World oil falls but ends week higher
Oil prices fell nearly 2 percent on Friday as investors worried about a global economic slowdown, snapping a nine-day winning streak spurred by US-China trade hopes, but clung to some gains from that rally to end the week higher.
Brent crude futures LCOc1 dropped $1.2 to settle at $60.48 a barrel, a 1.95 percent loss. US West Texas Intermediate (WTI) crude futures CLc1 were down $1 to settle at $51.59 a barrel, or 1.9 percent. Still, both benchmarks saw their second week of gains, with Brent rising about 6 percent and WTI up about 7.6 percent.
The global crude benchmark on Thursday posted its first consecutive nine-day rally since September 2007. WTI, which also hit its ninth straight day of gains, beat a 2010 record.
On the supply side, oil markets have received support from supply cuts by the Organization of the Petroleum Exporting Countries and non-OPEC members including Russia. The deal is aimed at shrinking a glut that emerged in the second half of 2018.
Rising expectations that an all-out trade war between Washington and Beijing might be averted supported markets earlier in the week. Three days of talks between the two economic superpowers concluded on Wednesday with no concrete announcements, but higher-level discussions may convene later this month.
Gold moves higher in NY trade
Gold edged higher on Friday and was on track for its fourth successive weekly gain, as US stocks slipped and expectations rose that the US Federal Reserve might halt its monetary policy tightening cycle.
Spot gold was up 0.2 percent at $1,288.47 an ounce in New York trade. US gold futures settled 0.2 percent higher at $1,289.5.
Data on Friday showed US consumer prices fell for the first time in nine months in December, which likely supports recent remarks by several policymakers, including Powell, for caution about raising interest rates this year.
Gold tends to gain on expectations of lower interest rates, as they reduce the opportunity cost of holding non-yielding bullion.
Among other precious metals, palladium was down 0.2 percent at $1,319.50 an ounce, and was up about 1.4 percent for the week. Platinum slipped 0.7 percent to $814.10 and ounce and was down over 1 percent for the week. Silver gained 0.3 percent to $15.61 an ounce.
New York raw sugar falls oil and Brazilian real weaken
Raw sugar futures on ICE fell on Thursday, pulling away from a multi-week peak set a day earlier as prices tracked energy markets lower, while the weaker Brazilian currency weighed on both sugar and arabica prices. March raw sugar settled down 0.2 cent, or 1.6 percent, at 12.67 cents per lb. It was the contract’s first negative finish in five sessions, coming a day after prices hit a five-week peak of 12.94 cents. Prices were pressured by weaker oil prices, dealers said. Weaker oil prices undermine the competitiveness of ethanol in top grower Brazil, stoking fears that mills will switch more of their output back to sugar from the biofuel. Prices were also weighed down by a weaker currency in Brazil, a top grower. A weaker currency can encourage producer selling by increasing local returns on dollar-traded commodities such as sugar and coffee. India is likely to export 2.5 million to 3.5 million tonnes of sugar in the 2018/19 marketing year that started on Oct. 1, five dealers and three industry officials told Reuters; far below the official 5 million-tonne target. March white sugar settled down $3.60, or 1 percent, at $344.10 per tonne.
CBOT Soy falls on lack of new Chinese demand
Chicago Board of Trade soybean futures fell sharply on Thursday on a lack of fresh demand from China and after Brazilian crop forecaster Conab said Brazil’s soy crop was larger than some traders had expected. CBOT March soybeans ended down 17-1/4 cents at $9.06-3/4 per bushel, a one-week low. The 1.9-percent drop was the contract’s steepest since Nov. 26.
CBOT March soymeal ended down $6.60 at $316.80 per short ton while March soyoil fell 0.41 cent to 28.19 cents per pound. The drop in soybeans erased gains posted over the past week as hopes for more export sales to China since US-China trade talks this week have thus far failed to materialize. Brazilian statistics agency Conab cut its estimate of the 2018/19 soybean harvest to 118.8 million tonnes from 120.1 million in December. Many traders had been expecting a deeper cut following hot, dry weather in parts of the country.
Malaysian palm oil in sharpest fall in 2 weeks
Malaysian palm oil futures declined at their sharpest daily rate in two weeks by the end of trade on Thursday, snapping two sessions of gains, on bearish official data on December inventories, production and exports.
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange fell 0.9 percent to 2,163 ringgit ($528.21) a tonne at the close of trade, its biggest daily decline since Dec. 26 and coming off a near three-week high it hit in the previous trading session. It earlier fell as much as 1.5 percent to an intraday low of 2,150 ringgit. Trading volumes stood at 35,351 lots of 25 tonnes each at the end of the trading day. Data from industry regulator the Malaysian Palm Oil Board (MPOB), released after the market paused for the midday break, showed end-stocks rising 6.9 percent from the previous month to 3.21 million tonnes.
Copper steadies in Asian trade
Copper steadied on Thursday in Asia trading as investors grew weary of mixed signals from U.S.-China trade talks and poor China data, though a weaker dollar and still tight supply-side conditions underpinned the metal. China said the three days of talks in Beijing had established a “foundation” to resolve the two country’s differences, but gave virtually nothing in the way of details on key issues at stake.
At the same time, the world’s biggest base metals consumer released data showing factory-gate inflation rose at its slowest rate in more than two years. Three-month copper on the London Metal Exchange was flat at $5,995 a tonne as of 1119 GMT, snapping three consecutive days of gains. The metal fell 18 percent in 2018 and has slipped 0.1 percent so far this year.
Dalian iron ore falls on anti-smog measures
China’s iron ore futures dipped by more than 1 percent on Thursday, as emergency anti-pollution measures in the north of the country dampened demand for steelmaking raw materials. The Ministry of Ecology and Environment said late on Wednesday that it expects a bout of severe smog to blanket regions in northern China, including top steelmaking province Hebei and coal mining hub Shanxi, from Jan. 10-14.
The most-active iron ore futures on the Dalian Commodity Exchange fell as much as 1.5 percent, their steepest drop since Dec. 25, before closing down 1.2 percent at 506.50 yuan ($74.61) a tonne. Stocks of imported iron ore at Chinese ports had risen to 140.6 million tonnes, as of Jan. 7, their highest level in seven weeks, data compiled by SteelHome showed.