WORLD COMMODITIES TRADING
World oil futures up 1pc, US oil soars 10pc in week
Oil futures rose 1% on Friday, with US crude up 10% in the week and global benchmark Brent gaining 5%, on fears the United States could attack Iran and disrupt flows from the Middle East, which provides more than a fifth of the world’s oil output.
US gasoline futures, meanwhile, jumped around 4% following a massive fire at Philadelphia Energy Solutions’ refinery in Philadelphia, the largest on the US East Coast.
While the rise in US-Iranian tensions has largely driven the crude price gains, analysts said an early July meeting of the Organization of the Petroleum Exporting Countries (OPEC) and its allies to reassess production targets, a potential softening of trade tensions between the United States and China and the refinery fire were also supporting prices.
Brent futures were up 72 cents, or 1.1%, to $65.17 a barrel, while the most active U.S. West Texas Intermediate (WTI) crude contract was up 47 cents, or 0.8%, at $57.54. That put Brent on track to gain about 5% for the week, its first weekly gain in five weeks, and WTI to jump about 10%, which would be its biggest weekly percentage gain since December 2016.
The US benchmark surged 5.4% and Brent jumped 4.3% on Thursday after Iran shot down a drone that the United States claimed was in international airspace and Iran said was over its territory.
US President Donald Trump said he had aborted a military strike on Iran because such a response to Tehran’s downing of the unmanned US surveillance drone would have caused a disproportionate loss of life.
Iranian officials told Reuters that Tehran had received a message from Trump through Oman overnight warning that a U.S. attack on Iran was imminent.
World gold prices surge to near 6-year peak
Gold prices surged to a near six-year peak on Thursday after the US Federal Reserve bank signaled it was ready to cut interest rates as early as next month to boost growth, triggering a sharp fall in the dollar.
Spot gold jumped 2.2% to $1,390.38 per ounce. Prices touched $1,392.84, their highest since early September 2013. US gold futures settled 3.6% higher at $1,396.90 per ounce.
Lower interest rates decrease the opportunity cost of holding non-yielding bullion and weigh on the dollar, making gold cheaper for investors holding other currencies. The Fed on Wednesday signalled interest rate cuts beginning as early as July, saying it is ready to battle growing global and domestic economic risks as it took stock of rising trade tensions and growing concerns about weak inflation.
Silver was up 2% to $15.46 per ounce, its highest in over 12 weeks. Platinum dropped to $808.00 per ounce and palladium declined 0.8% to $1,488.50.
Ice canola futures sag on wetter weather
ICE canola futures dropped on Wednesday, pressured by forecasts for rain in Western Canada and a drop in US soybean prices. July canola lost $5 to $455.50 per tonne. Most-active November canola gave up $6.70 to $469.30 per tonne.
July-November canola spread traded 5,958 times. Warmer temperatures have boosted crop growth in the Canadian province of Manitoba, but flea beetles and cutworms have damaged crops, the government said. Chicago July soybeans fell on technical selling and profit-taking. Paris Matif August rapeseed futures dipped and Malaysian September palm oil futures rose. The Canadian dollar strengthened to a five-day high against its US counterpart, as investors reduced bets on a Bank of Canada interest rate cut this year after domestic data showing greater-than-expected inflation
South Korea to send 50,000 tonnes of rice to north
South Korea said Wednesday it will send 50,000 tonnes of rice to North Korea via the World Food Program to help the country cope with a severe food shortage. The isolated, impoverished North — which is under several sets of sanctions over its nuclear weapon and ballistic missile programs — has long struggled to feed itself and suffers chronic food shortages. It will be the first time the South has provided food aid to the North since 2010, when it sent 5,000 tonnes of rice across the border. It comes after a joint report last month by the UN’s Food and Agriculture Organization and WFP that said about 10.1 million North Koreans — 40 percent of the population — were suffering from severe food shortages and that conditions could be exacerbated in the absence of aid.
Malaysian palm oil up on expectation of better export data
Malaysian palm oil futures jumped more than 1 percent on Wednesday as traders bet upcoming export data would overshoot forecasts. The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange was up 1.2 percent at 2,047 ringgit ($491) per tonne at the close. Cargo surveyors and an independent inspection company had over Saturday and Monday reported more than 15 percent falls in exports for the June 1-15 period. Malaysia’s Southern Peninsular Palm Oil Millers Association reported a 26.4 percent drop in production on Monday which also helped boost prices.
New York sugar falls, coffee gains
Raw sugar prices on ICE fell on Wednesday for a third day as fund short covering ran out of steam and as oil and corn prices continued to retreat, while arabica coffee edged up off a three week low. July raw sugar fell 0.1 cent, or 0.8 percent, to hit a one week low of 12.51 cents per lb by 1031 GMT.
Prices hit a 1-1/2-month high on Friday. Sugar has been supported of late by dry weather in India, a top sugar grower, and by surging corn prices, though these have retreated this week, along with crude oil. Falling crude oil prices tend to weigh on ethanol prices, tempting Brazilian cane mills to produce more sugar and less ethanol. Cane is a feedstock for both products.
Copper holds near 3-week highs on trade talk optimism
Copper prices held near three-week highs on Wednesday on hopes that renewed talks between China and the United States will defuse a trade dispute that investors fear will damage economic growth and metals demand.
Benchmark copper on the London Metal Exchange (LME) was down 0.2 percent at $5,935 a tonne after jumping 1.8 percent in the previous session. Worsening confrontation between Washington and Beijing had helped drive copper prices from a high of $6,608.50 in April to a low of $5,740 on June 7. Copper was also helped by expectations that the United States and the euro zone may deliver interest rate cuts as early as July.
Euronext to expand wheat futures delivery to french Atlantic coast
Euronext will expand from next year its network of physical delivery points for wheat traded on its wheat futures market to include France’s Atlantic coast, the exchange said on Wednesday.
Euronext’s milling wheat futures, a price benchmark for the European grain market, can currently be delivered to silos in the northern French ports of Rouen and Dunkirk. Between September 2020 and 2021, there will also be a provision to allow users to switch delivery from Montoir to Nantes, Euronext added. The widening of wheat delivery to the Atlantic coast had been under discussion as part of Euronext’s efforts to reinforce participation in its grain markets.
China’s Shanxi orders 82 coal mines to halt production or construction
Northern China’s Shanxi province ordered 82 coal mines in the first five months of the year to either stop production or construction after uncovering hidden safety dangers at their sites, said two provincial government agencies. The authorities carried out 2,167 inspections in Shanxi over the January-May period, with 32,612 hidden dangers and 99 major hidden dangers found, said the Shanxi Coal Mine Safety Administration and the provincial emergency management department in a joint statement on Tuesday. Total fines imposed were nearly 61 million yuan ($8.8 million), according to the statement.