Gold Price Steady Above $1,100

GOLD PRICE NEWS - The gold price has closed within the narrow $25 band of $1,090 to $1,115 over the past eight trading days. Gold price volatility, as measured by the CBOE Volatility Index, has fallen 12.5% over the past two weeks as both stock and commodity markets have recovered their early February losses. The prices of gold mining stocks, after rallying over 10% in the first two weeks of the month as measured by the Market Vectors Gold Mining ETF (GDX), have settled into a narrow trading range.

Whether the breakout in the price of gold is to the upside or to the downside could be driven by the perception of investors as to the speed at which crisis-driven monetary policy is unwound. There has been some level of confusion with respect to global monetary policy, specifically the question of if central banks have begun to shift away from the ultra-easy stance that has been in place over the past eighteen months......more detail

Morning markets: rain fears help crops hold gains

The danger for crop investors was that Tuesday would be one of the Turnaround variety.

Chicago-watchers say that a strong trend on a Monday is often reversed the next day, implying that its investors should brace for sharp losses today.

However, as of 07:30 GMT, weakness had yet to set in in any meaningful way, with the grains showing only marginal losses and soybeans keeping their nose above water.

The dollar was on food commodities' side, slipping a touch, and so making US exports look cheaper.

Investors are expecting the Federal Reserve to quash expectations of an imminent interest rate rise which were stoked by last week's tightening of terms in which America's central bank lends to commercial banks......more detail

Consumer Confidence Data Awaited As Traders Seek More Clarity - RTTNews Daily Market Analysis

(RTTNews) - The major U.S. index futures are pointing to a lower opening on Tuesday, with the recovery theme getting a hit following the release of an economic report from across the Atlantic showing a dip in German business confidence. In reaction, commodities prices are experiencing weakness. However, corporate earnings were bordering on the positive, with home improvement retailer Home Depot (HD) reporting better than expected results and announcing an increase in its dividend......more detail

Soybeans Rise for a Second Day as Weaker Dollar Attracts Buyers

Feb. 23 (Bloomberg) -- Soybeans gained for a second day as a weaker dollar made U.S. supplies more attractive to importers.

The U.S. currency fell against the euro on speculation the U.S. Federal Reserve will hold its target interest rate near zero to sustain a recovery in the world’s biggest economy. Speculative short positions, or bets prices will drop, fell 15 percent to 75,034 contracts in the week ended Feb. 16, according to the U.S. Commodity Futures Trading Commission.

“It’s the big funds buying in the grain market, covering their previous short positions,” Johnston Bae, a grains broker at Eugene Investment & Futures Co., said from Seoul. “They must be taking advantage of the weakness in the dollar.”

Soybeans for May delivery rose 2 cents, or 0.2 percent, to $9.71 a bushel on the Chicago Board of Trade at 10:51 a.m. London time. The contract added 1.5 percent yesterday.

Demand for soybeans in China, the world’s biggest buyer of the oilseed, will remain “huge and irreversible” Han Jun, director of the rural economy department at the Development Research Center of the State Council, said at a press conference in Beijing today........More detail

Two Needs for Higher Wheat Prices

by Kim Anderson, Oklahoma State University Professor and Extension Economist

More Wheat News! Visit the Virtual Wheat Tour at www.VirtualWheatTour.com.

The market tried to take out the $5.10 price resistance level with the KCBT March wheat contract and failed. The downtrend is broken and a sideways pattern between $4.80 and $5.10 has been established. Technically, the good news is that Tuesday's 18-cent rally set a new short-term top and the volume (number of contracts traded) was high. Lower prices on Wednesday and Thursday were with relatively low volume.

At the USDA Annual Outlook Conference, the USDA released estimates for 2010/11 wheat, corn and soybean planted acres, production and ending stocks. These estimates are not based on surveys and are not "official." Official estimates will be released March 31. 2010 wheat production is estimated to be 1.945 billion bushels (bb). Ending stocks are estimated to be 940 million bushels (mb) compared to 981 mb for the 2009/10 marketing year. The average annual 2010/11 price is estimated to be $4.90 compared to $4.85 for the 2009/10 marketing year..........more detail

Allendale Early Calls: Corn Turns Bearish, Cattle Feeders Make Extreme Price Gains

CMEGroup Grain Futures Calls:

-March corn called 2 to 5 higher.

-March soybeans called 7 to 10 higher.

-March wheat called 1 to 2 higher.

March US dollar is down 16 at 80.55. April crude is up $.48 at $80.54. March Dow futures are up 49.

Economic Information:

-Federal Reserve chairman Ben Bernanke will give is bi-annual testimony to congress on Wednesday and Thursday.

-A second revision to our fourth quarter GDP rates is due later this week. The trade expects the original reading of a 5.7% growth to be revised to a 5.6% rate.
-Israel’s prime minister calls for an oil embargo on Iran, even without official UN sanctions.

-The National Association for Business Economics indicated the economy is growing. They do expect unemployment to remain above 9% the entire year though.
-Consumer confidence, durable goods orders, and home prices and sales will be out this week.

-Rumors circulate that Germany has prepared a 20 to 25 billion euro bailout package for Greece.

Weather:

-The rain and snow system will finish up in the east this morning. There are no forecasts for precip in the Midwest through next week.

Grain Market Influences:

The government’s very mild inflation report on Friday, the CPI, showed a very mild 0.2% increase for January. That should alleviate fears of inflation and also keep the Fed from raising interest rates. That is supportive to crude oil and therefore grains.

Corn summary… This was an interesting commodity week with many emotional stories to swing thinking from bullish bearish. Corn ended the day +2 3/4 and the week -1 1/2 cents. Ag news this week included Japan and S Korea balking about US quality.

Soybean summary… It was another very low volume trading day in beans today. This morning started with a day session reaction to the higher dollar and after that trade was dead calm for the rest of the day. Next week we get China back into the market. They have been tied up with the Lunar New Year holidays. That is not to say they will come back into the market causing an instant reaction but they can give us some demand news to trade from.

The focus will remain on South American soybean production this week. Is Argentina too wet? Is Brazil really that good looking?

Wheat summary… It is encouraging is to see the 3rd weekly higher close for the wheat despite nearby neutral fundamentals. Technically, higher wheat futures are extremely important this time of year. Fundamentally, we view the weekly export sales as neutral for this week.

The Philippines purchased 25,000 tonnes of feed wheat overnight. Officially it is optional origin but the trade views likely suppliers as either Ukraine or South America.

The private industry continues to up their estimates of potential Indian wheat exports. One report suggests they may export up to 2.5 million metric tonnes after June. The sales would only be made as special one time government to government sales.

An economist with the United Nations Food and Agriculture Organisation suggests 2010 wheat production could fall by 5%. .........more detail

Hedge Funds Have Largest Short Position Against Euro Ever

Based on data reported to the CFTC, Societe Generale has released its latest monthly hedge fund report that examines what speculators are buying and selling across various asset classes. SocGen's research indicates that hedge funds have again turned to sellers of U.S. equities, but on a smaller level than before. This is something we saw last week when we noted hedge funds had their lowest net long position in equities since May 2009......More detail

Weekly Review: FED Raises Discount Rate

Late last Thursday, in a surprise move, the FED raised its Discount Rate to 0.75% from 0.50%.

The move caused the dollar to strengthen across the board, and left the Dollar Index at its highest level in 8 months. Before the FED move, the dollar had been moving higher last week against the Euro, Pound and Yen.

The dollar’s initial strength occurred even as equities and commodities rallied. Media outlets were attributing the dollar’s strength to positive economic numbers even though Jobless Claims and the FOMC Minutes were unspectacular. Therefore, at GFC Markets, we believe that the dollar may be benefitting from short term institutional funds being rotated into the dollar from the euro and pound. The goal would be to park funds in dollars until the Greece economic turmoil boils over......More detail

Dubai Gold & Commodities Exchange: Weekly Market Views - February 21, 2010

Commodities Overview

Currencies Overview

Commodities prices may be volatile this coming week, but with an upward bias. Over the past few weeks oil, gold, and other commodities have demonstrated strong support around recent price levels. Sharp increases in the dollar, the IMF’s announcement that it was moving toward public sales of 191 metric tonnes (6.1 million ounces) of its gold, the U.S. Fed’s raising the discount rate, evidence of stronger economic growth in the United States and other parts of the world, and stronger corporate earnings and equity markets all have failed to trigger a major sell-off in gold. Prices have dipped in response to announcements related to these developments, but the declines have not been particularly large. Nor have they been protracted. Each dip has been answered by significant buying from investors seeking to add to their gold positions whenever prices drop. Energy prices may take a breather this week, following strength last week. Even so, demand remains in an upward trend, and investors remain interested in energy assets as likely to appreciate in value as real economic activity continues to expand in most parts of the world. Periodic bouts of investor doubt over the course of economic trends will occasionally push prices, however, but the trend is upward......more detail

The U.S. dollar is expected to continue along the path of recent weeks, showing overall strength but consolidating its gains against major currencies rather than running away to higher levels. The dollar is showing strength, reflecting investor attitudes that the U.S. economy may register stronger growth in 2010 and 2011 than Europe and Japan. The strength in the dollar has not been one-way, however: The dollar’s exchange rate against the euro and other currencies has been and is expected to continue to be volatile. While there is a clear upward bias emerging for the dollar, it also is clear that on-going fiscal, budgetary, and trade concerns remain in the forefront of investors’ minds. The dollar is looking stronger against other major traded currencies such as the euro, pound, yen and Swiss franc, but it is a matter of degrees of unattractiveness that is helping boost the dollar at this time. As a result, the dollar may show signs of consolidation this week, as part of a longer term upward trend against other major traded currencies. The dollar will remain vulnerable relative to the rupee and currencies from emerging economies and commodities exporting nations, however. Political tensions also could hit the dollar this week.

Technical Summary: GOLD Reversal Rally Eyes The 1,127.00 Level

Technical Summary: GOLD Reversal Rally Eyes The 1,127.00 Level

GOLD was seen reversing its two-day loses on Friday bouncing off the 1,099.33 level and targeting its Feb 17’10 high at 1,127.00. The commodity will have to decisively break and hold above that level to create scope for the resumption of its corrective recovery triggered off the 1,044.20 level. The 1,141.48 level comes in as the next resistance. CRUDE OIL remains on the offensive following through on its Thursday recovery and testing a high of 80.24 on Friday. The commodity requires a break and hold above the 79.43/80.72 level to open the door for further upside gains towards its 2010 high at 83.93. SILVER now looks to head higher towards the 16.92 level following a reversal of its two-day correction on Friday. A break and hold above the 16.92 level will create further upside risk towards the 17.23 level. Although WHEAT still retains its corrective recovery bias, its failure at the 509 level and its subsequent declines has halted further corrective upside gains and turned threats to the downside towards its YTD low at 466. CORN maintains a similar pattern like Wheat. It has turned lower off the 368 level and now eyes its 2010 low at 347 though currently seen hesitating.....more detail

Euro Weakens After Fed Hikes Discount Rate, Greece Concerns

The Federal Reserve hiked the discount rate 25 basis points to 75 basis points late Thursday, sending the U.S. Dollar sharply higher. This buying spree spilled over into the overnight trade pushing the Dollar Index closer to the all-important major 50% level at 82.63.

The discount rate hike by the Fed was implemented to encourage banks to borrow more from the private sector. This move does not reflect a change in monetary policy despite market reactions and analyst commentaries to the contrary. Some have interpreted the action by the Fed as a move towards monetary-policy normalization although the Fed insists this is not the case. As far as the Fed is concerned, its official statement is that interest rates will remain low for an "extended period".

What it could mean is that the Fed is comfortable enough to begin hiking rates although it is not a change in monetary policy. In addition, I think it sends a clear signal that the emergency supply of liquidity that helped fund the economic recovery is done. It could also be interpreted as a psychological move by the Fed for investors to get ready for the future course of monetary policy. This action by the Fed is basically signaling that future rates are more likely to go up, rather than stabilize or go down.......more detail

USDA Exports: Corn Up, Soybeans & Wheat Down, Beef Sales To Mexico

Wheat: Net sales of 408,900 metric tons for delivery in 2009/10 were down 25 percent from the previous week and 33 percent from the prior 4-week average. Increases were reported for Nigeria (162,900 MT), Japan (83,200 MT), Mexico (63,300 MT), South Korea (32,000 MT), the Philippines (30,800 MT), Morocco (29,800 MT), and Canada (25,000 MT). Decreases were reported for unknown destinations (60,000 MT). Net sales of 54,500 MT for delivery in 2010/11 were for the Philippines (49,500 MT) and unknown destinations (5,000 MT). Exports of 364,600 MT were down 19 percent from the previous week and 11 percent from the prior 4-week average. The primary destinations were Japan (89,100 MT), Nigeria (88,500 MT), Taiwan (33,100 MT), Mexico (32,900 MT), Morocco (31,100 MT), and South Korea (24,600 MT).

Corn: Net sales of 974,600 MT for delivery in 2009/10 were up 31 percent from the previous week, but down 7 percent from the prior 4-week average. Increases were reported for Japan (335,000 MT, including 125,000 MT switched from unknown destinations and decreases of 3,700 MT), Mexico (186,000 MT), Egypt (66,000 MT), Syria (60,000 MT), South Korea (58,400 MT), Guatemala (51,800 MT), and the Dominican Republic (46,300 MT, including 15,000 MT switched from unknown destinations). Decreases were report for unknown destinations (124,700 MT) and Colombia (17,000 MT). There were no sales reported for delivery in 2010/11. Exports of 652,200 MT were up 8 percent from the previous week, but down 16 percent from the prior 4-week average. The primary destinations were Japan (226,500 MT), Mexico (148,300 MT), South Korea (115,000 MT), Ecuador (33,400 MT), Canada (28,600 MT), Saudi Arabia (23,500 MT), and Taiwan (20,100 MT).

Soybeans: Net sales of 203,600 MT for delivery in 2009/10--a marketing-year low--were down 35 percent from the previous week and 65 percent from the prior 4-week average. Increases were primarily for Mexico (117,700 MT), the Netherlands (79,900 MT, including 70,000 MT switched from unknown destinations), Indonesia (59,300 MT), Syria (43,300 MT, including 38,800 MT switched from unknown destinations), Turkey (42,500 MT, including 8,500 MT switched from unknown destinations and decreases of 17,100 MT), Spain (32,500 MT, switched from unknown destinations), and France (27,500 MT, switched from unknown destinations). Decreases were reported for unknown destinations (279,000 MT). Net sales of 300 MT for delivery in 2010/11 were for Japan. Exports of 1,119,000 MT were down 7 percent from the previous week and 17 percent from the prior 4-week average. The primary destinations were China (561,200 MT), Taiwan (81,000 MT), the Netherlands (79,900 MT), Syria (68,300 MT), Egypt (66,100 MT), and Mexico (58,200 MT).

......More detail

Cargill Sees Record Soybean Output in Brazil, Argentina on Rain

Feb. 19 (Bloomberg) -- Brazil and Argentina, the biggest soybean producers after the U.S., may harvest as much as a combined 120 million metric tons of the oilseed this year as rain boosts yields, Cargill Inc.’s Jose Luiz Glaser said.

Brazil will produce 64 million to 67 million tons of soybeans, while Argentina will harvest another 52 million to 53 million tons, Glaser, head of Cargill’s soybean business in Brazil, said in a telephone interview from Sao Paulo today......more detail

USDA Sees Record Corn Crop, But Downturn in Soybeans and Wheat

USDA sees a return to trend yields on corn and soybeans for 2010 while wheat yields are forecast to decline as there are fewer acres planted to higher-yielding soft red winter wheat, according to commodity outlooks delivered by USDA analysts at the Outlook Forum......more detail

Corn, Wheat, Soybeans Drop as Fed’s Rate Increase Boosts Dollar

Feb. 19 (Bloomberg) -- Corn, wheat and soybeans declined after the Federal Reserve raised the discount rate for the first time in more than three years, boosting the dollar and potentially crimping overseas demand for U.S. crop supplies.

Corn for May delivery fell as much as 1.1 percent to $3.65 a bushel in after-hours electronic trading on the Chicago Board of Trade. The price also fell after the U.S., the world’s biggest grower, raised estimates for corn planting........(more detail)

World Gold Consumption

World Gold consumption fell 11% in year 2009, the high prices pressure on industrial demand but in other hand demand for investment increase. Data below showing global gold demand in year 2007-2009.

Top 10 Gold reserve by country as of Dec 2009

The IMF announce to selling 191.3 tonnes of gold that could be pressure on gold futures. Last year since September IMF has sold 212 tonnes with biggest purchase is India, which bought 200 tonnes of gold (6.7 billion). Data below show Top 10 gold reserve by country as of Dec 2009.