Palm Oil :
Malaysian palm oil futures skyrocketed to an all-time high of MYR 6,354 a tonne in the last week of February and are now up more than 30% since the beginning of 2022. Robust demand and supply constraints have been driving prices higher, while the Russia- Ukraine war lifted crude prices and boosted the appeal of tropical oil. Malaysian Palm Oil Board’s estimated the country’s production in February fell 1.79% from the previous month, with exports rising faster than its output. Meanwhile, Indonesia, the world’s top producer, started requiring producers to sell 20% of their planned exports to the domestic market.
Chicago soybean futures jumped almost 5% to $17.5 a bushel on Thursday, the highest since September 2012 amid ongoing supply concerns in the world’s largest producers and exporters of processed soy. Commodity markets were also extremely volatile amid news of a Russian military incursion in Ukraine. Argentina and Brazil have been facing abnormally dry conditions linked to the La Niña pattern, hitting the quality and quantity of crops. Brazil is expected to export 7.5 million tonnes of soybeans in February, down from 9.923 million tonnes projected the week prior by farm consultancy ANEC. As a result, the latest USDA monthly crop report pegged Brazil’s soy crop at 134 million tonnes, down from 139 million in January, and Argentina’s soy crop at 45 million, down from 46.5 million. The report also pointed to smaller US soybean supplies amid rising demand from the crushing industry.
Chicago wheat futures surged to an over 9-year high of $9.3 per bushel in the final week of February, as the Russian invasion of Ukraine announced by President Putin led to expectations of wheat supply disruptions from two of the world’s largest producers. Reports from the Ukrainian Minster of the Interior Gerashchenko said Russian troops disembarked in the coast of Odessa, the Ukrainian Black Sea port city. At the same time, Ukrainian authorities asked Turkey to lock the Black Sea’s entry and exit to Russian ships from prohibiting entry into the Bosphorus and Dardanelles waterways. With Russia and Ukraine accounting for roughly 30% of the world’s wheat exports, conflict in the region jeopardizes crucial supply from an already tight market. Elsewhere, droughts in North America hampered US and Canadian production.
Crude Brent Oil Hits $100 :
Brent crude futures hit $100 per barrel for the first time since September 2014 on Thursday, after president Vladimir Putin announced that Russia would launch a military operation in Ukraine, with explosions being reported in Kyiv. Putin claimed that Russia’s goal was not to occupy Ukraine, but merely to protect residents of eastern Ukraine from what he called a regime, and warned other countries that any attempt to interfere with the Russian action would lead to “consequences they have never seen,” according to Reuters. Markets have been wary of escalating tensions in Eastern Europe for weeks now, amid fears that a major conflict could disrupt energy flows and provoke crippling sanctions. Meanwhile, investors are also closely monitoring the Iran nuclear talks amid signs of progress, as a potential deal could add more than 1 million barrels a day of supply and help ease a tight global market.
Natural Gas :
Natural gas futures rose more than 5% to a three-week high of $4.9 per million British thermal units on Thursday, as traders digested news of a broad Russian attack on Ukraine and amid strong heating demand prospects. The US and EU leaders vowed harsher sanctions against Russia after its President, Vladimir Putin, announced an attack on its neighbor country. The consequences of those sanctions could result in leaving Russian energy exports out of global markets. Meanwhile, frigid weather continued to move across most of the US, boosting gas demand for heating.
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Gold Hits :
Gold increased to a 13-month high of 1917 USD/t.oz, as investors rushed to the precious metal amid an escalating crisis in Ukraine. Russia’s Putin said Kremlin would launch military action on its neighbor, as explosions were heard in Kyiv and Donetsk. Meantime, the UN Security Council reportedly convened an emergency meeting while the West imposed more sanctions on Moscow. The US Wednesday launched new sanctions on the company in charge of building Russia’s Nord Stream 2 gas pipeline, expanding penalties on Moscow after it recognized two breakaway regions in eastern Ukraine.
Copper futures consolidated around the $4.5 per pound level in the last week of February, having been stuck in a tight range since mid-month as investors weighed concerns about the escalating crisis over Ukraine against robust demand and supply disruptions. Western countries, Australia and Japan, announced sanctions targeting Russian banks, the country’s sovereign debt and elites after Moscow ordered troops into separatist regions of eastern Ukraine. Aside from conflict headlines, copper usage is surging, especially in developed countries, with increasing demand for electric vehicles and wind farms, solar panels and the power grid. Also, a political shift across high producing countries Chile and Peru ignited civil protest against mining companies that often halt trucks from heading to and returning from the mines, exacerbating supply tightness.
Newcastle coal futures were trading around $230 per tonne in late February, below a four-month high of $245 per tonne touched earlier this month as a milder weather outlook kept sentiment muted while investors continue to follow the back and forth on the Ukrainian crisis. This bearish tone contrasts with the sharp gains in Chinese coking coal futures. Tight supply and prospects of solid demand following the Lunar New Year holidays and the Winter Olympics drove the most-active coking coal futures on the Dalian bourse to levels not seen since October last year.