Aug 26, 2026 · 57 min
AI demand broadens the commodity bull market
The Commodity Bull Market Is Broadening | Jim Wiederhold on Copper, Grains, and Bloomberg Commodity Index
The episode connects technology investment, weather risk, constrained supply, and portfolio diversification across metals, grains, energy, and gold.
- 1Copper and silver face rising technology demand, but mine development and material thrift limit how quickly supply can respond.
- 2Grains are recovering after years of weakness as crop conditions, fertilizer costs, planting decisions, and El Niño reshape supply risks.
- 3The Bloomberg Commodity Index offers diversified inflation protection by capping energy exposure and allocating across multiple commodity groups.
Don't miss
Jim Wiederhold explains why the Bloomberg Commodity Index deliberately limits energy exposure and maintains meaningful allocations to grains and other groups.
The brief
Jim Wiederhold of Bloomberg argues that the commodity rally is spreading beyond precious metals, with AI infrastructure, electrification, inflation, and constrained supply supporting a wider group of markets.
Copper sits at the center of the debate: data centers, electric vehicles, and renewable power raise demand, while mine development, ESG constraints, and long lead times restrict supply.
Silver combines monetary appeal with industrial exposure, but solar manufacturers are using less of it and the late-January surge above $100 proved unsustainable.
Grains add a different kind of risk, as poor wheat-crop ratings, fertilizer costs, planting decisions, and El Niño’s region-specific weather effects reshape agricultural markets.
The Bloomberg Commodity Index is designed to diversify rather than mirror production, limiting energy’s share while giving agriculture and metals meaningful representation.
Oil flows have adapted to Strait of Hormuz disruption, but refined products remain unusually expensive because inventories and refining capacity are constrained.
What was said on this episode
46 statements · 28 positive · 9 negative · 2 mixed · 7 neutral
Commodities have strong broad-based tailwinds.
“there's just a clear ton of tailwinds for the commodities asset class”
Listen at 0:34
Macro conditions and inflows are driving commodity price appreciation.
“it's all just driving more price appreciation across the commodity complex”
Listen at 2:44
Gold typically consolidates after a major multi-year price spike.
“price action tends to spike. And then we have some sideways move and potentially consolidation over a few months to even a few years in gold”
Listen at 3:45
Copper faces scarcity amid energy-transition and AI data-center demand.
“copper in particular, it... It has scarcity. It's the projected demand from the energy transition from renewables, but also data center build out with AI”
Listen at 4:00
Meeting copper demand requires new mines that can take 10–15 years to produce.
“in order to meet that demand we need to increase supply and sometimes it takes up to 10 15 years to create a new new mine new metal mine from discovery to actually be able to produce”
Listen at 5:40
Higher commodity prices incentivize producers to increase production.
“with increased prices and when you have a very high price for any commodity that incentivizes production”
Listen at 7:14
Supply disruptions and rising costs have pushed copper to all-time highs.
“that's why you're seeing these all-time high prices in copper in particular”
Listen at 8:31
Global demand for traded metals has increased.
“there's definitely been a global increase in demand”
Listen at 9:46
U.S. renewable-energy growth has suffered only a temporary setback.
“over the long term it's it's definitely just been a hiccup in in the trend over the over the long term”
Listen at 10:37
U.S. renewable energy will remain volatile through 2028.
“it's just going to be volatile at least until 2028 for now in the US”
Listen at 11:20
Industrial uses account for 60% of silver consumption.
“silver is... somewhat considered an industrial metal because 60 percent of its use is industrial in nature”
Listen at 11:47
Replacing silver with copper makes solar panels less efficient.
“you're having less efficient solar panels if you do that”
Listen at 14:11
Silver’s late-January price surge was unsustainable short term.
“this move was clearly something that... is unsustainable in the short term”
Listen at 15:04
Silver could spike again, but current positioning does not expect it.
“There's always potential for things to spike again. But as of now, people aren't necessarily thinking that's going to happen”
Listen at 16:11
Increased central-bank gold buying usually precedes higher gold prices.
“as soon as you see big pickups in central bank buying, that's like a usually pretty good. indicator that the price is going to go higher”
Listen at 18:21
A global-growth slowdown would reduce demand for raw materials.
“unless you're calling for a recession and you think global growth is going to slow down there's gonna be less need for raw materials”
Listen at 18:37
Industrial real assets have performed well as inputs to the global economy.
“I think most of these real asset types that are that are actually the inputs to our global economy i think those are the ones that are They have done well.”
Listen at 18:43
Copper is up about 15% year-to-date; aluminum and nickel are also performing.
“copper's up over about 15 on the year aluminum and nickel are doing okay”
Listen at 19:24
Solar energy is now among the cheapest energy alternatives.
“the cost of solar energy is finally one of the cheapest out of all the alternatives out there for the first time ever”
Listen at 19:51
Grain commodities are performing well.
“the grains are performing well”
Listen at 24:23
Chicago and Kansas wheat prices are up more than 25%.
“Chicago wheat, Kansas wheat, up over 25% each”
Listen at 24:48
Grain prices could rise then pull back on improved crop news.
“we could have these moves higher and then a pullback if we get even some better news on the next crop cycle”
Listen at 25:33
Lower fertilizer use could cause future corn-price appreciation.
“that could lead to potential issues and corn price appreciation in the future”
Listen at 27:25
Black Sea shipping disruptions could increase wheat prices.
“that could lead to increased wheat prices from here potentially”
Listen at 28:56
Crude oil has limited near-term upside incentive.
“oil probably has the least incentive to move higher here”
Listen at 29:54
Cocoa could spike higher again if African crop risks worsen.
“Cocoa could be... something that could potentially spike back up again”
Listen at 31:12
Jim remains bullish on industrial metals, especially copper and aluminum.
“I do like the industrial metals. I still like that call. Copper is clearly trending higher, aluminum is following.”
Listen at 31:19
The commodities market is in a commodity supercycle.
“I think we really are”
Listen at 31:52
Investors should hold a small commodity allocation.
“it's a good time to have a small piece of allocation to commodities in a portfolio”
Listen at 32:29
BCom historically rose 5% quarterly and 15% annually after gold reached highs.
“every time gold made a new all-time high over the last six decades. If you looked at BCom, it rose 5% over the next quarter and 15% over the next year.”
Listen at 32:53
Rising gold and silver prices increase investors’ spending power.
“as the world gets richer because the the price of their gold silver allocations increase they have more spending power”
Listen at 34:55
El Niño could leave sugar with ample supply.
“sugar that could potentially have ample supply after this”
Listen at 36:15
El Niño rain could lower U.S. corn, soybean, and wheat prices.
“which could potentially lead to lower prices”
Listen at 36:33
Commodities are the least correlated major asset class.
“commodities are they're the most uncorrelated of the major asset classes”
Listen at 38:11
Investors typically allocate 5–10% to commodities.
“they typically put five to ten percent of an allocation in there”
Listen at 38:20
BCom has most assets among Bloomberg commodity indices.
“it has the majority of assets of all our commodity indices”
Listen at 42:01
Bloomberg Enhanced Roll Yield assets approached $10 billion quickly.
“you can see a big, big pickup towards the 10 billion mark in a short period of time”
Listen at 42:41
Enhanced Roll Yield historically outperformed BCom by over 1% annually.
“over a percent. more outperformance per year because of just that curve premium”
Listen at 43:19
Enhanced Roll Yield is up about 30% versus BCom’s 25–26% this year.
“i think barry is up about 30 this year and then bcom is 25 to 26”
Listen at 43:56
BCom caps each commodity group at 33%.
“no commodity group can be more than 33%”
Listen at 44:53
BCom caps any single commodity at 15%.
“no single commodity can be more than 15%. of the index”
Listen at 45:35
Broad commodity exposure has volatility similar to equities.
“when you... put them together in a broad exposure it has a similar volatility profile to equities”
Listen at 46:05
North American oil producers increased production during the disruption.
“increase in production from North America across. canada us and all those oil producers increased production at a good time”
Listen at 46:58
Oil could reach $150–$200 per barrel if the disruption persists.
“we could get to these 150 200 a barrel forecasts”
Listen at 50:34
About 9 million barrels per day transit Hormuz, mostly via shadow fleet.
“now they say that there's probably 9 million barrels a day going through, and it's more than half of that is the shadow fleet”
Listen at 52:08
Refined products are scarce while crude oil is not.
“we are seeing scarcity in the refined products, not necessarily in crude oil”
Listen at 54:29
Statements are attributed to the speaker as said on the episode and reflect their view at the time, not PodLume's. They are not advice.