Thursday, October 20, 2011

20111020 0956 Global Commodities Related News.

Corn (Source: CME)
US corn futures close lower on spillover pressure from a sharp drop in soybeans. The late break in the oilseed market spilled over into the grains after corn and wheat spent much of the day trading higher, traders say. The day was "absent of any news other than general commodity-wide liquidation," says Rich Feltes of RJ O'Brien. Commodity funds sold an estimated 8,000 corn contracts, a moderate amount. Yet, farmers are still hanging on to their crops, reluctant to sell until prices increase. CBOT December corn slides 5 1/2c to $6.38 1/2/bushel.

Wheat (Source: CME)
US wheat futures end mostly lower as broad selling hits the grain markets. Prices decline as pressure spills over from losses in soybeans and crude oil, traders say. Wheat lacks supply concerns to push prices higher, as global inventories are ample. Yet, traders continue to keep an eye on dry weather slowing planting in US Plains. CBOT December wheat loses 5 3/4c to $6.19 1/2/bushel; KCBT December slips 6c to $7.05 1/2. MGEX December jumps 5c to $9.11 1/2 as the market feels support from the lack of selling by farmers waiting for higher prices.

Rice (Source: CME)
US rice futures advance on supply concerns, despite losses in other grain markets. Flooding in Thailand, the world's top rice exporters, remains a concern, with the former head of the Thai Rice Exporters Association warning water may hurt the upcoming harvest. Worries pushed prices higher as corn, wheat and soybean prices sank. CBOT November rice ends up 19c to $16.45/hundredweight.

Soybeans fall on harvest forecast, demand concerns
KUALA LUMPUR, Oct 19 (Reuters) - U.S. soy futures fell for a third day on Wednesday as expectations for a bigger harvest and concerns about reduced demand from the world's top buyer, China, weighed on sentiment.
"China's imports aren't going to plunge but they may slow a little as consumption is expected to come off a bit," said Ker Chung Yang, an analyst at Phillip Futures Pte in Singapore, who forecasts that soybeans may trade near $13 per bushel by the end of the year and the first quarter of 2012.

Ukraine grain stocks at 21.9 mln T as of Oct 1
KIEV, Oct 19 (Reuters) - Ukraine's grain stocks totalled 21.9 million tonnes as of Oct. 1, 23 percent more than at the same date in 2010, the State Statistics Service said on Wednesday.  
The service said stocks of large- and medium-sized agriculture companies included 13.9 million tonnes of wheat, 3.5 million tonnes of barley and 1.3 million tonnes of maize.
   
Canada to downsize Wheat Board, end grain monopoly
WINNIPEG, Manitoba, Oct 18 (Reuters) - The Canadian government put forward long-promised legislation on Tuesday to dismantle Western Canada's grain-marketing monopoly, and gave the Canadian Wheat Board (CWB) five years to implement a business plan to survive in an open market.
In draft legislation presented to Parliament, the Conservative government offered the CWB certain financial guarantees, but said it would not provide seed capital or regulated access to grain handlers after the board loses its grain marketing monopoly.

UK wheat exports below last season, rapeseed up
LONDON, Oct 18 (Reuters) - UK wheat exports rose in August but are still running well below last year's levels, customs data showed on Tuesday.
Shipments in August totalled 163,037 tonnes, up from 116,391 tonnes in July, bringing the cumulative total for the 2011/12 season, which started on July 1, to 279,428 tonnes, versus 468,264 tonnes in the same period a year earlier.

Harvest to bog down in soggy eastern U.S. Midwest
CHICAGO, Oct 18 (Reuters) - Wet weather this week in the eastern half of the U.S. Midwest will slow corn and soybean harvesting, while dry weather boosts the harvest in the west, an agricultural meteorologist said Tuesday.
"Harvest looks good for the west and not so good for the east, at least for the short term. There is more rain now than expected earlier east of a line from St. Louis to Green Bay," said John Dee, meteorologist for Global Weather Monitoring.

Italy 7-month wheat imports down, maize up-Anacer
MILAN, Oct 18 (Reuters) - Imports of wheat into Italy, a major grain buyer in the European Union, fell in the first seven months of this year while maize imports jumped 37 percent, Italian cereals body Anacer said on Tuesday.  
Imports of soft wheat fell to 2,597,502 tonnes in the January-July period from 2,618,082 tonnes in the same period of 2010, while imports of durum wheat used for making pasta fell to 1,114,713 tonnes from 1,237,035 tonnes, Anacer said in a statement.

S.Africa weekly white maize exports jump
JOHANNESBURG, Oct 18 (Reuters) - South Africa exported 86,567 tonnes of white maize last week compared with 40,204 tonnes in the previous week, the South African Grain Information Service (SAGIS) said on Tuesday.
Exports of yellow maize were recorded at 3,562 tonnes, compared with 2,412 tonnes in the week before, SAGIS said on its website www.sagis.org.za.

Poland 2011-12 Grain Output Seen Down 3.5% On Year - USDA (Source: CME)
Poland's 2011-12 grain crop is expected to be smaller and of worse quality than last year after heavy rain disrupted this summer's harvest, the U.S. Department of Agriculture said. Grain production is expected to fall 3.5% from 2010-11 to 26.3 million metric tons, including a 10.1% slump in rapeseed output to 1.9 million tons, the USDA's Warsaw attache said in a report. "Grain quality is reported as poorer due to fungi presence after excessive rainfall prior [and] during the harvest," the report said.

Thai October Rice Exports Likely To Fall On Lower Indian Prices (Source: CME)
Thailand's October rice exports will likely fall 12.5% from September as buyers are postponing shipments amid cheaper Indian offers, and sales may remain subdued for the next few months, former Thai Rice Exporters Association President Chookiat Ophaswongse said. He confirmed that buyers in Africa have deferred exports of around 150,000 metric tons of Thai parboiled rice. Global traders and African buyers are snapping up Indian parboiled rice at $455-$480/ton, free on board compared with Thai offers of about $600/ton. Until August, buyers were aggressively buying Thai rice due to fears that supply may dry up once the government implements its program of procuring paddy at THB15,000/ton, around 40% above market rates. The program kicked off Oct. 7, but the government has hardly purchased any rice due to floods. Last month, India relaxed its ban on exports of ordinary rice, hitting demand for Thai grain--particularly parboiled grades.
Thailand has dominated the parboiled rice market for more than three years due to India's ban. This year, it exported 350,000 tons on average each month until August. September exports fell to around 300,000 tons and may be just above 100,000 tons in October, Chookiat said. Until August, Thailand exported 1 million tons on average every month--all rice grades combined--but volumes slipped to 800,000 tons in September. Floods may affect the next harvest in December and January, but the country has adequate stocks from previous crops, Chookiat said. Thai white rice prices rose more than 20% in the July-August period, while 5%-brokens have been at $590-$620/ton since early September. Prices may rise further once the procurement program gathers momentum, Chookiat said.

SE Asia flood impact on rice supply, prices in focus
HO CHI MINH CITY, Oct 18 (Reuters) - Tightening rice supply in top exporter Thailand due to floods and defaults by Vietnam as prices jump could prompt Indonesia,  Africa and the Middle East to delay imports until the market steadies or seek cheaper options from India and Pakistan.
International traders and government officials meeting in Vietnam this week will also assess the full impact of flooding on output in the top two exporters, whether prices will escalate further and the demand outlook for typhoon-hit Philippines.

Rise in small bounce, weaker dollar supports
LONDON, Oct 19 (Reuters) - ICE cocoa, raw sugar and arabica coffee futures steadied on Wednesday, supported by a weaker dollar, as the markets consolidated following losses earlier in the week on worries over global growth and the eurozone debt crisis.
Cocoa futures on ICE were slightly higher, hovering near their lowest level in more than two years, as ample supplies capped gains.

Malaysia's Q3 cocoa grindings down 2.8 pct y/y
SINGAPORE, Oct 19 (Reuters) - Cocoa grindings in Malaysia, Asia's largest grinder, slipped 2.8 percent to 71,451 tonnes in the third quarter of 2011 from the same period last year, the Malaysian Cocoa Board (MCB) said.  
Cocoa grindings were down 0.9 percent from the second quarter, dropping for a second consecutive quarter, the MCB said in a statement. It gave no further details.
 
Ukraine produces 930,000 T sugar so far
KIEV, Oct 18 (Reuters) - Ukrainian sugar refineries produced 930,000 tonnes of white sugar from sugar beet as of Oct. 17 or 33 percent more than at the same date in 2010, Ukraine's sugar union Ukrtsukor said on Tuesday.
The union said that 75 refineries had received about 9.0 million tonnes of sugar beet and processed more than 7.0 million tonnes.  -

India Renuka Sugar sees global restocking at 22-24 cents/lb
MUMBAI, Oct 18 (Reuters) - Sugar importers with lower-than-normal inventories would replenish stocks at 22 to 24 cents per pound levels, supporting prices in a year supplies are set to surpass demand, India's biggest sugar refiner said on Tuesday.
"There was very strong buying support between 22 to 24 cent (per pound). Many importing countries have very low stocks and they would look to build up stocks at this price," Narendra Murkumbi, managing director of Shree Renuka Sugars  told Reuters in an interview.

Uzbekistan Cotton Heads East As Western Buyers Boycott (Source: CME)
Pressure from western countries is mounting on the Uzbekistan government, one of the world's largest producers and exporters of cotton, to prove it is ending the use of child labor in its trade of the agricultural commodity. During a recent International Cotton and Textile Fair in the Central Asian country's capital Tashkent, not a single western buyer signed a contract for Uzbekistan's cotton, the government cotton marketing agent Uztsentrimpex said. Western buyers were boycotting Uzbekistan cotton because of allegations of child labor used in cotton growing in Uzbekistan. The government's marketer doesn't expect a further significant decline in its cotton exports, as Russian and Asian buyers were replacing western buyers at a considerable rate. Although the shift in cotton trade flows from Uzbekistan to the East won't affect global cotton prices, the western boycott demonstrates the strength of many retailers' drive to stamp out the use of child labor in the cotton industry.
Uzbekistan is the world's seventh-largest cotton producer, harvesting about 4.1 million bales of raw cotton last year and exporting about 65% of that, according to the National Cotton Council of America. Each bale weighs 480 pounds. Cotton orders placed at Uzbekistan's international fair fetched $550 million for this year, or about 600,000 metric tons, but sales fell 50,000 tons shy of those at the same event last year. In 2010, Uzbekistan said it had earned more than $500 million from cotton sales at the fair. Russian buyers bought 40% of the Uzbekistan cotton available during the mid-October fair, with the remaining 60% going to buyers from China, Bangladesh, Vietnam, Japan, United Arab Emirates, Iran, Turkey, Pakistan, South Korea and Singapore. An Uzbekistan government official said the law prohibited children under age 16 from working. He added that even if children did work in the fields, it was not because they were forced to do so but because they wanted to. He declined to offer any further comments.
Sportswear and equipment maker Adidas AG said it has signed a pledge, along with more than 50 of the world's best known apparel companies, to not knowingly source Uzbek cotton harvested using forced child labor. "The Adidas Group fully supports the pledge," said Frank Henke, the company's global director of social and environmental affairs. "We have been enforcing our code of conduct, the so-called 'workplace standards,' for many years, which includes a clear ban of child labor from our entire supply chain. By signing this pledge we are showing our unwavering commitment to the cause." Swedish fashion giant Hennes & Mauritz AB, which also signed the pledge, said it also works to avoid buying from cotton producers that use children workers. "The companies will maintain this pledge until the elimination of this practice is independently verified by the International Labor Organization," H&M press officer Charlotta Nemlin said. "H&M is a major cotton consumer and does not accept child labor."
Still, Keith Flury, senior commodity analyst at London-based Rabobank, warns that tracing the origin of cotton supplies remains a challenge for the industry. "Traceability of fiber is easier than raw cotton, but given the complicated and globalized cotton supply chain it is difficult, and adds costs to account for origins in the final textile products," Flury said. December-delivery cotton on the IntercontinentalExchange ended 0.2% lower at $1.0018 Tuesday, recovering from an intraday low of 99.61 cents.

Asia Coal-Australia thermal coal prices dip on tepid demand
Oct 19 (Reuters) - Australia's thermal coal prices dropped slightly for the week with Chinese buyers on the sidelines, while the level of demand elsewhere in the market was insufficient to push up prices.  
Thermal coal on the global COAL Newcastle index for the week to date closed at $119.75 per tonne on Tuesday, down from $121.63 per tonne a week earlier.

Australia Newcastle coal exports up 5 pct in week
Oct 19 (Reuters) - Thermal coal shipments from Australia's Newcastle port rose 5 percent in the week ending Oct. 17 to 2.320 million tonnes, the Newcastle Port Corporation said on its website on Wednesday.    
The vessel queue at the port was unchanged at 13, and the average waiting time for vessels rose by two days to around 12.6 days.

Euro Coal-Prices fall further, outlook seen soft
LONDON, Oct 18 (Reuters) - Prompt physical coal prices fell on Tuesday by $1 to $2 a tonne as slow business and a weaker outlook hurt sentiment.
European demand has been minimal in recent weeks aside from the regular spot buying by one major utility which is always short on physical coal.

Spain 2011 thermal coal imports seen at 10 mln T
MADRID, Oct 18 (Reuters) - Spain is on course to import 10 million tonnes of thermal coal in 2011 due to better margins on burning coal than liquefied natural gas, an executive from Spanish utility Iberdrola  said on Tuesday.
Speaking on the sidelines of the annual Coaltrans conference in Madrid, utility sources said they have renegotiated LNG take-or-pay contracts and resold cargoes, mainly to Japan but also to Europe and elsewhere in Asia.

China 2011 coal imports seen 150-160 mln T - Tader
MADRID, Oct 18 (Reuters) - China's 2011 thermal coal imports are likely to be around 150-160 million tonnes, having recovered in the second half of the year after a slow start, Phil Ren of China's Tader Coal SCM Company and Vice President of Northeast Asia Coal Exchange Center, said on Tuesday.
Speaking at the Coaltrans annual conference in Madrid, Ren said China's thermal coal imports could rise to account for 10 percent of the country's total consumption - 400 million tonnes - in five years' time.

Oil Trades Near One-Week Low on U.S. Fuel Demand, Economic Growth Outlook (Source: Bloomberg)
Oil traded near a one-week low in New York after U.S. fuel use dropped to the lowest in five months and the Federal Reserve said the pace of economic growth in parts of the world’s biggest crude-consumer was “modest.” December futures were little changed after declining 2.5 percent yesterday. The Fed said in its Beige Book survey that companies reported more doubt about the strength of the recovery. U.S. fuel use fell 2.2 percent to 18.3 million barrels a day last week, the least since May, the Energy Department said. Crude oil for December delivery, the most actively traded contract, was at $86.24 a barrel, down 5 cents, in electronic trading on the New York Mercantile Exchange at 9:39 a.m. Sydney time. The contract yesterday fell $2.24 to $86.29, the lowest since Oct. 13. Prices are down 5.8 percent this year. November futures, which expire today, were at $86.11.

Need for more OPEC oil this year, next-IEA official
PARIS, Oct 19 (Reuters) - There is a need for more OPEC oil late this year and next year, an IEA official said on Wednesday, but declined to say directly whether he thought the group should raise its output quotas when it meets on Dec.14.
"We think there's a market in the fourth quarter and 2012 for a little more than what OPEC is producing," said David Fyfe, the head of the oil industry and market division at the International Energy Agency.

Saudi oil output rose to 9.756 mln bpd in Aug-JODI
ABU DHABI, Oct 19 (Reuters) - Leading oil exporter Saudi Arabia produced 9.756 million barrels a day (bpd) of crude in August, 150,000 bpd more than in July, according to the latest official data published by the Joint Data Initiative (JODI).  
Saudi crude production of 9.813 million bpd in June was the highest level since JODI records began in 2002 and came after Saudi Oil Minister Ali al-Naimi said the kingdom would produce all the oil customers wanted after OPEC talks over coordinated production levels collapsed on June 8.

Brent weakens as demand outlook weighs
LONDON, Oct 19 (Reuters) - Brent crude fell below $111 per barrel, dented by worries on the euro zone debt crisis and the demand outlook after Moody's Investors Service cut Spain's sovereign rating.    
"We may avoid a catastrophe, but even if there is a solution, there will be a price to pay, and there will be an economic cost which will hit demand and growth," said Christophe Barret, analyst at Credit Agricole Corporate and Investment Bank.

Iron Ore-Spot prices extend losing streak, swaps slide
SINGAPORE, Oct 19 (Reuters) - Spot iron ore prices slumped to their lowest since November 2010, extending a losing streak that has slashed values by more than 12 percent so far this month, as slower demand from top buyer China raised fears of further price declines.
A steep fall in prices of iron ore forward swaps reflected expectations spot rates have yet to hit a floor, preventing potential buyers from returning to the physical market.

Singapore Exchange iron ore swaps volume hits record
SINGAPORE, Oct 19 (Reuters) - The volume of iron ore swaps cleared by the Singapore Exchange  reached a record 1,526 lots or 763,000 tonnes on Tuesday, as prices fell sharply on fears that slower Chinese demand will drag down spot rates further.
Open interest also rose to a record at 10,298 lots, or 5.15 million tonnes, SGX said on its website on Wednesday. SGX clears the bulk of iron ore swaps  traded globally.

India iron ore exports in Aug fall 43.4 pct - trade body
Oct 18 (Reuters) - Iron ore exports in August from India, the world's third biggest exporter, fell 43.4 percent on year to 2.65 million tonnes, data from a trade body showed, as monsoon dented shipments and there were no exports from a key state even after lifting of a ban.
Exports in the first five months of the fiscal year to August fell 24.38 percent to 28.02 million tonnes, the Federation of Indian Mineral Industries (FIMI) said in a statement.

China Sept steel output lowest since Feb - stats bureau
BEIJING, Oct 18 (Reuters) - Chinese crude steel production in September fell to its lowest point in seven months, shrinking 3.5 percent from August to 56.7 million tonnes, figures from the country's statistics bureau showed on Tuesday.
On a daily basis, the decline was less dramatic, with production at 1.89 million tonnes compared with 1.895 million tonnes in the previous month, according to Reuters calculations.

Silver Bear Market Seen Ending on Extended Europe Debt Crisis: Commodities (Source: Bloomberg)
Silver, the best-performing and most-volatile precious metal of the past year, may rebound from a bear market as investors bet on growth in developing nations and an extended European debt crisis. The metal may average $38 an ounce this quarter and rise to a record $42 by the final three months of 2012, compared with $31.245 at 7:48 a.m. in Singapore today, according to the median in a Bloomberg survey of 11 analysts. The gains will mean record profit for producers Pan American Silver Corp. (PAA) and Fresnillo Plc (FRES), analyst estimates compiled by Bloomberg show.
China, the biggest emerging-market user, is expanding at more than five times the speed of the U.S., driving consumption of the precious metal most used in industry. Demand is also coming from investors looking for an alternative to cash and gold, which costs about 50 times more than silver. The 30-week correlation coefficient between the two metals is now at 0.82, from as low as 0.47 in 2005, data compiled by Bloomberg show, with a figure of 1 meaning the two move in lockstep.

Copper Drops Most in Three Weeks as European Debt, China May Erode Demand (Source: Bloomberg)
Copper futures fell the most in three weeks on concern that demand will ease as Europe’s debt crisis persists and economic growth slows in China, the world’s largest metal buyer. Moody’s Investors Service yesterday cut Spain’s credit rating for a third time since June 2010 as the region’s fiscal woes weigh on the country’s economy. Gross domestic product in China expanded in the third quarter at the slowest pace since 2009. Copper has slumped 30 percent from a record $4.6575 a pound on Feb. 15. “Copper is under pressure because of a theme of slowing economies throughout the world,” Frank Lesh, a trader at FuturePath Trading in Chicago, said in a telephone interview. “Prices will need to go lower to attract Chinese buyers as there’s ample supply” in the country, he said.

Technical Signs Say Gold’s Fall May Continue (Source: Bloomberg)
Gold prices, down 14 percent since touching a record in September, are poised for more losses, according to technical analysis by Steel Vine Investments LLC. Bullion’s advance from the Sept. 26 low of $1,535 an ounce to a high of $1,696.80 on Oct. 17 created a so-called bear flag pattern where price movements resemble an inverted flag, according to Spencer Patton, the Chicago-based chief investment officer for Steel Vine. The metal’s plunge from a record $1,923.70 on Sept. 6 to the low on Sept. 26 created the so-called flag pole. Losses in the past three sessions signal the completion of the pattern, and that prices will resume their decline, Patton said. Gold may drop to $1,550 by the first week of November, he said.

China’s Love of Sleeping U.S. Cherries Fuels Chilled-Cargo Surge: Freight (Source: Bloomberg)
Container lines struggling to make money hauling Chinese-made goods to the U.S. are experiencing a surge in lucrative shipments of meat, fruits and vegetables in the other direction. A.P. Moeller Maersk A/S and Neptune Orient Lines Ltd.’s APL unit have led a 46 percent jump in refrigerated-container shipments to China from the U.S. this year, according to Piers data, as higher wages and quality concerns stoke demand for imported food. The need for specialized containers, known as reefers, means rates are about four times higher than those for carrying a standard box from Shanghai to Los Angeles. “There’s an opportunity in the reefer market,” said Tim Smith, the North Asia head at Maersk Line, the world’s largest container-ship operator. In China, “the level of disposable incomes has increased a lot, so we think they’ll want more high- quality foods and perishable products,” he said.

Asia Dry Bulk-Port congestion to push cape rates to 2011 highs
SINGAPORE, Oct 19 (Reuters) - Rates for capesize dry bulk carriers on key Asian freight routes are expected to reach fresh highs for the year over the next week, supported by rising port congestion in key commodity exporting nations.
For smaller panamax and supramax vessels, rates in the intra-Asia market are seen higher on strong demand for Indonesian coal, shipbrokers said on Wednesday.
Baltic index falls, China economy watched
LONDON, Oct 18 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, fell for a second day on Tuesday hit by slower iron ore and coal cargo bookings to China.
Brokers said the market was watching to see if weaker-than-expected Chinese economic data issued on Tuesday would signal a pullback in raw materials demand, which would dent the dry freight market already struggling with a glut of vessels.

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