Commodity Blog

Posts Tagged ‘Greece’

White sugar dropped to the 10-month low in London on expectations of high supply from Brazil and India. Brazil’s output surged and supply may exceed demand in India, turning the biggest buyer into exporter. Increasing supplies together with continuous troubles in Europe cause experts to be bearish in their outlook for sugar. August delivery for white sugar dropped $11 (2.5 percent) to $431.50 per metric ton on Liffe exchange as of 10:39.

Cocoa futures tumbled today as commodities followed decline of global equities. The global economic recovery may be slowed, hurting commodity prices, by the spreading contagion of Greece’s fiscal crisis. The Standard & Poor’s 500 Index may are heading toward the largest weekly decline since March 2009. July futures for cocoa delivery sank $178 (5.6 percent) to $3,025 per metric ton by 11:55 on ICE Futures U.S. in New York.

Cotton futures slid to the lowest level in four weeks today as the stronger dollar cut a demand for some commodities as alternative assets. The U.S. dollar jumped against the euro on a concern that the debt crisis will spread from Greece to other European countries. Some commodities, including cotton, felt the impact of this situation. July delivery for cotton slid $0.0223 (2.7 percent) to $0.7985 per pound on ICE Futures U.S. in New York.

Sugar dropped to the lowest level in a year on the prediction that growing supplies from Brazil and India will curb the global deficit. Production in Brazil’s Center South, the biggest growing region, in the world, surged 77 percent in the first half of April. The production deficit will total 8 million metric tons this year, compared to the February estimate of 9.4 million tons. July delivery for raw sugar dropped $0.0074 (5.1 percent) to $0.1367 per pound on ICE.

Palladium and platinum declined today on a speculation that investors will prefer gold as an alternative investment. Analysts say that traders will be shifting from the platinum-group metals toward gold. Immediate delivery for palladium fell $33.60 (6.5 percent) to $484.40 per ounce in London. Platinum dropped $44.40 (2.7 percent) to $1,624.60 per ounce.

Corn and wheat gained today on a speculation that crops in the U.S. and some other parts of the world will be damaged by an adverse weather. Low temperatures may harm crops in the U.S., while dryness may impede a growth of the crops in some parts of China, Australia, Canada and Russia. July futures for corn delivery gained $0.04 (1.1 percent) to $3.73 per bushel on the Chicago Board of Trade. July wheat futures added $0.0125 (0.2 percent) to $5.12 per bushel on CBoT.

Soybeans dropped today on a concern that a demand for the commodity may be reduced as the global economic recovery can be slowed by the persisting fiscal problems in Greece. As Greece’s budget deficit crisis threatens to spread across whole Europe markets are suffering. July futures for soybean delivery fell $0.09 (0.9 percent) to $9.78 per bushel on CBoT.

Cocoa gained today on an outlook that a demand will exceed an output as exports from Cameroon dropped. Cameroon shipments of cocoa fell as much as 35 percent in March, while the global production won’t be enough to satisfy a demand in the 2009–10 season. July delivery for cocoa rose $18 (0.6 percent) to $3,211 per metric ton by 10:02 on ICE Futures U.S. in New York.

Copper dropped on speculation that the global recovery will be slowed by spreading debt problems in Europe, resulting in a lower demand for raw materials. Credit ratings of Greece, Portugal and Spain were lowered this week. A concern about a budget deficit is contaminating European countries, hurting markets. July futures for copper delivery slid $0.02 (0.6 percent) to $3.3665 per pound as of 10:14 on the Comex.

Gold gained as a speculation that Greece won’t receive an aid soon spurred a demand for the precious metal as an alternative to traditional currencies. Gold priced in the euro and the Swiss franc reached records, while the precious metal priced in pound jumped to almost all-time highest level. The dollar’s 4.9 percent rally against a basket of six major currencies this year hadn’t significant impact on a gold price, supporting the viewpoint that gold can be considered yet another currency. The weak dollar still benefits the metal, yet the strong one isn’t necessary hurt it anymore.

An increasing investors’ demand boosted sales of old jewelry and other scrap gold. Asia still provides steady consumer base for a physical selling.

Analysts say that gold needs to noticeably jump above the old highs to continue its rally. The metal must rise above the $1,160 level of previous resistance to attract more investors.

June futures for gold delivery in gained $6.90 (0.6 percent) to $1,160.90 per ounce by 10:49 on the Comex in New York. Highest level of $1,170.70 for gold prices in the year was reached on April 12th. Futures reached their all-time high level of $1,227.50 on December 3rd.

Copper rose today after Giorgos Papakonstantinou, the Minister for Finance of Greece, said that Greece will be provided with an aid package from the European Union and the International Monetary Fund rather soon, easing concerns for EU economy. This announcement has brought some relief to markets, though it hasn’t completely removed doubts about future of the Euro zone.

An expanding global economic recovery coupled with a rising demand from China sparked optimism for a worldwide increase of a copper usage. A gross domestic product in China expected to grow about 8 percent, while an inflation rate predicted to be 3 percent in 2010. Sales of new houses in the U.S. have jumped 27 percent in March, adding to a copper demand in the world’s second biggest consumer of the metal. LME-tracked copper inventories dropped 0.2 percent to 506,125 tons.

Delivery for copper in three months advanced $45 (0.6 percent) to $7,795 per metric ton today on the London Metal Exchange. July futures for copper delivery added $0.0175 (0.5 percent) to $3.548 per pound on NYMEX.

Gold gained today as the concern that the rescue package, offered to Greece, won’t be enough to deal with the nation’s debt increased the appeal of the precious metal as a safe haven. Worries about a budget deficit are spreading to other European countries and also to U.K., driving investors to look for alternative assets and a safe haven. June futures for gold delivery gained $3 (0.3 percent) to $1,142.20 per ounce by 11:20 on NYMEX.

Sugar dropped to the weekly low in London on speculation that India may cut imports of the sweetener after its own sugar production increased. The India’s production may rise to 23 million tons in the year starting October 1st as there should be enough rains for the expected harvest. August futures for refined sugar delivery dropped $3.30 (0.7 percent) to $486.40 per metric ton at 15:18 on Liffe exchange.

Copper declined on speculation that demand for the metal may fall after China toughened rules for lending and property markets. Measures taken by China’s government should cool the nation’s economy, possibly resulting in falling demand and sinking price for commodities. Delivery for copper in three months declined $15 (0.2 percent) to $7,775 per metric ton as of 17:09 on the London Metal Exchange.

The gold performed well from the beginning of this year. While it hadn’t jumped as much as some experts expected, the metal generally retained its trend to rise, if not with the tremendous pace. The gold stayed above the $1,000 level, but can it conquer new heights?

Nowadays it looks like the gold can be considered more like the alternative currency than the commodity. And, as such, it can benefit from the uncertainty in the currency market and the need of the investors for the safety. The situation with Greece let many believe that Europe has some deep-seated problems, which can’t be resolved in near future, and the bailout, offered to Greece, isn’t the actual solution, but the hasty attempt to do at least anything, which may be futile in the end. Of course, other currencies benefited from the resulting weakness of the euro. The dollar is one of such currencies as it is still considered as the safe haven for the investors. But how long will it last? Some analysts think that the debt problem may hit the U.S. too, weakening the dollar and striping the currency from its importance for the global economy. Many countries, China in particular, are already beginning to sell the dollar and amassing the gold. And the gold may become very attractive as an alternative currency as it’s not that much prone to the inflation as the other currencies.

The physical demand, like the demand from the jewelry industry, was subdued by the growing prices. Yet it may be slowly restoring itself as the customers are becoming accustomed to the new prices. What’s more important, the physical demand may provide the support for the gold prices as the customers will be buying more gold if its price would fall.

Some analysts think that by the end of the year the gold price may reach as much as $2,000. But most don’t support such optimistic outlook, claiming that the precious metal will stay in the current range. But despite some disagreement over the short-to-medium term gold performance, almost all agree that over over the long-term the metal looks bullish.

Crude oil fluctuated today around $86 per barrel as the China’s economy is widening, yet the demand for commodities as an alternative investment dwindled as the dollar rose. The China’s refiners processed 34.56 million metric tons in March, 18 percent more than in the same month in the previous year. The U.S. stockpiles of crude oil declined 2.2 million barrels (0.6 percent) in the previous week to 354 million barrels. May delivery for crude oil gained $0.15 to $85.99 per barrel by 9:53 a.m. on the New York Mercantile Exchange.

Wheat went up today as the hedge funds and other large speculators are unwinding bets on falling prices. The report showed that the speculative short positions outnumbered the long positions by 55,427 contracts in the week ended April 6th in Chicago. July futures for wheat delivery added $0.0525 (1.1 percent) to $4.925 per bushel at 10:43 on CBoT.

Gold little changed in New York today, though it may advance as the demand for the precious metal increase because of concern about the situation with the budget deficit in Greece. The European Union provided the rescue package to Greece, but speculation arose that it may be not enough the resolve the nation’s debt problem. June futures for gold delivery advanced $0.7 to $1,160.30 per ounce as of 11:55 on NYMEX.

Wheat gained on the outlook that the weak dollar will increase the appeal of the grains as an inflation hedge and will bolster demand for the supplies from the U.S. The weak dollar can increase the purchasing ability of the crop importers from the U.S. July futures for wheat delivery gained $0.05 (1 percent) to $4.8425 per bushel at 9:46 on CBoT.

Crude oil fluctuated around $85 per barrel as the speculation about the dollar weakness spurs demand for the commodity as an alternative asset, driving the prices up, yet the concern for the declining demand forces the oil prices downward. The rescue package, provided to Greece by the European Union, sparked expectations for the dollar to fall versus the euro. In the same time, the global inventories are stockpiling, the U.S. inventories are above average and there is no sign of supplies decline. May delivery for crude oil for dropped $0.04 to $84.88 per barrel by 12:39 on the New York Mercantile Exchange.

Copper prices dropped from the highest level in 20 months on speculation that the rally was excessive. Previously prices have risen on outlook for the economic recovery in the U.S., but the National Bureau of Economic Research insisted that it is too early to talk about the end of the U.S. economic recession. May futures for copper delivery fell $0.024 (0.7 percent) to $3.566 per pound as of 12:48 on NYMEX.