Commodity Blog

Posts Tagged ‘USDA’

Corn and wheat dropped today after the US Department of Agriculture predicted that global stockpiles will grow. Soybeans also declined. The USDA projected that world wheat inventories will increase by 1.5 million metric tons to 210.0 million in the 2011–12 season, global corn stockpiles will grow 1.0 million tons to 128.1 million tons and soybean ending stocks are projected to be higher by 45 million at 275 million bushels.

Earlier, the agricultural commodities were rising as adverse weather posed threat to crops in South America. Nevertheless, the estimates of the USDA showed that lower supply from the region will be mostly offset by production in other parts of the world.

Wheat slipped from $6.4125 to $6.0500 per bushel as of 23:47 GMT today on CBoT. Corn tumbled from $6.5125 to $6.1150 per bushel, while soybeans fell from $11.9775 to $11.7350 per bushel today.

Crude oil advanced for the second day today as the US inventories dropped more than predicted. The Energy Information Administration reported that the US stockpiles of crude fell by 4.4 million barrels to 359.5 million barrels last week, while market participant anticipated a decline by only 1.5 million barrels. August futures for delivery crude oil gained $1.88 to $94.77 per barrel on NYMEX.

Wheat jumped to the highest level in almost six weeks as excessive precipitation in the north of the US hurt crops. The US Department of Agriculture reported that about 69 percent of the spring-wheat crops were in good or excellent condition as of June 26, compared to 72 percent in the week before. Futures for delivery wheat in September climbed $0.21 (3.2 percent) to $6.7175 per bushel as of 13:15 on CBoT.

Gold gained today as the previous drop to the lowest level in five weeks attracted investors to the metal. Futures on gold reached $1,490.80 per ounce on June 27, the lowest settlement since May 20. Futures for delivery of gold in August went up $10.20 (0.7 percent) to $1,510.40 by 13:43 on COMEX.

Cocoa fell on the speculation that there will enough supply to satisfy demand. INTL Hencorp Futures LLC predicted that a global surplus of cocoa will be 156,000 metric tons by September. The strengthening dollar also had its negative impact on commodities, including cocoa and wheat. September delivery for cocoa tumbled as much as $89 (3 percent) to $2,886 per ton as of 12:01 on ICE, posting the biggest drop since May 5.

Supply of wheat is also expected to be ample and therefore prices went down. Russia plans to lift the ban on exports by July 1, while rainy weather should help the crops in Ukraine. The US Department of Agriculture increased its forecast for global inventories on June 9 to 184.26 million metric tons, up 1.7 percent from the forecast in the previous month. Futures for delivery of wheat in September sand $0.31 (4.2 percent) to $7.0825 per bushel by 13:15 on CBoT after it reached $7.0325, the lowest price since March 17.

Corn jumped to a record as forecasts promise that adverse weather in the US will reduce supply, while the demand for the crop as livestock feed and for ethanol production will increase. The US Army Corps of Engineers reported that floods affected as much as 6.8 million acres of farmland across the South and Midwest, reducing prospects for yield. The government report said that ethanol production advanced 0.7 percent to an average of 915,000 barrels per day, the highest level since January.

The US Department of Agriculture decreased its forecast for the global stockpiles of corn next year to 111.89 metric million tons from the May forecast of 129.14 million tons. Experts predicted that the harvest in 2012 will be smallest since 1996.

July futures for delivery of corn gained as much as $0.015 (0.2 percent) to $7.87 as of 13:15 on CBoT. The price reached earlier the all-time high of $7.9975. The previous record was $7.9925 in June 2008. The price climbed 4.4 percent this week. Last year prices more than doubled because of adverse weather.

Corn jumped to the highest level in 33 months on the prediction that the US stockpiles will decline. According to the data released by the US Department of Agriculture, the US inventories of corn shrank to 6.523 billion bushels, the lowest for level in four years, on March 1 because of rising consumption of grain as livestock feed, biofuel and food products. The decrease of inventories caused not only by the rising demand, but also by declining supply as the wet weather in the US is expected to slow planting. May futures for corn delivery gained $0.2425 (3.3 percent) to $7.6025 per bushel by 13:15 on CBoT, the all-time record closing price for a contract closest to expiration.

The rains, that boosted price for corn, caused decline of soybeans prices. That’s because farmers will switch to planting of soybeans after rainfalls prevented planting of corn. May futures for soybean delivery slipped $0.0975 (0.7 percent) to $13.84 per bushel.

Cocoa fell on as concerns about the political tensions in the Ivory Coast eased. The troops of Alassane Ouattara, the internationally recognized winner of the presidential election, gained control of the capital. May future for cocoa delivery fell as much as $70 (2.3 percent) to $2,987 per metric ton as of 12:06 on ICE.

Cattle futures jumped to the record on the anticipation of higher demand from Japan. The retail prices for beef in the US touched the all-time high last month as supplies declined. June futures for cattle delivery rose $0.01675 (1.4 percent) to $1.19575 per pound by 13:00 on CME. The price rose to the record $1.198 earlier.

Soybeans gained to the highest level in a week on the speculation that supply may decline as farmers prefer to plant corn. US Farmer may forecast to plant 76.79 million acres with soybeans this year, compared to the previous forecast of the US Department of Agriculture of 78 million acres. May future for soybeans delivery added $0.08 (0.6 percent) to $13.695 per bushel at 10:41 on CBoT.

Corn fell on the forecast that the US farmers will increase planting this year and on the speculation that the advance of prices weakened demand. Goldman Sachs Group Inc. predicted that the US farmers will sow 92.1 million acres of corn this year. According to the US Department of Agriculture, the farmers have sown 88.2 million acres of corn last year. May delivery for corn fell $0.1 (1.5 percent) to $6.765 per bushel by 12:14 on CBoT.

Cotton jumped by the exchange limit on ICE on the speculation that rains will curb supplies from Australia. The wet weather may slow the harvest that starts this month. Prices have more than doubled in the past year as the global demand rises while the supply declines. May delivery for cotton surged by the limit of $0.07 (3.5 percent) to $2.0596 per pound as of 14:39 on ICE.

Corn, rice, soybeans, and wheat declined today as the earthquake in Japan caused speculation that demand for raw materials will wane. The commodities also weakened as the US Department of Agriculture predicted higher global supplies.

The 8.9-magnitude earthquake off the north coast of Japan shook buildings in Tokyo and caused multiple deaths. On the other positive side, specialists say that the disaster most likely won’t cause a long-term damage to supplies in the country.

World stockpiles of wheat will reach 181.9 million metric tons by the end of the marketing year on May 31, according to the USDA forecast. Corn stockpiles expected to advance from 122.5 million tons last month to 123.1 million tons, because of the better harvests in Brazil. Rice inventories may reach 98.8 million tons, the highest level in eight years.

May futures for corn delivery slipped $0.1475 (2.2 percent) to $6.68 per bushel as of 10:07 on CBoT, the biggest decline since November 12. May delivery for rice fell $0.425 (3.3 percent) to $12.625 per 100 pounds after it touched $12.55, the lowest level since October. May futures for soybean delivery went down $0.18 (1.3 percent) to $13.375 per bushel. The prices declined this week 5.4 percent, the biggest weekly decline since October 1. May delivery for wheat subtracted $0.14 (1.9 percent) to $7.265 per bushel, posting a weekly decline of 13 percent, the biggest drop since December 2008.

Cattle jumped to the record as demand for US beef increased. The US Department of Agriculture reported that the US beef exports advanced as much as 19 percent last year to about 1.04 million metric tons. Increasing demand put strain on supplies of meat, making the US cattle herd the smallest since 1958. June futures for cattle delivery rose $0.0155 (1.3 percent) to $1.1745 per pound as of 13:08 on CME. Previously the price reached the record level of $1.18.

Wheat and corn posted the first gain this week on the concern that the global inventories may decline. The USDA is expected to reduce its estimate of the world supplies tomorrow. The experts say that Saudi Arabia will increase its imports of food to prevent increase of food prices, as the surge of the prices was one of the reasons for the uprising in Tunisia, Egypt and Libya. May delivery for wheat gained $0.07 cents (0.9 percent) to $7.8675 per bushel by 13:14 on CBoT. May delivery for corn added $0.045 (0.6 percent) to $7.10 per bushel.

Soybeans showed a strong rally in the previous year and in January, which has stalled recently. It looks like the commodity ran ahead of itself. Soybeans, as well as soybean meal and soybean oil, may advance in the next month, though.

There are some concerns regarding soybeans and soybeans meals as the high prices may curb demand. The Oil Crops Outlook by the United States Department of Agriculture supported the outlook for lower demand. Soybean crushing decreased by 2 million bushels to 153.1 million bushels in December. The US exports of soybean meal dropped 1.9 million short tons as of February 3 from a year earlier. Crops in Argentina may be boosted by rains, but the harvest will be likely smaller because of the previous drought. The lower supplies from Argentina will be easily offset by output from Brazil and Paraguay.

Soybean oil is excluded from this negative trend, even though the prices for the commodity are high. In fact forecasts suggest that the price for soybean oil may reach the record average monthly level. The USDA raised its 2010/11 forecast for this month by 100 million pounds to 2.8 billion. China is the biggest buyer, purchasing 38 percent of the US soybean oil.

Despite the not encouraging outlook for the demand, the World Agricultural Supply and Demand Estimates predict an increase of the prices for the soybean group of commodities. The soybean price range for 2010/11 is projected at $11.20 to $12.20 per bushel, the soybean oil prices are forecast at $0.51 to $0.55 per pound and the soybean meal prices are forecast at $340 to $380 per short ton.