Trade war rewrites the script in commodities

By Blu Putnam, Chief Economist & Erik Norland, Senior Economist, CME Group

Grains: Midsummer rallies turn to fall nightmares

• Corn prices increasingly track Brazilian real, Russian ruble more than USD
• Black Sea region, Brazil are now setting the marginal production cost globally
• Prices are less reactive to inclement US weather as output overseas grows
• Trade war could also impact corn, wheat as sliding yuan weakens real, ruble

Gold, copper and oil go their separate ways

• Gold, oil and copper’s long periods of synchronized moves can diverge abruptly
• Gold is now more focused on US monetary policy than global dissonance
• Watch copper for signals on global growth as trade war remains unresolved
• Oil must contend with shale revolution, growing US exports and slowing growth