Softening Wheat Prices

WHEAT PRICES recently declined to their lowest in four years. This downward slide is driven by a burgeoning supply and a surge in exports. Notably, Russian consultancy Sovecon has revised its 2024 wheat crop forecast upwards to a robust 84.7 million metric tonnes. Simultaneously, in the Southern Hemisphere, Argentina reports remarkable progress in its wheat sowing endeavours, with 98.5% of the planned 6.3 million hectares already under cultivation. Since January 2023, the world has watched a steady decrease in wheat prices, a trend that inevitably trickles down to the prices of various fast-moving consumer goods. Bread, pasta, and other wheat-based essentials may soon see cost reductions, offering a silver lining to the consumer.

Copper's Red-hot Rally

IN THE WORLD of metals, copper often heralds economic vitality. Yet, copper futures have retreated below $4.1 per pound, settling near a four-month low amid weak manufacturing data emerging from the U.S. and China. The London Metal Exchange reported a marginal 0.2% dip in three-month copper prices, now standing at $9,747 per metric tonne. Further compounding these concerns, the usual premium for importing copper into China has inverted into a discount, signalling tepid demand from the world’s largest copper consumer. This phenomenon reflects a broader hesitancy amid high and fluctuating prices, as manufacturers and traders navigate these choppy economic waters.

Aluminium: South-ward Bound

ALUMINIUM is also feeling the pinch. Futures have tumbled to $2,222 per tonne, marking the lowest point in nearly five months and effectively erasing the year’s gains so far. This slump is attributed to both dwindling demand and an overabundant supply. The fears that drier weather might hinder production have been assuaged; China’s primary aluminium output surged 6.2% year-on-year in June, reaching 3.76 million tonne — the highest since November 2014. Meanwhile, customs data reveals a 109% increase in alumina exports, a clear sign that Chinese manufacturers are offloading excess supply onto global markets.