Crude oil - we've all been scammed again
Oilintel, Houston, TX - When we wrote at midday (Friday) that we had no idea where this market was heading today, we never imagined this would happen. July crude oil and contracts soared to new record highs while July heating oil, while outpacing both crude and gasoline, did not set a new record.
Crude oil soared to a new high of $139.01, surpassing the old record of $135.09 while gasoline hit $3.5650, 4.50 cents above the old record.
As if in direct defiance to the CFTC, speculators reacted as if Katrina II hit the Gulf and wiped out all refineries, the Saudi oilfields were on fire and Iran closed the Strait of Hormuz. A sequence of events like these would be necessary to justify the unprecedented gains today in energy futures, not a 4 or 5 cent drop in the dollar, or a well-timed forecast from Morgan Stanley.
You see Morgan Stanley would say "we owe it to our clients to let them know what we believe will occur." But the reality is, they know full well it will be leaked, and acted upon. They know they will get all the help they require in achieving their prediction of $150 per barrel by July 4. We just didn't think it would happen in a day or two.
What happened today is another severe blow to the U.S. economy as Wall Street keeps plowing the money that the Federal reserve made available to them back into commodities to make up for the huge losses they sustained in the housing crisis.
These large commission houses are laughing all the way to the bank as consumers everywhere make decisions about driving to work or eating that day. It's become a blatant and immoral scam that has to end. It's almost as if they know the end is near, so they will ride it as hard as they can until the CFTC pulls the plug.
Naturally, some analysts point to statements by an Israeli official today indicating that an attack on Iranian nuclear facilities might be unavoidable.
Of these factors, not one reduces the amount of oil available today, tomorrow or next week. It's time for the U.S. Congress and officials in London to change limits on speculative positions, strip away commercial status of all investment banks, and change the rules that stipulate commercial status only for companies that can document 90% of their business is energy-related, from a physical market standpoint.
Conspiracy theory #1
The CFTC announced Friday that it was withdrawing it's proposed rules to limit the size of position a speculative trader may hold. It gave no explaination why. Crude has it's biggest rise one-day ever. Grains shoot sharply higher. Corn sets all-time high. Discuss.
Link here: wheels within wheels
Agriprem regains UFAS accreditation
Next week: How to jump through hoops whilst balancing a ping pong ball on your nose.
Cargill to invest $1.5 bln in Russia in next 5 yrs
ST. PETERSBURG. June 7 (Interfax) - Cargill, the U.S. agri-food giant, plans to invest more than $1.5 billion in its Russian assets in the next five years.
The Russian government's latest initiatives to curb rising food prices will not hinder these investments, Cargill chairman Greg Page said Friday.
Cargill has invested about $1.5 billion in Russia in the last 5-7 years and, considering the country's potential and the Russian government's efforts to sharply increase grain production, the company thinks it would be reasonable to invest about the same amount in the next five years, Page said.
He said the company does not intend to acquire existing assets in Russia, but build new ones. There are plans to open a new production facility in the Tula region.
Asked about curbs on food price increases that the government imposed at the beginning of the year, Page said that any restrictions are unpleasant for business, but thankfully Russia did not restrict grain exports, which was appreciated. Other countries imposed tough restrictions on grain exports during this period, causing a major imbalance on the world market, he said.
Global price increases for food goods will force the governments of various countries to take protective measures, but in Russia's case these measures did not have any impact on Cargill's investment decisions, Page said.
He said world grain prices will continue to trend upward for a fairly long time, but all the countries in the former Soviet Union have strong potential to increase production.
Cargill first opened an office in Russia in 1991, and in 1995 it acquired the Yefremov glucose and treacle plant. In recent years, the company has developed an industrial complex in Yefremov and invested in the construction of a malt house, a plant to produce starch products and treacle, and a vegetable oil refining plant.
Cargill and its joint ventures own 75 elevators in Russia, Kazakhstan, Ukraine, Romania and Hungary, with combined capacity for about 2 million tonnes of grain.
F O Licht sees 2008-09 EU-27 wheat output up 18.3MMT
On Friday F.O. Licht forecast 2008-09 world wheat output will rise by 43.7 million tons to a record high of 652 million. This included a rise of 18.3 million tons in E.U. all-wheat output and 5.1 million tons in competing neighbour Ukraine. F.O. Licht also projects higher E.U. output for corn, barley, oats and rye.
Late call on Chicago
CBOT soybean futures are called to start the session 8 to 10 cents higher. The combination of higher outside markets, supportive weather forecasts, bullish demand outlooks amid the lingering Argentina farmers' strike and the resurgence of speculative money flowing into the market are seen buoying prices, analysts added.
Benchmark Chicago Board of Trade July wheat is called to open 3 to 5 cents per bushel higher on spillover support from CBOT corn and soybeans, analysts said. Weather looks bullish for CBOT corn and soybeans amid concerns about slow planting and development of the row crops due to excessive moisture. "They want to run, and we're going to follow," a CBOT wheat trader said about corn and soybeans.
Chicago Board of Trade corn futures are expected to open 3 to 5 cents higher Friday on the momentum from Thursday's new highs and on support from crop concerns and outside markets, analysts said. July corn is at an all-time high, and prices have broken out of a trading range that had confined the market for two months. July had been trading between $5.80 and $6.20. An analyst said the new highs will encourage more buying. "With the weekend approaching, we could see a little profit-taking today, but all I think we'll do is temper gains," the analyst said.
Morning Foods to close
Morning Foods have announced that they will be closed on 25/26th December 2008.
Early call on Chicago
Corn futures are expected to open steady to 3 higher; soybeans 8 to 11 higher; wheat 3 to 5 higher. With wet weather forecast for many more days, grain and soybean prices are called higher. There could be some profit-taking before the close Friday, however.
