Commodities October outlook: No treat for global supply
A look at how geopolitics, El Niño, and changing supply chains are reshaping the outlook for commodities around the world.
Duration: 7 Mins
Date: Oct 28, 2026
Commodity markets have no shortage of reasons to keep investors guessing. Geopolitical conflict, shifting supply chains, and increasingly disruptive weather are creating pressure across the physical market, but lumping those forces together under the Supercycle label risks missing what is really happening.
Beyond the Supercycle
We wouldn’t call this a commodity Supercycle.
The term Supercycle is undefined, and using undefined terms serves to misinform rather than inform. Generally, Supercycle implies a decade-or-more-long bull market in most/all commodities, usually driven by a period of high economic growth causing demand to increase much faster than supply can manage.
We believe there are elements of the commodity landscape that may turn out to be a Supercycle, especially around the energy transition. However, battery technology is evolving very quickly and so is battery chemistry, so today's must have mineral may be tomorrow’s has been.1
It is more correct to see it as a period in which global supply chains are being rewired into two separate supply chains: a country's friends and a country's geopolitical competitors. These disruptions are occurring after a period of stability that facilitated just in time supply chains, which isn’t exactly a world we live in at the moment.
When geopolitics meets the weather
Consumers who are exposed to commodity increases have been very unlucky recently. Two widespread military conflicts exist in two of the most commodity intense areas of the world. Global weather patterns aren't helping either.
Even though the droughts that sometimes occur during La Niña events can create large price rises in agriculture, our current El Niño-Southern Oscillation condition is El Niño, which has less direct influence on weather in the US crop growth regions.2 However, an extreme El Niño can bring about strong effects that hurt crop production and raise prices. By some projections we are destined for an extreme El Niño event by January 2027.3
The combination of supply disruptions in the Black Sea ports that normally export grains from Russia and Ukraine, in addition to global weather disruptions is a powerful combination.
The global reach of El Niño
The effects of a strong El Niño can vary significantly by region, with implications for agriculture, energy demand, and transportation. Current conditions are already highlighting vulnerabilities across several important commodity-producing and trading regions.
Final thoughts
October marks the scary season with Halloween trick or treating at the end of the month. For consumers, the scary season started months ago, adding agriculture price gains on top of energy price gains. We believe the primary benefit of broad commodity exposure is its potential to help portfolios capture unexpected inflation. Commodities themselves are often a source of those inflation surprises. The real trick may be anticipating inflation’s surprises – and recognizing where commodities could provide the potential treat.
1 "Breaking It Down: Next-Generation Batteries." Department of Energy, October 2026. 2 The El Niño-Southern Oscillation, or “ENSO” for short, is a natural climate pattern across the tropical Pacific, with El Niño and La Niña representing its warm and cool phases. 3 "An ‘unprecedented’ El Niño and its implications for the weather forecast." Met Office, August 2026. 4 "Extreme Rainfall Main Climate Threat To Cocoa Yields." Eurasia Review, October 2026. 5 "Panama Canal to add transit slot on 15 Oct, immediately raise draft restrictions to 49 feet." Port News, May 2026. 6 "Honduras Drought Raises Questions for 2026/27 Coffee Crop as El Niño Concerns Intensify." StoneX, August 2026. 7 "Sugar No.11 Softens as Brazil Rains Meet Still‑Tight Global Fundamentals." CMB News, October 2026. 8 "Maharashtra's monsoon deficit raises concern as El Niño threatens warmer winter, rabi crops." Times of India, October 2026. 9 "European agriculture hit hard by exceptionally hot and dry summer." Joint Research Centre, September 2026. 10 "France offers €2bn in zero-interest loans after drought." The Poultry Site, October 2026. 11 "Rhine Sinks to Record Low in Further Blow for Shipping." SWI swissinfo.ch, September 2026.
Important information
The statements and opinions expressed are those of the author and are as of the date of this report. All information is historical and not indicative of future results and subject to change. Reader should not assume that an investment in any securities and/or precious metals mentioned was or would be profitable in the future. This information is not a recommendation to buy or sell. Past performance is not a guide to future results. The abrdn Silver ETF Trust, abrdn Gold ETF Trust, abrdn Platinum ETF Trust, abrdn Palladium ETF Trust and abrdn Precious Metals Basket ETF Trust are not investment companies registered under the Investment Company Act of 1940 or a commodity pool for purposes of the Commodity Exchange Act. Shares of the Trusts are not subject to the same regulatory requirements as mutual funds. These investments are not suitable for all investors. Trusts focusing on a single commodity generally experience greater volatility. Commodities generally are volatile and are not suitable for all investors. Please refer to the prospectus for complete information regarding all risks associated with the Trusts. The value of the Shares relates directly to the value of the precious metal held by the Trust and fluctuations in the price could materially adversely affect investment in the Shares. Several factors may affect the price of precious metals, including: A change in economic conditions, such as a recession, can adversely affect the price of the precious metal held by the Trust. Some metals are used in a wide range of industrial applications, and an economic downturn could have a negative impact on its demand and, consequently, its price and the price of the Shares; Investors’ expectations with respect to the rate of inflation; currency exchange rates; interest rates; Investment and trading activities of hedge funds and commodity funds; and global or regional political, economic or financial events and situations. Should there be an increase in the level of hedge activity of the precious metal held by the Trust or producing companies, it could cause a decline in world precious metal prices, adversely affecting the price of the shares. Should there be an increase in the level of hedge activity of the precious metal held by the Trust or producing companies, it could cause a decline in world precious metal prices, adversely affecting the price of the shares. Also, should the speculative community take a negative view towards the precious metal held by the Trusts, it could cause a decline in prices, negatively impacting the price of the shares. There is a risk that part or all of the Trusts’ physical precious metal could be lost, damaged or stolen. Failure by the custodian or sub-Custodian to exercise due care in the safekeeping of the precious metal held by the Trusts could result in a loss to the Trusts. The Trusts will not insure its precious metals and shareholders cannot be assured that the custodian will maintain adequate insurance or any insurance with respect to the precious metals held by the custodian on behalf of the Trust. Consequently, a loss may be suffered with respect to the precious metal that is not covered by insurance. Commodities generally are volatile and are not suitable for all investors. Diversification does not eliminate the risk of experiencing investment losses. Investors buy and sell shares on a secondary market (i.e., not directly from Trusts). Only market makers or “authorized participants” may trade directly with the Trusts, typically in blocks of 50k to 100k shares. This material must be accompanied or preceded by the prospectus. Carefully consider each Trust’s investment objectives, risk factors, and fees and expenses before investing. To view the prospectus, please click here – abrdn Silver ETF Trust, abrdn Gold ETF Trust, abrdn Platinum ETF Trust, abrdn Palladium ETF Trust, and abrdn Precious Metals Basket ETF Trust. ALPS Distributors, Inc. is the marketing agent. ALPS is not affiliated with abrdn.
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