U.S. Commodities: Copper Soars as Report Signals Demand Rebound
New York, Jan. 31 (Bloomberg) -- Copper soared to an eight-
month high after a report of improved manufacturing in the Midwest
signaled an increase in metals demand in coming months.
A Chicago-area factory index compiled by the National
Association of Purchasing Management rose in January for the first
time in four months. Copper prices have risen 22 percent from a 14-
year low in November, partly on expectations for a rebound in
demand for wire and pipes as the economy recovers from recession.
``We're expecting our business to improve toward the end of
the year, but we tend to lag the economy,'' said Richard Brill,
who buys copper for Okonite Co., a Ramsey, New Jersey-based maker
of high-voltage power cables.
In other markets, heating oil futures rose as low
temperatures returned to the U.S. Northeast, the biggest market
for the fuel, after weeks of mild winter weather, and wheat rose
for the first time in four days. The energy-weighted Goldman Sachs
Commodity Index gained 2.41 to 166.03.
Copper for March delivery rose 3.65 cents, or 5.2 percent, to
73.35 cents a pound on the Comex division of the New York
Mercantile Exchange, the highest closing price for a most-active
contract since June 7, 2001. Prices rose 11 percent this month.
The rally accelerated after prices rose above 72 cents a
pound, and then 72.4 cents, triggering pre-arranged buy orders,
said Jim Steel, director of commodity research at Refco Inc. in
New York.
The U.S. economy unexpectedly grew in the final three months
of last year, gaining at a 0.2 percent annual rate, following a
1.3 percent decline in the third quarter, the Commerce Department
said yesterday. Orders for durable goods such as cars and
appliances rose 2 percent in December.
The Chicago factory index rose to 45.1 this month from 41.5
in December. While the index rose, readings below 50 indicate that
business contracted. An employment index showed Chicago-area
factories continued to cut jobs.
Heating Oil
Heating oil futures rose for the first time this week as low
temperatures returned to the U.S. Northeast, the biggest market
for the fuel, after weeks of mild winter weather.
Weak demand for heating oil has allowed inventories of the
fuel to rise 31 percent above year-ago levels, industry figures
show. Prices have dropped 21 percent over the past four months and
poor profit margins forced several refiners to restrict output.
``It'll be down to freezing tonight,'' said Ed Silliere, vice
president of risk management at Energy Merchant LLC in New York,
which markets wholesale gasoline and heating oil. ``Heating oil
prices have already been pretty well beaten up. It's gone as low
as it can go versus crude oil.''
Heating oil for February delivery, which expired today, rose
1.38 cents, or 2.7 percent, to 52.29 cents a gallon on the New
York Mercantile Exchange. The March contract gained 1.85 cents, or
3.6 percent, to 53.16 cents.
Earth Satellite Corp. today predicted below-normal
temperatures in New England from Feb. 5 to Feb. 9. The company is
one of several forecasters that use National Weather Service
figures in their predictions hours before the government agency
releases its six-to-10-day forecast.
The Weather Service yesterday predicted above-normal
temperatures across the Midwest and for all of the Northeast
except Maine. Forecasters at Rockville, Maryland-based Earth
Satellite wouldn't comment on their report.
Wheat
Wheat rose for the first time in four days on speculation
that demand for U.S. grain will improve after Argentine wheat
exports were halted because of a local tax dispute.
Grain exporters in Argentina have stopped buying wheat after
the government failed to restore tax rebates that were suspended
in December. Although a similar halt to exports two weeks ago
failed to spur new orders for U.S. supplies, analysts said flour
millers probably are running short of inventory.
The exporters ``were supposed to get their money but they
haven't, so trade out of Argentina is at a standstill,'' said
Gregg Hunt, senior trader at Fox Investments in Chicago.
Wheat for March delivery rose 0.75 cent, or 0.3 percent, to
$2.86 a bushel on the Chicago Board of Trade. Although prices have
fallen 8.7 percent from a 3 1/2-year high Jan. 14, they are up 4.8
percent from a year ago amid shrinking global supplies.
Argentina, the fourth-largest wheat exporter, suspended tax
rebates to exporters of grain and livestock feed in December after
riots toppled the government and shut down the Buenos Aires grain
exchange. Cargill Inc. is the largest grain exporter in Argentina,
followed by Bunge Ltd.
The rebates are intended to reimburse shippers and processors
for taxes they pay to cover fertilizer costs incurred by Argentine
farmers. The Argentine government is short on cash after a three-
year recession prompted it to devalue the currency Jan. 6 and
default on $95 billion in debt.
Commodities settled as follows:
Precious Metals:
April gold unchanged at $282.90 an ounce
March silver down 0.7 cent to $4.223 an ounce
April platinum down $7.50 to $448.20 an ounce
March palladium down $3.35 to $369 an ounce
Livestock:
April live cattle down 0.25 cent to 75.525 cents a pound
March feeder cattle down 0.025 cent to 84.325 cents a pound
April lean hogs down 0.3 cent to 60.9 cents a pound
February pork bellies down 0.975 cent to 75 cents a pound
Grains:
March soybeans up 2.5 cents to $4.3025 a bushel
March corn unchanged at $2.06 a bushel
March wheat up 0.75 cent to $2.86 a bushel
March oats down 2.25 cents to $2.0025 a bushel
Food and Fiber:
March coffee down 0.05 cent to 45.1 cents a pound
March cocoa down $23 to $1,344 a metric ton
March cotton down 0.04 cent to 35.48 cents a pound
March sugar down 0.19 cent to 6.38 cents a pound
March orange juice up 0.35 cent to 86.4 cents a pound
Energy:
March crude oil up 40 cents to $19.48 a barrel
March natural gas up 5.8 cents to $2.138 per million British
thermal units
February heating oil up 1.38 cents to 52.29 cents a gallon
February gasoline up 0.61 cent to 55.92 cents a gallon
Others:
March lumber down $2.60 to $268.70 per 1,000 board feet
March copper up 3.65 cents to 73.35 cents a pound
--Claudia Carpenter in the New York newsroom (212) 318-2346 or at
ccarpenter2@bloomberg.net, with reporting by Stephen Voss in New
York and Joe Carroll in Chicago. Editor: Enoch |
