Commodity Blog

Archive for May, 2010

Sugar prices declined, but some analysts expect the rebound. Bullish forecasts say that global sugar inventories will decline to 32 percent of total consumption, 52.8 million metric tons, in the year to September 30th. While sugar prices decline after reaching the record level, the inventories still need to be resupplied and current low prices may help in this, which, in turn, may drive prices up. With civil unrest in Thailand and South Africa’s exports being lower than expected demand may exceed supply.

Bears point out on signs of increasing supply. Thailand’s government claims that it has restored order. India may turn from the largest consumer in the world to a net exporter, while Brazil’s output continues to grow. This expected to cause global sugar supplies to turn to surplus in the year from October.

July delivery for raw sugar fell 4.9 percent to $0.1419 per pound last week on ICE Futures U.S. in New York. Thus, prices resumed their bearish trend, which was reversed this month.

Oil prices were heavily hit by the economic recession in 2008, but now they are rapidly rebounding. Will this trend continue in the next years?

In fact, analysts expect the so-called Oil Peak. Global production probably isn’t ready to satisfy quickly growing demand. While developed countries are expected to keep their consumption of oil on stable level or even experience a slight decline of demand, developing countries, primarily China and India significantly accelerate the rate of their consumption, leading to noticeable jump in the global demand in coming years. China’s oil demand has increased 28% over a year by January 2010. In the same time, any noticeable increase of production isn’t expected. OPEC considers their current level of production in target range and isn’t planning to expand it. There is expected an increase of output from Non-OPEC producers, but it’s unlikely that their supply will be enough to satisfy the ever-growing demand. New sources of oil, like findings in Brazil, Columbia and Mexico looks perspective, but it may take a lot of time before the actual drilling will begin.

The growth of oil prices may be not very noticeable in the next two years as the economies worldwide are struggling to recover. Crude oil prices averaged $84 per barrel in April 2010. Oil prices will average about $84 per barrel over the second half of 2010 and rise to $87 by the end of 2011. By 2015 consumption should exceed supply by 10 million barrels per day (MBD). By 2030 the global demand will reach 118 MDB, while producers will be able to supply only 110 MBD. Barring any unexpected major occurrence, like developing and implementing some new sort of fuel instead of conventional gasoline and diesel fuel or significant easily accessible find, by 2030 crude oil price will soar above $100 per barrel level, maybe even jumping as high as $150 per barrel.

The technical analysis, that includes the indicators’ data and major pivot points for Brent Oil, Gold, Silver and Copper as traded on spot market as of May 29th 2010:

Sugar prices dropped as Brazil’s output rose this year and India may increase production in the year starting October 1st. Prices’ downfall may cause decline in global supplies, as low prices make expanding production unprofitable. This may cause global deficit as demand continue to increase, leading to rebound of prices for the sweetener. July delivery for raw sugar dropped 2.9 percent to $0.1492 per pound in New York yesterday.

Orange-juice futures jumped today to the highest level in two weeks amid concerns that citrus groves in Florida, the second biggest citrus producer, will be harmed by hurricanes. Forecasts tell that this is an active year with 14 to 23 named storms in the season beginning June 1st and 8 to 14 among them will develop into hurricanes. July delivery for orange juice climbed $0.023 (1.6 percent) to $1.435 per pound by 10:03 a.m. on ICE Futures U.S.

Rubber rose today on signs of increasing demand in China, the largest buyer, which should outweighing concerns for decreasing demand from Europe. Chinese demand can boost rubber prices by at least 25 percent to the 30-year high. November delivery for rubber rose 1.8 percent to 286.20 yen as of 14:17 in Tokyo.

Latest commodity prices (ICE, NYMEX, CME) as of 16:03 GMT:

Oil (Brent) — $74.46
Gold — $1,206.35
Silver — $18.31
Palladium — $464.50
Platinum — $1,555.68
Copper — $6,930.00
Aluminum — $2.045.00
Nickel — $21,400.00
Zinc — $1,927.00
Cocoa — $2,954.00
Sugar — $14.28
Corn — $369.50
Soybean — $948.50

Sugar dropped in New York and London on forecast that output in Brazil, the largest cane grower in the world, will rise. Growing output was attributed to favorable weather. Production in the Center South, the country’s biggest producing region, increased to 1.51 million metric tons in the second half of April. July delivery for raw sugar lost $0.0028 (1.8 percent) to $0.1508 per pound on ICE.

Cocoa rose today in signs of dwindling supplies from Africa and on prospect for increasing demand. Cocoa exports from Ivory Coast, the biggest producer in the world, dropped 46 percent in April. Global production will trail demand by 69,000 metric tons in the year ending September 30th. July delivery for cocoa gained $20 (0.7 percent) to $2,924 per ton by 9:26 on ICE Futures U.S. in New York.

Latest commodity prices (ICE, NYMEX, CME) as of 17:03 GMT:

Oil (Brent) — $74.43
Gold — $1,210.72
Silver — $18.40
Palladium — $461.00
Platinum — $1,549.41
Copper — $6,974.00
Aluminum — $2.063.00
Nickel — $21,666.00
Zinc — $1,930.00
Cocoa — $2,976.00
Sugar — $15.06
Corn — $371.75
Soybean — $947.75

Coffee futures jumped today on signs of declining global supplies. Vietnam exports of coffee in the previous month were 10 percent less than predicted. Output from El Salvador expected to be 1.075 million bags in the year ending September 30th, compare to previous forecasts of 1.52 million. July delivery for Arabica coffee jumped $0.0095 (0.7 percent) to $1.337 per pound on ICE Futures U.S. in New York.

Sugar gained in New York on amid growing demand and as buyers increase inventories. Unfavorable weather in Brazil and India in the previous year caused supplies to decline and sparked speculations about possible deficit if the sweetener. July delivery for raw sugar gained $0.0011 (0.7 percent) to $0.1536 per pound on ICE.

Soybeans advanced on speculation that European debt crisis will be outweighed by growing demand for food and livestock feed from China. China plans to import 46 million metric tons in the year that ends October 1st and may import as much as 49 million next year. July futures for soybean delivery advanced $0.075 (0.8 percent) to $9.38 per bushel on CBoT.

Latest commodity prices (ICE, NYMEX, CME) as of 22:39 GMT:

Oil (Brent) — $71.47
Gold — $1,211.70
Silver — $18.09
Palladium — $436.50
Platinum — $1,520.70
Copper — $6,825.00
Aluminum — $2.023.00
Nickel — $21,340.00
Zinc — $1,900.00
Cocoa — $2,909.00
Sugar — $15.31
Corn — $370.50
Soybean — $937.50

This video presents a rather optimistic view on the gold and silver future growth, suggesting a continuation of the bullish trend and setting of the new record high levels. It operates with the fundamental on the production and technical data in a form of the long-term charts. The author of the video also suggests that the Australian stock market may also benefit from the rising commodity prices (and especially gold).