Bull market…

by Jim Colburn • Friday, June 30, 2017

in Spring wheat… (My first job in commodities was a a grains analyst for the World Agricultural Outlook Board, at the USDA, and still interested)…

Here is Bloomberg:

“The wheat varieties that trade on U.S. commodity exchanges are diverging sharply in price. Spring wheat is fetching a growing premium to the winter classes grown in the Great Plains and Midwest, with the spread against hard red winter wheat futures reaching a nine-year high. That’s because the spring crop, which still has several weeks left to develop, is in poor shape as drought conditions persist in northern states.”

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Presentations from the EIA’s annual energy conference are online…

by Jim Colburn • Friday, June 30, 2017

Some day I’ll make to this:

https://www.eia.gov/todayinenergy/detail.php?id=31872#

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Analysts get it wrong… Bloomberg

by Jim Colburn • Friday, June 30, 2017

Is this news? (We’ve all been here)… The Bloomberg article picks on Goldman, but, of course, there are many:

“Across the globe, traders have been wrong-footed by the commodities rout this year. They’ve watched as oil prices have slipped despite production cuts by the Organization of Petroleum Exporting Countries. They’ve seen copper prices drop as scrap dealers de-stocked heavily to take advantage of higher prices. They’ve witnessed policy changes in the Philippines that caused a sell-off in nickel.”

It’s not an easy chore, forecasting prices in volatile assets…

 

 

 

 

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US exports of crude oil and petroleum products…EIA

by Jim Colburn • Tuesday, June 27, 2017

They have doubled since 2010… From the EIA’s Today in Energy:

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Investors Still Own Worst Enemy… DALBAR

by Jim Colburn • Tuesday, June 27, 2017

The Big Picture posted the graph below taken from Index Fund Investors which in turn cites DALBAR…

And here are annual returns averaged over 30 years:

 

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Hedge funds cut bullish bets on oil… Kemp, Reuters

by Jim Colburn • Monday, June 26, 2017

John Kemp, Reuters, updates hedge fund net positions in week ending June 20th:

Here is the Kemp article:  http://www.reuters.com/article/oil-hedgefunds-kemp-idUSL8N1JN2MG

 

 

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West Texas Drillers squeezed… Houston Chronicle

by Jim Colburn • Monday, June 26, 2017

Lower oil prices and rising costs are squeezing West Texas drillers  reports the Houston Chronicle:

“The average oil well in the prolific region now breaks even at about $43 a barrel – the price at which U.S. oil settled on Friday – up from about $39 a barrel at earlier this year, according to energy research firm Wood Mackenzie.”

Here is the link: http://www.chron.com/business/energy/article/Lower-oil-prices-and-rising-costs-squeeze-West-11245048.php

 

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Plastics…WSJ

by Jim Colburn • Monday, June 26, 2017

The shale revolution is leading to a boom in the production of plastics… Here is the WSJ:

“That boom in drilling has expanded the output of oil and gas in the U.S. more than 57% in the past decade, lowering prices for the primary ingredients Dow Chemical Co. DOW -0.56% uses to make tiny plastic pellets.”

“The scale of the sector’s investment is staggering: $185 billion in new U.S. petrochemical projects are in construction or planning, according to the American Chemistry Council. Last year, expenditures on chemical plants alone accounted for half of all capital investment in U.S. manufacturing, up from less than 20% in 2009, according to the Census Bureau.”

“By the end of the decade, energy consultancy PCI Wood Mackenzie estimates the U.S. chemical industry will have increased its capacity to make ethylene by 50%.

The world consumed more than 147 million metric tons in 2016 of ethylene and will need more than 186 million tons by 2023 to meet global demand, according to the consultancy. It said U.S. exports of polyethylene, the plastic pellets, are expected to reach $10.5 billion by 2020.”

 

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Miles traveled update… dshort.com/Advisor Perspectives

by Jim Colburn • Saturday, June 24, 2017

Advisor Perspectives updates data from the Department of Transportation to show total vehicle miles traveled and as a population adjusted series… Together they support the narrative that we are driving more (more people working, more people, low gasoline prices, etc.) and we are driving less (more nesting behavior, aging population)… The data released in June is as of April:

 

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Libya and DUCs… Bloomberg

by Jim Colburn • Tuesday, June 20, 2017

Reasons for weakness in crude from Bloomberg:

“Another factor feeding trader angst is a rise in the number of drilled-but-uncompleted wells in the nation’s oilfields. At the end of May, there were 5,946 wells in this category, the most in at least three years, according to estimates by the EIA. In the last month alone, explorers drilled 125 more wells in the Permian Basin than they would open.”

 

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