CHICAGO—U.S. corn futures closed higher, boosted by forecasts for dry weather and by strong cash markets. Corn for July delivery rose 20 cents, or 3.5%, to $5.99 1/2 a bushel at the Chicago Board of Trade. December corn rose 28 cents, or 5.5%, to $5.34 a bushel. Forecasts Monday for hot, dry weather in much of the Midwest heightened concerns the unfavorable conditions could damage the U.S. corn crop, just as it enters its key pollination phase in the next few weeks. Government condition ratings for the corn crop have already fallen in recent weeks, and analysts expect a further decline in a report due out Monday afternoon.
Monday, June 18, 2012
Corn Futures Jump on Dry Weather
CHICAGO—U.S. corn futures closed higher, boosted by forecasts for dry weather and by strong cash markets. Corn for July delivery rose 20 cents, or 3.5%, to $5.99 1/2 a bushel at the Chicago Board of Trade. December corn rose 28 cents, or 5.5%, to $5.34 a bushel. Forecasts Monday for hot, dry weather in much of the Midwest heightened concerns the unfavorable conditions could damage the U.S. corn crop, just as it enters its key pollination phase in the next few weeks. Government condition ratings for the corn crop have already fallen in recent weeks, and analysts expect a further decline in a report due out Monday afternoon.
Fed QE3 in mortgages limited to half size of QE1, Barclays says
June 18 (Bloomberg) -- Any new buying of government-backed mortgage bonds by the Federal Reserve will be limited to no more than $500 billion to $600 billion per year by supply constraints, according to Barclays Plc.
Grain, soybean focus shifts to weather
Corn: As is typical for summer, we need to watch each forecast update that is available. Any trader will benefit greatly from keeping an eye on national rainfall while limiting too much focus on any one area. Coming up soon will be pollination in the Southern Midwest where planting started very early.
Gold edges up on uncertainty over Europe
Gold eked out a small gain on Monday as lingering uncertainty over the euro zone debt crisis following Greece's elections and a policy meeting by the U.S. Federal Reserve lifted bullion from its early losses. Safe-haven bids boosted gold as G20 leaders pressed Europe to do whatever it takes to combat Europe's crisis after a victory for pro-bailout parties in a Greek vote reduced the chances of a euro breakup but failed to calm financial markets. Monday's trading volume of U.S. gold stood at just over half of its 30-day average, and gold option volatility also tumbled as investors opted to stay on the sidelines ahead of a key Fed meeting later this week.
Softs- cotton hits 5-week high; sugar, coffee lower
U.S. soft futures were mixed during early U.S. morning hours on Monday, with cotton prices continuing to draw support from signs of increasing demand from top consumer China. Meanwhile, sugar futures edged lower as investors cashed out of the market to lock in gains from last week’s rally that took prices to the highest in more than a month, while coffee futures consolidated above the previous session’s two-year low.
Corn rallies on fears about dry Midwest weather
Corn futures rallied 4 percent on Monday, their biggest rise in seven weeks, and wheat and soy also advanced, as worries about warm and dry weather in the U.S. crop belt overshadowed lingering concerns about the euro zone debt crisis. Grains drew early support from global market enthusiasm after a weekend victory for pro-bailout parties in Greek elections. But U.S. equity markets and crude oil later retreated as relief over Greece gave way to pessimism about the nagging debt crisis still facing the euro zone. Corn, soybeans and wheat remained supported by fears that dry conditions might limit U.S. crop prospects. The world grain trade is counting on a bumper corn harvest this autumn to replenish supplies after U.S. corn inventories dwindle to a projected 16-year low this summer...
Crude Futures Decline in New York on Record Spanish Bond
Oil dropped in New York as rising Spanish borrowing costs pushed the dollar higher, adding to concern that Europe’s debt crisis will curb crude demand. Futures fell as much as 1.5 percent in New York after the Spanish 10-year bond yield rose to a euro-era record of 7.14 percent. Greece’s New Democracy and Pasok parties won enough seats to form a majority in the 300-member parliament, according to an official projection. Money managers cut bullish oil wagers for a sixth week, according to the Commodity Futures Trading Commission’s Commitment of Traders Report.
Copper gives up gains as Greek election relief fades
Copper fell on Monday, reversing after touching a three-week high early in the day, as relief that pro-bailout parties in Greece won a slim majority soon turned sour and the investor focus turned to debt and banking problems in Spain, Europe's fifth-largest economy. All major base metals on the London Metal Exchange slipped into negative territory with the fading of a burst of optimism, which followed a narrow election victory on Sunday by Greece's centre-right New Democracy party, which will try to form a coalition to back the international bailout and stay in the euro zone.
Stocks, Euro, Commodities Gain as Greek Pro-Bailout Parties Win
Stocks and the euro rose to the highest levels in a month, and commodities climbed as gains by pro-bailout parties in Greek elections eased concern the nation would exit the euro. Indian stocks erased advances after the central bank unexpectedly left rates unchanged. The MSCI All-Country World Index advanced 0.7 percent to the highest since May 15 at 8:04 a.m. in London. The Stoxx Europe 600 Index climbed 1.1 percent and Standard & Poor's 500 Index futures added 0.4 percent. The euro strengthened 0.5 percent to the highest since May 22, and the dollar and yen fell against most major counterparts. The S&P GSCI Index of 24 commodities rose 0.8 percent while bond risk in Asia dropped to the lowest since May 8...
Asian currencies' rally against US dollar may be short-lived
Asian currencies on Monday rallied against the US dollar on easing concerns over the situation in Europe, with the JP Morgan Asia Currency Index currency trading barometer gaining as much as 0.25 per cent. High risk currencies like the Korean won and the Indian rupee were among those in the limelight. The Korean won hit a one-month high of 1,156.7 won to the dollar, while the Malaysian Ringgit also touched a three-week high of 3.1350 against the greenback. Experts say traders snapped up Asian currencies after they sold these units earlier on concerns that Asian currencies will weaken if the Euro situation worsens. Still, analysts expect this rally to be short-lived, with dealers saying the rally is just a knee-jerk reaction and may not be sustainable.
Managed funds boost bullish positions on stimulus outlook
Managed funds added to their bullish commodity positions as mounting speculation that central banks will announce more economic stimulus halted a slide in prices and drove gold to its longest rally since August. Money managers raised combined net-long positions across 18 U.S. futures and options by 9.1 percent to 587,327 contracts in the week ended June 12, rebounding from the lowest level this year, Commodity Futures Trading Commission data show. Gold holdings rose to a six-week high, while wagers on a rally in silver prices jumped to the highest since the start of May.
Biggest stocks beat S&P 500 most in 13 years as P/Es fall
The largest U.S. companies are beating the average stock in the Standard & Poor’s 500 Index by the most in more than a decade, fueled by rising dividends, valuations 31 percent below the historical average and fear. Companies in the S&P 100 from Apple Inc. to Bank of America Corp. have gained 7.7 percent in 2012, compared with 5.1 percent for a version of the S&P 500 that strips out weightings for market value, the widest margin since 1999, data compiled by Bloomberg show. With price-earnings ratios down 6.6 percent this quarter to 12.7 and payouts at 2.2 percent of share prices, analysts raised buy recommendations for the group to the highest level since 2007.
EU says ban on insuring Iranian oil will proceed as planned
Europe’s sanctions on insurance for Iranian oil shipments won’t be lifted or suspended as Asian importers look to governments to cover cargoes. Insuring ships carrying crude from the Persian Gulf country will be banned when the European Union’s embargo takes effect July 1, Michael Mann, foreign-policy spokesman for the 27-nation bloc, said today in Moscow. The rules apply to 95 percent of the world’s tankers because they’re covered by the 13 members of the London-based International Group of P&I Clubs. The EU delayed the ban on insurance against risks including spills and collision until July 1 amid discussions with government and industry officials about its global reach.
Spanish bond yields climb to record as stocks retreat with euro
Spanish 10-year bond yields rose above 7 percent for the first time since the euro’s creation as a jump in bad loans fueled concern the debt crisis is deepening. Stocks and the euro fell, erasing gains triggered when Greek pro-bailout parties won enough seats to form a government. The 10-year Spanish yield jumped 32 basis points to 7.19 percent at 9:31 a.m. in New York. The Standard & Poor’s 500 Index lost 0.3 percent and the Stoxx Europe 600 Index slipped 0.2 percent after earlier rallying 1.1 percent. The euro depreciated 0.4 percent to $1.2593 after rising as much as 0.9 percent.
Oil Prices Keep Falling, But a Strange Gap Persists
Oil prices are down more than 20 percent since mid-March. Yet that hasn’t erased a strange anomaly in the market: the gap between two essentially identical types of oil. North American light, sweet crude, also known as West Texas Intermediate, trades just below $84 while its international equivalent, known as Brent, is priced at $97. Why would two similar products sell for such different prices? The problem is getting hold of WTI and connecting supply with demand. The gusher of new domestic oil production coming out of shale deposits in North Dakota, Texas, and Oklahoma has outstripped the country’s pipeline capacity to move it around. The result is a supply glut that has built up in the middle of the country, lowering the price of WTI. Refineries along the Gulf Coast would love to get their hands on more cheap domestic crude, but they can’t simply call an oil supplier and have a load of cheaper WTI delivered whenever they want. While pipeline projects to solve the problem are just getting underway, there’s still no easy way to get large quantities of WTI down to the country’s refining hub along the Gulf Coast. So refiners remain trapped, forced to keep taking more expensive imported oil.
Greece Steps Back From the Brink
Greece isn’t ready to call Europe’s bluff. If early indications from the polls are correct, the top vote getter in Sunday’s parliamentary elections was the pro-euro New Democracy Party—not the leftist Syriza coalition, which campaigned on a platform of rejecting Europe’s conditions for bailout assistance.
Greece Races to Forge New Government as Cash Dwindles
Greece’s two traditional political rivals are in a race to forge an unprecedented coalition as the state’s cash dwindles, bank deposits flee and Europe demands renewed austerity pledges before releasing more emergency aid. Greece will run out of money in mid-July, the Syriza party, which placed second in yesterday’s election, said on June 13 after being briefed by Acting Finance Minister Giorgios Zanias. Caretaker Labor and Social Security Minister Antonis Roupakiotis refused to offer assurances pensions will be paid in August, Athens News Agency reported the same day.
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