Food Prices Mostly Stable in May, But Middle East Conflict Threatens Broader Shock, UN Says -- Commodities Roundup

MARKET MOVEMENTS:

--Brent crude oil is down 1.5% to $93.05 a barrel.

--European benchmark gas is down 0.9% to 48.27 euros a megawatt-hour.

--Copper futures are down 2.4% to $13,597.00 a metric ton.

--Gold futures are down 2.5% to $4,391.00 a troy ounce.

TOP STORY:

Food Prices Mostly Stable in May, But Middle East Conflict Threatens Broader Shock, UN Says

World food prices were broadly stable in May, with increases in cereal and sugar offset by declines in vegetable oils and dairy products, the United Nations' Food and Agriculture Organization said.

The FAO's food price index--which tracks a basket of widely traded food commodities--averaged 130.8 points last month, down 0.2% from its revised April level but still 2.9% higher than a year ago, as supply disruptions in the Middle East and rising fertilizer costs pose a growing threat to global food markets.

OTHER STORIES:

A Post-Iran War View on Energy Investing

A new world order is emerging in global energy markets, creating both havoc and opportunity for investors.

The Iran war's historic disruption of oil-and-gas production and shipping through the Strait of Hormuz has resulted in shortages and soaring prices. It has also set off a global rush to secure supplies.

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The IPO Market Is So Hot a 140-Year-Old Silver Mine Just Went Public

IPO-crazed investors have gobbled up stock offerings from a data-center buyer, AI provider, chip maker, automotive-software developer and geothermal power producer. The latest bonanza surrounds a historic silver mine in Idaho that hasn't been fully operational for a quarter century.

Billionaire Thomas S. Kaplan -who made his fortune in natural gas and precious metals and his name as an art collector with an affinity for Rembrandt-plans to restart the Sunshine mine, once America's most prolific source of silver.

MARKET TALKS:

Crude Futures Slip Ahead of the Weekend -- Market Talk

0929 ET - Oil futures are lower heading into the weekend as the market holds out hopes for U.S.-Iran negotiations to eventually bring about an agreement to reopen the Strait of Hormuz. The market appears more sensitive to occasional bearish war headlines or optimistic comments from President Trump than to the daily loss of supply, Ritterbusch & Associates says in a note. "Holding a long position that would be more appropriate to global oil fundamentals has been extremely difficult throughout the course of this war." WTI is down 0.9% at $92.23 and Brent is off 0.6% at $94.49([e-mail])

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U.S. Labor Data Pushes Up Yields, Dollar Even as Oil Slips -- Market Talk

0925 ET - A stronger-than-expected U.S. labor report breaks the recent correlation between yields-dollar and oil prices. Crude futures are slightly lower amid hopes of easing hostilities in the Middle East, while yields and the dollar rise. The three had been moving in lockstep recently. May's surprisingly strong 172,000 payrolls print makes the Fed more likely to focus on cooling inflation than in bolstering labor markets, and odds of a Fed hike this year rise to 68% from 51% yesterday, according to CME. The two-year Treasury yield, considered more sensitive to Fed policy, rises to 4.135% from 4.043% before the data. The WSJ Dollar Index is up 0.2% from yesterday. ([e-mail]; @ptrevisani)

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Crude Palm Oil Ended Lower Amid Weakness in Soybean Oil -- Market Talk

1024 GMT - Crude palm oil ended lower for another session, weighed by persistent weakness in the Chicago soybean oil market, says David Ng, a trader at Kuala Lumpur-based Iceberg X. Recent weakness in export demand is also pressuring prices in the near term, he says. Ng sees prices of palm oil supported above 4,480 ringgit a ton and resistance at 4,750 ringgit a ton. The Bursa Malaysia Derivatives contract for August delivery was 47 ringgit lower at 4,554 ringgit a ton. ([e-mail])

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Orsted Making Progress, But Consistent Execution Required -- Market Talk

0741 GMT - Orsted should have a net cash balance sheet by 2029, while tail risks for the construction of U.S. offshore wind projects are diminishing, Deutsche Bank analyst Olly Jeffery writes. The outlook for offshore wind in Europe has improved and Orsted's relative valuation looks attractive, Jeffery adds. "Although Orsted's very recent track record has got better, we would want to see a sustained period of good execution, in order to become more constructive." Deutsche Bank raises its target price on the stock to 155 Danish kroner from 135 kroner and maintains its hold rating. Shares closed at 160.35 kroner. ([e-mail])

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Gold Pressured by Rate-Hike Fears as Middle East Uncertainty Persists -- Market Talk

0734 GMT - Gold prices trade below $4,450 a troy ounce and are on track for a weekly loss as uncertainty surrounding U.S.-Iran peace talks and renewed hostilities in the Middle East weaken investor sentiment. Concerns over sustained disruptions to energy shipments through the Strait of Hormuz have supported higher oil prices and heightened inflation risks, strengthening prospects of higher-for-longer interest rates or potential hikes that would weigh on non-yielding assets. "Energy analysts warn that rapid inventory drawdowns from the Strait of Hormuz closure are likely to deliver fuel price shocks, with prices across the energy complex expected to remain higher for longer," analysts at Saxo Bank say. New York gold futures are down 0.3% to $4,492.70 an ounce. ([e-mail])

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Oil on Track for Weekly Gains on Stalled U.S.-Iran Talks -- Market Talk

0720 GMT - Oil prices slip in early trading, but are headed for weekly gains as renewed tensions in the Middle East and uncertainty over U.S.-Iran talks dampen hopes for an imminent, gradual reopening of the Strait of Hormuz. A renewed ceasefire between Israel and Lebanon faced immediate strain, as both sides exchanged fire within hours of the agreement. Brent crude is down 0.4% to $94.67 a barrel, while WTI futures fall 0.7% to $92.41 a barrel. The benchmarks are on track for gains of about 2% and 4%, respectively. "The oil market continues to trade on expectations of an imminent resumption in energy flows from the Persian Gulf," analysts at ING say. "This leaves significant upside risk as inventories fall and we move closer towards the stronger demand period of the third quarter." ([e-mail])

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Lynas Rare Earths' Next CEO Has Big Shoes to Fill -- Market Talk

0401 GMT - The appointment of an interim CEO at Lynas Rare Earths highlights the complexity of the role, says Macquarie. The job requires "not only operational and strategic capability but also strong stakeholder management amid heightened geopolitical dynamics," the bank says. Lynas has appointed Chief Operating Officer Pol Le Roux as interim CEO as incumbent Amanda Lacaze prepares to step down. Macquarie calls Le Roux a pair of "safe hands operationally," as one of the miner's most experienced executives. The appointment of a permanent CEO will nevertheless be a near-term focus for investors, alongside the ramp up of the Kalgoorlie plant, says Macquarie. Lacaze's successor has "big shoes to fill," it says. Macquarie has a neutral rating and a A$20.00 target on Lynas. Shares are down 2.4% at A$18.27. ([e-mail]; @RhiannonHoyle)

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(END) Dow Jones Newswires

06-05-26 1047ET