Thursday, December 29, 2011

20111229 1021 Global Commodities Related News.

Ex-Tropical Cyclone Grant May Re-Form (Source: CME)
The former Tropical Cyclone Grant could re-form as it tracks eastward across the Gulf of Carpentaria off Australia's northern coast, the Bureau of Meteorology said Wednesday. Gales aren't expected in the Gulf's coastal areas abutting Queensland state over the next 24 hours, but could develop later, the bureau reported in a statement at 0618 GMT. Heavy rain is expected to cause flooding of low-lying areas over the east-central areas of the Gulf in the Northern Territory, while heavy rain potentially leading to flooding is expected to develop across Cape York Peninsula and northern parts of the Gulf Country districts in Queensland Thursday and Friday, it said. The Gulf region is relatively sparsely populated, but hosts a number of mining projects, with production most shipped out through ports such as Weipa and Karumba in the eastern Gulf and from Groote Eylandt in the west. The bureau issued a high seas warning for eastern Arafura Sea, north of the Gulf.
Meanwhile, rail operator Genesee & Wyoming Inc. (GWR) reported one of its trains derailed near a bridge about 40 kilometers north of Katherine town in the Northern Territory, with three wagons hauling shipping containers and two wagons containing copper concentrate toppling into a river. The line to Darwin, mostly used for hauling bulk freight, is out of service, with crews inspecting the bridge and making plans to repair the 350 meters of damaged track. This will cause only minor disruptions to the supply of goods, including food, the company said in a statement. Northern Territory Chief Minister Paul Henderson said rains associated with the former tropical cyclone caused widespread flooding in the Northern Territory's Top End, with damage to roads and bridges. In a weekly tropical climate note, the bureau said it expects above-average rainfall and strong winds will continue across northern parts of the continent until early January.

Corn (Source: CME)
US corn futures end up for the eighth day in a row as South America's hot, dry weather fuels continued gains. Market posted modest early gains and then jumped at mid-day, as weather forecasts failed to show any relief for Argentina's crop. Traders note technical buying, and say possibility of a smaller South America crop could boost export demand in the US. Funds bought an estimated 8,000 contracts today, but some traders say the recent rally is fueled by short-covering and year-end positioning. Market sets a fresh six-week high. CBOT March corn ends up 9 1/4c to $6.42 1/2.

Wheat (Source: CME)
US wheat futures end higher Wednesday as the market continues to get pulled higher by corn. Hot, dry South America weather is threatening the corn crop and is the dominant factor in grains. Wheat dragged higher since smaller corn supplies could mean more demand for wheat as feed. Export demand remains weak, however, and traders say gains fueled largely by short-covering. Like corn, CBOT wheat up 8 days in a row. March CBOT wheat ends up 6 1/2c to $6.51 1/4 a bushel, KCBT March wheat up 3 1/2c to $6.99 1/4 and MGEX March wheat up 1/2c to $8.63.

Rice (Source: CME)
US rice futures end lower Wednesday for the fourth straight day on poor demand. A stronger dollar weighed on commodities. CBOT Jan. rice ends down 5c to $13.75 per hundredweight. The market is down from a high of $14.28 1/2 a week ago, but remains above the December low of $13.50 1/2.

US soy, corn drop from 6-wk tops, farmer selling weighs
SINGAPORE, Dec 28 (Reuters) - U.S. soybeans slid 1 percent, after climbing to a six-week top in the last session, while corn eased as higher farmer selling and a broad-based weakness in the global markets prompted investors to book profit.
"The farmers had kept the supply in the physical market very tight until they saw the rally," said Jonathan Barratt, managing director at Commodity Broking Services in Sydney. "Now they are cashing in on the rally, that is the move which has motivated some selling."

Kazakh rail firm says Dec grain exports to hit 1 mln T
ALMATY, Dec 28 (Reuters) - Kazakhstan's state railway monopoly said on Wednesday it will ship 1 million tonnes of the country's record grain harvest for export in December.
Kazakhstan Temir Zholy said its grain exports in the three months to December would rise by 147 percent from the same period last year, as the country steps up shipments to the Caucasus and ports on the Black Sea and Baltic Sea.

Crop scout Cordonnier cuts S. America crop size
CHICAGO , Dec 27 (Reuters) - Widely followed crop scout Michael Cordonnier has cut his estimates for South American corn and soybean production for 2011/12 and indicated further reductions may be necessary.
"Certainly this is an ominous forecast and if it verifies it would cause more harm to the crops and begin to stress soybeans when they're flowering and setting pods," Cordonnier said.

China 2012 Grain Output Target Above 525M Tons (Source: CME)
China will make every effort to stabilize grain output at more than 525 million metric tons in 2012, Minister of Agriculture Han Changfu said Wednesday, the state media Xinhua News Agency reported.
Han told the annual central conference on rural work that China would keep grain crop acreage stable next year and prioritize improving unit yield, Xinhua said.
China produced a record 571.21 million tons of grain in 2011, up 4.5%, the National Bureau of Statistics said earlier.

Sugar around three-week peak, coffee steady
LONDON, Dec 28 (Reuters) - ICE raw sugar futures hovered around three-week highs and arabica coffee and cocoa were little changed in thin post-Christmas volumes early, with many players in the softs complex away until after the New Year holidays.
ICE raw sugar futures firmed on light investor buying and book-squaring, trading around a three-week peak, with potential upside in prices pressured by big crops in the EU, Russia, Ukraine, India and Thailand.

Vietnam's coffee supply squeeze to perk up global prices
SINGAPORE/HANOI, Dec 28 (Reuters) - Global coffee prices may surge early next year as tighter bank lending in top robusta producer Vietnam chokes off cash to exporters, cutting supply and pushing up premiums even as the harvest rolls in.
London robusta prices could rise by about 10-20 percent, leaving roasters with no choice but to pay up until farmers in Vietnam decide to release stocks and beans from other key coffee growers resurface in the second quarter of 2012.

Vietnam's Dec coffee exports ease 8.5 pct y/y-govt
HANOI, Dec 28 (Reuters) - Vietnam exported an estimated 150,000 tonnes, or 2.5 million bags, of coffee in December, a drop of 8.5 percent from the same month last year, the government said on Wednesday.
November's coffee export volume was revised up to 70,700 tonnes from 50,000 tonnes estimated earlier, the government's General Statistic Office said in its monthly report.

Dry spell still a concern in Ivorian cocoa regions
DAKAR, Dec 27 (Reuters) - Prolonged drought conditions mixed with the dry harmattan wind last week in most of Ivory Coast's cocoa regions could reduce the size and hamper the quality of Ivorian main cocoa crop, farmers said on Tuesday.
The harmattan, which blows south from the Sahara from December to March, is sweeping through most of Ivory Coast's cocoa regions, reducing air moisture needed for the development of cocoa pods.

Argentine 2011 biodiesel exports soar to $1.9 bln
BUENOS AIRES, Dec 27 (Reuters) - Argentine biodiesel exports rose more than 58 percent to $1.9 billion in 2011 compared with the year before, the country's main biodiesel industry group said on Tuesday.
In volume terms, biodiesel exports from the South American country shot 18.5 percent higher to 1.6 million tonnes, according to a statement from the Argentine Biofuels Chamber, or CARBIO, as it is known by its Spanish initials.

New Forms Of Biofuel Fall Short (Source: CME)
Hopes for a surge in production of alternative biofuels are falling flat, and the U.S. expects to continue to rely on corn- and sugarcane-based ethanol to meet a national mandate for renewable fuels in 2012. The Environmental Protection Agency said Tuesday that a tiny fraction -- less than one-tenth of 1% -- of renewable fuels required to be used in the U.S. next year will come from cellulosic biofuel, based on projected production volumes, despite a congressional target that the fuel made from plant stalks and other inedible materials account for more than 3% of the total. The agency sets volume requirements for renewable fuels every year to implement a 2007 law that requires refiners to use increasing amounts of renewable fuels in gasoline. Cellulosic fuel, which can be made from plant waste such as corncobs, is still far from being able to meet volume mandates laid out by Congress, the EPA said Tuesday, confirming a draft analysis it had published earlier this year.
Instead, the agency will require refiners to use other types of advanced biofuels, including sugarcane ethanol. The EPA said it would set the required volume of cellulosic fuel at 8.65 million gallons for 2012. Congress had set a goal of using 500 million gallons next year, on the way to 16 billion gallons in 2022. The EPA has the option to cut the target based on industry capacity to produce the more advanced fuels. Although the EPA set the requirement well below Congress's goal, its decision still irked refiners. Companies will have to buy credits from the EPA if they can't find enough cellulosic ethanol to purchase -- even though the fuel may not be available. "The [EPA's] cellulosic number is still conjecture-based fantasy," said Stephen Brown, vice president for government affairs for refiner Tesoro Corp.
The credits cost about $1.20 per gallon, according to Charles Drevna, president of the National Petrochemicals and Refiners Association. "Once again, refiners are being ordered to use a substance that is not being produced in commercial quantities -- cellulosic ethanol -- and are being required to pay millions of dollars for failing to use this nonexistent substance. This makes no sense," he said. Brooke Coleman, executive director of the Advanced Ethanol Council, which represents advanced-biofuel companies, said Congress built flexibility into the mandate because "there was always a chance" the industry wouldn't meet the schedule. "It shouldn't surprise anyone with the state of the economy, the state of the financial world, the state of the banks. . .that there are delays in implementation of new technologies," Mr. Coleman said.
Overall, the 2007 law says the U.S. must use 36 billion gallons of renewable fuels per year by 2022, including 16 billion gallons of cellulosic biofuel. According to a National Academy of Sciences report published this year, the latter target won't be met "unless innovative technologies are developed that unexpectedly improve the cellulosic biofuels production process."

Brent drops below $109; Iran threat supports
SINGAPORE, Dec 28 (Reuters) - Brent crude edged down after rallying for six straight sessions, but prices continued to hover near $109 per barrel supported by Iran's threat to halt oil shipments through the Strait of Hormuz and positive U.S. data.
"The U.S. is ending the year so far on a rather upbeat note, which is good for oil," said John Vautrain, a director at energy consulting firm Purvin & Gertz.

Vietnam 2011 crude exports +3.6 pct y/y-govt
HANOI, Dec 28 (Reuters) - Vietnam's crude oil exports this year are estimated to have risen 3.6 percent from a year ago to 8.27 million tonnes, or 166,000 barrels per day, the government said on Wednesday.
The General Statistics Office said the full-year crude exports generated $7.24 billion, a 45.9 percent increase from a year ago.

Japan's Nov crude imports from Iran tumble, tanker delay cited
TOKYO, Dec 28 (Reuters) - Japan's crude imports from Iran tumbled 38 percent last month to 1.09 million kiloliters (228,000 barrels per day) from a year earlier, a decline that a source at an importer attributed to a delay in at least one tanker arrival rather than sanctions-related problems.
Iran is facing the threat of fresh sanctions from the United States and European Union over its nuclear programme that could prevent Asian refiners from paying for Iran's oil, and European refiners from buying it.

Iran threatens to stop Gulf oil if sanctions widened
TEHRAN, Dec 27 (Reuters) - Iran threatened on Tuesday to stop the flow of oil through the Strait of Hormuz if foreign sanctions were imposed on its crude exports over its nuclear ambitions, a move that could trigger military conflict with economies dependent on Gulf oil.
Western tensions with Iran have increased since a Nov. 8 report by the U.N. nuclear watchdog saying Tehran appears to have worked on designing an atomic bomb and may still be pursuing research to that end. Iran strongly denies this and says it is developing nuclear energy for peaceful purposes.

Oil Trades Near One-Week Low on U.S. Stockpile Gain, European Debt Crisis (Source: Bloomberg)
Oil traded near the lowest level in a week in New York after a report showed U.S. crude stockpiles surged last week, indicating fuel demand may be weakening as Europe’s debt crisis threatens to slow the global economy. Futures were little changed after sliding 2 percent yesterday, the first decline in seven days, as record lending by the European Central Bank signaled the growing risk of the region’s crisis. U.S. inventories increased 9.57 million barrels last week, according to the industry-funded American Petroleum Institute. An Energy Department report today was forecast to show supplies fell 2.5 million in a Bloomberg News survey. Crude for February delivery was at $99.45 a barrel, up 9 cents, in electronic trading on the New York Mercantile Exchange at 8:19 a.m. Singapore time. The contract yesterday fell $1.98 to $99.36 in the biggest decline in two weeks. Prices are up 8.8 percent this year after climbing 15 percent in 2011.

Japan Nov zinc exports up 64 pct, led by China
TOKYO, Dec 27 (Reuters) - Japan's exports of refined zinc surged to 11,712 tonnes in November, up 64 percent from a year earlier, driven by a three-fold jump in exports to China, customs-cleared data showed on Tuesday.
Exports to China increased to 3,578 tonnes, up from 1,191 tonnes a year before, replacing Taiwan as the top importer of Japan's refined zinc and accounting for about 30 percent of total exports.

China 2012 rare earth quotas unchanged from 2011
BEIJING, Dec 27 (Reuters) - China will keep rare earth export quotas for 2012 at this year's levels, it said on Tuesday, a move that will ease overseas worries about the supply of 17 crucial elements used in high-tech manufacturing.
China accounts for more than 95 percent of the global output of rare earths, which are used in the electronics, defense and renewable energy industries.

Vale giant ore ship makes maiden arrival in China
SHANGHAI/SINGAPORE, Dec 28 (Reuters) - China has received the first of Vale's  giant iron ore vessels, industry sources said on Wednesday, a major breakthrough for the Brazilian miner after months of uncertainty over the fleet's access to the world's top steelmaker.
Top iron ore exporter Vale is spending billions of dollars to build the world's biggest dry bulk ships to cut the cost of shipping the steelmaking ingredient to China, but until now had failed to gain Beijing's approval for the six vessels already on the water to even stop at a Chinese port.

China steel products demand to reach 646 mln T in 2012 - report
SHANGHAI, Dec 28 (Reuters) - China's consumption of steel products is expected to reach 646 million tonnes in 2012, marginally higher than this year's level, the state-owned China Securities Journal reported on Wednesday.
The report said the China Metallurgical Industry Planning and Research Institute had estimated consumption of finished steel products in the world's top steel producer and consumer at 610 million tonnes this year.

Japan Q1 crude steel demand seen at near 2-yr low
TOKYO, Dec 27 (Reuters) - Japanese demand for crude steel is expected to fall 6.2 percent from a year earlier to an almost two-year low of 26 million tonnes in the January-March quarter, as a plunge in steel exports outweighs strong demand from the domestic auto sector, the trade ministry said on Tuesday.
The ministry estimates Japan's annual crude steel output for the year to March 2012 at 105.92 million tonnes, 4.87 million tonne, or 4.4 percent, less than a year ago.

METALS-London copper falls as U.S. housing prices sag
KUALA LUMPUR, Dec 28 (Reuters) - London copper dropped on Wednesday, snapping four days of gains, on concerns that demand for the metal may wane after a report showed weak house prices in the United States, the world's largest economy.
A more-than-expected slump in Japan's November factory output after Europe's debt crisis and flooding in Thailand hit major manufacturers also hurt copper prices.

PRECIOUS-Gold inches down as growth concerns weigh
SINGAPORE, Dec 28 (Reuters) - Gold edged lower on Wednesday, tracking falls in industrial metals and equities, as concerns about global economic growth weighed on market sentiment amid thin year-end trading volumes.
Investors were cautious as the latest data out of the United States sent mixed signals. Improving labour market conditions lifted consumer confidence to an eight-month high in December, but persistently weak house prices remain an obstacle to faster economic growth.

Gold Posts Longest Slump Since 2009 (Source: Bloomberg)
Gold fell, capping the longest slump since October 2009, and silver tumbled to a three-month low as Europe’s deepening debt crisis drove commodities and stocks lower. The euro dropped to an 11-month low against the dollar as lending to financial institutions sent the European Central Bank’s balance sheet to a record high. The Standard & Poor’s GSCI index of 24 raw materials and the MSCI World Index of equities were poised for the biggest declines in two weeks. Platinum approached the lowest since November 2009, and palladium dropped almost 3 percent. The ECB said lending to euro-area banks jumped 214 billion euros ($276.9 billion) to 879 billion in the week ended Dec. 23, bolstering credit to the economy during the fiscal turmoil. Gold has slumped 19 percent from a record $1,923.70 an ounce on Sept. 6, partly on sales to cover losses in other markets. About $10 trillion has been erased from global equities (MXWD) since May.

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