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Darrell Fletcher - Monthly Commodity Recap: Is This A Commodity SuperCycle?

The KE Report Sep 1, 2026 28:45

Summary

August was a broad commodity rally — Bloomberg commodity index up 7%, agriculture sector up 12%, with gold and silver each gaining roughly 10%.

Crude spot stayed muted despite war headlines; the real signal is in the narrowing backwardation curve and record-high diesel crack spreads.

Higher energy and development costs are pushing copper producers toward M&A instead of organic mine builds, lifting the long-run price floor.

Gold defended the 4000 level and is consolidating near 4500, with managed money steadily adding positions since April.

A strong El Nino on the horizon could disrupt grains, softs, and shipping — layering fresh risk onto already tight global supply chains.

Darrell Fletcher's takeaways

  • Top takeaway Argues a long-term commodity super cycle is underway, driven by post-COVID supply chain disruption and the geopolitical re-securitization of supply across regions
  • Flags the products side of energy as the real story: diesel YTD up roughly 112%, gas oil up about 114%, gasoline up about 103%, with crack spreads hitting all-time highs for refiners
  • Warns oil upside shocks have gone muted even as the US strategic reserve has been drawn for 23 straight weeks at multi-million-barrel rates, pushing refill pressure deep into 2027-2028
  • Sees structurally higher floors for copper from mining cost inflation and supply constraints that are driving M&A; COMEX copper near $6.60 is up about 45% year over year, with $7s on the 2027 curve
  • Expects precious metals to consolidate after a strong month - gold up roughly 10% and silver up about 14-15% - with $4,500 flagged as the key level to watch on gold

Cory Fleck's takeaways

  • Top takeaway Argues that the AI/data center build-out has been a major copper demand driver and that any slowdown in that spending would at minimum temper copper's momentum
  • Observes that silver has not leveraged gold's recent run the way gold equities have, noting silver still needs to roughly double to revisit its prior highs