Wednesday, November 28, 2012

20121128 1040 Global Commodities Related News.

DTN Closing Grain Comments 11/27 14:29 Grains Stage Strong Rally Late Tuesday (CME)
Similar to Monday, early commercial buying gave way to noncommercial trade late in the day, extending Tuesday's rally in most grain markets.

Wheat Market Recap Report (CME)
December Wheat finished up 24 at 873, 1/2 off the high and 23 3/4 up from the low. March Wheat closed up 24 3/4 at 888 1/2. This was 24 3/4 up from the low and 1/2 off the high. December Chicago wheat finished the day sharply higher but KC wheat traded over 30 cents higher into the close and Minneapolis followed. Drought conditions in the western plains and hopes that the US will begin to see an increase in export demand pushed Chicago March wheat to a new high for the move. The weekly Winter Wheat Conditions report showed 33% of the crop was rated good/excellent compared to 34% last week and 52% last year. This was in line with market estimates was the lowest rating on record for this time of year, beating out the old record of 42% good/excellent in 1999. No significant precipitation is expected in the next two weeks and temperatures are expected to be above normal which will keep some wheat from entering dormancy in the south. Nearly half of the Hard Red Winter wheat crop will enter dormancy with poor establishment. Export tenders this week include, Jordan for 100,000 tonnes, Iraq for 50,000 tonnes, Syria for 100,000 tonnes of soft wheat, and Algeria issued a tender for 50,000 tonnes yesterday. Japan is seeking 49,000 tonnes of wheat for February shipment.
December Oats closed up 4 1/4 at 373. This was 4 up from the low and equal to the high.

Corn Market Recap for 11/27/2012 (CME)
December Corn finished up 12 3/4 at 760, 1/4 off the high and 13 1/2 up from the low. March Corn closed up 12 3/4 at 764. This was 13 3/4 up from the low and 1/4 off the high. March corn finished the day sharply higher seeing support from a sharply higher wheat market and on concern in regards to Argentina's corn production. Outside markets are slightly negative with crude oil and stocks trading lower while the US Dollar is stronger. The grain markets shrugged off the negative macro influences and instead chose to focus on the supportive weather factors in the market. Winter Wheat crop condition ratings fell to 33% good/excellent which is the lowest rating on record for this time of year. No relief is expected in the western plains over the next 10 days and current forecasts call for above normal temperatures for much of the Corn Belt in the coming week. Renewed fears that winter weather will fail to produce adequate precipitation to ease soil moisture deficits has added positive sentiment to the marketplace. Export demand continues to disappoint but long term supply fears are the highlight of the market at the moment. January Rice finished up 0.165 at 15.085, 0.005 off the high and equal to the low.

Drought-Parched Mississippi River Is Halting Barges (Bloomberg)
Mississippi River barge traffic is slowing as the worst drought in five decades combines with a seasonal dry period to push water levels to a near-record low, prompting shippers to seek alternatives. River vessels are cutting loads on the nation’s busiest waterway while railroads sign up new business and the U.S. Army Corps of Engineers draws criticism from lawmakers over its management of the river, which could be shut to cargo from companies including Archer-Daniels-Midland Co. (ADM) next month. “Our shippers are looking at alternate modes of transportation,” said Marty Hettel, senior manager of bulk sales for AEP River Operations, the barge unit of American Electric Power Co. (AEP), a utility owner based in Columbus, Ohio. “If you’re shipping raw materials to a steel mill in Chicago, you’re trying to figure out if you can go to Cincinnati or Louisville, Kentucky, unload it out of the barge and rail it up to the steel mill.”
The worst U.S. drought since 1956, which dried farmland from Ohio to Nebraska, will last at least through February in most areas, according to the U.S. Climate Prediction Center in College Park, Maryland. Barges on the Mississippi handle about 60 percent of the nation’s grain exports entering the Gulf of Mexico through New Orleans, as well as 22 percent of its petroleum and 20 percent of its coal.

Recap Energy Market Report (CME)
January crude oil prices experienced a choppy trading session and registered a lower low in the process. Crude oil took on a higher track during the initial morning hours, supported by a boost in risk-sentiment after EU and IMF leaders came to an agreement over Greece's debt target. However, a rebound in the US dollar and ongoing concerns over the US fiscal cliff seemed to rattle sentiment and pushed the crude oil market lower. Some traders indicated that better than expected US economic data on Durable Goods Orders and Consumer Confidence seemed to limit the downside. Expectations for this week's EIA crude stocks report are for a build in the range of 500,000 to 1.0 million barrels.

Oil Trades Near One-Week Low as U.S. Crude Stockpiles Increase (Bloomberg)
Oil traded near the lowest price in a week in New York after an industry-funded report showed rising stockpiles in the U.S., the world’s biggest crude consumer. Futures were little changed after slipping 0.6 percent yesterday. U.S. inventories gained 1.96 million barrels last week, data from the American Petroleum Institute indicated. An Energy Department report today may show supplies increased 350,000 barrels to 374.8 million, according to the median estimate of 11 analysts in a Bloomberg News survey. “Stockpiles are above two-to-three year averages, so there’s ample supply,” said Jonathan Barratt, the chief executive officer of Barratt’s Bulletin, a commodity newsletter in Sydney. “The market is still ignoring the builds. I would look at it as a seasonal adjustment, as we’re expecting winter to be cooler than last year.”
Crude for January delivery was at $87.12 a barrel, down 6 cents, in electronic trading on the New York Mercantile Exchange at 12:42 p.m. Sydney time. The contract decreased 56 cents yesterday to $87.18, the lowest since Nov. 20. Prices are down 12 percent this year. Brent for January settlement rose 3 cents to $109.90 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract was at a premium of $22.79 to West Texas Intermediate, compared with $22.69 yesterday.

Silver Market Recap Report (CME)
After making a fresh new high for the move early on, December silver sagged into and through mid session. The failure to sustain a rally attempt in US equities, adverse currency market action and US data that failed to inspire probably emboldened the bear camp in silver, especially since fears that the US will fall over the fiscal cliff are sitting just below the surface of most markets. Clearly silver was unable to benefit from residual strength in platinum and grain prices and that would seem to suggest that something financial was behind the weakness in silver today.

Gold Market Recap Report (CME)
The gold market started out a touch soft and spent most of the morning in weaker ground. However, into mid session and early afternoon, gold came under some fresh pressure perhaps because of sagging confidence in seeing a US fiscal deal but it is also possible that adverse currency market action served to undermine gold prices. Others traders suggested that options were responsible for the weakness in gold but with fresh hopes of a Greece deal in the headlines, it seemed as if gold wasn't going out of its way to find the positives today.

Gold Declines on Waning India Demand, Dollar’s Rebound (Bloomberg)
Gold fell the most in a week as physical demand from India, last year’s biggest buyer, remained slack and a rebounding dollar eroded the appeal of the metal as an alternative investment. Buying in India has “retreated,” UBS AG wrote today in a report. The U.S. Dollar Index extended gains after a report showed U.S. demand for goods such as machinery and electronics climbed in October by the most in five months. While gold rose 5.1 percent in September after the Federal Reserve announced stimulus measures to boost growth, such accommodative policies can’t be left in place forever, Fed Bank of Dallas President Richard W. Fisher said today in Berlin. “The dollar strength is working against gold,” Ronald Stoeferle, a commodity analyst at Erste Group Bank AG in Vienna, said in a telephone interview. “Also, the physical market looks quiet.”
Gold futures for December delivery fell 0.4 percent to settle at $1,742.30 an ounce at 1:44 p.m. on the Comex in New York, the biggest decline since Nov. 20. Prices dropped 0.1 percent yesterday, after reaching $1,755 on Nov. 23, the highest since Oct. 17. Holdings in gold-backed exchange-traded products rose 0.7 metric ton to a record 2,607 tons yesterday, data compiled by Bloomberg show. Silver futures for March delivery slid 0.5 percent to $34.074 an ounce in New York, after reaching $34.37, the highest since Oct. 11. On the New York Mercantile Exchange, platinum futures for January delivery rose 0.5 percent to settle at $1,618.50 an ounce. Palladium futures for December delivery climbed 1.1 percent to $668.20 an ounce.

Shanghai Ship Index Challenges 268-Year-Old London Bourse (Bloomberg)
Shanghai Shipping Exchange will introduce dry-bulk and oil-tanker indexes today in a challenge to a 268-year-old London bourse that sets freight rates covering about 75 percent of global commodity cargoes. The indexes will track China-import shipping rates using data collected from shipowners, brokers and charterers, the Shanghai exchange said in an e-mailed reply to Bloomberg News questions. The gauges will initially run on a trial basis. Derivatives, used to speculate on future rates, will be added at a later date, it said. The Shanghai bourse is introducing the gauges as China’s biggest port tries to compete with London and Singapore as a shipping-finance center. The bourse will need to overcome concerns about the use of data from operators and slumping derivatives trading to lure investors using indexes compiled by Baltic Exchange Ltd.
“They have to convince the shipping market that their data is independent and objective,” said Ralph Leszczynski, the Beijing-based head of research at shipbroker Banchero Costa & Co. “They shouldn’t create indexes that are only handy for Chinese state-owned companies.” The Shanghai exchange will take data from 23 companies for dry-bulk indexes tracking three vessel types. The oil tanker gauge, which only follows very large crude carriers, will use information from 18 companies. The exchange didn’t say which routes it will track. State-controlled companies contributing data for the indexes will include ship operators China Cosco Holdings Co. (1919) and CSC Nanjing Tanker Corp. (600087) and oil company China Petroleum & Chemical Corp. Overseas companies such as brokers Fearnleys A/S and ICAP Plc will also provide information.

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