Wednesday, November 16, 2011

20111116 0947 Global Commodities Related News.

Midwest Farmland in Third Quarter Rises 25%, Most Since 1977, Fed Reports (Source: Bloomberg)
Farmland values in the U.S. Midwest surged 25 percent during the third quarter, the most since 1977, as higher grain and livestock earnings boosted demand for acreage, the Federal Reserve Bank of Chicago said. Rising net income for corn and soybean growers and improved cattle, hog and milk earnings supported higher land prices from a year earlier in Iowa, Illinois, Indiana, Michigan and Wisconsin, the Fed said today in a report. Land values rose 7 percent from the second quarter, and 39 percent of the 216 bankers surveyed forecast higher values in the fourth quarter. “There has continued to be very strong increases in land values this year,” David B. Oppedahl, a business economist at the Federal Reserve Bank of Chicago, said in a presentation today at the bank.

Nationalism Replaces Crisis as Biggest Threat to Metal Supply: Commodities (Source: Bloomberg)
Rising government demands for higher taxes and royalties are becoming a bigger threat to mining companies and their production than the financial crisis that’s wiped $6 trillion off stock market values since July. “You can’t ignore it and the problem is it’s gathering pace,” David Russell, a director at Ernst & Young LLP’s mining and metals team in London, said Nov. 14. “It’s almost like a contagion. The key risk is an inability to plan.” Resource nationalism, as the push by states is known, jumped to being the number one concern among mining executives this year, replacing capital allocation, Ernst & Young said in its annual risk survey published in August. At least 11 countries from Australia to Ecuador have this year raised or revealed plans to increase taxes or royalties on sales of resources such as gold and coal, according to Deutsche Bank AG.

Corn (Source: CME)
US corn futures settled at a three session high, buoyed by spillover support from a spike in soybean prices and renewed optimism about global demand. News of South Korea buying U.S. corn provided a fundamental lift for prices, says Terry Reilly, analyst with Citi in Chicago. The sales were first new sales for corn in a while, and with strong domestic demand, limited farmer selling, and sharp gains in beans, sellers were reluctant to press prices, he added. CBOT Dec corn corn ended up 12c at $6.45 1/2/bushel.

Wheat (Source: CME)
US wheat futures end higher, recovering from prior declines on spillover strength from soybeans and some technical buying. Traders exited some previously sold positions after recent declines took investment-fund positions near record short levels, analysts say. The market bounced today on short-covering, but without some significant export demand, analysts say it will be hard to sustain rallies. CBOT December wheat rose 17c to $6.32 3/4 a bushel, December KCBT ended up 13c at $7.05 and December MGEX added 3 3/4c to $9.31 1/4.

Rice (Source: CME)
US rice futures recover from early losses by the close thanks to spillover support from rallying grain and soybean futures. Rice is showing some stability after falling more than $2/hundredweight in recent weeks, with poor export demand pressuring prices and outweighing worries about Asian crops damaged by floods. January CBOT rice ended up 1/2c at $15.22 1/2.

EU's 2011-12 Grain Crop Seen At 282.5M Tons, Above Expectations - USDA (Source: CME)
The European Union's 2011-12 grain crop is now expected to reach 282.5 million metric tons, the U.S. Department of Agriculture's London attache said, 2.5 million tons above previous expectations. Wheat production is estimated at 137.5 million tons, the USDA said, just over 1 million tons above previous estimates and largely due to reduced concerns over the French harvest. Corn production is expected to reach the record figure of 62 million tons, the USDA said, 1 million tons above previous expectations, while the barley crop is pegged at 52 million tons. The total grain crop of 282.5 million metric tons is an increase of 7 million tons over 2010-11, the USDA said, but nearly 31 million tons below the record crop of 2008-09. The USDA cautioned that even though the total grain crop is above previous expectations, the European nations have carried around 27.5 million tons of stocks into the current marketing year, so supply remains tight.
A lack of rain in the major producing countries of France, Germany and the U.K. through most of the spring months caused considerable concern, the USDA said, yet downfalls came in time for the wheat crop in Southern France and the barley crop in Germany. Dry weather has seen challenging planting conditions in much of the European Union for the 2012 grain harvest, the USDA said, particularly for the U.K., Bulgaria, Romania and Hungary. However, the USDA said recent rainfall has assuaged producers' concerns about water availability for the late running winter plantings, particularly in the north and west of Europe. Increased industrial use of wheat in Germany is expected to result in varying intra-EU trade, the USDA said, with French wheat instead being imported into Belgium and the Netherlands, while French exports to Spain, Italy, and Greece are likely to decline due to competition from Bulgaria and Romania.
The return of low-priced Black Sea origin wheat in 2011-12 will mean more competition for EU exports, the USDA said, but exports are forecast to fall just 6 million tons from the very high level seen last season.

East Australian Grain Quality Little Affected By Rain (Source: CME)
Rainfall that has delayed harvesting of winter crops including wheat in eastern Australia hasn't had much impact on grain quality, GrainCorp Ltd. said, though concerns persist about grain quality in Western Australia. Widespread concern has been voiced in the industry about the possibility of a downgrading of grain quality due to wet weather at harvest in eastern and western Australia. Heavy and widespread rainfall and flooding in eastern Australia during the previous harvest forced a downgrading of wheat quality, resulting in an unusually high percentage of the crop being graded suitable only for livestock feed. In a typical year, nearly all the crop is graded as milling wheat fit for human consumption. Another La Nina climate event in the Pacific this year has raised industry concerns about a repetition of last year's rains, floods and grain quality downgrades.
On Monday, Cooperative Bulk Handling Ltd. reported that wet conditions in Western Australia are frustrating, raising grain quality issues, but it will be some time before the industry has an accurate idea about the rain's impact. Commonwealth Bank of Australia said that the price premium for Western Australian milling wheat over New South Wales milling wheat has widened a little in the past week "because of downgraded grain quality." GrainCorp reported that the harvest is already nearly over in central Queensland but is in full swing in southern areas of the state, while storm-related rainfall has disrupted harvest across Victoria and New South Wales, slowing crop maturation. "Rainfall [is] not of an intensity or amount to have a marked effect on grain quality to date," the company said. It operates eastern Australia's biggest upcountry grain storage network. In the fiscal year starting Oct. 1, GrainCorp has already received 3.04 million metric tons into its upcountry storages as of Nov. 15.
Most forecasts for this crop year peg wheat production in a range of 25 million-26 million tons, compared with a record 26.3 million tons produced last year ended March 31. Agriculture Minister Joe Ludwig said that growing conditions over winter and spring were broadly favourable in Australia's major winter-cropping regions and crops were generally reported to be in good condition. World wheat and coarse grain prices are forecast to remain relatively high in 2011-12 due to relatively low availability, while world oilseed prices are forecast to increase as a result of higher imports by China, greater oilseed crush and growth in feed demand from livestock industries, Ludwig said in a statement.

US soy up on forecast of harvest rain, wheat slides
SINGAPORE, Nov 15 (Reuters) - Chicago soy rose 1 percent, gaining more ground as the market was supported by rains delaying the last leg of the U.S. harvest and expectations of strong demand led by China, the world's top buyer.
"Demand destruction remains at the forefront of the market's mind as we are seeing relatively sluggish export results out of the United States," said Luke Mathews, a commodity strategist at Commonwealth Bank of Australia.

Philippines sees 2011 rice output below goal
MANILA, Nov 15 (Reuters) - The Philippines' unmilled rice production this year is expected to reach 16.68 million tonnes, below a target of a record output of 17.3 million tonnes, the Bureau of Agricultural Statistics (BAS) said on Tuesday.
Rice production in October to December was expected to decline by 8.8 percent from a year earlier to 5.93 million tonnes due to typhoon damages to crops, the state agency said in a report.

Manila's Q3 rice output below fcast; import review on
MANILA, Nov 15 (Reuters) - The Philippines' rice output in the third quarter grew 20 percent from a year earlier, below a government forecast partly due to typhoon damages to crops, as Manila reviews plans to import more rice in 2012 than earlier estimated.
Unmilled rice output grew almost 16 percent to 10.745 million tonnes in the nine months to September from a year earlier, the Bureau of Agricultural Statistics (BAS) said in a report released on Tuesday.

Philippine Jan-Sept farm output grows 4.28 pct y/y
MANILA, Nov 15 (Reuters) - Philippine farm output grew 4.28 percent in January to September from a year earlier, reversing a near 3.0 percent contraction in the same period last year, as favourable weather boosted rice and corn production, a senior government official said on Tuesday.
Unmilled rice output rose 15.96 percent in the first nine months from a year earlier, said Maura Lizarondo, assistant director of the Bureau of Agricultural Statistics (BAS).

Argentina approves more 2010/11 corn exports
BUENOS AIRES, Nov 14 (Reuters) - Argentina's government approved another 500,000 tonnes of 2010/11 corn for export on Monday and an industry group said more might soon be freed up for shipment.
Argentina's government controls corn and wheat exports through a quota system designed to guarantee affordable local food supplies and help tame high inflation, a system that irritates growers in the world's second-biggest corn supplier.

Ukraine 2011 grain crop at 54 mln T so far
KIEV, Nov 14 (Reuters) - Ukraine's grain harvest reached 54.1 million tonnes bunker weight as of November 14, 2011 compared to 41.2 million at the same date in 2010, the Agriculture Ministry said on Monday.
The ministry said in a report farms had harvested 96 percent of the planted area and the grain yield averaged 3.65 tonne per hectare. The yield totalled 2.84 tonne in 2010.

Weather favours Russia winter grain crop-forecaster
MOSCOW, Nov 14 (Reuters) - The weather favours Russian winter grains crop, the sowing of which was 90 percent complete last week, Russia's top weather forecaster said on Monday.
"The weather conditions are highly favourable and the state of winter crops are very good," Roman Vilfand, director of the Hydrometcentre weather forecasting service, told reporters, adding in some producing regions snow was plentiful.

ICE markets steady, focus on euro zone debt
LONDON, Nov 15 (Reuters) - ICE cocoa, sugar and coffee futures were little changed in early trading as investors focused on Southern European countries' ability to tackle their debt problems.
ICE March cocoa was down $8 or 0.3 percent at $2,547 a tonne at 0920 GMT, just above Monday's 2-1/2-year trough. The contract had dipped to $2,515 on Monday, the lowest level for the second month since July 2009.

Vietnam Coffee-Farmers rush to harvest, quality a concern
HANOI, Nov 15 (Reuters) - Vietnam, the world's largest robusta coffee producer, has harvested around 10 percent of its current 2011/2012 crop and farmers are accelerating the picking process to thwart theft, traders said on Tuesday.
Thieves, encouraged by high coffee prices, often pick both ripe and unripe cherries in farms with lax security. Most farms are owned by individual growers who try to prevent theft by boosting their own security or by harvesting early.

Ivorian patchy rains mixed for cocoa, west too dry
ABIDJAN, Nov 14 (Reuters) - Lack of rain last week in Ivory Coast's cocoa centre-western region raised concerns of poor yields and quality next year, but good rains elsewhere boded well for the crop, farmers said on Monday.
Ivory Coast, the world's top cocoa grower, is due to enter the dry season from mid-November to March, when rains are scarce. Depending on how severe it is, it can weigh on the size and quality of the crop.

Rains return to Brazil's thirsty coffee belt
BRASILIA, Nov 14 (Reuters) - Heavy rains should return to Brazil's coffee belt early in the week, forecaster Somar said on Monday, bringing badly-needed moisture trees to ensure tiny coffee fruit swells up and provides next year's crop.
The Minas Gerais coffee belt will see close to 70 millimeters (2.7 inches) of rain on Monday and Tuesday alone, according to the forecast, a significant volume given the state has been mostly dry so far this month.

India rubber seen extending losses for third week
MUMBAI, Nov 15 (Reuters) - India rubber futures are likely to extend fall for the third week in a row weighed by a jump in imports as industry takes advantage of a global fall in prices, with local farmers  unwilling to sell their produce at lower prices, analysts said.
The benchmark December rubber  on India's National Multi-Commodity Exchange (NMCE) was 3.9  percent down at 18,901 rupees per 100 kg, after losing 7.4 percent in the previous two weeks.

Petronas finds "significant" oil off Malaysia's Sabah
KUALA LUMPUR, Nov 15 (Reuters) - Malaysia's Petronas discovered oil offshore Sabah in the latest "significant" find this year in the hydrocarbon-rich state on Borneo island, as the national oil company sets to boost reserves and output amid easing production costs.
Initial estimates put the well's reserves at 227 million barrels of oil equivalent (boe) and tests in three different reservoirs yielded a maximum output rate of 8,200 barrels per day (bpd), Petroliam Nasional Bhd (Petronas) said on Tuesday.

Brent rises above $112 but wary over euro crisis
LONDON, Nov 15 (Reuters) - Brent crude oil futures  rose more than $1 per barrel as hopes for progress in resolving the euro zone's debt crisis helped encourage some consolidation after heavy falls in the previous session.
"More selling in oil may be expected in coming days because of concerns about the prospects for growth in Europe," said Victor Shum, managing consultant at Purvin & Gertz. "But we are also entering a strong demand season, which will set a relatively high floor on prices, limiting any pullback."

Libya data forecasts full crude exports end-2012
LONDON, Nov 14 (Reuters) - Libya's National Oil Corporation (NOC) expects crude exports to rise to 1.345 million barrels per day (bpd) by the fourth quarter of 2012, indicating the OPEC member's oil is returning to the international market faster than expected.
The NOC made the forecast in a table entitled "Estimated Daily Production", which was sent to NOC clients and seen by Reuters on Monday.

OPEC will be fine without outside involvement-Iran OPEC governor
DOHA, Nov 15 (Reuters) - The Organization of Petroleum Exporting Countries will watch market developments closely and will be able to work well together as long as there is 'no outside influence', Iran's OPEC governor said on Tuesday.
OPEC, at its last meeting in June, failed to reach consensus on an output deal to contain crude oil prices and scheduled to meet again in early December.

Taiwan September crude imports up 83 pct from August
Nov 15 (Reuters) - Taiwan's September crude imports increased 83 percent from the month before, as refineries started coming back online following outages and maintenance work, government data showed on Monday.
September crude import volume stood at 25.4 million barrels, up from August's 13.9 million barrels.

S.Korea October LNG imports rise 9 pct y/y
SEOUL, Nov 15 (Reuters) - South Korea's imports of liquefied natural gas (LNG) jumped 9 percent year-on-year in October, as the world's second-largest LNG buyer built its inventory ahead of winter demand, customs data showed on Tuesday.
South Korea imported 2.98 million tonnes of LNG in October, up from 2.74 million tonnes a year earlier, the Korea Customs Service data showed.

Oil Trades Near Three-Month High on U.S. Economy, Declining Fuel Supplies (Source: Bloomberg)
Oil traded near the highest level in more than three months in New York as investors speculated that signs of U.S. economic growth indicate fuel demand may increase in the world’s biggest crude consumer. Futures were little changed, after climbing 1.3 percent yesterday as the Commerce Department reported that U.S. retail sales rose 0.5 percent in October, beating the median forecast in a Bloomberg News survey of economists. Fuel inventories fell last week, according to the American Petroleum Institute. Crude oil for December delivery was at $99.29 a barrel, down 8 cents, in electronic trading on the New York Mercantile at 10:35 a.m. Sydney time. The contract advanced $1.23 to $99.37 yesterday, the highest settlement since July 26. Prices have advanced 21 percent in the past year.

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