Reports & Statistics

Housing starts were higher in May, jumping to 532,000 from 454,000 in April. New permit applications rose 4 percent. Both numbers beat Briefing.com’s forecasts.1 The Producer Price Index (PPI) rose 0.2 percent in May, less than economists’ forecast for a 0.5 percent increase.2 U.S. industrial output declined 1.1 percent in May. This follows a revised decline of 0.7 percent in April, and is worse than analyst estimates for a 1 percent decline.3 The Consumer Price Index (CPI) rose 0.1 percent in May. Over the past year, the CPI has fallen the most since 1950.4

Natural gas demand may decline 2.2 percent this year due to a drop in industrial consumption.5 This week’s EIA report shows a build of 114 billion cubic feet versus expectations for a 104 billion build. The total storage amount is nearly 32 percent higher than June 12th of last year and 23 percent higher than the five-year average.6 Crude oil supplies fell 3.9 million barrels, which was greater than the anticipated 1.7 million barrel drop. Gasoline supplies increased 3.4 million barrels, topping a Platts survey which showed expectations for a 650,000 barrel increase. Distillates came in with a 300,000 barrel increase versus expectations for a 950,000 barrel increase.7

Top Commodity News

Precious Metals

Physical gold sales in India may have increased ahead of the final week of the wedding season. According to dealers, there may have been last minute demand for wedding gold.8 A recent House of Representatives bill includes an attachment which allows U.S. members of the International Monetary Fund (IMF) “to agree the proposed $13 billion sale of 400 tons of IMF gold to shore up its finances”.9 One of the world’s top platinum producers has shut down a furnace for a possible 30-day repair period following a “production incident”. Three other furnaces have been started up “with about half the capacity”.10

Grains & Oilseeds

Soybean yields in Louisiana may suffer from recent dry weather.11 China’s imports of soybeans may decline in the next crop year. Domestic stockpiling spurred Chinese imports, and the latest focus may be on South American soybeans rather than U.S. soybeans.12 Rains and wet weather continue across many states, but progress with field work was also noted.13 Soybean growers in Ohio are being urged to “get out in their fields and start scouting” as high soybean aphid populations are predicted.14 In India, consideration is being given to lifting a ban on rice and wheat exports. The discussion has been spurred by adequate stocks and lower prices. Indian corn supplies may be tight.15

Coffee, Cocoa & Sugar

The strike by Ivory Coast dock workers ended this week. The docker’s union “urged members to resume work” following a meeting with the president.16 Elsewhere in the cocoa growing country, “unusually heavy rains” hit growing regions. Humid conditions may impact the quality of mid-crop beans if access to the plantations is affected.17 In coffee growing regions of Vietnam, rains may boost fruit production and improve crop forecasts.18 This news is in contrast to a Dow Jones story which says adverse weather will reduce the 2009-2010 coffee crop output of Vietnam.19 Rains in India may also help coffee output for the season which begins in October. The Coffee Board has suggested that the crop may increase by 17 percent.20 India may continue its program of duty-free sugar imports through March.21

Livestock

A regional director from the U.S. Meat Export Federation has suggested that U.S. pork demand in Mexico will return to normal in the coming weeks. This forecast follows the possible slowdown of pork demand due to the H1N1 virus.22 A lack of participation has shelved plans for a hog retirement program for U.S. hog farmers. Independent culling of sows is still underway.23 The USDA is forecasting an 8 percent decline in U.S. beef exports, citing weak foreign demand and a stronger U.S. dollar.24

Coming Up Next Week:
Monday: Crop Progress, Cold Storage
Tuesday: Existing Home Sales
Wednesday: Energy Stocks, Durable Goods Orders, New Home Sales, FOMC Meeting Ends
Thursday: Gas Storage, Testimony – Ben Bernanke, GDP
Friday: Quarterly Hogs & Pigs

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://money.cnn.com/2009/06/16/real_estate/May_housing_starts/?postversion=2009061609
2 http://www.marketwatch.com/story/gold-rises-as-dollar-weakens-after-ppi-housing
3 http://www.marketwatch.com/story/industrial-production-slumps-11-in-may
4 http://online.wsj.com/article/BT-CO-20090617-709722.html
5 http://www.google.com/hostednews/ap/article/ALeqM5jGCVlu611POE4ZhZ9Byzh1e3frRQD98T90U00
6 http://online.wsj.com/article/SB124536617277329285.html
7 http://money.cnn.com/2009/06/17/markets/oil/?postversion=2009061715
8 http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=85177&sn=Detail
9 http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=85171&sn=Detail
10 http://www.mineweb.com/mineweb/view/mineweb/en/page35?oid=84896&sn=Detail
11 http://www.2theadvocate.com/news/business/48568992.html
12 http://www.bloomberg.com/apps/news?pid=20601086&sid=aypSmWwJ88I0
13 http://www.agweb.com/get_article.aspx?pageid=151667
14 http://www.wisconsinagconnection.com/story-national.php?Id=1306&yr=2009
15 http://in.reuters.com/article/domesticNews/idINBOM23084320090619?pageNumber=2&virtualBrandChannel=0
16 http://www.bloomberg.com/apps/news?pid=20601116&sid=ajT8DoBU01Fc
17 http://www.thepeninsulaqatar.com/Display_news.asp?section=World_News&subsection=Rest+of+the+World&month=June2009&file=World_News2009061664425.xml
18 http://www.thanhniennews.com/business/?catid=2&newsid=49957
19 http://online.wsj.com/article/BT-CO-20090617-702057.html
20 http://www.bloomberg.com/apps/news?pid=20601091&sid=aDpdMcnUgK3o
21 http://www.bloomberg.com/apps/news?pid=20601091&sid=aArT01u3iRvI
22 http://www.meatingplace.com/MembersOnly/webNews/details.aspx?item=12708
23 http://www.meatingplace.com/MembersOnly/webNews/details.aspx?item=12712
24 http://www.meatingplace.com/MembersOnly/webNews/details.aspx?item=12696