Commodities Head for Third Monthly Gain

11:48AM Apr 30, 2014
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Commodities are heading for the third monthly gain, led by arabica coffee and nickel.

The Standard & Poor’s GSCI Total Return Index of 24 commodities climbed 0.6 percent this month as of 5:08 p.m. in London. Nickel advanced 15 percent, the most since September 2012, on concern possible sanctions on Russia will curb supply with an export ban on ore already in place in Indonesia. Russia is the second-biggest producer of refined nickel, after China, and home to OAO GMK Norilsk Nickel, the top miner of the metal.

"It was the supply side and not the demand side that drove commodities higher," said Bjarne Schieldrop, the chief commodity analyst in Oslo at SEB AB. "The Russia/Ukraine crisis is bullish for nickel, palladium and agriculture."

Nickel for delivery in three months reached $18,715 a metric ton on April 28, the highest since February 2013. Goldman Sachs Group Inc. boosted its six-month price forecast to $20,000 a ton from a previous estimate of $15,000 this month. Supplies will lag behind demand by 100,000 tons in 2015, the first shortfall since 2010, BNP Paribas SA said April 24.


Arabica Coffee


Arabica coffee jumped to a 26-month high on April 23 as the worst Brazilian drought in decades ravaged the crop and Volcafe Ltd. predicted global bean harvests will fall short of demand. Coffee climbed 17 percent this month to $2.0735 a pound on ICE Futures U.S. in New York. By the end of December, prices may be at $2.54 a pound, a Bloomberg survey of 19 analysts showed this month.

Feeder cattle surged to a record in April for the biggest monthly gain since December 2012. The U.S. feedlot herd at the start of April unexpectedly fell 0.6% to 10.86 million head from a year earlier, U.S. Department of Agriculture data showed on April 25. Feeder cattle are young animals that weigh 500 pounds to 800 pounds and are fattened in feedlots on corn until they weight about 1,200 pounds, and then sold to meatpackers.

Corn gained 3.1 percent as rain delayed planting and wheat advanced 3.6 percent in Chicago on dry weather and possible supply disruptions from Ukraine. The odds are increasing that an El Nino weather system will form this year, portending drought for Australia and Asia and a warmer winter in the U.S. Northeast, according to the U.S. Climate Prediction Center.