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February 22nd, 2012
Coffee futures arabica fell the most in a week as stockpiles climbed and producers sought to increase sales in Brazil, the world’s top grower. Cocoa advanced, while sugar dropped.
Coffee inventories monitored by ICE Futures U.S. have jumped 24 percent since the end of October, exchange data show. As of Feb. 17, Brazil’s permits for exports this month surged 26 percent from January, the nation’s Council of Coffee Exporters, known as Cecafe, said on its website. Markets in the country were closed on Feb. 20 and 21 for the Carnival festival.
“Brazilian sellers are back in the market,” Hernando de la Roche, the director of futures at INTL FCStone in Miami, said in a telephone interview. “Stocks are also rising.”
Coffee futures arabica on ICE for May delivery declined 1.9 percent to $2.022 a pound at 10:54 a.m., heading for the biggest drop since Feb. 14. Before today, the price slumped 9.2 percent in 2012.
Equities fell worldwide for a second day after separate reports signaled slowing growth in Europe and China. The dollar rose as much as 0.4 percent against a six-currency basket, reducing the appeal of commodities as alternative assets.
There’s “a general risk-off atmosphere with the dollar trading stronger,” Adam Klopfenstein, a market strategist at Archer Financial Services Inc. in Chicago, said in an e-mail.
Cocoa futures for May delivery climbed 0.7 percent to $2,440 a metric ton on ICE, after touching $2,450, the highest since Jan. 27. Before today, prices gained 15 percent this year.
Raw-sugar futures for May delivery slid 0.6 percent to 24.32 cents a pound in New York. The sweetener rose 4.7 percent in the previous four sessions.
In London futures trading, robusta coffee dropped, while cocoa advanced, and refined sugar was little changed on NYSE Liffe.
- Marvin G. Perez in New York at Bloomberg.
February 21st, 2012
Ethanol futures declined the most in three weeks as corn fell on signs that demand for the grain may ease.
The biofuel dropped 1.4 percent. Corn futures decreased for the first time in three days on speculation that near-record supplies of ethanol will reduce purchases of the biggest U.S. crop, the primary ingredient in U.S. production of the alternative fuel.
“Ethanol followed corn,” Dan Flynn, a trader at PFGBest in Chicago, said by telephone. “Ethanol prices are down due to the big break in the corn market.”
Ethanol futures denatured for March delivery declined 3.1 cents to $2.184 a gallon on the Chicago Board of Trade. Corn for May delivery fell 1.8 percent to $6.335 a bushel.
Stockpiles in the U.S. rose for a ninth straight week to an all-time high of 21.5 million barrels in the week ended Feb. 10, the Energy Department said. Daily output is down 3.6 percent from the record set in December.
In cash market trading, ethanol was unchanged in the Gulf Coast at $2.225 a gallon and in New York at $2.24, according to data compiled by Bloomberg. Ethanol in Chicago was unchanged at $2.175 a gallon and on the West Coast the additive was steady at $2.295.
The biofuel is blended with gasoline to augment supply and meet federal mandates. There are 209 ethanol distilleries in the U.S., with the capacity to produce 14.8 billion gallons annually, according to the Renewable Fuels Association, a Washington-based trade group.
- Ksenia Galouchko in New York at Bloomberg.
February 22nd, 2012
Sugar Futures – Raw sugar climbed for a fifth day in New York, the longest winning streak in a month, on speculation supplies will remain limited after a drought damaged the crop in Mexico. Coffee and cocoa slid in New York.
A drought in Mexico has reduced the crop to 5.1 million metric tons from a previous forecast of 5.3 million tons, an industry committee said on Feb. 10. Mexico now plans to approve imports of 250,000 tons of sugar, according to a proposal by the country’s economy ministry. With smaller-than-expected Mexican supplies, some sugar from Central America may be shipped to the U.S., limiting availability of sweetener to be delivered against the March contract in New York. Mexico traditionally supplies the U.S. and March raw sugar futures expire on Feb. 29.
“Despite a large recovery in inventories in 2011, prices have been recently supported by the slowdown in exports from Brazil in January and downgrades to Mexico’s sugarcane harvest following the ongoing drought,” Damien Courvalin, an analyst at Goldman Sachs Group Inc. in New York, wrote in a report e-mailed today.
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February 21st, 2012
Commodity Investing – Commodities jumped to a six-month high as euro-area finance ministers reached agreement on a second debt bailout for Greece and U.S. equities rallied, boosting prospects for raw-material demand.
The Standard & Poor’s GSCI Spot Index of 24 commodities rose 1.7 percent to close at 699.92 at 3:46 p.m. in New York, after reaching 700.79, the highest since July 27. Metals led the gains with silver up 3.7 percent and aluminum gaining 3.5 percent. The Dow Jones Industrial Average climbed above 13,000 for the first time since 2008.
Greece won a rescue after governments in Europe wrung concessions from private investors and tapped the European Central Bank to shield the region from a default. Finance ministers awarded 130 billion euros ($173 billion) in aid. Investors who were waiting for a Greece resolution are “planting themselves long commodities,” said James Cordier of OptionSellers.com.
“In the U.S., we have the Dow touching 13,000, and that is opening a whole lot of eyes to the fact that the U.S. economy is getting possibly much better,” Cordier, a portfolio manager, said in a telephone interview from Tampa, Florida. “You have investors really pouring money into the riskier assets and, of course, commodities get to be the big winner.”
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February 21st, 2012
Gold Futures – Comex April gold futures prices ended the U.S. day session sharply higher and near the daily high Tuesday. The precious metals markets were boosted by news that Greece and the European Union have finally secured a debt-restructuring deal. The key “outside markets” were also in a bullish daily posture for gold and silver, as the U.S. dollar index was lower and crude oil prices were sharply higher. The gold and silver market bulls regained upside near-term technical momentum with Tuesday’s solid price gains. April gold last traded up $31.20 at $1,757.00 an ounce. Spot gold was last quoted up $21.60 an ounce at $1,756.25. March Comex silver last traded up $1.134 at $34.35 an ounce.
The market place gained increased investor risk appetite Tuesday as Greece secured its next round of bailout money from the European Union. That boosted the Euro currency and pressured the U.S. dollar index. However, the European stock markets greeted the Greek news with trepidation as those markets treaded water or weakened slightly in the aftermath of the news.
The U.S. dollar index traded lower Tuesday, which was a positive for the precious metals. Meantime, Nymex crude oil futures prices were sharply higher and hit a fresh 9.5-month high Tuesday. The solidly higher crude oil prices were a major bullish factor for the precious metals. Crude oil and the U.S. dollar index will remain the two key “outside markets” that will generally have at least some daily influence on gold and silver price moves.
The gold market also sees bullish tailwinds from the weekend news that Iran has halted oil shipments to some European countries, to pre-empt an EU ban on Iranian oil imports. The tensions between Israel and the West, and Iran, are and likely will remain a bullish fundamental factor for the safe-haven gold market. Also, the weekend news that China eased its monetary policy is a bullish underlying factor for all raw commodity markets.
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February 17th, 2012
Cattle futures rose to an all-time high for the 10th time this year as rising demand for U.S. beef tightens supply and increases costs for restaurants including Chipotle Mexican Grill Inc. (CMG) Feeder cattle also reached a record and hogs gained.
The U.S. cattle herd as of Jan. 1 was the smallest for that date since 1952, and beef exports surged 21 percent in 2011, government data show. The U.S. Department of Agriculture forecast a 4.1 percent drop in beef output in 2012, boosting the cost of the meat for consumers by as much as 5 percent this year, more than any other food group except seafood.
Global food prices in January rose by the most in 11 months, according to the United Nations. Retail beef last month was the most expensive ever, and wholesale prices through midday are up 14 percent in the past year, boosting costs for retailers including Whole Foods Market Inc. (WFM), the Austin, Texas-based owner of specialty supermarkets, and Ruth’s Hospitality Group Inc. (RUTH), operator of upscale steakhouses.
“Everyone wants to be bullish on cattle just because of the lower supplies,” Chad Henderson , a market analyst at Prime Agricultural Consultants Inc. in Brookfield, Wisconsin, said in a telephone interview. “That’s where all the bullish enthusiasm comes from.”
Cattle futures for April delivery rose 1 percent to close at $1.309 a pound at 1 p.m. on the Chicago Mercantile Exchange, after reaching $1.31275, the highest for a most-active contract since the commodity started trading on the CME in 1964. The price, up 3.2 percent this week, has gained 7.8 percent in 2012.
Feeder-cattle futures for March settlement gained 1 percent to $1.58425 a pound in Chicago, after reaching a record $1.5905. Feedlots buy year-old animals that weigh 500 pounds (227 kilograms) to 800 pounds, called feeders. The cattle are fattened on corn for about four to five months until they weigh about 1,200 pounds, when they are sold to meatpackers.
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February 21st, 2012
Gasoline futures rose as oil traded near the highest price in nine months after euro-area finance ministers agreed on a second bailout for Greece.
Gasoline futures touched a nine-month high as crude gained as much as 2.1 percent. European finance ministers approved 130 billion euros ($173 billion) in aid for Greece by tapping into European Central Bank profits and coaxing investors into providing more debt relief to shield the region from a default.
“It’s very much the Greek situation and the stability it brings to the markets,” John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy, said by phone. “Now we can focus on the continuing improving data set that we’ve been getting in the U.S.”
Gasoline futures for March-delivery rose 3.84 cents, or 1.3 percent, to $3.054 a gallon at 11:57 a.m. on the New York Mercantile Exchange after touching $3.0593, the highest intraday price since Aug. 2. Prices gained 1.4 percent last week and are up 14 percent so far this year.
Greece’s debt may still balloon to 160 percent of gross domestic product in a worst-case scenario, analysis by the International Monetary Fund and European officials indicated.
Prices also gained as an Iranian military commander said Iran would consider taking pre-emptive action in response to threats, according to the state-run Fars news agency.
“We will no more wait to see enemy action against us,” Fars quoted Mohammad Hejazi, deputy head of the General Staff of the Iranian Armed Forces for Logistic and Industrial Research, as saying in an interview.
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February 21st, 2012
Crude oil futures increased to a nine-month high after Greece won a second bailout and Iran said it stopped selling crude to France and Britain.
Crude oil futures rose as much as 2.7 percent after the euro-area ministers approved 130 billion euros ($173 billion) in aid for Greece by tapping into European Central Bank profits and coaxing investors into providing debt relief, shielding the region from a default. Iran stopped selling oil to the countries yesterday, preempting a European Union ban, an official news website said.
“There’s a lot of relief about the Greek situation in the market and Iran is making a lot of noises,” said Kyle Cooper, director of research at IAF Advisors, a Houston-based energy consulting company. “The Greek agreement has increased optimism about the economy.”
Crude oil futures for March delivery gained $2.62, or 2.5 percent, to $105.86 a barrel at 2:04 p.m. on the New York Mercantile Exchange. The contract climbed to $106.07, the highest intraday level since May 5. Futures have risen 7.1 percent this year. The March contract expires at the close of floor trading today.
The more actively traded April contract increased $2.69, or 2.6 percent, to $106.29 a barrel on the Nymex. Floor trading was closed yesterday because of the U.S. Presidents Day holiday.
Brent oil for April settlement increased $1.63, or 1.4 percent, to $121.68 a barrel on the London-based ICE Futures Europe exchange.
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February 21st, 2012
Dow Jones Futures – U.S. stocks rose, sending the Standard & Poor’s 500 Index above its highest close since 2008, as investors weighed a second bailout for Greece and after earnings from Home Depot Inc. to Macy’s Inc. (M) beat estimates.
Six out of 10 industries in the S&P 500 advanced as commodity producers had the biggest gain. Alcoa Inc. (AA) and Chevron Corp. climbed at least 1.6 percent. Home Depot, the world’s largest home-improvement retailer, and Macy’s, the second- biggest U.S. department-store chain, added more than 0.4 percent. Wal-Mart Stores Inc. (WMT), the world’s biggest retailer, tumbled 4 percent as low prices hurt margins.
The S&P 500 added 0.2 percent to 1,364.27 at 1:59 p.m. New York time, rising for a third day. The Dow Jones Industrial Average advanced 27.13 points, or 0.2 percent, to 12,977, briefly rising above 13,000 for the first time since 2008.
“I don’t think the market is stretched yet,” said Michael Strauss, who helps oversee about $27 billion of assets as the chief investment strategist at Commonfund in Wilton, Connecticut. “We’re positive on the U.S. economy. The earnings side has been fine. That’s providing the biggest seeds to the strength in equities,” he said. “Was there any surprise in Europe kicking the can down the road? It’s a token positive, but it doesn’t solve the long-term issue.”
The S&P 500 (SPX) added 8.5 percent this year as reported 12- month earnings for its companies increased 9.4 percent to $96.58 a share, the highest level ever. The index is trading for 14.1 times reported earnings, compared with the average since 1954 of 16.4 times, according to data compiled by Bloomberg.
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February 21st, 2012
S&P 500 – U.S. stocks rose, sending the Standard & Poor’s 500 Index above its highest close since 2008, as investors weighed a second bailout for Greece and after earnings from Home Depot Inc. to Macy’s Inc. (M) beat estimates.
Six out of 10 industries in the S&P 500 advanced as commodity producers had the biggest gain. Alcoa Inc. (AA) and Chevron Corp. climbed at least 1.6 percent. Home Depot, the world’s largest home-improvement retailer, and Macy’s, the second- biggest U.S. department-store chain, added more than 0.4 percent. Wal-Mart Stores Inc. (WMT), the world’s biggest retailer, tumbled 4 percent as low prices hurt margins.
The S&P 500 added 0.2 percent to 1,364.27 at 1:59 p.m. New York time, rising for a third day. The Dow Jones Industrial Average advanced 27.13 points, or 0.2 percent, to 12,977, briefly rising above 13,000 for the first time since 2008.
“I don’t think the market is stretched yet,” said Michael Strauss, who helps oversee about $27 billion of assets as the chief investment strategist at Commonfund in Wilton, Connecticut. “We’re positive on the U.S. economy. The earnings side has been fine. That’s providing the biggest seeds to the strength in equities,” he said. “Was there any surprise in Europe kicking the can down the road? It’s a token positive, but it doesn’t solve the long-term issue.”
The S&P 500 (SPX) added 8.5 percent this year as reported 12- month earnings for its companies increased 9.4 percent to $96.58 a share, the highest level ever. The index is trading for 14.1 times reported earnings, compared with the average since 1954 of 16.4 times, according to data compiled by Bloomberg.
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