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Copper Futures Surge on Stronger-than-Expected Construction and Housing Data

Strategic Insights

— 1 min read

Stronger-than-expected construction and housing data boosted copper futures, with the Comex July copper settling at $2.1440 a pound on the New York Mercantile Exchange. Analysts point to a "better feeling about the economy" developing, with the release of positive construction and pending home sales data. The National Association of Realtors' index for pending sales of previously owned homes rose 3.2% to 84.6 in March, beating analysts' expectations.

Key Takeaways:

  • Copper futures surged 4.3 cents to settle at $2.1440 a pound on the Comex division of the New York Mercantile Exchange.
  • U.S. construction spending rose 0.3% to a seasonally adjusted annual rate of $969.7 billion during March, exceeding analysts' expectations of a 1.3% decline.
  • The National Association of Realtors' index for pending sales of previously owned homes rose 3.2% to 84.6 in March, outpacing analysts' projections of a 1% increase.
  • Sterling Smith, vice president with FuturesOne, notes a "generally better feeling about the economy" developing, partly driven by stronger-than-expected housing numbers.
  • Ralph Preston, senior market analyst with Heritage West Financial, attributes copper's support to better-than-expected housing numbers.
  • Fresh buying and short covering pared the funds' net short position in Comex copper futures and options, with large non-commercial accounts adding 1,427 long lots and cutting 173 short lots.
  • The funds' net short position in Comex copper futures and options decreased to 18,108 lots, down from the prior week's 19,708.

Statistics:

  • Comex July copper settled at $2.1440 a pound.
  • U.S. construction spending grew 0.3% to $969.7 billion in March (seasonally adjusted annual rate).
  • The National Association of Realtors' index for pending sales of previously owned homes rose 3.2% to 84.6 in March.
  • Analysts projected pending sales to grow 1% in March, but the actual increase was 3.2%.
  • Large non-commercial accounts added 1,427 long lots and cut 173 short lots in the week through Tuesday, Friday afternoon CFTC data show.
  • The funds' net short position in Comex copper futures and options decreased to 18,108 lots, down from the prior week's 19,708.

Sources:

  • Dow Jones Commodities News via Comtex (May 04, 2009)
  • Matt Whittaker, Dow Jones Newswires; 201-938-5959; matt.whittaker@dowjones.com (May 04, 2009)
  • Copyright (c) 2009 Dow Jones & Company, Inc.

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