Commodity

Iron ore futures rise in rangebound trade

Iron ore futures edged higher on Wednesday but were stuck in a narrow trading range, as restocking demand propelled spot prices in China to the highest in more than a week despite renewed steel production controls in Tangshan city. The most-traded iron ore for May delivery on China’s Dalian Commodity Exchange rose 0.5percent to 683 yuan ($107.19) a tonne, after earlier hitting 696.50 yuan, its strongest since Dec. 27. The steelmaking ingredient’s most-active February contract on the Singapore Exchange was virtually flat at $122.30 a tonne. The spot price of benchmark 62percent-grade iron ore from Australia rose to $123.50 a tonne on Tuesday, the highest since Dec. 27, according to SteelHome consultancy data. Rebar on the Shanghai Futures Exchange rose 1.7percent, while hot-rolled coil climbed 2.1percent. Stainless steel gained 0.6percent.

Rice production decline by 8.74 pc

Rice production in the current fiscal has significantly shrunk and the fall is the lowest in the past five years.According to the statistics unveiled by the Ministry of Agriculture and Livestock Development on Sunday, this year the rice production went down by 8.74 percent compared to the production of the last fiscal year (2020-21). The production was 5,130,000 metric tons this year while it was 5,621,000 last fiscal year.In the previous three years, the production was 5,550,000 metric tons (fiscal year 2019-20), 5,610,000 (fiscal year 2018-19) and 5,151,925 (2017-2018) fiscal year 2074-75 BS).Earlier, the rice production this year was estimated to increase, however, the offseason rain during the harvest season impacted negatively on the yield.

OPEC and its allies agree to keep pumping additional oil

OPEC+ agreed on Tuesday to stick to its planned increase in oil output for February because it expects the Omicron coronavirus variant to have a short-lived impact on global energy demand. The group of producers comprising the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia has raised its output target each month since August by 400,000 barrels per day. The United States has urged the group to pump more crude to help the global economic recovery from the pandemic and cool prices as they trade near $80 a barrel. But the group has said the market did not require extra oil. OPEC+ is unwinding record production cuts of 10 million barrels per day, which were imposed in 2020, as demand and prices recover from their pandemic-induced slump. Brent crude rose 50percent last year and has rallied so far in 2022, trading 2percent up above $80 on Tuesday. Current plans would see OPEC+ again raise the target by 400,000 barrels per day for February, leaving about 3 million barrels per day in cuts to unwind by September, in line with an agreement last July.

U.S. natural gas prices rise

U.S. natural gas prices gained over 2percent on Monday after output fell during the New Year’s weekend as cold weather froze some production wells in Texas, New Mexico and Colorado, reminding the market of what can happen when temperatures drop. Last February, a brutal winter storm named Uri killed more than 100 people and left around 4.5 million Texas homes and businesses without power and heat – some for days – after gas pipes and power plants froze. The cold over the New Year’s weekend, however, was no where near as extreme as last February’s freeze. Well freeze-offs occur whenever temperatures drop enough to freeze water and other liquids in a well or pipe and halt production. Gas prices have been falling recently with the rise in production but gained on Monday as the freeze-offs disconcerted the market. Gas output in the U.S. Lower 48 states fell to an average of 94.8 billion cubic feet per day (bcfd) so far in January from a record 97.6 bcfd in December. Much of that production decline was in Texas and occurred on Sunday.

Supply-side effects on dairy industry will continue in 2022

The rapid evaporation of growth in dairy cows, milk and milk solids production dropped all three into negative territory during October. These supply-side effects have dominated the dairy situation recently and will continue to do so well into the coming year. Domestic consumption growth of all milk and dairy products has been somewhat sluggish in recent months, but U.S. dairy exports during the first ten months of 2021 have set a new volume record of 17.6 percent of U.S. milk solids production, well above this measure’s second-highest year, 2020 at 16.3 percent. The drop in production is being felt most in dry skim milk products, and to a lesser extent in butter and dry whey production. Cheese production remains the preferred channel for available milk. Product stocks are being drawn down and prices rising, as production trends change.

EU sugar production set to rebound in 2021-22

EU sugar production is set to rebound in the marketing year 2021-22 (October-September), as cooler weather resulted in a lower incidence of virus yellows. The market will be closely eyeing the impact of the new COVID-19 wave on sugar consumption. Demand for industrial ethanol — which uses sugar as a feedstock — is set to increase. EU sugar production in the MY 2021-22 is set to rise for the first time in four years. The 2020-21 crop was especially bad with the ban on neonicotinoids and warmer winter causing a high incidence of virus yellows. The cooler weather in MY 2021-22 has resulted in a lower incidence of virus yellows, with some countries not requiring the use of neonicotinoids even though the ban was temporarily lifted. Despite sugar content being at multiyear lows due to poor sunshine over the summer, this is not expected to be as low as originally feared.

Check Also

Gulf News

Gulf In Focus

Remarkable performance of Qatar in 2021 Despite the repercussion of the COVID-19 pandemic, which continued …

Leave a Reply