(May 18 2012)
It was a tumultuous week as fears of a Greek exit from the Euro caused panic in the markets. In the end; however, the 19-commodity Thomson Reuters-Jefferies CRB index managed to edge higher Friday after the relative outperformance of most of the softs as well as gold and silver won out. On a weekly basis, however, the CRB was headed for its third week of declines, weighed down by the multi-month lows in oil and copper. Here is a snap-shot of the biggest commodity price developments:
Precious Metals: Gold, Silver, Platinum and Palladium
After getting beaten down all month, gold rallied late Thursday and into Friday, adding $72 to the spot price of gold, lifting it from a low of $1523/oz on Wednesday to $1595 an ounce. Spot gold hovered just below $1,580 an ounce, up nearly $20 on the day. The psychologically important $1,600-per-ounce mark remained elusive. Silver also climbed on Friday, gaining 2.18% to close at $28.64 an ounce.The gold:silver ratio, touched 56.6 this week, its highest since late December, but eased on Friday to around 56 as silver outperformed gold in a rising market.
Platinum and palladium underperformed gold prices, at the metal’s higher exposure to the economic cycle compared to gold limited any upside. Spot platinum was up 0.53 percent at $1,452.75 an ounce, while spot palladium put on 0.54 percent at $601.22 an ounce. This week, the gold:platinum ratio rose to a 3-1/2-month high at 1.09. Industry players gathered in London for Platinum Week this week and were pessimistic about a fast recovery.
Copper futures in London had their biggest weekly decline since December, settling below the $8,000 a ton level. Copper futures fell 4.9% on Friday alone taking their losses to 10% since April. Futures are now up only 2% so far this year.
Oil prices edged toward $93 a barrel Friday; but the commodity still had a terrible performance over the week. Bbenchmark oil for June delivery was up 16 cents to $92.72 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 25 cents to settle at $92.56 in New York on Thursday.
Corn staged the biggest rally this month, on Friday, recovery from a six week low as Corn traders turned bullish on concerns that hot and dry weather will curb U.S. yields. Nineteen of 27 analysts surveyed by Bloomberg expect prices to gain next week and three were neutral, the highest proportion since March 30. Corn futures for July delivery climbed 2.4 percent to close at $5.9725 a bushel at 1:15 p.m. on the Chicago Board of Trade, the biggest gain since April 27. On May 11, the most-active contract touched $5.7225, the lowest since Oct. 3.
Cotton futures ended higher on Friday as speculative short-covering pushed futures off the 2-1/4-year low they touched inthe previous session. July cotton on the ICE Futures U.S. exchange climbed 1.75% to finish at 76.65 cents per lb. The short-covering in the market lifted the 14-day relative strength index reading to 29.5 from 23 in the previous session. A reading of 30 or below normally means a market is oversold and one of 70 or higher meant it is overbought.
Soybean futures for July delivery advanced 1.9 percent to $14.13 a bushel on the CBOT, the biggest gain since April 20. Yesterday, the most active contract touched $13.76, the lowest since March 30. Futures for delivery in November added 0.8 percent to $13.05. Soybeans gained strength from speculation that overseas demand will shift away from more expensive supplies in Brazil.
Wheat surged, posting its biggest weekly gain in 16 years as hot and dry weather in the U.S. plains and Russia stoked fears about potential crop losses. Benchmark wheat for July on the CBOT was hovering around $6.96 a bushel, up about 6% for the day. For the week, wheat was up almost $1 a bushel, or 16%, which, according to Reuters data is the biggest weekly gain since 1996 for a front-month CBOT wheat contract on a spot continuation basis.