A weaker dollar index and a slight decline in the long-term bond prices were competing bullish and bearish factors for commodities in March. The June dollar index moved 3.04% lower, while the May U.S. 30-year Treasury bond futures fell 0.55% to 117-24 during the third month of 2025. Precious and base metals were mostly higher; grains were lower, and animal proteins rallied, while the energy sector rallied, and soft commodities turned in mixed results, with cocoa and FCOJ posting significant declines.
The only double-digit percentage gains were in copper and Rotterdam coal futures. Copper, along with gold, reached a new record high in March. FCOJ and cocoa posted double-digit percentage losses for the month ending on Monday, March 31.
Copper and gold reach new highs
Rotterdam coal led the asset class on the upside, with a 12.50% gain, but COMEX copper futures with a 10.69% gain in March, rose to a new record high.
The quarterly chart shows a substantial rally that took the red nonferrous metal to a new $5.3740 on March 26 before correcting. After holding the $4 level in November 2024, December 2024, and January 2025, copper prices have taken off on the upside, eclipsing the May 2024 previous record peak in March 2025.
Meanwhile, gold’s bullish trend since 1999 continued in March 2025, taking the precious metal to new highs.
The quarterly chart shows gold eclipsed the $3,000 level in March, rising to $3,162 on March 21 and closing the month over the $3,125 level, posting an 8.82% gain for March.
One factor impacting gold and copper prices is the Trump administration’s tariff plans. These trade barriers have tightened futures markets, causing metals to move from Europe and other locations to the U.S. Silver, gold’s sibling and a byproduct of copper production, could be the next metal to make a significant upside move.
Silver futures look set to challenge technical resistance at the 2024 high
Silver and gold prices rallied in March, with silver slightly outperforming the yellow metal with a 9.89% gain. One of the most bullish factors for a tight silver market is that while central banks and government can act as lenders of last resort for the gold market, silver holdings are not in the same hands, and industrial demand has increased to levels that create a fundamental deficit. Therefore, there is no lender of last resort for the silver market.
The quarterly chart highlights silver’s critical technical resistance level at the Q4 2024 $35.07 high. May silver futures reached a $35.495 high on March 28 and look set to move to higher highs over the coming weeks, as the price was over $34.60 per ounce on March 31.
Meanwhile, platinum and palladium posted 8.16% and 9.74% respective gains in March 2025.
Cocoa and FCOJ corrections continue- Grains lower, animal proteins rally
FCOJ and cocoa futures reached new record highs in 2024. Gravity hit the two soft commodities in March as they led the commodities asset class on the downside.
The monthly continuous contract FCOJ futures chart shows the soft commodities continued to be a falling knife in March, leading the asset class on the downside with a 19.14% decline. Meanwhile, FCOJ was above $2.40 per pound at the end of March, which is still higher than the pre-2023 record high.
The monthly continuous cocoa futures chart illustrates the 13.39% monthly decline in March 2025. However, at just below the $7,900 per ton level, cocoa futures were still well above the pre-2024 record high from 1977.
The action in FCOJ and cocoa reflects that the cure for high commodity prices is the high prices, as the lofty levels encourage increased production, rising inventories, and consumer substitution, leading to market tops. FCOJ and cocoa reached unsustainable levels in 2024.
World sugar futures rose 1.84% in March, while Arabica coffee futures moved 1.80% higher to just under $3.80 per pound. The coffee futures remain well above the pre-2024 record high. Cotton futures rose 2.42% in March.
Animal proteins posted across-the-board gains, with live cattle for June delivery leading the way on the upside with a 7.88% gain. May feeder cattle futures rallied 4.83%, and the June lean hogs posted a marginal 0.26% gain as the 2025 peak grilling season begins in late May. The March 31 pigs and hogs report was mostly bullish as it indicated lower-than-expected supplies, which could be bullish for pork prices.
As farmers began planting grain and oilseed crops for the 2025 crop year, corn, soybean, and soft red winter wheat futures declined in March. Prices remain at low levels compared to 2022. The May beans were 1.07% lower, while corn futures for May delivery fell 2.61%. May soft red winter wheat futures led on the downside with a 3.37% decline.
Energy commodities could reflect geopolitics and U.S. energy policy
The energy sector moved higher in March, with 3.09% and 3.42% respective gains in WTI and Brent crude oil futures. Gasoline was 2.88% higher, while heating oil gained only 0.81%. Seasonal factors in the products favored gasoline.
After a volatile month, natural gas moved 5.72% higher, with prices rise to over $4.90 and falling below $4 per MMBtu during March. The 2024/2025 withdrawal season ended, with natural gas in storage across the United States reaching a 1.698 trillion cubic feet low, the lowest level since 2022, supporting prices. Increasing LNG demand and U.S. exports have supported natural gas prices.
Rotterdam coal led the energy sector on the upside with a 12.50% gain, while ethanol swaps were 1.29% higher.
Geopolitics and U.S. energy policy will dictate crude oil prices’ path of least resistance. Nearby NYMEX WTI crude oil closed March at $71.48 per barrel, with critical technical support at the May 2023 $63.67 low. Crude oil has remained in a bearish trend since the 2022 high, but the energy commodity rallied on March 31 as U.S. President Trump threatened tariffs on Russian oil purchases.
Meanwhile, lumber prices were marginally lower, and cryptos declined, with Bitcoin outperforming Ethereum. Bitcoin fell 1.96% in March, while Ethereum plunged 17.57%. The stock market declined in March as uncertainty over tariffs dominated market sentiment.
Factors to watch in April 2025
Trends are a trader or investor’s best friend in markets across all asset classes, and commodities are no exception. As the raw materials sector moves into April, metals and animal proteins remain in bullish trends. The path of least resistance in grains and oilseeds remains bearish, while we should expect volatility in energy and soft commodities. The following macroeconomic and geopolitical factors could cause periods of increased price variance over the coming weeks:
- The wars in Ukraine and the Middle East and relations between the U.S. and countries worldwide could cause bouts of volatility.
- U.S. policies under the Trump administration could continue to cause market turmoil. Tariffs are trade barriers that impact global raw material prices, creating distortions that lead to sudden price moves. The administration has said that tariffs will take effect on April 2. Time will tell if the trade barriers are a negotiating tactic as they are reciprocal.
- The Chinese economy remains critical as China is the demand side of the equation for many commodity markets.
Volatility in commodities creates trading opportunities. As I wrote in early March, “Approach markets with a risk-reward plan and stick to the program. Accepting small losses in the quest for oversized gains is always acceptable. Therefore, stick to loss levels when markets move contrary to expectations, but adjust risk-reward dynamics to protect capital and gains when markets move in the desired direction.”
Expect continued volatility in the commodities asset class in April and beyond, and you will not be surprised or disappointed. Keep a close eye on grains, gasoline, and meats as the 2025 planting season starts. The driving season runs through spring and summer, as does the grilling season. Meanwhile, metals have been bullish beasts, but even the most aggressive bull markets rarely move in straight lines. The higher prices rise, the greater the odds of corrections.
