Commodity markets started the week on a positive note Monday, with easing tensions in Egypt helping sentiment more broadly, although concerns are still sufficient enough to keep oil bulls in charge of the energy complex.
Brent crude has pushed back above the key $100/bbl mark today, having dipped below it on Friday on mixed U.S. employment data. Although, broadly speaking, the tension in Egypt was easing over the weekend, the potential impact on the oil market is too much to ignore for market players, with a high-ranking Kuwaiti official saying over the weekend that oil could hit $110/bbl if the problems continue. This comes on the back of wider speculation that oil could top $200/bbl if Egypt decides to shut down the Suez Canal.
Precious metals have managed to squeeze higher for the most part this morning, although gold is underperforming its higher beta counterparts as money flows away from safe haven assets today. The technical picture shows the 21-day moving average continuing to keep overhead resistance on the spot price of the yellow metal today around $1,351/oz, although with 10-day momentum and the daily stochastics both pushing into positive territory, a break above this point is a definite possibility, opening up further bids back towards the October peak around $1,387/oz.
Base metals have been seeing broader gains today as wider risk appetite increases, while news on Friday that U.S. unemployment fell from 9.4% to 9% continues to help prices. Copper is most notably among the gainers, breaking above the key $10,000/tn mark on Friday and topping a new record high over $10,010/tn in London this morning. This came as the world’s largest listed copper producer, Freeport McMoRan (FCX), said that the global copper market will remain extremely tight beyond the current year, with supply likely to remain constrained in the foreseeable future due to the mining industry not responding quickly enough to global demand and suffering declining ore grades.
The agricultural complex is seeing gains in line with the broader commodity markets today, a weak U.S. dollar giving additional strength on a day that sees little in the way of fundamental news for the complex. That said, corn price did jump around 2.4% on Friday, and remain supported today after industry association The U.S. Grains Council suggested China could import up to 9 million tonnes of corn this year.