Commodities: Rising dollar sinks all boats

Hawkish Fedspeak, a rising US dollar and data showing a very large jump in US oil inventories during the latest reference week took the wind out of commodity prices on Wednesday.

Bloomberg's Commodity index was retreating 1.81% to 160.85 as of 18:18GMT, while the US dollar spot index edged higher by 0.41% to 96.036.

The latter was boosted by somewhat hawkish remarks from a top US central bank official, St.Louis Fed chief James Bullard, on the same day.

In remarks to Bloomberg TV, Bullard chimed in with recent warnings from his colleagues at the Atlanta and San Francisco, saying the US central bank should consider an interest rate hike in April.

Oil prices were also lower as investors reacted to a large jump in the headline figure for weekly US crude oil inventories.

US commercial crude oil stockpiles rocketed by 9.4m barrels in the week ending on 18 March, according to the US Energy Information Administration.

However, that came amid large drops in gasoline and distillate inventories and a hefty rise in crude oil imports.

Notwithstanding the above, front month Brent crude futures were 2.48% lower at $40.78 per barrel on the ICE, alongside West Texas Intermediate down 3.34% to $40.11 per barrel.

Adding fuel to the fire, earlier in the day the International Energy Agency, the rich-world's oil watchdog, admitted a deal among some OPEC producer to 'freeze' their output levels was largely "meaningless".

"Amongst the group of countries (participating in the meeting) that we're aware of, only Saudi Arabia has any ability to increase its production," IEA oil industry and markets chief Neil Atkinson said at an industry event, according to Reuters.

Other benchmark energy contracts were also pushed lower by traders, with NYMEX-traded natural gas futures down 2.31% to $1.82/MMBtu.

Out on Comex it was a similar story, with April 2016 gold futures lower by 1.98% to $1,223.90 per ounce, while silver fell 3.84% to $15.28 and platinum another 3.52% to $960.35 per ounce.

Corn futures on the Chicago Board of Trade took part in the move lower, slipping 0.61% to $367.75.

Cocoa futures for delivery in May 2016 fared worst, retreating 2.37% to $2,963 per metric tonne on ICE.

Three-month copper futures sank 1.8% to $4,964.50 per metric tonne on the LME.

"In metals, the flush of Chinese liquidity has spilled into the property market. However the underlying problems of high private sector indebtedness and property inventory remain," analysts at Deutsche Bank said in a research report e-mailed to clients.