Adjustments Announced for Rogers International Commodity Index (RICI)

In a press released Wednesday, November 7, Jim Rogers and Beeland Interests, Inc. announced it was making a couple of adjustments to the Rogers International Commodity Index (RICI).

The press released said this:

The RICI Committee has decided to replace ICE Coffee (2.0% Index Weight) with NYSE Liffe Coffee. In addition, ICE Cocoa (1.0% Index Weight) will be replaced by NYSE Liffe Cocoa. The addition of NYSE Liffe Cocoa, traded in GBP, will add that currency to the Index. These changes will be implemented during the January 2013 roll period, occurring at the end of January 2013.

According to the press release, RICI, which was created in 1997-1998, has jumped by 266 percent since in inception of the Index, and as of the end of October 2012.

Rogers is one of the foremost and most well-known commodity investors in the world.

Archer Daniels Midland (NYSE:ADM) Closing Mansfield Plant, Expanding Chocolate Plant

Archer Daniels Midland (NYSE:ADM) is closing their operation in Mansfield, Massachusetts in the fall, but will be expanding operations at their chocolate plant in Hazleton.

Approximately 83 jobs will be coming to the chocolate plant, some of them possibly transferring from the Mansfield facility.

At this tim eabout 200 workers are at the Humboldt Industrial Park plant, which ADM has expanded in the past, transferring 53 workers from its cocoa-processing plant in Glassboro, New Jersey.

Cocoa Drops While Coffee Rises

Cocoa and Coffee prices

Cocoa and coffee prices moved in opposite directions as events outside demand drove cocoa prices down and coffee prices up to end the week.

Most of the commodity price movement was in relationship to the strengthening of the U.S. dollar against the euro, which seems to motivated some commodity investors to hold back on commodities in the latter part of the week.

Cocoa future prices for may dropped a little, while coffee prices moved in the opposite direction, for the first weekly gain in about a month.

Cocoa prices are expected to resume their upward climb based on demand in the near future.

Cocoa and coffee prices

Cocoa Demand Exceeding Supply 2010

Cocoa demand and supply 2010

As the year goes on, it seems cocoa demand will not be able to be met by supply, and prices have started to respond to those circumstances, with cocoa prices increasing the most in eight weeks.

At this time, it seems the markets have taken the challenge into account in its current price, and should support it through the year.

On ICE Futures U.S., May delivery for cocoa surged $76 to $3,116 a metric ton, a 2.5 percent lift.

Over the last 12 months cocoa has increased in price by 16 percent.

Cocoa demand and supply 2010

Barry Callebaut (SWF:BARN): 15,000 Ton Cocoa Bean Loss

Cocoa Bean Fire Destroys 15,000 Tons of Beans

A fire in the Ivory Coast city of Abidjan resulted in close to 15,000 tons of cocoa beans being destroyed, which were stored in a warehouse owned by Swiss chocolate production company Barry Callebaut (SWF:BARN).

The warehouse was owned by a local subsidiary of Barry Callebaut.

An unnamed official from the company said that there was always between 10,000 to 15,000 tons of beans and/or cocoa products stored in the warehouse.

For the 2008, 2009 cocoa season, the country exported close to 300,000 tons of semi-finished products and have been working hard at increasing its grinding capacity to significantly increase that amount.

The Ivory Coast is the leading producer of cocoa in the world.

Cocoa Bean Fire Destroys 15,000 Tons of Beans

Cocoa Prices Up While Most Other Commodity Prices Fall

A lot of commodity prices fell based on surplus stockpiles, along with some commodity investors taking profits after price runups like with copper recently. Even so, copper has also increased its stockpiles, which would have put downward pressure on copper prices either way. Taking profits was done because of the stockpiles which commodity investors knew would drive copper prices down.

Oil and natural gas have also experienced larger stockpiles, driving prices down there as well. Even with the cold weather it's thought natural gas prices will still remain down.

Commodity metals used in the industrial process are especially subject to price movements based on stockpiles or supply, and so will almost always move down in price based upon that.

Grain prices were also down, with wheat futures prices plunging to a one month low in Chicago, as global wheat supplies remain robust. The front-month contract for Chicago wheat has dropped 9 percent in December so far.

Cocoa was about the only commodity market which bucked the dropping commodity price trend, as it increased by 21 pounds to 2,266 pounds a ton, after exploding to a 25-year high of 2,269 pounds a ton.

The U.S. dollar dropped again as expected, as its three-day run in positive territory abruptly ended, with nothing there to sustain any type of real rally for the greenback.

Commodities: Cocoa Holding Up Well

While commodities continue to get battered, cocoa is performing stongly for the group, actually growing by 15 percent for the year, standing at about $2,372 a metric ton.

So far chocolate sales this year have been decent, but like everything else, much depends on the economy as to whether that will continue.

A major concern in this area is dark chocolate, which uses more cocoa than its milk chocolate cousin.

The good news is cocoa-related chocolate is a comfort food, and historically during times like these - along with coffee - have grown in usage.

There's always a bright side for specific commodities, as demand for some over others will always be part of human desire.

Commodity Surge Here Again

It looks like the commodity market is done taking a breather, and it's on the way again, as not only agricultural products went up in significant amounts, but a number of metals increased along with them.

After the hit commodities took last week, the usual number of the uninformed called the end to the sector: how wrong they were!

Of course this doesn't mean we're going to on huge surges all the time, but I do think overall, we'll see a steady climb in the overall sector, with the occasional dip. Of course it all depends on the individual commodity and its performance, but overall this trend should continue on for some time.

Both corn and soybeans gained the allowable amount on the Chicago Board of Trade. Others like cocoa also had significant increases, with cocoa growing by 6 percent and coffee by 3 percent in New York.

Upheavals in Argentina, with farmers striking ports, caused concerns on what would get out of the country, as well as wet weather conditions in the eastern part of the midwest have slowed down planting dates for corn. It finished at $5.44-3/4 a bushel for the May contract today.

Soybeans also hit their limit for the second straight day, as it reached $13.07 a bushel for May SK8, when hitting its 50-cent limit. Most other contract months on the CBOT hit their limits as well.

Wheat responded to the agriculture rally, as its May WK8 contract closed at $10.67-1/2 a bushel, an increase of 47-1/2 cents.

The rally in corn and soybeans also lifted CBOT wheat for May WK8, which closed up 47-1/2 cents at $10.67-1/2 per bushel.

Light crude in the U.S. increased to $101.22 a barrel, moving up 36 cents. Its cousin across the pond, London Brent Crude surged by 74 cents, to reach 100.60 a barrel.

Others that enjoyed surges were gold, copper and U.S. crude oil.