Commodity Blog

Commodity Prices – Beef

Cattle futures gained on signs of increasing demand for U.S. beef. Wholesale beef, shipped by meatpackers in the week that ended yesterday, climbed as much as 44 percent to 43 million pounds, compared to 29 million pounds in the week earlier. October futures for cattle delivery rose $0.00875 (1 percent) to $0.92275 per pound on CME.

Cotton futures rebounded as the weaker dollar boosted demand for some commodities as an inflation hedge. The U.S. currency dropped to the lowest level in two months versus the basket of six currencies. December delivery for cotton gained $0.0086 (1.2 percent) to $0.7465 per pound on ICE Futures U.S.

Copper and aluminum prices rose after aluminum producer Alcoa Inc. reported that its earnings were higher than expected. Alcoa Inc. forecast that global aluminum demand would grow 12 percent in 2010. September futures for copper delivery added $0.0085 (0.3 percent) to $3.0175 per pound on COMEX. Aluminum rose 1.2 percent to $1,995 per metric ton on LME.

Arabica coffee climbed to the weekly high level today amid speculations that supplies would decline. Inventories tracked by ICE sank 29 percent this year to the lowest level since August 2002 as of July 7th. Global exports will be below last year’s forecast of 95.5 million bags (1 bag equals 60 kilograms or 132 pounds). September delivery for Arabica coffee gained $0.024 (1.5 percent) to $1.645 per pound at 10:01 on ICE.

Cattle futures dropped today on expectation that outdoor grilling in the U.S. would decline because of jot weather, diminishing demand for beef. Prices also may slump as investors liquidate positions after the three-day rally. Prices were rising throughout this year partly because of growing demand for beef. August futures for cattle delivery dropped $0.004 (0.4 percent) to $0.905 per pound as of 10:47 on CME.

Corn, soybeans and wheat declined after the nonfarm payrolls showed the lower number of new employees hired than was expected, causing concern that demand for the crops would fall. The nonfarm payroll employment grew by 431,000 in May, compared with the estimated increase of 521,000. July futures for corn delivery dropped $0.04 (1.1 percent) to $3.455 per bushel as of 10:05 on the Chicago Board of Trade. July futures for soybean delivery went down $0.1175 (1.2 percent) to $9.4325 per bushel on CBoT. July futures for wheat delivery subtracted $0.0225 (0.5 percent) to $4.395.

Sugar rose on speculation that buyers will increase purchases to restock their inventories, which waned after two year of the global deficit. India, the largest sugar buyer in the world, may import 1 million tons before the end of September. July delivery for raw sugar rose $0.007 (5 percent) to $0.1469 per pound at 10:15 on ICE Futures U.S.

Hog and cattle futures slipped as the stronger dollar caused concern that demand for U.S. pork and beef will decline. The dollar gained to the highest level in 14 months against the basket of six major currencies, making U.S. exports more expensive for oversees buyers. July futures for hog settlement slid $0.01475 (1.8 percent) to $0.8015 per pound by 11:53 on the Chicago Mercantile Exchange. August futures for cattle delivery fell $0.0125 (1.4 percent) to $0.88875 per pound.

Cattle futures slid for the second time this week on speculation that demand for a beef has declined as wholesale prices rose in January to a highest level in seven months. Beef price touched the record level since May 27th at January 19th, causing retailers and importers to cut buying. Since January 19th beef has fallen 4.5 percent. April futures for cattle delivery slid $0.00625 (0.7 percent) to $0.8925 per pound by 9:39 on the Chicago Mercantile Exchange.

Wheat futures tumbled in Chicago on forecast that dollar will advance, curbing the demand for U.S. grain as an alternative investment. The dollar rose 0.5 percent versus a basket of six major currencies today, the first gain this week. Some speculators may begin selling commodities which they purchased when dollar was weak. March futures for wheat delivery subtracted $0.0875 (1.8 percent) to $4.785 per bushel as of 9:59 on CBoT.

Gold imports in India, the greatest buyer in the world, may wane in December because demand went down on high prices. Imports by India expected to fall to 30 metric tons, down from 32 metric tons in November. Analysts forecast that “demand will remain low until prices fall”. Bullion for immediate-delivery rose to $1,096.66 by 9:56 in Mumbai.

Analysts predict that retail-food prices in the U.S. will rise about 2 percent this year, curbed by declining production. The outlook for food inflation in 2010 is about 3.5 percent. Beef and veal prices dropped at a rate of 0.5 to 1.5 percent this year. Pork prices fell 1.5 to 2.5 percent. Prices for fruits and vegetables slid 1.5 to 2.5 percent this year.

Corn price surged to the highest level since June and soybeans gained, continuing the three-month rally, as the weaker dollar pushed up demand for commodities. Weak dollar creates an upward momentum for commodities in the market as speculators seek alternative assets for investment to preserve their purchasing power. March futures for corn delivery gained $0.0625 (1.5 percent) to $4.2375 per bushel by 10:00 on the Chicago Board of Trade.

Cattle futures dropped after the report that export demand for U.S. beef fell. Exports declined 20 percent to 162.4 million pounds in September from a year earlier. There is no demand for beef priced at current level, partly because of the global recession. February futures for cattle settlement dropped $0.005 (0.6 percent) to $0.8515 per pound as of 10:13 on CME.

Wheat gained because of worries that dry weather will cause decline in production of Australia, the fourth- biggest exporter of the grain in the world. El Nino climate pattern causes abnormal weather that may curb grain yield. Australian growers may harvest 23 million metric tons in the year ending on May 31 compared to 21.5 million tons in the previous year. December futures for wheat delivery gained $0.0775 (1.6 percent) to $5.065 per bushel as of 10:04 on CBoT.

Gold dropped as result of a rebound in the dollar and decline of oil reducing attractiveness of the precious metal as a hedge against inflation. The dollar climbed after reports from U.S. about increase in the sales of new houses and rising orders for goods. December delivery for gold futures fell $0.9 (0.1 percent) to $945.10 per ounce by 13:05 on the New York Mercantile Exchange’s Comex division.

Argentine farmers are going to halt grain and beef sales after the government vetoed a law about tax breaks to Buenos Aires growers experiencing the worst drought in a century. The government claimed that it vetoed parts of the bill because of concern that farmers would claim their goods came from drought- afflicted areas of Buenos Aires to evade taxes. Argentine farmers harvested 13.2 million tons of corn this year compared to 22 million tons harvested previous year.

Beef demand falls, hogs slump today. Cattle futures dropped the most in seven weeks resulting in concern that beef demand is wane as the recession continues while hogs fell to the lowest since February. October futures for cattle dropped $0.01025 (1.1 percent) to $0.901/pound by 10:42 on CME.

Supply concerns rise causing sugar gain today. Demand in the world will surpass production resulting in concern that the worldwide supply deficit will increase. October futures for raw-sugar gain $0.0007 (0.4 percent) to $0.1787/pound as of 12:04 on ICE Futures  U. S. in New York.

The falling dollar increased the attractiveness of precious metals as an alternative investment causing gold to go up today. Federal Reserve Chairman Ben S. Bernanke reimplemented a plan to keep benchmark U.S. lending rates at historic lows for a continuous period. August futures for gold increased $5.50 (0.6 percent) to $952.40/ounce at 12:39 on the New York Mercantile Exchange’s Comex division.