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Falling Commodity Prices Raise Hopes That Inflation Has Peaked

Sven
in Other Investing
Excerpt from a WSJ article (on Apple News) that inflation may be cooling.
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
This accounted for recent decline in commodity and commodity futures funds and ETFs.

Comments

  • yogibearbullyogibearbull
    WSJ chart via Twitter, https://twitter.com/GunjanJS/status/1544097319301308416

    image
  • Sven
    Thank you. One picture said a thousand words.
  • Old_JoeOld_Joe
    Let's hope that downward trend continues.
  • hank
    Oil’s off 8.4% in late morning trading. Under $100. Good news.
  • Sven
    Things are moving fast. Several posters here reported oil price declined a week or two ago. Now the agricultural product prices are falling too. This may imply inflation is coming down as well. Hopefully gasoline price is coming down as well.
  • MikeMMikeM
    edited July 2022
    Commodity prices could be falling per lower demand, slowing economic growth, aka recession.

    Excerpt from Barrons article, this weeks edition.

    Commodity Prices Are Dropping. Why That’s a Recession Red Flag.
    Many commodity prices—oil, wheat, and copper, for example—are sliding at the same time worries about a recession are growing.

    A weaker economy would reduce, in theory, demand for some things. Copper, for instance, might very well be one of those commodities that falls out of favor. In a downturn, construction slows—copper is used in wiring and plumbing—and other industries make fewer things like electrical equipment, which also uses the metal.
  • Sven
    You are spot on. Commodity futures are falling while assuming a recession is coming.

    What if a recession does not materialize?
  • davfordavfor
    One commodity with the potential for price pressure for an extended period of time....
    “This is the 1970s for natural gas,” says Kevin Book, managing director at ClearView Energy Partners LLC, a Washington-based research firm. “The world is now thinking about gas as it once thought about oil, and the essential role that gas plays in modern economies and the need for secure and diverse supply have become very visible.”
    Natural Gas Soars 700%, Becoming Driving Force in the New Cold War

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