Commodity Blog

Posts Tagged ‘Germany’

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.

Cocoa futures posted the biggest gain since October 2009 as a strike in Nigeria threatened to disrupt shipments. The strike of Nigerian workers that started today may lead to ports shutting down. Nigerian farmers stopped selling crops after fuel prices doubled and the government removed fuel subsidies, while prices for crops fell 40 percent. Cocoa spot price climbed from $2,033 to $2,171 per metric ton on ICE as of 22:02 GMT today and reached $2,199 earlier.

Crude oil fell today after a report showed that German industrial production declined. Germany’s output dropped 0.6 percent in November, following the 0.8 advance in October. Oil also slid on easing concerns that Iran would disrupt oil supplies from the Persian Gulf. February contract for delivery of crude oil slipped $0.25 to $101.31 per barrel on NYMEX, the lowest price this year. Brent oil declined from $113.42 to $112.33 on ICE.

Copper, oil and gold advanced as good news from Europe and the United States bolstered commodities. Oil also rose on the speculation that the US inventories declined.

The European Union pledged €150 billion to the International Monetary Fund that the IMF will use to help in the battle with the region’s sovereign-debt crisis. The German Business Climate index unexpectedly increased to 107.2 in December from 106.6 in November, while analysts predicted it to drop to 106.2. Spain sold its three- and six-month bills at an auction yesterday, exceeding its maximum target.

The US housing starts increased from 627,000 to 685,000 and the building permits rose from 644,000 to 681,000 in November.

February futures for crude oil delivery advanced $3.19 to $97.24 per barrel on NYMEX. Brent oil was at $107.15 per barrel today as of 3:11 GMT on ICE after jumping from $104.30 to $107.00 yesterday. Gold advanced from $1,615.50 to $1,620.20 per ounce today on COMEX, following yesterday’s rise from $1,596.40 to $1,615.00. Copper traded near its opening level of $3.3720 per pound today, while the metal climbed from $3.3230 to $3.3640 yesterday.

Crude oil rallied today after the German business confidence improved. Yesterday’s decline of the US inventories also helped crude.

The German Business Climate index, according to the Ifo Institute for Economic Research, increased to 106.6 in November from 106.4 in the previous month. Not a big increase, but it’s still better than the predicted drop to 105.3.

The US crude oil inventories decreased by 6.2 million barrels to 330.8 million last week. That’s compared to the forecast of a 0.3 million decrease and the decline by 1.1 million in the week before.

The leaders of Germany, France and Italy met today in Strasbourg, France, to discuss the ongoing debt crisis in the Eurozone. The results of the meeting were mixed. On one hand, the European chiefs discussed the measures to ensure a fiscal discipline among the members of the European Union, and such talks were a good sign. On the other hand, the idea of joint euro-bonds was postponed or even completely rejected, and that wasn’t particularly good news.

Brent crude rose to $107.20 to $107.76 per barrel today as of 22:14 GMT on ICE and earlier touched $108.08. Crude oil gained $1.01 to $97.18 per barrel on NYMEX.

Crude oil fell on the speculation the spreading Europe’s crisis will slash demand. Germany auctioned its debt yesterday and it was considered a disaster as there was a significant lack of demand for the government bonds, reinforcing concerns about Europe’s economy. The US economy also showed sings of slowdown. January futures for crude oil dropped $2.25 to $95.76 per barrel before trading at $96.45 on NYMEX.

Sugar prices declined on the outlook for higher supply from Brazil. Luis Pogetti, chairman of the Copersucar SA, predicted that production will go up to 34 million metric tons in Brazil’s Center South next year. India is also expected to add to the global supply. March contract for delivery of raw sugar fell 1 percent to $0.2321 per pound on ICE after reaching $0.2316 — the lowest level since June 2.

Gold fell on Friday, but ended this week with weekly gain. The negative developments in Europe, as well as in other parts of the world, supported demand for the precious metal and made gold bulls to look in the future with confidence.

The US nonfarm payrolls showed that the employment growth slowed from 158,000 jobs in September to 80,000 jobs in October. The Eurozone services PMI (in the final revision) contracted to 46.4 in October, compared to the preliminary estimate of 47.2. The report said that the conditions in France, Italy and Spain deteriorated, leading to the fasted decline of the industry since mid-2009. The German factory orders fell 4.3 percent in September.

The pessimism rules markets and gold remains in high demand as a safe haven not only among speculators, but among central banks as well. The International Monetary Fund reported that Bolivia, Kazakhstan, Tajikistan and Thailand added a total 26.7 tons of gold valued at $1.52 billion to their reserves in September. Central banks bought 220 tons of the metal during this year, according to the World Gold Council.

Spot price for gold fell from $1,765.90 to close at $1,755.30 per ounce on COMEX. The price rose from $1,743.50 per ounce this week.

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 sugar futures managed to pare their recent losses and reach the highest level in more than a week today amid the positive market sentiment. It’s based on the German approval of the additional powers for the eurozone bail-out fund, better fundamental reports from the United States and the increasing expectations of poor sugar production in Brazil.

Brazil is holding the worlds leadership in sugarcane growing with about 37 percent share of the global industry. News of the decreased sugarcane crops in this country due to the bad weather conditions have inspired the market last Friday. Now the seeds of these speculations have fallen on a fertile soil of the global market optimism.

German Bundestag approved the extra rights for the European Financial Stability Facility — the eurozone bail-out fund. The new functions will include buying bonds on the secondary markets, recapitalization of the banks and issuing the precautionary credits. This will most likely help to contain the European debt crisis, increasing the global demand for commodities.

The US statistics played its role in the rise of sugar prices today — last week’s unemployment claims turned out to be about 7 percent lower than the median forecast of the economic strategists was showing. Additionally, the second quarter of 2011 GDP growth figure was revised positively in the United States. These factors added to the reasons for the bull markets today.

Sugar futures contracts with September 30 delivery rose from $25.62 to $27.08 for 112 pounds or about 5.7 percent as of 17:47 GMT today. The highest intraday level was at $27.64 — commodity’s maximum price since September 21.

The sentiment on markets was pessimistic today. As a result prices for copper and oil fell, while gold gained.

Concerns about the crisis in the European Union intensified after German economist Juergen Stark resigned from the European Central Bank’s Executive Board today, leading to the speculation Germany will increase opposition to bailing out Greece. Traders also speculate that Greece may be forced to leave the Eurozone. US President Barack Obama spoke today, but failed to ease worries about the state of the US economy.

The MSCI All-Country World Index and the Standard & Poor’s 500 Index both dropped as much as 3.1 percent.

October futures for delivery of crude oil fell $1.81 to $87.24 per barrel on NYMEX. December futures for delivery of copper slid $0.141 (3.4 percent) to $4.0025 per pound by 13:00 on COMEX. December contract for delivery of gold advanced $2 (0.1 percent) to $1,859.50 per ounce as of 13:49 in New York.

Gold rebounded today as global equities slumped. Earlier, the precious metal was heading to the biggest drop since 2008.

European regulators extended the temporal ban on short selling, driving stocks down and bolstering demand for precious metals. The MSCI World Index of stocks fell 1.4 percent. The Standard & Poor’s 500 Index slid 1.8 percent. Rising unemployment claims in the US and falling consumer confidence in Germany also benefited gold.

December futures for delivery of gold added $5.50 (0.3 percent) to $1,762.80 per ounce as of 13:25 on COMEX. Earlier, the metal dropped as much as 3 percent to $1,705.40 and was heading to the biggest decline in three days since October 2008.