A steady dollar index and a decline in the long-term bond prices were primarily bearish factors for commodities in March. The June dollar index moved only 0.01% lower, while the June U.S. 30-year Treasury bond futures fell 3.50% to 112-23 during May. 

Precious and base metals were mostly higher; grains were mostly lower, and animal proteins rallied, while the energy and soft commodity sectors turned in mixed results.

The only double-digit percentage gains were in cocoa, Bitcoin, and Ethereum. Bitcoin and cattle futures reached new record highs in May. Arabica coffee futures posted a double-digit percentage loss for the month ending on Friday, May 30. 

Cocoa and platinum lead on the upside

Cocoa led the asset class on the upside, with a 10.17% gain. Supply concerns continue to grip the primary ingredient in chocolate confectionery products. 

The monthly chart shows the rally that took the cocoa futures over 10% higher to close May at $9,971 per ton on the nearby July ICE futures contract. Cocoa remains in a bullish trend despite the correction from the December 2024 record high. 

Meanwhile, platinum posted an impressive 8.82% gain in May.  

The monthly chart shows that NYMEX platinum futures probed above the $1,100 level in May, rising to $1,104.80, and closed the month over the $1,050 level, above the $1,000 pivot point. 

Platinum has lagged gold for years and remains at a substantial discount to the yellow precious metal. Time will tell if the 8.82% May platinum rally is the beginning of a bullish trend that will catch up with gold and silver. 

Arabica coffee futures correct lower

Arabica coffee futures were the worst-performing commodity in May, declining 14.55% for the month ending on May 30, 2025. 

The monthly chart highlights the correction in Arabica coffee futures after they reached an all-time high of $4.2995 per pound in February 2025.  Supply concerns over weather-related issues and crop diseases in the leading growing regions have kept coffee prices above the $3 per pound level for only the fourth time since the early 1970s. 

Energy, softs, and grains mixed- Animal proteins and precious metals, sans gold, rally

Oil prices rose in May, with NYMEX WTI futures increasing 5.50% and ICE Brent futures moving 3.49% to the upside. Gasoline and heating oil futures posted 1.12% and 1.03% gains, sending crack spreads lower for the month. Weakness in the refining spreads signals tepid consumer demand. The volatile U.S. natural gas futures market declined 5.17% in May, which is a shoulder month when heating and cooling demand decline. Ethanol and Rotterdam coal prices declined for the month despite a rise in crude oil and oil product prices. 

Soft commodities, which had been bullish beasts in 2023 and 2024, were mixed in May. World sugar futures fell 1.16%, while Arabica coffee futures led the sector on the downside with a 14.55% decline. Cocoa rose 10.17%, while cotton futures fell 1.45% and remained near the most recent low. Frozen concentrated orange juice futures moved 6.70% higher and remained elevated.

Animal proteins posted across-the-board gains, with lean hogs for August delivery leading the way on the upside with an 8.11% gain. August feeder cattle futures rallied 1.29%, and the August live cattle futures posted a 2.60% gain as the 2025 peak grilling season began on the Memorial Day weekend. Live and feeder cattle rose to new all-time highs in May, with the feeders eclipsing the $3 per pound level for the first time. 

As the 2025 planting season for grain and oilseed crops is underway, corn and soybean futures declined, while the CBOT soft red winter wheat futures edged higher in May. Prices remain at low levels compared to 2022. The July beans were 0.26% lower, while corn futures for July delivery fell 6.62%, leading the sector on the downside. July soft red winter wheat futures edged 0.61% higher, but the KCBT-CBOT wheat spread moved to a discount for the KCBT hard red winter wheat, which is a bearish signal for the primary ingredient in bread. 

Precious metals were higher, despite a 0.97% decline in gold, which had set a record high in April. Platinum was the leader with an 8.82% gain, while palladium moved 2.55% higher. Silver edged 0.61% higher, outperforming gold. COMEX copper, the red nonferrous metal, which is the leader of the base metals trading on the London Metals Exchange, moved 1.49% higher. Copper had experienced a volatile March and April, with the price fluctuating from a new record high to critical support at the $4 per pound level. Copper prices stabilized in May, settling over the $4.65 level on the active month July futures contract. 

Cryptos rally in May- New highs in Bitcoin

Bitcoin rallied 6.15% in May, closing the month at over $104,840 per token. 

The monthly chart highlights Bitcoin’s May rally to a new record high of just below the $112,000 level. Bitcoin remains in a long-term parabolic bullish trend despite periodic substantial corrections. Bitcoin rallied by over 50% from its April 7 low to its May 22 record high. Support for cryptocurrencies from the Trump administration has lit a bullish fuse under the asset class. 

Meanwhile, Ethereum was the star performer in May. 

The monthly chart illustrates Ethereum’s 45.15% rally in May, which pushed the price above the $2,580 level. Ethereum nearly doubled in value from its low on April 9 to its high on May 29. 

Factors to watch in June 2025

As I have written in the past monthly reports:

Trends are a trader or investor’s best friend in markets across all asset classes, and commodities are no exception. 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.

As the raw materials sector moves into June, seasonality in natural gas during the cooling season, gasoline during the driving season, and cattle and hogs during the grilling season could support prices. 

Precious metals remain in bullish trends, while copper and base metals are consolidating, awaiting a return of significant Chinese demand will return to boost prices. 

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 if hostilities rise or peace talks lead to agreements.
• U.S. policies under the Trump administration could continue to cause market turmoil. Tariffs are trade barriers that affect global raw material prices, creating distortions that can lead to sudden price fluctuations.  
• The Chinese economy remains critical as China is the demand side of the equation for many commodity markets.
• Expect liquidity in markets to decline during the summer vacation months. Less liquidity tends to create the potential for higher volatility.
• The U.S. debt and the progress of the Trump administration’s “big beautiful” economic package could lead to volatility in the bond and stock markets. 

Expect continued volatility in the commodities asset class in June and beyond, and you will not be surprised or disappointed.