Oil Prices Tumble, Jp Morgan Cuts Price Forecast
Oil prices fell on Friday as concerns about surging US output and falling demand in China weighed on the contract and JP Morgan cut its price forecast.
Brent crude futures LCOc1 settled down 86 cents, or 1.1 percent, at $76.46 a barrel. US West Texas Intermediate (WTI) crude futures CLc1 ended 21 cents lower at $65.74 a barrel. For the week, Brent fell 0.5 percent, while US crude slipped 0.3 percent.
In the past three weeks, prices have declined from three-year highs as the market has contended with supply concerns. On Friday, oil prices came under pressure after data suggested Chinese demand was waning and concerns lingered about growing US output.
JP Morgan cut its 2018 crude forecast for WTI by $3 to $62.20 a barrel. The bank said geopolitical tensions and lingering risks of supply disruptions may push prices higher during the second half 2018, it expects prices will head lower late in the year, and remain capped in 2019.
Wheat Climbs On Global Weather Woes; Corn, Soy Decline
US wheat futures climbed nearly 2 percent on Wednesday on a mix of technical buying and worries about persistent dry weather in major exporting countries including Russia and Australia.
Corn and soybeans sagged as weather in the US crop belt remained mostly favorable.
Chicago Board of Trade July wheat settled up 9-3/4 cents at $5.19-3/4 per bushel after climbing to $5.31-1/4, its highest in nearly a week.
CBOT July corn ended down 5-1/2 cents at $3.78-1/4 after touching $3.78, its lowest since March 23. July soybeans fell 7 cents at $9.94-1/4 a bushel, ending below psychological support at $10.
Wheat advanced for a second session as the trade focused on global weather concerns, especially in the Black Sea region.
Copper hit a 3-1/2 month high on Wednesday as the dollar fell sharply, concerns lingered over possible supply disruptions in Chile and buying momentum picked up after the metal broke key technical levels.
Nickel and zinc hit their highest in more than a month, tracking the ferrous complex higher after a blast at an iron ore mine in China and amid falling inventories.
Copper has risen nearly 4 percent this week after the union at BHP’s Escondida mine in Chile, the world’s largest, said on Friday it had started the latest round of wage negotiations.
Failure to reach a deal last year led to a strike that resulted in a near 8 percent drop in annual output.
Palm Extends Losses To Near One-Month Low
Malaysian palm oil futures extended losses on Wednesday, hitting their lowest in nearly a month, as weak exports and waning demand during the otherwise high-consumption period of Ramadan.
The palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange was down 0.37 percent at 2,393 ringgit ($602.47) a tonne by the close.
The benchmark contract edged slightly higher during the midday break, largely because of higher soybean prices in Chicago and India’s plans to raise the import tax on soft oils.
Bangladesh May Bring Back 28pc Tax On Rice Imports
Bangladesh may impose a 28 percent import tax on rice to support local farmers as production from the summer-sown crop is set to surpass the target, two government officials said on Wednesday.
The duty hike would reduce imports, especially from neighbouring India, which emerged as a biggest supplier to the south Asian country last year after floods ravaged its crop.
Bangladesh cut an import duty of 28 percent in two phases in 2017 to 2 percent after domestic prices of the staple grain climbed to a record high.
Bangladesh’s rice output from the summer crop is likely to hit 19.7 million tonnes against the target of 19 million tonnes, Mohammad Mohsin, director general of Department of Agriculture Extension, told Reuters last month.
The country’s production for 2018/19 as a whole is expected to recover to 34.7 million tonnes, up 6.3 percent year-on-year, according to estimates from the US Department of Agriculture attache in Bangladesh.
Rusal’s May Aluminium Exports Up Threefold
United Company Rusal, the world’s second biggest aluminium producer, in May increased aluminium exports to 197,000 tonnes, up almost threefold from April, Interfax news agency reported.
Citing Russian Railways data, Interfax said January-May aluminium exports totalled 972,000 tonnes, down 16 percent on a year earlier.
Last year, Rusal, where Oleg Deripaska’s En+ is a controlling shareholder, exported 3.95 million tonnes of aluminium, of which 42 percent was shipped to Europe.
NY Coffee May Drop More To $1.2040
New York July coffee may drop more to $1.2040 per lb, as it has broken a support at $1.2170.
The support was provided by the 50 percent projection level of an upward wave c from $1.1635. This wave looks like a part of a wedge that developed from the April 17 low of $1.1530. The pattern suggests a target around $1.1790 which is too far away to be realistic.
A more realistic target could be $1.2040, a break below which could open the way towards $1.1885. A break above $1.2170, now a resistance, could lead to a gain to $1.2295.
China Iron Ore Futures Rise On Mine Closures
China’s Dalian iron ore futures rose on Tuesday on concerns of tight supplies after a report said Tangshan city plans to shut hundreds of mining companies, while mounting stockpiles at ports limited gains.
Tangshan, the country’s No.1 steelmaking city in Hebei province, said it will close 226 mining firms – half iron ore miners – that do not have legitimate licenses as part of efforts to curb illegal mining and cut pollution.
The central government, meanwhile, has sent teams of inspectors to 10 regions to check rectification measures after previous probes uncovered thousands of environmental violations. Some regions have promised to beef up anti-pollution curbs.
The most-traded iron ore, for September delivery, on the Dalian Commodity Exchange closed 1.7 percent higher at 467 yuan ($72.90) a tonne.
Stockpiles of imported iron ore at Chinese ports continued to rise last week as of June 1, adding 1.4 million tonnes to 161.98 million tonnes, the most since at least 2011, data compiled by SteelHome showed.
The most-traded construction steel rebar futures on the Shanghai Futures Exchange recovered during afternoon trading, gaining 0.1 percent to 3,736 yuan, after some losses in the morning.