The latest Market Talks covering Commodities. Published exclusively on Dow Jones Newswires throughout the day.
0244 GMT - Iron ore futures prices across different deliveries are mostly lower in early Asian trade. The most actively traded September iron ore contract on the Dalian Commodity Exchange is flat at 716.00 yuan a ton. While China's iron ore supply remains ample, steel demand has been weak as the country's official manufacturing PMI contracted from the preceding month, Galaxy Futures says in a research note. As overseas steel demand is also expected to drop, iron ore prices could decline further in the next month, the brokerage says. (sherry.qin@wsj.com)
0243 GMT - Hillgrove Resources' new copper-hedging program is modest and adds a good level of support in case prices soften, according to analysts at MA Moelis Australia. They say it makes sense for Hillgrove to ensure a minimum price for some of its production. The volumes--Hillgrove hedged 3,600 metric tons over the 12 months--seem appropriate, they add. "While recent times have seen the market grow cautious of hedging in general, it is still incumbent upon companies to ensure appropriate risk mitigation," the analysts say. MA has a buy rating and a 9.5 Australian cents a share target on Hillgrove. The stock is down 0.8% at 6.35 Australian cents. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)
0243 GMT - Palm oil rises in Asian trading, driven by biodiesel demand and weather concerns that could weigh on output, AmInvestment Bank says in a note. Technical analysis suggests crude palm oil futures' broader uptrend should remain intact although near-term consolidation may persist, it adds. AmInvestment Bank expects palm oil prices to face resistance at 4,700 ringgit a ton and find support at 4,650 ringgit a ton. The Bursa Malaysia Derivatives contract for October delivery is higher by 14 ringgit at 4,691 ringgit a ton. (yingxian.wong@wsj.com)
0237 GMT - A good U.S. crop season is unlikely to benefit crude palm oil prices, given U.S. soybean oil and CPO prices have decoupled, Maybank IB's Ong Chee Ting says in a note. Soybean oil is now largely used to meet the U.S. renewable-fuel standard, limiting the impact of a good U.S. soybean crop on CPO prices, the analyst notes. However, a major soybean harvest failure could prompt the U.S. to import feedstocks from global markets, supporting CPO prices, he says. Maybank maintains its 12-month neutral view on Southeast Asia's plantations sector but remains positive over the three-month period. SD Guthrie, Sarawak Oil Palms and Genting Plantations are its top picks. (yingxian.wong@wsj.com)
0108 GMT - Base metals are mixed in early Asian trade. Gains in the base metals complex appear to be more selective after a broadly strong run for most of last week, say Sucden Financial analysts in a note. Aluminum holding above the $3,240-a-metric-ton area suggests it is relatively well-supported, but the lack of catalysts keeps Sucden cautious about extrapolating a sustained rally in the metal's prices. Meanwhile, copper needs to stabilize quickly and reclaim the $14,150-$14,200 a ton range to potentially extend its earlier breakout, its analysts add. The three-month aluminum contract on the London Metal Exchange is flat at $3,280.00 a metric ton, while three-month copper declines 0.1% to $14,062 a ton. Nickel is down 0.2%, zinc is up 0.2% and lead holds steady. (megan.cheah@wsj.com)
0033 GMT - Gold holds steady in the Asian session. The U.S.'s July payrolls report encouraged investors to price in a softer labor-market path, weighing on the dollar while supporting precious metals, says Sucden Financial in a note. Gold's earlier rally towards $4,355 a troy ounce and its remaining above the previous $4,300 zone suggest buyers remain comfortable adding exposure to the metal, says Sucden. Still, the rebound in the U.S. 10-year bond yield toward 4.7% means that the market could be more vulnerable to profit-taking if rates continue to retrace higher, it adds. Spot gold is flat at $4,339.60 an ounce.(megan.cheah@wsj.com)
2244 GMT - Gold remains one of the standout markets, says Chris Weston, head of research at Pepperstone. Technically, the picture remains constructive. A bull steepening in the Treasury curve, together with consolidation in real yields, continues to provide an increasingly supportive macro backdrop, he says. Gold has broken decisively above the consolidation range established in early August, with strong range expansion validating the breakout, he adds. Friday's powerful rally towards US$4,400 per troy ounce has reinforced the bullish trend, says Weston. Wednesday's U.S. CPI release remains a key market catalyst, followed by Thursday's PPI report.
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