Energy
• US oil rig count: The number of active US oil rigs increased by 8 over the last week, taking the total number to 741 rigs. The rig count has increased consistently since mid-January 2017, with producers bringing back 219 rigs since then. The growth in the number of active rigs has supported production, which has increased by 548Mbbls/d since the start of the year.
• Oil speculative position: The latest Commitment of Traders Report shows that speculators increased their net long position in WTI crude oil by 15,037 lots over the last reporting week, leaving them with a net long of 221,140 lots. However, given the pressure on prices since Tuesday, it is expected that the speculative position will show a large reduction in this week’s release.
Metals
• Chinese iron ore inventory: Latest data from Steelhome shows that Chinese iron ore port inventory stands at a record 140mt, up 26mt since the start of this year, and up 40mt YoY. We expect that the scale of Chinese inventories should keep prices under pressure.
• Chinese steel output: Metal Bulletin reports that Chinese crude steel output over the last 11 days of May averaged 1.7639mt, compared to a daily average of 1.8050mt seen over mid-May. It appears that production has started to respond to lower domestic steel prices, which have been under pressure since early March.
Agriculture
• WASDE report: The USDA released its latest WASDE report on Friday. While the market was expecting the USDA to lower US ending stocks for corn and soybeans, the department kept corn ending stocks unchanged. For US soybeans, the crush estimate was lowered for the current season, which saw the estimate of ending stocks for this season and next grow by 15m bushels to 450m bushels.
• Global coffee market: Brazilian coffee trader Comexim expects that the global coffee market will see a deficit of 4.2m bags over the 2017/18 season, compared to a deficit of 1.7m bags in 2016/17. The market has largely expected a deficit for the 2017/18 season, particularly because Brazil is in the lower-yielding year of the biennial cycle