Commodity Blog

Posts Tagged ‘Brazil’

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.

Crude oil fell on the speculation the spreading Europe’s crisis will slash demand. Germany auctioned its debt yesterday and it was considered a disaster as there was a significant lack of demand for the government bonds, reinforcing concerns about Europe’s economy. The US economy also showed sings of slowdown. January futures for crude oil dropped $2.25 to $95.76 per barrel before trading at $96.45 on NYMEX.

Sugar prices declined on the outlook for higher supply from Brazil. Luis Pogetti, chairman of the Copersucar SA, predicted that production will go up to 34 million metric tons in Brazil’s Center South next year. India is also expected to add to the global supply. March contract for delivery of raw sugar fell 1 percent to $0.2321 per pound on ICE after reaching $0.2316 — the lowest level since June 2.

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.

The sugar futures managed to pare their recent losses and reach the highest level in more than a week today amid the positive market sentiment. It’s based on the German approval of the additional powers for the eurozone bail-out fund, better fundamental reports from the United States and the increasing expectations of poor sugar production in Brazil.

Brazil is holding the worlds leadership in sugarcane growing with about 37 percent share of the global industry. News of the decreased sugarcane crops in this country due to the bad weather conditions have inspired the market last Friday. Now the seeds of these speculations have fallen on a fertile soil of the global market optimism.

German Bundestag approved the extra rights for the European Financial Stability Facility — the eurozone bail-out fund. The new functions will include buying bonds on the secondary markets, recapitalization of the banks and issuing the precautionary credits. This will most likely help to contain the European debt crisis, increasing the global demand for commodities.

The US statistics played its role in the rise of sugar prices today — last week’s unemployment claims turned out to be about 7 percent lower than the median forecast of the economic strategists was showing. Additionally, the second quarter of 2011 GDP growth figure was revised positively in the United States. These factors added to the reasons for the bull markets today.

Sugar futures contracts with September 30 delivery rose from $25.62 to $27.08 for 112 pounds or about 5.7 percent as of 17:47 GMT today. The highest intraday level was at $27.64 — commodity’s maximum price since September 21.

July sugar exports from Brazil (the world’s biggest sugarcane producers) climbed to the maximum in eight previous months, pushing the market prices for this commodity down to 2-week minimum.

From the technical analysis point of view, the decline is finely justified as a correction that followed a sharp rally in July. That rally was induced by the rumors that Brazilian production will decline.

The market analysts point out the fact that the buyers are currently afraid of the tons of supply that may get into the market anytime. If that happens, supply may overwhelm any demand, sending the prices down the hill.

September sugar futures fell from $29.02 to $28.27 per 100 pounds or more than 2.5 percent as of 17:17 GMT on ICE today. It’s the lowest level since July 18.

Soybeans extended the longest rally since August on concerns that adverse weather may hurt crops in the US. The National Weather Service predicted that temperatures will be 12 degrees Fahrenheit above normal for five days starting July 16 in the Midwest. November futures for delivery of soybeans added $0.02 cents (0.1 percent) to $13.8175 per bushel at 10:30 on CBoT.

Gold retreated from the record as Federal Reserve Chairman Ben Bernanke spoke today, indicating that the Fed won’t add more stimulus for the US economy. Earlier the precious metal jumped to a record as Fitch Ratings downgraded Greece’s credit rating. August futures for delivery of gold gained $4.10 (0.3 percent) to $1,589.60 as of 12:46 on COMEX after reaching the all-time high of $1,594.90 per ounce.

Sugar posted a biggest drop in eight weeks today on the forecast that production in Brazil will be bigger than previously estimated. Prices climbed 24 percent in the last month on concerns about output. October futures for delivery of raw sugar slumped as much as 0.0122 (4 percent) to $0.2902 per pound by 14:00 on ICE, posting the biggest drop since May 19. Yesterday, the price reached the highest level in five months of 0.3133 cents.