While crude oil prices have come off their highs, the price per barrel still remains elevated around $100. With Russia preparing for a second offensive in Ukraine, energy markets are going to remain volatile until we see more concrete negotiations.
China locked down Shanghai at the end of last month following their zero tolerance Covid policy. We have not yet felt the full lock-down effect, but shipping containers are stacking up at Shanghai port, putting additional strain on already stressed supply chains.
The USDA report on Corn and Soybeans came out last week, leaving U.S. Corn ending stocks unchanged, while raising Global ending stocks. The USDA lowered U.S. ending stocks on Soybeans due to increased Exports. Volatility in these markets continues due to three key factors: War in Ukraine, U.S. planting weather, and Chinese demand.
Actionable insight: Watch for news of a loosening of the China lockdowns or more concrete Ukraine-Russia negotiations, either of which could help calm markets, and thereby soften commodity and energy prices.