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World oil prices retreats

Oil prices retreated on Friday after strengthening early in the session as US President Donald Trump’s remarks on trade led the dollar to strengthen against other currencies, weakening greenback-denominated commodities including crude.

Trump told Canada and the European Union to do more to bring down their trade surpluses, a day after hitting the two US allies and Mexico with import tariffs on their steel and aluminum.

The president’s comments led the dollar to strengthen and dollar-denominated commodities to sell off, said John Kilduff, a partner at Again Capital Management.

US West Texas Intermediate crude CLc1 fell 48 cents to $66.56 a barrel by 12:03 p.m. For the week, WTI was on track for a 1.9 percent fall, adding to last week’s near 5 percent decline. Global benchmark Brent LCOc1 fell 91 cents to $76.65 per barrel. It was set to rise 0.3 percent for the week. WTI’s discount to Brent WTCLc1-LCOc1 widened to $11.57 a barrel, the largest since 2015, before narrowing to $10.19 a barrel as both grades retreated.

Concerns about growing US crude production and a glut trapped inland due to a lack of pipeline capacity have pushed prices of WTI lower, doubling its discount to Brent over the course of a month.

US crude production has hit record levels since late last year. In March, it jumped 215,000 barrels per day (bpd) to 10.47 million bpd, a new monthly record, the Energy Information Administration said on Thursday. On a weekly basis, it rose to 10.8 million bpd last week, coming close to matching that of top producer Russia, the EIA added.

Gold slightly down in New York

Gold fell on Friday after stronger than forecast US payrolls data boosted expectations that the Federal Reserve will press ahead with another US interest rate hike this month, lifting the dollar.

The metal is highly sensitive to rising rates, which increase the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced.

Spot gold lost 0.2 percent at $1,295.19 by 1:32 p.m. EDT (1732 GMT), earlier peaking above $1,300 an ounce. US gold futures for August delivery settled down $5.40, or 0.4 percent, at $1,299.3 per ounce. Spot gold is poised to close the week about 0.5 percent lower.

“Treasuries are up, the dollar ticked back up and there’s no geopolitical news really supportive of gold at the moment,” said

Philip Streible, senior market strategist at RJO Futures.

The dollar rose against the euro and Treasury yields hit session highs after the payrolls report showed the US economy added 223,000 jobs last month, well ahead of expectations for 188,000 jobs. Wages rose solidly, cementing expectations that the Federal Reserve will raise interest rates this month.

While a worsening global trade situation could benefit gold if it curbs appetite for assets seen as higher risk, it is not yet offsetting the negative impact of an expected increase in rates, and the effects of that on the dollar.

Spot silver increased 0.4 percent at $16.42 an ounce, but headed for a 0.5 percent weekly decline. Platinum gained 0.3 percent at $903.90 an ounce, earlier hitting $1,005.40, a 10-day high and heading for a 0.4 percent weekly rise. Palladium rose 1.9 percent at $1,003.90 per ounce, poised for a 2.3 percent increase on the week.

Indonesia’s palm, palm kernel oil exports drop in April

Indonesia’s shipment of palm oil and palm kernel oil dropped 7 percent to 2.39 million tonnes in April from a year earlier, the Indonesian Palm Oil Association (GAPKI) said last Wednesday.

This is an unusual phenomenon, because usually prior to Ramazan, palm oil demand from India increases, but not in this year, it said in a statement, pointing to higher import duty in India. Year-on-year, January-April exports to India declined 24 percent to 1.8 million tonnes from 2.37 million tonnes in 2017. In January-April, exports to the European Union also declined 16 percent from a year earlier due to a negative campaign and stocks of rapeseed, it said. Indonesia’s palm oil stocks stood at 3.97 million tonnes by the end of April, the group added, compared to 3.65 million tonnes by end-March.

Corn, soybeans sag on renewed US-China trade jitters

US corn futures fell nearly 2 percent on Tuesday, with the front contract dropping below $4 a bushel as US trade tensions with China re-emerged, analysts said. Wheat turned lower after climbing to multi-month highs, and soybeans also slipped.

Chicago Board of Trade July corn was down 7-3/4 cents at $3.98-1/4 per bushel. July wheat was down 8 cents at $5.35 a bushel and July soybeans were down 9-1/2 cents at $10.32 a bushel. Corn tumbled after the United States said it will continue pursuing action on trade with China, days after Washington and Beijing announced a tentative solution to their dispute and suggested that tensions had cooled.

Nickel and zinc rise as Chinese steel prices recover

Rising steel prices in China helped to boost steelmaking ingredients zinc and nickel on Tuesday despite a stronger dollar making metals more expensive for buyers with other currencies.

China is the world’s biggest steel producer and a seasonal recovery in construction activity has driven prices higher, with steel product rebar up 16 percent since late March. Benchmark nickel on the London Metal Exchange closed up 0.9 percent at $14,905 a tonne, taking gains since the start of May to around 10 percent.

Nickel on the Shanghai Futures Exchange hit three-year highs on Tuesday. Technical resistance was at Friday’s high of $15,055 and profit-taking around the $15,000 mark was making it harder for prices to move higher, broker Marex Spectron said. LME zinc ended up 1.3 percent at $3,089 a tonne. The metal has fallen 14 percent from a 10-1/2 year high in February but was threatening to break above its downtrend line on Tuesday, which could trigger technical buying.

 

Arabica coffee futures slip

Arabica coffee futures on ICE slipped on Tuesday, pressured by a weak Brazilian currency against a backdrop of thin demand from roasters and speculators, while raw sugar steadied and New York cocoa fell as chart signals soured. July arabica coffee was down 0.45 cent, or 0.4 percent, at $1.1995 per lb.

Dealers said another drop in the Brazilian real had inspired producer hedging, since the weaker currency improves local returns on dollar-traded commodities. Meanwhile, last week’s speculative buying – partly inspired by the trucker strike in Brazil – had largely petered out, they said.

Speculators reduced a bearish stance on arabica coffee by 3,026 lots to 46,710 lots in the week to May 22. Focus also remained on ample global supplies, ahead of record production in Brazil, while buying interest was still thin, dealers said.

Algeria tenders again to buy wheat for July shipment

Algeria has issued an international tender to buy milling wheat for shipment in July, traders said on Tuesday, suggesting the major grain importer had not fully met its needs in a previous tender covering the same month.

State grains agency OAIC is seeking optional-origin wheat to be shipped on July 1-15, indicating a nominal volume of 50,000 tonnes that is usually exceeded in its actual purchase, traders said. The bidding deadline is on Thursday, May 31, they said. OAIC has already bought milling wheat for July shipment in a tender held in late April, with traders reporting at the time a volume of 420,000 tonnes. But traders now said the purchase was smaller at 360,000 tonnes and with only a third of the volume to be shipped in the first half of July, leaving Algeria lagging its normal wheat import pace. OAIC, one of the world’s biggest grain importers, does not disclose details of its tenders and results reported by traders are estimates. The first half of July could prove an awkward period for French wheat, the main origin bought by Algeria, traders added.

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