Agricultural Commodities Down on Stronger US Dollar

Precious Metals in Red Amid Upbeat US Jobs Data

Gold continued its downward trajectory, tumbling to the lowest level in the last three months on Friday on the back of better-than-anticipated US jobs data that bolstered expectations for a December rate hike by the Fed. Bullion futures for delivery in December plummeted 1.49%, or $16.50, to settle at $1,087.70 a troy ounce by the end of Friday’s trade on the Comex division of the New York Mercantile Exchange, following an earlier drop to $1,084.50, metal’s lowest since August 7. As for the week, prices of the precious metal sank $50.30, or 4.67%, posting the most substantial weekly loss since June 2013. So far, gold has declined nearly 6% on a monthly basis and is currently trading close to its six-and-a-half-year-low from July, when the prices breached the $1,080 level.

Silver’s behaviour was quite similar to gold’s throughout the previous week, with futures for December delivery plunging 1.95%, or 29.2 cents, to settle at $14.69 a troy ounce on the Comex division of the New York Mercantile Exchange by end of trade on Friday, marking the metal’s lowest close since October 2. On the week, silver prices declined substantially, with best-traded futures for December delivery sliding 7.41% amid the Fed’s interest rate hike timing uncertainty, which has been a significant factor weighing on prices of silver along with worries about China’s economic health.

Platinum futures continued their downward trajectory last week, with the most actively-traded platinum futures for January delivery slipping even further on Friday, posting a loss of $12.1 to settle at as low as $941 per ounce and sliding 7.55% over the course of the prior trading week.

Palladium jumped on Friday, with the best-traded contract trading up $11.25 to close the session at $617.55. Despite a small rebound, metal’s prices did not manage to recover, posting quite a significant weekly drop of 11.86% on the Comex.

Base Metals Post Mixed Results Over

Aluminum was trading higher last week, with US metal’s premiums jumping to their three-month high after Alcoa announced their intentions to close the last two aluminum smelters, which raised concerns that there might be a significant deficit of the metal on the market. At the London Metal Exchange, aluminum futures for delivery next month managed to gain 1.3% on Friday, posting 3.39% rise on the week. However, with the other metals being under substantial pressure amid a stronger US Dollar and weak growth in emerging markets that continue to be the dampeners, the future increase in prices of aluminum is set to be rather dim.

Copper futures for delivery in December sank on Friday, falling 1.3 cents, or 0.58%, to finish the trading session at $2.242 a pound on the Comex after sliding to $2.335 earlier in the day, marking the weakest level since August 24. Besides all, copper prices kept being under significant selling pressure, shrinking 5.0 cents, or 3.04%, on the week, as a broadly higher US Dollar combined with ongoing concerns over future demand from China, the world’s top copper consumer, worsened traders’ sentiment and increased their cautiousness.

Nickel also continued to track its downward trend, with most actively-traded futures plummeting 1.1% by the end of Friday’s trade at the London Metal Exchange. Meanwhile, analysts say that the tightness in nickel selling was mostly in line with weak fundamentals and decreasing demand from alloy-makers at the domestic spot markets. Still, worries about metal’s oversupply combined with weak demand from China continue weighing on prices of nickel, dragging the metal down 4.9% over the course of the previous week.

Zinc was trading slightly higher on Friday, rising 0.3% to settle at $1,664 a tonne at the London Metal Exchange, after falling to as low as $1,654 earlier in the day. On the week, metal’s prices still posted a loss of 4.16% amid persistent concerns about oversupply paired with weak demand from China.

Oil Tumbles On Higher Greenback

Crude oil prices slid to seven-day lows on Friday amid a broadly stronger Greenback combined with persistent worries over a global supply glut. On the New York Mercantile Exchange, crude oil for delivery in December plummeted 91 cents, or 2.01%, to finish Friday’s trade at $44.29 a barrel, after falling to $44.11 earlier in the session, the lowest mark since October 28. Over the course of the previous trading week, New York-traded oil futures tumbled 5.84%, following the news that US oil supplies rose for the sixth straight week, remaining near the record-high levels in the last eighty years.

Brent oil also did not manage to post any gains last week, with best-traded oil futures for delivery in December declining 56 cents, or 1.17%, to settle at $47.42 a barrel by the end of Friday’s trade on the ICE Futures Exchange. For the week, London-traded Brent oil futures shed 4.78%, tracking the downtrend and posting the third weekly loss over the last four amid US Dollar strength caused by the upbeat jobs data that supported the expectations that the Fed might still hike rates next month. In the meantime, the spread between the US and the European benchmarks stood at $3.13 per barrel on Friday.

Heating oil was trading remarkably lower in line with other energy commodities, with futures for December delivery slipping 2.59% over the prior trading week to settle at $1.489 per gallon by the end of Friday’s session on the Nymex.

Natural gas jumped to a two-week high on Friday on the back of colder outlook and smaller-than-expected storage injection. On the New York Mercantile Exchange, natural gas futures for December delivery tacked on 0.7 cents, or 0.3%, to settle at $2.371 per million British thermal units by the close of trade on Friday, after rising to $2.398 earlier in the day. As concerns the whole trading week, natural gas prices, however, lost 0.9% despite smaller-than-expected supplies data.

Agricultural Commodities Down on Stronger US Dollar

Corn prices slumped to a nearly three-week low last week, being weighed down by a broadly firmer US Dollar that is likely discouraging demand from overseas buyers, whilst inventories in the US are expected to grow. At the Chicago Board of trade, corn futures for delivery in December slid 1.5 cents, or 0.4% to settle at $3.73 a bushel by the end of trade on Friday. For the week, prices plummeted 4.05%, being influenced by competition from rival exporters – Ukraine and Brazil. Meanwhile, analysts say expectation that the USDA will lift its forecast for the US corn continued to drag prices down last week.

Wheat was trading mixed over the prior week, though still closing mostly lower, being weighed down by strength in the Greenback, which also dampens the competitiveness of the US grain. At the Chicago Board of Trade, wheat futures for delivery in December sank 3 cents, or 0.6%, to close the trade at $5.23 a bushel. Over the course of the previous week, US grain prices posted a loss of 3.88% compared to the previous week’s end price amid ample supplies and flat demand for the US crops.

Soybeans booked gains on Friday, being buoyed by trader short covering and renewed optimism about demand for the current crop, after sinking to a nearly six-week low on Thursday. At the Chicago Board of Trade, soybean futures for delivery next month climbed 3.5 cents, or 0.4%, to settle at $8.71 a bushel. On the week, however, prices did not manage to post a jump, declining 2.2% compared to the previous week’s closing price despite the fact that investors were buying contracts ahead of the end of Friday’s trade, disregarding the strong Greenback and uncertainty over the interest from China.

Raw sugar was trading in red over the prior week, posting a weekly decrease of 3.65% at the Chicago Board of Trade.

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

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

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