SPOT COM

 

GOLD

 

Chart Comment

Gold prices bottomed in October of 2008 and have been working higher since. Early this year, it looked like gold was making a series of lower highs, but the higher close on March 31st turned the trend higher again - so far, so good

Key Events - Gold

2010
6-8 - GFMS Ltd. CEO: Gold should trade between $1,050 and $1,300 an ounce for the rest of 2010.
5-26 - WGC: World mine production +5% in Q1 from a year ago and total demand -25%.
3-29 - WGC: China's gold demand amounts to 11% of world demand and is expected to double in 10 years.
3-19 - The Reserve Bank of India increased its key interest rate from 4.75% to 5.00%, the first increase since July of 2008.
2-17 - WGC: World mine production up 6% and total demand down 11% in 2009.

2009
11-19 - WGC: Mine production up 6% in Q3 v. a year ago. World demand down 34% in Q3 from a year ago.
11-3 - IMF sells 200 tons of gold to the Reserve Bank of India for $6.7 billion.
8-19 - The World Gold Council said that central banks bought 14 tons of gold in the second quarter of 2009 - "the first net purchase by central banks for a considerable length of time."
8-13 - South Africa gold production down 12% in June v. a year ago.

2001
9-11.

Fundamental Notes

In September of 2009, the European Central Bank and 18 others agreed to limit sales for five years to 400 tons per year. Now that gold prices are higher and the dollar's future is in question, most banks aren't so eager to sell. On April 8, 2008, the International Monetary Fund let it be known that it may sell 13 million ounces of gold over several years to raise cash. On November 3, 2009, the IMF sold roughly half of that amount to India.

On May 26, 2010, the World Gold Council (WGC) said that world mine production was up 5% in the first quarter of 2010 while total demand was down 25%. On August 19, 2009, the WGC noted that central banks bought 14 tons of gold in the second quarter of 2009 - "the first net purchase by central banks for a considerable length of time." On September 14, 2009, GFMS, Ltd. said that production costs at primary gold mines were over $600 per ounce.

 

 

COPPER

 

Chart Comment

In 2009, copper was one of the strongest commodities on the board, but fortunes have turned. On April 27th, prices broke lower and, on May 17th, July copper dropped 20 cents to its lowest close in three months Prices have been hurt by Europe's debt problems and talk that China's economy may be cooling. China's economy may not be as weak as feared, but so far, copper prices are weak

Key Events - Copper

2010
6-4 - World Bank est.: China's economy will grow between 9-10% in 2010.
5-13 - Copper inventories in London were down 1,255 tons this morning to 485,150 tons, the lowest since late-December.
4-14 - A survey of mining analysts by the Chilean government expects copper to average $3.35 a pound in 2010 and $3.29 in 2011.
4-1 - Better-than-expected manufacturing reports from the U.S., U.K., and Euro area.
3-19 - The Reserve Bank of India increased its key interest rate from 4.75% to 5.00%, the first increase since July of 2008.
2-27 - 8.8 earthquake in Chile.
2-24 - China's copper imports total 196,926 tons in January, up 9% from a year ago.
1-21 - China's copper imports total 244,013 tons in December, up 25% on the month.
1-20 - Chinese government orders banks to restrain lending.
1-20 - LME copper inventory at 526,650 tons, the most in ten months.
1-12 - China will raise its bank reserve requirement by .5% on January 18th.
1-12 - Industrial production in India was up 11.7% in November from a year ago, the biggest gain in over two years.
1-11 - Bloomberg survey of 23 analysts: World copper production in 2010 will exceed demand by 63,500 tons.
1-4 - An index of manufacturing in China increased from 55.7 to 56.1 in December, the highest in five years

2009
12-11 - China's industrial production +19.2% in November from a year ago, the biggest annual gain in over two years.
12-1 - The Chinese government's index of manufacturing was unchanged at 55.2 in November, the ninth consecutive month of expansion.
11-30 - LME copper inventory at 438,525 tons, the highest since late-April.
11-11 - China's industrial production up 16.1% in October from a year ago, stronger than expected. Copper imports totaled 263,109 tons in October, down 34% on the month.
11-3 - LME copper inventory at 373,800 tons, the most since May 12th.
11-2 - Positive manufacturing reports from China, U.S., U.K., and Europe.
10-29 - IMF est.: 2010 GDP growth of 9% in China and 6.4% in India.
10-22 - Real GDP in China +8.9% in Q3 from a year ago, the most annual growth in a year.
10-14 - China imported 399,052 tons of copper in September, up 23% from August.
10-14 - LME copper inventory at 353,225 tons, the most since May 18th.
10-8 - ICSG est.: World production surplus of 370,000 tons in 2009 and 540,000 tons in 2010.
9-22 - Asian Development Bank: Real GDP in China will be up 8.2% in 2009 and up 8.9% in 2010.
9-11 - China's industrial output was up 12.3% in August from a year ago, much stronger than expected

Fundamental Notes

On May 20, 2010, the International Copper Study Group's (ICSG) preliminary data showed that world copper production exceeded refined usage by 148,000 tons in the first two months of 2010. The ICSG also showed that world copper production exceeded refined usage by 171,000 tons in 2009, up from a production surplus of 161,000 tons in 2008.

On October 8, 2009, the ICSG predicted that copper will show a world production surplus of 368,000 tons in 2009 and 539,000 tons in 2010. On August 17, 2009, the world's largest copper producer, Codelco, said that it had production costs of roughly $1.70 per pound in the first half of 2009.

 

 

SILVER

 

Chart Comment

In late-March, silver prices recovered, but have not had much luck pushing higher. Silver prices have been chopping sideways since early-April and the range appears to have narrowed between roughly $17.50 to $18.50

 

Fundamental Notes

Until prices exploded higher in late-2003, it was hard to find anything positive to say about silver. The main changes have been the consolidation that has taken place in the gold and copper industries and the difficulty in developing new sources of production. As much as 75% of silver's production comes from gold, copper, lead, and zinc mining which is why changes in these other industries have a large impact on the price of silver. On the demand side, silver (like most commodities) benefits from strong world growth, a weaker U.S. dollar, and increasing use in electronic applications. According to an article in Barron's on June 8, 2009, the cash cost of producing silver is somewhere around $4.50 to $5.30 an ounce, but that rises to as much as $12 per ounce if exploration costs are included.

Fundamental data is hard to come by for the silver market, but the Silver Institute said that world mine production totaled 681 million ounces in 2008, up 2.5% from the previous year. According to CPM Group, 2008 fabrication demand was down 3% from the previous year. On November 19 2009, Gold Fields Mineral Services, Ltd. estimated that fabrication demand was down 11% in 2009.

 

 

COCOA

 

Chart Comment

Cocoa prices have been a bit of a roller coaster lately. Up on signs of good demand and down with worries over Europe. On June 2nd, July cocoa closed impressively higher, but could not hold up. Two days later, prices were back below $3,000 - a sign of weakness

Key Events - Cocoa

2010
5-21 - ICCO est.: World cocoa net production will fall short of consumption by 69,000 tons in 2009-2010.
5-21 - Fortis Bank Nederland est.: World cocoa production deficit est. increased from 124,000 to 136,000 tons. Estimating a 3,000 ton deficit in 2010-2011 with world grindings of 3.70 million tons, just shy of 3.707 million ton record in 2007-2008.
4-16 - North American Q1 cocoa grind totaled 116,122 tons, up 16.2% from a year ago and more than expected.
4-13 - European Cocoa Assn.: Q1 grind totaled 340,900 tons, up 8.1% from a year ago.
3-3 - ICCO est.: World cocoa net production will fall short of consumption by 18,000 tons in 2009-2010.
2-12 - Ivory Coast President Gbagbo dissolved the government and postponed the national election for the seventh time.
2-1 - Fortis: Estimated 48,000 ton world production deficit in 2010-2011. Ending stocks to use ratio will fall from 42% to 35%.
1-22 - North American Q4 cocoa grind totals 111,986 tons, -1.5% from a year ago.
1-14 - European cocoa grind +.6% in Q4 from a year ago.

2009
12-17 - BNP Paribas Fortis predicts 63,000-ton world production deficit in 2009-2010.
12-3 - ICCO increased its world ending stocks estimate for 2008-2009 from 1.490 to 1.556 million tons, or 44% of annual use.
10-14 - European cocoa grind -1.5% in Q3 from a year ago.
9-8 - ICE: U.S. cocoa inventories at 2.79 million tons, the lowest in almost seven months.
8-25 - The International Cocoa Organization (ICCO) reduced its estimate of 2008-2009 world cocoa production from 3.47 to 3.46 million tons. The 2008-2009 ending stocks estimate was increased, however, from 1.47 to 1.49 million tons or 43% of annual use.
7-29 - Cocoa arrivals at Ivory Coast ports in 2008-2009 are down 15% from a year ago with nine weeks left in the season.
7-17 - North American cocoa grind -6.75% in Q2 from a year ago, better than expected.
7-9 - European cocoa grind -11.3% in Q2 from a year ago, less than expected.
4-17 - North American cocoa grind -13% in Q1 from a year ago.

Fundamental Notes

The Ivory Coast and Ghana account for over one-half of the world's cocoa production and the Ivory Coast has been politically divided since 2002. On March 4, 2007, the Ivory Coast government and rebel forces agreed to form a new government, but on February 12, 2010, President Gbagbo dissolved the government and postponed the national election for a seventh time. The other threats to the world's cocoa crop are primarily from weather - the swollen shoot virus and black pod disease. On May 1, 2009, Nestle announced that it will help farmers in West Africa plant one million new disease-resistant cocoa trees each year for the next ten years.

Obtaining recent data on world cocoa statistics is difficult. On May 21, 2010, the International Cocoa Organization (ICCO) estimated that world cocoa net production will total 3.56 million tons in 2009-2010 and reduce the ending stocks from 1.688 to 1.619 million tons, or 45% of annual use.

 

 

COFFEE

 

Chart Comment

Coffee prices have been choppy to lower since mid-December and appear to be in a range between $1.30 and $1.41? The higher close on June 10th was a surprise - is there more to it?

Key Events – Coffee

2010
6-10 - ICO est.: World coffee production at 134 million bags in 2010-2011 and consumption of 134 million bags in calendar year 2010.
6-8 - Brazil's Census Bureau (IBGE) estimated the upcoming coffee crop at 45.8 million (60kg) bags. That is probably low.
5-24 - USDA FAS est.: El Salvador will produce historically low 1.075 million (60kg) bags of coffee in 2009-2010. Vietnam is expected to produce 17.5 million bags of coffee in 2009-2010, down from 18.0 million bags in 2008-2009.
5-18 - USDA official est.: Brazil's coffee crop at 55.3 million bags in 2010-2011, up from 44.8 million bags in 2009-2010.
5-6 - Brazilian firm, Safras and Mercado est.: Brazil's coffee crop at 52.9 million bags in 2010-2011.
5-6 - Brazilian government's CONAB est.: Brazil's coffee crop at 47 million bags in 2010-2011.
4-30 - ICO: Global coffee exports totaled 8.8 million bags in March, down from 9.3 million bags a year ago.
4-12 - ICO: "Bearing in mind the outlook for production, it is likely that demand will continue to outstrip supply in coming months."
2-26 - Fortis Nederland: World production of arabica beans will exceed demand by almost 7 million bags in 2010-2011.
2-22 - Analyst with Illycaffe Spa told Bloomberg news that Brazil's coffee crop was in surprisingly good shape and may total a record high 55 million bags this year.
2-9 - ICO: "World coffee supply could be tight in 2010É"
1-21 - Brazil Ag official: 2010-2011 coffee crop may only total 39 million bags due to recent heavy rain.
1-7 - Brazil's Conab: 2010-2011 coffee crop will total 47.3 million bags.

2009
12-18 - USDA: 2009-2010 world ending stocks will fall 6.3 million bags to 34.7 million bags, or 26% of annual use.
12-11 - ICE warehouse stocks at 3.17 million bags.
9-14 - Colombian National Coffee Growers Federation: The current harvest may fall to 10.3 million bags or less due to excess rain at harvest, down from 11.5 million bags a year ago.
9-11 - ICO increased its estimate of 2008 world consumption from 128.4 to 130.0 million bags.
6-12 - USDA: 2009-2010 world ending stocks will fall from 40.1 to 35.3 million bags or 27% of annual use.
1-1 - ICE coffee warehouse stocks at roughly 4.4 million (60-kg) bags.

Fundamental Notes

On December 18, 2009, the USDA estimated 2009-2010 world coffee production at 125.2 million (60 kg) bags with implied use of 131.4 million bags. That puts 2009-2010 ending coffee stocks at 34.7 million bags, or 26% of annual use which is historically on the low end. They also estimate that Brazil harvested 43.5 million bags in 2009-2010, down from 51.5 million bags the previous year. On May 6, 2010, Brazil's government (Conab) said that they expect the coffee crop to increase to 47 million bags in 2010-2011, but other analysts are predicting the harvest as high as the high-50's. On May 18, 2010, a USDA official estimated Brazil's upcoming crop at 55.3 million bags.

In its May report, the International Coffee Organization (ICO) reduced its estimate of 2009-2010 world coffee production from 122 to 120.6 million bags. The ICO also predicted 134 million bags of world production in 2010-2011. World consumption was estimated at 132 million bags in 2009 and at 134 million bags in 2010.

 

 

SUGAR

 

Chart Comment

Everyone knew on the way up that world sugar supplies were tight, but no one expected prices to fall as early or as far as they did. July sugar remains weak, but the pace of selling appears to be slowing

Key Events – Sugar

2010
6-3 - U.N.: "Preliminary projections for (world sugar in) 2010/11 indicate a small production surplus for the first time since 2007/08, providing some downward pressure on prices."
6-3 - Czarnikow est.: World production will increase 11% in 2010-2011 to 174.3 million tons.
5-13 - ISO est.: World production surplus of 2.5 million tons in 2010-2011.
4-13 - Morgan Stanley est.: World production deficit of 5.4 million tons in 2009-2010.
4-9 - ISO est.: World production deficit of 8 million tons in 2009-2010.
3-18 - F.O. Licht est.: 7.7 million ton world production deficit in 2009-2010.
2-26 - ISO est.: World production deficit of 9.4 million tons in 2009-2010. "Looming global surplus in 2010-2011."
2-8 - Kingsman est.: 11.9 million ton world production deficit in 2009-2010. 4.0 million ton surplus in 2010-2011.
2-8 - India Sugar Mills est.: India may produce 23.5 million tons of sugar in 2010-2011.

2009
12-30 - India extends its ban on futures trading in sugar until September 30, 2010.
11-24 - ISO est.: World production surplus of .75 million tons in 2010-2011.
11-19 - USDA: 2009-2010 world ending stocks to use ratio estimated at 17%, the lowest since 1993-1994.
11-13 - ISO est.: World production deficit of 7.2 million tons in 2009-2010.
10-19 - Czarnikow: Prices will have to go higher to ration demand.
9-3 - ISO: Estimates 2009-2010 world production at 159 million tons, short of consumption by 8.4 million tons.
8-31 - Private firm, Kingsman, predicts 7 million ton world production deficit in 2009-2010.
5-26 - India's government bans futures trading in sugar for the rest of 2009 and considers extending duty-free import policy for sugar to help boost local supplies.
5-21 - USDA: 2009-2010 world endings stocks to use ratio will be 19%, the lowest in 16 years.
4-9 - India's government gives approval to import 1 million tons of white sugar with no duty by August 1st.

Fundamental Notes

On May 21, 2010, the USDA said that 2010-2011 world sugar production will total 163.8 million tons up from 152.2 million tons the previous year. Sugar stocks at the end of 2010-2011 are only expected to rise 504,000 tons to 27.0 million tons or 17% of annual use. That seems odd, given the big increase in production. The USDA expects the largest producer, Brazil, to produce 40.7 million tons in 2010-2011. Beware: The USDA sometimes revises its world sugar data as far back as four years or more.

 

 

SOYBEAN

 

Chart Comment

On April 15th, November soybeans broke higher and tried to rally, but did not get very far. On May 6th, prices broke sharply lower, pressured by problems in Europe and good growing weather in the U.S. Prices still look weak

Key Events – Soybean

2010
6-10 - USDA 2010-2011 end. stocks est. reduced from 365 to 360 million bushels.
5-11 - USDA 2010-2011 end. stocks est. at 365 million bushels. 2009-2010 est. stayed at 190 million bushels.
4-9 - USDA 2009-2010 end. stocks est. stayed at 190 million bushels.
3-31 - USDA est.: 78.1 million acres of soybeans to be planted, up slightly from a year ago.
3-10 - USDA 2009-2010 end. stocks est. reduced from 210 to 190 million bushels.
2-9 - USDA 2009-2010 end. stocks est. reduced from 245 to 210 million bushels.
1-12 - USDA 2009-2010 end. stocks est. reduced from 255 to 245 million bushels.

2009
12-10 - USDA 2009-2010 end. stocks est. reduced from 270 to 255 million bushels.
11-27 - USDA: 2009-2010 soybean exports jump from up 24% to up 37% from a year ago, the third consecutive week of significant increase and much more than the USDA estimate.
11-10 - USDA 2009-2010 end. stocks est. increased from 230 to 270 million bushels.
10-9 - USDA 2009-2010 end. stocks est. increased from 220 to 230 million bushels.
9-11 - USDA 2009-2010 end. stocks est. increased from 210 to 220 million bushels.
8-12 - USDA 2009-2010 end. stocks est. reduced from 250 to 210 million bushels.
7-10 - USDA 2009-2010 end. stocks est. increased from 210 to 250 million bushels.
6-30 - USDA: 77.48 million planted acres, +2% from a year ago and a new record high, but less than expected.
6-10 - USDA: "Brazil's soybean oil exports are expected to decline sharply as the government announced a further increase in biodiesel admixtures."
6-10 - USDA: 2009-2010 ending stocks estimate reduced from 230 to 210 million bushels. 2008-2009 ending stocks estimate reduced from 130 to 110 million bushels

Fundamental Notes

On June 10, 2010, the USDA reduced its estimate of U.S. 2010-2011 ending stocks from 365 to 360 million bushels, up from 185 million bushels in 2009-2010. The resulting 2011 ending stocks to use ratio is 12%. Worldwide, the USDA estimated that 2010-2011 ending stocks will increase from 65 to 67 million tons or 27% of annual use.

In 2009-2010, the USDA expects exports to be up 13% and so far, they are up 24%. The USDA said that 84% of the soybean crop was planted as of June 6th and 75% of it was rated good to excellent.

 

 

WHEAT

 

Chart Comment

July wheat has been in a down-trend since November 18, 2009 and, so far, the down-trend continues. Prices tried to rally in early-May in the face of a rising dollar, but that did not last.

Key Events - Wheat

2010
6-10 - USDA 2010-2011 end. stocks est. reduced from 997 to 991 million bushels.
6-3 - U.N. est.: World ending stocks of wheat to fall from 196.1 to 194.1 million tons in 2010-2011.
5-11 - USDA 2010-2011 end. stocks est. at 997 million bushels. 2009-2010 est. reduced kept at 950 million bushels.
4-9 - USDA 2009-2010 end. stocks est. reduced from 1,001 to 950 million bushels.
3-31 - USDA est.: 53.8 million acres of wheat to be planted, down 9% from a year ago.
3-10 - USDA 2009-2010 end. stocks est. increased from .981 to 1.001 billion bushels.
2-16 - Australia lowered its estimate of the 2009-2010 wheat crop from 22.0 to 21.7 million tons.
2-9 - USDA 2009-2010 end. stocks est. increased from 976 to 981 million bushels.
1-21 - IGC predicts 2010-2011 world wheat production at 653 million tons.
1-12 - USDA: Winter wheat seeded area estimated at 37.097 million acres, down 14% from a year ago and the smallest area since 1913.
1-12 - USDA 2009-2010 U.S. end. stocks est. increased from 900 to 976 million bushels. Stocks to use ratio now at 49%, the highest since 1986-1987.

2009
12-10 - USDA 2009-2010 U.S. end. stocks est. increased from 885 to 900 million bushels.
11-10 - USDA 2009-2010 U.S. end. stocks est. increased from 864 to 885 million bushels.
10-9 - USDA 2009-2010 U.S. end. stocks est. increased from 743 to 864 million bushels.
9-11 - USDA 2009-2010 end. stocks est. stayed at 743 million bushels.
8-12 - USDA 2009-2010 U.S. end. stocks est. increased from 706 to 743 million bushels.
7-10 - USDA 2009-2010 U.S. end. stocks est. increased from 647 to 706 million bushels.
6-30 - USDA: 59.78 million planted acres, -5% from a year ago.

2007
2-15 - Government of India bans wheat exports due to concerns of an impending shortage.

Fundamental Notes

On June 10, 2010, the USDA reduced its estimate of 2010-2011 U.S. ending stocks from 997 to 991 million bushels, up from 930 million bushels in 2009-2010. The resulting U.S. ending stocks to use ratio for 2010-2011 is 47%. Worldwide, the USDA is expecting 2010-2011 ending stocks to increase from 193 to 194 million tons, or 29% of annual use.

In 2010-2011, the USDA expects wheat exports to be up 2%. As of June 6, 2010, the USDA said that 66% of the winter wheat crop was rated good to excellent, up from 44% a year ago. Also, 84% of the spring wheat crop was rated good to excellent, up from 73% from a year ago.

 

 

CORN

 

Chart Comment

In May, December corn made a couple of lame attempts to go higher, but got turned lower - signs of weakness

Key Events - Corn

2010
6-10 - USDA 2010-2011 end. stocks est. reduced from 1.818 to 1.573 billion bushels.
5-11 - USDA 2010-2011 end. stocks est. at 1.818 billion bushels. 2009-2010 est. reduced from 1.899 to 1.738 billion bushels.
4-9 - USDA 2009-2010 end. stocks est. increased from 1.799 to 1.899 billion bushels.
3-31 - USDA est.: 88.8 million acres of corn to be planted, up 3% from a year ago.
3-10 - USDA 2009-2010 end. stocks est. increased from 1.719 to 1.799 billion bushels.
2-9 - USDA 2009-2010 end. stocks est. reduced from 1.764 to 1.719 million bushels.
1-12 - USDA 2009-2010 end. stocks est. increased from 1.675 to 1.764 million bushels.

2009
12-10 - USDA 2009-2010 end. stocks est. increased from 1.625 to 1.675 billion bushels.
11-10 - USDA 2009-2010 end. stocks est. reduced from 1.672 to 1.625 billion bushels.
10-9 - USDA 2009-2010 end. stocks est. increased from 1.635 to 1.672 billion bushels.
9-28 - USGC: China's corn crop est. at 149 million tons v. 166 million tons a year ago.
9-15 - Possible frost in the forecast for next week (didn't come true).
9-11 - First mention of severe drought conditions affecting China's corn crop.
9-11 - USDA 2009-2010 end. stocks est. increased from 1.621 to 1.635 billion bushels.
8-12 - USDA 2009-2010 end. stocks est. at 1.62 billion bushels.
7-23 - USDA to re-survey corn acres in seven states that planted late due to wet weather. Results will be in the August 12th report.
7-10 - USDA 2009-2010 end. stocks est. at 1.55 billion bushels.
6-30 - USDA: 87.04 million planted acres, +1% from a year ago, the second most acres since 1946, and much more than expected.
6-10 - USDA 2009-2010 ending stocks estimate at 1.090 billion bushels.
6-2 - USDA: 93% of corn crop is planted.
5-18 - USDA: Only 62% of corn crop is planted.
5-12 - USDA 2010 U.S. ending stocks estimate at 1.145 billion bushels.
4-27 - Outbreak of swine flu in Mexico becomes an international health emergency.
3-31 - USDA reduced its 2009 planting estimate for corn from 86 to 85 million acres.
3-18 - Two-cent drop in the U.S. dollar after the Fed said that it will keep the federal funds rate low "for an extended period."
3-11 - USDA 2009 ending stocks estimate reduced from 1.790 to 1.740 billion bushels.
2-27 - USDA predicts 2009-2010 U.S. ending stocks at 1.72 billion bushels, down from 1.79 billion bushels in 2008-2009.
2-12 - USDA predicts U.S. corn crop at 12.68 billion bushels in 2009, up 5% from 2008.
1-16 - Talk of dry weather in South America.
1-12 - USDA 2009 ending stocks estimate increased from 1.474 to 1.790 billion bushels.

Fundamental Notes

On June 10, 2010, the USDA reduced its estimate of 2010-2011 U.S. ending stocks from 1.818 to 1.573 billion bushels, down from 1.603 billion bushels the previous year. That put the 2011 ending stocks to use ratio at 12%, matching the lowest in seven years. On the world scene, the USDA is looking for 2010-2011 ending stocks to increase from 143 to 147 million tons, or 18% of annual use.

In 2009-2010, the USDA expects exports to be up 5% and so far, they are up 10%. As of June 6, 2010, 76% of the U.S. corn crop was rated good to excellent, up from 69% a year ago.

 

 

COTTON

 

Chart Comment

In April, there was talk of a possible shortage of world cotton, but on June 4th, December cotton broke lower, pressured by concerns about the world economy. Prices only stayed below the average for four days before returning higher again - a sign of strength

Key Events - Cotton

2010
6-10 - USDA 2010-2011 end. stocks est. reduced from 3.0 to 2.8 million bales. The 2010-2011 ending stocks to use ratio is 17%, the lowest in 15 years.
5-11 - USDA 2010-2011 end. stocks est. at 3.0 million bales. 2009-2010 est. increased from 3.0 to 3.1 million bales.
4-20 - India stopped exporting cotton yesterday in an effort to protect domestic supplies.
4-9 - USDA 2009-2010 end. stocks est. reduced from 3.2 to 3.0 million bales.
4-6 - U.S. agrees to pay Brazil in order to protect U.S. cotton subsidies.
3-31 - USDA est.: 10.5 million acres of corn to be planted, up 15% from a year ago.
3-10 - USDA 2009-2010 end. stocks est. reduced from 3.3 to 3.2 million bales.
2-9 - USDA 2009-2010 end. stocks est. reduced from 4.3 to 3.3 million bales. Stocks to use ratio is lowest in six years.
2-8 - NCC est.: 10.1 million acres of planted acres in 2010, up 10% from a year ago.
1-12 - USDA 2009-2010 end. stocks est. reduced from 4.5 to 4.3 million bales.

2009
12-10 - USDA 2009-2010 end. stocks est. reduced from 4.9 to 4.5 million bales.
11-10 - USDA 2009-2010 end. stocks est. reduced from 5.4 to 4.9 million bales.
10-27 - India plants record high 24.7 million acres of cotton; expects 31.3 million bale crop.
10-9 - USDA 2009-2010 end. stocks est. reduced from 5.6 to 5.4 million bales.
9-11 - USDA 2009-2010 end. stocks est. kept at 5.6 million bales.
8-12 - USDA 2009-2010 U.S. end. stocks est. kept at 5.6 million bales.
7-10 - USDA 2009-2010 U.S. end. stocks est. kept at 5.6 million bales.
6-30 - USDA: 9.05 million planted acres, -4% from a year ago.

Fundamental Notes

On June 10, 2010, the USDA reduced its estimate of U.S. 2010-2011 ending stocks from 3.0 to 2.8 million bales, down slightly from 2.9 million bales in 2009-2010. That puts the 2010-2011 ending stocks to use ratio at 17%, the lowest in 15 years. Worldwide, the USDA expects 2010-2011 ending stocks to fall from 52 to 50 million bales, or 42% of annual use.

In 2009-2010, the USDA expects exports to be down 8% and, so far, they are down 16%. As of June 6, 2010, 91% of the U.S. cotton crop was planted and 66% of it was rated good to excellent.

 

 

LIVE CATTLE

 

Chart Comment

August cattle have been in an up-trend this year, but took a pause after the sharply lower close on May 14th. 89 cents looked like good support for a while, but then prices broke below that on June 4th - weak

Key Events - Live cattle

2010
5-21 USDA: May 1 cattle on feed -3.4% from a year ago, slightly less than expected.
5-13 - USMEF: Q1 total beef exports +11% from a year ago.
4-23 - USDA: Apr. 1 cattle on feed -3.5% from a year ago, less than expected.
4-14 - USMEF: February total beef exports +9% from a year ago.
3-19 - USDA: Mar. 1 cattle on feed -3.2% from a year ago, as expected.
3-12 - USMEF: January total beef exports +9% from a year ago.
2-19 - USDA: Feb. 1 cattle on feed -2.6% from a year ago and a little more than expected.
2-18 - USMEF: December total beef exports +9% from a year ago.
2-16 - Statistics Canada: 13.0 million head of cattle in inventory on January 1st, down 1.3% from a year ago and the lowest number in 15 years.
1-29 - January 1st cattle inventory down .9% from a year ago and the lowest in seven years, but a little more than expected.
1-22 - USDA: Jan. 1 cattle on feed -2.0% from a year ago, less than expected.
1-15 - USMEF: November total beef exports +4% from a year ago.

2009
12-18 - USDA: Dec. 1 cattle on feed -.6% from a year ago, less than expected.
12-11 - USMEF: October beef exports -4% v. year ago.
11-20 - USDA: Nov. 1 cattle on feed +.6% from a year ago.
11-16 - USMEF: September beef exports -22% v. year ago.
10-30 - R-CALF USA sends letter to White House, describes "acute crisis" in the cattle industry.
10-16 - USDA: Oct. 1 cattle on feed +.6% from a year ago, a little more than expected.
10-12 - USMEF: August beef exports -26% v. year ago.
9-18 - USDA: Sept. 1 cattle on feed -1.2% v. yr ago, more than expected.
9-11 - USMEF: July beef exports -13% from a year ago.

Fundamental Notes

On June 10, 2010, the USDA said that they expect beef production to be down 2% in 2010 and choice steers to average 94 cents per pound. So far in 2010, U.S. beef production is down 1% from a year ago. In 2011, they expect beef production to be down 2%.

The May 1st cattle on-feed inventory was 10.453 million head, down 3.4% from a year ago, slightly less than expected. April placements were up 2% and marketings were down 1% from a year ago. As of January 1, 2010, the U.S. cattle and calf inventory totaled 93.7 million head, down .9% from a year ago and the lowest in seven years. On February 11, 2010, the USDA said that they expect cattle inventory to bottom sometime in 2011.

 

 

CRUDE OIL

 

Chart Comment

On May 5th, crude oil broke lower, pressured by concerns about Europe's debt problems. So far, there has only been one close below $70 - will $70 hold as support?

Key Events - Crude oil

2010
6-9 - OPEC: World oil demand est. at 85.37 mbd in 2010.
6-8 - DOE: World oil demand est. at 85.5 mbd in 2010 and 86.6 mbd in 2011.
5-11 - DOE: World oil demand est. at 85.6 mbd in 2010 and 87.2 mbd in 2011.
5-11 - OPEC: World oil demand est. at 85.38 mbd in 2010.
4-14 - OPEC: World oil demand est. at 85.21 mbd in 2010.
4-6 - DOE: World oil demand est. at 85.5 mbd in 2010.
3-10 - OPEC: World oil demand est. at 85.24 mbd in 2010.
3-9 - DOE: World oil demand est. at 85.5 mbd in 2010.
2-10 - DOE: World oil demand est. at 85.3 mbd in 2010.
2-10 - OPEC: World oil demand est. at 85.12 mbd in 2010.
1-19 - OPEC: World oil demand est. at 85.15 mbd in 2010.
1-15 - IEA: World oil demand est. at 86.3 mbd in 2010.
1-12 - DOE: World oil demand est. at 85.2 mbd in 2010.

2009
12-30 - DOE: Crude oil supplies at 326 mb.
12-15 - OPEC: World oil demand est. at 84.3 mbd in 2009 and 85.1 mbd in 2010.
12-12 - Iraq's Oil Minister: Production capacity could reach 12 mbd in six years.
12-8 - DOE: World oil demand estimated at 84.1 mbd in 2009 and 85.2 mbd in 2010.
11-11 - OPEC: World oil demand est. at 84.3 mbd in 2009 and 85.1 mbd in 2010.
11-10 - DOE: World oil demand estimated at 84.1 mbd in 2009 and 85.4 mbd in 2010.
10-13 - OPEC: World oil demand est. at 84.2 mbd in 2009 and 84.9 mbd in 2010.
10-6 - DOE: World oil demand estimated at 83.7 mbd in 2009 and 84.8 mbd in 2010.
9-28 - Iran test fired Shahab-3 missiles with a 2,000 kilometer range, capable of reaching Israel and other targets around the Middle East. This adds to the tensions created by Friday's disclosure that they have a second nuclear facility near Qom.
9-24 - IHS Cambridge Energy Research Associates: The oil industry discovered 10 billion barrels of new oil reserves in the first half of 2009 and is on track for their best year since 2000.
9-15 - OPEC: World oil demand est. at 84.1 mbd in 2009 and 84.6 mbd in 2010.
9-10 - DOE: Crude supplies down 5.9 mb to 337.5 mb.
9-10 - DOE: 165.6 million barrels of distillate inventories is the most since 1983.
9-9 - DOE: World oil demand estimated at 83.7 mbd in 2009 and 84.6 mbd in 2010.

2008
12-17 - OPEC cuts production 2.2 mbd.
10-24 - OPEC cuts production 1.5 mbd.

2001
9-11.

 

Fundamental Notes

Fundamentally, the key statistic in the crude oil market is world surplus production capacity and that was only 1.5 million barrels per day (mbd) in 2008 - most of it in Saudi Arabia. On June 8, 2010, the U.S. Energy Department said that surplus capacity was 5.2 million barrels per day in May - a far more comfortable margin.

On June 8, 2010, the DOE estimated OPEC's actual production at 29.3 mbd in May with 2.35 mbd coming from Iraq. The DOE also estimated that world consumption will total 85.5 mbd in 2010. West Texas crude oil prices are expected to average $78.75 in 2010 and $82.50 in 2011. On June 4th, U.S. crude oil stocks were down slightly from a year ago.