Oil falls from 7-year high
Oil prices fell after Brent crude hit more than $90 a barrel, as concerns about tight supply worldwide were balanced by expectations the US Federal Reserve would soon tighten monetary policy.
Closing session 27/1, Brent crude oil fell 62 US cents to 89.34 USD/barrel, WTI oil dropped 74 US cents to 86.61 USD/barrel in a volatile session.
Russia, the world’s second-biggest oil producer, and the West are at odds over Ukraine, stoking fears that energy supplies to Europe could be disrupted, although concerns are focused on supply. gas rather than crude oil.
Russia has made it clear that the United States is not willing to address Moscow’s main security concerns about Ukraine, but has left the door open for dialogue.
The US Federal Reserve said it could raise interest rates in March and plans to end its bond-buying program that month to curb inflation. The dollar rose after the announcement, making oil more expensive for buyers in other currencies. On January 27, the USD index rose to the highest level since July 2021.
Markets are turning their attention to the OPEC+ meeting on February 2. According to some sources, OPEC+ may maintain their plan to raise production in March. However, the organization is facing capacity constraints that make some members unable to produce at quota levels. their.
Gold price falls
Gold prices fell more than 1% to their lowest in more than two weeks, as the dollar rose after strong U.S. economic data reinforced the possibility that the Federal Reserve would raise interest rates in March.
Spot gold fell 1.3% to $1,794.3 an ounce, after falling to $1,790.2 an ounce. US gold for February futures closed down 2% at $1,793.1 an ounce.
US economic growth accelerated in the fourth quarter of 2021, making 2021 the best growth in nearly four decades.
The USD index rose to the highest level since July 2020, putting more pressure on gold prices.
Gold prices will fall in 2022 and 2023 as central banks raise interest rates making gold less attractive. Gold has fallen more than 3% since hitting a 10-week high on January 25 due to tensions between Russia and Ukraine.
The price of copper fell
Copper prices fell as the US Federal Reserve indicated it may tighten monetary policy faster than previously expected.
In a press conference after the Federal Open Market Committee meeting, Fed Chairman Jerome Powell said the committee intends to raise the federal funds rate at its March meeting assuming the conditions are right to do so. present like that. The news sent the USD to its highest level since July 2020.
Three-month copper on the London Metal Exchange fell 1.4% to $9,770 a tonne, ending a two-session rally. Limiting the downside is the metal’s low inventory levels in LME warehouses.
Mining company Anglo American said its overall output for the fourth quarter of 2021 was stable, expecting output to increase this year.
The Chilean Senate has approved an amendment to the country’s mining royalties bill, which would increase taxes on companies operating in the world’s top copper-producing country.
Iron ore rises on hopes of Chinese demand
Dalian iron ore prices rose on hopes of strong demand in China as steel production restrictions ease following the Beijing Olympics next month.
The possibility of tight supply is also a bullish factor for iron ore even as some investors stay on the sidelines ahead of next week’s Lunar New Year break.
The May iron ore contract on the Dalian Commodity Exchange rose about 2% to 781 yuan ($123.07) a tonne, its highest since October 13, 2021, when it closed up just 0. .5% to 769 CNY/ton.
The price of iron ore for delivery in March in Singapore increased about 1% to 139.05 USD/ton.
Iron ore demand is expected to recover when traders return from the holidays and after the Winter Olympics when steel mills can replenish inventories.
Spot iron ore prices into China also recovered, with 62% Fe content rising to $139 a tonne, the highest since September 3, 2021, according to data from consulting firm SteelHome.
Bar steel on the Shanghai trading floor fell 0.3% while hot rolled coil fell 0.2%. Stainless steel fell 0.4%.
Japanese rubber fell
Japanese rubber prices fell as investors took profits ahead of the Lunar New Year holiday in China, while concerns that a hike in US interest rates could slow the global economic recovery also weighed on prices. pressed for rubber.
Markets in mainland China will be closed for a one-week Lunar New Year holiday starting January 31.
The July rubber contract on the Osaka exchange closed down 2.5 JPY or 1% at 236.5 JPY (2.1 USD)/kg.
Rubber in Shanghai for May term fell 270 CNY to close at 14,105 CNY (US$2,220)/ton.
Robusta coffee at the lowest 2.5 months
Robusta coffee for May term closed down $17, or 0.8%, to $2,174 a tonne, having previously fallen to $2,167 a tonne, the lowest since early November 2021.
The plus of March coffee futures with May futures on ICE fell to the lowest level since mid-October 2021 due to worries about diminishing supply.
Arabica coffee for March delivery fell 6.85 US cents or 2.9% to 2,3205 USD/lb.
Coffee prices fell in Vietnam amid gloomy trading ahead of the week-long Lunar New Year holiday.
Farmers in the Central Highlands sell coffee at 38,800 to 40,200 VND (1.71 – 1.78 USD)/kg, a slight change from 38,800 – 40,700 VND.
A trader here said prices are falling due to increased supply but weak demand.
Markets in Vietnam will be closed next week for the Tet holiday, and traders expect exports to not resume until the end of the year.
Traders have offered to sell grade 2 robusta with 5% black and broken beans at a discount of $270-$280/ton from the May coffee futures contract in London, a week before the deduction was 250 – 270 USD/ton.
In Indonesia, Sumatran robusta coffee is offered at a discount of 120 USD/ton compared to the February futures contract in London. Trading activity has yet to pick up in Indonesia as inventories remain low at least until March.
Sugar prices fall
Raw sugar for March delivery closed down 0.08 US cents or 0.4% at 18.41 US cents/lb, extending three consecutive days of decline.
India’s sugar output in the 2021/22 market year could increase 3% year-on-year to 31.9 million tonnes due to increased production in the western state of Maharashatra.
Brazilian President Jair Bolsonaro has signed an executive order allowing the country to retaliate unilaterally in trade disputes if hearings at the World Trade Organization are delayed. This move prompted Brazil to unilaterally retaliate against India in trade disputes related to sugar.
March white sugar futures dropped 0.1 USD to 499.7 USD/ton.
Indian rice prices fall
Indian rice prices fell, moving away from more than seven-month highs this week on a weak rupee, while activity in other hubs quieted ahead of the key harvest and holiday season.
India’s 5% broken parboiled rice was offered at $372-379/ton this week, down from a 7-month high of $375-382/mt a week ago.
Thailand’s 5% broken rice increased to $408-415/ton from $407-$410/ton last week. Thailand exported 6.1 million tons of rice in 2021, up 6.7% from a year ago, according to data from the country’s Ministry of Commerce. Foreign demand for Thai rice remains largely subdued.
Vietnam’s 5% broken rice price was offered for sale at $395-405/ton, unchanged from a week ago. Traders say the winter-spring harvest will begin next week, but won’t peak until mid-March.
Soybeans hit 7-month high due to supply concerns
Soybean prices hit a seven-month high on worries about a South American harvest. Wheat fell for a second session in a row as the dollar rose and fears of a Russian attack on Ukraine eased slightly. Corn fluctuated in both directions during the session but closed lower.
March CBOT soybeans closed up 8-1/4 US cents to 14.48-1/4 USD/bushel after hitting the highest level since June 16. Maize for March delivery fell 1-3/4 US cent to 6.25-1/4 USD/bushel. Wheat futures for March fell 18 US cents to 7.77 USD/bushel.
Prices of some key items in the morning of January 28
