Commodities, Energy, Metals and Agriculture
Energy • US crude inventories: API are said to have reported that US crude oil inventories fell by 2.21MMbbls over the last week. The EIA are scheduled to release inventory data today, which the market is expecting will show a decline of 1.5MMbbls. • Chinese coal mine closures: Henan province in China has said to have shut down 100 coal mines over 2016, with a combined capacity of 23.9mtpa. This has seen the province exceed its 2016 target of shutting 22.2mtpa of capacity.
Metals • Record copper spec position: Unsurprising given the strength seen in copper prices recently, speculators have increased their net long in LME copper to a record 78,054 lots. Since the start of 4Q16, the speculative position in copper has increased by 35,796 lots. • Chinese iron ore inventory: Iron ore port inventory in China currently stands at almost 111m tonnes according to Steelhome. Inventories at Chinese ports have increased by almost 6% since the start of 4Q16. While stock levels are fairly close to the record 114m tonnes of inventory seen back in 2014.
Agriculture • Brazilian gasoline price increase supports sugar: Brazilian oil company, Petrobras has announced an 8.1% increase in gasoline prices in the country. The increase has been supportive to ethanol prices, and as a result also sugar prices. With the sugar market in deficit, sugar prices need to remain above ethanol prices so that Brazilian sugar mills allocate more cane towards sugar production. • Larger French wheat acreage: French cooperative, Axereal expects that farmers would have increased wheat acreage by up to 5% YoY. This is a result of farmers switching from rapeseed to wheat, given the dry conditions seen over the rapeseed planting period. A larger acreage for the next wheat crop, should see a recovery from this season, which saw a poor harvest.