Commodity Blog

Archive for September, 2009

Latest commodity prices (ICE, NYMEX, CME) as of 18:50 GMT:

Oil (Brent) — $64.71
Gold — $993.61
Silver — $16.24
Palladium — $290.50
Platinum — $1,322.76
Copper — $5,928.00
Aluminum — $1,832.00
Nickel — $17,000.00
Zinc — $1,850.00
Cocoa — $3,057.00
Sugar — $21.30
Corn — $336.25
Soybean — $34.05

In this video Jeff Fortenberry, a congressman from the U.S. state of Nebraska, discusses the role of the commodity market speculators in the global economic crisis. Although it’s quite a political issue, the video will be useful to watch in order to understand what possible regulatory actions and policies will be introduced to decrease the role of the speculators in the formation of the commodity prices. Jeff talks about the possible ways to decrease the proportion of the speculators to the hedgers that deal with the commodities directly or indirectly by the nature of their business.

Copper prices dropped as inventories reached a four-month high, causing concern that demand is falling. Other reasons for price decline are stronger dollar, decreasing appeal of the metal as an alternative investment, and slower imports in China. December delivery for copper dropped $0.0565 (2 percent) to $2.808 per pound on the New York Mercantile Exchange’s Comex division.

U.S. hog farmers may cut their breeding herds to the lowest level since 1988 as two years of losses forced more operations to shrink or go out of business. Demand for pork declined significantly, yet farmers are slow to cut supplies as they have about $3,000 invested in every sow they own. The December contract for wholesale pork gained $0.0095 (1.9 percent) to $0.497 per pound by 10:40 on the CME.

Latest commodity prices (ICE, NYMEX, CME) as of 18:37 GMT:

Oil (Brent) — $68.03
Gold — $1,015.83
Silver — $17.02
Palladium — $295.50
Platinum — $1,328.70
Copper — $6,174.00
Aluminum — $1,872.00
Nickel — $17,975.00
Zinc — $1,912.00
Cocoa — $3,153.00
Sugar — $21.70
Corn — $331.00
Soybean — $34.20

This 2-part video shows Ted Butler answering the interview questions regarding the silver as an investment commodity. The main idea of these videos is that the shortage of physical silver (not the derivatives that are settled on paper with U.S. dollars) is imminent. Ted discusses the extreme growth of volume of the short positions in SLV ETF recently, talking about how ungrounded these positions are. With the current volume of the physically stored silver, Butler believes it will spur a huge bullish rally if some regulatory action is taken against those short positions on SLV or if China will announce an increase in the demand for silver.

Sugar gained as a weaker dollar boosts the demand for commodities as an inflation hedge. Prices also boosted on speculation that adverse weather in Brazil and India, the largest cane growers, will cause deficit in global supplies, cutting harvest of cane. March futures for raw-sugar delivery rose $0.0042 (1.8 percent) to $0.2364 per pound at 9:21 on ICE Futures U.S. in New York.

Corn gained as the dollar weakened, increasing overseas demand for supplies from the U.S. Expectation of a global recovery supports overseas demand for food, fuel and animal feed made from corn. December futures for corn delivery rose $0.025 (0.8 percent) to $3.185 per bushel as of 10:12 on CBoT.

Copper gained for a second day because the weaker dollar boosts attractiveness of commodities as an alternative investment. Prices also were boosted today after a daily report showed that inventories monitored by LME dropped for the first time in 18 days, slipping 50 tons to 331,775 tons. December futures for copper delivery rose $0.053 (1.9 percent) to $2.8585 per pound by 11:32 on the New York Mercantile Exchange’s Comex division.

Latest commodity prices (ICE, NYMEX, CME) as of 18:10 GMT:

Oil (Brent) — $70.40
Gold — $1,013.57
Silver — $17.08
Palladium — $301.52
Platinum — $1,326.43
Copper — $6,290.00
Aluminum — $1,899.00
Nickel — $17,950.00
Zinc — $1,935.00
Cocoa — $3,169.00
Sugar — $22.07
Corn — $326.00
Soybean — $34.44

Copper prices gained after a report that the index of U.S. leading economic indicators increased for a fifth month, causing expectations for growth in metals demand. There is speculation that consumption of raw materials will increase with rebound in economy boosting demand from home-building and manufacturing industries. December delivery for copper gained $0.0205 (0.7 percent) to $2.8055 per pound on the New York Mercantile Exchange’s Comex division.

Oil traders are paying high for the options to protect against a plunge in crude prices. Growth in prices after the recovery from the global recession alone isn’t enough to erode the glut by the end of next year because production exceeds demand. October delivery for oil slid $2.94 (4.3 percent) to $68.96 a barrel on NYMEX today.

Corn and soybeans fell because warm weather will help crop mature in the U.S., the biggest producer and exporter of both in the world. The weather speeds maturation of plants before freezing weather can damage yields. Corn yield will increase to 12.954 billion bushels (7 percent) this year. Soybean production will climb to a record 3.245 billion bushels (9.7 percent). December futures for corn delivery dropped $0.02 (0.6 percent) to $3.16 per bushel on CBoT. November futures for soybean delivery slumped $0.275 (2.9 percent) to $9.135 per bushel in Chicago.

Latest commodity prices (ICE, NYMEX, CME) as of 18:46 GMT:

Oil (Brent) — $69.11
Gold — $997.78
Silver — $16.65
Palladium — $295.00
Platinum — $1,320.50
Copper — $6,068.00
Aluminum — $1,863.00
Nickel — $16,778.00
Zinc — $1,884.00
Cocoa — $3,077.00
Sugar — $21.90
Corn — $315.75
Soybean — $33.80

This is a three-part interview of James Turk, the commodity expert and also a founder of an on-line gold/silver selling and storing company. James explains his view on gold, silver, the U.S. currency and the possible hyperinflation of the dollar, which would lead to a hyper-rally in commodities, namely the precious metals. Turk represents the bullish camp in the point of view on the commodity markets and thus suggests at least a moderate long-term growth on both gold and silver. Although the whole case of gold and silver being more reliable than the fiat currencies (such as USD) is quite debatable and James Turk, in my opinion, isn’t interested in expressing the unbiased opinion in this interview, this is a good video to watch if you want to understand reasons for a potential growth of gold and silver prices.