Key Takeaways:
Commodity snapshot:
European gas prices held above EUR68 per megawatt-hour, the highest in three years, as EU storage at 63% trails the 80% five-year average.
"At the current rate, it will be difficult for the EU to hit even the lower storage target of 75% ahead of the heating season," analysts at ING said. "This raises the prospects of forced buying, increasing upside risk for gas prices."
EU gas storage is just under 63% full, below the five-year average of 80% and lower than the almost 76% seen at the same stage last year. The benchmark Dutch TTF contract slipped 0.2% to 68.10 euros per megawatt-hour in early trading but is up 7% on the week. Goldman Sachs analysts estimate December 2026 TTF would need to move above EUR100 per megawatt-hour in a scenario where Middle East energy exports normalize only gradually through 2027, versus a base case of EUR50.
Current inventory levels are the lowest in 17 years, and supply available for purchase is tighter than in 2022. The LNG squeeze has pushed European buyers into direct competition with Asian buyers for limited spot volumes, with Europe currently losing that race.
Oil prices drifted lower despite renewed US plans to tighten economic pressure on Iran. ICE Brent closed 2.35% lower, with traders treating Washington's push as marginal rather than market-moving. The US announced more than 70 Iran-related sanctions and is threatening secondary sanctions on trading partners that do not cut ties with Iran. However, China remains the largest buyer of Iranian energy, and it is unclear whether the US would risk a fragile trade truce with Beijing over secondary sanctions.
LME copper edged higher after fresh withdrawals from exchange warehouses renewed concerns over tight inventories. LME cancelled warrants increased by 51.4kt, the largest daily rise since May, with most cancellations concentrated in US and Asian locations. The move follows last week's squeeze in the nearby market, which pushed prompt premiums to record levels. Copper remains supported by strong metal flows into the US, where elevated premiums are encouraging shipments and tightening availability elsewhere. The metal is up almost 15% year-to-date, though record-high prices are making Chinese buyers more cautious.
CBOT corn extended its rally as expectations for a smaller US harvest and ongoing Black Sea tensions raise supply concerns. The Pro Farmer crop tour pegged the US corn crop at 15.3 billion bushels with an average yield of 173.2 bushels per acre, well below the USDA's production estimate of 16.01 billion bushels and yield estimate of 180.7 bushels per acre. EU corn yields are also set to weaken, with the European Commission's MARS report estimating output at 6.61 tonnes per hectare, down from a previous projection of 6.93 tonnes per hectare and below the five-year average of 7.1 tonnes per hectare.
In sugar, the Indian Sugar Mills Association lowered its 2025/26 gross production forecast to 30.9 million tonnes from an initial estimate of 34.5 million tonnes, citing adverse weather, lower cane yields, and weaker sugar recovery rates. Annual domestic demand is estimated at 28 to 28.5 million tonnes.
This article is for informational purposes only and does not constitute investment advice.
