In June 2025, global commodities markets experienced significant volatility in late June, followed by a powerful rally tied to fresh manufacturing data. Although the Bloomberg Commodities Index ultimately ended the week down around 4%, the underlying story is one of resilience, demand recovery, and evolving macroeconomic dynamics. As factories in the US and China reported stronger output, industrial metals, grains, and even energy flickered back to life before recent pressures emerged.

Global Commodities Landscape

Throughout early and mid-June, the Bloomberg Commodities Index (BCOM) climbed steadily, buoyed by hopes of sustained industrial growth. Energy prices led the way at first, only to reverse sharply toward month end with a steep 9.7% drop in energy pushing the overall index lower by about 4% for the week ending June 27.

This roller-coaster reflects a market deeply sensitive to global policy shifts, currency moves, and geopolitical tensions. Safe-haven assets like gold soared to +29% YTD, on pace for their best year since 1979, while agricultural staples found support from weather-related delays and biofuel mandates. Metals rallied on currency tailwinds, though recent US tariff announcements and OPEC+ output plans threaten to check further gains.

Key Commodity Performance at a Glance

Below is a concise table summarizing year-to-date performance and primary drivers for major commodity groups:

Manufacturing Data and Commodity Demand

At the heart of June’s rebound lies improved factory data from two economic powerhouses. China’s Caixin Manufacturing PMI returned above the expansionary 50 mark, while the US ISM Manufacturing Index surprised to the upside. These readings signaled renewed orders, rising production, and easing supply-chain constraints.

Manufacturing and broader macroeconomic signals drove optimism across industrial metals such as copper and stainless steel, which climbed off five-year lows. With China’s currency strengthening against the dollar and the Fed holding rates steady at 4.25%–4.5% for the fourth straight meeting, stable financial conditions created fertile ground for commodity inflows.

Meanwhile, agricultural markets responded to parallel dynamics. US EPA biofuel mandates boosted soybean crush margins by around $0.40 per bushel, while Midwest rains delayed wheat harvests, triggering speculative positions. Corn remained anchored by the USDA’s trimmed end-stocks forecast, even as Brazilian output promises some relief.

Sector-by-Sector Analysis

The rebound was not uniform. Each sector faced unique drivers and challenges:

• Grains: Wheat staged a modest bounce after record short coverings and weather disruptions. Corn benefited from a four-year low in stocks-to-use ratios, and soybeans gained on heightened renewable diesel blending requirements.
• Metals: Stainless steel rebounded on a weak dollar and anticipated strength in the renminbi. However, looming US tariffs of 50% on steel and aluminum threaten to distort trade flows and weigh on longer-term demand.
• Energy: Brent crude flirted with $90 per barrel amid US-Iran tensions in the Strait of Hormuz, only to tumble as OPEC+ signaled accelerated supply increases. Short-term volatility remains elevated, with forecasts pointing to $60 by year-end.

These divergent narratives highlight the complexity of current markets. While industrial metals and grains found support in manufacturing optimism and policy incentives, energy’s fortunes hinge on geopolitics and OPEC+ supply strategy.

Drivers and Macro Trends

Several overarching themes shaped the June rally:

• Currency Movements: The US dollar traded near two-year lows, boosting dollar-priced commodity inflows and bolstering demand for metals and grains.
• Monetary Policy: A Fed rate pause reinforced investor confidence, reducing funding costs and supporting commodity financing.
• Policy Incentives: Heightened EPA biofuel mandates and US tariff shifts injected fresh demand into agricultural and metals markets.
• Geopolitical Tensions: Short-lived flare-ups in the Middle East added risk premiums to oil and select base metals.

Risks and Forward Outlook

Despite the June resurgence, several headwinds threaten the next leg of commodity price action:

• Rising global supply: OPEC+ output and record Brazilian crop forecasts may overwhelm demand growth.
• Softening manufacturing momentum: Any rollback in PMI readings could undercut industrial metals.
• Policy uncertainty: Shifts in US financial regulations, EPA waivers, and trade tariffs remain wildcard factors.
• Inflation dynamics: Commodity corrections could ease input costs but may also signal broader economic cooling.

For investors and producers alike, vigilance is key. Volatility remains unusually high, and market sentiment can flip with each new macro data point or political development. Yet the June rebound underscores a fundamental truth: when factories hum and currencies align, raw material demand springs to life.

Looking ahead to H2 2025, the balance between supply expansions, policy levers, and global growth trajectories will dictate commodity trends. Stakeholders who stay informed, hedge thoughtfully, and embrace flexible strategies will be best positioned to navigate both rallies and retreats.