Metal prices after witnessing a sharp decline on Monday saw a bit of buying on Tuesday, but most of the soft commodities continued to decline.
Besides Evergrande’s liquidity problems, there is also the China slowdown. The country is releasing not just metals and crude but also some grains into the physical market and that seems to be weighing on these commodities.
The US dollar is trading at one-month high. As the US Fed meeting will kick start today, it is expected that the Fed will make some announcements relating to the tapering of bond purchases.
Ahead of that, some profit-taking and liquidation of long positions are seen in soft commodities.
Sugar has declined and is now trading below 19 cents. It is one-week low.
Cocoa declined 3 percent overnight and is now trading at two-week lows.
Cotton prices have declined to six-week lows, while global wheat is now trading at six-week lows. On a weekly and monthly basis, many of these soft commodities are trading in the negative, with major declines witnessed in sugar, cocoa, and palm oil.
Rubber prices are trading at one-year lows, declining by 9 percent in a year.
Only a couple of soft commodities that have positive fundamentals like coffee and rice are still trading in the positive on a weekly, monthly and yearly basis. Other commodities have gone in for some declines.
First Published: Sept 21, 2021 2:04 PM IST