Yahoo Finance Five Key Charts to Watch in Global Commodities This Week
(Bloomberg) -- The cotton industry is witnessing a fierce battle that pits Louis Dreyfus Co. against Singapore-based Olam Agri Holdings Ltd. in the pursuit of an Australian takeover. Global temperatures keep breaking records — causing wide-ranging impacts for agriculture and energy, and life itself. And palladium is losing its shine to platinum.
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Here are five notable charts to consider in global commodity markets as the week gets underway.
Cotton
Two major crop traders are locked in a duel to buy Australia’s largest cotton processor, Namoi Cotton Ltd. Olam Agri launched a bid for the company in late March, overtaking an initial offer from Louis Dreyfus, and the merchants have been progressively upping their offers in the weeks since. That sent Namoi shares to the highest since 1999 last week. Australia ranks among the world’s biggest exporters of the fiber and is coming off of a few bumper harvests. Market watchers are eyeing whether Olam’s latest bid will be accepted or if the bidding war continues ahead.
Precious Metals
Platinum traded above palladium in May for the second time this year, and analysts point to a looming deficit as consumption outstrips supply. That view suggests similar reversals may become more frequent for the metals used in catalytic converters of gasoline-powered cars. Much of the demand appears to be from China as the Asian nation expands stockpiles, with platinum imports rising 77% in March. The trend will likely be a hot topic for those attending events at London’s Platinum Week starting Tuesday. Spot prices of platinum rose Monday while palladium wavered.
Oil
Oil’s key technical levels are providing a floor for losses. West Texas Intermediate settled above $78 a barrel last week after a monthlong slide that dragged prices to the lowest since mid-March. The stabilization is largely because technical levels are providing support rather than any change in broader sentiment. Earlier last week, the 100-day moving average stemmed the decline, while the nine-day relative strength index signaled the selloff was overdone. Amid a cloudy fundamental outlook, markets are looking ahead to the OPEC+ meeting on June 1 when the cartel is expected to press on with supply cuts in the second half of the year to prevent a surplus. Oil edged higher Monday.
Weather
The Northern Hemisphere is going into what could be another unusually hot summer, according to forecasters, as global temperatures continue breaking records. The European Union’s Copernicus Climate Change Service said last month’s temperatures globally were 1.58C (2.8F) above historical averages and marked the hottest April on record. The past 12 months have been 1.61C higher than pre-industrial temperatures, exceeding the 1.5C threshold that policymakers and scientists say could threaten the life of the planet.
Natural Gas
Storage of US natural gas is more than 33% higher than the five-year average heading into summer after an unusually mild winter decimated demand. Traders are waiting to see whether the country will see a hot summer, which would help draw down stored supplies. Prices, which had been hovering around four-year lows for much of the year, have seen a boost ahead of expected seasonal warmth.
--With assistance from Doug Alexander, Mark Burton, Sybilla Gross and Keira Wright.
(Adds Monday’s price moves for oil, platinum from fourth paragraph.)
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