Oil pulled back from near the $US58 a barrel on Friday, but stayed within sight of those six month highs at the close.
New York crude was up 58c to $US57.29 a barrel. It touched a six-month high of $US58.57 on Thursday. Brent crude was up 48c at $US56.95
At those levels oil is up more than 70% on the lows hit in the depths of last December of $US33.55.
The pace of US job losses slowed in April, but the unemployment rate hit 8.9%, the highest for 25 years.
It supported the view that the economic climate is stabilising.
New York gold futures ended lower as the improving economic sentiment prompted investors to take profits after a recent sharp rally.
Gold for June delivery finished down 60c at $US914.90 an ounce in New York.
However copper fell for a second day on Friday, despite the seeming improvement in the US economic climate.
Royal Bank Of Scotland analysts forecast that copper output will again top consumption for a second year in 2009.
Comex July copper futures fell 1.9cto $US2.1455 a pound on Friday, after a 1% fall on Thursday.
But the metal was still up 2.1% over the week, but traders report that values are becoming stretched.
Prices rose almost 2% after the US jobs figures were released on Friday, but then fell on profit taking.
The price is up 52% so far this year.
China continues to dominate the market with a further fall in copper stocks said to be the result of Chinese buyers taking delivery of metal purchases.
Copper stocks monitored by the London Metal Exchange dropped 1.2% on Friday to 389,000 tonnes, the lowest since mid-January. Stocks have dropped for five straight weeks.
RBA warned in its research note that a correction in copper prices was "quite possible over the summer months as Chinese buying eases off".
“We expect copper and other metal prices to rise further later in 2009 and through 2010.”
RBS forecast copper will average $US1.90 a pound this year and will increase to $US2.50 next year.
Production will exceed demand by 25,000 tonnes.
Three month LME copper dropped $US25 to $US4,685 a tonne or $US2.13 a pound.
Sugar prices may reach a 28-year high as a plunge in India’s harvest creates a global production deficit.
Raw sugar prices have jumped 30% so far this year, in the biggest rally since 2005, and rose to 15.41 USc a pound on the ICE Futures market in New York on Thursday, the highest level since July 2006. It eased to close at 15.27 USc a pound on Friday.
Analysts are talking about another 30% rise in prices by the end of this year and into the first quarter of 2010 that could see the world price hit 20 USc a pound.
The Indian shortfall we wrote about last week will now see that country boost imports by a third to 4 million tonnes a year this year and in 2010. It could also see global consumption exceed global production.
The International Sugar Organization said last week that the global deficit will reach 7.8 million tonnes this year, the most in more than a decade and higher than a February forecast of 4.3 million tonnes.
While Brazil, the largest grower, forecasts a 20% jump in the size of its harvest this year, forecasters say output won’t be enough to meet world demand.
The last time global consumption topped output for two years straight was during the three seasons ended in September 2006, the International Sugar Organization said.
In February 2006, sugar futures jumped to a 24-year high of 19.73 USc a pound. That was after a cyclone damaged the North Queensland crop.
But prices fell as more sugar flooded the market later in the year.
India’s sugar production has fallen after the government raised the minimum price for other crops such as wheat in a bid to encourage enough grain output to meet domestic demand.
Commodity trader, Czarnikow Group says Indian farmers also were encouraged to switch as cash-strapped sugar mills delayed or withheld payments for supplies, and that has seen India become a net importer for the first time since 2006.
Other forecasters claim that India’s production of sugar will bounce back to top 20 million tonnes next year from 14.7 million to 15 million tonnes this year. That still won’t be enough to meet domestic demand of 23 million tonnes.
In Brazil, slumping demand for fuel during the recession is reducing the appeal of crop-based ethanol and forcing refiners to shift more of the nation’s sugar cane to make sugar.
Brazil will boost its sugar output as much as 20% to a record 37.9 million tonnes this harvest.
About 45% of the cane harvest will be refined into sugar this year, up from 42% last year. The industry is being hurt by rising debt and a lack of credit curbing investment in new mills.
Falling demand for ethanol, especially in export markets, is having an adverse impact on returns.
