Commodity prices rallied this week, with oil striking 2009 highs on growing optimism about an economic recovery, as traders also tracked the results of key "stress tests" on troubled US banks.
"Commodity index returns have rebounded over the past week," said Deutsche Bank analyst Michael Lewis in a research note to clients.
"In our view, this reflects the market's less pessimistic assessment towards the global growth outlook. However, in most instances index returns are still trading lower on a year to date basis."
Financial markets appeared unruffled by the stress tests, which found that 10 major US banks need to raise a total of 74.6 billion dollars (55.7 billion euros) in new funds to shield against the risk of a further economic downturn.
Official data showed Friday that the US unemployment rate rose to 8.9 percent in April with 539,000 jobs lost, according to a report which was not as bad as feared by private analysts for the recession-stricken economy.
The jobless rate hit its highest level since September 1983 but the pace of job losses slowed appreciably, offering another possible sign of an easing of the severe economic slump.
The unemployment rate was in line with forecasts but the number of job losses not nearly as bad as the consensus Wall Street estimate of 600,000.
Earlier this week, a survey by payrolls firm ADP data showed that the US private sector shed 491,000 jobs in April, which was much lower than analysts had forecast.
OIL: Prices rocketed to near six-month highs above 58 dollars per barrel as stock markets gained on increasing signs of economic recovery in the United States, the world's biggest energy consumer.
"Crude oil prices are being driven higher by a combination of building confidence of a faster economic recovery, increased funds flow into commodities, and higher utilisation at US refineries," said Lewis.
"However we believe the fundamental outlook remains weak and that inventories are set to remain high."
Prices have posted solid gains this week on hopes of a recovery in energy demand, but they remain far below last July's record peaks above 147 dollars a barrel.
"Oil prices have been surging this week on titbits of information indicating that the economic crisis has reached its trough and that recovery could be around the corner," said analysts at JBC Energy.
"US banks appear to be doing better than everybody thought according to the Fed's preliminary release on the stress test, while the rate of job losses in the country has slowed.
"In the wider picture there are also tentative signs that economic activity in China and India has been picking up with Chinese manufacturing having accelerated for the first time in nine months.
"The Baltic Dry Index also surged by 8.9 percent, day-on-day, and was last seen at over 2,000 points; the Index is a daily average of the costs of shipping raw materials to end customers and so can be seen as a good barometer of the health of the world economy," added the JBC analysts in a research note.
However Nimit Khamar at the Sucden brokerage in London warned that oil prices could head lower in coming weeks should investors begin to show less optimism regarding an economic recovery.
By Friday, on the New York Mercantile Exchange (NYMEX), light sweet crude for delivery in June surged to 57.60 dollars a barrel from 52.11 dollars a week earlier.
On London's InterContinental Exchange (ICE), Brent North Sea crude for June soared to 57.28 dollars a barrel from 51.63 dollars a week earlier.
PRECIOUS METALS: Precious metals sparkled, with gold hitting 925 dollars per ounce on Thursday, drawing strength from the weak US currency.
A struggling greenback makes dollar-priced commodities cheaper for foreign buyers using stronger currencies -- and therefore tends to stimulate demand.
By late Friday on the London Bullion Market, gold rose to 907 dollars an ounce from 884.50 dollars the previous week.
Silver advanced to 13.90 dollars an ounce from 12.15 dollars.
On the London Platinum and Palladium Market, platinum increased to 1,149 dollars an ounce at the late fixing on Friday from 1,076 dollars.
Palladium leapt to 242 dollars an ounce from 212 dollars.
BASE METALS: Base metals prices soared on hopes that a global economic recovery would boost demand.
"Prices strengthened across the complex... as sentiment was boosted by a higher than expected figure for US employment data offering further evidence that the macro outlook may be beginning to improve," said Barclays Capital analysts.
"Sentiment towards the broader global macro outlook has been turning more positive recently and this is being reflected in base metals prices."
By Friday on the London Metal Exchange, copper for delivery in three months climbed to 4,763 dollars a tonne from 4,515 dollars the previous week.
Three-month aluminium jumped to 1,564 dollars a tonne from 1,518 dollars.
Three-month lead rose to 1,484 dollars a tonne from 1,356 dollars.
Three-month tin surged to 14,214 dollars a tonne from 12,475 dollars.
Three-month zinc increased to 1,557 dollars a tonne from 1,475 dollars.
Three-month nickel rallied to 13,303 dollars a tonne from 11,725 dollars.
COCOA: Cocoa prices advanced on signs of strengthening demand.
By Friday on LIFFE, London's futures exchange, the price of cocoa for delivery in July rose to 1,751 pounds a tonne from 1,703 pounds the previous week.
On the New York Board of Trade (NYBOT), the July cocoa contract gained to 2,507 dollars a tonne from 2,388 dollars.
COFFEE: Coffee prices also climbed, hitting 125.80 US cents per pound in New York -- a level last seen on February 9.
By Friday on LIFFE, Robusta for delivery in July increased to 1,493 dollars a tonne from 1,475 dollars the previous week.
On the NYBOT, Arabica for July stood at 125.20 US cents a pound from 116.35 cents.
GRAINS AND SOYA: Prices gained ground amid production delays and higher crude oil prices. Corn, or maize, is used to produce ethanol -- a clean plant-based fuel which is cheaper than oil.
"Support for corn prices stems from delays in corn plantings especially in the eastern US corn belt, as well as the strong rise in crude oil prices," said Barclays Capital analysts.
By Friday on the Chicago Board of Trade, maize for delivery in July rose to 4.19 dollars a bushel from 4.13 dollars the previous week.
July-dated soyabean meal -- used in animal feed -- gained to 11.04 dollars from 10.91 dollars.
Wheat for July advanced to 5.80 dollars a bushel from 5.70 dollars.
SUGAR: Sugar prices surged close to a three-year peaks, stretching as high as 452.20 pounds in London and 15.60 cents in New York -- the highest points since July 2006.
"Sugar prices have shot higher on an anticipated tightening of stocks in India and on supportive developments in the biofuel industry in the United States," said Standard Chartered analysts.
Sugar is used to make ethanol, a cheaper alternative to gasoline used to power road vehicles.
By Friday on LIFFE, the price of a tonne of white sugar for delivery in August rose to 445.90 pounds from 431.80 pounds the previous week.
On NYBOT, the price of unrefined sugar for July increased to 15.37 US cents a pound from 14.47 cents.
RUBBER: Malaysian rubber prices tracked rising oil prices to close higher Friday.
Traders said the rubber price was also benefitting from tight supply. The price of natural rubber is linked with the cost of crude oil, which affects the price of synthetic rubber products.
The Malaysian Rubber Board's benchmark SMR20 was at 165.90 US cents per kilo, compared to 157.15 US cents on April 30.
"Commodity index returns have rebounded over the past week," said Deutsche Bank analyst Michael Lewis in a research note to clients.
"In our view, this reflects the market's less pessimistic assessment towards the global growth outlook. However, in most instances index returns are still trading lower on a year to date basis."
Financial markets appeared unruffled by the stress tests, which found that 10 major US banks need to raise a total of 74.6 billion dollars (55.7 billion euros) in new funds to shield against the risk of a further economic downturn.
Official data showed Friday that the US unemployment rate rose to 8.9 percent in April with 539,000 jobs lost, according to a report which was not as bad as feared by private analysts for the recession-stricken economy.
The jobless rate hit its highest level since September 1983 but the pace of job losses slowed appreciably, offering another possible sign of an easing of the severe economic slump.
The unemployment rate was in line with forecasts but the number of job losses not nearly as bad as the consensus Wall Street estimate of 600,000.
Earlier this week, a survey by payrolls firm ADP data showed that the US private sector shed 491,000 jobs in April, which was much lower than analysts had forecast.
OIL: Prices rocketed to near six-month highs above 58 dollars per barrel as stock markets gained on increasing signs of economic recovery in the United States, the world's biggest energy consumer.
"Crude oil prices are being driven higher by a combination of building confidence of a faster economic recovery, increased funds flow into commodities, and higher utilisation at US refineries," said Lewis.
"However we believe the fundamental outlook remains weak and that inventories are set to remain high."
Prices have posted solid gains this week on hopes of a recovery in energy demand, but they remain far below last July's record peaks above 147 dollars a barrel.
"Oil prices have been surging this week on titbits of information indicating that the economic crisis has reached its trough and that recovery could be around the corner," said analysts at JBC Energy.
"US banks appear to be doing better than everybody thought according to the Fed's preliminary release on the stress test, while the rate of job losses in the country has slowed.
"In the wider picture there are also tentative signs that economic activity in China and India has been picking up with Chinese manufacturing having accelerated for the first time in nine months.
"The Baltic Dry Index also surged by 8.9 percent, day-on-day, and was last seen at over 2,000 points; the Index is a daily average of the costs of shipping raw materials to end customers and so can be seen as a good barometer of the health of the world economy," added the JBC analysts in a research note.
However Nimit Khamar at the Sucden brokerage in London warned that oil prices could head lower in coming weeks should investors begin to show less optimism regarding an economic recovery.
By Friday, on the New York Mercantile Exchange (NYMEX), light sweet crude for delivery in June surged to 57.60 dollars a barrel from 52.11 dollars a week earlier.
On London's InterContinental Exchange (ICE), Brent North Sea crude for June soared to 57.28 dollars a barrel from 51.63 dollars a week earlier.
PRECIOUS METALS: Precious metals sparkled, with gold hitting 925 dollars per ounce on Thursday, drawing strength from the weak US currency.
A struggling greenback makes dollar-priced commodities cheaper for foreign buyers using stronger currencies -- and therefore tends to stimulate demand.
By late Friday on the London Bullion Market, gold rose to 907 dollars an ounce from 884.50 dollars the previous week.
Silver advanced to 13.90 dollars an ounce from 12.15 dollars.
On the London Platinum and Palladium Market, platinum increased to 1,149 dollars an ounce at the late fixing on Friday from 1,076 dollars.
Palladium leapt to 242 dollars an ounce from 212 dollars.
BASE METALS: Base metals prices soared on hopes that a global economic recovery would boost demand.
"Prices strengthened across the complex... as sentiment was boosted by a higher than expected figure for US employment data offering further evidence that the macro outlook may be beginning to improve," said Barclays Capital analysts.
"Sentiment towards the broader global macro outlook has been turning more positive recently and this is being reflected in base metals prices."
By Friday on the London Metal Exchange, copper for delivery in three months climbed to 4,763 dollars a tonne from 4,515 dollars the previous week.
Three-month aluminium jumped to 1,564 dollars a tonne from 1,518 dollars.
Three-month lead rose to 1,484 dollars a tonne from 1,356 dollars.
Three-month tin surged to 14,214 dollars a tonne from 12,475 dollars.
Three-month zinc increased to 1,557 dollars a tonne from 1,475 dollars.
Three-month nickel rallied to 13,303 dollars a tonne from 11,725 dollars.
COCOA: Cocoa prices advanced on signs of strengthening demand.
By Friday on LIFFE, London's futures exchange, the price of cocoa for delivery in July rose to 1,751 pounds a tonne from 1,703 pounds the previous week.
On the New York Board of Trade (NYBOT), the July cocoa contract gained to 2,507 dollars a tonne from 2,388 dollars.
COFFEE: Coffee prices also climbed, hitting 125.80 US cents per pound in New York -- a level last seen on February 9.
By Friday on LIFFE, Robusta for delivery in July increased to 1,493 dollars a tonne from 1,475 dollars the previous week.
On the NYBOT, Arabica for July stood at 125.20 US cents a pound from 116.35 cents.
GRAINS AND SOYA: Prices gained ground amid production delays and higher crude oil prices. Corn, or maize, is used to produce ethanol -- a clean plant-based fuel which is cheaper than oil.
"Support for corn prices stems from delays in corn plantings especially in the eastern US corn belt, as well as the strong rise in crude oil prices," said Barclays Capital analysts.
By Friday on the Chicago Board of Trade, maize for delivery in July rose to 4.19 dollars a bushel from 4.13 dollars the previous week.
July-dated soyabean meal -- used in animal feed -- gained to 11.04 dollars from 10.91 dollars.
Wheat for July advanced to 5.80 dollars a bushel from 5.70 dollars.
SUGAR: Sugar prices surged close to a three-year peaks, stretching as high as 452.20 pounds in London and 15.60 cents in New York -- the highest points since July 2006.
"Sugar prices have shot higher on an anticipated tightening of stocks in India and on supportive developments in the biofuel industry in the United States," said Standard Chartered analysts.
Sugar is used to make ethanol, a cheaper alternative to gasoline used to power road vehicles.
By Friday on LIFFE, the price of a tonne of white sugar for delivery in August rose to 445.90 pounds from 431.80 pounds the previous week.
On NYBOT, the price of unrefined sugar for July increased to 15.37 US cents a pound from 14.47 cents.
RUBBER: Malaysian rubber prices tracked rising oil prices to close higher Friday.
Traders said the rubber price was also benefitting from tight supply. The price of natural rubber is linked with the cost of crude oil, which affects the price of synthetic rubber products.
The Malaysian Rubber Board's benchmark SMR20 was at 165.90 US cents per kilo, compared to 157.15 US cents on April 30.
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