A last-minute Black Sea grains deal is not guaranteed

For the most part, commodity prices rose this week. A weaker US dollar in the wake of a lower-than-expected June CPI reading in the US was a key factor boosting prices. Not surprisingly, the prices of the precious metals rose sharply, but we think they will ease back on renewed dollar strength later in the year. Oil prices also rose, supported by supply outages in Libya and Nigeria, as well as the ongoing OPEC+ output cuts. Looking to next week, the direction of agricultural prices is likely to be determined by whether Russia agrees to extend the Black Sea Grain Initiative, which is not guaranteed. Otherwise, China's June activity and spending data on Monday are expected to show further weakness. Somewhat ironically, this may give a lift to commodities prices as it will spark hopes of more policy stimulus.