Monday, December 10, 2012

20121210 1001 Global Commodities Related News.

Speculators Cut Bullish Bets as U.S. Talks Stall: Commodities (Bloomberg)
Investors cut bullish commodity bets for the first time in three weeks as U.S. lawmakers appeared no closer to an agreement to avert more than $600 billion in automatic tax increases and spending cuts and Europe cut its growth outlook. Speculators and money managers decreased net-long positions across 18 U.S. futures and options by 3.4 percent to 898,380 contracts in the week ended Dec. 4, U.S. Commodity Futures Trading Commission data show. Gold holdings fell 25 percent, the biggest drop since March, as Goldman Sachs Group Inc. said the longest winning streak in at least nine decades will peak next year. Wheat bets fell for the second time in three weeks.
The Standard & Poor’s GSCI Spot Index of 24 raw materials tumbled 2.6 percent last week, the most since September. U.S. House Speaker John Boehner said Dec. 7 that it had been a “wasted week” in talks with President Barack Obama to avoid the so-called fiscal cliff. The European Central Bank said a day earlier that it’s now expecting a contraction instead of growth next year, and President Mario Draghi said the region won’t start to emerge from the slump until the second half of 2013. “There’s an overriding fear of the fiscal cliff,” said Jeffrey Sica, who helps oversee more than $1 billion of assets as the president and chief investment officer at Sica Wealth Management LLC in Morristown, New Jersey. “One of the main causes for the selloff is we have this incredible discrepancy regarding growth in general. Not only growth in the U.S., but also growth in Europe and Asia.”

Wheat Market Recap Report (CME)
March Wheat finished down 1 at 861, 3 3/4 off the high and 8 1/4 up from the low. May Wheat closed down 3/4 at 870 1/4. This was 8 1/2 up from the low and 3 1/2 off the high.
March Chicago and KC wheat traded slightly lower on the day but managed to hold up rather well against sharp declines in corn and soybeans. A better than expected jobs report sent the US Dollar higher but negative political rhetoric in regards to yearend tax reform kept outside markets shaky. Light rainfall moved across Illinois, Indiana, Ohio, and Pennsylvania today which should help soil conditions. The updated Drought Monitor showed dry conditions spreading east into Illinois, southern Indiana, Kentucky, and Arkansas. Extreme drought conditions are showing up in areas of the southeast and Carolinas. Good precipitation from December through April will be needed. The west remains extremely dry with little to no relief in sight. Additional downside was due to profit taking as some expect export demand could be slashed in next week's USDA report which could increase the domestic carryout significantly. Some in the trade expect a modest uptick of just over 710 million bushels vs. 704 currently.
March Oats closed down 6 3/4 at 391 1/4. This was 3 3/4 up from the low and 10 3/4 off the high.

Corn Market Recap for 12/7/2012 (CME)
March Corn finished down 14 1/4 at 737 1/4, 15 1/2 off the high and 2 1/4 up from the low. May Corn closed down 13 3/4 at 739 1/4. This was 2 1/2 up from the low and 15 off the high. March corn traded sharply lower into the closing bell following very disappointing export demand data released yesterday. Profit taking was noted and the US dollar was strong on the day which pressured the broader commodity market. Many analysts are now cutting export demand in next week's USDA report which could mean a slight uptick in the crop year carryout to just over 660 million bushels vs. current estimates of 647. This would still be the tightest carryout since 1995/96. Early support was linked to flooding in Argentina but rainfall will come to an end today. A drier trend will begin over the weekend which will help progress planting in some areas. Argentina corn planting was pegged at 55% complete vs. 69% last year.
Overall, Brazil conditions are ideal with rain and sunshine and temperatures are not expected to rise to above normal levels. January Rice finished down 0.045 at 15.265, 0.145 off the high and equal to the low.

Recap Energy Market Report (CME)
January crude oil prices trended lower throughout the US trading session and registered an inside day range in the process. Crude oil rallied to its high of the session in response to US jobs data that came in above expectations. While that seemed to bolster the case for an economic turnaround, a disappointing consumer sentiment reading and gains in the US dollar soured that early optimism. January heating oil registered a new low for the decline this morning, falling to its lowest level in more than four months. January crude oil ended the week at the lower end of the nearly $5 range and down 3.3%.

Oil Advances as China Rebound Accelerates Before OPEC Meeting (Bloomberg)
Oil rose from the lowest level in three weeks in New York after reports showed China’s economy improved last month and crude processing climbed to a record. OPEC meets in Vienna this week to discuss its production quota. Futures advanced as much as 0.3 percent after falling the past four days. China’s oil refining climbed 9.1 percent in November from a year ago to 41.6 million metric tons, the National Bureau of Statistics in Beijing said yesterday. Industrial production jumped 10.1 percent and retail sales increased 14.9 percent. The Organization of Petroleum Exporting Countries meets on Dec. 12. Saudi Arabia is content with current prices, the country’s petroleum minister said last week. “The Saudis don’t want prices to go up much from here,” Robin Mills, the head of consulting at Dubai-based Manaar Energy Consulting and Project Management, said yesterday. “Some members like Iran may want a cut in production, but the oil price is still healthy so it’s difficult for OPEC members to claim there’s oversupply.” Crude for January delivery rose as much as 25 cents to $86.18 a barrel and was at $86.12 in electronic trading on the New York Mercantile Exchange at 11:17 a.m. Sydney time. The contract slid 33 cents on Dec. 7 to $85.93, the lowest close since Nov. 15. Prices slid 3.4 percent last week and are down 13 percent this year. Brent for January settlement gained 38 cents to $107.40 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract was at a premium of $21.28 to West Texas Intermediate futures. Economists surveyed by Bloomberg forecast China’s industrial production would increase 9.8 percent and retail sales would gain 14.6 percent. The nation is the world’s biggest crude consumer after the U.S. OPEC will probably leave its group production quota of 30 million barrels a day unchanged, according to a Bloomberg News survey of 18 analysts. “The prices are fine and customers are happy,” Ali Al- Naimi, Saudi Arabia’s petroleum minister, said on Dec. 7.

Copper Has Longest Run of Weekly Gains in 10 Months (Bloomberg)
Copper futures rose, capping the longest run of weekly advances in 10 months, as U.S. payrolls gained more than projected, boosting economic optimism and signaling more metal demand. Employment climbed by 146,000 in November, topping the 85,000 median estimate in a Bloomberg survey of economists, a government report showed today. The unemployment rate fell to the lowest in almost four years. Copper also rose as analysts forecast industrial output will accelerate in China, the world’s top consumer of base metals. “Markets are moving in reaction to the jobs report, and the idea is that we’re finally in the mind-set that things are going to get better” for the economy, Frank Cholly, a senior commodity broker at RJO Futures in Chicago, said in a telephone interview. “There are also signs of growth out of China.”
Copper futures for March delivery rose 0.5 percent to settle at $3.663 a pound at 1:21 p.m. on the Comex in New York. This week, the price advanced 0.4 percent, the fourth straight gain and the longest rally since Feb. 3. The U.S. is the second- biggest consumer of the metal. Chinese industrial-production growth probably accelerated for the third straight month in November to 9.8 percent from a year earlier, while retail sales probably rose more than 14 percent, the most since March, according to median estimates in Bloomberg News surveys before data due on Dec. 9. On the London Metal Exchange, copper for delivery in three months climbed 0.4 percent to $8,035 a metric ton ($3.64 a pound). Aluminum, zinc, nickel and lead rose, and tin declined.

Silver Market Recap Report (CME)
The March silver contract forged an outside day up but the upside action was limited and it wasn't sustained. Silver was buffeted by the ebb and flow fiscal cliff sentiment throughout the session, but silver was generally lifted off the flow of US scheduled data. As suggested in the gold coverage today, a nearing to the end of the Lame Duck Congress on December 14th could serve to increase the volatility in the coming week in silver and other physical commodity markets. All things considered silver should have cheered the flow of US data as that at least partially countervails the new found slowing fears in Europe.

Gold Market Recap Report (CME)
A huge range today in gold shows a market that remains in the crosshairs of a number of technical and fundamental crossroads. Clearly gold was undermined into the payroll reports but clearly gold was lifted in the wake of better than expected US scheduled data flows. However, gold and other physical commodity markets weren't able to embrace a full on "risk-on" environment, perhaps because negative talk from the Fiscal cliff battle countervailed the positives from the jobs sector. In fact, considering the potential negative drag from the east coast storm, one might suggest that the US economy is holding together despite major negative influences. With February gold at the low today, sitting as much as $116 an ounce below the October highs, any clearing of the fiscal cliff cloud ahead, could be seen as a powerful bullish tonic for gold and other physical commodity markets. On the other hand, a nearing of the end of the lame duck congressional session, could serve to increase the volatility in both directions next week.

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