Commodity Blog

Posts Tagged ‘India’

Sugar futures dropped to a lowest in seven months in New York as production rose in Brazil and India, the largest producers in the world. India’s production will reach 16.8 million metric tons in the year ending September 30th, while output in Brazil more than doubled in the second half of February from a year earlier. Traders are holding their purchases in hopes for further price decline. May futures for sugar delivery fell $0.0063 (3.1 percent) to $0.1969 per pound on ICE Futures U.S.

Soybeans advanced to a highest in a week as China bought supplies from the U.S. exporters and after the report that stockpiles will be smaller than predicted. China bought 110,000 metric tons for delivery in the year beginning September 1st, signaling that appeal of the U.S. supplies persist despite the record harvest in South America. Inventories will be 190 million bushels on August 31st, down from 210 million forecasted in February. May futures for soybean delivery gained $0.105 (1.1 percent) to $9.58 per bushel on CBoT.

Wheat futures slid to a monthly low on speculation that inventories in the U.S., the greatest exporter in the world, will increase. Stockpiles will reach as much as 1.001 billion bushels on May 31st, up from a February forecast of 981 million bushels, while consumption for food, livestock feed and exports will be 1 percent less than predicted in the previous month. May futures for wheat delivery declined $0.08 (1.6 percent) to $4.815 per bushel on the Chicago Board of Trade.

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.

White sugar gained in London on signs that a global production deficit may persist, encouraging importers to increase inventories. Production of sugar cane in Brazil and India, the largest growers in the world, was hampered by adverse weather. Analysts forecast that global demand will exceed worldwide output by 9.4 million metric tons in the 2009–10 season. May delivery for white sugar rose $7.60 (1.1 percent) to $714.50 per metric ton on the Liffe exchange.

Wheat, soybeans and corn dropped in Chicago after the dollar gained, making purchases of U.S. crops unprofitable for traders, who are using other currencies. May delivery for wheat lost 1.3 percent to $4.9325 per bushel on CBoT by 12:34. Argentina, the third biggest soybean exporter in the world, may produce more soybeans than previously predicted record 52 million tons with the aid of rains. May delivery for soybeans declined 0.7 percent to $9.575 per bushel. Corn planting is expected to increase from 86.5 million acres last year to 89 million this year. May delivery for corn fell 0.7 percent to $3.6625 per bushel.

Coffee slid New York as the stronger dollar curbed demand for commodities as an alternative investment. The greenback gained for the first time this week versus a basket of six major currencies. March futures for Arabica-coffee delivery slid $0.006 (0.5 percent) to $1.298 per pound by 9:51 on ICE Futures U.S. in New York. Coffee price may tumble to $1.20 if the dollar rally will continue, yet the coffee may rise with deficit of high quality coffee and in case of dollar decline. The coffee price increased previous year because adverse weather harmed harvests in Brazil and Colombia.

Sugar rose on speculation that farmers in India will not significantly increase planting of cane. A less-than-expected increase in planting area can lead to import of sugar by India, supporting prices. March futures for raw-sugar delivery rose 1.8 percent to $0.2707 per pound on ICE.

White sugar price reached to the highest level since 1989 in London as concern about supply deficit forces India and other importers to increase stockpiles. India, the biggest consumer in the world, are going to import at least 7 million tons of sugar this season, third of that number being white, or refined, sugar. Worldwide demand for sugar will exceed supply by 13.5 million metric tons in the 2009–10 season. March delivery for white sugar gained $11.20 (1.5 percent) to $743.90 per ton on the Liffe exchange.

Analysts predict that gold may decline as a stronger dollar eroded appeal of the precious metal as an inflation hedge. The U.S. currency rose 0.8 percent versus the euro today. If the greenback rally continues, gold is going to go down. Immediate delivery for gold was little changed, remaining at $1,133.50 per ounce by 11:12 in New York.

Analysts predict that crude oil’s rally will stop at $88 level. The level of $88 was a support in 2007 and at the end of 2008. Price support level at a falling market may become resistance when prices are beginning to rise. Oil rose to $83.52 per barrel (a highest level in 14 months) on January 6th.

Sugar prices increased the fourth time this week reaching the highest level in almost three decades on expectation that countries including India, the greatest buyer in the world, are going to raise imports to ease a growing supply shortage. As a result of surge in global prices sugar mills in India are forced to delay imports because high prices made overseas purchases unprofitable. Sugar futures more than doubled in the past year, touching a 29-year high yesterday in New York, as adverse weather damaged cane crops in India and Brazil, biggest growers in the world. March futures for raw-sugar delivery gained $0.0031 (1.1 percent) to $0.2831 per pound by 11:19 on ICE Futures U.S. in New York.

Sugar futures rose in New York, continuing a rally to the record price in 29 years, on concern that supplies will shrink as worldwide demand exceeds production. Sugar price more than doubled in the previous year as drought in India and excess rainfalls in Brazil have cut cane yield. Analysts say that “a deficit in the sugar market will help the commodity to outperform a lot of the softs”. March futures for raw-sugar delivery gained $0.004 (1.4 percent) to $0.2802 per pound as of 9:52 a.m. on ICE

Crude oil fluctuated after forecasts that temperature in the northern U.S. will rise next week. About four-fifths of the U.S. heating oil consuming depends on the weather in the northeastern U.S. U.S. stockpiles of distillate fuel, including diesel and heating oil, slid 1.78 million barrels last week. February delivery for crude oil dropped $0.04 to $81.47 per barrel by 10:49 on the New York Mercantile Exchange.

Orange-juice futures went up after frosts hit Florida, the second greatest grower in the world after Brazil. Cold weather will last for a week, which should be not enough to noticeably damage crops. March futures for orange-juice delivery added $0.083 (6.4 percent) to $1.3735 per pound as of 10:33 on ICE.

Copper prices jumped to the record in 16 months after a strike at the second-biggest mine in the world and as manufacturing in the U.S., China and India increased in December. Last month manufacturing in the U.S. grew at fastest rate in three months. Demand for the metal in China reached a record in the first half of 2009. March futures for copper delivery climbed $0.0505 (1.5 percent) to $3.397 per pound by 11:22 on the New York Mercantile Exchange’s Comex unit.

White sugar price reached the highest level in at two decades in London on concern that flooding in Brazil may harm the crop. Analysts forecast that global sugar production will decline by 13.5 million tons in 2009–2010 season. March delivery for white sugar rose $16.10 (2.3 percent) to $726.30 per metric ton on the Liffe exchange.

Sugar futures gained for the third time in four sessions as traders increased buying to profit from growing supply deficit. Speculators were interested mostly in remaining in the long positions. Unfavorable weather conditions cut crops in Brazil and India increasing a global deficit. March futures for raw-sugar delivery increased $0.0046 (1.7 percent) to $0.2723 per pound as of 9:57 on ICE.

Orange-juice prices dropped to the week low after report that citrus harvest won’t be damaged by a cold weather. Possibility for some frosts remains but citrus harvest will be mostly untouched by a harsh weather. Orange-juice previously rose as hedge funds and other speculators were buying on concern that frosts will harm the fruits. March futures for orange-juice delivery fell $0.0275 (2 percent) to $1.379 per pound by 12:06 on ICE Futures U.S. in New York.

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.