Wednesday, November 7, 2012

20121107 0952 Global Commodities Related News.

DTN Closing Grain Comments 11/06 14:45 Election Day Rally (CME)
Grains rallied on Election Day with soybeans leading the charge on renewed buying from both investors and end users. This was in part tied to excessively wet conditions in Argentina cutting into production potential.

Wheat Market Recap Report (CME)
December Wheat finished up 11 at 877, 2 3/4 off the high and 10 up from the low. March Wheat closed up 11 1/4 at 890 1/2. This was 10 1/2 up from the low and 2 1/2 off the high. December Chicago wheat traded sharply higher on the day after European wheat futures set new contract highs overnight and crop conditions in the US western plains deteriorated further. The weekly Winter Wheat Conditions report as of November 4th showed 39% of the crop was rated good/excellent which was in line with market estimates and compared to 40% last week. This was the lowest rating ever recorded for early November. Poor/very poor conditions jumped to 19% vs. 15% last year which was the highest poor/very poor rating for the same time period. Conditions in the eastern US remain more favorable than those of the western US. States like Kansas, Oklahoma, and Texas are beginning to dry down and soil moisture conditions are deteriorating according to the most recent top soil condition map which shows all three states as very dry.
Very  limited rainfall is expected for the western plains over the next two weeks. Jordan ended up buying no wheat in their 100,000 tonne tender overnight. This was most likely due to the recent rally in prices. Traders noted that volume was low in today's trade as most investors await the outcome of the US Presidential election. December Oats closed up 2 at 360. This was 6 1/2 up from the low and 3 3/4 off the high.

Corn Market Recap for 11/6/2012 (CME)
December Corn finished up 5 1/2 at 741, 1/2 off the high and 5 1/2 up from the low. March Corn closed up 5 at 743. This was 5 up from the low and 1/2 off the high. December corn rebounded today as the US Dollar turned lower and crude oil surged. A strong bounce in the soybean market also helped to support but traders noted that the volume was light due to the Presidential election. Additional support was linked to some analysts reducing their Argentina corn production estimate due to the heavy rainfall the last couple weeks which has caused significant delays to planting. The South American weather outlook is more favorable this week which may offer a bearish bias to the corn market. Central and Northern Brazil are expected to see showers while Southern Brazil and Argentina are expected to dry down. The high heat in Central Brazil has subsided and temperatures are expected to be non-threatening this week. These conditions should enhance field work and soil conditions. Traders also positioned ahead of Friday's USDA report which is expected to show a yield near the October estimate of 122 bushels per acre and production near 10.65 billion bushels vs. the October estimate of 10.7. November Rice finished up 0.175 at 15.035, equal to the high and 0.185 up from the low.

Oil Rises Most in a Month on Fuel Supply Concern (Bloomberg)
Crude rose the most in a month on forecasts that U.S. gasoline supplies dropped after Hurricane Sandy forced the shutdown of East Coast refineries and as Americans went to the polls to pick a president. Futures climbed to a two-week high after a Bloomberg survey showed supplies of the motor fuel probably decreased 1.5 million barrels last week. Hess Corp. (HES) and Phillips (PSX) 66’s New Jersey refineries remained shut after Sandy. U.S. voters decide today whether to return Barack Obama, a Democrat, as president or elect his challenger, Mitt Romney, a Republican. “Clearly there is a short-term shortage of gasoline on the East Coast because of the closure of refineries, terminals and pipelines,” said Julius Walker, global energy markets strategist at UBS Securities LLC in New York. “These problems should be short-lived. In the oil market, you also have some sentiment about the election affecting trading.”
Crude oil for December delivery advanced $3.06, or 3.6 percent, to $88.71 a barrel on the New York Mercantile Exchange, the biggest gain since Oct. 4 and the highest settlement since Oct. 22. Prices are down 10 percent this year. Prices were little changed after the American Petroleum Institute reported U.S. oil inventories slid 27,000 barrels to 371.7 million last week. Gasoline stockpiles gained 1.38 million to 201 million barrels. December oil advanced $2.75, or 3.2 percent, to $88.40 a barrel at 4:44 p.m. in electronic trading. Brent oil for December settlement increased $3.34, or 3.1 percent, to end the session at $111.07 a barrel on the ICE Futures Europe exchange. Gasoline supply may have dropped to 198 million barrels in the seven days ended Nov. 2, according to the survey. That would be the first decline in four weeks. The Energy Department is scheduled to release its inventory report at 10:30 a.m. tomorrow in Washington.

Silver Market Recap Report (CME)
The silver market might have caught most of its lift from the gold market today. However, gains in equities were significant enough to lift a number of physical commodity markets like silver today. Given that a number of technical levels were regained on the silver charts today, it is possible that silver was seeing technical short covering benefits. As suggested in the gold coverage, mid day press coverage was suggesting that gold was rising off ideas that Obama would retain the Presidency but that argument would seem to have suspect standing since the rally was in full bloom well ahead of any credible indications from the polls.

Copper Futures Post Biggest Gain in Almost Three Weeks (Bloomberg)
Copper futures posted the biggest gain in almost three weeks on speculation that demand will rise in China, the world’s biggest consumer of industrial metals, as new leaders take steps to boost the economy. Pressure is mounting on China’s officials to expand stimulus as they start a once-a-decade power transfer on Nov. 8 after the economy slowed for seven quarters in a row. Copper also gained as the dollar fell against a basket of major currencies, increasing the appeal of the metal as an alternative investment. “People are thinking the Chinese leadership change may mean more aggressive policy measures” on the economy, Harry Denny, a broker at Hoboken, New Jersey-based PVM Futures Inc., said in a telephone interview. “With the new leadership, we may see more of the infrastructure projects that a lot of people had expected in the third quarter.”
Copper futures for December delivery gained 1 percent to settle at $3.506 a pound at 1:24 p.m. on the Comex in New York, the biggest gain for a most-active contract since Oct. 17. Yesterday, the price touched $3.4485, the lowest since Sept. 5. “I suspect the market will shift to focusing on political and economic developments in China,” Nic Brown, the head of commodity research at Natixis SA in London, said in an e-mail. “We’re starting to see signs of recovery in Chinese data, which might be expected to strengthen further once the new political team finally takes its place.” On the London Metal Exchange, copper for delivery in three months rose 0.7 percent to $7,700 a metric ton ($3.49 a pound). Aluminum, nickel, lead, zinc and tin also gained.

Gold Jumps Most in 7 Weeks as U.S. Fiscal Cliff Awaits (Bloomberg)
Gold jumped the most in seven weeks, tracking gains in equities and commodities, on speculation that the U.S. will take additional measures to spur economic growth, regardless of the winner in today’s presidential election. The Standard & Poor’s GSCI Spot Index of 24 commodities advanced the most in a month, led by energy and metals, while the Dow Jones Industrial Average gained. The dollar fell. Whether President Barack Obama or Republican challenger Mitt Romney wins today, the next president will need to address a so- called fiscal cliff of more than $600 billion in tax increases and spending cuts that take effect in January unless Congress can reach a budget compromise. “The slowdown concerns remain, and the fiscal cliff is so huge that there is no quick solution,” Frank Lesh, a trader at FuturePath Trading in Chicago, said in a telephone interview. “Whoever comes to power cannot fix the problems immediately.”
Gold futures for December delivery rose 1.9 percent to settle at $1,715 an ounce at 1:53 p.m. on the Comex in New York, the biggest gain for a most-active contract since Sept. 13. Prices are up 9.5 percent this year, heading for a 12th straight annual gain as the Federal Reserve keeps interest rates at record lows to spur growth. UBS AG’s Edel Tully said Romney’s election may lead to a united government and stronger dollar, hurting gold. Bullion’s rally may be at risk if Romney wins as he may replace Federal Reserve Chairman Ben Bernanke at the end of his term and easing could end earlier than expected, Francisco Blanch, commodities research head at Bank of America Merrill Lynch, said yesterday.

Gold Market Recap Report (CME)
The sharp range up recovery today in gold caught some players by surprise as uncertainty from the election could have kept many on the sidelines today. However, a risk-on environment seemed to surface today in the wake of noted gains in US equities and that angle of thinking was given added credence in the wake of gains in a long list of physical commodities. Like many physical commodities, gold might have been feeding higher off short covering from last week's washout or perhaps gold is simply coming back into favor because the passing of the election should leave the fiscal cliff issue in a front and center standing. The Press was suggesting that gold was in favor off ideas that the incumbent would remain in office.

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