20121102 0919 Global Commodities Related News.

DTN Closing Grain Comments 11/01 14:46 Corn Loses Momentum (CME)
Renewed commercial selling pressured the corn market, wiping out a solid day. Beans and Chicago wheat were able to close higher with the former seeing solid double-digit gains.

Corn Market Recap for 11/1/2012 (CME)
December Corn finished down 4 3/4 at 751, 12 1/4 off the high and 1 up from the low. March Corn closed down 3 1/2 at 753 1/2. This was 1 up from the low and 9 3/4 off the high. December corn posted highs of the day in the overnight session and saw choppy to lower trade for much of the day and traded lower on the day late in the trading session to close near 4-5 cents lower. News of corn sales to Israel from Ukraine plus more talk that South America corn is still cheaper than the US helped spark some of the long liquidation selling. The spread has narrowed but traders fear more weeks of sluggish export news just ahead. Brazil exported 3.66 million tonnes of corn in October as compared with 3.15 million in September and from 1.52 million tonnes last year. Traders see weekly export sales for release in the morning near 225,000 tonnes as compared with 406,500 necessary each week to reach the USDA projection and from 142,300 tonnes last week. The market was trading 3 1/2 cents higher into the mid-session with continued concerns for the planting progress in South America, strength in wheat and a slight improvement in ethanol demand helping to provide support. Strong cash market and bullish spread activity has occurred in recent weeks in spite of sluggish demand from the export and ethanol sectors and this has helped to provide underlying support as well. Ideas that there could be a further revision lower in corn yield for next week's USDA crop production report is also seen as supportive. Ethanol production for the week ending October 26th averaged 825,000 barrels per day. This is up 3% from the previous week but down 9.9% vs. last year. The USDA is estimating ethanol usage at down 10% from last year for the entire season. Corn used in last week's production is estimated at 86.6 million bushels as compared with an average weekly total near 86.55 million bushels to meet this crop year's USDA estimate of 4.5 billion bushels. Stocks were 19.2 million barrels, up 2.4% vs. last week and up 11.7% vs. last year. November Rice finished down 0.065 at 14.765, equal to the high and equal to the low.

Wheat Market Recap Report (CME)
December Wheat finished up 4 at 868 1/2, 9 off the high and 5 up from the low. March Wheat closed up 4 at 883 1/4. This was 5 1/4 up from the low and 8 1/4 off the high. December Chicago wheat closed just 4 cents higher on the day and 9 cents off of the highs. Weakness in corn, a strong US dollar and sluggish US export news helped to spark the set-back from the overnight highs. The market jumped higher into the mid-session as traders seemed to react to news that only 40% of the freshly planted winter wheat crop was in good to excellent condition which is the lowest since at least 1986 and compares with the 20-year average of 61%. Oklahoma conditions showed only 27% good/excellent from 60% as the 20-year average and Kansas was 37% good/excellent from 68% as the 20-year average. New crop Kansas City wheat is hovering near 17-month highs. Nebraska good to excellent readings were just 9% with 49% of the crop rated poor to very poor. A whopping 61% of the South Dakota crop is rated poor to very poor. Dry conditions in the western and northern plains and fears that some of the crop may not see germination ahead of dormancy has also helped to support. Traders see weekly export sales for release in the morning near 425,000 tonnes as compared with 525,200 necessary each week to reach the USDA projection and from 571,900 tonnes last week. December Oats closed down 8 3/4 at 380 1/4. This was 1 up from the low and 11 1/2 off the high.

U.S. corn harvest 91 percent complete, soy 87 percent (Reuters)
The world's largest corn harvest limped along toward the finish line last week amid rain delays in the Midwest farm belt, but it remained tied with 2010 as the fastest ever, U.S. government data showed on Wednesday.

Commodities Post Biggest Loss in 5 Months to Trail Stocks (Bloomberg)
Slumping energy and metal prices sent commodities to their biggest monthly loss since May, lagging behind stocks, bonds and the dollar, as the global economy grew at the slowest pace since the 2009 recession. The Standard & Poor’s GSCI Total Return Index (MXAP) of 24 raw materials fell 4.1 percent, erasing gains for the year. The MSCI All-Country World Index of stocks slid 0.6 percent, including dividends, while the U.S. Dollar Index slid 0.02 percent. Bonds of all types gave positive returns, according to Bank of America Merrill Lynch’s Global Broad Market Index. Investor optimism dimmed as the International Monetary Fund cut its global growth forecast and the Federal Reserve said strains on the world economy present “significant downside risks.” China reported the seventh straight quarter of slowing growth, while services and manufacturing in the 17-nation euro area last month contracted more than economists forecast.
“Europe is a complete and total disaster and doesn’t appear to be solved,” John Stephenson, who helps manage $2.7 billion at First Asset Investment Management Inc. in Toronto, said in a telephone interview. “China clearly seems to be slowing. You essentially have a situation where investors just have very little optimism.” The S&P GSCI Total Return Index fell for a second month, leaving the gauge down 0.7 percent for 2012. Commodities are headed for a second consecutive annual loss for the first time since 1998. The total return gauge was up 0.2 percent today.

China Suspends Coal Mines for Congress, Boosting Prices (Bloomberg)
China, the world’s biggest producer and user of coal, is suspending operations at smaller mines in a bid to improve safety before the nation’s once-in-a-decade leadership transition this month. Ahead of the 18th Party Congress, which begins Nov. 8 in Beijing and runs for at least a week, the State Administration of Work Safety has sent inspectors to mines to “spot hazards” and accelerate shutdowns over the next month, it said in an Oct. 24 statement on its website. The congress is where China’s next generation of leaders will be formally anointed. Datuhe (Shanxi) Coking & Chemical Co. and Yongning Coal Co., a unit of Yongning Coal & Coking Group, have both had operations halted, according to company officials who declined to be identified because they aren’t authorized to speak publicly.
The suspensions could affect mines in provinces such as Inner Mongolia, Shanxi and Shaanxi. The three combined account for 60 percent of the nation’s output. China has been working to improve safety in an industry in which accidents killed 1,973 people last year and 2,433 in 2010, according to the State Administration of Work Safety. That compares with 48 deaths in 2010 in the U.S., the world’s second-biggest coal producer. “Improving mining safety is a direction of China’s coal policy. The recent fatal accidents highlight the urgency”, said Helen Lau, a Hong Kong-based analyst with UOB-Kay Hian Ltd. “Government officials are severely punished for coal mine accidents now. So, maintaining social and political stability is important in this leadership transition.”
China’s regions, departments and companies should “firmly prevent big coal mine accidents to create a safe, stable working environment for the opening of the Party Congress,” the work safety administration said, following a video conference with provincial officials on Sept 4.

Recap Energy Market Report (CME)
December crude oil traded higher throughout the session and registered a new six day high in the process. Early morning support for the crude oil market came from gains in global equity markets and favorable Chinese manufacturing data. Crude oil prices garnered more support following economic data that showed improvement in the US labor market, as well as manufacturing sector. This morning's EIA report revealed an unexpectedly large decline in US crude supplies of 2.045 million barrels last week, and that propelled December crude oil back above the $87.00 level. Some of the supply decline came from a drop in import activity. The refinery operating rate was up 0.5% to 87.7%.

Oil Trades Near Two-Week High on Unexpected Drop in Stockpiles (Bloomberg)
Oil traded near the highest level in almost two weeks after U.S. crude stockpiles unexpectedly declined and reports signaled the nation’s economic growth may be accelerating. Futures were little changed after rising 1 percent yesterday. Crude inventories slid 2 million barrels last week, the Energy Department said. Analysts surveyed by Bloomberg News forecast an increase of 1.8 million. The Institute for Supply Management’s factory index climbed to a five-month high and the Conference Board’s consumer sentiment reading advanced to the most since February 2008. Oil is headed for its first weekly gain in three. Crude for December delivery was at $86.90 a barrel, down 19 cents, on the New York Mercantile Exchange at 7:19 a.m. Singapore time. It advanced 85 cents to $87.09 yesterday, the highest close since Oct. 22. Prices are down 12 percent this year and up 0.7 percent this week.
Brent crude for December settlement dropped 53 cents, or 0.5 percent, to $108.17 a barrel on the London-based ICE Futures Europe exchange yesterday. The European benchmark crude grade was at a $21.08 premium to West Texas Intermediate. The Institute for Supply Management’s factory index rose to 51.7 in October from 51.5, the Tempe, Arizona, group said yesterday. The New York-based Conference Board’s sentiment gauge increased to 72.2, while the Labor Department in Washington said applications for jobless benefits fell by 9,000 to 363,000 in the week ended Oct. 27.

Copper Rises Most in Two Weeks on China, U.S. Economic Signals (Bloomberg)
Copper futures jumped the most in two weeks on signs that economies are stabilizing in China, the top consumer of industrial metals, and the U.S., the second-biggest. An official Chinese purchasing managers’ index released today rose to 50.2 in October from 49.8 in September, indicating the first expansion in three months. Readings above 50 signal growth. Manufacturing in the U.S. last month expanded more than economists forecast, and construction spending in September climbed to the highest in almost three years. Prices are up 2 percent since reaching a seven-week low on Oct. 29. “We’re seeing somewhat better economic data, and it looks like the worst may be behind us for the most part,” Frank Cholly, a senior commodity broker at RJO Futures in Chicago, said in a telephone interview.
Copper futures for December delivery climbed 1 percent to settle at $3.552 a pound at 1:15 p.m. on the Comex in New York, the biggest gain for a most-active contract since Oct. 17. Last month, the metal fell 6.4 percent, the most since May. The metal also climbed after a report showed companies expanded payrolls in the U.S. last month by the most in eight months. The increase of 158,000 followed a revised 114,000 gain in September, ADP Research Institute data showed. Labor Department figures tomorrow may show employers took on 125,000 workers in October, not enough to keep the jobless rate from rising to 7.9 percent from 7.8 percent, according to the median estimate in a Bloomberg survey of economists.
“The market is focusing on numbers that are better than expected today, but we’ll have to wait for the payroll numbers tomorrow” to see if the gains hold, Adam Klopfenstein, a senior market strategist at Archer Financial Services Inc. in Chicago, said in a telephone interview. “Copper is probably going to be stuck in a trading range until after the election.” The U.S. presidential election is on Nov. 6. On the London Metal Exchange, copper for delivery in three months rose 0.9 percent to $7,826 a metric ton ($3.55 a pound). Aluminum, nickel, lead, zinc and tin also advanced.

Gold Futures Slide for First Time in Three Days as Dollar Gains (Bloomberg)
Gold futures declined for the first time in three days as the dollar’s rebound reduced demand for the metal as an alternative investment. The greenback gained against a basket of major currencies after U.S. initial jobless claims fell to the lowest in three weeks and a measure of manufacturing activity rose more than forecast, adding to evidence that the economy is recovering. The dollar advanced 0.6 percent last week, while gold declined 0.7 percent. “The stronger dollar is putting pressure on gold,” Phil Streible, a senior commodity broker at R.J. O’Brien & Associates, said in a telephone interview. “The dollar is the winner today.” Gold futures for December delivery fell 0.2 percent to settle at $1,715.50 an ounce at 1:40 p.m. on the Comex in New York. Earlier, the metal reached $1,727.50, the highest since Oct. 23. The price advanced 0.6 percent in the previous two days. Silver futures for December delivery declined 0.2 percent to $32.248 an ounce on the Comex.
Platinum futures for January delivery fell 0.2 percent to $1,573.20 an ounce on the New York Mercantile Exchange. Palladium futures for December delivery advanced 0.4 percent to $612.45 an ounce. The price climbed for the third straight day, the longest rally in almost a month.

Gold Traders Most Bullish in 10 Weeks on Stimulus: Commodities (Bloomberg)
Gold traders are the most bullish in 10 weeks and investors are hoarding a record amount of bullion as central banks pledge to do more to spur economic growth. Eighteen of 27 analysts surveyed by Bloomberg expect prices to rise next week and five were bearish. A further four were neutral, making the proportion of bulls the highest since Aug. 24. Holdings in gold-backed exchange-traded products gained the past three months, the best run since August 2011, data compiled by Bloomberg show. They reached a record 2,588.2 metric tons on Oct. 31, valued at $143 billion, the data show.
The Bank of Japan (8301) expanded its asset-purchase program on Oct. 30 for the second time in two months, increasing it by 11 trillion yen ($137 billion). The Federal Reserve said last week it plans to continue buying bonds and central banks from Europe to China have pledged more action to boost economies. Gold rose 70 percent as the Fed bought $2.3 trillion of debt in two rounds of quantitative easing from December 2008 through June 2011. “Central banks are all very concerned about a depression, so they’re keeping monetary policies as loose as possible,” said Mark O’Byrne, the executive director of Dublin-based GoldCore Ltd., a brokerage that sells and stores everything from quarter-ounce British Sovereigns to 400-ounce bars. “People are buying gold as a store of value to protect against currency depreciation.”

Silver Market Recap Report (CME)
The silver market generally outperformed the gold market today. With the sharp morning rally the December silver contract managed to reach up to the highest level since October 19th and that in turn might have prompted technical short covering buying and perhaps a measure of fresh outright buying. Silver might also drafted off the residual strength in copper and clearly silver saw some positive spillover from the rather sharp gains in US equities. The bull camp might also play up the rise in open interest as a sign of increased bullish activity in silver but silver is still a physical commodity and it might need to see something positive from the US non farm payrolls on Friday to extend this week's gains.

Gold Market Recap Report (CME)
Favorable Consumer Confidence readings, a decline in initial claims and a sharp range up attempt in US equities should have lifted gold and other physical commodity markets but instead today's developments seemed to prompt long profit taking in gold prices. Perhaps traders were squaring positions ahead of the US payroll report as many traders think the results from Payrolls will have a major impact on the election results. Perhaps gains in the Greenback undermined gold or perhaps some gold players think the recent trend of improving numbers is starting to reduce the odds of additional US Fed easing action. All things considered action in the currency markets today weren't that significant and that would seem to increase the odds that today's action was technically inspired.