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May 16th, 2012
Commodity Investing – Commodities fell as talks to form a Greek government failed, boosting speculation that the country may quit the euro, and data from the U.S. and Japan added to concern an economic slowdown may reduce demand.
The Standard & Poor’s GSCI Spot Index of commodities lost as much as 1.5 percent to 626.57, the lowest level since Dec. 20. The gauge, set for to drop for the 10th day in 11 sessions, was at 627.16 at 8:48 a.m. in London. Oil fell for a fourth day in New York, trading at a six-month low, and copper dropped to the lowest price since January in London. Gold declined.
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April 19th, 2012
Corn rose the most in more than two weeks on speculation demand for U.S. supplies may increase after futures slumped to a four-month low yesterday.
Corn futures for delivery in July advanced as much as 2.8 percent to $6.1075 a bushel on the Chicago Board of Trade, the biggest intraday gain for the most-active contract since March 30, and traded at $6.0625 by 2:34 p.m. Paris time. Futures fell to $5.9175 yesterday, the lowest level since Dec. 19.
The Korea Corn Processing Industry Association issued a tender to buy as much as 55,000 metric tons of corn for food. Private buyers in China may seek permits to buy more corn after the price drop, according to Shanghai JC Intelligence Co.
“Corn has fallen a lot recently, and the $6 must look pretty attractive to physical buyers as well as some investors,” Park Jong Beom, a senior trader at Tong Yang Securities Inc., said today by phone from Seoul. “The import tenders by Korea today are the evidence and today’s price gain can be explained in that sense.”
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April 18th, 2012
Gasoline futures pared declines after the Energy Department reported inventories declined more than expected last week.
Gasoline futures rebounded from their lows as inventories of gasoline fell 3.67 million barrels to 214 million in the seven days ended April 13. The median estimate of 10 analysts surveyed by Bloomberg News called for a 1.1 million-barrel decrease.
Gasoline futures for May-delivery fell 5.75 cents, or 1.8 percent, to $3.1765 a gallon at 10:36 a.m. on the New York Mercantile Exchange. Prices traded at $3.1622 before the report’s release at 10:30 a.m. in Washington.
The government said heating oil and diesel inventories dropped 2.91 million barrels to 129 million. Analysts forecast a 125,000-barrel decrease, according to the survey.
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April 18th, 2012
Cotton futures jumped to a two-week high on signs of slumping production in China, the world’s biggest grower and consumer. Orange juice fell.
China’s cotton output is likely to drop below 6 million metric tons in the year starting Aug. 1 amid low prices and high input costs, Zhu Gang, a researcher at the China Academy of Social Science, said in an online webcast today. The country will produce 8.04 million tons in the current season, the U.S. Department of Agriculture said April 10. The fiber has plunged 59 percent from a record $2.197 a pound reached on March 7, 2011.
The smaller Chinese crop “is rather supportive,” to prices, Sterling Smith, a market analyst with Country Hedging, a brokerage in St. Paul, Minnesota, said in an e-mail.
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April 17th, 2012
Silver Futures – Last year CME Group (NASDAQ:CME) drastically raised the margin requirements for silver contracts, but this year the amounts needed to initiate and maintain silver contracts are being whittled back down. On April 16, the initial margin for COMEX 5,000 silver futures for speculators will be lowered from $21,600 to $18,900 and the maintenance margin will be reduced from $16,000 to $14,000. Initial and maintenance margins for hedgers and members will be reduced from $16,000 to $14,000.
These changes follow the reductions implemented on February 13, when initial margins for speculators were cut from $24,975 to $21,600, and maintenance margins were lowered from $18,500 to $16,000. The rate for hedgers and members was reduced from $18,500 to $16,000.
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April 18th, 2012
Natural Gas Futures – A below-average Atlantic storm season in 2012 probably will provide little support for energy prices as natural gas trades at 10-year lows.
Only four hurricanes are expected this year, according to researchers at Colorado State University who pioneered long- range Atlantic forecasting. In total, the storm season that runs from June 1 to Nov. 30 will produce 10 named systems, compared with 19 last year, they said in a report April 4.
Natural gas has fallen 35 percent this year, the worst performer in the 24-commodity Standard & Poor’s GSCI index, as the U.S. recorded its fourth-warmest winter ever and as output rose with improved production techniques. Prices may slide further as forecasters predict a cooler-than-normal summer along with the diminished hurricane threat to the oil- and natural- gas-rich Gulf of Mexico.
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April 18th, 2012
Brent crude futures dropped for a second day this week amid concern that Europe’s debt crisis may curb oil consumption, while U.S. benchmark West Texas Intermediate was little changed.
North Sea Brent declined as much as 1 percent while European equities fell and the euro declined against the dollar. A cease-fire in Syria and plans for renewed negotiations next month between Iran and the five permanent members of the United Nations Security Council plus Germany reduced the likelihood of more supply disruptions in the Middle East. U.S. crude stockpiles climbed for a fourth week, data from the industry- funded American Petroleum Institute showed.
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April 17th, 2012
Cattle Futures – The consumer backlash against a meat product made from leftovers and treated with chemicals is making a bad situation worse for Cargill Inc. and Tyson Foods Inc. (TSN) ahead of the beef industry’s peak sales period.
Kroger Co. (KR), the largest U.S. grocery-store chain, last month stopped buying ground beef containing what processors call lean, finely textured beef, while Wal-Mart Stores Inc. (WMT) said it would offer customers meat without the additive.
Lower demand for the product — dubbed “pink slime” by critics — has prompted Cargill, the biggest U.S. beef processor, to scale back output of the lean meat at four plants. Tyson says beef supply will decline. The companies, already dealing with higher cattle costs, may start labeling ground beef with the product as the industry tries to back shoppers’ confidence ahead of the U.S. summer grilling season.
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April 17th, 2012
Commodity Brokers – President Barack Obama urged Congress to bolster federal supervision of oil markets, including bigger penalties for market manipulation and greater power for regulators to increase the amount of money traders must put up to back their energy bets.
Obama asked Congress to fund a six-fold increase for surveillance and enforcement staff at the Commodity Futures Trading Commission to put “more cops on the beat” overseeing oil markets.
He also is seeking to give the CFTC new authority to raise margin requirements for traders’ oil positions and stiffen civil and criminal penalties for businesses that are guilty of market manipulation to $10 million from $1 million. The plan would cost $52 million.
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April 17th, 2012
Gasoline fell for a third day as Brent oil weakened versus the U.S. benchmark crude and on speculation that gasoline has peaked before the April-to- September U.S. driving season.
Gasoline futures declined as the London benchmark’s premium to West Texas Intermediate oil sank to a two-month low on reduced concern that tension over Iran’s nuclear program will disrupt supplies. Gasoline has lost 5.9 percent since reaching a 2012 high of $3.4166 on March 26.
“You’re seeing unwinding of the Brent-WTI spread, unwinding of crack spreads,” said Andrew Lebow, a senior vice president at Jefferies Bache LLC in New York. “Because gasoline was so long, it exacerbates this move and some traders think gasoline has peaked.”
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