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A further fall in US weekly oil stocks suggests that April’s highs marked the peak. However, if the drawdown continues at the current rate it will take another year before stocks are back to more normal levels. … US Weekly Petroleum Status …
13th May 2015
The USDA’s initial crop forecasts for 2015/16 suggest that world corn, wheat and soybean markets will remain well-supplied. As such, we continue to forecast the prices of all three crops to fall further this year. … Lower production won’t stop corn & …
Stocks of base metals generally fell over the last month. Admittedly, factors specific to individual commodities explained some of the inventory drawdown, but it does suggest that the markets are tightening and that physical demand may be picking up. … …
Last month’s small increase in supply from OPEC just adds to the glut of oil already in the market. Even though the cartel also raised its demand estimates, supply will still be ample. … OPEC oil output continues to …
With food price inflation appearing to have peaked and the economy probably already in recession, Russia is unlikely to extend its export tax on wheat. Although the authorities may leave the door open for future taxes, a return of Russian wheat to the …
11th May 2015
All the signs are that the Chinese authorities are committed to using the powerful tools at their disposal to prevent a “hard landing”. We expect that this will result in stronger demand for industrial raw materials, including copper, later in the year. …
Precious metals prices have been relatively stable in recent years, compared to other commodity sectors. Within the precious metal sector, silver has been by far the best performer this year. We remain positive on the sector overall but we think that the …
After a strong start to the week, with Brent seemingly heading for $70 per barrel, the recovery in oil prices ran out of steam by Friday. Indeed, the rebound over the last few months could simply encourage US firms to restart production, while undermining …
8th May 2015
The monthly US employment report can often trigger large movements in global commodity prices. April’s data, released today, have so far been an exception. Nonetheless, the numbers support our view that the stagnation in the US economy in the first …
China’s commodity imports, with the exception of oil, remained relatively subdued in April. However, we expect import growth to pick up in tandem with higher government spending on infrastructure. … China’s oil imports up strongly in …
The S&P GSCI industrial metals index fell sharply in May and under-performed other commodities. Renewed strength in the dollar coupled with subdued Chinese economic data undermined investor sentiment. … Prices rally as investors turn …
7th May 2015
The recent bounce back in oil prices has prompted speculation about whether they are about to return to the $100 per barrel levels of the last few years. However, there are some major headwinds, both on the supply and demand side, which mean that …
The FAO’s initial forecast for world cereal production, including wheat and corn, is for a fall in 2015, after two years of consecutive record harvests. … FAO Food Outlook (May …
Today’s data provide the best evidence yet that US oil stocks are at least levelling out and maybe about to start to trend lower. What’s more, the data also showed a further increase in demand and another small fall in US oil production. … US Weekly …
6th May 2015
The gold price has closed below $1,200 per ounce, having been above that level the day before, on 15 occasions since January 2011. However, it has never remained below $1,200 for longer than 15 days. We believe $1,200 represents an important support for …
Over the past month the S&P GSCI agriculture index has continued to fall, weighed down by large declines in the prices of corn and wheat due to improving supply prospects. As a result, the index continues to trade at a discount to its 50-, 100- and …
There has been much talk about the “new normal” for the Chinese economy, involving slower and more sustainable growth. In this Metals & Mining Watch , we discuss the implications of the “new normal” for China’s steel sector in terms of both demand and …
5th May 2015
Base metals prices rose strongly this week, in large part owing to renewed investor interest. Data suggesting persistent weakness in China’s economy are fostering hopes of additional stimulus measures. In contrast, gold prices slipped as safe-haven demand …
1st May 2015
Some weakness in the US dollar and hope for a delay to the first US interest rate hike helped to support commodity prices in April. Meanwhile, although Chinese economic data showed persistent weakness, this raised expectations of additional stimulus …
The appreciation of the US dollar since the middle of last year has been a contributing factor in the general decline in agricultural commodity prices. In this Agricultural Commodities Watch we look at the ways in which movements in the dollar can …
After sliding to six-year lows earlier in the month, nickel prices have rebounded sharply in the last week to around $13,500 per tonne. Although we are positive on the medium-term outlook, the latest price recovery appears more about investor positioning …
30th April 2015
Oil production outside the US and OPEC has been barely affected by the dramatic slump in prices over the last year. However, the effects of lower oil prices are likely to make themselves felt increasingly over the next few years. … Non-OPEC & non-US oil …
Today’s data provide more evidence that the growth in US oil stocks is starting to slow, although it will still be some time before stocks actually fall. … US Weekly Petroleum Status …
29th April 2015
An El Niño weather event is looking more likely this year, albeit current expectations are that it will be weak. The risk to supply disruptions and the potential for higher prices should be minimal. … El Niño set to arrive, but with limited …
The (largely positive) views set out in our first quarterly of 2015 have mostly been proved right. We continue to believe that this will be a year of recovery for commodity prices as a whole. Admittedly, some powerful headwinds remain, including the risks …
28th April 2015
Another large fall in the US active rig count last week has disappointed those who had hoped it was stabilising. But they probably won’t have to wait too much longer to see a floor. … US rig count continues to …
The recent rally in iron ore prices is reflecting short-term market dynamics, including an upturn in Chinese steel production and somewhat lower stocks. But the bigger picture is that the market remains massively oversupplied. As such, we expect prices to …
27th April 2015
In a relatively quiet week, oil prices consolidated their recent gains as the consensus swung round to our view that the lows recorded in Q1 would prove to be the turning point. However, powerful headwinds remain both on the supply and the demand side. …
24th April 2015
Expectations of lower cotton production for this coming year have underpinned a rise in prices. However, with a glut of stocks, we still think the price will end the year lower. … High stocks will overshadow lower cotton …
Having fallen sharply since late-2014, we expect US steel prices to stabilise and pick up over the course of this year owing to resilient domestic demand. That said, our forecast also assumes that the flood of Chinese steel imports is stemmed. … US steel …
Data on Asia’s Q1 cocoa grindings showed a 9.3% y/y decline, the third consecutive y/y fall. This follows declines announced last week in Europe and North America. … Asia Cocoa Grindings (Q1 …
The continued deterioration in China’s manufacturing sector signalled by early business surveys for April is disappointing, but the prices of key industrial metals have already factored in a lot of bad news from this source. Perhaps more worrying are …
23rd April 2015
The recent deal between Iran and the West means that it is now very likely that substantial volumes of oil from Iran will return to the market. (We do note that although a final deal is not guaranteed it seems very probable.) In this Energy Watch, we look …
With eyes now starting to focus on the new crops in the Northern Hemisphere, changes in weather conditions have underpinned fluctuations in many agricultural commodity prices in recent weeks. In particular, wet weather in the US has both improved the …
The latest data show a surge in China’s platinum imports in March, suggesting that historically low prices are finally stimulating buying interest. We think higher Chinese import volumes can be sustained and that this will be a factor in a recovery in …
Today’s data provide more evidence that US oil production is beginning to decline in response to lower prices rather than weather-related blips. … US Weekly Petroleum Status …
22nd April 2015
World Steel Association (WSA) data for March show a 2.7% m/m decline in global steel output, with falls in most of the largest producers. However, some recovery can be expected in coming months, notably in the US … Global Steel Production (Mar. …
21st April 2015
The price of gold has dipped below $1,200 per ounce again today, prompting some to ask whether a further escalation of the crisis in Greece would provide much support to the precious metal after all. We remain confident that it will. … Why isn’t gold …
20th April 2015
The rebound in the last few weeks has lifted oil prices above our current end-2015 projections for Brent and WTI, but we are in no rush to change them. Some major headwinds both on the supply and demand side – as well as the broader financial backdrop – …
Stock movements and prices should have an inverse relationship, but this has not beenthe case for many of the base metals over the last month. There are, of course, otherdrivers of the price, including investor sentiment which need not generally have …
17th April 2015
Oil prices rose sharply in the past week, supported by further evidence that US production and crude stocks are close to peaking – if they have not done so already. The recent stability of the US dollar has also helped sentiment towards commodities more …
Further falls in European and North American cocoa grindings suggest consumers’ love of chocolate is not as sweet as it once was. Coupled with ample supply, we expect the price of cocoa to fall this year. … Outlook for cocoa prices remains …
Last month’s increase in supply from OPEC just adds to the glut of oil already in the market. And although the cartel has also boosted its demand estimates for this year, global supply should still be greater than demand, meaning that stocks should …
16th April 2015
The biggest news in the energy market over the last month has undoubtedly been the rebound in oil prices, which came despite the announcement of a preliminary deal between Iran and the West. However, the prices of other energy commodities, such as coal …
A common response to our positive view on gold is that the precious metal is bound to struggle in an environment of dollar strength, especially if this strength is due to increases in US interest rates. However, while early Fed tightening is probably the …
15th April 2015
Today’s data add to evidence that US oil production may be slowing more quickly than the market had anticipated. Coupled with further signs of a revival in demand this should support prices in the second half of the year. … US Weekly Petroleum Status …
The boost to lead prices from the recent squeeze on stock availability may prove temporary. That said, it has exposed the underlying tightness in the market which should be a key factor supporting prices again later in the year. … Can the rally in lead …
The relative weakness of China’s Q1 GDP and March activity data has reinforced concerns about the impact of softer demand on global commodity markets. But in contrast to the consensus, we remain sanguine about the latest developments in the world’s most …
Commodity prices have generally risen since the middle of March, supported by a slightly weaker dollar. However, concerns about Chinese demand have weighed on the prices of some commodities, particularly coal and iron ore. … Weaker dollar provides a …
14th April 2015
China’s commodity import volumes rose in March, admittedly from a low base in February. However, lower prices appear to be encouraging purchases and we expect volumes to remain higher in Q2. … China’s commodity import volumes bounce back in …
13th April 2015
