The Market on August 30th: Oil, Gold Prices Rise, Rice at 2-Month High

Oil Rises Over 1%

Oil prices climbed over $1 per barrel on Thursday as supply disruptions in Libya and planned output cuts in Iraq raised concerns about tighter global supplies. Brent crude futures settled up $1.29, or 1.6%, at $79.94 a barrel. U.S. West Texas Intermediate crude gained $1.39, or 1.9%, to $75.91.

More than half of Libya’s oil output was shut on Thursday, and exports from some ports were blocked due to a standoff between opposing political factions. Meanwhile, Iraq plans to cut its oil output in September. The country will lower production to between 3.85 million and 3.9 million barrels per day (bpd) next month. Its agreed quota is 4 million bpd, and it produced 4.25 million bpd in July.

Gold Rises Nearly 1%

Gold prices rose about 1% on Thursday, buoyed by strong expectations for a Federal Reserve interest rate cut in September. Investors are now focused on U.S. inflation data for further clues on the extent of the rate reduction. Spot gold ended the session up 0.9% at $2,524.45 per ounce, while gold futures for December delivery settled up 0.9% at $2,560.30.

Fed Chair Jerome Powell signaled a rate cut on Friday, citing concerns about the job market. According to the CME’s FedWatch tool, traders see a 65.5% chance of a 25-basis-point (bp) cut in September and a 34.5% probability of a 50-bp reduction.

Iron Ore Climbs

Iron ore prices rose on Thursday, boosted by renewed hopes for improved demand in China in the coming weeks. However, concerns over high inventory levels and the pace of recovery in downstream steel demand capped the gains. The January iron ore contract on China’s Dalian Commodity Exchange (DCE) finished the day up 0.53% at 760 yuan ($106.93) per ton.

The September iron ore contract on the Singapore Exchange rose 0.84% to $101.65 per ton.

Rice Reaches Two-Month High

Thai rice export prices have climbed to a two-month high due to the strengthening of the baht. Thai 5% broken rice is quoted at $580 per ton, up from $570 last week. Indian 5% broken rice is priced at $540-$545 per ton, while Vietnamese 5% broken rice is at $578 per ton.

Soybeans, Corn, and Wheat Rebound

Soybean and corn futures rose on Thursday on increased export demand. Wheat futures also climbed, supported by relatively strong export sales.

At the close of trading, the most active soybean contract on the Chicago Board of Trade was up 15-1/2 cents at $9.92-1/2 per bushel, corn gained 5-1/4 cents to $3.96 per bushel, and wheat rose 7-1/4 cents to $5.48-3/4 per bushel.

Raw Sugar Hits Six-Week High

Raw sugar futures rose to a six-week high, driven by lower-than-expected production in Brazil and India’s move to increase ethanol output. October raw sugar climbed 0.35 cents, or 1.8%, to 19.89 cents per lb after reaching a six-week peak of 19.98 cents. October white sugar rose 2.3% to $557.20 per ton.

Rubber Reaches 13-Year High

Rubber futures rose for the eighth straight session in Japan, remaining at a 13-year high, amid expectations of tighter global supplies and stronger demand. The February 2025 rubber contract on the Osaka Stock Exchange (OSE) ended the session up 2.1 yen, or 0.56%, at 373.9 yen ($2.59) per kg.

However, the January rubber contract on the Shanghai Futures Exchange (SHFE) fell by 35 yuan, or 0.21%, to close at 16,640 yuan ($2,341.22) per ton.

Coffee Falls

December arabica coffee futures dropped 8.85 cents, or 3.5%, to $2.476 per lb. Brokers attributed the sharp decline to a sudden increase in the delivery of arabica coffee for grading at ICE-certified warehouses.

November robusta coffee fell by 0.5% to $4,901 per ton after reaching $4,972, the highest in at least 16 years.

Copper and Aluminum Extend Losses

Copper and aluminum prices continued to fall on Thursday, pressured by rising inventories, weak demand in China, and a stronger U.S. dollar. Three-month copper on the London Metal Exchange fell by 0.2% to $9,247 per ton, following a 2% drop in the previous session.

LME data showed that copper stocks in LME-registered warehouses rose by 8,700 tons to 322,950 tons, the highest in about five years and double the mid-June level. Aluminum prices on the LME fell by 1.4% to $2,461 per ton, partly due to concerns over excess supplies as inventories in SHFE-approved warehouses increased by 36% in the past three months.

The U.S. dollar strengthened after better-than-expected U.S. GDP data, making dollar-denominated commodities more expensive for buyers using other currencies.