Commodities: Prices little changed despite reports of 'progress' in US-China trade talks
Commodity prices were broadly flat as investors waited on the release of the key monthly non-farm payrolls report due out in the States on the following day and amid reports that trade talks between Washington and Beijing appeared to be in their final stages.
In a potential sign of the progress that had been made, reports also suggested that a date for a summit between the two countries' leaders might be set as soon as Thursday, possibly in a neutral third country.
Citing three persons familiar with the negotiations who had seen a draft of a deal, Bloomberg reported that the US would allow China to phase its purchases of US commodities out to 2025 as it chose, in exchange for allowing American firms full ownership of companies in the Asian giant.
But there were potential hurdles in the way, including the proposed sale of US-made fighter jets to Taiwan, one of those same sources said.
It was also reported that not all of China's pledges would allow for proportional US retaliatory tariffs to be imposed if Beijing broke its word.
Against that backdrop, as of 2013 BST the Bloomberg commodity index was edging higher by 0.06% to 82.23 even as the spot US dollar index rose by 0.21% to 97.2960.
Soft commodity prices were higher, with May corn on CBoT adding 0.69% to $3.6525 a bushel and June live cattle futures on the CME advancing by 2.16% to $1.2158 a pound.
US energy futures on the other hand were the weakest segment of the market, with West Texas Intermediate for May delivery down by 0.5% to $62.15 a barrel on the NYMEX.
The RBOB gasoline contract for May was also lower, shedding 0.87% to $1.9343 a gallon, alongside a 1.27% drop to $2.6/MMBtu for similarly-dated natural gas.
Another economically-sensitive contract, copper, was lower as well, slipping by 1.03% to $2.9180 a pound on COMEX.
Commenting on the reports of progress in US-China trade talks, Oxford Economics's Gregory Daco said a deal could help alleviate global growth concerns, providing a very welcome boost to global confidence.
"Opposing strategic ambitions and strong ideological beliefs mean the risk of a short-lived trade truce is significant.
"Still, while any agreement should be considered with care [...] This would, no doubt, be beneficial to the US and the rest of the world at a time when domestic activity is cooling and global trade flows have weakened sharply."