Commodity Blog

Posts Tagged ‘equities’

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.

Wheat prices advanced as the dollar fell, spurring demand for the U.S. grain. The U. S. currency slipped as much as 0.4 percent versus a basket of major currencies. Global stockpiles may climb 19 percent to 195.9 million metric tons in the year ending May 31st, slowing the wheat price increase. The grain price may also fall as U.S. have to compete with other exporters. May futures for wheat delivery advanced $0.015 (0.3 percent) to $4.95 per bushel on the Chicago Board of Trade.

Sugar futures dropped to the weekly low on speculation that world demand will decline. Analysts say that with increasing global inventories “the bulls will lose their opportunity for a strong rally”. May futures for raw-sugar delivery dropped $0.0062 (2.8 percent) to $0.2157 per pound on ICE.

Copper prices slid on concern that demand for the industrial metal will decline in China with stalled economic recovery. Earlier the metal fluctuated, following the dollar and the U.S. equities. May futures for copper delivery slid $0.007 (0.2 percent) to $3.4105 per pound on NYMEX.

Wheat futures slid on speculation that the stronger dollar and growing global stockpiles will cut demand for the U.S. grain. U.S. government forecast that world wheat inventories will rise 19 percent to 195.9 million metric tons in the year ending May 31st, the record level since 2002. May futures for wheat delivery slid $0.075 (1.4 percent) to $5.12 per bushel by 10:25 on the Chicago Board of Trade.

Crude oil fluctuated as the dollar rebounded versus the euro, equities rose more than predicted and on speculation about the global economic recovery. U.S. Energy Department reported that U.S. supplies of crude oil rose 1.73 million barrels last week. March delivery for crude oil dropped $0.18 to $76.83 per barrel as of 10:53 on NYMEX.

Cattle futures tumbled from a 15-month record as U.S. wholesale prices for the meat reached a highest in four-weeks, signaling that retailers may slow purchases of beef. Wholesale choice beef rose 0.6 percent to $1.4486 per pound, the highest price since January 20th, as cold weather in the U.S. reduced cattle-weight gains and diminished beef supplies. April delivery for cattle futures subtracted $0.002 to $0.91975 per pound at 11:23 on CME.

Cattle futures slid today on signs that the stronger dollar will cut appeal of  the U.S. beef. The dollar rose 0.9 percent against a basket of six major currencies to a record level since July. The rising dollar makes purchases of beef from the U.S. unprofitable for overseas traders. April futures for cattle delivery slid $0.003 (0.3 percent) to $0.9125 per pound by 12:06 on the Chicago Mercantile Exchange.

Cocoa prices dropped after the dollar rebounded versus the euro and equities declined, decreasing appeal of some commodities for investors as safe haven. The dollar jumped on speculation that a European Union plan to aid Greece avoid default will fall. Analysts say that downward trend for cocoa can be short-term. May futures for cocoa delivery fell $17 (0.5 percent) to $3,099 per ton at 12:11 on ICE.

Cotton price touched the lowest level since November as the stronger dollar curbed the demand for the commodity as an alternative investment. The greenback reached the highest level versus basket of six major currencies since July. Price also rose as declining equities caused concern that the economic rebound may be slow. March cotton delivery slid $0.0159 (2.3 percent) to $0.674 per pound at 11:55 a.m. on ICE Futures U.S. in New York.

Wheat prices went down in Chicago as oversees buyers moved to cheaper supplies. U.S. grain was considered overpriced as wheat from Russia, France and Kazakhstan was sold to Egypt for $174.90 per metric ton, while U.S. wheat was priced at $184.91 per ton. March futures for wheat delivery dropped $0.025 (0.5 percent) to $4.7325 per bushel on CBoT.

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.

Crude oil tumbled to the lowest in a month in New York on speculation that China will raise interest rates and as equities slid after U.S. President proposed restrictions on risk-taking at financial institutions. Oil also slid this week as the dollar rose, curbing the demand for commodities as an inflation hedge and investor confidence decreased on declines in equity markets.

Fuel consumption in the U.S. fell 1.8 percent in the past four weeks compared to a previous year. Refineries ran at 78.4 percent of capacity in the U.S. last week, the lowest rate since 1989, barring the Atlantic hurricane season. Gasoline stockpiles rose 3.95 million barrels to 227.4 million last week, the record level since March 2008.

March delivery for crude oil dropped $1.17 (1.5 percent) to $74.91 per barrel by 10:15 on the New York Mercantile Exchange. Some analysts think that there shouldn’t be any significant changes in the market in the next few days after decline. But there is probability that crude oil may decline next week as U.S. fuel consumption falls and refineries idle units.

Cocoa rose to a highest level in 21 years in London on speculation that demand will be boosted by a rebounding global economic. Restocking is taking place as consumer confidence returns and business conditions improve. Cocoa consumption jumped 0.6 percent in Europe in the fourth quarter. March delivery for cocoa rose 1 percent to $3,770 per metric ton on Liffe today.

Copper prices tumbled to the four-week low as the rising dollar cut buying of commodities as an inflation hedge and a decline in equity markets curbed demand outlook. Yet some analysts think that the outlook for copper over the longer term is quite positive as demand rises in Asia, including China. March futures for copper delivery dropped $0.06 (1.8 percent) to $3.295 per pound on NYMEX.

Soybeans rose on expectations that demand from China will rebound after prices from the U.S. fell 9.4 percent this month. China’s demand for soybeans grown in the U.S. to produce cooking oil and livestock feed rose as drought harmed crops in South America last year. March futures for soybean delivery gained $0.04 (0.4 percent) to $9.54 per bushel on CBoT.

Crude oil gained after the U.S. inventories unexpectedly fell because of declining imports. Stockpiles of crude oil dropped last week to 335.9 million barrels from 3.94 million. Another reason for oil advance is rising equities and a declining U.S. dollar boosting the demand for commodities as an inflation hedge.

President of Strategic Energy & Economic Research said that “inventories are down because nobody wants to have excess supply on hand. The drop is not due to a tightening market.” President of Prestige Economics LLC thinks that “this is completely an import story.”

Supplies could fall even more if it weren’t for the decline in refinery runs. Refineries operated at 80.6 percent of capacity, compared to 1.2 percentage points in the previous week, the lowest rate since the week ended April 10th.

December delivery for crude oil gained $0.71 (0.9 percent) to $80.31 per barrel by 11:49 on the New York Mercantile Exchange.

Crude oil fell from its highest level in a year on speculation that inventories are too high to justify the increase in prices. Previously prices reached a record $79.05 per barrel, the highest since October 15th, 2008. The record prices were supported by rising equities, signaling that an economic recovery will increase fuel consumption, and advancing industrial production in the U.S.

An analyst and broker at Tradition Energy said that buyers are “watching for signs of rising production rates and declines in gasoline inventories.” Until they get inventory figures for this week, the market will be following the equities and the dollar. An analyst at Nordea Bank AB predicted that oil prices likely aren’t going “to cross $80 a barrel and stay there.” Optimism from equities supports the oil market, but still it is required some increase on the demand side before the oil rise above $80.

November delivery for crude oil slid $0.14 to $78.39 per barrel by 9:30 a.m. on the New York Mercantile Exchange. December settlement for Brent crude oil fell $0.08 to $76.91 per barrel on the London-based ICE Futures Europe exchange.