Commodities Market Roundup May 18:
As a result of Beijing’s new home price regulations, China’s new home prices declined for the first time in more than six years, offering further evidence of Beijing’s pain inflicting on a sector by which the state has long generated economic growth.
Based on data from China’s National Bureau of Statistics, Wall Street Journal calculations show new-home prices edged down 0.11% in April compared with a year earlier. This has strongly weighed on the commodity prices as the fear of recession has heightened.
Crude oil
In early New York trading on May 18, crude moved lower as the stock market slump offset a larger-than-expected inventory draw in the US.
The US Energy Information Administration reported on May 18 that US commercial crude inventories decreased by 3.39 million barrels to 420.82 million barrels on May 13.
Inventories fell 13.9% behind the five-year average as the market exceeded current expectations for this time of year.
Brent oil
On Wednesday morning, Brent crude was up 2 cents at $111.95 per barrel, while US WTI crude increased 29 cents, or 0.26 percent, to $112.69 per barrel.
China’s lockdown might ease further, boosting expectations for an improvement in demand. According to sources, China allows 864 of Shanghai’s financial institutions to resume operation. In addition, some of the COVID test rules have been relaxed for travelers from the United States and other countries.
Natural gas
In Wednesday’s session, US gas futures gained about 2 percent to an all-time high due to lower production over the past few days and increased demand expected next week.
Due to higher global prices, US LNG exports have remained strong since Russia invaded Ukraine on Feb. 24, driving up gas futures in the US by about 128% since the start of the year. Gas prices in the United States are significantly lower than global prices because the United States is the world’s top producer, so it has all the gas it needs for domestic usage. At the same time, there are capacity constraints for importing additional LNG.
Gold
With firm Treasury yields and an aggressive stance by US Federal Reserve chief Janet Yellen, gold prices fell Wednesday as the dollar recovered a little, putting pressure on greenback-priced bullion.
On Wednesday, gold’s price edged down for a second consecutive day and extended its recent rejection slide away from the 200-day SMA.
The XAUUSD remained on the defensive and trading around $1,816 in late New York session.
Corn
Today, corn futures trade 1 12.5 to 6 12.5 cents lower. Tuesday’s Turnaround saw most contracts decline 1 to 8 34%. Nearby were the most negatively affected, with July 8 down 34%, although $8 support held. A new crop December contract came in at $7.60 34, down 4 12,000 cents. Corn is under pressure today due to weakness in the wheat markets. As part of efforts to restore grain exports out of Ukraine, the UN facilitates talks with Russia, Ukraine, Turkey, the EU, and the US.
The weekly Crop Progress report revealed that the planting pace lags the most in northern states, with Minnesota and North Dakota 37% below average. Conversely, North Carolina and Texas are the only states exceeding the 5-year average planting pace.
