Broken out from RHO channel. Likely to hit US$55 in the short term.
Showing posts with label Commodities. Show all posts
Showing posts with label Commodities. Show all posts
Monday, January 5, 2009
Wednesday, June 4, 2008
Commodity Crash Near 100% Certainty - CLSA
Commodity Crash Near 100% Certainty – GET VERY VERY LONG CHINA + PAN-ASIA MANUFACTURING/TECH SHARES- “From Stagflation to Disinflation in a Week”
Last Week’s Street Brawl – Jets vs Sharks
‘Inflate or die’ is crushing the ‘End of the Worlders’…some global stock picks & ruminations
Commodity Crash Near 100% Certainty – GET VERY VERY LONG CHINA + PAN-ASIA MANUFACTURING/TECH SHARES
Summary: A near perfect storm of a rolling commodity market, hoarding suppliers, slowing demand, and rapacious US regulators with a slew of proposed regulation who will stop at nothing to end the commodity “speculation” which has stopped traditional hedgers in those commodities from being able to hedge their positions. In formal chart terms, the global commodity complex bubble officially popped last week. This bubble had been steadily inflating since 2002 (since the last peak in the USD) and finally popped from Tuesday to Friday with oil (CL1) attempting a last run at 132 on Thursday evening (HK time) and then coming off to close at 127. This is a monumental WATERSHED occurrence and marks a major shift in market mentality from inflationary/stagflationary to a period of disinflation at the margin for the foreseeable future. My best hunch is we get a 3-6 month period of correcting commodity markets which will be very very very bullish for global non-commodity related equities. While this occurs, global GDP #s will be upgraded by economists while much weaker commodity prices will dampen rate hike expectations until latter 2H08 or even early 2009. THE MOST IMPORTANT THING TO APPRECIATE HERE IS THAT CHINA HAS THE MOST TO GAIN IN ASIA FROM A COMMODITY CRASH. China has Asia’s biggest inflation problem (outside of Vietnam, which is also a LONG here too), is still the world’s manufacturer (albeit a bit less cost competitive than they were a few years ago) and its equity market has underperformed the region since October. HSCEI is -33% from end-Oct, HSI -22%, HSCCI -25%, and SHCOMP -43%.
Top longs: GET VERY LONG downstream oil players including refiners (rapidly widening crack spreads) and Petrochina (857 HK), Sinopec (386 HK), Sinopec Shang Pet (338 HK), LONG SK Energy (096770 KS), S-Oil (010950 KS), (LONG AIRLINES: Cathay (293 HK), Air China (753 HK), China Eastern (670 HK), China Southern (1055 HK), HK Exchange (388 HK)….THE MOST LEVERED STOCK INTO RECOVERING CHINESE CAPITAL MARKETS + REVIVED IPO PIPELINE, IPPs WILL SEE A HUGE SHORT SQUEEZE - LONG (Datang – 991 HK, Huaneng - 902 HK, Huadian - 1071 HK), MANY SHORTS IN EXPRESSWAYS – LONG Shenzhen Expressway (548 HK), Jiangsu Expressway (177 HK), Zhejiang Expressway (576 HK), and Beijing Capital Airport (694 HK). Also get LONG CHINESE BANKS AND INSURERS (CCB-939 HK, China Life-2628 HK, Bank of China-3988 HK, ICBC-1398 HK) as falling commodities means it is much more likely that we will see austerity measures being relaxed in early 2H08. CHINESE PROPERTY NAMES (AND BANKS) THE BEST PLAY ON AUSTERITY RELAXATION: COLI (688 HK) the biggest but already +40% from lows, SHKP (16 HK) is only +16% from its lows (5% discount to NAV) and -28% from highs due to their family issues – I’m a buyer here…..and of course I am a buyer of Midland (1200 HK) which will challenge its previous HK$!5 high (+96%) in the next 12-months. Go LONG the steel and cement names: Angang New Steel (347 HK), Maanshan (323 HK), and Anhui Conch (914 HK). CCC (1800 HK) goes from being a margin squeeze concern to a LONG again. Of course, the China consumption story remains very bullish and should be accumulated: Paul McKenzie says his favorite PA pick would be Stella (1836 HK), HK$1.4bn mcap largest non-athletic footwar manufacturer in the world and said to have and excellent retail rollout planned with prospects for a massive stock-rerating. Expect consumption plays to re-rate to 30x+ P/Es again. I noticed that China Mengniu (2319 HK) did not sell off at all last week on the price fix story, LONG this stock, LONG MOST REGIONAL MANUFACTURERS (ie. all the auto stocks-esp Japanese autos, including US & European autos too) ARE LONGS, ESPECIALLY THE TECH SECTOR WHICH PARTICULARLY BENEFITS FROM A DISINFLATIONARY ENVIRONMENT.
Top shorts: SHORT upstream oil (CNOOC- 883 HK, 135 HK, STO AU, WPL AU, BP/ LN, XON US, CVX US, COP US). SHORT ALMOST ALL UPSTREAM COMMODITY PLAYS: short Shenhua (1088 HK)…its already down -39% so not a screaming short, SHORT China Coal (1898 HK) and Yanzhou Coal (1171 HK), short Chalco (2600 HK), SHORT CPO PLAYS: Golden Agri (GGR SP) since its impossible to short Malaysia (IOI/KLK) or Indonesia. Japan, Korea, and Thailand gain from falling oil prices (they are the biggest Asian importers as % GDP) but Thailand, Malaysia, and Indo will get hit by falling soft commodities. DTAC SP is a short as they are expanding upcountry and rice prices are collapsing.
Short upstream oil, short all commodity upsteam plays, CPO, short Indo, Thailand, Malaysia
From stagflation to disinflation in a week: As I’ve been saying since going to the US in April, it was becoming apparent that the commodity complex was turning into a bubble. In exhibit 1 below, since 4Q07 inflation expectations (the white line) has been holding steady, while the Fed Funds and USD fell. Meanwhile, the CRY index did another 20% move. The initial pullback in the CRY should be 354-370 (-12% to 16%) from current 422 where the -50-62% fib retracement support should be. HOWEVER, AND THIS IS A BIG HOWEVER I don’t think we hold there. If anything we fly straight through due to all the new regulation the US politicians are preparing (see the NY Times & Bloomberg articles on the topic from this weekend attached). So, if I am correct then the CRY retraces -50-62% of its move since 2001 and my CRY targets become 282-312 or -26% to -33%. If we get several new draconian regulations, then we could get over shoot to the 185-284 trading range of 1982-2002. I don’t think we go there because real rates are still negative in the US, China, HK, Singapore, and low everywhere else. Still very growth and asset price supportive. The USD is solid and has made its lows for this cycle. As Gartman says in his Friday note, the Fed St. Louis adjusted monetary base is barely growing 1% yoy. SO, NOT ONLY IS STAGFLATION A MODERN MYTH, BUT THE OTHER FLIPSIDE MYTH IS THAT THE US IS NOT PRINTING MONEY LIKE THERE’S NO TOMORROW. DE-LEVERAGING IS USD BULLISH (ie. reducing shorts on the USD).
New CFTC regulations – what’s coming up (…its WAY more than you previously thought): Please see attached in this e-mail/B’berg two articles – BOTH MUST-READS!!!! One is a collection of this weekend’s stories on upcoming CFTC regulations and ongoing investigations. Also, it doesn’t appear that these are ‘witch-hunts’ but legitimate investigations into ‘exploiting loopholes’, overstepping trading limits by going overseas to London, the Consumer-First Energy Act of 2008 proposal, increasing margin requirements, the Michael Masters testimony from last week, emending the ERISA Act, imposing taxes to the commodities market, rising incidences of inquiries into trading practises (ie. price gaps between futures and spot prices for cotton and oil). Oops…basically, the US government has no interest in allowing investors hold inventory and/or participating in the price rises of finite necessary resources. Its MUCH more effective to regulate the money out of commodities and back into equities where the capital creates jobs, reduces capital costs, adds to GDP, and BRINGS IN VOTES.
Much more new CFTC regulation than many realize…
Last Week’s Street Brawl – Jets vs Sharks
The way markets traded last week was like a full-on street brawl. The bulls were equally entrenched as the bears and an all-out scrap ensued. It got so nasty that I was getting hate-mail from both long-time friends & clients after my Sunday nite missive on Oil prices about to fall and time to get into the “short oil” trade. Guess when its your own money on the line its each man or woman to themselves. Going forward, its now time to get into the “short commodity” trade which is very equity supportive outside the upstream commodity complex.
‘Inflate or die’ is crushing the ‘End of the Worlders’ …some global stock picks & ruminations
My internal e-mail to CLSA Friday nite: its counterintuitive. USD has been in a 5.5yr bear market so u could argue that FX started pricing in US crisis 5.5yrs in advance. also, US/China/Sing real rates negative - very asset price supportive & right now the cheaping capital available to the most people in the history of the human race (since Bric really just happend). commods in a bubble which pop when USD starts strengthening (ie. now).
reason why equities are melting up is that they are an inflation hedge. global money has to get out of long end of curve and has been trying to hedge via commods, but commods too narrow a market so a bubble builds until Asia gov'ts threaten to take off oil subsidies (in FT last week). so much spec/investment money in commod futures that US congress is considering limiting access to just pros in that industry (still being considered). so u get the ethanol policies reversed and commod future access get done right when USD is reversing and commods crash.
that's good cos a tidal wave of money switching out of bonds his equities over the coming months into a slowing US economy (tho US + Europe slowing slower than the mtks expect).
read George Soros' "The Alchemy of Finance" and "Market Wizards" by Jack Schwager. also learn to read charts: John Murphy "Technical Analysis of Financial Markets" and "Intermarket Analyis: Profiting from Global Market Relationships". next week is going to be huge.
Oil: not only is it breaking down, the whole commodity complex is rolling over. Rice, which supposedly a few weeks ago was scarce, is COLLAPSING. The whole stagflation theory is a MODERN MYTH. Quickly being discredited as are most bubbles, thru run for the door selling with extreme prejudice.
Commodities: what I find interesting is that they are falling under their own weight. Without really much USD/DXY strength.
Gold: since there is a lot of gold bugs at CLSA my call for gold is its breaks 850, then breaks 800, and then next stop is 650. Do I have your attention yet. Parabolic commods was largely a USD phenomenon. Its over kids, else get squashed like a bug "cos the times they are and changing....". QED. T. Possible policies: Such scenarios could include (as suggest by TGL) mandating “for liquidation only” in futures, limits to access to the derivatives markets, new laws prohibiting new derivatives usage, the reversal of the (stupid) ethanol policies, etc. Such heavy policies would force global money to seek their inflation hedges outside of the commodities futures markets (already thinly traded versus FX, bonds, and equities). So, if you are rotating your portfolio out of bond markets and can’t hold cash because inflation is rising, YOUR ONLY CHOICE IS TO ROTATE INTO EQUITIES. GUESS WHAT? THE GLOBAL EQUITY MARKET MELT-UP CONTINUES!
Global stock picks & ruminations: I reiterate from my previous “short oil AI”: We recommend LONG downstream Japan oil names: 5019 JP, 5001 JP, short upstream 1605 JP, and 1662 JP, long airlines 9205 JP and 9202 JP, long DUG US (Ultrashort Oil & Gas ETF), regional/global airlines (293 HK, SIA SP, 670 HK, 1055 HK, 753 HK, 003490 KS – KOREAN AIR THE MOST UNHEDGED ON FUEL AND TRADES ON 0.8X PBV, THEY HAVE A LOT OF USD DEBT, OIL DOWN=KOREA DEFICIT IMPROVES, KRW UP=BETTER BALANCE SHEET, QAN AU, BAY LN, DAL US, LUV US, CAL US), regional/global auto plays – SEE THE ATTACHED FRONT PAGE BARRRON’S ARTICLE FROM JUNE 2 (TODAY) TITLED “BUY GM” - (BMW GR, MG/A CN, DAI GR, 7203 JP, 7267 JP, 7201 JP, 7261 JP, 7269 JP, 7272 JP, 000270 KS, 005380 KS…tho Korea names have run 30%+ past 3M, 1114 HK, 203 HK…China plays already benefit from subsidised oil), tire or rubber plays (ML FP, GT US, CTB US, 5105 JP, 000240 KS, 073240 KS, 5108 JP); in general go LONG futures in Japan / Korea / Thailand as they are the most energy dependent countries in Asia.
Global Implications of commodity crash: If this happens, then the ECB will be much more will to cut interest rates (since they have remained much more hawkish than the US). Depending on how fast this chain reaction occurs, I would start taking a look at some of the more toxic large cap global brand companies in Europe: yes, I swear to god its time to start kicking the tires on UBSN VX and RBS LN. UBS already put in its low at 21.52 on March 17th, RBS is quickly approaching theirs. AUD/USD are a short here and Oz now looks to be heading for a down credit cycle and rapidly accelerating likelihood of a property/asset quality crisis (see Daniel Tabbush’ Aussie banks sector note out this weekend).
Last Week’s Street Brawl – Jets vs Sharks
‘Inflate or die’ is crushing the ‘End of the Worlders’…some global stock picks & ruminations
Commodity Crash Near 100% Certainty – GET VERY VERY LONG CHINA + PAN-ASIA MANUFACTURING/TECH SHARES
Summary: A near perfect storm of a rolling commodity market, hoarding suppliers, slowing demand, and rapacious US regulators with a slew of proposed regulation who will stop at nothing to end the commodity “speculation” which has stopped traditional hedgers in those commodities from being able to hedge their positions. In formal chart terms, the global commodity complex bubble officially popped last week. This bubble had been steadily inflating since 2002 (since the last peak in the USD) and finally popped from Tuesday to Friday with oil (CL1) attempting a last run at 132 on Thursday evening (HK time) and then coming off to close at 127. This is a monumental WATERSHED occurrence and marks a major shift in market mentality from inflationary/stagflationary to a period of disinflation at the margin for the foreseeable future. My best hunch is we get a 3-6 month period of correcting commodity markets which will be very very very bullish for global non-commodity related equities. While this occurs, global GDP #s will be upgraded by economists while much weaker commodity prices will dampen rate hike expectations until latter 2H08 or even early 2009. THE MOST IMPORTANT THING TO APPRECIATE HERE IS THAT CHINA HAS THE MOST TO GAIN IN ASIA FROM A COMMODITY CRASH. China has Asia’s biggest inflation problem (outside of Vietnam, which is also a LONG here too), is still the world’s manufacturer (albeit a bit less cost competitive than they were a few years ago) and its equity market has underperformed the region since October. HSCEI is -33% from end-Oct, HSI -22%, HSCCI -25%, and SHCOMP -43%.
Top longs: GET VERY LONG downstream oil players including refiners (rapidly widening crack spreads) and Petrochina (857 HK), Sinopec (386 HK), Sinopec Shang Pet (338 HK), LONG SK Energy (096770 KS), S-Oil (010950 KS), (LONG AIRLINES: Cathay (293 HK), Air China (753 HK), China Eastern (670 HK), China Southern (1055 HK), HK Exchange (388 HK)….THE MOST LEVERED STOCK INTO RECOVERING CHINESE CAPITAL MARKETS + REVIVED IPO PIPELINE, IPPs WILL SEE A HUGE SHORT SQUEEZE - LONG (Datang – 991 HK, Huaneng - 902 HK, Huadian - 1071 HK), MANY SHORTS IN EXPRESSWAYS – LONG Shenzhen Expressway (548 HK), Jiangsu Expressway (177 HK), Zhejiang Expressway (576 HK), and Beijing Capital Airport (694 HK). Also get LONG CHINESE BANKS AND INSURERS (CCB-939 HK, China Life-2628 HK, Bank of China-3988 HK, ICBC-1398 HK) as falling commodities means it is much more likely that we will see austerity measures being relaxed in early 2H08. CHINESE PROPERTY NAMES (AND BANKS) THE BEST PLAY ON AUSTERITY RELAXATION: COLI (688 HK) the biggest but already +40% from lows, SHKP (16 HK) is only +16% from its lows (5% discount to NAV) and -28% from highs due to their family issues – I’m a buyer here…..and of course I am a buyer of Midland (1200 HK) which will challenge its previous HK$!5 high (+96%) in the next 12-months. Go LONG the steel and cement names: Angang New Steel (347 HK), Maanshan (323 HK), and Anhui Conch (914 HK). CCC (1800 HK) goes from being a margin squeeze concern to a LONG again. Of course, the China consumption story remains very bullish and should be accumulated: Paul McKenzie says his favorite PA pick would be Stella (1836 HK), HK$1.4bn mcap largest non-athletic footwar manufacturer in the world and said to have and excellent retail rollout planned with prospects for a massive stock-rerating. Expect consumption plays to re-rate to 30x+ P/Es again. I noticed that China Mengniu (2319 HK) did not sell off at all last week on the price fix story, LONG this stock, LONG MOST REGIONAL MANUFACTURERS (ie. all the auto stocks-esp Japanese autos, including US & European autos too) ARE LONGS, ESPECIALLY THE TECH SECTOR WHICH PARTICULARLY BENEFITS FROM A DISINFLATIONARY ENVIRONMENT.
Top shorts: SHORT upstream oil (CNOOC- 883 HK, 135 HK, STO AU, WPL AU, BP/ LN, XON US, CVX US, COP US). SHORT ALMOST ALL UPSTREAM COMMODITY PLAYS: short Shenhua (1088 HK)…its already down -39% so not a screaming short, SHORT China Coal (1898 HK) and Yanzhou Coal (1171 HK), short Chalco (2600 HK), SHORT CPO PLAYS: Golden Agri (GGR SP) since its impossible to short Malaysia (IOI/KLK) or Indonesia. Japan, Korea, and Thailand gain from falling oil prices (they are the biggest Asian importers as % GDP) but Thailand, Malaysia, and Indo will get hit by falling soft commodities. DTAC SP is a short as they are expanding upcountry and rice prices are collapsing.
Short upstream oil, short all commodity upsteam plays, CPO, short Indo, Thailand, Malaysia
From stagflation to disinflation in a week: As I’ve been saying since going to the US in April, it was becoming apparent that the commodity complex was turning into a bubble. In exhibit 1 below, since 4Q07 inflation expectations (the white line) has been holding steady, while the Fed Funds and USD fell. Meanwhile, the CRY index did another 20% move. The initial pullback in the CRY should be 354-370 (-12% to 16%) from current 422 where the -50-62% fib retracement support should be. HOWEVER, AND THIS IS A BIG HOWEVER I don’t think we hold there. If anything we fly straight through due to all the new regulation the US politicians are preparing (see the NY Times & Bloomberg articles on the topic from this weekend attached). So, if I am correct then the CRY retraces -50-62% of its move since 2001 and my CRY targets become 282-312 or -26% to -33%. If we get several new draconian regulations, then we could get over shoot to the 185-284 trading range of 1982-2002. I don’t think we go there because real rates are still negative in the US, China, HK, Singapore, and low everywhere else. Still very growth and asset price supportive. The USD is solid and has made its lows for this cycle. As Gartman says in his Friday note, the Fed St. Louis adjusted monetary base is barely growing 1% yoy. SO, NOT ONLY IS STAGFLATION A MODERN MYTH, BUT THE OTHER FLIPSIDE MYTH IS THAT THE US IS NOT PRINTING MONEY LIKE THERE’S NO TOMORROW. DE-LEVERAGING IS USD BULLISH (ie. reducing shorts on the USD).
New CFTC regulations – what’s coming up (…its WAY more than you previously thought): Please see attached in this e-mail/B’berg two articles – BOTH MUST-READS!!!! One is a collection of this weekend’s stories on upcoming CFTC regulations and ongoing investigations. Also, it doesn’t appear that these are ‘witch-hunts’ but legitimate investigations into ‘exploiting loopholes’, overstepping trading limits by going overseas to London, the Consumer-First Energy Act of 2008 proposal, increasing margin requirements, the Michael Masters testimony from last week, emending the ERISA Act, imposing taxes to the commodities market, rising incidences of inquiries into trading practises (ie. price gaps between futures and spot prices for cotton and oil). Oops…basically, the US government has no interest in allowing investors hold inventory and/or participating in the price rises of finite necessary resources. Its MUCH more effective to regulate the money out of commodities and back into equities where the capital creates jobs, reduces capital costs, adds to GDP, and BRINGS IN VOTES.
Much more new CFTC regulation than many realize…
Last Week’s Street Brawl – Jets vs Sharks
The way markets traded last week was like a full-on street brawl. The bulls were equally entrenched as the bears and an all-out scrap ensued. It got so nasty that I was getting hate-mail from both long-time friends & clients after my Sunday nite missive on Oil prices about to fall and time to get into the “short oil” trade. Guess when its your own money on the line its each man or woman to themselves. Going forward, its now time to get into the “short commodity” trade which is very equity supportive outside the upstream commodity complex.
‘Inflate or die’ is crushing the ‘End of the Worlders’ …some global stock picks & ruminations
My internal e-mail to CLSA Friday nite: its counterintuitive. USD has been in a 5.5yr bear market so u could argue that FX started pricing in US crisis 5.5yrs in advance. also, US/China/Sing real rates negative - very asset price supportive & right now the cheaping capital available to the most people in the history of the human race (since Bric really just happend). commods in a bubble which pop when USD starts strengthening (ie. now).
reason why equities are melting up is that they are an inflation hedge. global money has to get out of long end of curve and has been trying to hedge via commods, but commods too narrow a market so a bubble builds until Asia gov'ts threaten to take off oil subsidies (in FT last week). so much spec/investment money in commod futures that US congress is considering limiting access to just pros in that industry (still being considered). so u get the ethanol policies reversed and commod future access get done right when USD is reversing and commods crash.
that's good cos a tidal wave of money switching out of bonds his equities over the coming months into a slowing US economy (tho US + Europe slowing slower than the mtks expect).
read George Soros' "The Alchemy of Finance" and "Market Wizards" by Jack Schwager. also learn to read charts: John Murphy "Technical Analysis of Financial Markets" and "Intermarket Analyis: Profiting from Global Market Relationships". next week is going to be huge.
Oil: not only is it breaking down, the whole commodity complex is rolling over. Rice, which supposedly a few weeks ago was scarce, is COLLAPSING. The whole stagflation theory is a MODERN MYTH. Quickly being discredited as are most bubbles, thru run for the door selling with extreme prejudice.
Commodities: what I find interesting is that they are falling under their own weight. Without really much USD/DXY strength.
Gold: since there is a lot of gold bugs at CLSA my call for gold is its breaks 850, then breaks 800, and then next stop is 650. Do I have your attention yet. Parabolic commods was largely a USD phenomenon. Its over kids, else get squashed like a bug "cos the times they are and changing....". QED. T. Possible policies: Such scenarios could include (as suggest by TGL) mandating “for liquidation only” in futures, limits to access to the derivatives markets, new laws prohibiting new derivatives usage, the reversal of the (stupid) ethanol policies, etc. Such heavy policies would force global money to seek their inflation hedges outside of the commodities futures markets (already thinly traded versus FX, bonds, and equities). So, if you are rotating your portfolio out of bond markets and can’t hold cash because inflation is rising, YOUR ONLY CHOICE IS TO ROTATE INTO EQUITIES. GUESS WHAT? THE GLOBAL EQUITY MARKET MELT-UP CONTINUES!
Global stock picks & ruminations: I reiterate from my previous “short oil AI”: We recommend LONG downstream Japan oil names: 5019 JP, 5001 JP, short upstream 1605 JP, and 1662 JP, long airlines 9205 JP and 9202 JP, long DUG US (Ultrashort Oil & Gas ETF), regional/global airlines (293 HK, SIA SP, 670 HK, 1055 HK, 753 HK, 003490 KS – KOREAN AIR THE MOST UNHEDGED ON FUEL AND TRADES ON 0.8X PBV, THEY HAVE A LOT OF USD DEBT, OIL DOWN=KOREA DEFICIT IMPROVES, KRW UP=BETTER BALANCE SHEET, QAN AU, BAY LN, DAL US, LUV US, CAL US), regional/global auto plays – SEE THE ATTACHED FRONT PAGE BARRRON’S ARTICLE FROM JUNE 2 (TODAY) TITLED “BUY GM” - (BMW GR, MG/A CN, DAI GR, 7203 JP, 7267 JP, 7201 JP, 7261 JP, 7269 JP, 7272 JP, 000270 KS, 005380 KS…tho Korea names have run 30%+ past 3M, 1114 HK, 203 HK…China plays already benefit from subsidised oil), tire or rubber plays (ML FP, GT US, CTB US, 5105 JP, 000240 KS, 073240 KS, 5108 JP); in general go LONG futures in Japan / Korea / Thailand as they are the most energy dependent countries in Asia.
Global Implications of commodity crash: If this happens, then the ECB will be much more will to cut interest rates (since they have remained much more hawkish than the US). Depending on how fast this chain reaction occurs, I would start taking a look at some of the more toxic large cap global brand companies in Europe: yes, I swear to god its time to start kicking the tires on UBSN VX and RBS LN. UBS already put in its low at 21.52 on March 17th, RBS is quickly approaching theirs. AUD/USD are a short here and Oz now looks to be heading for a down credit cycle and rapidly accelerating likelihood of a property/asset quality crisis (see Daniel Tabbush’ Aussie banks sector note out this weekend).
Wednesday, March 5, 2008
Commodities Daily - 5th March 2008
Spotlight: OPEC is likely to maintain oil output targets today because supplies are sufficient and prices near $100 a barrel are high enough for the OPEC members. Commodities plunged the most in almost six weeks, as oil, gold and corn fell from records. However, platinum continued this year’s rally to record highs. Copper fell.
Energy: Crude oil fell more than $2 a barrel on signs that the OPEC will leave production targets unchanged at a time of year when demand declines. Gasoline fell the most since October 2006 as supplies increased. However, natural gas in New York advanced after updated forecasts called for lower temperatures, signaling higher demand.
Agriculture: Soybeans oil tumbled the most on speculation that China will increase sales of vegetable oil from inventories to slow food inflation. Corn fell the most in almost six weeks on speculation that overseas demand and U.S. animal-feed consumption will slow after grain prices reached a record yesterday. Wheat fell on speculation that U.S. growers will harvest more grain because fewer fields are being used to graze cattle.
Sugar fell the most in nine months as investors sold commodities on renewed concerns that the U.S. economy is slowing. Cocoa fell from a 28-year high as commodities slump. Likewise coffee fell on speculation U.S. recession may hurt consumer demand.
Precious Metals: Gold fell the most in four weeks after crude-oil futures dropped from a record, reducing the appeal of the precious metal as a hedge against inflation. Platinum continuing this year's rally to record highs, on concern over supplies from South Africa, which accounted for 78 percent of world shipments of the metal last year. Silver fell.
Industrial Metals: Copper tumbled the most in six weeks on speculation this year's rally will curb demand in China, the world's biggest metals buyer.
(Source: Bloomberg)
Energy: Crude oil fell more than $2 a barrel on signs that the OPEC will leave production targets unchanged at a time of year when demand declines. Gasoline fell the most since October 2006 as supplies increased. However, natural gas in New York advanced after updated forecasts called for lower temperatures, signaling higher demand.
Agriculture: Soybeans oil tumbled the most on speculation that China will increase sales of vegetable oil from inventories to slow food inflation. Corn fell the most in almost six weeks on speculation that overseas demand and U.S. animal-feed consumption will slow after grain prices reached a record yesterday. Wheat fell on speculation that U.S. growers will harvest more grain because fewer fields are being used to graze cattle.
Sugar fell the most in nine months as investors sold commodities on renewed concerns that the U.S. economy is slowing. Cocoa fell from a 28-year high as commodities slump. Likewise coffee fell on speculation U.S. recession may hurt consumer demand.
Precious Metals: Gold fell the most in four weeks after crude-oil futures dropped from a record, reducing the appeal of the precious metal as a hedge against inflation. Platinum continuing this year's rally to record highs, on concern over supplies from South Africa, which accounted for 78 percent of world shipments of the metal last year. Silver fell.
Industrial Metals: Copper tumbled the most in six weeks on speculation this year's rally will curb demand in China, the world's biggest metals buyer.
(Source: Bloomberg)
Tuesday, March 4, 2008
Commodities Daily - 4th March 2008
Spotlight: Crude oil rose to a record after the dollar dropped to an all-time low against the euro. Notably, soybean exports from Brazil plunged 45 percent in February. Gold, silver, platinum and palladium may be the best-performing financial assets this year as inflation and slowing growth erode the value of the world's major currencies, bonds and stocks.
Energy: Crude oil rose to a record after the dollar dropped to an all-time low against the euro. Natural gas declined as speculators trimmed positions after the fuel surged as much as 2.6 percent to more than a two-year high. Heating oil futures rose to a record as investors bought contracts to hedge against inflation and a weakening dollar.
Agriculture: Soybeans and soybean oil soared to records on increased Chinese demand. Besides, wheat rose as investors bet crops will face adverse weather. Corn jumped on speculation that U.S. farmers will plant less to take advantage of surging soybean and wheat prices.
Cotton rose to highest since 1996 as demand from China grows. Sugar rose to a 19-month high as a slide in the dollar and U.S. equity markets fueled demand for commodities as an inflation hedge. Notably, coffee in New York rose after prices for Folgers coffee, the top-selling U.S. brand, were boosted to compensate for soaring bean costs.
Precious Metals: Gold rose to a record $992 an ounce, silver, platinum and palladium soared as the dollar fell to the lowest ever against the euro and crude oil closed at $102 a barrel, stoking concern that inflation will accelerate.
Industrial Metals: Copper futures closed at the highest price ever in New York as global inventories declined and China, the world's biggest user of the metal, boosted imports.
(Source: Bloomberg)
Energy: Crude oil rose to a record after the dollar dropped to an all-time low against the euro. Natural gas declined as speculators trimmed positions after the fuel surged as much as 2.6 percent to more than a two-year high. Heating oil futures rose to a record as investors bought contracts to hedge against inflation and a weakening dollar.
Agriculture: Soybeans and soybean oil soared to records on increased Chinese demand. Besides, wheat rose as investors bet crops will face adverse weather. Corn jumped on speculation that U.S. farmers will plant less to take advantage of surging soybean and wheat prices.
Cotton rose to highest since 1996 as demand from China grows. Sugar rose to a 19-month high as a slide in the dollar and U.S. equity markets fueled demand for commodities as an inflation hedge. Notably, coffee in New York rose after prices for Folgers coffee, the top-selling U.S. brand, were boosted to compensate for soaring bean costs.
Precious Metals: Gold rose to a record $992 an ounce, silver, platinum and palladium soared as the dollar fell to the lowest ever against the euro and crude oil closed at $102 a barrel, stoking concern that inflation will accelerate.
Industrial Metals: Copper futures closed at the highest price ever in New York as global inventories declined and China, the world's biggest user of the metal, boosted imports.
(Source: Bloomberg)
Monday, March 3, 2008
Commodities Daily - 3rd March 2008
Spotlight: Bloomberg survey showed crude oil and natural gas may fall on weaker demand. Coffee slipped after price hits 10-year high and sparks selling. Gold rose to a record on speculation lower U.S. interest-rates will spur inflation and may top $1,000 an ounce for the first time ever as a slumping dollar and higher raw-materials costs boost demand for the precious metal as an inflation hedge. Copper fell.
Energy: Bloomberg survey showed crude oil and natural gas may fall this week because of rising U.S. inventories and weakening fuel demand as the nation's economy slows as well as demand for natural gas begins to wane with the approach of spring.
Agriculture: Corn futures rose extending last month's 11 percent rally to a record, on speculation that surging soybean prices will encourage a switch in crops. Besides, soybeans extended a rally to a record in Chicago on Chinese demand. However, wheat fell on speculation the world's farmers will seed more acres to capitalize on record prices, increasing stockpiles that are headed for the lowest level in 30 years.
Cotton soared to highest since October 2003 on supply concerns. Sugar rose after Federal Reserve Chairman urged the U.S. to reduce tariffs on imports of cane-based ethanol from Brazil, the world's largest producer. Cocoa fell as the U.K. pound eased against the dollar, reducing the appeal of U.S. futures. Notably, coffee fell after the price rose to its highest in 10 years and sparked selling by investors.
Precious Metals: Gold rose to a record on speculation lower U.S. interest rates will weaken the dollar and spur inflation; silver and platinum rose on speculation the dollar will extend a slump boosting the appeal of the metal as a hedge.
Industrial Metals: Copper fell as stockpiles in Shanghai rose for a third straight week, and fresh signs emerged that a slowing U.S. economy may weaken demand for the metal.
(Source: Bloomberg)
Energy: Bloomberg survey showed crude oil and natural gas may fall this week because of rising U.S. inventories and weakening fuel demand as the nation's economy slows as well as demand for natural gas begins to wane with the approach of spring.
Agriculture: Corn futures rose extending last month's 11 percent rally to a record, on speculation that surging soybean prices will encourage a switch in crops. Besides, soybeans extended a rally to a record in Chicago on Chinese demand. However, wheat fell on speculation the world's farmers will seed more acres to capitalize on record prices, increasing stockpiles that are headed for the lowest level in 30 years.
Cotton soared to highest since October 2003 on supply concerns. Sugar rose after Federal Reserve Chairman urged the U.S. to reduce tariffs on imports of cane-based ethanol from Brazil, the world's largest producer. Cocoa fell as the U.K. pound eased against the dollar, reducing the appeal of U.S. futures. Notably, coffee fell after the price rose to its highest in 10 years and sparked selling by investors.
Precious Metals: Gold rose to a record on speculation lower U.S. interest rates will weaken the dollar and spur inflation; silver and platinum rose on speculation the dollar will extend a slump boosting the appeal of the metal as a hedge.
Industrial Metals: Copper fell as stockpiles in Shanghai rose for a third straight week, and fresh signs emerged that a slowing U.S. economy may weaken demand for the metal.
(Source: Bloomberg)
Thursday, February 28, 2008
Commodities Daily - 28th Feb 2008
Spotlight: Crude oil fell from record after a government report showed that U.S. inventories increased a seventh week. Wheat surged to a record in Chicago as prices seesawed from the biggest gain ever to the largest decline and then back again. The European Union will ease restrictions on Brazilian beef imports. Corn and soybeans futures declined as record prices may boost plantings. Gold rose to a record.
Energy: Crude oil fell from a record after a government report showed that U.S. inventories increased a seventh week as the economy of the world's biggest energy-consuming country slows. Gasoline futures fell after an Energy Department report showed that supplies rose for the 16th consecutive week to the highest in 14 years. Natural gas fell on outlook for warmer weather and lower demand.
Agriculture: Wheat surged to a record in Chicago as prices seesawed from the biggest gain ever to the largest decline and then back again. Corn fell for a second straight session, and soybeans dropped on signs U.S. crop planting will increase, boosting grain and oilseed output and building inventories.
Coffee rose the most in a week reaching a 10-year high in London as speculators hedge against a declined in the Dollar. Sugar rose to the highest in 18 months on speculation investors seek lagging commodities. Separately, cotton fell from 4-year high as prices hurt exports and falling corn and soybean futures damped speculation of reduced cotton planting.
Precious Metals: Gold and silver futures rose as the dollar fell to the lowest ever against the euro, boosting the appeal of the metal as an alternative investment. Platinum futures fell after orders for U.S. durable goods in January dropped.
Industrial Metals: Copper jumped to the highest price since May 2006 as a decline in the dollar sparked purchases of commodities by investors as a hedge against inflation.
Energy: Crude oil fell from a record after a government report showed that U.S. inventories increased a seventh week as the economy of the world's biggest energy-consuming country slows. Gasoline futures fell after an Energy Department report showed that supplies rose for the 16th consecutive week to the highest in 14 years. Natural gas fell on outlook for warmer weather and lower demand.
Agriculture: Wheat surged to a record in Chicago as prices seesawed from the biggest gain ever to the largest decline and then back again. Corn fell for a second straight session, and soybeans dropped on signs U.S. crop planting will increase, boosting grain and oilseed output and building inventories.
Coffee rose the most in a week reaching a 10-year high in London as speculators hedge against a declined in the Dollar. Sugar rose to the highest in 18 months on speculation investors seek lagging commodities. Separately, cotton fell from 4-year high as prices hurt exports and falling corn and soybean futures damped speculation of reduced cotton planting.
Precious Metals: Gold and silver futures rose as the dollar fell to the lowest ever against the euro, boosting the appeal of the metal as an alternative investment. Platinum futures fell after orders for U.S. durable goods in January dropped.
Industrial Metals: Copper jumped to the highest price since May 2006 as a decline in the dollar sparked purchases of commodities by investors as a hedge against inflation.
Tuesday, February 26, 2008
Commodities Daily - 26th Feb 2008
Spotlight: Crude oil continue its upward trend on forecasts that fuel consumption will rise because of cold weather in the U.S. Cocoa rose to highest since 1984 on Pound rally and fund demand in agriculture commodities. Notably, coffee rose to 10-year high on demand for inflation hedge. Gold falls as U.S. pledges support for some IMF Bullion sales. Platinum falls as sales may decline after 42 percent rally in 2008.
Energy: Crude oil rose on forecasts that fuel consumption will rise because of cold weather in the northern half of the country. Natural gas rose to more than a two-year high on speculation of tight supply. Besides, heating oil futures rose to a fifth consecutive record after supplies dropped and forecasts showed below-normal temperatures.
Agriculture: Corn and soybeans surged to records and wheat rallied the most allowed by U.S. exchanges on signs that global crop production is not keeping pace with demand for food, animal feed and biofuels.
Coffee rose to a 10-year high as investors bought commodities as safeguards against inflation. Cotton rose reaching the highest since 2003, on speculation that record corn and soybean prices will encourage a switch in crops. Besides, cocoa rose extending a rally to the highest since 1984, as the U.K. pound gained against the dollar as well as fund demand in agriculture commodities.
Precious Metals: Gold fell the most in almost two weeks after the U.S. said it would back ``limited'' sales of bullion reserves by the International Monetary Fund, the third-largest holder of the precious metal. Besides, platinum fell in on concern the metal is too expensive for consumers after a 42 percent rally in 2008.
Industrial Metals: Copper fell from the highest since May 2006 as inventories rose, heightening speculation that supplies will outpace demand this year.
(Source: Bloomberg)
Energy: Crude oil rose on forecasts that fuel consumption will rise because of cold weather in the northern half of the country. Natural gas rose to more than a two-year high on speculation of tight supply. Besides, heating oil futures rose to a fifth consecutive record after supplies dropped and forecasts showed below-normal temperatures.
Agriculture: Corn and soybeans surged to records and wheat rallied the most allowed by U.S. exchanges on signs that global crop production is not keeping pace with demand for food, animal feed and biofuels.
Coffee rose to a 10-year high as investors bought commodities as safeguards against inflation. Cotton rose reaching the highest since 2003, on speculation that record corn and soybean prices will encourage a switch in crops. Besides, cocoa rose extending a rally to the highest since 1984, as the U.K. pound gained against the dollar as well as fund demand in agriculture commodities.
Precious Metals: Gold fell the most in almost two weeks after the U.S. said it would back ``limited'' sales of bullion reserves by the International Monetary Fund, the third-largest holder of the precious metal. Besides, platinum fell in on concern the metal is too expensive for consumers after a 42 percent rally in 2008.
Industrial Metals: Copper fell from the highest since May 2006 as inventories rose, heightening speculation that supplies will outpace demand this year.
(Source: Bloomberg)
Monday, February 25, 2008
Commodities Daily - 25th Feb 2008
Spotlight: Bloomberg surveys showed crude oil and natural gas may fall this week on speculation inventories are ample to meet demand. Copper fell from the highest in almost two years in London; robusta coffee headed for a fifth weekly advance. Gold headed for its biggest weekly gain in 19 months. Platinum fell.
Energy: Crude oil for April delivery rose to $98.81 a barrel last week on the New York Mercantile Exchange. Besides, Bloomberg survey showed crude oil may fall this week because of rising U.S. inventories and weakening demand as refineries perform seasonal maintenance. However, heating oil futures rose to a record after supplies dropped and the weather turned colder.
Agriculture: Soybean and soybean oil futures in Chicago surged on speculation that global demand for food, animal feed and biofuels will exceed production this year. Corn also reached its highest ever, and wheat surged.
Robusta coffee headed for a fifth weekly advance in London, the longest rally in more than eight months, on signs farmers are hoarding crops and speculators are increasing purchases in anticipation of further price gains. Cocoa surged the most since October, on speculation that dry weather may harm the harvest in Ivory Coast, the world's biggest producer.
Precious Metals: Gold headed for its biggest weekly advance in 19 months as lower U.S. interest rates may revive investor demand for the metal as an alternative to the dollar. Platinum fell from a record.
Industrial Metals: Copper fell from the highest in almost two years in London as higher prices attracted more metal into stockpiles and deterred buying in China, the world's largest user of the metal. Aluminum fell.
(Source: Bloomberg)
Energy: Crude oil for April delivery rose to $98.81 a barrel last week on the New York Mercantile Exchange. Besides, Bloomberg survey showed crude oil may fall this week because of rising U.S. inventories and weakening demand as refineries perform seasonal maintenance. However, heating oil futures rose to a record after supplies dropped and the weather turned colder.
Agriculture: Soybean and soybean oil futures in Chicago surged on speculation that global demand for food, animal feed and biofuels will exceed production this year. Corn also reached its highest ever, and wheat surged.
Robusta coffee headed for a fifth weekly advance in London, the longest rally in more than eight months, on signs farmers are hoarding crops and speculators are increasing purchases in anticipation of further price gains. Cocoa surged the most since October, on speculation that dry weather may harm the harvest in Ivory Coast, the world's biggest producer.
Precious Metals: Gold headed for its biggest weekly advance in 19 months as lower U.S. interest rates may revive investor demand for the metal as an alternative to the dollar. Platinum fell from a record.
Industrial Metals: Copper fell from the highest in almost two years in London as higher prices attracted more metal into stockpiles and deterred buying in China, the world's largest user of the metal. Aluminum fell.
(Source: Bloomberg)
Friday, February 22, 2008
Commodities Daily - 22nd Feb 2008
Spotlight: Cocoa tumbled 2 percent, the most this year. Crude oil advanced to a record $101 a barrel on rising demand. Gold futures rose to record as oil sparks demand for inflation hedge. However, platinum fell from on concern jewelry demand may drop. Copper fell.
Energy: Crude oil advanced to a record $101.32 barrel in New York on rising demand and concern inflation will erode the value of alternative investments. Natural gas was little changed on speculation inventories are ample to meet demand as the peak of the U.S. heating season wanes. Gasoline futures fell on forecasts a government report tomorrow will show that inventories rose.
Agriculture: Corn rose to a two-week high on speculation soaring energy costs will boost demand for crops to produce fuel. Soybeans fell from a record as rains improved production in Brazil and Argentina, reducing global demand from the U.S. Besides, wheat also fell as growers increase acreage after prices rally to record.
Cotton rose on speculation that demand is rising for investments that will hold their value as inflation quickens. Orange-juice rose the most in three weeks on speculation that dry weather in Florida will harm the harvest. However, cocoa tumbled 2 percent, the most this year, as pound slipped against the dollar and production in Brazil rose. Besides, coffee fell as a stronger dollar's reduced appeal of futures in New York.
Precious Metals: Gold futures rose to a record after energy costs jumped, boosting the appeal of the precious metal as a hedge against inflation. Platinum fell from a record in New York on concern that a 40 percent gain this year may cut demand from jewelery makers. Silver rose
Industrial Metals: Copper fell from a four-month high after a report showed U.S. housing starts remained near their lowest level since 1991 in January.
(Source: Bloomberg)
Energy: Crude oil advanced to a record $101.32 barrel in New York on rising demand and concern inflation will erode the value of alternative investments. Natural gas was little changed on speculation inventories are ample to meet demand as the peak of the U.S. heating season wanes. Gasoline futures fell on forecasts a government report tomorrow will show that inventories rose.
Agriculture: Corn rose to a two-week high on speculation soaring energy costs will boost demand for crops to produce fuel. Soybeans fell from a record as rains improved production in Brazil and Argentina, reducing global demand from the U.S. Besides, wheat also fell as growers increase acreage after prices rally to record.
Cotton rose on speculation that demand is rising for investments that will hold their value as inflation quickens. Orange-juice rose the most in three weeks on speculation that dry weather in Florida will harm the harvest. However, cocoa tumbled 2 percent, the most this year, as pound slipped against the dollar and production in Brazil rose. Besides, coffee fell as a stronger dollar's reduced appeal of futures in New York.
Precious Metals: Gold futures rose to a record after energy costs jumped, boosting the appeal of the precious metal as a hedge against inflation. Platinum fell from a record in New York on concern that a 40 percent gain this year may cut demand from jewelery makers. Silver rose
Industrial Metals: Copper fell from a four-month high after a report showed U.S. housing starts remained near their lowest level since 1991 in January.
(Source: Bloomberg)
Thursday, February 21, 2008
Commodities Daily - 21st Feb 2008
Spotlight: Cocoa tumbled 2 percent, the most this year. Crude oil advanced to a record $101 a barrel on rising demand. Gold futures rose to record as oil sparks demand for inflation hedge. However, platinum fell from on concern jewelry demand may drop. Copper fell.
Energy: Crude oil advanced to a record $101.32 barrel in New York on rising demand and concern inflation will erode the value of alternative investments. Natural gas was little changed on speculation inventories are ample to meet demand as the peak of the U.S. heating season wanes. Gasoline futures fell on forecasts a government report tomorrow will show that inventories rose.
Agriculture: Corn rose to a two-week high on speculation soaring energy costs will boost demand for crops to produce fuel. Soybeans fell from a record as rains improved production in Brazil and Argentina, reducing global demand from the U.S. Besides, wheat also fell as growers increase acreage after prices rally to record.
Cotton rose on speculation that demand is rising for investments that will hold their value as inflation quickens. Orange-juice rose the most in three weeks on speculation that dry weather in Florida will harm the harvest. However, cocoa tumbled 2 percent, the most this year, as pound slipped against the dollar and production in Brazil rose. Besides, coffee fell as a stronger dollar's reduced appeal of futures in New York.
Precious Metals: Gold futures rose to a record after energy costs jumped, boosting the appeal of the precious metal as a hedge against inflation. Platinum fell from a record in New York on concern that a 40 percent gain this year may cut demand from jewelery makers. Silver rose
Industrial Metals: Copper fell from a four-month high after a report showed U.S. housing starts remained near their lowest level since 1991 in January.
(Source: Bloomberg)
Energy: Crude oil advanced to a record $101.32 barrel in New York on rising demand and concern inflation will erode the value of alternative investments. Natural gas was little changed on speculation inventories are ample to meet demand as the peak of the U.S. heating season wanes. Gasoline futures fell on forecasts a government report tomorrow will show that inventories rose.
Agriculture: Corn rose to a two-week high on speculation soaring energy costs will boost demand for crops to produce fuel. Soybeans fell from a record as rains improved production in Brazil and Argentina, reducing global demand from the U.S. Besides, wheat also fell as growers increase acreage after prices rally to record.
Cotton rose on speculation that demand is rising for investments that will hold their value as inflation quickens. Orange-juice rose the most in three weeks on speculation that dry weather in Florida will harm the harvest. However, cocoa tumbled 2 percent, the most this year, as pound slipped against the dollar and production in Brazil rose. Besides, coffee fell as a stronger dollar's reduced appeal of futures in New York.
Precious Metals: Gold futures rose to a record after energy costs jumped, boosting the appeal of the precious metal as a hedge against inflation. Platinum fell from a record in New York on concern that a 40 percent gain this year may cut demand from jewelery makers. Silver rose
Industrial Metals: Copper fell from a four-month high after a report showed U.S. housing starts remained near their lowest level since 1991 in January.
(Source: Bloomberg)
Wednesday, February 20, 2008
Commodities Daily - 20th Feb 2008
Spotlight: Commodity prices surged to a record, as oil jumped above $100 a barrel and copper rallied, on signs that increased global demand for raw materials and the weakening dollar are fueling inflation. Gold and platinum rose.
Energy: Crude oil rose to a record $100.01 a barrel on speculation OPEC will cut production when it meets next month. Besides, natural gas advanced to the highest in 15 months on cold weather and crude oil touched a record. Gasoline, heating oil also rose to a record on refinery explosion.
Agriculture: Soybean rose to a record, and corn gained on speculation China will boost imports to rebuild grain reserves after food inflation quickened. However, wheat rose on speculation U.S. farmers may switch more acres to soybeans.
Coffee soared as inventories dwindle and commodities soared to a record as the dollar’s slump. Sugar extended its rally to an 18-month high as commodity prices surged and on speculation demand for alternative fuels is gaining. Notably, cocoa dropped from 24-year high on speculation a rally was overdone. Besides, orange-juice touched a five-month low on speculation that an increase in U.S. production will leave a glut as domestic demand declines.
Precious Metals: Gold futures rose the most in almost seven weeks on speculation a weaker dollar and higher commodity costs will boost the appeal of the precious metal as an inflation hedge. Platinum and palladium soared on concern about South African supply.
Industrial Metals: Copper jumped 5.5 percent to a four-month high in New York on signs of expanding demand in China, the world's largest metals buyer.
(Source: Bloomberg)
Energy: Crude oil rose to a record $100.01 a barrel on speculation OPEC will cut production when it meets next month. Besides, natural gas advanced to the highest in 15 months on cold weather and crude oil touched a record. Gasoline, heating oil also rose to a record on refinery explosion.
Agriculture: Soybean rose to a record, and corn gained on speculation China will boost imports to rebuild grain reserves after food inflation quickened. However, wheat rose on speculation U.S. farmers may switch more acres to soybeans.
Coffee soared as inventories dwindle and commodities soared to a record as the dollar’s slump. Sugar extended its rally to an 18-month high as commodity prices surged and on speculation demand for alternative fuels is gaining. Notably, cocoa dropped from 24-year high on speculation a rally was overdone. Besides, orange-juice touched a five-month low on speculation that an increase in U.S. production will leave a glut as domestic demand declines.
Precious Metals: Gold futures rose the most in almost seven weeks on speculation a weaker dollar and higher commodity costs will boost the appeal of the precious metal as an inflation hedge. Platinum and palladium soared on concern about South African supply.
Industrial Metals: Copper jumped 5.5 percent to a four-month high in New York on signs of expanding demand in China, the world's largest metals buyer.
(Source: Bloomberg)
Thursday, February 14, 2008
Commodities Daily - 14th Feb 2008
Spotlight: Crude oil rose as U.S. retail sales unexpectedly climbed. Cocoa rallies to highest since 1984 as Pound climbs. Platinum reaches record, surpasses $2,000 on African shortages. Notably, copper halts five-day rally in New York on U.S. growth concerns.
Energy: Crude oil rose after government reports showed that U.S. retail sales unexpectedly climbed and gasoline demand increased. Besides, the International Energy Agency, cut its forecast for 2008 global oil demand because of the slowing U.S. economy. Nymex natural gas fell on speculation supplies are ample.
Agriculture: Wheat fell after Egypt canceled purchase at prices that are near the highest ever. Soybeans rose on speculation that a record surge in wheat prices will encourage U.S. farmers to plant less of the oilseed in the northern Great Plains. Notably, corn fell on speculation that overseas demand for the biggest U.S. crop is slowing after prices climbed to records last week.
Cocoa extended a rally to a 23-year high as the U.K. pound’s rise. Coffee rose to the highest price since April 1998 as food companies and investors boosted purchases. Cotton fell on signs that the U.S. surplus will expand on increasing output and dwindling global demand. Besides, orange-juice fell to a four-month low on speculation rain may ease Florida’s drought conditions.
Precious Metals: Gold may decline on speculation a rally in equities will reduce the appeal of the precious metal as alternative investment. Platinum rose to a record, breaching $2,000 an ounce, as South Africa's state-owned electric utility advised mines that power shortages will persist for four years. Silver rose.
Industrial Metals: Copper fell, snapping a five-session rally, on renewed concern that a slowing U.S. economy will erode demand for the metal used.
(Source: Bloomberg)
Energy: Crude oil rose after government reports showed that U.S. retail sales unexpectedly climbed and gasoline demand increased. Besides, the International Energy Agency, cut its forecast for 2008 global oil demand because of the slowing U.S. economy. Nymex natural gas fell on speculation supplies are ample.
Agriculture: Wheat fell after Egypt canceled purchase at prices that are near the highest ever. Soybeans rose on speculation that a record surge in wheat prices will encourage U.S. farmers to plant less of the oilseed in the northern Great Plains. Notably, corn fell on speculation that overseas demand for the biggest U.S. crop is slowing after prices climbed to records last week.
Cocoa extended a rally to a 23-year high as the U.K. pound’s rise. Coffee rose to the highest price since April 1998 as food companies and investors boosted purchases. Cotton fell on signs that the U.S. surplus will expand on increasing output and dwindling global demand. Besides, orange-juice fell to a four-month low on speculation rain may ease Florida’s drought conditions.
Precious Metals: Gold may decline on speculation a rally in equities will reduce the appeal of the precious metal as alternative investment. Platinum rose to a record, breaching $2,000 an ounce, as South Africa's state-owned electric utility advised mines that power shortages will persist for four years. Silver rose.
Industrial Metals: Copper fell, snapping a five-session rally, on renewed concern that a slowing U.S. economy will erode demand for the metal used.
(Source: Bloomberg)
Wednesday, February 13, 2008
Commodities Daily - 13th Feb 2008
Spotlight: Oil fell on forecasts U.S. inventories gained for a fifth week. Wheat fell, capping the biggest two-day loss since 2003. Cocoa extended a rally to the highest since 1985 as U.K. pound rose. Gold, silver, platinum and palladium fell.
Energy: Crude oil fell for the first time in four days on forecasts that a government report tomorrow will show U.S. stockpiles increased for a fifth week. Natural gas fell, amid speculation higher temperatures may pare demand of the fuel for heating. Gasoline futures fell before a government report that's expected to show a 14th consecutive rise in U.S. inventories.
Agriculture: Wheat fell, capping the biggest two-day loss since 2003, on speculation that farmers will increase planting to take advantage of prices that have doubled to a record in the past year. Corn fell on speculation overseas grain demand is slowing after prices surged to a record. Notably, soybeans fell, erasing an earlier gain, on speculation investors will sell commodities and buy more stocks.
Sugar prices fell the most in a week on speculation that a global surplus and lower crude oil futures may slow demand. Cocoa extended a rally to the highest since 1985 on speculation the U.K. pound's rise against the U.S. dollar is boosting purchases of futures in New York. Coffee rose to the highest since 1998 as exchange inventories dropped.
Precious Metals: Gold fell the most in a week as a rally in equities reduced the appeal of the precious metal as an alternative investment. Besides, platinum fell from a record on concern that industrial demand for the metal may ease after prices rose 27 percent this year. Silver and palladium fell.
Industrial Metals: Copper rose for the fifth straight session on concern supplies will trail demand for the metal used.
Energy: Crude oil fell for the first time in four days on forecasts that a government report tomorrow will show U.S. stockpiles increased for a fifth week. Natural gas fell, amid speculation higher temperatures may pare demand of the fuel for heating. Gasoline futures fell before a government report that's expected to show a 14th consecutive rise in U.S. inventories.
Agriculture: Wheat fell, capping the biggest two-day loss since 2003, on speculation that farmers will increase planting to take advantage of prices that have doubled to a record in the past year. Corn fell on speculation overseas grain demand is slowing after prices surged to a record. Notably, soybeans fell, erasing an earlier gain, on speculation investors will sell commodities and buy more stocks.
Sugar prices fell the most in a week on speculation that a global surplus and lower crude oil futures may slow demand. Cocoa extended a rally to the highest since 1985 on speculation the U.K. pound's rise against the U.S. dollar is boosting purchases of futures in New York. Coffee rose to the highest since 1998 as exchange inventories dropped.
Precious Metals: Gold fell the most in a week as a rally in equities reduced the appeal of the precious metal as an alternative investment. Besides, platinum fell from a record on concern that industrial demand for the metal may ease after prices rose 27 percent this year. Silver and palladium fell.
Industrial Metals: Copper rose for the fifth straight session on concern supplies will trail demand for the metal used.
Tuesday, February 12, 2008
Commodities Daily - 12th Feb 2008
Spotlight: Oil rose to one-month high on refinery shutdown, natural gas and heating oil advanced on the back of colder weather. Wheat fell from a record in Chicago after the exchange expanded daily pricing limits. Gold and silver rose on demand for inflation hedge.
Energy: Crude oil rose to a one-month high after Valero Energy Corp. shut its Delaware refinery because of a power failure yesterday and cold weather swept across the northern U.S. Natural gas and heating oil soared on the back of colder weather will linger into next week.
Agriculture: Wheat fell from a record in Chicago after the exchange expanded daily pricing limits, clearing the way for sales that had been halted during the 16 percent rally last week, the biggest ever. Notably, corn fell and soybeans dropped the most in two weeks on speculation rains will help harvests in Brazil and Argentina, the biggest exporters of the crops after the U.S.
Cotton fell to a six-week low on signs global demand will slow. However, coffee rose to its highest in almost a decade as Colombia and Vietnam harvested less, tightening supplies. Cocoa rose on speculation that investors are betting commodities will outpace stocks again this year.
Precious Metals: Gold futures rose to a one-week high after energy costs climbed. Platinum rose to record on supply concerns. Silver and palladium rose.
Industrial Metals: Copper rose to the highest in more than three months as falling production and slumping inventories heightened speculation that metal supplies will trail demand.
Energy: Crude oil rose to a one-month high after Valero Energy Corp. shut its Delaware refinery because of a power failure yesterday and cold weather swept across the northern U.S. Natural gas and heating oil soared on the back of colder weather will linger into next week.
Agriculture: Wheat fell from a record in Chicago after the exchange expanded daily pricing limits, clearing the way for sales that had been halted during the 16 percent rally last week, the biggest ever. Notably, corn fell and soybeans dropped the most in two weeks on speculation rains will help harvests in Brazil and Argentina, the biggest exporters of the crops after the U.S.
Cotton fell to a six-week low on signs global demand will slow. However, coffee rose to its highest in almost a decade as Colombia and Vietnam harvested less, tightening supplies. Cocoa rose on speculation that investors are betting commodities will outpace stocks again this year.
Precious Metals: Gold futures rose to a one-week high after energy costs climbed. Platinum rose to record on supply concerns. Silver and palladium rose.
Industrial Metals: Copper rose to the highest in more than three months as falling production and slumping inventories heightened speculation that metal supplies will trail demand.
Wednesday, February 6, 2008
Commodities Daily -6th Feb 2008
Spotlight: Commodity prices dropped on concern the U.S. is headed for a recession. Gold and platinum fell. Monsanto Co. said Japan, the Philippines and Taiwan have approved imports of its new genetically modified soybeans.
Energy: Crude oil fell more than $1 a barrel after a report showed that U.S. service industries contracted in January, a sign of a slowing economy and reduced energy demand. BP Plc, Europe's second-biggest oil company, posted a 53 percent jump in fourth-quarter profit and increased its dividend after production rose for the first time since 2005.
Agriculture: Wheat futures limit up in early trade yesterday on shrinking supplies of high-protein spring varieties from the U.S. and Canada, the two largest exporters. Wheat jumped 30 cents, or 3.1 percent, to $10.03 a bushel in Chicago. Corn and soybeans fell on speculation that declining energy costs will reduce demand for biofuels made from crops. Corn fell 1.25 cents, or 0.2 percent, to $5.0925 a bushel in Chicago. Soybeans fell 3 cents, or 0.2 percent, to $13.23 a bushel in Chicago.
Precious Metals: Gold futures fell to the lowest in more than a week after the dollar rose against the euro, eroding the appeal of the precious metal as an alternative investment. Gold tumbled $19.10, or 2.1 percent, to $890.30 an ounce in New York. Silver dropped 43.5 cents, or 2.6 percent, to $16.345 an ounce.
Industrial Metals: Copper dropped the most in almost two weeks after a report showed U.S. services industries unexpectedly shrank last month, renewing concern that the world's largest economy is slipping into a recession. LME copper for three-month fell $130 and settled at $7,130 a tonne.
(Source: Bloomberg)
Energy: Crude oil fell more than $1 a barrel after a report showed that U.S. service industries contracted in January, a sign of a slowing economy and reduced energy demand. BP Plc, Europe's second-biggest oil company, posted a 53 percent jump in fourth-quarter profit and increased its dividend after production rose for the first time since 2005.
Agriculture: Wheat futures limit up in early trade yesterday on shrinking supplies of high-protein spring varieties from the U.S. and Canada, the two largest exporters. Wheat jumped 30 cents, or 3.1 percent, to $10.03 a bushel in Chicago. Corn and soybeans fell on speculation that declining energy costs will reduce demand for biofuels made from crops. Corn fell 1.25 cents, or 0.2 percent, to $5.0925 a bushel in Chicago. Soybeans fell 3 cents, or 0.2 percent, to $13.23 a bushel in Chicago.
Precious Metals: Gold futures fell to the lowest in more than a week after the dollar rose against the euro, eroding the appeal of the precious metal as an alternative investment. Gold tumbled $19.10, or 2.1 percent, to $890.30 an ounce in New York. Silver dropped 43.5 cents, or 2.6 percent, to $16.345 an ounce.
Industrial Metals: Copper dropped the most in almost two weeks after a report showed U.S. services industries unexpectedly shrank last month, renewing concern that the world's largest economy is slipping into a recession. LME copper for three-month fell $130 and settled at $7,130 a tonne.
(Source: Bloomberg)
Tuesday, February 5, 2008
Commodities Daily - 5th Feb 2008
Spotlight: Gold and silver fell while platinum surged to a record. Oil rose as dense sea fog slowed crude imports into the Houston Ship Channel. Wheat limit up on Monday as demand for spring wheat strengthened while inventories remained at a low.
Energy: Crude oil rose after Turkish planes attacked suspected Kurdish insurgent bases and the Houston Ship Channel reopened following an 18-hour shutdown for fog. Oil rebounded more than a $1 to over $90 a barrel on Monday as dense sea fog slowed crude imports into the Houston Ship Channel, the waterway to the busiest U.S. petrochemical port. President George W. Bush is asking Congress to fund a 4.7 percent increase for the Energy Department's budget, the largest request for the department in five years.
Agriculture: Wheat in CBOT soared on Monday as demand for spring wheat has been strong of late, with inventories hovering at 30-year lows. CBOT wheat limit-up 30 cents and settled at $9.73 a bushel. Soybean futures also soared yesterday amid beginning of the year fund-buying, Brazilian crop concerns and spillover buying from soyoil. Soyoil futures hit record highs yesterday amid a strong showing from vegetable oils. Crude Palm Oil rose 3.5 percent on Monday after Indonesia said it will impose a 20-25 percent export tax on CPO and its by-products if international prices hit $1,200 and $1,300 a tonne.
Precious Metals: Gold futures extended Friday’s losses but finished off the low as profit-taking and technical weakness led investors to sell. Active month gold contract settled at $909.40 an ounce, down $4.10 from the previous day. Platinum futures on the other hand scaled to fresh record highs above $1,800 an ounce as power outages in South Africa disrupted mine production in the country. Platinum settled at $1,797.60 an ounce, up $27.40 from a day ago.
Industrial Metals: Copper prices firmed on Monday on signs of stronger demand and as the market feared about supply disruptions in China. Copper for three-month delivery in LME settled at $7,260 a tonne. Copper supply in China has been quite tight as the country battles its worst winter in five decades. Aluminium also closed higher as production of the metal used in power, packaging and construction is energy intensive and speculators watching the power problems in China and South Africa have been betting on higher prices. Aluminium closed at $2,665 a tonne.
(Source: Bloomberg)
Energy: Crude oil rose after Turkish planes attacked suspected Kurdish insurgent bases and the Houston Ship Channel reopened following an 18-hour shutdown for fog. Oil rebounded more than a $1 to over $90 a barrel on Monday as dense sea fog slowed crude imports into the Houston Ship Channel, the waterway to the busiest U.S. petrochemical port. President George W. Bush is asking Congress to fund a 4.7 percent increase for the Energy Department's budget, the largest request for the department in five years.
Agriculture: Wheat in CBOT soared on Monday as demand for spring wheat has been strong of late, with inventories hovering at 30-year lows. CBOT wheat limit-up 30 cents and settled at $9.73 a bushel. Soybean futures also soared yesterday amid beginning of the year fund-buying, Brazilian crop concerns and spillover buying from soyoil. Soyoil futures hit record highs yesterday amid a strong showing from vegetable oils. Crude Palm Oil rose 3.5 percent on Monday after Indonesia said it will impose a 20-25 percent export tax on CPO and its by-products if international prices hit $1,200 and $1,300 a tonne.
Precious Metals: Gold futures extended Friday’s losses but finished off the low as profit-taking and technical weakness led investors to sell. Active month gold contract settled at $909.40 an ounce, down $4.10 from the previous day. Platinum futures on the other hand scaled to fresh record highs above $1,800 an ounce as power outages in South Africa disrupted mine production in the country. Platinum settled at $1,797.60 an ounce, up $27.40 from a day ago.
Industrial Metals: Copper prices firmed on Monday on signs of stronger demand and as the market feared about supply disruptions in China. Copper for three-month delivery in LME settled at $7,260 a tonne. Copper supply in China has been quite tight as the country battles its worst winter in five decades. Aluminium also closed higher as production of the metal used in power, packaging and construction is energy intensive and speculators watching the power problems in China and South Africa have been betting on higher prices. Aluminium closed at $2,665 a tonne.
(Source: Bloomberg)
Commodities Daily - 4th Feb 2008
Spotlight: OPEC said that it would not raise oil output in its meeting on Friday as the market is well-supplied. Wheat rose on limited supplies in the U.S. while gold fell by 1.5 percent on profit-taking.
Energy: Crude oil may fall this week on speculation that U.S. fuel demand will drop as consumers respond to the slowing economy and high prices. Crude oil for March delivery fell $1.75 last week, or 1.9 percent, to $88.96 a barrel on the New York Mercantile Exchange. Futures reached a record $100.09 a barrel on Jan. 3. OPEC said in its meeting on Friday that it would leave output unchanged as the market is well-supplied and it’s not necessary to raise output.
Agriculture: Wheat rallied on Friday on signs of rising demand for limited U.S. supplies of high-protein spring varieties. Wheat futures for March delivery rose 13.5 cents, or 1.4 percent, to $9.43 a bushel on the Chicago Board of Trade. Soybeans rose on signs that declining shipping costs and a falling dollar are boosting overseas demand for supplies from the U.S., even after prices reached a record last month. Soybean futures for March delivery rose 12.75 cents, or 1.1 percent, to $12.8725 a bushel. Corn settled almost unchanged on Friday.
Precious Metals: Gold fell sharply on Friday as investors booked profits after prices rose to a record high on earlier reduction in interest rates. COMEX gold fell 1.5% or $14.50 to $913.50 an ounce in late week. Platinum, on the other hand, climbed to a record on concern that a power shortage in South Africa, which accounts for about 80 percent of world supply, would cut output.
Industrial Metals: Copper prices fell by 1.6 percent on Friday after the U.S. unexpectedly lost jobs in January; renewing concern demand will fall in the world's largest economy. U.S. payrolls fell by 1,000 last month, the first drop in more than four years, the Labor Department said on Friday.
(Source: Bloomberg)
Energy: Crude oil may fall this week on speculation that U.S. fuel demand will drop as consumers respond to the slowing economy and high prices. Crude oil for March delivery fell $1.75 last week, or 1.9 percent, to $88.96 a barrel on the New York Mercantile Exchange. Futures reached a record $100.09 a barrel on Jan. 3. OPEC said in its meeting on Friday that it would leave output unchanged as the market is well-supplied and it’s not necessary to raise output.
Agriculture: Wheat rallied on Friday on signs of rising demand for limited U.S. supplies of high-protein spring varieties. Wheat futures for March delivery rose 13.5 cents, or 1.4 percent, to $9.43 a bushel on the Chicago Board of Trade. Soybeans rose on signs that declining shipping costs and a falling dollar are boosting overseas demand for supplies from the U.S., even after prices reached a record last month. Soybean futures for March delivery rose 12.75 cents, or 1.1 percent, to $12.8725 a bushel. Corn settled almost unchanged on Friday.
Precious Metals: Gold fell sharply on Friday as investors booked profits after prices rose to a record high on earlier reduction in interest rates. COMEX gold fell 1.5% or $14.50 to $913.50 an ounce in late week. Platinum, on the other hand, climbed to a record on concern that a power shortage in South Africa, which accounts for about 80 percent of world supply, would cut output.
Industrial Metals: Copper prices fell by 1.6 percent on Friday after the U.S. unexpectedly lost jobs in January; renewing concern demand will fall in the world's largest economy. U.S. payrolls fell by 1,000 last month, the first drop in more than four years, the Labor Department said on Friday.
(Source: Bloomberg)
Saturday, February 2, 2008
Commodities Daily 1st Feb 2008
Spotlight: Crude oil fell on signs slowing U.S. economy would curb demand. Natural gas rose while gasoline fell after a 12th consecutive weekly supply rose. Cocoa soared to the highest in almost five years. Gold gained, capping the biggest monthly increase since April 2006. Platinum rose to a record. Copper jumped, capping the biggest monthly gain since April.
Energy: Crude oil fell on concern that the U.S. is on the verge of a recession, curbing fuel demand in the world's biggest energy- consuming country. Natural gas advanced on speculation colder weather would boost demand. However, gasoline fell after a 12th consecutive weekly supplies were adequate.
Agriculture: Wheat rose, as demand for U.S. supplies increased after prices declined 3.1 percent last week. Corn rose for the first time in three days, on speculation that a weakening dollar is boosting overseas demand for supplies from the U.S.. However, soybeans fell as rains in South America may boost crop.
Cocoa soared to the highest price in almost five years because dry weather in West Africa, the biggest producer of the commodity, threatened supplies as well as the U.K. pound rose against the dollar. Besides, coffee rose to a two-week high as inventories dropped. Separately, cotton fell on speculation that U.S. exports may fall short of forecast. Sugar fell as recession concerns spurred declined in oil.
Precious Metals: Gold rose, capping the biggest monthly gain since April 2006, platinum rose to a record too on concern the dollar may weaken further, boosting the appeal of the metal as an alternative investment. Notably, silver rose to the highest since 1980. Palladium rose.
Industrial Metals: Copper rose in New York, capping the biggest monthly gain since April, on speculation lower U.S. borrowing costs will bolster economic growth and spurring demand.
(Source: Bloomberg)
Energy: Crude oil fell on concern that the U.S. is on the verge of a recession, curbing fuel demand in the world's biggest energy- consuming country. Natural gas advanced on speculation colder weather would boost demand. However, gasoline fell after a 12th consecutive weekly supplies were adequate.
Agriculture: Wheat rose, as demand for U.S. supplies increased after prices declined 3.1 percent last week. Corn rose for the first time in three days, on speculation that a weakening dollar is boosting overseas demand for supplies from the U.S.. However, soybeans fell as rains in South America may boost crop.
Cocoa soared to the highest price in almost five years because dry weather in West Africa, the biggest producer of the commodity, threatened supplies as well as the U.K. pound rose against the dollar. Besides, coffee rose to a two-week high as inventories dropped. Separately, cotton fell on speculation that U.S. exports may fall short of forecast. Sugar fell as recession concerns spurred declined in oil.
Precious Metals: Gold rose, capping the biggest monthly gain since April 2006, platinum rose to a record too on concern the dollar may weaken further, boosting the appeal of the metal as an alternative investment. Notably, silver rose to the highest since 1980. Palladium rose.
Industrial Metals: Copper rose in New York, capping the biggest monthly gain since April, on speculation lower U.S. borrowing costs will bolster economic growth and spurring demand.
(Source: Bloomberg)
Thursday, January 31, 2008
Corn Falls on Concern U.S. Economic Slump to Reduce Demand
By Jeff Wilson
Jan. 30 (Bloomberg) -- Corn dropped on concern an interest- rate cut by the U.S. Federal Reserve won't keep the economy out of a recession, reducing global demand for food, fuel and animal feed.
U.S. economic growth slowed to an annual rate of 0.6 percent in the fourth quarter, half the rate forecast, Commerce Department data showed today. The Federal Open Market Committee cut its benchmark interest rate by half a percentage point to 3 percent following the Jan. 22 emergency rate reduction, the fastest 1.25 percent easing of monetary policy since 1990.
``A global slowdown will have an impact on demand,'' said Sid Love, a grain analyst for Kropf and Love Consulting in Overland Park, Kansas. ``Prices are likely to hold firm into February'' the month that federal crop insurance rates are set based on average futures prices in Chicago, Love said.
Corn futures for March delivery fell 2.5 cents, or 0.5 percent, to $4.985 a bushel on the Chicago Board of Trade. The price still has climbed 9.4 percent in January, heading for the fifth straight monthly gain.
The most-active contract reached a record $5.1925 on Jan. 15. Futures climbed 17 percent last year on record demand for grain used to make ethanol and feed livestock.
Corn also fell on speculation import demand from Mexico, the second-biggest buyer of the crop, will decline.
Mexican economic growth will slow to 2.8 percent in 2008, the lowest in three years, from an estimated 3.2 percent in 2007, the Finance Ministry said today. The government had forecast 3.7 percent expansion.
Near Recession
The U.S. economy edged closer to recession in the fourth quarter as home construction fell the most in 26 years and Americans cut back on spending, government data showed.
``If these recession fears are realized, we could see a slowdown in global demand,'' said Marty Foreman, a grain analyst for Doane Agricultural Services Co. in St. Louis. ``A slowdown doesn't change things immediately, but for now, we can say prices are high enough.''
Corn prices also fell on speculation U.S.-produced ethanol may face increased competition from Brazilian supplies, which are made from sugar, said Chad Henderson, a market analyst for Prime-Ag Consulting Inc. in Brookfield, Wisconsin.
Ethanol import tariffs that have ``helped protect'' U.S. ethanol producers will be addressed in the 2009 budget set for release Feb. 4, Energy Secretary Samuel Bodman said yesterday. The U.S. industry ``is pretty close to being able to stand on its own,'' Bodman said after giving a speech in Washington.
``The elimination of the ethanol import tariff could change the outlook for corn demand,'' Henderson said. ``Imports could reduce demand for Midwestern ethanol'' on the East Coast and West Coast, where imports would be cheaper, Henderson said.
Corn is the biggest U.S. crop, valued at a record $33.8 billion in 2006, followed by soybeans at $19.7 billion, government figures show.
Jan. 30 (Bloomberg) -- Corn dropped on concern an interest- rate cut by the U.S. Federal Reserve won't keep the economy out of a recession, reducing global demand for food, fuel and animal feed.
U.S. economic growth slowed to an annual rate of 0.6 percent in the fourth quarter, half the rate forecast, Commerce Department data showed today. The Federal Open Market Committee cut its benchmark interest rate by half a percentage point to 3 percent following the Jan. 22 emergency rate reduction, the fastest 1.25 percent easing of monetary policy since 1990.
``A global slowdown will have an impact on demand,'' said Sid Love, a grain analyst for Kropf and Love Consulting in Overland Park, Kansas. ``Prices are likely to hold firm into February'' the month that federal crop insurance rates are set based on average futures prices in Chicago, Love said.
Corn futures for March delivery fell 2.5 cents, or 0.5 percent, to $4.985 a bushel on the Chicago Board of Trade. The price still has climbed 9.4 percent in January, heading for the fifth straight monthly gain.
The most-active contract reached a record $5.1925 on Jan. 15. Futures climbed 17 percent last year on record demand for grain used to make ethanol and feed livestock.
Corn also fell on speculation import demand from Mexico, the second-biggest buyer of the crop, will decline.
Mexican economic growth will slow to 2.8 percent in 2008, the lowest in three years, from an estimated 3.2 percent in 2007, the Finance Ministry said today. The government had forecast 3.7 percent expansion.
Near Recession
The U.S. economy edged closer to recession in the fourth quarter as home construction fell the most in 26 years and Americans cut back on spending, government data showed.
``If these recession fears are realized, we could see a slowdown in global demand,'' said Marty Foreman, a grain analyst for Doane Agricultural Services Co. in St. Louis. ``A slowdown doesn't change things immediately, but for now, we can say prices are high enough.''
Corn prices also fell on speculation U.S.-produced ethanol may face increased competition from Brazilian supplies, which are made from sugar, said Chad Henderson, a market analyst for Prime-Ag Consulting Inc. in Brookfield, Wisconsin.
Ethanol import tariffs that have ``helped protect'' U.S. ethanol producers will be addressed in the 2009 budget set for release Feb. 4, Energy Secretary Samuel Bodman said yesterday. The U.S. industry ``is pretty close to being able to stand on its own,'' Bodman said after giving a speech in Washington.
``The elimination of the ethanol import tariff could change the outlook for corn demand,'' Henderson said. ``Imports could reduce demand for Midwestern ethanol'' on the East Coast and West Coast, where imports would be cheaper, Henderson said.
Corn is the biggest U.S. crop, valued at a record $33.8 billion in 2006, followed by soybeans at $19.7 billion, government figures show.
Wheat Falls as Argentina Eliminates Restrictions on Exports
By Tony C. Dreibus
Jan. 30 (Bloomberg) -- Wheat fell for the second straight day after Argentina, the world's fourth-largest exporter of the grain, planned to end temporary limits on shipments next month.
The lifting of restrictions will free up about 2 million metric tons of wheat for sale overseas, eroding demand for supplies from the U.S., the biggest exporter, analysts said. Argentina halted registrations in November to curb rising domestic food prices.
``That's business that we would've gotten if Argentina wouldn't have allowed those exports,'' said Larry Glenn, owner of Glenn Commodities in Wichita, Kansas. ``That's five weeks worth of export business if we sold 400,000 a week.''
Wheat for March delivery fell 21.5 cents, or 2.3 percent, to $9.225 a bushel on the Chicago Board of Trade. The announcement yesterday in Buenos Aires that shipments would resume by Feb. 15 sent wheat tumbling 19 cents, or 2 percent, after the price earlier rose the exchange's 30-cent limit, or 3.1 percent.
Wheat futures still have doubled in the past year and reached a record $10.095 on Dec. 17 after importers began buying U.S. grain on concern supplies would fall short of demand.
Higher prices have hurt profit at Kellogg Co., the largest cereal maker in the U.S. Fourth-quarter earnings dropped 3.3 percent, partly because of higher wheat costs, the company said today. Net income fell to $176 million, or 44 cents a share, from $182 million, or 45 cents, a year earlier. Sales increased 8.1 percent to $2.79 billion.
Minneapolis Rally
On the Minneapolis Grain Exchange, contracts for high- protein spring wheat extended a rally, reaching a record in overnight trading on concern farmers in the U.S. and Canada may not seed enough acres in April and May.
Inventories of spring varieties are low after drought curbed yields in southern Canada and the northern U.S. in 2007. With corn and soybean prices at or near records, farmers may sow more of those crops rather than wheat, analysts said.
``Things are awful tight for spring-wheat supplies and demand's been high for quality wheat,'' Glenn said.
Wheat for March delivery in Minneapolis rose 16 cents, or 1.2 percent, to $13.43 a bushel after reaching $13.55, the highest ever. The price has jumped the 30-cent limit in six of the past nine sessions. Futures have surged 30 percent this month and more than doubled in the past year.
Futures for delivery in September and December fell the exchange limit on speculation stockpiles of spring wheat will rise as record prices encourage growers to plant more of the grain. Spring wheat is harvested starting in August.
Wheat was the fourth-biggest U.S. crop in 2006, valued at $7.7 billion, behind corn, soybeans and hay, government data show.
Jan. 30 (Bloomberg) -- Wheat fell for the second straight day after Argentina, the world's fourth-largest exporter of the grain, planned to end temporary limits on shipments next month.
The lifting of restrictions will free up about 2 million metric tons of wheat for sale overseas, eroding demand for supplies from the U.S., the biggest exporter, analysts said. Argentina halted registrations in November to curb rising domestic food prices.
``That's business that we would've gotten if Argentina wouldn't have allowed those exports,'' said Larry Glenn, owner of Glenn Commodities in Wichita, Kansas. ``That's five weeks worth of export business if we sold 400,000 a week.''
Wheat for March delivery fell 21.5 cents, or 2.3 percent, to $9.225 a bushel on the Chicago Board of Trade. The announcement yesterday in Buenos Aires that shipments would resume by Feb. 15 sent wheat tumbling 19 cents, or 2 percent, after the price earlier rose the exchange's 30-cent limit, or 3.1 percent.
Wheat futures still have doubled in the past year and reached a record $10.095 on Dec. 17 after importers began buying U.S. grain on concern supplies would fall short of demand.
Higher prices have hurt profit at Kellogg Co., the largest cereal maker in the U.S. Fourth-quarter earnings dropped 3.3 percent, partly because of higher wheat costs, the company said today. Net income fell to $176 million, or 44 cents a share, from $182 million, or 45 cents, a year earlier. Sales increased 8.1 percent to $2.79 billion.
Minneapolis Rally
On the Minneapolis Grain Exchange, contracts for high- protein spring wheat extended a rally, reaching a record in overnight trading on concern farmers in the U.S. and Canada may not seed enough acres in April and May.
Inventories of spring varieties are low after drought curbed yields in southern Canada and the northern U.S. in 2007. With corn and soybean prices at or near records, farmers may sow more of those crops rather than wheat, analysts said.
``Things are awful tight for spring-wheat supplies and demand's been high for quality wheat,'' Glenn said.
Wheat for March delivery in Minneapolis rose 16 cents, or 1.2 percent, to $13.43 a bushel after reaching $13.55, the highest ever. The price has jumped the 30-cent limit in six of the past nine sessions. Futures have surged 30 percent this month and more than doubled in the past year.
Futures for delivery in September and December fell the exchange limit on speculation stockpiles of spring wheat will rise as record prices encourage growers to plant more of the grain. Spring wheat is harvested starting in August.
Wheat was the fourth-biggest U.S. crop in 2006, valued at $7.7 billion, behind corn, soybeans and hay, government data show.
Subscribe to:
Posts (Atom)
