Commodities Update — Gold slips; wheat tumbles; Indonesia removes palm oil levy
RIYADH: Gold slipped on Friday and was headed for a fifth consecutive weekly loss, knocked down by the dollar’s overall strength amid prospects of steep rate hikes by the US Federal Reserve.
Spot Gold is currently priced at $1,708.17 per ounce, while US Gold future is at $1,703.60.
Chicago Board of Trade wheat futures tumbled to a five-month low on Friday, with hopes for a pick-up in exports from war-torn Ukraine threatening the recent gains made in demand for US supplies, traders said.
Corn futures firmed again, their seventh gain in the last eight sessions, on concerns about hot weather stressing the US crop as it passes through pollination.
Soybeans posted modest gains, also supported by weather concerns, but gains were limited as the crop was not in a critical development phase.
The benchmark Chicago Board of Trade September soft red winter wheat contract fell 12.9 percent this week, the biggest weekly loss in percentage terms for the most-active contract since March 2011.
CBOT September soft red winter wheat ended down 18-1/4 cents at $7.76-3/4 a bushel, its fifth straight losing session. Prices bottomed out at $7.65-3/4, the lowest for the most-active contract since Feb. 11.
CBOT December corn was up 2-3/4 cents at $6.03-3/4 a bushel and CBOT November soybeans were 1-1/4 cents higher at $13.42-1/4 a bushel.
Indonesia removes palm oil export levy
Indonesia has scrapped its export levy for all palm oil products until Aug. 31 in a fresh attempt to boost exports and ease high inventories, finance ministry officials said on Saturday, adding the move would not disrupt government revenues.
The decision by the world’s biggest palm oil exporter could further depress prices, which have fallen by about 50 percent since late April to their lowest in over a year.
Indonesian palm oil producers have struggled with high inventories since the country imposed a three-week export ban through May 23 to reduce domestic cooking oil prices.
Since lifting the ban, Jakarta has implemented rules on mandatory local sales — known as the domestic market obligation — to keep produce at home to be made into cooking oil.
At the same time, it has tried to clear up storage tanks by cutting export taxes and launching a shipment acceleration program, but exports remained slow, and companies have blamed the DMO rules and problems with securing cargo vessels.
The levy removal is intended to further support exports, Febrio Kacaribu, the ministry’s head of fiscal policy agency, told reporters on the sideline of a G20 finance meeting in Bali.
(With input from Reuters)