Reports & Statistics
Housing starts fell 1 percent in July to a seasonally adjusted 581,000. A MarketWatch survey had revealed expectations for a rise to 596,000. Single-family home permits rose 5.8 percent.1 According to the National Association of Realtors, the sales of existing homes in the US climbed 7.2 percent in July.2 The Producer Price Index showed a 0.9 percent decline in July versus expectations for a 0.3 percent drop.3
This week’s EIA data showed crude oil stocks declined by 8.4 million barrels versus a Reuters’ forecast for a 1.3 million barrel build. Distillates were down 700,000 barrels in contrast to expectations for a 600,000 barrel increase. Gasoline supplies dropped 2.1 million barrels versus expectations for a 1.1 million barrels decline.4 Natural gas in storage added 52 billion cubic feet, in line with Platts survey numbers.5
Top Commodity News
Precious Metals
Gold imports into India were down in July from a year earlier. According to the president of the Bombay Bullion Association, individuals hurt by the current economic conditions or farm incomes hurt by lacking monsoon rains may be behind lower sales. High prices may also have been a factor.6 Record silver production of 18.8 million ounces is being reported by Mexico’s Fresnillo.7 Implats’ (South Africa’s Impala Platinum) workers may strike over wages next week.8 Stillwater Mining – the US PGM miner – met with GM executives last week, but the meeting yielded little regarding the recent termination of the contract between the two companies.9
Grains & Oilseeds
Weather conditions in the US have been beneficial for soybeans, especially in Nebraska, according to the Pro Farmer Crop Tour.10 China may offer subsidies to crushers who purchase soybeans from government supplies, according to a Bloomberg news report. The move is intended to “narrow the gap in prices between domestic and imported” soybeans.11 Concerns for the Western Australian wheat crops have arisen due to dry weather, but production forecasts remain unchanged. The critical month for rainfall will be September.12
Coffee, Cocoa & Sugar
Rain in Nigerian cocoa growing areas may give farmers reason to delay harvesting some cocoa beans amid fears of mold.13 In Ivory Coast, local prices forcocoa beans may have fallen due to poor quality of “improperly dried beans”.14 Main crop harvest is set to begin next month in Ivory Coast and may be larger than last year as the number of black pod cases could be lower amid favorable weather conditions.15 According to the chairman of the Vietnam Coffee and Cocoa Association16, the 2009/2010 coffee crop in Vietnam could be 15 to 20 percent below the total for the previous crop due to poor weather.17 A deputy from the National Coffee Corporation in Vietnam has said that 28 percent of coffee farms “have a low yield as they were planted over 20 years ago”, and farmers must cultivate additional hectares to make up yield.18 Mexican drought has not affected that country’s coffee crop. Exports are expected to be nearly 2.8 million bags.19 According to the Utter Pradesh Sugar Mills Association president, an improving monsoon season in India “may limit damage to the sugarcane crop [and] improve the sucrose content in cane”.20
Livestock
The Canadian government has “announced a C$75 million program to reduce hog production and oversupply” named the Hog Farm Transition Program.21 Drought conditions in Argentina may cause cattle deaths, and lead to beef imports for the South American nation.22 Weaker demand may lead to a continued drop in livestock inventories in the US.23
USDA Livestock, Dairy, and Poultry Outlook – http://www.ers.usda.gov/Publications/LDP/2009/08Aug/ldpm182.pdf
Coming Up Next Week:
Monday: Crop Progress
Tuesday: Durable Goods, Consumer Confidence
Wednesday: Energy Stocks, New Home Sales
Thursday: Gas Storage, GDP, Rice Stocks
Friday: Personal Income/Spending
Disclaimer: Futures and options trading involves substantial risk of loss and is not suitable for all investors. Past performance is not indicative of future results. Copyright 2009 LaSalle Futures Group
1 http://www.marketwatch.com/story/us-housing-starts-flat-in-july-at-581000-pace-2009-08-18-83100
2 http://news.yahoo.com/s/nm/20090821/bs_nm/us_usa_economy_housing
3 http://www.forbes.com/feeds/afx/2009/08/18/afx6789145.html
4 http://www.reuters.com/article/marketsNews/idUSN1938919920090819
5 http://www.forbes.com/feeds/ap/2009/08/20/business-broadcasting-amp-entertainment-us-natural-gas-storage_6798867.html
6 http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=87691&sn=Detail
7 http://www.mineweb.com/mineweb/view/mineweb/en/page32?oid=87648&sn=Detail
8 http://www.mineweb.com/mineweb/view/mineweb/en/page35?oid=87869&sn=Detail
9 http://www.mineweb.com/mineweb/view/mineweb/en/page35?oid=87786&sn=Detail
10 http://www.bloomberg.com/apps/news?pid=20601086&sid=av.rr6UdDq7o
11 http://www.bloomberg.com/apps/news?pid=20601086&sid=apowlHXsXXZc
12 http://online.wsj.com/article/BT-CO-20090821-701731.html
13 http://www.bloomberg.com/apps/news?pid=20601116&sid=a_ULMPmaF5QU
14 http://af.reuters.com/article/investingNews/idAFJOE57K0HJ20090821
15 http://www.flex-news-food.com/pages/25521/Cocoa/Ivory-Coast/west-ivorian-cocoa-main-crop-seen-last-year.html
16 http://www.flex-news-food.com/pages/25550/Coffee/Vietnam/bad-weather-hit-vietnam-0910-coffee-crop.html
17 http://in.reuters.com/article/domesticNews/idINLL31246620090821
18 http://www.thanhniennews.com/business/?catid=2&newsid=51877
19 http://www.flex-news-food.com/pages/25522/Coffee/Mexico/mexico-coffee-harvest-not-hurt-drought-far.html
20 http://online.wsj.com/article/SB125076222646745813.html
21 http://www.meatingplace.com/MembersOnly/webNews/details.aspx?item=13427
22 http://www.meatingplace.com/MembersOnly/webNews/details.aspx?item=13450
23 http://www.meatingplace.com/MembersOnly/webNews/details.aspx?item=13453
