commodity investing 101

commodity investing 101

June 6th, 2016

Speculators lifted bullish positioning on agricultural commodities to the highest in nearly two years, as algorithmic funds flooded in, into sugar at least, – while coffee and wheat caught out investors making bearish bets.

Managed money, a proxy for speculators, raised by more than 64,000 contracts its net long position in futures and options in the main 13 US-traded agricultural commodities in the week to last Tuesday, according to data from the Commodity Futures Trading Commission (CFTC) regulator.

The increase took the net long – the extent to which long positions, which benefit when prices rise, outnumber short bets, which profit when values fall – to 681,515 contracts, the highest since June 2014.

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live cattle futures

live cattle futures

July 17th, 2015

US cattle slaughter is falling, thanks to ample pasture and low beef prices, further reducing expectations for what is already set to be the slowest year in beef production since 1993.

In a monthly livestock outlook report, the USDA reduced beef production estimates over the second quarter of 2015 due to lighter than expected steer and heifer slaughter during May and June.

However, the USDA also warned with July 4 barbecues finished “consumers appear to be backing away from beef at its recent record prices”.

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orange juice futures

orange juice futures

July 29th, 2014

Orange-juice futures slumped to a five-month low on Tuesday as weak demand for the beverage trumped fears of a hurricane damaging Florida’s next crop.

Frozen, concentrated orange juice for delivery in September fell 2.2% to $1.4475 a pound, the lowest closing price since Feb. 19 on the ICE Futures U.S. exchange.

A disturbance in the Atlantic Ocean shows a 70% chance of tropical cyclone formation in the next 48 hours, according to the National Weather Service. Usually, that kind of news boosts the orange-juice market, as previous hurricanes that have hit top orange-producing state Florida have damaged groves and ripped fruit from the trees.

“There still do not appear to be any major storms in sight in the Atlantic to hurt production, but traders will keep an eye on the developments of the system in the Atlantic to see if it grows and what its track might be,” said Jack Scoville, vice president at Price Futures Group in Chicago.

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s&p 500 futures

s&p 500 futures

July 31st, 2014

U.S. stock-index futures declined, signaling the Standard & Poor’s Index will trim its monthly gain, amid earnings at companies from Whole Foods Market Inc. (WFM) to Kraft Foods Group Inc. (KRFT), while Argentina missed a debt payment.

Whole Foods Market Inc. dropped 4 percent in in early New York trading after lowering its 2014 revenue forecast. Kraft Foods Group Inc. and Time Warner Cable Inc. declined in Germany after reporting that quarterly results missed analysts’ estimates. Allstate Corp. (ALL) added 2.6 percent late yesterday after posting earnings that beat projections.

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Feeder Cattle Futures

Feeder Cattle Futures

July 30th, 2014

Beef costs are poised to rise further as feeder-cattle futures climbed to cap the longest rally in 37 years amid mounting U.S. supply concerns.

Cattle inventories as of July 1 fell to the lowest for the date since records began in 1973, the U.S. Department of Agriculture data said last week. Gains in consumer spending helped the economy rebound more than forecast in the second quarter, according to government figures today. Retail ground beef and boneless sirloin-steak costs rose to all-time highs in June, Bureau of Labor Statistics data show.

“We’ve never had cattle supplies this tight before with this kind of beef demand,” Troy Vetterkind, the owner of Vetterkind Cattle Brokerage in Thorp, Wisconsin, said in a telephone interview. “At some point in time, we’re going to cool things off, but it doesn’t appear to be this week. It’s a historic thing that we’ll probably never see ever again.”

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cocoa futures

cocoa futures

July 30th, 2014

Cocoa futures rose to the highest price in almost three years in London on speculation chocolate manufacturers need to stock up with West Africa supplies limited until new harvests start in October.

Inventories are probably only enough to meet demand for six months and the industry usually needs seven to eight months of cover, according to Eric Sivry, head of agriculture options brokerage at Marex Spectron Group in London. Inventories in warehouses monitored by ICE Futures U.S. dropped 4 percent this month, the third consecutive decline.

“The industry is not enough covered,” Sivry said. “This is prompting some market participants to leapfrog the industry and push prices higher.”

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gold futures

gold futures

July 29th, 2014

Gold futures declined as U.S. and European equities advanced, curbing demand for the precious metal as an alternative asset.

Stocks climbed on optimism over corporate earnings. U.S. consumer confidence soared in July to the highest in almost seven years on the heels of a strengthening labor market, a private gauge showed today. Earlier, gold reached a one-week high on demand for a haven amid escalating conflicts in the Gaza Strip and Ukraine.

The metal headed for a monthly decline, partly on the outlook for an increase U.S. interest rates. The dollar rose to a seven-week high against a basket of 10 major currencies before Federal Reserve officials start a two-day meeting today. Policy makers have tapered monetary stimulus on signs of recovery in the economy.

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Crude Oil Futures Trade Near Week-Low

On July 28, 2014, in Crude Oil Futures News Report, by Infinity Trading
brent oil futures

brent oil futures

July 28th, 2014

West Texas Intermediate crude dropped for the fourth time in five days as economic data may signal slowing growth in the U.S., the world’s biggest oil consumer. Brent declined in London.

Crude oil futures fell as much as 0.8 percent to $101.27 a barrel in New York, extending a drop of 1 percent last week. A preliminary index of U.S. service industries is forecast to drop to 59.8 for July, a Bloomberg News survey showed before a report from Markit Economics today. The Federal Reserve is scheduled to review monetary policy at a two-day meeting starting tomorrow.

“Demand expectations are likely to remain weak and exert downward pressure in what is a big week for U.S. data,” said Michael Hewson, market analyst at London-based CMC Markets Plc. “Markets are expecting much more positive news out of the U.S. than is likely and this could well see U.S. prices slip back towards $100.”

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cotton futures

cotton futures

July 24th, 2014

Cotton production in India, the world’s second-largest grower, is set to climb to an all-time high as delays in monsoon rains prompt farmers to switch from soybeans and peanuts, the nation’s biggest cotton trader said. Futures in New York fell.

The harvest is poised to expand as much as 2.6 percent to 40 million bales of 170 kilograms (375 pounds) each in the year starting Oct. 1, according to B.K. Mishra, chairman of the Cotton Corp. of India. While the area is increasing from 11.7 million hectares (28.9 million acres), the harvest will be delayed by the worst start to the monsoon since 2009, he said. Cotton Corp. buys the crop at government-set minimum prices.

Cotton futures have dropped for 11 straight weeks in New York, capping the longest slump in 55 years, on concern that global inventories are climbing as demand slows from China, the largest user. A higher crop in India, the top shipper after the U.S., may curb any rally in prices that fell 20 percent in 2014.

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soybean futures

soybean futures

July 23rd, 2014

Soybean futures rose from a 45-month low on concern that some areas will face adverse weather in the U.S., the world’s largest grower. Corn extended a slump to the cheapest in four years, and wheat climbed.

Rain will be limited in the southwest Midwest in the next two weeks, raising the odds of stress for soybeans, Donald Keeney, a meteorologist at MDA Information Systems Inc. in Gaithersburg, Maryland, said a telephone interview. The U.S. Department of Agriculture said this week that 60 percent of the crop bloomed as of July 20, topping the prior five-year average.

“The most important phase is right in front of us during the pollination period,” Louise Gartner, the owner of Spectrum Commodities in New Richmond, Ohio, said in a telephone interview. “While the weather forecast is good, the market is just playing it cautious.”

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