Oil rose 1.5 USD/barrel
Oil prices rose by about $1.50 per barrel, rising for the third consecutive session on expectations of a tighter supply in 2021.
Closing the session, Brent crude rose $1.56 or 2.2% to $73.79 a barrel, while WTI crude rose $1.61, or 2.3%, to $71.91 a barrel.
OPEC+ this week agreed to a deal to increase oil production by 400,000 bpd from early August to December to cool prices and meet rising demand.
But as demand still hasn’t caught up with supply in the second half of the year, Morgan Stanley forecasts Brent will trade between $75 and $79 a barrel for the rest of 2021.
Russia’s Energy Minister said the country could start banning gasoline exports next week if fuel prices on domestic exchanges remain at current levels, showing signs of more limited oil supplies in the future. .
The US Energy Information Administration said that the country’s crude oil inventories unexpectedly rose 2.1 million barrels last week to 439.7 million barrels, the first increase since May. However, inventories at Cushing, Oklahoma fell for six straight weeks and hit its lowest level since January 2020 last week.
Barclay analysts also expect global oil inventories to fall faster than expected to pre-pandemic levels. The bank raised its oil price forecast for 2021 by $3 to $5 to $69 per barrel.
Gold price increases
Gold prices rose as stocks and US Treasury yields fell back, restoring gold’s appeal as a safe-haven.
Spot gold rose 0.1% to $1,804.45 an ounce. US gold for August futures closed up 0.1% at $1,805.4 an ounce.
Gold prices were also supported by a commitment by the European Central Bank to keep interest rates at record lows for longer.
Copper price increases due to weakening USD
Copper prices rose on the back of a weaker dollar, falling inventories and a rebound in riskier demand.
Three-month copper on the LME exchange rose 1.1% to $9,451 a tonne.
A fall in the dollar makes USD-denominated metals cheaper for buyers in other currencies.
LME copper stocks fell to 210,775 tonnes but have been on the rise since February.
Dalian iron ore lowest in 3 weeks
Dalian iron ore prices fell for a fourth straight session, falling more than 7% to their lowest in nearly three weeks, as the outlook for iron ore imports rose while demand softened by the government’s decision to cut output.
The Chinese government decided to control steel output strictly this year, which may affect the price of raw materials. Meanwhile, China’s iron ore imports are likely to increase this month, potentially leading to an oversupply.
Iron ore for September delivery, the most traded on the Dalian Commodity Exchange, closed down 5.3% to 1,138 yuan per ton, while at one session the price dropped 7.3% to 1,115 yuan ($172.51). )/ton, the lowest since July 2.
Spot iron ore prices with 62% Fe content in China fell by $4 to $217.5 per tonne on July 21, according to data from consulting firm SteelHome.
Coking coal rose 0.02% to CNY 2,085 a tonne and coking coal rose 0.1% to CNY 2,738 a tonne.
Steel bar for October delivery increased 1.1% to 5,648 CNY/ton. Hot rolled coil decreased by 0.3% to 5,947 CNY/ton. Stainless steel August futures in Shanghai closed up 0.1% to 18,575 CNY/ton.
Rice prices fall to multi-month lows
Export rice prices continued to fall to multi-month lows at Asia’s leading export terminals this week due to falling demand combined with increased supply.
Vietnamese rice 5% broken to the lowest level in more than 16 months, plummeted to 395-400 USD/ton on July 22 from 465-470 USD/ton a week ago.
A trader in Ho Chi Minh City said demand is weak while prices in other rice producing countries are very low. On the other hand, domestic supply is increasing as the summer-autumn harvest has begun. Traders said they have reduced purchases from farmers due to shipping restrictions caused by the coronavirus in Vietnam.
In India, prices fell to a 16-month low as the government released stockpiles that boosted supply.
Parboiled rice 5% broken in this country is offered at 361-366 USD/ton this week down from 364-368 USD/ton a week ago.
The 5% rice price in Thailand fell to 395-410 USD/ton on July 22, the lowest level in nearly 20 months from 405-412 USD/ton a week ago.
Coffee prices up 10%
September arabica coffee futures closed up 17.65 US cents, or 10%, to $1,9365/lb, in a session that hit $1.95/lb, the highest since November 2014. Prices are up nearly 20% this week.
Traders are assessing the damage from frost to Brazil’s coffee crop, with the possibility of damage up to 1-2 million bags.
September robusta coffee futures rose $110, or 6.2%, to $1,889 per ton.
In Vietnam, tight supply, weak demand and government restrictions to curb the spread of the coronavirus have reduced sales.
Farmers in the Central Highlands sold green coffee beans at 36,500 – 37,200 VND (1.59 – 1.62 USD)/kg compared to 37,000 – 37,2000 VND/kg a week ago.
Market activity is slowing down due to shrinking inventories, the end of the crop year and social distancing orders.
Traders have offered to sell grade 2 robusta coffee with 5% black and broken beans at a discount of 80-90 USD/ton compared to the September futures contract (July 21), stable compared to the previous week.
In Indonesia, Sumatra robusta coffee was offered a new discount of $100/ton compared to September and November futures contracts this week, down from a deduction of $50 last week.
Sugar prices fall
Raw sugar for October delivery closed down 0.05 US cents or 0.3% at 17.62 US cents/lb.
Frost has also affected some sugarcane growing areas in Brazil, but not much as the affected areas have already been harvested.
However, dealers said that unless macroeconomic factors turn negative, sugar will trend up as production estimates could fall in the coming weeks due to frost and previous drought.
October white sugar futures fell $3.4, or 0.8%, to $447 a tonne.
Corn, soybeans, wheat all fell
Wheat on the Chicago Mercantile Exchange fell 2.6%, losing its sixth consecutive day of gains as traders took profits from the rally.
Soybeans fell 2% with the latest weather forecasts showing some well-timed rain in key growing regions as the crop is at a critical stage of growth.
Maize also fell sharply with signs of weak export demand.
Corn futures for December closed down 7-1/4 US cents to 5.61-1/4 USD/bushel.
November CBOT soybean futures fell 27-1/4 US cents to 13.62-1/2 USD/bushel.
Soft red winter wheat fell 18-1/2 US cents to 6.92-1/4 USD/bushel. The contract rallied 12.2% in a six-session streak.
Prices of some key items on the morning of July 23:
