Monday, November 19, 2012

20121119 1042 Global Commodities Related News.

Hedge Funds Cut Bets in Longest Retreat Since 2008: Commodities (Bloomberg)
Hedge funds cut bullish commodity bets for a sixth straight week, the longest slump since the depths of the global recession four years ago, on mounting concern that economies are slowing. Money managers lowered combined net-long positions across 18 U.S. futures and options by 17 percent to 772,512 contracts in the week ended Nov. 13, Commodity Futures Trading Commission data show. Holdings have tumbled 38 percent since Oct. 2 in the longest retreat since August 2008. Investors turned bearish on copper for the first time since August.
Commodities are headed for the first annual loss since 2008 as weaker growth and more supply will mean surpluses in sugar, aluminum and zinc, according to Morgan Stanley. U.S. industrial production unexpectedly declined in October, while applications for jobless benefits rose to the highest since April 2011, separate reports showed last week. The 17-nation euro-area’s economy tumbled back into recession last quarter for the second time in four years, official figures showed Nov. 15. “I am not bullish on commodities,” said Martin Murenbeeld, the chief economist at Toronto-based DundeeWealth Inc., which manages about C$100 billion ($97 billion) of assets. “I don’t think we are going to see improvement in the world economy for some time as there are too many problems.”

DTN Closing Grain Comments 11/16 14:28 (CME)
Soybean Market Losses Continue
The soybean chart fell to new depths Friday, dragging the wheat market down with it, but some friendly news for corn-based ethanol allowed that market to post some gains at the end of the session.

Wheat Market Recap Report (CME)
December Wheat finished down 7 1/2 at 838, 12 off the high and 8 1/2 up from the low. March Wheat closed down 7 1/2 at 853 3/4. This was 8 3/4 up from the low and 11 3/4 off the high.
December Chicago wheat closed 7 1/2 cents lower on the session but down 48 1/2 cents for the week. The market traded moderately lower on the day into the mid-session as weakness in soybeans, a strong US dollar and the slow pace of exports helped to pressure. Weekly export sales came in about as expected at 314,600 metric tonnes which was higher than last week but still well short of a pace of 548,700 tonnes needed each week to reach the USDA projection for the year. Cumulative wheat sales stand at 48.7% of the USDA forecast for 2012/2013 (current) marketing year versus a 5 year average of 64.7%. While wheat sales were sluggish, the market found underlying support from ideas that US wheat is now competitive to other world suppliers and that future tender results might include more US wheat. Corn weakness early today helped to pressure but to higher on the day for corn support the solid gains off of the early lows. With a dry forecast for the central and southern plains and record low crop ratings already, July KC wheat managed to bounce near 12 cents off of the lows to close just slightly lower on the day. December Oats closed unchanged at 364 1/2. This was 4 up from the low and 3/4 off the high.

Corn Market Recap for 11/16/2012 (CME)
December Corn finished up 5 3/4 at 727, 2 3/4 off the high and 16 up from the low. March Corn closed up 6 at 731. This was 16 1/2 up from the low and 2 3/4 off the high.
December corn closed 5 3/4 cents higher on the session but the strong recovery from the lows still left the market down 11 3/4 cents for the week. The market traded as much as 10 1/4 cents lower on the day early in the session led by soybean weakness but support held near Tuesday's lows and the market managed to find fairly active short-covering to support the strong gains off of the lows. News from the EPA that they decided to hold the current ethanol mandate in place may have provided some psychological support. Traders did not expect a change in the mandate but the news appears to have sparked some short-covering; especially after the market failed to make a downside break-out. In addition, the EPA indicated that the waiver would only reduce corn prices by about 1%. Weekly export sales for corn came in at 103,900 metric tonnes for the current marketing year and 208,200 for the next marketing year for a total of 312,100. As of November 8th, cumulative corn sales stand at just 38.2% of the USDA forecast for 2012/2013 (current) marketing year versus a 5 year average of 45.6%. Sales of 425,000 metric tonnes are needed each week to reach the USDA forecast. January Rice finished down 0.02 at 14.845, 0.045 off the high and 0.045 up from the low.

Recap Energy Market Report (CME)
January crude oil trended higher throughout the US trading hours and registered a new seven day high in the process. Some traders noted that crude oil attracted support from escalating tensions between Israel and Gaza. Meanwhile, a weaker outside market tone, a sell off in equity markets and gains in the US dollar served to keep gains in check. Some traders also pointed to uncertainty surrounding the US fiscal cliff meeting in Washington as another force limiting gains during the session. Late morning support in January crude oil appeared to come from a positive turnaround in outside markets and an IAEA report indicating Iran's efforts to expand their uranium enrichment program.

Oil Advances a Second Day on Israel Conflict, U.S. Budget Talks (Bloomberg)
Oil advanced for a second day in New York after Israel said it may expand an assault on the Gaza Strip and U.S. House Speaker John Boehner signaled budget talks with President Barack Obama were constructive. Futures climbed as much as 0.9 percent after Israeli Prime Minister Benjamin Netanyahu said yesterday that the army is prepared to “significantly widen the operation,” raising concern Middle East unrest will disrupt oil supplies. Obama and congressional leaders met Nov. 16 to discuss how to avert the fiscal cliff, a combination of spending cuts and tax increases that threaten to throw the world’s biggest crude user into a recession next year. “The market is concerned about an escalation to the conflict in Israel,” said Jonathan Barratt, the chief executive officer of Barratt’s Bulletin, a commodity newsletter in Sydney. “Nervousness about the Middle East is forcing the hand of a few short positions,” or wagers on falling prices, he said.
Crude for January delivery rose as much as 76 cents to $87.68 a barrel in electronic trading on the New York Mercantile Exchange and was at $87.60 at 11:46 a.m. Sydney time. The contract increased $1.05 to $86.92 on Nov. 16 to cap a second weekly gain. Front-month prices are down 11 percent this year. Brent for January settlement gained 62 cents, or 0.6 percent, to $109.57 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract was at a premium of $21.97 to West Texas Intermediate.

Silver Market Recap Report (CME)
Silver prices ended up failing substantially lower during Friday's trading session and reached a new weekly low before making a sizable recovery by the close of trading. For the week, December silver finished with a loss of 0.299. Some traders felt that sluggish global equity markets and a fairly strong Dollar kept silver prices on the defensive through the later part of this week's trading. Other traders felt that December silver was able to avoid any sizable downside move late in the week due to there being no fresh risk flare-ups to eroded global risk sentiment going into the weekend.

Gold Market Recap Report (CME)
Gold was able to put together a modest recovery rally from early lows and was ultimately able to reach positive territory by the close of Friday's trading. For the week, however, December gold finished with a loss of 16.20. Many traders felt that Euro zone debt anxiety and the upcoming US fiscal cliff continued to erode macro-economic sentiment throughout the day, and ultimately will keep gold prices somewhat on the defensive going into the weekend. A lukewarm reading on US Industrial Production was also seen as a key negative factor for the gold market during today's trading. In addition, reports that China's gold output during the first 9 months of this year was 11% above the same period in 2011 may have weighed on December gold as well.

Gold Advances as ETP Holdings Expand to Record, Dollar Declines (Bloomberg)
Gold gained for the first time in three days, climbing alongside other commodities as the dollar weakened and investors boosted holdings in exchange-traded products to a record. Spot gold advanced as much as 0.4 percent to $1,721.30 an ounce and traded at $1,720.70 at 9:10 a.m. in Singapore. The metal slumped 1 percent last week as the dollar strengthened for a fourth week against a six-currency basket in the best run since June. Holdings in ETPs backed by bullion rose to 2,603.692 metric tons on Nov. 16, data compiled by Bloomberg show. President Barack Obama expressed confidence that he and Congress would reach a budget agreement needed to avert the so- called fiscal cliff, a combination of spending cuts and tax increases scheduled to take effect in January. This weighed on the dollar and helped send oil and copper higher today.
“Investment demand has been resilient despite lackluster price performance and that’s been helping to keep gold above $1,700,” said Sun Yonggang, macroeconomic strategist at Everbright Futures Co., a unit of one of China’s largest state- owned investment companies. “In the short term, developments in the U.S. and Europe will continue to determine direction of the dollar and thus gold.” Gold has rallied 10 percent this year as central banks including the Federal Reserve took steps to shield their economies hurt by Europe’s crisis. The Bank of Japan holds a meeting today amid speculation of further easing. The U.S. Mint has sold 56,000 ounces of gold coins in November, according to data on the Mint’s website. At that pace, total sales this month would be 106,909 ounces, up 161 percent from a year earlier.

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