Reports & Statistics
According to the latest ISM data, non-manufacturing industries index in the US fell in July to 46.4 percent from 47 percent in June. Economists were expecting a slight increase.1 The ISM Manufacturing index rose last month to 48.9 percent from 44.6 percent in June, beating economists’ expectations for 46.2 percent.2 Construction spending rose in June to 0.3 percent above May.3 Personal income fell 1.3 percent in June, and personal spending rose 0.4 percent.4 The latest release from the Labor Department showed the unemployment rate fell to 9.4 percent from 9.5 percent in July. Job losses were 247,000, much better than the June number of 443,000. Predictions ahead of the release covered a wide range; however, the median estimate of a Bloomberg survey was for a loss of 325,000 jobs.5
In energies, crude oil supplies reported by the EIA rose 1.7 million barrels. The Platts survey showed expectations for a rise of 1.5 million barrels. Gasoline supplies fell by 200,000 barrels versus expectations for a 2 million barrel decline. Distillates posted a 1.1 million barrel drop versus a forecast for a build of 1.1 million barrels.6 Natural gas in storage grew by 66 billion cubic feet. Supplies are over 19 percent greater than the five-year average.7
Top Commodity News
Precious Metals
Chinese gold miner Sino Gold is aiming to double its gold production by 2012. The 2009 gold production forecast from their Jienfeng and White Mountain lodes is “between 210,000 and 230,000 ounces”, up from 2008.8 Coeur d’Alene mines in Bolivia and Mexico may have contributed to their recent report of a 74 percent “increase in silver production and profit return.”9 HSBC is raising its gold and platinum price forecasts for 2009.10 Bank of America raised its platinum price forecast for 2010.11
Grains & Oilseeds
Forecasts call for positive weather in the northern Plains – a benefit for spring wheat crops.12 The latest Farm Futures Survey suggests that corn and soybean crops in the US could offer higher yields and numbers than previously anticipated. Average yield numbers for corn and soybeans from their survey of US farmers top the most recent forecasts from the USDA.13 The next USDA Crop Production and WASDE forecasts are due next Wednesday.14 Brazil’s corn output forecast has been raised – possibly to as much as 50.27 metric tons, according to the Agriculture Ministry. In other South American news, Argentina may lift the export restrictions on corn and wheat.15
Coffee, Cocoa & Sugar
India may purchase around 5 million tons of sugar in the next season following what may be a poor harvest. According to the secretary general of the Bombay Sugar Merchants Association, their requirements may be for 23 million tons while production may be 17 to 18 million tons. Bad weather may also be the catalyst for a 400,000 ton sugar import quota for Mexico.16 Mexico’s imports will be for August through December of this year, while India’s sugar mills will likely import through September of 2010. According to Unica, Brazil’s center south region has an excess of rainfall which may damage sugar crops and hurt output.17 Heavy rains in areas of India may have damaged up to 30 percent of coffee crop, mainly on Robusta plants. The Coffee Board will complete assessment in a coffee yield survey in October.18
Livestock
According to the latest Hog Outlook report from University of Missouri economists, pork demand from US consumers in the first half of this year was up 4.2 percent over last year. Live hog demand in the same months was down 4.2 percent. Sow slaughter was “down 9.2 percent from a year earlier” in the four week period which ended July 18th.19 A third dairy cow retirement program from the Cooperatives Working Together may send more cows for ground beef slaughter.20
Coming Up Next Week:
Monday: Crop Progress
Tuesday: FOMC Meeting Day 1
Wednesday: Energy Stocks, FOMC Meeting Day 2, WASDE/Crop Production
Thursday: Gas Storage, Retail Sales
Friday: CPI, Industrial Production, Utilization
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/non-manufacturing-industries-worsen-in-july-ism-2009-08-05
2 http://www.cbonds.info/all/eng/news/index.phtml/params/id/439752
3 http://www.bizjournals.com/kansascity/stories/2009/08/03/daily36.html
4 http://money.cnn.com/2009/08/04/news/economy/personal_income_spending/
5 http://www.bloomberg.com/apps/news?pid=20601103&sid=ajR8ZIdKCXrU
6 http://www.marketwatch.com/story/oil-extends-losses-after-eia-data-2009-08-05
7 http://online.wsj.com/article/BT-CO-20090806-715231.html
8 http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=87062&sn=Detail
9 http://www.mineweb.com/mineweb/view/mineweb/en/page32?oid=87247&sn=Detail
10 http://www.mineweb.com/mineweb/view/mineweb/en/page35?oid=87176&sn=Detail
11 http://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSL628299120090806
12 http://www.forbes.com/feeds/reuters/2009/08/06/2009-08-06T194422Z_01_SP373519_RTRIDST_0_MARKETS-GRAINS-UPDATE-4.html
13 http://www.farmfutures.com/ME2/dirmod.asp?sid=CD26BEDECA4A4946A1283CC7786AEB5A&nm=News&type=news&mod=News&mid=9A02E3B96F2A415ABC72CB5F516B4C10&tier=3&nid=6389D2C3408F424ABFCA1D1A742105F2
14 http://www.usda.gov/wps/portal/!ut/p/_s.7_0_A/7_0_1OB?navtype=MA&navid=NEWSROOM
15 http://www.bloomberg.com/apps/news?pid=20601086&sid=akNrdObGgK1M
16 http://www.forbes.com/feeds/reuters/2009/08/06/2009-08-06T193457Z_01_L6129976_RTRIDST_0_MARKETS-SOFTS-UPDATE-3.html
17 http://www.bloomberg.com/apps/news?pid=20601086&sid=atrWSDTWnL0Y
18 http://timesofindia.indiatimes.com/NEWS/City/Mysore/30-coffee-crop-lost-due-to-rain/articleshow/4849385.cms
19 http://www.meatingplace.com/MembersOnly/webNews/details.aspx?item=13259
20 http://www.meatingplace.com/MembersOnly/webNews/details.aspx?item=13293
