Monday, November 26, 2012

20121126 1011 Global Commodities Related News.

DTN Closing Grain Comments 11/23 12:54 Grains Close Holiday Week Higher (CME)
Led by a strong rally in the soy complex and sharp sell-off in the U.S. dollar index, grains were able to finish the week on a rally. Commodities in general were stronger, though cotton struggled throughout the day.

Corn Market Recap for 11/23/2012 (CME)
December Corn finished up 4 1/2 at 745 1/2, 3 1/2 off the high and 2 1/4 up from the low. March Corn closed up 4 1/2 at 749 3/4. This was 2 1/4 up from the low and 3 1/4 off the high.
December corn traded higher on the day on positive export data, less than favorable weather conditions in Argentina, and a sharply lower US Dollar. Risk assets saw a boost today on positive European and Chinese economic data. Net weekly export sales for corn, came in at 769,800 tonnes for the current marketing year and 188,800 for the next marketing year for a total of 958,600 tonnes. This was the second highest sales number for this crop year and Japan was a notable buyer. As of November 15th, cumulative corn sales stand at 41% of the USDA forecast for current marketing year vs. a 5 year average of 47%. Sales of 417,000 tonnes are needed each week to reach the USDA forecast. Additional support was linked to thoughts that the US export pace may pick up in 2013 amid tightening domestic supplies. Reports that recent rainfall in Argentina was heavier than expected may have also provided a boost to corn prices. January Rice finished up 0.205 at 15.035, equal to the high and equal to the low.

Wheat Market Recap Report (CME)
December Wheat finished up 2 3/4 at 848, 5 3/4 off the high and 2 3/4 up from the low. March Wheat closed up 2 1/4 at 862. This was 2 3/4 up from the low and 5 1/2 off the high.
December Chicago wheat traded slightly higher on the day in what was described as a low volume day due to the Thanksgiving holiday. Support was linked to positive export demand and dry weather conditions in the western plains. Other major world exporters continue to add sales while the US continues to struggle to find new business which could limit gains in the short term. Despite this, export sales were impressive this morning with sales reported at 635,400 tonnes for the current marketing year and 22,000 for the next marketing year for a total of 657,400. As of November 15th, cumulative wheat sales stand at 53% of the USDA forecast for current marketing year vs. a 5 year average of 66%. Sales of 498,000 metric tonnes are needed each week to reach the USDA forecast. Additional support was linked to news that Brazil may have bought German wheat which could imply that there are major issues with the quality and quantity of the wheat crop in Argentina. Little to no rain is expected in the western plains to finish out this month which could leave as much as a third of the wheat crop with poor establishment as it enters dormancy.
December Oats closed down 1 at 369. This was 4 1/2 up from the low and 5 1/2 off the high.

Wheat Gains for Second Day as Drought May Erode U.S. Supplies (Bloomberg)
Wheat rose for a second day in Paris on speculation global supplies will tighten because of dry weather in the U.S., the world’s largest exporter of the grain. Only 34 percent of U.S. winter wheat was rated good or excellent as of Nov. 18, the worst condition since tracking of data began in 1985, Department of Agriculture figures show. Prices climbed 39 percent this year in Paris trading after droughts in the U.S., Russia and eastern Europe. European Union export licenses for soft wheat in the marketing year begun July 2 are up 11 percent from a year earlier. “Matters are made worse for the hard, red winter wheat crop in that temperatures are warm, causing the wheat to mature earlier than it should and thus putting that crop at risk should normal cold winter temperatures return,” economist Dennis Gartman said of the U.S. today in his daily Gartman Letter.
Milling wheat for delivery in January added 0.3 percent to the day’s high of 271 euros ($350) a metric ton by 2:28 p.m. on NYSE Liffe in Paris. Prices are up 0.6 percent this week. Agricultural markets on the Chicago Board of Trade will open later today following yesterday’s Thanksgiving holiday. Argentina, which had above-normal rains in recent weeks, may produce 10.1 million tons of wheat, the Buenos Aires Cereals Exchange said yesterday. That compares with the USDA’s estimate for the country of 11.5 million tons. Corn for delivery in January gained 0.2 percent to 254 euros a ton in Paris. Rapeseed for delivery in February declined 0.2 percent to 470.75 euros a ton.

Recap Energy Market Report (CME)
January crude oil prices registered a higher high during the session, climbing back above the $88.00 level in the process. The market was under pressure during the morning hours following a ceasefire between Israel and Hamas, as well as uncertainty surrounding EU budget negotiations. A better than expected read on German Business sentiment, sell off in the US dollar and rally in global equity markets sparked the upside action in crude oil prices. Further support to risk sentiment came on ideas that Greece could be closer to receiving additional bailout funding.

Oil Trades Near One-Week High Before Europe Meeting on Greek Aid (Bloomberg)
Oil traded near the highest level in almost a week before European finance ministers discuss aid for Greece as they strive to tame a debt crisis that threatens to derail the economic recovery and curb fuel demand. Futures fluctuated in New York after rising 1 percent on Nov. 23 to cap the biggest weekly gain since October. Euro-area finance ministers are due to meet for the third time this month in Brussels to approve a Greek payment and forge a blueprint to keep the country a solvent member of the currency bloc. Oil advanced last week amid concern unrest in the Middle East from Israel to Egypt will spread and disrupt crude supplies. West Texas Intermediate crude for January delivery was at $88.02 a barrel, down 26 cents, in electronic trading on the New York Mercantile Exchange at 9:29 a.m. in Tokyo. Front-month futures rose 90 cents to $88.28 a barrel on Nov. 23, the highest settlement since Nov. 19. Prices are down 11 percent this year.
Brent for January settlement lost 6 cents to $111.32 a barrel on the ICE Futures Europe exchange. The European benchmark crude was at a premium of $23.30 to New York-traded WTI, up from $23.10 on Nov. 23. Israel yesterday eased restrictions on Palestinians in the Gaza Strip after last week’s cease-fire with Hamas survived claims of breaches by both sides. Hamas, which controls Gaza, said one Palestinian was killed and at least 19 injured after Israeli border guards opened fire. Israeli army spokeswoman Avital Leibovich said in a message on Twitter Nov. 23 that groups of Palestinians in the southern Gaza Strip had hurled rocks and tried to damage the security fence.
Protests have mounted in Egypt since President Mohamed Mursi on Nov. 22 granted himself new powers. The president will meet with the nation’s judicial council today, the state-run Middle East News Agency reported, citing presidential spokesman Yasser Ali. The nation’s judiciary said Nov. 24 that courts would suspend work until Mursi rescinds his decision.

Nickel Glut Recedes as Biggest Metals Loser Rallies: Commodities (Bloomberg)
Nickel, this year’s worst-performing metal, is rallying as analysts from Standard Bank Plc to BNP Paribas SA forecast a smaller-than-expected supply glut in 2013. Standard Bank reduced its estimate for the surplus by 17 percent on Oct. 15, citing project delays, and BNP Paribas said Nov. 12 it now expects output to match demand, after cutting its projection three times since April. Credit Suisse Group AG and Citigroup Inc. also lowered forecasts in the past two months. Nickel will average $19,000 a metric ton in the second quarter, 14 percent more than now, the median of 11 analyst estimates compiled by Bloomberg shows.
Futures fell 68 percent since reaching a record $51,800 in 2007 as higher prices spurred companies from Anglo American Plc to Vale SA to invest in new mines or expand existing ones. The surplus started in 2011 as slower growth weakened demand for stainless steel, which accounts for 65 percent of nickel consumption, and new supply emerged. Analysts are now paring supply forecasts as projects fall behind schedule. Prices rallied 5.5 percent in the past month. “The market balance is tighter than people had initially thought,” said Leon Westgate, an analyst at Standard Bank in London. “There are a number of operations and significant amount of capacity that may run into various issues. In terms of that producer wall of nickel, it may not be quite as large or impregnable as it looks on paper.”

Silver Market Recap Report (CME)
The silver market was also able to find its "second wind" midway through Friday's session, as prices reached their highest levels since mid-October. The sharp turnaround in macro-economic sentiment clearly helped to lift prices well above unchanged levels, with December silver more than $1.75 higher for the week at today's highs. The rapid pace of today's rally was also thought to have produced a large amount of technically-based short-covering, which in turn provided additional support for the silver market during Friday's trading.

Gold Futures Top $1,750, Silver Rises as Dollar Declines (Bloomberg)
Gold futures topped $1,750 an ounce and silver climbed to a six-week high as the dollar’s drop spurred demand for the metals as alternative investments. The greenback fell to a three-week low against a basket of major currencies as data showed German business confidence rose in November and speculation mounted that Europe’s policy makers will agree to keep aid flowing to Greece. Gold reached a five- week high. “The dollar weakness is supporting gold,” Michael Smith, the president of T&K Futures & Options in Port St. Lucie, Florida, said in a telephone interview. Gold futures for December delivery rose 1.3 percent to $1,751.40 at 12:45 p.m. on the Comex in New York. That’s the biggest gain for a most-active contract since Nov. 6. Earlier, the metal touched $1,755, the highest since Oct. 17. Floor trading was closed yesterday for the U.S. Thanksgiving holiday.
Holdings in gold-backed exchange-traded products rose to a record 2,605.3 metric tons on Nov. 21, data compiled by Bloomberg show. The U.S. Mint sold 67,000 ounces of American Eagle gold coins this month, exceeding the 59,000 ounces for all of October, data on its website showed. Silver futures for March delivery gained 2.3 percent to $34.206 an ounce. Earlier, the price reached $34.25, the highest since Oct. 11. Platinum futures for January delivery advanced 2.1 percent to $1,617.10 an ounce on the New York Mercantile Exchange, while palladium futures for December delivery increased 2.5 percent to $667.60 an ounce.

Gold Market Recap Report (CME)
After posting modest gains during overnight trading, gold prices were given a significant boost this morning and were able to reach a new 5-week high by the close of trading. Positive economic data from China and the Euro zone was widely seen to have underpin the gold market since Wednesday's close, although the upcoming US fiscal cliff situations and continued uncertainty with peripheral EU debt were thought to have kept additional gold strength in check early in the session. However, indications of strong "Black Friday" shopping levels gave a "jump-start" to US equities as well as triggered deep losses in the Dollar, both of which provided gold and other physical commodities with sizable near-term support. Reports of violence outside of a South African mine created additional supply anxiety from that nation, which in turn was a likely source of additional support during today's trading.

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