Commodity prices likely to stay volatile as inflation and recession battle plays out

By Brian Donovan
The Globe and Mail
May 15, 2023
Category: Finance & Economics
Region: Canada

Will we have a soft landing with minimal economic impact or will we enter a recession leading to falling commodity demand and prices? The cumulative interest-rate increases, coupled with the recent failures of regional banks in the United States, have also led to a credit-tightening cycle – another recession harbinger. Copper has moved down 8 per cent. …Wheat prices dropped to a two-year low. …Lumber prices are back down to levels we have not seen since the COVID outbreak in 2020, at $339 per thousand board feet. …Companies have shifted to production curtailments over the past two years as a way to put a floor on prices and we are now well below the average cost of production for West Coast lumber ($450-$500 MFBM). If we have a soft economic landing, we could see a sharp rise in lumber prices later in the summer. [to access the full story a Globe & Mail subscription is required]

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