Agricultural Commodities in Red on Global Cues

Gold Dips Amid Rate Hike Expectations

Gold inched up on Friday, but still closed the week down more than 2%, as solid data from the United States helped the Greenback to recover and drag metal’s prices down, while concerns over the Fed rate hike postponement faded away. Gold futures for delivery in December tacked on $11.40, or 1.02%, to finish Friday’s session at $1,134.00 a troy ounce on the Comex. Over the week, the precious metal’s futures lost 2.30% to settle at $1,132.90 per troy ounce, while prices slid 2.21%, posting the biggest weekly decline in about a month.

Silver prices fell to their six-year low on Wednesday mainly due to ongoing concerns over the health of the Chinese economy, which provoked some dramatic swings in global stock markets. However, despite sharp losses, silver managed to gain slightly on Friday amid upbeat US economic data that boosted expectations that the Fed will raise rates as soon as next month. Metal’s futures for September delivery added 0.82% to settle at $14.53 an ounce by the end of the session. Over the week, silver futures plunged 5.01%, or 81.0 cents, while prices slid 5.21%, posting the biggest weekly drop since mid-February.

Platinum, along with other precious metals, failed to book gains over the week, slipping 0.53% to settle at $1,014.

Palladium dropped to its lowest level since 2010, as slowdown in China’s imports spooked investors and increased the negative sentiment towards the metal. Palladium was flat on Wall Street to close Friday’s session at $583 an ounce. Over the week, palladium prices slid 2.37%, showing the second leanest position within the precious metals group, behind gold.

Base Metals Surge Higher on Strong US Data

Copper rallied on Friday amid a rebound in Chinese stocks, following a drop to six-year low on Wednesday, when the sharp slump in China’s equities triggered investors’ fears that the country’s slowing economy would cut its demand for the red metal. The best-traded contract for delivery in December gained 1.75 cents, or 0.8%, to settle at $2.3460 per pound on the Comex, marking the highest close since August 14, helping copper to add 1.65% over the week.

Aluminum rebounded from Monday’s low of $1.506 on Friday, settling at $1,602.00 per kg by the end of the trade at the London Metal Exchange. For the week, metal’s prices booked significant gains, finishing 3.92% up from the last week’s closing price.

Zinc futures scored their biggest one-day rally in more than two decades, settling at $1,814.00 a metric ton by the end of Friday’s session at the LME. Over the week, metal’s prices managed to post a substantial increase, closing 2.65% higher from the previous week’s close.

Nickel futures, on the contrary, slipped 0.2% at the London Metal Exchange on Friday amid a weak trend in global markets and low domestic demand. Nickel prices declined 1.35%, being the only industrial metal to post losses over the course of the previous week.

Oil Rallies as Stock Markets Rebound

Crude oil prices jumped for the second straight session on Friday, posting the biggest two-day percentage increase since 2009, as Chinese stock markets rebounded from a steep selloff, easing fears over an ongoing equity market slump. Crude oil futures for delivery in October reached a midday high of $45.90 a barrel, before closing Friday’s session up 6.25% at $45.22 per barrel on the Nymex. Over the past week, New York-traded oil futures added $4.92, or 11.79%, snapping a ten-week losing streak.

Brent oil futures managed to post the biggest one-day rally since March 2009, gaining 5.24% for the day to settle at $50.05 per barrel on Friday, compared to the previous week’s closing price of $45.28 a barrel on the ICE Futures Exchange in London. Over the course of the last week, London-traded Brent oil rose $4.70, or 10.1%, capping the first weekly gain in the past nine weeks, while prices bounced back after hitting their six-year low of $42.23 earlier in the week.

Natural gas futures rose on Friday, as warm weather forecast across the US increased demand expectations for the fuel. Natural gas futures for delivery in October gained 5.1 cents, or 1.91%, to settle at $2.715 per million British thermal units on the New York Mercantile Exchange. For the week, natural gas October contract added 4.4 cents, or 0.67%, while prices tacked on 1.46%. In the meantime, total US natural gas storage inched up 18.3% from the same week a year earlier, standing at 3.099 trillion cubic feet.

Agricultural Commodities in Red on Global Cues

Soybeans managed to book gains on Friday, driven up by worldwide stock markets stabilization and easing concerns over demand for the crop, following a fall to a six-and-a-half year low earlier in the week amid fears over an economic slowdown in China, the world’s biggest soybean importer. Soybeans futures for delivery in September jumped 6 cents, or 0.7%, to settle at $8.9225 a bushel at the Chicago Board of Trade. However, over the week, soybeans were still trading in red, closing 0.45% lower from the last week’s closing price.

Corn futures also edged higher on Friday, boosted by a broad recovery in global equity markets at the end of a turbulent week. Corn futures for September delivery gained 0.75 cents, or 0.2%, to trade at $3.6450 a bushel at the CBOT, driven upward by higher soybean prices and trader positioning ahead of the weekend. Despite a slight increase, corn prices fell 0.6% over the course of the week. However, analysts say that corn prices are likely to trade sideways for a few weeks until there is more certainty over the size of the US crop.

Wheat prices closed lower, being dragged down by a stronger US Dollar and stiff competition for export demand. Grain prices sank to a three-month low, losing 4.02% for the week, as Egypt, the world’s biggest wheat buyer, purchased cheaper Ukrainian grain, highlighting the lack of the US wheat competitiveness, while futures slid 7.25 cents, or 1.5%, to settle at $4.77 a bushel at the CBOT, the lowest level since May 29.

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