Written by Sumit Roy  |

July 13, 2012

Week In Review: Corn Surges Near $8 Record, Brent At 6-Week High On China Data Supports, Gold Edges Up

Details

We examine the latest developments in commodity markets and the week's performance.

Data from China lifted commodities across the board this week. The grain sector continued to be the leader, while precious metals lagged. Stocks, as measured by the S&P 500, were flat in the period, but are up nearly 8 percent year-to-date.

Macroeconomic Highlights

A batch of data Friday from China was the biggest macro highlight of the week. Bulls were relieved after the government reported that second-quarter GDP in the country grew by 7.6 percent year-over-year, close to expectations of 7.7 percent. However, that was the slowest rate since 2Q'09 during the global financial crisis.

Still, the figure was above the government's 7.5 percent growth target and some estimates that were calling for a much lower reading. The data suggest that the People’s Bank of China will likely continue to ease monetary policy further via interest rate cuts, which may support the economy for the rest of the year.

In other China data, industrial production grew by 9.5 percent year-over-year in June, down a tick from May's 9.6 percent. Retail sales advanced by 13.7 percent, which was also down slightly from May's reading of 13.8 percent.

Meanwhile, in the U.S., the Department of Labor said that the number of people filing for unemployment benefits fell sharply last week—from 376K to 350K—the lowest level since March 2008. But the figure may be distorted by the July 4 holiday and unusual activity at auto plants, said some analysts. Next week's figure may give a clearer indication of the health of the labor market.

Commodity Wrap