Copper traders extend bearish streak as prices drop

Global Expansion

The global economy will expand 3.5 percent this year and 4.1 percent next year, the International Monetary Fund estimates. Chinese Premier Wen Jiabao said over the weekend that the nation will focus more on spurring growth. Germany, Europe’s largest economy, will consider all ideas on bolstering the euro area, Finance Minister Wolfgang Schaeuble said May 21.

Potential production losses may help sustain a supply shortage. BHP Billiton Ltd. and Rio Tinto Group, the world’s biggest and third-biggest mining companies by sales, said this month they’ll ration capital spending because of costs. Codelco, the largest copper producer, produced 10 percent less metal in the first quarter as ore-grades decreased.

Manufacturing Falls

A gauge of euro-area manufacturing decreased to 45 in May from 45.9 in April, the lowest in 35 months, London-based Markit Economics said yesterday. A 48.7 preliminary reading for a purchasing managers’ index in China released by HSBC Holdings Plc and Markit yesterday compares with 49.3 for April. If confirmed on June 1, it would mark the longest run of below-50 readings since the global recession.

Thirteen of 26 traders and analysts surveyed by Bloomberg said gold would advance next week and three were neutral. Futures on the Comex exchange in New York rose 0.8 percent to $1,554.10 an ounce since the start of January after climbing the previous 11 years.

Six of 11 people surveyed expect raw-sugar prices to decline next week and two were neutral. It lipped 15 percent to 19.7 cents a pound on ICE Futures U.S. in New York this year.

Thirteen of 23 people surveyed anticipate higher corn prices next week, while 11 of 25 said soybeans will advance and six predicted little change. Corn dropped 9.4 percent to $5.855 a bushel this year as soybeans advanced 14 percent to $13.7925 a bushel in Chicago trading.

“All the problems in Europe are starting to have an effect on the real economy,” said Dan Smith, a commodities analyst at Standard Chartered in London. “Countries like China will start to re-accelerate as the government pumps more money into the system. We’re quite optimistic things will turn up in the second half of the year.”

*T Gold survey results: Bullish: 13 Bearish: 10 Hold: 3
Copper survey results: Bullish: 6 Bearish: 9 Hold: 3
Corn survey results: Bullish: 13 Bearish: 6 Hold: 4
Soybean survey results: Bullish: 11 Bearish: 8 Hold: 6
Raw sugar survey results: Bullish: 3 Bearish: 6 Hold: 2
White sugar survey results: Bullish: 3 Bearish: 5 Hold: 3
White sugar premium results: Widen: 2 Narrow: 4 Neutral: 5

Bloomberg News

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