Natural Gas Futures Dampened by Warm Weather

Gold Investors Eyeing Greece

Gold declined to a three – week low on the week ending Friday 26 before the losses were reversed as investors proceeded to monitor the Greece talks, amid the mounting fears of a debt default. Respectively, investors were eyeing the Greek developments ahead of the deadline for the country to repay 1.6 billion Euros to the International Monetary Fund on June 30. The country could exit the euro area in case the payment will be missed. Last week, the Prime Minister of Greece Alexis Tsipras stated the government rejected the reform measures proposed by creditors and called a referendum on July 5 instead. Gold futures for August delivery hit a daily low of $1,167.10 per troy ounce, a level lastly seen on June 5. For the week, prices slumped $26.50, or 2.39%, amid indications of stronger US economy.

Silver futures for delivery in September ended Friday’s session by going down 0.46%, straight at $15.76. Earlier during the same session, prices hit $15.48, the weakest since March 18. On a weekly basis, silver dropped 36.5 cents, or 2.32%.

Platinum retreated 0.7% during the week, in the respect for the months of straight decline.

Palladium fell the most over the last trading week June 22- 26, losing about 4.07% of its value with 13.62% monthly loss.

Bejing is Actively Supporting the Economy

Copper for delivery in September rose 0.61%, or 1.6 cents, on Friday, settling at $2.635 per pound. As for the week, prices hit new highs, rising about 7.2 cents. The new possible fresh stimulus measures supporting the economy, led prices for the red metal to jump about 2% for the week. On Sunday, the Bank of China cut the interest rate by 0.25%, from 5.10% to 4.85%, to boost the economic activity and its growth. It is the first cut since the month of November, showing that Bejing is starting to actively support the economy since the deflation risk rise. As a reminder, the Asian nation is the largest copper consumer, accounting for about 40% of global consumption as for the year of 2014. Investors are currently focused at Greek developments and the latest US reports and data releases.

Aluminum global production growth is surging. According to the latest figures published by the International Aluminum Institute showed that the daily average input in the month of May fell marginally from April’s 158,100 tonnes to 157,800 tonnes. However, that should not distract from the rising trend. 4.892 tonnes of aluminum was produced in the month of May, almost 12% higher year– over– year, the fastest growth since 2011. As an example, the European production has risen 5.2% in 2015 with the highest run– rate of 3.74 million tonnes.

Zinc prices traded higher by 0.08% for June delivery on Thursday. However, the metal fell by 0.75% on a weekly– basis.

Natural Gas Futures Dampened by Warm Weather

Crude oil declined on Friday, since investors were in a hunt for developments in Greece. If the country will not find a perfect solution of the situation, the country’s exit from the euro area is possible. Last week, Greek Prime Minister Alexis Tsipras stated that the government did not accept the latest reform measures proposed by the creditors and called a referendum instead. Crude oil slumped 7 cents, or 0.12%, on the New York Mercantile Exchange, ending the week at $59.63 per barrel. At Nymex, prices hit a low of $58.76, the weakest since June 9. Meanwhile, the number of rigs drilling in the US fell to 628, the 29th straight weeks of declines. On the weekly basis, oil futures cut 0.57% of value, or 12 cents, the second straight week of losses, amid the worries over high domestic production.

Brent oil for delivery in August reached a session low of $62.50, the weakest since June 22, before closing at $63.26. On the weekly basis, London– traded Brent oil futures tacked 0.38%. Meanwhile, the spread between the WTI and the Brent crude contracts changed from $3.05 to $3.63. The US Dollar Index, measuring the Greenback’s strength against a basket of currencies, tacked on 0.24% last Friday, closing at 95.60.

Natural gas prices fell on Friday, since forecasts for the mild US weather dampened the demand expectations. Demand for the fuel tends to be correlated with the weather, since the hot summer temperatures, the need for air heater is declining. Natural gas for August delivery stood at $2.770 per mBtu.

Wheat Prices Surged Amid Heavy Rains

Wheat futures soared about 6% of Friday, as excessive rainfall in the US Midwest will delay the harvest pace and damage the crops. The National Weather Service informed that up to six times the average rain has fallen over the last two weeks, and even more precipitation is forecasted. US wheat peaked at $5.6620 per bushel, a level last seen on January 13. Over the week, the July contract sky– rocketed 72.87 cents, or 14.7%, over the concerns of winter– wheat harvest. According to the US Department of Agriculture, about 19% of the US winter crop was harvested as of June 21, when the five– year average of 31% for this period of the year. Last week, 41% of US winter crop was rated good to excellent condition, while nearly 71% of the spring– wheat crop was in the same condition.

Corn for July delivery spiked 8.4 cents, or 2.26%, on Friday, ending at $3.8500 per bushel after reaching a session high of $3.900, the highest since March 31. On the week, futures for corn crop surged 33.0 cents, or 8.84%, since the wheat prices appreciation. Wheat and corn prices are highly correlated since both are used as animal feed. According to USDA, about 71% of the corn crop was rated good to excellent as of June 21, down from 73% in the preceding week.

Soybeans for July delivery rose to $10.2420 per bushel last Friday, the March 2 highest, before cutting gains and closing at $10.0200, up 1.6 cents, or 0.17%. US soybean contract added 2.93%, following the fifth consecutive gain, over the growing concerns of the US crop condition.

EXPLANATIONS

Commodities

• Gold - COMEX active contracted (USD/t o.z.)

• Silver - COMEX active contract (USD/t o.z.)

• Platinum - New York Mercantile Exchange active contract (USD/t o.z.)

• Palladium - New York Mercantile Exchange active contract (USD/t o.z.)

• Aluminum - Active contract of primary aluminum of minimum 99.2% purity at the LME (USD/MT)

• Copper - Active contact of electrolytic copper at the LME (USD/MT)

• Zinc - Active contract of zinc od minimum 99.995% purity at the LME (USD/MT)

• Nickel - Active contract of nickel of 99.8% purity at the LME (USD/MT)

• Crude oil - light, sweet crude oil active contract on the New York Mercantile Exchange (USD/bbl.)

• Brent oil - Brent oil active contract on the ICE Futures Europe (USD/bbl.)

• Natural Gas - natural gas active contract on the New York Mercantile Exchange (USD/MMBtu)

• Heating oil - heating oil active contract on the New York Mercantile Exchange (USD/gal.)

• Wheat - wheat active contract on the Chicago Board of Trade (cents/bu)

• Corn - corn active contract on the Chicago Board of Trade (cents/bu)

• Coffee - benchmark Arabica coffee active contract on the NYB-ICE Futures Exchange

• Soybeans - active contract on the Chicago Board of Trade (cents/bu)

Indices

• S&P GSCI Precious Metals Total Return Index - commodity group subindex composed of gold and silver; the index reflects return on underlying commodity futures price movement

• S&P GSCI Industrial Metals Total Return Index - commodity group subindex composed of futures contracts on aluminium, copper, lead, nickel and zinc

• S&P GSCI Energy Total Return Index - commodity group subindex composed of futures contracts on crude oil, Brent oil, RBOB gas, heating oil, gas oil and natural gas

• S&P GSCI Agriculture Total Return Index - commodity group subindex composed of futures contracts on wheat, red wheat, corn, soybeans, cotton, sugar, coffee and cocoa

Indicators

Long-term price forecasts - aggregated price forecasts based on predictions of 20 international banks forecasts

USDA Wasde Total Estimated Inventories (Today) - current level of inventories of wheat in 1000 MT, corn in 1000 MT, soybeans in million bushels and green coffee in 1000 bags