WORLD COMMODITIES TRADING
Oil plummets, on track for biggest weekly drop in 2019
Oil prices plunged on Thursday, losing about 5% as trade tensions dampened the demand outlook, putting the crude benchmarks on course for their biggest daily and weekly falls in six months.
Oil coursed downward with other global markets as concerns grew that the China-US trade conflict was fast turning into a technology cold war between the world’s two largest economies.
While the trade war is the main cloud over economic growth and demand predictions, market participants also pointed to weakening US data and overfull US crude stockpiles.
Brent crude futures, the international benchmark, settled down $3.23, or 4.6%, at $67.76 a barrel. US West Texas Intermediate (WTI) crude futures dropped $3.51, or 5.7%, to $57.91 a barrel. Earlier, the contract touched $57.33 a barrel, the lowest since March 13. That was a second consecutive daily decline for the benchmarks. WTI fell 2.5% on Wednesday after government data showed U.S. crude inventories rose last week, hitting their highest levels since July 2017.
Gold eases but on track for weekly gain
Gold eased on Friday as stock markets regained momentum, with a weaker dollar and renewed hopes of a rate cut by the US Federal Reserve keeping bullion on track for a weekly gain.
Spot gold was down 0.1% at $1,281.62 per ounce, after rising as much as 1.1% to a one-week peak of 1,287.23 in the previous session. The metal has risen about 0.4% so far this week.
US gold futures for June were down 0.3% at $1,281.
On the technical side, spot gold may break a resistance at $1,286 and edge up to the next resistance at $1,290, according to Reuters technical analyst Wang Tao.
Among other precious metals, silver fell 0.4% to $14.53 per ounce, while palladium climbed 1.9% to $1,335.75. Palladium was on track for a 1.8% weekly gain, its first in four weeks.
Platinum rose 1.6% to $806.25 an ounce, having touched its lowest since Feb. 15 at $791 in the previous session, putting it on track for its fifth straight weekly loss.
Euronext wheat futjures edge higher
Euronext wheat futures edged higher on Thursday in step with Chicago prices as worries about the impact of torrential rain on US grain belts continued to drive the market. Front-month September milling wheat on the Paris-based Euronext exchange unofficially closed 0.25 euro, or 0.1 percent, higher at 175.25 euros ($195.86) a tonne, steadying after a drop in the previous session. However, the contract pared earlier gains as a rebound in Chicago wheat faltered, with the Paris benchmark remaining below a near seven-week high of 178.25 euros struck on Tuesday. The US grain market has surged in the past week amid growing concern that torrential rain will prevent some corn planting and damage some maturing winter wheat crops. Parts of the US Midwest and Plains are forecast to see more showers in the week ahead, increasing risks for crops.
Copper hits lowest since January as US-China dispute escalates
Copper prices hit their lowest since January on Thursday as fears grew that a worsening confrontation between the United States and China will damage economic growth and metals demand.
Benchmark copper on the London Metal Exchange (LME) dropped to $5,880 a tonne in intraday trading, the weakest since Jan. 14, before pulling back to close down just $2 at $5,926. Prices were being dictated by a stronger dollar and worries over the US-China dispute, said ING analyst Warren Patterson. The dollar touched a two-year high on Thursday.
Mexican tomato producers make new offer in us trade spat
Mexican tomato growers have submitted new proposals to the US Commerce Department to govern trade of their products in a bid to end a dispute that led to tariffs being slapped on Mexican tomato exports to the United States this month.
In a statement on Thursday, the tomato growers said they had updated an offer issued last month to the United States. That offer failed to head off the spat with American rivals looking to restrict supply of Mexican tomatoes to the US market. Tariffs of 17.5 percent on Mexican tomatoes came into force after the United States allowed a so-called suspension agreement from 2013 to lapse just over two weeks ago. For six years that agreement halted an anti-dumping investigation sought by US producers against Mexican growers. Mexico’s tomato growers were required to make a formal proposal on May 22.
Arabica coffee prices ease as Brazil currency weakens
Arabica coffee and raw sugar futures on ICE were slightly lower on Thursday, weighed down partly by renewed weakness in Brazil’s real currency.
July arabica coffee was 0.25 cents, or 0.3 percent, lower at 91.5 cents per lb at 1428 GMT. Dealers said the market was keeping a close watch on the weather in top producer Brazil with a run-up earlier this week linked to forecasts that temperatures looked set to drop. Weather forecaster Maxar said in its daily coffee report on Wednesday that temperatures look set to trend cooler in Brazil but no frost was expected in major coffee growing areas.
Bangladesh nearly doubles rice import duty to support farmers
Bangladesh has raised import duty on rice to 55 percent from 28 percent to support its farmers, officials said on Thursday, amid widespread protests over a drastic fall in domestic prices. The new tax rates, that came into effect on Wednesday, would further curb rice imports, especially from neighbouring India, which emerged as the biggest supplier to the South Asian country in 2017, after floods destroyed its crop.
The move would help protect farmers’ interests as growers are being compelled to sell their rice at lower rates than the production costs, a food ministry official said. Local rice prices have fallen to their lowest in three years due to ample supply from last year’s crop and forecasts of record output. Bangladesh re-imposed a previous import duty of 28 percent in June after reducing it in two phases in 2017, to 2 percent, as local rice prices climbed to a record high.
Spring milk production flush likely to be weaker
The US Department of Agriculture released its latest “Milk Production” report this week, showing that milk production in the 23 major states during April increased only slightly from year-ago levels. April production totaled 17.4 billion lb., up 0.3 percent from April 2018. USDA also revised March production to 17.8 billion lb., a 0.3 percent decline from March 2018. The March revision represented a decrease of 40 million lb., or 0.2 percent, from last month’s preliminary production estimate.
Production per cow in the 23 major milk-producing states averaged 1,996 lb. for April, 19 lb. above April 2018. This is the highest production per cow for the month of April since the 23-state series began in 2003, USDA said. The number of milk cows on farms in the 23 major states was 8.71 million head, 55,000 head less than in April 2018 and 1,000 head less than in March 2019.