JONGHO SHIN
Oil prices fell for a second-consecutive day on Wednesday, falling more than 1% following a report that U.S. crude stockpiles rose sharply last week, and on signs that OPEC+ were unlikely to change their output policy at the next meeting. A more than expected crude build implies weaker demand and is bearish for crude prices. Official government data will be published on Wednesday at 10:30 a.m. EDT (1430 GMT).
The Organization of the Petroleum Exporting Countries and allies led by Russia, known as OPEC+, will hold an online joint ministerial monitoring committee meeting on April 3 to review the market and members' implementation of output cuts. However, the producer group is unlikely to make any oil output policy changes until a full ministerial gathering in June, Reuters reported.
J.P. Morgan Commodities Research meanwhile argued, Russian government's order to companies to reduce oil output in the second quarter, could push Brent oil price to $90 already in April, reach mid-$90 by May and close to $100 by September, keeping pressure on the U.S. administration in the run-up to elections.
U.S. gasoline prices are likely to climb to $4/gallon by May, the highest since the summer of 2022, brokerage said, adding that this price hike could be further amplified by the "even-odds possibility of the OPEC+ alliance extending in June its oil production cutbacks to the end of the year."
Among agricultural commodities, cocoa prices (CC1:COM) pulled back slightly from the all-time high of $10,080 per metric ton hit on Tuesday. Prices have surged nearly 130% since the start of the year, up about 48% this month, set for a third month of gain.
Hershey (NYSE:HSY) CEO Michele Buck told CNBC last month that the company has a hedging strategy to manage the price volatility. According to a commodities' analyst at Rabobank, "the world is facing the largest cocoa supply deficit in more than 60 years and consumers could start to see the effect at the end of this year or early 2025," CNBC reported.
The makers of Hershey (HSY) and Cadbury chocolates are planning more price hikes to cover a fresh record-setting surge in cocoa prices. Hershey (HSY) CEO Michele Buck has warned that “historic cocoa prices are expected to limit earnings growth this year,” as the company set 2024 profit guidance below Street estimates. Hershey stock is down about 23% over the past 12 months, while Mondelez International (NASDAQ:MDLZ) is up only 1.3% during the same period, as compared to a more than 200% gain in cocoa prices.
The International Cocoa Organization in a February report said, the recent supply shortfall from Côte d’Ivoire and Ghana is taking a toll on both markets across the Atlantic. "Since the start of the season, arrivals at Ivorian and Ghanian ports are down respectively 28% and 35% from the same period last season," it added.
Energy
Metals
- Palladium (XPDUSD:CUR) -1.07% to $983.00
- Platinum (XPTUSD:CUR) -0.82% to $895.61
- Gold (XAUUSD:CUR) +0.51% to $2,189.63
- Copper (HG1:COM) -0.44% to $3.98
Agriculture
- Corn (C_1:COM) -0.80% to $428.58
- Wheat (W_1:COM) -0.43% to $541.18
- Cotton (CT1:COM) +1.52% to $93.42
Commodity ETFs
Gold ETFs:
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- VanEck Gold Miners ETF (GDX)
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- iShares Gold Trust ETF (IAU)
- Direxion Daily Gold Miners Index Bull 2X Shares ETF (NUGT)
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Oil ETFs:
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- Invesco DB Oil Fund ETF (DBO)
- U.S. 12 Month Oil Fund, LP ETF (USL)
- U.S. Brent Oil Fund, LP ETF (BNO)
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Agriculture ETFs:
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- Teucrium Soybean ETF (SOYB)
- Teucrium Wheat ETF (WEAT)
- Teucrium Corn Fund ETF (CORN)