January 31st, 2012

Orange Juice Futures: With almost an entire month in the books, 2012 is shaping up to be a strong year for commodities, as a number of these investments have produced handsome gains. Futures for gold, cocoa, and silver have garnered a fair amount of attention, delivering eye popping gains in a relatively short period of time. But for those looking for a truly hot commodity, no product has been able to outdo orange juice. While these futures are certainly more obscure than something like gold or oil, their gains for the year are impossible to ignore [see also 50 Ways To Invest In Agriculture].
The Juicy Details

Thus far, orange juice futures have jumped by nearly 26% for the year. These gains have gone largely unnoticed due to the relatively low popularity as well as limited access that this commodity offers to investors. Still, the impressive rally is not without its reason, as there is a lot going on behind the scenes of this favorite fruit. The Food and Drug Administration has very strict policies on imports, and orange juice is no exception. Each import of orange juice needs to be tested for certain chemicals, and a recent shipment from Brazil tested positive for fungicide. Fungicide are chemical compounds used to kill fungi, but they are toxic to humans when consumed in certain quantities. The FDA “said 11 of 80 shipments sampled from Brazil and Canada contained carbendazim [a common fungicide] at concentrations of 10 parts per billion or higher” writes Marving G. Perez.

Continue reading »

January 27th, 2012

Commodity Investing – The Standard & Poor’s GSCI Spot Index of 24 raw materials rose 0.3 percent to close at 666.64 at 5 p.m. in New York as gasoline and natural gas climbed.

The UBS Bloomberg CMCI index of 26 prices was little changed at 1,606.01.
OIL PRODUCTS

Gasoline surged to the highest level since August as refinery outages, scheduled maintenance and plant closures in North America and Europe tighten supplies of the motor fuel.

Futures rose 2.8 percent as ConocoPhillips planned to shut the fluid catalytic cracker at its Bayway refinery in New Jersey. Two unprofitable refineries in Pennsylvania have shut down, one owned by Sunoco Inc. and one owned by ConocoPhillips. Hovensa LLC plans to shut its 350,000-barrel-a-day St. Croix plant in the U.S. Virgin Islands next month.

On the New York Mercantile Exchange, gasoline for February delivery rose 8.02 cents to $2.9268 a gallon, the highest settlement since Aug. 31. It gained 5.1 percent for the week. The crack spread, or the premium of gasoline over crude oil, widened $3.19, or 16 percent, to $23.22 a barrel, the highest level since October.

Continue reading »

January 31st, 2012

S&P 500 – U.S. stock futures rose, indicating the Standard & Poor’s 500 Index will cap the best January since 1997, as most countries in Europe agreed to tighter budget controls and Greece made progress on debt talks.

Bank of America Corp. and Morgan Stanley increased at least 1.1 percent, following gains in European lenders. Eli Lilly & Co. rallied 2.1 percent as the drugmaker’s profit beat projections. Archer Daniels Midland Co., the world’s largest grain processor, slumped 3.2 percent amid disappointing results.

S&P 500 futures expiring in March added 0.5 percent to 1,315.40 at 9:13 a.m. New York time. Dow Jones Industrial Average futures rose 50 points, or 0.4 percent, to 12,652.

“Most market participants will raise their glasses to usher out what has proved to be a decent January for performance, data and sentiment,” said Jim Reid, a global strategist at Deutsche Bank AG in London.

Global stocks rose today as European Union leaders, meeting in Brussels yesterday, completed a fiscal-discipline treaty that speeds sanctions on high-deficit states. Greek Prime Minister Lucas Papademos said he’s “strongly committed” to reaching a debt-swap pact with bondholders. Residential real estate prices fell more than forecast in November, showing distressed properties are hampering improvement in the U.S. housing market.

Stocks fell yesterday, sending the S&P 500 lower for a third day, as European leaders sparred with Greece over a second rescue program. The decline followed a four-week rally, which was driven by the Federal Reserve’s plans to keep interest rates low through at least late 2014 and better-than-estimated earnings. Of the 184 S&P 500 companies that reported results since Jan. 9, 123 posted per-share earnings that beat projections, Bloomberg data show.

Continue reading »

January 31st, 2012

Dow Jones – U.S. stock futures rose, indicating the Standard & Poor’s 500 Index will cap the best January since 1997, as most countries in Europe agreed to tighter budget controls and Greece made progress on debt talks.

Bank of America Corp. and Morgan Stanley increased at least 1.1 percent, following gains in European lenders. Eli Lilly & Co. rallied 2.1 percent as the drugmaker’s profit beat projections. Archer Daniels Midland Co., the world’s largest grain processor, slumped 3.2 percent amid disappointing results.

S&P 500 futures expiring in March added 0.5 percent to 1,315.40 at 9:13 a.m. New York time. Dow Jones Industrial Average futures rose 50 points, or 0.4 percent, to 12,652.

“Most market participants will raise their glasses to usher out what has proved to be a decent January for performance, data and sentiment,” said Jim Reid, a global strategist at Deutsche Bank AG in London.

Global stocks rose today as European Union leaders, meeting in Brussels yesterday, completed a fiscal-discipline treaty that speeds sanctions on high-deficit states. Greek Prime Minister Lucas Papademos said he’s “strongly committed” to reaching a debt-swap pact with bondholders. Residential real estate prices fell more than forecast in November, showing distressed properties are hampering improvement in the U.S. housing market.

Continue reading »

January 31st, 2012

Silver Futures – Record industrial demand for silver and resurging investor interest is diminishing a supply surplus, driving the metal used in everything from solar panels to batteries into its best start to a year in almost three decades.

Manufacturers will use 15,415 metric tons, 2.5 percent more than in 2011 and reducing the glut by 41 percent to 3,297 tons, Barclays Capital estimates. Investors may buy 2,000 tons through exchange-traded products, after selling 1,300 tons last year, Morgan Stanley predicts. Prices will average $37.50 an ounce in the fourth quarter, 11 percent more than now, the median estimate in a Bloomberg survey of 13 analysts shows.

Silver futures rallied 25 percent since closing at an 11-month low in December, entering a bull market on mounting confidence that another global recession will be avoided even as the World Bank and International Monetary Fund cut their growth forecasts. Prices had plunged 44 percent in eight months, making it the most volatile of any metal tracked by Bloomberg, as expansion slowed from Europe to China, crimping demand for commodities.

Continue reading »

January 30th, 2012

Crude oil futures dropped for a second day in New York on speculation that European Union leaders meeting today may fail to resolve the region’s debt crisis, while OPEC’s secretary-general said the market is well-supplied.

Crude oil futures slipped as much as 0.9 percent as stocks dropped and the dollar strengthened. EU chiefs will gather in Brussels today to complete a German-led deficit-control treaty and endorse a 500 billion-euro ($660 billion) rescue fund. Hedge funds and other large speculators increased wagers on rising crude prices, the Commodity Futures Trading Commission’s Commitment of Traders report on Jan. 27 showed.

“The market is taking off risk before the meeting,” said Thina Saltvedt, an analyst at Nordea Bank AB in Oslo, who predicts Brent crude will average $107 a barrel this quarter. “Ahead of this meeting, sentiment is less optimistic.”

Crude oil futures for March delivery fell as much as 85 cents to $98.71 a barrel in electronic trading on the New York Mercantile Exchange. It was at $99.10 at 1:10 p.m. London time. The contract lost 14 cents to $99.56 on Jan. 27. Prices are 0.3 percent higher this month.

Continue reading »

January 27, 2012

Gasoline futures jumped to the highest level since August and amid signs Greece is near an agreement with its creditors.

Futures rose 1.1 percent this week after gasoline surged on speculation that refinery outages and plant closures will cut supplies. Olli Rehn, the European Union’s commissioner for economic and monetary affairs, said an agreement is “very close” on private-sector involvement in a Greek debt swap.

“The closing of a number of refineries in the Northeast is making people very supply-conscious during a period with weak gasoline demand,” said Peter Beutel, president of trading advisory company Cameronhanover.com in New Canaan, Connecticut. “Expectations that they will put together a Greek deal soon are lifting the entire complex.”

Crude oil futures for March delivery increased $1.10 this week to settle at $99.56 a barrel on the New York Mercantile Exchange. Prices have climbed 16 percent in the past year. Futures slipped 14 cents today.

Brent oil for March settlement gained $1.60, or 1.5 percent, this week to $111.46 a barrel on the London-based ICE Futures Europe exchange. The futures ended today’s session up 67 cents, or 0.6 percent.

Gasoline futures for February delivery advanced 8.02 cents, or 2.8 percent, today to $2.9268 a gallon, the highest settlement since Aug. 31. Prices gained 5.1 percent this week.

Continue reading »

January 26th, 2012

Heating oil futures and gasoline gained as the Federal Reserve indicated it will maintain near-zero interest rates to stimulate growth and refiners reduced output to cut supplies.

Heating oil futures rose after Fed officials said yesterday that the benchmark interest rate would stay low until at least 2014. Two refineries in Pennsylvania and one in the U.S. Virgin Islands have been closed because they weren’t profitable.

“The underlying reason products are up continues to be the worries of supplies going forward,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “And there’s the idea that oil prices are going to be supported by easy money.”

Heating oil futures for February-delivery rose 3.43 cents, or 1.1 percent, to settle at $3.0535 a gallon on the New York Mercantile Exchange, the highest settlement since Jan. 12. Gasoline for February delivery rose 1.28 cents, or 0.5 percent, to $2.8466.

Continue reading »

January 27th, 2012

Corn futures advanced, heading for the biggest gain in five weeks, as concerns that a renewed heat wave in Argentina may damage crops boosted demand for U.S. grain. Soybeans gained.

The weather pattern known as La Nina has brought hot, dry conditions to Argentina, Brazil and Mexico, scorching recently planted crops. Temperatures will exceed 40 degrees Celsius (104 degrees Fahrenheit) in some of Argentina’s corn-growing areas through Feb. 2, the Buenos Aires Cereals Exchange said yesterday. Rain will be scarce in most areas, said climatologist Eduardo Sierra.

“The market is certainly worried,” said Nick Higgins, an analyst at Rabobank International in London. “In the $6.40-$6.50 a bushel range the market is accounting for substantial reductions in the 11/12 corn crop for South America.”

Corn futures for March-delivery advanced 0.7 percent to $6.39 a bushel on the Chicago Board of Trade by 11:43 a.m. in London. The most-traded contract is set for a 4.5 percent gain this week, the biggest weekly advance since the week to Dec. 23. Futures rose 2 percent last week.

Continue reading »

January 25th, 2012

Gold futures surged to a six-week high after the Federal Reserve said it expects “exceptionally low” interest rates through at least late 2014. Silver, platinum and palladium also advanced.

Fed Reserve Chairman Ben S. Bernanke said at a press conference after the central bank’s statement that the option of further large- scale bond purchases is still “on the table.” Gold has jumped 28 percent in the past 12 months, partly as record-low rates boosted the appeal of the metal as a hedge against inflation.

“We saw an immediate reaction in gold” after the Fed’s announcement, Michael A. Gayed, the chief investment strategist who helps oversee $150 million at New York-based Pension Partners LLC, said in a telephone interview. “People are betting that at some point the economy will face inflationary pressures because of the low interest rate.”

Gold futures for April delivery climbed 2.1 percent to close at $1,703 an ounce at 1:44 p.m. on the Comex in New York, the biggest gain since Jan. 3. In electronic trading after the settlement, the metal reached $1,716.10, the highest for a most- active contract since Dec. 12.

Continue reading »