Friday, October 21, 2011

20111021 0941 Global Market & Commodities Related News.

Nestle CEO Expects Commodity Prices To Remain High (Source: CME)
Nestle SA expects commodities prices to remain close to their present high levels, Chief Executive Paul Bulcke said. The maker of Nescafe soluble coffee and Maggi season cubes spends around CHF30 billion a year on ingredients and packaging, and in February said it expects its 2011 bill to rise between CHF2.5 billion and CHF3 billion. Earlier this month the U.N.'s Food and Agriculture Organization said its September Food Price Index averaged 225 points, only 13 points below the peak of 238 reached in February. "I do believe the level is going to stay high. Is it going to explode even on top of that? No I don't believe that, " Bulcke told Dow Jones Newswires on the sidelines of a press conference here.

Corn (Source: CME)
US corn futures close higher in a turnaround from Wednesday's losses. Prices rose as "a little bit of broad-based buying developed across the floor," says Shawn McCambridge of Jefferies Bache. He notes wheat futures also closed higher and soybeans ended off their lows. Commodity funds were buyers of the grains, snapping up an estimated 10,000 corn contracts, a moderate amount. Traders also shrugged off early disappointment with weekly corn-export sales that were toward the low end of expectations. CBOT December corn jumped 11c to $6.49 1/2 a bushel.

Wheat (Source: CME)
US wheat futures finish stronger, with KCBT rising the most amid ongoing worries about dryness hurting output in the Plains. Wheat is being planted in the region and attempting to grow. Yet, "extreme to exceptional drought will likely remain in place across most of the southern Plains for some time," says Kyle Tapley of MDA EarthSat Weather. Light showers may ease dryness "very slightly" in eastern Oklahoma and Texas this weekend, he notes. CBOT December wheat gains 11 1/4c to $6.30 3/4 a bushel; KCBT December climbs 19 1/2c to $7.25; MGEX December gains 6c to $9.17 1/2.

Rice (Source: CME)
US rice futures pull back as traders book profits following recent gains. Prices have retreated 3% since reaching a three-week high Monday. Declining demand added pressure to prices, traders say. Weekly export sales of 45,600 tons were down from 63,400 tons a week earlier. CBOT November rice slides 13 1/2c to $16.31 1/2/hundredweight.

Thailand 2012 rice exports to fall 30 pct -assoc
HO CHI MINH CITY, Oct 20 (Reuters) - Rice exports from Thailand next year could fall as much as 30 percent from 2011 to 7.0 million-7.5 million tonnes, as export prices have been pushed up by a government intervention scheme and floods, a senior industry official said on Thursday.
Higher export prices, as well as India's recent return to the market to sell, would cut Thailand's annual rice shipment this year to 10 million tonnes from 12 million tonnes in earlier projections, said Korbsook Iamsuri, President of Thai Rice Exporters Association. Exports in 2010 were 9 million tonnes.

Ukraine leader opens way for bumper grain export
KIEV, Oct 19 (Reuters) - Ukraine's President Viktor Yanukovich on Wednesday signed a law cancelling export duties for wheat and maize, opening the way for the former Soviet republic to pursue ambitious plan to export a record 27 million tonnes this season.
Ukraine imposed the duties in July and traders have said the measure slashed Ukrainian exports as Ukrainian-origin grain proved unable to compete with cheaper Russian exports.

Soy slides to 1-week low; corn, wheat extends losses
SINGAPORE, Oct 20 (Reuters) - U.S. soybean futures lost more ground, falling for a fourth straight day, while corn and wheat slid amid a selloff in the commodity markets triggered by mounting worries over the euro zone debt crisis.  
"Euro zone crisis does remain a key concern for the financial markets and there are murmurs that the Chinese economy could be facing some headwind," said Luke Mathews, a commodity strategist at Commonwealth Bank of Australia in Sydney.

Analyst hikes EU maize crop to 63.4 mln tonnes
PARIS, Oct 20 (Reuters) - French analyst Strategie Grains raised sharply on Thursday its forecast of this year's maize crop in the European Union, driven by strong yields in western countries as well as revisions to data in Romania.
Strategie Grains now sees the EU's 2011/12 maize crop at 63.4 million tonnes, up 1.7 million tonnes from last month and 15 percent above estimated output of 55.3 million last year.

Vietnam cuts 2011 rice export f'cast, demand weak
HO CHI MINH CITY, Oct 19 (Reuters) - Vietnam slightly lowered on Thursday its rice export forecast for this year to more than 7 million tonnes from an initial projection of up to 7.5 million tonnes, but said floods did not affect production.
The projection reflects slowing sales in recent weeks as buyers stand back to assess flood damages in top exporter Thailand, where prices have been rising also due to a government buying scheme, or to seek cheaper grain in India and Pakistan.

Thai floods delay rice loading, no default seen
HO CHI MINH CITY, Oct 19 (Reuters) - Thailand's worst floods in five decades have delayed the loading of at least 100,000 tonnes of rice for export as high waters have hindered the movement of rice barges, industry analysts and a trader said on Wednesday.
But the floods will not cause any defaults on deliveries from the world's largest rice export nation, President Korbsook Iamsuri of Thai Rice Exporters Association said.

Egypt says to grow 3 mln acres of wheat in 2011/12
SHARM EL-SHEIKH, Egypt Oct 19 (Reuters) - Egypt, the world's largest wheat importer, expects to grow 3 million acres of wheat in the 2011/12 season, the chairman of the country's National Seed Council said, about the same acreage as last year while it offers to pay farmers a higher price.
The planting area will be "around 3 million acres, plus or minus ... nearly like last year's area," Fawzi Mahrous told reporters on the sidelines of a Russian grain conference in Egypt on Wednesday.

Rain slows harvest in eastern US Midwest; dry in west
CHICAGO, Oct 19 (Reuters) - Rainfall at mid-week was slowing the corn and soybean harvests in the eastern U.S. Midwest, while dry weather was conducive to rapid combining in the west, an agricultural meteorologist said Wednesday.
"The wettest day will be today and the heaviest rain in Michigan, Indiana and Ohio with up to 1.0 inch to 3.00 inches today and tomorrow," said Kyle Tapley, meteorologist for World Weather Inc.

Cambodia rice exports may triple in 2011 to 180,000T
PHNOM PENH/HO CHI MINH CITY, Oct 19 (Reuters) - Cambodia, a small rice exporter, is projected to export 180,000 tonnes of the grain in 2011, more than three times last year's  volume, under an ambitious plan that envisages shipments to jump to 1 million tonnes by 2015, traders and officials said.
If the 1 million-tonne rice export target is achieved, it could generate about $500 million in revenue, or almost a quarter of the country's overall export revenues, its Deputy Prime Minister Yim Chhay Ly told a conference in Phnom Penh this week.
Ukraine Agmin sees higher grain crop, record export
KIEV, Oct 19 (Reuters) - Ukraine is likely to harvest about 53 million tonnes of grain in 2011 compared to 39.2 million in 2010 and the previous 2011 outlook of 51-52 million tonnes, Farm Minister Mykola Prysyazhnyuk said on Wednesday.
"This year, we plan to harvest about 53 million tonnes of grain. It will be one of the highest harvests in Ukrainian history. This volume allows us to export about 27 million tonnes," the ministry quoted Prysyazhnyuk as saying.

Saudi expects to import 1.9 mln T wheat in 2011
SHARM EL-SHEIKH, Egypt, Oct 19 (Reuters) - Saudi Arabia expects to import 1.9 million tonnes of wheat in 2011, the director general of the state-run Grain Silos and Flour Mills Organisation (GSFMO) said on Wednesday.
"Around 1.9 million tonnes this year and slightly more next year," Waleed el-Khereiji told reporters on the sidelines of a Russian grain conference in Egypt.

Global Rice Prices May Rise On Tight US, Thai Supply (Source: CME)
Global rice prices are likely to move higher in the next few months due to lower U.S. output and a slowdown in shipments from Thailand, the world's largest exporter, a senior industry analyst said. A Thai government plan to buy rice from farmers at prices above market rates and severe flooding that has hit vast tracks of paddy fields in the country may push prices up, Jeremy Zwinger, chief executive of The Rice Trader, a global consultancy and organizer of World Rice Conference said. Prices of Thailand's 5% broken rice may rise by more than 16% to above $700 a metric ton in the next few months, he said. These likely gains will be on the top of a 20% increase since early July. Zwinger said lower output in another major exporter, the U.S., due to adverse weather conditions is also supporting prices.
The International Grains Council has forecast U.S. rice output in the marketing year to March 31 at an 11-year low of 6.1 million tons, down 20% from 2010-11 but Zwinger said actual output is expected to be even lower. Rice futures on the Chicago Board of Trade and physical offers from key exporting countries are both undervalued, he said. CBOT November rice rose 19 cents Wednesday to $16.45 per hundredweight amid global supply concerns. California-based Zwinger said many traditional rice growers in the state are turning to corn cultivation, as earnings per acre can then be higher by almost one-third. Inputs from rice industry players in Thailand show that the damage due to floods is worse than was initially feared, with both the standing crop and rice held in warehouses getting affected, Zwinger said.
He said in milled terms, around 3.0 million metric tons, or 20%, of the country's main rice crop that is mostly harvested in December and January has been hit by floods. Supplies will also be squeezed because the Thai government will procure a large part of the crop at THB15,000/ton, around 40% above current market rates. Zwinger said even though India is selling rice some $100-$150/ton lower than Thai prices, Indian supply is not enough to offset impact of lower supply from Thailand. India may not be able to export more than 500,000 tons rice a month, including the premium variety, Basmati grades, due to inland and port bottlenecks, he said. Thailand has exports more than double that amount each month. Supply has tightened at a time when demand is on the rise with global rice trade expected to rise by more than 10% this year, Zwinger said.

Soybeans Slide for a Fourth Day as Rainfall May Boost Yields in Argentina (Source: Bloomberg)
Soybeans fell for a fourth day in Chicago on dry weather in Brazil and rain in Argentina that is likely to improve planting conditions for the oilseed. Brazil will have three to five days of drier weather to aid sowing, forecaster DTN said yesterday. Fields in Argentina will get light to moderate rain through Oct. 24, forecast yesterday. Prices also dropped on concern European leaders will fail to address the region’s debt crisis. “We’ve had some decent rains in Argentina over the last couple of weeks,” boosting optimism yields will rise, Michael Creed, an agribusiness economist at National Australia Bank Ltd., said by phone from Melbourne today. Europe’s debt issues are also damping investor demand for commodities, he said.

Corn Rises on Improving Overseas Demand for U.S. Supply; Soybeans Decline (Source: Bloomberg)
Corn futures posted their biggest gain in more than a week on signs that last month’s price drop revived demand for supplies from the U.S., the world’s biggest exporter. Soybeans fell for a fourth straight day. U.S. exporters sold 1.763 million metric tons of corn in the week ended Oct. 13, the most since March, the Department of Agriculture said today in a report. Total sales for delivery before Aug. 31 are 5 percent higher than at the same time last year and are at the highest level in four years. Last week, the USDA forecast a 13 percent drop in this season’s shipments. The “USDA looks a little too pessimistic on U.S. export sales this year,” Marty Foreman, an economist at Doane Advisory Services Co. in St. Louis, said in a telephone interview. “Export demand is a little stronger than the government expected.”

Sugar Traders Most Bearish in Three Months on Glut: Commodities (Source: Bloomberg)
Sugar traders and analysts are the most bearish in almost three months on mounting speculation that supply will outpace demand for the first time in four years, creating a glut that may persist through 2013. Nine of 13 people surveyed by Bloomberg expect raw sugar to drop on the ICE Futures U.S. exchange next week, the highest proportion since the end of July. The last time they were that bearish, prices fell 7.6 percent the following week. Speculators cut their bets on higher prices by 49 percent since the end of July, Commodity Futures Trading Commission data show. Traders also expect lower refined-sugar prices next week, and gains in gold, copper, corn and soybeans, separate surveys showed.
Sugar already fell 26 percent since reaching a three-decade high in February as the surge encouraged farmers to plant more cane. UBS AG, Macquarie Group Ltd. and Barclays Capital are among banks anticipating a surplus in the next 12 months. Kingsman SA, a researcher in Lausanne, Switzerland, expects the biggest glut since 2002-03, when prices dropped 25 percent.

ICE sugar, coffee dip as commodities decline
LONDON, Oct 20 (Reuters) - ICE raw sugar, cocoa and arabica coffee futures eased in early trade, tracking a broad-based retreat in crude oil and other commodities markets as investors dumped riskier assets on mounting concern about the euro zone's debt crisis.
Raw sugar futures were lower, dragged down by the overall weakness of commmodity markets.

Uganda expects Oct. coffee exports at 200,000 60-kg bags
KAMPALA, Oct 20 (Reuters) - Uganda expects to export 200,000 60-kg bags of coffee in October, up from 188,012 bags in the same month last year, the Uganda Coffee Development Authority said on Thursday.
"Coffee exports in October 2011 are projected at 200,000 bags as exporters and other players prepare for the new season 2011/12 and also continue offloading their stocks to fulfil contractual obligations with buyers," UCDA said in a sector performance report for September.

China 11/12 sugar output seen 11.8 mln tonnes-attache
Oct 19 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in China:
"In MY 2011/12, total sugar production is forecast at 11.8 million tonnes raw value, up 5 percent due to an increase in acreage. In MY 2010/11, total sugar production is estimated at 11.2 million tonnes raw value, down 2 percent because of frost damage. For MY 2011/12 sugar imports are forecast at 2.2 million tonnes raw value, a 15-year record high on rising domestic consumption and consecutive years of low sugar production."

Brazil cocoa output idles before next harvest
BRASILIA, Oct 19 (Reuters) - Cocoa arrivals at Brazilian warehouses in Brazil dipped in the last week with the upcoming main crop harvest yet to get under way, data from the Bahia Commercial Association showed on Wednesday.
Deliveries from the main cocoa state Bahia and outlying states totaled 39,463 bags in the week to Oct. 16.

Oil Climbs on Europe Plan, U.S. Optimism; Libyan Output Recovery Forecast (Source: Bloomberg)
Oil climbed in New York, trimming the first weekly decline in three, as investors bet signs of an economic recovery in the U.S. and Europe’s steps to contain in its debt crisis mean demand for raw materials may increase. Futures gained as much as 0.5 percent after a U.S. manufacturing gauge unexpectedly expanded and European governments discussed deploying $1.3 trillion in funds to tackle the sovereign debt crisis. The death of former Libyan leader Muammar Qaddafi will expedite efforts to revive crude output to normal levels, the state-run National Oil Corp. said. Crude oil for December delivery rose as much as 43 cents to $86.50 a barrel and was at $86.36, in electronic trading on the New York Mercantile Exchange at 9:41 a.m. Sydney time. The contract yesterday fell 0.3 percent to $86.07. Front-month futures are down 0.5 percent this week and 5.5 percent lower this year.

Oil steady at $108 ahead of EU summit
LONDON, Oct 20 (Reuters) - Oil prices held steady at around $108 on Thursday supported by tight supply although Europe's failure to agree a plan to resolve the euro zone's debt crisis continued to stalk the market.
"A lot of the strength of the market is being driven by the fact that there are cargoes missing from the programme and we expect to see some missing from next month's as well," a trader said.

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 $30.155 at 5:10 p.m. in London 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.

Gold Drops for Fifth Day, Heading for Longest Losing Streak Since January (Source: Bloomberg)
Gold for immediate delivery fell for a fifth day, the longest period of decline since January, dropping as much as 0.6 percent to $1,611.82 an ounce. The metal traded at $1,613.88 at 7:08 a.m. Singapore time, down 4 percent this week and poised for its first weekly decrease in three weeks.

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