Corn (Source: CME)
US corn futures rise sharply on increasing demand from end-users, with ethanol producers bidding up prices to secure grain while increasing output 0.7% last week. Meanwhile, market participants predict the USDA will cut its already-low inventory forecasts in a monthly crop report Thursday amid strong demand. Some expect the agency will also reduce its outlook for the next harvest due to planting delays this spring. That could keep inventories tight through next year. CBOT July corn climbs 27 1/2c to $7.64/bushel.
Wheat (Source: CME)
US wheat futures close stronger on spillover support from a 3.7% rally in the corn market. Corn's gains lift wheat as market participants expect livestock producers will increasingly feed wheat to animals and cut back on corn feedings. Corn closes above wheat in a reversal of their typical roles as traders are nervous about shrinking corn supplies and less concerned about looser supplies of feed wheat. CBOT July wheat rises 14 1/4c to $7.48/bushel while KCBT July gains 10 12/c to $8.85 and MGE July surges 36 3/4c to $10.21 1/2.
Rice (Source: CME)
US rice futures edge higher, taking their cue from rallies in the wheat and corn markets. Rice looks to wheat for direction as both grains are global food staples. Traders also worry about the potential for declining grain inventories ahead of a monthly USDA supply-and-demand report. CBOT July rice rises 1/2c to $14.77 1/2 per hundredweight.
U.S. corn rises for 2nd day, wheat firm after selloff
SINGAPORE, June 8 (Reuters) - Chicago corn ticked higher on Wednesday, rising for a second straight day as investors took positions ahead of a key U.S. government report which is expected to show tight old-crop supplies amid relentless demand from ethanol and feed producers.
"The supportive factor for corn is tightness in old-crop supply and also the expectation that the USDA may trim the 2010/11 corn carryout figures because high prices have been insufficient in curbing demand," said Luke Mathews, a commodity strategist at Commonwealth Bank of Australia.
Russia wheat pegged at $295/T FOB, exports 10 mln t
GELENDZHIK, Russia, June 8 (Reuters) - Export prices for Russian wheat stood at $295 per tonne FOB basis in the key Black Sea port of Novorossiisk, and should climb only slightly when exports re-open in July, a top analyst said on Wednesday.
Dmitry Rylko, general director of the Institute for Agricultural Market studies (IKAR) told a Grain Union conference in the Black Sea resort of Gelendzhik he saw FOB prices at $300 per tonne by Aug. 1.
Drought To Make French Soft Wheat Non-EU Exports Fall By Half (Source: CME)
The driest spring on record in France will lead to a decline of the country's soft wheat exports outside the European Union by more than half on the year, in the year starting in July. France AgriMer, the French government agency for agriculture and fisheries, expects that given the forecast for domestic demand and exports within the European Union, exports to non-EU countries is likely to fall to six million metric tons in the period between July 2011 and June 2012, from an expected record 13.2 million over the previous 12 months. The drought in the first half of 2011 will cause French soft wheat production to fall to 31 million metric tons in 2011-2012 from an expected 35.6 million tons in the 2010-2011. Soft wheat production would be the lowest since 2007-2008, France AgriMer said. The overall output will still be above the previous drought in 2003 when soft wheat fell to 29.1 million tons.
"Let's stop saying this will be a black year," said Xavier Rousselin, the head of France AgriMer's arable crops unit, adding the past few years were "outstanding." "A few years ago, we would have been glad to get such an output," he said. Rainfall during the coming months may offset somewhat the negative forecast, although damage is already beyond repair in some areas, Rousselin said. According to the French government weather agency Meteo France, the 2011 spring was both the warmest and the driest on record, with a higher average temperature and less rain than in 1976, the previous most severe drought since the agency started compiling the data. Exports to non-EU countries will be much lower than in 2010-2011 as French producers will first provide domestic needs and a strong demand from neighboring countries in the European Union.
The domestic demand for soft wheat is likely to rise as food companies will substitute barley --which output is likely to fall to 8.7 million tons-- with soft wheat, Rousselin said. France is likely to export eight million tons within the European Union in 2011-2012, up from 6.4 million in 2010-2011.
U.S. Corn-Crop Delays Signal Tightest World Supply Since 1974, Price Gains (Source: Bloomberg)
Wet weather that delayed corn planting in the U.S., the world’s largest exporter, may send global inventories to their lowest in 37 years, signaling higher costs for consumers and livestock producers. More than one-third of Midwest fields were planted after the mid-May target for optimal growth because of excessive rain, and Ohio farmers as of June 5 were the furthest behind since 1989, with 58 percent sown, government data show. Goldman Sachs Group Inc. said June 6 that the disruptions increase the “potential for a shortfall.”
Corn Advances for Third Day, Maintaining Premium to Wheat in Chicago Trade (Source: Bloomberg)
Wheat for July delivery gained 0.6 percent to $7.525 a bushel, rising for a second day, while corn increased 0.5 percent to $7.675 a bushel, climbing for a third day.
Reuters Summit-Natixis sees possible bubbles in commodities
LONDON, June 7 (Reuters) - The dislocation between loose U.S. monetary policy and rising rates in emerging nations will lead to more volatility and even bubbles in commodities, particularly in precious metals, says French investment bank Natixis.
The excess liquidity coursing through the financial markets that developed economy central banks such as the U.S. Federal Reserve or the European Central Bank pumped out during the global financial crisis has been a major driver in the rise in commodity prices.
Kenya delays resumption of coffee sales - officials
NAIROBI, June 8 (Reuters) - Kenya has delayed the resumption of its weekly coffee auction that had been set for June 7 after a cold spell affected drying of beans for milling, a senior exchange official said on Wednesday.
"Unfortunately there has been cold spell that has affected the drying of coffee parchment for milling. We now expect the auction to resume on June 28 and not June 7 as earlier planned," the official at the Nairobi Coffee Exchange told Reuters.
Vietnam robusta coffee trades at first premium since May 2010
SINGAPORE, June 8 (Reuters) - Vietnam's robusta coffee beans changed hands at premiums for the first time since at least May 2010 as stocks tightened ahead of the next harvest and after strong exports earlier this year, dealers said on Wednesday.
Vietnam's May coffee exports rose an estimated 10.6 percent from the same month in 2010 to 110,000 tonnes, or 1.83 million bags, exceeding market expectations, the government said.
Brazil to suffer ethanol fuel shortages for years
SAO PAULO, June 7 (Reuters) - Brazil, the world's largest grower of the most promising biofuel feedstock of the future -- sugarcane -- will suffer shortages of fuel ethanol for several years to come due to the lack of investment in new planting.
But regulatory change means uncertainty for the private sector, which is unwilling to plant more cane to meet both global demand for sugar and domestic demand for ethanol. As if matters weren't already bad after investments in new capacity stalled from the 2008 financial crisis, which pushed many heavily leveraged mills into bankruptcy.
Oil Gains for Third Day as OPEC Fails to Agree Quotas; U.S. Supplies Drop (Source: Bloomberg)
Oil rose for a third day in New York after OPEC failed to reach an agreement on production targets for the first time in at least 20 years and U.S. crude inventories fell more than analysts forecast. Futures gained as much as 0.7 percent after climbing 1.7 percent yesterday. The Organization of Petroleum Exporting Countries will maintain its current output for now, said Mohammad Aliabadi, the acting Iranian oil minister and OPEC president. A Gulf delegate said June 7 that the group would increase production targets. A U.S. government report showed crude supplies dropped the most since December.
OPEC Can’t Find Consensus on Oil Output (Source: Bloomberg)
OPEC failed to agree on crude production for the first time in at least 20 years after six countries opposed a Saudi Arabian push to increase supply as oil trades above $100 a barrel.
Gold Falls for Second Day on Bets Dollar Will Rebound on Bernanke Outlook (Source: Bloomberg)
Gold futures fell for the second straight day on speculation that the Federal Reserve won’t ease U.S. monetary policy further, boosting the dollar and eroding the appeal of the precious metal as an alternative asset. The greenback rose from a one-month low against a basket of six major currencies. Yesterday, Fed Chairman Ben S. Bernanke signaled that there won’t be a third round of so-called quantitative easing, and gold dropped 0.2 percent.
METALS-Copper falls on economic concerns, dollar
LONDON, June 8 (Reuters) - Copper fell more than 1 percent on Wednesday as the dollar rebounded from one-month lows and a bleak Federal Reserve assessment of the U.S. economy depressed market sentiment.
Federal Reserve Chairman Ben Bernanke late on Tuesday acknowledged the economy had slowed but offered no hint the U.S. central bank is considering any more stimulus to accelerate growth.
PRECIOUS-Gold slips as Bernanke dampens QE3 expectations
LONDON, June 8 (Reuters) - Gold fell on Wednesday after Federal Reserve Chairman Ben Bernanke offered no hints of further U.S. monetary easing in a speech a day earlier, taking pressure off the dollar.
Bernanke acknowledged the U.S. economy has slowed but offered no hint that the central bank is considering any more stimulus to accelerate growth.
Nickel Pig Iron Output in China Seen Surging in Challenge to Refined Metal (Source: Bloomberg)
Nickel pig iron output in China, the world’s largest metals user, may surge 50 percent this year, possibly curbing demand for the refined product and hurting prices that have lagged behind all other base metals in London.
Copper to Surge to Record by Year’s End on Chinese Demand, Barclays Says (Source: Bloomberg)
Copper prices will rise to a record $12,000 a metric ton by the end of the year as China’s imports rebound, said Nicholas Snowdon, an analyst at Barclays Capital in London. “The Chinese market is awakening from the destocking cycle that lasted nine months,” Snowdon said today at a Metal Bulletin conference in New York. “Their backyard inventories have been completely depleted. By July, we will begin to see a steady increase in imports.”
Rio Tinto remains cautious on aluminum outlook
NEW YORK, June 7 (Reuters) - Rio Tinto Alcan sees strong demand for aluminum in all sectors, but remains cautious about its medium-term outlook because of the high level of the inventories in London Metal Exchange warehouses, said chief executive Jacynthe Cote on Tuesday.
Concerns about European debt, U.S. unemployment, Chinese inflation, and the pace of the recovery in Japan also cloud the near-term view of aluminum demand, the executive said.
Novelis bullish on aluminum prospects
NEW YORK, June 7 (Reuters) - Novelis, which recycles cans to make aluminum products, expects earnings to almost double in the next four years as demand increases, especially from automakers, its chief executive said on Tuesday.
Philip Martens also expects the price of aluminum to remain around $2,600 to $2,700 per tonne for the foreseeable future, even as the global economy shows signs of strengthening.
Alcoa sees much scope for aluminum to replace copper
NEW YORK, June 7 (Reuters) - Alcoa Inc. Chief Executive Klaus Kleinfeld said on Tuesday that no one is happier to see copper prices climbing than he is, because that meant substitutions into aluminum would increase.
Speaking at The Aluminum Summit hosted by AMM, the head of the largest U.S. aluminum producer said: "I'm happy that the copper price has gone up. Every time it rises, those people who use copper are calling us, because they want to replace copper with aluminum."
China daily crude steel output falls 3.46 pct over May 21-31
BEIJING, June 8 (Reuters) - Daily output of crude steel in China in the last 11 days of May fell 3.46 percent compared with the previous 10 days, reaching 1.915 million tonnes, according to data issued on Wednesday by the China Iron and Steel Association.
The figure would amount to almost 699 million tonnes if calculated on an annualised basis, compared to 627 million tonnes of output for all of last year.
Indonesia May tin exports fall 4 pct due to stockpiling
JAKARTA, June 8 (Reuters) - Indonesia's refined tin exports fell 4 percent in May from the same month last year, despite rising production as exporters kept stocks in warehouses on hopes of improving prices, an official at the trade ministry said on Wednesday.
Indonesia, the world's top tin exporter, shipped 7,013.28 tonnes of refined tin last month, compared to 7,332.46 tonnes in the year-ago period, trade ministry data showed.
China to create rare earth monopoly in Inner Mongolia
BEIJING, June 8 (Reuters) - China will shut down 35 rare earth producers in the region of Inner Mongolia and entrust all exploration, production and processing of the metals to a single company, the Baotou Steel Rare Earth Group , the Ministry of Industry and Information Technology said.
The restructuring of the sector will be completed by the end of this month, according to a statement on the ministry's website.
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