Commercial Metals Is Maintained at Overweight by Wells Fargo

Crude futures move deeper into the red with the market concerned about oversupply and watching for progress in Russia-Ukraine peace efforts. Near-term positives include demand holding up, with jet fuel demand "looking to be 4% over year ago levels for this time of year," and higher year-on-year Chinese refinery rates, Dennis Kissler of BOK Financial says in a note. "Still, the longer-term negatives remain that global oil inventories are growing, and a peace deal with Russia will very likely ease sanctions adding to the oversupply." WTI is off1.7% at $56.47 and Brent is off 1.5% at $60.22. (anthony.harrup@wsj.com)

The National Oilseed Processors Association reports soybean oil inventories at a level last seen in June 2024. NOPA says in its monthly report that stocks totaled 1.51 billion pounds, up 40% from this time last year. Soybean crush fell from the prior month, totaling 216 billion pounds — which is below what analysts expected, says AgResource in a note. The firm adds that traders are nervous about what the future may hold for soybean oil futures. "Spot CBOT soyoil has dropped... as reduced implied disappearance highlights the ongoing uncertain nature of forward U.S. biofuel policy," says AgResource. Soyoil futures are down 1.2% in afternoon trade, while soybeans fall 0.4%. (kirk.maltais@wsj.com)

Petroleum futures continued falling Monday, with Brent barely holding above $60 and RBOB continuing to make fresh multi-year lows.

Prices are holding just above the daily lows and on the precipice of some important technical support points. The same factors that have been mentioned over the past several weeks remain in place, but the overall trend is pointing prices lower as West Texas Intermediate and Brent are within pennies of the mid-October lows. Talks between Russia and Ukraine continue to progress and Ukraine may be giving up hope of joining NATO.

On Oct. 20, front-month WTI traded as low as $56.35, and the January contract lows at around noon ET are just about there with the last trade at $56.41/bbl, down just over $1 on the day. Brent is in a similar situation as the low on that same day was $60.07/bbl with the current February print just pennies above that at $60.16/bbl, down 97cts.

While the most recent CFTC data is still about one-month behind the current date, the large speculators in WTI futures and options flipped back to a net short bias.

RBOB future continue to make fresh multi-year lows as the January contract traded down to $1.7248/gal recently and last printed at $1.7264/gal as the contract is off 2.57cts. Futures market weakness has brought Midwest gasoline prices to either side of $1.50/gal this morning. The CFTC large speculative positioning in RBOB futures and options is the complete opposite of WTI. As of Nov. 17, there was a more than 100,000 contract net long bias, and the recent selling could be capitulation by some of those bulls.

Further downside in gasoil has been pulling diesel along for the ride. Like other petroleum contracts, front-month gasoil is closing in on lows not seen since October with the January contract down $8.50/mt at $620.75/mt. ULSD futures are following, with prices down a little more than 2cts heading into midday.

The low in January ULSD came in at $2.1715/gal and the contract is still about 6cts or so above the lows seen in October. The contract was last trading at $2.1775/gal, down 2.05cts. Should the losses hold, this would be the fifth drop in the past six sessions with some of the declines in excess of 3cts. This has resulted in the ULSD contract, and RBOB to a lesser degree, becoming quite oversold.

This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal.

• Reporting by Denton Cinquegrana, dcinquegrana@opisnet.com; Editing by Michael Kelly, mkelly@opisnet.com

WINNIPEG, Manitoba--ICE Futures canola contracts were posting small losses at midday Monday, taking some direction from declines in the Chicago soy complex.

The January soyoil contract fell below psychological chart support at 50 cents per pound, while the more-active March contract also tested that key technical level.

Large supplies continue to overhang the canola market, with a lack of export demand from China adding to the burdensome outlook.

Canola futures touched fresh nine-month lows in early trade but uncovered support to the downside. End user bargain hunting and a lack of significant farmer selling tempered the declines.

The Canadian dollar was holding steady with Friday's close at midday.

An estimated 33,800 canola contracts traded as of 11:35 EST.

Prices in Canadian dollars per metric tonne at 11:35 EST:

 
           Price      Change 
Jan       604.30     dn 2.20 
Mar       617.20     dn 1.90 
May       628.80     dn 2.20 
Jul       636.70     dn 2.20 
 

Source: Commodity News Service Canada, news@marketsfarm.com

12:05 ET--The big gains and record highs posted by precious metal futures this year are not expected to repeat in 2026. In an outlook published Monday, Capital Economics says that it forecasts gold and silver prices to turn lower next year, backtracking as traders take profits made in 2025. "We think the recent run of strong gains will come to an end," says the firm. "In the case of gold, our view that the Fed will cut rates by less than market participants are anticipating." For silver, Capital Economics forecasts that the market deficit seen for next year won't be enough to support record-high prices. "It is worth noting that several years of market deficits have previously had little influence on prices." Gold is flat today, while silver rises 2.2%. (kirk.maltais@wsj.com)

By Giulia Petroni

A roundup of key agricultural commodity markets for the week of Dec. 15-19 by Dow Jones Newswires in Barcelona.

GRAINS & OILSEEDS: The broader macroeconomic mood is mixed following the Federal Reserve's decision to cut interest rates again in December, with a weaker U.S. dollar and lower oil prices.

Traders are now focused on the monetary policy outlook for next year after the U.S. central bank left the door open for further cuts. Key data points, including the nonfarm payrolls report on Tuesday and CPI inflation figures on Thursday, will be closely watched, as will policy decisions from the European Central Bank, Bank of England, and Bank of Japan, which could influence dollar volatility.

Meanwhile, the USDA and Commodity Futures Trading Commission, or CFTC, have released a new accelerated catch-up schedule following the record-long U.S. government shutdown. "The CFTC will be caught up by Dec. 29, and the first fully "normal" Tuesday-Friday week will be Jan. 9," according to Peak Trading Research.

December typically sees a bullish trend, with investors allocating capital into commodities and inflation-protecting assets ahead of the new year. Stock markets also tend to get a boost from the holiday rally.

"This is now the most bullish two-month stretch of the entire year for the agriculture complex," analysts at Peak Trading Research said. "It's a great time to buy dips, especially in cotton, cattle, corn, and soybeans."

Weather forecasts show mostly above-average rainfall across Brazil, aiding early soybean development, while Argentina is experiencing wetter conditions, offering relief after recent heat and reducing near-term La Niña yield risks, the firm said.

Chicago wheat futures fell 1.3% to $5.22 a bushel in European afternoon trade Monday, while corn was down 0.8% to $4.37 a bushel. Soybean prices declined 0.8% to $10.68 a bushel.

SOFT COMMODITIES: Coffee prices fell 2.5% to $3.60 a pound, pressured by expectations of ample supply on higher exports from Vietnam and increased production forecasts for Brazil. Meanwhile, the European Parliament approved a one-year delay to the deforestation law known as EUDR, meaning coffee flows won't be affected for the time being.

Cocoa prices dropped 6.4% to $5,883 a ton, as traders anticipate a surplus in the 2025-26 season due to improved supply and weaker demand. High prices last season damped consumption, and analysts expect buyers to remain cautious, keeping prices under pressure in 2026. Sugar slipped 1.5% to 15 cents a pound.

Write to Giulia Petroni at giulia.petroni@wsj.com