Wednesday, March 30, 2011

20110330 0947 Global Commodities Related News.

Oil : Oil rises on technicals, Libya uncertainy, Mideast
NEW YORK, March 29 (Reuters) - Crude oil prices rose on Tuesday in technical, thin trading and lifted by stronger equities and lowered expectations about a quick return of Libya's oil exporting capabilities.
"The API report is somewhat bullish due to the gasoline data. We have seen large drawdowns over the past several weeks, and if the trend does not reverse, supplies could become very tight just in time for the height of the driving season," said John Kilduff, partner at Again Capital LLC in New York.
 
NATURAL GAS: April natgas expires on weak note, ends down 3 pct
NEW YORK, March 29 (Reuters) - U.S. natural gas futures ended down sharply on Tuesday, with the expiring April contract pressured by profit-taking despite cold Northeast and Midwest weather this week that boosted demand.
"Futures looked like they just petered out ahead of expiration. It had to be profit-taking or long liquidation," a Texas-based trader said.

EURO COAL: Prices fall 75c/T, few trades reported
LONDON, March 29 (Reuters) - Prompt European physical coal prices weakened by around 75 U.S. cents a tonne on Tuesday as few trades took place, utilities and traders said.
"There are a few more utilities offering, but how much of that's because they have too much coal ... and how much is because they're short API2 paper (coal swaps) is impossible to tell," one European trader said.

COMMODITIES: Markets mixed as investors reshuffle near Q1 end
NEW YORK, March 29 (Reuters) - Commodity prices closed mixed on Tuesday, as investors prepared for the end of a volatile quarter, with oil rising on continued unrest in Libya, gold falling on talk that some countries may tighten monetary policy, and copper tracking moderate Wall Street gains.
"Any rhetoric on money tightening could certainly cause some anxiety, resulting in gold prices correcting a bit. But I continue to see a significant underlying bid in gold as dips are bought," said James Dailey, portfolio manager of the TEAM Asset Strategy Fund.

East Libya oil terminals suffered minor damage - firm
BENGHAZI, Libya, March 29 (Reuters) - The Libyan rebel-held oil terminals at Ras Lanuf, Zueitina and Es Sider suffered minor damage during recent fighting and will be ready to operate once the area is secure and workers return, an oil official said.
Abdel Jalil Mayuf, information manager at the Arabian Gulf Oil Company (AGOCO), based in east Libya, said it would likely take at least two weeks to get oil production in the rebel-held east up to 300,000 barrels per day (bpd) from 100,000-130,000 bpd now, depending on security and other factors.

Corn (Source: CME)
US corn futures finish near unchanged as traders wait for USDA to issue crop planting estimates Thursday. Grain users are nervous about how much will be sown as supplies are projected to reach a 15-year low this year. Plantings will increase from last year, but it may not be enough to ease tight inventories. "We can rarely recall a year when these figures were more eagerly anticipated," Joel Karlin, analyst for Western Milling, says about USDA's forecasts. Deferred contracts feel some support from worries wet weather will disrupt planting. CBOT May corn ends up 3/4c at $6.71 3/4 a bushel.

Wheat (Source: CME)
US wheat futures close stronger on concerns dryness in the Plains will reduce the next harvest. States like Oklahoma, Texas, Colorado and Kansas have struggled without much rain or snow since hard red winter wheat was planted there last fall. The crop, used to make bread, will be harvested this spring and summer. Yet, farmers will abandon much more than normal because plants are in poor condition, analysts say. CBOT May wheat ends up 12c at $7.37 1/4 a bushel, KCBT May climbs 18 1/2c to $8.67 and MGE May rises 13 1/4c to $8.88 1/4.

Rice (Source: CME)
US rice futures finish mixed as nearby contracts come under pressure from profit-taking. Market participants continued taking money off the table after the market finished at a 5-week high Friday. But deferred contracts jumped today as traders wait for the USDA to issue highly anticipated estimates on US crop plantings and grain inventories Thursday. It's widely expected that rice acres will be down sharply from last year due to weak prices. CBOT May rice down 3 1/2c to $13.85 1/2 a bushel while November gains 10c to $15.22.

Oil Declines as Petroleum Institute Report Signals Faltering U.S. Demand (Source: Bloomberg)
Oil declined in New York after an industry-funded report showed crude supplies in the U.S. rose the most since October, signaling a recovery in demand may falter in the world’s biggest consumer of the commodity.

Copper Drops to $9,569, Set for the Worst Quarterly Performance in Three (Source: Bloomberg)
Copper in London fell, putting it on track for its worst quarterly performance in three quarters, on concern global economic growth may slow after Japan’s worst earthquake on record and as China extends tightening measures.

FAO: China Corn Imports May Reach 2.5M Tons This Year (Source: CME)
China could import the largest volumes of corn for more than 15 years in 2010-2011 but dealers may hold off buying if an influential U.S. government report this week predicts high plantings, a senior economist with the United Nations' food body said. Speculation China could significantly boost imports this year and next has been a huge price driver for the already tight market. Corn futures traded in Chicago surged 14% last week on expectations China had inked a deal for U.S. supplies, speculation that many saw as confirmed when the U.S. Department of Agriculture said exporters struck deals to sell 1.25 million tons of corn but didn't disclose the destination. Secretary of the Food and Agriculture Organization's Intergovernmental Group on Grains, Abdolreza Abbassian, said a huge move by the Asian giant seems unlikely. But he said the country may import as much as 2.5 million tons by the end of the 2010-11 crop year, which would be the largest amount since 1994-1995 and the third-highest level in 50 years.
"Why would the Chinese buy now and take delivery just before summer when they have to harvest their wheat?" he said. "China isn't stupid--they know that if they come into the market in a big way prices will double. "The supply and demand balance I see in China doesn't convince me they will post a big import figure this year anyway. I would say China this season may buy 2-2.5 million tons, which is only 1 million tons more than we said in August." Increased demand from China would support the corn market because supplies are already projected to reach a 15-year low this year. U.S. corn futures reached a 32-month high earlier this month on strong demand and concerns farmers will not sow enough acres this spring to replenish supplies. Abbassian said if the USDA's figures come in below expectations and are bullish for the market, he expects China will buy sooner in anticipation of rising prices. But if they are bearish "my view is the price prospects will be more comfortable and they will be happy to wait."
For most of the past 50 years, Beijing has been largely absent from the international market, as domestic production was enough to meet demand. The most the world's second-largest corn producer has ever imported was 4.3 million tons in 1994-95, following a disastrous harvest. But as the country's rapidly-expanding middle class's growing taste for meat puts pressure on grain supplies after China's corn harvest suffered last year because of drought, speculation that the Asian giant may have to resort to imports has increased.

Ukraine Plans To Extend Grain Export Quotas But Confusion Continues (Source: CME)
Ukraine's Ministry of Economy has proposed an extension of restrictions on grain exports to the end of June from March 31, according to a draft resolution posted on the ministry's website. The resolution appears to contradict the words of Iryna Akimova, deputy head of the presidential administration, who said earlier Tuesday that Ukraine would end quotas as of April 1 and introduce alternative customs controls. The ministry said the reason behind the move to keep the quotas was to prevent an "uncontrolled growth" in grain prices. The resolution also proposes increasing export allowances for corn to 5 million metric tons from the current 3 million tons. Ukraine introduced grain export restrictions in October, citing a bad harvest due to drought and a need to control domestic food prices. The quotas were extended in December to run to the end of March.

India Considers Lifting Wheat Export Ban � Minister (Source: CME)
India is considering lifting its ban on wheat exports, junior Farm Minister Arun S. Yadav said, as the country is expecting a bumper crop for a second straight year. "We are thinking about it [allowing wheat exports]. A decision may be taken by April-May," Yadav told reporters. India, the world's second-largest wheat grower, has maintained the ban on the grain's export since 2007 to keep local supplies steady. But expectations of a bumper crop and a shortage of storage space have now prompted the government to consider allowing exports. Yadav didn't clarify whether the government was looking at allowing unrestricted wheat exports, but traders feel the country will clear only limited shipments. He said wheat output in 2010-11 will likely exceed the government's estimate of 81.47 million metric tons. A panel of top Indian bureaucrats met Monday to discuss the possibility of allowing wheat exports as state-run warehouses have run out of space, a food ministry official said on condition of anonymity.
"The panel was of the view that the matter be reviewed again in May when the government has a better idea of the crop's arrival in the local market," the official said, adding that trade ministry wants 2 million ton of wheat exports. Harvesting of the new wheat crop began March 15 and is likely to be over by end-April, while procurement of stocks by federal agencies is expected to end by mid-May. Food Corp. of India's wheat purchases for government stocks from the new crop have more than halved since the start of the procurement season compared with a year earlier. The state-run company has bought around 157,000 tons of wheat from the start of procurement on March 15 through March 27, compared with 332,000 tons a year earlier. Traders said that the government's procurement is being hampered by a lack of storage space. "The government will have to open up some exports as they would need to offload old stocks," said a wheat trader, in the central state of Madhya Pradesh.
"Probably, they will decide only once the procurement is over." While the trade, finance and farm ministries are keen on exports, the food ministry has opposed the move as it wants to maintain sufficient stocks for meeting the requirement of a proposed law that will widen the scope of subsidized grain sales to the poor. But the law is unlikely to be implemented soon as a maze of approvals will be required from within the government and the groundwork such as identification of poor households as well as a distribution mechanism is yet to be completed.

Farmers Plant Corn Faster Than Normal In Southern US (Source: CME)
Corn planting is ahead of schedule in the southern U.S., according to state crop progress reports. Warm, dry weather in Arkansas, Mississippi and Texas has allowed growers to accelerate planting after some areas saw temporary delays due to rain. Weekly reports issued by the U.S. Department of Agriculture confirmed growers had made significant advances in the past week. "Excellent weather conditions allowed producers to progress with field activities," the National Agricultural Statistics Service office in Louisiana said. The south makes up only about 6% of U.S. corn production, yet grain consumers are closely watching early plantings there in the face of low supplies, which are projected to reach a 15-year low this year. Corn futures recently reached 32-month highs and grain users remain concerned world supplies won't keep pace with strong demand. Farmers in the southern U.S. are busy planting corn, but aren't expected to significantly increase the number of acres devoted to the grain.
Strong prices for cotton are making it a more attractive crop. "The price is so good on cotton right now that some of that corn acreage will likely be shifted" to the fiber, said Brent Bean, professor and extension agronomist at Texas A&M University. The USDA last month projected cotton plantings nationwide would expand 18.2% from last year to 13 million acres and corn plantings would jump 4.3% to 92 million acres. The government will update its planting forecasts Thursday. Favorable weather in southern states contrasts with wet weather in the northern Plains and Midwest that has raised worries about planting delays that could reduce corn output. Farmers in the Midwest, where the bulk of the country's corn is grown, will begin sowing early next month. Planting was 46% complete in Mississippi as of Sunday, up from 5% a week earlier and above the average of 22%, according to government data. In Arkansas, planting was one percentage point ahead of normal at 28% complete.
The crop in Texas was 50% planted, up from 43% a week earlier and above the average of 48%. Growers are mostly finished planting in southern Texas. In the north, where the bulk of the state's corn is produced, farmers will avoid problems associated with a severe drought because most of the corn is irrigated, Bean said. Rains in January aided planting in southern Texas, but the crop will need more moisture in the next month, said Charles Ring, a corn grower and member of the Texas Corn Producers Board. The state accounted for about 2.4% of national corn production in 2010 and is the largest corn producer in the south.

Commodity traders say won't follow Glencore to IPO
GENEVA/SINGAPORE, March 29 (Reuters) - Two of the world's biggest commodities traders ruled out public flotations on Monday, at least for the time being, despite admitting the attractions of raising such "permanent capital."
Trafigura and Gunvor said they had no wish to follow Swiss commodities trading giant Glencore and raise capital through an initial public offering (IPO) of shares.

Big commodity traders mount last stand on U.S. curbs
WASHINGTON, March 28 (Reuters) - A global push to temper wild swings in oil and other commodity prices reached a pivotal point on Monday as big traders mounted their last attack on a U.S. plan to limit the role of speculators.
Many of the world's biggest commodity market participants such as U.S. agribusiness giant Cargill Inc and Delta Air Lines  are resisting new rules that would cap how many futures and related swaps contracts any one company can control.

Net commodity index investment rises to third record
NEW YORK, March 28 (Reuters) - Net investment into commodity indices rose to a record high for a third month in a row in February, with long positions crossing $300 billion for the first time ever, data showed on Monday.
The value of holdings by institutional investors and others who buy into commodity baskets has surged by more than $45 billion in the past three months, partly as a result of rising prices that have drawn near record highs.

Japan Feb aluminium shipments up 2.3 pct yr/yr
TOKYO, March 29 (Reuters) - Japanese shipments of aluminium products rose 2.3 percent in February from a year earlier to 168,092 tonnes, marking 15 consecutive months of gains, but a devastating earthquake is  likely to weigh on shipments this month.
Shipments in February rose 7.3 percent from January after two straight months of declines, the Japan Aluminium Association said on Tuesday.

China spot copper demand seen weak on tight credit, high prices
HONG KONG, March 29 (Reuters) - Demand for spot copper in China may not pick up in April and May if prices stay high and Beijing maintains a tight credit policy, analysts and industry players said on Tuesday.
Weak demand means the world's top copper buyer may be largely out of the international spot market after China's refined copper imports fell 3 percent in the first two months of the year.

Freeport Indonesia sees copper output down 17 pct this yr
JAKARTA, March 29 (Reuters) - Freeport-McMoran Copper & Gold Inc's  Indonesia unit, which runs the giant Grasberg mine, expects its copper output to fall 17 percent this year to about 1 billion pounds by weight, its chief financial officer said on Tuesday.
The primary driver for the dip are differences in ore grades as Freeport Indonesia work through different sections of the Grasberg open-pit mine, a spokesman added, on the sidelines of the Ozmine conference in Jakarta.

China daily steel output hits record in mid-March
BEIJING, March 29 (Reuters) - China's daily output of crude steel rose 2.6 percent to a record 1.945 million tonnes from March 11-20, despite faltering demand and surging steel product stockpiles, figures from the China Iron and Steel Association showed on Tuesday.
CISA said daily output stood at an average of 1.92 million tonnes in the first 20 days of the month, up from 1.823 million tonnes in February and 1.703 million tonnes in January.

METALS-Copper falls on Chinese demand worries
LONDON, March 29 (Reuters) - Copper fell to its lowest price in a week on Tuesday on concerns over high inventories and slack demand from top consumer China, exacerbated by talk of further monetary tightening there, but a weaker dollar lent support.
"The focus is clearly on China, and in China they are continuing to run down their inventories and are not coming back to the market. There is a lot of uncertainty on how much stuff they have," said Credit Agricole analyst Robin Bhar.

China corn purchases redefine global stocks: Gavin Maguire
--Gavin Maguire is a Reuters market analyst. The views expressed are his own. To get his real-time views on the market, please join the Global Ags Forum. --
CHICAGO, March 28 (Reuters) - China's alleged recent incursions into the corn import market represent much more than an additional mouth at the corn export trough, and could prompt a drastic redefining of what can be considered 'available' corn inventories globally.
China, the world's No. 2 corn grower, holds nearly half of the world's total corn reserves. Until recently, it routinely exported millions of tons to neighboring nations and so its inventories were considered part of the overall pool of corn supplies. But with China increasingly likely to become a net corn importer going forward, those inventories can no longer be considered as potentially available to other importers.

U.S. wheat, corn, soy consolidate, eyeing USDA report
BEIJING, March 29 (Reuters) - U.S. wheat, corn and soybean futures were consolidating in Asian trade as the market is cautious ahead of the U.S. Department of Agriculture's planting intentions report due on Thursday.  "Traders prefer to stay on sidelines, waiting for the report," said Zhao Ronghui, an analyst with China National Cereals Trade Corp.

Ukraine sows 461,000 ha spring grain as of Mar 28
KIEV, March 29 (Reuters) - Ukrainian farms had sown 461,000 hectares for the 2011 spring grain harvest as of March 28, almost the same area as a year earlier, the Farm Ministry said on Tuesday.
It said spring barley had dominated the area.
Cold weather across Ukraine in late February had prevented delayed spring grain sowing which traditionally starts in early March and farms began the 2011 sowing campaign in the second half of the month.

China sells 108,991 T feed wheat, 36 pct of volume
BEIJING, March 29 (Reuters) - China's government sold 108,991 tonnes of state wheat reserves whose quality has deteriorated for animal feed production, 36 percent of the volume of 300,990 tonnes offered at Tuesday's auction.
The auction marked the first such sale of wheat reserves to feed mills amid tight domestic corn supplies.

U.S. Plains wheat belt stays dry; Midwest cool
CHICAGO, March 28 (Reuters) - Little rain relief is in sight for the parched U.S. Plains wheat belt, but cooler temperatures this week will limit crop stress, a forecaster said on Monday.
"There is a pattern developing here and it is not good. All signs are failing," said Telvent DTN forecaster Mike Palmerino referring to recent outlooks for rain that turned dry again.

Cocoa dips, I.Coast conflict intensifies, sugar up
ICE cocoa futures were lower as dealers monitored conflict in top producer Ivory Coast, after two towns in the country's western cocoa belt fell to presidential claimant Alassane Ouattara.
Coffee prices eased in early trading, as strong exports from key producers Vietnam and Brazil weighed on markets.

Pakistan eyes record cotton crop above 15 mln bales in 2011/12
ISLAMABAD, March 29 (Reuters) - Pakistan is eyeing record cotton production of over 15 million bales in the 2011/12 crop year as farmers sow a wider area after domestic prices more than doubled from a year ago, government and industry officials said on Tuesday.  Cotton and textile account for about two-thirds of the country's exports and a healthy cotton crop is vital to economic growth, which is expected to slip to around 2.75 percent in the current financial year to June, because of flood damages.

High production costs curb Vietnam rice price drop
HANOI, March 29 (Reuters) - Vietnam's rice export prices are unlikely to fall significantly this year despite a recent bumper harvest due to surging production costs, an industry executive said, tempering the country's edge in export markets.
Despite a major dong devaluation in February that Thai traders said made Vietnamese rice more competitive and hurt Thailand's market share, rising costs in Vietnam had offset that advantage and helped to narrow the gap between the two nation's  export prices.

US farmers rush to sow idle acres, yields in doubt
CHICAGO, March 29 (Reuters) - For the past five years, Nebraska farmer Brandon Hunnicutt has carefully avoided a small, soggy seven-acre plot of land in the middle of his farm, fearing the poor soil will be more trouble than it's worth.
This year, however, Hunnicutt -- and thousands of others across the Midwest -- will rush to cash in on near-record prices by sowing corn, soybeans, wheat into every available inch of arable land, including some that have lain fallow for years if not decades.

Bumper US crop planting may tame high food prices
CHICAGO, March 28 (Reuters) - The bumper crops expected to be planted by U.S. farmers this spring could be the first big step toward alleviating global food price inflation.
After drought and torrential rains in 2010 devastated major crops from Russia to Australia, all eyes will be on the U.S. government's plantings report on Thursday for a glimpse of production prospects from the world's top grain exporter.

US spring wheat acreage growth limited by rains
CHICAGO, March 28 (Reuters) - U.S. farmers were expected to boost their plantings of spring wheat by just 30,000 acres in 2011 as wet conditions in the northern U.S. Plains will likely limit the amount of crop they can seed despite dwindling world supplies and strong prices, a Reuters poll showed.
"The better weather guys are saying we are going to have a very cold and very wet spring in the Upper Plains," said Tim Hannagan, analyst with PFGBest. "It is going to be cooler and wetter than normal. That certainly says you are going to plant less spring wheat."

U.S. corn area seen 2nd largest since 1944
CHICAGO, March 28 (Reuters) - High corn prices and big profits will lead U.S. farmers to plant the second largest land area to corn since 1944, ensuring a comfortable supply of the  feedgrain next year, weather permitting, analysts said.
The U.S. Department of Agriculture on Thursday will release its hotly anticipated March plantings report and an average of analysts' estimates pegged this year's corn acreage at 91.839 million, 4 percent more than last year and the second largest in nearly 70 years.

Indonesia white sugar output to rise 16 pct in 2011 - assoc
JAKARTA, March 28 (Reuters) - White sugar production in Indonesia, Southeast Asia's largest sugar consumer, will climb by 16 percent this year on drier weather, with planting rising by 3.5 percent, the Indonesian Sugar Association (AGI) said on Monday.
Indonesia produced about 2.25 million tonnes in 2010 after heavy rains hit crops, leading to government permits for 450,000 tonnes of imports, but this year output is seen jumping to about 2.6 million tonnes, Farukh Bakrie, chairman of AGI told Reuters.

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