Friday, January 4, 2013

20130104 0933 Global Commodities Related News.

Calpers Commodity Holdings Fell 55% in October to $1.564 Billion (Bloomberg)
Commodity holdings by the California Public Employees’ Retirement System, the largest U.S. pension fund, tumbled by 55 percent in October, according to the most- recent data available.
The fund held $1.564 billion in commodities as of Oct. 31, or 0.6 percent of the total fund assets listed at $242.749 billion, according to a monthly report released Dec. 10. That’s down from $3.45 billion in raw materials as of Sept. 30, or 1.4 percent of total assets of $243.227 billion, according report released Nov. 13.
The figures for the period through Nov. 30 will be released at the fund board meeting this month, a Calpers press spokesman said today in an e-mail, adding that Calpers doesn’t have any further comment on its commodity holdings. The board meeting will be Jan. 14 through Jan. 16, according to Calpers’ website.

Wheat Rises for First Time This Week on U.S. Plains Dry Weather (Bloomberg)
Wheat rose for the first time this week as drought persists in the U.S. southern Great Plains, where winter varieties have gone dormant.
Snow that fell across the Midwest last week did little to help parched soil recover from the worst drought since the Dust Bowl of the 1930s. Parched conditions grip 61 percent of the 48 contiguous U.S. states, according to the U.S. Drought Monitor in Lincoln, Nebraska. Fund managers in the week through Dec. 25 were net-short 11,899 contracts, the most in seven months, Commodity Futures Trading Commission data show.
“We have some dry conditions out here,” Tom Leffler, the owner of Leffler Commodities LLC in Augusta, Kansas, said by telephone. “And we’re oversold. The funds pushed things up too high and now they’ve pushed too low.”
Wheat futures for March delivery gained 0.7 percent to $7.6075 a bushel at 10:15 a.m. on the Chicago Board of Trade. The price increased 19 percent in 2012, the best performer on the Standard & Poor’s GSCI Index of 24 commodities, partly because of concern about dry weather in the U.S., Russia and Australia, last year’s biggest exporters of the grain.
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.

Wheat Market Recap Report (CME)
March Wheat finished up 1/4 at 755 1/2, 5 3/4 off the high and 5 3/4 up from the low. May Wheat closed down 1 1/4 at 764 3/4. This was 4 up from the low and 6 3/4 off the high.
KC and Chicago wheat saw modest gains for most of the day but sell pressure into the closing bell forced wheat lower on the day. Technical short covering following yesterday's sharp losses was prevalent early on but a sharply higher US Dollar limited gains throughout the day. Bearish demand headlines hit the wheat market this morning with Egypt suggesting that they have enough wheat supplies to last until June 17th. The head buyer expects their local wheat purchases this year to rise to 4 million tonnes vs. 3.7 last year. Wheat imports for this fiscal year in Egypt are expected to decline to 3.8 million tonnes, down 1 million tonnes from earlier estimates. The head buyer was quoted as saying the decline in imports is due to the expected increase in domestic purchases rather than then their currency devaluation which weakens their purchasing power. Furthermore, wires reported that an optional-origin wheat sale to Syria from earlier this year is being switched from a Black Sea origin to France. This will be the first cargo of wheat from France, destined for Syria, this season. Dry conditions in the western plains continue to support Kansas City futures against Chicago but better snowfall over the last couple of weeks has help conditions in some areas.
March Oats closed up 2 1/4 at 337 3/4. This was 7 up from the low and 2 1/2 off the high.

Corn Market Recap for 1/3/2013
March Corn finished down 1 1/2 at 689 1/4, 5 1/2 off the high and 4 1/4 up from the low. May Corn closed down 2 1/2 at 691. This was 3 1/4 up from the low and 6 off the high.
March corn ended lower into the closing bell on technical sell pressure and a stronger US Dollar. Calendar spreads were firm which supported a positive trade early on but losses in the soybean market spilled over to corn. Equity markets turned negative late today after FOMC minutes suggested that Fed officials are skeptical about how long their loose monetary policy would last which sent the US Dollar sharply higher. Argentina crop conditions remain mostly favorable despite an abundance of moisture early in the crop year. A dry period will extend into the end of this week but rainfall is set to return early next week which may slow field work. Brazil conditions remain in good shape with the exception of northeastern Brazil which needs rainfall soon. The trade is looking ahead to next week's USDA report with many expecting bullish implications if harvested acreage is slashed. Offsetting the bullish tilt is thoughts that planted acreage next year could hit record levels which would force corn prices dramatically lower if favorable yields are realized.
January Rice finished up 0.025 at 14.78, equal to the high and equal to the low.

Recap Energy Market Report (CME)
February crude oil prices experienced a choppy trading session and registered an inside day trading range. The market came under selling pressure early in the trading session from a combination of profit-taking and weakness in outside market sentiment. The tone of the market changed in favor of higher prices following US private sector hiring data that came in better than expected. Headlines suggesting that the Seaway pipeline expansion effort was on track for next week helped to pressure Brent crude oil relative to West Texas Intermediate. The market turned lower in late afternoon trade following the latest FOMC meeting minutes that indicated that further Treasury purchases could conclude by the end of the year. Meanwhile, expectations for this week's EIA inventory data call for a draw in crude stocks in the range of 750,000 barrels last week.

Brent Crude Oil Market Report (CME)
February Brent crude oil prices spent the entire session in negative territory but were contained inside of yesterday's trading range. While some of the weakness in Brent crude oil was attributed to a decline in macroeconomic sentiment, it is also possible that reports of the Seaway expansion effort on track for next week was a force pulling some of the demand away from Brent in favor of West Texas Intermediate. Prospects of more crude oil flowing from Cushing Oklahoma to the US gulf coast is also seen as a factor causing Brent crude oil to lose some of its premium relative to WTI. Meanwhile, the cash market trade showed firm demand for Brent forties, with bids at dated Brent plus $1.25, which put it at its highest valuation in ten months.

Oil Slips a Second Day in New York on U.S. Jobless Claims (Bloomberg)
Oil slipped for a second day in New York as more Americans than forecast filed applications for unemployment benefits last week and on concern that new budget legislation won’t reduce the deficit fast enough.
Prices dropped as much as 0.2 percent after the Labor Department yesterday said jobless claims rose 10,000 to 372,000. President Barack Obama signed the budget measure into law yesterday to undo automatic tax increases and spending cuts. Oil supplies fell to a two-month low, a Bloomberg survey of analysts showed before a government report today.
West Texas Intermediate for February delivery fell as much as 18 cents to $92.74 a barrel on the New York Mercantile Exchange and was at $92.79 at 8:02 a.m. in Singapore. Futures closed 20 cents lower yesterday after climbing to $93.12 a barrel Jan. 2, the highest settlement for a contract nearest to expiration since Sept. 18.
Brent for February settlement slid 33 cents, or 0.3 percent, to $112.14 a barrel on the London-based ICE Futures Europe exchange yesterday. The North Sea crude was $19.22 a barrel more than WTI. Trading volume in WTI was 68 percent below the 100-day average, while Brent was 1.1 percent below.
Prices trimmed losses yesterday after the American Petroleum Institute reported inventories dropped 12 million barrels last week to 358.5 million. The Energy Department is scheduled to release its weekly report two days later than usual this week because of the New Year’s holiday.
Oil stockpiles fell by 1 million barrels to 370.1 million in the seven days ended Dec. 28, according to the median of 10 analyst estimates. That would be a third weekly decline and the sixth drop in seven weeks.

Gold Seen Rallying From Worst Streak in Three Years: Commodities (Bloomberg)
Gold traders expect prices to rebound from the longest weekly losing streak in three years as mounting concern that U.S. lawmakers are doing too little to control the budget deficit spurs demand for a protection of wealth.
Twenty analysts surveyed by Bloomberg expect prices to rise next week, five were bearish and a further two were neutral. While hedge funds cut bullish bets to a four-month low last week as prices slid for a fifth week, investors are holding a near- record amount in gold-backed exchange-traded products that are now valued at $141.9 billion, data compiled by Bloomberg show.
Bullion is in its longest run of annual gains in at least nine decades as U.S. lawmakers this week passed legislation that prevented tax increases for most workers and delayed spending cuts by two months. The International Monetary Fund says the country’s debt ceiling ought to be raised “expeditiously.” While Credit Suisse Group AG yesterday said gold will average the most ever this year, it joined Goldman Sachs Group Inc. in predicting the 12-year bull market will probably peak in 2013.
“Euphoria over the fiscal-cliff avoidance could be short lived as all problems are not solved yet,” said Frederique Dubrion, the Geneva-based president and chief investment officer of Blue Star Advisors SA, which manages metals and energy assets. “There’s still a huge amount of debt. Gold is nobody’s liability, it’s the ultimate alternative currency.”

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