WORLD COMMODITIES TRADING
World oil prices end week on lower note
Oil prices inched up on Friday as strong US economic data boosted demand sentiment and as production losses in sanctions-hit Iran and Venezuela tightened the market. Still, oil futures recorded weekly declines after a jump in US crude inventories reported this week.
Brent crude oil futures settled at $70.85 a barrel, rising 10 cents. The global benchmark shed 2.6% for the week, breaking a five-week winning streak.
US West Texas Intermediate (WTI) crude futures closed at $61.94 a barrel, up 13 cents, while losing about 3% percent during the week, its second straight weekly decline.
A US jobs report that showed growth surging in April and the unemployment rate dropping to a more than 49-year low of 3.6% increased expectations that crude demand would stay strong. Gains in the oil market, however, were capped by Wednesday’s report that showed US crude inventories jumping to their highest since September 2017 and production hitting a record 12.3 million barrels per day last week.
Exports of US crude broke through 3 million bpd in November for the first time and peaked at 3.6 million bpd earlier this year, according to data from the Energy Information Administration. US sanctions against Iran and Venezuela and supply cuts led by the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, helped to tighten the market and support prices.
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Gold eyes biggest daily gain in two months
Gold was headed for its biggest daily rise in two months on Friday, clawing away from a four-month low hit in the previous session, helped by a pullback in the dollar and as some investors covered their short positions.
Spot gold rose 0.7% to $1,279.47 per ounce, and was set for its biggest percentage gain since March 8. U.S. gold futures settled 0.7% higher at $1,281.30 an ounce.
The metal on Thursday dipped to $1,265.85, its lowest since the end of December. Despite the gains, gold is still on track to post a weekly decline of about 0.5% after US Federal Reserve signaled little appetite to adjust interest rates in the near term. However, two Fed officials said on Friday they were increasingly worried about weak inflation, an indication that some US central bankers see a growing case for a future interest rate cut even as others push for continued patience.
Market participants were also keeping a close watch on US-China trade talks, anticipating a resolution to the year-long tariff war between the world’s two largest economies.
Reflecting investor sentiment toward bullion, holdings in the world’s largest gold-backed exchange-traded fund (ETF), SPDR Gold Trust, fell about 0.2% to 745.52 tonnes on Thursday, its lowest since Oct. 12.
Among other metals, silver rose 2.2% to $14.94 per ounce, after falling to a more than four-month low of $14.52 in the previous session. Platinum gained 2.6% to $869.75 per ounce, but has lost 3.3% for the week so far, its biggest weekly decline in eight. Palladium climbed 0.8% to $1,365.01 an ounce.
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Copper drops to one-month low
Copper prices slid to their lowest in a month on Wednesday as computer-driven funds unleashed selling following an options expiry amid disquiet about demand in top metals consumer China. Traders said there was no specific news that triggered a sharp reversal in the market around midday after prices had been slightly firmer in the morning.
Benchmark copper on the London Metal Exchange traded down 0.5 percent at $6,383 per tonne in official open outcry activity, having lost 1 percent in April. It hit a low of $6,331 in electronic trading, the weakest since March 28.
“The market was spooked and we’ve seen quite a few stops hit in zinc and copper. It was more technical selling than anything in a thin market since most of the Chinese are out today,” said a trader at a major broker.
Many markets were closed for the May 1 holiday, including China. Analysts said that while investors welcomed further signs of progress in US-China trade talks, they were still concerned after data on Tuesday showed Chinese factory growth unexpectedly slowed in April.
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CBOT wheat rises in short-covering bounce
US wheat futures ended higher on Wednesday in a short-covering recovery following several days of contract lows in both spring and winter wheat futures. Commodity funds hold a massive net short position in wheat futures markets, leaving them susceptible to bouts of short-covering. CBOT July soft red winter (SRW) wheat settled down 7-1/4 cents at $4.36 per bushel. K.C. July hard red winter (HRW) wheat ended up 6 cents at $4.00 a bushel. MGEX July spring wheat rose 5 cents to $5.12. Concerns about planting delays due to rain and chilly temperatures propped up spring wheat futures.
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Ivory coast 2019/20 cotton exports to hit record high
Ivory Coast, Africa’s fourth-largest cotton producer, is expected to export record amounts of cotton in the 2019/20 season, according to an report by a US Department of Agriculture attache published on Wednesday.
Ivorian cotton exports in 2019/20 are forecast at 875,000 bales, a new record, as yields improve and the area dedicated to cotton production expands. Overall production for 2019/20 is forecast at 925,000 bales. The Ivorian government has a one million bale production target for 2020/2021. Almost all of the cotton Ivory Coast produces is exported for further processing elsewhere. The Ivorian textile industry struggles to compete globally, a challenge that is expected to persist, the report said. Bangladesh is the top importer of Ivorian cotton.
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Raw sugar prices slip to four-month low
Raw sugar prices on ICE fell to their lowest level in about four months, weakened by technically-driven selling, while London cocoa slid from an earlier nine-month peak. July raw sugar was down 0.21 cents, or 1.7 percent, at 12.13 cents per lb at 1417 GMT after dipping to a low of 12.12 cents, the weakest for the contract since Jan. 4.
A retreat in crude oil prices during the last few days has also added to downward pressure on sugar along with weakness in Brazil’s real currency. The sugar market has taken a bit of a battering in the past sessions as technical support levels have been breached in a background of weaker energy prices and a weaker Brazil real,” Nick Penney, senior trader with Sucden Financial, said. A weaker Brazilian real improves dollar-denominated prices in local currency terms in the world’s top exporter and can spark a pick-up in producer selling. ICE August white sugar fell $4.50, or 1.3 percent, to $330.40 a tonne.
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Australia iron ore exports rebound in April
Australia’s iron ore exports rebounded in April after being hit by a cyclone the prior month, but the surge in shipments wasn’t enough to offset declining volumes from Brazil in the wake of January’s tailings dam disaster. Australian exports were about 69.1 million tonnes in April, according to preliminary figures compiled by Refinitiv, based on vessel-tracking and port data. This was up 20 percent from 57.5 million tonnes in March, when shipments were disrupted by Tropical Cyclone Veronica, which closed ports and impeded mining operations in Western Australia state. Brazil’s exports volumes have been slipping since top miner Vale was forced to close several mines in the wake of the collapse of a tailings dam at its Brumadinho mine in late January, which left more than 300 people dead or missing.
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NY coffee may retest resistance at $0.9420
New York July coffee may retest a resistance at $0.9420 per lb, a break above which could lead to a gain to $0.9545. The resistance is identified as the 50 percent retracement of the downtrend from $0.9940 to $0.89. Coffee failed twice to break this resistance. It is likely to overcome this barrier in its third attempt. Wave pattern suggests the progress of a wave C, the third wave of a three-wave cycle from $0.89. This wave may travel into a range of $0.9420-$0.9545. Support is at $0.9145, a break below which could cause a loss to 0.9050.