Oil & Copper Down on Poor Fundamentals, Sugar Falls as Surplus Grows
Commodities, including crude oil and copper, dropped today on poor fundamental reports from the United States and China. US nonfarm payrolls grew by just 69,000, compared to traders’ expectations of 151,000 growth, and the unemployment rate unexpectedly rose to 8.2 percent. Manufacturing Purchasing Managers’ Index fell from 54.8 in April to 53.5 in May. China’s PMI declined to 50.4 last month from 53.3 the month before. Futures for delivery of crude oil in July fell $2.94 (3.4 percent) to $83.59 per barrel by 10:22 on NYMEX after reaching $82.56 — the lowest level since October 7. Brent dropped from $101.65 to $98.76 as of 16:03 GMT on ICE today, following the decline to $97.71 — the lowest price since February 8. Copper went down from $3.3600 per pound to $3.3260 per pound on COMEX and its daily low of $3.3015 was the lowest since December 19.
Sugar had additional negative factor: speculations that surplus will grow as Brazil boost its output. Rabobank International predicted that world sugar production will outpace demand by 4.6 million metric tons in the 2012–13 season. Economists say that Asian countries, particularly China, increase their purchases of raw sugar because of the low prices, providing a temporary floor to prices. In the longer term, the agricultural commodity will likely resume its decline. Sugar declined from $0.1950 to $0.1916 per pound on ICE today and earlier it touched $0.1895 — the low last seen in August 17, 2010.
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