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In This Issue
News alert: Corn and Crude Oil
Economic Reports and Expiration Notices
GOOD TRADING!
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Newsletter Archives
October 8, 2008
Please note that Equity Indices products; ES, NQ, ER2, EMD and YM roll on Thursday the 12th at 8:30 am Chicago time from the June 08 contract to the September 08 contract. The month code for September is "U." Last trade for June Currencies is Monday the 16th, please close any open June Currencies position by the close on Friday the 13th. Should you have any further question please contact your broker.
Dear Traders,
We highly recommend reading the following articles, "Corn soars to record high, set to climb further" and "Oil seen hitting $150 this summer: Goldman analyst," as they may provide prospective on the current all-time highs in corn and crude oil.
- Cannon Trading staff
LONDON (Reuters) - Corn prices rose to record highs on Monday and looked set to climb further as torrential rains threatened to reduce further U.S. crop prospects in a market already facing tight supplies and surging demand.
The lead July 2008 corn futures contract rose as high as $6.73 per bushel, up more than 3 percent and a record for a spot contract. It closed on Friday at $6.50-3/4 while the July 2009 contract scaled an all-time peak of $7.20.
"We've got some rain in the United States that could reduce some of the plantings and yields for corn. Combine that with the drive into ethanol and you can see why corn is going to spike up," said analyst David Hart of Fat Prophets.
Strong demand for corn from U.S. biofuel producers has contributed to supply tightness in the corn market. The U.S. Department of Agriculture has forecast about a third of this year's crop will be consumed by the biofuel sector.
"I am still very bullish. I think $7, $8, $9 corn is well within reach," said Commerzbank analyst Edward Hands.
"The mandated biofuel side continues to weigh heavily on the corn balance sheet and the plantings this year seem to be very late," he added.
Nobuyuki Chino, president of Unipac Grain Ltd in Tokyo, said any drop in area and yields could lead to a further decline in already low stock levels.
"It is a very fragile market, and we are now standing at a very crucial point in time," he said.
BULLISH CONSENSUS
Others agreed that corn was headed higher.
"I think the widely held view is that (corn) will be rising another notch towards the summer," said Kenji Kobayashi, a grains analyst at Tokyo's Kanetsu Asset Management.
Soybean, wheat and rice prices also rose sharply on Monday.
July 2008 soybean futures on the Chicago Board of Trade rose to a peak of $14.89-1/2 a bushel, up 32 cents and the highest level for the contract since early March.
Prices for soybeans have been boosted by a prolonged conflict in key exporter Argentina between farm groups and the government which has paralyzed local markets.
"The Argentinian situation seems to be weighing on the beans at the moment," Hands of Commerzbank said.
Soybeans were also buoyed by sharp gains in corn prices.
Wheat price also rose.
July 2008 wheat futures on the CBOT climbed as high as $8.38 per bushel, up more than 3 percent from Friday's close.
In Europe, the Paris November milling wheat futures contract rose 9.00 euros to a peak of 199.00 euros a tonne, threatening to break above the key 200 euro level for the first time in a month.
"We are following the U.S. market but we are slowed down by still bright prospects for the harvest," one European grain trader said.
U.S. rough rice, which initially bucked the trend and dipped, recouped earlier losses.
July rice rose more than 2 percent to $20.40 per hundredweight, after it ended on Friday at $19.96.
(Additional reporting by Miho Yoshikawa in Tokyo)
(Editing by Christopher Johnson)
KUALA LUMPUR (Reuters) - Oil prices are likely to hit $150 a barrel this summer season, the global head of commodities research at Goldman Sachs (GS.N) said on Monday, as tighter supplies outweigh weakening demand.
"I would suggest that the likelihood of that happening sooner has increased tremendously ... sometime in summer," Jeffrey Currie told an oil and gas conference in the Malaysian capital, referring to oil at $150 a barrel.
Goldman Sachs, the most active investment bank in energy markets and one of the first to point to triple-digit oil more than two years ago -- a once unthinkable level -- said last month oil could shoot up to $200 within the next two years as part of a "super spike."
Forecasts that oil could head towards $150 and above have multiplied over the past month as prices broke through several records, the latest being last Friday, when oil soared more than $11 a barrel on Friday, its biggest one-day gain ever.
Oil hit an all-time high of $139.12 on Friday on the back of a weak U.S. dollar and mounting tensions between Israel and Iran.
Goldman Sachs forecast almost a month ago that U.S. crude would average $141 a barrel in the second half of 2008, up from a previous projection of $107, due to tight supplies.
"Demand for oil is weak but supplies are even weaker," Jeffrey Currie told the conference, citing supply disruptions in Nigeria and struggling output rise in Russia.
Investment bank Morgan Stanley, another big Wall Street energy player, said on Friday that crude may reach $150 by July 4 due to robust Asian demand and falling inventories.
(Reporting by Chua Baizhen, writing by Maryelle Demongeot; Editing by Ben Tan)
Source: Moore Research Center, Inc.
| Date | Reports | Expiration & Notice Dates |
|---|---|---|
| 06/12 Thu |
7:30 AM CDT - Export & Import Prices(May)
7:30 AM CDT - Retail Sales(May) 7:30 AM CDT - USDA Weekly Export Sales 7:30 AM CDT - Initial Claims-Weekly 9:00 AM CDT - Business Inventories(Apr) 9:35 AM CDT - EIA Gas Storage 3:30 PM CDT - Money Supply |
FN: Jun Live Cattle(CME)
LT: Jun Nikkei 225(CME) Jun Nikkei 225 Options(CME) |
| 06/13 Fri |
7:30 AM CDT - CPI & Core CPI(May) 7:30 AM CDT - Dairy Product Prices 9:00 AM CDT - Michigan Sentiment(Jun) |
LT: Jun Lean Hogs(CME)
Jun CRB Index(ICE) LT: Jun Lean Hogs Options(CME) Jun CRB Index Options(ICE) Jul Coffee Options(ICE) Jul Cotton Options(ICE) |
| 06/16 Mon |
7:30 AM CDT - NY Empire State Index(Jun)
8:00 AM CDT - Net Foreign Purchases(Apr) NOPA Crush |
FN: Jun Currencies(CME)
LT: Jun LIBOR(CME) Jun US T-Bill(CBT) Jun GSCI(CBT) Jun Eurodollar(CME) Jun Currencies(CME) Jun LIBOR 0ptions(CME) Jun US Dollar Index Options(ICE) Jun Eurodollar Options(CME) Jul Sugar Options(ICE) |
| 06/17 Tue |
7:30 AM CDT - Building Permits(May)
7:30 AM CDT - PPI & Core PPI(May) 7:30 AM CDT - Housing Starts & Building Permits(May) 8:15 AM CDT - Capacity Util & Industrial Prod(May) |
FN: Jun US Dollar Index(ICE)
Jun Canadian Dollar(CME) Jul Cocoa(ICE) LT: Jun Canadian Dollar(CME) Jul Crude Oil Options(NYM) |
| 06/18 Wed |
9:35 AM CDT - API & DOE Energy Stats
|
LT: Jul Platinum Options(NYM)
|
| 06/19 Thu |
7:30 AM CDT - USDA Weekly Export Sales
7:30 AM CDT - Initial Claims-Weekly 9:00 AM CDT - Leading Indicators(May) 9:00 AM CDT - Philadelphia Fed(Jun) 9:35 AM CDT - EIA Gas Storage 3:30 PM CDT - Money Supply |
LT: Jun 10 Year T-Notes(CBT)
Jun DJIA(CBT) Jun Valueline(KCBT) Jun NASDAQ 100(CME) Jun S&P 500(CME) Jun US Bonds(CBT) LT: Jun S&P 500 Options(CME) Jun Nasdaq 100 Options(CME) Jun Russell 2000 Options(CME) Jun Valueline Options(KCBT) Jun DJIA Options(CBT) |
* Please note that the information contained in this letter is intended for clients, prospective clients, and audiences who have a basic understanding, familiarity, and interest in the futures markets.
** The material contained in this letter is of opinion only and does not guarantee any profits. These are risky markets and only risk capital should be used. Past performances are not necessarily indicative of future results.
*** This is not a solicitation of any order to buy or sell, but a current market view provided by Cannon Trading Inc. Any statement of facts herein contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgment in trading!