Wednesday, January 16, 2013

20130116 1002 Global Commodities Related News.


Wheat Market Recap Report (CME)
March Wheat finished up 15 3/4 at 782 3/4, 7 off the high and 16 1/4 up from the low. May Wheat closed up 17 1/2 at 791. This was 17 1/2 up from the low and 7 1/4 off the high.
KC and Chicago wheat traded sharply higher on the day. Short covering and technical buying helped to support the move higher. Wheat saw significant gains on corn as some suggested wheat's premium to corn had narrowed too much given the likely increases in feed wheat usage going forward. Export demand remains weak despite Chicago wheat's competitive price structure in the world market. Syria and Algeria have tendered for soft wheat and many expect the US to be active in each tender. A tightening global supply outlook caused by less than ideal weather conditions has added optimism that the US will begin to sell a greater share of world export business. Recent sales to Egypt by the US has been supportive but as a whole, total sales and shipments continue to lag the pace needed to reach this crop years USDA export estimate. Active rainfall patterns east of Missouri have helped improve soil moisture levels but conditions in the west remain too dry. Much of the snowfall has melted in areas of the western plains which is raising concern that wheat could be subject to winterkill if temperatures plummet.
March Oats closed up 2 1/2 at 356 1/2. This was 5 up from the low and 4 1/4 off the high.

Corn Market Recap for 1/15/2013 (CME)
March Corn finished up 6 1/2 at 730 1/2, 4 off the high and 8 1/2 up from the low. May Corn closed up 7 3/4 at 730 3/4. This was 9 3/4 up from the low and 3 off the high.
March corn traded higher on the day as with support coming from active bull spreads and a firm interior basis. A slightly drier forecast for areas of Argentina and Southern Brazil continue to add support but many are still positive in the aftermath of last Friday's USDA report that showed a small than expected December 1st stocks and 2012/13 ending stocks estimate. Feed and ethanol demand continue to be supportive demand features but exports have shown no signs of improvement this year which could limit gains in the short term. Taiwan was in for corn overnight seeking US, Argentina, and Brazil origins. Argentina's Agriculture of Ministry reported midday that they expect the 2012/13 corn harvest to come in between 28-30 million tonnes, up from prior estimates of 24.5 and against the current USDA estimate of 28 million tonnes. Argentina began the year with too much rainfall which delayed planting but a shift to more favorable conditions in December has likely benefited the crop production outlook.

Corn Futures Record Longest Rally in a Year; Wheat Gains (Bloomberg)
Corn futures rose, capping for the longest rally in a year, as dry weather depletes soil moisture and increases crop stress in South America, boosting demand for shrinking U.S. supplies. Wheat also advanced, and soybeans fell.
Parts of Argentina, Paraguay and southern Brazil will have dry conditions in the next 10 days, Mike Tannura, the president of T-Storm Weather LLC in Chicago, said in a telephone interview. Rain will be needed by late January to prevent crop damage after parts of Brazil and Argentina got less than 60 percent of normal rain since Dec. 1, he said.
“South American weather is less than ideal for big crops,” Jerry Gidel, the chief feed-grain analyst at Rice Dairy LLC in Chicago, said in a telephone interview. “If it’s still dry at the start of February, there could be some real yield losses.”
Corn futures for March delivery rose 0.9 percent to close at $7.305 a bushel at 2 p.m. on the Chicago Board of Trade. The price climbed for the seventh straight session, the longest rally since Dec. 28, 2011. Earlier, the grain reached $7.345, the highest for a most-active contract since Dec. 17.
Inventories of corn as of Dec. 1 fell to the lowest in nine years for that date, the U.S. Department of Agriculture said on Jan. 11. The grain surged to a record $8.49 on Aug. 10 after the worst drought since the 1930s reduced Midwest production.
Wheat futures for March delivery jumped 2.1 percent to $7.8275 a bushel in Chicago. The price rose for the third straight session, the longest rally since Nov. 28, as drought and cold threatened U.S. winter plants.
Temperatures may fall as low as minus 10 Fahrenheit (minus 23 Celsius) as far south as Kansas and Illinois, increasing risk for damage to crops without a blanket of snow protection, Tannura of T-Storm Weather said. The U.S. Drought Monitor showed severe to exceptional drought conditions on 86 percent of the six-state Great Plains region as of Jan. 8.
Soybean futures for March delivery fell 0.3 percent to $14.135 a bushel. Earlier, the oilseed reached $14.3625, the highest since Dec. 26.

Brent Crude Oil Market Report (CME)
March Brent crude oil grinded lower throughout the session and encountered a late day selling spree that took prices below the $110.00 level. The outside market tone seemed to be under pressure throughout the session, first by weaker than expected Q4 growth data out of Germany, then a sell off in European equity markets. It seemed that Brent crude oil came under added pressure on prospects for a near term boost in supply, highlighted by a third cargo being added to the February loading schedule. Some traders also noted a near term boost in North Sea Forties supply coming from strong output in the Buzzard oil field. The added weakness in March Brent crude oil, relative to March WTI, tightened that spread differential below the $16.00. February Brent crude oil expires during Wednesday's session.

Oil Trades Near One-Week Low as U.S. Crude Inventories Increase (Bloomberg)
Oil traded near the lowest level in almost a week in New York after U.S. crude stockpiles increased and a gauge of New York-area manufacturing contracted for a sixth consecutive month.
Futures were little changed after slipping the most in almost a month yesterday. U.S. crude supplies gained a second week and inventories at Cushing, the delivery point for West Texas Intermediate, rose to a record, data from the industry- funded American Petroleum Institute showed. An Energy Department report today may show stockpiles climbed 2.2 million barrels, according to a Bloomberg News survey. The Federal Reserve Bank of New York’s general economic index fell to minus 7.8 this month from a revised minus 7.3 in December.
Crude for February delivery was at $93.44 a barrel, up 16 cents, in electronic trading on the New York Mercantile Exchange at 10:58 a.m. Sydney time. The contract declined 86 cents to $93.28 yesterday, the lowest close since Jan. 9. Prices dropped 7.1 percent last year.
Brent for February settlement, which expires today, fell $1.58 to $110.30 a barrel on the London-based ICE Futures Europe exchange yesterday. The more active March contract slid $1.32 to $109.63. The front-month European benchmark contract closed at a premium of $17.02 to West Texas Intermediate futures, the narrowest spread since Sept. 19.
Total U.S. crude stockpiles rose 46,000 barrels last week, according to the API. Supplies at Cushing increased 1.8 million barrels, a sixth weekly gain, to a record 51.8 million.
U.S. gasoline supplies rose 4.1 million barrels, the API said. They are projected to gain by 2.7 million in the Energy Department report, according to the median estimate of 11 analysts. Distillate inventories, a category that includes heating oil and diesel, fell 568,000 barrels, compared with a forecast 1.5 million barrel gain in the survey.

Platinum Advances to Three-Month High on Production Cuts (Bloomberg)
Platinum surged to a three-month high, exceeding the price of gold for the first time since April, after the world’s largest producer said it will cut production. Palladium reached a 10-month high and gold rose.
Anglo American Platinum Ltd. (AMS) said today it will idle four shafts in South Africa, cutting output by 400,000 ounces a year, after a review of its operations. The reduction is equal to almost 7 percent of total global production. The metal is mainly used in pollution-control devices in cars and in jewelry, and Barclays Plc estimated last month that supply will fall short of demand by 38,000 ounces this year.
“There is a rush to buy platinum as today’s news means that the market will be pushed further into deficit,” Adam Klopfenstein, a senior market strategist at Archer Financial Services Inc. in Chicago, said in a telephone interview. “We are seeing strength in other precious metals as well.”
Platinum futures for April delivery climbed 1.9 percent to settle at $1,689.90 an ounce at 1:15 p.m. on the New York Mercantile Exchange after touching $1,706.80, the highest for a most-active contract since Oct. 9. The precious metal has gained 9.6 percent this month, compared with last year’s 9.8 percent advance.
An ounce of gold bought as little as 0.99 ounce of platinum in London earlier today, compared with about 1.16 ounces in August, data compiled by Bloomberg show.
Palladium futures for March delivery added 1.4 percent to $713.35 on the Nymex, after reaching $725, the highest since Feb. 29.

Silver Market Recap Report (CME)
March silver prices rose back within striking distance of the 2013 highs today. Some think that most of silver's upside action is coming from outside market pressures, while others think that silver is just as undervalued as gold and platinum in the face of revived inflationary hopes, ongoing US easing and another round of pathetic Washington antics looming directly ahead. While silver isn't seeing as direct of a threat to its supply as either gold or platinum, that situation is probably lending silver some support.

Gold Market Recap Report (CME)
Gold prices started out strong, fell back ahead of mid session and then returned to the highs of the day in the early afternoon action. Many traders think that gold was primarily lifted in the wake of renewed assurances that the US Fed was going to continue to support the economy while others think that the approach of another significant Washington fiscal battle is sparking increased safe haven interest in the precious metals markets. To a certain degree some of the ongoing gains in gold, platinum and silver prices are probably the result of evidence of severe turmoil in certain areas of the South African mining sector!

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