Wednesday, January 2, 2013

20130102 1008 Global Commodities Related News.

Grains Ring Out the Old in Quiet Fashion
By DTN/The Progressive Farmer - Mon 31 Dec 2012 15:05:00 CT
Related Keywords: Agriculture
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DTN Closing Grain Comments 12/31 14:31 (CME)
Grains Ring Out the Old in Quiet Fashion
Grain markets seemed to be slumbering throughout Monday's session, preparing
for a late night party to ring in the New Year.
General Comments:
Corn closed 4 1/4 cents higher in the March and 3 1/2 cents higher in the May. Soybeans closed 8 1/2 cents lower in the March and 10 1/4 cents lower in the May. Wheat closed 3/4 cent lower in the March Chicago, 5 cents higher in the March Kansas City, and 2 1/4 cents lower in the March Minneapolis. The U.S. dollar index is 0.098 higher at 79.776. February gold is $20.40 higher at $1,676.30 while March silver is $0.390 higher and March copper is $.0610 higher. The Dow Jones Industrial Average is 70 points higher at 13,007. February crude oil is $0.99 higher at $91.79. January heating oil is $.0003 higher while January RBOB gasoline is $.0121 higher and February natural gas is $0.119 lower.

Wheat Market Recap Report (CME)
March Wheat finished down 3/4 at 778, 2 off the high and 10 1/4 up from the low. May Wheat closed down 3/4 at 787 3/4. This was 9 3/4 up from the low and 2 1/4 off the high.
Kansas City and Chicago wheat eased lower midday but closed mixed to slightly higher on the day. Weak technical signals triggered additional fund liquidation in early trade but outside markets turned positive late in the session which added some buying support to the commodity complex. The tender lineup is very thin with Iraq's 50,000 tonne option-origin tender the only notable change. Basis in the Gulf of Mexico ended last week on a supportive tone as many believe export demand has turned the corner which could be supportive to wheat futures long term. Export Inspections were considered bearish this morning with only 7.8 million bushels shipped vs. 15.1 last week. Shipments needed each week to reach this crop years USDA estimate are 23.9 million bushels, up from 23.3 last week. Cumulative shipments are now 49% of the current USDA forecast vs. the 5 year average of 58%. Oklahoma saw around a half inch of precipitation around the panhandle in the last 24 hours but this may not have helped the depleted soil moisture conditions. Central KS could see 3-4 inches of snowfall by January 4th which would help insulate wheat crops from winterkill.
March Oats closed down 1 1/2 at 347 1/2. This was 4 1/4 up from the low and 3 1/4 off the high.

Corn Market Recap for 12/31/2012 (CME)
March Corn finished up 4 at 698, 2 off the high and 8 3/4 up from the low. May Corn closed up 4 3/4 at 701 1/2. This was 9 1/2 up from the low and 1/4 off the high.
March corn traded lower early in the session but stabilized midday to trade higher into the closing bell. Export demand remains sluggish with inspections for the week ending December 27th reported at 7.9 million bushels, down from 13.5 last week. Shipments needed each week to reach this crop years USDA export estimate are 25.2 million bushels, up from 24.8 last week. The cumulative shipment pace is now 22% of the USDA export estimate vs. the 5 year average of 31%. Ethanol data was supportive last Friday after ethanol production and corn usage increased week over week. Furthermore, The USDA Hogs and Pigs Report, released after the close Friday, showed all hogs and pigs inventory at slightly higher levels than trade estimates. The market was looking for a modest decline in the herd and breeding stock due to the summer drought and high feed costs but instead the herd size stabilized and the breeding stock actually saw a slight uptick. The data is considered supportive to corn and wheat markets long term.
January Rice finished down 0.095 at 14.86, equal to the high and equal to the low.

Brent Crude Oil Market Report (CME)
February Brent crude oil prices traded lower during the initial morning hours, falling to a new four day low in the process. Uncertainty surrounding US budget negotiations and whether leaders would be able to avert the fiscal cliff seemed to rattle risk-taking sentiment. However, better than expected Chinese Manufacturing data in December was seen as a positive demand force. Favorable headlines out of the US later in the session, that leaders might be close to a deal on the fiscal cliff, lifted Brent crude oil prices back toward their highs of the session. Additional support came on reports of bidding activity in the Brent forties market, which saw that differential gain $0.45 on the session. Meanwhile, weak refining margins and build up of Nigerian cargoes might have limited upside action in February Brent crude oil. The premium between February Brent and WTI crude oil lost a little more than $0.40 on the session and was down for the fifth consecutive day.

Oil Trades Near Two-Month High as U.S. Senate Passes Budget Bill (Bloomberg)
Oil traded near a two-month high in New York after the U.S. Senate passed a budget bill that may avert some tax increases and spending cuts that threaten economic growth in the world’s biggest crude user.
Futures were little changed after rallying 1.1 percent on Dec. 31. If passed by Congress, the Senate’s plan would spare U.S. households making less than $450,000 per year an income- tax-rate increase as part of the automatic measures that took effect yesterday. House amendments to the bill could throw a deal into doubt, forcing lawmakers to begin again when the new session starts Jan. 3.
Crude for February delivery traded at $91.69 a barrel, down 13 cents, in electronic trading on the New York Mercantile Exchange at 8:09 a.m. in Singapore. It rose $1.02 to $91.82 on Dec. 31, the highest settlement since Oct. 18. Trading was closed yesterday for the New Year holiday. Prices dropped 7.1 percent last year and 0.4 percent in the fourth quarter. They rose 3.3 percent in December.
Brent oil for February settlement rose 49 cents, or 0.4 percent, to end the session at $111.11 a barrel on the London- based ICE Futures Europe exchange on Dec. 31. Brent has advanced 3.5 percent in 2012, a fourth annual gain. It slipped 12 cents in December and 1.1 percent in the fourth quarter.

Recap Energy Market Report (CME)
February crude oil prices registered a positive outside day reversal during Monday's session and the highest close since October 18th. The market came under pressure early in the session, and fell to a new three day low, weighed down by uncertainty surrounding US budget negotiations. Traders indicated that volumes were running about half their average pace ahead of the New Year's Day holiday. As a result, mid-day comments that US leaders were making progress on a plan to avert the fiscal cliff helped lift risk-taking sentiment and powered the crude oil market higher. Some traders indicated that any deal to avert falling over the cliff would be seen as a positive demand force for crude oil.

Silver Market Recap Report (CME)
The silver acted more as a physical commodity than as a safe-haven vehicle during Monday's trading session, as prices initially stayed close to unchanged levels before finding a late surge of strength to finish with some fairly sizable gains. A better than expected reading for the Dallas Fed's Texas manufacturing survey provided little initial benefit for silver prices, as the ongoing fiscal cliff saga was seen by many traders as the key factor for the market. A late rebound in optimism that a deal can get done to avoid the fiscal cliff provided the catalyst for March silver's late rally. A report that the solar industry's silver usage during 2012 dropped by one-third from last year's levels due to high prices was seen by some traders as providing some headwinds for the silver market to overcome during today's session but clearly not enough to overcome the late boost to global market risk sentiment.

Gold Market Recap Report (CME)
The gold market went through a bumpy ride during the final trading day of 2012 but managed to hold onto early strength to finish Monday's trading session with sizable gains. Many traders felt that gold's safe-haven status was able to overcome physical commodity concerns coming into this morning's trading, as an early setback in fiscal cliff optimism failed to take prices down into negative territory. The improving outlook that a deal could get done in time gave gold prices an additional boost later in the session. News reports that a well-regarded West Coast trader feels that gold will rally during next year was seen by some traders to have given gold prices an additional measure of support as well. Other traders felt that noted amounts of end-of-quarter and end-of-year long liquidation may well have kept further gain in check during the rest of today's pre-holiday trading session.

Shipping Loses as Faster Trade Means Record Fuel Costs: Freight (Bloomberg)
Accelerating world trade means the merchant fleet will burn the most fuel oil ever in 2013, driving ship owners’ biggest cost to a record and boosting profit for Aegean Marine Petroleum Network Inc. and other suppliers.
Demand for the so-called bunker fuel will rise 2.2 percent to 3.37 million barrels a day, according to JBC Energy GmbH, a Vienna-based research company. Prices will gain by the same amount to an all-time high of $690 a metric ton, according to McQuilling Services LLC, an industry consultant based in Garden City, New York. Shares of Aegean Marine, the largest independent fuel supplier, will jump 75 percent in 12 months, according to the average of four analyst estimates compiled by Bloomberg.
While the International Monetary Fund says world trade will grow 4.5 percent this year, from 3.2 percent in 2012, that may not be enough to curb the glut of shipping capacity that means most carriers are losing money. The fleet is already the biggest on record and will expand another 5 percent in 2013, according to Clarkson Plc (CKN), the biggest shipbroker. Some vessels may sail faster as demand gains, increasing fuel use, said Erik Nikolai Stavseth, an analyst at Arctic Securities ASA in Oslo.
“If world trade speeds up, the fleet speeds up, bunkers go up and vessel supply goes up,” said Simon Newman, the London- based head of tanker research at ICAP Shipping International Ltd. “Ship owners will be the clear losers, as an oversupplied fleet will continue to make it difficult to pass on the cost.”

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