Commodities finished the week in a fairly convincing fashion, except for gold and copper, and look like having another reasonable week with the US dollar expected to be weak ahead of the European Central Bank meeting on Thursday which is seen as putting up rates for the first time in several years.
That meeting is considered highly likely to boost the ECB’s main rate of 0.25% to 1.25% in a signal to the markets that the bank is worried about inflation.
But forecasts of two more rate rises later in the year from some US economists have been dismissed in Europe by local analysts who see the expected increase as a one-off movement.
The speculation which started after the March ECB meeting has certainly helped the euro and hurt the greenback.
The euro rose 0.5% last week to $US1.4231 on Friday.
The currency is up around 6% from its low of $US1.3428 on February 14. Its 2011 high so far was $US1.4249 last week.
That has helped keep some commodity prices rising in the face of weakening demand, such as oil where trading volumes are low compared to current price levels in the London and New York markets.
Nymex crude futures ended the week just short of $US108 a barrel, despite the better jobs data for February.
May delivery Nymex West Texas Intermediate rose $US1.22, or 1.1%, to $US107.94 a barrel on the New York Mercantile Exchange.
That’s the highest settlement for oil since September 25, when oil futures ended at $US108.05 a barrel.
Crude traded as high as $US108.05 a barrel and ended the week up 2.4%.
In London Brent May rose $US1.34 to settle at $US118.70 a barrel, the highest close since August 2008 and up $US3.11 for the week.
It hit a May contract peak of $119.14 in post-settlement trading on Friday.
Brent’s front-month 30 month high of $US119.79 was struck on February 24.
Reuters said the weekly total US crude trading volume was the lowest of the year, dropping to 2.45 million lots traded, down from 2.53 million last week and lowest since the week to December 31.
Reuters said Friday’s volume of 509,669 lots was 3% below the 30-day average, while Brent’s daily volume of 454,581 lots was only 7.5% below its 30-day average.
The rises came as more confusion emerged in Libya about who was calling for a ceasefire and who wasn’t.
But the dollar’s value will be a big influence this week, unless there is a sudden worsening in tensions somewhere in the Middle East or North Africa.
Gold fell Friday in the wake of the jobs report.
Spot gold dropped 0.6% to $US1,428.20 an ounce, but off the session’s low of $US1,412.55 reached earlier.
June Comex gold futures lost 0.8% to end the week at $US1,428.90.
Gold ended the week up around half a per cent.
It hit a record $US1,447.40 an ounce the week before last.
Silver for May delivery fell 16c, or 0.4%, to settle at $US37.73 an ounce.
On the week, silver rose 1.8%.
The May copper contract slipped 5c, or 1.1%, to $4.26 a pound.
On the week, copper lost 3.6%.
Corn futures surged the most in nine months after inventories slumped to a four-year low in the US, the world’s biggest exporter.
Corn prices rose 6.7% last week as demand from China and other export markets met buying from US ethanol manufacturers and collided with news that stocks of the grain in America were 15% less than previously disclosed, according to the monthly update from the US Department of Agriculture.
So corn closed up in Chicago for a second day at $US7.36 a bushel, a rise of 42.75 USc on the day, or 6.2%.
During trading it hit the limit up margin of 54USc after hitting the previous day’s limit up of 30USc.
Wheat prices were solid towards the end of last week, despite the USDA saying farmers will plant more of the grain for harvest than previously thought.
