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OIL RATES STUMBLE AFTER STRONG JUMP IN US CRUDE STOCKS

Crude prices slipped Thursday after data showed a stronger-than-expected increase in US crude and distillate fuel stocks at a time when oil exports out of the Middle East are surging.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in February CLH7, +0.36 percent traded at $52.16 a barrel, down 9 cents in the Globex electronic session. March Brent crude LCOH7, +0.60 percent on London’s ICE Futures exchange was flat at $55.10 a barrel.

For the week ended January 6, U.S. domestic crude stockpiles rose by 4.1 million barrels to 483.11 million barrels, a much larger growth than forecast by most analysts.

GOLD CLOSES HIGHER, HITS 6-WEEK HIGH

Gold prices ended the US day session with good gains and hit a six-week high on Wednesday. The precious metal became a bit volatile during President-Elect Donald Trump’s press conference, mainly because the US stock and bond markets became very jittery.

Trump said drug pricing in the US is “a disaster” and also made disparaging remarks about China. The US dollar index also backed way off its daily high to trade sharply lower in early afternoon trading, which also supported the precious metals market bulls. February Comex gold was last up $7.60 an ounce at $1,193.10. March Comex silver was last down $0.018 at $16.83 an ounce.

GLOBAL SUGAR PRODUCTION WILL RISE

World sugar production is projected to grow by 2.1 percent per annum to reach 210 metric tons (Mt) by 2025, up nearly 39 Mt, 19 per cent above the average for the base period.

Higher increases are expected to occur in developing countries with 79 percent of global sugar production in 2025 compared to 77 percent during the base period. In the developing world, the leading regions are Asia and Pacific and Latin America and the Caribbean, which are expected to account for 40 percent and 33 percent of global sugar production in 2025 respectively, up from 38 percent and 34 percent during the base period.

URANIUM HAS LIKELY GLOWING FUTURE

No major commodity had a worse 2016 than uranium. In fact, the element used to make nuclear fuel has had a pretty dismal decade.

Prices tumbled 41 percent last year, touching a 12-year low below $18 (US) a pound in November.

The slump was the seventh in nine years. The rise of nuclear power has slowed as utilities shifted to cheaper natural gas for new generators. And after the 2011 Fukushima disaster, safety concerns led big uranium buyers including Japan and Germany to shut down or decommission reactors.

WORLDWIDE MILK PRODUCTION DOWNTURN BODES WELL

The global downturn in milk production bodes well for New Zealand’s dairy farmers for much of 2017 and is increasing the likelihood of a boost in estimated payouts.

Between the key whole milk powder prices rising 45 percent during the past six months and six of the seven major dairy-producing countries reporting production declines, Rabobank’s dairy quarterly report paints a reasonably positive outlook for 2017.

However, recovery may become the catchphrase of the current season, as opposed to outright profitability, and the US currency may yet have a major impact, and on various markets.

ALL-TIME RECORD TEA RATES GALORE

Abbotsleigh estate, situated in the Hatton region and selling under the garden mark Florence, has achieved an all-time record price of Rs550 on two invoices of BP1 in the CTC high category at the weekly tea auction held on January 10, 2017.

These lines were purchased by George Steuarts Teas (Pvt) Ltd and Heritage Teas (Pvt) Ltd. Abbotsleigh estate is managed by Watawala Plantations PLC and the sale was conducted by tea broker John Keells PLC.

In another report, Delta Estate during ex-estate tea auction held on January 10, 2017 has recorded an all-time record price of Rs.540 for two invoices of BP1 in the CTC medium category.

 

CHINA STEEL OUTPUT CUT WON’T HIT RATES IN INDIA

What may have seemed to be a positive for steel stocks, China deciding to stop production of low quality steel using medium frequency induction furnaces is not going to have any impact on steel prices in India.

The low quality steel produced from the soon to be shut medium frequency furnaces, is not exported out of China. This isn’t anything new and the capacity cutting is in line with its target of cutting capacity of 150 million tones.

RISE IN WHEAT RATE GERMINATING

Wheat is the weed that feeds. The grain-yielding grass is such a hardy plant that it is grown on more land than any other crop in the world.

After four straight seasons of record harvests, bins are bulging from Kansas to Western Australia and prices are near the lowest in a decade. But there are signs the glut may not last much longer, or at least that supplies may tighten enough to halt the four-year slump in wheat futures. Farmers are planting less because many are losing money. At the same time, global consumption is at an all-time high. And the risk of crop-damaging weather lingers over key exporting countries this year.

LNG IN EUROPE

Gas is a key source of energy supply to Europe, and plays a fundamental role in Europe’s energy supply mix. Europe is a net importer of gas, which enters Europe in one of two ways: as natural gas which is transported via pipeline, or as liquefied natural gas (LNG) which is regasified in an LNG import (or regasification) terminal.

In 2015 Europe regained its position as a viable and commercial market for global LNG. Following five years of decline in LNG imports to Europe between 2009 and 2014, Europe’s net imports of LNG increased by 15.8 percent in 2015 to 37.6 million tones – slightly above their level in 2005.

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