Oil prices fell for the second day in a row
Oil prices fell for a second straight session on an uncertain demand outlook as many countries weighed restrictions on Chinese travelers where Covid-19 infections were widespread.
The Chinese government is lifting pandemic restrictions, but the soaring number of infections there prompts tighter travel regulations for Chinese travelers in some countries.
Closing session on December 29, Brent crude oil delivered in February 2023 fell 1 USD or 1.2% to 82.26 USD/barrel. WTI oil fell $0.56, or 0.7%, to $78.4 a barrel.
Britain is considering whether to impose restrictions on arrivals from China. The US, Japan, India and Taiwan have applied Covid testing to people coming from China.
The U.S. Energy Information Administration (EIA) said crude inventories rose unexpectedly last week as imports rose and exports fell.
Both oil contracts fell more than 2% earlier in the session but later pared losses as the dollar fell. A weaker dollar makes oil cheaper for buyers in other currencies.
Russia fired multiple missiles into Ukraine targeting Kiev and other cities in what was Moscow’s biggest aerial attack since the start of the conflict.
Meanwhile, TC Energy said the 622,000 bpd Keystone pipeline is now operational, weeks after a major spill in rural Kansas. The closure of this pipeline affected supplies in the US and briefly caused oil prices to rise.
Gold rose
Gold prices rose, as the dollar fell as first-time jobless claims data showed the US labor market was cooling, easing worries about more extreme rate hikes by the Federal Reserve. next year.
Spot gold rose 0.7 percent to $1,817.3 an ounce while US gold for February 2023 closed up 0.6 percent at $1,826 an ounce.
The jobs data led to a weaker USD and lower bond yields, while the market was trading weak due to the Christmas and New Year holidays. The dollar index fell 0.6 percent while the 10-year US Treasury yield fell after hitting a six-week high in the previous session.
Spot gold is now up nearly 9.5% this quarter, up nearly $200 from a more than two-year low in September on hopes of a slowing U.S. central bank interest rate hike.
Copper falls on worries about demand outlook
Copper prices fell as China’s spike in coronavirus cases and worries about a global recession fueled worries that demand for the metal is slowing.
Copper on the London Metal Exchange LME fell 0.2 percent to $8,428 a tonne. The metal hit a two-week high at $8,520 a tonne in the previous session.
Clues to the demand outlook for copper and other industrial metals will come from a survey of purchasing managers in China’s manufacturing sector, to be released in the next few days.
Copper faces resistance at $8,510/ton while support is provided by the 21-day moving average at $8,380.
Iron ore continues to rise
Iron ore prices continued to rise, with Dalian market hitting a more than six-month high as optimism about China’s demand outlook outweighed concerns about the rising number of Covid-19 infections in the country.
Iron ore for May 2023 on the Dalian Commodity Exchange closed up 1.6 percent to 845 yuan ($121.34) a tonne, after rising to 847.5 yuan, the highest since mid-month 6.
In Singapore, the January contract for January 2023 increased 1.3% to 114.6 USD/ton.
Anticipating demand from Chinese steel mills ahead of the Chinese New Year and Spring Festival holidays has provided some support, particularly iron ore prices in the near term. China will celebrate the week-long Spring Festival, also known as the Lunar New Year, on January 22, 2023.
Overall sentiment remains positive especially with the steel demand outlook in the real estate sector improving.
Steel prices also increased. Bar steel in Shanghai increased 0.1%, hot rolled coil increased 0.4%, stainless steel increased 0.6%.
Japanese rubber fell
Japanese rubber prices fell on a downward trend in Shanghai as a spike in Covid-19 cases in China fueled demand worries, while a strong JPY against the USD also added pressure. .
Rubber contract for June delivery on the Osaka exchange closed down 1.4 JPY or 0.6% at 219 JPY ($1.64)/kg.
In Shanghai, the price of rubber in May 2023 decreased by 105 CNY to 12,685 CNY (US$1,822)/ton.
Robusta coffee drops to the lowest in a month
Robusta coffee term in March 2023 closed down $ 45 or 2.4% to $ 1,824 / ton, in the session fell to $ 1,820, the lowest in a month.
Dealers expect sales from farmers in Vietnam, where the harvest has entered its final stages, to increase, helping to limit price increases.
Arabica coffee for March 2023 fell 3.5 US cents or 2% to $1,7005/lb, back down from a seven-week high in the previous session.
Coffee prices in Vietnam and Indonesia were stable this week as trading activity slowed down due to the festive season.
Farmers in the Central Highlands sold coffee at VND40,000-41,000 ($1.69-$1.73)/kg, up slightly from VND39,900-40,600 a week ago.
A trader in Dak Lak said farmers have harvested about 85% of the 2022/23 coffee crop, and they expect to increase sales in the coming weeks to pay for the upcoming Lunar New Year.
Traders said 2022/23 production is expected to fall to 1.75 million tonnes from 1.8 million tonnes in the previous crop year.
Grade 2 Robusta coffee with 5% black and broken beans is offered at a discount of 80-90 USD/ton compared to the May 2023 contract on ICE, unchanged from last week.
Coffee exports from Vietnam are estimated to increase 10.1% to 1.72 million tons in 2022, equivalent to 28.7 million bags of 60 kg/bag.
In Indonesia, Sumatran coffee was offered at a premium of $100/ton compared with the January 2023 contract, unchanged from the previous week.
Sugar prices increase
Raw sugar for March 2023 closed up 0.13 US cents, or 0.6%, to 20.29 US cents/lb.
Dealers note the market has fallen sharply after setting a six-year high at 21.18 US cents last week.
The market also continues to be underpinned by tight supply, which is expected to last until the first quarter of 2023, and concerns about low output in the state of Maharashtra, a major sugar producer in India.
White sugar futures in March 2023 increased by 6.1 USD or 1.1% to 561.8 USD/ton.
Rice prices in India, Vietnam increase
India’s export rice prices continued to rise this week on strong demand, while rice prices in Vietnam hit a five-month high on China’s move to ease Covid restrictions.
In India, the price of 5% broken parboiled rice was offered at $375-382/ton, up from $374-$380/ton last week. However, the upside momentum is limited by the increasing supply from the new harvest.
Vietnam’s 5% broken rice price was offered at $458/ton FOB, the highest since mid-July, compared with $448-453/ton a week ago.
According to traders, Vietnam could benefit from China’s move to ease Covid restrictions that could boost exports to the country.
Rice exports from Vietnam in 2022 are estimated to increase by 15.7% to 7.22 million tons.
In Thailand, the price of 5% broken rice was sold at $452-465/ton compared to $452-460/ton a week ago. Export prices of rice increased due to the strong baht.
Strong soybeans, reduced wheat and corn
Chicago soybeans rose to their highest level since June as investors watched forecasts for much needed rainfall in Argentina’s growing region and China’s easing of strict Covid-19 measures. But the upside was limited as investors took profits and readjusted their positions before the end of the year.
Wheat and corn fell from multi-week highs as investors waited for clear announcements of frost damage to the US wheat crop and as the number of Covid-19 infections surged in China.
CBOT soybean contract closed up 2 US cents to 15.16-1/4 USD/bushel.
CBOT wheat fell 11-1/2 US cents to $7.74 per barrel, while corn fell 3-1/4 US cent to 6.79-1/2 USD/bushel.
Prices of some key items in the morning of December 30
