Weekly Recap of the Metals, Energy, Grains, Meats, and Softs Markets
Energy
Crude oil closed 1.4-percent higher on the week, with the October contract settling $1.49 higher at $106.04 a barrel. Oil was supported from expectations for approval of the $700 billion bailout plan, combined with falling inventories due to hurricane disruptions.
Trading in crude oil was halted for five minutes Monday after the October crude contract reached the daily price limit of $10 per barrel. Under NYMEX rules, the price change limit is increased by another $10.
Crude inventories fell to 290.2 million barrels, for a decline of 1.5 million barrels for the week ended Sept. 19, the Energy Information Administration said. Government data showed a decline of 15.7 million barrels over the past five weeks.
Heating oil inventories fell by 4.2 million barrels to 125.4 million barrels for the week ended Sept. 19, the Energy Information Administration said. Government data showed a decline of 6.7 million barrels over the past four weeks. October heating oil settled 3.1-percent higher on the week at $2.9879 a gallon.
RBOB gasoline inventories fell by 5.9 million barrels 178.7 million barrels for the week ended Sept. 19, the Energy Information Administration said. Government data showed a decline of 38.4 million barrels over the past nine weeks. October RBOB gasoline settled the week nearly unchanged at $2.6136 a gallon.
The Energy Information Administration reported an injection of 51 bcf of natural gas into storage during the week ended Sept. 19, lifting the amount of working gas in storage to 3.023 tcf. The injection still left storage 162 bcf lower than the same period last year but 35 bcf above the 5-year average. October natural gas settled the week modestly lower at $7.472 per million British thermal units.
Grains
Corn finished the week slightly higher, with the December contract settling with a 1 cent gain at $5.43 a bushel. Corn reached a 4-day winning streak Wednesday, before poor export sales, and demand concerns erased nearly all of the gains on the week.
U.S. export sales fell 68-percent to 547,796 tons last week, compared to the same time last year, the U.S. Department of Agriculture said in a report Thursday. Total sales for delivery before the end of the marketing year are down 36-percent at 12.96 million metric tons.
The International Grain Council said in a report Thursday that global trade in corn will fall by 13-percent to 87 million metric tons in the marketing year that began July 1, compared with a year earlier.
Wheat settled the week modestly higher, with the December contract gaining 2 cents at $7.18 a bushel. A tug-a-war between higher production numbers from the USDA and speculation that farmers might cut plantings due to high input costs and falling prices was noted for some of the action on the week.
The forecast for global wheat production in 2008-09 was raised to 676.3 million tons, climbing 5.5 million since the August estimate and up 65.4 million from 2007-08, the U.S. Department of Agriculture said last week.
Speculation that higher fertilizer and other input costs at a time when wheat prices have nearly been chopped in half will encourage farmers to plant less this fall added to the bull case this week.
Soybeans were slightly higher on the week, with the December contract settling 20 cents higher at $11.64 a bushel. Inflation speculation sent soybeans to their weekly high gaining 5-percent on Monday, before closing with a much more modest 1.8-percent gain on the week.
Softs
Sugar jumped over 12-percent on the week, with the October contract settling 1.45 cent higher at 90.50 cents a pound. Smaller than anticipated production from south Brazil, combined with declining Indian production was noted for sugars climb to a fresh 1-month high.
India's summer-sown sugar cane area fell to 4.4 million hectares staring in June through Sept. 26 from a year ago period, as farmers switched into more profitable rice and soybeans.
Cotton closed 3.5-percent lower this week, as the December contract settled 2.14 cents lower at 62.52 cents a pound. Speculation that the global economy will continue to weaken reducing demand for cotton was noted for some of the weakness.
November orange juice settled the week nearly 1-percent higher, with the November contract gaining 0.7 cent at 90.50 cents a pound. Cocoa finished the week 2-percent higher at $2,743 a metric ton and December coffee gained just over a penny at $1.3415 a pound.
Meats
Cattle settled the week nearly unchanged, with October feeder cattle finishing 0.05 cent lower 105.80 cents a pound. Concerns over the global economy, and whether continued weakness would affect consumers ability to purchase more expensive protein. After falling to a 5-month low Thursday, October live cattle settled the week nearly unchanged at 100.95 cents a pound.
The U.S. Department of Agriculture's midday beef wire for Friday showed choice cuts were $2.07 per hundredweight lower, while select items fell by $0.54 per hundredweight.
The USDA's monthly belly storage results on Monday were considered mildly bullish by traders sending February pork bellies 710 points higher on the week at 98.00 cents a pound. October lean hogs gained 1.42 cent to settle at 69.62 cents a pound.
Metals
Gold finished a volatile week 2.8-percent higher, with the December contract gaining $23.80 to settle at $888.50 an ounce. Gold started the week with a huge 5.1-percent gain on Monday as the U.S. dollar fell to a 2-month low against the euro, but spent the rest of the week giving back much of those gains. December silver gained over 8-percent on the week at $13.503 an ounce.
Copper closed 3.5-percent lower on the week, with the December contract settling the week 3.5-percent lower at $3.0745 a pound. Speculation that the slumping U.S. housing market weakness will persist thus reducing demand for copper was noted for the decline.
The U.S. governments existing home sales report showed sales of previously owned homes crumbled more than expected last month in the U.S., with the median price sliding the most on record.
