- The energy sector was mixed last week. While WTI crude oil prices increased 0.4%, Brent crude oil prices finished the week down 0.6%. Natural gas, gasoil and heating oil prices all decreased, falling 1.2%, 1.4% and 0.2%, respectively. Gasoline prices rose 2.4%.
- Grain prices all increased last week except for soybeans. Chicago and Kansas wheat prices rose 0.8% and 0.5%, respectively, while corn prices increased 1.3%. Soybean prices fell 0.6%.
- Base metal prices, except for copper, rose last week. Zinc prices increased 1.3%, aluminum prices rose 0.2% and nickel prices gained 0.4%. Copper prices lost 2.2%.
- Gold, platinum and silver prices all finished higher last week with gold prices increasing 0.6% and platinum prices rising 2.7% and silver prices up 0.5%.
- Lean hog prices surged again last week, climbing 10.6%.
- The S&P GSCI slightly outperformed the Bloomberg Commodity Index last week with S&P GSCI up 0.44% and the Bloomberg Commodity Index up 0.25%. The S&P GSCI’s larger exposure to energy but smaller exposure natural gas and base metals was primarily responsible for its outperformance.
- Total assets in commodity ETPs rose $402.4m. Gold ($407.4m) and crude oil ($25.7m) ETP inflows were partially offset by broad commodity (-$30.2m) and silver (-$20.9m) ETP outflows.
Overcoming concerns of China resisting U.S. trade demands, commodity and U.S stock markets initially reacted positively to statements released after the end of the 2-day FOMC meeting on Wednesday indicating the U.S Federal Reserve would not raise rates in 2019 and would end the wind-down of its balance sheet by September. Sentiment reversed Thursday into Friday, however, on the back of the FOMC’s much lower U.S. growth forecast, an inverted U.S. Treasury yield curve and a much-lower-than-expected German purchasing managers index released on Friday. Up 1.2% through Thursday, the S&P 500 Index finished the week down 0.8%., the U.S. dollar was almost unchanged and the 10-year U.S. Treasury rate dropped 15bps to 2.44%.
Up 2.4% through Wednesday on the back of a large and unexpected decline in U.S. inventories and Saudi Arabia statements confirming their commitment to cutbacks, WTI crude oil prices dropped about 1.6% on Friday on increased concerns of lower global and U.S. growth despite another drop in active U.S rigs according the Baker Hughes report .
Supported by accommodative FOMC statements and reports the Chinese would not be enacting a new property tax law base metal prices moved to their intra-week high on Wednesday. Concerns of weaker global growth in general but especially in the U.S. and Europe pushed prices lower through Friday. Copper prices, for example, unchanged through Wednesday, ended the week down 2.2%.
Gold prices continued to be supported by Brexit uncertainty and concerns of lower global growth resulting in many developed country central banks adopting more accommodative monetary policy. Silver and platinum prices moved with base metal prices.
Corn prices moved higher on the largest sale of corn to China in five years. Wheat prices gained over weather concerns affecting U.S. plantings. Soybean prices suffered over reports of Chinese pushback to U.S. trade demands.
Lean hog prices surged higher again last week over continued swine fever concerns in China and other parts of Asia .
Coming up this week
- Light data week with highlighted by GDP on Thursday.
- Housing starts and consumer confidence on Tuesday.
- International trade on Wednesday.
- Jobless claims and second estimate Q2 GDP on Thursday.
- Personal income and outlays and new home sales on Friday.
- EIA Petroleum Report on Wednesday and Baker-Hughes Rig Count on Friday.