Will commodity prices support inflation?

Commodity price indices declined in June, except for energy products. Futures prices for the coming months point to further easing of upward pressure on commodities, including energy.

Figure 1: Price indices for energy (bold blue), non-energy (bold brown), agricultural (green), metals and minerals (red), base metals (pink), precious metals (purple), all 2010 = 100, all logarithmic Scales. Last observation – June. Peak-to-trough dates as determined by the NBER are in grey. Source: The World Bank as of 07/24/2022, and NBER.

Note that during June all indices are down from their March/April peaks, save energy (these are daily averages). Futures for the next month point to a bearish move in July as shown in these charts (all data taken from Macrotrends).

Crude Oil – Brent

Natural Gas – Henry Hub

Wheat

Corn

Soya

lumber

Platinum

Palladium

Obviously, some futures prices do not follow these patterns; e.g. natural gas in Europe:

Natural gas – TTF Dutch (not logarithmic)

Of course, this is due to market expectations regarding, for example, Russia’s actions regarding natural gas supplies to Europe, the impact of sanctions on Russian oil exports, what happens in China with energy demand and / or production under quarantine.