Commodities: Dovish Fed chair offsets bearish call from Barclays

More dovish than expected remarks from Fed chair Janet Yellen, especially when compared to a recent string of remarks from other US monetary policymakers over recent weeks, lent a helping hand to commodity prices on Tuesday.

Speaking to the Economic club of New York, Yellen said: "I consider it appropriate for the Committee to proceed cautiously in adjusting policy. This caution is especially warranted because, with the federal funds rate so low, the FOMC's ability to use conventional monetary policy to respond to economic disturbances is asymmetric.

"One must be careful, however, not to overstate the asymmetries affecting monetary policy at the moment. Even if the federal funds rate were to return to near zero, the FOMC would still have considerable scope to provide additional accommodation."

Front month West Texas Intermediate crude oil futures were down by 2.206% to $38.54 per barrel as of 18:55BST, alongside a decline of 2.39% to $39.33 per barrel in those for Brent.

Both oil contracts had traded lower earlier in the session as traders reacted to a bearish call from Barclays.

"Investors have been attracted to commodities as one of the best performing assets so far in 2016. However, in the absence of any concerted fundamental improvements, those returns are unlikely to be repeated in the second quarter, making commodities vulnerable to a wave of investor liquidation,” Barclay´s Kevin Norrish said in a research report sent to clients and dated 28 March.

Natural gas futures on the NYMEX were up by 2.38% to hit $1.89/MMBtu.

Data released on 24 March by Baker Hughes showed the US rig count fell by 15 to 372 during the latest week.

Gold futures for delivery in June 2016 jumped 1.38% to $1,238.80 per ounce on COMEX.

Spot platinum prices got an even bigger boost from Yellen´s remarks, rising by 2.21% to $966.65 per ounce.

Agricultural commodity furtures were trading in a mixed fashion, with corn futures for delivery in May 2016 up by 0.47% to $372.25 per bushel on the Chicago Board of Trade.

Those for wheat were advancing 1.22% to $476.75 per bushel but the May 2016 CME Cotton#2 contract was losing 0.61% to $57.45 per bushel.

Three-month copper futures traded on the LME were 0.4% lower to $4,911 per metric tonne as of 15:35BST.

Overnight, September 2016-dated iron ore futures on China´s Dalian Commodities Exchange lost 3.4% to 379 yuan ($58) a tonne, with some market commentary referencing a drop in Shanghai traded steel prices.