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Thursday, May 8, 2008

U.S. Economy
Same-store sales at Wal-Mart were up 3.2% in April, better than expected. At Costco, same-store sales were up 8% in April, also better than expected.

The U.S. Labor Department said that jobless claims were down 18,000 to 365,000, less than expected. The March eurodollars were up .11 at 97.095.

Grains
The USDA said that, as of last week, 2007-2008 exports of:
Corn remained up 16% from a year ago.
Soybeans remained down 3% from a year ago.
Wheat remained up 46% from a year ago (with four weeks left).
Cotton slipped from up 27% to up 25% from a year ago.

Last week's net sales of cotton were impressive at 564,000 bales. July cotton was up .48 at 70.85 ahead of tomorrow's monthly USDA supply and demand estimates.

Rain is falling today in Illinois, Indiana, Ohio, and Pennsylvania - several places where farmers would like a break from the rain to get some planting done. December corn finished up 15.75 cents at a new contract high of $6.462.

Today's U.S. Drought Monitor continues to show extreme drought conditions in the western half of North Dakota and abnormal dryness in much of the winter wheat crop's growing area. July wheat closed up 14.5 cents at $8.22.

Livestock
August cattle closed up 1.67 at a new contract high of 9930, blamed on fund-buying and active interest from packers for slaughter-ready cattle.

Lumber
Housing starts in Canada were at an annual rate of 213,900 units in April, down 12% from March's pace. July lumber ended down .70 at $251.80.

Coffee
The Brazilian government estimated its upcoming coffee harvest at 45.5 million (60 kg) bags, up from last month's estimate of 44.2 million bags. Many analysts are looking for the crop to top 50 million bags. July coffee closed up 3.45 cents at $1.3455.

Energies
The U.S. Department of Energy said that underground supplies of natural gas were up 65 billion cubic feet last week to 1.436 trillion cubic feet. Supplies are now down 17% from a year ago. July natural gas was down 8.2 cents at $11.37.

Currencies
Australia's Bureau of Statistics said that the unemployment rate increased from 4.1% to 4.2% in April, but 25,400 new jobs were added, more than expected. The June Australian dollar ended up .01 at 93.87.

The Bank of England met and kept the interest rate unchanged at 5.0%. The European Central Bank also kept its interest rate unchanged at 4.0%. The June euro was up .0004 at $1.5375.

India put a stop to trading futures in soybean oil in an effort to keep down prices.

Toyota predicted that it will have its first annual loss in seven years, due to a stronger yen and weaker U.S. sales.

Wednesday, May 7, 2008

U.S. Economy
The U.S. Labor Department said that worker productivity was up an annual rate of 2.2% in the first quarter, better than expected. Unit labor costs were up an annual rate of 2.2% in the first quarter, down from a 2.8% annual gain in the fourth quarter. The March eurodollars were up .07 to 96.985. The June U.S. dollar index gained 51.5 cents to 73.69, matching its highest close in two months.

There is no encouragement for the housing industry here - the National Association of Realtors said that the pending home sales index was down 1.0% in March and down 20.1% from a year ago. Surprisingly, July lumber closed up $5.90 at $252.50, the highest close in three weeks.

Grains
More rain is falling today on the winter wheat crop in the Central Plains and in parts of the Midwest, continuing to make corn planting difficult. December corn was up 7 cents at $6.305.

The USDA said that Iraq bought 300,000 tons of U.S. hard red winter wheat for 2008-2009. Also, Dow Jones Newswires reported that Jordan purchased 100,000 tons of wheat from either Kazakh or Ukraine. July wheat closed down 10.5 cents at $8.075.

Statistics Canada said that there were 10.825 million tons of wheat on hand as of March 31st, down 32% from a year ago. Canola stocks were down 22% from a year ago.

July soybeans closed up 32 cents at $13.09 with ongoing concerns about the determination of farmers in Argentina to hold back soybeans, in protest of the government's new export taxes.

Cocoa and Coffee
July cocoa closed down $44 at $2,682 and July coffee closed down 2.50 cents at $$1.3110, both hurt by today's stronger U.S. dollar.

Sugar
Expectations for increased world production of sugar this year are keeping a lid on sugar prices. July sugar ended down .09 at 11.73 in spite of record high gasoline prices.

Energies
The U.S. Department of Energy (DOE) said that crude oil supplies were up 5.7 million barrels last week to 325.6 million barrels, more than expected and thanks to increased imports. Supplies of gasoline were up 800,000 barrels while heating oil supplies were up 100,000 barrels. July crude oil finished up $1.86 at another new contract high of $123.20.

The DOE also said that refinery use slipped from 85.4% to 85.0% of capacity last week. Over the past four weeks, gasoline demand was up .3% from a year ago while distillate demand was down .5% from a year ago.

Currencies
Eurostat said that retail sales volume in the Euro area 15 was down .4% in March. The June euro closed down 1.29 cents at $1.5371.

The U.K.'s Office for National Statistics said that factory output was down .5% in March, weaker than expected. The June pound fell 2 cents to $1.9472.

Tuesday, May 6, 2008

Metals
July copper fell 6.90 cents to $3.8785 with news that union workers at Codelco in Chile agreed to accept a bonus and return to work after being on strike for 20 days.

These are rich times for many gold miners. Barrick Gold, the world's largest gold producer, said that it earned $514 million in the first quarter, up from a $159 million loss a year ago. They also said that they expect to produce around 7.8 million ounces this year at a cash cost of roughly $400 per ounce. June gold closed up $3.60 at $877.70.

On the other hand, the world's third largest gold producer, AngloGold Ashanti, posted a loss in the first quarter because its gold sales were hedged at a lower price.

Grains
Late yesterday, the USDA said that 27% of the corn crop was planted, down from its five-year average of 59%. On Friday, the USDA will release its first monthly supply and demand estimates for 2008-2009. December corn closed up 10.75 cents at $6.235.

Dow Jones Newswires reported that a government official in Pakistan said that they will need to buy 250,000 tons of wheat in the next three months. July wheat finished up 12.5 cents at $8.18.

Lumber
It may be early, but an editorial ran in the Wall Street Journal today with the title, "The Housing Crisis Is Over." July lumber closed up $4.00 at $246.60.

Sugar
July sugar closed up .34 at 11.82, helped by record high gasoline prices.

Energies
This will get some attention: an analyst at Goldman Sachs predicted that crude oil could trade as high as $125 per barrel this year and $200 per barrel in 2009. July crude oil closed up $1.87 at another new contract high of $121.34.

The U.S. Department of Energy (DOE) said in today's Short-term Energy Outlook that they expect West Texas Intermediate crude oil prices to average $110 per barrel in 2008 and $103 in 2009. Unlike the Goldman Sachs analyst, they expect an increase in non-OPEC production to help ease prices by early 2009.

The DOE also expects Henry Hub natural gas to average $9.70 per thousand cubic feet (Mcf) in 2008 and $9.40 per Mcf in 2009. July natural gas was higher most of the day, but ended down 3.4 cents at $11.286.

Currencies
An index of services in the U.K. fell from 52.1 to 50.4 in April, weaker than expected. The June British pound was up .0013 at $1.9672.

The Reserve Bank of Australia met and kept its interest rate unchanged at 7.25%, saying that there is evidence that domestic demand is slowing. The June Australian dollar ended up .36 at a new contract high of 94.51.

Canada issued C$5.6 billion of building permits in March, down 4.5% on the month.

Monday, May 5, 2008

U.S. Economy
The Institute of Supply Management's U.S. index of services increased from 49.6 to 52.0 in April, stronger than expected. The March eurodollars were up .03 at 96.895.

Metals
Codelco stopped work at the world's largest underground copper mine yesterday, due to a dispute with striking workers. July copper closed up 12.70 cents at $3.9475.

Gold Field's South Deep mine was given permission to open again by safety inspectors today after nine people died there in an accident on Thursday. June gold closed up $16.10 at $874.10.

Grains
The USDA said that Japan bought 105,664 tons of U.S. corn for this year and 56,896 tons for 2008-2009. Also, 116,000 tons of U.S. corn were sold to unknown destinations for this year. July corn fell 19.5 cents anyway, to $5.94, hurt by news that 22 Republican senators (including John McCain) want the Environmental Protection Agency to reduce or eliminate the 15-year ethanol mandate.

The USDA said that last week's export inspections of:
Corn totaled 30.7 million bushels, down 12% from a year ago.
Soybeans totaled 11.9 million bushels, up slightly from a year ago.
Wheat totaled 19.5 million bushels, up 3% from a year ago.
July wheat ended down 3.5 cents at $8.055.

After the close, the USDA said that, as of yesterday:
27% of the corn crop was planted, down from its five-year average of 59%.
5% of the soybean crop was planted, down from its five-year average of 14%.
26% of the cotton crop was planted, down from its five-year average of 32%.
58% of the spring wheat crop was planted, down from its five-year average of 62%.
47% of the winter wheat crop was rated good to excellent, up from 46% a week ago.

Livestock
August cattle were down .77 at 97.47 with reports that South Korean consumer groups are strongly opposed to their government's decision to accept U.S. beef imports.

Orange juice
After the close, the USDA's Florida Weather Crop Report said that 6.1 million boxes of Valencias were harvested last week and that the harvest is about half way through. They also noted that "(citrus) trees were beginning to show slight afternoon wilt during the heat of the day." July orange juice ended down .0085 at $1.2070.

Energies
July crude oil jumped up $3.68 to a new contract high of $119.47 after another attack on a Royal Dutch oil station in southern Nigeria over the weekend. There are also ongoing concerns about Iran.

Cocoa
Rebels in the northern half of the Ivory Coast are supposed to begin disarming now, ahead of November's presidential elections. This has been tried unsuccessfully before so it will be interesting to see if it actually happens this time. July cocoa was up $10 at $2,631.

Friday, May 2, 2008

U.S. Economy
The U.S. Labor Department said that the unemployment rate improved from 5.1% to 5.0% in April, but that non-farm payrolls declined by 20,000, a smaller loss than expected. The June U.S. T-bonds closed down 29/32nds at 116.15/64ths.

The Labor Department also said that non-farm payrolls were down 81,000 in March and down 83,000 in February.

The U.S. Commerce Department said that factory orders were up 1.4% in March, stronger than expected. Excluding transportation, orders were up 2.2%. The March eurodollars were down .09 at 96.865.

The Federal Reserve announced that it was acting in coordination with the European Central Bank to expand credit and will increase the emergency reserves it offers to banks to $150 billion in May.

Grains
More rain is pushing through the Midwest today, making it difficult to get the corn crop planted. December corn ended down 2 cents at $6.295.

Argentina's farmers are saying that they will resume their strike tomorrow against the government's new high export taxes. July soybeans closed up 33.5 cents at $13.045.

Livestock
USDA Secretary Schafer said that his department will purchase $50 million of pork products to donate to child nutrition programs. August hogs closed up .45 at 76.10.

After the close, the USDA estimated this week's beef production at 535.2 million pounds, up 8.1% from a year ago. Pork production was estimated at 436.2 million pounds, up 9,5% from a year ago. August cattle were up .75 to 98.25.

Lumber
These are tough times for lumber producers. Canadian lumber producer, Canfor, said that it lost C$85.4 million in the first quarter, even worse than its C$43 million loss in the first quarter a year ago. The company has been reducing production in an effort to weather the storm of poor housing demand. July lumber closed up $8.40 at $245.90.

Orange juice
The ten day forecast for central Florida is mostly warm and dry. July orange juice finished up 3.25 cents at $1.2155.

Energies
Turkey launched airstrikes overnight against Kurdish rebel bases in Iraq. No oil facilities were hit, but it did make the oil market nervous. June crude oil jumped up $3.80 to $116.32.

An eight day strike in Nigeria was settled yesterday and Exxon is expected to begin again producing 800,000 barrels of crude oil per day.

Metals
June gold got a little bounce after yesterday's sell-off and closed up $7.10 at $858.00.

Currencies
Australia's Bureau of Statistics said that retail sales were up .5% in March, better than expected. The June Australian dollar was up .27 at 93.10.

Thursday, May 1, 2008

U.S. Economy
The U.S. Commerce Department said that personal incomes were up .3% in March while consumer spending was up .4%... just enough to keep up with inflation. The March eurodollars were down .04 at 96.955.

The June U.S. dollar index jumped up .76 to 73.48, the highest close in seven weeks, with growing convictions that the Federal Reserve may be done lowering the federal funds rate. Most commodities are trading lower and the June U.S. T-bonds ended up 8/32nds at 117.09/64ths.

The June S&P 500 was higher, encouraged by several earnings reports today, today's drop in commodity prices, and a 2% federal funds rate.

The Institute of Supply Management's manufacturing index was steady at 48.6 in April, better than expected, but still a sign of contraction.

The U.S. Census Bureau said that construction spending was at an annual rate of $1.123 trillion in March, down 1.1% from February's pace. So far in 2008, U.S. construction spending was down 2.4% from a year ago.

The U.S. Labor Department said that jobless claims were up 35,000 last week to 380,000.

Grains
The USDA said that, as of last week, 2007-2008 exports of:
Corn slippped from up 17% to up 16% from a year ago.
Soybeans remained down 3% from a year ago.
Wheat remained up 46% from a year ago.
Cotton fell from up 31% to up 27% from a year ago.

Net sales of cotton were especially impressive last week at 643,000 bales, roughly triple its usual pace. July cotton fell 1.92 cents anyway, to 69.25, the lowest close this year, overwhelmed by today's stronger U.S. dollar.

Today's U.S. Drought Monitor shows extreme drought conditions in western North Dakota which will be hard on the spring wheat crop. Drought conditions in the southeastern U.S. have improved significantly since last fall. July wheat ended down 11 cents at $7.90.

July soybeans closed down 43 cents at $12.71, the lowest close in three weeks, caught in today's broad, commodity sell-off.

Livestock
August lean hogs closed down 1.20 at 75.65, the lowest close in two weeks, hurt by poor packer margins and talk that some plants might reduce their slaughter on Saturday.

Cocoa
July cocoa fell $159 to $2,617, hurt by a stronger U.S. dollar while the mid-crop harvest is underway.

Coffee
July coffee dropped 6.20 cents to $1.2925, the lowest close in nearly six months, while Brazil is in the early stages of its coffee harvest.

Sugar
July sugar closed down .46 at 11.35, the lowest close since January 2nd, hurt by the strong dollar and expectations for increased world production this year.

Energies
The U.S. Department of Energy said that underground supplies of natural gas were up 86 billion cubic feet last week to 1.371 trillion cubic feet. This puts supplies down 16% from a year ago and roughly even with the five-year average. July natural gas was down 27.7 cents to $10.702.

Metals
Today's stronger dollar and reports of slow U.S. vehicle sales hit copper prices hard. Vehicle sales for Ford were down 12% and sales for GM were down 16% in April from a year ago. July copper closed down 21 cents at $3.6945, the lowest close in five weeks.

June gold finished down $14.20 at $850.90, the lowest close this year, hurt by the stronger dollar and concerns that the Fed is done lowering interest rates.

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