| Pressure mounts for new controls on oil futures speculators
Sean Cota runs a family-owned fuel oil business in Bellows Falls, Vt., and has been active in the futures markets for 20 years, locking in prices to protect both himself and his customers. But over the past five years, he has watched in amazement -- and growing anger -- as speculators flooded into the market. It has created tremendous volatility and, he believes, driven up prices for crude oil, heating oil and a host of other commodities. As prices hover near record levels this year, his customers are bearing the brunt -- turning down their thermostats, taking longer to pay their bills and even using credit cards to pay for home heating. "All of these things are having a huge impact on people for something that is just not justified by supply and demand," Cota said.
Major grain merchandiser does away with HTAs
DTN Markets Blogger Pat Hill reports Thursday that the Andersons will no longer write hedge-to-arrive contracts for grain for delivery after August of 2008.
Hedge-to-arrive contracts are forward contracts that don't set the basis until a later date. When basis is wide, that's often a good deal for ag producers. But given the increasingly speculative nature of futures markets, it's become harder and harder for grain merchandisers to hedge that basis risk.
According to the DTN story, there aren't any other major grain firms that have sworn off on hedge-to-arrive contracts yet. But some have reportedly increased fees for those contracts.
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Australian share market falls on US recession fears
At the close, the benchmark S&P/ASX200 index was down 62.5 points at 6290.7, while the All Ordinaries lost 61.5 points to 6372.6. At 4.15pm (AEDT) on the Sydney Futures Exchange, the March share price index contract was 20 points lower at 6312, on a volume of 18,706 contracts. Macquarie Equities client advisor David Halliday said the local bourse was starting to factor in the possibility of a recession in the US. "The higher oil price and economic data is certainly making more people think about the prospect of a recession in the US, and if that is the case, it is bad news for equity markets around the world,'' Mr Halliday said. "Our market started to factor in the prospect of a recession a little bit more today and that's why we've seen the big falls.'' On Wall Street overnight, the Dow Jones industrial average fell 220.86 points to close at 13,043.96.
Gold hits new high over $900
Gold hit a record high above $900 an ounce this morning as turmoil in financial markets and expectations of aggressive US rate cuts helped raise the metal's appeal. Comex gold futures touched $908.90 an ounce, surpassing Friday's record high of $900.10. The most active February contract was later quoted at $907.0, up $9.3 an ounce. Platinum hit a lifetime high, while silver touched a 27-year peak, buoyed by gold's rise. Spot gold hit an all-time high of $906.70 an ounce, higher than $895.70/896.50 in New York on Friday. Fears of further subprime mortgage-related write-downs in the US financial sector and inflation fears driven by record-high crude oil also attracted buying from investors and speculators. .
Dow up 90 despite inflation, growth worries
Stocks climbed out of a hole Wednesday, closing higher despite conflicting worries about inflation and economic growth.
Advances by technology stocks, led by an 8 percent rally in the shares of Hewlett-Packard, and energy stocks, reflected in a nearly 2 percent gain by Chevron, helped lead the market higher.
In futures trading, crude oil continued its assault on triple-digit barrel prices. Oil for March delivery rose 73 cents a barrel, to $100.74, its second straight record-high close, after trading as high as $101.32 during the session.
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