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 end lower on outside market pressure and a lack of demand. Grains markets lacked their own direction and succumbed to a risk-off trade as worries about Europe's debt crisis flared up anew, says Don Roose of US Commodities. A stronger dollar also weighed on market action. "It seems like we have a market that's fairly well-balanced fundamentally," Roose says. Demand, particularly for exports, remains weak, but supplies are still likely to be tight at least until the next harvest. CBOT December corn ends down 2 3/4c at $6.42 3/4 per bushel.
Wheat (Source: CME)
US wheat futures end mostly lower, backpedaling from early gains. Traders were cautious of risk in the face of European debt uncertainty and worries about sluggish export demand, analysts say. The absence of a bullish fundamental story to buoy prices encouraged traders to take profits on advances, particularly with export competition from Black Sea region. CBOT Dec wheat ended down 16c at $6.16 3/4/bushel, Dec KCBT wheat ended 18c lower at $6.87, while Dec MGEX wheat climbed 2 1/4c amid tight farmer holding of supplies to $9.33 1/2.
Rice (Source: CME)
US rice futures end sharply lower, succumbing to the general weakness in grain futures, but posting the biggest decline. Weak demand and technical selling added to the lower theme, analysts say. CBOT January rice fell 27c to $14.95 1/2 per hundredweight.
Soy drops from 1-wk top on euro zone fears, wheat down
SINGAPORE, Nov 16 (Reuters) - U.S. soybeans slid from a one-week top, while corn lost ground as fears of the euro zone crisis spreading to top-rated members such as France weighed on the agricultural markets.
"Soybeans have been reasonably well supported but they are down today and everything is a little bit weaker, which is not surprising, given the stronger dollar," said Adam Davis, a senior commodity analyst at Merricks Capital in Melbourne.
Global 2012 wheat output seen almost flat-Agresource
GENEVA, Nov 16 (Reuters) - Global wheat output should stay nearly flat in 2012 at 682.6 million tonnes, against 683.3 million in 2011, as higher U.S. and European production offset a fall in Ukraine and Russia, U.S. analyst Agresource said on Wednesday.
The analyst pegged the European Union crop at 135.4 million tonnes, Russia's at 57 million tonnes, the U.S. crop at 56.1 million and Ukraine's at 18.5 million in its first forecast for the 2012 wheat crop given to Reuters on the sidelines of the Global Grain conference in Geneva.
Philippines cuts 2011 farm growth forecast to 3-3.5 pct
MANILA, Nov 16 (Reuters) - Philippine farm output in 2011 is now seen rising between 3.0 and 3.5 percent from last year, Agriculture Secretary Proceso Alcala said on Wednesday, revising down his growth forecast from 4 percent to 5 percent, due to typhoon damage to crops.
The agriculture sector, which accounts for a fifth of the southeast Asian country's overall domestic output, posted annual growth of 4.28 percent in January to September, reversing a contraction of nearly 3.0 percent a year earlier.
Weather helping Argentine grains, more rain seen
BUENOS AIRES, Nov 15 (Reuters) - Mild temperatures and rain over the last month has helped Argentina corn and soy crops bounce back from a dry September, a meteorologist said Tuesday, as farmers took advantage of good planting weather.
Sowing of the two crops is advancing steadily in the South American grains exporting country, which could be on its way to record harvests if the weather remains favorable.
US Plains wheat belt mostly dry; Ohio Valley wet
CHICAGO, Nov 15 (Reuters) - The U.S. Plains winter wheat belt should be mostly dry for the next seven days, but a developing storm system could bring rain to the region next week, an agricultural meteorologist said Tuesday.
"There is a potential system in the six- to 10-day forecast coming out of the southwestern United States that has some potential to bring significant rains to parts of central Texas, Oklahoma and central Kansas," said Mike Palmerino, a forecaster with Telvent DTN.
UK wheat exports pick up, remain behind year ago
LONDON, Nov 15 (Reuters) - UK wheat exports picked up in September although they continue to run significantly below last season's levels, customs data showed on Tuesday.
Shipments during September rose to 277,315 tonnes, up from the prior month's 165,314 tonnes.
Ukraine's Wheat Face Lingering Quality Concerns - Analysts (Source: CME)
Ukraine's wheat exports this crop year face lingering quality concerns, market participants said. "Although Egypt's state grains buying agency has approved Ukraine back to their supply list, quality issues still will be the main concern for our exports this year," Svetlana Sinkovskaya, head of marketing at Ukrainian analysis body APK Inform said. Egypt's General Authority for Supply Commodities, or GASC, bought 60,000 metric tons of Ukrainian wheat at the start of November, marking the second time it had bought Ukrainian wheat since suspending imports from the eastern European nation in 2008 over quality concerns. "GASC recently purchased Ukrainian wheat in a tender, but the wheat is yet to arrive at Egypt's ports. If there are problems with the wheat, this will be terrible for Ukraine," said Victoria Golubyatnirova, sales and business development manager at grains inspection company SGS.
Still, APK's Sinkovskaya said Ukraine should become more active in the wheat market in February as Russia pulls back exports. "Russia has already sold its best grain in very high volumes," Sinkovskaya said. "It is likely as well the government will place duties on exports." Higher grain production, weaker export competition and strong foreign demand has seen Russian grain exports soar during the first three months of the 2011-12 marketing year, the U.S. Department of Agriculture said last week.
Aussie, Canadian Wheat Faces Pressure From Black Sea - Viterra (Source: CME)
Increased competition from the Black Sea region due to higher yields will place increasing pressure on Australian and Canadian wheat markets over the next few years, Fran Malecha, Head of Grain at Viterra, Canada, said at a conference in Geneva. Malecha said cheaper grain supplies from the Black Sea region could threaten Australia and Canada's ability to supply North African and Middle Eastern markets. Cheaper wheat from the Black Sea region is already making it harder for European suppliers to maintain competitiveness with countries to which they traditionally export. However, Malecha said Australia's exports of wheat and barley to North Africa should remain healthy in the future. "Saudi Arabia's imports of barley in particular have indeed been strong and are expected to remain so," he said. Less regulation and more open food markets are necessary to avoid global food shortages and price spikes, Malecha added.
Countries such as France want to push better regulation of food markets--something that has met opposition from agricultural powers such as the U.S.
Wheat Declines as Rainfall in Argentina, U.S. May Help Crop Development (Source: Bloomberg)
Wheat fell in Chicago as harvests in Australia and Argentina may add to global supply and as rains boost yield prospects in parts of the U.S., the world’s largest exporter of the grain. March-delivery wheat declined 0.9 percent to $6.42 a bushel on the Chicago Board of Trade by 2:14 p.m. Paris time. Prices are down 19 percent this year. Western Australia’s wheat production may double to 9.24 million metric tons, more than the 9.12 million tons expected last month, the Grain Industry Association of Western Australia forecast. Southern Hemisphere harvesting will add to supply already boosted by bigger crops in Russia and Ukraine.
Soybeans, Corn Forecast to Open Lower on EU Debt Crisis; Wheat May Decline (Source: Bloomberg)
-- Soybean futures may open 5 cents to 7 cents a bushel lower on the Chicago Board of Trade amid concern that the European debt crisis will hinder the global economy, reducing commodity demand, Jim Gerlach, the president of A/C Trading Inc. in Fowler, Indiana, said in a telephone interview. Soybean-oil futures are expected to open 0.2 cent to 0.3 cent a pound lower, and soybean-meal futures may open down $1 to $2 per 2,000 pounds.
-- Corn futures are called to open 4 cents to 6 cents a bushel lower in Chicago on speculation that the dollar’s rally will erode demand for U.S. grain exports, Gerlach said.
ICE coffee dips, sugar steady, focus on euro zone debt
LONDON, Nov 16 (Reuters) - ICE cocoa and sugar futures were little changed and arabica coffee eased in early trading on Wednesday, weighed by a firm dollar and weaker share markets as investors focused on Southern European countries' ability to tackle their debt problems.
ICE March cocoa was up $10 or 0.4 percent at $2,547 a tonne at 0901 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.
India cotton exports in 2011/12 seen 8 mln bales-official
MUMBAI, Nov 15 (Reuters) - India could export eight million bales of cotton in the year to September 2012, up from seven million in the previous year, a Cotton Advisory Board (CAB) official said on Tuesday, as availability increases and Chinese demand grows.
India removed restrictions on cotton exports in July and is the world's second-biggest grower and exporter, with most of its sales going to China.
Mauritius revises up 2011 sugar output -chamber
PORT LOUIS, Nov 15 (Reuters) - Mauritius' Chamber of Agriculture revised its 2011 sugar production forecast up by 5 percent to 410,000 tonnes on Tuesday, saying the sugar cane crop had proven more resilient to poor rainfall than expected.
Sugar, long a pillar of the Indian Ocean island's now nearly $10 billion economy, accounts for roughly 1.2 percent of gross domestic product.
Euro Coal-S.African prices fall $1/T with oil
LONDON, Nov 14 (Reuters) - Prompt physical coal prices dropped by around $1.00 a tonne or 0.9 percent on Monday following oil's $2 loss on worries over implementation of reforms in Italy and Greece after naming new leaders and lower industrial output in the euro zone.
Comments by German Chancellor Angela Merkel on Monday, in which she said that Europe could be living through its toughest hour since World War Two swiftly stalled a rally on the financial markets earlier in the day.
Candy-to-Fuel Demand Cuts Oil Inventory to Lowest Since 1975: Commodities (Source: Bloomberg)
Stockpiles of the cooking oils used to make everything from candy bars to biofuels are declining to the lowest in two generations as farmers fail to keep up with demand expanding at five times the pace of the world population. Inventories of soybean, rapeseed, sunflower and six other oils will drop to less than 29 days of consumption this year, the fewest since 1975, U.S. Department of Agriculture data show. Palm, the most-consumed oil, will rise 7 percent to 3,475 ringgit ($1,103) a metric ton in Malaysian trading by the end of the first quarter, the highest since March, based on the median estimate of 12 analysts and traders surveyed by Bloomberg. Supplies of oils and fats will be near the “critically low level” seen during the 2008 food crisis, the United Nations said in a report Nov. 3. While the UN’s world food index dropped 9 percent from a record in February as grain harvests expanded, a tighter supply of cooking oils is helping to keep the gauge about 20 percent higher than the five-year average.
Oil Drops From Five-Month High After Rising Above $100 a Barrel (Source: Bloomberg)
Oil fell from the highest in more than five months in New York on speculation that prices have risen too fast amid concern Europe’s debt crisis will affect the economy of the U.S., the world’s biggest crude consumer. Futures slipped as much as 1 percent after closing above $100 a barrel yesterday. Crude’s relative strength index rose above 70, indicating prices may have advanced too fast, while equities tumbled after Fitch Ratings said U.S. banks face a “serious risk” that their creditworthiness will deteriorate if Europe’s debt crisis worsens. London-traded Brent’s premium to West Texas Intermediate narrowed for a seventh day. Crude oil for December delivery was at $101.69 a barrel, down 90 cents, in electronic trading on the New York Mercantile at 10:41 a.m. Sydney time. The contract advanced $3.22 to $102.59 yesterday, the highest settlement since May 31. Prices have increased 26 percent in the past year.
POLL-US crude stocks seen down on lower imports
Nov 15 (Reuters) - U.S. crude oil inventories were expected to have fallen last week for the second straight time on lower imports and slightly higher refinery runs, an expanded Reuters poll of analysts showed on Tuesday.
On average, U.S. crude stockpiles were forecast down 1.2 million barrels for the week ended Nov. 11, the poll of eight analysts showed. In the week to Nov. 4, crude stocks in the United States fell 1.37 million barrels to 338.09 million barrels, Energy Information Administration data showed.
Iron Ore-Spot at near 1-mth top as gains extend to Day 12
SINGAPORE, Nov 16 (Reuters) - Iron ore rose to its highest in nearly a month as spot prices gained for a 12th day in a row, with firmer steel prices in top consumer China encouraging more buying of the raw material and helping it recover from last month's slump.
Iron ore with 62 percent iron content climbed nearly 6 percent to $146.30 a tonne on Tuesday, the highest since Oct. 19, according to the Steel Index.
Europe stainless steel industry faces big cuts-SMR
LONDON, Nov 15 (Reuters) - Europe's stainless steel industry will see major curtailment of production between this year and next as private equity and other new investors get involved, the managing director of steel consultancy SMR told Reuters.
The European stainless steel industry has been suffering due to overcapacity and stiffer competition from Asia in the past few years, but production cuts and shutdowns have been slow to come.
Baltic index rises on fresh China iron ore buying
LONDON, Nov 15 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, turned positive on Tuesday as fresh iron ore sales to China boosted earnings and sentiment on the larger capesize market.
The overall index rose 28 points or 1.54 percent to 1,846 points after falling for two sessions.
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