NEW YORK: Commodity markets were mixed on Tuesday, with oil, copper and cotton up sharply, while gold, grains, and sugar slid, as each responded to market specific factors and many investors remained on hold ahead of Friday's US jobs report.
Brent crude oil prices shook off early losses and rose more than $1 per barrel, as rumors spread that South Korea would create new incentives for refiners to import crude that could bolster demand.
Around midday, oil prices jumped and volume spiked as talk circulated that the Asian importer would offer rebates for importing crude, as part of that country's effort to diversify supply. Officials in Seoul were not available to comment.
"There's a lot of market speculation that the South Koreans are going to change their tax policy on non-agricultural imports," said Andy Lebow, vice president at Jefferies Bache in New York. "That seemed to have rallied the Brent market."
Brent crude for July delivery rose to a session-high of $103.58 following the rumor, and settled up $1.18 at $103.24 a barrel. US oil CLc1 ended down 14 cents at $93.31 a barrel, after losing over $1 earlier in the session.
Meanwhile, spot gold fell about 1 percent, unwinding day-earlier gains after India, the world's largest bullion consumer, further restricted imports of the precious metal.
The Reserve Bank of India extended import restrictions, placed on banks last month, to all nominated agencies and trading houses.
Spot gold fell as much as 1.3 percent to a session low of $1,393.40 an ounce. It stood at $1,399.06, a 0.85 percent decline by session end. Gold futures for August delivery were down 0.9 percent at $1,399.20 an ounce.
The metal was also undermined by a stronger dollar and uncertainty over the timing of a pullback in the US Federal Reserve's stimulus program.
Many investors held to the sidelines ahead of the US labor market update due with Friday's May non-farm payrolls report.
Employment is a key factor determining the direction of Federal Reserve monetary policy, and without a major data driver released beforehand, commodity market investors had little incentive to trade aside from specific market fundamentals.
US job growth probably picked up only slightly in May, suggesting the economy is still in a rut and not ready for the Fed dial back its monetary support.
Copper rose as concerns eased about an early cut in US monetary stimulus and as investors took account of a prolonged shutdown at the world's second-biggest copper mine.
On Monday, a government official said Freeport McMoRan Copper and Gold Inc's Grasberg copper mine in Indonesia will not be able to resume output until a probe into a tunnel collapse is completed in about three months.
NEW YORK ICE cotton futures jumped nearly 5 percent, prompted by mill buying and trade short-covering, as fiber extended the previous session's gains.
Deferred US corn and soybean futures stumbled as forecasts for a pause in rainy weather raised hopes that farmers will follow through on plans for massive plantings.
The latest forecasts "suggest that we're going to catch up and we're going to get a lot of grain planted," said grain analyst Tim Hannagan of Walsh Trading. "The planting window won't open all the way, but it's going to be about three-fourths open," he said.
<Center><b><i>Copyright Reuters, 2013</b></i><br></center>
Comments
Comments are closed.