MARKET MOVEMENTS:
–Brent crude oil is down 7.20% to $101.97 a barrel.
–European benchmark gas is down 6.60% to 43.83 euros a megawatt-hour.
–Copper futures are up 1.86% to $13,378.00 a metric ton.
–Gold futures are up 3.30% to $4,719.30 a troy ounce.
TOP STORY:
Oil Prices Pare Losses After Trump’s Warning on Iran
Brent crude dropped around 10% to below $100 a barrel before reversing losses after the president warned of intensified bombing if Iran rejected a deal.
President Trump warned the U.S. would resume bombing of Iran “at a much higher level and intensity” if Tehran doesn’t agree to a deal. Oil prices, which had plunged more than 10% on hopes for a diplomatic breakthrough, pared losses but remained sharply lower.
OTHER STORIES:
Canada Stocks of Soybeans Fall, Wheat and Canola Stocks Rise
Canadian stocks of soybeans have fallen, though the country’s stores of other principal field crops were up.
Total soybean stocks dropped 45.7% on last year to 1.5 million metric tons as of the end of March thanks to lower supply and an increase in exports, Statistics Canada said Wednesday.
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Canfor Quarterly Loss Widens; Market Conditions Expected to Remain Weak
Canadian forest-products company Canfor is bracing for market conditions to remain tough as demand remains subdued by ongoing trade and geopolitical pressures.
The Vancouver, British Colombia, company’s loss widened in the first three months of the year against a year earlier as sales fell, though it saw an improvement from the final quarter of last year and pointed to some resilience in North American softwood-pulp markets and lumber-supply tightness that contributed to some improvement in North American benchmark lumber pricing.
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Kennametal Raises Outlook as Soaring Tungsten Prices Boost Results
Kennametal boosted its full-year outlook as soaring tungsten prices fueled better-than-expected results in the fiscal third quarter.
The tool maker on Wednesday raised its full-year sales outlook to $2.33 billion to $2.35 billion, up from a prior range of $2.19 billion to $2.25 billion. It now expects adjusted earnings per share to be $3.75 to $4.00, up from $2.05 to $2.45.
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Saudi Aramco Cuts Oil Price For June From Record High in May
Saudi Arabia cut the price of its main oil grade for Asia next month, but it remains near a historic high hit in May as the war in the Middle East disrupts supplies.
State oil giant Saudi Aramco lowered the official selling price for its flagship Arab Light crude for June by $4 a barrel to a premium of $15.5 over regional benchmarks, according to the company’s price list. Asia is the largest destination for Middle Eastern crude.
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Continental Notes Delay in Raw-Material Price Impact as Sales Decline
Continental reported a drop in sales for the first quarter and said that there would be a delayed effect from recent changes in raw material prices.
Consolidated sales for the first quarter fell 10.4% to 4.40 billion euros ($5.15 billion). Weak global markets dampened sales growth, the company said. Meanwhile, median analysts’ expectations had 4.37 billion euros in sales, according to company-compiled figures.
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MARKET TALKS:
Crude Price Drop Likely to Be Sharp But Short-Lived — Market Talk
0947 ET – With U.S. reluctance to escalate tensions in the conflict with Iran, the oil market is viewing a peace agreement as a base case scenario, FXPro’s chief market analyst Alex Kuptsikevich says in a note. “A rapid resumption of shipping will lead to a short-term surge in supply from tankers stranded in the Strait of Hormuz, pushing down the price of Brent and WTI,” he says. But oil prices are unlikely to return to prewar levels by the end of this year given the depletion of global stocks and time needed to repair damaged infrastructure in the Gulf states, he adds. “The fall in Brent and WTI prices is likely to be sharp but short-lived.” WTI is down 5.7% at $96.49 a barrel and Brent is off 5.8% at $103.53. (anthony.harrup@wsj.com)
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High Beef Prices Weigh on Bloomin’s Bottom Line — Market Talk
0919 ET – Bloomin’ Brands CFO Eric Christel says the restaurant operator’s margins were pressured in the latest quarter by continued commodities inflation and higher labor costs. A shortage of cattle on U.S. pastures is driving up livestock prices, making high prices the new normal in the beef market. Beef is a key ingredient at Bloomin’s Outback Steakhouse banner, and those higher prices contributed to overall commodities inflation rising 4.6% during the company’s recent quarter. The higher costs were offset by other lower restaurant operating expenses, Christel says, such as lower advertising spend and an improvement in productivity initiatives. Bloomin’ Brands surges 24% premarket after posting higher profit, revenue and comparable-restaurant sales. (connor.hart@wsj.com)
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Sharply Lower Oil Weighs on Grains — Market Talk
0907 ET – Crude oil futures are sliding this morning, pressuring CBOT grain futures due to the correlation between oil prices and renewable fuels for which corn and soybeans are both key feedstocks. Grains likely have room for a deeper pullback due to the large net positions built by fund traders in recent weeks. In a note, Doug Bergman of RCM Alternatives pegs corn’s support level at $4.60 a bushel, with soybeans potentially sinking back below the $12 a bushel mark and wheat seeing support at $6 a bushel. Most-active corn is down 1.4% premarket, while soybeans shed 0.5% and wheat is off 2.3%. (kirk.maltais@wsj.com)
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Grains Continue to Shed Risk Premium — Market Talk
0846 ET – War-related risk premium appears to be coming off CBOT grain futures, with wheat dropping 2.3%. The slide comes as President Trump says this morning that the U.S. would end its military campaign against Iran if Tehran agrees to terms under discussion. However, Trump also threatens in the Truth Social post that if Iran doesn’t agree to U.S. conditions, then “bombing starts, and it will be, sadly, at a much higher level and intensity than it was before.” Corn falls 1.5%, and soybeans are down 0.5%. All three grains have been rising since the war began, due to the supply-chain upheaval the conflict has created. (kirk.maltais@wsj.com)
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Oil Tempers Losses As Trump Post Adds Caution About Iran Deal — Market Talk
Oil futures curb some losses as President Trump suggests in a post that an agreement to end the conflict with Iran could still falter. “Assuming Iran agrees to give what has been agreed to, which is, perhaps, a big assumption, the already legendary Epic Fury will be at an end,” Trump says on Truth Social. He reiterated threats to resume bombing at a greater level if Iran doesn’t agree. A report by Axios that the U.S. and Iran are close to a deal had sent Brent briefly below $100 a barrel. WTI is down 7.7% at $94.63 a barrel and Brent is down 6.8% at $102.38.(anthony.harrup@wsj.com)
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Palm Oil Ended Lower on Potential Peace Deal Between U.S., Iran — Market Talk
Palm oil ended lower in early Asian trading. The vegetable oil fell below 4,600 ringgit a ton on a potential peace deal between U.S. and Iran, according to David Ng, a trader at Kuala Lumpur-based Iceberg X. Crude palm oil’s weakness also coincided with a decline in soybean oil prices as well, Ng says. He sees the price of palm oil supported above 4,500 ringgit a ton and faces a resistance at 4,680 ringgit a ton. The Bursa Malaysia Derivatives contract for July delivery fell 133 ringgit to 4,577 ringgit a ton. (tracy.qu@wsj.com)
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Gold Prices to Remain Supported by Solid Demand — Market Talk
0950 GMT – Solid demand for gold is expected to support higher prices, according to UBS Global Wealth Management Chief Investment Office. While gold has declined for two consecutive weeks as higher energy prices keep the U.S. dollar supported, demand from institutional investors, including central banks, remains strong, it says in a commentary. “Strong interest from sovereign-wealth funds in the Middle East suggests a broadening of institutional demand, reinforcing our view that official sector purchases will continue to be a structural support for gold prices,” it adds. With the recent price weakness likely temporary, UBS Global Wealth Management CIO sees the yellow metal rising toward $5,900/oz by the end of the year. Spot gold is 3.1% higher at $4,695.59/oz, according to Wind data. (tracy.qu@wsj.com)
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Oil Slides on Report of Peace Deal Progress — Market Talk
0924 GMT – Oil prices fall sharply in morning European trade on increased market hopes for a peace deal between the U.S. and Iran. According to a report in Axios, the White House is close to agreeing on a one-page memorandum of understanding with Iran to end the conflict. In response, WTI for June delivery falls back below $100, sliding 6.9% to $95.19 a barrel. Brent crude for July delivery–the most-traded contract–slides 5.6% to $103.85 a barrel. In its current form, the memorandum includes a gradual lifting over a 30-day period of Iranian restrictions on shipping through the Strait of Hormuz, and of the U.S. naval blockade on Iranian ships, the Axios report said.(josephmichael.stonor@wsj.com)
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Equinor’s Shares Slide Despite Beat to Expectations as Oil Prices Fall — Market Talk
0852 GMT – Equinor’s shares fall over 5% despite posting first-quarter earnings that beat expectations. The operationally strong performance wasn’t enough to stop shares sliding on a drop in oil prices, with both Brent crude and WTI prices down around 3.3%. The Norwegian energy major’s shares have outperformed its European peers since the conflict began. This is partially because it has no direct exposure to the region and is therefore able to fully capture the higher prices. Despite Wednesday’s fall, shares remain up more than 50% over the year to date. Shares fall 5.5% to 362.3 kroner. (adam.whittaker@wsj.com)
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Gold Gains as U.S.-Iran Cease-Fire Appears to Hold — Market Talk
(MORE TO FOLLOW) Dow Jones Newswires
05-06-26 1101ET