U.S. Natural-Gas Output Rises to Highest Since January 2005

“Rising production is going to add pressure on gas prices,” said James Williams, an economist at WTRG Economics, an energy research firm in London, Arkansas. “Production will probably remain at a high level with the rig count staying around 900.”

U.S. natural gas production in the lower 48 states increased 0.1 percent in June to the highest level since at least 2005, the Energy Department said.

Production rose to 69.47 billion cubic feet a day from a revised 69.39 billion in May, the department’s Energy Information Administration said today in a monthly report known as EIA-914. That’s the highest level since department began collecting monthly lower-48 data in January 2005.

The number of U.S. gas drilling rigs dropped 2 last week to 898, according to Houston-based Baker Hughes Inc.

Natural gas for October delivery gained 7.9 cents, or 2.1 percent, to $3.909 per million British thermal units on the New York Mercantile Exchange. Prices have dropped 11 percent this year.

via U.S. Natural-Gas Output Rises to Highest Since January 2005, DOE Reports – Bloomberg.

Commodities Rebound, as Gold Climbs to a Record in New York, Nickel Gains

Commodities rebounded as silver, copper and gasoline gained on speculation that growth in developing countries will be strong enough to boost raw materials demand. Gold advanced to a record as stocks fell.

The Standard & Poor’s GSCI Index of 24 commodities rose as much as 1.5 percent, after plunging 3.3 percent yesterday. Silver futures were up 2.9 percent at 10:46 a.m. in New York, sugar rose 3.2 percent, and gasoline gained 1.7 percent. Copper advanced for the third time this week, and gold rallied as much as 3.3 percent to $1,881.40 an ounce, the highest ever.

via Commodities Rebound, as Gold Climbs to a Record in New York, Nickel Gains – Bloomberg.

U.S. Springs Wheat Data

The U.S. Department of Agriculture quietly released estimates it usually keeps under wraps, shedding more light on how much this year’s flooding disrupted wheat plantings and roiling grain markets.

That sent prices of the type of wheat in question, hard red spring wheat, soaring. Futures have surged more than 6% percent this week to end Wednesday at $9.1675 a bushel, a two-month high. It’s referred to as “spring” wheat because what’s when it’s planted.

Traders caught on to the new data set, posted on the USDA’s web site, earlier this week and latched on to figures indicating that the size of the nation’s prized fall wheat crop could be smaller than expected.

Read the rest of U.S. Springs Wheat Data » » »

Steel Price Vastly Undervalued

The latest ‘This Week in Steel” report published by Steel Reality noted in the price model page that spot market prices of Hot Rolled Steel have now fallen to the lowest level in over two years.

Spot prices were estimated to be at $638/ton for this model making hot rolled steel nearly $75 less than fair market value. Other products such as plate and rebar have held up much better than flat rolled steel, due to the current overcapacity of flat rolled production.

Compared to global prices of flat rolled steel, prices in the US have moved down to levels now associated with the opportunity of increased exports going forward. Imports continue to arrive at high levels in July and August, though going forward these arrivals will start to decline just as US mills look for other markets to absorb excess production.

via WSJ: Steel Price Vastly Undervalued.

Chinese Hunger for Corn Stretches Farm Belt

China’s struggle to meet the growing demands of its middle class is fueling a sudden surge in demand for corn, sending vast ripples across the U.S. farm belt and potentially upending the grain’s trade flows around the world.

Corn prices, which have nearly doubled over the past year, climbed another 1% Tuesday. The corn futures contract for December delivery at the Chicago Board of Trade rose 7.5 cents to settle at $7.275 a bushel.

via Chinese Hunger for Corn Stretches Farm Belt – WSJ.com.

Natural Gas Caps Third Weekly Drop as Hot Weather Moderates

Gas declined 4.9 percent this week as the National Weather Service said the weather will be cooler than normal from Aug. 10 to Aug. 14. Temperatures were above 100 degrees last month in cities such as New York and Chicago. Gas yesterday closed below $4 for the first time since March after a bigger-than-forecast stockpile increase.

“Natural gas is a weather play and we’ve lost the bullish weather,” said James Williams, an economist at WTRG Economics, an energy research firm in London, Arkansas. “I think gas will trade below the $4 level unless the weather gets really hot again.”

Natural gas for September delivery settled at $3.941 per million British thermal units on the New York Mercantile Exchange, unchanged from yesterday. Prices are down 11 percent this year.

via Natural Gas Caps Third Weekly Drop as Hot Weather Moderates – Businessweek.

Commodities Erase 2011 Gain on Faltering Recovery

Crude-oil futures fell to the lowest level in five months on the New York Mercantile Exchange. On the Comex in New York, silver for September delivery fell as much as 6.2 percent, and copper futures dropped to a one-month low.

Commodities slumped, erasing gains for the year, on growing concern that the global economic recovery is faltering.

The Thomson Reuters/Jefferies CRB Index of 19 raw materials slumped 2.4 percent to 329.31 as of 1 p.m. in New York, led by declines in silver, energy and nickel. A settlement at that level would leave the index down 1 percent for the year.

via Commodities Erase 2011 Gain on Faltering Recovery – Bloomberg.