Thursday, December 20, 2012

20121220 1010 Global Commodities Related News.

IntercontinentalExchange Said in Merger Talks With NYSE Euronext (Bloomberg)
IntercontinentalExchange Inc., the energy and commodity futures venue that was part of a hostile bid for NYSE Euronext (NYX) last year, now is in talks to acquire the New York Stock Exchange owner, according to a person with direct knowledge of the matter.
The cash-and-stock proposal may be announced as soon as this week, said the person, who declined to be identified because the talks are private. NYSE Euronext shares rose in late New York trading after the Wall Street Journal reported the negotiations earlier.
Combining the owners of the biggest American stock exchange and the second-largest futures market may revive the wave of exchange takeover offers from 2011, almost all of which failed. ICE’s joint bid with Nasdaq OMX Group Inc. to acquire NYSE was rejected by the U.S. Justice Department on concern the combination would dominate U.S. stock listings.
“This is a much easier deal to get done,” said Brian Barish, who helps oversee about $7 billion including about 4 million NYSE Euronext shares as president and chief investment officer of Denver-based Cambiar Investors LLC. “When Nasdaq was talking about doing something with NYSE, there were obvious antitrust market concentration problems. ICE is a totally different story because they don’t do equities.”
Atlanta-based ICE, its shares up 6.4 percent this year, has a market value of $9.3 billion, according to data compiled by Bloomberg. NYSE Euronext, whose stock fell 7.9 percent in 2012, has a capitalization of $5.8 billion. NYSE Euronext closed at $24.05 earlier and rose as much as 29 percent to $31 in trading after U.S. exchanges closed.

U.S. House Panel to Try Again With Full Agriculture Bill in 2013 (Bloomberg)
The House Agriculture Committee will go back to the drawing board on the farm bill in the next Congress, after unsuccessful efforts to include the legislation in any deal to avert more than $600 billion in tax increases and spending cuts set to trigger on Jan. 1.
“I see no reason to delay,” the committee’s chairman, Frank Lucas, an Oklahoma Republican, told reporters today.
Representative Collin Peterson of Minnesota, the committee’s top Democrat, said the panel probably will begin consideration of the bill, designed to set farm policy for five years, on Feb. 27. The old law expired Sept. 30. “What else are we going to do? we have no other choice,” Peterson said.
Some farm-state lawmakers had been talking about trying to get the agriculture bill included in a larger deal to avert the tax increases and spending cuts that have been labeled the fiscal cliff. With time running out, and facing opposition from House Speaker John Boehner, Republican of Ohio, the conversation has changed.
Instead, House leaders are considering doing an extension of the bill, according to a Republican leadership aide. Details on what that might look like haven’t been revealed.
Lucas said he ordered committee staff months ago to draft a “buffet of legislation” as a contingency for just such a scenario.

DTN Closing Grain Comments 12/19 14:26 Beans, Corn Fall Hard Again Wednesday (CME)
The soy complex and corn market continue to struggle to find buying interest as contracts fall through technical price support levels.
By Darin Newsom DTN Senior Analyst

General Comments:
Corn closed 17 cents lower in the March and 16 3/4 lower in the May.
Soybeans closed 29 cents lower in the January and 29 1/2 cents lower in the
March. Wheat closed 5 1/2 cents lower in the March Chicago, 2 1/2 cents lower
in the March Kansas City, and 6 cents lower in the March Minneapolis. The U.S.
dollar index is 0.076 lower at 79.283. February gold is $0.90 lower at
$1,669.80 while March silver is $0.509 lower and March copper is $.0495 lower.
The Dow Jones Industrial Average is 69 points lower at 13,280. January crude
oil is $1.58 higher at $89.51. January heating oil is $.0390 higher while
January RBOB gasoline is $.0527 higher and January natural gas is $0.094 lower.

Wheat Market Recap Report (CME)
March Wheat finished down 5 1/2 at 805 3/4, 17 off the high and 3 3/4 up from the low. May Wheat closed down 5 3/4 at 817 1/4. This was 3 3/4 up from the low and 16 1/2 off the high.
March Chicago and KC wheat traded lower on the day but held up rather well against sharp declines in the corn and soybean markets. The USDA reported that US exporters sold 180,000 tonnes of Soft Red Winter wheat to Egypt overnight. Furthermore, the USDA reported that US exporters sold 110,000 tonnes of KC hard red winter wheat to private Egyptian buyers. Both were seen as signs of increased demand for the broader wheat market which has been expected for some time now. Newswires also reported that Syria bought 100,000 tonnes of soft wheat overnight and it's expected to be sourced from the Black Sea. The missed business was shrugged off amid the positive sales by the US to Egypt. The NOAA 6-10 and 8-14 day precipitation outlooks show a better chance of rainfall for the eastern Corn Belt and above average precipitation for the southeast. Morning maps show snowfall and rain inching towards eastern Colorado and light showers are moving across central Kansas and the panhandle of Oklahoma this morning. Accumulation is expected to be light. A private grain analyst released updated 2013 winter wheat planting estimates and pegged planting at 42.198 million acres vs. prior estimates of 42.5. The decline in acres is likely due to the drought conditions in the western plains.
March Oats closed down 5 1/4 at 375 1/4. This was 1/4 up from the low and 8 1/4 off the high.

Corn Market Recap for 12/19/2012 (CME)
March Corn finished down 17 at 703, 20 off the high and 1 1/2 up from the low. May Corn closed down 16 3/4 at 707. This was 1 1/2 up from the low and 19 1/2 off the high.
March corn traded sharply lower and hit its lowest level in 5 months following another week of disappointing ethanol data. Ethanol production for the week ending December 14th averaged 822,000 barrels per day, down 0.24% from last week and down 12.8% vs. last year. Total Ethanol production for the week was 5.75 million barrels. Corn used in last week's production is estimated at 86.3 million bushels, down 210,000 bushels for the week. This crop year's cumulative corn used for ethanol production is 1.3 billion bushels. Corn use needs to average 86.6 million bushels per week to meet this crop year's USDA estimate of 4.5 billion bushels. Stocks as of December 14th were 20.8 million barrels, up 4.04% vs. last week and up 17.9% vs. last year. Imports surged higher to 2.59 million barrels, up 1.75 million on the week. Momentum was added to the downside after a private analyst released 2013 corn planting estimates that showed corn planting at just over 99 million acres from their previous forecast of 97.7 and against 96.9 in 2012/13. Wet weather in Argentina is seen as supportive factor in the corn market but the weak ethanol data along with the sluggish export pace favored the bear camp.
January Rice finished up 0.04 at 15.195, equal to the high and 0.025 up from the low.

Wheat Falls as Precipitation May Boost Crops in U.S. Plains (Bloomberg)
Wheat fell, heading for its biggest monthly decline in more than a year, on speculation that rain and snow in the U.S. Great Plains and Midwest will boost prospects for crops that are dormant for the winter.
Snow is expected in the southern Plains, where hard-red winter wheat is grown, and precipitation may fall as a winter storm covers most of Iowa, Nebraska and northwestern Missouri, forecaster DTN said in a report today. Concern that crops would be damaged by the worst U.S. drought since 1956 had helped send wheat prices up as much as 51 percent since mid-June.
“We’re getting some rain and some snow in areas that needed it,” Jon Marcus, the president of Lakefront Futures and Options LLC in Chicago, said by telephone.
Wheat futures for March delivery fell 0.7 percent to settle at $8.0575 a bushel at 2 p.m. on the Chicago Board of Trade. The price is down 6.7 percent since Nov. 30, heading for the biggest monthly slump since September 2011, on speculation that global stockpiles won’t fall as much as expected.
In the U.S., wheat is the fourth-largest crop, valued at $14.4 billion in 2011, behind corn, soybeans and hay, government data show.

Corn Falls to 11-Week Low on Slowing Demand; Soybeans Decline(Bloomberg)
Corn fell to the an 11-week low after the government said production of ethanol fell and inventories rose last week. Soybeans declined for a third time this week as rains aid crops in Brazil.
Production of ethanol in the U.S., mostly from corn, fell 13 percent in the week ended Dec. 14 from a year earlier, the Department of Energy said in a weekly report. About 42% of this year’s crop will be used to make ethanol, according to the U.S. Department of Agriculture. Stockpiles rose 4 percent last week from a year earlier to the highest since June. Ethanol producers are losing as much as 25 cents a gallon producing the fuel, according to Northstar Commodity Investments Inc.
“Ethanol production is slowing and inventories are still rising, a negative combination,” Mark Schultz, the chief analyst for Minneapolis-based Northstar, said in a telephone interview. “Corn demand is slowing.”
Corn futures for March delivery declined 1.5 percent to $7.09 a bushel at 11:20 a.m. on the Chicago Board of Trade, after touching $7.0575, the lowest since Sept. 28. The price through yesterday gained 11 percent this year after drought cut U.S. production 13 percent to a six-year low. The grain reached a record $8.49 on Aug. 10.
Soybean futures for March delivery dropped 1.1 percent to $14.4425 a bushel, heading for the first three-day decline since Nov. 12. Earlier, the oilseed touched $14.4225, the lowest since Dec. 4. Most-active futures through yesterday gained 21 percent this year after a drought in the U.S. triggered concern that supplies will fall short of growing demand from China.
Rain may boost Brazilian soybean production to 81.5 million metric tons in the marketing year that begins Feb. 1, up from 81.3 million forecast in November and 67.7 million harvested this year, the soybean processors group Abiove said today. The USDA predicts Brazil will surpass the U.S. as the top producer and exporter of the crop.

Recap Energy Market Report (CME)
February crude oil trended higher throughout the session, climbing to a new 12 day high in the process. Early support for the crude oil market came from gains in global equity markets and weakness in the US dollar. A better than expected read on German business sentiment, as well as hopes that US lawmakers might be getting closer to a budget deal offered support. This morning's EIA inventory report was a mixed bag, with crude oil stocks falling by a slightly smaller than expected amount of 964,000 barrels. Meanwhile, imports were a little lower than the prior week and the refinery operating rate was up 1.1% to 91.50%. EIA distillate stocks showed an unexpected draw last week of 1.085 million barrels. The entire complex traded higher after the report, led by gains in the crude oil market.

Oil Drops From Two-Month High as U.S. Budget Talks Deteriorate(Bloomberg)
Oil fell from the highest level in two months amid speculation its four-day gain was exaggerated as budget negotiations deteriorated in the U.S., threatening the economy of the world’s biggest crude user.
West Texas Intermediate futures slid as much as 0.4 percent, snapping the longest winning streak since September. President Barack Obama would veto House Speaker John Boehner’s budget proposal as it would put “too big a burden on the middle class,” according to White House Communications Director Dan Pfeiffer. Oil climbed 1.8 percent yesterday after the Energy Department said U.S. crude stockpiles declined and refinery rates rose to the highest since August.
Crude for February delivery slid as much as 39 cents to $89.59 a barrel and was at $89.64 in electronic trading on the New York Mercantile Exchange at 10:58 a.m. Sydney time. The January contract, which expired yesterday, rose $1.58 to $89.51, the highest settlement since Oct. 19. Front-month prices are down 9.3 percent this year.
Brent for February settlement climbed $1.52 to $110.36 a barrel on the London-based ICE Futures Europe exchange yesterday. Prices are up 2.8 percent this year. The European benchmark contract closed at a premium of $20.38 to WTI.
Oil is dropping in New York after reaching technical resistance at the upper Bollinger Band, according to data compiled by Bloomberg. Futures halted rallies from mid-July to mid-September and in early December near this indicator, around $89.96 a barrel today. Sell orders tend to be clustered near chart-resistance levels.

Silver Market Recap Report (CME)
The silver market fell down in another slide that ultimately resulted in a lower low for the move. Some players suggested that the March silver contract was gunning for the 200 day moving average down at $30.995 and others simply think that physical commodities are out of favor perhaps until the US fiscal cliff thing is out of the way. In short, supportive currency market action, sharp gains in energy prices and residual hope that the two sides were moving closer together was of little importance to would-be silver buyers today.

Gold Market Recap Report (CME)
In retrospect, February gold spent a lot of time waffling around unchanged levels but at times the market did return to the vicinity of the prior session's lows. Perhaps some players were simply defeated in the wake of the downward bias on the charts and perhaps others were simply discouraged because of gold recent lack of benefit from supportive outside market action. Even scheduled US data today was confusing as the data might have been softer than some expectations. The bulls probably need some significant improvement in global macro economic sentiment or perhaps a serious flight to quality event to regain control as recently potential bullish developments haven't been given much attention.

Gold Near Lowest Since August as U.S. Impasse Counters Holdings(Bloomberg)
Gold traded near the lowest level since August as an impasse in U.S. budget talks helped to boost the dollar, countering investor holdings in exchange-traded products at an all-time high.
Spot gold was little changed at $1,667.95 an ounce at 9:34 a.m. in Singapore after dropping 0.2 percent yesterday and falling to $1,661.10 on Dec. 18, the lowest level since Aug. 31 on signs of progress in the U.S. negotiations. Gold for February delivery rose 0.1 percent to $1,670.10 an ounce on the Comex.
Officials in President Barack Obama’s administration told leaders of business and financial-services groups that talks with House Speaker John Boehner have deteriorated in the past 24 hours, a person familiar with the meeting said. Lawmakers are negotiating to avert more than $600 billion in automatic tax rises and spending cuts set to start in January, known as the fiscal cliff. The Dollar Index snapped a four-day decline.
“We’ve had a few violent moves towards the downside,” said Jonathan Barratt, chief executive officer of Barratt’s Bulletin, a commodity newsletter in Sydney. “Looking into 2013, we still feel confident about prices eventually moving higher,” he said, citing prospects for increased ETP demand, central-bank buying and a weaker dollar next year.
Holdings in ETPs climbed 12 percent this year to 2,631.794 metric tons yesterday, data compiled by Bloomberg show. Bullion has advanced 6.8 percent this year, set for a 12th annual gain, as central banks around the world added to stimulus.
Cash silver climbed as much as 0.5 percent to $31.20 an ounce, and was at $31.16. The metal, which has risen 12 percent this year, fell to $30.9825 yesterday, the cheapest since Nov. 5. Palladium slipped 0.3 percent to $693 an ounce.
Spot platinum was little changed at $1,590 an ounce, after falling for the past three days. The best performing precious metal this year, up 13.5 percent, reached a two-week low of $1,584 earlier today.

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