Rebounding dollar pressures commodities

A resurgent dollar piled pressure on world commodity markets last week.
The US currency's rebound made dollar-priced raw materials less affordable for buyers outside of the United States.
GOLD: Gold prices stumbled below the 400-dollar threshold to reach a one-month low as a rebounding dollar sapped at the precious metal's value.
"The stronger US dollar continues to be encouraging long liquidation (selling of gold futures), along with a robust equity market performance and growing pressure on the US Federal Reserve to raise US interest rates," Barclays Capital analysts noted.
According to a report that the French finance ministry is considering to ask France's central bank to sell gold "also negatively affected sentiment", they told clients.
Under an agreement between European central banks that was renewed on March 8 in Basel, Switzerland, France may sell no more than 100 tonnes of gold a year for five years.
The gold price falls saw the precious metal retreat from a 15-year high above 430 dollars seen at the start of this month, dipping below 400 dollars before clawing back.
By Friday afternoon, gold prices stood at 400.85 dollars an ounce on the London Bullion Market against 419.50 at the end of the previous week.
SILVER: Silver prices also skidded to a one-month trough on the heels of gold.
But prices later rebounded as speculators moved in.
"This bounce in silver underlines the degree of investor interest in the metal and part of these long positions (bought futures) are in strong hands," said Barclays Capital analysts.
Silver prices recently reached a 17-year best of 8.45 dollars per ounce on to strong speculative buying.
By Friday, prices stood at 7.115 dollars against 8.085 dollars towards the end of the previous week.
PLATINUM AND PALLADIUM: Platinum and palladium scaled new peaks as the sister metals remained in favour with investors.
Platinum prices reached a new 24-year high of 944.5 dollars an ounce near the start of the week. Palladium rose to levels not seen since August 2002, hitting 339 dollars.
Investors were lured back to platinum as concerns subsided about the implications of a recent announcement by Belgian group Umicore that it had made a breakthrough allowing palladium instead of platinum to be used in catalytic converters for diesel cars, analysts said.
"The funds are back into the platinum market because they think that the downward move of last week after the Umicore announcement was a bit overdone," said Matthew Turner at precious metals consultancy Virtual Metals.
There were doubts about whether the technology would work and how long it would take to develop, he added.
"Palladium is still strong because if it does happen, it will matter more to palladium than to platinum... because platinum has jewellery demand too."
By Friday, platinum prices stood at 917 dollars per ounce on the London Platinum and Palladium Market from 897 dollars at the end of the previous week.
Palladium prices traded at 309 dollars against 322 dollars.
BASE METALS: Base metals prices continued to retreat, with the exception of aluminium, as the rising dollar triggered selling.
"For many markets, they all had their big bull run and hit very high prices, and once they got to their peak they eased back," said Andrew Cole of Metal Bulletin Research.
"The funds have invested in those metals, and they have decided they cannot push them higher anymore and that it was time to take their profits."
The funds were now looking for other investment opportunities, like aluminium, which was the "current hot metal," said Cole.
The market was keeping a close eye on swings in the dollar, in which the metals are priced.
By late Friday, three-month aluminium prices gained to 1.817.5 dollars per tonne on the London Metal Exchange from 1,739 dollars.
But three-month copper prices fell to 2,855 dollars per tonne from 2,885.
Three-month nickel prices stood at 12,750 dollars per tonne from 13,800. Three-month zinc prices eased to 1,017.5 dollars per tonne from 1,038.
Three-month lead prices declined to 730 dollars per tonne from 765.
Three-month tin prices slipped to 8,320 dollars per tonne from 8,350.
OIL: Oil prices ended the week higher, despite an unexpectedly big rise in US crude inventories.
The Middle East tension and reported refinery problems in the United States lent support to prices, analysts said.
As well as bloodshed and kidnappings in Iraq, State Department officials in Washington said the United States might order non-essential US diplomats to leave oil giant Saudi Arabia due to increased security worries.
Traders were also unclear about the state of US commercial crude oil inventories, after private and government surveys reported widely varying results.
The American Petroleum Institute (API), a private trade association, reported a boost of 10.4 million barrels in crude oil stocks in the United States in the week ended April 9.
A Department of Energy survey said crude oil stocks jumped a more modest 3.2 million barrels to 295.4 million barrels in the same period.
Analysts at US financial giant Merrill Lynch meanwhile raised their average Brent oil price forecast for 2004 to 27.75 dollars a barrel from 26 dollars previously.
"Our change in view stems from the fact that we remain firm believers in OPEC (being) in a stronger position to defend its (22-28 dollar) price band today than it was when it first adopted the strategy four years ago," Merrill Lynch analysts wrote in a research note.
"Specifically, we cite under-investment from non-OPEC as a key contributor, leaving OPEC as the true marginal supplier to satisfy an environment of improving (economic-led) oil demand."
The Organisation of Petroleum Exporting Countries lowered its official output quotas by four percent from April 1, though many traders are sceptical members will scale back supplies while prices remain so high.
On Friday, the price of benchmark Brent North Sea crude oil for June delivery stood at 33.81 dollars a barrel in London from 33.19 dollars at the end of the previous week.
In New York, the reference light sweet crude May contract traded at 37.85 dollars against 36.50.
RUBBER: Rubber prices were stable in quiet trading this week with Thailand shut for a three-day public holiday and seasonal factors also impacting supply.
"It's been very quiet all week because Thailand was closed for three days," one London trader said. Wintering, which brings a seasonal decline in production in Malaysia, Thailand and Indonesia, was coming to an end, but demand was affected by the dollar's strong performance against the euro that made rubber more expensive for Europeans, the trader added.
In Osaka, the RSS 3 May contract stood at 148.20 cents on Friday against 148 cents a week earlier.
Singapore's RSS 3 contract for June advanced to 139.25 cents on Friday from 138 cents.
COCOA: Cocoa prices weakened on technical selling and disappointing US grinding figures that showed a rise of 1.3 percent during the first quarter compared with the same period of the previous year.
Analysts had expected an increase of between four and six percent.
World grinding figures are seen as a good indication of industrial demand.
Traders were meanwhile unimpressed with the European grinding numbers, which showed a 6.4 percent hike.
"The 6.4 percent rise was seen as neutral, falling in the middle of a four to 11 percent range of expectations," Refco analyst Ann Prendergast said.
On LIFFE, London's futures exchange, the price of cocoa for May delivery fell to 791 pounds a tonne on Friday from 803 pounds the previous Thursday before the long weekend.
On the CSCE, the New York futures market, the May contract stood at 1,352 dollars per tonne from 1,407 dollars.
COFFEE: Coffee prices continued to slide with Brazil's government expected to revise upwards its forecast for the 2004/05 harvest.
"Traders are waiting on the Brazil government's revision of its 2004/05 crop estimate, earlier forecast at between 34.1 and 37.4 million bags and now widely expected to be raised" later this month, Prendergast said.
She added that the market consensus was for a crop of between 43 and 45 million bags.
On LIFFE, Robusta quality for May delivery stood at 707 dollars per tonne on Friday, from 725 dollars the previous Thursday.
On New York's CSCE market, Arabica for May delivery was down at 69.95 cents a pound from 72.80 cents the previous Thursday.
COTTON: Cotton prices fell on large-scale selling by speculative funds, but bounced back towards the end of the week following robust US export sales figures.
"Speculators hammered the contract lower," Prendergast said.
While orders for cotton fell in the week ending April 8, deliveries reached their highest level for the 2003/04 season to 476,000 bales, a rise of eight percent on the previous week, the US Agriculture Department said. New York's May contract rose to 62.20 cents a pound on Friday from 61.68 cents Thursday of last week.
The Cotton Outlook Index of physical cotton, the average of the world's lowest prices, was down at 67.55 cents Thursday from 69.55 cents Wednesday of last week.
GRAINS AND SOYA: Soya and grains prices fell this week, hit by investment fund selling and favourable weather conditions.
Weather has been a negative factor. Seeding conditions have been good for maize, AG Edwards analyst Victor Lespinasse said. Rain along with warmer weather in the south-west of the United States weighed on the price of wheat, he added, adding that the stronger dollar hurt US exports.
On LIFFE, wheat for May delivery stood at 97 pounds a tonne on Friday against 99.70 pounds the previous Thursday.
In Chicago, the price of wheat for May delivery fell to 388 cents a bushel from 414 cents.
Maize for May delivery declined to 312.50 cents a bushel from 333 cents.
Soyabeans for May delivery stood at 977 cents a bushel compared from 1,026 cents.
May-dated soyabean meal - used in animal feed - stood at 308.50 dollars per tonne from 326 dollars.
SUGAR: Sugar prices fell on technical movements ahead of the May expiry, dealers said.
However, Prendergast noted: "The market is supported by perceptions that global demand will exceed production."
Earlier in the week, British charity Oxfam accused European Union sugar producers of benefiting from guaranteed prices by producing more than necessary, and thus destabilising global sugar prices.
On LIFFE, the price of a tonne of white sugar for May delivery stood at 226 dollars on Friday from 227.40 dollars the previous Thursday.
On the CSCE in New York, a pound of unrefined sugar for May delivery traded at 6.70 cents against 6.76 cents.
WOOL: The Australian wool market was closed until April 19 for the Easter break.
The Australian Eastern index stood at 7.68 Australian dollars per kilo before the holiday began.
The British Wooltops index was stable at 445 pence from 446 the previous week.