Thursday, July 14, 2011

20110714 1103 Global Commodities Related News.

Corn (Source: CME)
US corn futures end sharply higher on crop-threatening hot weather and a weaker US dollar. Scorching weather, along with forecasts calling for more heat, prompt concerns about the size of the crop. Analysts warn that a crop shortfall would cause big problems because supplies are already tight. Forecasts differ on how long the heat will last. Meanwhile, the weaker USD and stronger equities helped boost commodities generally. July CBOT corn ends up 29 3/4c, or 4.3%, to $7.26 3/4 a bushel. Dec corn closes up 21 3/4c to $6.79 3/4.

Wheat (Source: CME)
US wheat futures surge, rallying near 4-week highs on spillover support from corn and external financial markets. Wheat continued to advance with corn, as traders price wheat as a competitive feed grain with corn, analysts say. Weakness in the U.S. dollar, broader based buying in commodities and assumptions the market was undervalued after recent break in prices attracted speculative buying to the market, analysts add. Comments from Fed Chairman Bernanke taunting the possibility of using additional economic stimulus weakened the dollar and bumped up commodity prices, said Dan Basse, president AgResource Co in Chicago. CBOT Sept wheat end up 6.3% at $7.14 1/2.

Rice (Source: CME)
CBOT rice futures continued to soar Wednesday, ending limit up on a troubled US crop and world prices. A late-planted crop and drought conditions are hurting the US crop, analysts say. Meanwhile, world prices are up sharply this week, and uncertainty about Thailand's new government and its rice policy is considered supportive. The most-active September contract is up 19% from a June 30 low, closed up 50c to $16.69/hundredweight. July rice, which is in delivery, ended up 40 1/2 cents to 2.6%.

US corn near 2-wk top on tight supplies, wheat dips
SINGAPORE, July 13 (Reuters) - Chicago corn futures were steady after climbing 4 percent to a two-week high in the previous session, buoyed by a U.S. government report which forecast surprisingly small corn stocks.
"The wheat is definitely better supplied than what corn is and today's action is more to do with profit-taking after 5 percent rally," said Adam Davis, a senior commodity analyst at Melbourne-based fund Merricks Capital. "Tight supplies as predicted in the USDA report are still supporting corn."

Ukraine says may export 20 mln T of 2011 grains
KIEV, July 13 (Reuters) - Ukraine may export 20 million tonnes of grain from this year's crop if the harvesting campaign progresses well, First Deputy Prime Minister Andriy Klyuev said on Wednesday.    
This volume could include 9 million tonnes of wheat, he told a government meeting. In the previous season, Ukraine was hit by drought and exported 12.1 million tonnes of grain including 4 million tonnes of wheat.

Black Sea grain crops rise, supply seen strong
BUCHAREST, July 13 (Reuters) - Eastern Europe's grain crops are likely to recover this year due to favorable weather, following a scorching previous season, and help the Black Sea powerhouse gear up for a pick-up in exports.
Last year Russia lost over a third of its grain crops in the worst drought in decades, prompting the government to ban exports for a year, while Ukraine's cereal crop production dropped by a sixth.

China 2011 wheat output seen up 1.4 pct at 116.79 mln T-CNGOIC
BEIJING, July 13 (Reuters) - China will likely harvest a total of 116.79 million tonnes of wheat this year, up 1.4 percent from last year, despite earlier concerns over drought damage to winter crop, according to the lastest estimate by an official think-tank.
China National Grain and Oils Information Centre (CNGOIC) revised upward the country's wheat output after the National Bureau of Statistics said the country's winter wheat, which accounts for a majority of the wheat harvest, was two percent higher than last year at 110.79 million tones.

US corn fields wet enough to face heat, for now
CHICAGO, July 12 (Reuters) - There is enough soil moisture across much of the U.S. Midwest to help the corn crop withstand soaring temperatures the next two weeks when plants pollinate and set yields, agricultural meteorologists said on Tuesday.
Incessant spring rains, especially in the eastern Corn Belt, have saturated the fields, giving the corn and soybean crops ample moisture against the high-pressure ridge.

Rains revive EU wheat outlook, sunshine now needed
LONDON, July 12 (Reuters) - Rains have improved the outlook for wheat crops in top European Union producers France and Germany, following spring droughts, and now sunshine is needed, crop analysts said on Tuesday.
Prospects for the wheat harvest in Britain, however, continue to deteriorate as dry weather further stresses crops in the EU's number three producer.

French farm body raises wheat crop view to 32 mln T
PARIS, July 12 (Reuters) - French farm office FranceAgriMer has raised its estimate for this year's soft wheat crop to 32 million tonnes from 31 million last month, data posted on its website showed on Tuesday.
The revised forecast, based on figures as of July 5, was still 10.3 percent down on a 2010 crop of 35.7 million tonnes and would remain the smallest since 2007.

Manitoba to See Hot, Dry July - Forecaster (Source: CME)
After being swamped by well-above-average rainfall throughout the spring, the wet areas of Manitoba have been able to dry out, for the most part, over the past month or so. Drew Lerner, president of World Weather Inc. in Kansas City, said a drying bias is under way in the province, and it should continue for a while longer. "The longer-range outlook was for Manitoba to see drier weather as the summer went along, and with the ridge of high pressure that's being advertised for the U.S. Midwest for the next 10 days or so, we will probably see that pattern perpetuate for the next little while," Lerner said. Lerner said although the weather will be hot and dry for the most part, the period won't be prolonged enough where droughtlike conditions could become a concern for Manitoba producers. He said thunderstorms were likely to flare up, which is where most of the moisture would be coming from. However, Lerner admitted July will turn out to be a hot month in Manitoba.
"Temperatures in the low to mid-30s [Celsius] are likely, and it will be humid," he said. As far as the harvest forecast is concerned across the Canadian prairies, Lerner said if crops develop quickly, there could be some delays. "Some of the areas in Saskatchewan and Alberta will still be getting rain in the traditional harvest season, but so much of the crop was planted late that it might not be much of a factor," he said. "We should see a wet August and early September, but then it should stop raining, and should see better weather for harvesting. "Manitoba is likely to be included in this as well, but it won't be as wet as it is in the western provinces. We will still have showers coming along during the start of the harvest season, but I think once we get a couple of weeks into September we should see better harvest conditions right across the Canadian prairies," Lerner said.

General Mills CEO: Price Of Food Is Unlikely To Decline (Source: CME)
Higher food prices are here to stay, General Mills Inc.'s Chief Executive Ken Powell said, adding that it was unlikely that food prices will slip into a deflationary cycle as they did last year. "It would be highly unlikely that we'll see price declines," Powell said. "The long-term trends are inflationary, not deflationary. You're going to see pricing in a significant way." General Mills will rely entirely on higher prices to increase its sales for fiscal 2012, as overall sales volume is expected to fall. Last month, the company issued its outlook, which sees revenue rising in the mid-single digits. Powell made the comments at General Mills annual meeting with investors, where the company highlighted opportunities to grow in yogurt, cereals, convenient meals like soup, snack bars and ice cream. Long-term goals see the maker of Cheerios cereal, Progresso soups and Yoplait yogurt growing sales by 20% to $18 billion and per-share earnings by more than a third to $3.38 by fiscal 2015.
The current year, however, faces challenges, largely due to rising costs for ingredients and fuel, which General Mills last month said would mute earnings growth, with the pain most acute this current quarter. The company hopes that a slate of new products, including 70 in the next several months, will excite consumers to spend, even though its prices are rising. In May, for instance, General Mills prices were 9.4% higher than a year ago. General Mills will also make a stronger run at the Greek yogurt category with its Yoplait brand. Greek yogurt's recent explosive growth in the U.S. has been driven by smaller brands such as Chobani and Fage, both privately held. General Mills earlier this year launched Yoplait Greek with fruit on the bottom, after a previous version that blended the fruit in wasn't popular with consumers. The change improved sales, and General Mills plans to devote more manufacturing capacity to Greek yogurt later this summer. It will also start an advertising campaign for the brand.
"We see no reason why we can't capture our fair share of the Greek yogurt market," said Ian Friendly, chief operating officer of General Mills' U.S. retail business. General Mills' increasing focus on innovation comes as some of its key rivals have been whipping up more recipes in their kitchen. Kellogg Co. (K) has ramped up innovation in the cereal aisle and in other categories to boost sales. Campbell Soup Co., whose soups compete with General Mills' Progresso brands, this week said it was spurring innovation over the upcoming year, including adding more flavor to 46 of its soups by increasing the sodium content. Progresso is also going to add more soups that highlight flavor, rather than healthful benefits, including additions to its Rich & Hearty line like Steak Burger soup. General Mills said it isn't following Campbell's move last month to raise list prices it charges retailer by 4% to 6%. Instead, Progresso is reducing the discounts it will offer on soup.

Ukraine Harvests 6.9M Tons Grain To July 12, Up On Year (Source: CME)
Ukraine harvested 6.9 million metric tons of grain to July 12 on 2.4 million hectares, which is 21% of the planned total area to be harvested, with the harvest to date being 1.1 million tons more than on the same date last year, the agriculture ministry reported. The average yield to date was 2.84 tons a hectare compared with 2.43 tons a hectare on the same date last year. Winter barley harvest to date was 2.8 million tons with the average yield of 2.78 tons a hectare. Winter wheat harvest to date was 3.5 million tons with the average yield of 3.13 tons a hectare. The ministry said 65% of the wheat harvest to date was milling wheat, the rest feed wheat. The agriculture ministry expects this year's grain harvest at 42-45 million tons. Ukraine's grain harvest in 2010 fell by 14.8% on the year to 39.23 million tons in clean weight because of drought. The national hydro meteorological center said May 27 that Ukraine was likely to harvest this year between 43 million tons and 44 million tons grain.

Food Prices Have A Long Way Back To Pre-Food-Crisis Levels -FAO Official (Source: CME)
World food prices will remain expensive and a fall towards their levels prior to the food crisis that peaked in 2008 will be a long time coming, as production of most agricultural commodities isn't rising fast enough to meet demand, an official at the United Nations Food and Agriculture Organization said. "Food prices aren't likely to return to pre-food crisis levels at least for the next 10 years," FAO policy officer Sumiter Singh Broca said on the sidelines of an agriculture conference. "Food production will have to [increase significantly] to fight rising prices." The price of staple foods including wheat and sugar will rise further without action. "The world is running out of suitable lands and greater urgency is now needed for governments to invest in agriculture to boost yields," Broca said.
Global food prices have risen steadily since 2000 and a combination of food scarcity, rising population and high energy prices pushed the cost of major staples including rice, soybeans and palm oil to record highs i n 2008, spreading hunger and poverty from developing to developed nations. The food crisis also led to a string of protests around the world, from Mexico to Egypt and other parts of Africa. While world food prices have declined from their 2008 peaks, they are around 50% higher than pre-crisis levels for some of the major grains including rice and maize, according to FAO data. The FAO food price index, which groups 55 food commodities, rose 1% from May to 233.8 points in June, driven by rising costs of sugar, meat and dairy products, the FAO said last week. The gauge rose to an all-time high of 237.7 in February. Global food prices have "stabilized for now," and over the next few months "won't surpass February's record due to good harvests in rice- and cereal-producing nations," Broca said.

Commodities Rise to Four-Week High as Bernanke Signals More U.S. Stimulus (Source: Bloomberg)
Commodities rose to a four-week high as Federal Reserve Chairman Ben S. Bernanke indicated he may provide more U.S. economic stimulus, driving down the dollar and boosting demand for raw materials as a hedge against inflation. Gold climbed to a record and silver surged the most since March 2009, partly as Europe’s debt crisis escalated. The dollar dropped the most in two weeks against a six-currency basket. Corn and soybeans jumped partly on concern that adverse weather will cut output in the U.S., the world’s leading exporter of the crops.

Sugar hovers near contract highs, coffee consolidates
LONDON, July 13 (Reuters) - Raw sugar futures eased , trading below the contract highs hit the previous session which were triggered by technical buying. Arabica coffee futures rose in a small bounce,consolidating, while cocoa also edged higher.
ICE raw sugar futures hovered near the contract high hit on Tuesday of 30.62 cents a lb, as dealers expected a downward revision to top producer Brazil's cane industry group's production forecast, due later in the session.

World 2010/11 coffee output revised up to 133.3 mln bags-ICO
HANOI, July 13 (Reuters) - World coffee production in the current 2010/2011 crop reached 133.3 million bags, a rise of 8.2 percent from the previous crop year, the International Coffee Organization said, revising up slightly an earlier estimate.
While output from Africa, Mexico and Central America were revised down from ICO's May report, the London-based coffee body raised estimates for Asia, Oceania and South America, based on member information, its June report seen on Wednesday showed.

U.S. 2011/12 sugar supply improves on higher imports
NEW YORK, July 12 (Reuters) - The U.S. sugar supply situation for 2011/12 has improved as imports from Mexico mitigated supply tightness in the market, the U.S. Department of Agriculture said on Tuesday.
The USDA's monthly supply/demand report for July showed the closely watched stocks-to-use ratio in 2011/12 was projected at 11.1 percent, from the previous month's 9.2 percent.The figure remains below the 15 percent preferred by the USDA.

Philippines may sell up to 200,000T sugar on top of US quota
MANILA, July 13 (Reuters) - Philippine sugar producers can export as much as 200,000 tonnes raw sugar to world markets this year on top of its U.S. quota commitments, after a three-year break, with local output set to hit the highest in three years, a senior government official said on Wednesday.
The Southeast Asian country would start selling raw sugar this month to Japan and Indonesia, with committed shipments of 35,892 tonnes, Rosemarie Gumera, manager at the policy and planning unit of the state agency Sugar Regulatory Administration (SRA), told Reuters.

Brazil sugar cane condition varied-Datagro
SAO PAULO, July 12 (Reuters) - The condition of Brazil's cane is varied, with recent frost damage in places and cold weather in other areas benefiting it, complicating an accurate assessment of outlook prospects in the world's top sugar producer, a senior Datagro analyst said on Tuesday.
Datagro's team of agronomists are currently assessing cane in Brazil, having recently revised down their 2011/12 center-south cane output projection to 536 million tonnes due to disappointing yields.

Ivorian cotton ginners raise output forecast
DAKAR, July 12 (Reuters) - The Ivory Coast ginners' association on Tuesday raised its forecast for 2011-12 cotton output, forecasting it would rise by more than 25 percent from a year ago to 220,000 tonnes due to improved security, high farmgate prices and good weather.
The cotton sector revised its forecast made in May, when it said after a first assessment that the West African country would produce 216,000 tonnes, from 175,000 tonnes a year ago.

Indonesia may not import white sugar in '12 -DGI
JAKARTA, July 12 (Reuters) - Indonesia, Southeast Asia's largest sugar consumer, may not import white sugar in 2012, given that its year-end inventory is expected to reach more than 1 million tonnes, above a safe level of 800,000 tonnes, a senior industry official said on Tuesday.
"I don't think it's necessary. White sugar stocks will be more than 1 million tonnes at year-end. We still have stocks from last year's imports," Bambang Priyono, secretary at the Indonesian Sugar Council (DGI), told Reuters.

S.Africa June India coal exports 1.2 mln T-exporters
LONDON, July 12 (Reuters) - South Africa exported 1.2 million tonnes of coal to India in June, 25 percent of its total exports of 4.8 million tonnes, little changed from May, exporters said.
China took 777,000 tonnes of South African coal in June, up from around 320,000 in May.

Euro Coal-Prices drop $1/T with oil 2 pct fall
LONDON, July 11 (Reuters) - Prompt physical coal prices fell by around $1.00 a tonne on Monday in line a 2 percent drop in oil and in the absence of fresh buying from end-users in Asia and Europe.
Few coal trades were reported during the past week as Indian and Chinese buyers held off in anticipation of weaker coal and freight values.

Ethanol, China keep US corn supply tight
WASHINGTON, July 12 (Reuters) - U.S. corn stocks will languish near 15-year lows for longer than expected as ethanol plants overtake livestock as the biggest consumers of the feed grain and China buys more American corn, according to government forecasts.
The U.S. Agriculture Department, as expected, boosted its forecasts on Tuesday of ending stocks this year and next, largely due to weaker-than-expected consumption by the livestock sector this year. But the revisions fell short of analysts' forecasts and supported prices that have fallen 15 percent from their peak on signs of healthier supplies.

Oil Trades Near Four-Day High as U.S. Supplies Counter Debt Rating Concern (Source: Bloomberg)
Oil traded near a four-day high in New York after signs of rising crude demand in the U.S. countered speculation the world’s biggest consumer of the commodity may face a credit rating downgrade. Futures were little changed, after slipping as much as 0.5 percent, as Moody’s Investors Service put the U.S. under review for a rating downgrade as talks to raise its $14.3 trillion debt limit stall. Prices advanced 0.6 percent yesterday after the Energy Department said oil supply fell 3.1 million barrels last week. They were projected to drop 1.5 million barrels.

China metals curbs may end up boosting smelting capacity
SINGAPORE, July 12 (Reuters) - China has issued fresh orders to slash capacity at steel and base metal smelters as it revamps its industrial sector, but the move could backfire and boost capacities instead as outdated units are replaced and modernised.
The world's top consumer of copper, aluminium and steel told local governments to phase out more than 2 million tonnes of aluminium, copper, lead and zinc smelting capacity in a plan to crack down on energy-heavy and polluting industries, around 13 percent more than targets set in May.

China's daily June crude steel output hits record
SHANGHAI, July 13 (Reuters) - China's daily crude steel output hit a record 1.998 million tonnes in June, up 2.8 percent from May, data from the National Bureau of Statistics showed on Wednesday.
June output was 59.93 million tonnes, 11.9 percent higher from the same period last year.

Iron Ore-Shanghai rebar 2-mth top, China daily steel output at record
SINGAPORE, July 13 (Reuters) - Shanghai rebar futures rose to their highest in more than two months on Wednesday, spurred by expectations that firm demand would continue to lift China's steel production after hitting a record daily rate in June.
China's daily crude steel output hit an all-time high of 1.998 million tonnes in June as the world's second-largest economy grew a faster-than-forecast 9.5 percent in the second quarter, defying fears it was heading for a hard landing and giving Beijing more confidence to tighten monetary policy further.

China's daily June crude steel output hits record
SHANGHAI, July 13 (Reuters) - China's daily crude steel output hit a record 1.998 million tonnes in June, up 2.8 percent from May, data from the National Bureau of Statistics showed on Wednesday.
June output was 59.93 million tonnes, 11.9 percent higher from the same period last year.

S.Africa steel sector mulls new deal to end strike
JOHANNESBURG, July 12 (Reuters) - South Africa's steel and engineering firms and their workers are evaluating a new wage proposal meant to end a week-long strike, an industry body said on Tuesday, while a strike in the fuel sector is unfolding.
The National Union of Metalworkers of South Africa (NUMSA) said thousands of workers went on strike last week seeking a 13 percent wage rise, almost three times the inflation rate.

Taiwan's China Steel cuts prices for Sept
TAIPEI, July 13 (Reuters) - China Steel , Taiwan's top steel producer, said on Tuesday it would slash domestic prices of its steel products for September by an average of 1.69 percent from July-August due to slowing global economic growth and soft demand.

U.S. aluminum May imports soar to near 2-year high
NEW YORK, July 12 (Reuters) - Shipments of aluminum into the United States rose for a second straight month in May, spiking to a near two-year peak, as a growing domestic market deficit and improved demand conditions drove the builds.
Data from the U.S. International Trade Commission on Tuesday showed May aluminum imports surge to 160,847 tonnes, up more than 50 percent from April to stand at their highest level since July 2009, when imports reached 189,671 tonnes.  

Japan June aluminium stocks up 1.4 pct m/m
TOKYO, July 13 (Reuters) - Aluminium stocks held at three major Japanese ports inched up in June from May, reflecting sluggish domestic demand and slowing deliveries from ports, trading house Marubeni Corp  said on Wednesday.
Aluminium stocks rose to 228,600 tonnes at the end of June, up 3,200 tonnes or 1.4 percent from a month earlier, increasing for a third straight month and hitting their highest level since September, when stocks stood at 230,400 tonnes.

China aluminium output seen up after June record with copper, nickel
HONG KONG, July 13 (Reuters) - China's production of primary aluminium may reach a fresh monthly record in July after hitting a fourth consecutive record in June due to new capacity, but analysts said refined copper could fall from June's record as scrap supply tightens.
China, the world's top producer of aluminium, lead, zinc and tin, finished the first half of 2011 strongly with copper, aluminium and nickel reaching monthly records in June due to increased capacity.

Seven-Month Wait for Aluminum Drives LME to Review Rules (Source: Bloomberg)
When the London Metal Exchange was founded in the days of steamships, contracts were priced three months out to reflect the time it took to get tin from Southeast Asia or copper from Chile. These days, it can take twice as long to get aluminum out of an LME-approved warehouse in Detroit.

Freeport Indonesia workers head to copper mine, port
TIMIKA, Indonesia, July 13 (Reuters) - Workers started heading by bus to Freeport McMoRan Copper & Gold's  huge Indonesia mine and its port early on Wednesday, providing evidence that an eight-day strike has ended, a Reuters eyewitness said.
The union representing around 8,000 workers struck a late deal on Tuesday with the firm for an end to the strike, but it had also agreed to end the strike on Monday and workers did not return on Tuesday as the union made more demands for new talks.

METALS-Copper gains on Chinese data; euro zone weighs
LONDON, July 13(Reuters) - Copper gained on Wednesday, supported by better-than-expected economic data from top consumer China offsetting fears of spreading debt contagion across Europe.
Three-month copper on the London Metal Exchange  was at $9,725 a tonne by 0933 GMT from a close of $9,651 on Tuesday.

PRECIOUS-Gold rises for eighth day as euro crisis worsens
LONDON, July 13 (Reuters) - Gold rose for an eighth day on Wednesday, set for its longest stretch of gains in nearly five years and trading less than half a percent off record highs after European leaders mulled the option of a Greek default and Ireland's credit rating was cut to junk.
European Union leaders will hold an emergency meeting on Friday after finance ministers acknowledged for the first time that some form of Greek default may be needed to cut Athens' debts and stop contagion spreading to Italy and Spain.

Gold Extends Advance to Record $1,589.80 on Speculation Over New Stimulus (Source: Bloomberg)
Gold for immediate delivery advanced as much as 0.5 percent to a record $1,589.80 an ounce and traded at $1,588.50 an ounce at 8:03 a.m. Singapore time.

Baltic index drops on ongoing capesize weakness
LONDON, July 12 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, fell for a third straight session on Tuesday, driven mainly by weaker capesize rates.
The overall index fell 1.84 percent, or 26 points, to 1,411 points.

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