U.S. Commodities: Copper Rises, Report Signals Stronger Demand
New York, March 15 (Bloomberg) -- Copper rose after the U.S.
said industrial production increased for a second month in
February, signaling stronger demand for wire and pipes.
The 0.4 percent gain in production reported by the Federal
Reserve was the largest since June 2000 and followed reports of
gains in Germany, Europe's largest economy, France and Italy.
Expectations for a pickup in industrial use of copper have boosted
prices by one-fourth from a 14-year low in November.
``Copper prices are bouncing off the bottom on expectations
of improved demand,'' said Clive Ramsey, president of Flemington,
New Jersey-based U.S. Bronze Powders Inc., whose products are used
to make copper parts and paint. ``Demand has to actually increase
to get this market much higher.''
In other markets, wheat had its biggest gain in more than two
months on concern that unusually warm weather in the U.S. Great
Plains will accelerate evaporation of soil moisture as crops
emerge from winter dormancy, and hog futures fell to a two-month
low. The energy-weighted Goldman Sachs Commodity Index rose 0.25
195.38.
Copper for May delivery rose as much as 1 cent, or 1.3
percent, to 75.5 cents a pound on the Comex division of the New
York Mercantile Exchange. Prices were up 0.3 percent for the week.
Industrial production in the U.S., the largest user of
copper, had fallen in 14 of the 15 previous months before
rebounding in January. Manufacturers such as General Motors Corp.,
the world's largest automaker, are increasing production to meet
rising demand. An average car contains about 50 pounds of copper,
according to the New York-based Copper Development Association.
Production in France and Italy rose in January, reports
yesterday showed, suggesting a recovery in the U.S. will help
revive European economies. In Germany, production rose in December
for the first time in four months.
The economy of the dozen nations sharing the euro will grow
between 0.4 percent and 0.7 percent in the second quarter after
expanding between 0.1 percent and 0.4 percent in the current
quarter, the European Commission estimates.
Wheat
Wheat had its biggest gain in more than two months on concern
that unusually warm weather in the U.S. Great Plains will
accelerate evaporation of soil moisture as crops emerge from
winter dormancy.
Temperatures reached 90 degrees Fahrenheit yesterday in
Kansas and Oklahoma, sapping moisture from fields already parched
by 4 1/2 months of below-normal rainfall, meteorologists said.
Without ample rain, some farmers may abandon fields rather than
risk losing money on a poor harvest in May, analysts said.
``Those plants are going to need moisture and there is
none,'' said John Ulrickson, a grain broker at Agri-Mark Inc. in
West Fargo, North Dakota. ``If we don't get some rain soon, we may
be talking about significant crop losses.''
Wheat for May delivery rose as much as 7.5 cents, or 2.7
percent, to $2.8675 a bushel on the Chicago Board of Trade, the
biggest one-day gain since Jan. 3. Wheat prices have gained 3
percent this week and are up 17 percent since reaching an 11-month
low on June 25.
The portion of the winter wheat crop rated poor or very poor
will probably increase when state agricultural officials in
Kansas, Oklahoma and Texas release reports Monday, analysts said.
Those are the three largest U.S. producers of winter wheat, which
accounts for 70 percent of U.S. wheat production.
Winter wheat plants in the southern Plains have been
deteriorating for months after dry weather last fall stunted
development of roots needed to ensure optimal growth in spring,
analysts said.
Hogs
Hog futures fell to a two-month low on reduced demand from
meatpackers that are slowing production because supermarkets have
accumulated ample inventories of pork.
Slaughterhouses are scaling back production amid declining
prices for ham and loins, which are cut into chops. Ham prices
fell to a 15-month low yesterday because grocers already have
enough to last through Easter, analysts said.
``The retailers aren't doing much with pork because there's a
lull in demand,'' said Joe Kropf, an analyst with Joe Kropf & Sid
Love Consulting Services in Overland Park, Kansas. ``The packers
have reduced the kill to balance out that sluggish demand.''
Hogs for April delivery fell as much as 1.2 cents, or 2.1
percent, to 54.85 cents a pound on the Chicago Mercantile
Exchange, the lowest price since Jan. 9. Prices were down 5.8
percent this week and have lost 16 percent in the past year.
Ham prices have fallen 10 percent this week, reaching 40.5
cents a pound yesterday, the lowest price since December 2000,
U.S. Agriculture Department figures showed. Compared with this
time last year, ham has lost 30 percent of its value.
Loins were little changed yesterday at 77.53 cents a pound,
the Agriculture Department said. Loin prices are down 4.4 percent
so far this year and have lost 29 percent since reaching a 3 1/2-
year high on May 25.
--Claudia Carpenter in the New York newsroom (212) 318-2346 or at
ccarpenter2@bloomberg.net with reporting by Joe Carroll in
Chicago. Editor: Enoch |
