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Wednesday, March 10, 2010
U.S. Economy
The U.S. Census Bureau said that wholesale sales were up 1.3% in January and up 10.5% from a year ago. Inventories were down .2% in January and down 9.7% from a year ago.
The U.S. Treasury sold $25 billion of 10-year T-notes at a median yield of 3.64% with a bid-to-cover ratio of 2.67. They also posted a budget deficit of $220.9 billion in February, roughly as expected. The June U.S. T-bonds ended down 4/32nds at 116.10/32nds.
Economists surveyed in the Blue Chip Economic Indicators newsletter said that real GDP will be up 3.1% in 2010 and up 3.0% in 2011.
The Mortgage Bankers' Association said that its index of mortgage applications was up .5% last week. The rate on a 30-year fixed rate mortgage averaged 5.01%.
Grains and Cotton
The USDA's 2009-2010 U.S. ending stocks estimate of:
Corn was increased from 1.719 to 1.799 billion bushels.
Soybeans was reduced from 210 to 190 million bushels.
Wheat was increased from .981 to 1.001 billion bushels.
Sugar was increased from 1.055 to 1.075 million tons.
Cotton was reduced from 3.3 to 3.2 million bales.
The USDA's 2009-2010 world ending stocks estimate of:
Corn was increased from 134 to 140 million tons.
Soybeans was increased from 60 to 61 million tons.
Wheat was increased from 196 to 197 million tons.
Cotton was reduced from 52 to 51 million bales.
The USDA also said today that China bought 110,000 tons of U.S. soybeans for 2010-2011. May soybeans closed up 10.5 cents at $9.58.
A smaller palm oil crop in Malaysia is boosting prices for soybean oil (see article). May soybean oil closed up .72 at 41.02, the highest close in eight weeks.
July wheat fell 7.75 cents to $4.945, the lowest close in five months, after today's increase in the U.S. and world ending stocks estimates.
Livestock
The USDA raised its average 2010 price estimate for choice steers from 88 to 89.5 cents per pound. June cattle closed down .60 at 91.72.
The USDA raised its average 2010 price estimate for barrows and gilts from 47.5 to 48.5 cents per pound. June hogs were up .17 at 80.65.
Orange juice
The USDA raised its estimate of the 2009-2010 Florida orange crop from 129 to 131 million boxes, but lowered the projected juice yield from 1.56 to 1.53 gallons per box at 42.0 degrees Brix. May orange juice was down .0020 at $1.4695.
Sugar
May sugar closed down .63 at 19.69, the lowest close in seven months, with more talk that upcoming sugar crops will ease the shortage. Brazil's sugarcane harvest is due to begin at the end of this month.
Energies
OPEC's monthly Oil Market Report shows an increase in the 2010 world oil demand estimate from 85.12 to 85.24 million barrels per day. Yesterday, the U.S. Energy Department predicted 85.5 million barrels per day. May crude oil finished up .57 at $82.43.
The U.S. Department of Energy (DOE) said that crude oil supplies were up 1.4 million barrels last week to 343.0 million barrels. Supplies of gasoline were down 2.9 million barrels and heating oil supplies were down 500,000 barrels.
The DOE also said that refinery use fell from 81.9% to 80.7% of capacity last week. Over the past four weeks, gasoline demand was up .5% from a year ago while distillate demand was down 4.1% from a year ago.
Metals
April gold fell $14.20 to $1,108.10, blamed on technical selling.
Currencies
The U.K.'s Office for National Statistics said that its index of production was down .4% in January and down 1.5% from a year ago.
Japan's Cabinet Office said that machinery orders were down 3.7% in January. The March Japanese yen dropped .0070 to 1.1047.
Is world trade improving? China's government said that exports were up 46% in February from a year ago while imports were up 45%.
Tuesday, March 9, 2010
U.S. Economy
The U.S. Treasury sold $40 billion of 3-year T-notes at a median yield of 1.40% with a bid-to-cover ratio of 3.13, better demand than expected.
Grains and Cotton
May corn finished down 6 cents at $3.69, ahead of tomorrow's monthly USDA estimates. Many are still wondering if the wet and cold U.S. weather will disrupt planting schedules this spring.
Livestock
June hogs closed down .97 at 80.47 with concerns that recent price gains will temper demand for pork.
Lumber
U.S. housing demand is poor, but lumber prices remain strong. May lumber closed up its $10 daily limit at $287.00.
Orange juice
May orange juice closed down 2.15 cents at $1.4715 ahead of tomorrow's USDA report. Some are anticipating a smaller Florida crop estimate due to January's freezing temperatures.
Sugar
I don't know of anyone that predicted it, but it looks like concerns of a sugar shortage are easing (see article). May sugar fell 1.25 cents to 20.32, the lowest close in seven months.
Coffee
May coffee closed up 1.65 cents at $1.3275, helped by Vietnam's plan to buy 200,000 tons for a government stockpile.
Metals
Yi Gang, China's decision maker on foreign exchange holdings, told a news conference that the U.S. Treasury market was still very important to China, but he was not eager to boost the price of gold. Over the long-run, he does not believe that gold is a good investment. April gold ended down $1.70 at $1,122.30.
Energies
The U.S. Department of Energy (DOE) said in today's Short-term Energy Outlook that they expect world oil demand to increase from 84.0 to 85.5 million barrels per day in 2010, up from last month's estimate of 85.3 mbd. They expect West Texas Intermediate crude oil to average above $80 this spring. May crude oil ended down .45 at $81.86.
The DOE also said that they expect the spot price of Henry Hub natural gas to average $5.32 per thousand cubic feet in 2010, down from last month's estimate of $5.53.
Currencies
The U.K.'s Office for National Statistics said that total exports were down 6.9% in January while imports were down 1.6%. The March British pound fell
.0087 to $1.4987.
The British Retail Consortium said that like-for-like retail sales were up 2.2% in February.
Japan's Cabinet Office said that its coincident index increased from 97.4 to 99.9 in January, stronger than expected and the tenth consecutive increase. The March yen closed up .0046 at 1.1117.
Some leaders are starting to get it. German Chancellor Angela Merkel and Luxembourg's Prime Minister Juncker said today that Europe and the U.S. must take quick action to regulate credit-default swaps before more financial crises occur.
Monday, March 8, 2010
U.S. Economy
According to a survey by the National Association of Business Economists, most of their members expect a small increase in the federal funds rate sometime in the next six months. The June 2011 eurodollars were down .005 at 98.415.
Grains and Cotton
The USDA said that last week's export inspections of:
Corn totaled 34.1 million bushels, down 22% from a year ago.
Soybeans totaled 30.9 million bushels, down slightly from a year ago.
Wheat totaled 20.4 million bushels, up 39% from a year ago.
May corn ended down a quarter-cent at $3.752 and July wheat was up 2 cents at $5.077.
Brazil identified 102 U.S. items that it will begin raising tariffs on in 30 days unless the two governments reach an agreement before then. The World Trade Organization gave its approval for the tariffs in November because of unfair subsidies that the U.S. pays to its cotton producers (see article). May cotton closed down .39 at 82.04.
Livestock
For the first time since December, Russia has agreed to allow pork imports from the U.S. again. Under the new rules, U.S. exporters will first have to get approval and show that their pork does not contain any of Russia's banned antibiotics. June hogs closed down .42 at 81.45.
Lumber
Canada's Mortgage and Housing Corp. said that housing starts were at an annual rate 196,700 in February, up 6.1% from January and more than expected. May lumber finished up $7.50 at $277.00.
Orange juice
On Wednesday morning, the USDA will give its latest update of this year's Florida orange crop - will there be another reduction due to January's freezing temperatures? May orange juice traded both higher and lower today, ending down .0040 at $1.4930.
Metals
Are gold bulls having second thoughts? April gold turned unexpectedly weak today in spite of a steady U.S. dollar and closed down $11.20 at $1,124.00.
Currencies
Industrial output in Germany was up 2.2% in January from a year ago, stronger than expected. The March euro was up .0010 at $1.3633.
Friday, March 5, 2010
U.S. Economy
The U.S. Labor Department said that the unemployment rate stayed at 9.7% in February while non-farm payrolls were down 36,000, a smaller drop than expected. The June U.S. T-bonds dropped 1.04/32nds to 116.22/32nds.
The U.S. Labor Department also said that the drop in payrolls was revised in January from -20,000 to -26,000 and in December from -150,000 to -109,000.
Grains and Cotton
Overall, grains were steady to lower with the USDA's next monthly estimates due out on Wednesday. May corn finished down 7.5 cents at $3.755, the lowest close in over a week.
Livestock
After the close, the USDA estimated this week's beef production at 476.2 million pounds, down slightly from a year ago. Pork production was estimated at 438.5 million pounds, down 3.5% from a year ago. June hogs were down
.12 at 81.87.
Energies and Metals
Today's jobs report is being seen as a positive indication that the economy is continuing to recover. May crude oil is trading higher. May copper closed up 4.20 cents at $3.4175.
Currencies
Japan had its own positive employment report just two days ago, but the March yen fell .0156 to 1.1068, the lowest close of the week, with concerns that a U.S. recovery favors the dollar.
There seems to be a growing consensus that Europe will be able to manage Greece's debt problems. The March euro closed up .0046 at $1.3623.
Thursday, March 4, 2010
U.S. Economy
The U.S. Labor Department said that jobless claims were down 29,000 last week to 469,000, roughly as expected. Tomorrow morning, the monthly unemployment report will be released.
The National Association of Realtors said that its index of pending home sales was down 7.6% in January, weaker than expected. From a year ago, the index was up almost 9%.
The U.S. Commerce Department said that factory orders were up 1.7% in January, roughly as expected.
The U.S. Labor Department said that non-farm productivity increased at an 5.8% in the fourth quarter of 2009 from a year ago. Unit labor costs were down 4.7% from a year ago. The June U.S. T-bonds finished up 17/32nds at 117.26/32nds.
Grains and Cotton
The USDA said that, as of last week, 2009-2010 exports of:
Corn improved from up 6% to up 7% from a year ago.
Soybeans remained up 34% from a year ago.
Wheat improved from down 23% to down 22% from a year ago.
Cotton improved from down 27% to down 25% from a year ago.
May corn closed down 3.75 cents at $3.83.
July wheat closed down 13.75 cents at $5.145, vulnerable to today's higher U.S. dollar.
Livestock
The USDA said that net sales of beef totaled 5,200 tons last week, down from 8,000 tons the previous week. June cattle were up .20 at 91.67.
Coffee
May coffee closed down 1.90 cents at $1.3020, continuing to disappoint those that were talking about tighter coffee supplies this year.
Energies
The U.S. Department of Energy said that underground supplies of natural gas were down 116 billion cubic feet last week to 1.737 trillion cubic feet, a smaller drawdown than expected. Supplies are now down 4% from a year ago. May natural gas fell 17.8 cents to $4.643, the lowest close in over a year.
Metals
April gold closed down $10.20 at $1,133.10, pressured by today's higher U.S. dollar.
Currencies
The Bank of England met and kept its interest rate unchanged at .50%, as expected.
The European Central Bank met and kept its interest rate unchanged at 1.00%, as expected. Also, Eurostat said again that real GDP was down 2.3% in the fourth quarter from a year ago. The March euro closed down .0123 at $1.3577.
Statistics Canada said that building permits totaled C$5.7 billion in January, down 4.9% from December, but still up 33% from a year ago.
Japan's Finance Ministry said that business investment was down 17% in the fourth quarter from a year ago, the eleventh consecutive negative quarter. The March yen closed down .0090 at 1.1224.
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