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OIL PULLS BACK AS TRADERS EYE CUSHING BUILD, U.S. CRUDE SUPPLY

Oil futures fell on Wednesday, pulling back after eight straight sessions of gains after US crude inventory data suggested the market was still heavily supplied.

Traders focused on preliminary US production estimates in the weekly EIA report that suggested domestic output is still climbing. The report also showed stockpiles at the US crude hub at Cushing, Oklahoma, rose 276,000 barrels in the week.

Brent crude futures settled down 37 cents to US$55.86 a barrel after hitting a one-month high of US$56.65. US West Texas Intermediate crude futures were down 29 cents and settled at US$53.11 a barrel after touching the highest since March 7 at US$53.76.

GOLD ENDS AT HIGHEST LEVEL SINCE EARLY NOV

Gold prices added to recent gains on Wednesday, ending the session at levels last seen in early November, as geopolitical tensions persisted — boosting demand for investments considered less risky.

June gold GCM7, +0.70 percent rose $3.90, or 0.3 percent, to settle at $1,278.10 an ounce, with prices marking their highest finish since Nov. 7. Prices also closed above the metal’s 200-day moving average of $1,260.49 on Tuesday, pointing to an updraft developing in the precious commodity.

ZIMBABWE’S MILK PRODUCTION TO GO UP

Zimbabwe’s raw milk production is likely to go up by 15 percent in 2017 on the back of an anticipated bumper harvest. It is said that milk production is likely to improve in 2017 on the back of an improved agricultural season. In 2017, experts are anticipating a 15 percent increase in raw milk production from last year’s figure of 65 million litres. However, cost of production is our biggest challenge compared to other countries like Zambia and South Africa.

Experts said in February 2017 milk production dropped 12.7 percent to 4,4 million litres compared to 5,03 million litres achieved during the same period last year. In January, milk production grew to 5,53 million litres compared to 5,51 million litres last year. Milk production in 2016 reached 65,36 million litres, which was a 13,5 percent growth from prior year’s 57,54 million litres.

EIA INCREASES Q2 SPOT GAS PRICE FORECAST

The US Energy Information Administration raised its forecast for second-quarter spot natural gas prices and said prices for 2017 and 2018 would likely be further buoyed by added exports and rising consumption.

While gas production levels are expected to be higher, on average, this year for the first time since 2005 after declining last year, the EIA in its April Short-Term Energy Outlook nonetheless scaled back its production estimates from the prior-month’s report.

The outlook released Tuesday raised the Q2 Henry Hub natural gas spot price forecast to $3.04/MMBtu, 15 cents above the agency’s estimate a month earlier. Prices picked up in March, averaging $2.88/MMBtu, the agency said, as temperatures returned closer to seasonal norms after significantly warmer-than-normal weather in February.

CHINA MARCH SOYBEAN IMPORTS IN RECORD INCREASE

China, the world’s largest soybean buyer, imported 6.33 million tonnes of the beans in March, a record for the month, as supplies from presale orders landed.

March imports were up 3.8 percent from 6.1 million tonnes in the same month a year ago and were 14.3 percent higher than February’s 5.54 million tonnes. Soybean imports are expected to climb even higher in the coming months, reaching over 8 million tonnes. Pressure on supplies will start kicking in around April.

 

COCOA FUTURES SLIPS, ARABICA COFFEE CLIMB

Cocoa futures weakened on Wednesday as a decline in demand for chocolate confectionary hurt sentiment, while firmer technicals helped boost arabica coffee.

July London slipped 23 pounds, or 1.43 percent, to 1,580 pounds a tone by 1416 GMT, while July New York cocoa fell $28, or 1.41 percent, to $1,960 a tone. Both markets made gains on Tuesday in a moderate recovery after prices hit four-week lows recently.

European first-quarter grind data showed an increase of 1.1 percent from the same period last year to 339,485 tones, although Germany’s grind fell 7.7 percent. It’s coming so close to expectations that the figure is not going to be market moving. However, sentiment was dampened by data, released in Barry Callebaut’s results, showing the global chocolate confectionary market shrunk by 2.1 percent in the six months to February.

EU AWARDS 1,900 TONNES WHEAT IMPORTS UNDER QUOTAS

The European Union has this week awarded about 1,900 tonnes of wheat imports, mostly from Ukraine, under preferential-tariff quotas.

The EU granted 1,741 tones of Ukrainian wheat imports under an annual duty-free quota, along with 157 tonnes of wheat imports under reduced-tariff quotas open to various origins. The European Commission usually issues its grain export and import data on Thursdays but brought forward this week’s publication due to the Easter holiday.

BRAZIL CENTER-SOUTH SUGAR OUTPUT RISES

Brazil’s center-south sugar output jumped to 270,000 tonnes in the second half of March from 73,000 tonnes in the previous fortnight as more mills started crushing in the world’s largest cane producing region, industry group Unica said on Wednesday.

Center-south mills crushed 7.96 million tonnes of cane late in March compared with 3.26 million tonnes in the first half of the month. Ethanol production reached 327 million liters in the period versus 161 million liters early in March. Unica said 83 mills out of around 300 in the region were operating at the end of March from around 50 earlier in the month. It expects some 180 mills to be crushing early in April.

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