• High-fliers include wheat, natural gas and coffee
• Weak PMI from China raises demand concerns
• Cocoa bounces back after delivery news
The DJ-UBS index is seeing the first negative day in a week after traders booked profit on some of the recent high-flying commodities, such as wheat, natural gas and coffee. Weaker-than-expected manufacturing PMI from China overnight once again raised concerns about the future outlook for demand from the worlds biggest consumer of raw materials.
Gold spent most of the day near the bottom of its recent range but has so far managed to stay above support at USD 1,303/oz being its 200-day moving average.
Cocoa bounced back strongly after news that deliveries from the Ivory Coast, the world's largest producer, was slowing ahead of the delivery of the smaller of two annual harvests which is due to begin in April. Expectations of the biggest crop in three years should help to limit the upside potential.
Source: Bloomberg and Saxo Bank
Ole Hansen, Saxo Bank’s head of Commodity Strategy, is a specialist in traded futures with particular focus on commodities.