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Five Key Charts to Watch in Global Commodities This Week

(Bloomberg) -- Cocoa, the key chocolate-making ingredient, continues to rally, setting fresh records ahead of Easter. Oil is poised to extend its monthly streak of advances as demand outpaces expectations. And copper investors are increasing bullish bets for the industrial metal.

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Here are five notable charts to consider in global commodity markets as the week gets underway.

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Cocoa

As the Easter holidays approach, chocolate eggs and bunnies are getting more costly — and next year may be even worse, due to the unrelenting surge in cocoa prices. Futures of the sweet treat have skyrocketed, setting new records day after day to make cocoa the hottest commodity. The main reason for the surge is poor harvests in West Africa due to drought and disease, which have been worsened by decades of underinvestment and insufficient support for millions of impoverished cocoa farmers. Cocoa extended gains in New York Monday to as high as $9,250 a metric ton, a fresh intraday record.

Copper

Copper’s recent rally to an 11-month high triggered a jump in open interest on the London Metal Exchange. The number of outstanding contracts soared above 300,000 last week, the most in more than 2 1/2 years, signaling strong buyer appetite. The wiring metal has gained 8.5% over the past six weeks, as investors honed in on risks to supply at mines and smelters and a more positive global economic outlook that could bolster demand. Outstanding contracts also jumped to the highest in more than three years on the Comex after the Shanghai Futures Exchange earlier hit a record.

Electric Vehicles

The Biden administration’s stringent new tailpipe emission limits for cars and light trucks will compel automakers to rapidly boost sales of battery-electric and plug-in hybrid models to meet the mandates. Under the rule, carbon dioxide emissions are capped at 85 grams per mile in 2032 — down from 170 grams per mile for model year 2027. The targets are “still a stretch” for the industry but should “give the market and supply chains a chance to catch up,” said John Bozzella, president of the Alliance for Automotive Innovation. The US Environmental Protection Agency is set to release emission standards for heavy-duty trucks this week.

Oil

West Texas Intermediate and Brent futures are on pace for a third straight month of gains, the longest streak since September. Oil prices have been boosted by tight supplies due to output cuts from the Organization of Petroleum Exporting Countries and its allies, as well as muted US production growth during a period of improving demand. Geopolitical risks are also factor, with Houthi attacks on the Red Sea prompting longer tanker trips and Ukrainian drone strikes on Russian refineries increasing odds of an escalation in war between the two countries. Oil edged higher Monday.

Renewables

Deals for solar and wind projects are slowing down, with less and less power-generating capacity changing hands, according to a BloombergNEF report. Last year saw acquisitions involving almost 88 gigawatts of solar and wind projects, down almost a quarter from 2022. The drop comes amid persistent macroeconomic headwinds and revenue volatility due to fluctuating electricity prices, BNEF noted.

--With assistance from Jennifer A. Dlouhy, Yvonne Yue Li, Ilena Peng, Devika Krishna Kumar and Sophie Caronello.

(Updates cocoa record and oil price moves.)

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