There are many factors that affect futures prices. For example, after the supply-side structural reform of 20 16, the price of black futures such as rebar rose sharply, which was actually caused by the shrinkage of the supply side, rather than the incremental impact of the demand side.
Futures prices are often more closely related to the supply and demand sides and have expectations.
However, economic recovery is often accompanied by moderate inflation rate, which shows that supply and demand are booming, especially industrial products, PPI will rebound, and people will raise the price of futures contracts based on the expectation of future economic recovery. For agricultural products in futures contracts, the close relationship between price and supply is more than that of industrial products, and agricultural products are more dependent on supply, such as output, sowing area and inventory. However, it is not closely related to the expected economic recovery.
So we need to be clear about logical causality.
However, is it possible that there is another situation, that is, commodity prices are rising, but the economy is declining? This situation also exists, that is, "stagflation". When stagflation occurs, commodity prices may be understood as the recent rise in futures prices, but the real GDP is stagnant or shows signs of recession. This economic phenomenon may also occur. The actual reason can be simply understood as the continuous price increase of means of production and output commodities, including labor, while the demand side is unable to effectively or has been unable to digest high-output products, resulting in some enterprises with high debts and high production costs unable to operate, rising unemployment rate and declining purchasing power, forming a vicious circle and accelerating the exposure of the demand side.
Therefore, on the whole, the surge in futures market prices is not necessarily the performance of economic recovery, but may also occur when the economy is stagnant or declining.
The expectation of economic recovery will generally promote the rise of futures prices, especially industrial products, but the increase depends on the specific performance of both ends of supply and demand.