TSX Ends Higher On Commodity Stocks, Global Cues – Canadian Commentary

(RTTNews.com) – Canadian stocks settled higher Friday boosted by commodity stocks, strong earnings and global equity markets, notwithstanding some disappointing data indicating a slowdown in US economy growth. Investors largely ignored eurozone concerns after Spains sovereign debt rating was downgraded by two notches.

Earlier today, rating agency Standard amp; Poors cut Spains sovereign credit rating by two notches to BBB+ from A on concerns that the nation will have to provide further fiscal support to the banking sector as the economy contracts. Nevertheless, most European markets ignored the downgrade to end higher.

Torontos main index, the Samp;P/TSX, closed Friday at 12,237.75, up 91.90 points or 0.76 percent. The Samp;P/TSX Composite Index touched an intraday high of 12,248.07 and a low of 12,139.68.

The TSX gained about 1.9 percent for the week.

The TSX Venture Index closed at 1,412.76, up 19.52 points or 1.40 percent. The index opened at 1,409.21 compared to its previous close of 1,393.24.

Almost all indices of the Samp;P/TSX Index were in positive territory, with the exception of the the Industrials Index which was down slightly.

The Metals amp; Mining Index gained 0.46 percent with Lundin Mining Corp. (LUN.TO) down 1.62 percent. Belo Sun Mining Corp. (BSX.TO) moved up 7 percent, while Teck Resources Limited (TCK_B.TO) gained 0.30 percent.

Light Sweet Crude Oil futures for June delivery, gained $0.38 or 0.4 percent to close at $104.93 a barrel on the NYMEX Friday.

The Energy Index gained 1.03 percent with Encana Corp. (ECA.TO) up 3.76 percent and Athabasca Oil Sands Corp. (ATH.TO) surging 7.38 percent. Canadian Natural Resources Limited (CNQ.TO) added 2.30 percent, while Suncor Energy Inc. added 0.57 percent. Talisman Energy Inc. (TLM.TO) gained 0.46 percent.

International oil company Petrominerales (PMG.TO) plunged over 17.66 percent after providing operational update at its Deep Llanos Basin, Colombia

Crude oil and gas transportation company TransCanada Corp. (TRP.TO) edged up 0.14 percent, despite posting lower first-quarter earnings of C$363 million or C$0.52 per share versus C$423 million or C$0.61 per share last year. Analysts expected earnings of C$0.54 per share for the quarter.

Energy sector business solutions provider Canadian Utilities (CU.TO) added 1.56 percent after reporting improved first quarter earnings of C$193 million or C$1.45 per share, while analysts expected C$1.37 per share.

Independent power producer Capital Power Corp. (CPX.TO) gathered 2.06 percent after its first quarter profit rose to C$40 million or C$0.64 per share. Normalized earnings were C$0.46 per share versus C$0.34 per share a year ago. Analysts expected earnings of C$0.34 per share for the quarter

Gold for June delivery gained $4.30 or 0.3 percent to close at $1,664.80 an ounce Friday on the NYMEX. The Global Gold Index advanced 1.13 percent.

Among gold stocks, Kinross Gold Corp. (K.TO) up 1.48 percent, while Eldorado Gold Corp. (ELD.TO) gained 0.71 percent. Lake Shore Gold Corp. (LSG.TO) surged 8.89 percent, while Barrick Gold Corp. (ABX.TO) gained 1.40 percent.

Agnico-Eagle Mines (AEM.TO) surged 9.64 percent after reporting an increase in first-quarter net income. The companys adjusted net income of $101.4 million or $0.59 per share came in better than analysts expectation of C$0.37 per share.

Iamgold (IMG.TO) slipped 1.29 percent after announcing that it would acquire Trelawney Mining and Exploration Inc. (TRR.V), a junior mining and exploration company, for $3.30 cash for each share.

The Materials Index moved up 0.91 percent, with Mercator Minerals Ltd. (ML.TO) gaining 1.65 percent. Uranium One Inc. (UUU.TO) shed 0.70 percent, while Potash Corporation of Saskatchewan Inc. (POT.TO) dropped 0.95 percent.

Blackberry maker Research In Motion (RIM.TO) was down 0.79 percent, while transportation systems maker Bombardier (BBDBTO) dropped 1.69 percent.

Base-metals miner Inmet Mining Corp. (IMN.TO) gained over 2 percent after reporting first quarter net income of C$96.14 million or C$1.39 per share, up from C$59.41 million or C$0.97 per share in the prior year quarter.

The Financial Index gained 0.79 percent, with Royal Bank of Canada (RY.TO) up 0.78 percent, Bank of Nova Scotia (BNS.TO) up 1.0 percent, and The Toronto-Dominion Bank (TD.TO) gaining 1.04 percent.

Transportation and logistics services TransForce Inc. (TFI.TO) edged up 0.28 percent after reporting a much improved first-quarter net income. Adjusted net income of C$24.7 million or C$0.25 per share, compares with analysts expectations of C$0.26 per share.

Entertainment technology company IMAX Corp. (IMX.TO) swung to profit in first quarter 2012, with adjusted earnings of $4.0 million or $0.06 per share higher than last year. Analysts expected earnings of C$0.07 per share for the quarter. The stock dropped 0.95 percent.

In economic news from south of the border, the US Commerce Departments initial estimate of growth in the economy showed a 2.2 percent growth rate, down from the 3 percent growth posted for the final quarter of 2011. Most economists expected the growth in the economy to drop from the 3 percent rate in the fourth quarter of 2011 though many had forecast a somewhat stronger 2.5 percent growth rate.

US consumer sentiment for April showed an unexpected improvement compared to the previous month, revised data from Reuters and the University of Michigan showed on Friday. The report indicated consumer sentiment index for April at 76.4 compared to the mid-month reading of 75.7. Economists had been expecting a much more modest upward revision to a reading of 75.8.

From the eurozone, German consumer sentiment is set to deteriorate next month, a survey by market research group GfK showed. The forward-looking consumer confidence index dropped to 5.6 in May from a revised value of 5.8 in April. Economists were expecting a level of 5.9.

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Tags : Commodity

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According to the National Weather Service, March 2012 was the most sweltering month since official tracking began in 1910. That was outside.

Inside the worlds key commodity markets, according to EWIs chief commodity analyst and Futures Junctures Service editor Jeffrey Kennedy, the Elliott wave heat is about to set new records in May.

Tags : Commodity

LONDON: Commodity prices diverged this week as traders weighed up weak global growth data, escalating eurozone debt fears and the latest outlook by the US Federal Reserve.

Trading was volatile on Friday as official data revealed a sharp slowdown in US gross domestic product and worsening economic news for eurozone member Spain.

OIL: World oil prices were mixed over the course of the week that ended with official data Friday showing US economic growth slowed sharply to 2.2 percent in the first quarter of the year.

Gross domestic product (GDP) growth had hit 3.0 percent in the final quarter of 2011.

The Federal Reserve on Wednesday said it saw US growth picking up and unemployment falling by the end of the year, as it stuck fast to existing stimulus policies despite some short-term economic headwinds.

Oil prices meanwhile began the week lower as downbeat Chinese data and eurozone uncertainty cast doubt on the strength of global energy demand.

Investors were spooked by results in Frances presidential vote that left President Nicolas Sarkozy hunting for far-right votes after losing to Socialist Francois Hollande in a first round vote.

The right-wing incumbent moved quickly to woo the 18 percent of voters who backed the anti-immigrant National Front led by Marine Le Pen, saying they deserved an answer to their concerns.

Across in Asia, all eyes were fixed on HSBCs China purchasing managers index (PMI) that showed factory output rose to 49.1 in April from 48.3 in March.

However, the reading remained below the key boom-or-bust 50-point level, indicating an improvement but no return to expansion just yet.

Chinas economy is closely watched by oil traders as it is the worlds largest energy consuming nation.

Eurozone debt catagion meanwhile came to the fore as it was revealed that Spains unemployment rate spiked to almost 25 percent in the first quarter, during which the country also fell back into recession.

The eurozone trouble is causing a lot of worry about (oil) demand, said Newedge broker analyst Ken Hasegawa.

Samp;P on Thursday cut Spains rating by two notches to BBB-plus and added a negative outlook, saying it expected the economy to shrink this year and next.

It also warned that the governments budget situation was worsening and that its banks would likely rely increasingly on official sources for funding as they grapple with piles of bad loans, especially in real estate.

By late Friday on Londons Intercontinental Exchange, Brent North Sea crude for delivery in June dipped to $119.20 a barrel from $119.21 a week earlier.

On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for June rose to $104.23 from $103.88.

PRECIOUS METALS: Prices were mixed, with gold rising and sister metal silver heading south.

Gold prices have edged higher after this afternoons GDP number from the US came in light prompting concerns about further loose policy from the Fed, said CMC Markets analyst Michael Hewson.

By late Friday on the London Bullion Market, gold gained to $1,663.50 an ounce from $1,641.50 a week earlier.

Silver fell to $31.14 an ounce from $31.79.

On the London Platinum and Palladium Market, platinum eased to $1,573 an ounce from $1,579.

Palladium climbed to $677 an ounce from $666.

BASE METALS: Prices rebounded, lifted by the Federal Reserves latest outlook according to traders.

But William Adams, an analyst at financial company Fast Markets, cautioned: We feel the global economic conditions are still weakening and therefore we do not expect the stronger tone to last too long.

By late Friday on the London Metal Exchange, copper for delivery in three months rallied to $8,408 a tonne from $8,181 a week earlier.

Three-month aluminium grew to $2,106 a tonne from $2,081.

Three-month lead gained to $2,137 a tonne from $2,117.

Three-month tin climbed to $22,451 a tonne from $21,650.

Three-month nickel increased to $18,362 a tonne from $17,858.

Three-month zinc advanced to $2,042 a tonne from $2,024.

COCOA: Cocoa futures gained on tight supply concerns in major producer Ivory Coast.

By Friday on LIFFE, Londons futures exchange, cocoa for delivery in July rose to 1,512 a tonne from 1,452 a week earlier.

In New York on the NYBOT-ICE, cocoa for July gained to $2,283 a tonne compared with $2,221.

COFFEE: Coffee prices dropped, weighed down by expectations of a large Brazilian crop.

By Friday on NYBOT-ICE, Arabica for delivery in July fell to 176.05 US cents a pound from 177.30 cents a week earlier.

On LIFFE, Robusta for delivery in July slid to $2,007 a tonne from $2,031.

SUGAR: Sugar futures hit multi-month lows as the International Sugar Organization forecast a global surplus of more than 6.0 million tonnes for the 2011/12 season, up from a previous estimate of 5.17 million tonnes.

By Friday on LIFFE, the price of a tonne of white sugar for delivery in August dropped to $572.80 from $582.90 a week earlier.

On NYBOT-ICE, the price of unrefined sugar for July fell to 21.05 US cents a pound from 21.67 cents.

Tags : Commodity

UBS, one of the largest issuers of ETNs including a number of commodity products, is the latest to make an addition to the fast-growing ETP lineup. The new ETRACS DJ-UBS Commodity Index 2-4-6 Blended Futures ETN (BLND) will take a unique approach to delivering exposure to commodity futures. The underlying Dow Jones-UBS Commodity Index 2-4-6 Forward Blend Total Return consists of futures contracts diversified across multiple maturitiesspecifically two, four, and six months out. Those three maturities will be equally weighted [see also Five Questions To Ask When Buying An ETF].

Spreading exposure across the maturity curve could potentially reduce the adverse impact of roll yield close to spot, which can result from contango in futures markets, while still offering exposure to a diversified basket of natural resources futures contracts. The potential trade-off could come in the form of reduced sensitivity to changes in spot prices; the further down the curve contracts are, the weaker the correlation to the underlying commodity tends to be (though long-dated futures contracts still generally exhibit a fairly strong relationship with spot prices).

Under The Hood

BLND will offer exposure to the same commodities that make up the Dow Jones-UBS Commodity Index, which serves as the underlying benchmark for popular commodity ETNs DJP and DJCI. That benchmark consists of 20 different commodity futures contracts, including aluminum, Brent crude, coffee, copper, corn, cotton, WTI Crude Oil, gold, heating oil, lean hogs, live cattle, natural gas, nickel, silver, soybeans, soybean oil, sugar, unleaded gas RBOB, wheat and zinc. Like many commodity indexes, theres a tilt towards energy resources; Brent, WTI crude, heating oil, natural gas, and gasoline combine to make up about a third of total holdings [see also 5 ETF Experts You Need To Follow On Twitter].

Tags : Commodity

Torontos main market rose Monday afternoon as commodities gained, but BlackBerry maker Research In Motion (TSE:RIM) (NASDAQ:RIMM) still saw shares drop despite a major management shake up.

RIMs co-CEOs Mike Lazaridis and Jim Balsillie bowed to investor pressure over the weekend and resigned their top executive posts. The smartphone maker will now be led by current COO Thorsten Heins, a former Siemens AG executive who has risen steadily through RIMs upper management ranks since joining the company in late 2007, ending a two-decade long partnership of Lazaridis and Balsillie at the head of the company.

Still, the move did not seem to impress investors after Heins failed to make any major announcements on the companys future direction during a conference call this morning, with shares of the Waterloo-based company declining around seven percent.

The move can also be seen as too little, too late as RIMs share price has plummeted to eight-year lows in the wake of a loss of market share, flawed product launches, missed forecasts, service outages and security difficulties in emerging markets.

Numerous industry surveys put Apples (NASDAQ:AAPL) iPhone at the front of the pack in the smartphone market, closely followed by Googles (NASDAQ:GOOG) Android operating system.

Speculation was rife that RIM was up for sale, but investors pointed to the presence of Lazaridis and Balsillie at the helm as a stumbling block to any potential sale.

Despite higher commodities, RIMs share performance weighed on Canadas main market, with the Samp;P/TSX Composite Index rising 82.11 points, or 0.66%, to 12,479.21 as of just after 12:00pm ET. The more junior Samp;P/TSX Venture Composite gained 14.20 points, or 0.90%, to 1,585.54.

Commodities were in the green, with gold futures up 0.89% to $1,678.80 an ounce, and silver for March rising over 2.5% to $32.48 an ounce.

Base metal copper gained more than 1.4% to $3.80 a pound, while crude oil futures rallied 59 cents to $98.92 a barrel, after the EU adopted an oil embargo Monday against Iran, as well as a freeze of Irans central bank assets – part of sanctions designed to pressure the country to resume talks on its nuclear program.

Two Iranian lawmakers have reportedly repeated threats to close the Strait of Hormuz following the European Unions embargo.

Meanwhile, in Europe, Greece restructuring debt talks seemed to stall, as private creditors are being asked to take longer maturities and lower interest rates on new loans swapped for exisiting ones.

Greece is looking for rates as low as three percent on the new bonds, with private creditors seeking at least 4.5 percent. Still, reports say a deal is close regardless, with this agreement being a key condition for the country to secure additional funds necessary for a March bond payment.

In Toronto, energy and financials were the biggest gainers, with info-tech seeing the largest decline on account of RIM, falling more than 2%.

On the energy front, Suncor Energy (TSE:SU) was ahead 0.44%, while Canadian Natural Resources (TSE:CNQ) gained around 2%. Encana Corp (TSE:ECA) rose 5.3%.

Among materials, Kinross Gold (TSE:K) and Barrick Gold (TSE:ABX) moved higher by 2.6% and 1.3%, respectively. Copper heavyweight Teck Resources (TSE:TCK.B) advanced 0.72%, and Lundin Mining (TSE:LUN) shares increased 1.6%.

Financials were up over 1% as Royal Bank of Canada (TSE:RY), Toronto-Dominion Bank (TSE:TD) and Canadian Imperial Bank of Commerce (TSE:CM) all gained around 1%.

In corporate news, Canada saw some mergers and acquisitions activity in the mining sector, with two notable deals being signed.

Pan American Silver (TSE:PAA)(NASDAQ:PAAS) made a move Monday to increase production in Mexico as it bought Minefinders (TSE:MLF)(AMEX:MFN) for $1.5 billion. Mondays deal will create one of the largest diversified silver mining companies with a combined market capitalization of approximately $4 billion.

The new entity will consist of eight operating mines and an extensive portfolio of development and exploration projects in jurisdictions throughout the Americas, where Pan American currently operates. Minefinders shares rallied more than 24% on the day.

New York-based private equity firm Luxor Capital Group said Monday it has raised its offer to acquire a majority stake in Crocodile Gold Corp (TSE:CRK) from 56 cents a share to 62 cents per share, with Crocodiles board accepting the revised bid. The new offer represents a premium of roughly 82 percent to the closing price of Crocodile on the TSX on December 13, 2011, the last trading day prior to Luxors announcement of its intention to make the bid.

Shares of Crocodile, which also said separately Monday that it has achieved the upper target of its 2011 production guidance by producing 68,019 ounces last year, advanced around 7.3%.

Meanwhile, Ottawa-based Wi-LAN (TSE:WIN) has launched a patent suit against RIM in a US district court in Florida, which claims the BlackBerry maker is infringing on two Wi-LAN patents.

Canadian Pacific Railway (TSE:CP) signed a 10-year agreement with Canpotex, a company jointly owned by three of North Americas largest potash producers to export Canadian potash. Financial terms of the deal were not disclosed.

Ithaca Energy (TSE:IAE)(AIM:IAE) shares jumped over 14% as it confirmed early Monday that it has received a non-binding takover proposal from an undisclosed suitor, which is conditional on due diligence, definitive documentation, board approvals, and other conditions. The companys board is being advised by CIBC World Markets, and said that discussions are at a preliminary stage.

US/Europe

US markets were slightly down Monday afternoon, as investors anxiously awaited news from the Greece debt talks, with no domestic economic reports on tap today. The Dow was lately down 0.3%.

Oil and gas companies were gaining, after Chesapeake Energy (NYSE:CHK) announced Monday it would cut natural gas production to push up prices, sending its shares up around 4.6%.

Meanwhile, Halliburton (NYSE:HAL) reported fourth quarter earnings rose 50 percent to beat analysts estimates as North American sales drove growth.

For the three months that ended December 31, the provider of oilfield services posted earnings of $906 million, or $0.98 per share, up 50 percent compared to $605 million, or $0.66 per share, a year ago.

Adjusted for certain one-time items, including environmental-related charges, earnings rose to $921 million, or $1.00 per share. Total revenues rose to $7.06 billion, up 37 percent from $5.16 billion in the same period last year.

According to Bloomberg Businessweek, analysts were expecting 99-cents per share for the quarter, on $6.8 billion in revenues.

Aside from Greeces debt talks, Eurozone finance ministers were also meeting today, with debt issues still dominating the agenda.

European markets finished higher today with shares in London leading the region. The FTSE 100 was up 0.94%, while Frances CAC 40 rose 0.51% and Germanys DAX ended up 0.50%.

Tags : Commodity

Wheat is down 30%, corn up 10%, gold up 21%, and natural gas down 32% – the progress of commodities in 2011 presents a patternless set of data.

>Commodities are notoriously heterogeneous, and each ones pricing depends on a host of quite different factors. Often events that impact one commodity positively will prove a negative drag on another.

Making sense of it all is a lot to ask of a private investor.

Overall, commodity prices have pulled back recently on fears that economic growth will be sluggish. But while growth in the developed world looks set to be disappointing, it should be more than offset by economic strength across Asia and in particular China, which is still expected to grow at a rate of 8% next year.

The protracted European sovereign debt crisis has also dented confidence, but many commentators think Europes leaders will avert financial crisis. Having said that, low returns on other investments can help to drive demand for commodities.

For many commodities, the fundamental attractions have not materially weakened from where they were pre-2008. Jim Rogers, the famous commodity bull, points out for example that although sugar has risen steeply, it is still 60% below its all-time high. What else do you know that is 60% below its all-time high? he asks.

There is a good chance broad commodity prices could firm up again in 2012, though we are probably looking beyond the first quarter of next year for sentiment to really improve.

While most investors focus on demand – because it is easier to grip and understand – the other side of the equation is the supply position and the state of inventories. These are also diverse and dependent on myriad geopolitical factors, weather conditions, the industrial climate and even fashion.

For instance, supply of copper has been interrupted by industrial action at mines in Zambia, Peru and Indonesia. Copper is therefore unusual in being in supply deficit, and will be furiously in demand by Chinas massive investment in social housing.

However, not everyone believes that China can save the market – BMO >Capital Markets, for example, argues that industrial metals will struggle to make any serious headway in 2012 despite Asian growth.

At the other extreme, energy is in oversupply. Currently there is enough oil for 93 days of use compared with an historical average of 88 days. Natural gas faces particular excess as huge growth in extracting US shale formations outpaces consumption, and underground gas storage in the US has hit record levels.

The diversity of experience in production of crops is also enormous and at times contradictory. Corn has suffered from poor weather conditions and is in low stock while this years wheat crop has been exceptional, prompting the International Grains Council to hike their production forecasts for the grain. The floods in Thailand have taken out many rice crops and put pressure on all substitute products.

Hog prices have risen by nearly 30% over the course of the year partly as a consequence of buoyant demand from China and South Korea. In contrast, the price of canola (edible rapeseed oil) has been slipping all year as supplies of the oilseeds increase.

Most investor focus on precious metals, and there is no shortage of bets on gold topping the performance charts next year. TD Economics, for example, says that gold is heading towards $2,100. Gold also has the backing of Rogers. Adjusted for inflation, gold should rise to $2,400; it is already at $1,800 and the commodity bull market has at least a year to go, he says.

Gold is a special case, however. Its price is highly volatile and could crash if the global economy recovers as it is very largely supported by investors looking for a safe haven.

There are strong arguments for investing instead in platinum, because, historically, platinum has traded at a premium to gold, but the position has reversed recently. Platinum is $150 cheaper than gold but there is no reason why this should be the case as both are scarce and platinum is also widely used in industrial processes, says Chris Eibl, managing partner at Tiberius Asset Management. It does not make sense to be long gold in this environment. Platinum is the safe bet.

The strongest underperforming precious metal will be silver, he adds, not only because it is in oversupply but because so much of the demand is from investors and there is no other industrial or medical application that could absorb demand to the same scale.

Looking for a guide to gaining exposure to platinum? Read: How to trade platinum and palladium.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Tags : Commodity

Risk (Stocks and Commodity FX) and Reversal Characteristics

By

Jamie Saettele, CMT, Sr. Technical Strategist

Tags : Commodity

An appeals court in Washington has dismissed a lawsuit by the
financial industry challenging new federal regulations aimed at
cracking down on speculation in commodities markets, a move that
will likely delay a decision about whether the rules pass
muster.

The Securities Industry and Financial Markets Association and
the International Swaps and Derivatives Association in December
filed challenges to the regulations adopted last year by the
Commodity Futures Trading Commission.

The US Court of Appeals for the District of Columbia Circuit
dismissed the lawsuit saying that the case must first be heard by
a lower court, an argument advanced by the CFTC.

There is no express congressional authorization of direct
appellate review applicable to the petition for review in this
case, the three-judge panel said in a brief order issued late on
Friday.

They said that federal laws provided for appellate review for
other agency action but not the challenged regulation.

The CFTC voted 3-2 in October to set position limits on the
number of commodity futures and swaps contracts that a trader
could hold. It has been decried by traders as a politically
motivated effort to cap prices that will make markets less liquid
and more volatile.

The two trade groups sued to block the new rules arguing that
the CFTC exceeded its authority and that the regulations were not
adequately justified.

The CFTC had argued that the case should first be heard by the
US District Court for the District of Columbia. Once that court
hears the case, whatever decision reached there can be challenged
at the appeals court level, a lengthier process.

Although the statute was unclear, we thought that might be
the answer and were prepared for it, and for that reason we filed
in both courts, said Steve Kennedy, a representative of the the
International Swaps and Derivatives Association. We now will
move forward quickly in the district court.

The industry groups already have filed a challenge at the
district court as well, but it was put on hold pending a decision
by the appeals court on whether it would hear the case.

The CFTC declined to comment.

(Reporting by Jeremy Pelofsky; Editing by Vicki Allen)

Tags : Commodity

Smuckers Simply Fruit Strawberry is spread atop peanut butter. JM Smucker Co. said Thursday its fiscal second-quarter net income fell 15 percent as the food maker faces higher ingredient costs. (AP Photo/Gene J. Puskar)

Tags : Commodity

Cotton fell the most in more than
eight weeks on concern that Europe’s debt crisis will slow
global growth and trim commodity demand. Orange juice rose.

The Standard amp; Poor’s GSCI Index of 24 raw materials fell
as much as 3.2 percent as European borrowing costs surged amid
mounting concern the region’s leaders will fail to stem fiscal
woes. World cotton demand will be 1.7 percent lower than
forecast last month, leaving a “massive” surplus of more than
3.5 million metric tons, according to Cotlook Ltd., a research
company in Birkenhead, England.

“The world’s going to have enough cotton to meet its
demands,” John Flanagan, the president of Flanagan Trading
Corp. in Fuquay-Varina, North Carolina, said in a telephone
interview. “Demand is slow because of the economic situation in
the US and Europe.”

Cotton for March delivery declined by the exchange’s 4-cent
limit, or 4 percent, to settle at 96.48 cents a pound at 2:46
pm on ICE Futures US in New York, marking the biggest loss
since Sept. 19.

The fiber has tumbled 56 percent from a record $2.197 on
March 7. A bale weighs 480 pounds (218 kilograms)

“The commercial sector is still ailing, as evidenced by
the complete lack of demand outside of China,” Andy Ryan, a
senior-risk management consultant at INTL FCStone Inc. in
Nashville, Tennessee, said in a report.

Orange-juice futures for January delivery advanced 1.8
percent to $1.7185 a pound in New York, the biggest gain since
Oct. 24. The commodity has advanced 13 percent in the past year.

Inventories of frozen orange juice monitored by ICE have
dropped 59 percent to 24.4 million pounds from a year earlier,
exchange data show.

“Supplies have been a little tight,” Jack Scoville, a
vice president at Price Futures Group in Chicago, said in a
telephone interview.

To contact the reporter on this story:
Blair Euteneuer in Chicago at
beuteneuer@bloomberg.net

To contact the editor responsible for this story:
Steve Stroth at
sstroth@bloomberg.net

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  Tags : Commodity