Commodity Blog

Posts Tagged ‘GDP’

Cocoa dropped on concerns about the European crisis and the slower-than-expected economic growth in the United States. Traders remained concerned about the potential outcome of talks among Greece and its creditors. US gross domestic product rose 2.8 percent in the last quarter, while the expected growth was 3.0 percent. It’s still better than the 1.8 percent advance in the third quarter of 2011.

Earlier, the agricultural commodity reached the highest price since November as European NYSE-monitored stockpiles fell 1.8 percent since January 9. Additionally, concerns that dry weather in Ivory Coast will hurt output were boosting prices.

Cocoa closed at $2,361 per metric ton on ICE, falling from the opening of $2,452. Intraday, the price reached $2,480 — the highest level since November 14.

Commodities advanced today as German economic confidence improved, while China’s economic growth slowed, spurring speculation about stimulus. Oil, corn and soybeans were among gainers.

China’s gross domestic product increased 8.9 percent in the fourth quarter of 2011, following the 9.1 percent expansion in the third quarter. That was the slowest growth in 10 quarters. The report fueled talks that the country will perform measures to stimulate economic growth.

ZEW Economic Sentiment for Germany increased from -53.8 to -56.1 (month-on-month) in January, the highest level since July 2011. Economic expectations for the eurozone improved to -32.5 this month from -54.1 in the month before.

Standard & Poor’s downgraded credit ratings of several European countries on January 13. Markets were downbeat somewhat after the action, but quickly recovered as such move was expected and generally priced in.

February futures for delivery of crude oil advanced $2.01 (2 percent) to $100.71 per barrel on NYMEX. Brent oil rose from $111.42 to $111.57 per barrel as of 23:54 GMT today on ICE. Corn price was higher from $6.0125 to $6.0600 per bushel on CBoT today, while soybeans rallied from $11.6300 to $11.8275 per bushel.

Crude oil rallied, while gold fell today as the fundamental data from the United States confirmed that the economic recovery gains momentum.

The US gross domestic product expanded 1.8 percent in the third quarter. The jobless claims went down from 368,000 to 364,000 last week. The University of Michigan consumer sentiment index rose from 64.1 to 69.9 in December. The leading index advanced 0.5 percent in November.

Oil also gained as the report showed that the US inventories shrank by 10.6 million barrels to 323.6 million barrels last week.

February futures for gained as much as $1.14 to $99.81 per barrel by 12:19 on NYMEX. Brent crude oil advanced from $107.92 to $108.21 per barrel today as of 17:48 GMT on ICE, following the earlier drop to $107.29. Gold retreated from $1,608.80 to $1,604.00 on COMEX.

The global economic turmoil and uncertainty about the recovery reduce appeal of commodities to traders. Copper, like most other industrial metals, dropped on the mounting signs of a slower recovery.

China’s gross domestic product expanded 9.1 percent in the third quarter from a year ago, showing the slowest pace of growth since 2009. The conditions for New York manufacturers worsened as was shown by the Empire State Manufacturing Index that was at -8.5 in October. The ZEW Indicator of Economic Sentiment for Germany declined to -48.3 in October from -43.3 in the previous month.

December futures for delivery of copper fell 0.5 percent to $3.36 per pound by 13:21 on COMEX. The prices have declined 26 percent in the three months ended September 30, posting the biggest quarterly drop since the end of 2008.

The depressing macroeconomic data from Europe turned markets to risk-off mode. As a result, gold advanced, while crude oil and copper retreated.

Germany’s gross domestic product, according to the preliminary estimate, rose 0.1 percent in the second quarter of 2011, compared to the increase by 1.3 percent in the first quarter of this year. The GDP of Eurozone advanced 0.2 percent in Q2 2011, while in Q1 the advance was by 0.8 percent. The trade balance deficit of the euro area increased to €1.6 billion in June from €0.8 billion in May on the seasonally adjusted basis, while market analysts expected a surplus of €0.3 billion.

Futures for gold delivery in December advanced $29.30 (1.7 percent) to $1,787.30 per ounce as of 10:45 on COMEX, following the 0.9 percent gain yesterday. September futures for crude oil delivery fell $1.05 (1.2 percent) to $86.83 per barrel by 13:55 on NYMEX after yesterday’s jump by 2.9 percent to $87.88. Contract for delivery of copper in three months traded at $8,917.75 per metric ton on the LME, erasing the previous gain of 0.5 percent.

Crude oil fell as the economic reports showed the US economic recovery stalled. The US gross domestic product grew 1.8 percent in the first quarter of this year, while traders anticipated a 2.2 percent growth. The jobless claims posted an increase from 414,000 to 424,000 instead of expected drop to 403,000.

US inventories of crude grew by 600,000 barrels to 370.9 million barrels last week.

Oil tends to gain while economy improves as growing economy means rising demand. Conversely, slowing economy erases demand. Therefore, the problems in Europe and the US macroeconomic data are negative for crude, showing that the global economy isn’t as healthy, as it was thought.

July contract for crude oil delivery fell $0.15 to $100.08 per barrel in electronic trading on NYMEX. July futures for Brent crude oil gained $0.12 (0.1 percent) to $115.05 per barrel yesterday on ICE.

Copper and crude oil gained today as the European economy grew more than expected in the first quarter of this year. The gross domestic product of the Eurozone expanded 0.8 percent in the first quarter of 2011, compared to forecasts of 0.6 percent growth. The German GDP increased by 1.5 percent, while analysts predicted 0.9 percent increase. The French GDP posted growth by 1.0 percent instead of expected 0.6 percent.

Growing economy is good for both copper and oil as it increases demand for raw materials. Copper is used in construction and various industries, while oil is consumed as a source of energy and fuel. The credit crisis in Europe still threatens the economic recovery, though, and may stem gains of commodities.

July futures for delivery of copper rose $0.013 (0.3 percent) to $3.9835 per pound by 13:10 on COMEX. The metal gained 0.2 percent during this week. June futures for crude oil delivery went up $0.68 $99.65 per barrel on NYMEX. Prices for crude advanced 2.5 percent over this week.

Gold fell today as the global economic recovery reduces need for the precious metal a safer asset. Precious metals tend to rise in times of uncertainty and decline when economy looks good as other commodities become more profitable. The global economy these days look good enough to prefer risk over safety, even considering the problems in Japan.

The economy of the US adds to the evidences of the global economic recovery. The US gross domestic product showed strong growth in the fourth quarter of 2010. The personal income of the US citizens grew and the spending rose more than predicted in February. The positive fundamentals spur talks that the Federal Reserve will end its stimulating program and increase the interest rates.

June futures for gold delivery dropped $3.80 (0.3 percent) to $1,417.50 per ounce by 14:21 on COMEX. That’s was the fourth consecutive daily drop, the longest stretch of declines since January 7. The metal gained 28 percent from a year ago, but lost 0.3 percent this quarter.

Crude oil declined at a fastest pace since January 4th today as the reported inflation data in China made the investors believe that the consumption of this widely traded commodity won’t be growing as fast as expected.

The Brent was falling to the lowest level since January 11 mid-day but then it has managed to recover almost 50% of its daily decline. The oil wasn’t alone in this fall — all precious and industrial metals (except nickel) decreased today. China reported its inflation data at 2:00 GMT today, showing December yearly CPI at 4.6 percent and PPI at 5.9 percent. PPI was expected at 5.7 percent, while CPI was the same expected.

The global domestic product rose by 9.8 percent in the fourth quarter of 2010 in China, which is above the median forecast of 9.4 percent. The market analysts believe that at the current levels of the macroeconomic indicators will allow Chinese authorities to conduct a stricter monetary policy, which will eventually lead to slower growth and less demand for crude.

Oil declined from $97.79 to $96.66 per barrel or 1.15 percent as of 17:25 GMT with a daily low at $95.44 per barrel today.

Sugar advanced today to the highest level in 29 years on forecast that global supplies will trail demand. World sugar consumption will exceed production by almost 3 million metric tons in the year ending September 30th. March delivery for raw sugar advanced $0.0046 (1.4 percent) to $0.3296 per pound as of 14:00 on ICE.

Crude oil gained today on signs that US economy recovers, increasing demand in the biggest oil-consuming country. Experts predict a report this week will show that growth of US gross domestic product accelerated. January delivery for crude oil gained $0.79 to $88.81 per barrel on NYMEX.

Cotton was also bolstered by an anticipation of increasing demand in the US. The Thomson Reuters/Jefferies CRB Index of 19 raw materials jumped to the highest level in more than two years. March futures for cotton delivery rose $0.04 (2.7 percent to the record $1.5412 per pound by 14:43 on ICE.