A Few Speculators Dominate Vast Market for Oil Trading

August 20, 2008 07:00 PM
 

Snapshot of news and events for today

Quick links

* Financial markets

* Ag futures

* USDA reports this week

* NWS forecast

* Major media

* Ag media

* Political humorists



Financial markets Major world indicators

Japanese trading...

  • The 225-issue Nikkei Stock Average ended down 99.48 points at 12,752.21, its lowest close since April 1.

  • The dollar was trading around 108.93 yen against the yen, having fallen back from a seven-month high of 110.67 yen hit last week.

Wednesday's U.S. Markets...

  • The Dow Jones Industrial Average snapped a steep two-day losing streak, ending 68.88 points higher, up 0.6 percent, at 11,417.43, down 14 percent on the year. The Nasdaq Composite Index ended 0.2% higher at 2,389.08, down 9.9 percent on the year.
  • The two-year note's yield fell to 2.254 percent, from 2.321 percent Tuesday, extending its winning streak since last Thursday. It rose in price by 4/32 point, or $1.25 per $1,000 face value, to 100 30/32.

  • The dollar rose against the yen, euro, and British pound. The U.S. Dollar Index gained 0.2 percent.

Ag futures Yesterday's action and
overnight indicators

What happened yesterday...


  • Corn: Futures gapped higher on the open, filled the gap, but then returned to near session highs to close 9 3/4 to 11 cents higher.
  • Soybeans: Futures ended the day about where they began it, finishing 19 1/2 to 26 3/4 cents higher. Meal and soyoil found spillover support.

  • Wheat: Futures opened slightly higher, but extended gains and posted a high-range close. Chicago wheat closed 28 to 29 3/4 cents higher, with Kansas City up 23 to 28 cents and Minneapolis up 5 to 25 cents, but most contracts were at least 20 cents higher.
  • Cotton: Futures closed slightly to sharply higher, finding spillover support from neighboring pits.
  • Lean Hogs: Lean hog futures gapped sharply lower on the open, but trimmed losses amid short-covering, finishing mixed. October hogs closed 15 lower, with December up 15 cents and further-deferred futures up 90 cents to $1.25.
  • Live Cattle: Cattle futures opened lower, but benefited from short-covering support in mid-morning trade and closed steady to 70 cents higher. Feeder futures closed 37 to 80 cents higher, with upside potential limited to short-covering due to strength in the corn market.

Scheduled USDA Reports & Summaries This Week

Agricultural Marketing Service = (A)
Census Bureau = (CB)
Economic Research Service = (E)

Farm Service Agency (FSA)

Foreign Ag Service = (F)

National Agricultural Statistics Service = (N)

World Agricultural Outlook Board = (W)

Monday

Tuesday

Wednesday

Thursday

Friday

Aug. 18

Grain Inspections (A)
Tomatoes: World Markets and Trade (F)
Milk Production (N)
Crop Progress (N)

19

Livestock, Dairy, and Poultry Outlook (E)
US and Canadian Cattle (N)
US and Canadian Hogs(N)
Cranberries(N)
Weather - Crop Summary (N)

20

Broiler Hatchery (N)

21

U.S. Export Sales (F)
Catfish Feed Deliveries (N)
Catfish Processing (N)
Wheat Data (E)
Feed Grains Database (E)

22

Dairy Products Prices (N)
Livestock Slaughter (N)
Cattle on Feed (N)
Chickens and Eggs (N)
Cold Storage(N)
Mushrooms (N)
Peanut Prices (N)


Overview Other reports affecting agriculture
Major media Links to top news reports
with potential U.S. ag impact

Wall Street Journal (subscription to site required for access)

  • McCain Closes Gap on Obama In Poll as Conventions Loom McCain has all but closed the gap with Obama. A WSJ/NBC News poll found the race in a statistical dead heat, with 45% favoring Obama and 42% for McCain. The poll underscores how international crises and negative ads have helped McCain, although concern among voters about his age remains.
  • U.S., Iraq Are Said to Have Set Withdrawal Timetable U.S. and Iraqi negotiators reached agreement on a security deal that calls for American military forces to leave Iraq's cities by next summer as a prelude to a full withdrawal of combat troops from the country by 2011.
  • Iran Buys Wheat From U.S. For First Time in 27 Years Poor Harvest Spurs
    Tehran's Rare Move; Limited Options
    Iran this summer resumed buying U.S. wheat after a 27-year hiatus, a sign of the limited options for importers seeking large quantities of high-quality grain.
  • Heating-Oil Users Can Brace For Expensive Winter Heating-oil prices have dropped to their lowest levels in months, but there are signs that tight supplies could keep winter heating bills high even if crude prices continue to tumble. Government data released Wednesday showed the nation's heating-oil supplies are down 9.8% compared with this time last year. In New England, where many houses are warmed with heating oil during the winter, the fall in inventories has reached 49%.
  • Gas Prices Fuel New Views By Democrats on Offshore Drilling As gasoline prices have become a focal point for voters' economic concerns, Democratic candidates across the country are rewriting the party line on the issue.
  • Voters Want Everything on Energy Voters are crying out for more solar and wind energy -- but that doesn't mean they are opposed to drilling for more oil at the same time, according to a Wall Street Journal-NBC News poll.
  • Don't Be Cornfused About Ethanol, Subsidies, Prices Three letters to the editor on the topic.
  • Fate of Fannie and Freddie Hinges On $225 Billion Fannie Mae and Freddie Mac need to refinance $225 billion of debt by the end of September. Investor interest may hinge on the details of any potential government bailout.
  • Why to Count Chickens Before They Hatch A decline in the number of chickens coming into production may lead to higher prices, a welcome development for poultry producers, but not so good for consumers and restaurant chains.
  • Commodities Inspire Bold Bets, Hedges The options market offers an arena for both reckless betting and scrupulous hedging, and nowhere more so than in the volatile commodities sector.
  • CBOE, Board of Trade Reach Deal The Chicago Board Options Exchange, or CBOE, reached a deal that paves the way for a long-anticipated sale or stock-market flotation.

New York Times (registration to site required)

  • Rural Swath of Big State Tests Obama Once solidly Democratic, western Pennsylvania has become an uncertain political terrain and a target for John McCain.
  • Prescriptions for Fannie and Freddie As policy makers work to ease the strain on the mortgage giants Fannie Mae and Freddie Mac, a consensus is emerging that the two companies will have to look substantially different in the long term.
  • Voters in Poll Want Priority to Be Economy, Their Top Issue Senators Barack Obama and John McCain are heading into their conventions neck and neck in the presidential race, with voters focused overwhelmingly on economic issues but convinced that the candidates are not paying enough attention to their priorities, according to the latest New York Times/CBS News poll.

Washington Post

  • A Few Speculators Dominate Vast Market for Oil Trading Regulators had long classified a private Swiss energy conglomerate called Vitol as a trader that primarily helped industrial firms that needed oil to run their businesses.
  • Bloomberg Calls for Alternative Energy Mayor Urges Study of Wind, Solar Power
    Outlining his vision for a dramatic reconfiguration of urban energy sources, Mayor Michael R. Bloomberg says he is exploring potential for installing turbines and other alternative energy generators throughout New York City, in the water and on bridges and skyscrapers.
  • U.S. and Poland Seal Missile Pact Deal on Defense System Signed Despite Russian Warnings The United States and Poland signed an agreement here Wednesday to place parts of a U.S. missile defense system on Polish territory, finalizing a long-negotiated deal in the face of Russian warnings that Poland would become a potential target for attack.
  • Commodity Prices Retreat Declines for Oil, Food That Help Consumers Could Disrupt Strong Run for U.S. Exports Financial markets are frazzled, and the jobs situation is getting worse. But there is a surprising bit of good news for the economy in the months ahead.
  • Investor Jitters Deflate Fannie, Freddie Shares Drop to 20-Year Low Follows Speculation About a Rescue Shares of Fannie Mae and Freddie Mac tumbled more than 20 percent yesterday, hitting their lowest levels in nearly two decades, as investors fled out of fear that a government initiative to save the ailing mortgage giants could render their stock worthless.
  • Energy Firms Bid on Gulf Tracts Nearly $500 Million Spent to Explore Recently Opened Waters Energy companies bid hundreds of millions of dollars yesterday to explore for oil and natural gas beneath 1.8 million acres in the western Gulf of Mexico, while they look forward to the possibility of future drilling in federal waters now off limits.
Ag media Monitoring the countryside

Denver Post (Colorado)

  • Researchers try veggie oil to clean up toxic spill (Via Associated Press) Researchers at the nation's most contaminated nuclear site last year injected 5,000 gallons of molasses into the soil to try to clean up toxic groundwater near the Pacific Northwest's largest waterway. This week, they're trying vegetable oil.
Laughing with, not at From political humorists

Jay Leno: “Since Congress went on recess, oil prices have dropped to $118 a barrel. That’s, like, a $30 drop from the record high. You know, maybe Congress should take more vacations, huh?”

Jay Leno: “Actually, analysts say a weak economy is causing less energy use, resulting in falling oil prices. Yeah. Basically, the worse the economy, the lower the oil prices, which means if Bush could serve one more term, oil would be free.”

Jay Leno: “Well, Barack Obama and John McCain have both switched their positions on offshore oil drilling. They both used to be against it, but now they say they are for it under the right circumstances, like if it helps them get elected.”

Jay Leno: “The International Olympic Committee is saying that the yellow-gray haze over Beijing is not pollution, it is only mist. … Okay, it’s lead mist, but still.”

Jay Leno: “Have you seen China’s slogan for the Olympics? Here it is. “One world, one dream.’ But see the asterisk? Go in close. What does it say? ‘Restrictions apply, Tibet not included.’”

Jay Leno: “And because of this entire Brett Favre situation,” which has “turned out to be such a public relations disaster, the Green Bay Packers have hired President Bush’s former spokesman Ari Fleischer. … So you know what the Packers are going to do now? Invade Iraq.”

David Letterman: “Well, the big debates are coming up.” Barack Obama “wants to debate about foreign policy,” while “John McCain wants to debate about the big band era.”

David Letterman: “You know, I like John McCain. He looks like the guy that hangs out at the driving range,” always “giving you unwanted tips. … ‘You’re topping the ball. You’re top -- give me the club. You’re topping the damn ball!’”

Conan O’Brien: “Of course, Barack Obama” is “still continuing to dominate media coverage. ‘The New York Times’ just did a big piece” in which they “say that Barack Obama has been successful in politics because he’s a black man who doesn’t make white people feel threatened,” which “explains Obama’s Secret Service code name, ‘Al Roker.’”


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