Energy – Oil falls on optimism over Iran war
Oil prices fell after US President Trump signalled a potential end to the war with Iran. Brent slipped to below $100/bbl on Wednesday morning and WTI also traded below $100, after Trump said the US could leave Iran within two to three weeks, suggesting an agreement with Tehran may be reached but is not required for the conflict to end. The President is due to address the nation at 9pm ET today with an update on Iran.

The Wall Street Journal also reported that the UAE has urged the US and European and Asian military powers to form a coalition to open the Strait of Hormuz by force.

Meanwhile, China and Pakistan jointly called for an immediate ceasefire and for shipping through Hormuz to be safeguarded.

On Tuesday, Trump warned allies to buy US jet fuel or risk losing access via the Strait, telling countries reliant on oil to “start learning how to fight for yourself.”

Even if the Strait reopens, clearing the vessel backlog would take time, with production, exports and LNG flows normalising only gradually rather than immediately.

Meanwhile, Saudi Aramco may raise the official selling price of Arab Light for Asian buyers next month, while key US crude grades are trading at their strongest premiums since the Covid‑19 period.

In US inventory data, API figures showed crude stocks rose by 10.3mb last week, far above expectations for a 1.3mb build. Gasoline and distillate inventories fell by 3.2mb and 1.04mb, respectively, which should continue to support product cracks. The EIA report is due later today.

In gas markets, European prices fell sharply, with TTF down more than 7.7% on Tuesday amid favourable weather forecasts and hopes of de-escalation in the Iran conflict. Strong wind generation could weigh on gas demand for power, while weaker industrial demand and a lighter maintenance season in Norway add to the bearish tone. EU gas storage levels have fallen to 28% as of 30 March, well below the five-year average of 41%, prompting the Energy Commissioner to urge early injections to avoid a late‑season supply crunch.

Metals – Gold extends gains for third session
Gold extended gains for a third session on Wednesday on hopes that the war in the Middle East may be nearing an end. Spot prices climbed above $4,700/oz, while equities rallied and the US dollar fell, after President Trump said he expected the US to end the war within weeks.

Also, earlier this week, Fed Chair Jerome Powell said long‑term US inflation expectations remain anchored and policy is “in a good place to wait and see”.

Still, despite the rebound this week, gold’s almost 12% decline in March was its worst monthly performance since October 2008.

Gold remains vulnerable to a broader liquidity squeeze and a firmer US dollar, though so far pullbacks have been met with buying rather than a loss of confidence.

Upcoming data on central bank purchases will be key to gauging whether the early‑year slowdown in official sector buying marks a more sustained pause or merely a temporary breather, with recent Turkish sales yet to be fully reflected.

In base metals, on the supply side, Chile posted its lowest monthly copper output in almost nine years, underscoring persistent structural constraints. February production fell to 378,554 tonnes, down 8.5% m/m and 4.8% y/y, according to INE data, as declining ore grades and underperformance at key mines weighed on output. The last time production was this low was March 2017, when strikes halted operations at BHP’s Escondida mine. Chile, which accounts for around a quarter of global mine supply, has now seen output decline on an annual basis for seven consecutive months.

Elsewhere, Ivanhoe trimmed production guidance for the Kamoa‑Kakula mine, lowering its 2026 outlook to 290-330kt from 380-420kt and cutting its 2027 forecast to 380-420kt from 500-540kt, as it adopts a more conservative mining plan following last year’s flooding.

According to the latest LME COTR report, speculators increased net long positions in aluminium by 1,285 lots in the week ending 27 March, snapping six consecutive weeks of declines and lifting total net bullish bets to 82,987 lots. The increase reflected fresh long positions and short covering amid tight global supply. In contrast, net longs in copper fell by 2,302 lots to 38,729, while zinc net longs declined by 4,393 lots to 40,171 after two weeks of gains.

Agriculture – Cocoa rises on adverse weather
Cocoa prices in the US and London jumped more than 5% amid concerns that El Niño could further disrupt production in key growing regions. Over half of Côte d’Ivoire and nearly two-thirds of Ghana are experiencing drought conditions, threatening cocoa formation and potentially slowing the mid‑crop harvest. Risks could intensify later this year if El Niño develops, bringing additional dryness to West Africa during a critical stage of the next main crop.

The USDA’s Prospective Plantings report points to lower US corn and wheat acreage this year, while soybean plantings are set to rise. Corn acreage is forecast to fall to 95.3m acres from 98.75m in 2025, above market expectations of 94.5m acres, reflecting a shift toward soybeans after last year’s record harvest. Wheat acreage is projected at 43.8m acres, the lowest since 1919, down 3% YoY and below expectations, pressured by high input costs, fertiliser shortages and weaker profitability. Soybean acreage is expected to increase 4% YoY to 84.7m acres, slightly below market expectations despite ongoing trade frictions with China.

The USDA’s quarterly stocks report showed US corn inventories at 9.02bn bushels as of 1 March, up 11% YoY but below expectations of 9.1bn bushels. Soybean stocks rose 10% YoY to 2.1bn bushels, marginally above expectations, reflecting slower export demand earlier in the season. Wheat inventories stood at 1.3bn bushels, up 5% YoY and broadly in line with forecasts.

Elsewhere, Uganda’s coffee exports rose 15% YoY (+15% MoM) to 651.9k bags in February, supported by higher output. Cumulative shipments for the 2025/26 season (Oct-Feb) reached 3.05m bags, up 26% YoY.
Source: ING