Palm Oil Falls With Crude Amid Concern Over Soybean Harvest

March 15 (Bloomberg) -- Palm oil fell a third day, tracking crude oil, and on concerns over higher soybean supplies from the South American harvest, reducing the need for substitutes.

May-delivery palm oil futures dropped as much as 1.2 percent to 2,618 ringgit ($790) a metric ton on the Malaysia Derivatives Exchange and traded at 2,621 ringgit at 12:06 p.m. Crude for April delivery in New York declined as much as 0.6 percent to $80.75 a barrel in Asian trading, and last traded at $80.81 a barrel. Palm oil, used as an alternative fuel additive, lost 0.8 percent last week as crude oil dropped 0.3 percent..............more detail

Weekend Commodities Review

General Comments

Market congestion is building for a volatile breakout - or breakdown depending on the market. 'Hurry up and go nowhere' trading is about to end, I suspect, with a strong stock market decline bringing commodities along for the ride starting Monday.

Energies

Critical technical resistance on crude oil within $2 of Friday's closing price should be sold into with stops above. Put buying is the preferred defined risk approach. Natural gas is a strong buy with straight calls for July or beyond. The heating oil versus rbob spread is actually just about right so no play there for now.

Financials

The S&P has shown significant strength bolstered by strong retail sales and economic rebound-like numbers coming out of several key reports. Sell this rally with stops above 1164 or with bear put spreads. I expect 25 points down by Wednesday if not sooner. Bonds remain a strong buy. The dollar is stuck in choppy land with no clear directions on how to get back on the road to the bull trend highway, but this week is setup to be a difference maker. Expect the dollar to run to 81.50 quickly on this bear move forecast in the S&P being the catalyst. I continue to standby my prediction that:........................more detail

China Soy Meal Demand May Rise in Second Quarter, Analyst Says

March 15 (Bloomberg) -- Demand for soybean meal in China, the world’s biggest importer of soybeans, may increase in the second quarter, boosting consumption of the oilseed, Shanghai JC Intelligence Co. said.

Government measures to support hog prices will spur farmers to increase pig inventory and warmer temperatures in the spring will boost fish and shrimp farming, animal husbandry analyst Helen Huang said in telephone interview from Shanghai.

China’s soybean meal prices have fallen to the lowest in almost a year on declining hog inventory, paring margins earned by crushers and slowing imports of the oilseed. China last week said it may invoke stockpiling measures to bolster hog prices.

“I think in April to May we will see demand for soybean meal picking up,” Cao Hongrun, a feedstock buyer for Shunde Wanghai Feed Co., said by phone from Guangdong. “Government support does create a psychological support, and fish and shrimp farmers are preparing to seed their ponds.”.........more detail

Morning Call by Bryce Knorr

Look for futures to open a little lower this morning, with lack of fresh fundamentals and cautious outside market's keeping traders nervous. The Federal Reserve meets to consider monetary policy Tuesday, keeping most markets cautious unless breaking news intervenes.

Corn could see a light selling on the open this morning, but the market appears to be trying to build a base to confirm a low after holding February lows.

Volume was very weak on Friday just 122,000 contracts, with open interest gaining as futures held. The latest Commitment of Traders showed speculative hedge funds were light sellers in the latest week, though they remain with a modest net long position.

A turn to a drier forecast this week could help improve soils as farmers try to get back into the field. Most areas will be dry until the end of the week.

Otherwise, traders have little to chew on directly in the grain market this morning, taking their cues instead from outside forces. Chinese stocks moved sharply lower again the morning, with investors bracing for the central bank there to raise interest rates to keep their economy from overheating, though no new measures were announced today.......more detail

Retail Sales in U.S. Unexpectedly Rose in February

March 12 (Bloomberg) -- Sales at U.S. retailers unexpectedly climbed in February as shoppers braved blizzards to get to the malls, signaling consumers will contribute more to economic growth.

Purchases increased 0.3 percent, the fourth gain in the past five months, Commerce Department figures showed today in Washington. Figures for the prior two months were revised down, taking some of the shine off of today’s data. Sales excluding autos rose 0.8 percent, exceeding all estimates.......more detial

Hedge your bets with commodities

When inflation gets going, investors need a decent hedge - and commodities are a good answer.

In recent months inflation has picked up sharply and is set to continue rising in the near future amid a stuttering economic recovery.

Mark Bolsom, head of UK trading desk at Travelex commented: "Inflation is to continue rising, as the pound continues to depreciate in value against a basket of currencies. Long-term inflation forecasts are very dependent on the policy-makers ability to bring it under control and at the moment they are unable to use traditional inflationary control measures because they don't want to choke recovery in its infancy."

Latest figures from the Office of National Statistics show the headline rate of inflation hit a 14 month high in February. Its rapid rise to 3.5% - the peak predicted by the Bank of England - has fuelled fears that it will prove stickier than expected and fall back to the government's 2% target more slowly.

If this is the case, investing in commodities could prove a smart move.......more detial

Oil Fluctuates as Retail Sales Gain, Consumer Sentiment Drops

March 12 (Bloomberg) -- Crude oil fluctuated after U.S. retail sales unexpectedly rose in February and a separate report showed that confidence among U.S. consumers declined this month.

“There’s a rush to interpret every new piece of economic data,” said Michael Fitzpatrick, vice president of energy at MF Global in New York. “We did reach $83.16, a new high, but otherwise today is a sleeper.”

Crude oil for April delivery rose 18 cents to $82.29 a barrel at 10:58 a.m. on the New York Mercantile Exchange. Prices touched $83.16, the highest since Jan. 11. Futures are up 1 percent this week and are 75 percent higher than a year ago.

Brent crude oil for April delivery rose 22 cents, or 0.3 percent, to $80.50 a barrel on the London-based ICE Futures Europe exchange.

Prices climbed earlier as the dollar weakened against the euro and the International Energy Agency bolstered its outlook for global fuel demand this year......more detial

Soy crush prospects poor in US, and worse in India

American soybean crushers face tougher times – but not as tricky as those besetting their Indian peers, which are being undercut by cheaper imported oilseed products.

US processors typically suffer a seasonal decline in the spring, as South American competitors begin to chew through the region's crops and regain share of export markets.

But they face a "sharper than usual" fall this year, thanks to flat American markets for soyoil and soymeal, the US Department of Agriculture said......more detial

Grain Complex

The CRB TrendTrader report is Short Soybeans, Wheat, Corn, Meal, Oats, Rice and Long Bean Oil.

See full position report below.

Remember - day traders work for the markets - Trend Traders let the markets work for them, the Trend is your friend!

The CRB Futures Market Service is one of the oldest and most respected market letters in the industry since 1934.

Grains

Grain prices this morning are higher. May corn this morning is up +1-1/4 cents, May soybeans are up +5-3/4 cents, and May wheat is up +4-3/4 cents. The grain markets yesterday finished mostly lower. May corn closed unchanged, May soybeans closed down -26-1/2 cents, and May wheat closed down -3 cents. May corn and May soybeans fell to 1-month lows and May wheat plunged to a 5-month low. Bearish factors included (1) the decline in gasoline which undercuts ethanol prices and corn demand, (2) carry-over weakness in wheat prices after the USDA Wednesday hiked US wheat stockpiles to a 22-year high, (3) slack foreign demand for US corn after the USDA reported US corn sales in the week ended Mar 4 plunged -56% from a week earlier, and (4) concerns that more buyers of US soybeans will cancel purchases and seek supplies from South America after the USDA reported that buyers canceled 115,808 metric tons of US soybeans purchased in the week ended Mar 4. Bullish factors included (1) the weaker dollar, and (2) increased foreign demand for US wheat after the USDA reported that US wheat sales for the week ended Mar 4 quadrupled from the previous week. ......more detial

Wheat production and global demand

U.S. wheat export demand is steady for the second straight month in a growing world market according to the World Agricultural Supply and Demand Estimates (WASDE) report from the U.S. Department of Agriculture (USDA) for March 2010. Producers around the world have responded to growing demand by producing record crops recently. As a result, USDA forecasts that global ending stocks for 2009/10 (June-May) will be 196.8 million metric tons (MMT) up 60 percent from a recent low of 123.3 MMT in 2007/08......more detial

Payrolls in U.S. Fell 36,000 in February: Unemployment at 9.7%

March 5 (Bloomberg) -- The jobless rate in the U.S. held at 9.7 percent in February and employment declined less than forecast even as severe winter weather may have forced some employers to temporarily close.

Payrolls dropped 36,000 last month after a 26,000 decrease in January, figures from the Labor Department in Washington showed today. Employment fell in construction and increased at temporary-help services. While more people entered the workforce, the unemployment rate was unexpectedly unchanged.

Blizzards during the week that the government surveys businesses and households on jobs set seasonal snowfall records in cities including Washington and Philadelphia, prompting many Americans to stay home. The economic expansion that began last year has yet to generate sustained gains in employment, raising the risk that the recovery will cool as households keep a lid on spending........more detail

Barchart U.S. Morning Call

Overnight Developments

• Global stocks are stronger with the European DJ Stoxx 50 Index up +0.58% at a 1-month high and March S&Ps up +4.60 points at a 1-1/4 month high. Global stocks gained ahead of the Feb US payrolls report that will provide clues about the strength of the recovery. The dollar and Treasuries are little changed and most commodities are higher. Greece successfully raised 5 billion euros ($6.8 billion) in a sale of 10-year bonds and Jean-Claude Juncker, who heads the group of Euro-Zone finance ministers, said Greece "won't be left alone" as it tries to tame a record budget deficit. European stocks also received a boost after Jan German factory orders rose a more-than-expected +4.3% m/m and +19.6% y/y. The +4.3% m/m increase is the biggest monthly gain in 2-1/2 years as a revival in global demand shows the recovery strengthening. Basic-resource producers rallied as commodity prices rose and Volkswagen AG, Europe's largest automaker, climbed 2.3% after Citigroup upgraded the stock to "buy" from "hold." Limiting gains in European stocks was the 1.1% drop in Salzgitter AG after Germany's second-largest steelmaker posted a full-year net loss of 386.9 million euros, wider than analysts' estimates of a 239 million-euro loss.

• The Asian markets today closed higher with Japan up +2.20%, Hong Kong +1.03%, China +0.28%, Taiwan +1.27%, Australia +0.35%, Singapore +0.78%, South Korea +1.01%, India +0.13%. The yen weakened and Japanese stocks gained after the Nikkei newspaper reported that the BOJ would discuss ways to lower short-term rates at its 2-day policy meeting starting March 16. Japanese exporters were boosted after the yen dropped and Asian shipping companies gained after the Baltic Dry Index, a gauge of shipping rates, soared 7.2%, its biggest increase since July. Chinese stocks came off of their best levels after Premier Wen Jiabao warned of "latent risk" in China's banks and pledged to crack down on property speculation as the government struggles to avert building asset bubbles. Wen also said the government will promote the yuan's usage abroad and aims to manage inflation expectations........more detail
  

The Day Ahead: Employment Situation Report and Consumer Credit

Equity futures are firmly higher this morning ahead of February employment numbers. Payrolls are expected to continue declining but investors are reacting positively to news that the Bank of Japan could initiate measures to protect the economy from deflation.

Overseas markets have been positive across the board, including a 2.20% gain in Japan, a 1.03% gain in Hong Kong, and gains of around 1% in Europe.

“The Nikkei posted its strongest week of the year as the yen weakened amid speculation that the BoJ will undertake further easing,” noted analysts from BMO. “Meantime, a successful 10-year bond sale by Greece (which raised €5 bln), and stronger-than-expected factory data, are giving Europe a lift, though the euro is little changed.”

Two hours before the opening bell, Dow futures are up 35 points to 10,466 while S&P 500 futures are off 5.10 points to 1,127.40.

Commodities remain mixed. WTI crude oil is up 46 cents to $80.67 per barrel but Spot Gold is down $9.60 per ounce to $1,133.70........more detail

Commodities Buzz: Soybeans Harvest Hits 50% In Mato Grosso

In Mato Grosso, 50% of the 09/10 soybean crop have been harvested, amounting to 3.1 million hectares. Although the percentage is above the performance of last season, which in this same period reached 35.2% of the area, the state producers fear further damage until the end of the harvest........more detail

GRAINS-CBOT soy, grains firm ahead of US jobs data

MARKETS-GRAINS/(UPDATE 2)

* Steady dollar supports in subdued trade

* Grains stay forex-sensitive, bearish fundamentals cap

* Corn may find support in planting hitches, ethanol demand

* Coming up: U.S. February non-farm payrolls at 1330 GMT

(Updates with quotes, European trading, previous SYDNEY)

By Bruce Hextall and Gus Trompiz

PARIS/SYDNEY, March 5 (Reuters) - Chicago soybean and grain futures clawed back ground on Friday as a steady dollar supported soft commodities after a day of heavy losses.

Gains were modest as the market awaited the release later on Friday of the U.S. employment report for February, seen as a key indicator of the pace of economic recovery.

Grain markets were also waiting for direction from next Wednesday's closely watched World Agricultural Supply and Demand Estimates report from the U.S. Department of Agriculture.

"Currrency and grains markets will be choppy in front of those U.S. employment numbers tonight and if the numbers point to an improving U.S. economy you will see a rally in global equities markets and the dollar but grains could fall," said Garry Booth, an adviser at MF Global Australia.

A rising dollar makes U.S. priced commodities more expensive for buyers holding other currencies and tends to push prices of those commodities lower, as happened in Chicago on Wednesday.

Bearish fundamentals continued to cap gains, including upgrades to projected Argentine soybean and corn crops by Informa Economics on Thursday.

The respected analytical firm raised its estimate of Argentina's 2009/10 soybean production to 55.0 million tonnes and its corn production to 21.0 million tonnes, trade sources said..

In Brazil, meanwhile, the soybean harvest is gathering pace, encouraging China, the world's largest soy importer, to switch to buying supplies from the South American nation, the No. 2 soybean exporter, rather than from the United States.

China made no purchases of U.S. soybeans in the latest week......More detail