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August 26th, 2011
The hottest summer since 1955 in Iowa and Illinois is eroding yield prospects for corn and soybean crops in the U.S., the largest grower and exporter.
Signs of diminished output appeared this week during a four-day, seven-state sampling of about 2,000 fields in the Midwest organized by the Professional Farmers of America, which will report its findings later today. A Bloomberg survey of 25 tour participants showed all expected the government to cut its corn-harvest forecasts and 21 predicted a reduction for soybeans.
Corn prices have jumped 24 percent since July 1 and soybeans touched a five-week high on Aug. 24 as crops in parts of the Midwest were damaged by more than 35 days of temperatures above 90 degrees Fahrenheit (32 degrees Celsius), government data show. Corn, the biggest U.S. crop, is the main ingredient in livestock feed and ethanol, a gasoline additive.
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August 26th, 2011
Federal Reserve Chairman Ben S. Bernanke said the central bank still has tools to stimulate the economy without providing details or signaling when or whether policy makers might deploy them.
“In addition to refining our forward guidance, the Federal Reserve has a range of tools that could be used to provide additional monetary stimulus,” Bernanke said in a speech today to central bankers and economists gathered at an annual forum in Jackson Hole, Wyoming. He said a second day has been added to the next policy meeting in September to “allow a fuller discussion” of the economy and the Fed’s possible response.
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August 25th, 2011
Readers continue to express an abiding interest in the “poor man’s gold,” also known as silver. Prominent among the questions they raise are: Quo vadis silver?
Recently the noble white metal experienced a rapid run up to the halcyon heights of $50, only to retreat precipitously to the low 30’s. (Also read Silver Sees Parabolic Blow-Off, Gold Price Remains Steady.) This on again, off again action was due to a technical response to silver’s inherent volatility as both an industrial and a safe haven metal.
In order to quell such ebullient action, the Comex lowered the boom by a series of increasing margin requirements similar to what is occurring now in gold futures. I’ve written that such moves were in the cards with silver in late April and gold more recently. Too much hot, speculative money was entering this market in late April and early August in gold. Moreover, the big banks and hedge funds grew uncomfortable with their growing short interest positions. The actions of the Comex arrived just in time to save the day for the big fellows.
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August 25th, 2011
Federal Reserve Chairman Ben S. Bernanke tomorrow may disappoint stock investors betting on a commitment to step up stimulus. He has little choice, given rising consumer prices and a U.S. economy that is still growing.
Gasoline costs are 33 percent higher, consumer inflation is twice as fast and inflation expectations are above levels since Bernanke signaled more easing a year ago at the annual Fed symposium in Jackson Hole, Wyoming. While the U.S. expansion has slowed, the Chicago Fed’s index of 85 economic indicators improved in July for a third month on gains in production.
Policy makers, who said Aug. 9 they’ll use additional tools “as appropriate,” probably don’t expect a recession or rapid disinflation, making a signal of bond buying premature, said Roberto Perli, managing director at International Strategy & Investment Group in Washington. Instead, Bernanke will probably detail options for further stimulus and clarify how much the Fed’s reduction in its outlook this month stems from long-term obstacles to growth, said Keith Hembre, a former Fed researcher.
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August 25th, 2011
Gold futures fell for a third day, extending its biggest drop since February 2010, after CME Group Inc. (CME) raised futures margins for a second time this month, prompting some investors to sell the metal after a rally to a record high.
Gold bullion for immediate delivery dropped as much as 1.7 percent to $1,729.45 an ounce and traded at $1,742.38 at 2:43 p.m. in Singapore. The metal slumped 3.8 percent yesterday as better-than-estimated U.S. economic data boosted the dollar and cut demand for safe assets before central bankers from around the world gather on Aug. 26 for an annual meeting.
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August 25th, 2011
Apple Inc. (AAPL) shares declined after the resignation of Chief Executive Officer Steve Jobs, who transformed the company he started at age 21 from a personal- computer also-ran into the world’s largest technology company.
The shares fell as much as 7 percent in extended trading in the U.S. yesterday after the announcement. Jobs, who will become chairman, was on medical leave since Jan. 17, following a 2003 cancer diagnosis and a liver transplant in 2009. He is succeeded by Chief Operating Officer Tim Cook, 50, who has been running day-to-day operations.
“I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know,” Jobs, 56, said in a statement yesterday. “Unfortunately, that day has come.”
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August 23rd, 2011
Crude oil futures rose for a second day in New York amid speculation the Federal Reserve will bolster efforts to stimulate the economy.
Crude oil futures increased as much as 2.3 percent as equities climbed and the dollar weakened ahead of this week’s meeting of central bankers in Jackson Hole, Wyoming. Fed Chairman Ben S. Bernanke hinted at a second round of asset purchases at last year’s gathering. Earlier, crude fell 1.2 percent after former Fed Chairman Alan Greenspan said the euro “is breaking down.”
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August 23rd, 2011
U.S. stocks rallied, reversing earlier losses, as the government’s list of “problem” banks declined for the first time since 2006 and investors speculated the Federal Reserve will act to spur the economy. Treasuries fell before a sale of two-year notes.
The Standard & Poor’s 500 Index jumped 2.4 percent at 12:57 p.m. in New York, as weaker-than-anticipated U.S. economic data increased optimism for stimulus measures from the Fed. The MSCI All-Country World Index added 1.8 percent. S&P’s GSCI Index of 24 raw materials rose 1.3 percent, with oil resuming gains after erasing an earlier rally. Treasury two-year yields rose one basis point. The dollar fell against all of its 16 major peers.
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August 22nd, 2011
The rout that drove commodities to a nine-month low is proving irresistible to speculators anticipating that even slowing economic growth will cause shortages of raw materials.
Oil has risen 8 percent since plunging 25 percent in the two weeks to Aug. 9. Copper has rebounded 4.6 percent after sliding 16 percent. The Standard & Poor’s GSCI Enhanced Commodity Index rose 4.2 percent since bottoming almost two weeks ago. Goldman Sachs Group Inc. expects the gauge to gain 20 percent in 12 months, led by energy and industrial metals.
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August 22nd, 2011
Gold futures climbed to a record for the third straight session as mounting concern that the global economy is slowing amid debt crises spurred demand for bullion as a protection of wealth. Platinum rose to a three-year high.
German Chancellor Angela Merkel attempted to shut the door on common euro-area bonds as a means to solve the debt crisis, saying she won’t let financial markets dictate policy. The Federal Reserve holds its annual symposium in Jackson Hole, Wyoming, this week, amid speculation that it may signal a third round of asset purchases to boost the faltering recovery.
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