Tuesday, November 27, 2012

20121127 1023 Global Commodities Related News.

Speculators Raise Wagers First Time in Seven Weeks: Commodities (Bloomberg)
Speculators raised bullish commodity wagers for the first time since early October as signs of improving economic growth in the U.S. and China pushed prices higher for three straight weeks. Hedge funds and other money managers increased combined net-long positions across 18 U.S. futures and options by 9.6 percent to 846,321 contracts in the week ended Nov. 20, Commodity Futures Trading Commission data show. That was the biggest gain since mid-August. Corn holdings rose the most since July, and those on silver reached a five-week high. The Standard & Poor’s GSCI Spot Index of 24 raw materials has rebounded 3.9 percent since reaching a three-month low on Nov. 5. Manufacturing in China, the world’s biggest consumer of everything from copper to coal to cotton, is on pace to expand in November for the first time in more than a year, figures showed Nov. 22.
In the U.S., more Americans this month said the world’s largest economy will improve than at any time in the past decade, and new-home construction climbed to a  four-year high in October, separate reports showed last week. “There are a lot of reasons to believe that we are starting to turn the corner,” said James Paulsen, the Minneapolis-based chief investment strategist at Wells Capital Management, which oversees about $325 billion. “Growth in the U.S. and China gives me confidence to remain invested in commodities.”

Wheat Market Recap Report (CME)
December Wheat finished up 1 1/4 at 849, 5 1/4 off the high and 4 1/2 up from the low. March Wheat closed up 2 1/4 at 863 3/4. This was 5 1/2 up from the low and 5 1/4 off the high. December Chicago wheat is trading slightly higher to finish the day with most of the supportive trade centered on new crop contracts. The leader throughout the session was KC wheat as the market continues to be concerned with the poor weather and soil conditions in the western plains. New export tenders are beginning to hit the market after a slow lineup last week. Jordan is in for 100,000 tonnes, Iraq for 50,000, Syria is still in the market for 100,000 tonnes of soft wheat, and Algeria issued a tender for 50,000 tonnes. The sluggish pace of exports continues to be a drag on wheat futures in the short term but many are optimistic that the pace will increase in 2013 as supply tightens in Argentina and Australia. Chicago wheat saw selling pressure midday after export inspections were reported at 7.8 million bushels vs. 11.1 last week. Shipments needed each week to reach the current USDA export estimate total 24 million bushels. The cumulative shipment pace is now 41% of the current USDA export estimate for this crop year vs. the 5 year average of 50%. Outside markets were negative throughout the day with the US Dollar trading higher and stocks lower which kept gains limited in the Chicago wheat market. December Oats closed down 1/4 at 368 3/4. This was 7 3/4 up from the low and 1 1/4 off the high.

Corn Market Recap for 11/26/2012 (CME)
December Corn finished up 1 3/4 at 747 1/4, 5 3/4 off the high and 5 1/2 up from the low. March Corn closed up 1 1/2 at 751 1/4. This was 5 1/4 up from the low and 5 3/4 off the high.
March corn traded modestly higher on the day but was able to post a new high for the move early in the session before pulling back amid weaker outside markets. The US Dollar was stronger to start the week and US equity markets traded sharply lower which added a negative tilt to the market sentiment. Some traders suggest that wet weather conditions in Argentina have likely cut corn production for this year which added support to corn, but sluggish export data released midday helped to offset the positive tilt. Corn export inspections for the week ending November 22nd were reported at 15.9 million bushels vs. 14.4 last week. Corn shipments needed each week to reach the current USDA export forecast is 23.5 million bushels. The cumulative shipment pace is 17% of the USDA export estimate vs. the 5 year average of 22%. Many traders believe the US export pace is due for an uptick very soon as South American prices firm. This could be supportive to the long term price outlook for the corn market but very little evidence of this has developed so far.
January Rice finished down 0.115 at 14.92, 0.12 off the high and equal to the low.

U.S. Winter-Wheat Crop Worsening as Dry Weather Curtails Growth (Bloomberg)
Crop conditions for winter wheat in the U.S. declined for the fourth straight week and were the worst since 1985, the government said, as dry, cold weather slowed seed germination and early plant growth. An estimated 33 percent of the crop was rated good or excellent as of yesterday, down from 34 percent last week and 52 percent a year earlier, the U.S. Department of Agriculture said today in a report. About 26 percent was in poor or very poor condition, compared with 13 percent a year earlier. The worst U.S. drought since 1956 helped send wheat futures up 32 percent this year. About 56 percent of the six High Plains states from Kansas to North Dakota was in extreme or exceptional drought as of Nov. 20, up from 6.3 percent a year earlier, government data show. Plant emergence was 88 complete in the 18 top-producing states, compared with 91 percent a year earlier, the USDA said.
“The crop is already dying in some fields from the lack of rain,” Alan Brugler, the president of Brugler Marketing & Management Inc. in Omaha, Nebraska, said in a telephone interview before the report. “Crops survived the dry weather last year because there were surplus soil-moisture reserves. The crop is more susceptible to wind and cold damage this year because of the poor conditions.” Dry, warm weather is expected over the next 10 days, which will slow root development before plants go dormant for the winter, according to T-Storm Weather LLC in Chicago. About 46 percent of the wheat crop from Texas to Montana received less than half the average rain during the last 90 days, the forecaster said.

Recap Energy Market Report (CME)
January crude oil prices experienced a choppy trading session that was mostly lower. The crude oil market was under pressure early this morning as concerns over the US fiscal cliff weighed on sentiment, as well as uncertainty surrounding a meeting between EU officials and the IMF on releasing more aid to Greece. Meanwhile, a measure of support for the crude oil market seemed to come from modest geopolitical tensions from recent protests in Egypt and ahead of a judicial hearing on their President's new powers.

Thailand to Surpass India as Top Rice Shipper on Stockpile Sales (Bloomberg)
Thailand is set to overtake India as the world’s largest rice exporter as the nation accelerates sales from state stockpiles, adding to record global supplies, according to the International Rice Research Institute. Shipments from India may drop to as low as 7 million metric tons in the year that began Oct. 1, said Samarendu Mohanty, a senior economist. Exports including the aromatic basmati variety more than tripled to 10.4 million tons the previous year, said the U.S. Department of Agriculture. Thailand plans to ship 8.5 million tons in 2013 from 7.3 million tons this year, according to the Department of Foreign Trade.
Rising Thai supplies may increase competition among Asian producers and pressure prices that have risen 1.2 percent in Chicago this year. A decline in the staple for half the world may further lower food costs that the United Nations’ Food & Agriculture Organization estimates dropped 0.9 percent in October from a six-month high. Global opening stockpiles for 2012-2013 will climb to the highest in a decade, the USDA says. “Thailand has little choice but to release stocks and that will probably lead to lower prices,” Concepcion Calpe, a senior economist at the FAO, said from Rome. “There will be growing competition from less important rice-supplying countries, such as Brazil, Russia, Egypt and Australia in the export markets, which will tend to reduce prices in 2013.”

Natural Gas Drops Most in Five Weeks on December Forecast (Bloomberg)
Natural gas tumbled the most in five weeks as revised forecasts showing an unusually warm start to December signaled reduced demand for heating fuels. Futures fell 4.4 percent, closing with the biggest one-day decline since Oct. 22, as companies including Commodity Weather Group LLC predicted above-normal temperatures for the lower 48 states in the next six to 10 days. Gas rose to a 13-month high last week on forecasts showing colder weather in early December and a government report of a bigger-than-expected supply drop. “A little bit of cold that we had is coming to a quick end,” said Dominick Chirichella, senior partner at the Energy Management Institute in New York. “If the weather does turn out to be warmer than normal, we could see” more gas additions to stockpiles.
Natural gas for December delivery fell 17.1 cents to $3.73 per million British thermal units on the New York Mercantile Exchange after dropping as much as 5.1 percent to $3.704. If prices had closed there it would have been the biggest decline since Aug. 10. The futures are up 5.3 percent from a year ago. Gas climbed to $3.933 during the previous trading session, the highest intraday price since Nov. 1, 2011. Electronic trading volume was 271,004 contracts today at 2:42 p.m. exceeding the 154,615 contracts that traded on Nov. 23. “The perception is that the market was a bit overbought last week” amid low volume because of the U.S. Thanksgiving holiday, said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York. “It looks like the drive to $4 has definitely stalled for the time being.”

Oil Rises From One-Week Low as Euro Ministers Agree on Greek Aid (Bloomberg)
Oil rose from the lowest level in almost a week after European finance ministers reached an agreement on aid for Greece, easing concern that Europe’s debt crisis will derail the economic recovery and curb fuel demand. Futures advanced as much as 0.4 percent in New York after slipping 0.6 percent yesterday. Ministers agreed to help Greece manage its debt burden in talks in Brussels that lasted more than 12 hours, a European Union official said. It was the fourth round of discussions by ministers on the Greek crisis in two weeks. U.S. crude inventories probably rose 500,000 barrels last week, according to a Bloomberg News survey of analysts before an Energy Department report tomorrow. Crude for January delivery gained as much as 35 cents to $88.09 a barrel in electronic trading on the New York Mercantile Exchange and was at $88.08 at 12:16 p.m. Sydney time. The contract decreased 54 cents yesterday to $87.74, the lowest since Nov. 21. Prices are down 11 percent this year.
Brent for January settlement advanced 25 cents to $111.17 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract was at a premium of $23.09 to West Texas Intermediate, compared with $23.18 yesterday. The European Union accounted for 16 percent of the world’s oil consumption last year, according to BP Plc’s Statistical Review of World Energy. The U.S. and China were the world’s biggest crude users, accounting for a combined 32 percent. International Monetary Fund Managing Director Christine Lagarde told reporters after the Brussels meeting that her aim to get Greece’s debt on a “sustainable path” was achieved in today’s discussions. IMF criticism of Europe’s failure to do so had held up an accord.
U.S. gasoline supplies probably rose 1 million barrels, according to the median of five analyst estimates in the Bloomberg survey before the Energy Department report. Distillate stockpiles, a category that includes heating oil and diesel, rose 500,000 barrels, the survey shows. The American Petroleum Institute will release separate inventory data today.

Silver Market Recap Report (CME)
The silver market showed some weakness this morning but in retrospect, December silver prices seemed to have the capacity to hold up near the recent highs. In other words, silver maintained a fairly narrow trading range today and prices seemed to derive added support from the even number $34.00 level. In the end, noted weakness in equities and the rest of the metals complex probably weighed on silver prices and perhaps some would be longs were concerned about the potential for another jump in the weekly spec long positioning in silver from the delayed COT reports.

Gold Market Recap Report (CME)
With open interest on the rise in gold over the last several weeks and gold prices generally maintaining a positive track on the charts, the bull camp might feels like recent gains have confirmed a growing bullish interest in the market. However, gold also appears to be negatively impacted by physical commodity market fundamentals and by evidence of slowing in the US economy. In fact, some players think the lack of an EU deal on Greece and news that US leaders wouldn't meet this week to discuss the fiscal cliff were serving to undermine gold prices today. It would also seem like weakness in US equities were another element that served to provide a cap on gold prices today.

No comments: