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Oil prices fall as Us-China trade war escalates

Oil prices fell on Friday after China unveiled retaliatory tariffs against about $75 billion worth of US goods including crude oil, another escalation of a protracted trade dispute between the world’s two largest economies.

Brent crude futures fell 58 cents, or 1%, to settle at $59.34 a barrel. US West Texas Intermediate (WTI) crude futures fell $1.18, or 2.1%, to settle at $54.17 a barrel. WTI lost 1.3% for the week, while Brent rose 1.2% during the week.

China’s commerce ministry said it would impose additional tariffs of 5% or 10% on a total of 5,078 products originating from the United States, including crude oil, agricultural products such as soybeans, and small aircraft.

In retaliation, US President Donald Trump said he was ordering US companies to look at ways to close operations in China and make products in the United States.

Gold soars after Powell speech, Trump tweets

Gold surged 2% on Friday as investors interpreted US Federal Reserve Chair Jerome Powell’s speech as leaning toward a dovish monetary policy stance and President Donald Trump’s latest comments exacerbated trade tensions with China.

Spot gold rose 1.9% at $1,526.60 an ounce on Friday trade in New York, shaking off slight headwinds ahead of the Fed Chair’s speech. Prices earlier rose to $1,528.79, the highest since Aug. 13, when spot gold had scaled a six-year peak of $1,534.31. US gold futures settled up 1.9% to $1,537.60.

Powell said the US economy is in a “favorable place,” but gave few clues about interest rate cuts at its next meeting. However, he listed a series of economic and geopolitical risks the Fed is monitoring, noting these were linked to the trade spat.

Powell’s speech prompted a backlash from Trump on Twitter, asking whether the Fed chair was a greater “enemy” than China’s leader Xi Jinping.

Trump also ratcheted up the rhetoric on China, ordering US companies to look at ways to close operations in the country, which sent equities tumbling and drove further inflows into safe-haven gold.

This came after China unveiled retaliatory tariffs against about $75 billion worth of US goods.

Gold has risen nearly 8% so far this month and about 19% this year, and was set for a fourth straight week of gains.

Elsewhere, silver gained 2.3% to $17.39 an ounce, while platinum was up 0.1% at $858.11.

Palladium fell 1.7% to $1,461.83 an ounce, but the auto catalyst metal remained on track for a third straight weekly gain of about 0.9%.

London copper hovers at 2-year low

London copper prices on Wednesday struggled to break away from a two-year low as markets remained fragile with barely any signs of progress in the year-long trade negotiations between the United States and China.

US President Donald Trump pledged to stand with American farmers in the face of Chinese retaliation, after Beijing halted US farm purchases and raised the possibility of additional tariffs on US farm products in response to new tariffs.

London copper rose as much as 0.7 percent in early Asian hours on hopes of further US-China trade negotiations, but retreated to gain only 0.1 percent at $5,687.50 a tonne. On Monday, prices of the metal used widely as a gauge of economic health hit $5,640 a tonne, its lowest since June 2017. Meanwhile, Shanghai copper ended down 0.4 percent to 45,960 yuan ($6,528.04) a tonne.

 

EU wheat hits fresh lows on export doubts

Euronext wheat futures fell to new contract lows on Wednesday as ample international supplies and sluggish activity on the French market dampened export prospects. Benchmark December milling wheat on Paris-based Euronext settled down 0.50 euro at 169.75 euros ($188) a tonne.

It earlier touched a new life-of-contract low at 169.00 euros, below a previous low of 170.25 euros struck on Tuesday. A new three-month low for Chicago wheat added to technical pressure on Paris futures. Expectations of large global supplies have weighed on wheat markets, with tepid west European exports increasing pressure on Paris prices. In France, where the harvest is widely expected to be the second-biggest volume on record, traders were growing concerned that export prospects were faltering despite less competition than usual from Russia. An estimated 89 percent of this year’s French soft wheat crop was showing protein content of 11percent or above, partial results from annual quality showed on Wednesday.

Arabica coffee climbs as Brazil’s currency strengthens

Arabica coffee futures on ICE climbed on Wednesday, pulling away from the prior session’s three-month low, boosted by a stronger currency in top-grower Brazil, while cocoa rose for its third positive finish in 22 sessions.

December arabica coffee settled up 1.4 cent, or 1.5 percent, at 96.65 cents per lb. The market was supported by a firmer currency in Brazil, which helped the contract pull away from the three-month low of 93.40 cents hit on Tuesday. A stronger Brazilian currency discourages producer selling of dollar-denominated commodities such as coffee and sugar. Prices were also underpinned by a diminishing outlook for next year’s crop in Brazil following adverse weather. The blossoms could be shed in the high temperatures that are forecast for September, which would reduce the potential yields,” Commerzbank said in a market note. November robusta coffee settled up $4, or 0.3 percent, at $1,328 per tonne.

Palm oil rises more than 1pc

Malaysian palm oil futures rose over one percent on Wednesday, supported by data pointing to slower than expected growth in production.

The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange closed up 1.4percent at 2,208 ringgit ($528.86) per tonne, its biggest daily gain in a week. The contract rose to as high as 2,210 ringgit during the session. Palm oil production in Malaysia, the world’s second largest producer, rose 15.1 percent in July to 1.74 million tonnes, the highest monthly output this year. It also marked the biggest month-on-month rise since March 2018, according to data from industry regulator the Malaysian Palm Oil Board. Meanwhile, US soyoil futures on the Chicago Board of Trade were last up 0.7 percent on Wednesday. Chicago corn futures edged up on Wednesday to recover from their lowest in more than three months, buoyed after a US crop tour forecast lower yields, while soybeans and wheat also gained.

Illinois corn yields seen below average

Corn farmers in west-central Illinois are facing potentially smaller corn yields this fall in what has been a challenging growing season after extreme weather and heavy rains delayed plantings across much of the US Midwest, scouts on an annual tour said on Wednesday.

Many of the soy fields surveyed in Illinois on the third day of the Pro Farmer Midwest Crop Tour were also behind their normal growing schedule, as they were in parts of Indiana and Ohio, with fields of short soybean plants an indication of the late planting. But the corn crop improved significantly the further west the scouts traveled despite the later-than-normal plantings, and there were few signs of unplanted fields.

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