Commodity Blog

Posts Tagged ‘US’

Copper extended its rally today after data on nonfarm payrolls eased concerns for US economy. The report on employment change released today showed much smaller decline of work places than was estimated (54,000 compared to predicted 101,000). December futures for copper delivery advanced $0.0125 (0.4 percent) to $3.508 per pound by 10:24 on COMEX.

Wheat prices advanced today as demand for supplies from the US increased after Russia extended its ban on exports. Prime Minister Vladimir Putin announced yesterday that Russia would extend a grain-export ban till the end of the next harvest. At the same time, US exporters sold 110,000 metric tons of wheat to Egypt and 275,000 tons to other buyers. Global stockpiles may fall to 174.8 million tons by the end of the marketing year on May 31st. December futures for wheat delivery gained $0.1775 (2.5 percent) to $7.315 per bushel at 10:33 on CBoT.

Crude oil fell today as decline of service industries in the US caused speculation that demand may drop. The Institute for Supply Management Purchasing Managers’ Index showed a decrease from 54.3 to 51.5 in August. October delivery for crude oil fell $1.51 (2 percent) to $73.51 per barrel as of 11:53 on NYMEX.

Copper prices jumped today as unexpected growth of pending home sales and improving labor market in the US suggest that demand for the industrial metal may increase. Pending home sales showed a growth by 5.2 percent in July instead of an expected decline. Claims for unemployment benefits fell from 478,000 to 472,000 last week. December futures for copper delivery rose $0.018 (0.5 percent) to $3.4955 per pound as of 13:17 on COMEX.

Gold rallied today on forecast that central banks around the world would keep interest rates at present levels. The European Central Bank decided today to keep the benchmark interest rate at the record low level of 1 percent. The Federal Reserve has kept the US benchmark rate near 0.25 percent since December 2008. December futures for gold delivery gained $5.30 (0.4 percent) to $1,253.40 by 13:46 COMEX.

Raw-sugar futures gained today on concerns that drought may threaten harvest in Brazil, the largest producer. Harvest of sugar-cane in Brazil’s Center South, the biggest growing region in the world, may be lower than estimated 570 million metric tons if dry weather persists. October delivery for raw sugar rose $0.0063 (3.2 percent) to $0.2038 per pound as of 10:48 on ICE.

While in some countries wheat harvest is also threatened by drought, in Europe wheat faces other danger: excessive rains. Wheat prices jumped on speculation that Germany and some other countries of the Western European Union would have too much rain and also after Egypt bought 225,000 metric tons of wheat from the US. December futures for wheat delivery gained $0.23 (3.4 percent) to $7.0875 per bushel by 13:15 on CBoT.

Crude oil prices jumped today after manufacturing in the US and China expanded in August faster than expected. ISM PMI in the US rose from 55.5 to 56.3 in August. October settlement for crude oil (Brent) went up $1.71 (2.3 percent) to $76.35 per barrel on ICE.

Hogs futures gained today on speculation that prices declined too much last week, considering strong demand in the US. Exports of meat rose, also adding to demand. October futures for hog settlement rose $0.00275 (0.4 percent) to $0.7515 per pound by 13 on CME.

Soybean prices dropped today on speculation that demand in China and the US may slow after prices surged. November futures for soybean delivery slid $0.125 (1.2 percent) to $10.10 per bushel as of 13:15 on CBoT, the biggest drop since August 19th. December futures for soybean-oil delivery dropped $0.0048 (1.2 percent) to $40.05 per pound.

Corn slipped today as rains improved outlook for wheat output and on speculation that demand for ethanol would fall after oil prices declined. Speculators continue to bet on price increase, anyway. December futures for corn delivery fall $0.0225 (0.5 percent) to $4.3925 per bushel on CBoT.

Wheat prices hit the highest level in a week today on an outlook for reduced output from Argentina and Russia because of drought. Global inventories may decline 9.9 percent to 174.8 million metric tons. December futures for wheat delivery gained $0.215 (3.1 percent) to $7.165 per bushel as of 11:21 on CBoT. Concerns about adverse weather boosted wheat futures, causing them to rise 45 percent since the end of June.

Gold fluctuated today, but expected to resume its rally as faltering economic recovery and declining US equities increased demand for the metal as a safe haven. US stocks dropped after a government report showed that personal income rose less than predicted. The gross domestic product rose 1.6 percent in the second quarter of 2010, less than estimated in the previous month. December futures for gold delivery slid $0.5 to $1,237.40 per ounce by 11:25 on COMEX. Gold prices advanced 13 percent this year, touching the record level of $1,266.50 per ounce in June.

Copper prices declined today after the report of the Federal Reserve Bank of Philadelphia showed that US manufacturing activity unexpectedly slowed in August. Philadelphia Fed index dropped from 5.1 to -7.7 this month. Median forecast was an increase to 7.1. A figure below 0.0 indicates worsening conditions. December futures for copper delivery slid $0.023 (0.7 percent) to $3.3475 per pound by 10:29 on COMEX.

Philadelphia Fed report, together with an increasing number of unemployment claims, also drove down prices for crude oil. Claims for jobless benefit jumped from 488,000 to 500,000 last week. It was even more frustrating, considering that analysts promised a decline to 478k, not an increase. Signs of economic slowdown suggest that demand for commodities, including copper and oil, may wane. October settlement for crude oil went down $1.34 (1.8 percent) to $75.13 per barrel on ICE.

Crude oil fell today as reports showed that US oil and motor gasoline inventories declined less then expected, while US stockpiles of petroleum and distillate fuel increased. US crude oil inventories decreased by 0.8 million barrels from the previous week to 354.2 million barrels, while a decrease by 1.1 million was expected. Gasoline inventories fell 39,000 barrels to 223.3 million, compared to a predicted drop by 375,000. Stockpiles of distillate fuel went up 1.07 million barrels to 174.2 million and petroleum inventories increased by 5.3 million barrels last week.

Analysts say that demand remained strong and even grows, it’s just that growth of supplies outpaced demand. Total US fuel consumption grew 0.4 percent to 19.6 million barrels per day in the last month, while gasoline demand rose 6,000 barrels per day at the same time to 9.45 million, the highest level since August 2008. Reports showed a mixed picture, where balance of supply and demand may easily shift, so oil prices may move in any direction in the future. Prices advance can be limited, though, by concerns for the global economic recovery.

September delivery for crude oil slipped $0.35 (0.5 percent) to $75.42 per barrel on NYMEX. Futures reached $73.83, the lowest price since July 7. Oil prices are still 9 percent higher than at the same period in the previous year.

Gold dropped today from the highest price in six months after the stronger dollar decreased appeal of the precious metal as an alternative investment asset. The US currency gained as much as 0.2 percent versus the basket of six currencies today. Gold have tendency to move in an inverse pattern to the dollar. Gold also fell after some traders sold the metal to profit from high prices.

Gold prices previously surged on concerns about the global economic recovery. Outlook for the US economy is grim after dovish statement of the Federal Reserve this week, China’s economic expansion is slowing and Europe’s economy may be crippled by budget cuts. Actually, these concerns hadn’t gone away, so gold still has great potential. Considering increasing demand in Asia, especially in China and India, we can expand that bullion’s rally will continue.

December futures for gold delivery slid $2.30 (0.2 percent) to $1,214.40 as of 11:09 COMEX. Gold futures previously rose to $1,219.80, the highest price since July 1. The metal reached the record $1,266.50 level per ounce in June.

Copper prices jumped today on speculation that the metal was oversold, considering declining inventories. Prices declined earlier as traders were concerned about slower economic growth in two most significant copper consumers: the US and China. The Federal Reserve said that the US economic growth would be “more modest”. China’s industrial production grew with the slowest pace in 11 months in July.

Worries are still present, but perhaps fears were overdone. LME-monitored inventories were decreasing for five consecutive months, the longest decrease since July 2007. As Matthew Zeman, a trader at LaSalle Futures Group, put it:

On a short-term basis, this market has been oversold. The lower inventory levels will help to keep a lid on things. The market will still be vulnerable if we continue to get more indications that growth is slowing.

September futures for copper delivery went up $0.037 (1.1 percent) to $3.3125 per pound by 11:25 COMEX. The price previously slipped 0.6 percent to $3.255, the lowest level since July 30.

Crude oil declined today for a second day on concerns that slower economic growth in China and the US will damp demand. Year-on-year industrial production expansion in China slowed to 13.4 percent in July, compared to the June growth of 13.7 percent. The report that US inventories of crude oil declined for a second week may support the prices. September delivery for crude oil slipped $1.35 (1.7 percent) to $78.90 per barrel as of 9:57 on NYMEX.

Copper prices also fell on concerns for the global economy. The metal prices slid after the Federal Reserve said that the US economic recovery would be “more modest” and as pace of China’s industrial output growth was slowest in 11 months. Copper also dropped as the dollar surged. September futures for copper delivery went down $0.0705 (2.1 percent) to $3.242 per pound as of 11:22 on COMEX.