Palladium prices fell on Monday on track for hefty monthly losses. 

Palladium gave up $2000 then $1,900 as the dollar spiked against a basket of major rivals, pressuring metals and commodities. 

Palladium and other industrial metals were also pressured by global recession forecasts as central banks continue to aggressive tighten monetary policies to control inflation.

Markets are also concerned about a return to very strict Covid 19 rules in China amid new waves of infections. 

The dollar index rose 0.6% to 111.4 as of 13:45 GMT, with a session-high at 111.4, and a low at 110.6.

Palladium futures due in December tumbled 4.1% to $1,819 an ounce as of 13:45 GMT, heading for a monthly loss of 11.5%. 

Oil prices fell over 2% in European trade for the second straight session away from two-week highs on profit-taking amid concerns about demand from China, the world's largest fuel importer. 

Prices are also pressured by a stronger dollar against a basket of major rivals ahead of the Fed's policy meeting this week, expected to conclude with a 0.75% rate hike for the fourth time in a row. 

Oil Prices

US crude fell 2.4% to $86.19 a barrel, while Brent dropped over 2.1% to $92.19 a barrel, with a session-high at $94.30.

US crude lost 0.4% on Friday, while Brent gave up 0.5%, the first such loss in four days on active profit-taking from recent two-week highs.

Chinese Demand

An official survey showed factory activity in China fell unexpectedly in October, as global demand wanes, and amid strict ongoing Covid 19 restrictions that harmed Chinese production.

Local Chinese authorities continue their eternal crackdown and restrictions on movement and trade as Covid 19 continues to spread in successive waves, hurting fuel demand.

Natural such restrictions are harming the economic and trade position of China, with the country's crude imports falling 4.3% in the first three quarters of the year, the first such decline in this period since 2014.

The Dollar

The dollar index rose over 0.5% today for the third straight session against a basket of major rivals. 

A stronger dollar naturally pressures dollar-denominated commodity futures as they become costlier to holders of other currencies.

Dollar's gains came as US 10-year treasury yields surged following US consumer spending data on Friday, which showed continued inflationary pressures. 

The Federal Reserve is convening its periodic policy meeting tomorrow, expected to issue more clues about futures steps, with many major financial institutions expecting a final interest rate of 5% by the end of the first quarter in 2023.

Wheat prices rallied on Monday as Russia suspended the deal that allows Ukrainian export of grains through the Black Sea.

Corn and soybean prices rose as well due to the developments, which will hurt availability and will impose increased costs.

Global Grain Prices

Wheat prices at the Chicago Exchange rose 8% to $8.9325 a bushel, a three-week high, while yellow corn prices rose 2.85%, as Soybean prices rose 2.25%, and soybean oil rose 3%.

Russian Decision

Russia announced on Saturday the suspension of the Ukrainian grains export deal through the Black Sea, accusing Ukrainian aeroplanes of attacking the Russian fleet in the Crimean Peninsula.

Both Russia and Ukraine signed a deal on July 22 with support from the UN to reopen Ukrainian ports on the Black Sea for grains export in an attempt to alleviate the global shortages.

However Russia officially told the UN the deal is suspended "indefinitely", and it won't guarantee the safety of civil ships going through the Black Sea under such a deal.

A Worsening Crisis

No doubt, the decision will cause yet another spike in food prices and shortages worldwide, given in mind that since the deal was signed in July, over 9 million tones of wheat, corn, barley, soybeans and other agricultural products were exported from Ukraine. 

Western Condemnation 

US President and other western figures condemned the Russian decision and its impact on food safety for many countries. 

As for prices, analysts expect further volatility in the global grains market until more news come out of the Black Sea.

Europe's consumer prices rallied 10.7% in October, the highest ever on record, above 9.9% in September, and above estimates of 9.9%. 

Core prices, excluding food and energy, rose 5% this month, above estimates of 4.8%, and up from 4.8% last month.