Commodity Blog

Posts Tagged ‘Argentina’

Corn and soybeans fell on forecast that rains may alleviate drought in South America. Global Weather Monitoring predicted that about 90 percent of areas planted with soybeans in Argentina and Brazil will get as much as 3 inches (7.6 centimeters) of rainfall. Previously, the region suffered from drought, therefore the forecast increases prospects for output.

Returning worries about the debt crisis in the European Union also hurt the commodities. European leaders were meeting yesterday at summit in Brussels. Investors are concerned that previously planned measures won’t be enough to contain spread of the problems across the eurozone.

Corn traded near $6.3200 per bushel today as of 00:43 GMT on CBoT, following the slump from $6.3925 to $6.3200 yesterday. Soybeans traded at $11.8900 per bushel today after falling from $12.1425 to $11.8525.

Corn and soybeans were rising today on concerns that bad weather in South America may hurt crops. Later the agricultural commodities reversed its trend. Corn closed above the opening price, while soybeans ended session with losses.

The continuing drought in Brazil and Argentina is worse than forecasters previously estimated and yield may be lower than was anticipated. The US Department of Agriculture predicted that Argentina will harvest 29 million metric tons of corn and 52 million tons of soybeans.

The problems in the European Union reduced demands for commodities, including corn and soybeans. A report of the European Commission showed that the economic sentiment in the eurozone declined.

Corn closed at $6.4350 per bushel on CBoT today after opening at $6.4200 and climbing to $6.4950. Soybeans fell from $11.9800 per bushel to close at $11.8852, following the advance to $12.0900.

Corn jumped today in the longest rally this year on concerns about dry weather in South America. Commodity Weather Group predicted that about 50 percent of the crops in Argentina will be dry in the next 10 days and about a third of Brazil’s crops will also suffer from drought. Corn advanced from $6.3200 to $6.4125 per bushel today as of 23:32 GMT on CBoT and reached $6.4625 earlier — the highest price since November 16.

Oil declined as concerns about the European debt crisis intensified. The European Central Bank boosted lending to banks of the eurozone, spurring speculation that the European financial system is failing. February futures for crude oil delivery dropped $1.98 to $99.36 per barrel on NYMEX. Brent crude declined from $109.06 to 107.41 per barrel today on ICE after falling earlier to $106.77.

Corn and soybeans gained on the concerns about the adverse weather in Argentina and Brazil. Forecasters said that hot, dry weather may hurt crops in the South African countries. Corn climbed from $5.7825 to close at $5.8275 per bushel on CBoT. Soybeans advanced from $11.1225 to $11.2975 per bushel.

Coffee fell as inventories grew. ICE-monitored stockpiles rose for the fifth consecutive week and have increased 20 percent since November 1. The prices may still rebound as the forecast of the US Department of Agriculture showed that the balance of supply and demand may result in deficit. Coffee prices declined from $2.1340 to $2.1095 per pound on ICE.

Corn and soybeans gained today on the speculation that the recent slump of the price will spur demand from makers of food and fuel. Prices for cattle and hogs jumped this year, potentially prompting farmers to increase their herds and to buy more animal feed as a result. The drought in Argentina can reduce supply, further boosting the agricultural commodity. On the other hand, forecasters say that the drought in Brazil may soon end and that can reduce the impact of lower supply from Argentina.

Corn was up from $5.8000 to $5.8575 per bushel on CBoT today, following the intraday drop to $5.7000 per bushel. Soybean price advanced from $11.2550 to $11.3000 per bushel today after falling earlier to $11.2025 per bushel.

Wheat was a different story as it declined on the forecast that the demand will decrease, while stockpiles will grow, yet the crop was also trying to erase its losses by the end of the trading session. Economists expect China to reduce its wheat import as the nation’s economy is slowing. Market forecasters predict that the report of the US Department of Agriculture on December 9 will show that the global wheat inventories rose 202.89 million tons, compared to the November estimate of 202.6 million tons.

Wheat closed at $5.9775 per bushel on CBoT down from the opening price of $6.0050, but significantly above the daily low of $5.8825.

Wheat was flat today after falling yesterday on forecasts of increasing supply.

The Grain Industry Association of Western Australia predicted that output from Western Australia may double to 9.24 million metric tons, above the 9.12 million tons estimated last month. Rainy weather in Argentina may help accelerate planting. Oil World forecast that Argentine farmers will increase sowing 6.8 percent to 4.87 million hectares (12 million acres).

Growing production in the Southern Hemisphere added to increasing supply from Russia and Ukraine. As a result, demand for the US wheat shrank. US exports are expected to drop to 26.54 million tons in the 2011–12 season from 35.1 million tons a year ago, according to the Department of Agriculture.

Wheat spot price was near its opening level of $6.1625 per bushel as of 8:09 GMT on CBoT.

Corn posted the biggest advance in more than a week on the anticipation of returning demand for the US supplies. According to the report of the US Department of Agriculture, the US exports of corn totaled 1.763 million metric tons in the week ended October 13, the highest level since March. Total sales for delivery before August 31 were 5 percent above the sales in the same period of the previous year, being at the highest level in four years. Settlement for corn jumped from $6.38 to $6.50 per bushel by 23:38 GMT today on CBoT.

The forecasts of good weather drove soybeans down. Dry weather in Brazil and rains in Argentina should boost harvest. The problems of Europe and the resulting worries also weighted down the oilseed. Soybean prices retreated from $12.2525 to $12.2350 per bushel today on CBoT.

The European crisis also caused the drop of rubber to the lowest level in 14 months. The leaders of European nations will discuss the situation in Europe at the summit this weekend. Some economists argue that the bailout fund will be boosted. Yet others speculate that the politicians won’t be able to reach an agreement and such speculation weight the commodity down. January future fo delivery of rubber slumped as much as 4.4 percent to 25,445 yuan ($3,985) per ton in Shanghai.

Soybeans showed a strong rally in the previous year and in January, which has stalled recently. It looks like the commodity ran ahead of itself. Soybeans, as well as soybean meal and soybean oil, may advance in the next month, though.

There are some concerns regarding soybeans and soybeans meals as the high prices may curb demand. The Oil Crops Outlook by the United States Department of Agriculture supported the outlook for lower demand. Soybean crushing decreased by 2 million bushels to 153.1 million bushels in December. The US exports of soybean meal dropped 1.9 million short tons as of February 3 from a year earlier. Crops in Argentina may be boosted by rains, but the harvest will be likely smaller because of the previous drought. The lower supplies from Argentina will be easily offset by output from Brazil and Paraguay.

Soybean oil is excluded from this negative trend, even though the prices for the commodity are high. In fact forecasts suggest that the price for soybean oil may reach the record average monthly level. The USDA raised its 2010/11 forecast for this month by 100 million pounds to 2.8 billion. China is the biggest buyer, purchasing 38 percent of the US soybean oil.

Despite the not encouraging outlook for the demand, the World Agricultural Supply and Demand Estimates predict an increase of the prices for the soybean group of commodities. The soybean price range for 2010/11 is projected at $11.20 to $12.20 per bushel, the soybean oil prices are forecast at $0.51 to $0.55 per pound and the soybean meal prices are forecast at $340 to $380 per short ton.

Soybeans touched the highest level in 30 month and corn gained as the strike of port workers in Argentina disrupted supplies, increasing demand for exports from the US. The Chamber of Commerce announced that 30 ships at main terminals have been blocked. The US Department of Agriculture reported that US exports of corn totaled 120,000 metric tons and sales of soybeans reached 110,000 tons.

Prices also rose on the signs of increasing demand from China. The USDA reported that US exporters sold 20,000 tons of soybean oil to China in the year ending September 30.

March futures for corn delivery rose $0.065 (1 percent) to $6.66 per bushel. Prices touched the highest level in 30 months of $6.67 on January 21. March futures for soybean delivery gained $0.25 (1.8 percent) to $14.38 per bushel by 13:15 on CBoT, the biggest increase since January 12. The contract earlier reached $14.405, the highest price since July 21, 2008.

Corn and soybeans gained today as unfavorable weather may reduce output in Argentina and Brazil. Rains missed some important regions in the South African countries and now forecasts promise dry weather and high temperatures, which may harm crops. March futures for corn delivery gained $0.12 cents (2 percent) to $6.07 per bushel as of 13:15 on CBoT. March futures for soybean delivery went up $0.155 (1.1 percent) to $13.805 per bushel.

Copper extended its decline today on the speculation that demand in China may drop. Chinese copper imports fell 2 percent in September, following the 29 percent jump in November. March futures for copper delivery dropped $0.018 (0.4 percent) to $4.2645 per pound by 13:16 on COMEX.

Gold and silver rallied today as concerns about potential spreading of the European debt crisis strengthened. Costs of insuring Portugal’s and Spain’s debt against a default jumped to the record ahead of the planned bond sales. February futures for gold delivery climbed $5.20 (0.4 percent) to $1,374.10 per ounce at 13:55 on COMEX. March futures for silver delivery rose $0.19 (0.7 percent) to $28.861 per ounce.