The Base Metal Blues

The world’s eighth-largest aluminum maker, Alcoa, threw investors for a loop on Monday, unexpectedly announcing a new chief executive officer (CEO). 😮

Roy Harvey has led the company since November 2016, when it went public, and will remain a strategic adviser until the end of 2023. He’ll be replaced by William Oplinger, who has served as executive vice president and chief operations officer (COO) since February of this year.

Although the company says this reflects its “succession planning process,” the market seemingly did not expect a change. However, it’ll likely have to wait until the company reports third-quarter results in mid-October for more color on the change and potential impacts. 📝

$AA shares fell 6% on the day to fresh 2.5-year lows. It has now given back 70% of its October 2020 to March 2022 gains. 😬

Other companies in its space have not fared particularly well this year either. Although the commodity sector has performed well in aggregate, most of the strength has come from energy and agriculture. The chart below shows the base metals ETF lagging its peers year-to-date, falling nearly 5%. 📉

We’ll have to wait and see if things improve. However, the global economy slowing down will remain a headwind for the group, including copper, aluminum, and zinc. 🤷

Breakfast Is Getting More Expensive

Some say breakfast is the most important meal of the day. But unfortunately, the commodity markets are saying that prices to fill your bowls and cups each morning could be heading higher. 🥣

If we look at Finviz’s year-to-date performance chart for the major assets tracked by the futures markets, four of the top five gainers are agricultural commodities. Orange juice leads the pack, rising 84.53%, followed by sugar (+44.2%), Cocoa (+39.68%), and Oats (+30.10%). They’re only separated by the Nasdaq 100, which is up 36.91%.

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Traders Eye Gasoline Prices

Despite being a slow day overall, one chart in the commodities space had traders gassed up. Pun intended. 🙃

That commodity is gasoline, which is heavily tracked due to its impact on consumer confidence and the economy. And most recently, there’s been a significant decline in prices that’s helped cheer people up ahead of the holidays—case in point: the headlines below. 👇

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Oil Returns To The Status Quo

The U.S. oil market is returning to its pre-pandemic norms, at least according to the manager of the popular oil ETF $USO. 🛢️

The United States Oil Fund ($USO) has been around since April 2006 and is a futures-based ETF that looks to track the price of U.S. crude oil. It does so by purchasing the front-month sweet light crude oil (WTI) contract, holding it, and then rolling its holdings to the following contract before expiration. 

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Grains Lose Their Gains

Grain commodities were the talk of the town for a bit during the pandemic, as soaring prices pushed up producer and consumer inflation. They’ve not gotten a lot of headlines lately, as a slow and steady decline is less interesting than a sharp increase. 😴

However, they were back in the news today after making a swift move lower. The USDA quarterly grain stocks report showed higher stocks and production than initially anticipated. Wheat was hit the hardest, though soybeans and corn were both down too. 📉

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