The latest Market Talks covering Commodities. Published exclusively on Dow Jones Newswires throughout the day.
0854 ET - Treasury yields edge higher, alongside the dollar, as Middle East tensions linger while central banks struggle to curb inflation. WTI crude rises 2%, after falling yesterday. The Bank of Japan holds rates, as expected, while indicating a hike may be upcoming. U.S. employment costs rise 0.9% in 2Q, beating WSJ consensus of 0.8%. The July University of Michigan Consumer Sentiment Index is forecast to increase. The WSJ Dollar Index rises 0.3% as the greenback strengthens 0.5% against the yen. The 10-year yield is at 4.696%, up from yesterday's settle of 4.662%. The two-year rises to 4.283% from 4.227%. (paulo.trevisani@wsj.com; @ptrevisani)
0835 ET - The current heatwave in Europe is increasing risks of inflation, Felix Schmidt at Berenberg says in a note. "Very low water levels in German rivers are causing supply-chain problems, and the ongoing drought could lead to lower harvests and thus cause food prices to rise," he says. Eurozone inflation increased in July, driven by higher energy prices, and is unlikely to alter the European Central Bank's policy outlook. "The ECB will focus on whether energy prices ease in coming weeks before its September meeting, with August inflation data likely to be more important," Schmidt says. (don.forbes@wsj.com)
0607 ET - Palm oil ended lower, tracking softer soybean oil prices on the Chicago Board of Trade, says David Ng, a trader at Kuala Lumpur-based Iceberg X. Prices were also weighed by concerns of output rising in the coming weeks and expectations of increasing stock levels in Malaysia, he adds. Ng sees prices of crude palm oil supported above 4,600 ringgit a ton and pegs resistance at 4,780 ringgit a ton. The Bursa Malaysia Derivatives contract for October delivery dropped 41 ringgit to 4,642 ringgit a ton. (amanda.lee@wsj.com)
0336 ET - Gold prices slip on Friday, but are headed for their first monthly gain in five months as investors closely monitor developments in the Middle East. "Precious metals recovered as the dollar weakened after the softer GDP print, but the move was not fully convincing given the lack of a clear decline in Treasury yields," analysts at Sucden Financial say. Meanwhile, the Federal Reserve left interest rates unchanged at its July meeting, with Chairman Kevin Warsh offering little clarity on the central bank's next policy move. Markets are now pricing in a 63% chance of a rate hike in September, according to CME's FedWatch tool. New York gold futures fall 0.7% to $4,132.50 a troy ounce in early European trading, but are up 1.5% on the week. (giulia.petroni@wsj.com)
2345 ET - Capstone Copper is one stock where the devil isn't in the detail, say MA Moelis Australia analysts. "Obviously individual asset level performance is important, but if/when the business broadly meets its production promises, we think the stock is a close proxy for the copper price," the analysts write in a note. While Capstone's 2Q production is a tad lower than MA's estimates, and costs slightly higher, Ebitda appears a beat to consensus, they say. Record Ebitda of US$354 million in 2Q compares with consensus of US$339 million. Output totals 51,759 metric tons of copper. MA was expecting about 53,300 tons. MA has a buy rating and A$15.90 target on the stock. Shares rise 8.5% in Sydney to A$13.87. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)
2239 ET - Palm oil falls in Asian trading on profit taking. However, CPO futures remain technically supported, AmInvestment Bank says in a note. Unless external markets experience a significant downturn, any pullbacks are expected to attract both commercial and speculative buying interest, it says. AmInvestment Bank expects prices to face resistance at 4,703 ringgit a ton and find support at 4,649 ringgit a ton. The Bursa Malaysia Derivatives contract for October delivery is lower by 24 ringgit at 4,659 ringgit a ton. (yingxian.wong@wsj.com)
2227 ET - Iron ore declines in the Asian session. The fall is likely due to dampened expectations of Chinese stimulus that would lend support to steel demand, says Commonwealth Bank of Australia's Ryan Felsman in a note.China's Politburo on Thursday signalled little appetite for major stimulus in 2H. Iron-ore demand is typically influenced by steel, as the ferrous metal is a key input for steel production. The most-traded iron-ore contract on the Dalian Commodity Exchange drops 0.8% to 719.50 yuan a metric ton. (megan.cheah@wsj.com)
2215 ET - Copper edges higher in early Asian trade. Sentiment across the base metal sector was boosted by the Fed leaving rates unchanged, while signs of short-term tightness also provided some support, the ANZ Research team writes in a note. Tightening supply may be due to ongoing concerns that the Trump administration may impose tariffs on copper imports, it adds. The three-month LME copper contract is 0.1% higher at $13,813.50 a ton. (kimberley.kao@wsj.com)
2048 ET - Gold falls in Asian trade. The precious metal appears to be trading largely within its consolidation range of the last few weeks, says Empire FX's Crispus Nyaga in an email. Markets are likely reacting to the Federal Reserve's decision to hold its interest rates steady, he says. Traders seem to be pricing in a rate hike at the next meeting, but the probability for another hold has likely increased after the latest U.S. price index of personal-consumption expenditures, he says. Still, major central banks are expected to tighten policy in coming months, he adds. A higher interest-rate environment typically drags down the nonyielding yellow metal. Spot gold declines 0.3% to $4,091.57 a troy ounce.(megan.cheah@wsj.com)
1528 ET - Live cattle futures on the CME finish up 1.6% to $2.2745 a pound. Cattle prices are climbing after the USDA said it was beginning the process of gradually reopening the U.S.-Mexico border to Mexican feeder cattle exports. "Time will tell just how many will cross the border," says ADM Investor Services. Lean hog futures settle lower, dropping 2.9% to 83.25 cents a pound. (kirk.maltais@wsj.com)
1513 ET - U.S. natural gas futures rise with September making its debut as the new front month. Prices received a modest lift from the EIA's storage report showing a below-estimate 28 Bcf inventory build for last week that left the surplus against the five-year average little changed at 185 Bcf. "Cooling demand is expected to trend higher across most of the U.S. in the coming weeks, likely resulting in lighter storage builds as the market moves through the historical peak of summer," Andy Huenefeld of Pinebrook Energy Advisors says in a note. Nymex natural gas for September delivery settles up1.3% at $2.758/mmBtu.(anthony.harrup@wsj.com)
1508 ET - CBOT corn and soybean futures are lower as traders get their books in order ahead of August. Weather is also turning favorable for grains following a hot streak in much of the Corn Belt. "Timely precipitation is forecast for much of Iowa and Illinois over the coming days keeps production optimism alive in the heart of corn & soybean country," says Brady Huck of EmpowerAg Trading. The effect of copious rainfall may be reflected in yields reported when the USDA releases its next WASDE report on Aug. 12. Corn is down 0.4%, while soybeans drop 0.2% but wheat remains up 0.8%.
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