A better end to the week for most major commodities, thanks to more confirmation that the US economy seems to be recovering, and an easing of fears that the Government-engineered volatility in the Chinese stockmarket could cause problems in the wider economy.
Drought in the Ukraine, parts of the US and Australia is continuing to drive action in US grain prices.
The drought in the Ukraine could see a ban on shipments in force by next month, which would add to the worries caused by the shortfall from Australia and concerns about some parts of the US and the continuing impact the huge corn plantings (for ethanol production), are having on wheat production.
Corn and canola plantings for ethanol and biodiesel are also troubling European production forecasts.
In Chicago, July wheat rose 4.9 per cent to a high of $US5.2575 a bushel last week while July corn rose 3.5 per cent to a high of $US 3.89 a bushel. Wheat closed at $US5.2075 and corn at $US3.8675 a bushel.
Lead prices hit a series of records last week. Buying interest was boosted by interruptions to supplies from Australia where a month's delay is expected before 9,000 tonnes of metal can be shipped from Esperance in Western Australia, where an investigation into severe pollution problems in shipping the metal is continuing.
LME lead hit a record $US2,385 a tonne Friday, up 6.7 per cent over the week.
London Copper rose 3.2 per cent to $US7,457.5 a tonne, supported by declines in stocks in Shanghai and on the London Metal Exchange.
Zinc rose 3 per cent to $US3,750 a tonne helped by LME stocks shrinking to a 16-year low. Nickel edged higher at $US 47,350 a tonne in spite of pressure from a rise in LME stocks in May and continuing concerns steelmakers will increase nickel-free steel production.
London goldtraded without a solid lead until Friday when the European Central Bank said it had no plans to sell more bullion this year.
Under the Central Bank Gold Agreement, European banks have sold around 250 tonnes this year, but there is a feeling they won't sell the annual 500 tonnes maximum they can.
Gold in London rose 2 per cent to $US 668.10 an ounce, and silver was also higher.
……..
New York copper futures saw the first weekly gain in a month after those stocks in Shanghai fell.
Stockpiles in Shanghai dropped 3.8 per cent this week to 95,254 metric tons, the second weekly decline in a row.
LME stocks also tumbled to their lowest level since late last October.
Copper prices are up 18 per cent so far this year, down from the 25 per cent rise in late April, early May.
July Comex copper climbed to $US3.405/lb on Friday, with the better than expected May jobs figures and further signs of recovery in the manufacturing sector of the US economy, driving sentiment.
…………….
New York gold had its biggest rise in three months on Friday after the news of the slowdown in European central bank sales.
Comex August gold jumped $US 10.20 to $676.90 an ounce. The metal is now 6.1 per cent up this year.
Gold prices in New York rose 2.3 per cent last week, the first increase in the past four weeks.
July silver rose 27 cents to $US13.74 an ounce, the biggest gain since late February.
Silver jumped 5.7 per cent last week and reversed six straight weeks of declines.
Silver is now up 6.2 per cent this year after being all but steady 10 days ago. The metal rose 46 per cent in 2006, gold 23 per cent.
……………
New York oil rose more than $US1 a barrel on Friday, on concern that US petrol supplies are still too low to meet expected demand this summer.
July oil rose $US1.07 to $US65.08 a barrel on Nymex. The contract fell 12 USc overall last week and US futures prices are 7.5 per cent lower than a year ago.
Gasoline for July delivery in New York rose 4.14 cents, or 1.9 percent, to close at $2.2446 a gallon.
Brent crude oil for July settlement rose $US 1.03 to close at $US 69.07 a barrel on the London-based ICE Futures exchange and maintaining that margin over the West Texas Intermediate crude on Nymex in New York.
…………………….
Preliminary estimates for May indicate that the Commodity Index rose 0.6 per cent in SDR terms, following a rise of 1.4 per cent (revised) in April.
The largest contributors to the rise in May were increases in the prices of nickel, zinc and wool.
In Australian dollar terms, the Index rose by 0.5 per cent in May following a fall of 1.9 per cent (revised) in April.
The export price measure for canola has displayed large fluctuations over the past six months. As a result, the series appears unrepresentative of actual movements and therefore has been replaced with the Winnipeg spot price.
In addition, the barley price previously used was discontinued and has been replaced with the US Pacific North-West export price. These changes have a negligible impact on the Index of Commodity Prices and Rural Price sub-index.
