Economic Buzz: Japan's Manufacturing Growth Slows In July

Manufacturing sector growth in Japan moderated in July, a survey by Markit Economics showed Wednesday. The seasonally adjusted Markit/JMMA purchasing managers' index, that measures performance of the factory sector, fell to 50.7 in July from June's 28-month high of 52.3. PMI readings above 50 indicate expansion of the sector, while readings below 50 suggest contraction.

New orders increased for a fifth month running in July. New export orders also increased, but the pace of growth slowed since June. Both input and output prices increased in July, the survey found.

Source by Commodity Insights

Oil Inches Up Ahead Of Fed; Jobs

Oil.......

Crude oil futures inched up on value buying in the Asia electronic session today after the commodity tumbled to the lowest level in more than three weeks yesterday as traders awaited a reading on U.S. economic growth and an update on the Federal Reserve's stimulus measures.

Light, sweet crude futures for delivery in September are trading up 22 cents at $ 103.30 per barrel on the New York Mercantile Exchange. Light, sweet crude for September delivery settled $1.47, or 1.4%, lower at $103.08 a barrel its lowest finish since July 3.

In the economic front today, Japan's manufacturing grew at a slower pace this month, though still registered expansion, according to the Markit/JMMA Japan manufacturing Purchasing Managers' Index, released Wednesday. The headline index fell to 50.7 from June's 52.3, but remained above the 50 level -- the dividing line between growth and contraction -- for the fifth straight month.

Chinese stocks rose Wednesday after state media said the Communist Party's politburo vowed to keep economic growth steady in the second half of the year despite what it said were "extremely complicated domestic and international conditions." The Xinhua news report Tuesday carrying the statement didn't specify a growth level that it would defend. China's gross domestic product rose 7.7% in the first quarter and 7.5% in the second quarter.

The American Petroleum Institute reported a decline in U.S. inventories in its separate survey released late Tuesday. The industry group said crude stockpiles last week declined 740,000 barrels.

Investors are likely to remain cautious ahead of the second-quarter gross domestic product data and Fed statement Wednesday. The weekly crude stockpiles data is also due Wednesday. On Friday, traders will shift their focus to the Labor Department's closely watched nonfarm payrolls for the month of July. The release will offer clues on the health of the U.S. jobs market.

MCX August crude oil futures may open today’s session near Rs 6280 levels with resistance near Rs 6315-30 levels.

Source by Commodity Insights

Technical Comment For Day: Crude Oil

Oil........

Crude Oil settled at Rs 6251 per barrel, up 0.84%. The prices are shaping on the lower side similar to the open interest that is dipping with every passing session. The decline in open interest is an indicator that the path of Crude will become more skewed between upside and downside. The support for Crude is at Rs 6150, which is also its trend line support, intact from 9 July 2013.

Source by Commodity Insights

Oil Extends Losses In Asia

Oil.......

Crude oil futures slipped below $105 a barrel in the Asia electronic session today pressured by strength in the US dollar. The energy commodity is also undermined by growing concerns over the outlook for energy demand in China, ahead of manufacturing data from China and a statement on monetary policy from the U.S. Federal Reserve due this week.

Crude oil for September delivery is trading down 24 cents at $104.31 per barrel on the New York Mercantile Exchange. Yesterday, it fell 15 cents, or 0.1%, to settle at $104.55 a barrel. On Friday, the contract fell 79 cents to $104.70 a barrel.

The ICE dollar index, a gauge of the greenback’s movement against six other major currencies, rose to 81.711, up from 81.663 late Monday in North America. The euro bought $1.3260, little changed from $1.3263, while the British pound fell to $1.5339 from $1.5349.

On the data front today, Japan's industrial production took an unexpectedly sharp drop in June, falling a seasonally adjusted 3.3% from May, though manufacturers offered an upbeat outlook for the current month, the Ministry of Economy, Trade and Industry reported Tuesday.

Meanwhile, Japanese consumer spending made a surprise downturn in June, though the unemployment rate eased in the same month, the Finance Ministry reported Tuesday. Spending by households of two or more people fell 0.4% on a price-adjusted basis compared to a year earlier. On a brighter note, the unemployment rate eased to 3.9% in June -- an almost five-year low.

MCX August crude oil futures may open today’s session near Rs 6240 per barrel with support around Rs 6190 levels.

Energy investors have a busy week of economic updates to consider, including the first look at second-quarter growth in the U.S. and more manufacturing data from China for July. Last week, oil prices suffered their first weekly loss in five weeks after HSBC data showed manufacturing activity in China fell to an 11-month low in July.

A statement on monetary policy is due from the Fed on Wednesday, followed by statements Thursday from the European Central Bank and the Bank of England. The markets will watch for any language from the Fed that hints at the timing of when it will start tapering monetary stimulus. The central bank’s bond-buying program, part of a strategy to encourage economic growth, currently runs at $85 billion a month.

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Hot Commodities: Natural Gas Tumbles Near Six Month Lows

The US Natural Gas futures tumbled to near their six-month lows today as traders continued to sell the commodity amid a weak global economic backdrop. Prices have also been hit in the last few days on ideas that after predictions that most of the eastern U.S. will see seasonal temperatures, with lower readings in the Midwest. Today, the benchmark US contract slipped nearly 2% to quote at $3.497 per mmbtu as Asian stocks were pushed lower.

Natural Gas stockpiles rose by 41 billion cubic feet last week to 2.786 trillion, below the five-year average gain of 53 billion for the period, an EIA report yesterday showed. A deficit to the historic average widened to 1.6 percent from 1.2 percent the previous week. Inventories were 12.5 percent below year-earlier levels, compared with 13.1 percent in last week's report.

However, the commodity could turn up on updates regarding Tropical Storm Dorian. The storm is currency on the east of the northern Leeward Islands and is moving west-northwest and may be over the southern Bahamas early July 31. The storm has maximum winds of 50 miles per hour and is expected to weaken a bit in the next day or so, the center said.

For the time being though, bearish moves engulf the commodity quite vehemently. Asian stocks have tumbled heavily, down around 1-2% with Nikkei being slammed by nearly two and half percent. MCX Natural Gas is quoting at Rs 208.70, down 2% with a massive 8.8% increase in open interest.

A deficit to the historic average widened to 1.6 percent from 1.2 percent the previous week. Inventories were 12.5 percent below year-earlier levels, compared with 13.1 percent in last week's report.

Source by Commodity Insights

Commodities Buzz: US Timberland Index Up 9% In First Half Of Year

Returns on US forestry surged to their highest since the global economic crisis, and are poised for further gains, despite setbacks to hopes for housebuilding, a key destination for lumber. A timberland index compiled by National Council of Real Estate Investment Fiduciaries (Ncreif) showed a gain of 9.36% in the year to the end of June, the highest figure since autumn 2008, as the world was falling into slump.

The second quarter rise in US interest rates and the 9% drop in overall US housing starts triggered a slight downward adjustment in forecasts for housing demand for the remainder of 2013, the council said.

However, Ncreif notes that expectations are still on track for housing starts to climb north of 950,000 starts for 2013, a strong improvement after 2012's 780,000 starts. As the economy and housing markets continue to improve, the timber fund index should continue to see positive results.

The returns from timberland are well below those of 20.0% from farmland over the past year, but unlike agricultural property are on a rising annual trend, on Ncreif data.

Source by Commodity Insights

COMEX Gold Well Under $1330 Levels

Gold......

Gold

slipped well under $1330 per ounce today, not being able to hold onto its recent gains as traders resorted to profit selling ahead of the weekends. The metal witnessed a similar movement yesterday as well. The overall movement in global stocks is mixed today and gold is quoting at $1325.40, down $3.40 per ounce on the day.

Yesterday, a large increase in aircraft bookings during June drove orders for new U.S.-made durable goods up by 4.2%, the third straight large monthly gain. However, because of the volatile nature of the main component driving the headline index higher, traders continued to maintain a cautious stance on the economy. US stocks had another lackluster day amid disappointing earnings reports.

Dollar lost out yesterday and slipped further today, nearing its five week low against the Euro as Eurozone's leading economic index moved up 0.5 percent on a monthly basis to 107.5 in June, marking the third successive growth. The index increased for the third successive month in June, adding to hopes that the recession-stricken economy would recover in the second half, data from a survey by the Conference Board showed today.

The weakness in dollar could support gold. The metal has witnessed some good bargain hunting in last few days, with a break above $1300 per ounce keeping sentiments supported. The MCX Gold futures slipped towards Rs 27000 end edged up before giving up yet again today. The counter quotes at Rs 27390, down Rs 14 per 10 grams on the day. Prices had dropped to a low near Rs 27300 earlier in the session.

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