Commodities: China shows appetite for corn and wheat, US oil output hits record 12.0m b/d
By Alexander Bueso
Date: Thursday 21 Feb 2019
(Sharecast News) - Commodity prices were little changed as traders waited on fresh news out of trade talks in Washington for direction, despite the release of some weak economic data in the States and alongside figures showing record domestic US oil output.
And traders in soft commodities got just that.
As of 1951 GMT, May corn on CBOT was adding 1.25% to $3.8425 a bushel and similarly-dated wheat was gaining 1.39% to $4.91 a bushel.
Triggering those moves, according to Bloomberg, the People's Republic of China had offered to purchase an additional $30bn-worth of US corn and wheat per year.
Increased buying would come on top of pre-trade war levels and run for as long as the memoranda of understanding being discussed for the sector.
Cotton#2 on the ICE meanwhile was up by 2.56% to $0.7401 a pound.
Overnight, reports had indicated that Washington and Beijing were working on various MoUs covering areas ranging from agriculture or technology transfers and intellectual property to non-tariff barriers.
From a bird's eye view, the spot US dollar index was edging higher by 0.18% to 96.6290 while Bloomberg's commodity index was tacking on 0.13% to 81.79 on NYMEX.
Front month Brent and West Texas Intermediate crude oil however were little changed, with the former down by just 0.05% to $67.05 a barrel and the latter off by 0.4% a $56.95.
That was despite data from the US Department of Energy revealing that domestic crude oil output hit a record 12.0m b/d in the week ending on 15 February, pushing commercial crude oil inventories up by 3.7m barrels (consensus: 3.1m) over the week to reach 454.4m barrels.
But the same DoE figures also showed that refinery inputs fell during that same week.
Hence, stockpiles of gasoline and distillate fuels declined by 1.5m barrels each one.
In parallel, base metals futures were decidedly mixed, although three-month LME copper finished at $6,280 per metric tonne, after starting the day off from $6,407.
To take note of, in the background the latest batch of high frequency data Stateside threw up weaker than expected readings on 'core' US durable goods orders for December and for the Philly Fed's closely-followed regional manufacturing index.
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