Wednesday, November 23, 2011

20111123 0958 Global Commodities Related News.

China Food Prices Down Last Week But Vegetables Up (Source: CME)
Key food prices, with the exception of vegetables, fell in China in the week to Sunday, the Ministry of Commerce said. Food items account for about a third of China's consumer price index, and price movement in the sector is closely watched as the government seeks to contain inflation. China's inflationary growth last month slowed for a third straight month, as the indicator was seen by analysts to have largely peaked. Still, wholesale prices of vegetables in the week to Sunday showed signs of resurgence, gaining 1.5% compared with a week earlier, and accelerating from a 0.4% gain the week before. This is the second straight week that vegetable prices have risen after a month of declines. Pork prices fell 1.7% and have come down 9.8% since mid-September. Mutton prices rose 0.8% while beef rose 0.5%. China may face a domestic pork supply deficit this year due to hog disease and rising feed costs, keeping upward pressure on prices, Rabobank agricultural analyst Chenjun Pan said earlier this month.
Egg prices slipped 0.9% during the eighth consecutive week of decline. Prices of edible oil were largely steady, the ministry said. The overall softening in prices suggest China may shift toward a more accommodative policy stance to support growth. The central bank said last week China will fine-tune its "prudent" monetary policy by an appropriate degree and at an appropriate time according to economic developments. The language of the statement represents a softening of official rhetoric on the task of containing inflation.

Corn (Source: CME)
US corn futures end slightly higher in a modest short-covering rebound. Markets stabilized generally after Monday's broad-based selloff on worries about the world economy. But traders say poor export demand is limiting corn's upside as cheaper global competition is winning more business. Investors are also unwilling to take on risk in the current environment. Meanwhile, farmers' reluctance to sell is limiting losses and traders wait to see when end users will step in to buy. December CBOT corn ends up 1 1/4c at $5.99/bushel.

Wheat (Source: CME)
US wheat futures end mostly lower on poor demand and technical selling. The market extended recent losses even as other markets stabilized, as anemic export demand continues to weigh on prices. Traders add that losses in the Minneapolis market, which has outperformed other markets, fell as the market hit pre-set sell signals. CBOT Dec. wheat ends up 2 1/2c to $5.94 a bushel, but all other contracts lower. KCBT Dec. wheat down 6c to $6.61 and Dec. MGEX wheat down 36 1/4, or 4%, to $8.60 1/4.

Rice (Source: CME)
US rice futures continue to tumble, ending lower amid poor demand. The market is at a 4 1/2-month low, and has fallen from a September high of $18.63 1/2. Weak exports and ample world supplies, along with technical selling, have weighed. Jan. CBOT rice ends down 14 1/2c to $14.31 per bushel.

U.S. wheat, corn edge up; economic worries weigh
KUALA LUMPUR, Nov 22 (Reuters) - U.S. corn and wheat prices recovered some ground  after a more than 1 percent drop in the previous session, but prices held below $6 a bushel as a grim global economic outlook weighed on sentiment.
"In the past two months, the market's tracking what's happening on the general economy," said Lynette Tan, an analyst at Phillip Futures in Singapore.

Weekend rain to help Argentine soy, corn -meteorlogist
BUENOS AIRES, Nov 21 (Reuters) - Weekend rain in Argentina's main crop belt further improved conditions for soy, corn and wheat, setting the stage for healthy harvests, a meteorologist said on Monday.
Farmers in grain-exporting powerhouse Argentina were concerned by dry weather in September, but precipitation over the last six weeks in top producing province Buenos Aires and surrounding areas improved the outlook.

Ukraine to boost spring grains area to cover losses
KIEV, Nov 21 (Reuters) - Ukraine plans to sow an additional 2.0 million hectares of spring grains and 300,000 hectares of soybean in 2012 in a bid to compensate future losses in winter grain crops already affected by poor weather, Ukraine's Farm Ministry said on Monday.
"Taking into account an expected area of the reseeding, the ministry and regions had worked out the structure of the 2012 spring sowing, according to which we plan to sow additional 500,000 hectares of maize, 200,000 of spring wheat, 300,000 of soybean, 1.2 million of spring barley and 100,000 of other cereals," the ministry said in a statement.

Bulgaria maize crop up 6 pct to 2.05 mln T
SOFIA, Nov 21 (Reuters) - Bulgaria harvested 2.05 million tonnes of maize this year from over 98 percent of the sown area, up 120,000 tonnes from a year ago mainly due to bigger acreage, the agriculture ministry said on Monday.
Farmers in the Balkan country planted 376,000 hectares with maize last autumn, up from 314,000 ha in 2009, the ministry said in a statement.

Options expiry to prop up corn, for now: Gavin Maguire
-- Gavin Maguire is a Reuters market analyst. The views expressed are his own. To get his real-time views on the market, please join the Global Ags Forum. --
CHICAGO, Nov 21 (Reuters) - After having slumped by more than 10 percent in less than 10 days on the back of a broad commodity market sell-off, December corn futures prices look set to find their footing in the $6.00 area as a standoff develops in the options arena ahead of Friday's December options expiration.
Pools of open interest are still in place at the $6.00 a bushel strike price in both put and call options, which will likely keep the underlying futures market anchored in that area until those options go off the board on November 25. After that, however, fresh downside momentum can't be ruled out in corn prices should broad economic woes continue to spur widespread commodity selling.

Canada To Pass Wheat Board Changes By Year-End (Source: CME)
Canada's Agriculture Minister said the country's parliament would sit as long as required to get legislation passed before year-end that strips the Canadian Wheat Board of its monopoly powers as of next August. He told a grain-industry symposium in Ottawa that the Conservative government, with its majority mandate, would do what is required to ensure legislation passes - even if it means both the lower and upper houses of Canada's parliament continue to work through the planned Christmas break. Once a bill passes the upper house, or senate, it is enacted into law. The legislation, as structured, would allow wheat and barley farmers to sell their wares to whomever they choose, starting Aug. 1 of next year. More important, once the legislation gets through parliament farmers can enter into forward contracts for the sale of grain in the post-Aug. 1 period.
The lower house is scheduled to sit until Dec. 16 before taking a Christmas break. The upper house - whose members are appointed by the prime minister - are set to continue working until Dec. 22. The Conservatives have a majority of the seats in both chambers, but opposition parties have vowed to fight passage of the bill. The current policy requires grain farmers to sell their products to the Winnipeg-based agency. The government's proposed bill also establishes a new board of directors to take over the Canadian Wheat Board and restructure the organization, with the goal of selling assets to the private sector, in a five-year timeframe. Ritz added the lawsuit launched by eight Wheat Board directors to stop the federal government's efforts are baseless. "There is nothing in the legal challenges that is going to stop this," he said, adding that Canada's parliament is the country's supreme law-making body.

Zambia May Ban Wheat Imports To Protect Local Industry (Source: CME)
Zambia is considering a ban on wheat imports to protect the local industry from unfair competition, vice president Guy Scott said late Monday. He made the remarks while launching the 2011-12 planting season, when he urged farmers to diversify crop production. "The Patriotic Front government will strive to protect every farmer in the country, be it large or small scale" he said. "the government will pay particular attention to farmers as they are the genesis of the food production value chain." According to Zambia's Wheat Farmers Union, the country now produces enough wheat for the country's domestic market and can even export to regional southern African markets if the government can provide the sector with more incentives and ban cheap imports. Last week, Zambia's finance and planning minister announced a 48% increase in the agriculture funding for 2012.
President Michael Sata's Patriotic Front party, which won the presidential and parliamentary elections in September, has announced a range of policy legislations to deliver on populist campaign promises. The government is in talks with the Bakers Association of Zambia on measures to eliminate unnecessary costs in the wheat value chain and make the industry more competitive. Last month, Sata rejected a proposal from the bakers' body to increase the price of bread by 7%, saying it wasn't justifiable. Bread is a staple food for most urban residents in Africa's top copper producer. Last year, Zambia produced at least 220,000 metric tons of wheat, enough to meet local demand, but farmers now face competition from cheap imports.

US Wheat Ratings Stable, S Plains Still Stressed (Source: CME)
The condition of U.S. winter wheat crops held steady last week, although crops in the southern plains remain stressed by dryness issues. The U.S. Department of Agriculture, in a weekly crop progress report issued Monday, rated 50% of winter wheat as good to excellent, unchanged from a week earlier. The rating was up from 47% a year earlier. The good-to-excellent rating in Oklahoma rose 1 percentage point from last week to 55%. Dryness has plagued winter wheat this fall throughout the southern Plains. The crop will be harvested early next summer. There remain issues for southern plains wheat, and with forecasts for drier conditions this week and next, the ratings will probably drop further next week, said Rich Nelson, director of research at brokerage and advisory firm Allendale Inc. Plains states, such as Texas and Oklahoma, grow hard red winter wheat, used to make bread. Texas' good-to-excellent rating dropped one percentage point from last week to 22%.
Ratings were better in Midwestern soft red winter wheat states. Soft red winter wheat is used to make pastries and snack foods. In Ohio, the top soft red winter-wheat growing state, the good-to-excellent rating rose six percentage points from last week to 50%. In Indiana, the rating climbed 2 percentage points to 73%. The stability in the national rating was generally anticipated and shouldn't have a major impact on U.S. wheat futures, Nelson said. Traders aren't following the condition ratings closely enough to trade off of a one-percentage-point change at this point, he added. The yield of the crop is not determined by the fall crop rating. Indeed, good spring rains can still revitalize plants that missed out on autumn precipitation, analysts said. Overall, 87% of U.S. winter wheat had emerged from the ground as of Sunday, compared with the five-year average of 88% for this time of year, according to the USDA. A week ago, 83% of the crop had emerged.
In a weekly report issued Monday, USDA said the corn harvest was 96% complete as of Sunday, up 3 percentage points from last week and 8 percentage points above the five-year average for that point in the year. Corn harvest pace in Ohio picked up in the midst of drier conditions last week, rising eighteen percentage points to 69% complete, but still well off the five-year average of 88%. Despite Ohio continuing to lag behind in harvest, it should not be a problem as farmers will continue to advance the harvest in the next week, Nelson said.

Soybeans May Open Higher on China Demand; Corn, Wheat Futures Seen Steady (Source: Bloomberg)
What follows are opening calls for U.S. grain and oilseed markets.
-- Soybean futures may open 1 cent to 2 cents a bushel higher on the Chicago Board of Trade on speculation that demand will increase in China after prices dropped to a 13-month low, Jim Gerlach, the president of A/C Trading Inc. in Fowler, Indiana, said in a telephone interview. Soybean-oil futures are expected to open 0.15 cent to 0.25 cent a pound higher, and soybean-meal futures may open steady to $1 higher per 2,000 pounds.
-- Corn futures are called to open 1 cent a bushel lower to 1 cent higher in Chicago as domestic demand climbs and U.S. exports ebb, Gerlach said.
-- Wheat futures may open 1 cent a bushel lower to 1 cent higher on the CBOT, the Kansas City Board of Trade and the Minneapolis Grain Exchange as a drop in the dollar boosts prospects for U.S. exports while rain in the southern Great Plains aids crop development, Gerlach said.

Corn May Advance on Speculation Price Declines Will Help Increase Demand (Source: Bloomberg)
Corn futures may gain on speculation that declining prices will increase demand for raw materials used to make food and biofuels. Wheat and soybeans may rise. Corn has dropped 3.6 percent this year, soybeans are down 18 percent and wheat has plunged 23 percent. China’s soybean imports may rise to 60 million metric tons this year, more than the 56.5 million forecast by the U.S. Department of Agriculture, Abah Ofon, an analyst at Standard Chartered Bank, said in a report. “Overall we still expect markets to trend higher in Q1-2012, although at a less aggressive pace than we saw at the start of the year, as they remain pinned down by uncertainty,” Ofon said. “We also believe investor demand will return, but this will depend very much on sentiment, which in turn hinges on developments in the euro area.”

ICE sugar, cocoa steady, digest recent losses
LONDON, Nov 22 (Reuters) - ICE raw sugar futures consolidated above the previous session's five-month low, as global markets steadied following a sell-off on worries over U.S. and European debt.
Raw sugar futures were slightly higher, caught between the smaller-than-expected Brazilian crop which is supportive of prices, and the large northern hemisphere crops which are bearish.  

Thai sugar cane crush starts after minor delays- trade
SINGAPORE, Nov 22 (Reuters) - Cane crushing has started in Thailand after minor delays caused by floods, with less than 10,000 tonnes of sweetener already produced before activity picks up next month in the world's second-largest exporter after Brazil, dealers said on Tuesday.
Thailand's worst floods in decades may cause minimal damage to sugarcane in the 2011/12 crop year, but market talk was that output could be revised down to 95 million tonnes from 100 million, though still within sight of last year's record of around 95.4 million tonnes.

Brazil sugarcane crop on way to another letdown
SAO PAULO, Nov 21 (Reuters) - Output from the world's biggest sugar producer Brazil is likely to disappoint again next season, putting a potential floor under global sugar prices that have been falling over the past few months.
Even with investments in cane replanting and good weather in the coming months, Brazil's main center-south sugarcane region will not recover to its high-water mark of 2010/11 when mills crushed a record 557 million tonnes.

Brazil 2011/12 coffee output seen down-attache
Nov 21 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in Brazil:
"The ATO/Sao Paulo estimate for Brazilian coffee production during marketing year 2011/12 remains unchanged at 49.2 million 60-kg bags, down 5.3 million bags compared to the previous year, due to the off-year of the biennial production cycle of the Arabica trees. Coffee exports are estimated at 29 million bags, down 6 million compared to MY 2010/11, due to lower availability of the product. Carry-over stocks are forecast at 3.38 million bags."

Dry season takes hold in some Ivorian cocoa areas
ABIDJAN, Nov 21 (Reuters) - Ivory Coast's main cocoa growing regions were mostly dry last week, farmers said on Monday in what might augur an early start to the dry season in some parts in the world's top grower.
The dry and dusty season which brings the Harmattan winds usually runs from mid-November to March. When harsh, it can trim the size and affect the quality of the crop.

India again delays decision on sugar exports
NEW DELHI, Nov 21 (Reuters) - India again postponed a decision on sugar exports, raising the chance that approval for up to 1 million tonnes of sales could be delayed yet further as the government may face criticism of its food policies when parliament resumes on Tuesday.
Ministers with power to decide on exports now look likely to meet on Nov. 22, official sources said, after their talks were rescheduled twice in less than a week, most recently to Monday.

Brazil sugar output seen up in 2012/13-Kingsman
SAO PAULO, Nov 20 (Reuters) - Sugar output in centre-south Brazil is expected to rise to 32.5 million tonnes in 2012/13, some 2 million tonnes more than in 2011/12, Jonathan Kingsman, managing director of consultancy Kingsman SA, said on Sunday.
He told Reuters that he expected cane output in centre-south Brazil, the main growing region of the world's No. 1 sugar producer, to stand at 515 million tonnes in 2012/13.

Sugar Falls to Five-Month Low as India Permits More Exports; Cocoa Climbs (Source: Bloomberg)
Sugar futures fell to a five-month low after India, the world’s second-largest producer, approved an increase in exports. Cocoa rebounded from a 30-month low, while coffee was little changed. India will export an additional 1 million metric tons, boosting annual shipments to a four-year high. Raw-sugar prices have tumbled 35 percent from a 30-year high of 36.08 cents a pound on Feb. 2. “The news that India was allowing exports came earlier than the market was expecting,” Juliano Ferreira, a researcher at ICAP do Brasil CTVM, said in an e-mail. “Buying from China and Egypt had been supporting the market.” Raw sugar for March delivery dropped 2.7 percent to settle at 23.44 cents at 2 p.m. on ICE Futures U.S. in New York. Earlier, the price touched 23.33 cents, the lowest for a most- active contract since June 8.

Oil Drops After Gasoline Stockpiles Rise, Growth Trails Estimate in U.S. (Source: Bloomberg)
Oil dropped from a three-day high in New York after rising gasoline stockpiles and slower-than- estimated economic growth raised concern about U.S. demand. Futures slipped as much as 0.5 percent after the American Petroleum Institute said fuel supplies climbed 5.42 million barrels last week. An Energy Department report today may show they rose by 1 million barrels, according to a Bloomberg News survey. U.S. gross domestic product advanced at a 2 percent annual rate, less than economists projected and down from a preliminary estimate of 2.5 percent, revised Commerce Department figures showed yesterday. Crude oil for January delivery slid as much as 48 cents to $97.53 a barrel in electronic trading on the New York Mercantile Exchange and was at $97.70 at 10:42 a.m. Sydney time. The contract yesterday gained 1.1 percent to $98.01, the highest close since Nov. 17. Prices are up 20 percent from a year ago.

South Sudan says oil output down 20,000 bpd since July
JUBA, Nov 22 (Reuters) - South Sudan's daily oil output has fallen by about 5 percent since the country declared independence in July, largely because of logistics issues and a lack of skilled workers, the petroleum and mining minister said on Tuesday.
South Sudan took about 75 percent of the united Sudan's oil output with it when it broke off into a separate country.

POLL-U.S. crude stocks seen down on lower imports, higher runs
Nov 21 (Reuters) - U.S. crude oil inventories likely dropped last week for the third straight time, due to lower imports and slightly higher refinery runs, a preliminary Reuters poll of analysts showed on Monday.
On average, U.S. crude stockpiles were forecast down 0.5 million barrels for the week ended Nov. 18, according to the poll of five analysts. In the week to Nov. 11, crude stocks in the United States fell 1.06 million barrels to 337.03 million barrels, data from Energy Information Administration (EIA) showed.

Tin Producers in Indonesia to Review Export Ban as Contract Sales Persist (Source: Bloomberg)
Tin producers in Indonesia, the largest exporter, will meet tomorrow to review a decision to halt overseas shipments until the end of the year to boost prices, an industry group said. The review follows complaints from users about metal scarcity at a weekend meeting between the Indonesia Tin Association with at least 10 buyers from Germany, Japan, South Korea and Taiwan, Johan Murod, general secretary at the group, said by phone today. Tomorrow’s meeting will be held in Pangkalpinang, Bangka Belitung province, he said. “The buyers were complaining that the halt has caused difficulties in securing supplies,” Murod said from Pangkalpinang. “We will hear the aspirations of all our members, and see what can we do to address these complaints.”

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