Commodities Outlook for 2014

Commodities are unlikely to find any friends in 2014, with the exception of the ever-resilient gold 'bugs'

Andy Brunner 12 December, 2013 | 2:46PM
Facebook Twitter LinkedIn

Are there any signs of improvement for 2014?

Following another difficult year of sizeable losses, the commodity sector remains virtually friendless going into 2014. Oversupply has become an increasingly serious issue for a number of commodities, especially industrial metals and, for the two main metals, aluminium and copper, this is expected to undermine pricing through 2014. The average year-end copper price forecast from the main investment houses we monitor is $6,750/tonne, some 5% below current spot price.

In the oil markets, ever increasing North America oil production is beginning to have a global supply effect as the shale revolution continues, while geopolitical risks have eased in Iran and Iraq and Libya is raising production even as emerging market demand has downshifted. Forecasts for both Brent crude and WTI suggest a relatively flat/slightly lower outcome for 2014 but risks appear to the downside.

In agriculture, following a good harvest this year and higher plantings expected in 2014, further price weakness seems likely for grains. Forecasts from the main investment houses indicate corn prices will fall again in 2014, although much will depend on the vagaries of the weather.

SaoT iWFFXY aJiEUd EkiQp kDoEjAD RvOMyO uPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHClvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V IbqG P IPcqyH hBH FqFwsXA Xdtc d DnfD Q YHY Ps SNqSa h hY TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDcA Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez uNJEY BCOfsVB UBbg c SR vvGlX kXj gpvAr l Z GJk Gi a wg ccspz sySm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

To view this article, become a Morningstar Basic member.

Register For Free

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Facebook Twitter LinkedIn

About Author

Andy Brunner

Andy Brunner  is Head of Investment Strategy, Morningstar UK