Food Prices at Highest Level in 18 Months, UN Says -- Commodities Roundup

MARKET MOVEMENTS:

--Brent crude oil is down 2.6% to $73.68 a barrel.

--European benchmark gas is up 2.75% to 42.41 euros a megawatt-hour.

--Gold futures are down 0.5% to $2,692.50 a troy ounce.

--LME three-month copper futures are down 2.2% at $9,466.50 a metric ton.

TOP STORY:

Food Prices at Highest Level in 18 Months, UN Says

Food prices rose to their highest level in 18 months in October, with the prices of almost all commodity groups rising, led by vegetable oils, the Food and Agriculture Organization of the United Nations said.

The FAO's food price index, which tracks global prices for a basket of staple foods, averaged 127.4 points in October, up 2.0% from a revised September level and 5.5% higher on year. The index now stands at its highest level since April 2023.

Vegetable-oil prices rose 7.3% to a two-year high with the prices of palm, soy, sunflower and rapeseed oils rising. International palm oil prices rose for the fifth consecutive month in October, driven by lower-than-expected output coinciding with potential seasonal production declines in major South East Asian producing countries. Sunflower and rapeseed oil prices also rose on prospects of lower production, and soyoil prices rose on global demand and limited alternative supplies.

OTHER STORIES:

Tycoon Drives India's Push Against China's Solar-Energy Dominance

AHMEDABAD, India- Gautam Adani, the billionaire founder of one of India's biggest business conglomerates, lies at the intersection of the country's clean energy challenge to China.

Adani Group, which built its energy empire on coal, is setting up an entire solar supply chain starting with indigenous manufacturing of ingots, wafers, cells and panels, and soon polysilicon. It is also constructing a solar farm in Khavda, western India, that will cover an area over five times the size of Paris.

The group's goal reflects India's twin aims of aggressively chasing renewable-energy targets while reducing dependence on Chinese imports, goals that are often in conflict with each other.

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Icahn Enterprises Looks to Build Stake in CVR Energy, Cuts Dividend in Half

Icahn Enterprises said it wants to acquire additional shares of CVR Energy's stock and will cut its dividend in half, confirming an earlier report by The Wall Street Journal.

The company founded by activist investor Carl Icahn on Friday said it delivered a proposal to CVR's board to acquire more shares through a tender offer. It proposed acquiring up to 15 million additional shares at a price of $17.50 a share.

Shares of CVR closed down 4.7% at $16.52 on Thursday, and were up 2.9% at $17 in premarket trade.

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U.S. EV Maker Rivian to Use LG Cylindrical Batteries

U.S. electric-vehicle startup Rivian Automotive plans to use LG Energy Solution's advanced cylindrical batteries to power its cars in the North American market.

The South Korean battery maker said Friday that its plant in Arizona will supply 67 gigawatt-hours of the 4695 cylindrical cells to Rivian for its R2 sport-utility vehicles, once mass production starts in 2026.

LG didn't disclose the value of the five-year contract signed by Rivian and LG Energy Solution Arizona.

MARKET TALKS:

Oil Futures Retreat As Demand Concerns Weigh -- Market Talk

0821 ET - Crude oil futures lose ground with concerns about weaker demand weighing and supply risk from Hurricane Rafael in the seen diminishing. "This risk reduction helped alleviate some of the upward pressure on oil prices, creating a more balanced sentiment," Joseph Dahrieh of Tickmill says in a note. "Demand-side worries about slower global consumption suggests a bearish near to medium-term outlook for crude oil." The hurricane, which has shut in some U.S. offshore production, is forecast to weaken over the coming days as it moves around the central Gulf of Mexico, according to the National Hurricane Center. WTI is off 1.6% at $71.18 a barrel and Brent is down 1.4% at $74.60.([e-mail])

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A Downward Gold Price Correction Is Expected But Won't Last Long -- Market Talk

1215 GMT - Gold futures fall but the dip is only temporary, Commerzbank says. Futures fall 0.2% to $2,699.30 a troy ounce. Selling pressure has been caused by a significantly stronger U.S. dollar and a sharp rise in bond yields. Gold investors had also built up considerable correction potential due to a strong rally in previous weeks. The rally wasn't based on a change in interest rate expectations, Commerzbank says. Some market participants apparently took this as an opportunity to close positions, analysts say. That said, gold's price weakness shouldn't last long. The Federal Reserve cut interest rates by 25 basis points yesterday, with the prospect of more to come. In addition, president-elect Donald Trump's policies are likely to increase inflation risks. Therefore, gold will likely remain in demand as a hedge against inflation, Commerzbank says. ([e-mail])

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Europe's Gas Prices Rise on Stronger Demand -- Market Talk

1116 GMT - European natural-gas prices are nearly 3% higher in afternoon trade amid signs of stronger demand across the bloc. The benchmark Dutch TTF contract is up 2.9% at 42.49 euros a megawatt hour. According to industry group Gas Infrastructure Europe, net withdrawal from EU gas storage facilities surged to around 3.8 terawatt hours on Wednesday. "While the weather across the region is still relatively mild, temperatures are dropping and are forecast to fall further next week," ANZ Research analysts say in a note to clients. "Gas demand has also been supported by weak output from wind generation." ([e-mail])

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Palm Oil Rises Amid Broader Vegetable Oil Rally -- Market Talk

1006 GMT - Palm oil ended higher amid a broader vegetable oil rally. Cargo surveyors have reported a significant rise in Malaysian palm oil exports in October, with shipments rising 11.5%-13.7% compared with September, Phillip Nova analyst Lim Tai An said in a research note. Meanwhile, data from the Malaysian Palm Oil Association showed October palm oil production largely remained flat from September, which further supported prices, the analyst added. Investors await official supply and demand data due early next week. The Bursa Malaysia Derivatives contract for January delivery ended MYR148 higher at MYR5,100 a ton. ([e-mail])

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U.S. LNG Projects Could Suffer Impact of Trump's Trade Tariffs -- Market Talk

0958 GMT - Project development of liquefied natural gas in the U.S. could be hit by the effects of higher trade tariffs under Donald Trump's administration, according to trade data firm Kpler. The president-elect said he aims to implement tariffs of up to 60% on goods from China and at least 10% on other countries. But the U.S. is heavily reliant on imports for many of the components needed to build LNG trains, Kpler's analyst JP Lacouture says. "Increasing the costs of the necessary raw materials, machined parts, and equipment will in turn increase already rising costs associated with constructing a liquefaction plant in the U.S.," he says in a note. "Higher project expenditures may make it more difficult for U.S. LNG projects to secure financing and could decrease profitability." ([e-mail])

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Further Delays to OPEC+ Output Plan Will Be Crucial to Avoid Oversupply -- Market Talk

0940 GMT - OPEC+ would have to further delay its planned output hike to curb the anticipated global supply surplus next year, according to BMI analysts. The cartel and its allies pushed back their plan to gradually reintroduce some barrels into the market until the end of December amid broader concerns over weaker demand and oil prices. "The dominant driver of price action over the course of next year will be OPEC+ policy," the analysts say. "Our data currently show a surplus of around 720,000 barrels a day for 2025 and this assumes that OPEC+ does not begin ramping up its output until April of that year." ([e-mail])

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Gold Futures Slip, Set to End Week Down on Higher Dollar -- Market Talk

0925 GMT - Gold continues to fall, on course to end the week lower following Donald Trump's election win. Futures fall 0.3% to $2,696.50 a troy ounce. The precious metal mounted a small recovery on Thursday's session, but remains down 1.9% on-week. This reflects reduced uncertainty surrounding the U.S. election, BMI analysts say in a note. Trump's resounding victory in the U.S. election sent the dollar higher, pressuring gold prices, BMI says. At the same time, Trump's proposed policies--including tariffs and stricter immigration controls--are inflationary in nature. This has softened expectations for sizeable Federal Reserve cuts to the U.S. interest rate, BMI says. This has further damped the appeal of gold. Higher interest rates are typically a headwind for non-interest bearing bullion. ([e-mail])

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Oil Falls as Hurricane Rafael Is Set to Weaken -- Market Talk

0912 GMT - Oil prices fall in early European trade as Hurricane Rafael is forecast to start weakening, easing risks to U.S. output. Brent crude is down 1.3% to $74.61 a barrel, while WTI falls 1.6% to $71.18 a barrel. Rafael is expected to start moving at a slower speed and weaken through the weekend, according to the U.S. National Hurricane Center. Still, crude prices are headed for weekly gains as markets weigh the potential effects of a Trump presidency on market fundamentals. "It is difficult to say with any certainty what the net impact on prices will be," BMI analysts say in a note. "Key areas to watch include a potential tightening of sanctions, notably on Iran, meaningful shifts in the foreign policy approach and rising trade tensions, in particular with Mainland China." ([e-mail])

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Gold's Rally May Have Run its Course, Charts Show -- Market Talk

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11-08-24 1046ET