Commodity Blog

Posts Tagged ‘Canada’

The unusual heat in many wheat-producing countries, especially Russia and parts of Eastern Europe, this summer hurt crops and decreased output from autumn harvest. Concerns for possible wheat shortage increased prices and boosted demand for exports from wheat-producing countries unaffected by unfavorable weather, primarily from the US. Can we expect wheat deficit and further increase of prices?

The scenario of a price surge doesn’t look likely. Lower output in countries hit by bad weather may be outweighed by production in such countries as the US, Canada and Australia. Even in countries like Russia and European Union, where crops were harmed by weather, improving weather boosts prospect for winter wheat. Global inventories of wheat also remain plentiful, making possibility of a deficit very low.

Global output is expected to total from 643 million metric tons to 644 million. Global inventories are predicted to reach 177.8 million tons this month and 183 million by the end of this year. Global wheat consumption is estimated in a range from 657 million ton to 661.2 million. Prices forecast to remain mainly in a range of $4.95-$5.65 per bushel.

Wheat prices fell today as Canada’s government report predicted that production would decline less than previously estimated. Canadian wheat output will decrease 15 percent, compared to previous estimates of a 17 percent decline. Wheat prices surged earlier after Russia banned exports because of worst drought in about half-a-century. December futures for wheat delivery slid $0.06 (0.8 percent) to $7.0825 per bushel as of 10:21 on CBoT.

Gold slipped together with other commodities today as signs slower global economic growth caused investors to sell commodities and equities. Stronger dollar also pushed gold prices lower. Reports this week increased concerns that US economy may experience double-dip recession. Next week can also bring news, as reports expected to show that sales of existing homes in the US decreased, growth of exports from Japan slowed and German business confidence weakened. December futures for gold delivery went down $7.10 (0.6 percent) to $1,228.30 per ounce by 11:19 COMEX.

Sugar prices went up today in New York for the first time in three days on prediction that harvest may be hurt by low precipitation in India, sugar’s biggest consumer. In the week that ended June 23 India’s monsoon, the main source of nation’s irrigation, was 21 percent below average. October delivery for raw sugar rose $0.0038 (2.4 percent) to $0.1619 per pound on ICE.

Wheat futures rose today for the first time in a week also on outlook for adverse weather. As much as 12.5 million acres of grain were prevented from being planted in Canada because of rainfall. The output from the U.S. and Russia may also be lower because of adverse weather. September futures for wheat delivery gained $0.0175 (0.4 percent) to $4.775 per bushel on CBoT.

Copper prices gained today as government reports signaled that demand may be higher then economic indicators previously suggested. Cores durable goods orders rose by 0.9 percent in May and unemployment claims dropped from 476,000 to 457,000 last week, suggesting that the U.S. economic recovery strengthens. On the negative side we have unexpected plunge of new home sales from 446,000 to 300,000, which may curb gains of the metal prices. September futures for copper delivery added $0.0695 (2.4 percent) to $3.024 per pound on COMEX.

Wheat rose today amid speculations that planting in Canada might be at its lowest level in almost four decades because of excessive precipitation. Farmers in Canada, the second largest grower of the grain in the world, may plant 19.15 million acres of wheat, down 18 percent from the previous year and the lowest level since 1971. September futures for wheat delivery gained $0.0175 (0.4 percent) to $4.785 per bushel on the Chicago Board of Trade.

Sugar dropped today from its highest level in seven weeks as traders think that prices rallied too much. Analysts say that fundamentals remain unchanged and the decline is just correction after an excessive rally. October delivery for raw sugar slipped $0.0045 (2.8 percent) to $0.156 per pound on ICE.

Arabica-coffee also declined on the opinion that its rally was overdone. Experts have divided opinions on an optimal price level for Arabica-coffee. Some say that current price is where it has to be, while others argue that fundamentals are pointing to higher price. September delivery for Arabica-coffee slid $0.018 (1.1 percent) to $1.578 per pound on ICE.

Soybeans went up to the highest in two weeks with rising demand in China and U.S. Prices was also boosted by drought in Brazil and Argentina, decreasing soybeans exports from these countries in 2009. March futures for soybean delivery went up $0.0025 to $10.62 per bushel on the Chicago Board of Trade.

Coffee futures touched a record in 15 months on outlook that yield will drop in Brazil and Vietnam, the largest producers in the world. Coffee prices may also rise with colder weather boosting demand. March futures for Arabica-coffee delivery increased $0.0135 (0.9 percent) to $1.4725 per pound on ICE.

Wheat slid as the stronger dollar forced down demand for exports from the U.S. As crop is being harvested in Australia, while some countries like Canada and France also have wheat for sale, it looks like supply just exceeds demand. March futures for wheat delivery slid $0.0675 (1.2 percent) to $5.3675 per bushel on CBT.

Petro-Canada, prominent in global oil and gas production and gasoline retailing in Canada, says its fourth-quarter profit jumped 36 per cent to $522-million, from a year-earlier $384-million.
Net earnings in the quarter ended Dec. 31 amounted to $1.08 a share, compared with 77 cents per share a year ago, the Calgary-based company reported Thursday.
Analysts’ consensus forecast was for earnings of $1.32 a share, before one-time items, according to Thomson Financial.
“The fourth quarter was a solid quarter, capping off an excellent year,” CEO Ron Brenneman said in a release. “We successfully followed through on our two business priorities; exceeding our upstream production targets and not only advancing five major projects, but adding two more.
“In 2008, we will bring on the Edmonton refinery conversion project — a significant contributor to future cash flows. We will also advance our six other growth projects, making final investment decisions on Fort Hills, the Syria Ebla gas and Montreal coker projects.”
The company credited higher operating earnings and gains on foreign currency translation of long-term debt, partly offset by a change in the value of the Buzzard derivative contracts in the North Sea.
Net earnings from continuing operations for the full year totalled $2.7-billion or $5.59 a share, compared with $1.6-billion or $3.15 per share in 2006.
During the fourth quarter, the company entered into derivative contracts to close out the hedged portion of its Buzzard production from Jan. 1, 2008, to Dec. 31, 2010, resulting in an after-tax charge of $120-million.
The North American natural gas business unit recorded a charge of $97 million after tax for the impairment of coal-bed methane assets in the U.S. Rockies “due to probable reserves reductions, combined with lower prices.”
In 2008, the firm plans to drill up to 17 wells focused in the North Sea, offshore Trinidad and Tobago, Libya and in the Northwest Territories and Alaska.
Work is under way for the drilling of the three North of 60 wells in the first quarter of 2008. In the North Sea, Petro-Canada and its partners plan to drill up to six wells.