7 March 2008
NEW YORK (Reuters) - Oil ended slightly lower on Friday, falling from record highs hit earlier when buying by speculators hedging against the weaker dollar and inflation sent prices above $106 a barrel.
U.S. oil settled down 32 cents at $105.15 a barrel, trimming gains after hitting an all-time high of $106.54 earlier in the trading session. London Brent crude settled 23 cents lower at $102.38 a barrel.
"We rose earlier on the dollar play and expectations that the Fed may have to lower rates," said Rob Kurzatkowski, a futures analyst with optionsXpress.
"This has lately been an inflation and currency play."
A government report showing a second straight month of contractions in U.S. payrolls spurred talk the Federal Reserve might cut interest rates again, weakening the dollar early in the day. The greenback later rebounded, helping to ease oil off earlier highs.
The steady decline in the U.S. dollar has helped push commodity prices higher, while a sharp drop in U.S. crude stocks and OPEC's decision on Wednesday not to increase output also boosted oil prices.
While U.S. crude inventories had been building in recent weeks and U.S. gasoline stocks were at 14-year highs, a U.S. government report showed crude stocks fell by 3.1 million barrels last week, against forecasts for an increase.
The Organization of Petroleum Exporting Countries, which pumps more than a third of the world's oil, has long argued the current high prices do not reflect market fundamentals and are being driven by speculation.
Influential Saudi Oil Minister Ali al-Naimi reiterated that view in remarks published on Friday, saying speculation was behind triple-digit oil and made it impossible for any organization to control price movements.
"Today there is no link between oil (market) fundamentals and prices," he told Moroccan newspaper Asharq al-Awast.
"The duty of oil exporters is to make sure that fundamentals are healthy," said Naimi. "If these fundamentals were stable and fulfill market needs, then there is no need to raise or decrease production."
OPEC will next meet in September, although ministers could confer informally at a conference between consumers and producers in Rome April 20-22.
"Leaving things so open-ended gives me and others a clear impression that the cartel is prepared to let prices run away for the time being. Perhaps they feel the weakness in the dollar would offset any rise in price," said Rob Laughlin at MF Global.
Tensions between OPEC member Venezuela, a top oil exporter to the United States, and neighbor Colombia, also have underpinned oil prices.
Friday, March 7, 2008
Wednesday, February 20, 2008
Commodity Quote and Chart Websites
http://futures.tradingcharts.com/
http://futuresource.quote.com/quotes/index.jsp
http://www.cbot.com
http://www.prophet.net/quotes/futureswatch.jsp
http://www.barchart.com
http://futuresource.quote.com/quotes/index.jsp
http://www.cbot.com
http://www.prophet.net/quotes/futureswatch.jsp
http://www.barchart.com
Players Involved in Commodities Trading
There are three different types of players in the commodity markets:
Commercials: The entities involved in the production, processing or merchandising of a commodity. For example, both the corn farmer and Kellogg’s from the example above are commercials. Commercials account for most of the trading in commodity markets.
Large Speculators: A group of investors that pool their money together to reduce risk and increase gain. Like mutual funds in the stock market, large speculators have money managers that make investment decisions for the investors as a whole.
Small Speculators: Individual commodity traders who trade on their own accounts or through a commodity broker. Both small and large speculators are known for their ability to shake up the commodities market.
Commercials: The entities involved in the production, processing or merchandising of a commodity. For example, both the corn farmer and Kellogg’s from the example above are commercials. Commercials account for most of the trading in commodity markets.
Large Speculators: A group of investors that pool their money together to reduce risk and increase gain. Like mutual funds in the stock market, large speculators have money managers that make investment decisions for the investors as a whole.
Small Speculators: Individual commodity traders who trade on their own accounts or through a commodity broker. Both small and large speculators are known for their ability to shake up the commodities market.
How do Futures Work?
Futures are standardized contracts among buyers and sellers of commodities that specify the amount of a commodity, grade / quality and delivery location. Commodity trading with futures contracts takes place at a futures exchange and, like the stock market, is entirely anonymous.
For example: the buyer might be an end-user like Kellogg’s. They need to buy corn to make cereal. The seller would most likely be a farmer, who needs to sell his corn crop. They create a contract of December Corn futures at the current market price. A contract of corn at the CBOT consists of 5,000 bushels. Therefore, the farmer would have to deliver 5,000 bushels of corn to Kellogg’s in December at a designated location.
For example: the buyer might be an end-user like Kellogg’s. They need to buy corn to make cereal. The seller would most likely be a farmer, who needs to sell his corn crop. They create a contract of December Corn futures at the current market price. A contract of corn at the CBOT consists of 5,000 bushels. Therefore, the farmer would have to deliver 5,000 bushels of corn to Kellogg’s in December at a designated location.
What are Commodities?
The terms “commodities” and “futures” are often used to describe commodity trading or futures trading. You can think of them as generic terms to describe the markets. It is similar to the way “stocks” and “equities” are used when investors talk about the stock market. To be more specific, this is what they really mean: Commodities are the actual physical goods like corn, soybeans, gold, crude oil, etc. Futures are contracts of commodities that are traded at a futures exchange like the Chicago Board of Trade (CBOT). Futures contracts have expanded beyond just commodities; now there are futures contracts on financial markets like the S&P 500, t-notes, currencies and many others.
Futures Contract: December 2007 Corn, which is a contract of 5,000 bushels of corn that trades at the Chicago Board of Trade with a contract expiring in December 2007.
Futures Contract: December 2007 Corn, which is a contract of 5,000 bushels of corn that trades at the Chicago Board of Trade with a contract expiring in December 2007.
Monday, February 4, 2008
Wheat Market Recap Report for 2/4/2008
2/4/2008
May Wheat finished up 29 at 989 1/2, 1 off the high and 29 up from the low. July Wheat closed up 30 at 904 1/2. This was 29 1/2 up from the low and equal to the high.
The March Minneapolis wheat contract again pushed to limit up near the close pulling nearby contracts up in both Chicago and KC. Those contracts also closed limit up. Fund buying occurred during the session on fair volume. Export demand and the scramble for tight stocks in Minneapolis were also contributing factors according to floor traders as was the sharp mid-session rally in crude oil. March, May, July and December contracts in KC all made new contract high closes with March KC closing at 1020 1/4. March wheat in Chicago closed at 973. This week's export inspections for wheat were 16.52 million bushels, down from last week's 24.45 million and below the low end of trade expectations. An average of 16.7 million is needed each week to reach the USDA projection. Cumulative shipments have reached 75.4% of the USDA export forecast for the season as compared with the 5-year average for this time of the year at 66.2% exported. Canada's federal agriculture department forecast a 25% rise in next year's total wheat production today. Weather continues to be favorable to crop development in the US with the exception of a continued moisture deficit in Texas and adjacent wheat growing areas.
May Oats closed up 11 3/4 at 344 3/4. This was 3 3/4 up from the low and equal to the high.
May Wheat finished up 29 at 989 1/2, 1 off the high and 29 up from the low. July Wheat closed up 30 at 904 1/2. This was 29 1/2 up from the low and equal to the high.
The March Minneapolis wheat contract again pushed to limit up near the close pulling nearby contracts up in both Chicago and KC. Those contracts also closed limit up. Fund buying occurred during the session on fair volume. Export demand and the scramble for tight stocks in Minneapolis were also contributing factors according to floor traders as was the sharp mid-session rally in crude oil. March, May, July and December contracts in KC all made new contract high closes with March KC closing at 1020 1/4. March wheat in Chicago closed at 973. This week's export inspections for wheat were 16.52 million bushels, down from last week's 24.45 million and below the low end of trade expectations. An average of 16.7 million is needed each week to reach the USDA projection. Cumulative shipments have reached 75.4% of the USDA export forecast for the season as compared with the 5-year average for this time of the year at 66.2% exported. Canada's federal agriculture department forecast a 25% rise in next year's total wheat production today. Weather continues to be favorable to crop development in the US with the exception of a continued moisture deficit in Texas and adjacent wheat growing areas.
May Oats closed up 11 3/4 at 344 3/4. This was 3 3/4 up from the low and equal to the high.
Corn Market Recap for 2/4/2008
2/4/2008
May Corn finished up 9 1/4 at 522 1/2, 1/2 off the high and 9 1/4 up from the low. December Corn closed up 14 at 533. This was 14 up from the low and 1/2 off the high.
Corn rallied today on continued strong export demand along with higher wheat and soybeans and closed near the highs of the day.
Mexico's Energy Department said today that it would start to allow companies to produce both ethanol and bio-diesel fuels in order to reduce exhaust emissions and to provide a boost in income to impoverished farmers.
The Buenos Aires Grains Exchange reported on Friday that this year's corn harvest may be only 20.5 million tons due to hot and dry conditions. The crop also suffered from the fairly severe frosts that occurred there last November. Those frosts were thought to have damaged wheat and this triggered a halt in grain export registrations. Damage to wheat proved to be negligible and wheat registrations have since reopened. Export registrations for corn are set to reopen shortly. Basis levels at the Gulf were steady to firm today on good demand. Traders expected fund buying today, and funds were buyers in most markets during the session. Export inspections dipped sharply this week to 47.74 million bushels compared to 61.15 million the week before. This was in line with trade expectations. A weekly average of 45.43 million bushels is needed to reach the USDA projection. The budget sent to Congress by the Bush Administration left the 54-cent US ethanol import tax unchanged, so far.
May Rice finished down 0.1 at 15.4, 0.08 off the high and 0.01 up from the low.
May Corn finished up 9 1/4 at 522 1/2, 1/2 off the high and 9 1/4 up from the low. December Corn closed up 14 at 533. This was 14 up from the low and 1/2 off the high.
Corn rallied today on continued strong export demand along with higher wheat and soybeans and closed near the highs of the day.
Mexico's Energy Department said today that it would start to allow companies to produce both ethanol and bio-diesel fuels in order to reduce exhaust emissions and to provide a boost in income to impoverished farmers.
The Buenos Aires Grains Exchange reported on Friday that this year's corn harvest may be only 20.5 million tons due to hot and dry conditions. The crop also suffered from the fairly severe frosts that occurred there last November. Those frosts were thought to have damaged wheat and this triggered a halt in grain export registrations. Damage to wheat proved to be negligible and wheat registrations have since reopened. Export registrations for corn are set to reopen shortly. Basis levels at the Gulf were steady to firm today on good demand. Traders expected fund buying today, and funds were buyers in most markets during the session. Export inspections dipped sharply this week to 47.74 million bushels compared to 61.15 million the week before. This was in line with trade expectations. A weekly average of 45.43 million bushels is needed to reach the USDA projection. The budget sent to Congress by the Bush Administration left the 54-cent US ethanol import tax unchanged, so far.
May Rice finished down 0.1 at 15.4, 0.08 off the high and 0.01 up from the low.
Monday, January 14, 2008
Time's up for petrol cars, says GM chief
Joshua Dowling Motoring Editor in DetroitJanuary 15, 2008
THE world's biggest car maker, General Motors, believes global oil supply has peaked and a switch to electric cars is inevitable.
In a stunning announcement at the opening of the Detroit motor show, Rick Wagoner, GM's chairman and chief executive, also said ethanol was an "important interim solution" to the world's demand for oil, until battery technology improved to give electric cars the same driving range as petrol-powered cars.
GM is working on an electric car, called the Volt, which is due in showrooms in 2010, but delays in suitable battery technology have slowed the project.
Mr Wagoner cited US Department of Energy figures which show the world is consuming roughly 1000 barrels of oil every second of the day, and yet demand for oil is likely to increase by 70 per cent over the next 20 years. Some experts believe the supply of oil peaked in 2006.
The remaining oil reserves are deeper below the Earth's surface and therefore more costly to mine and refine.
"There is no doubt demand for oil is outpacing supply at a rapid pace, and has been for some time now," Mr Wagoner said. "As a business necessity and an obligation to society we need to develop alternative sources of propulsion."
He added: "So, are electrically driven vehicles the answer for the mid- and long-term? Yes, for sure. But … we need something else to significantly reduce our reliance on petroleum in the interim."
GM is so convinced about ethanol it has signed an agreement with a supplier that claims to have come up with a way of producing ethanol that is cheaper and more efficient than refining oil. The supplier claims it can produce ethanol from "almost any material" such as farm waste, municipal waste, discarded plastics - even old tyres.
The car industry has had a love-hate relationship with ethanol, which is most commonly derived from crops such as corn, wheat and sugar cane. At first, car makers criticised ethanol-blended fuel because most vehicles weren't compatible with it. Then car makers changed their tune and embraced ethanol-blended fuel after retuning engines to suit the new mix.
THE world's biggest car maker, General Motors, believes global oil supply has peaked and a switch to electric cars is inevitable.
In a stunning announcement at the opening of the Detroit motor show, Rick Wagoner, GM's chairman and chief executive, also said ethanol was an "important interim solution" to the world's demand for oil, until battery technology improved to give electric cars the same driving range as petrol-powered cars.
GM is working on an electric car, called the Volt, which is due in showrooms in 2010, but delays in suitable battery technology have slowed the project.
Mr Wagoner cited US Department of Energy figures which show the world is consuming roughly 1000 barrels of oil every second of the day, and yet demand for oil is likely to increase by 70 per cent over the next 20 years. Some experts believe the supply of oil peaked in 2006.
The remaining oil reserves are deeper below the Earth's surface and therefore more costly to mine and refine.
"There is no doubt demand for oil is outpacing supply at a rapid pace, and has been for some time now," Mr Wagoner said. "As a business necessity and an obligation to society we need to develop alternative sources of propulsion."
He added: "So, are electrically driven vehicles the answer for the mid- and long-term? Yes, for sure. But … we need something else to significantly reduce our reliance on petroleum in the interim."
GM is so convinced about ethanol it has signed an agreement with a supplier that claims to have come up with a way of producing ethanol that is cheaper and more efficient than refining oil. The supplier claims it can produce ethanol from "almost any material" such as farm waste, municipal waste, discarded plastics - even old tyres.
The car industry has had a love-hate relationship with ethanol, which is most commonly derived from crops such as corn, wheat and sugar cane. At first, car makers criticised ethanol-blended fuel because most vehicles weren't compatible with it. Then car makers changed their tune and embraced ethanol-blended fuel after retuning engines to suit the new mix.
Thursday, January 3, 2008
INDONESIA TO IMPORT 200,000 TONS OF SUGAR IN 2008
JAKARTA, Jan 04, 2008 (AsiaPulse via COMTEX) -- Indonesia's government plans to issue a license for the import of 200,000 tons of sugar this year to strengthen buffer stock, an official said.
The stock will be enough if the harvest takes place as expected, said Trade Minister Mari Elka Pangestu.
Ms Pangestu said as of December, 2007 stocks totalled 1 million tons, enough to cover consumption for 5 months.
Earlier, the Indonesian Sugar Council (DGI) recommended not importing sugar this year, but Ms Pangestu said imports are needed to secure stock in the event of a delay in harvest.
In 2007, the trade ministry issued a license for the import of 250,000 tons of sugar.
The stock will be enough if the harvest takes place as expected, said Trade Minister Mari Elka Pangestu.
Ms Pangestu said as of December, 2007 stocks totalled 1 million tons, enough to cover consumption for 5 months.
Earlier, the Indonesian Sugar Council (DGI) recommended not importing sugar this year, but Ms Pangestu said imports are needed to secure stock in the event of a delay in harvest.
In 2007, the trade ministry issued a license for the import of 250,000 tons of sugar.
Corn Market Recap for 1/2/2008
2 Jan 2008
March Corn finished up 7 at 462 1/2, 7 off the high and 6 1/2 up from the low. December Corn closed up 6 3/4 at 480 1/4. This was 6 3/4 up from the low and 7 1/4 off the high.
A sharp break in the US stock market and a surge to new all-time highs for crude oil set the stage for an impressive rally in the grain markets today. International money managers appear even more attracted to Agricultural markets with so much uncertainty in financial markets. A rally of nearly $3.00/barrel for crude oil and $20 for gold helped spark aggressive speculative buying across all of the grain markets which helped spark the early run to new contract highs and to the highest level for nearby corn futures since July of 1996. New crop December corn moved as high as 487 1/2 early in the session. The market is finding some fundamental support from an uncertain weather outlook for the drier areas of Argentina and from news of export tariffs for China corn. Traders see news that China is taxing exports as further evidence that US corn export demand should remain strong. Gains may have been limited by general fears that producer selling could increase on the move to new highs into the new tax year. Midwest cash basis levels were said to be weak at some locations as the new high may have attracted some increase in producer sales. Nearby corn futures posted gains of 16.7% for all of 2007.
March Rice finished up 0.42 at 14.285, 0.015 off the high and 0.145 up from the low.
March Corn finished up 7 at 462 1/2, 7 off the high and 6 1/2 up from the low. December Corn closed up 6 3/4 at 480 1/4. This was 6 3/4 up from the low and 7 1/4 off the high.
A sharp break in the US stock market and a surge to new all-time highs for crude oil set the stage for an impressive rally in the grain markets today. International money managers appear even more attracted to Agricultural markets with so much uncertainty in financial markets. A rally of nearly $3.00/barrel for crude oil and $20 for gold helped spark aggressive speculative buying across all of the grain markets which helped spark the early run to new contract highs and to the highest level for nearby corn futures since July of 1996. New crop December corn moved as high as 487 1/2 early in the session. The market is finding some fundamental support from an uncertain weather outlook for the drier areas of Argentina and from news of export tariffs for China corn. Traders see news that China is taxing exports as further evidence that US corn export demand should remain strong. Gains may have been limited by general fears that producer selling could increase on the move to new highs into the new tax year. Midwest cash basis levels were said to be weak at some locations as the new high may have attracted some increase in producer sales. Nearby corn futures posted gains of 16.7% for all of 2007.
March Rice finished up 0.42 at 14.285, 0.015 off the high and 0.145 up from the low.
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