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World oil prices decline

Oil prices edged lower on Friday due to concerns of oversupply and a strong dollar but losses were limited by expectations that the Organization of the Petroleum Exporting Countries (OPEC) and Russia would agree some form of production cut next week.

The two benchmarks, North Sea Brent LCOc1 and US crude CLc1, still have had their weakest month in more than 10 years in November, losing more than 20 percent as global supply has outstripped demand.

Front-month Brent futures fell 80 cents, or 1.3 percent, to settle at $58.71 a barrel, ahead of expiry. The more active February Brent crude futures LCOG9 lost 45 cents to settle at $59.46 a barrel. US crude CLc1 dropped 52 cents, or 1 percent, to $50.93 a barrel.

Gold prices fall in New York

Gold fell on Friday as the dollar strengthened ahead of trade talks between the US and Chinese leaders at the G20 summit on Saturday, while palladium prices crossed the $1,200 per ounce mark for the first time.

US President Donald Trump and his Chinese counterpart Xi Jinping will be meeting on the sidelines of the summit in Argentina to discuss the ongoing trade dispute between the world’s two biggest economies.

Spot gold dipped 0.29 percent to $1,220.01 per ounce in New York close on Friday. US gold futures GCv1 settled down 0.33 percent at $1,220.10 an ounce.

Gold prices have been trading between $1,210.65 and $1,230.07 over the past two weeks.

Among other precious metals, palladium inched down 0.24 percent to $1,178.15 per ounce, having soared to a record high earlier in the session above the key $1,200 an ounce level for the first time.

Spot silver fell 1.1 percent to $14.15 per ounce. Platinum slipped 2.75 percent, to $794.50 per ounce, on track for a fourth consecutive weekly decline. The metal fell more than 4 percent in November, after gaining in the previous two months.

China steel prices struggle amid glut, iron ore rises

Chinese steel futures slipped back on Thursday amid abundant supply and lean demand, but steelmaking ingredient iron ore rose as traders say prices for both materials remain under pressure.

A rout in steel prices on Monday sparked a selldown in raw material iron ore as well as coking coal, but the commodities have since regained some ground. The most-traded January rebar on the Shanghai Futures Exchange closed down 0.2 percent at 3,605 yuan ($520) a tonne, after hitting an early high of 3,665 yuan, and slipping after a two-day rise.

Saudis won’t cut oil production on their own

Saudi Arabia is going to do whatever it takes to stabilize the oil market, but it can’t and won’t do it alone without a collective decision from the OPEC and non-OPEC deal participants,

Saudi Energy Minister Khalid al-Falih said on Wednesday. Saudi Arabia and Russia steered the group in June to start pumping more oil to offset what was expected to be a steep drop-off of Iranian oil supply with the U.S. sanctions. But after the United States granted waivers to eight of Iran’s key oil buyers, oil prices began to slide, dragged down by fears of oversupply and of slowing global economy and oil demand growth. Now the Saudis need higher oil prices than the current $60 Brent Crude, but Riyadh’s earlier idea of a sizeable decisive cut to be announced at the OPEC+ meeting next week could be trumped by President Trump’s recent comments about oil prices—”Thank you to Saudi Arabia, but let’s go lower!”—and his support for the Kingdom and its Crown Prince Mohammed bin Salman amid growing calls in the U.S. to punish the Saudis for the murder of Jamal Khashoggi.

 

EU wheat firm with US market, tepid exports curb gains

European wheat futures edged higher on Wednesday, supported by a rebound on the US market and a weaker euro but with mixed export prospects helping keep prices in their recent range.

Benchmark March milling wheat on the Paris-based Euronext exchange was up 0.50 euros, or 0.3 percent, at 202.00 euros ($228.97) a tonne. US. futures rose, led by a bounce in Kansas hard wheat after an eight-month low on Tuesday. A two-week low for the euro below $1.13 also lent support to Euronext, but traders said western European wheat continued to struggle in export markets. Traders said French wheat faced strong competition to supply an optional-origin purchase of around 600,000 tonnes made on Tuesday by Algeria, France’s main wheat export market.

Concerns over a sea incident between Russia and Ukraine last weekend have also eased, with little immediate impact anticipated in grain shipping.

Tight margins slow US milk production

US dairy farmers have taken 43,000 cows out of the national herd since February, reining in milk production growth in a fourth year of sour milk prices. There is “certainly economic hardship at the farm level throughout the country,” Matt Gould, analyst with Dairy Market Analyst, said. Producers he’s visited with in different parts of the country feel downtrodden and beat up after several years of lackluster prices, he said. Some of these farms have struggled to be profitable since 2014, which was a great year for milk prices, he said. Things were setting up to be not so disappointing in 2018. But the tariff wars started in June and took a lot of money out of the dairy farm economy, with estimated losses of $1.5 billion this year, he said. Milk production has slowed bust managed to increase 0.8 percent in October year over year to 17.9 billion pounds, USDA National Agricultural Statistics Service reported on Monday.

There were 30,000 fewer head on US dairies compared with October 2017, but ever-improving production per cow tilted the scale. Twelve of the 23 reporting states — including Wisconsin, the second largest milk-producing state — saw declines in milk production year over year. But heavy hitters California, Idaho and New York were up 3.2 percent, 2.1 percent and 1 percent, respectively. California dairy producers reduced cow numbers by 30,000 year over year but gained 70 pounds in production per cow. Idaho farmers increased cow numbers by 7,000 and picked up 20 pounds per cow. New York saw 3,000 fewer cows but gained 30 pounds per cow.

Vietnam coffee prices edge lower

Domestic coffee prices in Vietnam continued to edge lower this week on rising supplies from an ongoing harvest that was not impacted by tropical storm Usagi that made landfall in the country over the weekend.

A Vietnam coffee association official said last week he was concerned that heavy rain triggered by the storm might disrupt the harvest in the Central Highlands, the country’s largest coffee growing area. Traders, however, said on Thursday that the storm did little harm. Farmers in the Central Highlands sold coffee at 35,200 dong ($1.51) per kg, slightly down from 35,300 dong a week earlier, traders said. Traders in Vietnam offered the 5 percent black and broken grade 2 robusta at a $50-$70 discount per tonne to the January contract, widening from $45-$65 last week.

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