Oil up about 2%
Oil prices rose about 2% to a one-week high as the dollar fell to a 6-week low after the US Federal Reserve raised interest rates less than expected and hinted at a halt to future rate hikes. .
Closing session on March 22, Brent crude oil increased by 1.37 USD or 1.8% to 76.69 USD/barrel, WTI oil increased by 1.23 USD or 1.8% to 70.90 USD/barrel. This is the highest close for both oils since March 14.
The Fed raised interest rates by 0.25 percentage points, but said it was about to stop raising borrowing costs amid uncertainty in financial markets caused by the collapse of two US banks.
The dollar fell to its lowest level since February 2 against a basket of other currencies, supporting oil demand as prices are cheaper for buyers in other currencies.
Oil markets ignored weekly data from the US Energy Information Administration, which showed crude inventories rose 1.1 million barrels last week to a 22-month high.
Analysts in a Reuters poll forecast a 1.6 million barrel drop in oil inventories. But official EIA data showed a smaller increase in inventories than the 3.3 million barrel increase reported a day ago by the American Petroleum Institute.
U.S. crude inventories have increased since December, sending inventories to their highest levels since May 2021. Meanwhile gasoline and distillate stocks fell last week more than analysts expected.
WTI and Brent oil prices last week fell to their lowest levels since 2021 on concerns that instability in the banking sector could trigger a global recession and cut oil demand.
According to three delegates from the Organization of the Petroleum Exporting Countries and its allies including Russia, the organization will maintain its agreement to cut output by 2 million bpd until the end of the year, despite falling crude prices.
Gold up 1.7%
Gold prices rose after the US Federal Reserve raised interest rates slightly and signaled the end of the rate hike period.
Spot gold rose 1.7% to $1,973.52 an ounce after gaining about 2%. US gold for April futures closed up 0.4 percent at $1,949.6 an ounce before the Fed announced a rate hike.
In a press conference, Fed Chairman Jerome said the central bank does not expect a rate cut in 2023.
Gold has gained more than 7% this month, near a record high above $2,000 reached in March 2020, on banking and financial concerns.
US bond yields fell and the dollar hit a near seven-week low, making the metal more attractive.
Copper rose for the 5th session
Copper prices rose for a fifth day in a row on concerns about tight supply, but investors were cautious about the Federal Reserve’s decision to raise interest rates later in the day.
Three-month copper on the London Metal Exchange (LME) rose 1.4% to $8,881.5 a tonne, recovering from a 10-week low hit last week.
The metal used in electrical wires has been on a downtrend since prices hit $9,550.5 a tonne in January, well below last year’s record $10,845.
Demand in China recovered more slowly than expected and uncertainty in the banking sector weighed on global economic growth.
Global stock markets rose cautiously while the dollar fell to five-week lows making the currency-denominated metals cheaper for buyers in other currencies.
Rising demand and difficult supply will make the market tight, predicting prices will average $9,000/ton this year and $11,000/ton in 2024.
Copper reserves at the Shanghai and Comex exchanges also fell.
Iron ore continues to fall
Dalian and Singapore iron ore prices continued to decline with the demand outlook temporarily pressured by China considering cutting steel output by about 2.5%.
The target was proposed by policymakers at last week’s meeting but has yet to be finalized. Some officials say a 2.5% cut is too high as the economy is still recovering and the target is expected to be in place before the end of June.
Iron ore for May delivery on the Dalian Commodity Exchange closed down 2.15% to 865.5 CNY ($125.64) a tonne, the lowest since Feb. 15.
In Singapore, iron ore for April delivery fell 2.26% to $120.7 a tonne, the lowest since February 13.
Rebar in Shanghai fell 0.84% to CNY 4,153/ton, hot rolled coil fell 0.35% and stainless steel fell 0.22%.
Japanese rubber fell
Japanese rubber prices fell after a brief recovery in the session, as traders remained worried about the interest rate decision of the US Federal Reserve.
The August rubber contract on the Osaka exchange closed down 0.6 JPY or 0.3% at 204.4 JPY ($1.54)/kg. The contract fell to its lowest level since September 2021.
In Shanghai, the price of rubber for May delivery increased by 25 CNY to 11,700 CNY (US$1,698.83)/ton.
Rising sugar
May white sugar futures closed up $14.1 or 2.4% to $603.9 a tonne after setting a six-month high at $604.3 a tonne.
Dealers say the market continues to be supported by lower-than-expected yields in India and Thailand while focus will soon shift to the Brazilian south-central harvest which is expected to start early and harvest in next month.
Raw sugar for May delivery rose 0.34 US cents, or 1.6%, to 21.14 US cents/lb.
Reduced coffee
Arabica coffee for May delivery closed down 2.3 US cents or 1.3% at $1.78/lb.
Dealers say the market lacks a clear overall trend and is falling back to this month’s average.
Robusta coffee for May delivery fell $18, or 0.8%, to $2,112 a tonne.
Uganda’s coffee exports in February increased by 6% year-on-year as rising prices spurred investors to release their reserves.
Soybean, wheat down, corn up
Soybean prices on the Chicago Mercantile Exchange closed lower on liquidation of buy contracts and pressure from rising Brazilian production estimates.
CBOT soybean for May term closed down 18-1/2 US cents to 14.48-1/2 USD/bushel. The contract fell to a 15-week low this session.
Wheat closed lower, at times to its lowest since July 2021, driven by technical selling and pervasive weakness in the European cereal market. Corn reversed to close higher.
Winter red soft wheat for May delivery closed down 19-3/4 US cents at $6.63-1/2 per bushel after falling to $6.54, the lowest level for the heavily traded contract. maximum since July 2021.
CBOT corn for May futures rose 3-1/2 US cents to 6.33-1/2 USD/bushel.
Prices of some key items in the morning of March 23
