Highlights

• The TDCI in U.S. dollars rose 1.2% last week, led by a 6.8% gain in crude oil prices. In Canadian dollar terms, the picture was quite different, as a 2% appreciation of the loonie drove the index down 0.9%.

• Increased optimism surrounding the U.S. economy, coupled with news that China will be reducing diesel exports in order to satisfy domestic demand, sent crude oil prices up to US$53 per barrel last week. Meanwhile, the market shrugged off an EIA report stating that U.S. demand for crude oil sank to an 11 year low in February.

• Natural gas prices slid 4.6% on the week, to the lowest level since the end of 2002. The decline stemmed from the U.S. storage report which indicated that inventories are now 22.5% ahead of the 5-year average.

Moreover, with economic conditions still quite weak, industrial demand for natural gas is expected to slide by 7.4% this year, thereby keeping storage levels elevated.

• The spread of swine flu around the globe has added to the headwinds facing hog producers, as prices plunged 11.6% last week. While the flu cannot be transmitted via eating pork, fears that both domestic and export demand for hog and pork products will fall is dominating the market.

• In contrast, crop prices gained on the week, largely due to an uptick in speculative buying that was triggered by bullish technical signs. A depreciation in the U.S. dollar also stimulated demand for crops. Wheat and barley prices each gained 4.0% on the week, while canola prices were up by a more modest 2.4%.

• Uranium prices jumped 4.8% last week as higher bids drove sellers to increase asking prices. Utilities, traders and financial entities are all still active in the market, though some of this demand may be discretionary. Uranium prices are down 32% from year-ago levels.

Join the Discussion