Price action in oil remains somewhat rangebound, with ICE Brent extending to trade about US$63/bbl.
There has been little in the way of fresh catalysts for the oil market over the last week. Nevertheless, the market proceeds to follow US/ Iranian developments closely.
Nuclear talks among the US and Iran on Friday worked as expected, with Iran still wanting all sanctions raised before it would consent to return to compliance with the nuclear deal, something the US is unwilling to do.
Metals
The US dollar has turned from a headwind to a tailwind more lately for the metals complex. This, coupled with a pause in the march higher in US Treasury yields, has given room for gold to rally, notwithstanding investors continuing to cut their ETF holdings in gold.
Although over the last reporting week, examiners did improve their net longs in COMEX gold futures by 26,943 lots, dropping them with a net long position of 77,406 lots as of last Tuesday. This is the most significant weekly gain after June last year.
LME copper proceeds to join near the US$9,000/t mark. Soaring stocks and the collapse of mine supply hazards to escalate after the border closing in Chile have held the metal from moving higher. Remarks from Chinese authorities over the last week may also drop investors more careful.
Last Thursday, a rare one-line statement was issued following China’s Financial Stability and Development Commission, directed by Vice-Premier Liu He. He warned about the possible rise of commodity prices and the consumer boom.
Over the weekend, Premier Li Keqiang again asked for stabilizing commodity prices and reducing domestic manufacturers’ cost pressures.
Agriculture
The USDA issued its April WASDE report on Friday, and the domestic balance sheets for soybean and wheat noticed little change. The US soybean balance was left stable from last month, while wheat saw a slight reduction in feed demand and somewhat lower imports, which marked 2020/21 US ending stocks rise from 836m bushels to 852m bushels.
Nevertheless, the US corn balance sheet marked more extensive changes, with the agency developing both export estimates and domestic demand. Both were raised by 75m bushels, which sees 2020/21 US ending stocks falling from a little over 1.5b bushels to 1.35b bushels.
Turning to global balances, and the USDA developed higher its estimation for Chinese feed demand for wheat by 5mt to 40mt for the 2020/21 season.
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