Commodity Blog

Posts Tagged ‘COMEX’

Copper extended its rally today after data on nonfarm payrolls eased concerns for US economy. The report on employment change released today showed much smaller decline of work places than was estimated (54,000 compared to predicted 101,000). December futures for copper delivery advanced $0.0125 (0.4 percent) to $3.508 per pound by 10:24 on COMEX.

Wheat prices advanced today as demand for supplies from the US increased after Russia extended its ban on exports. Prime Minister Vladimir Putin announced yesterday that Russia would extend a grain-export ban till the end of the next harvest. At the same time, US exporters sold 110,000 metric tons of wheat to Egypt and 275,000 tons to other buyers. Global stockpiles may fall to 174.8 million tons by the end of the marketing year on May 31st. December futures for wheat delivery gained $0.1775 (2.5 percent) to $7.315 per bushel at 10:33 on CBoT.

Crude oil fell today as decline of service industries in the US caused speculation that demand may drop. The Institute for Supply Management Purchasing Managers’ Index showed a decrease from 54.3 to 51.5 in August. October delivery for crude oil fell $1.51 (2 percent) to $73.51 per barrel as of 11:53 on NYMEX.

Copper prices jumped today as unexpected growth of pending home sales and improving labor market in the US suggest that demand for the industrial metal may increase. Pending home sales showed a growth by 5.2 percent in July instead of an expected decline. Claims for unemployment benefits fell from 478,000 to 472,000 last week. December futures for copper delivery rose $0.018 (0.5 percent) to $3.4955 per pound as of 13:17 on COMEX.

Gold rallied today on forecast that central banks around the world would keep interest rates at present levels. The European Central Bank decided today to keep the benchmark interest rate at the record low level of 1 percent. The Federal Reserve has kept the US benchmark rate near 0.25 percent since December 2008. December futures for gold delivery gained $5.30 (0.4 percent) to $1,253.40 by 13:46 COMEX.

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.

Copper prices declined today after the report of the Federal Reserve Bank of Philadelphia showed that US manufacturing activity unexpectedly slowed in August. Philadelphia Fed index dropped from 5.1 to -7.7 this month. Median forecast was an increase to 7.1. A figure below 0.0 indicates worsening conditions. December futures for copper delivery slid $0.023 (0.7 percent) to $3.3475 per pound by 10:29 on COMEX.

Philadelphia Fed report, together with an increasing number of unemployment claims, also drove down prices for crude oil. Claims for jobless benefit jumped from 488,000 to 500,000 last week. It was even more frustrating, considering that analysts promised a decline to 478k, not an increase. Signs of economic slowdown suggest that demand for commodities, including copper and oil, may wane. October settlement for crude oil went down $1.34 (1.8 percent) to $75.13 per barrel on ICE.

Gold dropped today from the highest price in six months after the stronger dollar decreased appeal of the precious metal as an alternative investment asset. The US currency gained as much as 0.2 percent versus the basket of six currencies today. Gold have tendency to move in an inverse pattern to the dollar. Gold also fell after some traders sold the metal to profit from high prices.

Gold prices previously surged on concerns about the global economic recovery. Outlook for the US economy is grim after dovish statement of the Federal Reserve this week, China’s economic expansion is slowing and Europe’s economy may be crippled by budget cuts. Actually, these concerns hadn’t gone away, so gold still has great potential. Considering increasing demand in Asia, especially in China and India, we can expand that bullion’s rally will continue.

December futures for gold delivery slid $2.30 (0.2 percent) to $1,214.40 as of 11:09 COMEX. Gold futures previously rose to $1,219.80, the highest price since July 1. The metal reached the record $1,266.50 level per ounce in June.

Copper prices jumped today on speculation that the metal was oversold, considering declining inventories. Prices declined earlier as traders were concerned about slower economic growth in two most significant copper consumers: the US and China. The Federal Reserve said that the US economic growth would be “more modest”. China’s industrial production grew with the slowest pace in 11 months in July.

Worries are still present, but perhaps fears were overdone. LME-monitored inventories were decreasing for five consecutive months, the longest decrease since July 2007. As Matthew Zeman, a trader at LaSalle Futures Group, put it:

On a short-term basis, this market has been oversold. The lower inventory levels will help to keep a lid on things. The market will still be vulnerable if we continue to get more indications that growth is slowing.

September futures for copper delivery went up $0.037 (1.1 percent) to $3.3125 per pound by 11:25 COMEX. The price previously slipped 0.6 percent to $3.255, the lowest level since July 30.

Crude oil declined today for a second day on concerns that slower economic growth in China and the US will damp demand. Year-on-year industrial production expansion in China slowed to 13.4 percent in July, compared to the June growth of 13.7 percent. The report that US inventories of crude oil declined for a second week may support the prices. September delivery for crude oil slipped $1.35 (1.7 percent) to $78.90 per barrel as of 9:57 on NYMEX.

Copper prices also fell on concerns for the global economy. The metal prices slid after the Federal Reserve said that the US economic recovery would be “more modest” and as pace of China’s industrial output growth was slowest in 11 months. Copper also dropped as the dollar surged. September futures for copper delivery went down $0.0705 (2.1 percent) to $3.242 per pound as of 11:22 on COMEX.

Concerns about the global recovery and the recovery in the US pushed gold prices higher today. A decision of the Federal Reserve to keep interest rates at record low levels and speculation that the US government would continue to print money to support economy increased concerns about sustainability of the US economic expansion and drove traders to seek safety, increasing appeal of gold. Previously gold declined as the dollar strengthened. December futures for gold delivery reached $1,207.60 per ounce by 15:12 on COMEX.

Some other commodities, particularly crude oil and copper, reacted much more negatively on pessimistic sentiment across markets. Demand for crude oil depends on the global economic health, and with grim outlook for recovery demand will likely wane. Copper prices were hit not only by news from US, but also but expectations of lower imports in China. Spot price for crude oil was $80.36 per barrel on NYMEX, while copper futures fell $0.0415 cents (1.2 percent) to $3.3125 per pound as of 13:28 on COMEX.

Copper fell today after US non-farm payrolls decreased more than expected, suggesting that the economic recovery in the US is fragile and demand for the metal may wane. US non-farm payrolls dropped by 131,000, compared to the forecast 63,000 decrease. Unemployment rate remained stable at 9.5 percent.

Reports about employment, together with previous bad news from US, makes one think that nation’s economy is far from being stable. That’s bad for copper as the US is the second largest consumer of the industrious metal in the world. China, the biggest copper user, is also experiencing slowdown of economic growth.

September futures for copper delivery slid $0.0125 (0.4 percent) to $3.341 per pound by 11:44 on COMEX. The price touched $3.4105, the highest level in three months, on August 4th and declined 1.5 percent yesterday. Analysts say that the metal may fell to $3.00.

Copper dropped today from its record prices on speculation that demand for the metal would wane as house prices in China will tumble. Chinese government was concerned after house prices jumped 68 percent in the first quarter that soaring prices would create bubble that sooner or later burst, crippling the nation’s economy. The government was already attempting to cool the overheated economy and bring prices down. Now Chinese banking regulators are going to perform stress tests on banks to discover how they would fare in case of a 60% slump of Chinese house prices. Housing market has great influence on copper prices as construction makes up a quarter of copper demand.

Frank McGhee, the head dealer at Integrated Brokerage Services LLC, thinks that “if China wants to signal a slowdown, then the copper rally may have run its course”. Another analyst said that that it’ll be good if annual growth of Chinese demand would be limited by 8 percent.

September futures for copper delivery slid $0.0480 (1.4 percent) to $3.3565 per pound by 11:21 on COMEX. Yesterday, price reached $3.4105, the highest level since April 29th. Delivery for copper in three months dropped $94.50 (1.3 percent) to $7,410.50 per metric ton on LME.