20130111 0928 Global Commodities Related News.

Commodities Rise to Highest in 11 Weeks on China Demand Outlook (Bloomberg)
Commodities rose to their highest in more than 11 weeks, led by energy and metals, amid optimism that an economic recovery in China will boost demand. Gold advanced to a one-week high.
The Standard & Poor’s GSCI Index of 24 raw materials gained to the highest level since Oct. 22, as aluminum advanced as much as 2 percent and crude climbed to the highest level in more than three months. China’s exports jumped 14.1 percent last month, compared with a 5 percent median forecast in a Bloomberg News survey. The nation is the world’s biggest user of industrial metals and energy.
“From a broad commodity perspective, what is good is the fact that China’s exports have picked up quite significantly in December and well above expectations,” Walter de Wet, head of commodities research at Standard Bank Plc, said by phone from Johannesburg today. “There is no doubt that things are stabilizing in China.”
Oil for February delivery gained as much as $1.60 to $94.70 on the New York Mercantile Exchange, the most since Sept. 19. Saudi Arabia cut crude production in December to a 19-month low, according a Gulf official with knowledge of the kingdom’s energy policy who asked not to be identified because the information is confidential.
Aluminum for three-month delivery on the London Metal Exchange advanced for a fourth day, gaining 1.5 percent to $2,105.50 a ton. Usage of the lightweight metal in China will rise 11 percent this year, aided by stimulus spending, Alcoa Inc., the biggest U.S. producer, said this week.
Gold advanced to a one-week high after European Central Bank President Mario Draghi said economic weakness in the region will continue, boosting speculation that policy makers will do more to revive growth.

Corn Market Recap for 1/10/2013 (CME)
March Corn finished up 4 1/2 at 698 3/4, 1 3/4 off the high and 4 1/4 up from the low. May Corn closed up 3 3/4 at 697 1/2. This was 3 3/4 up from the low and 1 1/2 off the high.
March corn traded slightly higher on the day as trader's position ahead of tomorrow's USDA report. Some in the trade are leaning slightly bullish for the report on expectations that supply may be cut if harvested acreage is revised lower. The positive supply side sentiment was offset after export sales came in well below market estimates and show no real sign of improving. Net weekly export sales came in at only 12,600 tonnes for the current marketing year and a cancellation of 11,600 for the next marketing year for a total of only 1,000 tonnes. As of January 3rd, cumulative corn sales stand at 44% of the USDA forecast for current marketing year vs. a 5 year average of 57.5%. Sales of 478,000 tonnes are needed each week to reach the USDA forecast, up from 464,400 the week prior. South American corn continues to trade at a discount to the US which could be considered a long term negative to price direction.
January Rice finished down 0.13 at 14.87, equal to the high and equal to the low.

Wheat Market Recap Report (CME)
March Wheat finished down 1 at 744 1/2, 12 off the high and 1/2 up from the low. May Wheat closed down 1 at 753 1/2. This was 1/2 up from the low and 11 1/4 off the high.
KC and Chicago wheat traded lower into the closing bell. It was reported that the US sold a portion of the Egyptian wheat tender this morning which added a supportive tilt to the market but some were disappointed after a portion of the trade went to Canada. This limited gains on the day along with light volume ahead of tomorrow's report. Total tonnage on the trade amounted to 115,000 tonnes. France has missed out on export business recently after being active sellers last fall. The EU granted export licenses for 373,000 tonnes of soft wheat this week, taking the total since the beginning of the crop year to 10.1 million tonnes vs. 7.5 last year. The US export sales report was considered bearish against trade estimates after coming in at 233,700 tonnes for the current marketing year. As of January 3rd, cumulative wheat sales stand at 68% of the USDA forecast for the current marketing year vs. a 5 year average of 75%. Sales of 435,000 tonnes are needed each week to reach the USDA forecast. The fact that sales came in below the pace needed to reach this year's USDA export estimate is seen as a negative to price direction.
March Oats closed up 3 at 339 1/2. This was 6 1/4 up from the low and 1 off the high.

Corn Supply Dropping Most Since 1995 Signals U.S. Rally (Bloomberg)
U.S. corn supplies, the world’s biggest, are dropping at the fastest pace in 17 years as drought damage exceeds government forecasts and five months of declining prices spur demand from livestock producers.
Inventories on Dec. 1 were 15 percent lower than a year earlier at 8.22 billion bushels (208.8 million metric tons), the smallest post-harvest stockpile since 2003, according to the average of 26 analyst estimates compiled by Bloomberg. Goldman Sachs Group Inc., Morgan Stanley and Macquarie Group Ltd. expect prices to rebound at least 17 percent to $8.14 a bushel in 2013.
While futures surged to a record $8.49 in August as the drought spread, they then tumbled 18 percent as U.S. exports slowed and buyers sought cheaper supply from Brazil and Ukraine. Prices will rebound because the government overestimated the harvest and probably will lower the figure when it reports tomorrow, the analysts said. The U.S. Department of Agriculture already expects global stockpiles on Oct. 1 to be the smallest relative to consumption since 1974.
“Consumers have become too complacent waiting for lower prices,” said Christopher Gadd, an analyst at Macquarie in London who expects prices to reach $8.50 this year. “The story going forward will be an improvement in U.S. exports. Buyers have nowhere else to turn.”
Corn rose as much as 68 percent from June 15 to mid-August on the Chicago Board of Trade before retreating. It ended the year up 8 percent, compared with a 0.3 percent gain in the Standard & Poor’s GSCI gauge of 24 commodities. The MSCI All- Country World Index of equities jumped 13 percent. A Bank of America Corp. index shows Treasuries returned 2.2 percent.

Corn Extends Rally on Tightening U.S. Inventories: Soybeans Drop (Bloomberg)
Corn rose for a fourth day, heading for the longest rally since October, on speculation that the worst drought since the 1930s sent U.S. inventories to a nine- year low. Soybeans dropped.
The government probably will say tomorrow that domestic corn reserves on Dec. 1 fell 15 percent from a year earlier, the biggest drop since 1995, according to a Bloomberg survey. Cash prices yesterday in Kansas City were almost double the 10-year average, while ethanol producers in Cedar Rapids, Iowa, were paying a premium of 28.4 cents a bushel over Chicago futures, compared with a 4.4-cent discount a year earlier.
“Gains were fueled by expectations for the federal government to trim its estimate for 2012 domestic corn production,” Jim Gerlach, the president of A/C Trading Co. in Fowler, Indiana, said in a report to clients. “Cash markets are firming” on increasing completion for supplies from U.S. livestock producers and ethanol plants, he said.
Corn futures for March delivery gained 0.4 percent to $6.9675 a bushel at 9:55 a.m. on the Chicago Board of Trade, heading for the first four-day rally since Oct. 19. Prices rallied as much as 68 percent since mid-June to a record $8.49 on Aug. 10 before retreating.
Soybean futures for March delivery slid 0.2 percent to $13.825 a bushel in Chicago. Through yesterday, the most-active contract fell 23 percent since reaching a record $17.89 on Sept. 4 as rains boosted crops in Brazil and Argentina, the two biggest producers after the U.S. last year.
Earlier, the contract gained 0.7 percent after the U.S. Department of Agriculture reported export sales of 120,000 metric tons to China for delivery in the 12 months starting Sept. 1 and 60,000 tons for delivery before Aug. 31. Exporters reported sales of 281,500 tons to unknown destinations for delivery by Aug. 31.
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.

Natural Gas Gains Most as Nickel Declines: Commodities at Close (Bloomberg)
The Standard & Poor’s GSCI gauge of 24 commodities rose 0.5 percent to 653.11 at 4 p.m. in New York. Natural gas and cocoa led the advance, while nickel declined.
The UBS Bloomberg CMCI index of 26 raw materials gained 0.6 percent to 1,581.247.
NATURAL GAS
Natural gas futures advanced for the first time in four days after a government report showed that U.S. stockpiles declined by the most in almost two years.
Gas gained 2.6 percent after the Energy Information Administration said inventories fell 201 billion cubic feet in the seven days ended Jan. 4 to 3.316 trillion cubic feet, the biggest weekly decline since February 2011. Analyst estimates compiled by Bloomberg showed an expected drop of 191 billion.
Natural gas for February delivery rose 8 cents to settle at $3.193 per million British thermal units on the New York Mercantile Exchange. Prices have climbed 8.6 percent from a year ago.
BASE METALS
Copper climbed for the first time in six sessions in New York as trade data for all goods signaled an economic rebound in China, the world’s biggest metals consumer. Aluminum gained for a fourth day.
Chinese customs figures showed today that total exports jumped 14 percent in December from a year earlier. That was the biggest increase since May and more than the 5 percent gain predicted by analysts surveyed by Bloomberg. A broad measure of credit surged 28 percent, according to the central bank.
Copper futures for delivery in March advanced 1 percent to settle at $3.709 a pound on the Comex in New York. The metal fell 1.8 percent in the previous five sessions, the longest string of declines since late October.
On the LME, copper for delivery in three months rose 0.4 percent to $8,115 a ton ($3.68 a pound).
Aluminum for delivery in three months gained 1.9 percent to $2,113.50 a ton on the LME. Demand for the lightweight metal in China will rise 11 percent this year, aided by stimulus spending, according to Alcoa Inc. (AA), the biggest U.S. producer.
Lead, zinc and tin climbed in London. Nickel fell.
CRUDE OIL
Oil rose to the highest level in three months as exports from China accelerated and European Central Bank President Mario Draghi said “a gradual recovery should start” in the region this year.
Crude oil for February delivery gained 72 cents to $93.82 a barrel on the Nymex, the highest settlement since Sept. 18.
Brent oil for February settlement increased 13 cents to $111.89 a barrel on the London-based ICE Futures Europe exchange. Brent’s premium to New York futures narrowed 59 cents to $18.07 a barrel, the narrowest spread since Sept. 24.
PRECIOUS METALS
Gold jumped the most in more than two months after Draghi said economic weakness in the region will continue into 2013, boosting speculation that policy makers will do more to revive growth.
Gold futures for February delivery gained 1.4 percent to settle at $1,678 an ounce on the Comex in New York, the biggest jump for a most-active contract since Nov. 6.
Silver futures for March delivery advanced 2.2 percent to $30.918 an ounce in New York, the third gain in four days.
On the Nymex, platinum futures for April delivery jumped 2.1 percent to $1,634.30 an ounce, the biggest climb since Sept. 12.
Palladium futures for March delivery gained 2 percent to $702.20 an ounce, the second straight rise.
SOFT COMMODITIES
Orange-juice futures gained the most in four weeks on speculation that the U.S. will cut its forecast for output in Florida, the world’s second-biggest citrus grower. Sugar, coffee, cocoa and cotton also advanced.
Orange juice for March delivery rose 1.5 percent to settle at $1.124 a pound on ICE Futures U.S. in New York, the biggest gain for a most-active contract since Dec. 13. A box weighs 90 pounds, or 41 kilograms. Brazil is the top producer.
Raw-sugar futures for March delivery climbed 1.3 percent to 18.96 cents a pound in New York.
Arabica-coffee futures for March delivery increased 1.2 percent to $1.4965 a pound.
Cocoa futures for March delivery rallied 2.1 percent to $2,269 a metric ton.
Cotton futures for March delivery advanced 0.5 percent to 75.2 cents a pound.
GRAINS, OILSEEDS
Wheat fell for the third straight day on speculation that the U.S. Department of Agriculture tomorrow will say winter seeding from September through November surged to a four-year high.
Wheat futures for March delivery fell 0.1 percent to settle at $7.445 a bushel on the Chicago Board of Trade. Last quarter, the price tumbled 14 percent, the most since mid-2011, on prospects for improving supplies.
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.
Corn rose for a fourth day, capping the longest rally since October, on speculation that the worst drought since the 1930s sent U.S. inventories to a nine-year low. Soybeans declined.
Corn futures for March delivery climbed 0.6 percent to close at $6.9875 a bushel on the Chicago Board of Trade, capping the first four-day rally since Oct. 19. Prices rallied as much as 68 percent since mid-June to a record $8.49 on Aug. 10 before retreating.
Soybean futures for March delivery slid 0.4 percent to $13.7975 a bushel in Chicago. The most-active contract has fallen 23 percent since reaching a record $17.89 on Sept. 4 as rains boosted crops in Brazil and Argentina, the two biggest producers after the U.S. last year.
OIL PRODUCTS
Heating oil fell after imports of gasoil to the U.S. East Coast increased, replenishing stockpiles.
Heating oil for February delivery declined 1.56 cents, or 0.5 percent, to settle at $3.0543 a gallon on the Nymex.
Gasoline for February delivery advanced 1.44 cents, or 0.5 percent, to $2.7933 a gallon.
The average nationwide retail price for regular gasoline gained 0.6 cent to $3.31 a gallon, AAA said today on its website. That’s the highest price since Dec. 11.

Oil Rises a Second Day on Saudi Production Cut, Economic Outlook (Bloomberg)
Oil rose, extending the longest weekly winning streak since August, amid a cut in production by Saudi Arabia and signs of global economic growth.
Futures gained as much as 0.3 percent after closing at the highest level in almost four months yesterday. Saudi Arabia, the world’s largest crude exporter, reduced production in December to the lowest in 19 months as booming U.S. output and recovering shipments from Iraq threaten to oversupply the global oil market, according to a person with knowledge of the kingdom’s energy policy. Prices also advanced after Chinese exports accelerated and European Central Bank President Mario Draghi said the euro-area economy will gradually recover.
Crude for February delivery rose as much as 31 cents to $94.13 a barrel in electronic trading on the New York Mercantile Exchange and was at $93.99 at 11:08 a.m. Sydney time. The contract increased 72 cents to $93.82 yesterday, the highest since Sept. 18. Prices declined 7.1 percent last year.
Brent for February settlement gained 13 cents to $111.89 a barrel on the London-based ICE Futures Europe exchange yesterday. The European benchmark contract closed at a premium of $18.07 to West Texas Intermediate futures, the narrowest since Sept. 24.
Saudi Arabian production fell 4.9 percent to 9.025 million barrels a day in December, the person in the Persian Gulf said, asking not to be identified because the information is confidential. The 465,000 barrel cut is the largest monthly drop since November 2008, when the country and other members of the Organization of Petroleum Exporting Countries reduced supplies amid a global recession.

Recap Energy Market Report (CME)
February crude oil prices rallied sharply higher during the initial morning hours, climbing to a new three month high in the process. The combination of stronger than expected Chinese trade data overnight and headlines of a further cutback in Saudi Arabian oil production in December contributed to the morning advance. Some traders noted that a new contract high in the March S&P 500 and weakness in the US dollar offered an added source of support. A measure of late-day profit-taking trimmed some of the early gains but February still closed up $0.72 on the session

Brent Crude Oil Market Report (CME)
February Brent crude oil prices broke out of their recent congestion zone and climbed to the highest level since October 16th. Much stronger than expected Chinese trade day overnight and reports of a further cut in Saudi Arabian oil output in December were seen as supportive forces. Meanwhile, reports of an extra cargo added to January North Sea loadings put pressure on Forties and robust output from the Buzzard oil field was seen as an added negative. The February Brent vs. WTI crude oil spread narrowed around $0.40 on the session and just above the $18 level.

Gold Climbs to One-Week High as Draghi Sees Weakness (Bloomberg)
Gold jumped the most in more than two months after European Central Bank President Mario Draghi said economic weakness in the region will continue, boosting speculation that policy makers will do more to revive growth.
“The economic weakness in the euro area is expected to extend into 2013,” Draghi said at a press conference in Frankfurt today. The metal climbed 7 percent last year, a 12th straight gain, as central banks in Europe, the U.S. and China increased stimulus measures to boost economies.
“Draghi made it clear that Europe is still on the weaker side, and they will continue to lean towards accommodative policy,” Bill O’Neill, a partner at Logic Advisors in Upper Saddle River, New Jersey, said in a telephone interview.
Gold futures for February delivery gained 1.4 percent to settle at $1,678 an ounce at 1:47 p.m. on the Comex in New York, the biggest jump for a most-active contract since Nov. 6. Earlier, prices touched $1,678.80, the highest since Jan. 3.
“A gradual recovery should start” later this year as ECB measures work their way through the economy, Draghi said.
The metal also rose after better-than-expected China trade figures spurred optimism that demand for raw materials will increase. Data this week showed China’s net imports of gold rose to a seven-month high in November, while volumes traded on the Shanghai Gold Exchange jumped.
“The market was already trading higher on the Chinese data, and Draghi’s statements gave it a further boost,” O’Neill said.
Silver futures for March delivery advanced 2.2 percent to $30.918 an ounce in New York, the third gain in four days.
On the New York Mercantile Exchange, platinum futures for April delivery jumped 2.1 percent to $1,634.30 an ounce, the biggest climb since Sept. 12.
Palladium futures for March delivery gained 2 percent to $702.20 an ounce, the second straight rise.

OPEC to Boost Supply for Final Winter Demand, Oil Movements Says (Bloomberg)
The Organization of Petroleum Exporting Countries will increase crude shipments this month to meet the final phase of peak winter demand in the northern hemisphere, according to tanker tracker Oil Movements.
The group that supplies about 40 percent of the world’s oil will export 24.15 million barrels a day in the four weeks to Jan. 26, up 210,000 barrels, or 0.9 percent, from the previous period, the researcher said today in an e-mailed report. The figures exclude Angola and Ecuador.
“Winter demand is still strong in the east, near the tail- end but not quite there,” Roy Mason, the company’s founder, said by phone from Halifax, England. “We’ve got another two or three weeks to go before we’re at the peak.”
Brent crude rose as high as $113.29 a barrel on the ICE Futures Europe exchange in London today, its strongest level in almost three months, amid signs of economic recovery and lower production by Saudi Arabia. The kingdom cut output by 465,000 barrels a day, or 4.9 percent, in December to 9.025 million, according to a Gulf official who declined to be identified.
“It’s probably the right time to put the brakes on,” said Mason. “Looking ahead, they must be able to see a price decline in the spring” because OPEC is currently supplying more than the market needs, he said.
Middle East shipments will increase 1.3 percent to 17.83 million barrels a day in the period, compared with 17.6 million in the four weeks to Dec. 29, according to the report. That figure includes non-OPEC members Oman and Yemen.
Crude on board tankers will average 476.1 million barrels, down 2 percent on the previous period, the data show. Oil Movements calculates the volumes by tallying tanker bookings. Its figures exclude crude held on vessels for storage.
OPEC comprises Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. The organization is next scheduled to meet in May.

Silver Market Recap Report (CME)
The silver market managed a very impressive range up extension today and in the process the March contract reached up to the highest level since the big washout day of January 3rd. Like gold and other physical commodity markets, silver seemed to lifted by revived macro economic optimism from China. Silver probably saw some added lift from strength in the Euro and weakness in the Greenback. With silver taking out some consolidation resistance and ranging upward on the charts, it is possible that some of the buying today was technical in nature.

Gold Market Recap Report (CME)
A big day for the bull camp as gold showed a minor run up to start before ranging up rather aggressively just ahead of mid session. After seeing a couple weeks where gold wasn't exactly tracking a specific focus some traders might come away from the action today with the view that gold has shifted back into a physical commodity market in need of improvement in the global economy. After all inflationary hopes were dashed last week by the US Fed and for the time being, extreme flight to quality hopes were tempered by the partial avoidance of the fiscal cliff and that might have left gold with a physical commodity market status.