Nat Gas, Oil Fall Before Storm Report: Market Bits


NEW YORK (TheStreet) -- May natural gas futures were falling 0.6% to $4.263 per million British thermal units, down for the third straight day, as traders braced for Wednesday's hurricane report.

Tuesday's decline also precedes the U.S. Energy Information Administration's weekly inventory report on Thursday.

"Warming weather is contributing to a truce for now, but tomorrow's hurricane report from Dr. William Gray at CSU (Colorado State University) and the EIA's expected large withdrawal should disturb the peace," a Gelber & Associates report said.

Storms and hurricanes can be burdensome on oil and natural gas operations, many of which are concentrated in the Gulf of Mexico and Gulf Coast regions.

Gelber & Associates is neutral on natural gas Tuesday.

Natural gas stocks were mostly trading in negative territory.

Shares of Westport Innovations ( WPRT) were flat at $25.87, Clean Energy Fuels ( CLNE) was down 0.9% to $17.25, Fuel Systems Solutions ( FSYS) was falling 1.7% to $29.34 and Devon Energy ( DVN) was losing 0.9% to $91.17.

Light sweet crude oil for May delivery was also down ahead of the report, falling 0.5% to $107.93 a barrel.

Newfield Exploration ( NFX) was rising 1.5% to $76.34 and Cheniere Energy ( CQP) was falling 0.5% to $19.06. Kinder Morgan Energy Partners LP ( KMP) was 0.4% lower to $74.07.


(Published at 11:10 am)

Treasuries were falling after the Institute for Supply Management reported that its U.S. non-manufacturing index fell to 57.3 in March -- still comfortably above a reading of 50. The index hit 59.7 in February.

A reading above 50 reflects growth in the sector.

The two-year note was falling 2/32, pushing the yield up to 0.79%; the 10-year note was down 3/32, raising the yield to 3.436%; and the 30-year bond was falling 0/32, pushing the yield up to 4.481%.

The iShares Barclays 1-3 Year Treasury Bond Fund ( SHY ) was flat at $83.74, iShares Barclays 7-10 Year Treasury Bond Fund ( IEF) was down 0.2% to $92.95 and iShares Barclays 20+ Year Treasury Bond Fund ( TLT) was down 0.1% to $92.16.

iShares Barclays TIPS (Treasury Inflation Protected Securities) Bond Fund ( TIP) was flat at $109.27.


May cocoa futures were falling as traders braced for a possible resolution of the political strife taking place in the world's largest cocoa producing country and a return to normal cocoa export levels.

May cocoa futures were falling 1.8% to $2,967 a metric ton, pointing to the end of a two-day winning streak.

On Monday, the battle over main Ivory Coast city Abidjan persisted for the fifth straight day, with fighters favoring President-elect Alassane Ouattara gaining control. The Ivory Coast has been embroiled in political turmoil. The conflict involves Laurent Gbagbo, a 10-year incumbent who refuses to step down, and Ouattara, who declared victory during the country's 2010 presidential elections and wants Gbagbo to formally resign.

By Tuesday, reports said United Nations forces backing Ouattara had damaged Gbagbo's home and that the incumbent was negotiating his surrender.


Copper for May delivery was rising 0.2% to $4.26 a pound amid a two-day holiday in China and a week-long CESCO (The Center for Copper and Mining Studies)/CRU mining conference in Chile.

Man Financial analyst Ed Meir said initial reports from the conference have been quite upbeat, with most speakers pointing to tight supply and healthy demand to support their "relatively rosy outlook" for prices.

"We would agree, but are nonetheless quite wary about short-term prospects, particularly going into Q2," said Meir. "In this respect, we think markets have not adequately discounted what could be a soft patch in terms of demand likely caused by a ratcheting higher of interest rates and typified by rising inventories."

ANZ Global Markets Commodity Research Analyst Natalie Robertson said top copper producer Codelco warned that copper stocks in China were "abnormally high and that non-mining companies were using copper as collateral for loans -- a significant risk to the downside."


Corn was weaker Tuesday morning amid technical profit-taking.

May corn was falling 0.6% to $7.55 ¾ a bushel, while soybeans for May delivery were falling 0.7% to $13.74 ½ a bushel.

MaxYield Cooperative analyst Karl Setzer said the markets are trying to assess quarterly grain stocks data to determine carryout for both old crop and new crop.

MaxYield thinks the markets could see old corn crop carryout stock dip to 560 million bushels (bu) and new crop total no more than 760 million bu in May. Soybean ending stocks are expected to hold at 150 million bu on old crop, but decline to 105 million bu on new crop, according to MaxYield.

"It is quite likely however, that with the high prices these reserves will instigate, we will also see at least some rationing of current demand," Seltzer said.


"Worsening U.S. crop weather is providing internal support to the wheat market," according to by Commonwealth Bank of Australia.

Wheat for May delivery was flat at $7.90 ¾ a bushel.


The U.S. dollar was rising 0.4% against the euro at EUR 0.70594 and up 0.7% against the Japanese currency at 84.603 yen on speculation of U.S. monetary tightening.

"The dollar strengthened after Fed Chairman Bernanke said that further commodity price rises could boost U.S. inflation, and that the Fed would have to respond if higher inflation was sustained," UBS foreign exchange strategist Gareth Berry said.

However, the dollar was falling 0.6% against the British pound sterling at 0.61590 as the UK Purchasing Managers Index registered favorable data.

PowerShares DB US Dollar Index Bullish ( UUP) was flat at $21.79 and CurrencyShares British Pound Sterling Trust ( GBP) was rising 0.8% to $161.55.


The Brazilian real (BRL) was rising 0.3% against the dollar at $0.6191 as Standard Chartered Global Research raised its short and medium term ratings on the currency to overweight from underweight.

"Policy makers' threshold for currency strength has increased following consolidation in Q1 (first quarter)...This suggests a lower USD-BRL range in Q2 (second quarter)," the report said.

BRL 1.58 is the currency team's new end-quarter target for the U.S. dollar-Brazilian real pairing. WisdomTree Dreyfus ETF BZ Real Fund ( BZF) was trading sideways at $28.07.

(Published at 9:54 am)

Treasuries were rising again, extending gains from Friday's strong employment report.

The two-year note was rising 0/32, pushing the yield down to 0.766%, the ten-year note was up 6/32, lowering the yield to 3.401% and the 30-year bond was rising 14/32, pushing the yield down to 4.455%.

"Bernanke's comments helped to lift Treasuries up from early losses in Asian-time and have taken the active issues back to unchanged levels as Tuesday's New York session gets underway," said Martin Mitchell, head of government trading at Stifel Nicolaus.


Moody's has slashed Portugal's sovereign debt rating by one notch to Baa1 on concerns that the country will need short-term aid ahead of a June 5 election.

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