10 best-performing commodities based on price changes over the last year, according to data from the World Bank. First, we provide paid placements to advertisers to present their offers. The payments we receive for those placements affects how and where advertisers’ offers appear on the site. This site does not include all companies or products available within the market. Buyers are hoping the price they lock themselves into will be lower than it will be in the future, and sellers are hoping it will be higher.

Unlike gold, roughly 50% of demand for silver can be attributed to its industrial uses, which include solar panels, photographic films and electrical contacts. Like gold, however, a large proportion of demand for silver is also driven by jewellers and investors. The price of oil and electricity can affect the price of aluminium, as separating the element from ores is very energy intensive. Demand is driven by manufacturing and construction, so economic developments in economies such as China can have a big effect on its price.

The outlook for commodity markets depends heavily on the duration of the war in Ukraine and the severity of disruptions to commodity flows, with a key risk that commodity prices could be higher for longer. At the start of 2024, the risk of global oil supply disruptions from the Middle East conflict remains elevated, particularly for oil flows via the Red Sea and, crucially, the Suez Canal. In 2023, roughly 10% of the world’s seaborne oil trade, or around 7.2 mb/d of crude and oil products, and 8% of global LNG trade passed through this major trade route. The main alternative shipping route around Africa’s Cape of Good Hope extends voyages by up to two weeks – adding pressure on global supply chains and boosting freight and insurance costs. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.

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