Commodity Blog

Posts Tagged ‘London’

Gold reached new record today after Standard & Poor’s downgraded the outlook for the US credit rating. S&P confirmed the US rating of AAA/A-1+, yet put the outlook to negative. It cited the bid budget deficit of the US, compared to other developed nations.

S&P explained why the issue wouldn’t likely be fixed in the near future:

We believe there is a material risk that U.S. policymakers might not reach an agreement on how to address medium- and long-term budgetary challenges by 2013; if an agreement is not reached and meaningful implementation is not begun by then, this would in our view render the U.S. fiscal profile meaningfully weaker than that of peer ‘AAA’ sovereigns.

June futures for gold delivery gained $6.90 (0.5 percent) to $1,492.90 by 14:04 on COMEX. Contact for immediate delivery of gold jumped 0.8 percent to the record of $1,497.90 in London.

Oil surged on concerns that political unrest will spread throughout North Africa and Middle East. The conflict in Libya threatens oil supply as the country holds Africa’s biggest reserve. April delivery for crude oil rose $0.09 to $95.51 per barrel on NYMEX by 9:24 after jumping yesterday $5.71 to $95.42, the highest price since October 2008.

The turmoil was also benefiting to precious metal, including gold and silver. The Libyan military and security forces were attacking protesters that demanded freedom and democracy. April futures for gold delivery gained $12.50 (0.9 percent) to $1,401.10 as of 13:51 on COMEX. The price reached the record level of $1,432.50 on December 7. May futures for silver delivery climbed $0.571 (1.8 percent) to $32.856 per ounce after it reached $34.315, the highest price since March 1980.

The unrest in Libya had negative impact on copper. The industrial metal dropped in London as well as in New York. Delivery for copper in three months dropped 0.6 percent to $9,524 per metric ton on LME, while futures on May delivery subtracted 0.7 percent to $4.3320 per pound on COMEX.

Wheat slid today for the sixth straight session after favorable weather improved forecasts for winter varieties of the crop in the U.S. The southern U.S. Great Plains have got as much as six times the normal precipitation the last week, causing expectations of an increased yield. July futures for wheat delivery slid $0.015 (0.3 percent) to $4.6625 per bushel as of 10:29 on the Chicago Board of Trade.

Platinum and palladium dropped today as concerns about impact of Germany’s ban of some bearish assets on the European economy caused speculation that demand for metals may fall. The Germany prohibited naked short sales for 10 banks and insurers and naked credit-default swaps on government bonds of the Euro-zone, causing volatility and panic on markets. Fundamentals look good for the metals, though, and long-term outlook remains favorable despite some short-term pessimism. Immediate delivery for platinum fell $74 (4.4 percent) to $1,599.50 per ounce by 15:31 in London. Palladium dropped $41.30 (8.3 percent) to $457.70 per ounce.

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.

White sugar gained in London on the prospect for the increased imports by China as the drought may decrease the sugar stockpiles. The Chinese importers may boost their purchases after the sugar production fell because of the drought in the Yunnan province. The sugar output, including beet and cane sugar, may decline to 12 million metric tons this crushing year, down from 12.5 million tons in the previous year.

The refining of the raw sugar imports in Russia dropped 22 percent, compared to the same period in the previous year, from the start of this year through April 1st. Russia may begin importing raw sugar in exchange for the grain shipments.

August delivery for white sugar rose $7.10 (1.6 percent) to $462.70 per ton on the Liffe exchange in London. May delivery for raw sugar retreated 0.6 percent to $0.1607 per pound by 12:37 on ICE. Analysts say that, while the support for the sugar price’s increase is not strong, the fundamentals still can push sugar further up.

Wheat prices went up as some traders are planning to unwind bets on falling prices. Government report said that hedge-fund managers and other large speculators increased their net-short positions by as much as 17 percent in the week ended on March 16th. May futures for wheat delivery went up $0.0575 (1.2 percent) to $4.895 per bushel as of 10:21 on CBoT.

Cocoa futures gained as U.K. pound, used to trade cocoa in London, rose, boosting the attractiveness of contracts traded in New York. Earlier the commodity slid on speculation about increasing production in Ivory Coast. Some analysts think that, without the support of the strong pound or threat of adverse weather in Ivory Coast, cocoa may drop to $2,650 this week. May futures for cocoa delivery gained $25 (0.9 percent) to $2,859 per metric ton by 11:51 on ICE Futures U.S. in New York.

Cotton futures advanced in New York on concern that farmers in the U.S. won’t plant enough this year to meet demand. Analysts say that prices are not high enough to encourage more plating. May delivery for cotton advanced $0.0055 (0.7 percent) to $0.8273 per pound at 12:19 on ICE.

Analysts say that importers will likely increase purchasing of sugar after prices for the sweetener dropped. Raw sugar has tumbled as much as 37 percent from $0.304, the record in 29 years reached on February 1st, on speculation that global deficit will ease. Global production was hampered by adverse weather conditions in Brazil and India in the previous year. Australia, the third biggest exporter in the world, may increase its sugar production by 10 percent this season in case favorable weather remains. May delivery for raw sugar rose 3.8 percent to $0.1903 per pound yesterday in New York.

Gold fell as buyers regained confidence in world economy, curbing appeal of the precious metal as an alternative haven. Sales of all types of gold coins dropped to 53,930 ounces in the first two months of this year, compared with 267,091 ounces in the same period in 2009. Immediate delivery for bullion dropped 0.5 percent to $1,122.10 per ounce by 8:33 in London.

Analysts think that platinum may soon touch $1,662 per ounce. Forecast reverted to bullish after price exceeded $1,617 level, highest in the previous week. Analysts predict that the next higher resistance level will be $1,704. Platinum traded at $1,637.53 as of 10:19 in London.

Cattle futures gained for the fifth straight session on concern that dwindling stockpiles will boost prices for the U.S. beef. Adverse weather impeded weight gain of cattle. Cattle futures also rose on speculation that recovering economy will spur demand for a meat. June futures for cattle delivery gained $0.00275 (0.3 percent) to $0.939 per pound by 11:28 on the Chicago Mercantile Exchange.

Wheat gained as U.S. farmers are cutting sales on anticipation that a weaker dollar will increase demand for the grain. Price was falling as global wheat supplies are increasing faster than world demand but low wheat planting this winter may cause lack of supplies, leading to rebound in price. May futures for wheat delivery rose $0.1125 (2.2 percent) to $5.1575 per bushel on the Chicago Board of Trade.

Corn advanced on speculation that excessive rainfall may harm crops in Argentina. Price is supported by combination of a falling dollar, adverse weather and improving world stock markets, as well as by farmers, who are holding crops for higher prices. May futures for corn delivery jumped $0.0525 (1.4 percent) to $3.8675 per bushel in Chicago.

Gold may rise to $1,162 per ounce, according to technical analysis, in case prices hold above $1,135 level. The precious metal advanced 3.6 percent this year. Gold traded at $1,136.45 by 10:44 in London.

Wheat slipped after dollar gained and Iraq shifted from U.S. grain to supplies from Canada and Russia. The greenback advanced 0.8 percent versus a basket of six major currencies today. Iraq bought 100,000 metric tons of wheat from Canada and 280,000 tons from Russia. May futures for wheat delivery dropped $0.0475 (0.9 percent) to $4.9975 per bushel as of 10:17 on CBoT.

Cocoa sank to the lowest in three months in London on outlook for increasing production in Ivory Coast. While output in Ivory Coast hasn’t returned to its highest level, production is higher then previously predicted. Analysts rose forecast for Ivory Coast cocoa supply for 2009–2010 period by as much as 44,000 metric tons up from January to 3.425 million tons. Cocoa for may delivery fell 1.3 percent to $2,824 per metric ton by 17:24 on ICE Futures U.S. in New York.