Skip navigation
Navigation skipped

News Releases

Commodity Prices Rise 5.4 Per Cent in January to Jump Start the Year, Say BMO Economists  

The BMO Financial Group Commodity Price Index jumped 5.4 per cent in January to end the month at its second highest level ever.  All four commodity sub groups registered gains with the Price Index finishing the month at 148.5 (1993=100), 18.7 per cent higher than its year ago level.

“The combination of tight base-metal inventory levels, rejuvenated gold prices, higher grain and oilseed demand and a fired-up construction industry helped buoy commodity prices in January to levels just 4.1 per cent short of their all time highs,” said Earl Sweet, Assistant Chief Economist, BMO Financial Group.

In January the Oil and Gas Index continued to rise sharply, fuelled by very cold weather in major consuming regions and by concerns about supply adequacy in the face of rising heating requirements and strengthening economic activity. U.S. crude oil inventories are now at their lowest level in five years. The energy sub index was up 6.3 per cent for the month to 239.5 (1993=100).

“Notwithstanding very high current prices, the likelihood of substantial increases in non-OPEC supplies this year and the approach of spring are likely to pressure oil prices into noticeable retreat over the next few months,” said Sweet.

The Forest Products Index rebounded strongly in the month, moving up 6.1 per cent to 110.2 (1993=100). Most of the gains came through sharp increases in the wood product category, reflecting booming home construction in North America, while pulp and paper prices remained mostly unchanged for the third consecutive month.  The index, which has been on a rising trend since the beginning of 2003, is forecast to moderate in 2004.

The Metals and Minerals Index made broad-based gains in January, rising 3.4 per cent to 136.6 (1993=100). Precious metals were lifted by U.S. dollar weakness while an improving economic climate stimulated demand and labour disputes pressured supply, igniting base metals prices.

Reflecting tight supplies and robust growth in demand by stainless steel producers in Asia, Nickel prices rose four per cent to US$6.83/lb., leaving the monthly average close to 90 per cent higher than a year ago and at its highest level in more than14 years.  Copper prices climbed 9.3 per cent to US$1.10/lb, 48 per cent higher than a year ago.  Aluminum rose 2.9 per cent to a monthly average of US72.9¢/lb, 17 per cent higher than a year ago.

“The upward trend in metals and mineral prices has been dramatic this year.  While such momentum may be difficult to sustain, market fundamentals – tight supplies and rising global consumption -- should keep prices high in 2004,” said Sweet.

Agricultural prices rose a moderate one per cent in January to 101.9 (1993=100).  The index is now 3.8 per cent above its year-ago level.  Wheat prices remained essentially flat for the month, gaining just 0.2 per cent to US$4.43/bu., while Canola recorded a modest gain of 1.2 per cent to C$371/tonne.

“With supply balances expected to remain tight and demand for the major grains and oilseeds strengthening, prices should be pushed higher over the course of the year,” said Sweet.

BMO Commodity Index for January 2004

Jan. 2004 Level
(1993 = 100)

Per cent change
from month ago

Per cent change
from year ago

All Commodities




Oil & Gas




Metals & Minerals




Forest Products








The full BMO Financial Group Commodity Price Index report for January is available on the BMO website at