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Thursday, October 28, 2010

Crude oil falls on stronger $, QE doubts US crude to average over $83 next year: Poll LONDON: Oil fell towards $81 a barrel on Wednesday, as mounting doubts about the size and timing of US economic stimulus pushed up the dollar, but data showing a drop in US gasoline inventories helped limit oil's losses. The US Energy Information Administration's report showed crude stocks rose 5.01 million barrels, more than forecast but less than the rise reported Tuesday by industry. Gasoline stocks fell 4.39 million barrels, after being expected to be up 200,000 barrels. Distillate stocks fell near expectations. US crude for December fell $1.30 to $81.25 a barrel at 1445 GMT, off an earlier low of $80.73. ICE Brent fell $1.21 to $82.45. Oil was down almost 2 per cent prior to the release of the US government oil stocks data as the dollar was

forced up on doubts about how far the Federal Reserve will go on economic stimulus plans. Data on Wednesday showed new US single-family homes rose more than expected in September, helping to support the dollar and pressure oil, as investors saw strong economic data making the case for less aggressive Fed easing.

The negative correlation between the dollar and the price of oil was near its strongest level in 14 months in the run-up to a meeting on Nov. 2-3 when the Federal Reserve is expected to make clear the details of how much money it will pump into the US economy. Speculation financial mar-

kets may have priced in too much QE was stoked by a Wall Street Journal report on Wednesday, which said the US Federal Reserve's Treasury bond-buying programme was likely to be worth "a few hundred billion dollars." Investors had been counting on between $500 billion and $1 trillion to help the economic recovery. A Reuters poll of 33 analysts and industry experts predicted oil would average over $83 next year as US monetary stimulus fed through to the economy and boosted fuel demand. Oil refinery strikes in protest against French President Nicolas Sarkozy's unpopular pension reform eased on Tuesday, with walkouts ending at several plants and unions sounding more open to talks with employers. -Reuters

GAZA STRIP - PALESTINE: Palestinian farmers sort peanuts during harvest in Khan Younis in the southern Gaza Strip. -Reuters

US cotton jumps for 5th day, touches record NEW YORK: US cotton futures surged on Tuesday, hitting a record high and ending nearly 4 per cent higher on frenetic buying by mills, speculators and funds, analysts said. After a fifth straight session of gains, Lou Barbera, cotton analyst at brokerage VIP Commodities, said cotton was "over-inflated." He predicted prices would drop in the days ahead as investment funds started rolling positions out of the December contract. "We're up here in la-la land, in the stratosphere," said Mike Stevens, an independent cotton analyst in Louisiana. "You've still got the same fundamentals

going." Cotton prices have soared nearly 80 per cent in value since late July, rocketing up due to strong demand and higher fibre prices in China, the No 1 producer which has been squeezed by tight stocks and shrinking production. ICE Futures US key December cotton contract gained 4.88 cents or nearly 4 per cent to finish at $1.2959 per lb. Before a late bout of profit taking, cotton touched a record high at $1.305. After the biggest five-day rise for US cotton futures since March 2003, many believe the market is overbought. "It's out of control," said Jobe Moss, an ana-

lyst for brokers and merchants MCM Inc in Lubbock, Texas. In China, the Zhengzhou Commodity Exchange's benchmark fourth-month cotton contract last traded at 27,135 yuan per tonne, having touched an alltime top of 27,980 yuan. "Cotton price gains on the physical market have failed to keep up with the gains on futures, and there will be great risks if traders keep pushing futures prices higher," said Li Panfeng, an analyst with Bette Futures. The market will watch closely to see if the pace of buying by China has slowed down given the record run-up in prices. -Reuters

Palm oil extends losses on strong dollar KUALA LUMPUR: Malaysian palm oil extended losses on Wednesday and China's soyoil market tumbled from two-year highs as a stronger dollar made commodities priced in the currency expensive and unattractive as an inflation hedge. Benchmark January 2011 palm oil futures on the Bursa Malaysia Derivatives Exchange ended 0.5 per cent lower at 3,037 ringgit ($981.3), extending losses to a second day after the market hit a two-year high on Monday. Traded volume was heavy at 19,420 lots of 25 tonnes each changing hands, almost double from the usual 10,000 lots. "Palm oil followed a correction of China's soyoil and profit taking on a stronger dollar,"

said a trader in Kuala Lumpur. But traders expect resilient palm oil export when cargo surveyors issue September data next week, which may have limited the losses in the Malaysian benchmark. Reuters technical analyst Wang Tao expects Malaysian palm oil to maintain at 3,194 ringgit per tonne based on its wave pattern and a Fibonacci projection analysis. China soyoil futures fell on Wednesday, tracking Chicago soybean prices that fell back from 14-

month highs during Asian trade. The most active September soyoil contract on China's Dalian Commodity Exchange tumbled 2.8 per cent to 9,440 yuan per tonne on profit taking after climbing to its fresh twoyear highs of 9,580 yuan earlier in the session. China booked about 250,000 tonnes of soyoil mainly from Argentina this week for March to May shipment after Beijing lifted a ban over imports from the world's largest exporter, an official think tank said on Wednesday. -Reuters

LONDON METAL EXCHANGE (PLASTIC) LME Official Prices, US$ per tonne for October 26 2010 POLYPROPYLENE(PP)

LINEAR LOW (LL)

Cash & Settlement

1200

1180

October (3rd Wednesday)

1230

1180

November (3rd Wednesday)

1230

1180

LONDON METAL EXCHANGE (METALS) LME Official Prices, US$ per tonne for October 26 2010

ALUMINIUM ALUMINIUM COPPER LEAD NICKEL ALLOY

Cash buyer Cash seller 3-months buyer 3-months seller 15-months buyer 15-months seller 27-months buyer 27-months seller

2250 2255 2220 2230 2185 2195 2185 2195

2331 2332 2361 2362 2405 2410 2462 2467

8465 2540.5 8466 2541 8473.5 2568 8474.5 2569 8305 2535 8315 2540 7940 2503 7950 2508

23180 23185 23295 23300 22800 22900 21750 21850

TIN

ZINC NASAAC

26545 2556 26550 2556.5 26500 2584 26550 2585 26000 2608 26050 2613 2563 2568

2281 2282 2295 2305 2345 2355 2400 2410

European vegetable oil prices ROTTERDAM: The following were the Wednesday's Rotterdam vegetable oil price's at 21:00 PST. SOYOIL: EU degummed euro tonne fob exmill Dec10/Jan11 860.00-5.00, Feb11/Apr11 865.00+1.00. RAPEOIL: Dutch/EU euro tonne fob exmill Feb11/Apr11 852.00+2.00, May11/Jul11 857.00+2.00, Aug11/Oct11 840.00+5.00. SUNOIL: EU dlrs tonne extank six ports option Jan11/Mar11 1320.00-10.00, Apr11/Jun11 1305.00-5.00, Jul11/Sep11 1330.00+0.00. LINOIL: Any origin dlrs tonne extank Rotterdam Oct10/Nov10 1297.50-7.50. CRUDE PALM OIL: Sumatra/Malaysia slrs option dlrs tonne cif R'dam Nov10 1030.00-5.00, Dec10 1030.002.50, Jan11/Mar11 1025.002.50, Apr11/Jun11 1027.502.50. PALMOIL: RBD dlrs tonne cif Rotterdam Dec10 1057.50, Jan11/Mar11 1052.50. PALMOIL: RBD dlrs tonne fob Malaysia Dec10 1012.505.00, Jan11/Mar11 1007.505.00. PALM OLEIN: RBD dlrs tonne fob Malaysia Dec10 1022.50-5.00, Jan11/Mar11 1017.50-5.00, Apr11/Jun11 1020.00-5.00. PALM STEARIN: Dlrs tonne fob Malaysia Nov10 1005.00+0.00, Dec10 1005.00+0.00. COCONUT OIL: Phil/Indon dlrs tonne cif Rotterdam Oct10/Nov10 1430.00-15.00, Nov10/Dec10 1430.00-15.00, Dec10/Jan11 1430.00-15.00. CASTOROIL: Any origin dlrs tonne extank Rotterdam Oct10/Nov10 1925.00+0.00. Reuters

Indian sugar flats; millers eye festival demand MUMBAI: India's spot sugar ended steady on Wednesday as millers kept prices unchanged in tenders despite weak demand, dealers said. "Demand was weak, but millers were not lowering prices in tenders.... Retail demand may pick up in next few days," said Shrikant Karwa, a sugar dealer based in Phaltan, Maharashtra. Demand for sugar usually goes up ahead of Diwali, the Hindu festival of lights, which falls in the first week of November. In Kolhapur, a key market in top-producing Maharashtra state, the most traded S-variety nudged 1 rupee up to 2,580 rupees ($58) per 100 kg. India is likely to take a decision on sugar exports after the second week of November, Farm Minister Sharad Pawar said on Wednesday. He said the country is likely to produce 25 million tonnes sugar in 2010/11. Fresh showers in India's key sugar producing states of Maharashtra and Karnataka are likely to delay cane crushing, industry and government officials told Reuters. -Reuters

Copper falls as Fed expectations lift $

Robusta coffee hits 2-yr high, sugar slips

stoppage at the world's No. 3 copper deposit. Union sources have said results from the vote could come in around 0000 GMT.

LONDON: Robusta coffee hit a two-year high on Wednesday, while arabica coffee held near its recent 13-year peak, as dealers said technical buying based on historical price charts supported the markets. ICE raw sugar futures prices eased, just below a nine-month peak, while cocoa edged higher, as the firm dollar weighed on the commodities complex. Dealers said robusta coffee was boosted by supportive technicals. January robustas peaked at $1,927 a tonne before easing slightly to trade up $36 or 1.9 per cent at $1,915 a tonne at 1500 GMT. Arabica coffee remained near the 13-year peak hit on Tuesday of $2.0460 a lb, trading unchanged at $2.0175 a lb. Indian authorities are expected to give a decision in the next week on whether to allow sugar exports and an approval seems likely, GSC Rao, chief executive of Indian refining group Simbhaoli Sugars, said on Wednesday. ICE March raw sugar futures traded down 0.30 cent or 1.1 per cent at 27.66 cents a lb, near their nine-month peak hit last week of 29.23 cents a lb. London December white sugar was down $14.30 or 2 per cent at $694.00 per tonne. Czarnikow's head of analysis, Toby Cohen, said on Wednesday he estimated global sugar stocks were below 20 million tonnes and the stocksto-use ratio was around 10 per cent, putting the market in a fragile position. Cocoa was higher as dealers focused on Ivory Coast, the world's biggest producer, where cocoa arrivals have been below expectations thus far. Dealers also eyed the upcoming election due at the end of the month as any unrest could trigger higher cocoa prices. ICE December cocoa up $21 or 0.7 per cent at $2,910 per tonne. Liffe second-month March cocoa was up 18 pounds at 1,969 pounds a tonne. -Reuters

LONDON: Copper fell away from recent two-year highs on Wednesday responding to a firmer dollar amid speculation that fresh monetary easing in the United States would not be as pronounced as previously thought. Benchmark copper on the London Metal Exchange closed at $8,300 per tonne, from a Tuesday close of $8,511, and a session low of $8,266.50. The metal used in power and construction hit its highest since July 2008, at $8,554, in the prior session. An unexpected dip in demand for US durable goods in September caused the dollar to pare gains earlier in the session, supporting copper briefly, but the effect was shortlived and base metals resumed their decline. Demand for long-lasting US manufactured goods, excluding aircraft, unexpectedly slipped last month and a key gauge of business capital spending plans also fell, underscoring the economic recovery's tepid pace. Meanwhile, workers at Chile's giant Collahuasi mine look set on Wednesday to vote for a strike in a wage-offer ballot, union leaders said, in a move that could lead to output

Shanghai copper falls Benchmark third-month Shanghai copper fell 490 yuan to 64,040 yuan. Shanghai zinc also fell 3 per cent to 20,360 yuan. Three-month zinc fell on Wednesday to close at $2,510, from a close of $2,615 per tonne. It has retraced four per cent from nine-month peaks of $2,638.75 touched on Tuesday. The metal used in galvanising is at risk of a deeper correction, added Major given ample global supply. Meanwhile, LME-bonded warehouses registered the largest zinc inflow in some five months, data showed today. Lead, which hit a new peak since January earlier at $2,619, slipped to close at $2,543 from $2,594. Aluminium closed at $2,323 a tonne from $2,390. Nickel closed at $22,805 a tonne from $23,300. Tin declined to $26,050 a tonne from $26,700. LME inventories rose 90 tonnes to 12,825 tonnes, the highest since end-September, data showed. -Reuters

Gold sheds 1.5pc ahead of Fed meeting LONDON: Gold fell 1.5 per cent on Wednesday as the dollar rose versus the euro after a report said the Federal Reserve would likely adopt a gradual approach to further US monetary easing at a meeting next week. Spot gold hit a low of $1,318.74 and was bid at $1,320.25 an ounce at 1513 GMT, against $1,338.70 late in New York on Tuesday. US gold futures for December delivery fell $17.80 an ounce to

one of the biggest gold-buying occasions of the year, approached in November. India's October gold imports are forecast to rise by 14.6 per cent from a year ago despite record high prices, as Hindu festivals and the metal's investment performance attract buyers. Elsewhere, a newspaper run by China's Ministry of Commerce said on Wednesday the country should significantly boost its state gold reserves to a level

China rubber limits-down

$1,320.80. All eyes will turn to US growth data at the end of this week, and the hotly awaited policy meeting of the Federal Open Market Committee the following week, at which the prospect of monetary easing is set to be discussed. "The greenback is holding strong, and there is little other news (for gold)," said Andrey Kryuchenkov, an analyst at VTB Capital. US GDP data on Friday will be key for the dollar, and consequently for gold, he said, "but it is really down to the FOMC on 2/3 November". "I think the Fed won't go as big on QE2 as people have been expecting, and I think the dollar (will) firm into year-end," said Simon Weeks, head of precious metals at the Bank of Nova Scotia. "It's just a question of time before we are lower." In India, bullion traders snapped up bargains to meet festival demand as Dhanteras,

equal to that held by the United States, citing a local researcher. Palladium was at $619.55 an ounce against $620.63, having earlier touched its highest since 2001 at $636.25 an ounce. The autocatalyst metal is one of this year's best-performing commodities. Silver was bid at $23.39 an ounce against $23.82. The US Commodity Futures Trading Commission said there had been attempts to influence silver prices, but did not provide any detail on the status of a probe into price manipulation in silver that started in 2008. The US commodity futures regulator is looking into claims by a trader in London that JPMorgan Chase & Co was involved in manipulative silver trading, the Wall Street Journal said, citing a person close to the situation. Platinum was at $1,681.42 an ounce against $1,694.95. -Reuters

BEIJING: Benchmark rubber futures traded on the Shanghai Futures Exchange were limitdown on Wednesday, but analysts said fundamentals are unchanged. The May 2011 rubber futures contract fell 5 per cent to go limit-down at 31,210 yuan ($4,685) per tonne. On Tuesday, the contract hit a record high of 33,320 yuan per tonne. Analysts said a stronger dollar prompted an overall downward correction in agricultural commodities, especially those that had been rising fast in recent months. The SHFE lifted trading fees for natural rubber futures contracts from Monday, which also increased the difficulty of short-term speculative trading, Guo added. As fundamentals had not changed, once the dollar weakened, rubber prices would likely set fresh record highs, said Song Chao, an analyst with Tianma Futures, putting initial support for the benchmark futures at 30,000 yuan per tonne. -Reuters

National Commodity Exchange Ltd Trading Summary Date

27-Oct-2010 27-Oct-2010 27-Oct-2010 27-Oct-2010 27-Oct-2010 27-Oct-2010 27-Oct-2010 27-Oct-2010 27-Oct-2010 27-Oct-2010 27-Oct-2010 27-Oct-2010 27-Oct-2010 27-Oct-2010 27-Oct-2010 27-Oct-2010 27-Oct-2010 27-Oct-2010 27-Oct-2010 27-Oct-2010 27-Oct-2010 27-Oct-2010 27-Oct-2010 27-Oct-2010 27-Oct-2010 27-Oct-2010 27-Oct-2010 27-Oct-2010 27-Oct-2010 27-Oct-2010 27-Oct-2010

Commodity

CRUDE100 CRUDE100 CRUDE100 SILVER - SL500 SILVER - SL500 GOLD 01oz GOLD 01oz GOLD 01oz GOLD 100oz GOLD 100oz GOLD 100oz GOLD GOLD GOLD Kilo GOLD Kilo GOLD Tola Gold50 Tola Gold100 Mini Gold Mini Gold Mini Gold Mini Gold Mini Gold TT Gold TT Gold TT Gold IRRI6W Rice IRRI - 6 RBD Palm Olein KIBOR3M KIBOR3M

Contract Date

Price Quotation

Open

High

Low

Close

NO10 DE10 JA11 NO10 DE10 NO10 DE10 JA11 NO10 DE10 JA11 NO10 DE10 JA11 NO10 DE10 NO10 NO10 1-Aug 2-Aug 3-Aug 4-Aug 5-Aug 1-Sep 2-Sep 3-Sep 28OC10 NO10 NO10 10-Dec 11-Mar

US$ Per Barrel US$ Per Barrel US$ Per Barrel US$ Per Troy Ounce US$ Per Troy Ounce US$ Per Troy Ounce US$ Per Troy Ounce US$ Per Troy Ounce US$ Per Troy Ounce US$ Per Troy Ounce US$ Per Troy Ounce Per 10 grms Per 10 grms Per 10 grms Per 10 grms Per 10 grms Per Tola Per Tola Per 10 grms Per 10 grms Per 10 grms Per 10 grms Per 10 grms Per Tola Per Tola Per Tola Per 100 kg Per 100 kg Per Maund Per Rs. 100 Per Rs. 100

82.30 82.94 83.52 23.34 23.34 1329.00 1333.50 1335.00 1333.70 1329.00 1334.90 37025.00 36885.00 36902.00 36848.00 36857.00 42989.00 42979.00 37933.00 37972.00 37894.00 37907.00 37920.00 43578.00 43623.00 43533.00 2402.00 3323.00 4491.00 86.73 86.16

82.80 83.41 83.52 23.68 24.17 1343.00 1343.00 1344.00 1333.70 1341.20 1334.90 37075.00 36885.00 36902.00 36848.00 36857.00 42989.00 42979.00 37933.00 37972.00 37894.00 37907.00 37920.00 43578.00 43623.00 43533.00 2402.00 3347.00 4500.00 86.77 86.16

81.57 82.30 82.26 23.34 23.22 1328.00 1325.40 1325.80 1331.30 1327.90 1330.40 36673.00 36741.00 36758.00 36704.00 36704.00 42811.00 42811.00 37775.00 37815.00 37828.00 37749.00 37762.00 43393.00 43439.00 43454.00 3302.00 3323.00 4491.00 86.73 85.79

81.92 82.60 82.26 23.68 23.64 1331.30 1330.40 1331.30 1331.30 1330.40 1330.40 36732.00 36741.00 36758.00 36704.00 36704.00 42811.00 42811.00 37775.00 37815.00 37828.00 37749.00 37762.00 43393.00 43439.00 43454.00 3326.00 3347.00 4500.00 86.77 85.79

Traded Volume in lots 176 48 238 557 1,763 1,929 9 3 -

Previous Settlement Price 82.33 82.99 83.53 23.99 23.99 1338.60 1339.10 1340.00 1338.60 1339.10 1340.00 37016.00 37025.00 37043.00 36989.00 36997.00 43143.00 43143.00 38063.00 38102.00 38115.00 38036.00 38050.00 43729.00 43774.00 43789.00 3302.00 3323.00 4491.00 86.73 85.80

Note: Traded Volume reflects the trades from 06:00 pm of previous day to 06:00 pm of current day

Current Open Interest Settlement in Lots Price 81.92 39 82.60 12 82.26 23.68 23.64 52 1331.30 55 1330.40 799 1331.30 1,711 1331.30 1330.40 7 1331.30 36732.00 50 36741.00 9 36758.00 36704.00 1 36713.00 42811.00 42811.00 37775.00 37815.00 37828.00 37749.00 1 37762.00 43393.00 43439.00 43454.00 3326.00 3347.00 4500.00 86.77 85.79 -

The Financial Daily-Epaper-28-10-2010  

The Financial Daily Epaper