Commodity Blog

Posts Tagged ‘weather’

Soybeans gained after demand for the grain from makers of animal feed and vegetable oil in the U.S. increased in the past month. Processors consumed 148.35 million bushels of soybeans in February, which is 15 percent higher than in the previous year and highest level for the month ever. Dwindling U.S. stockpiles is a supportive factor for the grain price. May futures for soybean delivery rose $0.0525 (0.6 percent) to $9.3075 per bushel as of 11:25 on CBoT.

Wheat fell on concern that a rising dollar will cut appeal of the U.S. supplies and as good weather conditions resulted in the favorable outlook for the winter crop in Kansas. The greenback rebounded 0.7 percent versus a basket of six major currencies. The government report showed that inventories may reach 27.2 million metric tons by May 31st, the highest level since 1988. May futures for wheat delivery slid $0.045 (0.9 percent) to $4.8075 per bushel by 11:45 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.

Analysts forecast that gold priced in euro will continue to hit new highs. When price will reach its previous peak a cup and handle pattern may occur as investors start selling, causing some decline in price. After that price tend to rise greatly. Gold rose to 836.98 euro per ounce, an all-time record, on March 2nd.

Copper scrap discount to New York-listed futures declined by half in two months on deficit of used metal. Demand for the copper is rebounding on speculation that economic recovery will increase consumption. In the same time, scrap copper becoming scarcer because of harsh winter in the U.S. as snow hampers collection of scarp. May delivery for copper shrunk 0.3 percent to $3.4245 per pound by 11:17 on NYMEX.

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.

Coffee may rise 21 percent in two months on lack of high quality supplies. The output in Columbia, the second largest grower in the world, fell to the lowest in 33 years because of adverse weather. Analysts predict that global demand will be about 131 million bags, while world production will be around 124 million bags in 2010. May futures for Arabica-coffee delivery slid $0.0515 (3.8 percent) to $1.319 per pound today in New York.

Corn and soybean prices advance with rising gasoline price, boosting the attractiveness of fuels produced from grain and oilseeds. Gasoline prices reached the highest level in five weeks, increasing demand for corn-based ethanol and biodiesel made from soybeans. May futures for corn delivery gained $0.11 (3 percent) to $3.8275 per bushel on the Chicago Board of Trade. May futures for soybean delivery rose $0.145 (1.5 percent) to $9.69 per bushel.

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.

Wheat futures slid on speculation that the stronger dollar and growing global stockpiles will cut demand for the U.S. grain. U.S. government forecast that world wheat inventories will rise 19 percent to 195.9 million metric tons in the year ending May 31st, the record level since 2002. May futures for wheat delivery slid $0.075 (1.4 percent) to $5.12 per bushel by 10:25 on the Chicago Board of Trade.

Crude oil fluctuated as the dollar rebounded versus the euro, equities rose more than predicted and on speculation about the global economic recovery. U.S. Energy Department reported that U.S. supplies of crude oil rose 1.73 million barrels last week. March delivery for crude oil dropped $0.18 to $76.83 per barrel as of 10:53 on NYMEX.

Cattle futures tumbled from a 15-month record as U.S. wholesale prices for the meat reached a highest in four-weeks, signaling that retailers may slow purchases of beef. Wholesale choice beef rose 0.6 percent to $1.4486 per pound, the highest price since January 20th, as cold weather in the U.S. reduced cattle-weight gains and diminished beef supplies. April delivery for cattle futures subtracted $0.002 to $0.91975 per pound at 11:23 on CME.

Oil gained after forecast about winter storms in the U.S. this week. The National Weather Service is predicting that temperatures will be below average for the next 6–10 days. According to weather forecast Washington temperatures will be 10 degrees Fahrenheit (12 degrees Celsius) below normal as of February 14th, while New York will be 8 degrees below average by February 13th.

U.S. inventories of distillate fuel, including heating oil and diesel, decreased last week after temperatures fell. OPEC governor stated today that global oil supplies are enough to satisfy demand for the first half of 2010.

March delivery for crude oil advanced $0.73 cents (1 percent) to $71.92 per barrel by 11:58 on the New York Mercantile Exchange. March delivery for heating oil rose $0.016 (0.9 percent) to $1.8908 per gallon. March settlement for Brent crude gained $0.61 (0.9 percent) to $70.20 per barrel on ICE. Hedge-funds and other large speculators reduced bets on increasing oil prices for a third week.

Corn is the most widely grown crop in the United States. 332 million metric tons of the crop are harvested annually in the U.S. What prospects are for the corn in 2010?

By the end of 2009 future seemed to be bright for corn prices as adverse weather caused late planting in the U.S. But everything has turned upside down when the U.S. Department of Agriculture predicted that US corn production will reach a new record. USDA estimated 2009 corn crop as much as 13.15 billion bushels, while analysts forecast yield to be about 12.82 billion bushels. U.S. corn exports forecast went down by 50 million bushels to 2.1 billion bushels, further pushing down outlook for corn prices. U.S. exporters also have to deal with competition from Argentinean corn. Production of corn in Argentina may reach 17 million bushels, compared with estimated 12 million bushels, and at least 9 million bushels will be available for export. Slow recovery of U.S. economy does not help demand, and therefore prices, either.

Yet not everything looks dim for corn. Low prices improved exports by 20 percent this month. Recent reports about low soil moisture in Argentina corn growing areas are also supportive for corn prices. As you see, conditions can change significantly over small amount of time, making hard to say which price should be expected. USDA forecasted the price for the corn to be in a range of $2.90-$4.50 per bushel, suggesting with such a wide range that Department is unsure too. Analysts say that “there are not many fundamental reasons for high corn prices” and “technical support should not allow prices to fall much more”.

Coffee gained in New York on speculation that declining production in Colombia and Mexico will increase global demand. Coffee crop in Mexico may be harmed by cold weather. Analysts say that harvest in Columbia will be 9 million bags of coffee beans in the year through September, 26 percent down from June forecast. March futures for Arabica-coffee delivery rose $0.004 (0.3 percent) to $1.435 per pound as of 10:06 on ICE.

Orange-juice futures slid on speculation that warm weather in Florida, the second largest orange grower in the world, is lowering the risk that cold will harm citrus plants. As concern about frost damage recedes volatility is returning to the market. March futures for orange-juice delivery dropped $0.027 (2 percent) to $1.337 per pound by 12:31 on ICE Futures U.S. in New York.