Platinum’s spot price last week jumped to a five-and-a-half month of $1,484 an ounce after the wage talks collapsed. Late this week, the spot precious metal was trading a tad off at that level and was fixed at $1,476 in the pm in London on Mar. 13. U.S. platinum futures settled at $1,476.30 an ounce basis the April contract on Comex at midweek, more or less flat on a week earlier.
The price reaction to the strike largely has been muted mainly on account of ample above ground stocks which so far has kept the market well supplied. The precious metal has gained only around 8 percent in value since the start of the year.
However, with no end to the labour dispute in sight, concerns about supplies are growing.
Gold moved higher again this week, climbing to a five-month high as the ongoing tensions in Ukraine and renewed worries about slowing economic growth in China boosted the precious metal’s safe-haven investment appeal.
Spot gold reached $1,371 an ounce in the am fix on London’s bullion market on Mar. 13, a level not seen since June last year. U.S. gold futures for April delivery on Comex settled at $1,370.50 an ounce at midweek, a five-month peak.
Arabica takes a breather
Arabica coffee futures reached fresh two-year highs on Mar. 11 before a surprise modest downturn at midweek. Less-than-expected rainfall at the weekend across Brazil’s drought-hit coffee belt pushed prices higher before investors took profits amid reducing risk-appetite across a number of commodity markets.
May arabica on New York’s ICE Futures U.S. exchange climbed to 208.90 cents a pound on Mar. 11, the highest level for a second-position contract since February 2012 and a more than 80 percent advance since the start of the year.
The prolonged dry weather and higher temperatures in Brazil’s main coffee-growing area in Minais Gerais and the north of São Paulo states is not only expected to cut the size of the country’s 2014/15 crop but has led to concerns that production in 2015/16 will also be reduced.
May ICE arabica settled 4.77 cents down at 204.13 cents a pound on Mar. 12 as some investors sold holdings in the coffee beans.
However, many analysts believe the expected arabica supply deficit in 2014/15 coupled with worries over the impact on the 2015/16 season will continue to fuel upward price pressure. Arabica coffee futures already have surged by more than 88 percent since the start of 2014.
Robusta coffee futures on London’s NYSE Liffe exchange have also moved higher this year, partly on arabica’s coat tails. But demand for the cheaper robusta beans also has increased in the physical market as arabica beans have become more expensive.
May robusta on NYSE Liffe touched $2,218 a tonne on Mar. 12, the strongest level for a second-position contract since October 2012. May settled $20 up on the day at $2,200. Robusta beans have added around 30 percent to their value since the year began.
However, recent reports by the Vietnam Coffee-Cocoa Association (Vicofa) that the country’s 2014/15 coffee harvest could be “significantly lower” than the previous year on account of the “quite severe” dry weather spell affecting Vietnam’s main coffee-growing were largely downplayed by a number of analysts The region’s rainy season typically only starts in the second half of April, they said.
Among other soft commodities, sugar prices eased back this week after reaching four-month highs on Mar. 6 on concerns about the impact of dry weather in Brazil’s main Center-South cane-growing areas. Despite expectations of some reduction in the size of the next Center-South crop, global sugar supplies are seen as ample.
Raw sugar futures for May on ICE Futures U.S. were 0.83 cents down at 17.64 cents a pound at midweek, having hit a four-month high of 18.47 cents on Mar. 6.
Several analysts have reduced their production estimates for Brazil’s Center-South crop in the April-March season, but the market is weighed down by huge global stocks. Late last month, the London-based International Sugar Organization estimated ending stocks for the current sugar year (Oct. 1-Sept. 30) to reach a projected 74.714 million tonnes, raw value, increasing the stocks/consumption ratio to over 42 percent.
Refined, or white, sugar prices were also lower this week. May refined sugar on NYSE Liffe settled at $461.60 a tonne on Mar. 12, down $23.70 on a week ago.
Cocoa, meanwhile, climbed above $3,000 a tonne on ICE Futures U.S. for the first time in two and a half years, buoyed by concerns about the prospects for top producer Côte d’Ivoire’s mid-crop amid an already expected global supply deficit in the current season. Demand is also running at a strong pace for the key chocolate-making ingredient.
May cocoa on ICE touched $3,027 a tonne on Mar. 11 before settling the day at $3,017. In London, NYSE Liffe cocoa for delivery in the same month hit £1,888 a tonne, the highest for the second-position contract in two and a half years. Liffe May cocoa subsequently finished the day at £1,881.
Both ICE and Liffe cocoa eased back the following day , with ICE May cocoa finishing $68 lower at $2,949 a tonne and the Liffe May contract down $31 at £1,850 a tonne.
While care has been taken to ensure that the information contained in this report is accurate, it is supplied without guarantee. The author can accept no responsibility for any errors or any consequence arising from the information provided.
