Oil : Brent jumps to 2-1/2 year peak, U.S. oil slips
NEW YORK, April 5 (Reuters) - Brent crude jumped to a 2-1/2 year peak above $122 a barrel on Tuesday, gaining for a fourth straight day as conflict and unrest in Africa and the Middle East more than offset China's latest interest rate hike.
"WTI is sputtering a bit ahead of inventory data. But Brent continues to march higher on Middle East/Africa supply outages and concerns," said Tom Bentz, a broker at BNP Paribas Commodities Futures Inc in New York.
NATURAL GAS: Natural gas ends lower on milder weather, supplies
NEW YORK, April 5 (Reuters) - U.S. natural gas futures ended lower on Tuesday, pressured by comfortable supplies and expectations that milder Northeast and Midwest weather this week will slow demand and continue to weaken prices.
"Demand is picking up a little, and we should see a large storage draw this week, but it's not necessarily enough to drive prices much higher. Weather isn't supportive, and there's still a lot of gas around," a Pennsylvania-based trader said.
EURO COAL: Spot coal down on weather, futures still strong
LONDON, April 5 (Reuters) - European futures coal prices remained strong on Tuesday as oil prices soared but the spot coal market dropped on the back of milder weather forecasts, traders said.
"This move has brought the power and coal markets back in line," one German utility trader said.
COMMODITIES: Gold, corn hit record; China rate hike ignored
NEW YORK, April 5 (Reuters) - Gold and corn prices hit record highs on Tuesday and crude oil hit new peaks as euro zone woes sparked inflation fears that drove investors into commodities.
"The market doesn't seem that bothered about Chinese interests rates any more," said David Morrison, strategist at London brokerage GFT.
Corn (Source: CME)
US corn futures close at an all-time high settlement for the second consecutive day on strong demand. Demand remains robust in the face of limited stockpiles ahead of next fall's harvest. Supplies, already projected to reach a 15-year low, will tighten more unless buyers step back because of high prices. "The market needs some clear evidence that you've shut off demand," says Mike Krueger, president of The Money Farm. Corn for May delivery rises 6 1/2 cents, or 0.9%, at $7.66 3/4 a bushel after reaching a record intraday high of $7.70 3/4.
Wheat (Source: CME)
US wheat futures finish narrowly mixed as traders assess whether the markets have adequately factored in weather threats. The USDA confirmed wheat in the Plains is in poor condition after prices rallied 4% Monday on crop concerns. "I think the market is just pausing to reflect on the fact that it's already had a lot of bullish news fed to it," says Dan Manternach, agriculture services director at Doane Advisory Services. CBOT May wheat falls 3 3/4c to $7.86 1/4 a bushel, KCBT May rises 2c to $9.50, and MGE May rises 3/4c to $9.62 1/4.
Rice (Source: CME)
US rice futures rise on projections Japan will increase imports due to damage from natural disasters. The disruption to food production in Japan is fueling talk that the country will raise imports to meet its domestic needs. Nearly three weeks after Japan's devastating earthquake and tsunami, rice and other food items aren't readily available in stores countrywide, according to reports. CBOT May rice rises 19 1/2c to $14.11 per hundredweight.
Oil Falls a Second Day After Signals U.S., China Demand Growth May Falter (Source: Bloomberg)
Oil declined for a second day in New York amid signs that the pace of fuel demand recovery may falter in the U.S. and China, the world’s biggest energy users.
Gold Climbs to Record in `Flight to Safety'; Silver Reaches 31-Year Peak (Source: Bloomberg)
Gold climbed to a record for a second day as the sovereign-debt crisis in Europe deepened after Moody’s Investors Service cut Portugal’s credit rating and higher grain and oil prices worsened the inflation outlook.
China Demand Seen Strong For Corn, Soybeans This Year (Source: CME)
Investment bank JP Morgan continues to maintain a bullish view on Chinese import demand for feedgrains, particularly soybeans and corn, Jing Ulrich, the managing director for Global Markets-China, said. Speaking at Commodities Week Asia, Ulrich said the demand for feedgrains was rising as more people in China are switching to a protein-rich diet. Chinese soybean import demand could rise 20% on year in 2011, she said. Last year, China imported 55 million tons of soybeans, compared with just about 5 million tons in 1999. Corn imports could hit 5 million tons this year, up from 1 million-2 million tons last year. "Between the two, corn has better potential for price growth," she said. Higher oil prices will make corn more expensive due to its use in the production of ethanol, she added. Ulrich, however, declined to give a price forecast for corn.
On gold, Ulrich said the current rally isn't over yet. "We maintain our positive view on gold since it is seen as an alternative to paper currency. Gold prices have staged a major rally recently, but we're not at the end of the rally yet." The demand for gold is likely to remain firm as Chinese consumers buy more gold jewelry as well as gold bars and coins, she noted. China's gold holdings only account for 2%-3% of its overall forex reserves. This could rise, and boost demand, she said.
USDA Confirms Poor HRW Wheat Conditions (Source: CME)
The U.S. Department of Agriculture confirmed the U.S. hard red winter wheat crop is in poor shape overall, struggling in the southern plains. The government, in its first weekly crop progress report of the year, rated 37% of the crop as good to excellent, down from 65% a year ago. Analysts had expected the crop would be in worse condition than last year, when plants were emerging from good winter conditions. "The trade was expecting it to be the worst initial ratings in decades," said Charles Soule, an analyst for Country Hedging, a brokerage firm. Grain traders are worried about the potential for the U.S. crop after poor weather slashed global output last year. The U.S. is the world's top wheat exporter and increased demand for the grain shoved wheat futures to 2 1/2-year highs in February. Plains states that produce hard red winter wheat, used to make bread, look particularly poor thanks to dry conditions.
In Kansas, traditionally the country's top wheat-producing state, 31% of the crop was rated good to excellent, down from 69% a year ago, according to the USDA. Oklahoma's crop was rated 16% good to excellent, compared with 69% last year. Wheat in Texas was rated 12% good to excellent, down from 60% a year earlier. The poor hard red winter wheat ratings in the southern plains were expected by the market, but the drop in ratings for Nebraska at 35% good to excellent, and Colorado at 16% good to excellent showed other areas also didn't perform well, said Shawn McCambridge, senior grains analyst at Prudential Bache. "The poor HRW ratings will support the idea of production losses if crop conditions don't improve soon," McCambridge said. Traders said the condition rations ratings may not fully reflect the impact of record high temperatures and windy weather during the weekend in the plains, particularly Kansas.
The USDA said 64% of the crop in Ohio, the country's top soft red winter wheat-producing state, was in good to excellent condition. SRW wheat, grown in the Midwest and South, is used to make pastries and snack foods. Favorable winter weather produced improved ratings for soft red winter wheat crops across the Midwest. The Ohio ratings held steady from the levels that they went into dormancy, but Illinois, Indiana, and Arkansas all showed improvement during the winter after crops were struggling heading into dormancy, McCambridge said. The USDA rated Illinois's crop at 55% good to excellent, up from 38% in November. Indiana crop was rated 61% good to excellent, up from 30% in November, according to the USDA. In Arkansas, 68% of SRW wheat was rated good to excellent, up from 52% in November. "The improvement in ratings should put pressure on Chicago wheat relative to the hard red winter wheat contract traded in Kansas City," said McCambridge.
Overall, winter wheat was rated 32% poor to very poor, up from 6% a year ago, the USDA said. The crop will be harvested in early summer.
U.S. Eyes Higher Agriculture Trade, Investment With Indonesia (Source: CME)
The United States is looking to increase trade and investments with Indonesia in the agriculture sector, on the heels of high global food price and to help support U.S. economic recovery, a senior USDA official said. Michael Scuse, the acting undersecretary of the U.S. Department of Agriculture, led about 20 agriculture-related firms to help introduce them to the Indonesian market. "This sort of event is important, to reach out to businesses in other parts of the world...Not many notice that Indonesia has a huge land (area), with a large population, high economic growth, an expanding middle class, providing opportunities to expand exports of U.S. food and agricultural goods and stimulate investment," Schuse said.
Agricultural products comprise about 40% of U.S. exports to Indonesia, and were valued at more than $2 billion in 2010, while Indonesia's exports of agriculture products to the U.S. were valued at more than $4 billion, he said. "I think both countries agreed that the figures were underdeveloped and we'll be looking on how to increase it," he said.
China May Import More Corn As Reserves Fall Short - Council (Source: CME)
China may import significant amounts of corn before U.S. farmers harvest their next crop, the U.S. Grains Council said as corn futures reached all-time highs on fears about dwindling supplies. China, which has tried to be self sufficient in grain production, may buy another two million to three million tons of corn in the 2010-11 marketing year, which ends Aug. 31, according to the council. The U.S. Department of Agriculture has estimated the country's imports at one million tons. So far, China has bought 313,700 tons from the U.S., according to government data. "After reviewing the figures with a number of sources, I believe it is possible that China will purchase another two to three million tons," said Thomas Dorr, president of the council. Dorr, who recently traveled to China, said he heard from "Chinese sources" that state reserves were 10 million to 12 million tons less than previously thought. The USDA in March pegged China's end-of-season inventories at 60.11 million tons.
The potential for increased demand from China, which has tried to be self sufficient in grain production, threatens to tighten global corn supplies that have already dropped to a precariously low level. Corn futures on Tuesday reached an all-time high of $7.68 a bushel in an attempt to curb demand from limited stockpiles ahead of next fall's harvest. Grains traders have been on edge about demand from China due to the tight supplies, which are projected to reach a 15-year low in the U.S. by the end of the marketing year. Traders suspect the resource-hungry nation was the buyer of 1.25 million tons of U.S. corn sold to "unknown destinations" late last month. China's need for grain has increased due to growing demand for meat, fattened with corn and soybeans, from its middle class. As a result, China last year made its first significant purchase of U.S. corn since 1995, buying around 1.5 million metric tons.
China needs to be more transparent about the size of its grain stockpiles and harvests to send clear signals to global farmers about how much to grow, Dorr said. Futures markets entice farmers to increase plantings with high prices. Yet, signals from China have been unclear due to limited information about its output and reserve supplies. "U.S. farmers need consistent signals, and if given the correct ones, they will step up to the task at hand. Chinese buyers and end-users need to be transparent with regard to becoming a sustainable market," Dorr said. The council is an industry group that develops export markets for U.S. grains. It's members, including agribusiness giants like Bunge and Cargill and producers' groups, benefit from increased prices and exports.
Corn hovers near record high, short supply woes persist
SYDNEY, April 5 (Reuters) - U.S. corn futures edged up to stay near record highs erasing early losses, as continued worries over tight supplies in top exporter the United States helped stretch a rally. "There's enough bullish news in the market to warrant further gains in corn prices," said Luke Mathews, commodity strategist at Commonwealth Bank of Australia, citing "catastrophically tight U.S. corn supplies and worries around the potential weather in the Northern Hemisphere for the new crop" which may hit yields.
Analyst cuts Ukraine grain crop f'cast for 2011
KIEV, April 5 (Reuters) - UkrAgroConsult agriculture consultancy on Tuesday lowered its forecast for Ukraine's grain harvests in 2011 to 44.72 million tonnes from the previous estimate of 46.88 million due to smaller yields.
The consultancy said in a report it reduced its forecast for Ukrainian wheat, barley, maize, rye, peas and millet harvests.
Bangladesh signs deal with Vietnam for 100,000T rice
DHAKA, April 5 (Reuters) - Bangladesh has signed a deal to import 100,000 tonnes of parboiled rice at $575 a tonne, CIF, from Vietnam in a government deal and will ink a deal for another 100,000 tonnes of rice, a senior official said on Tuesday.
A deal will be signed for another 100,000 tonnes of white rice at $530 a tonne, CIF, Ahmed Hossain Khan, director-general of the state grains buyer, told Reuters.
Japan may lift ban on Vietnam rice imports -report
HANOI, April 5 (Reuters) - Japan, once a frequent buyer of Vietnamese rice, may lift a ban on imports in place for several years and buy 250,000 tonnes of the grain from the southeast Asian country, a state-run newspaper reported on Tuesday.
"At the start of this year, signals from Japan show the country wants to resume importing Vietnamese rice, with volume of around 250,000 tonnes," Vietnam Food Association Chairman Truong Thanh Phong was quoted by the Vietnam Agriculture newspaper as saying.
US winter wheat rated below year ago on dry weather
CHICAGO, April 4 (Reuters) - Condition ratings for the U.S. winter wheat crop were far below year-ago levels due to dry weather in key production areas, but spring seeding of corn was off to a strong start in far southern production areas, according to a U.S. Agriculture Department report released on Monday.
Only 37 percent of the U.S. winter wheat crop was rated in good to excellent condition, compared with 65 percent in that category a year ago, according to the USDA's crop progress and condition report.
Cocoa falls as Ivory Coast fighting intensifies
ICE cocoa futures fell more than 2 percent in early trade as heavy fighting in top grower Ivory Coast loosened Laurent Gbagbo's hold. Forces loyal to Ivory Coast's presidential claimant launched a major assault on the presidential palace, shaking Gbagbo's grip on power to the core after U.N. and French helicopters left his military bases in flames Arabica coffee futures on ICE were steady, consolidating losses after three consecutive closes lower on speculator liquidation.
Vietnam's April coffee loading seen below 100,000 T
HANOI, April 5 (Reuters) - Coffee shipments from Vietnam are expected to drop below 100,000 tonnes this month from an estimated 150,000 tonnes shipped in March, and may go as low as 75,000 tonnes, traders said on Tuesday.
"Coffee export (loading) picked up strongly since the middle of March to meet demand for both roasters and deliveries to London but it will slow this month to a usual range," a trader in Ho Chi Minh City said.
Pakistan cotton output seen 10.9 mln bales-attache
WASHINGTON, April 4 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in Pakistan:"Pakistan's 2011/12 cotton production is forecast at 10.9 million (480 lb) bales, 25 percent higher than last year's production level and the second largest harvest on record. 2010/11 cotton production is estimated at 8.7 million bales, down 12 percent from the preceding year. In 2010, the Government of Pakistan formally approved nine biotech cotton varieties (8 open pollinated and one hybrid) for cultivation.
S.Korea says could cut oil taxes if crude prices rise further
SEOUL, April 6 (Reuters) - South Korea will consider cutting oil taxes if crude prices rise further, the government said on Wednesday, without giving details.
It will also consider allowing state-run Korean National Oil Corp to sell oil products to retailers, an economy ministry statement said, as it looks for ways to trim energy costs that have helped drive inflation to a 29-month high.
U.S. crude oil inventories fall 2.8 mln bbls -API
NEW YORK, April 5 (Reuters) - U.S. crude inventories fell unexpectedly by 2.8 million barrels last week and gasoline stocks posted a surprise build, data from the American Petroleum Institute (API) showed on Tuesday.
The drop in crude stocks for the week to April 1 compared with analysts' expectations for a 1.7-million-barrel build in a Reuters poll.
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