The latest Market Talks covering Commodities. Published exclusively on Dow Jones Newswires throughout the day.
Lean hog futures continued the bounce that they posted on Friday, with the most-active contract rising 1.7% to 83.6 cents a pound. The bounce may be technical though, because other fundamental factors suggest further declines in hog futures, one factor being the weather conditions seen in the U.S. Corn Belt. "Animal stress will remain low this week as the northern half of the Plains and Midwest will enjoy much cooler temperatures than the southern areas," says ADM Investor Services in a note. Managed money is maintaining a net short in lean hog futures, according to Friday's Commitment of Traders report from the CFTC. Live cattle futures settled up 0.6% to $2.267 a pound. (kirk.maltais@wsj.com)
1535 ET - U.S. natural gas futures rise as near-term weather forecasts add heat to the outlook, LNG feedgas rises and continuing conflict in the Middle East feeds global supply concerns. Natural gas balances are more supportive, "with elevated cooling demand and export flows nearly matching available supply despite production remaining historically strong," Gelber & Associates says in a note. "Cooling demand should still soften as temperatures retreat toward seasonal norms later in the month, but the warmer revision reduces some of the downside risk that had weighed on prices last week." Nymex natural gas settles up 5% at $2.794/mmBtu.(anthony.harrup@wsj.com)
1455 ET - Oil futures post gains as Iran's latest demands on the U.S., including a military withdrawal, unfreezing of Iranian assets and payment of reparations, are seen prolonging the closure of the Strait of Hormuz. "This list of demands seems more like a child's wish list to Santa Claus than anything grounded in reality," Phil Flynn of the Price Futures Group says in a note. While Iran tries to give the impression it's calling the shots, lower oil prices at the back of the curve suggest the market is unconvinced the strait will be a lasting problem, he adds. "The near-term risk is tight diesel and heating oil supplies heading into winter." WTI settles up 5.1% at $82.13 a barrel, and Brent rises 5% to $87.72. (anthony.harrup@wsj.com)
1418 ET - Diesel futures are outpacing gains in crude oil as attacks on refineries in Russia by Ukraine and in Saudi Arabia by Houthis add to concerns about the continued closure of the Strait of Hormuz. "The refinery attacks have taken substantial amounts of diesel off the market with global benchmarks rallying strongly," Mizuho's Robert Yawger says in a note. "Unless there are big breakthroughs in the peace process around both conflicts, large amounts of diesel will remain shut in." ICE gasoil is up 9.9% at $1,316 a metric ton and Nymex diesel is up 7.2% at $4.1817 a gallon.(anthony.harrup@wsj.com)
1404 ET - Precious metal futures settle higher for the second consecutive session. Front-month gold finishes with a gain of 0.5% to $4,361.80/oz, bringing the price up to a breakout point, says Bret Kenwell of eToro in a note. "Bulls now want a move above $4,400 [per ounce] and the 50-week moving average to sustain momentum; otherwise, $4,000 [per ounce] could return to focus," says Kenwell. Silver rises 2.8% to $65.106/oz. (kirk.maltais@wsj.com)
1357 ET - Canada's two biggest provinces, Ontario and Quebec, would sustain the biggest economic blows from the Trump administration's planned 50% tariff on certain Canadian goods beginning Aug. 19, says Michael Davenport of Oxford Economics. Canadian officials are in talks with Washington about averting this new duty, which targets about $20 billion of Canadian goods ranging from cement, paper and wood products, and chemicals. Davenport says the new hefty duty would weigh on growth in Ontario and Quebec, given the concentration of targeted sectors in those two central Canadian provinces. Also taking a relatively big hit is New Brunswick, which is represented in parliament by Dominic LeBlanc, the minister in charge of US-Canada trade. All three of those provinces have imposed bans on US alcohol sales. (Paul.Vieira@wsj.com; @paulvieira)
1353 ET - CBOT soybean futures remain above water, with the most-active contract up 0.3%. Demand for U.S. exports from China are a factor supporting soybeans, says ADM Investor Services in a note. "The bulls have the tentative edge… on oversold conditions in beans, anticipation of additional Chinese demand this week, and China's announcement of another auction of just over 500,000 tonnes of reserve beans as they continue to make space for U.S. arrivals," says ADM Investor Services. The USDA reported a new flash sale of U.S. corn this morning, providing additional support for futures. Corn and wheat are also higher, with corn up 0.1% and wheat climbing 0.3%. (kirk.maltais@wsj.com)
1349 ET - Treasury yields and the dollar keep rising as markets see nearly equal chances of a Fed hike or hold in September. The dollar strengthens nearly 1% against the yen, despite officials' efforts to prop up the Japanese currency. The lasting U.S.-Iran standoff over the Strait of Hormuz pushes Brent crude up 4% to $87, rekindling inflation fears that could bolster the case for an interest rate increase. The 10-year yield reaches 4.701% and the two-year is at 4.239%. The WSJ Dollar Index rises 0.2%. (paulo.trevisani@wsj.com; @ptrevisani)
1313 ET - Oil futures extend gains as Iran's latest demands, seen as unacceptable to the U.S., reduce hopes for a quick reopening of the Strait of Hormuz. "Most traders feel near term, tighter supplies are more probable for longer," Dennis Kissler of BOK Financial says in a note. "Still, the economic pressure of the U.S. blockade, if it's enforced, could squeeze the hardliners of the regime possibly more than U.S. strikes on their military infrastructure." WTI is up 4.2% at $81.43 a barrel and Brent is 4.1% higher at $87.01 a barrel. (anthony.harrup@wsj.com)
1307 ET - The most-active gold futures contract climbs 0.3% to $4,414 a troy ounce, continuing to bounce back after closing below the $4k a troy ounce mark last month. Gold remains well off of all-time highs seen in late-January, when the continuous contract set a new record high of $5,354.80 a troy ounce. "Any real progress toward reopening the Strait [of Hormuz] could extend this pullback toward $4,300 support, but another flare-up sends gold straight back toward record territory," says Waleed Said at GivTrade. Silver rises 2.9% to $66.085 a troy ounce. (kirk.maltais@wsj.com)
1223 ET - Gold futures are up in trading Monday with the most-active contract climbing 0.4% to $4,418 a troy ounce. Gold is managing to bounce back after briefly dipping below the $4k a troy ounce mark briefly. Gold remains well off of the all-time highs seen in late-January, when the continuous contract set a new record high of $5,354.80 a troy ounce. "Any real progress toward reopening the Strait [of Hormuz] could extend this pullback toward $4,300 support, but another flare-up sends gold straight back toward record territory," says Waleed Said at GivTrade. Silver rises 2.9% to $66.085 a troy ounce. (kirk.maltais@wsj.com)
1114 ET - CBOT wheat futures are leading the grains complex higher in morning trade, with world volatility playing a larger role in how wheat prices move versus other grains. "With several areas around the world (U.S./EU, potentially Australia) harvesting short crops, Russian and Ukraine exports restricted by war, and fertilizer supply tightness due to tensions in the Middle East, wheat prices are expected to trade higher over time," says Doug Bergman of RCM Alternatives in a note. Corn and soybeans remain locked in rangebound movement, says Bergman. Most-active wheat futures are up 0.8%, while corn falls 0.1% and soybeans are up 0.3%.
Comments