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Brent Lantzy

Brent Lantzy

Writing is in my DNA. That is, I don’t know why I've always had the inclination to write, or why I’ve always been particularly good at communicating effectively through the written word. It is simply a part of who I am. Now, I’ve turned this skill into a business, lending my best writing efforts to professional projects requiring a unique, creative, and human touch.

Articles by Brent Lantzy

Cattle Placements Lower in October

November 21, 2016

According to USDA data, October placements in feedlots totaled 2.17 million head, 5% less than the same time in 2015. Marketings of fed cattle during October reached 1.71 million head, a 5% increase from 2015. The November on feed number reached 10.7 million head, marking a 1% decrease from a year ago.
The U.S. imported 107,559 live cattle in September, a 9.5% increase from August, but a 26.3% decrease from September, 2015, according to monthly trade data from the USDA.
November WASDE data show a 0.35% increase from October in estimated 2016 beef production, and a 1.08% increase in the 2017 estimate.
The PM beef cutout value was mixed on Friday, with choice cuts at $182.95 per cwt, up $0.64 from the previous day, and select cuts down $0.09 at $161.01 per cwt. Monday’s AM report will be available at 14:30 GMT.
According to the CFTC, managed money increased their net long position in live cattle by 3,956 futures and options contracts for the period ending Tuesday, November 15. The next report will be available on November 22 at 20:30 GMT.
CME live cattle for the most heavily traded February 2017 contract closed up by 0.050 cent to settle at 1.08850 cents per pound on Friday, while the front month contract increased by 0.100 cent to settle at 1.08325 cents per pound. January 2017 feeder cattle were up by 0.050 cent to close Friday at 1.24975 cents per pound.

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Higher Production May Keep Cotton Prices Restrained

November 11, 2016

In the most recent WASDE report, the USDA increased its estimate of 2016/17 US cotton production to 16.16 million bales, up from its October estimate of 16.03 million bales. US ending stocks are estimated at 4.5 million bales, up from the October estimate of 4.3 million bales.
A larger than expected crop in Texas, the largest cotton growing state in the US, is being partially offset by decreases in the Southeast, where hurricanes had damaged some crops. The forecast range for the average price received by producers was increased from 59.00–69.00 cents per pound in October to 63.00–71.00 cents in November.
World 2016/17 estimates are also showing larger production and ending stocks, mainly due to a 500,000 bale increase in India’s crop. World production is now estimated at 103.3 million bales, up from 102.7 million bales in October. World ending stocks are now projected at 88.3 million bales, up from the October estimate of 87.4 million bales. World consumption remained unchanged at approximately 112 million bales.
The USDA’s weekly cotton export sales report released today showed current marketing year sales up 5% from the previous week at 168,800 running bales. However, this represents a 21% decrease from the prior four week average.
ICE cotton futures were up during Thursday’s trading session with the most heavily traded December contract gaining 0.91 cent (1.

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Steel, Iron Ore, Coking Coal Bubbles Keep Expanding

November 1, 2016

Iron ore stockpiles at Chinese ports climbed 0.9% to 106.75 million metric tons, the highest since November 2014, according to data from Shanghai Steelhome Information Technology Company. Holdings are up 15% in 2016, rising 2.1% in October, and continuing 5 consecutive quarters of gains.
The highest volume January 2017 iron ore contract on the Dalian Commodity Exchange (DCE) closed up 8.5 yuan on Monday at 494.5 yuan per ton, touching a yearly high of 502.5 yuan per ton during that session.
According to Metal Bulletin, the spot price for 62% fines deliverable to the Qingdao port rose to $64.38 per ton on Monday, its highest level since April 29. The Steel Index reports 62% fines deliverable to the Tianjin port rose to $63.80 per ton on Monday, also a new six month high.
A recent report by the WSJ warns of asset bubbles forming in China as huge amounts of speculative money move between stocks, bonds, and commodities – specifically, iron ore.
A shortage of coking coal is helping to drive iron ore and steel prices higher. In an interview with Bloomberg, Dang Man, an analyst with Maike Futures Co. noted:
The shortage in coal supply right now seems unlikely to improve before year-end. That’s driving steel prices and production higher, benefiting iron ore too.
The highest volume January 2017 coking coal contract on the DCE was up 26.5 yuan on Monday, closing at 1,289.

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Supply Concerns Keep Coffee Buzzing

November 1, 2016

Consumption is going up, but supplies keep getting tighter, and coffee is getting pricier.
Net long coffee holdings jumped 18% to 50,651 futures and options in the week ended October 25, according to CFTC data.
Arabica beans have risen 39% over the past year, making coffee the fifth best performing commodity in the Bloomberg Commodity Index.
U.S. demand for coffee is expected to grow, with consumption increasing 2% per year until 2020, according to a WSJ interview with a spokesman for the London based International Coffee Organization (ICO).
According to an end of the year market report by the ICO, production in Brazil was down 5.3% from the previous year, while production volume in Vietnam, Columbia, and Indonesia increased; however, expectations for the 2016/17 season are diminished by continued worries about La Niña, drought, and other adverse weather conditions. The report also states that the 2015/16 season is in deficit for the second consecutive year, as consumption outpaced production by 3.3 million bags. Some support has been provided by accumulated stocks from the surplus years of 2012/13 and 2013/14, and stocks in importing countries reached 24.2 million bags at the end of June 2016, their highest level since September 2009.
ICE New York coffee futures for December delivery fell 1.7% to 161.

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Heavy Hog Supplies Have Investors Anxious

October 19, 2016

In its latest WASDE report, the USDA forecast lean hog prices to decrease by 17% to $36–38 per cwt in the fourth quarter of 2016. The forecasted decline comes after prices averaged $53.71 per cwt during the second quarter of this year, and $49.26 during the most recent quarter. The USDA also raised its estimate for 2017 pork production from 25.5 billion pounds to 25.9 billion pounds.
US inventory of all hogs and pigs on September 1, 2016 stood at 70.9 million head, up 2% from this time last year, and up 4% from June 1, according to USDA data.
Another USDA report released on October 18 warns of the potential consequences of increased hog supplies:
[The Quarterly Hogs and Pigs] report foreshadows significantly higher hog numbers—with lower hog price implications, all else equal-as the industry moves into 2017.
In an interview with Pork Network, independent livestock futures trader Dan Norcini commented:
That’s an awful lot of pork tonnage coming onto the market. Pork demand is going to need to remain exceptional to absorb this wall of pork coming our way.
Front month lean hog futures on the CME gained 0.200 cents on Wednesday to settle at 41.325 cents per pound, with the February 2017 contract shedding 0.250 cents to close at 48.200 cents per pound.
If you have any questions and comments on the commodities today, use the form below to reply.

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Death of Thai King Spells Uncertainty for Rubber Market

October 19, 2016

The most actively traded rubber contract on TOCOM for March 2017 delivery lost 6.3 yen to close at 176.7 yen per kilogram on Wednesday, briefly touching a high of 184.0 near the open of the session before falling by over 3% on the day. The same contract touched a yearly high of 184.6 yen per kilogram on Monday, October 17.
As with any upheaval, some traders worried that the death of Thailand’s King Bhumibol Adulyadej could spell a time of economic uncertainty for the world’s largest rubber producer.
This news comes as Thailand, Indonesia, and Malaysia launched a new regional rubber market on September 26, which is intended to set a benchmark for physical prices in the three countries, which account for 68% of global rubber production. The rubber is to be priced in U.S. cents per kilogram and packaged in contracts of 20.16 tons, with trading times set for Monday through Friday in two sessions from 2:00 – 4:00 and 6:00 – 10:00 GMT.
Natural rubber for January 2017 delivery on the Shanghai Futures Exchange closed down by 125 yuan to settle at 13,840 yuan per ton, while the contract for May 2017 delivery closed down by 75 yuan to 14,205 yuan per ton on Wednesday.
The front month TSR20 rubber contract on SGX was down 0.60 cents per kilogram after Tuesday’s trading, settling at 151.00 cents per kilogram, while the November RSS3 contract closed up by 2.20 cents to settle at 166.

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Sugar Market Flat After Hitting 4 Year Peak

October 13, 2016

After marking a near four year high on September 29 at 24.10 cents per pound, raw sugar prices have traded mostly flat.
On Thursday, Sugar #11 for March 2017 delivery on the ICE closed at 22.92 cents per pound, down 0.23 cents for the day.
Continued concerns over insufficient supplies in the 2015/16 and 2016/17 marketing years have helped to boost the price of the sweetener by over 50% on a year to date basis.
Large speculators have amassed huge bullish positions in sugar, worrying some traders that the market could repeat what happened in early 2010 when prices fell from 30 cents to 13 cents per pound within 6 months.
According to CFTC data, managed money increased its net long position in futures from 266,624 to 268,301 positions for the week ending October 4. The next COT report will be available on Friday, October 14 at 19:30 GMT.
The USDA’s Beijing office released a report on September 30 showing marketing year 2016/17 imports revised down to 6.0 million tons, 1.9 million tons below the previous forecast. The report attributes the result to higher domestic cane production, less attractive smuggling opportunities, and a Chinese clampdown against illegal sugar trade. Marketing year 2015/16 imports were also revised down by 700,000 metric tons to 6.0 million.
White sugar for December 2016 delivery on the ICE closed at $592.70 per ton, down $1.

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Cattle Futures Sliding on Supply Concerns

September 27, 2016

The USDA’s September Cattle on Feed report showed August placements up by 15% year on year, marketings up by 18% compared to last August, and the number of cattle on feed as of September 1 at 10,135 thousand head, up 1% from this time in 2015.
According to a Drovers article, the average trade predictions prior to release were for placements to be up 13.1%, marketings to be up 17.5%, and September 1 cattle on feed to be at 1.2%.
Beef production is 17% above the previous year at 2.26 billion pounds, and cattle slaughter is up 18% from August 2015 at 2.75 million head, according to monthly data released by the USDA. The data also shows average live weight dropped 11 pounds from last year to 1,352 pounds.
The most actively traded CME live cattle contract for December delivery fell 1 cent on Monday to close at $1.05850 per pound, while the front month October contract fell 0.725 cent to settle at $1.06550 per pound. The February 2017 contract dropped 0.950 cent to settle at $1.06150 per pound.
October feeder cattle dropped 1.525 cents on Monday to settle at $1.30850 per pound, while the November contract lost 2.050 cents to close at $1.27675 per pound. The CME feeder cattle index price dropped 1.525 cents to $1.30850 per pound.
Midday choice beef cutout price for September 26 is up $0.23 from the previous day at $187.04 per cwt, while the select cuts are up by $0.84 to $179.

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Sugar Rallies on Production Concerns

September 20, 2016

Front month Sugar #11 on the ICE is up 0.02 cents (0.09%) to 22.12 cents per pound as of 9:23 GMT on Tuesday, while the most actively traded March 2017 contract is down 0.03 cents (0.13%) to 22.72 cents per pound.
The contracts posted their largest single day increase in four years on Friday, settling up by over 6%. Monday’s session added another 0.32 cents (1.47%) to the October contract, and 0.28 cents (1.25%) to the March 2017 contract.
Commerzbank lifted its forecast for raw sugar futures, predicting prices at 21.0 cents per pound lasting through the first quarter of 2017, according to an agrimoney.com report, a figure that is lower than any of the current contract prices. From the report:
The fact that we expect to see slightly declining [sugar] prices in the [October-to-December] quarter has to do with the beet harvesting and sugar production at that time in key producer countries in the northern hemisphere, and with the expectation of the Brazilian real depreciating again.
A definitive rationale for sugar’s breakout is undefined, yet many traders point to disruptive rains in Brazil and predicted global production deficits in upcoming years as likely culprits. However, a weakening real may work to push prices downward.
ICE white sugar futures for December delivery are up $1.20 to $588.60 per ton as of 9:22 GMT, with the March 2017 contract up $2.40 to $591.00 per ton.

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Lean Hogs Seeking Bottom

September 20, 2016

Record production has lean hog futures searching for a bottom.
Most actively traded December 2016 lean hog futures on the CME closed down 1.725 cents (3.6%) at 48.225 cents per pound, reaching a contract low of 48.075 cents per pound during Monday’s session.
The October 2016 contract lost 0.600 cents (1.1%) on Monday to settle at 54.875 cents per pound, just above the contract low set on Thursday at 54.550 cents per pound. Hogs for February 2017 delivery also touched a new contract low of 52.550 cents per pound during Monday’s trading.
The USDA slightly decreased their 2016 pork production estimates from 24,907 million pounds in August to 24,892 million pounds, according to the September WASDE report. Predictions for 2017 production remain unchanged. Live hog prices are expected to average around $47 per cwt for 2016, and between $42–45 per cwt for 2017.
The USDA estimates 2,359,000 hogs slaughtered for the week ending September 17, up 3.1% from the same time last year. Year to date slaughter for 2016 reached 81,374,000, a 0.6% increase from this time in 2015. Estimated pork production for the week is at 488.7 million pounds, a 13.3% increase from the prior week.
Traders are anticipating updated US inventory numbers in the Quarterly Hogs & Pigs report to be released by the USDA on September 30 at 19:00 GMT.

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Cattle Slip in Recovery from 6 1/2 Year Low

September 14, 2016

Cattle futures are down again today after reaching the 3.000 cent up limit on Monday and failing to settle at the expanded 4.500 cent limit on Tuesday. This comes after prices dipped to six year lows last week.
The World Agricultural Supply and Demand report released by the USDA increased their forecasts for 2016 beef exports from 2,450 million pounds to 2,460 million pounds on improving trade prospects, though the 2017 export forecast remained unchanged at 2,580 million pounds.
Beef production forecasts were lowered slightly from 24,962 million pounds to 24,942 for 2016, and remain unchanged at 25,800 for 2017.
Meat and livestock monthly trade data released by the USDA on September 7 showed US beef exports up 8% from this time last year to 216 million pounds. Greater exports to South Korea, Mexico, and Japan more than offset a 22% reduction in exports to Canada.
Beef imports from this time in 2015 were down by 6.8% to just below 269 million pounds, the lowest monthly total since February.
July total cattle imports were down 44%, with imports from Canada down 28% and imports from Mexico down 54%.
CME October live cattle futures fell 1.025 cents on Tuesday to settle at 104.675, while the December contract fell 0.900 cents to settle at 105.825 cents per pound.
October feeder cattle were down 1.750 cents to settle at 133.375, and the November contract settled at 128.

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Iron Ore, Steel Sliding as Chinese Production Ramps Up

September 9, 2016

The resumption of production at many Chinese steel mills following mandated shuttering in preparation for last weekend’s G20 summit has increased supply and sent steel and its main component iron ore on a downward spiral.
Customs data from China show steel exports decreasing to 9 million metric tons in July, the lowest level in six months. Although, little emerged from the Hangzhou summit to quell concerns over continued overcapacity issues.
Benchmark 62% fines iron ore deliverable to China’s Qingdao port fell 0.55% to $58.14 per ton on Thursday, the lowest level since July 26, according to Metal Bulletin. This is the fourth consecutive losing session, marking a 2.1% total loss. However, prices are still over 33% above what they were this time last year.
62% fines deliverable to the Tianjin port feel 1.5% to $57.40 per ton on Thursday, according to The Steel Index.
The highest volume January 2017 iron ore futures contract on the Dalian Commodities Exchange posted a 0.3% loss in overnight trading to finish the session at 405.5 yuan.
Analysts at Metal Bulletin report that Chinese iron ore imports surged to 87.72 million tons last month, an 18.4% increase year to date.

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Chinese Steel Output Accelerated in August, Iron Ore Below $60 on Demand Concerns

August 31, 2016

62% fines deliverable to China’s Qingdao port rose 0.29% to $59.31 per ton on Wednesday, according to Metal Bulletin.
Iron ore for delivery to the Tianjin port gained 0.3% to settle at $59 per ton on Tuesday, according to The Steel Index.
The most active January 2017 iron ore contract on the Dalian Commodity Exchange fell 4.5 yuan to finish at 415.50 yuan per ton on Wednesday.
Chinese officials ordered the suspension of production activities during the second half of August at mills around the Hangzhou area in order to improve air quality ahead of the September 4–5 G20 summit.
However, according to Metal Bulletin, major Chinese mills continued to raise daily crude output through the middle of August:
CISA members produced crude steel at an average rate of 1.7490 million tonnes per day during the second ten days of the month, up 3.0% from the preceding period, according to data released yesterday. The overall upward trend in spot steel prices, as well as the anticipation for demand to improve in the upcoming peak season of September and October has kept mills’ production interest high…
According to data tracked by SteelHome consultancy, iron ore inventory at China’s major ports has reached 105.2 million tons as of August 26, near the highest level since December of 2014.

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Cotton Dips to Multi Week Low on Improved US Crop

August 31, 2016

A stronger dollar and the arrival of needed rains in Texas have prompted traders to liquidate their cotton positions, sending the fiber to multi week lows.
The most active December Cotton #2 contract on the ICE declined by 0.71 cents (1.07%) to settle at 65.58 cents per pound on Wednesday, touching a low of 65.41 cents during the session. The March 2017 contact declined 0.66 cents (0.99%) to settle at 66.01 cents per pound.
From the middle of July through early August, cotton for December delivery soared, touching a high of 77.98 cents per pound on August 05.
Though supply concerns have eased in the US, The Wall Street Journal reports that India, the world’s largest cotton producer, has signed agreements which will bring their total cotton imports for the year to around 2 million bales due to a challenging planting season.
The USDA’s weekly crop progress report released on Monday after the market closed showed that 48% of US crops were in either good or excellent condition, a slight improvement from the 47% figure reported the previous week.
Weekly export sales for the current marketing year for the period ending August 18 totaled 275,900 running bales, according to USDA data. The next weekly export report will be released tomorrow, September 01, at 20:00 GMT.
The USDA reported the adjusted world price (AWP) of upland cotton at 58.81 cents per pound.

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Weaker Yen a Minor Boost for Rubber, Production Cuts Continue

August 30, 2016

Benchmark Tokyo rubber futures ended slightly lower on Tuesday after hitting a one week high of 154.9 yen. The most heavily traded February 2017 contract on the Tokyo Commodity Exchange (TOCOM) lost 0.5 yen to close at 154.0 yen per kilogram. This comes a day after that contract jumped 3.9 yen (2.6%) to close at 154.5.
TOCOM rubber futures have been stuck in a tight trading range between 145 and 165 yen since late May.
In its July Natural Rubber Trends and Statistics report, the Association of Natural Rubber Producing Countries (ANRPC) reported year on year natural rubber supply growth at only 0.2% during the first seven months of 2016, noting:
…a weak demand outlook, low crude oil prices and weak currencies of major NR-exporting countries have combined to suppress prices…
The International Rubber Tripartite Council, which includes Indonesia, Thailand, and Malaysia, has agreed to reduce exports by a further 85,000 tons from September to December this year, following an agreement earlier in the year in which the members agreed to cut production by 615,000 tons in the six months to August 31.
Rubber contracts have seen a recent boost from a weaker yen as a Fed rate hike before the end of the year has become more probable.

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Lean Hogs Continue Losing Ground on Record Production

August 23, 2016

CME lean hog futures experienced another day of losses with the October contract falling 0.350 cent (0.57%) to settle at 60.800 cents per pound. The December contract fell 0.275 cent (0.48%) to settle at 56.775 cents per pound.
Unusually high production is weighing on the pork market.
The August WASDE report from the USDA predicts 2016 pork production to be 1.7% higher than last year, and 2017 production to be 2.4% higher than this year. 2016 third quarter production is expected to be 6,090 million pounds, and fourth quarter production is estimated to be 6,625 million pounds.
The next WASDE report will be released on September 12 at 16:00 GMT.
Federally inspected pork production for the week ending August 20 stood at 476 million pounds, a 2.2% increase from the previous week and a 2.1% increase from a year ago, according to USDA data. Estimated slaughter also increased to 2.291 million head, up 2.5% from the previous week and 2.7% from a year ago. This is the largest weekly hog slaughter since January.
Total pork stocks in cold storage warehouses at the end of July increased 2.3% from June and decreased 5.3% from July 31, 2015, according to USDA data released on August 22.
If you have any questions and comments on the commodities today, use the form below to reply.

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Cocoa Sinks After Touching One Month High

August 22, 2016

December New York cocoa futures on the ICE continue to fall after reaching a one month high on Friday at $3,120 per ton. The contract reached a low of $2,977 per ton around 11:00 GMT today before recovering slightly to $2,991 per ton by 16:05 GMT.
The contract has risen sharply since touching a bottom of $2,826 per ton on July 29, mainly on supply concerns as disruptive weather conditions have continued to hamper production in major growing regions in West Africa.
Olam International, a major trader in agricultural commodities, widened its forecast for the world cocoa deficit in the 2015/16 season from 308,000 tons to 320,000 tons, dramatically higher than the 180,000 ton deficit forecast by the International Cocoa Organization (ICCO) in its quarterly report in May.
The ICCO will release their next quarterly report at the end of this month.
December London cocoa was down 3.5% by 16:20 GMT at 2,407 pounds per ton.
ICE October raw sugar was up 0.50 cents (2.5%) to $20.27 per pound as of 16:09 GMT, while October white sugar was up $11.20 (2.1%) to $536.50 per ton.
If you have any questions and comments on the commodities today, use the form below to reply.

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Steel Rallies, Iron Ore Defies Analysts’ Expectations

August 18, 2016

Chinese steel futures rallied earlier this week on supply concerns with the October SHFE contract touching 2,687 yuan per ton on Tuesday, and the heavily traded January contract reaching 2,601 on Wednesday, the highest levels for both contracts since April.
Officials in the major steel producing city of Tangshan announced that they would cut steel capacity by 40 million tons by the end of next year. Authorities have also ordered short term production cuts of 30–50% through the rest of August for many steel mills in the Yangtze River region in an effort to curb pollution ahead of the September 4–5 G20 summit in Hangzhou.
The October rebar contract settled down 49 yuan (-1.9%) at 2,580 yuan per ton on Thursday, while the most heavily traded January contract settled down 29 yuan (-1.1%) at 2,542 yuan per ton.
January iron ore on the DCE closed down 4.5 yuan (-1%) to 432 yuan per ton ($65.20) on Thursday, not far removed from the 466 yuan high posted on April 25.
The Steel Index reports a $0.70 (-1.1%) decrease to $61.10 per ton in the spot price of iron ore deliverable to the Tianjin port on Thursday. 62% fines delivered to the Qingdao port came in at $60.71 per ton, according to Metal Bulletin.
Many traders are expecting dampened demand over the next few months as China enters the traditionally slow winter season.

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Cotton Falls from 2 Year Highs

August 11, 2016

The most actively traded December cotton contract on the ICE is up by 0.35 cents to 71.79 cents per pound as of 14:36 GMT on Thursday.
The December contract has been bearish this week, posting losses in the last 3 trading sessions after touching a two year high of 77.98 per pound on Friday, August 5. On Wednesday, the contract settled down by the maximum 3 cent daily trading limit. ICE expanded that limit to 4 cents for Thursday, however the fiber only traded between 71.00 and 72.90, settling down by 1.61 cents (2.20%) to 71.44 cents per pound.
Unfavorable weather conditions in major producing regions in India and the United States have made for the continued prospect of tight global supplies. A Bloomberg survey showed that world inventories are expected to be smaller than the USDA estimated last month.
The USDA will publish an updated World Agricultural Supply and Demand Estimates report in addition to the updated Cotton Ginnings report, both due to be released at 16:00 GMT on Friday.
Chinese officials confirmed on Monday that they would extend their annual cotton auction an additional month through the end of September due to a 47% increase in prices over the previous 5 months and complaints of shortages from mill owners, according to The Wall Street Journal.

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Strong Export Sales Continue Cotton Rally

August 5, 2016

Cotton has marked another new high today, trading at 77.98 cents per pound on the ICE. As of 17:47 GMT, the most actively traded December contract was up 0.72 cent (0.95%) to 76.55 cents per pound.
Net upland US export sales totaled 38,400 running bales for the week ending July 28 (a marketing year low), down 14% from the previous week and down 59% from the prior 4-week average, according to USDA data. Total net sales for the current marketing year came in at 194,000 running bales.
The July 31 crop condition report rated the crop at 50% excellent or good, 35% fair, 12% poor, and 3% very poor, according to official data.
According to an Agweb.com story, Robert Buckles of New Hope Risk Management in North Carolina believes the rally may not last:
From what the technical writers are saying, 80 cents is in the cards. If we get some rain in Texas, the fundamentals will take over, and the rally is over in my opinion. Basis has been dropping with every rally in the market, which is also an indicator to me that futures will have to follow soon.
The Cotlook ‘A’ Index was up 0.25 cent to 83.35 cents as of August 4.
If you have any questions and comments on the commodities today, use the form below to reply.

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Orange Juice Continues to Gain on Supply Concerns

August 4, 2016

The September frozen orange juice concentrate contract on the Intercontinental Exchange (ICE) closed up by 2.25 cents (1.3%) to 175.15 cents per pound on Thursday, marking the second straight session of gains following a limit down close at 170.85 cents on Tuesday. The exchange raised the trading limit to 20 cents on Wednesday, however the contract traded within the 168.75 to 173.80 range.
This follows a similar 10 cent down limit close on Thursday, July 28 which was then followed by a further 5.15 cent fall on Friday.
Prices have been bullish all year on supply concerns, touching a 12 month high of 195.45 cents per pound on July 26. The price is currently up nearly 21% year to date.
Open interest as of July 26 is at 23,888 futures and options positions, according to data released by the CFTC.
Supply concerns range from worries over the effects of citrus greening disease, El Nino and the early arrival of the Florida hurricane season, and the recent appreciation of the Brazilian real.
The USDA July citrus forecast report shows Florida FCOJ yield at 1.405 gallons per box, down from 1.5 gallons per box last season. The 2015–16 all orange forecast was up 100,000 boxes in July to 81.5 million boxes.
The first USDA forecast of the 2016–17 season will be released at 16:00 GMT on October 12.
If you have any questions and comments on the commodities today, use the form below to reply.

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Steel, Iron Ore Mark Second Losing Session Following Recent Rally

August 4, 2016

The most active September contract on the Dalian Commodity Exchange (DCE) closed down 7.5 yuan (1.55%) on Thursday to 475.0 yuan per metric ton, marking the second negative session for the contract following a 3 month high of 489.0 yuan reached on Tuesday.
Shanghai Futures Exchange (SHFE) rebar for the highest volume October contract settled down 34 yuan to 2,461 yuan per ton, after touching a two week high of 2,529 yuan on Tuesday.
The most active October SHFE hot rolled coils contract settled down by 34 yuan to 2,635 yuan per ton.
Iron ore for delivery to China’s Tianjin port was unchanged at $60.70 per ton on Wednesday, according to The Steel Index.
Benchmark 62% fines for delivery to the Qingdao port fell slightly to $61.67 per ton on Wednesday, according to data provided by Metal Bulletin.
Port stocks stood at 106.05 million tons on July 29, according to data tracked by SteelHome Consultancy.
Sanford C. Bernstein & Co., an investment research firm, has said iron ore could be boosted over the next year by increased steel production underpinned by expanded credit in China.
The manufacturing purchasing managers index increased to 50.6 in July from 48.6 in June, according to data provided by Caixin Media and Markit Economics. The official PMI for July fell slightly to 49.9 from 50 in June. Numbers below 50 are meant to indicate deteriorating conditions.
Macquarie Group Ltd.

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Iron Ore Rally Closing in on April Highs

July 29, 2016

The September iron ore contract on the Dalian Commodity exchange closed 6.5 yuan higher at 472.5 yuan ($71) per ton on Thursday, just 1.5 yuan below the highest close of the year made on April 21 when speculators propelled prices to a 15 month high.
The benchmark spot price for 62% fines delivered to the Qingdao port settled at $60.70 per ton, according to Metal Bulletin. 62% fines delivered to the Tianjin port rose 1% to $58 per ton on Wednesday, according to The Steel Index.
A major flood in northern China disrupted some deliveries last week, while some furnaces in the steel-hub Tangshan remain closed to ensure clean air for the anniversary of the Great Tangshan earthquake of 1976, and other firms are experiencing reduced output due to environmental checks by authorities.
The most active October steel rebar on the Shanghai Futures Exchange rose 2.6% to 2,480 yuan per ton, after briefly touching a high of 2,503 yuan earlier.
According to a July 14 Wall Street Journal report, Macquarie, a bank, is skeptical that the continued rise will go on for very long given high port stocks, low oil prices, and reduced steel output.
Port holdings increased 0.2% to 105.65 million tons last week, the highest since December 2015, according to Shanghai Steelhome Information Technology Company.
If you have any questions and comments on the commodities today, use the form below to reply.

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Cattle Rebounds on Lower Than Expected Supply Growth

July 26, 2016

A lower than expected increase in US livestock and beef supplies reported on Friday in the USDA’s Cattle on Feed report has buoyed the market over the last few sessions, with Monday’s trading reaching the limit up for the August, October, and December contracts. This comes after the August live cattle contract hit fresh 5 year lows during last week’s trading.
The report shows the number of cattle in US feedlots growing at a slower than expected pace, up only 1% from last year. This has led some traders to anticipate the beginning of a recovery in cattle prices.
US beef demand is near a seasonal low as consumers choose lighter fare during the hottest summer weeks.
August live cattle futures on the Chicago Mercantile Exchange (CME) climbed 0.775 cents (0.7%) to $1.13725 per pound, the highest level since June 30. The October contract increased 1.350 cents (1.2%) to $1.12425 per pound. The August feeder cattle contract increased 0.650 cents to $1.42350 per pound. Both live cattle and feeder cattle contracts traded at expanded limits today.
Afternoon choice beef cutout for July 26 is up $1.34 to $199.93 per cwt, while select cuts increased by $1.38 to $190.82 per cwt, according to USDA data.
The CME Feeder Cattle Index for the 7 days ending July 25 stood at $138.61.
If you have any questions and comments on the commodities today, use the form below to reply.

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Cattle Futures Reach 5 Year Low on Sluggish Demand

July 21, 2016

US cattle futures declined to five year lows on Thursday with August live cattle declining 1.9 cents (1.7%) to $1.07525 per pound on the Chicago Mercantile Exchange (CME). This represents the lowest closing price for a front-month contract since June 2011.
The most heavily traded October contract declined 2.4 cents to $1.05700 per pound.
August feeder cattle futures declined 4.225 cents to $1.3440 per pound, the lowest close in over three years.
Cattle prices are under pressure from lower seasonal demand and expanding US production.
The midday choice beef cutout price for July 21 was down $0.61 from Wednesday to $200.70 per cwt, while select cuts were down $1.19 to $189.82 per cwt, according to USDA data.
The CME Feeder Cattle Index was down to $140.23 for the 7 days ending July 20, down from $141.28 on July 19.
Traders are anticipating the USDA’s Cattle on Feed report due to be released Friday at 19:00 GMT.
If you have any questions and comments on the commodities today, use the form below to reply.

© BrentLantzy for Commodity Blog, 2016. |
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Iron Ore Continues Decline on Slower Production

July 21, 2016

Iron ore has extended its decline to over 6% since July 12.
The spot price for benchmark 62% fines at the Qingdao port fell by 0.48% to $55.75 per ton on Wednesday, according to Metal Bulletin. 58% fines decreased by 1.13% to $43.70 per ton.
According to The Steel Index, the spot price for 62% fines deliverable to the Tianjin port closed at $55.10 per ton, the lowest since July 1.
As of July 18, iron ore inventory at 33 major Chinese ports amounted to 100.29 million metric tons, up 3.56 million metric tons from July 11 levels, according to China’s Xinhua News Agency, reported by Steel Orbis.
Analysts at Metal Bulletin observed that CISA (China Iron & Steel Association) member mills lowered their crude steel production rates in early July after a rebound in late June. As of July 10, CISA member mills had a total of 13.8 million metric tons of finished steel in their inventories, up 4.3% from June 30 levels.
Analysts continue to be concerned with China’s slowing real estate market.
The most active September 2016 iron ore contract on the Dalian Commodities Exchange rose by 0.7% to 426.0 yuan.
The most actively traded October 2016 steel rebar futures on the Shanghai Futures Exchange were up 2.04% to 2,353 yuan per ton.
If you have any questions and comments on the commodities today, use the form below to reply.

© BrentLantzy for Commodity Blog, 2016.

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Cotton Soaring on USDA Forecasts

July 14, 2016

The Cotton: World Markets and Trade report released by the USDA on Tuesday sent cotton soaring to its 300 cent daily up limit. The most actively traded December cotton contract on the ICE has had a stunning week, reaching a high of 74.78 cents per pound on Wednesday, a two year high, before closing at 73.15, still the highest level in a year. The contract has soared 15% from Friday through Wednesday, the largest 4 day gain in over four years.
The past two years have seen cotton prices maintaining a relatively steady range between 60 and 65 cents per pound, mainly due to huge stockpiles in China and declining global production.
The report startled investors as the USDA increased its 2016/17 estimate for US cotton exports to 11.5 million bales. The estimate for US ending stocks was lowered from 4.8 million bales to 4.6 million bales. The US production estimate has been increased by 1 million bales to 15.8 million.
Estimates for world cotton inventories at the close of 2016/17 were lowered to 91.3 million bales, mainly due to a lower estimate for ending inventories in China, where the government has had success in depleting huge state stockpiles.
The USDA also cut the forecast for Indian and Pakistani 2016/17 cotton production by 0.5 million and 1 million bales respectively due to concerns over disease, pests, and weather conditions.
The Cotlook ‘A’ Index stood at 81.

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Live Cattle Lowest in Five Years

July 8, 2016

Chicago Mercantile Exchange (CME) August live cattle futures settled lower on Thursday, down $1.00 to $111.800 cents per pound, the lowest closing price for a front-month contract in five years. The October contract closed 87.5 cents lower at 112.225 cents per pound.
Some of the downward pressure can be attributed to large funds “rolling” their positions from the front-month contract to deferred months. Friday is the first of five days in which funds that track the Standard & Poor’s Goldman Sachs Commodity Index “roll” August live cattle and lean hog long positions primarily into October.
August feeder cattle closed 95 cents lower to 143.625 cents per pound.
The afternoon choice beef price was up 97 cents from Wednesday to $210.05 per cwt. Select cuts were up 5 cents to $196.98, according to USDA daily beef reports.
Due to the July 4 holiday on Monday, the USDA’s weekly beef and pork export report will be released a day late on Friday at 12:30 PM GMT.
If you have any questions and comments on the commodities today, use the form below to reply.

© BrentLantzy for Commodity Blog, 2016. |
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Orange Juice Higher on Supply-Side Woes

July 1, 2016

Orange juice futures for September delivery reached a high of 180.00 cents per pound on Thursday before settling up 2.65 cents to 177.20 on the Intercontinental Exchange (ICE). Thursday’s high of 180.00 marks the highest price in over four years.
The lower volume July contract closed up by 4.25 cents to 177.15 cents per pound.
The USDA’s National Agricultural Statistics Service released its June citrus forecast on June 10, raising slightly the 2015–2016 Florida all orange forecast to 81.4 million boxes, up from 81.1 million boxes forecasted in the May report, which noted this to be likely the smallest harvest since the 1963–1964 season. The next report is scheduled for release on July 12.
Top producers Florida and Brazil have had millions of acres of crops affected by the citrus greening disease, which currently cannot be cured and causes trees to produce green, misshapen, and bitter fruit unsuitable for sale.
Threats from the Atlantic hurricane season, which lasts through November, are expected to keep prices supported over the next few months.
Recent gains for the Brazilian Real against other major currencies has discouraged local farmers from selling to foreign buyers.
Though demand is lower, the cocktail of supply-side issues indicates that both US and global stockpiles are declining.

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Lean Hogs Lower on Swollen US Inventory

June 28, 2016

The highest volume August lean hog contract on the Chicago Mercantile Exchange (CME) was down 0.125 cents to 83.375 cents per pound as of 15:28 GMT, while the July contract stood down 0.150 cents to 83.000 cents per pound.
The most recent CME lean hog index for the 2 business days ending June 24 stands at 84.61 cents per pound.
The USDA’s quarterly Hogs and Pigs report released on Friday indicated high levels of production so far this year. Swollen US hog inventory at 62.4 million head (up 2% from last year) represents the highest June 1 market hog inventory since estimates began in 1964.
Following the success of the British campaign to leave the EU, industry analysts are trying to get a handle on how this will affect pork exports. Though the largest US export partners for pork are Japan, Mexico, China, Canada, and South Korea, a steadily rising US dollar could dampen demand throughout the world as currency traders seek the security of the greenback amidst the Brexit turmoil.
From late-May through to late-June, August lean hogs shot from around 78 cents to near 90 cents per pound, though about half of these gains were lost prior to the release of the USDA’s report on Friday.
If you have any questions and comments on the commodities today, use the form below to reply.

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