WORLD COMMODITIES TRADING
World oil prices up over 2pc
Oil prices rose more than 2% on Friday after Iranian media said a state-owned oil tanker was attacked in the Red Sea near Saudi Arabia, while optimism surrounding the US-China trade war lifted sentiment. Brent crude futures LCOc1 gained $1.41, or 2.4%, to settle at $60.51 a barrel.
West Texas Intermediate (WTI) crude CLc1 futures rose $1.15, or 2.2%, to settle at $54.70 a barrel. The gains were tempered by the International Energy Agency’s forecast for weakened demand in 2020. Still, Brent and WTI were headed for their first weekly increases in three weeks. Brent rose 3.7% for the week, while WTI gained 3.6%.
The Iranian Suezmax crude tanker was struck in the Red Sea off Saudi Arabia’s coast on Friday, Iranian media said, with various reports differing on the level of damage caused.
Both benchmarks recorded their biggest daily rise since Sept. 16, the first trading day after attacks on Saudi installations knocked out more than half of the kingdom’s crude output and temporarily pushed oil prices up by about 20%.
Largest US oil production drop in a decade
The largest monthly drop in US crude oil production in more than a decade in July is likely a temporary, geographically isolated glitch largely due to Gulf of Mexico shut-ins due to Hurricane Barry, the EIA said on Wednesday, expecting that US crude oil production will return to grow month on month throughout the rest of this year.
According to the EIA’s most recent Petroleum Supply Monthly, US crude oil production dipped in July by 276,000 barrels per day (bpd) from June. This was the largest decline in monthly crude oil production in more than a decade. This production drop was temporary and geographically constrained to the US Gulf of Mexico area, where operators shut in production and evacuated platforms ahead of the expected passing of Hurricane Barry, according to EIA.
Gold prices fall, weekly loss on track
Gold prices fell 1% on Friday, on track for a weekly loss, as optimism around the U.S.-China trade talks and the possibility of a Brexit deal diminished some save-haven interest in bullion, while palladium scaled a new record peak.
Spot gold fell 0.6% to $1,485.53 per ounce at 1323 GMT, after touching their lowest in over week at $1,479.31, heading towards a weekly decline of about 1%. U.S. gold futures slid 0.7% to $1,490.20.
Elsewhere, deficit-hit palladium rose 0.1% to $1,701.39 an ounce, having hit a record peak of $1,705.84 earlier in the session. It gained about 2% so far this week. Platinum fell 1.5% to $885.58 an ounce, while silver climbed 0.3% to $17.54.
Australian milk production continues to fall
Australian milk production continues to fall, according to the latest figures from Dairy Australia. The production figures for August reveal a fall of 5.9 percent nationally compared with the same month last year. Production is down 6.9 percent for the first two months of the new season. Queensland continues to lead the fall, confirming its new status as Australia’s smallest dairy state, with production there down 13.1 percent for August and 13.4 percent year to date. South Australia, which had grown in the first part of last season, also suffered a big fall with production down 11.3 percent for August and 13 percent year to date. NSW production was down 6.1 percent in August and 8.2 percent year to date, while Victorian production was down 5.4 percent in August and 5.9 percent year to date. Western Australia has been the least affected – with August production down 1.3 percent and year to date down 2.6 percent.
CBOT corn futures modestly lower
Chicago Board of Trade corn futures ended modestly lower on Wednesday, retreating after the lead December contract hit its highest in nearly two months, as traders squared positions a day ahead of a monthly US government crop report.
CBOT December corn settled down 1-1/2 cents at $3.94-14 per bushel after reaching $3.97-1/4, its highest since Aug. 12. Ahead of the USDA’s weekly export sales report, also due on Thursday, traders expected the government to show US corn export sales in the week to Oct. 3 at 500,000 to 800,000 tonnes. The US Energy Information Administration said weekly US output of corn-based ethanol rose to 963,000 million barrels per day while stocks fell to 21.22 million barrels.
New York raw sugar steadies
Raw sugar futures on ICE steadied on Wednesday, reversing Tuesday’s losses, but with the market held back from extending last week’s rally on account of producer and trade selling. Arabica coffee edged up after hitting a one-month low while robusta coffee recovered after matching Monday’s nine-year lows. March raw sugar was up 0.01 cent, at 12.47 cents per lb by 1204 GMT. Price rallied 10 percent last week but have lost steam this week.
Sugar continues to get background support from fund short-covering and forecasts for a global deficit in 2019/20, but last week’s rally has fizzled partly thanks to producer and trade selling, and excess stocks. December white sugar was up $3.6, at $345.20 a tonne.
Malaysian palm oil futures hit 2-week high
Malaysian palm oil futures on Wednesday extended gains for a fourth consecutive session, hitting their highest in more than two weeks, supported by a weaker ringgit and firmer soyoil on China’s Dalian Commodity Exchange.
The ringgit, palm’s currency of trade, eased to a three-week low against the dollar, making the edible oil cheaper for holders of foreign currencies. The ringgit was down 0.1 percent at 4.1960. The benchmark palm oil contract for the December delivery on the Bursa Malaysia Derivatives Exchange was up 1.1 percent at 2,199 ringgit per tonne. It earlier rose as much as 1.4 percent to 2,206 ringgit, its highest levels since Sept. 23. Palm oil may test a resistance at 2,205 ringgit per tonne, a break above which could lead to a gain to 2,223 ringgit, said Wang Tao.
The January palm oil contract on the Dalian exchange rose 1.9 percent on Wednesday, while the January soyoil contract on the Dalian exchange was up 1.0 percent. In other related edible oils, US soyoil futures on the US Chicago Board of Trade was last traded 0.2 percent higher. Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Shanghai copper tumbles on trade deal concern
Shanghai copper fell to its lowest in over a month on Wednesday as an expanding trade dispute between the United States and China intensified concerns over demand. The most-traded November copper contract on the Shanghai Futures Exchange fell as much as 0.8 percent to 46,520 yuan ($6,512.03) a tonne, its lowest since Sept. 4, tracking overnight declines in the London market.
It closed down 0.6 percent. The United States and China, the world’s two biggest economies, are due to have their first minister-level talks in months on Thursday in a bid to end a 15-month long trade dispute that has hurt the global economy.