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Australia's low grade iron ore miner Fortescue Metals Group lowered its fiscal year ending June 2018 price realisation guidance to near 65% of the average benchmark S&P Global Platts 62 CFR index following sluggish demand growth from China.

In the back drop of trade wars we note coal shipping vessels continue to queue for Australian coal. Underscoring that Australia is in the middle of the US-China crossfire PWCS coal terminals' vessel rose to six ships in just a week.

Wool prices reversed trend at Australian wool auction sales this week as prompt demand rose with lighter volumes on offer. A falling Australian dollar impacted by China trade uncertainty was also supportive.

US net corn export sales continue to rise. Mexico and Japan are the two largest destination for American corn. The Department of Agriculture reported current crop and next crop corn were up 35% from the previous week.

American agricultural markets may be at risk should China choose to retaliate against Steel and Aluminum tariffs. Specifically the vulnerable markets are soybeans, beef abd grains including sorghum. Such a ban could be a boon for Australia and South America.

The Reserve Bank of Australia (RBA) released preliminary estimates for February commodity prices showing the index rose 1.8 per cent (on a monthly average basis) in SDR terms, after increasing by 7.7 per cent in January (revised).

The rise in the yen has added to Japan's Soga Sosha financial strength. The trading houses search for suitable asset plays in the commodity sector, wary of debt financed plays and high prices they are looking for cash spends.

Global demand for primary aluminum grew by 5.8 percent in 2017, and is expected to grow by around 4-6 percent in 2018 Norske Hydro said in it's earnings report. Compared to the fourth quarter of 2016, global demand rose 5.6 percent.

Production of primary aluminium in China rose 13.4 percent in 2017, but due to the capacity control measurements introduced in 2017 production increase is expected to pull back to around 4-6 percent in 2018.

Australia's coal exports hit a record high A$56.5 billion ($44.21 billion) in 2017, the previous record was A$46.7 billion in 2011. Exports from New South Wales and Queensland of thermal and metallurgical coal were up 35% year on year. 

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