Commodity Blog

Posts Tagged ‘Brazil’

Raw-sugar futures gained today on concerns that drought may threaten harvest in Brazil, the largest producer. Harvest of sugar-cane in Brazil’s Center South, the biggest growing region in the world, may be lower than estimated 570 million metric tons if dry weather persists. October delivery for raw sugar rose $0.0063 (3.2 percent) to $0.2038 per pound as of 10:48 on ICE.

While in some countries wheat harvest is also threatened by drought, in Europe wheat faces other danger: excessive rains. Wheat prices jumped on speculation that Germany and some other countries of the Western European Union would have too much rain and also after Egypt bought 225,000 metric tons of wheat from the US. December futures for wheat delivery gained $0.23 (3.4 percent) to $7.0875 per bushel by 13:15 on CBoT.

Crude oil prices jumped today after manufacturing in the US and China expanded in August faster than expected. ISM PMI in the US rose from 55.5 to 56.3 in August. October settlement for crude oil (Brent) went up $1.71 (2.3 percent) to $76.35 per barrel on ICE.

Soybeans gained today on speculation that US inventories will decline with increasing China’s imports. China bought 284,000 metric tons of US soybeans for delivery after September 1st, while Chinese processors may have purchased more than 1.2 million tons of soybeans from the US in the previous week. November futures for soybean delivery went up $0.0525 (0.5 percent) to $10.39 per bushel as of 10:12 on CBoT.

Cocoa slipped to the lowest level in three months in London on outlook for better harvest in Ivory Coast, the biggest grower in the world. The harvest starting next month may rise 11 percent to 1 million metric tons from 900,000 tons in the previous year. December delivery for cocoa gained $4 (0.1 percent) to $3,039 per ton by 12:03 on ICE.

Raw-sugar futures erased gains, sliding to the two-week low, on speculation that growing supplies from Brazil will curb the global deficit. Production in Brazil’s Center South, the largest producing region in the world, advanced 26 percent in the first half of July. October delivery for raw sugar fell 0.5 cent (2.7 percent) to $0.1774 per pound as of 13:10 on ICE.

Hogs futures slipped today on forecast that high US pork prices may diminish retail demand. Meatpackers shipped 9.215 million pounds of pork last week, the worst week since late June. October futures for hog settlement slid $0.003 (0.4 percent) to $0.793 per pound at 9:42 on CME.

Raw sugar experienced a strongest decrease in almost two moths on speculation that supplies from Brazil and India, the world’s largest producers, would increase, erasing the global deficit. Production in Brazil’s Center South increased by 26 percent in the first half of July, while cane planting in India was boosted by rains, which were 2.5 percent above the 50-year average in July. October delivery for raw sugar slumped $0.0079 (4.1 percent) to $0.1861 per pound by 9:45 on ICE.

Coffee futures dropped the most in two weeks on speculation that the commodity rallied too much, considering the anticipated high supplies from Brazil, the biggest producer. Global coffee production may grow 12 percent to 135 million bags in the year starting October 1st. September delivery for Arabica coffee slid $0.0475 (2.8 percent) to $1.6775 per pound as of 10:04 on ICE.

Sugar prices tend to be unpredictable, as they demonstrated at the first half of this year, slumping dramatically instead of rising, as traders expected. Recently the prices showed signs of some recovery, though. So, where do we stand now, what can we expect? In fact, sugar prices again show unpredictability as analysts provide completely different opinions on this matter. Such turn of event isn’t surprising, as the prices very dependent on weather, which itself quite hard to predict.

On the positive side, we had dry weather in June, import levy in India and outlook for stable demand. Drought might damage crops in Thailand, reducing yield by 10–15 percent. Some experts say that adverse weather may harm next-year harvest in Brazil too. Even in case of big harvest, Brazil may experience problems with delivering it to foreign importers, as it’s currently unable to load sugar on all ships waiting in ports. India may impose 40 percent tax on imports, supporting the price. India may actually keep its supplies from global markets to meet the local demand.

On the negative side, outlook for growing supplies makes it unlikely for sugar price to rise significantly. Indian tax, while supportive for the price, unlikely to boost it higher than current level. India expected to produce about 26 million metric tons of the sweetener, from which around 500,000 tons might be exported. Forecast for Brazilian harvest for the most part shifted from promising lower supplies to predicting higher output. Brazil’s output may climb 14 percent to as high as 41 million tons. Economists say that global deficit would shift to surplus of about 5 million tons in the next season.

All in all, there is no reason to expect major upswing of sugar prices. The prices expected to remain for the most part in the $0.15-$0.18 range. Price of $0.13 can be considered a good buying opportunity.

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.

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.

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.

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.

Corn futures dropped today after forecast that U.S. corn stockpiles may reach a highest level in five years. Reserve supplies will increase 4.6 percent to 1.818 billion bushels (45.9 million metric tons). July futures for corn delivery slipped $0.015 (0.4 percent) to $3.705 per bushel yesterday on CBoT.

Orange-juice continues to rise on outlook for low fruit supplies from Brazil and Florida. The output in Brazil will total 286 million boxes in the states of Sao Paulo, Minas Gerais and Parana; while Florida expected to produce 131.6 million boxes in the harvest that ends in July. July delivery for orange juice advanced $0.035 (2.5 percent) to $1.4155 per pound as of 10:52 on ICE.

Copper prices fell today for a first time in three sessions on speculation that demand from Europe and China will go down as an economic growth will slow. Increasing inflation may prompt China to cool its economy and European problems aren’t expected to go away even after the unprecedented loan package. July futures for copper delivery slid $0.0315 (1 percent) to $3.1965 per pound by 11:45 on the COMEX in New York.