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Oil prices mixed on China tariff talk concerns

Oil prices pulled back on Friday on concerns additional U.S. tariffs would be placed on Chinese imports, after an earlier rally triggered by worries that more sanctions on Iran might constrict supply.

Crude futures ended the week up more than 1.6 percent.

Traders said an early rally on Friday was sparked by reports US Secretary of State Michael Pompeo was going to announce new sanctions on Iran.

The gains were curbed though by reports US President Donald Trump instructed aides to proceed with tariffs on about $200 billion more of Chinese products.

Brent crude oil futures pulled back on the reports of additional tariffs, dropping 9 cents a barrel to settle at $78.09. The global benchmark fell 2.0 percent on Thursday after rising on Wednesday to its highest since May 22 at $80.13.

US West Texas Intermediate (WTI) futures settled up 40 cents at $68.99 a barrel after dropping 2.5 percent on Thursday.

After a volatile week, Brent was set for a 1.6 percent weekly rise and WTI 1.8 percent.

Brent reached a session high of $78.94 a barrel, as speculators attempted to push the price above the $79.00 level. Brent crude futures have reached a high around $80.00 a barrel three times this year before pulling back.

Gold falls as dollar strengthens from tariff spat

Gold turned negative on Friday, as the U.S. dollar rose against the Chinese yuan after US President Donald Trump reportedly told aides to proceed with tariffs on Chinese imports.

Trump has directed aides to place tariffs on about $200 billion of Chinese goods, according to a person familiar with the matter. Bloomberg News first reported Trump’s action.

Spot gold lost 0.5 percent at $1,195.21 per ounce by 1:35 p.m. EDT (1735 GMT), having hit its highest since Aug. 28 at $1,212.65 on Thursday. It has risen more than 0.1 percent so far this week, on track for its first weekly gain in three.

US gold futures for December delivery settled down $7.10, or 0.6 percent, at $1,201.10 per ounce.

The months-long trade tension between Washington and Beijing has prompted investors to buy the US dollar, in the belief that the United States has less to lose from the dispute.

Gold has shown a close correlation to the currency of China, the biggest gold consuming nation, analysts say.

Meanwhile, investors widely expect another US interest rate increase. Higher rates make gold less attractive since it does not pay interest but costs money to store and insure.

Gold prices have declined about 12 percent from a peak of $1,365.23 in April amid the intensifying global trade tensions and rising US interest rates.

USDA raises US corn, soybean harvest outlook

The US Agriculture Department on Wednesday issued a surprise increase to its corn harvest forecast due to an outlook for record yields in key production areas such as Illinois, Iowa, Nebraska and Indiana. The government also raised it outlook for soybean production and yields to record levels.

In its monthly supply and demand report, USDA pegged the 2018/19 corn harvest at 14.827 billion bushels, based on an average yield of 181.3 bushels per acre. Soybean production was seen at 4.693 billion bushels, based on average yields of 52.8 bushels per acre. Chicago Board of Trade corn futures dropped 3.2 percent to their lowest in nearly two months after the report was released while soybeans turned higher.

 

Brazil, Australia to fight any Indian sugar export subsidy

Brazilian and Australian sugar industry groups have joined forces and are working together with their respective governments to prepare a formal complaint to the World Trade Organization (WTO) over any possible sugar export subsidy by India, a top Brazilian sugar official told.

Raw sugar prices in New York recovered slightly in the last days since slumping to a 10-year low of 9.91 cents on Aug. 22 as a two-year global supply surplus and massive fund short position pressured values. There was no immediate comment from the Indian trade ministry. Indian officials have earlier said the country’s sugar exports do not violate WTO rules as New Delhi does not give any subsidy for overseas sales. India rather gives production subsidy to its cane growers.

EU wheat ends lower as USDA hikes US corn, Russian wheat outlook

European wheat futures closed lower on Wednesday after a widely followed US government crop report raised projections for US corn and Russian wheat harvests.

December milling wheat on the Paris-based Euronext settled 1.75 euros, or 0.9 percent, lower at 198.75 euros ($231.07) a tonne. It rose earlier to its highest in more than a week at 204.50 euros, buoyed by gains in Chicago, before turning lower after the US Department of Agriculture’s (USDA) monthly report.

The USDA surprised traders with a steep increase to its projection for this year’s US corn harvest yield to a new record. It also raised its forecast of global wheat stocks, partly due to a 3 million tonne rise to estimated Russian production. Very strong Russian exports at the start of the 2018/19 July-June marketing year have fuelled speculation that a supply crunch is developing, and Russian wheat again dominated a tender held by Egypt on Wednesday. The major importer booked 235,000 tonnes of Russian wheat. Traders were awaiting results of a tender by Algeria, which should bring fresh sales for French wheat.

European palm oil eases on bearish MPOB stocks report

Palm oil on the European vegetable oils market eased on Wednesday following bearish Malaysian Palm Oil Board (MPOB) data for August. Lower CBOT soyoil also weighed.

The MPOB report showed a 12.4 percent increase from the month before in Malaysian palm oil ending stocks to 2.49 million tonnes. Asking prices for palm oil were between $2.50 and $7.50 a tonne down from Tuesday after Malaysian palm oil futures, back from a four-day break, closed between 24 and 35 ringgit per tonne lower on the back of the MPOB report. At 1600 GMT, CBOT soyoil futures were between 0.20 and 0.34 cents per lb lower on positioning ahead of fresh USDA supply/demand and crop reports, which were issued around that time. EU rapeoil was offered between six and eight euros per tonne lower, also in anticipation of bearish USDA data and because of a weaker dollar, which weighs on euro-priced products. Lauric oils were mostly offered between $5 and $25 a tonne down from Tuesday, with many Malaysian players returned from the long weekend, mostly tracking weaker palm oil and because sellers were lowering prices to attract buyers.

ICE canola futures slip on pressure from strong dollar

ICE canola futures dipped on Wednesday for a second straight day, pressured by a stronger Canadian dollar. November canola shed $1.90 at $491.70 per tonne.

Traders shrugged at forecasts for snow in parts of Western Canada, as the remaining crop is well advanced, a trader said. The US Department of Agriculture on Wednesday issued a surprise increase to its corn harvest forecast because of expectations of record yields in key areas, and also pegged soybean yields at an all-time high. The November-January canola spread traded 1,947 times. Chicago November soybeans rose, rebounding from a contract low. November Paris Matif rapeseed futures and Malaysian November palm oil slipped. The Canadian dollar was trading at $1.2998 to the US dollar, or 76.93 US cents at 1:18 p.m. CDT (1818 GMT).

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