Commodity prices declined moderately in April with diversified commodity indices falling around 2%. Major losses were seen in several agriculture and soft commodities, notably wheat and sugar, declining 5% and 11% respectively. Sugar traded near a one-year low as speculators cut their long positions. The FTSE Physical Commodity Industrial Metals Index shed 0.6% bringing the year to date performance to just over 4%.
There were price increases in some energy commodities and in the markets for soybeans and soy products. Soybean futures rallied to the highest levels in almost four years amid ongoing concerns about a smaller South American crop. Gold lost 0.7% – a third straight monthly decrease – and silver shed 6.5%. Silver briefly traded below US$30 on April 25th but recovered some losses later in the month.
Crude oil markets were weak for most of April. Dubai/Oman crude came under pressure and extended losses at the end of the month on excess supplies and relatively weak Asian demand.
Oman oil lost more than 4% in April, clearly underperforming both Brent crude oil (-1.88%) and West Texas Intermediate crude oil (+0.62%) but is still up more than 8% for the year.
Global oil benchmarks recently declined on news that Iran is considering a Russian proposal to halt the expansion of its nuclear program in order to avert new sanctions.
Nevertheless the possibility of a disruption in supply either due to problems in Iran, Syria, Yemen or an intensifying conflict between Sudan and South Sudan remains a major risk to global oil consumers and keeps prices elevated on a relative basis.
Declines are being used by commodity consumers either to build up or add to existing positions in order to be protected against the possibility of an oil price spike if tensions should rise.
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