Oil Speculation Draws Congressional Focus

June 23, 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 swung between gains and losses at least 14 times, closing down 7.91, or 0.1 percent, to 13,849.56.

  • The dollar was mostly lower in Asian trading, but marked modest gains on its Japanese rival on talk of possible investment outflows. The dollar bought 107.97 yen, up from 107.85 yen late Monday, but down from a Tuesday high of 108.18 yen. The euro was buying $1.5569, up from $1.5525 in late North American trading Monday.

Monday's U.S. Markets...

  • The Dow Jones Industrial Average slipped by 0.33 point to 11842.36, nearly unchanged in percentage terms for the day. The Nasdaq Composite Index ended down 0.9 percent, off 20.35 points, at 2385.74. .
  • The 2-year Treasury note slipped 3/32, yielding 2.951 percent. The benchmark 10-year note fell 1/32 to yield 4.172 percent.

  • The dollar was higher against major rivals, including across-the-board gains Monday against European denominations.

Ag futures Yesterday's action and
overnight indicators

What happened yesterday...


  • Corn: Despite gap-lower opens in all corn futures contracts, on-going crop concerns provided support for higher closes. Old-crop futures closed 3 to 3 1/4 higher with new-crop futures 3 3/4 to 5 1/4 cents higher.
  • Soybeans:Old-crop soybean futures ended 10 1/2 to 18 cents lower with new-crop futures 5 to 6 1/2 cents lower. Soybean meal closed $5.30 to $7.70 lower in nearby contracts and slightly higher in far-deferred futures. Soybean oil closed mostly 58 to 63 points lower. Much of the pressure stemmed from restarted movement of new-crop supplies in Argentina.

  • Wheat: Futures closed a fairly active session steady to slightly mixed. Throughout the session, wheat was torn between pressure from a higher dollar and support from the price "recovery" in corn.
  • Cotton: A sharp rally in the U.S. dollar provided much of the cover spec traders needed to take profits on long positions, forcing a moderately lower close in cotton futures today. Most contracts ended the session 50 to 79 points lower.
  • Lean Hogs: Lean hog futures were 12 cents to $1.02 lower with the nearby contracts seeing the heaviest selling pressure. Continued worries over high feed costs and herd liquidation weighed on nearby contracts.
  • Live Cattle: Live cattle futures futures ended the session mostly narrowly mixed -- 25 cents lower to 22 cents higher. Feeder cattle futures ended mostly 52 cents to $1.10 lower. Following Friday's bullish Cattle on Feed Report, most contracts opened higher before profit-taking entered the 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

June 23

Grain Inspections (A)
Chickens and Eggs (N)
Crop Progress (N)

24

Weather - Crop Summary (N)

25

Broiler Hatchery (N)
Monthly Milk Cost of Production (N)

26

U.S. Export Sales (F)
Feed Outlook (E)
Vegetables and Melons Outlook (E)

27

Dairy Products Prices (N)
Agricultural Prices (N)
Quarterly Hogs and Pigss (N)
Peanut Stocks and Processing(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)

  • Oil Speculation Draws Scrutiny House Panel Told Curbs on Trading Could Ease Prices Lawmakers eager to curb speculation in oil markets got support Monday from witnesses who told a House subcommittee that oil prices could fall sharply if Congress put strict limits on trading in energy futures by investment banks, pension funds and other financial investors. A panel of witnesses are sworn in to testify on Capitol Hill on Monday. But officials of the Commodity Futures Trading Commission disputed the findings of a Congressional study that concluded 70% of trading in certain key oil futures contracts is now speculative.
  • Weak Links in the Food (Supply) Chain Firms Pinched by Rising Commodity Prices Strive for Tech Efficiency Industry analysts predict that rising commodity costs will make it easier to justify buying new software that can help plan manufacturing cycles and optimize delivery routes.
  • Driving Away Oil Speculators May Not Help In congressional hearings, witnesses and lawmakers decried the role of speculators in energy markets -- but there's no evidence of the hoarding that often accompanies wanton speculation or market manipulation.
  • SEC Aims to Rein In The Role of Ratings The SEC plans to propose rules that could diminish the importance of credit ratings across various markets.
  • Brazilian Beef Firm Buys Brazil's third-largest beef exporter, Marfrig Frigorificos e Comercio de Alimentos SA, plans to acquire the Brazilian and European assets of OSI Group for at least $680 million in cash and shares, the company said on Monday.

New York Times (registration to site required)

  • Conflict With Farmers Takes Toll on Argentina Embattled president, Cristina Fernández de Kirchner, met with farm leaders late Monday. Argentina’s Congress is expected to begin a thorny debate this week on an export tax, which touched off the farmers’ revolt more than three months ago. In a long-awaited concession, Mrs. Kirchner, her popularity plummeting in opinion polls, agreed last week to let Congress approve or reject the system of sliding taxes that she imposed on farmers in March.
  • China’s Visa Policy Threatens Olympics Tourism With the Beijing Olympics less than two months away, hotel operators, travel agencies, and foreign businessmen say new Chinese visa restrictions are proving bad for business, casting a pall over Beijing during what was supposed to be a busy and jubilant tourist season leading up to the Olympic Games.

Washington Post

  • Economic Challenges Draw Out Divisions at Fed As Federal Reserve policymakers sit down this morning to begin deciding whether to adjust interest rates, they do so at a time of exceptional internal disagreement over what approach the central bank should take.
  • IRS Raises Mileage Rate to Reflect Gas Prices The Internal Revenue Service, citing the drain that high gas prices are having on people's finances, said yesterday that it is raising the automobile mileage rate that businesses and others can claim.
  • Consumer Pain Goes Beyond The Pump Gas Fees Added in Several Industries Two dollars for pizza delivery. An extra $1.70 to ship a $20 package.
  • EU Backs Sanctions on Iran, Freezes Bank Assets Travel Ban Is Imposed For Some in Government The European Union approved new sanctions against Iran on Monday, including a freeze on the assets of its largest bank, in a continuing effort to force Tehran to curtail its nuclear development programs and fully cooperate with international inspectors.
Ag media Monitoring the countryside

Omaha World-Herald (Nebraska)

  • More call for limits on oil speculation Lawmakers continue to blame large investors for their role in propping up oil prices, pointing out Monday that speculation in crude futures has nearly doubled since 2000

Des Moines Register (Iowa)

Laughing with, not at From political humorists

Jay Leno: “Thanks for coming out on such a hot day. … It was so hot, Barack Obama met with Al Gore just for the shade.”

Jay Leno: “Yesterday, a bunch of these Bear Stearns hedge funds guys were arrested for shady business practices. Talk about turning lemons into lemonade, today Bear Stearns…announced they’re opening a new division specializing in bail bonds.”

Jay Leno: “The government says they’re focusing on some e-mails that show these guys may have given bad investment advice. For example, a lot of the e-mails began, ‘I’m a diplomat currently living in exile in Nigeria.’”

Jay Leno: “President Bush and Senator John McCain were both touring the flood-damaged areas of Iowa this week, but they did not cross each other’s path. McCain said he didn’t want to join up with Bush because that might send the wrong message. You know, nothing turns voters off more than people getting together for a noble cause.”

Jay Leno: “Well, listen to this. According to a Pentagon report this week, more than 1,000 nuclear missile components in the US arsenal are lost and cannot be located. Huh? We can’t even find our own weapons of mass destruction.”

Jay Leno: “In their defense,” the “Air Force said today there is a big difference between something being missing and just not being able to find it, which would be okay if you’re talking about a pair of lost sunglasses!

Jay Leno: “Today, Ralph Nader attacked Barack Obama for refusing to accept public financing for his campaign and said that Obama was too closely tied to big business. … Yeah, then the guy sitting next to Nader on the park bench said, ‘Shut up!’”

David Letterman: “President Bush has ordered…his troops now to find Osama bin Laden. Yep. Boy, he really jumped on that one, didn’t he?”

Conan O’Brien: “Last night, President Bush held a celebration at the White House honoring jazz. … Yeah. It was an awkward moment when Bush said, ‘This is great. It’s just like being in an elevator.’”


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