Commodity Blog

Posts Tagged ‘export’

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.

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.

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.

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.

Copper rose in London on outlook for increasing demand in Japan, the fourth biggest buyer of the metal in the world. Japan’s gross domestic product grew 4.6 percent in the fourth quarter. Imports of the metal in China declined as much as 546,000 metric tons. Yet analysts say that this decline can be more than offset by rising global demand. Three-month delivery for copper rose $70 (1 percent) to $6,880 per ton by 16:52 on the London Metal Exchange.

Wheat futures fell in Paris on speculation that rising global stockpiles will decrease prices. The U.S. Department of Agriculture reported that global wheat stockpiles will increase from 164 million metric tons a year earlier to 195.9 million tons by the end of May as supply exceeds demand for a second year. Prices may yet go up with farmers’ reluctance to sell at current prices and good European Union exports. March delivery for milling wheat fell 0.4 percent to 125.25 euros ($170.35) per metric ton today on NYSE Liffe.

Corn is the most widely grown crop in the United States. 332 million metric tons of the crop are harvested annually in the U.S. What prospects are for the corn in 2010?

By the end of 2009 future seemed to be bright for corn prices as adverse weather caused late planting in the U.S. But everything has turned upside down when the U.S. Department of Agriculture predicted that US corn production will reach a new record. USDA estimated 2009 corn crop as much as 13.15 billion bushels, while analysts forecast yield to be about 12.82 billion bushels. U.S. corn exports forecast went down by 50 million bushels to 2.1 billion bushels, further pushing down outlook for corn prices. U.S. exporters also have to deal with competition from Argentinean corn. Production of corn in Argentina may reach 17 million bushels, compared with estimated 12 million bushels, and at least 9 million bushels will be available for export. Slow recovery of U.S. economy does not help demand, and therefore prices, either.

Yet not everything looks dim for corn. Low prices improved exports by 20 percent this month. Recent reports about low soil moisture in Argentina corn growing areas are also supportive for corn prices. As you see, conditions can change significantly over small amount of time, making hard to say which price should be expected. USDA forecasted the price for the corn to be in a range of $2.90-$4.50 per bushel, suggesting with such a wide range that Department is unsure too. Analysts say that “there are not many fundamental reasons for high corn prices” and “technical support should not allow prices to fall much more”.

Corn rebounded from the lowest level in 16 weeks after the report that exports from the U.S., the biggest grower in the world, will rise. Exports went up 20 percent in the four weeks ended January 21st, compared with the previous year, after prices dropped 14 percent this month. Production of ethanol is also increasing. Analysts predict that low prices will spur demand. March futures for corn delivery added $0.01 (0.3 percent) to $3.5925 per bushel by 11:07 on the Chicago Board of Trade.

Analysts say that gold is still bullish in long term, despite its fall 11 percent down from its record last month. The precious metal’s drop can be considered “a normal pullback” and ”the long-term momentum” is still present. Gold is little changed, erasing a previous gain of 5.9 percent, as the dollar rebounded versus the basket of six major currencies this month.

Wheat prices dropped on expectation that China’s lending limits will slow economic growth and cause decline in demand for U.S. grains. Wheat fell 8 percent this month as pace of an increase in weekly U.S. exports is not enough to outweigh growing global stockpiles. March futures for wheat delivery slid $0.03 (0.6 percent) to $4.9525 per bushel as of 10:16 on CBoT.

Corn slid on speculation that record U.S. production will exceed world demand as China are going to slow economic growth. Analysts forecast record global production, resulting in ample supplies for producers of sweeteners, ethanol and livestock feed. March futures for corn delivery dropped $0.03 (0.8 percent) to $3.6475 per bushel by 10:23 on the Chicago Board of Trade.

Sugar went down in New York as the record prices since 1981 drove away buyers from the commodity. Futures reached $0.301 per pound yesterday, the highest level in 29 years. March futures for raw-sugar delivery declined $0.0009 (0.3 percent) to $0.2971 per pound at 10:26 on ICE.

Sugar rallied in 2009 amid tight supplies, becoming the top performing commodity in the past six months. Adverse weather conditions damaged crops in Brazil and India, the two largest producers in the world, causing sugar prices to double this year. And how the commodity is going to perform in 2010?

Fundamentals can be considered bullish for the sweetener. Investment funds, limited production in India and a weak dollar are major supporting factors for sugar prices. The commodity also helped by demand for ethanol from Brazil’s flex fuel car fleet.

Global supplies of sugar will remain low for the first half of 2010. The world is using more sweetener than it is producing, causing a deficit for two consecutive years. The global sugar supply deficit is estimated as much as 13.5 million metric tons in the 2009–2010 season. There is some pending dryness in regions including India and Australia, curbing the commodity productions in these countries. On the other side, a favorable weather conditions are expected in Brazil’s Center-South, where increasing production may start to ease the current global deficit.

Beet growers in France and Germany, the two largest producers in the Europe, expect the greatest harvest since 2006. But EU regulations state that farmers may produce no more than 13.3 million metric tons of sugar for food for the domestic market, and surplus beet is considered out-of-quota and turned into export sugar or products such as ethanol. For the foreseeable future the European Commission is not going to authorize the export of out-of-quota sugar in excess of the fixed quantitative limit. Beet harvest of French growers is highest in 50 years, adding to this year’s EU oversupply of 550,000 tons. In case European growers will convince Commission to loose regulation the commodity deficit can be significantly reduce by European sugar.

Considering all factors, the outlook for sugar is rather optimistic. Most analysts agree that next target price for the commodity should be about $0.30. Yet some analysts argue that price as low as $0.13 more realistic. They point that such factors as possibility that mills will produce more sweetener than previously predicted and probability for unloading of funds positions in case if sugar prices will fall may put downward pressure on sugar. Even considering this factors its price is not likely to fall below $0.10. As always caution is advised when dealing with commodities.

Soybeans went up to the highest in two weeks with rising demand in China and U.S. Prices was also boosted by drought in Brazil and Argentina, decreasing soybeans exports from these countries in 2009. March futures for soybean delivery went up $0.0025 to $10.62 per bushel on the Chicago Board of Trade.

Coffee futures touched a record in 15 months on outlook that yield will drop in Brazil and Vietnam, the largest producers in the world. Coffee prices may also rise with colder weather boosting demand. March futures for Arabica-coffee delivery increased $0.0135 (0.9 percent) to $1.4725 per pound on ICE.

Wheat slid as the stronger dollar forced down demand for exports from the U.S. As crop is being harvested in Australia, while some countries like Canada and France also have wheat for sale, it looks like supply just exceeds demand. March futures for wheat delivery slid $0.0675 (1.2 percent) to $5.3675 per bushel on CBT.