Commodity Blog

Posts Tagged ‘Columbia’

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.

Coffee may rise 21 percent in two months on lack of high quality supplies. The output in Columbia, the second largest grower in the world, fell to the lowest in 33 years because of adverse weather. Analysts predict that global demand will be about 131 million bags, while world production will be around 124 million bags in 2010. May futures for Arabica-coffee delivery slid $0.0515 (3.8 percent) to $1.319 per pound today in New York.

Corn and soybean prices advance with rising gasoline price, boosting the attractiveness of fuels produced from grain and oilseeds. Gasoline prices reached the highest level in five weeks, increasing demand for corn-based ethanol and biodiesel made from soybeans. May futures for corn delivery gained $0.11 (3 percent) to $3.8275 per bushel on the Chicago Board of Trade. May futures for soybean delivery rose $0.145 (1.5 percent) to $9.69 per bushel.

Coffee slid New York as the stronger dollar curbed demand for commodities as an alternative investment. The greenback gained for the first time this week versus a basket of six major currencies. March futures for Arabica-coffee delivery slid $0.006 (0.5 percent) to $1.298 per pound by 9:51 on ICE Futures U.S. in New York. Coffee price may tumble to $1.20 if the dollar rally will continue, yet the coffee may rise with deficit of high quality coffee and in case of dollar decline. The coffee price increased previous year because adverse weather harmed harvests in Brazil and Colombia.

Sugar rose on speculation that farmers in India will not significantly increase planting of cane. A less-than-expected increase in planting area can lead to import of sugar by India, supporting prices. March futures for raw-sugar delivery rose 1.8 percent to $0.2707 per pound on ICE.

Wheat prices dropped to a lowest in three months on speculation that demand for grain from the U.S. will fall and global stockpiles will increase. Analysts say that global inventories will rise 19 percent in the year ending May 31st. Futures also fell as the strengthening dollar cut the attractiveness of U.S. exports. March delivery for wheat futures dropped $0.03 (0.6 percent) to $4.975 per bushel on the Chicago Board of Trade.

Coffee futures tumbled to the two-week low as the dollar gained, curbing the demand for commodities as an alternative investment. Coffee has gained 21 percent in 2009 as the dollar slid and supplies of coffee beans from Brazil and Colombia declined. Analysts forecast that commodities may fall in the next few weeks as China is going to raise interest rates. March futures for Arabica-coffee delivery slid $0.017 (1.2 percent) to $1.392 per pound on ICE.

Coffee gained in New York on speculation that declining production in Colombia and Mexico will increase global demand. Coffee crop in Mexico may be harmed by cold weather. Analysts say that harvest in Columbia will be 9 million bags of coffee beans in the year through September, 26 percent down from June forecast. March futures for Arabica-coffee delivery rose $0.004 (0.3 percent) to $1.435 per pound as of 10:06 on ICE.

Orange-juice futures slid on speculation that warm weather in Florida, the second largest orange grower in the world, is lowering the risk that cold will harm citrus plants. As concern about frost damage recedes volatility is returning to the market. March futures for orange-juice delivery dropped $0.027 (2 percent) to $1.337 per pound by 12:31 on ICE Futures U.S. in New York.

Coffee prices touched the lowest level this month as the dollar rebounded, erasing the attractiveness of commodities as a hedge against inflation. The dollar rose for a second day versus a basket of six major currencies, rebounding from a 15-month low. The price advanced 21 percent this year, before today, because of low supplies from Brazil, Colombia and Central America. March futures for Arabica-coffee delivery slumped $0.005 (0.4 percent) to $1.353 per pound as of 10:16 on ICE.

Wheat advanced, erasing previous losses, as demand rises amongst hedge funds and other investors for the futures as an inflation hedge. Need for food ingredients don’t fall much during inflation periods, thus making wheat quite a safe investment. Speculation suggests that wheat will fare better than other investments as the dollar declines. December futures for wheat delivery advance $0.0475 (0.9 percent) to $5.5675 per bushel by 11:40 on the Chicago Board of Trade.

Coffee production in Colombia, the third-largest producer in the world, may jump 18 percent next year as warmer weather helps crops. Output may rise to 11 million bags with recovery from a slump after heavy rainfalls this year. Coffee has climbed 23 percent in New York this year as excess rains have hurt harvests in Colombia and Brazil.

Wheat stockpiles in the U.S. before the next harvest will exceed forecast with declining exports and falling global demand. Forecast for unsold supplies on May 31st is 864 million bushels, 16 percent up from a September forecast of 743 million and up from 657 million this year. December delivery for wheat gained $0.1075 (2.3 percent) to $4.74 per bushel on the Chicago Board of Trade.