U.S. Commodities: Copper Jumps to Five-Week High on Fund Demand
2006-07-06 16:43 (New York)
By Katy Watson
July 6 (Bloomberg) -- Copper prices jumped 6.3 percent to a
five-week high on demand from investment funds as industrial metals
outperformed stocks and bonds.
Commodity investments held by hedge funds, banks and other
money managers have grown to about $130 billion, John Normand,
global currency and fixed income strategist at JPMorgan Chase &
Co., told the Commodity Investment Summit in London yesterday.
``We are starting to see this new money coming in,'' said
Stephen Briggs, a London-based analyst at Societe Generale, one of
11 companies trading on the floor of the London Metal Exchange.
In other markets, corn prices rose to a two-year high and
soybeans climbed to the highest since August on speculation hot,
dry weather will intensify a drought that threatens plants west of
the Mississippi River. Natural-gas prices slumped. The energy-
weighted Goldman Sachs Commodity Index gained 1.82 to 490.90.
Copper futures for September delivery climbed 21.3 cents to
$3.617 a pound on the Comex division of the New York Mercantile
Exchange, the highest since May 31. Prices reached a record $4.04
on May 11 and have more than doubled in the past year.
A futures contract is an obligation to buy or sell a commodity
at a set price for delivery by a specific date.
An index of prices on the London Metal Exchange, including
copper, lead and zinc, has gained 85 percent in the past year. The
Morgan Stanley Capital International World Index, which measures
stocks in 23 major markets, has climbed 14 percent in the past 12
months. The MSCI World Sovereign Index, which includes the debt of
21 major markets, has gained 0.3 percent.
Corn, Soybeans
Rains next week will be as much as 75 percent below normal in
Iowa, Nebraska, Minnesota and South Dakota with temperatures
approaching 100 degrees Fahrenheit (38 degrees Celsius) in some
locations, said David Salmon, a meteorologist for Weather
Derivatives in Belton, Missouri. The best high temperature for
reproduction of corn, the biggest U.S. crop, is 86 degrees.
``Traders continue to be torn between the better-than-normal
crop ratings and the knowledge that if we don't continue to get
very timely rains the crops will deteriorate quickly,'' said John
Roach, president of Roach Ag Marketing Ltd. in Boca Raton, Florida.
``Temps are due to heat up, and the long-range weather forecasts
look warm and dry.''
Corn for December delivery rose 5.75 cents, or 2.2 percent, to
$2.7025 a bushel on the Chicago Board of Trade, the highest close
since June 29, 2004. Corn is up 13 percent from a year ago, partly
because investors shifted assets to commodities from stocks and
bonds including corn.
Soybean futures for November delivery rose 14.25 cents, or 2.3
percent, to $6.3525 a bushel, the highest since Aug. 12. Prices
still are down 10 percent from a year ago after farmers harvested
the second-biggest crop last year, boosting reserve inventories on
June 1 to a record.
Natural Gas
Natural gas fell to the lowest since September 2004 on an
abundance of inventory stowed in underground caverns.
Supplies held in 390 U.S. storage depots have swelled this
summer after a mild winter and spring reduced demand for the
furnace and power-plant fuel. Stockpiles reached 2.542 trillion
cubic feet in the week ended June 23, 32 percent higher than the
average for the past five years.
``Storage is pretty lush,'' said Jason Schenker, an economist
at Wachovia Corp. in Charlotte, North Carolina. ``I don't think
we've seen the bottom. If the weather remains mild, we could see a
gradual trend downward.''
Gas for August delivery fell 10.1 cents, or 1.8 percent, to
$5.664 per million British thermal units on the Nymex, the lowest
close since Sept. 27, 2004. Prices have plunged 7.2 percent this
week and are down 64 percent from a record $15.78 in December.
Commodities settled as follows:
Precious metals:
August gold up $6.60 to $636.30 an ounce
September silver up 17 cents to $11.585 an ounce
October platinum up $1 to $1,249.60 an ounce
September palladium up $3.15 to $330.85 an ounce
Livestock:
August live cattle down 0.9 cent to 85.95 cents a pound
August feeder cattle down 1.2 cents to $1.1605 a pound
August lean hogs down 0.825 cents to 70.85 cents a pound
August pork bellies up 0.5 cent to 93.4 cents a pound
Grains:
November soybeans up 14.25 cents to $6.3525 a bushel
December corn up 5.75 cents to $2.7025 a bushel
September wheat up 2.5 cents to $4.0725 a bushel
December oats up 1.75 cents to $2.0075 a bushel
Food and Fiber:
September coffee down 0.4 cents to $1.0305 a pound
September cocoa up $9 to $1,710 a metric ton
December cotton down 0.3 cent to 53.16 cents a pound
October sugar up 0.14 cent to 17.16 cents a pound
September orange juice down 1.6 cents to $1.717 a pound
Energy:
August crude oil down 5 cents to $75.14 a barrel
August natural gas down 10.1 cents to $5.664 per million British
thermal units
August heating oil down 0.1 cent to $2.0616 a gallon
August gasoline down 1.68 cents to $2.259 a gallon
Others:
September copper up 21.3 cents to $3.617 a pound
September lumber up $4.50 to $305 per 1,000 board feet
--With reporting by Jeff Wilson in Chicago and Geoffrey Smith in
New York. Editor: McKiernan |
