Friday, October 14, 2011

20111014 1002 Global Commodities Related News.

Corn (Source: CME)
US corn futures finished lower on continued pressure from USDA's larger-than-expected inventory estimate. The market felt "a lot of hangover from yesterday's report" that raised the year-end supply outlook 29% from last month, says Brian Hoops of Midwest Market Solutions. Confirmation that China bought 900,000 tons of US corn didn't spark a rally, as the demand was priced in with Tuesday's surge on chatter about the deals. CBOT December corn drops 2 1/2c to $6.38 1/4 a bushel.

Wheat (Source: CME)
US wheat futures closed weaker as USDA's unexpectedly large supply estimate continues to hang over markets. The government raised its US and global inventory projections in crop reports yesterday, giving users of the grain "more breathing room," says Brian Hoops of Midwest Market Solutions. That means buyers do not need to worry about supplies and can take their time in making purchases. CBOT December wheat falls 8 3/4c to $6.18 a bushel; KCBT December drops 10c to $7.01; MGEX December loses 20 1/2c to $8.83 1/4.

Rice (Source: CME)
US rice futures edged higher as traders continue to worry about declining supply expectations. Market participants were surprised yesterday by USDA's 5% cut in the outlook for projected season-ending inventories. On Friday, they will review weekly export data from USDA to assess demand for the crop. CBOT November rice rises 5c to $16.40 1/2 per hundredweight.

US wheat falls for 2nd day on supply pressure, soy dips
SINGAPORE, Oct 13 (Reuters) - U.S. wheat slid 0.7 percent , falling for a second straight day as the market was weighed down by a U.S. government report that raised estimates for global supplies.
"U.S. and world wheat supplies are comfortable and are not supportive for high prices,"  Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, said in a report.

Thai floods damage rice, threaten exports
SINGAPORE/HANOI, Oct 12 (Reuters) - Thailand's worst floods in half a century have inundated farms and mills, squeezing rice supplies from the world's top exporter, while rival Vietnam is expected to default on half a million tonnes as prices of the staple climb.
Flood-damage to Thai rice comes as the nation's new government implemented a scheme that gives farmers a big increase in farmgate prices, raising concerns over food inflation among buyers in Asia, the Middle East and Africa.

China 2011 corn output seen at record 184.5 mln T -CNGOIC
BEIJING, Oct 13 (Reuters) - China's corn output this year is likely to rise 3.93 percent from last year to a record 184.5 million tonnes, according to the latest estimate published by an official think-tank on Thursday.
The China National Grain and Oils Information Centre revised up its estimate for corn output by 2 million tonnes from its earlier forecast due to an expanded planting area and favourable weather in most parts of the country.

Global grains picture brightens in U.S. forecast
WASHINGTON, Oct 12 (Reuters) - World grain supplies will be much healthier next year than previously forecast, the U.S. government said in a report that could put further pressure on crop prices that have already tumbled from their peaks.
Apart from an unexpectedly deep cut to its forecast of U.S. soybean stockpiles, the U.S. Agriculture Department's monthly report made surprisingly large upward revisions to global inventories of nearly every type of grain -- a welcome respite for consumers after over a year of steadily thinning supplies.

China imports corn, soy to rebuild state reserves
BEIJING, Oct 12 (Reuters) - China, the world's biggest agricultural products consumer, has swooped in to import copious amounts of corn and soy products from the United States and elsewhere this week, taking advantage of the slump in global prices to replenish its dwindling state reserves.
The large orders for corn, soybeans and soyoil underlines China's explosive appetite for grains and adds to growing evidence its corn imports could well exceed government forecasts this year.

UK wheat supplies seen barely changed in 2011/12
LONDON, Oct 12 (Reuters) - Wheat supplies in Britain are seen barely changed in 2011/12 as a slightly larger crop offsets lower opening stocks by comparison with the start of the previous season, the Home-Grown Cereals Authority said on Wednesday.  The HGCA, in its first supply/demand balance for the 2011/12 marketing season which began on July 1, put wheat availability at 17.83 million tonnes, marginally down from 17.91 million in the prior season.

Showers slow down U.S. corn and soy harvesting
CHICAGO, Oct 12 (Reuters) - Showers at mid-week will slow down the harvesting of corn and soybeans in the U.S. Midwest, but the delays will be short-lived, an agricultural meteorologist said Wednesday.
"There are some rains today and tomorrow in most of the Midwest and eastern Plains with the bulk of the rainfall in the west central and eastern Midwest including Missouri, Iowa, Minnesota and western Illinois," said Don Keeney, meteorologist for MDA EathSat Weather.

French farm body lifts non-EU wheat export forecast
PARIS, Oct 12 (Reuters) - Farm office FranceAgriMer on Wednesday raised by 500,000 tonnes its estimate for French soft wheat exports outside the European Union in the current 2011/12 season to 8.5 million tonnes.
That was still sharply lower than the record 12.9 million tonnes exported in 2010/2011 when Russia was mostly absent from the global export market.

Ukraine grain exports remain low - analyst
KIEV, Oct 12 (Reuters) - Ukraine's grain exports has totalled 3.7 million tonnes so far in the 2011/12 season compared to 4.5 million in the same period a season ago, analyst UkrAgroConsult said on Wednesday.
It said Ukraine exported 6.7 million tonnes of grain in the same period in 2009 and 6.6 million in 2008.

S.Africa maize deliveries rise to 9.342 mln T -SAGIS
JOHANNESBURG, Oct 12 (Reuters) - Maize deliveries to South African silos rose to 9.342 million tonnes in the week to Oct.7, up from a revised 9.326 million tonnes in the week before, data showed on Wednesday.
White maize deliveries rose to 5.692 million tonnes from a revised 5.685 million tonnes, while yellow maize submissions increased to 3.650 million tonnes from a revised 3.641 million tonnes, the South African Grain Information Service (SAGIS) said.

Mexico's Tortilla Prices Reach All-Time High (Source: CME)
Tortilla prices in Mexico have reached all-time highs this month due to problems with the country's corn harvests this year, a major concern for the Mexican population since tortillas are a dietary staple. Mexico is the world's largest producer of the white corn used to make tortillas, the main source of food for some of Mexico's rural poor. Freezes and dry spells that hurt Mexico's corn output this year helped push the nationwide average price per kilogram in tortilla shops above 11 pesos (83 U.S. cents) this month, according to the Economy Ministry's market information system. That was up 13% from October 2010 and up about 160% from a decade ago. "The current price of tortillas is a severe blow to the economy of families in Mexico," said Jose Jacobo, president of the country's group of rural organizations, Cocyp. "The situation is very serious." He added that some families in the rural sector spend about a third of their daily income on tortillas.
Mexico has almost always been self-sufficient in the production of white corn. But in the first eight months of this year, it imported 854,199 metric tons from the U.S, and South Africa, more than double the amount imported during the same period in 2010. The rising cost of tortillas indicates an increase in the cost of white corn, which was trading at $2.56 on Tuesday, according to the Agriculture Ministry's trade service. The Mexican government has taken steps to try to bring down tortilla prices, such as calling on local governments to make sure tortilla shop owners aren't agreeing to fix prices. Agriculture officials say the country's white corn output this year is expected to reach 18.3 million tons.

Corn Falls for Second Day as U.S. Raises Stockpile Estimates; Wheat Drops (Source: Bloomberg)
Corn fell for a second day in Chicago after the U.S. boosted estimates for local and global stockpiles, signaling more supplies for makers of food, animal feed and fuels. Wheat declined. Corn inventories in the U.S. will be 29 percent larger than forecast last month as exports slow, the Department of Agriculture said yesterday. Global corn reserves were pegged at 123.19 million metric tons, 4.9 percent above a September forecast. Projections exceeded analysts’ expectations. “Bigger-than-expected reserves have put pressure on corn prices,” Lynette Tan, an analyst at Phillip Futures Pte, said by phone from Singapore. “Prices may gain later boosted by strong demand.”

China Corn Output Hitting Record In 2011 (Source: CME)
China's corn output this year will likely increase 3.9% to a record level, indicating China's corn imports may slow as domestic corn prices fall with the arrival of new domestic crops. The state-backed China National Grain and Oils Information Center has revised its estimate for corn output to 184.5 million metric tons from an earlier estimate of 182.5 million tons, it said in a report. The report is in line with a U.S. Department of Agriculture report Wednesday that put China's 2011 corn output at 182 million tons, up 2.2% from its last estimate and 2.7% from actual output last year, while maintaining its import forecast for the marketing year that began Sept. 1 at 2 million tons. This increase is due to favorable weather that is boosting yields as well as increased crop area, said Dai Xiaojing, an analyst with Dalian Yigu Information Consulting Co., which runs the country's largest corn information portal.
Dalian Yigu forecast 2011-12 corn output at 170.4 million tons and imports at 4 million tons, she said, adding that if domestic prices continue to weaken, imports will fall short of the estimate. The U.S. Grain Council made a more conservative estimate, at 167 million tons, after it concluded a crop tour in China last month.

Ukraine's Grain Exports Slump 50% In Early October (Source: CME)
Ukraine's grain exports slumped almost 50% during the first nine days of this month to 201,000 metric tons from 400,000 tons during the same period last month, according to Ukrainian agricultural analysis body UkrAgroConsult Thursday. The shipments of grain were made up of 50,500 tons of wheat and 150,900 tons of corn, Sergey Feofilov, general director of UkrAgroConsult said.

Goldman Sees Downside Risks To Wheat Prices (Source: CME)
Wheat prices may have further to fall as improving prospects for the world harvest point to abundant supplies in the 2011-12 season, Goldman Sachs said. Grain prices stumbled Wednesday after the U.S. Department of Agriculture raised its forecast for world wheat ending stocks by 4% to 202 million metric tons due to higher output in Australia, Europe, Canada and Kazakhstan. Corn inventories, which have been a key driver for world grain markets in recent months, were raised to 866 million bushels from the 672 million expected in September, offsetting predictions for a smaller harvest. Goldman said it now sees a downside risk to its three- and six-month forecasts for U.S. wheat prices of $6.40 a bushel and $6.50/bushel. "We expect that wheat prices will underperform on higher foreign supplies," said analyst Damien Courvalin. The investment bank also reiterated its preference for soybeans, which it expects to outperform the grain complex.
Its stance was helped Wednesday by the USDA, which announced a surprise cut to its yield and ending stocks estimates. "We continue to expect that soybean prices will outperform corn prices, as reflected in our $12.60/bu and $13.00/bu 3- and 6-mo forecasts," said Courvalin. "The wheat and corn was destined for Egypt, Israel and Jordan," Feofilov said.

As US Corn Outlook Cut, Rivals Step Up (Source: CME)
The U.S. Department of Agriculture trimmed its projection of the U.S. corn harvest for the third consecutive month due to poor weather, but grain prices stumbled as the report provided fresh evidence that foreign competitors are gearing up. In trading Wednesday at the Chicago Board of Trade, the corn futures contract for December delivery dropped 4.25 cents, or 0.7%, to finish at $6.4075 a bushel. The December wheat futures contract plunged 34 cents, or 5.1%, to $6.2675 a bushel. Still, traders said the grain-price rally is long from over, in part because the U.S. corn inventory is expected to fall to its lowest level since the mid-1990s. What's more, any big dip in prices seems to fuel the appetites of big foreign buyers such as China. Sinograin, the country's official grain-stockpiling agency, bought about 59 million bushels of foreign corn on Tuesday, most of it likely from the U.S., two executives familiar with the matter said separately Wednesday.
"It's the China put," said Dan Basse, president of AgResource Co., a Chicago commodity forecasting company. "We think the high prices of grain will be maintained." Grain prices also dipped Wednesday because the USDA raised its one-month-old forecast of the amount of wheat and corn that will remain in U.S. inventories by the time the next harvest season replenishes supplies. In the wake of a Sept. 30 government report that found more-than-expected corn in inventory, the USDA said it expects the U.S. to have 866 million bushels of corn still around on Aug. 31, 2012, up 29% from its month-old forecast. The agency said it expects the corn harvest that is in full swing across the Midwest this month to produce 12.433 billion bushels, down slightly from its September projection and nearly the same size as last year's harvest. While such a corn crop would be the fourth-biggest on record, it is one billion bushels less than what the USDA had projected before a heat wave gripped the Midwest in July.
As a result, ethanol-fuel makers, livestock producers and food manufacturers likely will use more of the nation's biggest crop than farmers are able to produce for the second consecutive year, which will keep U.S. corn reserves at unusually tight levels for at least another year. But the crop-price rally, which began in June 2010, is encouraging foreign farmers to produce more corn, wheat, cotton and oilseeds. That, combined with good growing weather in many countries, is allowing several countries to increase exports, in some cases at the expense of U.S. farmers. Despite the drought that is searing wheat fields across the U.S. southern Plains, global wheat supplies are climbing in large part because good growing weather has returned to the wheat-growing region around the Black Sea. As a result, Russia, Kazakhstan and Ukraine are reclaiming customers in North Africa and the Middle East from U.S. shippers.
The USDA said it expects Russia to export 660 million bushels during the 2011-2012 crop year, up from last year's drought-stunted 146 million bushels. Russia is shipping out grain so quickly that Moscow this week tried to reassure food executives there with a promise to limit exports if necessary. But some analysts said the planned cap appears more political than practical because they don't expect Russian exports to exceed that level anyway. U.S. wheat exports, meanwhile, are forecast by the USDA to drop 24%, to 975 million bushels, during the year ending May 31, 2012. Likewise, the government expects the volume of U.S. cotton exports to drop 20% while U.S. soybean exports sink 8% and corn exports fall 13%.

ICE raw sugar, cocoa futures rise early
LONDON, Oct 13 (Reuters) - ICE sugar futures rose in early trade boosted by technically driven buying while cocoa climbed on bullish third-quarter European grind data.  Raw sugar futures on ICE rose to a three-week high in early trade, boosted by chart-driven buying.

Indonesia seeks to boost domestic cocoa consumption
JAKARTA, Oct 12 (Reuters) - Indonesia plans to triple domestic cocoa consumption over the next three years to boost the local manufacturing industry, which could impact exports from the world's No. 3 producer, an industry ministry official said on Wednesday.
Indonesia, Southeast Asia's largest economy, has set an ambitious target of boosting annual cocoa consumption to 0.6 kg per capita per year in 2014, from current levels of 0.2 kg, said Faiz Ahmad, director of food and fishery industry at the industry ministry.

Pakistan may import 400,000 T sugar next year
ISLAMABAD, Oct 12 (Reuters) - Pakistan may import up to 400,000 tonnes of refined sugar next year to bolster reserves despite expectations of a bumper crop, officials of the Ministry of Industries said on Wednesday.
The Economic Coordination Committee (ECC), the highest economic decision-making body, is expected to discuss the stock position and prospects for the next crop in a meeting on Thursday, the officials said.

Brent falls to near $111 as China crude imports slow
SINGAPORE, Oct 13 (Reuters) - Brent crude fell to near $111, snapping six days of gains, after trade data from China pointed to slower demand in the world's second-largest oil consumer.
"The fall in crude imports could be attributed to either weak demand or a draw down in inventories," said Brynjar Bustnes, J.P. Morgan analyst in Hong Kong.

Oil Falls for Third Day on U.S. Fuel-Consumption Drop, Spain’s Downgrade (Source: Bloomberg)
Oil declined a third day in New York as investors bet that demand will falter on signs of slowing U.S. fuel consumption and a worsening debt crisis in Europe. Brent oil’s premium to U.S. prices reached a record. Futures slipped as much as 0.6 percent, paring a second weekly gain, after Standard & Poor’s Ratings Services cut Spain’s long-term sovereign credit rating on risks to growth prospects. U.S. crude inventories climbed 1.34 million barrels last week and total products supplied, a measure of fuel use, slid an average 364,000 barrels a day to the lowest in four weeks, according to the Energy Department. “Confidence continues to deteriorate,” said Jonathan Barratt, a managing director of Commodity Broking Services Pty in Sydney. “We’ve currently got a neck-brace on Europe and we don’t know whether the head is going to topple or whether it’s going to hold. The larger than expected build in inventories was a little bit of a curve ball.”

Shell outage drives up Asia transport, heating costs
SINGAPORE, Oct 6 (Reuters) - The shutdown of Royal Dutch Shell's  biggest refinery is driving up the cost of transport and heating fuel to buyers from China to Indonesia as they scramble to secure alternative supplies.
The fire has knocked out 150,000 barrels per day (bpd) of distillate -- heating oil, jet fuel and diesel -- equivalent to the volume of diesel Southeast Asia's top consumer Indonesia imports. The shortage comes just as the world's number two and three oil consumers China and Japan build stocks of heating fuel for winter.

Q&A-Shell's shutdown may impact Asian gasoline mkt
SINGAPORE, Oct 3 (Reuters) - The shutdown of Royal Dutch Shell's Singapore refinery will impact the gasoline market as the massive 500,000 barrel per day (bpd) plant is a key supplier in the region.
Shell has a quarterly term agreement with Indonesia, and sells 92-octane spot cargoes to Vietnam and India.

S.Korean refiners to boost earnings with high exports
SEOUL/SINGAPORE, Sept 30 (Reuters) - South Korean refiners look set to maintain record high fuel exports by operating almost at full throttle, aiming to maximise earnings by taking advantage of a market where shipments from other top suppliers are shrinking.
Apart from lower exports from top fuel producers China and Japan, Royal Dutch Shell's  largest refinery shut this week after a fire, coming close on the heels of Taiwan's Formosa taking Asia's fifth-largest plant offline.

China Sept crude imports 12 pct off year-ago peak
BEIJING, Oct 13 (Reuters) - China's daily crude oil imports fell 12 percent in September from last year's record high, remaining below 5 million barrels per day for the fourth consecutive month as refiners drew on inventories amid volatile crude markets.
A marginal rise in September versus August fell short of estimates that imports would recover more quickly because of rising refinery throughput after maintenance and new plants coming onstream.

IEA cuts oil demand forecast while US more bullish
WASHINGTON/LONDON, Oct 12 (Reuters) - The International Energy Agency cut its global oil demand growth projection on Wednesday while the U.S. government increased its outlook for 2012, making it the most bullish forecaster as the economy heads into an uncertain year.
The U.S. Energy Information Administration's outlook for oil demand growth next year was much stronger than the Paris-based IEA's projection and the forecast issued by the Organization of the Petroleum Exporting Countries on Tuesday.

U.S. oil diplomacy targets consumer demand
ASTANA, Oct 12 (Reuters) -  The United States will press major oil-producing nations to ensure they are pumping enough oil to meet demand, regardless of price, while also encouraging a recovery of oil output from Libya and Iraq, a senior energy department official said on Wednesday.
"We don't assess the supply and demand equation as a function of price per se," U.S. Deputy Secretary of Energy Daniel Poneman told Reuters in an interview. "We look at satisfying consumer demand."

Silver Increases 0.6% in New York Trading While Gold Is Little Changed (Source: Bloomberg)
Silver for December delivery advanced 0.6 percent to $31.85 an ounce after dropping 3.4 percent yesterday in New York. Gold for December delivery was little changed at $1,668 an ounce.

Dubai Gold Buyers Seen Switching From To Bullion (Source: CME)
The recent violent volatility in gold prices is disrupting traditional buying patterns in Dubai with customers moving from jewelry to bullion as they renew a focus on the yellow metal's investment potential, a trend that is prompting more city jewelers to stock gold in the form of coins and bars. Dubai, known as the city of gold, is a long-established market for bullion and wholesale and retail jewelry. Its trade is fueled by demand from India, the world's number one gold consumer, and domestic consumption which, at 19 tons in the second quarter of 2011, makes the United Arab Emirates the second-largest consumer of gold jewelry and bullion in the Middle East after Saudi Arabia. Whereas traditional retail demand was for jewelry, there has been a change in buying patterns, said Pradeep Unni, senior relationship manager at Richcomm Global Services, a Dubai-based commodity services company and a broker of the Dubai Gold and Commodity Exchange, or DGCX, which trades a gold futures contract.
"Earlier while women would buy gold in the form of jewelry, now one can see men, finding themselves with a bit of spare cash, go into a jewelry shop and buying ten-tola bars," he says. A ten-tola bar, called TT bar in the trade, is a traditional Indian measure of weight that equals 3.75 ounces. "Sales of gold coins and TT bars are up 30-40% on year as they aren't as expensive as the kilo bar," said Unni. Cyriac Varghese, general manager of Sky Jewellery in Dubai, has noticed a similar trend. "When prices went up in early August, there was a drop in jewelry business and people who had spare cash moved into gold coins and bars as they thought the price would rise further," he said. The gold price has soared 35% since January 2011 to above $1900 per ounce in September as investors sought refuge in its safe haven status in the face of an uncertain global economic outlook and concerns about the health of the U.S. dollar.
According to Ahmed Bin Sulayem, executive chairman of the Dubai Multi Commodities Centre, those who are looking to invest in gold now are "those who don't have gold in their portfolios; people who think that in addition to having a bank account, they need to have gold." The Dubai Multi Commodities Center is one of the backers of the DGCX, and helps promote the local gold trade. The World Gold Council, an industry organization, says demand for physical bars and coins in the United Arab Emirates--the grouping of seven emirates that includes Dubai--rose 6% in the second quarter of 2011 from the previous year period, while demand for jewelry was down 1% in the same period.
If the trend continues, it could suggest that demand for gold in Dubai is becoming more speculative, local jewelers said, since buyers appear more willing to sell their bars and coins into any rise in the price. Buyers of jewelry, in contrast, are less likely to sell for cash as women prefer to exchange it for a newer design or pass it on from one generation to the next. "There is slightly more demand than before for bars and coins. This was also exacerbated by a shortage of supply for these in the market. We also noticed that when the price of gold fell, people came back into the stores to try sell the coins and bars back again," said Raj Sahai, director-retail, at jewelry retailer Damas.
Jewelry shops in Dubai, from souk to glittery malls, are stocking up on bullion to meet the higher demand. Damas has been ordering more coins and bars, Sahai noted. Gold certificates are also increasingly popular. Demand for local bank Emirates NBD's Gold Certificates, that can be redeemed either in cash or physical gold bars, has risen five-fold in August and September from the beginning of the year, Gerhard Schubert, head of precious metals, at Emirates NBD said. "There's been unprecedented buying from the moment of the market opening till close," he said adding that many of the certificate buyers are fresh buyers. However street wisdom holds that there's a marked preference for physical gold in Dubai. "Unlike in the West where people are happy to invest in gold certificates and exchange traded funds, here they like to handle gold; it's a cultural difference," said an analyst who declined to be named.

Gold Futures Fall as Equities Retreat, Dollar’s Gain Curbs Investor Demand (Source: Bloomberg)
Gold fell for the second time this week in New York as equities declined and gains in the dollar curbed demand for the precious metal as an alternative asset. The greenback climbed as much as 0.6 percent against a basket of six major currencies after a report showed exports from China rose the least in seven months. The dollar advanced 6 percent last month, while bullion declined 11 percent. The MSCI All-Country World Index of equities fell as much 1.1 percent. “Gold is muted by the strength in the dollar,” Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago, said in a telephone interview. “Gold is taking cues from other markets.” Gold futures for December delivery dropped 0.8 percent to settle at $1,668.50 an ounce at 1:44 p.m. on the Comex in New York. Prices have slumped 13 percent since touching a record $1,923.70 on Sept. 6.

Gold Traders Turn Most Bullish in Three Months After 20% Rout: Commodities (Source: Bloomberg)
Gold’s biggest slump in three years means traders and analysts are now the most bullish in three months, speculating that Europe’s debt crisis, slowing growth and a bear market in equities will drive demand for bullion. Twenty-two of 25 people surveyed by Bloomberg expect the metal to rise next week, the highest proportion since mid-July. Prices rebounded 8.3 percent since reaching a two-month low at the end of September and investors are adding to their holdings in gold-backed exchange-traded products for the first time in a month, according to data compiled by Bloomberg. Traders also expect gains in copper, sugar, corn and soybeans, surveys show.
Gold slumped as much as 20 percent since reaching a record $1,923.70 an ounce on Sept. 6 as investors sold the metal to cover losses in other markets. As much as $4.2 trillion was erased from the value of global equities in the past month on mounting concern that economies will tip back into recession and European lawmakers will fail to prevent sovereign defaults. The last time traders and analysts were this bullish, bullion surged 21 percent to an all-time high within eight weeks.

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