FXStreet (Delhi) – Research Team at ING, presents their baseline views on commodities. Key Quotes “Crude oil (CAD) – Slow recovery The Middle East is likely to maintain the discounts being offered for crude in a bid to secure contracts in a well-supplied market (though Iran and Venezuela have voiced concerns about pursuing this strategy indefinitely). Lower US rig counts and lower capex plans are being seen along with a rising call on OPEC for supply cuts. Falling investment (projects on hold in Gulf of Mexico, Alaska and Russia) and increasing automobile base in China improves medium-term outlook. Iron ore and coal (AUD) – Few reasons to be positive Despite the sharp drop in iron ore prices, new mines have been coming online – with existing mines also ramping up production as producers enforce supply chain efficiencies to reduce costs. We see little upside in the near-term; production cost curves for Rio Tinto and BHP sit in the $28-30/metric tonne area, and combined they could produce 185mn metric tonnes at those prices. Any iron price floor looks soft. Dairy prices (NZD) – Scope for a bounce European producers have been chasing US and other markets to maintain exports in light of Russia export ban. Downside pressure remains as the EU removes its quota system on milk production. Positive signs are emerging; falling inventory of cattle heads and a rising middle-class in emerging markets will be supportive in the LT.” For more information, read our latest forex news.