Commodity Blog

Posts Tagged ‘Argentina’

Wheat prices hit the highest level in a week today on an outlook for reduced output from Argentina and Russia because of drought. Global inventories may decline 9.9 percent to 174.8 million metric tons. December futures for wheat delivery gained $0.215 (3.1 percent) to $7.165 per bushel as of 11:21 on CBoT. Concerns about adverse weather boosted wheat futures, causing them to rise 45 percent since the end of June.

Gold fluctuated today, but expected to resume its rally as faltering economic recovery and declining US equities increased demand for the metal as a safe haven. US stocks dropped after a government report showed that personal income rose less than predicted. The gross domestic product rose 1.6 percent in the second quarter of 2010, less than estimated in the previous month. December futures for gold delivery slid $0.5 to $1,237.40 per ounce by 11:25 on COMEX. Gold prices advanced 13 percent this year, touching the record level of $1,266.50 per ounce in June.

Cotton and soybeans dropped today on signs of increasing output. U.S. farmers planted cotton on the area, 19 percent wider compared to the previous year. The soybeans seeded area will be 1.8 percent wider compared to the last year and will reach the all-time record, while combine output of Brazil and Argentina will grow by 37 percent. December delivery for cotton slid $0.0051 (0.7 percent) to $0.7762 per pound as of 9:50 on ICE. November futures for soybean delivery slipped $00325 (0.4 percent) to $9.0875 per bushel by 11:03 on CBoT.

Raw sugar climbed to the weekly high level on forecast that output in India would be reduced by adverse weather. Production in Thailand may also fall; it expected to decline by 13 percent. October delivery for raw sugar rose $0.0041 (2.7 percent) to $0.1569 per pound as of 11:50 on ICE Futures U.S.

Copper rebounded today as the concern for the global recovery eased after the report about the increased manufacturing in the U.S. Chicago PMI index value of 59.1 in June indicated an increase, as figure above 50 signals about growth. September futures for copper delivery gained $0.0165 (0.6 percent) to $2.947 per pound at 12:20 on COMEX.

Soybean prices changed little today and are heading for the biggest weekly increase in two months on the prospect that China will expand its purchases of soybean oil from the U.S. China is shifting to imports of soybean oil from the U.S. and Canada after the country has cut imports from Argentina. The additional demand may put strain on the U.S. supplies. July delivery for soybean futures dropped $0.0075 to $9.9225 per bushel by 11:59 the Chicago Board of Trade.

Wheat reached the highest level in six weeks as speculators decreased bets on falling prices after the largest weekly rally of the futures in two months. Speculative short positions outnumbered long positions by 74,286 contracts by April 6th. Funds were buying to cover short positions every time there was increase on the market. July futures for wheat delivery gained $0.0975 (2 percent) to $5.025 per bushel on CBoT.

Soybeans reached the highest level in seven weeks after the report that China may continue its purchases of supplies from the U.S. The demand for the supplies from the U.S. rose as China stopped the soybean-oil imports from Argentina. The country may import 5.5 million metric tons in the next month. July futures for soybean delivery rose $0.0375 (0.4 percent) to $9.7925 per bushel as of 11:01 on the Chicago Board of Trade.

Copper gained on the weakening dollar and the recovery of the U.S.economy. U.S. retail sales rose in March more than forecast, signaling about the widening economic rebound. The U.S. currency dropped versus the basket of the six major currencies, making commodities more appealing as an inflation hedge. May futures for copper delivery gained $0.0075 (0.2 percent) to $3.608 per pound by 12:10 on NYMEX.

Hog futures advanced today as the supplies of animals from the U.S. are declining, while the demand for the pork rises. The output of the pork was lower this week because of the Easter holiday, but meat packers may restart pork production after the holiday to profit from the high pork prices. The U.S. meat demand usually increases with a warm weather as more consumers are grilling outdoors. June settlement for hog futures advanced $0.00475 (0.6 percent) to $0.83375 per pound today on the Chicago Mercantile Exchange.

Soybeans dropped today on a speculation that the record harvests in Brazil and Argentina will curb demand for the U.S. supplies. As the 10-day strike by dockworkers in Argentina, which was blocking shipments of soybeans, have been settled, the renewed supply from this country may cause a decline of the demand from the U.S. supplies of soybeans. May futures for soybean delivery dropped $0.0775 (0.8 percent) to $9.3325 per bushel by 10:10 on CBoT.

Analysts think that soybean imports by China, the largest buyer in the world, may rise to a record as increased crusher capacity and growing demand for livestock feed may put strain on global supplies. The country consumes more than half of the global soybean exports. China plans to import about 45 million metric tons in the year ending September 30th, 5.9 percent more than previously predicted. While soybean meal consumption fell since January, this decline is considered to be temporary and demand should rebound in the near future.

Yet some analysts are rather pessimistic about soybeans prices. They insist that even with increasing Chinese import supply may exceed demand. World production increased 40 million tons (20 percent) this year, partly because of record harvests in Brazil and Argentina. The contract for May delivery traded at $9.6050 per bushel in Chicago today. Soybean futures fell 8.4 percent this year.

Wheat gained as U.S. farmers are cutting sales on anticipation that a weaker dollar will increase demand for the grain. Price was falling as global wheat supplies are increasing faster than world demand but low wheat planting this winter may cause lack of supplies, leading to rebound in price. May futures for wheat delivery rose $0.1125 (2.2 percent) to $5.1575 per bushel on the Chicago Board of Trade.

Corn advanced on speculation that excessive rainfall may harm crops in Argentina. Price is supported by combination of a falling dollar, adverse weather and improving world stock markets, as well as by farmers, who are holding crops for higher prices. May futures for corn delivery jumped $0.0525 (1.4 percent) to $3.8675 per bushel in Chicago.

Gold may rise to $1,162 per ounce, according to technical analysis, in case prices hold above $1,135 level. The precious metal advanced 3.6 percent this year. Gold traded at $1,136.45 by 10:44 in London.

White sugar gained in London on signs that a global production deficit may persist, encouraging importers to increase inventories. Production of sugar cane in Brazil and India, the largest growers in the world, was hampered by adverse weather. Analysts forecast that global demand will exceed worldwide output by 9.4 million metric tons in the 2009–10 season. May delivery for white sugar rose $7.60 (1.1 percent) to $714.50 per metric ton on the Liffe exchange.

Wheat, soybeans and corn dropped in Chicago after the dollar gained, making purchases of U.S. crops unprofitable for traders, who are using other currencies. May delivery for wheat lost 1.3 percent to $4.9325 per bushel on CBoT by 12:34. Argentina, the third biggest soybean exporter in the world, may produce more soybeans than previously predicted record 52 million tons with the aid of rains. May delivery for soybeans declined 0.7 percent to $9.575 per bushel. Corn planting is expected to increase from 86.5 million acres last year to 89 million this year. May delivery for corn fell 0.7 percent to $3.6625 per bushel.

Corn is the most widely grown crop in the United States. 332 million metric tons of the crop are harvested annually in the U.S. What prospects are for the corn in 2010?

By the end of 2009 future seemed to be bright for corn prices as adverse weather caused late planting in the U.S. But everything has turned upside down when the U.S. Department of Agriculture predicted that US corn production will reach a new record. USDA estimated 2009 corn crop as much as 13.15 billion bushels, while analysts forecast yield to be about 12.82 billion bushels. U.S. corn exports forecast went down by 50 million bushels to 2.1 billion bushels, further pushing down outlook for corn prices. U.S. exporters also have to deal with competition from Argentinean corn. Production of corn in Argentina may reach 17 million bushels, compared with estimated 12 million bushels, and at least 9 million bushels will be available for export. Slow recovery of U.S. economy does not help demand, and therefore prices, either.

Yet not everything looks dim for corn. Low prices improved exports by 20 percent this month. Recent reports about low soil moisture in Argentina corn growing areas are also supportive for corn prices. As you see, conditions can change significantly over small amount of time, making hard to say which price should be expected. USDA forecasted the price for the corn to be in a range of $2.90-$4.50 per bushel, suggesting with such a wide range that Department is unsure too. Analysts say that “there are not many fundamental reasons for high corn prices” and “technical support should not allow prices to fall much more”.

Copper gained in New York and London after imports of the industrial metal into China rose for a second month and the dollar fell. Shipments of copper into China increased to 369,400 tons in December. March futures for copper delivery gained $0.0405 (1.2 percent) to $3.441 per pound on the Comex division of the New York Mercantile Exchange. Delivery for copper in three months rose $106.50 (1.4 percent) to $7,567.50 a ton ($3.43 a pound) on LME.

Corn futures slid and soybeans declined on speculation that demand for supplies from the U.S. will decline as rains will increase crop yields in Argentina and Brazil. Rainfall will aid crops in Brazil in the next 10 days and will increase soil moisture for developing corn and soybeans in the next two days in Argentina. March futures for corn delivery declined $0.005 to $4.225 per bushel on the Chicago Board of Trade. March futures for soybean delivery slid $0.115 (1.1 percent) to $10.105 per bushel in Chicago.

Sugar tumbled to the lowest in nine weeks after speculators increased sales as prices last week reached the record in almost 29 years. Hedge-fund managers and other speculators boosted net-long positions by 25 percent in the last six weeks. March futures for raw-sugar delivery dropped $0.0078 (2.8 percent) to $0.2675 per pound on ICE.