Natural Gas Draws Yawns: Market Bits


NEW YORK (TheStreet) -- Natural gas futures ended flat, surrendering a bounce early in the session.

The May contract settled unchanged at $4.211 per million British thermal units. Earlier, it was rising 0.5% to $4.234, although that move came on low volume.

On Thursday "traders were caught short the market when those supportive numbers came out," Altavest Worldwide Trading analyst Jeff Pritchard said of the Energy Information Administration's report that inventory built up less than expected on a weekly basis. "Short covering probably took place, which pushed the market up momentarily, but didn't change the outlook fundamentals of the market in the long term. This would explain the lack of follow through ..."

Pritchard noted evidence that a technical consolidation pattern is developing, and said he'll be watching for the next catalyst that will drive prices higher.

A Gelber & Associates report said natural gas got some price support earlier from near-term cool weather in the North and heat anticipated for early next week in the South. "Overall, the seasonal weather looks bearish to close out April, but few if any are taking short positions into the weekend."

Natural gas plays were trading in mixed territory. Chesapeake Energy ( CHK) was unchanged at $32.67; Westport Innovations ( WPRT) was falling 0.5% to $24.72; Fuel Systems Solutions ( FSYS) was adding 2.1% to $28.84; Devon Energy ( DVN) was flat at $87.76; Newfield Exploration ( NFX) was adding 1.6% to $71.31; Cheniere Energy ( CQP) was losing 1.1% to $18.32; and Kinder Morgan Energy Partners LP ( KMP) was unchanged at $75.12.

(Published at 2:45 pm)

The yuan rose 0.06% at 6.5198 per dollar on high inflation numbers and expectations of further Chinese policy tightening.

"Beijing's data release last night showed that tightening there has yet to pull in the reins," said Andrew Barber, strategist at investment advisory firm Waverly Advisors.

"We hold a somewhat contrarian view on Chinese policy, and continue to anticipate that there will be more tightening moves over the coming months."

Barber said he expects the People's Bank of China, the country's central bank, to continue to prefer credit tightening as a means to curb excess capacity and property development. Further rate increases and the less likely prospect of currency appreciation in the intermediate term are still on the table, he added.

China's first quarter gross domestic product (GDP) number came in at 9.7%, above consensus forecasts of 9.4%. The country's consumer price index came in at 5.4% year-over-year in March while the producer price index turned out to be 7.3% -- both were above average forecasts.

The important food component of the consumer price index hit 11.7% year-over-year, its highest level since 2008, while both industrial output and retail sales blew past the consensus at 14.8% and 17.4% year-over-year, respectively.

PowerShares DB US Dollar Index Bullish ( UUP) was up 0.1% to $21.45, Market Vectors Chinese Renminbi/USD ETN ( CNY) was slipping 0.1% to $40.24 and the WisdomTree Dreyfus Chinese Yuan Fund ( CYB) was flat at $25.47.

U.S. Treasuries were gaining Friday on subdued inflation data.

The two-year note rose 4/32, pressuring the yield down to 0.705%; the ten-year note advanced 19/32, shaving the yield down to 3.425%; and the 30-year bond increased 31/32, lowering the yield to 4.489%.

The U.S. consumer price index rose 0.5% in March, meeting consensus expectations, and basically matching last month's growth rate. The core rate, which excludes food and energy costs, rose 0.1%, in line with forecasts and narrower than the 0.2% from February.

"Treasuries continue to trade well, despite the modest bid in domestic equities and reflecting the benign inflation reads of the day," said CRT Capital senior government bond strategist Ian Lyngen.

The iShares Barclays 1-3 Year Treasury Bond Fund ( SHY) was up 0.1% to $83.91, iShares Barclays 7-10 Year Treasury Bond Fund ( IEF) was up 0.6% to $93.28 and iShares Barclays 20+ Year Treasury Bond Fund ( TLT) was rising 1% to $92.31.

iShares Barclays TIPS (Treasury Inflation Protected Securities) Bond Fund ( TIP) was adding 0.6% to $110.19.


(Published at 1:10 pm)

The May contract for corn was falling with the strength of the dollar, but fundamentals are pointing to more upside for corn.

Corn for May delivery was falling 0.9% to $7.47 ¼ a bushel.

Altavest Worldwide Trading's Jeff Pritchard said dollar firmness "isn't bringing much strength to the grains overall today."

Pritchard is bullish on the corn market, predicting that prices could reach $9 by July. "Ending stocks are very tight and weather could become an issue as farmers look to plant the new crop in the months ahead."

The December contract for the new corn crop was showing the most strength Friday due to weather concerns for plantings about to take place, according to Pritchard. He notes that corn's more than $1 jump so far this month is considered "large" for a short time frame, and has left a big technical gap in the chart. "The question is whether or not the corn market decides to fill this gap before continuing it's advance to the $9 level," the analyst said.

December corn was popping 0.2% to $6.56 ½ a bushel.

Food companies were advancing. General Mills ( GIS) was rising 0.6% to $37.27, Yum! Brands ( YUM) was adding 0.4% to $50.89 and McDonald's ( MCD) was adding 0.4% to $77.38.

Corn refiner Corn Products International ( CPO) was rising 1.2% to $52.01 and grains transporter Archer Daniels Midland ( ADM) was falling 0.3% to $34.95.

Crop nutrient companies Agrium ( AGU) and Mosaic ( MOS) were up 0.6% to $88.74 and down 1.8% to $74.14, respectively.


(Published at 12:35 pm)

Cocoa futures were leading commodities Friday on a combination of short-covering and concerns over existing supply.

Cocoa for July delivery was rising 0.2% to $3,133 a metric ton, up for the fifth day in a row.

The views on cocoa supply have been mixed.

The European Union lifted sanction on the Ivory Coast's main ports after former leader Laurent Gbagbo was captured on Mondayu. Gbagbo had refused to relinquish power, but was captured by forces siding with new president Alassane Ouattara. The new president also lifted the three-month ban on cocoa and coffee exports.

"This sets the stage for the export of hundreds of thousands of tonnes of cocoa held hostage during the political crisis," said PFG Best analyst Robin Rosenberg.

Rosenberg said for now, cocoa's momentum can be explained by traders who are short to the maximum and providing support as they cover.

Jeff Pritchard, analyst with Altavest of Worldwide Trading, notes that "there's also a concern that the cocoa that has pent up due to the export ban may go to waste due to rotting."

Cocoa futures have risen to 4.5% over the last five days, touching a five-day high of 3,160 on Friday.

iPath Dow Jones-UBS Cocoa Subindex Total Return ETN ( NIB) was falling 0.2% to $44.42, Hershey ( HSY) was rising 0.7% to $57.11, Kraft ( KFT) was advancing 0.9% to $33.23, Nestle ( NSRGY) was adding 1.5% to $60.72, Unilever ( UL) was advancing 1.1% to $32.12, Rocky Mountain Chocolate Factory ( RMCF) was 1.4% higher to $10.54 and Kellogg ( K) was up 0.3% to $55.44.

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-- Written by Andrea Tse in New York.

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