The Commodities Feed: Nickel stocks decline

US crude oil inventories & data releases: While hope of fruitful trade talks provided support to the oil market yesterday, looking ahead all attention will be on US inventory numbers later today and tomorrow. The API is scheduled to release its weekly inventory report later today, and the market is expecting that US crude oil inventories increased by 1.95MMbbls over the last week. This will be followed by the weekly EIA report on Wednesday.

Other important data releases this week for the oil market include the EIA’s Short Term Energy Outlook, which will come out today, followed by the OPEC monthly oil market report on Thursday, and then finally on Friday, the IEA will release its monthly market report. The market will likely focus on demand estimates from OPEC and the IEA, to see whether there have been further downward revisions in demand growth. Whilst the OPEC report will also provide Saudi production estimates for September- the month of the attacks on Saudi oil infrastructure.

Nickel stocks: As LME nickel stocks fall further, demand for physical delivery of the metal also grows with fears of short supply. LME nickel stocks declined by 7.4kt yesterday- the second biggest one-day withdrawal on record, and resulting in almost 32kt of nickel being withdrawn over the past week. Current LME nickel inventories stand at 126kt, which is a seven-year low, while another 75.4kt is earmarked for withdrawal in the coming days. Most of the withdrawals were seen in Asia, where Indonesia is a major supplier of the metal. Tsingshan Holding, a large stainless steel producer was reportedly taking delivery of the metal. Meanwhile, with SHFE nickel inventory standing at 22kt, it is marginally above this year’s lows of around 9kt; however, that is still significantly lower than the peaks of more than 112kt in 2016.

US crop conditions: The USDA’s weekly crop progress report continues to show a weaker crop outlook and slow harvesting for the current season. In its latest report, the USDA rated 53% of the current soybean crop in good-to-excellent condition compared to 55% a week ago and 68% at the same stage last year. Some 14% of the current crop has been harvested to date, compared to 31% last year and the five-year average of 34%. Similarly for corn, crop conditions worsened last week, with the agency rating 56% of the corn crop to be in good-to-excellent condition, compared to 57% in the previous week and 68% a year ago. 15% of the current crop was reported to be harvested to date, compared to last year’s 33% and the five-year average of 27%. Looking ahead, the USDA is scheduled to release its monthly WASDE report on Thursday, and the market will be watching it closely for any revisions to US grain supply estimates.