Reports & Statistics
Durable goods orders came in better than anticipated with a 1.8 percent increase in May. Forecasts had pointed to a 0.4 percent decline based on a weaker automobile sector. Orders are still 26.8 percent lower year-over-year.1 In home sales, new homes posted an unexpected decline in May, falling 0.6 percent. The median price for new homes has fallen 3.4 percent.2 Existing home sales were up 2.4 percent, lower than expectations. Median price for homes sold has fallen 16.8 percent from last year.3 The first quarter GDP was expected to show a 5.7 percent decline4, but instead came in at 5.5 percent.5 Personal income rose 1.4 percent in May, and spending increased 0.3 percent.6
EIA data showed a larger than expected decline in crude stocks, falling 3.8 million barrels versus the anticipated 1 million barrel decline. Gasoline stocks gained 3.9 million barrels compared to the expected 1.3 million barrel increase. Distillates were up 2.1 million barrels versus forecasts for an 800,000 barrel increase.7 Natural gas inventories increased 94 billion cubic feet, below analyst forecasts for 96 to 100 billion cubic feet.8
Top Commodity News
Precious Metals
The latest news regarding the platinum-producer Lonmin’s furnace shut down is that 20,000 ounces may be left unprocessed by the end of the fiscal year. This will likely be deducted from the previous sales target of 700,000 ounces.9 The World Gold Council released a statement saying it “welcomes the news that the U.S. Congress has, in effect, finalised the process whereby the IMF can sell 403.3 tonnes of gold”. Any sales will likely be completed in coordination with existing agreements to limit total annual sales volume.10 A senior researcher from China’s Communist Party has suggested that China should buy more gold to hedge against a falling U.S. dollar. He also stated that current gold holdings are too small at 1.6 percent of reserves.11
Grains & Oilseeds
According to Statistics Canada, spring wheat plantings in Canada’s prairie provinces have increased 6.912 to 7.3 percent. Soybean acreage in Ontario has gained 14.3 percent, while Quebec farmers have planted 4.3 percent more.13 Dry weather across the US Corn Belt may provide respite for any farmers still trying to complete plantings, notably for soybeans. This week’s export sales of 308,400 tons of soybean meal surpassed estimates for 150,000 to 200,000 tons.14 In Texas, hot and windy weather in some areas is bringing crop stress to forage crops and cotton. In the northern region, wheat harvest was nearly complete; however, some fields were too damaged.15
Coffee, Cocoa & Sugar
Sugar output in Australia may not meet earlier estimates, falling 3.1 percent behind, according to the government. According to the Indian Sugar Mills Association, India’s sugar output may fall to 14.6 million tons from 26.4 million tons last year.16 In coffee, Columbia may catch up to delayed coffee exports by October. The head of the International Coffee Organization stated that production may be “below 10 million bags in 2008/09”; over one million bags fewer than the Columbia National Federation estimate. Columbia’s Agricultural Minister said that Brazilian Arabica has provided a substitute for any shortfall in Central American beans.17 Meanwhile, coffee exports from India for the year ending in September may be 14 to 18 percent lower than the previous year. The president of the Coffee Exporters Association of India said that exports will be at a ten-year low due to the global recession.18 Heavy rain in Ivory Coast coastal areas continues to be of concern for the mid-crop harvest. Rains may cause pods and flowers to fall from trees, and higher moisture levels may cause the return of black pod disease.19
Livestock
Two separate recalls will affect nearly 48,000 pounds of beef believed to be contaminated with E. coli.20,21 Monday’s USDA Cold Storage report showed that overall red meat supplies are 2 percent lower than the month prior but slightly higher than last year. Pork supplies were up one percent from last year but down 5 percent from the previous month. Pork bellies were down 9 percent from last year and down 1 percent from last month.22
Coming Up Next Week:
Monday: Crop Progress
Tuesday: Grain Stocks, Rice Stocks, Acreage, Consumer Confidence
Wednesday: Energy Stocks, Construction Spending, ISM Manufacturing
Thursday: Gas Storage, Employment Report
Friday: ISM Non- Manufacturing
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/durables-orders-rise-for-third-time-in-four-months-200962483300
2 http://money.cnn.com/news/newsfeeds/articles/djf500/200906241251DOWJONESDJONLINE000673_FORTUNE5.htm
3 http://money.cnn.com/2009/06/23/real_estate/existing_home_sales/?postversion=2009062314
4 http://www.bizjournals.com/baltimore/stories/2009/06/22/daily50.html
5 http://www.nordmarkets.com/index.php?option=com_content&task=view&id=65&Itemid=76&lang=en
6 http://money.cnn.com/2009/06/26/news/economy/personal_income/index.htm?postversion=2009062609
7 http://www.reuters.com/article/marketsNews/idUSN2419781520090624
8 http://www.marketwatch.com/story/us-natural-gas-inventories-rise-94-bcf-last-week
9 http://www.mineweb.com/mineweb/view/mineweb/en/page35?oid=85427&sn=Detail
10 http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=85262&sn=Detail
11 http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=85486&sn=Detail
12 http://www.bloomberg.com/apps/news?pid=20601082&sid=aKb73IfmIPLk
13 http://www.axcessnews.com/index.php/articles/show/id/18233
14 http://www.forbes.com/feeds/reuters/2009/06/25/2009-06-25T193034Z_01_N25290511_RTRIDST_0_MARKETS-GRAINS-UPDATE-3_print.htm
15 http://www.chron.com/disp/story.mpl/ap/business/6495496.html
16 http://www.bloomberg.com/apps/news?pid=20601081&sid=aAGbqEyDuDMc
17 http://www.guardian.co.uk/business/feedarticle/8573060
18 http://www.business-standard.com/india/news/coffee-exports-set-to-hit-10-year-low/362078/
19 http://www.flex-news-food.com/pages/24447/Cocoa/ivorian-cocoa-farmers-fear-rain-damage-mid-crop.html
20 http://www.meatingplace.com/MembersOnly/webNews/details.aspx?item=12756
21 http://www.meatingplace.com/MembersOnly/webNews/details.aspx?item=12783
22 http://usda.mannlib.cornell.edu/usda/current/ColdStor/ColdStor-06-22-2009.pdf
