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General news

  • Trade tensions between China and the US have increased following the delaying of imports of US cars, pork, apples, logs and pet food by Chinese inspectors. The White House has expressed its concern that China appears to be treating US products unfairly and Chinese customs officials have not responded to a request to comment.

Agriculture

  • According to the National Oceanic and Atmospheric Administration the likelihood of an El Nino weather pattern occuring in the coming northern hemisphere winter period is now almost 50%. If the phenomenon materialises it could lead to south-east Asian droughts and warmer sea temperatures in South America, impacting prices of wheat, rice, coffee, sugar and cotton.
  • Raw sugar and coffee prices have eased
    • Sugar prices have dipped as a result of concerns about oversupply as a result of Brazil and India looking set to have record production next year. 
    • Sugar for July delivery trading at 11.22USc/lb.
    • Arabica coffee prices are trading lower due to the Brazilian Real weakening, driving farmers to sell at lower dollar-denominated prices.
    • Arabica coffee for July delivery is trading at $1.194/lb.

Metals

  • The LME has confirmed that the restrictions currently in place on metal produced by Russian Rusal are to remain in place. The current restrictions means that any metal produced by Rusal after 6th April when the US sanctions were announced, cannot be warranted or placed into LME warehouses.

Energy - UK 

  • Centrica has announced that it believes Rough will produce slightly more than planned this year, producing between 9-11mboe of gas in 2018.
  • UK gas prices have fallen at the start of this week as a result of weaker commercial and residential demand compounded by increasing supply from Norway.

Energy - International

Oil

  • The Bank of America has hinted that a return to $100/barrel oil prices could be on the cards.
    • The bank has already raised its price forecast for 2018 and 2019 to $70 and $75, respectively.
    • The revision of forecasted prices, and consideration for the return to $100/barrel, follows a collapse in Venezuelan output and Iranian exports whilst US shale struggles to offset the loss in supply due to infrastructure constraints.

Other

  • According to IHS Markit the US will likely quadruple its residential battery energy storage capacity by 2022.
  • Wholesale European prompt power prices have risen sharply on the back of a higher demand forecast for Germany.
  • Asian spot LNG prices for delivery in June have slipped to $7.90/mmBtu on the back of plentiful supply, defying strong oil and coal markets.