Scotiabank predicted Monday that commodity prices will continue to trade close to current levels for the summer before heading higher after September.

The bank's Commodity Price Index soared by 6.1 per cent between March and April to a level just 13.4 per cent below its record high in July 2008. But that level likely corrected sharply in May, the bank said.

The index reached 233.6 in April. With a base of 100 in 1997, that means commodity prices are 2.3 times higher than 14 years ago.

Scotiabank economist Patricia Mohr predicted that traders will remain reluctant to watch copper — the bellwether for base metals — fall below the $4 US per pound mark, given the likelihood of a shortfall in supply likely recurring by late 2011. It currently trades at about $4.15.

Mohr said there have been market jitters for some time about the impact of high food and energy prices on consumer spending. In addition, there's been a mild slowdown in China's growth.

Oil to average $100 US

Mohr said China has been affected by an earthquake-related shortage of auto parts from Japan and the impact of drought on hydroelectric power generation.

Oil prices, she predicted, should average $100 US in 2011and remain high at $103 in 2012 because worldwide supply and demand remains firm.

Mohr suggested that agricultural commodities may be one of the best performing sectors over the rest of this year amid dry conditions in the U.S. Southern Plains, which threaten the winter wheat crop, and flooding in Manitoba and wet weather in eastern Saskatchewan which have also delayed planting. She expected that will lead to strong demand for fertilizers and agricultural equipment.

With feed grain prices expected to remain high, she predicted only limited herd rebuilding in the United States and Canada in the coming year and continued strong cattle and hog prices.