Commodities: Mixed with safe haven gold finding support - ANZ

Analysts at ANZ explain that amid a note of caution spreading across markets, commodities were mixed with safe haven assets like gold finding support.

Key Quotes

“Crude oil prices advanced to a one-month high expectations of an imminent fall in stockpiles in the US continued to rise. Utilisation rates at refineries jumped 1.9% to 90.8%, which should result in a drawdown in US crude oil in coming weeks. A disruption at a Canadian oil sands operation is also raising concerns of tightness in heavy Alberta oil. A fire at Syncrude Canada’s a 350kb/d plant could be offline for weeks.”

“Base metals prices were volatile before settling slightly lower by the end of the day. Traders remained cautious heading into Friday’s US payrolls release, while possible military action in Syria also kept the market on edge. Sentiment in the copper market remained positive as industry participants finished up their annual gathering in Santiago, Chile. Codelco CEO Nelson Pizarro came away from meetings with Chinese delegates thinking demand will be stronger than expected this year.”

“Iron ore prices eased lower but remained above USD80/t as sentiment stays positive towards stronger demand. Steel and iron ore futures actually rose as traders raised concerns about the slowing availability of cargoes. A fall in port stockpiles in China also added to the concern of some imminent tightness.”

“Coking coal prices jumped above USD200/t as buyers desperately tried to secure supplies in face of the disruption in Australia. With stockpiles at the port relatively limited, the tightness is going to be felt almost immediately. Buyers are scouring the globe for supply, with Russia and domestic Chinese coal now being sought.”

“Gold found some support as unease set in as Trump was preparing to meet President Xi. Prices pushed towards USD1260/oz before easing lower late in the day. Safe haven buying has been elevated in recent days after North Korea tested another missile and the gas attacks in Syria.”

“Agriculture markets were mixed, with softs higher but selling remained prevalent in the grains market. Wheat fell almost 2% after data showed US export sales came in at a hefty 568,400 tonnes, which was well ahead of expectations. Sugar prices rebounded as traders viewed recent falls as excessive.”