More on commodity melt-up:
Oil:
Message 19441045
From Noland, gotta like that corn trade, need it to counteract stock melt-ups:
The CRB index surged 2.5% this week to its highest level since March. Yesterday corn futures enjoyed their “biggest gain in 30 years” and wheat the strongest gain in five months (from Bloomberg). Cotton traded to the highest level in 7 years, soybeans six years, and rubber (traded in Tokyo) 6 ½ years.
October 23 – Bloomberg: “Wheat futures in Chicago surged more than 4 percent, their biggest gain in five months, after a U.S. Agriculture Department report showed strengthening overseas demand for the grain.”
October 23 – Bloomberg: “Cotton futures in New York surged to a seven-year closing high after China made its biggest purchase of U.S. cotton since 1995.”
October 23 – Bloomberg: “China’s soybean imports in September rose to their highest this year… China has been increasing its purchases of U.S. soybeans to lock in prices that have risen 47 percent since the end of July, as a drought in the U.S. Midwest devastated crops. China said it plans to buy about 22 million tons of the oilseed worldwide in the current marketing year, up 10 percent from last year.”
October 24 – The Asian Wall Street Journal (Peter Wonacott): “From steak to iron ore to cotton to diamonds, China’s rising urban incomes and changing consumer tastes are reshaping the world’s commodity markets. The country’s emergence as a major importer of raw materials is driving global prices higher and catching some suppliers flat-footed… ‘China has sucked the cupboard bare of raw materials,’ says Jim Lennon, executive director of commodities research at Macquarie Bank Ltd…. And because of its fast growth, Mr. Lennon cautions, China ‘is starting to place severe strains on the global raw-materials supply chain.’ Already, prices of many natural resources and metals are surging. In the past year and a half, the cost of alumina, used to make aluminum, and nickel, which is used to make standard steel, has doubled, according to metals traders and analysts. World-wide metal inventories are at their lowest level ever, because big metal suppliers were reducing their capacity due to the economic slowdown in the U.S., Japan and Europe. But now, these companies are rushing to fill China’s voracious needs. Global shipping-freight rates have skyrocketed in response to Chinese demand. China’s auto and construction craze is underpinning the voracious global metals buying. Aside from iron ore, the country is so starved for copper that Chinese companies are importing French francs and melting them down, according to a Beijing official…” |
