Commodity Blog

Posts Tagged ‘commodity’

Gold futures rallied today to the highest level in a week as the rising stocks and commodities signaled about expanding global economic growth, causing speculations that demand for raw materials will rise. The MSCI World Index of stocks climbed to the highest level since May 13 and Reuters/Jefferies CRB Index of 19 commodities headed for the biggest rally in almost a year. Crude oil jumped above $81 per barrel, while copper surged to the highest level in three months. An outlook for a seasonal increase of demand in such countries as India and Turkey also supported gold prices.

Euro’s rally prompted investors to sell the precious metal and buy the 16-nation European currency, limiting gains of gold. As McGhee of Integrated Brokerage Services said:

On the rallies, you’ve got some investors moving out of gold and back into euros.

December futures for gold delivery advanced $1.50 (0.1 percent) to $1,185.40 by 13:35 on COMEX, following the surge to $1,193.90. Speculators raised net-long position by 5.9 percent on COMEX in the week ended July 27th.

Corn slipped as the dollar rose, decreasing appeal of commodities as a hedge against inflation. Corn prices also dropped on speculation that the debt crisis in the European Union will curb demand for animal feed and fuel made from the crop. July delivery for corn futures slipped $0.065 (1.7 percent) to $3.665 per bushel by 9:41 on the Chicago Board of Trade.

Cattle futures and hogs fell on concern that a dollar’s appreciation may hurt U.S. meat exports, making commodities more expensive to overseas buyers. August delivery for cattle futures dropped $0.0085 (0.9 percent) to $0.938 per pound as of 9:52 on CME. July futures for hog settlement fell $0.003 (0.4 percent) to $0.8495 per pound.

Soybeans slid after a report that demand from U.S. processors unexpectedly fell in April. Consumption declined 12 percent to 131.7 million bushels from the near-record high level in March. July futures for soybean delivery retreated $0.085 (0.9 percent) to $9.56 per bushel at 10:26 on CBoT.

Crude oil fluctuated as the dollar fell, bolstering the demand for commodities as an alternative investment, and after a government report that the U.S. economy expanded less than predicted in the fourth quarter of 2009. The U.S. currency fell as much as 1.1 percent versus the euro. OPEC is planning to raise shipments by 1.7 percent in the month ending April 10th, signaling that demand in Asia stays high. May delivery for crude oil fell $0.14 to $80.39 per barrel as of 10:26 on NYMEX.

Hog futures slid on outlook for lower reductions of the U.S. breeding herd. U.S. hog farmers held back about 5.855 million sows for breeding by March 1st, that’s 2.3 percent down from a previous year. Reductions declined as farmers expect that profits may rebound after losses on slumping pork demand and high corn prices. June futures for hog settlement slid $0.00175 (0.2 percent) to $0.7945 per pound by 11:44 on the Chicago Mercantile Exchange.

Copper prices slipped in New York as the stronger dollar curbed demand for the industrial metals as an inflation hedge. The euro dropped to a lowest in 10 months versus the U.S. currency. Some analysts think that copper may fall to $3.20 in the next two weeks. May futures for copper delivery slipped $0.0335 (1 percent) to $3.3455 per pound on the NYMEX in New York.

Cocoa futures in New York dropped after the dollar rose, cutting appeal of raw materials as an alternative assets. Cocoa was under pressure of the greenback from the beginning of 2010 as the stronger dollar reduced demand for commodities as a safe haven. Cocoa price also slid as harvest in Ivory Coast was better than predicted. May futures for cocoa delivery dropped $62 (2.1 percent) to $2,833 per metric ton on ICE Futures U.S.

Corn and soybeans prices dropped today as the stronger dollar curbed appeal of commodities as an alternative investment. May futures for corn delivery dropped $0.0275 (0.7 percent) to $3.7125 per bushel by 10:37 on the Chicago Board of Trade. May futures for soybean delivery slid $0.005 to $9.585 per bushel in Chicago.

Copper prices slipped after the dollar gained, diminishing the demand for most metals as an inflation hedge. Prices also fell on concern that demand from China, the largest consumer of the metal in the world, will wane on increasing interest rates. May futures for copper delivery slipped $0.0225 (0.7 percent) to $3.3955 per pound in New York.

Prices for cotton may rise as China, the largest cotton importer, may increase purchases of the fiber 30 percent in 2010. Analysts say that imports may total more than 2 million metric tons, compared 1.53 million tons in the previous year. May delivery for cotton rose 0.3 percent to $0.8137 per pound on ICE.

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.