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World oil prices touch 2019 highs

Oil prices touched their highest since mid-November on Friday and posted weekly gains for the second week in a row, boosted by hopes that US-China trade talks would soon produce a deal, although new record US oil supply limited gains.

Brent crude futures briefly reached $67.73 a barrel, their 2019 high. The global benchmark fell 5 cents to settle at $67.12 a barrel. Brent gained 1.2 percent on the week. US West Texas Intermediate (WTI) crude futures gained 30 cents to settle at $57.26 per barrel, after hitting $57.81 earlier on Friday, also their highest for the year. WTI recorded a 3-percent weekly rise and reached its strongest settlement price of 2019.

Top US and Chinese trade negotiators met on Friday to wrap up a week of talks that have seen the two sides struggle to reach a deal by a March 1 deadline. US President Donald Trump will meet with Chinese Vice Premier Liu He at the Oval Office later on Friday.

Both oil benchmarks have risen this year after the Organization of the Petroleum Exporting Countries and its allies, including Russia, began to cut output to prevent a supply glut from growing.

Surging US crude oil production, is partly offsetting OPEC’s cuts. US crude production last week climbed to a record 12 million barrels per day as stockpiles built for a fifth straight week to their highest since October 2017 and exports hit an all-time high, the Energy Information Administration said on Thursday.

Palladium surges past $1,500/oz for first time

Palladium jumped above the $1,500 per ounce mark for the first time on Wednesday, propelled by a stark supply deficit, while gold steadied near a 10-month peak as doubts lingered over future rate hikes after the US Federal Reserve released its minutes. Spot palladium, which traded as high as $1,502 per ounce, was up 0.6 per cent at $1,488.50.

“Palladium’s deficit is likely to persist for at least the next couple of years and there’s limited opportunity to ease the market’s tightness,” said Suki Cooper, precious metals analyst at Standard Chartered Bank. Leading autocatalyst manufacturer Johnson Matthey said last week that a persistent supply deficit in the palladium market was likely to widen this year.

Gold rises and on way to post weekly gain

Gold rose on Friday enroute to a second weekly gain as the dollar was subdued by weak US economic data and hopes of a breakthrough in the US-China trade dispute, with a darkening global economic outlook bolstering bullion. Spot gold was up 0.3 percent at $1,327.40 per ounce in New York Trade, or about 0.5 percent higher so far this week. US gold futures settled down 0.4 percent at $1,332.80 per ounce.

The metal had fallen about 1 percent on Thursday following the release of minutes from the US Federal Reserve’s last policy meeting, which painted a less dovish picture than expected.

 

CBOT wheat plunges to 7-month low, soybeans rebound

Chicago Board of Trade wheat futures plunged yet again on Wednesday as traders fretted over lagging US exports despite them being competitively priced in the global market. Soybeans started the day off on the negative side, with the most active soybean contract dipping just below the one-month low struck a day earlier, but ended the day on a positive note on technical buying.

Meanwhile, corn futures remained relatively steady throughout the day, as grain markets watched for developments in the US-Chinese trade discussions. But for the second session in a row, the market story of the day was wheat. Chicago’s most active wheat contract plunged to a 7-month low on a continuous basis, to its lowest point since July 12. A key reason, traders said, is that US wheat was not even in the running for a tender by top importer Egypt.

Brazil soy export forecast revised down to 70.2mn tonnes

Brazil is expected to export 70.2 million tonnes of soy in 2019, consultancy Agroconsult said on Wednesday, cutting its previous forecast of 73 million tonnes. The forecast for Brazil’s total soybean production was revised down slightly to 116.4 million tonnes, compared to the prior forecast earlier this month of 116.5 million tonnes, Agroconsult said.

Colombia coffee growers seek govt aid as prices languish

Colombia’s coffee federation called urgently on Wednesday for the government to make structural changes to help coffee farmers in the face of low international prices. Prices have hovered close to $1 per pound on the New York market so far in 2019, leaving farmers struggling to pay debts and afford fertilizer and new trees.

The federation repeatedly asked for government aid in 2018 amid low prices, and the country eventually spent at least $13.5 million to fund tree replacements. The country’s coffee-growers are especially worried about the low prices they are getting because 45 per cent of the national harvest is collected in the first half of the year, it added. The government should subsidize farmers, incentivize tree renovation and help with fertilization, the statement said, while coffee buyers internationally need to commit to paying farmers more. Internal prices have fallen 4.2 per cent in the first two months of the year, the federation said.

Raw sugar hits one-month peak

Raw sugar futures on ICE climbed to a one-month high on Wednesday boosted by fund short covering while arabica coffee slipped to a two-month low. May raw sugar was up 0.11 cent, or 0.9 per cent, at 13.34 cents per lb by 1520 GMT after climbing to a one-month high of 13.35 cents. Fund short covering against the backdrop of recent gains in crude oil has helped to fuel the recent advance. Higher oil prices encourage increased use of cane in Brazil to make biofuel ethanol rather than sugar, and can curb sugar output. Sucden Financial senior trader Nick Penney said in a note that the market had now moved into a 12.75 to 13.50 cent range from a previous trading band of 12.50 to 13.00 cents. “Weather issues remained a concern and could alter the picture but whilst crops were expected to be lower in EU, Thailand, India and Brazil, stocks are still high and would still need to be absorbed before more remunerative prices for producers were to be achieved next season,” he said.

Malaysian palm oil falls

Malaysian palm oil futures fell to a one-month low on Wednesday with traders expecting a slower than forecast decline in February output.

The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange was down 0.7 per cent at 2,245 ringgit ($552.41) a tonne at the close of trade. Earlier in the session, the contract fell to 2,238 ringgit, its lowest levels since Jan. 18. Trading volumes stood at 42,795 lots of 25 tonnes each at the end of the trading day. Production fell 3.9 per cent from a month earlier to 1.74 million tonnes in January, data from the Malaysian Palm Oil Board showed. Output of the edible oil typically falls during the first quarter of the year in line with seasonal trend. February data is due out on March 10 but some traders are expecting a small fall month-on-month following the January report.

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