Wednesday, October 31, 2012

20121031 1001 Global Commodities Related News.

USDA says crop progress report, due Monday, delayed by Sandy(Reuters)
The weekly U.S. crop progress report that is normally released on Monday afternoons will be delayed as the federal government closes down ahead of Hurricane Sandy, the Department of Agriculture said.

DTN Closing Grain Comments 10/30 14:28 (CME)
Another Quiet Day
Corn was the only market to close near its session highs, while wheat and soybeans drifted well off their respective highs by the close. The Dow Jones Industrial Average will trade again Wednesday following a two-day closure, which may allow activity to pick up for commodities in general.

Pro Farmer: After the Bell Wheat Recap (CME)
Wheat futures wrapped up a choppy day of trade with a mid-range and mixed finish. Nearby contracts settled marginally lower in Chicago and Kansas City with deferred months firmer. Minneapolis wheat futures posted slight gains in most contracts. Futures initially benefited from light short-covering thanks to a weaker dollar and spillover support from corn and beans today, but this gave way to bouts of profit-taking as export demand for U.S. wheat remains sluggish.

Wheat Market Recap Report (CME)
December Wheat finished down 1 1/4 at 856 3/4, 9 3/4 off the high and 4 up from the low. March Wheat closed down 1 at 871 3/4. This was 4 up from the low and 9 1/2 off the high. December Chicago wheat ended the day slightly lower and struggled to advance throughout the day amid growing concern over the sluggish US export pace. The sharply lower US Dollar and dry weather conditions in the western plains helped to support. Remnants of Hurricane Sandy shifted over to areas of Ohio and other wheat growing regions in the east which may have helped pressure futures midday. Tunisia announced a tender for 100,000 tonnes of milling wheat for December through January shipment. Cash traders noted that US soft wheat prices have narrowed their spread to French origins but it remains to be seen just how competitive US offers will be. Support in the wheat market continues to be linked to thoughts that the USDA will cut world production and ending stocks again next week after adverse weather conditions negatively impacted crops in Australia and Argentina. December Oats closed up 1 at 388 3/4. This was 2 1/4 up from the low and 1 off the high.

Pro Farmer: After the Bell Corn Recap (CME)
Corn futures were firmer throughout the day and ended mostly around 5 cents higher through the July contract, with far-deferred contracts around a penny higher. Futures were supported by weakness in the U.S. dollar index today, although buying was limited due to a lack of fresh news and the disruptive storm event on the East Coast.

Corn Market Recap for 10/30/2012 (CME)
December Corn finished up 4 3/4 at 741 3/4, 2 off the high and 5 3/4 up from the low. March Corn closed up 5 1/2 at 744 1/2. This was 6 1/2 up from the low and 1 1/2 off the high. December corn saw modest gains to end the session but traded higher throughout the day as the US Dollar moved lower and on support from a surging soybean market. Corn bids in the Gulf of Mexico were steady today on very slow export business but traders were hopeful that rising price levels in South America and Ukraine will push demand to the US border. Private Egyptian buyers have reportedly purchased an additional 20,000 tonnes of South American corn overnight after buying 180,000 tonnes of corn from the same origin yesterday. Support in futures was also linked to ideas that the recent rainfall in Argentina and Southern Brazil has delayed corn planting enough that some farmers may switch acreage over to soybeans. The wheat market struggled to hold onto gains throughout the session which added resistance to the advance in corn prices. November Rice finished up 0.035 at 14.765, equal to the high and equal to the low.

Australian Wheat Exports Plunging Most in Six Years: Commodities (Bloomberg)
The deepest slump in Australian wheat shipments in six years will exacerbate the biggest contraction in global exports in a generation after droughts withered crops around the world. Sales by Australia, last year’s second-largest supplier, will tumble 31 percent to 17 million metric tons in the 12 months through Sept. 30, based on the median of seven analyst estimates compiled by Bloomberg. The prediction is 1 million tons lower than forecast by the U.S. Department of Agriculture. The most widely held option on the Chicago Board of Trade gives holders the right to buy the grain for delivery in December at $10 a bushel, or 16 percent more than now, bourse data show.
A lack of rain is also curbing corn and soybean harvests, driving futures to records and contributing to the highest global food costs in six months, United Nations data show. Countries will spend more than $1 trillion on food imports for a third year in 2012, the UN estimates. Wheat surged 32 percent this year, the most since 2007, after dry weather in the U.S., Europe and Australia. The USDA expects worldwide exports to drop 16 percent, the biggest decline since 1986. “The rain didn’t come until late,” said Maitland Davey, a 69-year-old who farms 3,700 acres northeast of Perth, the capital of Australia’s biggest exporting state. “I hate ripping that ground up dry, dust just flying everywhere,” he said, predicting a 30 percent decline in his harvest this year.

Gasoline Supply Seen Down to 1990 Low on Sandy: Energy Markets (Bloomberg)
Gasoline stockpiles on the U.S. East Coast may sink to the lowest level since at least 1990 as Hurricane Sandy moves ashore, curtailing fuel production and distribution, based on Energy Department data. Refineries accounting for 94 percent of regional processing capacity shut or reduced rates before Sandy, the largest tropical storm on record in the Atlantic, approached the East Coast yesterday. Colonial Pipeline Co., which operates the largest link between Gulf Coast refiners and East Coast distributors, planned to shut its main line delivering fuel to Philadelphia and New York Harbor late yesterday as customers shuttered operations.
Prices had jumped 5.9 percent in three days, breaking the longest losing streak since 1986, as the storm headed directly for the heart of East Coast fuel refining and distribution. Gasoline inventories in the central Atlantic area are already 16 percent below a year earlier. Sandy threatens to flood and disrupt power at refineries and terminals that account for one- third of U.S. finished gasoline production, according to BNP Paribas SA. “Given that the hurricane is passing over the refining and terminal system and not just near them, it’s clear that supply concerns will outweigh concerns about reduced demand as people stay home,” Harry Tchilinguirian, BNP Paribas SA’s head of commodity markets strategy in London, said in an interview yesterday. “You’re going to have a run-up in prices that could be kept up.”

Oil Trades Near Two-Day High as Refiners Plan Post-Storm Restart (Bloomberg)
Oil traded near the highest level in two days in New York after the Atlantic superstorm Sandy moved away from the U.S. East Coast and refineries started planning to resume operations. Futures were little changed after rising 0.2 percent yesterday. Restarts at Phillips’s 238,000 barrel-a-day Bayway refinery in Linden and Hess’s 70,000 barrel-a-day Port Reading plant are contingent on post-storm assessments, the companies said. Philadelphia Energy Solutions’ 355,000-barrel-a-day Pennsylvania refinery is restoring operations, Cherice Corley, a spokeswoman at the plant, said in an e-mail. Crude for December delivery was at $85.70 a barrel, up 2 cents, in electronic trading on the New York Mercantile Exchange at 8:17 a.m. Singapore time. Prices rose 14 cents yesterday to $85.68, the highest close since Oct. 26. Futures are down 7 percent in October, the biggest decline in five months, and 13 percent this year.
Brent oil for December settlement slipped 8 cents to $109 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude’s premium to the West Texas Intermediate contract was at $23.30. Floor trading on the Nymex, suspended for a second day yesterday because of the storm, may resume today if New York City lifts the evacuation order for Zone A in Manhattan, CME Group Inc., the exchange’s owner, said in an e-mail. Electronic trading is operating normally. Gasoline for November delivery rose 6.18 cents to $2.7906 a gallon in New York, the highest level since Oct. 16. The contract expires today. The more-active December future was up 2 cents at $2.6355.

Recap Energy Market Report (CME)
December crude oil prices trended higher throughout most of the US trading session, but remained inside of Monday's range. Early support for the crude oil market came from gains in global equity markets and weakness in the US dollar. Another source of support seemed to come from reports suggesting that refinery damages from Hurricane Sandy might not be as bad as initially expected, which should support demand for crude oil. However, afternoon weakness in the product markets seemed to drag December crude oil prices lower into the New York closing.

Copper Rises, Ends Longest Slump in 14 Years, on China Outlook (Bloomberg)
Copper futures rose, ending the longest slump in 14 years, on prospects for demand to increase in China, the world’s biggest consumer. Total Chinese demand, including refined and scrap metal, may gain an average 6 percent a year from 2011 to 2015, Wang Zhongkui, the deputy general manager of Beijing Antaike Information Development Co., said today. Imports of refined copper jumped 17 percent in September from a month earlier, the most this year, data showed last week. “The market is in a supply deficit, and Chinese copper imports have recently risen again,” helping to support prices, analysts led by Tobias Merath at Credit Suisse Group AG’s private-banking unit, said in a report. Copper futures for December delivery gained 0.3 percent to settle at $3.506 a pound at 1:14 p.m. on the Comex in New York. The metal fell in the previous eight sessions, the longest slide for a most-active contract since October 1998.
Comex floor trading was closed for the second straight day after Hurricane Sandy slammed into the U.S. East Coast, flooding streets and leaving millions of people without power. Copper also gained after central banks took more steps aimed at spurring economic growth. The Bank of Japan (8301) expanded its asset-purchase program for the second time in two months, and the Reserve Bank of India cut lenders’ reserve requirements to back a policy revamp by the government. “Given the added stimulus, I wouldn’t be surprised to see copper hold at these levels and consolidate a bit,” Matt Zeman, a strategist at Kingsview Financial in Chicago, said in a telephone interview. On the London Metal Exchange, copper for delivery in three months rose 0.3 percent to $7,720 a metric ton ($3.50 a pound). Aluminum, nickel, tin, zinc and lead also gained.

Hedge Funds Returning to Palladium as ETPs Retreat: Commodities (Bloomberg)
Hedge funds are siding with analysts predicting decade-high palladium prices even as investors cut holdings in exchange-traded products backed by this year’s worst-performing precious metal. The funds’ wagers on a rally more than doubled since August as ETP holdings slumped to a seven-month low this month, data compiled by Bloomberg show. Prices for the metal used mostly in catalytic converters will average $800 an ounce in the third quarter, 34 percent more than now and the highest since 2001, based on the median of 13 analyst estimates. Speculators that slashed bets to the lowest level since 2009 in May as growth slowed are now more bullish after central banks from the U.S. to Europe to China pledged additional measures to boost economies. Palladium’s 9 percent retreat this year contrasts with a 10 percent advance in platinum, driven by mine strikes and violence in South Africa, the biggest producer of the metal also used in autocatalysts.
“Platinum got the South Africa boost but palladium didn’t enjoy that,” said Jeffrey Sica, the Morristown, New Jersey- based president of SICA Wealth Management, who helps oversee more than $1 billion of assets. “I do anticipate higher prices because of the global liquidity push. At some point there will be growth revival.”

Silver Market Recap Report (CME)
As with other metals markets, silver prices were able to post modest gains during Tuesday's session as well as consolidating well above the recent lows for the move. A negative turnaround in the Dollar was a key factor with silver's early strength, as well as the emergence of a general "risk on" mood throughout many commodity markets as the now-Tropical Cyclone Sandy passes inland and away from New York City. Lukewarm strength in US equity index futures weighed on the silver market, and kept prices close to unchanged level later on in the trading day.

Gold Market Recap Report  (CME)
The gold market ended up posting moderate gains during Tuesday's trading, although prices remain firmly within the trading range of the previous four sessions. Many traders pointed towards a tangible improvement in global risk sentiment, which started during European trading but gained additional momentum from reports that Hurricane Sandy's damage may be lower than early forecasts. Today's lone major US data release, a private survey of US home prices, generally matched market expectations but was also felt to have underpin gold's early gains. News that a major gold ETF had over $100 million in outflows last week may have weighed on the gold market later on during the trading session and kept prices from gaining further ground.

Gold Fever Still Gripping Many Investors (CME)
By The Economist Intelligence Unit - Mon Oct 29 16:34:00 CDT 2012 CT
Miners' Rising Output Tempers Rally, But Collapse Unlikely
Gold has long been a difficult market to analyze, its fervent supporters regarding the metal as the one true source of value, while detractors, including many economists, view it as a "barbarous relic" with no place in serious discussions of monetary policy. Despite the skeptics, gold remains popular, partly reflecting its status as an "alternative currency" during a time of expansionist monetary policy driven by the U.S. Federal Reserve and other major central banks, the Economic Intelligence Unit wrote in a recent report. These policies led to negative "real" interest rates in developing countries that eliminated the opportunity costs of holing gold. "But as with any commodity, high prices are creating a market response," with mining companies expected to boost gold production by more than 20% this year compared with 2008, the group said. Rising production has tempered a rally in gold prices, but a market collapse is unlikely "unless real interest rates increase sharply."
With the Fed set to hold benchmark rates near historic lows until 2015, "that means a good chance of a high gold price for some years to come," the group wrote. COMEX gold futures currently trade around $1,708 an ounce, down 4.7% over the past three weeks but up 9% so far this year, based on the front-month contract.

World Wine Output to Fall to 37-Year Low, Depleting Stocks (Bloomberg)
Global wine production will slump to the lowest in 37 years after weather damage to grapes from France to Argentina, forcing a draw down of stocks, the International Organisation of Vine and Wine said. Output may fall to about 248.2 million hectoliters (6.56 billion gallons) this year from 264.2 million hectoliters in 2011, according to the group, known as OIV. That would be the lowest since at least 1975, Federico Castellucci, director general, said at a press conference in Paris today. Drought and hail harmed vines and grapes in France and Italy, the biggest producers, while Argentina also suffered weather damage to its vineyards, according to Castellucci. The production slump will deplete stocks and result in a “tight” market for wine to make spirits and vermouth, the OIV head said.
“We’re dipping into the reserves for supply,” Castellucci said in an interview. “There’s a lack of product in bulk. Merchants worldwide are starting to turn to the small countries for bulk wine, that shows there’s real tension.” World wine consumption in 2012 is estimated at 235.7 million to 249.4 million hectoliters, with an additional 30 million hectoliters of wine used to make spirits, vermouth and vinegar, according to the OIV. Castellucci declined to provide an estimate of global wine stocks, citing a lack of data. Market feedback suggests bulk wine availability is falling and prices are climbing, he said. “If we don’t have availability in the market, there’s a strong chance some products will increase in price,” Victor Magalhaes, an OIV statistician, said in an interview, citing wine vinegar as a product that may become more expensive. “Countries that are large producers of must and juice all face a shortage this year,” he said, referring to young wine.

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