Commodities: Mixed performance - ANZ

Research Team at ANZ, notes that the commodities were mixed overnight, with industrial commodities stronger while selling in the energy market continued.

Key Quotes

“Brent crude oil prices fell despite EIA data showing US inventories unexpectedly fell. The decline of 553,000 barrels last week was centred on the west coast, which is isolated from the rest of the network. Inventories actually increased along the East and Gulf Coasts. However, investors remain uncertain as to whether OPEC can implement the tentative agreement to cut production.

Industrial metals were slightly higher, led by copper. Inventories of copper on the LME fell for the fifth straight day and are now down over 11% from their three year high reached last month. Nickel was also higher despite news that Indonesia will discuss its exports policy next week. A new study from the International Nickel Study Group indicated that the nickel market will be in a 66kt deficit in 2017. Positive sentiment in the physical iron ore market saw prices push above USD63/t yesterday.

Gold was little changed as investors look to India for signs of increasing physical demand. Central banks have also been in the market, with Kazakhstan and Russia both increasing their gold reserves last month according to IMF data.

Agriculture prices were stronger across the board. Corn was higher after news that South Africa may import more than 2m tonnes of corn next year following two seasons of droughts. Sugar was the only major market that fell, with investor selling emerging after the recent price rises.”