Friday, January 18, 2013
20130118 0930 Global Commodities Related News.
Wheat Market Recap Report (CME)
March Wheat finished down 3 3/4 at 781 1/4, 8 1/4 off the high and 5 1/4 up from the low. May Wheat closed down 4 at 789 3/4. This was 4 3/4 up from the low and 8 off the high.
KC and Chicago wheat traded lower on the day despite positive export demand data this morning. Chicago wheat export sales were impressive while Kansas City continues to struggle with new sales given its premium price in the world market. Wires reported this morning that Iraq bought 300,000 tonnes of milling wheat from Australia and Canada while Algeria bought close to 400,000 tonnes of soft wheat from France yesterday. Export sales this morning were positive towards price direction but the US remains well behind the pace needed to reach this crop year's USDA export estimate. Net weekly export sales came in at 536,200 tonnes for the current marketing year and 38,500 for the next marketing year for a total of 574,700. As of January 10th, cumulative wheat sales stand at 69% of the USDA forecast vs. a 5 year average of 76%. Sales of 431,000 tonnes are needed each week to reach the USDA forecast. The EU reported that they granted export licenses for 340,000 tonnes of soft wheat taking the total since the beginning of the crop year to 10.4 million tonnes vs. 7.7 for the same period in 2011/12.
March Oats closed down 2 1/4 at 355. This was 3 up from the low and 5 off the high.
Corn Market Recap for 1/17/2013 (CME)
March Corn finished down 6 3/4 at 724 1/2, 9 1/2 off the high and 2 up from the low. May Corn closed down 6 at 725 1/4. This was 2 1/4 up from the low and 8 1/2 off the high.
March corn traded slightly lower on the day due to light profit taking following surprisingly positive export data this morning. Traders noted that the 9 day rally may have gotten a bit over extended and some were taking money off the table. Net weekly export sales came in at 393,300 tonnes for the current marketing and as of January 10th, cumulative sales stand at 54.5% of the USDA forecast vs. a 5 year average of 60%. Sales of 328,000 tonnes are needed each week to reach the USDA forecast, down from 330,000 last week. The market continues to keep a watchful eye on weather in South America as warmer and drier conditions settle into Argentina and South Brazil over the next 10-14 days. A private consultant in Brazil raised their corn production estimate to 74.7 million tonnes for 2012/13 from last year's 72.7 million tonnes. The analyst cited beneficial rainfall in key growing regions that should help boost the yield outlook. The USDA is estimating production at 71 million tonnes.
Corn Drops on Slowing Fuel, Export Demand; Soybeans, Wheat Fall (Bloomberg)
Corn declined for the first time in nine sessions after a government report showed slowing demand for the grain to make fuel in the U.S., and exports tumbled. Soybeans and wheat dropped.
Ethanol production fell last week to the lowest since the government began reporting data in June 2010, and inventories rose to the highest in four weeks, the Energy Department said yesterday. Export sales of corn were 48 percent smaller than a year earlier in the week ended Jan. 10, and commitments since Sept. 1 were down 49 percent compared with the same date a year ago.
“The slowdown in ethanol production will curb demand for corn,” Jerry Gidel, the chief market analyst for Rice Dairy LLC in Chicago, said in a telephone interview. “Corn exports remain depressed.”
Corn futures for March delivery slid 0.9 percent to close at $7.245 a bushel at 2 p.m. on the Chicago Board of Trade. The grain jumped 7.5 percent in the prior eight sessions, the longest rally since December 2011.
Corn and soybeans also fell as rain overnight in Argentina and forecasts for more in northern Brazil increased crop potential, reducing the outlook for U.S. exports when harvesting begins in South America next month, Roy Huckabay, an executive vice president for the Linn Group in Chicago, said in a telephone interview.
Soybean futures for March delivery declined 0.4 percent to $14.3025 a bushel on the CBOT. Earlier, the price touched $14.48, the highest since Dec. 19.
Wheat futures for March delivery slipped 0.5 percent to $7.8125 a bushel in Chicago, after gaining 5.4 percent the prior four sessions. Yesterday, the price touched $7.91, the highest since Dec. 26.
Corn is the biggest U.S. crop, valued at a record $76.5 billion in 2011, with soybeans in second place at $35.8 billion, government figures show. Wheat is the fourth-biggest crop, behind hay, with a value of $14.4 billion.
China Said to Have Bought 250,000 Tons of Sugar as Price Falls (Bloomberg)
China, the second-biggest sugar consumer, bought 250,000 metric tons of the sweetener as a 23 percent decline in prices in the past year has made imports more attractive, said two executives with direct knowledge of the matter.
The raw-sugar cargos will arrive in January and February at about $460 a ton, cost-and-freight to China, said the executives, who asked not to be identified because the information is private. At least one cargo will be sourced from Guatemala, they added.
China’s purchases may help absorb the global sugar surplus. Goldman Sachs Group Inc. cut its price forecast this week amid the glut.
Sugar in New York dropped in the past year as farmers from Russia to Thailand planted more crops.
Natural Gas Jumps to 6-Week High on Above-Forecast Supply Drop (Bloomberg)
Natural gas futures jumped to the highest price in almost six weeks after a government report showed a bigger-than-expected U.S. inventory decline.
Gas rose 1.7 percent after the Energy Information Administration said stockpiles fell 148 billion cubic feet last week to 3.168 trillion. Analyst estimates compiled by Bloomberg showed a decrease of 139 billion. Supplies were 4.4 percent below year-earlier levels, the widest deficit in 17 months. Frigid Northeast and Midwest weather may boost demand next week.
“It’s a supportive report,” said Stephen Schork, president of Schork Group Inc., a consulting group in Villanova, Pennsylvania. “The current weather and weather forecasts for key gas-consuming areas for the weeks ahead are supportive of prices.”
Natural gas for February delivery increased 5.9 cents to $3.494 per million British thermal units on the New York Mercantile Exchange, the highest settlement price since Dec. 7. Trading volume was 34 percent above the 100-day average at 2:54 p.m. Gas has climbed 40 percent from a year ago.
April $4.50 calls were the most active gas options in electronic trading. They were 0.1 cent higher at 1 cent on volume of 6,760 contracts as of 2:53 p.m. Calls accounted for 47 percent of options volume.
Oil Declines From Four-Month High Before China Economic Reports (Bloomberg)
Oil fell from the highest level in four months in New York, paring the longest weekly winning streak in 14 months, before reports that will show whether China halted a seven-quarter economic slowdown.
Futures slid as much as 0.4 percent after rising the most in two weeks yesterday. The economy in China, the world’s second-biggest crude user, probably expanded 7.8 percent in the fourth quarter from a year ago, up from 7.4 percent in the three months through September, according to a Bloomberg survey before data from the National Bureau of Statistics. The bureau may also say factory output and retail sales accelerated in December.
Crude for February delivery slid as much as 34 cents to $95.15 a barrel in electronic trading on the New York Mercantile Exchange and was at $95.17 at 10:56 a.m. Sydney time. The contract advanced 1.3 percent to $95.49 yesterday. That’s the biggest gain since Jan. 2 and the highest close since Sept. 17. Prices are up 1.7 percent this week for a sixth weekly advance, the longest winning streak since November 2011.
Brent for March settlement increased $1.42, or 1.3 percent, to $111.10 on the London-based ICE Futures Europe exchange yesterday. The front-month European benchmark contract closed at a premium of $15.16 to West Texas Intermediate futures, the narrowest spread since July 24.
London-traded Brent will struggle to advance past the combined barrier of a one-year resistance line and a downward- sloping trend channel at $112.82 a barrel, according to technical analysis by Societe Generale SA.
Brent Crude Oil Market Report (CME)
March Brent crude oil traded higher on the session and back above the $111.00 level. Some of the support for the market came from an improvement in macroeconomic sentiment following better than expected US economic readings, as well as a boost in geopolitical tension in Algeria. Meanwhile, North Sea Forties traded sharply lower relative to Brent crude oil on the session, weighed down by a boost in near term supply flows. UAE's TAQA indicated that oil flows from the Brent pipeline had restarted after this week's stoppage. As a result, North Sea Forties traded below dated Brent crude oil. The March Brent vs. West Texas crude oil spread came under added pressure early in the session, trading down to $14.61 premium to Brent. The spread differential rallied to $15.10 later in the session, up about $.10 compared to yesterday's settlement.
Silver Market Recap Report (CME)
The silver market ranged up sharply today and in the process the March silver contract reached back up to the highest level since December 19th. Technical players might be emboldened by the fact that March silver rejected a lower low today and then flashed back up to a multi-week high. In addition to favorable scheduled data from the US, silver might have been able to draft support from higher copper prices, strength in equities and marginally supportive currency market action.
Gold Market Recap Report (CME)
The gold bulls have to come away from the action today emboldened as the market appeared to be on the ropes in the morning trade and then the gold market seemed to fall even further in the face of better than expected US scheduled data. Eventually the gold market recovered and charged back into positive ground as the overall attitude in the market returned to a widely embraced risk-on stance. From a technical perspective February gold showed what appeared to be a rather definitive reversal and that had to put some gold bears back on their heels today.
Posted by MW Chong at 9:30 AM