Posts Tagged ‘supply and demand’
Oil Prices Down as Sanctions Against Iran Postponed, Cattle Climbs on Demand for Beef
Crude oil declined today as threat of sanctions against Iran lessened. There are rumors that the International Atomic Energy Agency will discuss with Iran its nuclear program. In the meantime, European Union officials said that an embargo on Iranian oil exports may be postponed for six months. There is no more rush to buy oil and prices reacted accordingly. February futures for crude oil delivery slipped $0.79 (0.8 percent) to $98.31 per barrel by 13:36 on NYMEX. Brent oil declined from $111.01 to $110.91 per barrel as of 20:53 GMT today on ICE, while earlier it touched $109.71 — the lowest price since January 3.
Cattle advanced as demand for beef rose, while supply decreased. Beef price increased 5 percent in the United States this year, following the 10 percent increase in 2011. Beef exports jumped 25 percent in the 10 months ended October 31 from a year ago, while cattle herds were record small last year. April futures for cattle delivery rose 0.9 percent to $1.264 per pound at 13:00 on CME.
Copper Prices Go Higher as Inventories Shrink, Demand Rise
Copper gained today as global inventories declined, while demand is expected to pick up.
Global stockpiles fell 22 percent since March and were at the lowest level since October 2009 this month.
The European Central Bank injected money in Europe’s financial system by providing loans to European banks in an attempt to battle with the region’s crisis. Goldman Sachs Group Inc. predicted that Europe’s demand for copper will increase in the next quarter and prices will advance 26 percent in the next year.
The US economy continuously shows signs of improvement, improving prospects for industrial metals. Durable goods orders rose 3.8 percent in November after no growth was registered in October.
Copper rose from $3.4250 to $3.4470 per pound today on COMEX and earlier reached $3.4635 — the highest level since December 13.
Corn Retreats from Monthly Record on Growing Supplies
Corn retreated today on the forecast of rising global supplies. The crop reached the highest price in a month yesterday.
The US Department of Agriculture estimated that the world production will grow 4.8 percent to 867.5 million metric tons in the 2011–12 season. The global stockpiles will shrink by just 0.8 percent, demonstrating the smallest drop in three years. The output from the United States is expected to decline by 1.1 percent, by the growth of the production in other parts of the world, including the European Union and Russia, should surpass the predicted drop. Supply is rising as farmers reacted to the record prices this year by boosting production.
Corn prices advanced yesterday on the speculation that adverse weather in South America would hurt crops in South America and would increase demand for supplies from the USA. The prices reached the highest level since November 17.
Corn spot price was down from $6.1550 to $6.1450 per bushel as of 3:27 GMT today on CBoT. Yesterday, the price jumped from $6.0575 to $6.1675, while the daily high was $6.1900. The prices reached the record level of $7.9975 on June 10.
Corn & Soybeans Closes Higher, While Wheat Goes Down
Corn and soybeans gained today on the speculation that the recent slump of the price will spur demand from makers of food and fuel. Prices for cattle and hogs jumped this year, potentially prompting farmers to increase their herds and to buy more animal feed as a result. The drought in Argentina can reduce supply, further boosting the agricultural commodity. On the other hand, forecasters say that the drought in Brazil may soon end and that can reduce the impact of lower supply from Argentina.
Corn was up from $5.8000 to $5.8575 per bushel on CBoT today, following the intraday drop to $5.7000 per bushel. Soybean price advanced from $11.2550 to $11.3000 per bushel today after falling earlier to $11.2025 per bushel.
Wheat was a different story as it declined on the forecast that the demand will decrease, while stockpiles will grow, yet the crop was also trying to erase its losses by the end of the trading session. Economists expect China to reduce its wheat import as the nation’s economy is slowing. Market forecasters predict that the report of the US Department of Agriculture on December 9 will show that the global wheat inventories rose 202.89 million tons, compared to the November estimate of 202.6 million tons.
Wheat closed at $5.9775 per bushel on CBoT down from the opening price of $6.0050, but significantly above the daily low of $5.8825.
Oil & Corn Rally on Joint Effort of Central Banks
Crude oil rallied after the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, and the Swiss National Bank agreed to lower interest rates on dollar swaps among banks. Analysts viewed this move as a measure to help European banks in funding their dollar reserves. Market commentators warned that the rally may be
Corn also advanced, but its gains were limited on the outlook for higher supply from South America. On the other hand, economists argue that lower price may prompt China to expand its import, boosting demand for the agricultural commodity. Corn spot price rose from $6.0275 to $6.0450 per bushel today on CBoT.
Oil Falls on Outlook for Demand, Sugar Drops on Higher Supply
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 Demand Trends Q3 2011 Infographics
World Gold Council released its Gold Demand Trends report for the third quarter of 2011 last Thursday. As an addition to this invaluable report on gold demand and supply, they’ve also shared an interesting infographics with us:
If you want to learn more about the developments concerning this precious metal, including the supply growth by segments, please refer to the latest report by the World Gold Council:
Woes of Zinc Could End, Still Caution Required
The recent plunge of zinc may come to an end on the signs of increasing demand and declining supply.
Zinc was falling in three of the last four years on the London Metal Exchange, showing the worst performance among the six major industrial metals. The slowdown of the global economy contributed to the decline. Another reason for the bad performance was overproduction of the metal.
But market analysts began to view zinc in more favorable light. The rapid economic growth in Asia, particularly China, increase demand for industrial metals. Production of
There are reasons to be optimistic for zinc, but also there are reasons to be cautious. The world economic recovery is encountering problems and may even falter, at least according to forecasts of most pessimistic economists. Such worries aren’t good for industrial metals. The International Monetary Fund cut its global growth forecasts to 4 percent for 2011 and 2011, compared to the previous estimates of 4.3 percent and 4.5 percent respectively.
Zinc rose today from $94.60 to $95.10 per kilogram on MCX, following the previous advance to the daily high of $96.10.
Copper at New 14-Month Low in Commodities Downfall
The overall bearish market in the commodities and expectations of a lower demand for copper due to the global industry contraction led copper to a new minimum level in last 14 months. The metal is currently showing its worst monthly decline since October 2008.
Market participants see little point in betting on copper in the face of the expected recession wave that will probably hit both developed and emerging economies. China, the biggest consumer of copper, will likely have to reduce its imports if GDP growth falls short of the government forecast next year.
Copper is currently leading, along with nickel and cotton, the list of the most bearish commodities this year. It was expected before that the lower production numbers will stimulate the price growth for this metal. Now the analysts cut their price forecasts before the London Metal Exchange Week that will be held next Monday and will shed more light on the state of the industry.
Copper COMEX continuous price fell from $323.55 to $315.00 per 100 pounds as of 15:40 GMT today. It reached its daily low at $311.45 — the lowest level since July 2010. This month copper is showing 24.6 percent drop.
Rice Posed to Gain on Inventories, Sugar Falls on Supply
Rice is expected to surge as the smallest increase of inventories in five years may create deficit on markets. Stockpiles increased only 1.1 percent this year, compared to 29 percent in the past four years. The estimates of the US Department of Agriculture predicts signal that supply, being 456.2 million metric tons, still exceeds demand (455.2 million tons). Yet market analysts predict that prices will jump 20 percent by the end of this year. So far, prices for rice advanced 15 percent from May.
Sugar fell today on the speculation that India will increase exports, causing supply to exceed demand. On the other hand, China and Indonesia are going to expand their purchases of the commodity, potentially supporting prices. October contract for delivery of raw sugar slipped $0.0022 (0.8 percent) to $0.2762 per pound as of 12:24 on ICE.
