Commodity Blog

Posts Tagged ‘employment’

Commodities, including crude oil and corn, gained today as prospects for the US and European economies improved, making traders more willing to invest into riskier assets.

The speculation about recapitalization of the European Union banks and hopes that the European Central Bank would support the region’s economy reduced concerns about the debt crisis in Europe.

The sentiment about the economy of the United States improved after Federal Reserve Chairman Ben Bernanke signaled about possible implementation of another round of stimulating measures. The outlook for the American economy further improved after the ADP employment report showed the growth by 91,000 working places, compared to the median forecast of 76,000. The non-farm payrolls will be released on October 7 and economists think they will show an increase by 51,000 jobs. Employment was the major concern for the US policy makers for a long time and improvement of this sector is definitely a good sign.

Crude oil also gained as the US inventories decreased by 4.7 million barrels to 336.3 million barrels last week instead of rising by 1.0 million as was expected.

Futures for delivery of corn in December gained $0.1225 (2.1 percent) to $6 per bushel as of 10:22 on CBoT. November futures for delivery of crude oil jumped as much as $3.54 (4.7 percent) to $79.21 per barrel by 13:42 on NYMEX.

Silver, along with the other traded metals resumed, its yesterday’s drop today, in spite of the improving macroeconomic conditions, falling dollar and the rise of gold.

The industrial and precious metals, except for gold, continued to fall today, even after a surprising and very positive unemployment report from the United States. The silver declined for a second day, reaching a 3-week low vs. the US dollar.

It looks like the investors favor gold as the most risk-free commodity, leaving silver, platinum and the industrial metals behind, not willing to re-open their long positions in those markets. The crude oil joined gold in its recovery but mainly due to the natural demand for fuel.

Meanwhile, many market analysts suggest closing out the long gold positions, as they do not expect the new highs any time soon. If the speculators will leave gold, and won’t enter the stock markets with those money, they might choose silver or some other less overbought but liquid commodity.

Silver fell from $38.89 to $37.97 per troy ounce or almost 2.4 percent as of 17:56 GMT on the spot market today; it reached its daily low at $37.53 — the minimum level since July 13.

Crude oil gained after the report about the employment in the US showed better-than-expected change. The US employers added 157,000 jobs last month, while estimates of analysts promised increase by only 67,000. August futures for delivery of crude oil rose $2.02 to $98.67 per barrel on NYMEX, the highest price since June 14.

Wheat fell on the forecast that good weather in the US and Western Europe will help crops. The return of Russia to export market is expected to increase supply of wheat, further reducing prices. Contract for delivery of wheat in September dropped $0.0775 (1.2 percent) to $6.1925 per bushel by 10:49 on CBoT.

Copper futures climbed to the highest in almost three months on concerns that adverse weather in Chile, the biggest producer in the world, and the strike at the Grasberg mine in Indonesia will disrupt supplies. The positive employment data also helped the industrial metal. Futures for delivery of copper in September advanced as much as $0.107 (2.5 percent) to $4.442 per pound as of 13:18 on COMEX, following the jump to $4.4435, the highest settlement since April 12.

Oil was slowly recovering today after yesterday it posted the biggest drop in two years. Oil’s relative strength index dropped to 32, the lowest level since August 24. The index still remains above 30, suggesting that the commodity has potential to gain.

Oil quickly dropped below $100 as decline of other commodities indicates that the global recovery is probably slowing. One of the sources of concern is the labor market of the US as unemployment claims unexpectedly increased from 431,000 to 474,000 last week and the nonfarm payrolls today are predicted to show slower growth of employment.

June contract for crude oil delivery rose $1.08 to $100.88 per barrel in electronic trading on NYMEX. Yesterday prices dropped $9.44 to $99.80, the lowest since March 16 and the biggest decline since April 20, 2009. June futures for Brent crude delivery gained $1.71 (1.5 percent) to $112.51 per barrel on ICE, following the yesterday’s slump by $10.39 (8.6 percent) to $110.80.

Crude oil rebounded from its lowest level in three weeks as positive data about US employment signals about recovery of the US economy, which may result in higher demand for the fuel. A report on January 5th showed an increase of US employment by 297,000. Non-farm payrolls today expected to show growth by 159,000. The February contract for oil delivery rose $0.69 to $89.07 per barrel on NYMEX.

Wheat declined on prediction that estimates of the US Department of Agriculture will show decline of exports from the US, the biggest exporter in the world. US exporters sold 464,700 metric tons of the grain last week, 22 percent less than the average in the previous four weeks. Now traders await a USDA report on January 12th, which may show a further decline of exports. March contract for wheat delivery lost 0.9 percent to $7.82 per bushel on CBoT.

Crude oil and precious metals, including gold, silver and palladium, gained after a report showed that US employers added fewer jobs than expected and unemployment rate in the US unexpectedly rose, decreasing appeal of the dollar and boosting demand for commodities. Nonfarm payrolls in the US grew by 39,000 jobs in November, compared to the expected value of 143,000 and the growth in October by 172,000. Unemployment rate rose to 9.8 percent, while it was expected to remain unchanged at 9.6 percent.

Poor employment data sparked a new wave of criticism of quantitative easing and fueled concerns about US economy. The Dollar Index, which tracking greenback versus six currencies of major US trading partners, fell as much as 1.1 percent. A decline of the dollar increased attractiveness of commodities. The Thomson Reuters/Jefferies CRB Index of 19 commodities rose 1.3 percent to 316.16, the highest level since November 10th.

January delivery for crude oil jumped $1.19 to $89.19 per barrel on NYMEX. February futures for gold delivery rose $16.90 (1.2 percent) to $1,406.20 as of 14:15 on COMEX. March futures for silver delivery went up $0.699 (2.4 percent) to $29.271 per ounce. March futures for palladium delivery climbed $6.40 (0.8 percent) to $770.10 per ounce on NYMEX.

Crude oil jumped today on signs of global economic recovery, which may lead to an increasing demand for a fuel. China’s Manufacturing PMI rose from 54.7 to 55.2 in November. US employers added 93,000 jobs in November, following an increase by 83,000 in October.

Confidence in the global economy also improved on speculation that Eurozone policy makers may find a solution to the debt crisis on tomorrow’s meeting of the European Central Bank. The Standard & Poor’s 500 Index rose as much as 2.2 percent to 1,206.06. The Dow Jones Industrial Average grew 2.3 percent to 11,260.96. The OPEC output of crude oil declined 0.3 percent (80,000 barrels) in November to an average 29.05 million barrels per day.

January delivery for crude oil rose $2.64 to $86.75 per barrel on NYMEX, the highest level in three weeks. January settlement for Brent crude oil gained $2.95 (3.4 percent) to $88.87 a barrel on ICE.

Corn fell today as demand slows after prices rallied. Soybeans may follow this trend. Spot price for corn fell to $6.3875 per bushel after it jumped yesterday to the highest level since August 2008. December futures for corn delivery dropped $0.0225 (0.4 percent) to $5.8775 per bushel on CBoT. The average spot price for soybeans advanced today to $13.28 per bushel, the highest level since September 2008. January futures for soybean delivery went up $0.0925 (0.7 percent) to $12.84 per bushel.

Crude oil climbed today to the highest level in two years after nonfarm payroll in the US increased more than expected. US nonfarm payrolls rose by 151,000 in October, compared to the expected value of 63,000. Improving employment signals about improving economy, and growing economy means more demand for fuel. December for oil delivery rose $0.36 (0.4 percent) to $86.85 per barrel on NYMEX.

Commodities, including copper and oil, rallied today as the dollar fell after US nonfarm payrolls showed that employers cut more jobs than expected, causing speculation that the weaker dollar would make dollar denominated commodities more attractive.

Nonfarm payrolls were 95,000 down in September after employers cut 57,000 in August. The report drew the dollar lower, making commodities cheaper to buy with dollars. On the other hand, talks about possible quantitative easing also spurred commodities, increasing traders’ willingness to risk. The Reuters/Jefferies CRB Index of 19 raw materials jumped to the highest level in almost two years.

December futures for copper delivery gained $0.095 (2.6 percent) to $3.7745 per pound by 13:30 on COMEX. November delivery for crude oil advanced $0.99 to $82.66 per barrel on NYMEX.

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.