The Alan "there is no inflation" Greenspan train wreck rally in commodities booms along. Key multi-year highs in lumber ,copper, list keeps growing.
Commodities - Copper near 8-year high, soybeans sink
Reuters, 02.12.04, 5:05 PM ET
CHICAGO (Reuters) - Copper prices rose to the highest level in almost eight years on Thursday as the outlook for tight supplies with economies expanding in China and the United States kept speculators on the buy side.
In other commodity markets, corn and soybean prices fell after more cases of bird flu were found in poultry in New Jersey and Pennsylvania. Gold rose and oil was mostly higher.
At the COMEX in New York, copper for March delivery closed 2.55 cents higher at $1.12415 per pound, the highest closing price since May, 1996.
"Copper looks like a one-way bet at this stage," said analyst Maqsood Ahmed at Credit Lyonnais Rouse, a trading house at the London Metal Exchange.
Supply/demand factors have been instrumental in driving prices higher, with the market heading for a significant shortfall as demand outpaces supply. Demand has been voracious from China to meet the needs of its booming economy. Strikes in Chile and Canada have also tightened supply this year.
Grupo Mexico, the world's third-largest copper producer, said on Thursday that its 2003 copper production was a little over 800,000 metric tons, slightly below 2002, but it expects output to rise this year amid greater capacity.
On the demand side, the market got a boost on Wednesday when Federal Reserve Chairman Alan Greenspan forecast continued growth this year for the U.S. economy. He also saw no reason not to keep U.S. interest rates at the current 45-year lows.
That outlook also boosted prices for lumber, like copper an essential construction commodity. At the Chicago Mercantile Exchange, March lumber closed up $7.20 at $384.70 per thousand board feet, setting new 4-1/2-year highs.
At the Chicago Board of Trade, soybean and corn prices saw another volatile day as investigations into bird flu cases in Delaware spilled out into New Jersey and Pennsylvania with discovery of infected chickens in flocks or markets there.
The strain of avian flu is not the same as the virus that has killed 19 people and devastated poultry flocks in Asia.
But corn and soybean meal are the main poultry feeds. The U.S. poultry disease is not only causing thousands of chickens to be destroyed but U.S. poultry exports to be halted.
That raised fears of lower cattle and hog prices as a "meat glut" develops in U.S. supermarkets from all the backed-up poultry, which could in turn reduce herds -- and feed demand.
The latest discoveries also increased the chances that Russia, the top U.S. customer, will ban all U.S. poultry imports, not just poultry from Delaware as it did on Saturday.
"Russia is the largest export market for U.S. poultry, and it was expected to buy 772,000 tonnes from the U.S. this year," said Bill Nelson, AG Edwards & Sons analyst. "This news is bearish for soybeans and meal and supportive to soybean oil."
CBOT March soybeans closed 16 cents lower at $8.22 per bushel and March soymeal fell $4.90 per ton at $243.10. March corn closed 3 cents lower at $2.81-1/4 per bushel and March wheat fell 1-3/4 cents at $3.86-3/4.
At the COMEX, gold rose to a 15-day high as precious metals continued to benefit from investors' perception that the Federal Reserve was in no rush to raise interest rates and saw little harm in the weak dollar.
COMEX April gold rose $3.50 to $414.20 an ounce, its highest since Jan. 28. Gold bullion rose to $411.75/2.50 from $411.25/2.00 on Wednesday. London's afternoon fix was $411.60.
The euro backed off a bit during the day after rising overnight to $1.2846, which was half a cent from last month's lifetime high of $1.2898. That made gold a more affordable alternative for European investors exiting the greenback.
Greenspan, in his Wednesday remarks to Congress, said a weak dollar may help narrow the U.S. current account deficit.
At the New York Mercantile Exchange, oil prices closed mostly up buoyed by Tuesday's decision by producer group OPEC to cut output by April and eliminate "leakage" above quotas.
NYMEX April crude closed 17 cents higher at $33.38 per barrel. March heating oil rose 0.78 cent at 91.91 cents per gallon. March gasoline fell 0.26 cent at $1.0056 per gallon. |
