Wednesday, May 18, 2011

20110518 0941 Global Commodities Related News.

Corn (Source: CME)
US corn futures finish sharply higher on concerns farmers will plant fewer acres than they previously intended due to excessive rains. Farmers are struggling to sow the crop in the eastern Midwest and northern Plains and may give up on planting unless the weather clears up. If corn is planted late, the crop produces lower yields because it must develop during the peak of summer heat. "We're running out of time," says Bill Gentry, analyst for Risk Management Commodities. CBOT July corn jumps 22 3/4c to $7.20 1/4 a bushel.

Wheat (Source: CME)
US wheat futures finish up sharply on worries harsh weather will reduce harvests. Excessive rains are slowing planting of spring wheat in the northern Plains and threatening the quality of soft red winter wheat in the Midwest. Drought already has slashed the harvest of hard red winter wheat in the southern Plains. Western Europe also is dealing with dryness and heat. CBOT July wheat surges 27 1/2c to $7.64 a bushel; KCBT July jumps 18 1/2c to $8.94 1/2; MGE July climbs 26c, or 2.9%, to $9.36 1/4.

Rice (Source: CME)
US rice futures finish stronger as the grain markets extend gains on weather concerns. Rains and floods are delaying planting in the South. The USDA confirmed the disruptions, saying farmers had sown 69% of the crop as of Sunday, below the average of 83% for that time of year. The crop was rated 54% good to excellent, down from 64% a year ago. CBOT July rice rises 28 1/2c to 14.39 per hundredweight.

Corn plantings seen 60 pct done, soybeans 20 pct
KANSAS CITY, Mo., May 16 (Reuters) - U.S. farmers made good progress on closely watched corn plantings over the last week, but more rain in the forecast and a rapidly closing window for optimal seeding kept some industry players on edge.
The pace of both corn and soybean planting remains well behind schedule but picked up dramatically over the last week as farmers raced to take advantage of a break from incessantly wet spring weather, analysts surveyed by Reuters said on Monday morning.

U.S. corn, soybeans post modest gains on crop concerns
SYDNEY, MAY 17 (Reuters) - U.S. corn and soybean futures posted modest gains in quiet Asian trade as market players assessed a U.S. government report showing planting crops in the United States remained well behind schedule. "It is almost as though no-one is willing to trade this market until the U.S. gets a full day's trading on the crop progress report," said Adam Davis, senior grains trader at Melbourne-based Merricks Capital.

Philippines sees Q3 rice output up 32 pct on yr
MANILA, May 17 (Reuters) - The Philippines' unmilled rice output in the third quarter is forecast to rise 32 percent from a year ago to 3.49 million tonnes as better rains result in higher yields from an expanded harvest area, the Bureau of Agricultural Statistics (BAS) said on Tuesday.
The projected growth in July to September, a lean period for rice production due to the onset of the rainy season, puts less pressure on the country to import more rice this year.

W. Canada plants 20 pct of crops, favorable forecast seen
WINNIPEG, Manitoba, May 16 (Reuters) - Western Canada farmers took advantage of favorable weather in Alberta and parts of western Saskatchewan to push overall crop seeding progress to 20 percent, the Canadian Wheat Board said on Monday.
Farmers have also started to plant in some areas of eastern Saskatchewan, south central and southeastern Manitoba, the Wheat Board said in its weekly bulletin..

Cold and wet delay Midwest planting
Cold and wet weather continued to delay crop planting in the Midwest, with the lengthiest in the eastern crop region including Indiana and Ohio. Major flooding on the Mississippi River was hitting more farmland, and the return to wet weather later this week will spawn more flooding.
Significant losses to corn and wheat acreage are expected.

Frost hits U.S. Corn Belt and southern Plains wheat
CHICAGO, May 16 (Reuters) - Freezing temperatures hit parts of the northern U.S. hard red winter wheat belt and much of the western Corn Belt on Monday morning, raising worries that some crops may have been damaged, a forecaster said.
Morning lows in wheat country dipped to 30 to 35 degrees Fahrenheit (-1 to -2 Celsius) in western Kansas, eastern Colorado and southwestern Nebraska. In the Corn Belt, northern Iowa and eastern Nebraska saw lows near 33 degrees F.

Bulgaria expects unchanged wheat harvest
SOFIA, May 16 (Reuters) - Bulgaria expects to reap 3.9 million tonnes of wheat this year, the agriculture ministry said on Monday, virtually unchanged from 2010.
"With good development of sowings and favourable agrotechnical conditions ... the total wheat production this year would reach 3.9 million tonnes," the ministry said in a statement.

Concern continues about parched German wheat
HAMBURG, May 16 (Reuters) - Concerns about dryness damage to German wheat plants persist after heavy rain forecast for the weekend often failed to materialise, traders said on Monday.
Crop watchers are concerned the wheat harvest in Germany, the EU's second largest grain producer, will suffer after only 38 percent of average rain fell in April and with early May also very dry.

Bullish funds slash commodity bets by $17 bln-data
NEW YORK/CHICAGO, May 13 (Reuters) - Big hedge funds and speculators cut their bullish bets on commodity markets by $17 billion in the week through Tuesday, the biggest bear turn since at least 2009, regulatory data showed on Friday.
The so-called "managed money" funds cut their overall net long holdings in 22 U.S. futures markets by over 222,000 contracts or 13 percent in the five days ended May 10, according to Reuters calculations based on the Commodity Futures Trading Commission's weekly Commitment of Traders.

UK Farm Ministry Prepares To Tackle Drought (Source: CME)
Preparations are underway across the U.K. to ensure any potential drought doesn't harm the country's agriculture, Farm Minister Caroline Spelman said, although observers warned crops in some regions may be beyond help. Speaking after a meeting with farming groups and environment agencies, Spelman said assessments are being made to determine the "likelihood of a drought in the longer term, and how it might affect our farmers, our food industry and consumers." "The Environment Agency, together with the water industry, are going to provide me with an update on water supplies and they are also going to review their drought plans," she said. England and Wales have seen the lowest rainfall in March and April since 1938 while meteorologists have recorded the warmest spring in centuries. Forecasters now predict a heatwave in the coming weeks means May could prove to be the hottest since records began 353 years ago.
Some areas in the south east have received just 20% of their average rainfall so far this month, although in parts of Scotland, more than the total May average rainfall has fallen to date this month. Four regions around the west and east Midlands and East Anglia have already been given potential drought status said Jenny Bashford, water policy advisor at the National Farmers Union, who attended the meeting. She emphasized, however, that the problems are localized and said that water companies are working to create contingency plans in the event other areas are threatened by drought. The NFU is also working with farmers to ensure effective planning for the use of water resources, she said. "This isn't a drought on the scale of 1976," she said. "The scale and the impact of the problem is localized both geographically and in terms of the products that are grown. The plans being put together are more long-term."
Yet the lack of rainfall is already stressing U.K. barley and wheat crops. David Eudall from the Home Grown Cereals Association recently said that in many places crop development is already two weeks ahead of schedule, meaning yields could fall. Forecaster WeatherEdge Ltd. warned that wheat yields could drop up to 15% this year due to the dry weather, putting pressure on already near record-high prices for U.K. feed wheat. The NFU's Bashford said that for farmers growing crops like wheat and barley in lighter soils crops could face "serious problems." But she said that current high prices meant some farmers are finding it economically viable to irrigate crops even at this early stage. "It's unheard of to be irrigating uncombinable crops but the value of the crop makes it worthwhile to spend the money rather than losing them," she said.
Spelman said water groups, including Water U.K., are preparing contingency for further problems and further plans will be considered in a month's time if the situation has not changed.

FAO: Biofuels Could Boost Developing World Food Security (Source: CME)
Investment in biofuels could actually help to improve food security in rural economies by creating jobs and boosting incomes, the United Nations' food body said, adding its voice to a growing debate over the impact of biofuels on agriculture. Controversy over using farmland to grow fuel crops has intensified this year as world food prices have hit record levels, pushing 44 million people into poverty, according to World Bank estimates. Some critics argue that increasing the amount of land devoted to biofuels will further strain hard-pressed agricultural resources. Others say biofuels can encourage deforestation in the developing world, releasing more carbon dioxide into the atmosphere than is offset by burning the fuel. But the Food and Agriculture Organization said if managed responsibly, cultivating crops for fuel, such as sugar and corn, can actually spark much-needed investment in agricultural and transport infrastructure in rural areas.
"Done properly and when appropriate, bio-energy development offers a chance to drive investment and jobs into areas that are literally starving for them," said Heiner Thofern, who heads FAO's Bioenergy and Food Security project. He cited the growth of potential export markets for bio-energy products like Europe as presenting farmers in the developing world with new opportunities to access world markets and boost their household incomes. World food prices surged to precedent levels in February. This second price spike in four years has re-ignited the debate over government incentives for biofuels, schemes which some international agencies have blamed for sparking the food crisis of 2007-08. U.S. lawmakers are currently in the process of reconsidering their controversial subsidies policy for corn-based ethanol. A bill introduced earlier this month aims to eliminate the 45-cents-a-gallon tax credit at a time when refiners are expected to use a record 5 billion bushels this season.
"A third of the supply of U.S. corn is being diverted to biofuels and of course, that has an impact," said Jay Naidoo, chair of the board of directors of the Global Alliance for Improved Nutrition, an organization devoted to improving diets for poor people around the world. Yet the FAO isn't alone in arguing that biofuels could encourage much-needed investment in farming. A study by the International Energy Agency released last month found that with improved land use management, increasing biofuels production to meet 27% of demand will only need 100 million hectares worldwide, around 5% of global agricultural land. "We aren't pretending that biofuels are the answer to everything but we think they can provide an impetus to improve sustainable policies," said Paolo Frankl, head of the IEA's renewable unit.
In order to help governments evaluate the feasibility of bio-energy development and the impacts on food availability, the FAO has developed a framework to help policymakers weigh the pros and cons of the sector, including social impacts. "Our goal is to help policy-makers take informed decisions regarding whether bioenergy development is a viable option," said the FAO's Thofern.

Wheat Damage Claims on Dry Weather May Signal Worse Harvest Than Forecast (Source: Bloomberg)
Wheat crops in the U.S. Great Plains are showing signs that production may plunge more than the government forecast last week as hot weather and a lack of rain erode plant quality and force farmers to harvest early. As of May 15, U.S. winter-wheat was in the worst condition since 1996, with 44 percent of fields rated poor or very poor by the government. The National Weather Service estimates rainfall in the past two months was less than half of normal in much of Texas, Oklahoma and Kansas, where insurance adjuster David Reed said he’s had 300 farmer claims for drought damage in his area this season, already 10 times more than last year.

Argentina Official: China Corn Deal May Take 6 Months To Complete (Source: CME)
A deal for Argentina to export corn to China may take six months to a year to complete, Argentina government officials said. The timeframe is longer than some in the Argentine farm lobby previously forecast, suggesting still some months before the two countries reach a phytosanitary agreement needed for the grains to be shipped. The bulk of Argentina's corn is from transgenic crops that haven't been cleared for sale in China. The corn deal could be completed by the end of the year, said Marcelo Lucco, director of export promotion at Argentina's Ministry of Foreign Affairs. The officials, led by Undersecretary for International Trade Ariel Schale, declined to project China's potential corn demand once the agreement is signed.

Mississippi River Diversion Cuts Threat to Cities, Refineries, Croplands (Source: Bloomberg)
Mississippi River water pouring through 15 gates on Louisiana’s Morganza floodway has greatly reduced the risk of flooding to oil refineries that account for about 14 percent of U.S. capacity. The diversion means the Mississippi has crested at about 17 feet in New Orleans, 2.5 feet below the forecast, and is expected to top out at 45 feet in Baton Rouge, below a record 47.5 that was expected by May 22, according to the U.S. Lower Mississippi River Forecast Center’s website.  Oil Rises From Three-Month Low as Supplies of Cushing Crude, Gasoline Drop Oil advanced from the lowest in almost three months in New York after an industry-funded report showed gasoline stockpiles dropped and crude inventories at Cushing declined the most since June in the world’s biggest consumer of the fuel. Futures gained as much as 1.1 percent today, after the lowest settlement since Feb. 22.
Inventories at Cushing, Oklahoma, the delivery point for the West Texas Intermediate grade, slid 1.5 million barrels last week, the American Petroleum Institute said. Gasoline supplies fell 676,000 barrels, contrasting with estimates that an Energy Department report today will show they increased 950,000 barrels.

Cargill Resumes Cocoa Operations In Ivory Coast (Source: CME)
Commodities trade house Cargill Inc. said it has resumed operations of its cocoa business in Ivory Coast in the wake of months-long political turmoil there. More than 400,000 tons of cocoa beans, the raw ingredient in chocolate, had been tied up in Ivory Coast since late January amid a power struggle between two presidential hopefuls that led to a ban on cocoa exports. Ivory Coast supplies more than one-third of the world's cocoa. "The situation is continuing to improve with visible and practical signs that the country is on the road to recovery following the months of instability and uncertainty after the presidential elections," said Jos de Loor, head of Cargill's cocoa and chocolate arm in an e-mailed statement. The company said cocoa exports would resume in the "next few days" and said its cocoa supplies are "sufficient to meet our 2011 commitments."
Earlier this month, Switzerland-based Barry Callebaut AG (BARN.EB), the world's largest chocolate maker, said it planned to resume cocoa exports this month. Kip Walk, head of cocoa at Chicago-based Blommer Chocolate Co., which processes cocoa for major candy manufacturers, said it expects its first delivery of Ivory Coast cocoa beans by late May.

ICE sugar, coffee, consolidate higher
LONDON, May 17 (Reuters) - ICE raw sugar and arabica coffee edged higher in early trading on Tuesday, as softs markets consolidated following the recent slide in commodity markets, while cocoa eased. Sugar futures nudged higher, supported by tight new-crop sugar supplies from Brazil, where mills have been focussed on ethanol production.

Gold Declines to One-Week Low as U.S. Housing Data Damps Commodity Outlook (Source: Bloomberg)
Gold futures fell to a one-week low as signs that the U.S. economy is slowing eroded the appeal of commodities. Silver dropped more than 2 percent. Housing starts declined unexpectedly in April, and any recovery in construction may take years because unemployment is lingering around 9 percent and wages are stagnant. The Thomson Reuters/Jefferies CRB Index of 19 raw materials dropped for the third straight session.

LME aluminium stocks hit record above 4.71 mln T
LONDON, May 17 (Reuters) - Stocks of aluminium in London Metal Exchange warehouses jumped 22,625 tonnes to hit a record high of 4,710,550 million tonnes, data showed on Tuesday.
A backwardation or premium for the cash contract against the three-month contract is attracting metal to LME warehouses.

Aluminium premiums in Europe hold at highs
LONDON, May 16 (Reuters) - Premiums for duty-paid physical aluminium in Europe have held around record highs, supported by the fact that much material is tightly-held, traders said.
Although large amounts of aluminium are held in London Metal Exchange warehouses, much of it is tied up in financing deals through which metal holders profit if prices rise faster than storage costs.

Citigroup cautious about copper on lower China demand
May 16 (Reuters) - Citigroup said it was upbeat on iron ore, met coal and aluminum but cautious on copper due to further monetary tightening in top consumer China.
China lifted bank reserve requirements by 50 basis points on Thursday, signalling that containing inflation and soaking up excess cash remained its top priority even after signs the economy was slowing down.

US copper import surge led by manufacturing bounce
NEW YORK, May 16 (Reuters) - U.S. copper imports climbed to a two-year peak in March, snapping back-to-back monthly declines in the first two months of the year, as demand for the metal grew with a sustained recovery in manufacturing.
As inbound shipments of copper broke higher, aluminum imports sputtered, falling 20 percent in the first quarter -- a trend that could continue in the coming months as the combination of production restarts and sky-high prices on the London Metal Exchange (LME) deter consumer appetites.

China refined nickel imports to drop as NPI output grows-industry
HONG KONG, May 17 (Reuters) - China's imports of refined nickel will drop sharply as new nickel-pig-iron projects come online in the next two years, boosting production of the cheaper replacement by as much as a quarter this year and doubling it by 2013, industry watchers said on Tuesday.
China, the world's leading nickel consuming nation, is expected to produce more than 200,000 tonnes of nickel in the form of nickel-pig-iron, or NPI, this year, compared to 160,000-170,000 tonnes last year, analysts estimated, including Fan Runze at state-backed research firm Antaike.

METALS-Copper climbs on signs of China demand support
LONDON, May 17 (Reuters) - Copper rose on Tuesday as the euro advanced against the dollar ahead of a series of U.S. economic reports, while signals that Chinese consumers are returning to the market underpinned prices.
Benchmark copper  on the London Metal Exchange traded at $8,900 a tonne at 1008 GMT, up from $8,840 at Monday's close.

PRECIOUS-Gold rises as dollar retreats from 7-week high
LONDON, May 17 (Reuters) - Gold rose on Tuesday as the dollar eased from a seven-week high against the euro, relieving downward pressure on prices, while lingering concerns over euro zone debt supported demand for the metal as a haven from risk.
Spot gold  was bid at $1,494.69 an ounce at 0944 GMT, against $1,489.20 late in New York on Monday. U.S. gold futures for June delivery  rose $3.50 an ounce to $1,494.10.

No comments: