Gold hits record in rush to commodities

SOFTS HIT HIGHS
Raw sugar futures on ICE set a 30-year high on Tuesday while arabica coffee climbed to a 13-year peak. The sugar market has surged in recent months, with prices more than doubling since May, as expectations for a rise in output failed to materialize due to bad weather, sparking concern over low stocks.
March raw sugar futures on ICE rose to a peak of 32.68 cents a lb, a 30-year high for the benchmark front month, before easing back to 32.63 cents. >>>>>> More

Commodities Advance to Two-Year High Led by Agriculture Futures

By Tony C. Dreibus

Oct. 11 (Bloomberg) -- Commodities rose to the highest in two years, led by agriculture futures, after a U.S. Department of Agriculture report last week showed corn production in the country would decline more than expected by analysts.

The Standard & Poor’s GSCI Index of 24 raw materials rose as much as 1.3 percent to 571.4810, the highest level since Oct. 3, 2008. The UBS Bloomberg Constant Maturity Commodity Index climbed to 1,490.731, the highest since Aug. 27, 2008. Corn futures gained as much as 8.5 percent and soybeans jumped to a 16-month high.

U.S. corn production will total 12.664 billion bushels, the U.S. Department of Agriculture said Oct. 8. That’s below the average estimate of 26 analysts surveyed by Bloomberg News for 12.977 billion bushels. Yields will be 155.8 bushels an acre, the USDA said, compared with analysts’ forecast of 160.2 bushels an acre.

“Friday’s news has been exceptionally bullish for the markets,” said Sudakshina Unnikrishnan, an agricultural commodities analyst for Barclays Capital in London. “If one looks at current prices, I don’t think we’re close to peaks. There is still further upside from the current levels.”

Corn futures for December delivery surged 42.75 cents, or 8.1 percent, to $5.71 a bushel at 10:34 a.m. London time on the Chicago Board of Trade. The price has gained 23 percent since Oct. 1.

Barclays forecast the grain’s fourth-quarter average price at $5.24 a bushel before the report, Unnikrishnan said. The first quarter average was expected to be about $5.40 a bushel.

‘See a Scramble’

Soybeans for November delivery rose 43.5 cents, or 3.8 percent, to $11.785 a bushel in Chicago. The price has jumped 7 percent this month. Wheat futures for December delivery gained 8 cents, or 1.1 percent, to $7.2725 a bushel.

With corn prices rising, more growers will plant the grain instead of soybeans and wheat, Unnikrishnan said.

“The fact that corn prices are looking more attractive, we could see a scramble for acres tilting in favor of corn,” Unnikrishnan said. “We see soybean prices needing to push up in terms of planting. In feed substitution with wheat, prices need to push up.”

Sugar for March delivery gained 0.88 cent, or 3.3 percent, to 27.2 cents a pound on ICE Futures U.S. in New York. The price earlier touched 27.24 cents a pound, the highest in almost eight months, on speculation that crops in Brazil, the world’s largest supplier of the sweetener, will be harmed by drought that lasted through mid-September.

Silver for immediate delivery jumped as much as 1.6 percent to $23.6325 an ounce, the highest since March 13, 1980. Silver for December delivery gained 0.8 percent, also extending a rally to a 30-year high.

Gold for immediate delivery rose $1.86, or 0.1 percent, to $1,348.60 an ounce. Futures for December delivery climbed $6.70, or 0.5 percent, to $1,347 an ounce. The most-active contract has gained 23 percent this year.

--Editors: John Deane, Dan Weeks.

To contact the reporter on this story: Tony C. Dreibus in Chicago at tdreibus@bloomberg.net.

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net.

Commodity News Snapshot-Pakistan

THE RUPEE: dollar down further

KARACHI (October 07, 2010): Sharp recovery was witnessed on the currency market on Wednesday as the rupee maintained its surge mainly because of easy supply of the US currency, dealers said. The rupee was sharply higher by 14 paisa in relation to the greenback for buying and selling at 85.98 and 86.02, they said. In the third Asian trade dollar stayed near eight-month lows on the euro and edged towards a 15-year trough on the yen, hurt by expectations of Federal Reserve easing after Japan lined up its own reflation tools.

Prices remain firm on exporters' buying on cotton market

KARACHI (October 07, 2010): Prices showed firmness on the cotton market on Wednesday as exporters' buying helped the rates to retain the overnight levels, dealers said. The Karachi Cotton Association (KCA) official spot rate was inert at Rs 7,050; they said. In the ready business, nearly 20,000 bales of cotton changed hands between Rs 6,850-7,100; they said.

TCP offloads 24,800 tons of sugar in open market

KARACHI (October 07, 2010): Following the directives of the Economic Coordination Committee (ECC), the Trading Corporation of Pakistan on Wednesday offloaded 24,800 tons imported sugar in open market to stabilise soaring commodity prices. The ECC on September 21, decided to offload 50,000 tons of imported sugar in the open market to overcome sugar crisis, as provinces had completely failed to sell subsidies imported sugar in domestic market at low rates during Ramazan, following which sugar price hit peak level of Rs 82-84 per kg in retail market.

Gold, silver prices soar to new peaks

KARACHI (October 07, 2010): The prices of gold and silver on Wednesday struck new highs of Rs 43, 350 per tola and Rs 650 per tola respectively on the local market, traders said. Gold reached the record high mark of Rs 43, 000 per tola a day before on the local market, surpassed to a new rise of Rs 43, 350. Similarly, the price of gold 10-gram exceeded to the highest ever level of Rs 37, 157 from previous high of Rs 36, 857, according to traders.

Bullion Rates

KARACHI (October 07, 2010): Gold and silver rates in rupees per 10 grams prevailing in major cities on Wednesday (October 06, 2010).

International News

Malaysian palm oil jumps

KUALA LUMPUR (October 07, 2010): Palm oil prices hit a near one-week high on Wednesday on expectations of a new round of central bank action to ginger up weakening economies although a record US soy crop dragged on sentiment. Hopes of central banks easing monetary policies weighed on the greenback, as it would make dollar-priced commodities such as Malaysian palm oil and US soyaoil cheaper for big customers like China and India.

Gold at new record highs, just below $1,350 an ounce

LONDON: Gold rose to record highs for a second day in a row on Wednesday as investors punished the dollar ahead of the Federal Reserve’s possible resumption of special measures to protect the flagging economy.

Oil hits fresh 5-month high

LONDON: Crude oil reached a fresh five-month high after the release of US government figures that showed a large fall in product inventories. Markets responded to this sign of high product demand by pushing up prices, despite simultaneous data showing a higher than expected rise in crude oil stocks.

EU wheat jumps

MILAN (October 07, 2010): European wheat futures jumped on Tuesday on the back of strong gains in US grain futures and other commodities, shrugging off a rally in the euro that could hamper Europe's wheat competitiveness on world markets. Benchmark November on Euronext milling wheat futures closed at 205.75 euros ($283.3) a tonne, up 6.50 euros or 3.26 percent after hitting an intraday high of 206.00 euros. The next resistance level is estimated at 208 euros.