Commodity Blog

Posts Tagged ‘CBoT’

Gold and silver erased this year’s gains as the credit crisis in Europe continue to weaken demand for raw materials. Talks about Greece exiting the euro-union are becoming more and more serious and some analysts even speculate about collapse of the eurozone. Traders seek a safe haven amid uncertainty and economic turmoil, but it looks like the dollar took the role of refuge that was traditionally attributed to precious metals. Gold was down from $1,541.40 to $1,535.80 per ounce on COMEX yesterday, reaching $1,533.80 intraday — the lowest price since December 29. Silver fell from $27.69 to $26.90 per ounce yesterday — the lowest settlement since December 29, while today it opened at$27.21.

Wheat jumped today for the fourth trading session as bad weather in various parts of the world threatened to curb output. Russia continues to suffer from drought and parts of Kansas suffer from the same problem. Russia is the world biggest exporter. Wheat is the fourth biggest US crop and Kansas is the biggest wheat-growing region of the United States. Wheat climbed from $6.3825 to $6.4325 per bushel as of 00:51 GMT on CBoT today.

Wheat posted the biggest gain in more than two weeks as adverse weather in the United States threatens to curb output. The US Department of Agriculture estimated that 52 percent of crops were in good or excellent condition as of May 13 the Kansas, the biggest US grower, down from 60 percent in the week before. Dry weather in parts of Russia and Ukraine is expected to further reduce supply of the grain. Wheat climbed from $5.9525 to $6.0700 per bushel as of 21:09 GMT on CBoT today, posting the biggest gain since April 27.

Oil and rubber fell on political turmoil in Greece. Greek political parties failed to form a new coalition government, resulting in new election. Polls show that many Greeks favor parties that stand against austerity measures demanded from the European Union and the International Monetary Fund in exchange for a bailout. Greece may leave the eurozone and the resulting fear harm markets. Futures for delivery of crude oil in June fell $0.8 to $93.98 per barrel on NYMEX, the lowest price since December 19. Brent crude advanced from $111.13 to $111.86 on ICE today. The futures for delivery of rubber in October tumbled as much as 5.1 percent to $3,317 per metric on the Tokyo Commodity Exchange, the lowest settlement for a most-active contract since January 6.

Soybeans gained today after three sessions of losses on speculation that adverse weather in South America will bolster demand for US exports. The US Department of Agriculture predicted that soybean exports from the United States will climb 14 percent. The Department estimated that US stockpiles of the grain will shrink to 145 million bushels by August 31, 2013, from this year’s 210 million. Soybeans jumped from $14.2775 to $14.4700 per bushel as of 20:05 GMT today on CBoT.

Oil was down today extending its losses after the US Energy Department reported yesterday that US stockpiles grew. US inventories of crude climbed by 3.7 million barrels to 379.5 million barrels last week — the highest level since 1990. Rumors that Saudi Arabia boosted output were also negative for oil prices. Brent crude fell today from $112.73 to $112.57 per barrel on ICE.

Soybean futures gained today as adverse weather hurt crops in Argentina and Brazil, boosting demand for US exports. The US Department of Agriculture reported that the United States were selling about 100,000 of metric tons daily, rising 10 times since the beginning of April. China was the biggest buyer. Soybeans closed at $14.7450 per bushel today on CBoT, following the drop from $14.6825 to $14.5800.

Crude oil slumped today as growth of US nonfarm payrolls was much smaller than was predicted by analysts. The payrolls rose just by 115,000 in April, while an increase of 173,000 was expected. That confirmed the earlier data that showed slowdown of US employment growth. The report fueled concerns that the global economic recovery is faltering. June futures for delivery of crude oil dropped as much as $2.11 to $100.43 per barrel (the lowest since February 14) before trading at $100.66 as of 13:46 on NYMEX today. Brent oil fell from $116.09 to $113.20 per barrel on ICE after touching $111.76 — the lowest price since February 2.

The ongoing drought in South America, the biggest oilseed producer in the world, continues to heat up the prices of everything related to cooking oil — from soybeans to palm oil. Meanwhile, experts’ forecasts project an elevated demand for this type of agriculture in Asia this year despite the overall decline in commodity consumption.

The US farmers have switched a significant part of their fields from the oilseed (mainly soybean) to corn on a higher corn prices last year. Now the lack of the soybean crops is driving the commodity up. It’s in a strong uptrend since mid-December of 2011. The US Department of Agriculture forecasts that the reserve-to-demand ratio for the main oil plants will fall this year to the lowest levels in decades.

Decreasing production of the soybean oil may spur the growth in palm oil market. Palm oil is the most popularly consumed edible oil in the world and, while its production isn’t affected by such adverse weather conditions as soybean. Its demand is going to grow this year. Market analysts expect the palm oil to be in an uptrend at least until the fourth quarter of 2012 when the commodity surplus reaches its peak.

Soybean rose from $14.2125 to $14.3000 per bushel as of 15:35 GMT on CBoT today. Soybean oil went up from $0.5573 to $0.5615 per pound during the day.

Oil climbed today, rising for the second day, as central banks of developed nations signaled that they may stimulate their economies. Janet Yellen, a member of the Federal Open Market Committee, suggested that the US economy needs stimulus despite signs of recovery:

I consider a highly accommodative policy stance to be appropriate in present circumstances. But considerable uncertainty surrounds the outlook, and I remain prepared to adjust my policy views in response to incoming information. In particular, further easing actions could be warranted if the recovery proceeds at a slower-than-expected pace, while a significant acceleration in the pace of recovery could call for an earlier beginning to the process of policy firming than the FOMC currently anticipates.

Masaaki Shirakawa, the Governor of the Bank of Japan, said that the central bank will perform “powerful easing”. The European Central Bank hinted that it may resume purchases of sovereign securities. Futures for crude oil delivery in May gained $0.94 to $103.64 per barrel on NYMEX. Brent was up from $120.08 to $121.79 per barrel as of 20:29 GMT on ICE today.

Corn gained for the first time this week and wheat advanced for the second consecutive session today on concerns that low temperatures may hurt crops in the United States. The USA is the largest exporter of both grains. Prices may yet fall as rains in Europe may boost plant growth. Corn climbed from $6.3750 to $6.4450 per bushel today on CBoT before trading at $6.3925. Wheat was up from $6.2925 to $6.3900 per bushel, following the advance to $6.4775.

Copper fell for the straight day today, reaching the lowest level since January. Yield for Spain’s bonds increased, causing concern that the debt crisis is spreading across the eurozone. China reduced its imports of raw materials, adding to signs of waning demand. Copper price was down from $3.6370 to $3.6290 per pound as of 22:28 GMT today on COMEX.

Wheat rose today on the forecast that cold weather in the United State will slow growth of crops. Many analysts believe that the prices may yet fall in the near future as the market is oversupplied. The International Grains Council predicted that global stockpiles will increase 7.1 percent to 210 million metric tons this year, while output will reach 681 million tons in 2013 — the level seen only twice in history. Wheat spot price rose from $6.2625 to $6.2800 per bushel on CBoT today. Yesterday, the price sank from $6.4175 to $6.2500 per bushel.

Gold advanced as traders continued to speculate that the Federal Reserve may stimulate the US economy. The poor payrolls last week have set markets in risk aversion mode, hurting most commodities, but benefiting precious metals. The 
Standard & Poor’s GSCI Spot Index of raw materials fell as much as 1.5 percent yesterday. Gold was up from $1,649.00 to $1,659.20 per ounce on COMEX yesterday, before opening at $1,654.70 today.

Soybeans reached the new high this year on the forecast of rising demand in China. The Asian country posted an unexpected trade surplus, reducing fear of the economic slowdown. Yet debt problems in Europe and the poor employment data in the United States trimmed optimism. Some analysts said that the expected demand from China doesn’t warrant the current high price. Soybeans reached $14.5225 yesterday on CBoT, the highest level since August 31.

Copper fell today for the third day, but that hasn’t deterred experts from being bullish on the industrial metal. The reason for this is the positive outlook for the US economy, caused by improving employment. Jobless claims fell from 363,000 to 357,000 last week, according to today’s report. Tomorrow, non-farm payrolls are expected to confirm that employment is rising steadily. Copper price was down from $3.8030 to 3.7915 per pound as of 18:52 GMT today on COMEX.

Soybeans continued to rally to a new record today on the forecast that adverse weather conditions will hurt crops in South America. Brazil may harvest 66 million metric tons, lower that the 68.5 million forecast by the US Department of Agriculture. Demand for US crops should rise with the shortage of supply from South American countries. The United States are the biggest producer of soybeans in the world, while Brazil is the second largest. Soybeans advanced from $14.2000 to $14.3225 per bushel today on CBoT, while the intraday high of $14.3425 was the same as the high on April 3, which was the highest price since September 5.

Corn jumped today after the US Department of Agriculture reported that inventories reached the lowest level in eight years. Wheat and soybeans also surged.

Corn stocks fell 8 percent to 6.01 billion bushels as of March 1 from a year ago. That was the lowest level in the period since 2004.

Wheat stockpiles fell 16 percent from the previous year to 1.20 billion bushels. That was the lowest level in three years.

Soybeans inventories were up 10 percent. Still, prices rose as US farmers plan to sow 73.902 million acres this year, 1.4 percent less than in 2011 and the lowest in five years.

Rabobank International wrote in its report today:

Given the long season ahead and the risk of weather disruptions along with low inventories, the outlook for soybean and corn crops remains bullish.The upside risk is considerable, and if crop potential is threatened by weather, we would expect prices to visit new highs.

Corn price climbed from $6.0550 to $6.4400 per bushel on CBoT today. Soybeans advanced from $13.5450 to $14.0200 per bushel in Chicago, while the intraday high of $14.1600 was the highest price since September 12. Wheat surged from $6.1525 to $6.5875 per bushel today.