The Next Phase of The Commodities Supercycle Will Be The “Super Squeeze”

Phil Carr
Published: Jan 29, 2024, 21:37 GMT+00:00

Commodity prices have made an explosive start to 2024 – with a long-list of Metals, Energies and Agricultural markets notching up impressive double-digit gains within the first month of this year already.

Gold bullion, FX Empire

In this article:

Commodity Markets Surge: Cocoa, Coffee, Sugar, Crude Oil, and Uranium Hit Unprecedented Highs in 2024

So far this month, we have seen Cocoa prices soar to their highest level in 46-years to hit a new all-time record high. Robusta Coffee prices climbed to their highest level in 16-years, while Sugar prices have rallied to a decade high – racking up a stunning gain of over 450% from their 2020 low.

Elsewhere in the Energy markets, Crude Oil prices have been on an absolute tear – with both Brent and WTI Crude Oil benchmark’s rising over $10 a barrel or 12% this month – to hit their highest price point seen this year.

But there’s one Commodity that has continued to set new back to back record highs.

And that’s Uranium.

Uranium’s bull market is off to a red-hot start in 2024 with spot prices rocketing above $106 per pound to hit their highest level in 17 years. That’s more than a 100% increase from their 2023 low. It is also a whopping gain of over 350% from their 2020 low.

And this could just the beginning!

Cocoa, Sugar, Coffee, Crude Oil and Uranium were among the best-performing asset classes in 2023 and that trend is set to continue throughout 2024.

The ‘Super-Squeeze’ in Global Commodity Markets

Right now, the global Commodity markets are currently experiencing an unprecedented phenomenon known as a “Super-Squeeze”.

This phenomenon results from an ever-growing number of macroeconomics factors including supply disruptions, escalating geopolitical tensions, the climate change crisis and energy transition.

Rising geopolitical tensions and trade fragmentation have contributed to a strain on Commodity markets. Disruptions from events like the Israel-Hamas conflict and the Russia-Ukraine war have hampered global trade, while the consequences of climate change have disrupted supply chains. Additionally, the lack of investment in critical metals, minerals and energy transition materials has further exacerbated the situation.

The longer these macro and geopolitical events persist, the tighter the Commodities markets will become – leading to a greater squeeze in prices.

According Goldman Sachs, the macroeconomic backdrop for Commodities in 2024 is looking more bullish than ever before – ultimately indicating that we could be on the verge of another blockbuster year.

Whichever way you look at it, one thing is clear. It won’t take much for Commodity prices to move significantly higher in this current economic environment and breach new highs in the coming weeks and months ahead.

Commodity Price Forecast

Where are prices heading next? Watch The Commodity Report now, for my latest price forecasts and predictions:

About the Author

Phil Carrcontributor

Phil Carr is co-founder and the Head of Trading at The Gold & Silver Club, an international Commodities Trading, Research and Data-Intelligence firm.

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