The Energy Report - What's the Difference?
July 06 2012 9:59 AM EDT
Oil supply may rise or fall like they did in yesterday's Energy Information Administration report. But what matters to oil more than anything else right now is the differing rate expectations as the EU and China cuts rates, the UK prints and the United States intentions are still a big question mark. No critics will point to the supply and demand numbers and claim that somehow the market has divorced itself from the fundamentals but by doing so, they really are ignoring the most important fun...
Crude Oil May Have Bottomed on Central Bank Actions
July 05 2012 12:51 PM EDT
WTI crude oil price continued the reversal that started last week after the EU summit paved the the way for a risk rally from 77.30. So far this week, the rally has extended to almost 89.00. This rally is in-line with expectations of central bank action. The BoE for example added £50 billion to its Asset Purchase Program (QE), making the total £375 Billion. The ECB cut the benchmark rate from 1.0% to a historical low of 0.75%, also reducing the deposit rate to 0%. Even the People's Bank of Ch...
The Energy Report - Showdown in the North Sea
July 05 2012 9:31 AM EDT
While tensions seem to be easing over Iran after their temper tantrum in the Straits of Hormuz, the oil market now is focused on growing tensions in the North Sea. These tensions do not involve a conflict between countries but a conflict between Norway's Statoil and Norway's oil labor union the oil industry association. While the strike has been going on for only 12 days, already it seems Statoil has had enough and said it would lockout all workers at midnight on Monday. That would essenti...
The Nemenoff Report Bonds Lower, S&P's higher, Silver Higher
July 03 2012 9:17 AM EDT
Dec. Corn is currently 8'0 higher at 664'0, Nov. Beans 10'0 higher at 1448'0 and Dec. Wheat 4'0 higher at 795'0. Hot dry weather has been the dominant force for the last few trading sessions pushing markets to new recent highs. On Friday we tried the short side of Dec. Corn in the 652'0 area with a 15 cent protective stop only to be stopped out over night in the 667'0 area. Until there is precipitation in the forecast these markets appear destined to trade higher. As for ...
The Energy Report - Unalienable Rights
July 03 2012 9:05 AM EDT
As the European embargo on Iranian oil takes effect, an Iranian lawmaker borrowing from none other than Thomas Jefferson said they have unalienable right to nuclear technology. Of course the quote was spelled inalienable which brings up a debate that has been going on since 1776 as to which is correct. But it brings up the question as to whether a rouge state has a right either unalienable or inalienable to pursue a weapon of mass destruction or does the world have are responsibility to ...
Unmasking the Asian Giant
July 02 2012 2:59 PM EDT
Chinese operas have been keeping audiences enthralled for hundreds of years with mythical characters, enchanting stories and elaborate masks that add drama and mystery. While this fantastical treatment is appreciated in the theatre, it isn't in global markets. Investors don't like mystery-think of how uncertainty has spooked markets in recent years.
The Energy Report - Pre Market Fireworks
July 02 2012 9:19 AM EDT
Once again the commodities can't wait for the Fourth of July to provide us with fireworks! Oil had its biggest up move in years as hope for a Euro zone solution and short covering as we get ready to start the second half of the year. Who wanted to be short into a weekend where it was apparent the Spanish and Italian banks were not going to fail. Add to that the beginning of the European sanctions and the Iranian oil embargo driving provocative comments from Iranian Admiral Al Fadavi as saying...
The Grain Report - ACRES
June 29 2012 1:22 PM EDT
The weekly export sales report Thursday for corn showed 291,000 metric tons was sold the week prior. It's clear that our government is slowing exports near-term until the crop yields are some what determined at the end of July as the current drought shows no sign of stopping. Last year spring floods and hot dry July coupled with the overly aggressive export pace left us with ending stocks this year of 851,000 metric tons or about a 50 day supply. So expect slow exports to show up until Augu...
The Energy Report - Healthcare Care and the Euro Surprise
June 29 2012 9:18 AM EDT
Yesterday it appeared that oil and health care have a lot more in common than you'd think. No, I am not talking about oil being used for medical purposes like it was in the old days but the impact on the price of oil after the surprise Supreme Court provision to uphold the Obama-care individual mandate. Chief Justice Roberts, in the majority opinion, held that the law was a valid exercise of Congress's power to tax. Roberts changed the debate over health care by basically saying that forci...
Friday Acreage Report Key to Grain Trading
June 28 2012 10:53 AM EDT
Friday morning's planted acreage report by the USDA could be a game changer during a critical growing time for grains. The report is due at 7:30 a.m. Central Friday. The next 40 days are critical for the 2012-13 corn and beans season. This has been the warmest year and among the top 10 driest on record.
The Energy Report - Refiners Are Rocking!
June 28 2012 8:55 AM EDT
In another sign that we are seeing a major shift in the fundamentals of the US oil market yesterday's Energy Information Administration weekly Petroleum Status report provided more evidence for my prediction that US gasoline prices may have peaked forever. Refiners just rocked an abundance of relatively cheap crude supply drove refinery runs to 92.6% the highest level since July of 2007. For those of you keeping score that is before that financial crisis really began to break and gas demand i...
The Nemenoff Report Bonds Lower, S&P's higher, Silver Lower
June 27 2012 9:19 AM EDT
Sept. Bonds are currently 4 lower at 148'25 and the 10 Yr. Note 1 lower at 133'13. Over the next few days we have Weekly Initial Jobless Claims, European Union Summit and the Supreme Court decision on Health Care (Obamacare). Bottom line: I prefer being on the sidelines and trading the market reaction.
The Energy Report - In Good Company
June 27 2012 8:05 AM EDT
In recent days and weeks I have made some predictions about gasoline prices and how the high price that you paid this summer may end up being the highest price you will ever pay. I also said that you heard it here first in the Energy Report and soon others will be jumping on this bandwagon. Well one part of my multi faceted argument for that prediction was backed up nicely by none other than Harvard University.
The Grain Report - ADDED HEAT
June 26 2012 5:20 PM EDT
Markets had no problem pricing in this week's weather with corn up$. 40, beans and wheat $.50 Monday. We closed last week higher on the week on lack of rain cutting probable quality conditions. But Saturday's weather models took the cooler weather for this week, added a heat dome for Wednesday into Saturday and dried-up any measurable rain expected. This led to sharply higher trade as Sunday electronic trading opened and continuing into Monday.
The Energy Report - Structural Change
June 26 2012 8:26 AM EDT
As gas price continue to plummet the question become will gas prices ever go up again. While tropical Debby churns away in the Gulf and could cause a price spike in the big picture as I have said before the era of high gas prices has ended. As the global economy goes through major retracting we are entering what should be a lost decade for gasoline demand growth. The frantic global demand growth that we saw in China and the emerging market will level out as Europe and the rest of the globe conti...
The Nemenoff Report Bonds Higher, S&P's Lower, Silver Higher
June 25 2012 10:37 AM EDT
Sept. Bonds are currently 1'04 higher at 149'07 and the 10 Yr. Note 17 higher at 133'17. Once again the markets are fearing the repercussions of European Soveriegn Debt seeking safety in U.S. Treasuries. An E.U. summit meeting later this week may either help or harm these perceptions putting me on the sidelines for the moment. Technically the market now has a wider than normal spread between suppport and resistance. Support is currently 147'26 and resistance 150'04.
The Energy Report - 23% just isn't what it used to be
June 25 2012 8:46 AM EDT
Tropical Storm Debby played havoc in the Gulf of Mexico shutting down 23% of oil and Gas production. Of course because of the Shale gas revolution 23% just is not what it used to be. Back in 2005 Gulf of Mexico offshore production accounted for about 30% of US oil production and 17% for us natural gas production. Now it only accounts for 20% of US oil production and the real shale bonus is in gas where gulf production only accounts for 6% of natural gas production. More production on lands means...
The Grain Report - EXPORTS SLOWING
June 22 2012 3:45 PM EDT
Thursday's weekly export sales report showed old crop year corn exports at 171t.m.t.. and new crop year 210 t.m.t. China was in for 19 t.m.t of the total. The past three weeks have confirmed that our government has importers backing away from old crop year export deliveries and largely going new crop year.
The Energy Report - Feeling Low!
June 22 2012 9:31 AM EDT
Commodities get crushed and commodity traders are feeling low. Like a nine month low on oil, a six month low on RBOB wholesale gasoline futures, an 18 month low on heating oil, a 6 month low on copper , a 21 day low on gold, a 6moth low on silver. Notably bucking the downtrend yesterday was coffee and orange juice. The market must have believed that after a day like yesterday that perhaps a lot of drinking would soon be going on.
The Nemenoff Report Bonds Lower, S&P's Higher, Silver Lower
June 21 2012 9:47 AM EDT
Sept. Bonds are currently 2 lower at 148'17 and the 10 Yr. Notes 2 lower at 133'04. This mornings Initial Jobless Claims Report showed -2,000 vs. expectations of dow 1000. Yesterday's FOMC meeting left rates unchanged. However, the talk of continuation of Operation Twist (the buying of treasuries with maturities of 6-30 years and the selling of maturities of 3 years or less in an effort to keep rates low) kept the Bonds in a high volatility trade rallying from 147'25 to 149...