Agriculture: Wheat advances as Russian harvest falls

Precious Metals: Palladium fell on lack of easing in the US

Precious metals tumbled on Wednesday as Fed decided not to implement QE at the moment.

Gold fell after the Fed announced that it would not provide additional monetary stimulus and cut the US growth forecast from 2.9% to 2.4% 2012.

Silver followed gold suit and declined by almost 1% as hopes for new round of QE faded.

Platinum dropped after release of FOMC statement. Moreover, South African efforts to improve conditions for platinum mining companies are likely to results in larger output volumes.

Palladium declined as investors were disappointed that Fed decided not to relax its monetary policy further. Slowing US economy is likely to weight down on palladium demand as car sales may decrease.

Industrial Metals: Zinc slid as clashes at Bolivian mines to end soon

Industry metals apart from nickel slid on Wednesday after the Fed left no hopes for QE in the nearest term. Traders were also cautious ahead of HSBC China’s PMI release due on Thursday.

Aluminum followed bearish trend on absence of easing in the US. Meanwhile, China’s production cuts approached such level that it may support weak prices due to lower supply.

Copper declined after Fed decision. However, eased worries across Greece after three parties managed to form a coalition limited losses of the red metal.

Nickel was the only gainer as spot market activity has improved. However, elevating inventory levels in China may limit the upswing.

Zinc also was exposed to the Fed incentive not to inject extra liquidity in the US economy. Meanwhile, clashes between competing miners in Bolivia are likely to be resolved thus may weaken the price.

Energy: Heating oil plunged after Fed decision

Energy markets plunged on Wednesday as lack of easing measures from the Fed weighted on demand prospects.

Crude oil was the top-loser on absence of easing measures in the US and unexpected increase in the US crude oil inventories last week. The EIA reported that stockpiles rose by 2.86 million barrels as compared to expectations for a 1.11 million barrels fall.

Brent oil also slid on elevating inventory levels and disappointing Fed decision.

Natural gas moved down as investors started to cash out from the market after recent rally. Moreover, market participants await US inventory report due on Thursday.

Heating oil dropped on demand uncertainly as Fed plans no easing in the nearest term.

Agriculture: Wheat advances as Russian harvest falls

Agricultural commodities except for coffee rose on Wednesday on unfavorable weather conditions in South and North America.

Wheat soared for the third session in a row as dry weather damaged Russian crops. Russian harvest was 12% lower on June 1 as compared to the same period in 2011.

Corn was higher despite potential fall in ethanol demand in the light of slowing US economy.

Sugar continued to appreciate as rains in Brazil may impact crops. However, the upswing was capped as Australian sugar exports rocketed to three-year high last month.

Coffee was the only loser ahead of the harvest from Brazil.

EXPLANATIONS

Commodities

·        Gold - spot 995 fine gold

·        Silver - spot 999 fine silver

·        Platinum - spot platinum with minimum purity 99.95%

·        Palladium - spot palladium with minimum purity 99.95%

·        Aluminium - three months forward aluminum contract on the London Metal Exchange

·        Copper - three months forward copper contract on the London Metal Exchange

·        Zinc - three months forward zinc contract on the London Metal Exchange

·        Nickel- three months forward nickel contract on the London Metal Exchange

·        Crude oil - light, sweet crude oil active contract on the New York Mercantile Exchange

·        Brent oil - Brent oil active contract on the New York Mercantile Exchange

·        Natural Gas - natural gas active contract on the New York Mercantile Exchange

·        Heating oil - heating oil active contract on the New York Mercantile Exchange

·        Sugar - white sugar on the LIF-NYSE LIFFE London Exchange

·        Wheat - wheat active contract on the Chicago Board of Trade

·        Coffee - benchmark Arabica coffee active contract on the NYB-ICE Futures Exchange

·        Corn - corn active contract on the Chicago Board of Trade

Indices

·        Dow Jones-UBS Precious Metals Subindex Total Return - commodity group subindex composed of gold and silver; the index reflects return on underlying commodity futures price movement

·        Dow Jones-UBS Industry Metals Subindex Total Return - commodity group subindex composed of futures contracts on aluminium, copper, nickel and zinc; the index reflects return on fully collateralized futures positions

·        Dow Jones-UBS Energy Subindex Total Return - commodity group subindex composed of futures contracts on crude oil, heating oil, unleaded gasoline and natural gas; the index reflects return on fully collateralized futures positions

·        Dow Jones-UBS Agriculture Subindex Total Return - commodity group subindex composed of futures contracts on coffee, corn, cotton, soybeans, soybean oil, sugar and wheat; the index reflects return on fully collateralized futures positions

Indicators

Daily Ranked Price Moves - daily price changes in an ascending order for positive changes and in a descending order for negative or mixed changes

Monthly Ranked Price Moves - monthly price changes in an ascending order for positive changes and in a descending order for negative or mixed changes

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