Commodity Blog

Posts Tagged ‘CBoT’

Corn retreated today on the forecast of rising global supplies. The crop reached the highest price in a month yesterday.

The US Department of Agriculture estimated that the world production will grow 4.8 percent to 867.5 million metric tons in the 2011–12 season. The global stockpiles will shrink by just 0.8 percent, demonstrating the smallest drop in three years. The output from the United States is expected to decline by 1.1 percent, by the growth of the production in other parts of the world, including the European Union and Russia, should surpass the predicted drop. Supply is rising as farmers reacted to the record prices this year by boosting production.

Corn prices advanced yesterday on the speculation that adverse weather in South America would hurt crops in South America and would increase demand for supplies from the USA. The prices reached the highest level since November 17.

Corn spot price was down from $6.1550 to $6.1450 per bushel as of 3:27 GMT today on CBoT. Yesterday, the price jumped from $6.0575 to $6.1675, while the daily high was $6.1900. The prices reached the record level of $7.9975 on June 10.

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.

Commodities, including copper and oil, gained today on good news from Europe and the United States. The European politicians discussed on today’s summit ways to resolve the region’s debt problems and announced a range of measures, including leverage for the temporary bailout fund and an implementation of more permanent stability mechanism next year. The US consumer confidence improved this month, according to the preliminary estimate of the University of Michigan.

Agricultural commodities, specifically corn, soybeans and wheat, haven’t joined the rally as the US Department of Agriculture boosted its forecast for the next year’s inventories. The outlook for the global stockpiles of corn was 4.6 percent higher than in the previous estimate, for soybeans 1.5 percent higher and for wheat 2.9 percent above the previous forecast.

January futures for delivery of crude oil advanced $1.07 to $99.41 per barrel on NYMEX, while Brent jumped from $107.78 to $108.68 per barrel today as of 21:48 GMT on ICE. Copper rallied from $3.4720 to $3.5560 per pound on COMEX. Corn fell from $5.8900 to $5.8500 per bushel, soybeans slumped from $11.3100 to $11.0575 and wheat traded near its opening price of $5.7675 after falling to $5.6775 today on CBoT.

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 rallied after the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, and the Swiss National Bank agreed to lower interest rates on dollar swaps among banks. Analysts viewed this move as a measure to help European banks in funding their dollar reserves. Market commentators warned that the rally may be short-term as nothing changed fundamentally. January contract for delivery of crude rose $0.18 to $100.54 per barrel in electronic trading on NYMEX. Brent traded at $110.63 per barrel today as of 3:31 GMT on ICE after falling yesterday from $110.78 to $110.37 per barrel.

Corn also advanced, but its gains were limited on the outlook for higher supply from South America. On the other hand, economists argue that lower price may prompt China to expand its import, boosting demand for the agricultural commodity. Corn spot price rose from $6.0275 to $6.0450 per bushel today on CBoT.

The developments in the global economy continue to put downward pressure on commodities. As a result, soybeans touched the lowest level in 13 months today, while iron ore is expected to follow other commodities in decline.

The members of the US congressional debt-reducing supercommittee failed to reach agreement about budget cuts. Germany’s Finance Ministry admitted that the country’s economic growth became “noticeably slower”.

China may increase its imports of soybeans, supporting prices, but for now the negative fundamentals have upper hand. As for iron ore, even China isn’t going to support the commodity as demand in the Asian nation wanes.

Soybean settlement was at $11.5025 per bushel as of 9:24 GMT today on CBoT after falling yesterday from $11.7100 to $11.4575 per bushel and touching today $11.4100 per bushel — the lowest level since October 8, 2010.

Spot price for ore climbed to $147.40 per metric ton yesterday. Prices were up 24 percent this month, while ore dropped 31 percent in October and analysts predict it’ll resume its decline next month.

Wheat was flat today after falling yesterday on forecasts of increasing supply.

The Grain Industry Association of Western Australia predicted that output from Western Australia may double to 9.24 million metric tons, above the 9.12 million tons estimated last month. Rainy weather in Argentina may help accelerate planting. Oil World forecast that Argentine farmers will increase sowing 6.8 percent to 4.87 million hectares (12 million acres).

Growing production in the Southern Hemisphere added to increasing supply from Russia and Ukraine. As a result, demand for the US wheat shrank. US exports are expected to drop to 26.54 million tons in the 2011–12 season from 35.1 million tons a year ago, according to the Department of Agriculture.

Wheat spot price was near its opening level of $6.1625 per bushel as of 8:09 GMT on CBoT.

Sugar declined on forecasts of good harvest. At the same time, expectations for soybean yield more pessimistic, causing the crop to gain.

Sugar was down on the signs of advancing output from Ukraine. Ukraine’s harvest of sugar beet was almost 29 percent larger than in the previous year as of November 1, according to the government report. The US Department of Agriculture estimated that Ukraine’s sugar exports will double in the 2011–12 season.

The USDA projections for soybeans, on the other hand, were more pessimistic. The USDA predicted that production in the USA will decline 8.5 percent to 82.9 million metric tons this year. The reason for the declining output is dry weather in parts of the United States.

March futures for delivery of raw sugar declined 1.6 percent to $0.2499 per pound by 8:21 on ICE. The weekly decline was 2.3 percent, while prices were down 22 percent over this year. Futures for delivery of soybeans in January advanced 0.7 percent to $11.755 per bushel as of 13:15 on CBoT.

Commodities gained today as Greece rejected the planned referendum and the European Central Bank lowered its key interest rate. Crude oil and wheat were among the gainers.

The referendum, promised by Greek Prime Minister George Papandreou, threatened the stability of the Eurozone. Some of the European leaders even spoke about expelling Greece from the European Union. Now tensions receded, reinvigorating markets.

Economists expected the ECB to keep the interest rates unchanged today. Many market participants were concerned that the rates are too high for the strained economy of the EU. The central bank, lead by its new President Mario Draghi, surprised everyone by cutting the main minimum bid rate by 25 basis points to 1.25 percent.

Wheat was down yesterday as the record harvest boosted the global stockpiles. International Grains Council estimated that output will increase 5 percent to 684 million metric tons in the 12 months ending June 30, pushing inventories to the highest level in a decade. The supply expanded as major wheat exporters, such as Russia and Ukraine, resumed their shipments after the drought last year.

Wheat was up today from $6.2300 to $$6.3575 per bushel as of 22:27 GMT on CBoT, following yesterday’s decline from $6.2900 to $6.2225 per bushel. Spot price for Brent crude jumped today $109.11 to $110.83 per barrel today on ICE, rebounding from the daily low of $107.83 per barrel.

Oil, nickel and wheat slumped today, followed by most other commodities, as the uncertainty about the future of the world economy damped global demand.

At present, the main driver for markets is the situation in Europe. The European leaders were meeting on the weekend and then yesterday, but it’s still unclear what measures will be taken to resolve all the difficulties region has encountered. The absence of clear answer to the issue of Europe keeps traders in depressed mood. The Standard & Poor’s GSCI Index fell 1.8 percent.

Oil also fell after the US stockpiles of crude increased more than was forecast. US crude oil inventories increased by 4.7 million barrels 337.6 million barrels from the previous week, while the increase by 500,000 barrels was anticipated by analysts.

Brent crude oil traded at $109.97 per barrel today as of 00:44 GMT on ICE, following yesterday’s drop from $110.85 to $109.50 per barrel. Nickel declined from $1008.50 to $973.50 per kilogram on MCX before trading today at $972.20 per kilogram. Spot price for wheat was $6.2375 on CBoT today per bushel after it fell from $6.3650 to $6.1950 yesterday.