Monday, October 17, 2011

20111017 1019 Global Commodities Related News.

Hedge Funds Add to Raw-Material Bets in Biggest Rally of 2011: Commodities (Source: Bloomberg)
Speculators boosted their wagers on higher commodity prices for the first time in five weeks as increasing confidence that the global economy will avoid another recession spurred the biggest rally of the year. Money managers boosted combined net-long positions across 18 U.S. futures and options by 0.2 percent to 656,691 contracts in the week ended Oct. 11, Commodity Futures Trading Commission data show. The Standard & Poor’s GSCI Index of 24 commodities rose 5.2 percent last week, the most since December and enough to take the gauge out of the bear market it entered last month. Hedge funds had cut their bets by 49 percent in the previous four weeks. The surge in prices mirrored the advance in global equities, while Treasuries declined for a third consecutive week, on mounting investor confidence. Leaders from the biggest economies began talks to tame Europe’s debt crisis and Slovakia provided the needed approval to enhance a euro region bailout fund. U.S. retail sales rose the most in seven months.

Corn (Source: CME)
Strong foreign demand helps US corn futures finish higher. Weekly export sales of 1.3M tons beat analysts' expectations, as buyers were attracted by the recent setback in prices. Traders continue to talk about the potential China may continue to buy after booking 900,000 tons this week. Those sales will be included in next week's weekly data. Yet, traders say selling keeps a lid on advances after USDA issued a larger-than-expected supply forecast earlier this week. CBOT December corn edges up 1 3/4c to $6.40/bushel.

Wheat (Source: CME)
US wheat futures close higher as weakness in the dollar supports prices. Strength in the crude oil and equities add to the positive tone for the grain markets as concerns ease about the global economy and uncertain demand for commodities. "Optimism for a resolution of the debt crisis in Europe is favorable for the wheat outlook," says Doane Advisory Services. CBOT December wheat gains 4 3/4c to $6.22 3/4 a bushel; KCBT December rises 6 1/2c to $7.07 1/2; MGEX December jumps 9 1/4c to $8.92 1/2.

Rice (Source: CME)
Rice futures close higher, rising with other grain markets amid weakness in the US dollar. That makes US commodities more attractive to foreign buyers, helping boost corn, wheat and soybean prices. Some traders remain concerned about demand reducing rice supplies as the USDA cut its US output estimate Wednesday. CBOT November rice jumps 22c to $16.62 1/2 per hundredweight.

US soy dips after 4-day rally, wheat rebounds
SINGAPORE, Oct 14 (Reuters) - Chicago soy fell half a percent on Friday, as the market took a breather following a four-day rally, but stayed on track for its biggest weekly gain in almost two years on dwindling stockpiles and firm cash prices.
"We are still bearish on wheat as there is a lot of competition in the market and I don't see any fresh news which can trigger a surge in prices," said Lynette Tan, a grains analyst at Phillip Futures in Singapore.

Ukraine grain exports at a record low - lobby
KIEV, Oct 14 (Reuters) - Ukraine's grain exports totalled 400,000 tonnes in the first 13 days of October or just a half of the export volume in the same period in September, Ukrainian Agrarian Confederation said on Friday.
"The absence of the final decision on cancelling grain export duty is the main reason for the small export," the confederation quoted its director Serhiy Stoyanov as saying.

Malaysia turns to South Asian rice as Thai floods delay cargoes -paper
KUALA LUMPUR, Oct 14 (Reuters) - Malaysia will source rice cargoes from India and Pakistan to meet its import needs after floods swamped farms and mills in Thailand, the world's largest exporter of the grain, the Star newspaper reported on Friday.
It quoted Deputy Agriculture Minister Johari Baharum as saying that while Malaysia has a stockpile of close to one million tonnes of rice that can last more than five months, it was awaiting a consignment from Bangkok where water levels were still rising.

Argentine wheat seen falling to 12.6 mln T-exchange
BUENOS AIRES, Oct 13 (Reuters) - Argentina's 2011/12 wheat harvest is expected to total at least 12.6 million tonnes, down from 15.8 million tonnes last season, the Buenos Aires Grains Exchange said on Thursday in its first estimate of the crop.
Dry weather has hurt this season's wheat crop, which is already being harvested in some northern areas. Argentina is a leading global wheat exporter as well as the No. 3 soybean exporter.

Scottish barley output seen up 17 pct in 2011
LONDON, Oct 13 (Reuters) - Scottish barley output was estimated to rise 17.0 percent year-on-year to 1.949 million tonnes in 2011, the Scottish Government said on Thursday.
This was caused by an increase in spring barley area of 21,000 hectares or 8.5 percent, alongside a 12.4 percent increase in spring barley yields, said the statement, the first estimate of the Scottish cereal and oilseed rape harvest in 2011.
EU clears 218,000 tonnes wheat exports this week
PARIS, Oct 13 (Reuters) - The European Union this week granted export licences for 218,000 tonnes of soft wheat, taking the total since the beginning of the 2011/12 (July-June) season to 4.1 million tonnes, official data showed on Thursday.
The total so far this season compared with 7.1 million tonnes of export licences cleared by the same stage in 2010/11.

Rains reduce drought area in Texas, but more needed
Oct 13 (Reuters) - Relief in the form of raindrops helped shrink the mass of drought-stricken areas in Texas over the last week, but much more rain is needed to turn back the historic dry spell, according to a national drought report issued Thursday.
Farmers rushed back into fields to seed winter wheat, and thirsty cattle enjoyed the respite from what has been months of little to no rain and hot temperatures.

Russian winter grain area seen below govt target
Oct 13 (Reuters) - Russia will sow 17.5 million hectares with winter grains for the 2012 crop, which is below the official target of 17.99 million tonnes, but still above 17 million forecast by the country's main grain lobby, a top weather forecaster said on Thursday.
"Unbelievably, heavy rains in September have complicated the harvesting and sowing... but this year we will still sow notably more than last year," Roman Vilfand, director of the Hydrometcentre weather forecasting service told reporters.

Minor slowdowns in US Midwest harvest due to rains
CHICAGO, Oct 13 (Reuters) - Minor harvest slowdowns were expected over the next week to 10 days in the U.S. Midwest corn and soybean growing region due to light rainfall, an agricultural meteorologist said Thursday.
"The first wave of rain will be today and tomorrow and then again early next week, but overall still a pretty favorable harvest environment," said Drew Lerner, meteorologist for World Weather Inc.

Canada May Introduce Law To Dismantle Wheat Board (Source: CME)
Canada's Conservative government has issued notice it could introduce a law as early as Monday that strips the Canadian Wheat Board of its monopoly powers. News of the legislation's pending introduction was contained in the Canadian parliament's notice paper, released Thursday night. Under Canadian parliamentary tradition, the government needs to provide two working-days notice of its intention to bring forth legislation. Canada's Agriculture Minister, Gerry Ritz, is scheduled to deliver a speech on Monday in rural Alberta where he will outline why western Canadian grain farmers need more freedom in marketing their crops, according to a statement released by the agriculture department.
The Conservative Party, which won a majority mandate in last May's national vote, has made dismantling the agency a priority, with Prime Minister Stephen Harper saying last week that an overhaul toward a market-oriented approach was "long overdue." He also suggested legislation was in the offing and would be passed "very soon" -- an indication the government could try to limit debate in the legislature. The Wheat Board acts as a single buyer of wheat and barley crops in Canada. Those who oppose the board's monopoly say farmers could capture better returns by having the freedom to market their own crops. Supporters, meanwhile, say its control over western Canada's grains gives it considerable power in global commodity markets to ensure farmers there get the best prices. The government is moving ahead even though surveys conducted by the Wheat Board indicated a majority of farmers wanted the status quo maintained.
The left-leaning New Democratic Party, which holds the second-most seats in Canada's lower house, has vowed to launch a challenge against the legislation. But with the Conservatives holding a parliamentary majority, the New Democratic Party's options are limited and the legislation would be expected to pass.

Informa Cuts US 2012 Corn Outlook (Source: CME)
Private analytical firm Informa Economics cut its outlook for U.S. corn plantings in 2012 and increased its forecasts for plantings of soybeans and wheat, traders said. Informa, a closely watched crop forecaster, pegged corn plantings at 93.1 million acres, down from its September estimate of 94.3 million acres, traders said. The firm projected soybean plantings at 77 million acres, up from its September forecast of 75.8 million, and wheat plantings at 57 million, up from its September estimate of 56.6 million, they said. The firm attributed the shifts to "corn's decline in net revenue prospects as compared to those for soybeans over the past month." Corn futures have dropped 16% since the start of September, while soybeans have lost almost 13%. Corn for December delivery, the most actively traded contract, recently was down 2 1/4 cents, or 0.4%, at $6.36 a bushel at the Chicago Board of Trade. Soybeans for November delivery were up 6 cents, or 0.5%, at $12.63 a bushel.
If Informa's planting projections are realized, farmers in 2012 will harvest a record 14 billion bushels of corn, assuming they abandon a normal number of acres and produce trend-type yields, according to the firm. Farmers will harvest a record 3.4 billion bushels of soybeans and 2.3 billion bushels of wheat, assuming normal abandonment and trend-type yields, Informa said. The firm noted it had reduced its yield outlook for hard red winter wheat, the variety grown in the central and southern Plains, by 1.7% from last month to 45.4 bushels an acre due to unfavorable dryness. Farmers in the region are in the process of planting the crop, which is used to make bread and will be harvested next spring and summer. The U.S. Department of Agriculture this week estimated farmers in 2011 will harvest 12.433 billion bushels of corn, 3.06 billion bushels of soybeans and 2.008 billion bushels of wheat.
The department estimated farmers had planted 91.9 million acres of corn, 75 million acres of soybeans and 54.4 million acres of wheat for harvest in 2011. Informa also issued estimates for cotton, keeping its forecast for 2012 plantings steady at 12 million acres and saying output could reach 18.5 million 480-pound bales. Farmers planted 14.7 million acres of cotton for harvest in 2011 and produced 16.6 million 480-pound bales, according to the USDA.

East Asia Feedmills Buy Indian Corn (Source: CME)
East Asian buyers have snapped up as much as 500,000 metric tons of Indian corn in the last few weeks, mostly for shipment between November and January, several trading executives said. Aggressive purchases within weeks of the start of India's harvest help meet East Asian demand amid flooding in Thailand and tight U.S. supply, which is also more expensive. India's corn is among the world's cheapest. On a delivered basis, it may be $30-$40 cheaper than U.S. corn. Traders said the latest offers are $255-$258/ton, free on board. India's new crop corn has mostly traded in a $248-$285/ton, FOB, for shipment to Malaysia, Vietnam and Indonesia, while at least one cargo was sold to South Korea. Traders in India confirmed that sales of at least 350,000 tons of corn in bulk and close to 150,000 tons in containers have already been made, for shipment over the next few months.
Demand is strong and India may export 2.5 million-3.0 million tons of corn over the next one year, an executive with a global commodities trading company said. He said even old-crop corn from earlier sale contracts is still being shipped at $290-$310/ton, FOB. At least 150,000 tons of Indian new-crop corn was traded around $250/ton, FOB before prices rose due to heavy rains in the southern states of Karnataka and Andhra Pradesh. Recent offers for Indian corn, delivered at Kakinada port, were INR11,400-INR11,600/ton but if rains increase moisture and supply of export-quality corn tightens, local suppliers may push for higher prices, an exporter in Mumbai said. India doesn't make large-scale shipments like the U.S. of 55,000 tons or higher each but its supply is useful to control the cost of making animal feed in the region. The U.S. Department of Agriculture has revised lower the U.S. corn output forecast due to lower yields.
Production this marketing year is now expected around 316 million tons, slightly less from a year ago. U.S. corn exports are likely to fall 13% to 40.64 million tons, USDA said. Traders expect this to be offset partly by Ukraine, India and countries in central Europe. Non-U.S. corn trade will likely to rise by 25% to 53.5 million tons in 2011-12, USDA said.

EU Sees Tight European Grains Market (Source: CME)
The European grains market is expected to remain relatively tight during the 2011-12 crop year, due to earlier unfavorable harvesting conditions in the Baltic region that heavily impacted on yield and quality, the European Union said. Heavy rainfall that caused delays to harvesting in Germany and the Baltic-fringe countries over the summer, has prompted various analysts to revise down its expectations for European grains production. Total European harvested grains output for the 2011-12 crop year is anticipated at 277.4 million metric tons, down by 0.2% on the prior crop year. "By consequence, cereal markets tend to remain tight in the EU and a further reduction in stocks can be expected," the European Union said in its agricultural commodity outlook report for the 2011-12 crop year.

US Wheat Farmers In a Holding Pattern (Source: CME)
Harlan Klein, a wheat farmer in North Dakota, has just finished a disappointing harvest. But he is holding on tight to his crop and hasn't sold a single bushel. Instead, he is storing the roughly 300,000 bushels in bins, waiting for prices to rise. "We need to see a price improvement to start breaking some bushels loose," Mr. Klein said. It is a bet many farmers are making. Prices started to dip this summer after soaring in 2010 and this year, and many growers believe the decline is temporary because the harvest was smaller than expected. The result of their reluctance to sell is having ripple effects in the wheat market, where price moves of different varieties are diverging. Some farmers didn't sell wheat this fall unless they already had agreed to deals before the harvest, said Jim Peterson, marketing director for the North Dakota Wheat Commission. That is unusual, he said, because farmers typically sell some of the crop because they need cash or don't have enough room to store the entire harvest.
The U.S. Department of Agriculture tracks how much wheat is stored on farms on a quarterly basis, but doesn't break the figures down by type. The latest data are from Sept. 1, before the harvest of wheat planted in the spring was complete. The wheat just harvested by Mr. Klein and farmers across the Great Plains is known as hard, red spring wheat and is particularly of high quality and loaded with protein. It finds its way into high-end bread made by artisan bakeries and typically fetches a premium to other varieties. Because farmers are holding back, the futures prices for hard, red spring wheat traded on the MGEX in Minneapolis have declined less than that of other wheat contracts. Hard, red spring wheat is down 21% from its high in June. Soft, red winter wheat traded on the Chicago Board of Trade is down 31% since hitting a high in February. Hard, red spring wheat for December delivery fell 20.5 cents, or 2.3%, to $8.8325 a bushel on the MGEX on Thursday.
The result is that bakeries and millers likely will pay relatively higher prices this fall for the benefit of the high-quality wheat. Those costs are likely to be passed on to consumers, analysts said. The farmers' strategy comes with risk. The U.S. Department of Agriculture predicts that world output will rebound 5.1% this year, which typically would send prices down further. But after last year's price surge, farmers have money in the bank and plenty of storage capacity, so they are able to wait. They could hold onto the wheat until next year, when they would be forced to empty out their bins to make room for the new harvest.
Farmers had expected a bit more of a boost to prices after flooding and a hot, dry summer reduced the harvest. Mr. Klein's came in at half of last year's output. The Agriculture Department this week cut its output forecast for this fall's crop 15% from last month, to 405 million bushels, down 29% from last year. Farmers also have become accustomed to high prices because of recent harvests' low-quality crops. Farmers are saying, "'we're selling into a hole, so why do it?'" said Chad Henderson, an analyst with Prime Agricultural Consultants, a commodities brokerage in Wisconsin. Farmers who hold onto their wheat face some risks. They could decide to sell at the same time, potentially causing a glut and pressuring prices. And in the meantime, customers could go elsewhere. Flour millers can use other combinations of wheat or could look elsewhere in the world for wheat supplies, said Jay Sjerven, senior editor for Milling and Baking News, an industry newsletter.
Traditionally, countries like Japan and the Philippines have been big buyers of hard, red spring wheat. Canada is another big producer of the wheat and competes with the U.S. for export business. For now, flour millers are making do in the spot, or cash, market. Without much wheat available from the northern Plains, they are turning to the southern Plains, where the winter wheat crop has been of high quality.

Canada Building Stronger Ag Ties with Russia (Source: CME)
Agriculture trade ties between Canada and Russia have been strengthened, according to Canadian Agriculture Minister Gerry Ritz. "Our government is committed to strengthening ties with our Russian partners in creating trade and business opportunities" said Ritz, who is leading the trip along with 20 Canadian industry representatives. Ritz, speaking to the media on a teleconference call from Moscow, announced the continuation of the Canadian veterinary export certificates with Russia until Jan. 1, 2013. The extension allows key livestock products including poultry, meat and livestock to enter Russia. A deal between Canada Pork International and the Russian Meat Union was revealed as well by Ritz. The new deal would allow for better collaboration of technology and information to build better trade relations between Canada's pork and Russia's meat industries, he said. Canadian food exports to Russia 2010 were C$278 million. This included $185 million in pork, $24 million in beef and $22 million in soybeans.
When asked about whether legislation on dissolving the Canadian Wheat Board would be tabled next week in parliament, Ritz reiterated it would be tabled very soon.

Wheat Advances on Speculation Demand May Build Amid Rebounding Corn Prices (Source: Bloomberg)
Wheat rose in Chicago, heading for a first weekly climb in seven, on speculation demand for the grain to feed livestock will strengthen after corn prices rebounded. Corn is up 8.2 percent this month in Chicago trading as consumers increase purchases after prices fell 23 percent last month. Rising corn prices make wheat a more attractive source of feed for cattle, hogs and poultry. Wheat has gained 2.3 percent in October. “We’re seeing some commercial demand at these levels” for wheat, said Erin FitzPatrick, an analyst at Rabobank International in London. “Even though cheap Black Sea wheat is bearish, corn prices continue to give support to wheat.” Wheat for December delivery advanced 5.25 cents, or 0.8 percent, to $6.2325 a bushel by 12:09 p.m. London time on the Chicago Board of Trade. Prices are up 2.6 percent this week. Milling wheat for November delivery traded on NYSE Liffe in Paris rose 1 percent to 184.75 euros ($254.73) a metric ton.

Guatemala, El Salvador coffee exports rise in season
GUATEMALA CITY, Oct 13 (Reuters) - Coffee exports from Guatemala and El Salvador rose in the 2010/11 harvest compared to the previous season, as farmers took advantage of higher prices, the national coffee associations of both countries said on Thursday.
Exports from El Salvador soared to 1.73 million 60-kg bags in the 2010/11 crop year, which ended last month. That amount was 74 percent more than were shipped in the 2009/10 cycle, while Guatemala saw exports increase by 6 percent during the same period.

Colombian coffee output, exports fall in Sept
BOGOTA, Oct 13 (Reuters) - Colombia's coffee output fell for the sixth consecutive month in September, dropping 10.5 percent versus the same month last year to 459,000 60-kg bags, the coffee growers federation said on Thursday.
Exports from the world's No. 1 producer of high-quality Arabica beans decreased 11.4 percent to 467,000 sacks, according to the federation.

Pakistan to import up to 100,000 t sugar
ISLAMABAD, Oct 13 (Reuters) - Pakistan's government on Thursday decided to import 100,000 tonnes of sugar to beef up reserves, a government announcement said, but did not say when it would do so.    
The Economic Coordination Committee (ECC), the highest economic decision-making body, allowed the import following recommendations by the Ministry of Industries that oversees sugar's supply and demand.

Coal fundamentals to take a back seat in 2012
LONDON, Oct 13 (Reuters) - Coal supply is likely to be in surplus next year, even while Chinese demand rises, but these factors may have only a limited impact on prices, which have been barely twitching in a market hampered by a sharp drop in trading volumes.
When traders, utilities and miners gather in Madrid for the coal industry's biggest annual event next week, fundamentals of supply and demand may take a back seat to the search for lucrative market niches and the likelihood of disappointing bonuses.

Indonesia ponders coal export tax -industry groups
JAKARTA, Oct 13 (Reuters) - Indonesia, the world's top exporter of thermal coal, is considering an export tax on the power plant fuel, but implementation is unlikely and would face fierce opposition, industry groups said on Thursday.
Government talks involving the industry over an export tax for coal from Indonesia, which holds some of the world's richest mineral deposits, have been ongoing for several months, Supriatna Suhala, executive director of the Indonesian Coal Mining Association, told Reuters.

China's Jan-Sept coal imports at 120 mln T, up 1.9 pct
SHANGHAI, Oct 13 (Reuters) - China's coal imports for the first nine months of the year reached 120 million tonnes, up 1.9 percent from a year ago, figures from the General Administration of Customs of China showed.
With last month's data showing coal imports from January to August at 104.4 million tonnes, that would indicate import for the month of September was 15.6 million tonnes, down 5.97 percent from 16.59 million tonnes recorded in August and much lower than traders' expectations of some 20 million tonnes.

Mongolia's giant coal mine to start production on Dec 1
ULAN BATOR, Oct 13 (Reuters) - Mongolia will start producing coal from the eastern block of the giant Tavan Tolgoi coal deposit in the Gobi desert on Dec. 1, the head of one of the companies entrusted with its development told Reuters on Thursday.
"We have all the necessary rights to start production on December 1," said Wolfgang Peters, chairman of Germany's BBM Operta Group, which was awarded the contract to develop the eastern Tsankhi block of Tavan Tolgoi with Australia's Macmahon Holdings in August.

S.Africa exported 1.2 mln T coal to India in Sep
LONDON, Oct 13 (Reuters) - South African exported 1.2 million tonnes of coal to India in September, down from 1.8 million in August, out of a total 5 million tonnes shipped, exporters said.
China took 910,000 tonnes from South Africa, down from 1.l5 million in August.

Brent crude rises near $112 as China inflation cools
SINGAPORE, Oct 14 (Reuters) - Brent crude rose toward $112, heading for a second-straight weekly increase, on bets that China may loosen credit as inflation cools and boost fuel demand in the world's second largest oil consumer.
"If that helps consumer spending and prevents a slowdown in construction, it would be positive for global commodities," he added.

Russia quake halts Transneft oil shipments to China
MOSCOW, Oct 14 (Reuters) - Russian oil pipeline monopoly Transneft  said it halted oil shipments to China on the ESPO line following an earthquake in the Russian Far East on Friday but that the pipeline was not damaged and deliveries could restart on Friday.
"Transneft expects aftershocks, but theoretically shipments can be restarted today," a company spokesman said. The pipeline carries 300,000 barrels of oil to China per day.

Indonesia buys 2.4 mln bbls sweet crude for Dec
SINGAPORE, Oct 14 (Reuters) - Petral, the trading unit of Indonesian state-run energy firm Pertamina, bought 2.4 million barrels of sweet crude for December delivery in a tender, an increase of 17 percent over its average monthly spot purchase volume this year.
The purchase will help to soak up excess barrels in Asia caused by a rise in supply from new fields and an unexpected outage at Shell's refinery. Weaker naphtha margins have also curbed refiners' appetite for light sweet grades.

Last stand for Russia in China gas talks
MOSCOW, Oct 13 (Reuters) - Risks are rising that Russia could lose a long-term deal to sell gas worth hundreds of billions of dollars to China as Beijing's pursuit of an expanding range of rival sources of supply strengthens its hand in the long-running talks.
Russian negotiators, meanwhile, have shown no willingness to compromise, even though Gazprom , the state-controlled gas export monopoly, needs to sell a lot of gas to finance a push into east Siberia, where vast untapped fields lie waiting and pipelines must be built to carry gas to customers.

China Aviation seeks more fuel storage after recent buys
SINGAPORE, Oct 13 (Reuters) - China Aviation Oil , Asia's top jet fuel buyer, is scouting for more storage assets after two recent acquisitions as it seeks to cash in on growing air travel.
The company has identified three locations to own or to lease storage -- China, North Asia and the greater Singapore region -- Chief Executive Meng Fanqiu said in an interview. These places are either close to the company's main suppliers, customers or the region's central fuel pricing hub, he said.

Oil Rises a Second Day on Speculation U.S., Europe May Bolster Fuel Demand (Source: Bloomberg)
Oil extended gains from the highest close in almost a month in New York after European leaders promised to agree on a strategy for resolving their debt crisis and U.S. economic data eased concerns about a recession. Futures advanced as much as 1.1 percent, adding to last week’s 4.6 percent rise, after Group of 20 finance ministers and central banks concluded weekend talks in Paris and set Oct. 23 as a deadline for a plan to avoid a Greek default, bolster banks and curb contagion. U.S. retail sales rose more than forecast in September, the Commerce Department said Oct. 14. China may say tomorrow its economy grew more than 9 percent last quarter.
“It does look as if that extremely pessimistic view that the world was heading into recession, if not depression, is now changing and the overall investment view is what we’re looking at is a low-growth environment,” said Michael McCarthy, a chief market strategist at CMC Markets Asia Pacific Pty Ltd. in Sydney. “Confirmation of the growth story in China will be important.”

Iron Ore-Spot at 11-month low, Shanghai rebar falls for 5th week
SINGAPORE, Oct 14 (Reuters) - Spot iron ore prices fell to 11-month lows on thin demand from top buyer China, where steel futures dropped for a fifth straight week on Friday.  
Iron ore prices have lost around $10 a tonne so far this week as lower steel prices and tighter credit in China, as well as the uncertainty facing the global economy, convinced Chinese mills there was no immediate need to restock on the steel-making raw material.

Chinese mills seek to delay iron ore shipments, renegotiate contracts-trade
SINGAPORE, Oct 13 (Reuters) - Chinese steel mills are seeking to postpone shipments or renegotiate fourth-quarter iron ore contracts as spot prices fell to their lowest level since November 2010, traders said on Thursday.
Under supply contracts for the fourth quarter, miners are charging more than $175 a tonne for iron ore based on a pricing system that averages spot prices over a previous three-month period.

China's Sept iron ore imports highest since January
SHANGHAI/SINGAPORE, Oct 13 (Reuters) - China imported 60.57 million tonnes of iron ore in September, the highest monthly volume since January, as mills stocked up ahead of a holiday, but the purchasing momentum of the world's top buyer may not be sustained as steel prices take a hit.
Last month's import volume was up 2.5 percent from August, putting iron ore imports over the first three quarters of the year at 508 million tonnes, 11 percent more compared with the same period last year, data from China's customs authority showed on Thursday.

Chinese mills offered better Q4 iron ore pricing options-sources
SHANGHAI, Oct 14 (Reuters) - A number of Chinese steel mills have been given the option to buy iron ore for the fourth-quarter based on October to December spot rates, instead of a common industry practice to buy on prices based on previous months.
Three mill sources briefed on the change told Reuters that miners, such as Vale SA , have offered Chinese mills' the option to pay for fourth quarter supplies based on more current rates, following the recent tumble in ore prices.

No recent iron ore shipment to China cancelled-BHP
PARIS, Oct 13 (Reuters) - Global miner BHP Billiton  has not had any iron ore shipment to China cancelled or renegotiated in the last few weeks, the company's Chief Executive Ferrous and Coal said on Thursday.
Concern had risen in markets that Chinese steel mills were seeking to postpone shipments or renegotiate fourth-quarter iron ore contracts as spot prices fell to their lowest since November 2010, traders said.

Gold Traders Most Bullish Since July After Plunge (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 9.2 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.

Baltic index rises 1.3 percent
LONDON, Oct 13 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, rose on Thursday having hit its highest in over 10 months the previous day helped by strong cargo demand.  
Brokers said growing vessel supply, which was outpacing commodity demand, was set to cap dry bulk freight rate gains in the coming months with economic uncertainty adding to headwinds.

Asia Dry Bulk-Cape rates to test 2011 highs on China demand
SINGAPORE, Oct 13 (Reuters) - Rates for capesize dry bulk carriers on key Asian freight routes are expected to test 2011 highs over the next week on strong Chinese imports of iron ore from Australia and Brazil.
For smaller panamax and supramax vessels, rates in the intra-Asia market are seen steady with ample tonnage offsetting a resurgence in freight demand, shipbrokers said on Thursday.

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