28/04/2014

Weekly Commodity Overview

Ma r ke t Hi ghl i ght s Ma r ke t Hi ghl i ght s
Monday, April 28, 2014
15:30 GMT
Dukascopy Bank SA, Route de Pre-Bois 20, Internatonal Center Cointrin, Entrance H, 1215 Geneva 15, Switzerland tel: +41 (0) 22 799 4888, fax: +41 (0) 22 799 4880 research@dukascopy.com
ASIA-PACIFIC REGION
China HSBC flash manufacturing PMI signals contraction
The preliminary reading of the HSBC manufacturing PMI showed that manufacturing actvity in
China contnued to contract in April. The HSBC manufacturing gauge came at 48.3 in April, in
line with estmates and slightly more than a Marchs fnal fgure of 48. A reading below 50
indicates contracton of the industry. The weakness of the manufacturing sector added to
concerns over the worlds second largest economy, following the fow of negatve data on GDP
and industrial producton released in the preceding week.
EUROPE
European PMI numbers mixed; German business confidence gains
Manufacturing actvity in the single currency zone remained unchanged in April, with fash
manufacturing PMI coming at 53.3, perfectly matching expectatons. At the same tme,
separate states showed mixed picture. German manufacturing PMI outshone forecasts, while
French manufacturing gauge missed estmates in April. German PMI came at 54.2 versus
projectons of 53.9, whereas French PMI was at 50.9 compared to a forecast of 51.9.
Meanwhile, German business confdence surprisingly rose this month. The Ifo business climate
index climbed to 111.2 in April from 110.7 in March; experts called for a small drop to 110.4.
NORTH AMERICA
U.S. data mostly negative but durable goods orders rise
Housing market data in the U.S. was controversial. Existng home sales slightly declined to 4.59
million units in March from 4.60 million in February, while experts predicted a larger decline to
4.57 million units. At the same tme, new home sales disappointed investors, coming at 384,000
units that is smaller than 449,000 units in the preceding month and below market consensus of
455,000 units. Flash manufacturing numbers as well as jobless claims added to skeptcism,
missing forecasts. Nevertheless, durable goods orders were on the positve side, gaining 2% in
March instead of adding only 0.6% as experts had projected.
Weekly Ranked Price Moves (%) Weekly Ranked Price Moves (%)
Precious Metals Slump Mostly Higher amid Ukraine Turmoil
Monday, April 28, 2014
15:30 GMT
Dukascopy Bank SA, Route de Pre-Bois 20, Internatonal Center Cointrin, Entrance H, 1215 Geneva 15, Switzerland tel: +41 (0) 22 799 4888, fax: +41 (0) 22 799 4880 research@dukascopy.com
Gold closed higher despite being in the downturn for the most of the week. Positve
data from the U.S. created the heaviest drag on the yellow metals prices by eroding
safe-haven demand and fuelling concerns that the Fed will end its stmulus
programme sooner than expected. At the same tme, on-going turmoil in Ukraine stll
was at a play to contain the decline. Riots in the eastern parts of Ukraine contnued
last week and the chances of a prompt resoluton of the confict seemed negligent.
Meanwhile, support pertaining to solid demand in Asia started to fade on ideas that
India, the world second largest consumer of the bullion, may hold on its import
restrictons amid depreciatng natonal currency. However, the fall in imports by India
may be somehow compensated by increased buying actvity in China. The World Gold
Council expects Chinas gold purchases to rise up to 25% by 2017.
Silver mirrored gold moves, inching up 0.62%. The latest import data from India put
a heavy selling pressure on the grey metal. In January, the countrys net imports
totaled 28 metric tonnes that is a 12% monthly increase but at the same tme a 77%
yearly drop. Since the end of 2013, the precious metal was underpinned by a record
Indias purchases that sent total silver imports for 2013 189% higher to 6,125 tonnes.
Platinum and Palladium were mixed amid signs of progress in resoluton of the
labour dispute in South Africa. Last week, three biggest platnum producers started a
discussion with South Africas union ofcials afer producers revised a pay ofer.
However, skeptcism was in place as a proposed rise in wages does not meet the union
demands. At the same tme, palladium remained fundamentally stronger than its peer
thanks to stoking supply concerns stemming from the Russias and the West standof
over Ukraine. Russia is the worlds biggest palladium exporter.
Industrial Metals Mixed on Chinas Data, Supply Worries
Dukascopy Bank SA, Route de Pre-Bois 20, Internatonal Center Cointrin, Entrance H, 1215 Geneva 15, Switzerland tel: +41 (0) 22 799 4888, fax: +41 (0) 22 799 4880 research@dukascopy.com
Aluminum lacked directon last week as negatve numbers from China were
outweighed by supply-side support. As reported earlier, top global producers, United
Co. Rusal and Alcoa, may contnue reducing output at a tme when the global market is
expected to swing to defcit of 730,000 tonnes in 2014. United Co. Rusal, the biggest
producer, said its output has already dropped to an eight-month low in February, while
Alcoa, the third biggest miner, plans to cut output by 800,000 tonnes this year.
Copper was on the rise untl Wednesday when it reversed its trend and erased some
of the prior gains. The reason behind this was a release of the preliminary Chinas PMI
data. HSBC fash manufacturing index showed contracton of the industry for the fourth
consecutve month in April. However, the red metals slide was restricted as slowing
manufacturing actvity of the worlds top manufacturer has not produced any negatve
efect on the copper demand yet. According to the latest trade data, Chinas copper
imports rebounded last month. The country bought 420,000 tonnes of the base metal
in March versus 379,000 tonnes in February; imports were 31% up on yearly basis.
Nickel surged to a 14-month high as Russia, the top exporter, may become as subject
to new sanctons from the West as fast resoluton of Ukrainian confict seems elusive.
Supply worries were further fuelled by the fact that Indonesia that accounted for circa
20% of global exports imposed a ban on ore exports in January this year. Nickel market
may swing to a defcit in 2014, reported Sumitomo Metal Mining Co.
Zinc lost support pertaining to falling LME inventories and unexpected defcit on the
market last year. LME supplies dropped 1.87% during last week and stood almost 30%
lower than in the same period in 2013.
Monday, April 28, 2014
15:30 GMT
Energy Futures Swing to Losses after EIA Data; Brent Gains on Ukraine
Dukascopy Bank SA, Route de Pre-Bois 20, Internatonal Center Cointrin, Entrance H, 1215 Geneva 15, Switzerland tel: +41 (0) 22 799 4888, fax: +41 (0) 22 799 4880 research@dukascopy.com
WTI and Brent oil were mixed last week, with WTI retreatng from multple-week
highs. At the same tme, Brent oil was more resilient than its U.S. peer, being bolstered
by the uncertainty over oil ports in Libya and unrest in Ukraine. In Libya, the largest
holder of oil reserves in Africa, an agreement to restart operatons at two oil ports that
were returned to the state by the rebels may collapse as payments envisaged by the
accord have not been received yet. Meanwhile, Ukraines state resumed an ofensive
against protesters in the east thus escalatng tensions with Russia, the worlds largest
energy exporter.
At the same tme, the EIA data was negatve for the energy futures for the second
consecutve week. U.S. stockpiles jumped 3.5 million barrels in the week ended April 18
afer skyrocketng 10 million barrels in the week ended April 11. Experts called for a 2.6-
million-barrel increase.
Natural gas was trading higher in the frst part of the week as updated weather
forecasts contnued to point to the colder-than-normal weather in the central and
eastern regions of the U.S. Natural gas futures contnued to gain even afer the EIA
report, showing that U.S. storage increased more than expected in the week ended
April 18. Natural gas inventories climbed 49 billion cubic feet versus a forecast of a
climb of 40 billion cubic feet. In the preceding week, stocks rose 24 billion cubic feet.
Heating oil plunged, following losses in WTI futures. The commodity also came under
additonal pressure afer the weekly EIA report, indicatng that U.S. supplies of distllate
fuel, which includes heatng oil and diesel, climbed 600,000 barrels, defying
expectatons of a decline of 900,000 barrels. However, below-normal temperatures in
the U.S. restricted the downturn in heatng oil prices.
Monday, April 28, 2014
15:30 GMT
Agricultural Commodities Up on Slow U.S. Planting; Coffee Soars on Brazil
Dukascopy Bank SA, Route de Pre-Bois 20, Internatonal Center Cointrin, Entrance H, 1215 Geneva 15, Switzerland tel: +41 (0) 22 799 4888, fax: +41 (0) 22 799 4880 research@dukascopy.com
Monday, April 28, 2014
15:30 GMT
Wheat halted its advancement in the beginning of the last week amid talks that long-
awaited rains would boost crops in the U.S., Europe and Russia. Another factor
representng a partcular signifcance was a release of the U.S. export data that failed to
meet expectatons last week. Moreover, a rally of more than 4% in the week ended April
18 prompted traders to take profts thus adding weigh on the wheat futures. However,
later in the week wheat managed to erase losses, being propped up by the lack of
improvement in the U.S. crop conditons and on-going tensions in Ukraine.
Corn started the week on the negatve note but the weakness was short-lived as
persistent turmoil in Ukraine coupled with solid U.S. exports that stood at 1.60 million
tonnes last week helped the commodity to swing to gains. The rally was also atributed
to the disappointng USDA fgures showing that U.S. seedings were only 6%, below the
average of 14% and expectatons of 10%. Weather also was on the positve side as rains
in the Midwest and Delta may slow down the plantng further.
Soybeans posted the longest decline since July on worries that China, top consumer,
will reduce its imports. According to the Oil World, the pace of soybean buying by China
from the U.S. and South America is likely to slow down closer to the end of the season as
Chinas stockpiles are ample. Moreover, Chinese buyers experience problems in opening
leters of credits that also pressurizes the countrys buying actvity.
Coffee soared to a 26-month high in the middle of the week as drought in Brazil, the top
producer, damaged crops. Volcafe Ltd. reduced its estmate of Brazilian crop by 18% to
28.4 million bags. Also sending cofee futures higher, Volcafe Ltd. lifed its forecast for a
defcit in 2014/15 season to 11 million bags from 6.5 million bags estmated earlier and
warned of a potental supply shortage in the following seasons as well.
Monday, April 28, 2014
15:30 GMT
Dukascopy Bank SA, Route de Pre-Bois 20, Internatonal Center Cointrin, Entrance H, 1215 Geneva 15, Switzerland tel: +41 (0) 22 799 4888, fax: +41 (0) 22 799 4880 research@dukascopy.com
Correlation Matrix
Precious Metals Confidence Intervals for the Next 7 Days
Dukascopy Bank SA, Route de Pre-Bois 20, Internatonal Center Cointrin, Entrance H, 1215 Geneva 15, Switzerland tel: +41 (0) 22 799 4888, fax: +41 (0) 22 799 4880 research@dukascopy.com
Monday, April 28, 2014
15:30 GMT
Dukascopy Bank SA, Route de Pre-Bois 20, Internatonal Center Cointrin, Entrance H, 1215 Geneva 15, Switzerland tel: +41 (0) 22 799 4888, fax: +41 (0) 22 799 4880 research@dukascopy.com
Monday, April 28, 2014
15:30 GMT
Industrial Metals Confidence Intervals for the Next 7 Days
Dukascopy Bank SA, Route de Pre-Bois 20, Internatonal Center Cointrin, Entrance H, 1215 Geneva 15, Switzerland tel: +41 (0) 22 799 4888, fax: +41 (0) 22 799 4880 research@dukascopy.com
Monday, April 28, 2014
15:30 GMT
Energy Confidence Intervals for the Next 7 Days
Dukascopy Bank SA, Route de Pre-Bois 20, Internatonal Center Cointrin, Entrance H, 1215 Geneva 15, Switzerland tel: +41 (0) 22 799 4888, fax: +41 (0) 22 799 4880 research@dukascopy.com
Monday, April 28, 2014
15:30 GMT
Agriculture Confidence Intervals for the Next 7 Days
Commodites
Gold - COMEX actve contracted (USD/t o.z.)
Silver - COMEX actve contract (USD/t o.z.)
Platnum - New York Mercantle Exchange actve contract (USD/t o.z.)
Palladium - New York Mercantle Exchange actve contract (USD/t o.z.)
Aluminum-Actve contract of primary aluminum of minimum 99.2% purity at the
LME (USD/MT)
Copper Actve contact of electrolytc copper at the LME (USD/MT)
Zinc - Actve contract of zinc od minimum 99.995% purity at the LME (USD/MT)
Nickel Actve contract of nickel of 99.8% purity at the LME (USD/MT)
Crude oil - light, sweet crude oil actve contract on the New York Mercantle
Exchange (USD/bbl.)
Brent oil - Brent oil actve contract on the ICE Futures Europe (USD/bbl.)
Natural Gas - natural gas actve contract on the New York Mercantle Exchange
(USD/MMBtu)
Heatng oil - heatng oil actve contract on the New York Mercantle Exchange
(USD/gal.)
Wheat - wheat actve contract on the Chicago Board of Trade (cents/bu)
Corn - corn actve contract on the Chicago Board of Trade (cents/bu)
Cofee - benchmark Arabica cofee actve contract on the NYB-ICE Futures
Exchange
Soybeans -actve 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 refects 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, heatng 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, coton, sugar, cofee and cocoa
Indicators
Long-term price forecasts-aggregated price forecasts based on predictons of 20
internatonal banks forecasts
USDA Wasde Total Estmated Inventories (Today)-current level of inventories of wheat in
1000 MT, corn in 1000 MT, soybeans in million bushels and green cofee in 1000 bags
Dukascopy Bank SA, Route de Pre-Bois 20, Internatonal Center Cointrin, Entrance H, 1215 Geneva 15, Switzerland tel: +41 (0) 22 799 4888, fax: +41 (0) 22 799 4880 research@dukascopy.com
EXPLANATIONS
Dukascopy Bank SA, Route de Pre-Bois 20, Internatonal Center Cointrin, Entrance H, 1215 Geneva 15, Switzerland tel: +41 (0) 22 799 4888, fax: +41 (0) 22 799 4880 research@dukascopy.com
Disclaimer
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products. Dukascopy group assume no responsibility for the completeness or the accuracy of any data contained in this artcle. Financial fgures indicated in this
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