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World oil prices mixed

Oil was mixed on Friday, with short-covering pushing up US crude futures while Brent slipped on global trade tensions and increased Saudi production.

West Texas Intermediate crude futures CLc1 gained 61 cents to $73.55 by 11:30 a.m. (1530 GMT). Global benchmark Brent LCOc1 was down 39 cents at $77 a barrel. For the week, WTI was on track for a loss of about 0.4 percent while Brent was down about 3 percent.

“We have a little bit of a rally that’s materialized” for WTI, said Bob Yawger of director of energy futures at Mizuho in New York. The rally appears to be a “short covering situation – we were down almost 2 percent yesterday,” said Yawger.

US crude futures slipped on Thursday after data showed an unexpected 1.3 million-barrel build in crude inventories.
Brent, meanwhile, was “still having difficulty gaining independent bullish traction,” said Jim Ritterbusch, president of Ritterbusch and Associates in a note.

“Increased Saudi crude availability that is being enhanced by reduced OSPs (official selling prices) into Europe and other regions is providing a strong counter against curtailed Libyan export activities,” Ritterbusch wrote.

In addition to reducing the price of its August barrels, Saudi Arabia also told the Organization of the Petroleum Exporting Countries (OPEC) that it increased production by almost 500,000 barrels per day last month.

Output cuts by OPEC and allies since January 2017 have reduced a crude glut.

Involuntary drops in supply in Venezuela, Angola and Libya have made the cutbacks even bigger, although OPEC – led by Saudi Arabia – has since agreed to a modest increase in output.

“The more that Saudi Arabia adds to the market, the less of a supply cushion we have – that’s a bullish twist to a bearish development,” said Yawger at Mizuho.

An imminent shift in global oil trade flows was also affecting prices.

US tariffs on $34 billion in Chinese imports took effect as a deadline passed on Friday and Beijing has vowed to respond in kind.

China has indicated that it could place a tariff of 25 percent on US oil. If that happens, “Chinese demand would then shift to other suppliers. Because the oil market is already in tight supply due to the numerous outages, this would drive international prices (Brent) further up,” Commerzbank said in a note.

Palm oil edges lower on weaker futures

Palm oil on the European vegetable oils market edged lower on Wednesday, tracking easier Malaysian palm oil futures, which were pressured by weakness in related edible oils.

Asking prices for palm oil were between $2.50 and $7.50 a tonne lower, a stronger dollar also weighed on dollar-priced products. Malaysian palm oil futures closed between 13 and 20 ringgit per tonne down. CBOT markets were closed on Wednesday for the US Independence Day holiday.


Paris wheat at 3-week high

Euronext wheat futures extended gains on Wednesday to a three-week high as concern that adverse weather will reduce harvest yields and quality in France and elsewhere in Europe remained the centre of attention.

December milling wheat, the most active position on Paris-based Euronext, settled 1.00 euro, or 0.5 percent, higher at 186.50 euros ($217.46) a tonne. It earlier rose to 187.00 euros, its highest since June 13.

Egypt’s cotton exports up nearly 37pc

Egyptian cotton production is on course to rebound with help from a devalued currency and bigger cultivation area, recovering from a slide in exports of the world-famous crop since 2011 that was caused by a drop in quality.

Cotton exports are expected to reach about 52,000 tonnes in the 2017/2018 season that ends in August, up nearly 37 percent from the previous year, Nabil al-Santaricy, head of the Alexandria Cotton Exporters Association told. Output fell drastically in 2011, when political upheaval meant regulations to maintain quality was not enforced. Egypt planted 336,000 feddans (141,120 hectares) of long-staple cotton in 2018, up from 220,000 feddans (92,400 hectares) in 2017, the ministry spokesman said this week.

White sugar ends higher

White sugar futures were higher on Wednesday, underpinned by short-term tightness in deliverable supplies, while robusta coffee and London cocoa were little changed. Raw sugar, arabica coffee and New York cocoa markets were shut on Wednesday for US Independence Day.

Gold, silver prices rebound from multi-month lows

Gold and silver prices are moderately higher in early US trading Tuesday, on some short covering in the futures markets and perceived bargain-basement buying in the cash markets.

Gold hit a 12-month low overnight and silver scored a 6.5-month low on Monday. The key “outside markets” are also in a bullish daily posture for the precious metals markets today, as the US dollar index is lower and crude oil prices are higher. August gold futures were last up $7.10 an ounce at $1,248.80.

July Comex silver was last up $0.14 at $15.975 an ounce. Reports overnight said Monday’s trading in gold exchange traded funds saw the largest outflow of money from those funds since late March. Gold and silver bulls remain stymied by their metals’ inability to rally in the face of the threat of a global trade war and some fresh instability in the European Union.

Colombia coffee output up 3.6pc

Colombia produced just over 1 million 60-kg bags of washed arabica coffee in June, up 3.6 percent from the same month a year earlier, the National Coffee Growers’ Federation said on Wednesday. Current international coffee prices are an embarrassment, the head of the federation said late last month, as growers struggle to make a living off the crop. Exports for June fell 4.3 percent to 906,000 bags. The Andean country produced 14.2 million bags in 2017.

Fonterra’s NZ milk production up 6pc

Milk producer Fonterra said on Tuesday that its total New Zealand milk production increased 6 percent in May, helped by favorable autumn weather conditions. Australian milk production rose 4 percent in April, the company said in a statement. Global dairy prices have been undercut by increased production, and fell during a fortnightly auction last month as stronger supply muted what buyers were willing to pay for key products.


A further fall is likely in the next fortnightly auction, due later in the day.

Fonterra, one of the world’s largest milk exporters, said its New Zealand dairy exports rose 10 percent in April, while its Australian dairy exports were up 16 percent. Shares of the cooperative group were down about 1.1 percent, as against an over 1percent gain in the New Zealand benchmark. Global dairy prices fell for the second time in a row at its most recent fortnightly auction held as stronger supply muted what buyers were willing to pay for key products.

Chile on alert after copper price falls

The world’s largest copper producer, Chile, said it was concerned Wednesday as copper fell to a nine-month low ahead of the first shots of a US-China trade war this week.

Copper fell to $2.929 a pound, its lowest price since October last year when it dropped to $2.927.

The US is due on Friday to begin enforcing tariffs on more than $30 billion (25.8 billion euros) in Chinese imports as retribution for what Washington describes as Beijing’s theft of US technology and other unfair trade practices.

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