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Inflation has ticked up again, and though the rate has decreased from its 2021 high of 9.1%, investors and consumers are warily watching renewed price hike risks.
Computer Trading Corporation chief executive Peter Borish believes a selection of products he calls the seven C’s of commodities — coffee, corn, cotton, copper, crude oil, cocoa, and cattle — can be the key to monitoring inflation rates.
“It’s an easy way to think about potential inflationary pressures, and it’s a set of diverse commodities,” Borish explained to Jared Blikre on Yahoo Finance’s Stocks in Translation podcast on Feb. 20 (see video above or listen below).
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Borish noted that several of the seven C’s have broken out in recent months. Coffee prices reached an all-time high in February, and corn prices similarly rose during the month.
Copper is another commodity seeing significant upside — prices jumped to their highest level since November 2022 on Wednesday after President Trump signaled he may impose a 25% tariff on the metal next week.
Meanwhile, other products such as cotton, crude oil, and cattle have come under pressure.
“If you look at traditional trend-following models, they’ve all recently given buys except for cotton,” Borish said. “I’m watching cotton, … and that’s the China tariffs aggregate demand level.”
Cocoa, which was seen as a commodities winner, has experienced wild price swings lately. Cocoa futures spiked to record highs in late 2024 but have fallen over 19% in the past month on an improved supply outlook.
“The tricky part here is this number and the inflationary numbers look like they’re going up, but beneath the surface, there’s this huge tug-of-war,” Borish said.
Prices for each of these individual commodities will likely continue to fluctuate, and seeing an increase in a couple of them isn’t cause for panic, Borish said.
“When all the seven C’s are signaling, that’s saying that there’s a likely pickup in inflation … particularly the subsurface numbers that people track and, certainly, the Fed tracks and PPI,” Borish said.
On Yahoo Finance’s podcast Stocks in Translation, Yahoo Finance editor Jared Blikre and producer Sydnee Fried cut through the market mayhem, noisy numbers, and hyperbole to bring you essential conversations and insights from across the investing landscape. Find more episodes on our video hub or watch on your preferred streaming service.
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