Oil reversed due to increased reserves in the US
Oil prices reversed the initial upward trend after information about an increase in US crude oil reserves overwhelmed expectations that US interest rates had peaked.
Brent oil futures closed up 18 cents to 86.00 USD/barrel while US West Texas Intermediate crude oil fell 58 cents to 82.91 USD/barrel. Prices increased by more than 1 USD/barrel earlier in the session.
Prices fell after US government data showed US crude inventories rose 10.2 million barrels last week to 424.2 million barrels, well above analysts’ expectations for a rise. 500,000 barrels. US crude oil production also reached a record level of 13.2 million barrels per day this week.
US inflation is slowing, continuing to support expectations that the Fed will freeze interest rate hikes next month. Lower US bond yields are also supporting stocks and oil, said UBS analyst Giovanni Staunovo.
Meanwhile, the IEA lowered its oil demand growth forecast for 2024, suggesting that harsher global economic conditions and advances in energy efficiency will weigh on consumption.
The agency now sees 2024 demand growth at 880,000 bpd, compared with a previous forecast of 1 million bpd. However, it raised its 2023 demand forecast to 2.3 million bpd. /day from the forecast level of 2.2 million barrels/day.
In contrast, the Organization of Petroleum Exporting Countries (OPEC) still maintains its forecast for relatively strong demand growth next year, expected to reach 2.25 million barrels/day.
Russia’s exports of crude and products in September rose to 460,000 barrels per day, the IEA estimated on Thursday, despite Western sanctions and Moscow’s pledge to cut output in parallel with OPEC.
Gold falls as bonds and USD rise after US inflation data
Gold prices fell as the dollar and Treasury yields edged higher after US consumer prices rose more than expected in September 2023 and raised concerns that the US Federal Reserve (Fed) may can keep interest rates higher for a while.
Spot gold fell 0.3% to $1,868.79 an ounce at 1904 GMT, after hitting its highest since September 27 earlier in the session. US gold futures fell 0.2% to $1,883.
The consumer price index rose 0.4% last month after rising 0.3% in August, the Labor Department said. However, year-on-year consumer prices have declined from a peak of 9.1% in June 2022.
“There are still some signs that the US economy is slowing, which will be beneficial for gold, predicting prices could trade in the $1,860 – $1,920 range in the near term,” said Edward Moya, analyst. said senior market analyst at OANDA.
Other metals, spot silver fell 1.2% to $21.79 an ounce, platinum fell 2.2% to $865.87, while palladium fell 2.9% to $1,132.75.
Iron ore prolongs its recovery thanks to China’s economic stimulus
Iron ore futures rose for a second straight session on Thursday as investors weighed the prospect of additional measures to shore up China’s weakening economy against steel output cuts in country and uncertainty about its real estate sector.
Hopes for fresh stimulus for the world’s second-biggest economy and top metals consumer supported iron ore after prices hit a six-week low earlier this week, partly on worries about the crisis. Debt crisis engulfed many Chinese real estate developers.
The price of iron ore delivered in November 2023 on the Singapore Exchange increased 1.8% to 114.55 USD/ton. Iron ore delivered in January 2024 on China’s Dalian Commodity Exchange closed up 1.6% at 837 CNY (114.71 USD)/ton.
Prices of steel and other steel materials also rose, with coking coal and coking coal on the Dalian exchange both up 0.6%. On the Shanghai Futures Exchange, rebar rose 0.3%, hot-rolled coil rose 0.4% and stainless steel rose 1.6%.
Dong fell after US inflation supported USD
Copper prices fell after US inflation data boosted the dollar, although China’s measures to support the economy and stronger demand limited the decline.
Copper price delivered after 3 months on the London Metal Exchange (LME) closed down 0.4% to 7,990 USD/ton. Prices fell after data showed US consumer prices rose slightly more than expected in September, but underlying inflation slowed. The strong rise in the USD makes traders expect that the Federal Reserve will most likely introduce another interest rate hike this year.
A stronger USD makes goods priced in the US currency more expensive for buyers using other currencies.
Copper stockpiles at LME registered warehouses hit a two-year high of 181,150 tonnes, LME daily data showed, but inventories fell to 175,100 after new cancellations of 3,525 tonnes.
On the LME, aluminum prices decreased 0.3% to 2,206.5 USD/ton after hitting the lowest level since September 18 of 2,195 USD, zinc hit the lowest level since September 11 of 2,441 USD and decreased. 1.3% to $2,443.50, while lead fell 1.6% to $2,060 after hitting its lowest since July 11 of $2,052. Tin price was flat at 24,915 USD. Nickel rose 2.1% to $18,760 after hitting its lowest since July 2022 on Wednesday.
Soybeans and corn increased after USDA cut production
Soybean, corn and wheat futures in Chicago rose sharply after a US report showed the corn and soybean harvest was smaller than previously expected.
Soybean futures in Chicago traded at $12.92/bushel, about 3.5% higher than the opening price and on track for the biggest daily increase in 3.5 months. CBOT soybean futures for December reached their highest level since September 29.
Corn futures rose about 1.5% to $4.95/bushel and wheat futures rose 13-1/4 cents to $5.69-1/4/bushel.
The United States Department of Agriculture (USDA) pegged the corn harvest at 15.064 billion bushels and the soybean harvest at 4.104 billion bushels, estimating average yields at 173.0 bushels per acre for corn and 49.6 bushels per acre for soybeans.
Despite the production cuts, weak export demand for both soybeans and corn is expected to leave ample domestic stockpiles, weighing on prices.
Rice decreased in India while increased in Thailand and Vietnam
Prices of parboiled rice exported from India extended their decline this week as buyers postponed purchases amid uncertainty over export duties set to expire this weekend.
Indian 5% parboiled rice prices traded at 515 to 525 USD/ton, down from 520 USD to 530 USD last week.
In August, India imposed a 20% export tax on parboiled rice that will be effective until October 15, potentially reducing exports and pushing up global rice prices. India plans to extend the 20% export tax on parboiled rice until March 2024, an Indian government official told Reuters on Wednesday.
Thailand’s 5% broken rice price increased to 580 – 600 USD/ton from 585 USD/ton last week. Prices increased due to higher domestic prices and the strengthening baht and supplies were harvested while demand came from Africa and Asia.
Vietnam’s 5% broken rice was offered at 615 – 625 USD/ton, up from 610 – 620 USD a week ago. In the first 9 months of this year, Vietnam’s rice exports increased 19.5% to 6.4 million tons, compared to the same period last year.
Meanwhile, domestic rice prices in Bangladesh remain high and the country still does not need to import rice, providing some relief while the global market is fluctuating.
Sugar and coffee increase
Raw sugar futures prices for March 2024 closed up 0.8% to 26.61 cents/lb. Europe’s largest sugar producer, Suedzucker, raised its full-year profit forecast, partly because it expects sugar prices to remain at historic highs as world supply continues to be tight.
China’s Ministry of Agriculture maintains the country’s 2023/24 sugar import forecast at 5 million tons. This compares to estimated imports of 3.8 million in 2022/23.
White sugar futures in December 2023 increased by 0.9% to 716 USD/ton.
Robusta coffee futures price for January 2024 increased 0.2% to 2,341 USD/ton after setting a 6-month low of 2,223 USD on Tuesday. Vietnamese robusta coffee remained high this week as the new crop had not yet arrived on the market, while prices in Indonesia were stable.
Arabica coffee futures price in December 2023 increased 0.2% to 1.4805 USD/lb.
Japanese rubber highest in 15 months
Japanese rubber futures rose to a 15-month high amid hopes for more economic stimulus in China and the possibility of a supply shortage in top producer Thailand. Rubber contract for March delivery increased by 12.8 yen, equivalent to 5.4%, to 248.8 yen (1.67 USD)/kg, after previously hitting the highest level since July 13, 2022. during session.
Rubber contracts on the Shanghai Futures Exchange (SHFE) for delivery in January 2024 increased by 405 CNY, equivalent to 2.9%, to 14,565 CNT (1,994.74 USD)/ton.
In China, stocks rose in early trading, after a state fund increased its stake in the country’s biggest banks following a series of stimulus efforts to revive the weakening stock market. Thailand has warned of gusty winds, heavy to very heavy rain and accumulation that could cause flash floods and spills across the country, potentially affecting supplies.
Prices of some key items on the morning of October 13, 2023
