20110823 1020 Global Commodities Related News.

Corn (Source: CME)
US corn futures end higher on worries about the US crop outside market support. Ongoing worries about a disappointing US crop underpin the market, despite lackluster demand internationally and domestically. Analysts said corn also had support from outside macro markets, including equities. Added that corn prices have held firm on crop woes even when broader markets have fallen in recent weeks. CBOT Sep corn ends up 9 1/2c, or 1.3%, to $7.20 1/2 a bushel. Dec contract set a new contract high, ending up 9 1/4 cents to $7.34 1/2.

Wheat (Source: CME)
US wheat futures end mostly higher amid outside market support. Markets got a boost from equities and a rally in corn, analysts say. Recent upswing has prompted technical buying, traders add. Minneapolis market closed slightly lower, however, in a correction from sharp gains Friday amid worries about the spring wheat crop. Sep CBOT wheat ends up 4 3/4c to $7.35 1/2 a bushel, at a two-month high, while Sep KCBT wheat closes up 2 3/4c to $8.21 3/4. MGEX Sep wheat down 2c to $9.43 1/4.

Rice (Source: CME)
US rice futures end higher, bouncing back from losses last week as worries about US supplies underpin. The market fell last week amid profit-taking, coming off a 2 1/2-year high earlier in the month. A scorching summer has hurt the US crop this year and supported prices. Market also supported today by stronger equities and gains in other commodities. Sep CBOT rice ends up 1.3%, or 22 1/2c, to $16.97 a hundredweight.

Russia Harvests 55.9 Mln Tons Grain To August 21 (Source: CME)
Russia harvested 55.9 million metric tons of grain to Aug. 21, which is 15.5 million tons more than on the same date last year, the Agriculture Ministry reported Monday. The grain was harvested on 20.8 million hectares, or 47.2% of the total area, with the average yield of 2.69 tons a hectare, compared with 2.08 tons a hectare a year ago. The government expects this year's harvest at 90 million tons. Last year's harvest fell to 60.9 million tons from 97.1 million tons in 2009 due to the summer drought.

Wheat at 2-month top on supply worries; corn, soy firm
SINGAPORE, Aug 22 (Reuters) - U.S. wheat rose 1 percent to its highest in more than 2 months as delays in spring wheat harvest and dry weather ahead of winter crop planting buoyed the market.  
"There are worries over wheat production in the U.S. and talk about lower corn yields which is supporting prices," said Ker Chung Yang, analyst at Phillip Futures in Singapore.  
"August is an important month for soybeans and people are looking at the crop tour after which we will have a better idea about yields."

Crop tour to scour US corn, soy for weather damage  
CHICAGO, Aug 19 (Reuters) - Nearly 100 crop scouts will trek across thousands of miles of Midwest farmland next week in search of a single truth: has this year's harsh weather done even worse damage to the U.S. corn crop than was evident a month ago?
The annual Pro Farmer Midwest Crop Tour of U.S. corn and soybean fields is most likely to find one of the most varied crops ever, after rain-delayed spring planting and excessive, crop-stressing heat this summer left an uneven mark.  

Kazakh AgMin forecasts higher 2011/12 grain exports
ASTANA, Aug 22 (Reuters) - Major wheat exporter Kazakhstan expects to increase its grain export potential by around 70 percent in the current marketing year on the back of a bigger harvest, the country's agriculture minister said on Monday.
"Our export potential, I think, will be more than 10 million tonnes of grain," Asylzhan Mamytbekov told reporters, referring to the crop marketing year that runs from July 1, 2011 to June 30, 2012.

Argentina says rains help key 2011/12 wheat area
BUENOS AIRES, Aug 19 (Reuters) - Rains over the last week in the southern part of Argentina's key wheat-growing province, Buenos Aires, alleviated dryness that had threatened to affect the 2011/2012 crop, the government said on Friday.
In its weekly crop report, Argentina's Ministry of Agriculture said most of the country's wheat fields were in good condition. The South American nation is a major world supplier of soy, corn and wheat.

Argentine 2011/12 corn crop could reach record 30 mln T
BUENOS AIRES, Aug 19 (Reuters) - Argentina's 2011/12 corn harvest could hit a record 30 million tonnes if weather conditions improve after harsh dryness hit yields last season, industry analysts say.
Higher global prices and strong demand are expected to motivate farmers to plant more this year after dry conditions linked to the La Nina weather phenomenon hurt yields in the 2010/11 season. If the weather remains normal, the 2011/12 corn harvest could reach record highs.

Bumper Ukrainian, Russian wheat exports expected
KIEV/MOSCOW, Aug 19 (Reuters) - Ukraine and Russia, top wheat exporters in the Black Sea region, are ready to shake the global market with bumper wheat shipments, which could soar to 25-30 million tonnes in 2011/12, analysts said.
Ukraine, which exported about 4 million tonnes of wheat in 2010/11, plans to boost exports to 9.7 million in 2011/12. Russia analysts expect it to export over 20 million tonnes of wheat this season, up from 3.4 million shipped in 2010/11 before the government banned exports from mid-August 2010 to July 1 due to a severe drought.

Rains to sweep through Midwest and help crops
CHICAGO, Aug 19 (Reuters) - Rain will sweep through most of the U.S. Midwest corn and soybean growing region this weekend and again next week, providing much-needed moisture for the filling corn crop and pod-setting soybeans, an agricultural meteorologist said Friday.
"There are two systems, one this weekend and the other at mid-week, and combined they will provide about 0.50 to 1.00 inch in about 80 percent of the Midwest, favoring the south," said John Dee, meteorologist with Global Weather Monitoring.

Romania 2011 wheat crop up 26 pct y/y to 7.2 mln T
BUCHAREST, Aug 19 (Reuters) - Romania reaped a wheat crop of about 7.2 million tonnes this year, up 26 percent from the previous season, the agriculture ministry said on Friday.  
The wheat crop in Romania, one of the largest cereal producers in the Black Sea region, was 5.7 million tonnes in 2010.
"This has been a very good year, with average yields rising to 3.65 tonnes per hectare. We also eye a very good season in terms of exports," a farm ministry official handling crop data told Reuters.

China July Commodity Imports Rise On Restocking, Holiday Buys (Source: CME)
China's commodity imports mostly rose in July, as lower prices in preceding months, holiday demand and restocking needs fueled buying last month. Finalized data released Monday by China's customs officials largely confirmed a preliminary sketch issued earlier this month that depicted a surge in import appetite that helped take the country's trade surplus higher than market expectations. Edible oil imports posted sizable increases, as festival consumption buoyed purchases. Soyoil imports rose 72% on year to 259,364 metric tons, while palm oil imports were up 11% on year to 511,794 tons, customs data showed. "In the case of palm oil, inventories have been relatively low and there was also the expectation that consumption would be higher ahead of the Mid-Autumn Festival," said Xiao Jun, analyst with Shanghai JC Intelligence Co.
Soyoil imports from Argentina also appeared to have recovered, with July shipments rising nearly 100 times over last year to 49,722 tons, after Buenos Aires moved to smooth a bilateral trade dispute over anti-dumping measures in which Beijing had cut off Argentinian soyoil. However, there were signs that China may already have found a new supplier in Brazil. Brazil's soyoil exports to China in the first seven months reached 331,638 tons, up 14% on year and nearly double that of Argentina's export volume in the same period. In comparison, in 2009, before Argentina's trade spat with China, Argentina accounted for 76% of the Chinese soyoil import market, while Brazil accounted for just 21%. While Monday's data confirmed a strong increase in soybean imports, corn imports in July fell 11% on year to 172,623 tons. However, all the corn shipments were from the U.S., likely part of a series of bookings this year by Chinese official stockpilers that have exceeded 1 million tons.
In metals, key imports rose strongly, aided by global price disparities. Refined copper imports were up 9% from a month earlier to 194,280 tons, its second highest monthly level this year. "In mid-May, an arbitrage window had opened which encouraged importers to ship [copper] to Shanghai," Shanghai Cifco analyst Fang Junfeng said, referring to relatively lower London copper prices at the time. Reflecting data earlier this month for imports of copper and copper products, imports of the refined metal also fell in the January-July period, down 28% to 1.28 million tons.

Voracious China Still Struggling To Stand On Its Own Two Feet (Source: CME)
Beijing's hopes for food self-sufficiency may prove little more than a pipe dream as growing pressures on China's water system limit its agricultural potential. China's influence on world food markets has grown steadily in recent years as consumption has increased, driven by population growth and a growing taste for more Westernized diets by the country's expanding middle class. The Asian giant caused ripples in world grain markets by becoming a net importer of corn for the first time in 15 years last season and analysts expect its sugar imports could rise by 50% in the 2011-12 crop year due to growing demand for sweet foods and drinks. But now experts warn that China's increasingly intensive farming practices--driven by the government's attempts to contain spiralling food-price inflation--are causing long-term damage to the country's water resources, leaving Beijing's goal of food self-sufficiency even further out of reach.
"China's trying as hard as they can to be food self-sufficient, but there are likely  to be some years where they can't do that," said David Molden, the deputy director general of research for the International Water Management Institute. "Looking at their water system 30 years down the line, I'm a little doubtful." Already the strain on China's agricultural system is showing. This year the government was forced to take the unprecedented step of releasing water from the Three Gorges reservoir after the worst drought in 50 years reduced parts of the Yangtze, Asia's biggest river, to a mere trickle.
In a new report with the United Nations Environment Programme, the IWMI warns that such problems could become even more widespread as harmful agricultural practices sap groundwater stores in the world's key breadbaskets--including the North China Plains, the Indian Punjab and western U.S. The report estimates that there are currently 1.6 billion people living in areas of water scarcity and this will "easily grow to 2 billion soon if we stay on the present course." And with climate change putting growing pressure on productivity and the world's population expected to top 9 billion people by 2050, IWMI forecasts that global crop yields may fall 5% to 25% short of demand over the next 40 years. "If we continue our present practices, 70% more food equates to using 70% more water," said Mr. Molden. "At some point there will be a point of reckoning. I think we're already coming close to that in all three places."
Instead, he argues for a more unified approach to managing ecosystems, incorporating links between agriculture and the wider landscape, re-using waste products and improving coordination with other sectors to improve the sustainability of food systems. And despite Beijing's goal to become self-sufficient in food, China is likely to become ever more reliant on international markets, said Mr. Molden. "China will have to rely on some kind of weather insurance in the trade system," he said.

Australian Wheat Shipments at 2004 High Easing Shortages: Freight Markets (Source: Bloomberg)
Australia may displace the European Union as the world’s second-biggest wheat shipper as cargoes jump to an eight-year high, easing a shortage that drove global food costs to a record. The country may export about 18 million metric tons in the 12 months from October, according to the median estimate in a Bloomberg survey of eight analysts and traders. That’s 1 million tons more than predicted by the U.S. Department of Agriculture, and the most since 2004 based on that data. Prices may decline to $6.90 a bushel by the end of December from $7.66 now, the median of the estimates showed. Wheat declined 16 percent since February as farmers planted more crops in response to prices that rose 47 percent last year. Extra supply is also coming from Russia, once the fourth-biggest shipper, which resumed sales last month after an almost year- long ban imposed as drought ruined crops. Australia’s harvest, which starts in October, is being closely watched because the USDA is still forecasting a supply shortage globally.

Corn Rises to 10-Week High, Soybeans Gain on Dry Weather in U.S. Midwest (Source: Bloomberg)
Corn futures rose to a 10-week high and soybeans gained on speculation that recent rains in the U.S. Midwest weren’t enough to ease dry conditions and abate damage to yields. Parts of southern Minnesota, northern Iowa and west-central Illinois have had less than 25 percent of normal rainfall since Aug. 1, Allen Motew, a meteorologist with QT Weather in Chicago, said in a telephone interview. The region had “virtually no” rain from storms over the weekend that brought as much as 1.25 inches (3.2 centimeters) to parts of southern Wisconsin, northeast Illinois and Michigan, Motew said. “The rain amounts were lighter than expected on Friday, with the coverage area maybe just about 35 percent,” Greg Grow, the director of agribusiness at Archer Financial Services Inc. in Chicago, said by telephone. “The areas that needed rain most stayed dry.”

Heat, Asia Stir Rice Market (Source: CME)
Rice prices aren't out of steam, even after surging 30% this summer. Starting in July, futures have soared. They recently approached three-year highs, as excessive heat threatened the crop in the southern U.S., fueling concern that the autumn harvest would fall short of expectations. A further push came from Thailand and India, major exporters of the grain, where government policies increasingly favor keeping rice at home, rather than exporting it to the global market. Yet prices likely haven't peaked. A poor fall harvest in the U.S. and continued constraints on Asian exports have analysts predicting that rice could climb 15% more before the end of the year. The September futures contract for rough rice are trading near $17 per 100 pounds at the Chicago Board of Trade. "There's definitely a chance to run it to $20 and maybe even a little higher," says Jack Scoville, vice president for Price Futures Group, a commodities brokerage in Chicago.
Still, prices remain well below the 2008 record of nearly $25, unlike in the much larger market for U.S. corn, which reached all-time highs in June. The prices of the two grains often hinge on different dynamics. Rice is tied closely to the economic climate in Asia. Because of that, it has avoided some of the pressure from concerns about an economic slowdown in the U.S. and Europe because the outlook for Asian nations appears more stable, says Milo Hamilton, president of firstgrain.com, a rice-market advisory service. "Rice sort of marches to an Asian drum in the longer term, and not to a European and American drum," he says. However, political moves in Asia are contributing to global supply concerns. Thailand, the world's top rice exporter, is expected to raise the price at which it purchases rice from farmers to fill government reserves. The increase likely will curb exports; the Thai government's guaranteed price is above current market prices.
Exports from India have been hampered, as well. The government there set a high minimum price for exports of non-basmati rice, so growers have exported only about a third of the quantity that's allowed. "The market had been anticipating that India was going to start exporting non-basmati rice. So far, it hasn't really shown up," says Bill Nelson, analyst for Doane Advisory Services, a St. Louis-based agricultural advisory firm.

ICE sugar edges higher, eyes on Brazil crop
LONDON, Aug 22 (Reuters) - ICE raw sugar rose in early trade buoyed by diminishing crop prospects in top producer Brazil.
ICE coffee eased, under pressure from bearish outside markets including lower oil and world stocks, while cocoa was firm.
ICE October raw sugar futures  were higher, as dealers eyed repeated downward revisions to Brazil's crop and the diminishing 2011/12 world surplus.

India asks sugar mills to register for exports
NEW DELHI, Aug 20 (Reuters) - Indian government has asked sugar mills to register for  an additional 500,000 tonnes of unrestricted sugar exports, a statement said.
The food ministry would give permission to the mills to exports within three days after their applications, the statement posted on a government website showed.

German 2011/12 sugar output seen rising
HAMBURG, Aug 19 (Reuters) - Germany will produce 4.471 million tonnes of refined sugar in the new 2011/12 season, up from 3.442 million tonnes in 2010/11, the association of German sugar producers WVZ said on Friday.
A sharp rise in both planted area and sugar beet yields are expected, the association said.

China July coal exports up, imports at record
SHANGHAI, Aug 22 (Reuters) - China's July coal exports rose from the previous month but total sales overseas remain down 16 percent since the start of the year, as monthly imports surged to a record high.
Coal exports in July stood at 0.91 million tonnes, bringing total overseas shipments so far this year to 9.66 million tonnes, official data from the General Administration of Customs showed on Monday.  

U.S. coal use down 3 pct from previous week--Genscape
HOUSTON, Aug 19 (Reuters) - U.S. coal consumption was off 3 percent in the past week, Genscape said Friday, as summer eased its grip across the North and East and power providers used more gas to meet electricity demand. Use of coal for the week ended Thursday fell 2 percent from the same week in 2010, the power industry data monitor said.
"A series of cold fronts swept across the northern and eastern U.S., bringing relief from the heat to major cities of the Midwest, Northeast and even the deep Southeast, as a cold front made it all the way down to the Gulf Coast early in the week," WSI Corp weather service said.

Euro Coal-Prices fall on broad economic fears
LONDON, Aug 19 (Reuters) - European coal prices fell on Friday as economic woes sent European stocks into sharp decline, pulling smaller markets including coal down with them.
Nervous investors fled to the safety of core government bonds, Swiss francs and gold, which hit a record high, with many seeking to unwind holdings of riskier assets such as stocks, commodities and higher yielding currencies before the weekend.

China July LNG imports at new high, diesel falls-CCS
SHANGHAI, Aug 22 (Reuters) - China's imports of liquefied natural gas (LNG) struck a new record of 1.18 million tonnes in July, up 13.5 percent from a month ago, data from the China Customs Information Centre (HK) showed.
Imports of the super-cooled gas reached 6.36 million tonnes in the first seven months of 2011, up 32.5 percent from a year earlier, according to the report.

China to grant tax rebates for natural gas imports
BEIJING, Aug 22 (Reuters) - China will grant tax rebates for its rapidly growing imports of natural gas, including piped gas from central Asia and seaborne shipments of liquefied natural gas (LNG), a long-awaited move by state energy firms anxious to pare losses from gas imports.
The rebates will apply when import costs are above domestic wholesale prices and will cover the period from 2011 through 2020, as well as central Asian imports before the end of 2010, the Ministry of Finance said in a statement posted on the its website, www.mof.gov.cn.

Brent Slides as Libyan Rebels Enter Tripoli; Premium to U.S. Crude Narrows (Source: Bloomberg)
Brent oil fell in London, narrowing its record premium to the main U.S. oil grade, as investors bet that Libyan production may recover after rebels entered the capital city of Tripoli in a push to force out Muammar Qaddafi. The European benchmark contract tumbled more than 3 percent amid speculation Qaddafi’s regime is crumbling. Libya’s output dropped to 100,000 barrels a day last month, a Bloomberg News survey showed. That’s less than 10 percent of the 1.6 million barrels the nation pumped before the uprising started in February. Prices rose in New York as the dollar weakened, making crude more attractive for protecting against inflation.
“If the rebels continue to gain control as more liquidity comes into the oil market we could see prices fall more,” said Torbjoern Kjus, a senior analyst at DnB NOR ASA in Oslo, who predicts Brent will stabilize at about $100 a barrel. “We have no idea right now how much the oilfields and infrastructure have been damaged. But all the incentives are there for western companies and countries to get production back as quickly as possible.”

Oil slips $2 towards $106 on Libya end-game
LONDON, Aug 22 (Reuters) - Brent crude fell more than $2 towards $106 a barrel with traders and investors anticipating the resumption of oil exports from OPEC-member Libya as a six-month civil war there appeared close to an end.
"Brent is taking more of a battering but that's only to be expected," said Christopher Bellew, a trader at Jefferies Bache. "The divergence is just another graphic example of the dislocation between WTI and Brent."

Libyan rebels release fuel after refinery capture
OUTSIDE ZAWIYAH, Libya, Aug 20 (Reuters) - Libyan rebels sought to ease fuel shortages in their newly won territory west of the capital Tripoli on Saturday, releasing stockpiles from a refinery they seized from Muammar Gaddafi's forces three days ago.
Heavy fighting for Zawiyah, a strategic city on the coastal highway 50 km (30 miles) west of Tripoli, cut off regular deliveries for several days but truckloads of fuel have now arrived at petrol stations around the area.

Brazil sees strong oil bid interest despite crisis
RIO DE JANEIRO, Aug 19 (Reuters) - A top Brazilian energy official said on Friday he expects strong company interest in an upcoming oil bid round despite turmoil in capital markets, adding the auction should take place before the end of the year.
The country's 11th bidding round, the first oil rights auction in Brazil since 2008, will include onshore regions as well as areas off the country's northeastern coast, but not areas in the prolific Santos and Campos Basins where Brazil produces 85 percent of its oil and has made its biggest crude discoveries to date.

Crude Oil Fluctuates Before U.S. Stockpile Report; Brent Premium Widens (Source: Bloomberg)
Oil futures swung between gains and losses in New York before a report that may show U.S. crude stockpiles rose last week. Contracts for October delivery traded at $84.46 a barrel, up 4 cents, after earlier falling as much as 37 cents to $84.05 in electronic trading on the New York Mercantile Exchange.

Indonesia tin royalty moves support prices, economy key
JAKARTA, Aug 19 (Reuters) - The latest government crackdown on the Indonesian tin industry will damp some production and support benchmark prices, but the uncertain economic and demand outlook will play a bigger role in the market, analysts said on Friday.
A senior trade official said on Thursday that Indonesia, the world's top refined tin exporter, is looking to revise its royalty payments made on all domestic tin shipments, to close a tax loophole and bring these in line with existing charges on exports.

Japan Q4 aluminium premiums seen flat to slightly lower
TOKYO, Aug 19 (Reuters) - October-December aluminium term premiums to Japan will likely stay flat or fall slightly, with buyers seeing no reason for a rise and producers expected to point to high U.S. and European premiums.
The premiums for the current quarter were largely settled at $120 a tonne, marking the first rise in six quarters and putting them at their highest in a year.

Tokyo Steel cuts Sept prices, H-beams cut by 2,000 yen/T
TOKYO, Aug 22 (Reuters) - Tokyo Steel Manufacturing Co , Japan's biggest construction steel maker, said on Monday it cut its prices for September shipments to fend off imports.  
The company cut its price for H-beams, a key product used in construction, to 74,000 yen ($971) per tonne from 76,000 yen, after keeping prices unchanged the month before.

Singapore SMX's iron ore futures see small volumes
SINGAPORE, Aug 19 (Reuters) - Volumes traded on the Singapore Mercantile Exchange's iron ore futures remained thin a week after the bourse launched the contract with market participants opting for widely-traded swaps instead.
SMX, owned by India's Financial Technologies , introduced its cash-settled iron ore futures contract on Aug. 12, hoping to tap into a growing market to hedge prices of the steelmaking raw ingredient.

Iron Ore-Shanghai rebar hits 1-week low, ore prices steady
SHANGHAI, Aug 19 (Reuters) - China steel futures slipped to one-week lows on Friday, tracking losses in equities fed by fears the United States may be courting another recession and an unresolved debt crisis in Europe, although firm demand hopes capped losses.
A drop in factory activity in the U.S. Mid-Atlantic region to the lowest level since March 2009 coupled with the debt crisis in the euro zone, dragged down Asian stocks, with South Korea's benchmark shedding 5 percent and Chinese stocks down 1.3 percent.

METALS-Copper up on technicals, Bernanke's speech eyed
SHANGHAI, Aug 22 (Reuters) - Copper inched up but stayed range-bound on Monday as investors focused on potential supply disruptions in Chile and a general positive demand outlook, though worries about a global economic slowdown continued to weigh on sentiment.
Investors are eyeing the outcome of a U.S. Federal Reserve meeting on Friday for hints on how policymakers plan to handle the turmoil in financial markets.  

PRECIOUS-Gold soars to record high on economic woes
SINGAPORE, Aug 22 (Reuters) - Spot gold surged 1.4 percent to score an all-time high for a third consecutive session on Monday, as nervous investors fled to the safety of the bullion amid fears of another U.S. recession and the euro zone's debt crisis.
Spot gold  struck a record top above $1,878 an ounce, after staging its biggest weekly gain in 2-1/2 years last week. U.S. gold  jumped 1.6 percent to a record high of $1,881.9 earlier in the day.

Gold Tops $1,900 for First Time (Source: Bloomberg)
Gold extended its rally to a record above $1,900 as mounting concern that the global economy is faltering spurred demand for bullion as a protection of wealth. Goldman Sachs Group Inc. lowered its forecast for U.S. growth in 2011 on signs that the recovery in the largest economy lost momentum. German Chancellor Angela Merkel attempted to shut the door on common euro-area bonds as a means to solve the debt crisis, saying she won’t let financial markets dictate policy. Gold is in the 11th year of a bull market. Prices have more than doubled since the end of 2008 as governments worldwide struggled with debt crises and as record low U.S. borrowing costs boosted the appeal of bullion as a hedge against inflation.

Baltic index at over 2-month high, buying firm
LONDON, Aug 19 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, rose to its highest level in over 10 weeks on Friday as cargo bookings stayed strong, bolstering sentiment.
But brokers said growing world financial turmoil, tighter bank financing and rapid fleet growth would keep dry bulk freight rates under pressure in the coming months.