Commodities: Mixed/Bearish Price Action - ANZ
Analysts at ANZ noted the action in the commodities sector.
Key Quotes:
"Precious metals were
lower. A slightly stronger USD saw gold edge lower, although investor
interest remains strong. Gold rose early in the trading session after
the ADP report showed a smaller-than-expected increase.
Energy
was mixed. A stronger-than-expected build in inventories was negated by
further supply-side concerns. EIA data showed US crude oil inventories
rose 2.78 million barrels to 543.4 million barrels. Gasoline inventories
also climbed higher (up 536,000 barrels). However, a wildfire in the
oil sands regions of Canada is forcing many producers to cut output.
Bulks
were weaker. Further weakness in the Chinese steel market continued to
put pressure on iron ore prices. Inventories at China’s major ports rose
2mt to 100.3mt last week according to Umetal. This saw prices of billet
come under pressure, falling another RMB100/t to trade at RMB2,290/t.
Industrials
were lower. Disappointing manufacturing data this week continued to
weigh on the market. Copper also came under pressure from further
supply-side concerns. China’s largest copper producer, Jianxi, said that
the recent output cuts have been offset by new capacity in the country.
A group of smelters announced last December that refined copper output
would be cut by 400kt.
Agriculture was mixed.
Price action was choppy amidst a stronger USD. Corn fell to a one week
low as better-than-expected weather raises the risk of a stronger
harvest. Sugar rose to a five week high after a USDA reported indicated
India’s crop could fall 7.9% next year."
