Ideas
Commodities have broad tailwinds and inflows.
Commodities are in a broad-based rally with clear tailwinds from AI data center buildouts, deglobalization, rising freight and input costs, extreme weather supply disruptions and inflation-hedging inflows. BCOM is up about 27% this year, and the move is not driven by just one commodity; historically, after gold's all-time highs, broad commodity exposure like BCOM rose 5% over the next quarter and 15% over the next year.
Industrial metals outperform precious metals.
Industrial metals are rotating higher after precious metals already had a multi-year run. With global growth still decent, AI and electrification demand rising, and some industrial metals coming out of bear markets, Jim still likes the industrial metals call; copper is trending higher and aluminum is following.
Copper supply scarcity meets AI demand.
Copper has a scarcity problem against rising demand from electrification, renewables, AI data centers and broader electronic use. Supply takes 10-15 years to bring new mines online, weather disruptions are flooding mines, and LME copper is in backwardation with near-term inventory issues, supporting higher prices.
Silver has modelable industrial demand.
Jack is more bullish on silver than gold because silver demand from solar, AI data centers and industrial uses is modelable in real supply-demand terms. Silver supply is also less responsive because much of it comes as a byproduct of gold, copper and zinc mines, which can create sharp squeezes.
Central bank buying supports gold higher.
Central bank gold buying is a strong driver: central banks bought over 1,000 tons each year from 2022 to 2024, and the latest World Gold Council survey showed more than 40% expect to increase gold holdings over the next 12 months. Central banks are price sensitive and are treating the recent pullback as a buying opportunity.
Wheat crop lowest since 1970.
Wheat prices are supported by supply problems: the US wheat crop is rated the lowest since 1970, drought is hitting US and South American crop regions, Chicago and Kansas wheat are up over 25% each, and renewed attacks on commodity tankers in the Black Sea could push wheat prices higher from here.
Renewable fuel demand lifts soybean oil.
Soybean oil is performing very well because the percentage of soybean oil used in the renewable fuel standard mix increased, causing market participants to chase the move higher.
Fertilizer costs may cut corn yields.
Corn has not moved much yet despite spiking fertilizer costs, but that could be a sleeper setup. Farmers are cost-sensitive, using less fertilizer and cheaper seed, which could reduce future corn yields and lead to future corn price appreciation.
Refined product scarcity keeps crack spreads high.
Refined petroleum products are more attractive than crude oil because crude inventories were ample but refined product inventories were scarce. It takes time and specific facilities to turn crude into products, so crack spreads are extremely high, even above 2022 levels, and could remain supported.
El Niño threatens African cocoa supply.
Cocoa is down on the year after a prior spike, but softs like cocoa, cotton and coffee are more volatile. El Niño could cause bigger droughts in Africa's cocoa-producing regions, and cocoa could potentially spike back up again.
Enhanced roll yield beats front-month BCOM.
The Bloomberg Enhanced Roll Yield Index has picked up significant adoption because it spreads exposure across four futures contracts rather than only the front month, earning a curve premium, and tilts toward commodities with better roll yield while penalizing contango like natural gas. It has lower volatility and has outperformed BCOM, up about 30% this year.
Hormuz risk could spike crude sharply.
Crude oil is a Hormuz-driven tail-risk setup: much of the initial supply disruption was offset by Chinese demand levers, North American production, inventories, shadow fleet flows and jawboning, but the market is starting to realize no deal is coming. If escalation continues and Hormuz remains closed, oil could see $150-$200, though weakening economic data would soften that call.
This Monetary Matters video, published August 26, 2026,
features Jim Wiederhold, Jack Farley
discussing BCOM, DBB, Aluminum, COPPER, SILVER, GLD, Kansas wheat, WEAT, SOYB, CORN, Crack spread, XLE, COCOA, Bloomberg Enhanced Roll Yield Index, WTI.
12 trade ideas extracted by AI with direction and confidence scoring.
Speakers:
Jim Wiederhold,
Jack Farley
· Tickers:
BCOM,
DBB,
Aluminum,
COPPER,
SILVER,
GLD,
Kansas wheat,
WEAT,
SOYB,
CORN,
Crack spread,
XLE,
COCOA,
Bloomberg Enhanced Roll Yield Index,
WTI
