Sanctions or not the world continues to devour black gold and Iran seems to be somewhat unaffected by our political will. Can anyone say airstrike coming soon ?

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“Corn rose to a record in Chicago on speculation the U.S. Department of Agriculture will cut its harvest estimates as the worst U.S. drought since 1956 scorches crops, driving global food costs higher.

U.S. corn output may slide to 10.929 billion bushels, 16 percent smaller than the government estimated in July, according to a Bloomberg News survey before the USDA releases predictions later today. Corn has surged 64 percent since mid-June, leading gains in soybeans and wheat, as drought conditions cover more than 60 percent of the lower 48 states. The past month’s jump in crop prices spurred the biggest increase in world food costs since November 2009, theUnited Nations said yesterday.”

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“Gold traders are the most bullish in five weeks as investors expanded their bullion holdings near a record on mounting speculation that central banks will have to do more to bolster economic growth.

Fifteen of 30 analysts surveyed by Bloomberg said they expect prices to rise next week and eight were bearish. A further seven were neutral, making the proportion of bulls the highest since July 6. Investors bought about $850 million of gold through exchange-traded products this month, taking the total of 2,411.7 metric tons yesterday to within 0.1 percent of the all-time high set July 5, data compiled by Bloomberg show.”

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“Oil fell the most in six days, paring its weekly gain, as a collapse in China’s export growth signaled the global economy is weakening and the International Energy Agency said demand expansion is slowing.

Futures fell as much as 1.5 percent in New York after the customs bureau in Beijing said today that China’s net oil imports shrank to the lowest level this year. The bureau also said outbound shipments of all goods increased 1 percent in July from a year earlier, compared with an 8 percent median estimate in a Bloomberg survey of analysts. The Paris-based IEA cut global oil demand forecasts for this year and next.

“Most of the drop in oil prices today come from macro figures in China,” Thina Saltvedt, an analyst at Nordea Bank AB, said by phone from Oslo. “It started with China and then the IEA. That just added to the gloomy picture.”

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Speculation that nations are stockpiling oil at the fastest rate in 14 years is fanning expectations for Brent crude to drop below $100 a barrel.

Read the article here.

Peter Brandt asks,

The metals are coiling ever so tightly. But, can a breakout of these coils be trusted?

Read his article here.

“(Reuters) – World oil demand growth could fall short of forecasts next year, exporter group OPEC said on Thursday, citing a vague and turbulent outlook for the global economy.

The Organization of the Petroleum Exporting Countries (OPEC) said it expected world oil demand to expand by 810,000 barrels per day (bpd) next year, unchanged from its previous forecast, although the odds suggested demand could undershoot.

“The downward risk potential has greater probability in the forecast than the upward risk one,” OPEC said in a monthly report. “Therefore, the gloomy picture could reduce the world oil demand growth forecast by 20 percent next year.”

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Read on….

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“RICHMOND, Calif. (AP) — Analysts say a fire at one of the country’s biggest oil refineries will contribute to higher prices at the pump on the West Coast.

The fire at the Chevron refinery in Richmond, about 10 miles northeast of San Francisco, broke out Monday evening.

It sent plumes of black smoke over the San Francisco Bay area and sent scores of people to hospitals with breathing problems before it was out the following morning.”

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NEW YORK (CNNMoney) — The drought that’s killing crops across the Midwest and sending corn prices to record highs has revived calls to end or ease the government’s requirement that corn-based ethanol be blended with gasoline.

Current rules stipulate that nearly 10% of the nation’s gasoline supply come from corn-based ethanol. To make that ethanol, up to 40% of the country’s annual corn production can be required.

Read here:

NEW YORK (CNNMoney) — Gas prices continued their slow but steady march higher Tuesday, surpassing a nationwide average of $3.63 cents a gallon on the back of refinery problems in the United States and higher crude oil prices globally.

Nationwide average gasoline prices are now 30 cents higher than they were just five weeks ago. They are now at the midway mark between this year’s high price of $3.94 a gallon — hit April 5 — and the recent low of $3.33 hit just over five weeks ago, according to AAA.

Read here:

WTI and Brent are on the rise this morning as inventories are expected to fall…

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“Gold could be one of the few assets to profit from the political and economic turbulence in the United States as the “fiscal cliff” approaches, potentially creating a rally in the precious metal later in 2012 for it to reach $1,900 per ounce by the end of the year, analysts at HSBC said.”

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A short term outlook on the yellow metal.

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Oil failed to rally overnight in London and is down on NY boards pre-market. It is said that recent gains were too ambitious…

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Jez Liberty: The yo-yo is definitely back! May, June, July have started a new “trend” of a seesawing equity curve for the index – with relatively strong moves. This July rebound means that the index is now back in the “fairly comfortable” positive territory, although it will be interesting to see what August has got in store – especially since the equity curve seems to show signs of turning back down at the end of last month.

Read the rest including detailed analysis of multiple trend-following systems, here.

Currently up 4.89%….

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(CNN) — More than half of all U.S. counties have been designated disaster zones, the Department of Agriculture reported, blaming excessive heat and a devastating drought that’s spread across the Corn Belt and contributed to rising food prices.

Agriculture Secretary Tom Vilsack on Wednesday declared disaster zone designations for an additional 218 counties in 12 states because of damage and losses caused by drought and excessive heat.

The states are Arkansas, Georgia, Iowa, Illinois, Indiana, Kansas, Mississippi, Nebraska, Oklahoma, South Dakota, Tennessee and Wyoming.

Read here:

“A crippling drought affecting much of the nation will send food prices rising by $75 per person this year compared to last, said Gregory Page, CEO of U.S. food giant Cargill.

The drought has well over half of the country in its grip and has decimated crop yields, corn especially.

Eventually, less corn will mean higher prices at the grocery store, as many foods are made from corn, which is also a key additive in feed for beef, pork and poultry producers.”

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Oil is higher this am as traders hope for QE 3.

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