Wednesday, September 21, 2011

20110921 1004 Global Commodities Related News.

Corn (Source: CME)
US corn futures end mostly lower, stumbling late in the session after an early rally failed to attract follow-through buyers. Lack of follow-through support reinforced a negative technical picture, analysts say. Ongoing harvest is adding seasonal pressure to the market, analysts add, as more supplies enter the pipeline. Meanwhile, chatter about potential buying by China, which a sparked a rebound Monday, has yet to be confirmed, and in general traders say demand is lackluster. Volume was light, traders say. Dec CBOT corn ends down 2c to $6.90 1/4 per bushel, 13c off the intraday high.

Wheat (Source: CME)
US wheat futures end mixed, retreating from early strong gains as corn prices sagged. Grains are being led by corn, traders say, and has little fresh news of its own currently. Wheat demand has been weak in the face of significant competition from Russia in the export market, although some traders are optimistic that dynamic will soon change. Worries about the U.S. crop, while not acute, are underpinning the market, traders add. December CBOT wheat ends up 1 3/4c to $6.74 3/4 per bushel while KCBT Dec wheat closes down 3c at $7.65 and MGEX December settles up 3/4c at $8.42 1/2.

Rice (Source: CME)
U.S. rice futures end lower, continuing their sharp decline from the November contract high. The Nov contract down 6.4% since peaking Sept. 12, and has been pressuired by outside markets and unexceptional demand. The market is also facing seasonal pressure from the onoging U.S. harvest, which is pushing more supplies into the pipeline. Longer-term, tight long-grain rice stocks are supportive to prices, the Arkansas Farm Bureau says. Nov rice ends down 19 1/2c to $17.19 1/2.

U.S. grains rise 1 pct; strong dollar weighs
SINGAPORE, Sept 20 (Reuters) - U.S. wheat and soy futures gained around 1 percent as bargain hunters resurfaced after prices dropped in the previous session on concerns about the global economy, but a strong U.S. dollar was likely to cap gains.  
"There's probably not a lot of bullish U.S.-centric grain news out there. So, there's probably not a lot of fundamental news to push these markets higher," said Brett Cooper, a senior manager of markets at FCStone Australia.  

Drought delays Ukraine winter grain sowing
KIEV, Sept 20 (Reuters) - Ukraine's farms have sown 2.09 million hectares for the 2012 winter grain harvest or 26 percent of the expected area as of September 19 but dry weather is delaying the process, the Agriculture Ministry said on Tuesday.
The ministry said in a report the area included 1.82 million hectares of winter wheat, 169,000 of winter rye and 39,000 of winter barley.

Hungary's 2011 wheat crop 4.13 mln T –stats
BUDAPEST, Sept 20 (Reuters) - Hungary had a total wheat crop of 4.13 million tonnes this year, below 3.75 million tonnes harvested last year, the Central Statistics Office (KSH) said on Tuesday.
This year wheat was harvested from a total area of 980,000 hectares, versus 1.01 million in 2010.

Mexico set to expand GMO corn planting-group
MEXICO CITY, Sept 19 (Reuters) - Permits to plant large extensions of genetically modified (GM) corn for the first time in Mexico are likely to be approved before the end of the year, said a company lobby group on Monday.
Monsanto , DuPont's  Pioneer seed unit and Dow Chemical's  agricultural arm have all applied to expand on tiny experimental plots of GM corn in northern Mexico, said AgroBIO, an organization that represents the biotech companies.

Hyundai Heavy to invest $13 mln in Russia farm venture
SEOUL, Sept 20 (Reuters) - South Korea's Hyundai Heavy Industries Co Ltd  said on Tuesday that it will invest a total of $13 million over the next three years to boost soybean and wheat production in Russia in a move to hike overseas food supplies.
South Korea is heavily dependent on imported grains and other commodities to feed Asia's fourth largest economy.

Bangladesh eyes 700,000T wheat import tenders
SINGAPORE, Sept 20 (Reuters) - Bangladesh is likely to tender for 700,000 tonnes of wheat imports in the period until next April as it builds domestic stocks of the grain, a top procurement official said on Tuesday, in a move that spells opportunity for neighbour India.  
Giving the first official pointers to Bangladesh's appetite for wheat, Mohammad Badrul Hassan told Reuters the south Asian nation aimed to buy at least half its annual imports of 3 million tonnes from India, thanks to its competitive prices.

Western Canada harvest 78 pct done
Sept 19 (Reuters) - Western Canada's overall harvest moved to 78 percent complete, the Canadian Wheat Board said on Monday, ahead of the normal pace of 71 percent at this time of year.
The western Prairies got their first widespread frost last week, ending the growing season in most areas, except for western Alberta, the board said in a statement.

Rains ease Argentina farmland dryness, but more needed
BUENOS AIRES, Sept 19 (Reuters) - Weekend rains brought much-needed moisture to farming areas in Argentina, but growers in the corn belt urgently need more rainfall in order to press on with plantings, a weather forecaster said on Monday.
If severe dryness persists, many farmers could shelve plans to seed corn and sow soy instead when the planting season for the oilseed starts in October.

'Corn Sugar' Goes On Trial (Source: CME)
The "all natural" battle isn't the only one roiling the food industry. In a Los Angeles courtroom, two big industries are going after each other over the definition of a word well-known by every first-grader: sugar. In April, eight leading sugar companies and two trade associations sued six corn processors and a lobbying group, alleging the corn industry is improperly using the term "corn sugar" in advertisements and elsewhere to describe high-fructose corn syrup, a widely used sweetener used in snack foods, condiments, fruit drinks and other products. "Seeking to co-opt the goodwill of 'sugar' and even changing the [high-fructose corn syrup] name by calling it a kind of sugar... is paradigmatically false and misleading," reads the sugar companies' complaint. Last year, the nation's corn-refining giants asked the Food and Drug Administration for permission to use the "corn sugar" appellation on packages instead of "high-fructose corn syrup."
The sugar companies allege the move was prompted by declining sales of high-fructose corn syrup. The reason for the market softness, claim the sugar companies: a growing popular sense that high-fructose corn syrup has played a big role in the national obesity problem. The lobbying group, the Corn Refiners Association, and other defendants moved to dismiss the lawsuit, arguing that the plaintiffs fail to show any evidence that consumers have been deceived by the phrase "corn sugar" and that, in any event, the issue should be decided by the FDA, not a federal judge. On a website it runs on the topic, the CRA points to a variety of statements from the American Medical Association and others that high-fructose corn syrup and sugar aren't meaningfully different. "Like table sugar, high fructose corn syrup is roughly half glucose and half fructose and is metabolized by the body in the same way as table sugar," said a CRA spokesman, in a statement.
Still, some food-makers have in recent years ditched high-fructose corn syrup for cane or beet sugar. Among them: Starbucks Corp., Snapple Beverage Corp., and Kraft Foods Inc. The switches have come largely as a response to a growing sentiment among some consumers that sugar is more "natural" than high-fructose corn syrup and therefore is healthier. But why the lawsuit? Why didn't the sugar industry just plead its case in front of the FDA and let regulators make the call? "Damage has been done," said Daniel Callister, a lawyer for the plaintiffs. "We need to make up for the last 2½ years of falsehoods."

Speculation Doesn't Cause Commodity Market Volatility - FOA (Source: CME)
Speculation is not a major cause of market volatility in commodity markets, although it can amplify underlying price movements, the Futures and Options Association said at a briefing in London. According to an independent study produced by economic research group FTI Consulting on behalf of the FOA, fundamental supply and demand factors have been the main driver of price movements in recent years, although the exact proportion of the influence of speculators compared with fundamental factors is still up for debate. Anthony Belchambers, chief executive of the FOA, said it's important to adopt a "balanced approach in recognizing the key role of speculators in contributing to market liquidity and facilitating the risk management transactions of real economy enterprises--a capability that is critical in the current economic climate."
The role of speculators has been hotly debated for some years, and regulators in the U.S. and Europe are considering stricter positions limits on energy, agriculture and metals derivatives in an attempt to curb the potential manipulation of prices to unnaturally elevated levels. Belchambers urged that government regulators exercise caution in implementing new position requirements on commodities. "The government must be very careful about what action they take," he said. "If you're exercising position management, then it must be on the basis of public criteria." While the excessive 'financialization' of commodity markets has the potential to damage the price formation process if it causes a strong disconnect between market prices and fundamental supply and demand, speculation can also play a key role in providing liquidity to the markets, arguable reducing market volatility, he added.
"We mustn't lose sight of the importance of free markets," he said. The Futures and Options Association is the principal European association for the futures and options industry, representing its interests in the public and regulatory domain.

More to 2012 acres than soybean/corn ratio: Gavin Maguire
--Gavin Maguire is a Reuters market analyst. The views expressed are his own. To get his real-time views on the market, please join the Global Ags Forum. --
CHICAGO, Sep 20 (Reuters) - With the 2011 U.S. corn and soybean harvest upon us, grain analysts are already turning their attention to the 2012 season for signs on what the potential acreage jigsaw will look like next spring.
A quick glance at the widely tracked soybean-to-corn ratio for harvest-slot futures contracts would suggest corn has the upper hand in terms of making an early claim on available acres. But after two consecutive years of subpar corn yields, U.S. producers are likely to consider more than market prices when finalizing production plans for next year.

Sugar Production in India Seen at Four-Year High as Farmers Boost Planting (Source: Bloomberg)
Sugar output in India, the second- biggest producer, may surge to the highest level in four years after farmers boosted planting, potentially increasing exports. Production may total 25.83 million metric tons in the year starting Oct. 1, according to a compilation of estimates by sugar cane commissioners of 10 states including Uttar Pradesh and Maharashtra, the biggest growers. That compares with 26 million tons forecast by the Indian Sugar Mills Association and 24.2 million tons estimated this year. Rising production may prompt the government to lift curbs on exports, helping ease a shortage caused by a decline in supplies from Brazil, the biggest producer and shipper. Futures have declined 17 percent this year on expectations of increased production from Thailand, Russia and European Union.

Sugar up, underpinned by demand, cocoa firm
LONDON, Sept 20 (Reuters) - ICE raw sugar futures rose, supported by demand on the physical market, while cocoa and coffee were also firm.
Raw sugar futures on ICE edged higher in early trading, consolidating following Friday's sharp losses, with lower prices stimulating demand.

Cargill in Brazil cane crushing joint venture
SAO PAULO, Sept 19 (Reuters) - Cargill plans to expand cane crushing capacity in Brazil through a joint venture with local group Usina Sao Joao, to meet growing demand for ethanol, the U.S. agribusiness giant said on Monday .
The joint venture SJC Bioenergia has two mills in the center-western state of Goias.

Brent crude steady above $109, euro zone woes weigh
SINGAPORE, Sept 20 (Reuters) - Brent crude futures steadied above $109 on Tuesday, after two days of heavy losses on worries that a looming default by Greece will destabilise the global financial system, threaten global growth and pare oil consumption.
"Investors are very worried about Europe, and this is not just impacting oil but it is across the board to stocks and other markets," said Ken Hasegawa, a commodity derivatives manager at Japan's Newedge brokerage.

Oil Drops in New York on Speculation Demand Will Falter as Supplies Rise (Source: Bloomberg)
Oil declined in New York on speculation that fuel demand will falter amid rising crude supplies in the U.S., the world’s biggest consumer of the commodity, and concerns Europe’s debt crisis will persist. Futures declined as much as 0.7 percent after the American Petroleum Institute said crude stockpiles rose 2.57 million barrels last week. An Energy Department report today is forecast to show they fell 1.3 million barrels. The International Monetary Fund cut its estimate for U.S. growth this year. Equities erased gains after a report that international officials won’t make a decision on Greece’s next aid payment until October. Crude for November delivery slipped as much as 58 cents to $86.34 a barrel in electronic trading on the New York Mercantile Exchange and was at $86.37 at 9:13 a.m. Sydney time. The contract yesterday advanced $1.11 to $86.92. Prices are 17 percent higher the past year.

China crude stocks up for the 3rd month in Aug -report
BEIJING, Sept 20 (Reuters) - China's commercial crude oil stocks at the end of August increased 2 percent from a month earlier, the third consecutive gain since June, a report by the official Xinhua News Agency showed on Tuesday.
Inventories of refined oil products stocks fell 1.1 percent from the end of July, declining for the third month in a row, according to the China Oil, Gas and Petrochemicals publication.

OPEC watching Europe closely, supply comfortable - Qatar
DOHA, Sept 20 (Reuters) - Market oil supply is at a comfortable level, Qatar's oil minister said on Tuesday, and it was too early to say whether OPEC would trim production as Libya gets back on its feet.
"We have been watching the situation in European countries very closely, both at a national level here in Qatar and at the OPEC level," Mohammed al-Sada told reporters on the sidelines of a conference in the Qatari capital. "But supply is at a very comfortable level."

Gold Prices May Top $2,000 This Year on ‘Confidence Crisis’ (Source: Bloomberg)
Gold will probably top $2,000 an ounce by year-end amid surging investor demand, a Bloomberg survey showed. Prices will rise to a peak of $2,038 before Dec. 31, based on the average of 16 respondents in a Bloomberg survey at the London Bullion Market Association’s annual conference in Montreal. Next year, gold will rally as high as $2,268, according to the average in the survey. Gold has surged 25 percent this year, touching a record $1,923.70 in New York on Sept. 6. The metal climbed as escalating debt woes in Europe and the prospect of faltering U.S. growth boosted demand. Today, gold futures for December delivery advanced $4.80, or 0.3 percent, to $1,783.70 at 9:13 a.m. on the Comex in New York.

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