Global Futures Weekly Recap
Weekly Recap of the Metals, Energy, Grains, Meats, and Softs Markets
Gold had a wild week gaining 13-percent with historic volatility. Investors seeking safety from the financial crisis, and speculation that the global liquidity machine will increase inflation was noted for the bullish action in gold. The December contract finished the week over $100 higher at $864.70 an ounce.
The Federal Reserve, late Tuesday, seized control of AIG with an $85 billion bailout in an attempt to avert a potentially disastrous bankruptcy. The move by the Fed was the government's most dramatic attempt to halt a systemic threat to the global financial system.
Financial market turmoil continued in Russia this week, as trading on the country's major exchanges were halted for two straight days. The finance ministry announced plans to loan the three largest banks in Russia up to $44 billion.
Even money market funds that were considered low-risk investments have had to close. Putnam Investments LLC closing its $12.3 billion institutional Putnam Prime Money Market Fund closed due to "significant redemption pressure," the company said.
December silver gained $1.68 on the week to settle at $12.48 an ounce, October platinum fell $165 at $1,147 an ounce, and December copper settled nearly unchanged on the week at $3.18 a pound.
Crude oil settled the week 3.3-percent higher, with the October contract closing $3.37 higher at $104.55 a barrel. Crude fell to a 7-month low early in the week, before a larger than expected decline in crude inventories combined with a rally on Wall Street sent oil higher.
The Energy Information Administration reported that U.S. crude stocks fell by 6.3-million barrels for the week ending Sept. 12. The draw-down in inventories was much larger than the 3.7-million barrel drop expected by analysts.
The EIA also noted that motor gasoline supplies fell 3.3 million to 184.6 million in the latest week, falling 32.5 million in eight weeks. Refinery utilization slid to 77.4-percent of capacity last week from 78.3-percent a week earlier. October RBOB gasoline settled the week 6.1-percent lower at $2.5997 a gallon.
The Interior Department said that at least 49 offshore oil or natural gas production platforms in the Gulf of Mexico were destroyed by Hurricane Ike. The destroyed platforms were capable of producing 13,000 barrels of oil and 82 million cubic feet of natural gas a day, the Minerals Management Service said in a statement.
The Energy Information Administration reported an injection of 67 bcf of natural gas into storage during the week ended Sept. 12, lifting the amount of working gas in storage to 2.97 tcf. The injection still left storage 142 bcf lower than the same period last year but 61 bcf above the 5-year average. October natural gas closed 2.2-percent higher on the week at $7.531 per million British thermal units.
October heating oil fell 1.4-percent on the week to settle at $2.8978 a gallon.
Wheat closed the week nearly unchanged, with the December contract settling 1 1/4 cent lower at $7.18 a bushel. Grains were getting whipsawed by the volatile equity markets as funds continued to liquidate long commodity positions. Fundamentally wheat continues to hit a headwind on expectations for a record crop.
The USDA said this week that 92-percent of the spring wheat harvest is complete, and 11-percent of the hard red winter wheat has already been planted as of Sunday - because of favorable weather in the U.S. Plains.
The forecast for global wheat production in 2008-09 was raised to 676.3 million tons, climbing 5.5 million since the August estimate and up 65.4 million from 2007-08, the U.S. Department of Agriculture said last week.
On a bullish note demand data released Thursday for wheat was above analysts expectations. Strong demand for higher protein wheat was cited for demand outpacing projections.
Corn settled the week 3.7-percent lower at $5.42 a bushel. Favorable weather in the Midwest, with no signs of any frost on the way, combined with poor export sales were noted for much of the decline in corn this week.
Soybeans fell nearly 5-percent this week, with the November contract settling 58 1/2 cents lower at $11.43 1/2 a bushel. The fall was due to funds selling and a report from the USDA citing that export sales fell by 61-percent, from the same four-week period a year ago.
Coffee finished the week nearly 5-percent lower, with the December contract falling 6.2 cents to settle at $1.3310 a pound. Rising production estimates from Columbia, favorable weather over Brazils crop, and the Brazilian real reaching a yearly low against the dollar was noted for the decline on the week.
Brazil's coffee groves are expected to receive beneficial showers and thunderstorms Saturday night and Sunday. Rainfall is expected to reach 1/2 to 1 1/2 inches, with coverage expected to be widespread. An estimated 85-percent of Brazil's new arabica crop has been harvested with the remainder expected by the end of the month.
Colombia's coffee production from September 2007 through August 2008 was 5-pecent higher on the year at 12.625 million bags, the National Federation of Coffee Growers said Tuesday.
Cotton closed the week nearly unchanged, with the December contract gaining 39 points to settle at 62.52 cents a pound. Cotton fell to a 9 1/2-month low Thursday on demand concerns, before a bullish day Friday pushed cotton slightly higher on the week.
Orange juice was squeezed by 6-percent this week, with the November contract settling 5.60 cents lower at 89.80 cents a pound. Florida, escaping hurricane damage to its groves, combined with no tropical storm action in the Atlantic Basin sent orange juice in the path of least resistance - lower.
Sugar settled the week nearly 6-percent lower, with the October contract falling .71 cents to settle at 11.65 cents a pound. Cocoa finished the week $130 higher at $2,690 a metric ton.
Cattle settled the week mixed, with October feeder cattle finishing 3.07 cents lower 105.85 cents a pound. Concerns over the global economy, and whether continued weakness would affect consumers ability to purchase more expensive protein, were noted for much of the action. After falling to a 5-month low Thursday, October live cattle settled the week nearly unchanged at 101.55 cents a pound.
The U.S. Department of Agriculture's midday beef wire for Friday showed choice cuts were $0.82 per hundredweight lower, while select items fell by $0.71 per hundredweight.
Hogs finished the week moderately higher with October lean hogs gaining 2.1 cents to settle at 68.20 cents a pound. February pork bellies settled 4.6 cents higher at 90.90 cents a pound.