Commodity Blog

Posts Tagged ‘commodity’

Copper is an industrial metal important for housing construction. It’s also used in construction of refrigerators, automobiles, cell phones and other goods. Copper was steadily rising in the past year, but it experienced sharp decline through January to the beginning of February. Then, in the second half of February to March, the metal rebounded. What do analysts say about copper’s perspective? In fact, opinions vary on this matter.

There are voices supporting optimistic outlook for copper price. They are speculating about global economic recovery, supporting demand for the industrial metal. Data from the U.S., one of major copper consumer, about expanding economy especially supports optimism for copper performance, as healthy economy and decreasing jobless rate lead to more housing construction and, as a result, more copper demand. Reports about dwindling stockpiles of LME-monitored copper also can result in price increase. LME-monitored inventories of copper dropped to almost 540,000 metric tones, lowest amount since early February.

But many analysts are inclined to pessimistic view on copper ability to rise or even maintain current price level, some even were going as far as calling current price level “a bubble”. They point out that key reason for the metal’s outstanding performance was huge amount of copper imported by China, one of the world’s greatest consumer, causing copper price to double in 2009. In 2010 it turned out that China imported more copper than it really requires. And it seems that suggestion about demand for the metal rebounding after New Year holidays in China did not prove true. There is also concern that economic recovery may be slow and supply may exceed demand. Earthquake in Chile caused price surge at first but, while being harmful for copper output, didn’t affected copper production as strong as was expected.

So, how can we predict copper moves amid such uncertainty? First answer lies in the very nature of copper as industrial metal. Copper is tied very strongly with overall economical picture, so the world economy can suggest possible copper moves. If economy will continue to rebound, then copper will continue to go up. Another factor worthy consideration is a dollar. Commodities, including copper, are very dependent on the U.S. currency these days, so look for the greenback performance for suggestion where commodities may be heading. It’s also looks like copper performance is strongly correlated with the stock market, so you can plan your trade if you can predict where the stock market is heading.

Sugar futures dropped for a second day in New York, reaching the lowest price in six months, on speculation that production in India will increase. Analysts say that production in India may reach as much as 16.8 million metric tons of sugar in the year through September. Sugar futures more than doubled in 2009 as bad weather conditions cut supplies from India and Brazil. May futures for raw-sugar delivery fell $0.0077 (3.6 percent) to $0.208 per pound by 9:22 on ICE Futures U.S. in New York.

Wheat slid to a four-week low as the dollar gained, curbing appeal of commodities priced in the U.S. currency. The greenback rose 0.5 percent versus a basket of six major currencies today. U.S. wheat export may total 22.45 million metric tons in the year ending May 31st. May futures for wheat delivery dwindled $0.0425 (0.9 percent) to $4.9075 per bushel as of 9:58 on CBoT.

Corn, soybeans and sugar fell today as a stronger dollar curbed demand for commodities as an alternative investment. The dollar rose as much as 0.3 percent versus a basket of six major currencies. May futures for corn delivery slid $0.03 (0.8 percent) to $3.8325 per bushel by 12:02 on the Chicago Board of Trade. May futures for soybean delivery declined $0.15 (1.6 percent) to $9.48 per bushel on CBoT. May futures for raw-sugar delivery fell $0.007 (2.9 percent) to $0.237 per pound on ICE.

Wheat prices may decline 14 percent with start of new harvests in the next few months. World wheat production was predicted to reach 677.4 million metric tons. Russia, the third biggest grower in the world, plans to rise grain export by 32 percent in the next five years, putting even more strain on wheat prices. Analysts forecast that wheat may fall to $150 per ton.

Sugar futures gained after Pakistan increased purchases. Other importers may follow Pakistan, increasing demand for the sweetener. May futures for raw-sugar delivery gained $0.0072 (3 percent) to $0.244 per pound on ICE Futures U.S. in New York.

Wheat futures went up as the dollar’s decline boosted appeal of the U.S. commodities. The greenback fell 0.6 percent versus a basket of six major currencies today, supporting commodities. May futures for wheat delivery went up $0.08 (1.6 percent) to $5.1375 per bushel on CBoT.

Hog futures advanced as U.S. pork prices continued to rally, signaling that meat inventories are declining. Increasing U.S. exports may further lower pork supplies, spurring hogs price. April futures for hog settlement rose $0.009 (1.3 percent) to $0.7035 per pound on CME.

Copper slipped today on speculation that economic rebound in the U.S. may be slow. Uncertainty in future of the U.S. economy lowered consumer confidence, causing fewer purchases. Copper prices also slid as the rebounding dollar curbed the appeal of commodities as an inflation hedge. May futures for copper delivery fell $0.094 (2.8 percent) to $3.2345 per pound on the Comex Division of the New York Mercantile Exchange.

Cocoa sunk to the lowest since September in New York on signals that large supplies will cut the price of the chocolate ingredient. Prices also dropped as the dollar gained 0.7 percent versus the euro. A rising dollar cut demand for some commodities as alternative assets. May futures for cocoa delivery slid $138 (4.5 percent) to $2,945 per ton on ICE.

Corn and wheat slid today on speculation that demand is shifting from U.S. grain. Lower quality of U.S. corn crop may result in business shifting to supplies from competing nations. May futures for corn delivery fell $0.0225 (0.6 percent) to $3.695 per bushel by 10:26 on the Chicago Board of Trade.

Cotton price reached the highest level since July 2008 on signs that the dollar will decline, increasing the demand for commodities as a hedge against inflation. The dollar dropped 0.2 percent versus a basket of six major currencies before rebounding. May futures for cotton delivery advanced $0.0037 (0.5 percent) to $0.7648 per pound as of 11:28 on ICE.

White sugar declined in London today as technicals signal that further drops may lie ahead. Prices also slid as the dollar rebounded, curbing appeal of commodities priced in U.S. currency. May delivery for white sugar slipped $10 (1.4 percent) to $704 per metric ton on the Liffe exchange.

Corn and soybeans gained today as farmers slowed sales after a price drop earlier this year. Drop in sales have led to decline of supplies for export and for producing fuel, animal feed and food. May futures for corn delivery added $0.0575 (1.5 percent) to $3.79 per bushel by 10:44 on the Chicago Board of Trade. March futures for soybean delivery rose $0.18 (1.9 percent) to $9.63 per bushel.

Cocoa futures dropped after the dollar gained, causing an equity decline and, as a result, the investment attractiveness of commodities to wane. Decline is also caused by concerns that jobless rate in the U.S. and rising debt in Europe will stall economic revival. Analysts say that “equities can very easily break cocoa”. May futures for cocoa delivery fell $55 (1.7 percent) to $3,125 per metric ton on ICE Futures U.S. in New York.

Coffee price tumbled to the four-month low. Analysts say that this drop caused by the dollar’s rebound, not fundamentals. The dollar’s advance may convince investors and funds to take money out of commodities. March futures for Arabica-coffee delivery waned $0.0145 (1.1 percent) to $1.3155 per pound today.

Sugar went down in New York to the two-week low as the dollar rebounded against the euro, curbing investment appeal of the commodity. The U.S. currency gained 1.2 percent versus the euro, putting commodities under pressure. Some analysts say that sugar will be traded in a range of $0.27–$0.29 in the next couple of months if it wouldn’t fall below $0.27 now. March futures for raw-sugar delivery slid $0.0062 (2.2 percent) to $0.28 per pound by 13:08 on ICE.

Cattle futures slid for the second time this week on speculation that demand for a beef has declined as wholesale prices rose in January to a highest level in seven months. Beef price touched the record level since May 27th at January 19th, causing retailers and importers to cut buying. Since January 19th beef has fallen 4.5 percent. April futures for cattle delivery slid $0.00625 (0.7 percent) to $0.8925 per pound by 9:39 on the Chicago Mercantile Exchange.

Wheat futures tumbled in Chicago on forecast that dollar will advance, curbing the demand for U.S. grain as an alternative investment. The dollar rose 0.5 percent versus a basket of six major currencies today, the first gain this week. Some speculators may begin selling commodities which they purchased when dollar was weak. March futures for wheat delivery subtracted $0.0875 (1.8 percent) to $4.785 per bushel as of 9:59 on CBoT.

Wheat dropped to the weekly low on expectation that U.S. President’s plan to limit risk-taking by banks will cut investment in commodities, including U.S. grain. Barack Obama may announce further details of his plan to restrict proprietary trading or investing in hedge funds and private-equity funds. March futures for wheat delivery decreased $0.045 (1 percent) to $4.8925 per bushel as of 10:08 on CBoT.

Crude oil and gasoline tumbled to the lowest level in five weeks after the report that stockpiles of the motor fuel climbed to a 22-month high. Demand for fuel fell 2 percent compared to the previous year in the four weeks ended January 22nd. Gasoline consumption dropped 0.4 percent from the previous week. Refineries worked at 78.5 percent of capacity. March delivery for crude oil slid $1.05 (1.4 percent) to $73.66 per barrel by the 14:30 on the New York Mercantile Exchange.