Thursday, June 30, 2011

20110630 1029 Global Commodities Related News.

Corn (Source: CME)
US corn futures end mixed in a volatile session, with prices fluctuating wildly ahead of Thursday's USDA report on acreage and quarterly stocks. The market opened sharply higher today amid short-covering and renewed optimism about export demand, as well as worries about the US crop. New-crop contracts then relinquished gains. CBOT July corn closes up 15c at $6.98/bushel but December dropped 2 1/2c to $6.50 1/2.

Wheat (Source: CME)
US wheat futures rally for a second straight day as worries about the spring wheat crop in North Dakota continue to fuel the market. Millions of unplanted acres in North Dakota, a key wheat state, along with more rains that have threatened the planted crop, could lead to significant shortfalls, analysts say. MGEX July spring wheat led the way higher, jumping 37 cents, or 4.4%, to $8.76/bushel, while July KCBT wheat ends up 1 1/4 cents to $7.45. July CBOT wheat ends up 1 cent to $6.41 1/4, but some deferred contracts end slightly lower.

Rice (Source: CME)
US rice futures end lower as a modest rebound started Tuesday fails to hold. Prices are down sharply since June 10 thanks to widespread commodity selling and ample world rice supplies. Traders awaiting Thursday's USDA acreage and quarterly stocks report. The Arkansas Farm Bureau says it should give clearer look at how many U.S. acres have been lost to flooding. CBOT July rice ends down 5 1/2 cents to $13.26 1/2 per hundredweight.

Corn at one-week top, wheat rallies on crop conditions
SINGAPORE, June 29 (Reuters) - Chicago corn futures rose 2.4 percent on Wednesday, while wheat added almost 2 percent as renewed concerns over U.S. crops and investor positioning ahead of a key government report buoyed the markets.
"I think that Minneapolis wheat led grain markets higher as there is talk about lost acres due to wet weather in the U.S.," said Brett Cooper, a senior manager of markets at FCStone Australia.

Australia to allow more competition in WA grain exports
SYDNEY, June 29 (Reuters) - Western Australia's main grain handler will be forced to surrender its monopoly over transporting grain to export ports in the country's top grain exporting state, Australia's competition regulator said on Wednesday.
Co-operative Bulk Handling Ltd (CBH) is the dominant provider of up-country storage facilities for bulk export grain in Western Australia and over 90 per cent of the grain harvested in the state is stored in the firm's facilities.

Indonesia, Bangladesh rice demand lift Vietnam prices
HANOI, June 29 (Reuters) - Indonesia has been in talks to import between 400,000 and 600,000 tonnes of rice from Vietnam to capitalise on lower prices, with shipment possible in the third quarter of this year, traders and a state-run newspaper said on Wednesday.
The official Vietnam Economic Times newspaper said if the government-to-government contract is reached, 600,000 tonnes of rice would be shipped in August. It gave no details on pricing or the rice grades.

India likely to ease grain export curbs soon-sources
NEW DELHI, June 28 (Reuters) - India could decide soon to allow exports of a million tonnes each of wheat and common rice as government stocks hit a record 65.6 million tonnes, well above targets, two government sources said on Tuesday.
India, one of the world's biggest producers and consumers of wheat and rice, has kept a tight control over grain exports since 2007, allowing only overseas sales of aromatic basmati rice, to ensure it can provide cheap food grains to the poor.

Vietnam 2011 paddy output to rise to 41 mln T-report
HANOI, June 29 (Reuters) - Vietnam, the world's second-largest rice exporter after Thailand, plans to raise output this year to 41 million tonnes of paddy, up 2.5 percent from 2010 when it already shipped a record volume, a state-run newspaper reported on Wednesday.
Higher production of the staple in Vietnam would not only help secure more food security for a population of 87 million, but also raise the country's export capacity, thus helping to ease pressure on regional and global food supply.  

Frost clips Brazil winter corn crop, prices rise
SAO PAULO, June 28 (Reuters) - The first widespread frost hit Brazil's leading grain state of Parana in the past two mornings, hurting the quality of what is expected to be a record output for the winter corn crop, officials said.
Prices for the state's corn rose 4 percent after news of the extent of the frost became more widely known.

Emerging fast-food nation Indonesia props up wheat market
JAKARTA, June 28 (Reuters) - Indonesia will be crowned top Asian wheat importer this year, as higher incomes turn Southeast Asia's largest economy into a fast-food nation and help to keep global prices on the boil.
As affluent Indonesians turn away from rice, their country is vying with Japan to be Asia's leading wheat buyer, while the latter battles economic crisis in the wake of a devastating earthquake and an ageing population boosts protein in its diet.

Russia grain prices too low to trigger export duty
MOSCOW, June 28 (Reuters) - Low export demand, ample supplies and a decline in world wheat futures are likely to push Russia's domestic grain prices below the government's threshold for new export restrictions.
Deputy Prime Minister Viktor Zubkov said last week the government, which on Friday will allow exports to resume after a 10-month ban, would start levying a duty if milling wheat prices hit 6,500 roubles ($229.40) a tonne.

Australians Ponder Stricter Curbs On Foreign Investment In Sector (Source: CME)
As worries grow that the expansion of open-cut coal mining is damaging Australia's agriculture base, opposition and Greens lawmakers said they want stricter curbs on foreign investment in the farming sector. Both the environmentalist Greens party and center-right Liberal Party want to lower the threshold on investments that trigger scrutiny by the foreign investment watchdog, so proposals to buy farms can be vetoed. That threshold is now 231 million Australian dollars (US$243.5 million). "We are having another look at the threshold for these kinds of purchases, as we do have to ensure what's done is in Australia's national interest," Liberals leader Tony Abbott told reporters. A push for change by both parties could pressure the ruling minority Labor government, which partly depends on the Greens to stay in office, to meet some of the demands. A spokesman for Treasurer Wayne Swan, who ultimately oversees foreign investment, wasn't immediately available to comment.
Foreign buying of farmland in Australia makes up a small proportion of overall inward capital, but lawmakers are concerned some of the country's best pastoral regions are being churned up by the mining sector. In the fiscal year ended June 30, 2010, 17 proposals valued at A$2.3 billion were approved in the agriculture sector, out of total foreign investment of A$140 billion. This compared with 12 proposals the year earlier valued at A$2.8 billion. The last review of foreign-investment thresholds was in 2009, which set the bar at A$231 million, while rules on foreign buying of residential property were tweaked in 2010. Greens party leader Bob Brown said he also wants a registration for the foreign ownership of land, and tighter restrictions on the approval of new mines. Mr. Brown singled out investment in the coal-rich Liverpool pastoral plains area of northern New South Wales, which he said is a direct threat to agriculture.
"There are small farms -- some four, five, six, seven generations in ownership -- being put out of business for a 20- or 30-year coal mining venture," Mr. Brown said after a speech at the National Press Club. He also addressed the proposed minerals resource rent tax, urging the government to maximize value from the mining boom by widening its scope beyond coal and iron ore to other metals and minerals. He also wants a debate on the pace of extraction of iron ore. "Isn't it a worry for all of us that the massive iron-ore repository we have in this nation may be gone in 25 years?" he said. The chief mining lobby group, the Minerals Council of Australia, said the Greens policy was "xenophobic" and warned the party against interfering in an industry it says is generating benefits across the country.

Soggy Corn Fields Curb Planting as Demand for Ethanol, Animal Feed Climbs (Source: Bloomberg)
U.S. corn farmers were unable to plant on soggy or flooded fields from Arkansas to North Dakota this year, signaling tighter grain stockpiles even after rising demand for livestock feed and ethanol sent prices surging. The U.S. Department of Agriculture may cut its planting forecast tomorrow to 90.629 million acres, according to a Bloomberg News survey of 31 analysts. That’s less than the 92.178 million that farmers predicted in a government survey three months ago and would be the USDA’s biggest such reduction from the March forecast since 1995.

Corn Rises for Second Day as U.S. Crop Conditions Worsen; Soybeans Climb (Source: Bloomberg)
Corn advanced for a second day, extending the biggest gain in almost three months, and soybeans rose on declining crop conditions in the U.S., the biggest exporter of both commodities. U.S. corn was rated 68 percent good or excellent as of June 26, down from 73 percent a year earlier, the Department of Agriculture said this week. Sixty-five percent of soybeans earned top ratings, down from 67 percent in 2010, USDA data show.

China's 2011 Corn Buys From US At Least 1.7 Mln Tons -Executives (Source: CME)
China has bought at least 1.7 million metric tons of U.S. corn in the last four months--including 700,000 tons in recent weeks, traders, shipping executives and cargo surveyors said. More sales are in the pipeline, and although the figure couldn't immediately be confirmed, there is speculation that China has made deals for a further 800,000 tons, they said. China's purchases are significant because U.S. corn stocks are dwindling and are likely to hit a 15-year low of 18.5 million tons by the end of August. China became a net importer of corn in 2010 for the first time in 15 years, and its purchases amid current tight supply could buoy global prices. The executives said all purchases are to replenish government stocks. Chinese government officials couldn't be reached for comment.
Traders didn't give the exact prices of the deals but said that late last week, when some of the deals were finalized, U.S. corn was offered around $338 a ton, cost and freight for shipment to China in September from the Pacific Northwest. Offers for August shipment to China from the U.S. Gulf were around $342/ton, C&F. "U.S. corn delivered into Chinese ports is now cheaper than grain in the local markets, but taxes of around 14% for private imports and [the] cost of transporting it to mills is a deterrent," said a Washington-based corn industry executive. However, such pitfalls aren't a factor for imports to build state reserves, he noted. Traders said that last week, ex-warehouse corn prices in northern China were around $357/ton, while ex-railhead rates in southern China, which is distant from corn-producing regions, was around $377/ton.
"China is buying when global prices are off highs, and the first such purchase of a little over 1.0 million tons was some time in March," said an executive familiar with the deals. He said subsequent deals totaling several hundred thousand tons were done in the second week of May and then again in the second half of June. Most traders said China bought at least 700,000 tons in recent weeks through global trading companies. The pace of China's purchases indicates that imports may hit 4.0 million tons by the end of the year, said the Washington-based executive. This would be more than double last year's total imports of around 1.6 million tons.

Sugar dips, buoyed by Brazil crop data; coffee steady
LONDON, June 29 (Reuters) - ICE raw sugar futures eased from near three-month highs in early trading on Wednesday, buoyed by lower-than-expected crush data in top grower Brazil, while arabica coffee was little changed, supported by news that a minor Brazilian coffee region was hit by frost.
Sugar futures edged down in light early trade, supported by lower-than-expected crush data in Brazil as dealers expressed concerns over a slow start to the harvest in the centre-south.

Frost hits some Brazil coffee; impact may be minor
BRASILIA, June 28 (Reuters) - Frost hit parts of at least two of Brazil's coffee-producing states overnight, agronomists said on Tuesday, but damage observed suggested the freeze was unlikely to put a major dent in next year's output.
The freeze hit Parana state, which produces about 5 percent of the coffee in the world's top producer, and parts of Sao Paulo state which grows about a 10th of national output.

Global Agriculture Supply Worsening May Spur Food Shortages, Rogers Says (Source: Bloomberg)
The global agriculture supply situation has worsened and a failure to boost food production fast enough to meet demand may lead to shortages, said investor Jim Rogers, chairman of Rogers Holdings. “We’ve got to do something or we’re going to have no food at any price at times in the next few years,” Rogers said in a Bloomberg Television interview with Rishaad Salamat today in Singapore. “I still own agriculture. If I found something to buy, I would buy it.”

Commodities midway through 20 pct correction-UBS
LONDON, June 28 (Reuters) - Commodities are due to be weak over the next several months, having completed about half of an expected 20 percent correction as investors unwind positions built up during stimulus programmes, UBS said on Tuesday.
"We've done about 10 percent on copper... so we reckon that we're about halfway there," global commodity analyst Julien Garran told a briefing.

EPA Gives Go Ahead To Boost Ethanol In Gasoline (Source: CME)
The Environmental Protection Agency cleared the way for gasoline companies to begin adding more ethanol to the gasoline mix pumped out at stations. Drivers may soon see an orange and black sticker at the pump warning that the fuel dispensed there contains "Up to 15% ethanol" and is to be used only in "2001 and newer passenger vehicles" or flexible-fuel vehicles that are designed to run on a blend as high as 85%. Until now, the highest percentage of ethanol allowed to be blended into most gasoline was 10%, but the new EPA regulation allows for that to rise to 15%. The new EPA label warns that using a 15% ethanol blend in cars made before 2001 may damage the engine. The EPA approved the 15% ethanol mix, or E15, in October 2010 and is now issuing the specific guidelines and labels needed to allow the higher blend to be sold at gas stations. Gasoline companies must first register with the EPA before they distribute it, an EPA spokeswoman said.
"This is another step in the process to get E15 into the marketplace later this year, which will create U.S. jobs, improve the environment and strengthen national security by displacing foreign oil," Tom Buis, chief executive for the ethanol lobbying group Growth Energy, said. The allowance for more ethanol in gasoline will likely have only a minor impact on ethanol production in the near term because many of the cars on the road were made before 2001, said Joe Glauber, the U.S. Department of Agriculture's chief economist. The positive news for the ethanol group comes shortly after a sharp blow to the industry by the Senate, which voted on June 16 to do away with a $6 billion tax credit for ethanol blenders and a 54-cent-per-gallon tariff on ethanol imports. And there is plenty of opposition to the rise of corn-based ethanol in the U.S., especially in the livestock industry. Ranchers blame rising ethanol production for higher corn-based feed prices.
Corn consumption by ethanol producers is at a record high 5.05 billion bushels expected this year by the USDA.

Crude Oil Climbs for Third Day After U.S. Supplies Drop More Than Expected (Source: Bloomberg)
Oil climbed a third day in New York after a report showed U.S. crude stockpiles fell almost three times as much as analysts forecast and Greece passed austerity measures aimed at preventing a debt default which may have disrupted Europe’s economy. Futures gained as much as 0.6 percent after the biggest two-day rally in seven weeks. The Energy Department said crude inventories declined 4.38 million barrels, compared with a median analyst projection for a 1.5 million-barrel decrease. Oil has risen 4.5 percent since June 23, when it dropped 4.6 percent after the International Energy Agency announced the release of 60 million barrels from strategic reserves, including 30 million from the U.S.

Japan May zinc exports fall 32 pct yr/yr
TOKYO, June 29 (Reuters) - Japan's refined zinc exports for May fell 32 percent from a year earlier to 5,905 tonnes, narrowing from April's year-on-year drop of 40 percent, Ministry of Finance data showed on Wednesday, partly reflecting a recovery in production.
The drop in May exports was also narrower than a 34.6 percent year-on-year decline in March, while exports rose 17 percent from April.

Japan May copper exports plunge 52 pct yr/yr
TOKYO, June 29 (Reuters) - Japan's refined copper exports plunged 52 percent in May from a year earlier to 23,764 tonnes for an eighth straight month of year-on-year declines, Ministry of Finance data showed on Wednesday, reflecting slowing demand from China, the world's top copper consumer.
But exports inched up 0.8 percent from April, with China's share also improving to 36 percent in May from 29 percent in April. China accounted for 48.5 percent of Japanese refined copper exports in March.

Japan May rare earth imports from China down 3 pct m/m
TOKYO, June 29(Reuters) - Japan's imports of rare earths from China fell 3 percent in May from April, the first month-on-month drop in three months, as the price of the metal surged, though demand could pick-up later in the year as the country continues to recover from a massive earthquake.
China, which produces 97 percent of global rare earth supplies, has been tightening trade in the strategic metal which is used in high-tech electronics, magnets and batteries, causing concerns globally about supply and triggering prices to jump.

Iron Ore-Prices at 3-month lows, miners put more cargo on spot
SINGAPORE, June 29 (Reuters) - Spot iron ore prices languished at three-month lows and deals remained scarce on Wednesday as lower steel prices in top producer China continued to limit buying interest for the steelmaking ingredient.
Global miners BHP Billiton   and Rio Tinto  are selling more cargoes on the spot market with Chinese steel mills opting to buy at spot rates as the material is cheaper than on long-term contracts, traders said.

Global iron ore swaps volume seen swelling to 80 mln T in 2015
SINGAPORE, June 28 (Reuters) - Global volume of iron ore swaps may jump to 80 million tonnes by 2015, around four times last year's level, as interest in the hedging tool rises, an industry official said on Tuesday.
The projected volume represents nearly 13 percent of China's iron ore imports of more than 618 million tonnes last year.

METALS-Copper rises on dollar, Greek austerity plan vote
LONDON, Jun 29 (Reuters) - Copper rose on Wednesday, helped by a softer dollar and as market sentiment improved on prospects that Greece's government will pass an austerity plan to save the country from bankruptcy.
Three-month copper on the London Metal Exchange    was 1 percent higher at $9,165 a tonne by 1040 GMT, from $9,072 at the close on Tuesday.

PRECIOUS-Gold gains as invesors grow bolder over Greece
LONDON, June 29 (Reuters) - Gold  rose for a second day  on Wednesday  as growing certainty that Greece will approve steep budget cuts boosted the euro and other risk-related assets such as commodities and higher-yielding currencies.  
Gold often declines in periods of greater investor appetite, but any flickers of optimism over a solution to the Greek debt crisis have also resulted in a rise in the euro against the dollar, which has cushioned the bullion price.

Gold Futures Advance in New York as Decline to a 5-Week Low Prompts Buying (Source: Bloomberg)
Gold gained for a second day in New York as a drop to a five-week low spurred some investors to buy the metal as an alternative to currencies. Futures touched $1,490.80 an ounce on June 27, the lowest price since May 20. Greek Prime Minister George Papandreou today clinched enough votes to pass the first part of an austerity plan aimed at meeting European Union aid requirements and staving off a default.

Scrapping Record Fails to End ‘Nightmare’ for Shipowners: Freight Markets (Source: Bloomberg)
Shipowners are scrapping capesize vessels at a record pace after rates plunged about 50 percent in a year. It’s still not enough to end losses. Forty-eight capesizes, usually used for hauling iron ore or coal, have been demolished this year through June 24, compared with 18 in the whole of last year, according to shipbroker Clarkson Plc. Rates will remain below about $11,000 a day for the rest of the year, compared with a breakeven point of about $23,000, according to Johnson Leung, head of regional transport at Jefferies Group Inc. in Hong Kong.

Baltic index falls, capesize gains lose steam
LONDON, June 28 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, fell on Tuesday as the pace of cargo activity on the larger capesize market slowed.   
Brokers said they were watching for further developments in  China, which is facing its worst power shortages in years and  likely to have an impact on dry freight activity. Uncertainty over prospects for the world economy could also potentially hurt demand for raw materials.

DryShips adds more options to buy drillships - Wells Fargo
June 27 (Reuters) - DryShips Inc , a dry bulk shipper and oil and natural gas driller, has added options for two more drillships with a base price of $608 million each, Wells Fargo Securities said in a note following the company's analyst day on Friday.
The Greece-based company now has three options with Samsung Heavy Industries , and if all of them are exercised, DryShips' fleet will comprise two semi-submersible rigs and 10 drillships.

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