Commodity Blog

Posts Tagged ‘export’

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.

Futures on wheat gained for the fist time in three sessions on forecast that the renewed Russia’s exports won’t be enough to satisfy demand. Supply of the commodity is likely to decline as adverse weather in the US and Europe may hurt crops. July contract for delivery of wheat went up $0.105 (1.4 percent) $7.6975 per bushel as of 13:15 on CBoT.

Gold decline as the rebound of the euro reduced demand for the precious metal as a safe haven. The European currency gained 1.3 percent after Germany’s Chancellor Angela Merkel said that her country is committed to the stability of the euro. Futures for delivery of gold in August slipped $10.50 (0.7 percent) to $1,532.70 by 13:38 on COMEX.

Crude oil advanced after the dollar fell as Moody’s Investor Service put the US credit rating on review for downgrade. The rating agency will cut the debt rating of the North American country if there would be no progress in increasing the debt limit. July futures for crude oil delivery traded at $100.40 per barrel on NYMEX following the fall by 1.8 percent to $98.46.

Sugar prices fell to the lowest level since September as specialists forecast that exports from Thailand, second biggest shipper in the world, will increase. Cocoa and coffee also fell.

Thailand may export 7 million metric tons of sugar this season, and that would be a record. Analysts are afraid that surge of exports can create oversupply on the global markets.

At the same time, demand for the sweetener may decline as Asian countries are expected to slow their economic growth. India and Brazil signaled that they are considering another round of interest rate increases, while China continues its attempts to rein the rapidly growing inflation.

July for raw sugar delivery fell as much as $0.007 (3.2 percent) to $0.2135 per pound by 14:00 on ICE, following the drop to $0.2133, the lowest price since Sept. 10. Futures on raw sugar lost 34 percent this year.

July contract for cocoa delivery slipped $60 (1.8 percent) to $3,211 per metric ton at 11:58. Futures on Arabica coffee for delivery in July dropped $0.1165 (3.8 percent) to $2.945 per pound.

Cattle jumped to the record as demand for US beef increased. The US Department of Agriculture reported that the US beef exports advanced as much as 19 percent last year to about 1.04 million metric tons. Increasing demand put strain on supplies of meat, making the US cattle herd the smallest since 1958. June futures for cattle delivery rose $0.0155 (1.3 percent) to $1.1745 per pound as of 13:08 on CME. Previously the price reached the record level of $1.18.

Wheat and corn posted the first gain this week on the concern that the global inventories may decline. The USDA is expected to reduce its estimate of the world supplies tomorrow. The experts say that Saudi Arabia will increase its imports of food to prevent increase of food prices, as the surge of the prices was one of the reasons for the uprising in Tunisia, Egypt and Libya. May delivery for wheat gained $0.07 cents (0.9 percent) to $7.8675 per bushel by 13:14 on CBoT. May delivery for corn added $0.045 (0.6 percent) to $7.10 per bushel.

Soybeans showed a strong rally in the previous year and in January, which has stalled recently. It looks like the commodity ran ahead of itself. Soybeans, as well as soybean meal and soybean oil, may advance in the next month, though.

There are some concerns regarding soybeans and soybeans meals as the high prices may curb demand. The Oil Crops Outlook by the United States Department of Agriculture supported the outlook for lower demand. Soybean crushing decreased by 2 million bushels to 153.1 million bushels in December. The US exports of soybean meal dropped 1.9 million short tons as of February 3 from a year earlier. Crops in Argentina may be boosted by rains, but the harvest will be likely smaller because of the previous drought. The lower supplies from Argentina will be easily offset by output from Brazil and Paraguay.

Soybean oil is excluded from this negative trend, even though the prices for the commodity are high. In fact forecasts suggest that the price for soybean oil may reach the record average monthly level. The USDA raised its 2010/11 forecast for this month by 100 million pounds to 2.8 billion. China is the biggest buyer, purchasing 38 percent of the US soybean oil.

Despite the not encouraging outlook for the demand, the World Agricultural Supply and Demand Estimates predict an increase of the prices for the soybean group of commodities. The soybean price range for 2010/11 is projected at $11.20 to $12.20 per bushel, the soybean oil prices are forecast at $0.51 to $0.55 per pound and the soybean meal prices are forecast at $340 to $380 per short ton.

Cotton jumped to a record for the second straight day on the signs of strong demand for fiber from the US. The US Department of Agriculture reported that exports increased 26 percent as of February 3 from a week ago. The USDA predicted that production in the year ending July will total 115.25 million bales, 0.2 percent lower than in the January forecast. March delivery for cotton climbed $0.37 (9 percent) to $1.8758 per pound on ICE. Prices jumped 12 percent this week.

Another commodity posting a second day of records today was corn as demand grew, putting strain on inventories. US export sales advanced 51 percent in the week ended February compared to the previous four weeks, according to the USDA report. The US stockpiles of corn will be equal to about 18 days of consumption before the next harvest, near the record low of 1996. March futures for corn delivery gained $0.005 (0.1 percent) to $6.985 per bushel by 13:15 on CBoT, reaching $7.045 earlier, the highest price for the most-active contract since July 2008.

Cocoa jumped on the concern that the political unrest in Ivory Coast will disrupt supplies of the commodity. Alassane Ouattara, who is the internationally recognized victor of the November 28th election, attempts to weaken his political rival Laurent Gbagbo, who was declared the winner by the country’s Constitutional Council, by banning exports of cocoa to cut financial support of Gbagbo. Without funds Ouattara may lose support of the army. The plans for cocoa exports ban was supported by the US.

Patrick Achi, the spokesman for Ouattara’s government, explained:

Companies that flout the ban risk having to pay taxes twice as we are not going to recognize export payments to the illegitimate government of Gbagbo. On top of that, we will consider revoking their export licenses once this crisis is over.

Ahoua Don Mello, an adviser to Gbagbo, responded to the announcement of the ban:

Let them try, they will see. Economic actors like cocoa exporters know where their interests are.

The prices surged as they always do in time of a political unrest or other threats to supplies. The current problems affects not only this year’s harvest, but may harm cocoa production for the several next years, which only intensifies concerns.

Cocoa jumped 20 percent in New York since the November 28th elections and advanced 9.1 percent this month, the second biggest advance after cotton among the commodities tracked by the Thomson/Reuters Jefferies CRB Index. The analysts expect that cocoa may jump to $3,720 per metric ton, the highest price since January 1979.

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.

Wheat rose on speculation that demand for US exports increased. US wheat inspected for export totaled 17.5 million bushels last week, 53 percent more compared to a year ago. March futures for wheat delivery gained $0.18 (2.3 percent) to $7.9825 per bushel by 13:15 on CBoT.

Crude oil jumped to the highest level in 26 months as holiday retail sales in the US were best in five years and on forecast that inventories of crude would decline further. Holiday sales grew 5.5 percent to $584 billion from November 5th to December 24th, while the growth was 4.1 percent in the previous year. February delivery for crude oil rose $0.49 (0.5 percent) to $91.49 per barrel on NYMEX.

Orange-juice fell to the lowest level in two weeks as damage to citrus groves in Florida was not as significant as was previously estimated. The prices dropped as traders began selling the commodity, bought amid panic and speculations. March delivery for orange juice slipped $0.0695 (4.1 percent) to $1.6175 per pound as of 14:00 on ICE.

Soybeans futures touched the highest level in 28 months as demand in China recovered. According to Grain.gov.cn, China’s December soybean imports may total 5.3 million tons. US exporters sold 827,810 metric tons of soybeans in the week ended December 16th. March futures for soybean delivery advanced $0.2025 (1.5 percent) to $13.60 per bushel by 13:15 on CBoT.

Cotton slumped yet again by the most allowed on ICE, after a drop yesterday, on speculation that India, a biggest producer in the world, will resume its exports. India announced that it’s going to allow exports of 2.5 million bales (1 bale=375 pounds=170 kilograms). Cotton also slid as record prices erased demand. March delivery for cotton tumble by the exchange limit of $0.06 (3.9 percent) to $1.4812 per pound as of 14:30 on ICE.