The March 29 rupture of an Exxon Mobil Corp (XOM). oil pipeline in Mayflower, Arkansas, provided the latest evidence for opponents citing the risk of environmental contamination in their efforts to scuttle the Keystone XL project, an almost 2,000-mile pipeline linking Alberta’s oil sands with the world’s largest refining market on the U.S. Gulf Coast. The alternative, hauling crude by rail, may be worse, said Charles Ebinger, director of the Brookings Institution’s energy security initiative.
A U.S. denial of Keystone XL this year would “undoubtedly” result in more oil spills by trains, Ebinger said in a phone interview. Trains’ higher accident rate comes mainly from leaking rail car equipment, spill records show. Read more
West Texas Intermediate rose for a second day after China reported inflation eased more than forecast last month. U.S. crude stockpiles probably increased to the highest level in 22 years, a Bloomberg survey showed.
Futures gained as much as 0.5 percent in New York after advancing the most in almost two weeks yesterday. Goldman Sachs Group Inc. (GS) forecast that supplies at the U.S. delivery hub in Cushing, Oklahoma, will shrink at the end of next month, and pushed back its recommendation for trading the discount on WTI versus Brent. U.S. crude inventories climbed by 1.5 million barrels in the week to April 5 to 390 million, according to a Bloomberg survey before the Energy Department releases data tomorrow.
“Any healthy demand for oil will have to come from Asia or the Middle East,” said Michael Poulsen, an analyst at Global Risk Management in Middelfart, Denmark. “Hopes for a Chinese money bazooka have increased.” Read more
MAY WHEAT Resist: 700 1/4-705, 710 1/2* ST Trend: Down
(699) Supprt: 677 1/2, 664-659, 648 Obj: 655- TRP: 710.50
Comment: Despite last week’s rebound, the market retains a bear trend alignment and signals for a selling
wave to 655. Near term trade may try to extend corrective consolidation around 700+, but only a close over
710 1/2* signals a reversing upturn. Stalled near term rallies at 700-710 1/2* imply a failing rebound and
pending flip back to selloffs. A close under 664 will highlight washouts to 655 and possibly 625-.
MAY CORN Resist: 640 1/2, 647, 669 1/2* ST Trend: Down
(629) Supprt: 620, 590 Obj: 603- TRP: 695.50
Comment: The dramatic washout selloffs have opened up the formation to potential declines around 620-
590, matched with the starting levels of the last major bull advance from mid 2012. Friday’s tight congestion
leaves trade positioned for selloffs today. Corrective recovery trade contained within last Wednesday’s
range under 647 keeps aggressive bear trend forces intact. Read more
Energy futures continued its tumble today as buyers refused to see much value at current levels in light of the poor government payroll report that fell far-short of expectations. Buyers attempted to bid up RBOB, WTI, and Brent early in the session, but the disappointing employment data assured that no such pre-weekend profit taking would be had in the energy complex. Loss leaders on the day continue to be the ICE/Europe-based energy contracts (Brent and gasoil) for obvious reasons but RBOB and heating oil were right there with similar percentage losses. WTI again tried to maintain its level around $93 as crack spreads continue to breakdown with more and more demand coming from mid-continent/Canadian crude (aka crude that is benchmarked to WTI/Cushing based oil). Overall, energy is still in correction mode as values continue to reflect a weakening global economy even if we are not seeing the same type of “risk-off” price action in equities. This concerns me because at some point, we will see the stock market correct… but will energy follow it considering it is has already been putting in the leg work over the past few weeks? Read more
Crops will tumble 11 percent, the most since 1993, to 23.2 million metric tons in the year beginning Aug. 1, data from the International Cotton Advisory Committee show. Farmers will reduce sowing to 31.58 million hectares (78 million acres), a 7.7 percent decline and the largest in 11 years, according to Washington-based ICAC, which represents 41 governments. By July 2014, stockpiles will shrink 4.9 percent to 15.9 million tons, the first reduction in four years, the group’s data show.
Prices that slumped 62 percent from a record in 2011, prompting farmers to switch to soybeans and corn, are poised to rally 15 percent to 95 cents a pound by the end of 2013, according to the median of 16 estimates from analysts and traders compiled by Bloomberg. China is buying higher-grade American and Australian fiber for textile makers at cheaper prices than domestic supplies and sitting on lower-quality local stockpiles to subsidize farmers. Read more