WORLD COMMODITIES TRADING
World oil slumps over 3pc, posts six-month fall
Oil slumped over 3% on Friday and posted its biggest monthly drop in six months, after US President Donald Trump stoked global trade tensions by threatening tariffs on Mexico, a key US trade partner and major supplier of crude oil.
Brent crude futures fell $2.38, or 3.6%, to settle at $64.49 a barrel. U.S. West Texas Intermediate (WTI) crude futures fell $3.09 to $53.50 a barrel, a 5.5% loss. Brent touched a session low of $64.37 a barrel, lowest since March 8. WTI hit $53.41 a barrel, weakest since Feb. 14.
Brent futures posted an 11% slide in May and WTI a 16% drop, their biggest monthly losses since November.
Gold climbs to 7-week high, set for more gains
Gold climbed to a seven-week peak on Friday and was headed for its first monthly gain in four months, as investors sought the safe haven investment after US President Donald Trump threatened tariffs on imports from Mexico, which fed fears of a global downturn.
Spot gold jumped 1.3% to $1,305.17 an ounce by 1:51 p.m. ET (1751 GMT), having hit its highest since April 11 at $1,306.64.
Bullion has risen by about 1.7% so far this month and 1.6% for the week. US gold futures settled up 1.9% at $1,311.1.
Lower interest rates would support gold because they reduce the opportunity cost of holding non-yielding bullion.
Elsewhere, concerns in the auto sector rubbed off on palladium prices which marked its worst day since May 15.
The emissions reducing auto-catalyst metal slipped 2.5% to $1,333.01 per ounce and was down about 3.9% for the month.
Silver rose 0.3% to $14.56 an ounce but looked poised to register a fourth consecutive monthly loss.
Platinum fell 0.3% at $789 and was on track for its biggest monthly loss since November 2015, down 10%.
Copper hits near 5-month low after China-US tension flares
Copper prices slumped to the lowest in almost five months on Wednesday on fears an escalation in US-China trade tension will damage economic growth and curb metals demand. Reports in Chinese newspapers that the world’s second biggest economy was ready to use rare earths to strike back in a trade war with the United States hit global financial markets.
Benchmark copper on the London Metal Exchange slid to $5,873.50 a tonne, the lowest since Jan. 4, before paring losses to stand 1.2 percent lower at $5,888 by 1400 GMT. Copper has lost 11pc since touching a 9-month peak at around $6,600 in mid-April. An unsuccessful move on Tuesday to regain the $6,000 level emboldened bearish speculators, traders said.
Malaysian palm oil rises on strong us soyoil, weak ringgit
Malaysian palm oil futures rose 1pc in first-half trade on Wednesday, tracking gains in US soyoil on the Chicago Board of Trade and supported by a weaker ringgit.
The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange was last up 1pc at 2,087 ringgit ($497.62) per tonne, heading for a third straight session of gains. Earlier in the session, it climbed as much as 1.3pc to 2,093 ringgit, its strongest level since May 21. Palm oil may rise further into a range of 2,089-2,111 ringgit per tonne, said Wang Tao. The ringgit, palm’s currency of trade, eased 0.2 percent against the dollar to 4.1940, its weakest level in six months. A weaker ringgit usually makes the edible oil cheaper for holders of foreign currencies.
China’s mixed rubber policy to affect Thai, Vietnamese imports
China’s new policy on mixed rubber imports will affect 50percent of such imports from Thailand and all such imports from Vietnam, an official from the nation’s natural rubber association said on Wednesday.
China’s General Administration of Customs is believed to have stepped up inspections of mixed rubber, or natural rubber that is improved through addition of chemicals, to ensure importers are not mislabeling shipments as mixed rubber to take advantage of a lower tariff rate on the substance. The association has suggested the government set a new technology standard for mixed rubber imports to facilitate shipments, Zheng Wenrong, vice president of China’s Natural Rubber Association told.
Dry weather crimps NZ, Australia milk output
Dairy group Fonterra on Thursday said its New Zealand milk production fell 10percent in April from the year before as dry weather hit farms. The world’s biggest dairy exporter also said in a statement that its Australian milk output dropped 10percent in March from a year earlier amid continued drought and high farm costs in that country.
The group’s dairy exports from New Zealand increased by 27percent in March on-year, buoyed by demand from key Asian markets, although its exports from Australia fell 3percent in the same month. Fonterra earlier in May cut its annual earnings guidance and said it would close a more than 100-year old facility in Australia as dry weather and increased costs continued to undermine its operations.
Arabica coffee climbs to 3-1/2 months high
Arabica coffee futures on ICE rose to 3-1/2 month high on Wednesday, extending their recent rebound from a 13-1/2 year low earlier in May, boosted by technically driven buying and a strengthening in Brazil’s real currency.
July arabica coffee was 2.0 cents, or 2.1 percent, higher at 98.05 cents per lb at 1403 GMT after peaking at 98.35 cents, the highest since Feb. 15. Dealers said cold weather in top grower Brazil may have played a role in the recent run-up although there remained no immediate threat of crop damaging frosts. July robusta coffee rose $18, or 1.3 percent, to $1,390 a tonne.
Ukraine grain exports on the rise
Ukraine’s grain exports have risen to 46.1 million tonnes so far in the 2018/19 season compared with 36.4 million tonnes at the same point last season, the agriculture ministry said on Wednesday. Ukraine harvested a record 70 million tonnes of grain last year, up from about 61 million in 2017.
Exports could rise to about 49 million tonnes in the season that ends in June from 39.4 million the previous season, the ministry said. Ukraine had exported almost 27 million tonnes of corn and 14.9 million tonnes of wheat as of May 29, it said. Grains, vegetable oils and oilseeds dominate Ukraine’s agricultural exports.
Paris wheat slightly lower as US rain drama continues
Paris wheat futures closed slightly lower on Wednesday, retreating from an earlier 4-1/2 month high as a weather-related rally in US grains lost momentum. Front-month September milling wheat on Euronext settled 0.50 euros, or 0.3percent, lower at 184.25 euros ($205.18) a tonne.
It earlier climbed nearly 3percent to its highest since early January at 190.00 euros, before later falling as low as 181.50 euros, meaning the contract had traded in an exceptionally wide 9.50 euro range during the session. Chicago wheat surged to its highest since early January as slower than expected corn planting and a sharp fall in winter wheat ratings in a government report further fuelled worries about the impact of incessant rain in US grain belts.