Thursday, January 3, 2013

20130103 0933 Global Commodities Related News.

DTN Closing Grain Comments 01/02 14:28 Grains On the Defensive Again Wednesday (CME)
After a higher start to the day, grain contracts quickly collapsed as heavy investment selling hit the sector.
General Comments:
Corn closed 7 1/2 cents lower in the March and 6 3/4 cents lower in the May.
Soybeans closed 17 1/4 cents lower in the March and 15 cents lower in the May.
Wheat closed 22 3/4 cents lower in the March Chicago, 20 cents lower in the
March Kansas City, and 24 cents lower in the March Minneapolis. The U.S. dollar
index is 0.068 higher at 79.839. February gold is $12.70 higher at $1,688.50
while March silver is $0.828 higher and March copper is $.0810 higher. The Dow
Jones Industrial Average is 235 points higher at 13,339. February crude oil is
$1.04 higher at $92.86. February heating oil is $.0129 higher while February
RBOB gasoline is $.0356 higher and February natural gas is $0.114 lower.

Corn Market Recap for 1/2/2013 (CME)
March Corn finished down 7 1/2 at 690 3/4, 16 1/2 off the high and 3 up from the low. May Corn closed down 6 3/4 at 693 1/2. This was 3 up from the low and 15 1/2 off the high.
March corn trade lower into the closing bell after an initial surge higher. Weaker trade in the soybean and wheat markets helped to pressure corn. Outside markets were mostly supportive throughout the session with crude oil, copper, and stocks trading higher after Congress reached a deal on the "Fiscal Cliff". The US Dollar erased early losses and traded higher midday which added pressure to the grain complex. South American weather remains most favorable with drier conditions in Argentina this week and showers are expected in growing regions of Brazil. Traders continue to see Brazil production near 70 million tonnes, right in line with the USDA forecast but Argentina estimates remain near 22.5-23.0 million tonnes as compared with the USDA estimate of 27.50 million tonnes. More than 20% of the crop still needs to be planted in Argentina but harvest for earlier planted corn is expected to begin in about two weeks. The trade ministry in Brazil estimated December corn exports of 2.8 million tonnes vs. 3.91 in November. Corn basis in the Gulf is slightly higher but still lower from levels Monday as farmer sales come to a halt. Export demand remains sluggish.
January Rice finished down 0.105 at 14.755, equal to the high and equal to the low.

Wheat Market Recap Report (CME)
March Wheat finished down 22 3/4 at 755 1/4, 32 3/4 off the high and 2 3/4 up from the low. May Wheat closed down 21 3/4 at 766. This was 3 1/4 up from the low and 31 off the high.
Kansas City and Chicago wheat rallied on the pit open but the market saw sell pressure shortly thereafter to close down 19-20 cents on the day. The US Dollar turned higher midday which helped to pressure the grain markets. US wheat exporters are looking ahead to Iraq's 50,000 tonne option-origin tender and Syria issued a 100,000 tonne soft wheat tender overnight. The US has a chance of doing both bits of business which could be supportive to price. Kansas and Oklahoma released state crop condition ratings on Monday. Kansas was at 24% good/excellent vs. 29% last month. Poor/very poor was reported at 31%. Oklahoma was pegged at 11% good/excellent vs. 14% last month. The western plains are expected to dry out this week after seeing decent rain and snowfall last week. Conditions have not improved for most of the growing region but significant accumulation was seen in the central third of KS which will help protect crops from winterkill.
March Oats closed down 12 at 335 1/2. This was 3 1/4 up from the low and 13 off the high.

Wheat Slumps to Six-Month Low on Slowing Exports by U.S. (Bloomberg)
Wheat futures fell to a six-month low on mounting concern that export demand is slowing for supplies from the U.S., the world’s biggest shipper.
Export sales totaled 13.2 million tons from June 1 through Dec. 20, down 13 percent from the same period a year earlier, U.S. Department of Agriculture data show. While shipments jumped 55 percent in the most recent week, the most since January 2011, more gains are needed to change market sentiment, said Frank J. Cholly, a senior commodities broker at RJO Futures in Chicago. Short positions, or bets on lower prices, exceeded longs by 11,899 wheat futures and options as of Dec. 24, the most-bearish since May, government data show.
“We need a more compelling demand story to move the market higher,” Cholly said by telephone. “Buyers have to step up to the plate sooner or later. It’s cheap enough now.”
Wheat futures for March delivery fell 2.9 percent to settle at $7.5525 a bushel at 2 p.m. on the Chicago Board of Trade, the biggest decline since Dec. 11, after touching $7.525, the lowest for a most-active contract since June 29. Prices tumbled 9.9 percent in December, the biggest drop since September 2011.
Even with the decline last month, the grain ended 2012 up 19 percent for the year, and reached a four-year high of $9.4725 on July 23 as drought cut output in countries including the U.S. and Russia.
Wheat’s fourth-quarter slump makes the commodity an attractive investment because drought conditions persist in the U.S. and may affect production next year, Cholly said.
“I’d like to own wheat after this type of correction,” he said. “We don’t have any snow here, and we’re still in a drought. We planted into dry soils. If I’m an end-user, now’s a good time to be buying.”
Wheat is the fourth-largest U.S. crop, valued at $14.4 billion in 2011, behind corn, soybeans and hay, government data show.

Soybeans Slump to Six-Week Low on South America Outlook (Bloomberg)
Soybean futures fell to a six-week low on speculation that South America will harvest a record crop this year and boost exports. Corn dropped.
A unit of the U.S. Department of Agriculture said today in a report that Brazil will harvest 83 million metric tons this year, surpassing the U.S. as the world’s largest grower and exporter. Rain expected in the next two weeks may boost yields in Brazil, while dry weather in Argentina firms muddy soils for farmers to finish planting, Overland Park, Kansas-based World Weather Inc. said.
“South American weather remains very conducive for reaching current USDA crop forecasts,” Greg Grow, the director of agribusiness at Archer Financial Services Inc. in Chicago, said in a telephone interview. “Harvesting is just beginning in Brazil and will increase available supplies.”
Soybean futures for March delivery dropped 1.2 percent to close at $13.9225 a bushel at 2 p.m. on the Chicago Board of Trade. Earlier, the price touched $13.8625, the lowest for a most-active contract since Nov. 20. In 2012, the oilseed rose 17 percent after drought cut U.S. production to the lowest in four years.
In Argentina, output may jump 34 percent to a record, the USDA said on Dec. 10.
Corn futures for March delivery fell 1.1 percent to $6.9075 a bushel in Chicago. Earlier, the price touched $6.8775, the lowest since Dec. 20. Last year, the grain advanced 8 percent, the fourth straight increase.
In the U.S., corn is the biggest crop, valued at $76.5 billion in 2011, followed by soybeans at $35.8 billion, government figures show.

Sugar Climbs on Economic Outlook; Coffee, Cotton, Cocoa Rise (Bloomberg)
Sugar advanced to an almost one-month high on speculation that demand for commodities will rise after U.S. lawmakers reached a budget deal. Coffee, cotton and cocoa also gained, while orange juice fell.
The vote in the House of Representatives broke a yearlong impasse over how to avert $600 billion in tax increases and spending cuts that threatened to send the economy back into recession. The Standard & Poor’s GSCI Spot Index of 24 raw materials jumped as much as 1.6 percent.
Commodities “are going to enjoy a nice bounce after the majority of fiscal-cliff worries are now behind us,” Phil Streible, a senior commodity broker at R.J. O’Brien & Associates, said in an e-mail.
Raw sugar for March delivery climbed 0.9 percent to settle at 19.69 cents a pound at 2 p.m. on ICE Futures U.S. in New York, after touching 19.75 cents, the highest for a most-active contract since Dec. 4. Prices tumbled 16 percent last year.
Also on ICE, arabica-coffee futures for March delivery rose 3.9 percent to close at $1.494 a pound, the biggest gain since Sept. 10. Prices dropped 37 percent last year.
Cocoa futures for March delivery advanced 1 percent to close at $2,259 a metric ton in New York, capping the first increase since Dec. 14. Prices rose 6 percent last year.
Cotton futures for March delivery added 0.3 percent to settle at 75.36 cents a pound on ICE. The fiber fell 18 percent in 2012.
Orange-juice futures for March delivery slid 0.6 percent to close at $1.166 a pound in New York. Prices are down 19 percent since reaching a seven-month high on Dec. 19.
Florida “didn’t get cold,” Sterling Smith, a market specialist at Citigroup Inc. in Chicago, said in an e-mail. “The market is taking out most of the frost premium. Also, the good weather in Brazil is helping crops there, adding to the bearishness.”
Brazil is the world’s largest orange grower, followed by Florida.

Natural Gas Drops Most in 5 Weeks on Forecasts of Warmer Weather (Bloomberg)
Natural gas futures in New York tumbled the most in five weeks on forecasts of moderating temperatures that may reduce demand for the power-plant fuel.
Gas fell as much as 9 percent, the biggest intraday drop in more than three years, after Commodity Weather Group LLC said cold weather in most of the U.S. this week would give way to above-normal temperatures from Jan. 7 through Jan. 11. The low in New York on Jan. 10 may be 37 degrees Fahrenheit (3 Celsius), 10 higher than usual, AccuWeather Inc. said.
“We’re going to see some warm weather across the primary gas-consuming regions,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “As we get into the new year without signs of sustained cold weather, the fundamental picture is going to force us lower.”
Natural gas for February delivery fell 11.8 cents, or 3.5 percent, to settle at $3.233 per million British thermal units on the New York Mercantile Exchange. On a settlement basis, the drop was the biggest since Nov. 26. The intraday percentage decline was the most since Sept. 11, 2009. The futures have risen 8.2 percent from a year ago.
Trading volume was 297,874 contracts at 3:19 p.m., 3.8 percent below the 100-day average.
February $3.10 puts were the most active gas options in electronic trading. They were 3 cents higher at 6.6 cents on volume of 1,270 contracts as of 3:16 p.m. Puts accounted for 53 percent of options volume.
Gas slid to $3.05 in electronic trading, the lowest price since Sept. 26, before rebounding. A 900-contract sell order at 7:52 p.m. yesterday caused the “scary” drop, Drew Wozniak, vice president of market research and analysis at ICAP Energy LLC in Louisville, Kentucky, said in a note to clients today.

Oil Slips From Highest in Three Months on Signs Gains Excessive (Bloomberg)
Oil slid for the first time in three days in New York on speculation that its surge to the highest level in three months yesterday may have been excessive.
Futures lost as much as 0.5 percent after rallying 2.6 percent in the two days through yesterday as U.S. lawmakers passed a bill to undo automatic tax increases and spending cuts that had threatened growth in the world’s biggest oil-consuming country. Crude slipped today as a technical indicator showed futures may have risen too quickly for further gains to be sustainable, according to data compiled by Bloomberg.
“We’re getting a mild sell signal and the coincidence of those levels mean that some traders will be bailing out,” said Michael McCarthy, a chief strategist at CMC Markets in Sydney. “What we’re seeing is longs closing out, taking some profit.”
West Texas Intermediate for February delivery dropped as much as 42 cents to $92.70 a barrel in electronic trading on the New York Mercantile Exchange and was at $92.75 at 8:08 a.m. in Singapore. The contract yesterday advanced 1.4 percent to $93.12 a barrel, the highest settlement since Sept. 18. The volume for WTI oil contracts was 60 percent below the 100-day average for the time of day.
Brent for February settlement rose $1.36, or 1.2 percent, to $112.47 a barrel on the London-based ICE Futures Europe exchange yesterday. The North Sea grade advanced 3.5 percent in 2012, a fourth annual gain.
New York oil’s 14-day relative strength index rose to 68.1 yesterday, the highest level since Sept. 14. A reading above 70 is a signal to investors that price gains may have been excessive. It was 66 today.

Recap Energy Market Report (CME)
February crude oil prices trended higher throughout the early US trading hours, registering a new 2.5 month high in the process. The market drafted support on reports that US lawmakers were temporarily able to avert the fiscal cliff, and that was seen boosting risk sentiment. Early weakness in the US dollar and gains in global equity markets to start 2013 were seen benefiting the crude oil market. Some traders indicated that February crude oil challenged its 200 day moving average early on, but seemed to back track from those levels into the close.

Brent Crude Oil Market Report (CME)
February Brent crude oil prices trended higher throughout Wednesday's trading session, climbing to their highest level since October 17th. The market garnered an overnight lift on reports that US lawmakers agreed on a bill to temporarily avert the fiscal cliff. This was seen as a positive for risk-taking sentiment, boosted global equity markets and pressured the US dollar. Reports that China's manufacturing sector expanded for a third consecutive month was also seen as a positive demand force. The nearby Brent calendar spread expanded its backwardated pricing structure another nickel on the session.

Gold Reaches Two-Week High as Commodities Gain on Budget (Bloomberg)
Gold futures rose to a two-week high as commodities gained after U.S. lawmakers passed a budget accord. Palladium advanced to the costliest in 10 months, and silver jumped the most in eight weeks.
The Standard & Poor’s GSCI Spot Index of 24 raw materials gained as much as 1.6 percent after the House of Representatives approved a bill that prevents income taxes from rising for most U.S. workers. Industrial metals also jumped, while equities rallied.
“Markets reacted positively to news that a deal of sorts has been reached,” Steve Scacalossi, a New York-based vice president at TD Securities Inc., said in an e-mail.
Gold futures for February delivery rose 0.8 percent to settle at $1,688.80 an ounce at 1:38 p.m. on the Comex in New York. Earlier, the price reached $1,695.40, the highest for a most-active contract since Dec. 18. Floor trading was closed yesterday for the New Year’s holiday.
In 2012, the metal gained 7 percent, advancing for the 12th straight year, as central banks from the U.S. to China pledged more steps to bolster their economies.
President Barack Obama said he will sign the bill passed by Congress that makes the George W. Bush-era income tax cuts permanent for most workers while letting them expire for top earners.
The bipartisan vote in the House broke a yearlong impasse over how to head off $600 billion in tax increases and spending reductions that had been set to begin taking effect at the start of this year. Those measures may have triggered a recession, the Congressional Budget Office said.
Palladium futures for March delivery rose 0.7 percent to $707.95 an ounce on the New York Mercantile Exchange. Earlier, the price reached $718.85, the highest since March 2.
Silver futures for March delivery surged 2.6 percent to $31.007 an ounce on the Comex, the biggest increase since Nov. 6.
Platinum futures for April delivery gained 1.7 percent to $1,568 an ounce on the Nymex, the biggest gain since Nov. 23.

Copper Advances in New York Following U.S. Budget Accord (Bloomberg)
Industrial metals rallied to a three- month high, leading commodities higher, as a U.S. budget agreement that averted higher taxes and spending cuts brightened the outlook for demand.
The House approved a measure skirting income-tax increases for most households in the country, the world’s second-largest metals consumer. President Barack Obama said he would sign the bill into law. Global equities advanced, and lead, aluminum and nickel led gains on the Standard & Poor’s GSCI Spot Index (LMEX) of 24 raw materials. Copper rose the most in more than three months.
“This does help growth prospects, because if the tax increases went into play, it definitely would have taken a huge chunk out of gross domestic product,” Bill O’Neill, a partner at Logic Advisors in Upper Saddle River, New Jersey, said in a telephone interview. “We’re looking for improved demand this year for industrial metals.”
Copper futures for delivery in March increased 2.3 percent to settle at $3.736 a pound at 1:22 p.m. on the Comex in New York, the biggest gain since Sept. 14. China is the largest metals consumer.
On the London Metal Exchange, copper for delivery in three months climbed 3.5 percent to $8,209 a metric ton ($3.72 a pound).
The metal advanced 4.4 percent in 2012 on the LME, the third gain in four years, helped by forecasts for supply to lag demand. Copper inventories tracked by the exchange declined 14 percent in 2012, the third straight contraction.
The LMEX Index, which tracks the six primary metals on the exchange, settled at 3,581.7, the highest since Sept. 14.
Tin surged as much as 4.7 percent today, rising to the highest since February and leading gains among the London exchange’s six main metals. Lead reached $2,439 a ton, the highest since September 2011. Aluminum, zinc and nickel also increased.

Silver Market Recap Report (CME)
The silver market began the year with a significant rally, with prices climbing far above their late December trading range by the close of Wednesday's session. Some traders felt that silver has acted more as a physical commodity than as a safe-haven asset this week, so the removal of fiscal cliff anxiety is widely felt to have provided significant strength to silver prices. Other traders noted that March silver was able to climb back above its 200-day moving average, which they felt may provide additional support for the market.

Gold Market Recap Report (CME)
The gold market was able to build on overnight strength, and started out 2013 by posting sizable gains and by rallying up to a new 2-week high. Last night's approval of the fiscal cliff bill was seen by many traders to have provided a sharp early boost to global risk sentiment that lifted gold and other metals markets, although some traders felt that gold's flight-to-quality status at the end of last year may have limited further gains during today's trading. A report that India may enact additional curbs on gold imports was seen by some traders as an additional positive factor for the market. A recovery rally in the Dollar due to ongoing Euro zone anxiety was seen by other traders to have weighed on gold prices later on during today's session.

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