Corn (Source: CME)
US corn futures settled mixed, with nearby futures contracts ending at lowest points since late March, as investment money flowed out of old crop commodity contracts, said John Kleist, senior analyst with ebottrading.com. Funds liquidated long old crop positions, with lack of fresh supportive fundamental news weighing on prices. New crop futures however, held firm, supported by ongoing planting delays. CBOT July corn ended 10 3/4c, or 1.5%, lower at $7.23 3/4 a bushel; Dec corn ended up 1c at $6.62 1/4.
Wheat (Source: CME)
US wheat futures finished mixed, managing to rebound from earlier declines, as poor crop ratings and stalled spring-wheat plantings, provided support. The market came under pressure from broader based selling in commodities amid strength in the US dollar and falling energy and metal futures. However, the threat of smaller production prospects amid declining winter-wheat crop conditions and wet weather idling spring-wheat seedings in the northern Plains provided strength to limit losses, analysts say. CBOT July wheat finished 1 1/2c or 0.2% at $7.93 1/4.
Rice (Source: CME)
US rough rice futures climbed as traders continued to add risk premium to the market in the face of lagging plantings. Excessive rains raise the threat of lost production potential, analysts say. In Arkansas, a key growing state, and in Missouri, where flooding is an issue, traders are bracing for lost acreage. The USDA said Monday that 49% of intended US rice seedings were complete, compared to 77% last year and the 5-year average of 66%. CBOT July rice finished up 1.3% at $15.39/hundredweight.
Commodity market index longs surge in March-CFTC
WASHINGTON, April 28 (Reuters) - Net long index investment in U.S. commodities surged 4.2 percent in March from the previous month, as the red-hot commodity market kept attracting investors.
Overall net long holdings rose to $242.6 billion in March, up $9.9 billion from February, according to the Commodity Futures Trading Commission's monthly report on futures positions connected to index-based investment.
Morgan Stanley Joins Funds Buying Commodities as Goldman Says ‘Sell’ (Source: Bloomberg)
Money managers are making near-record bets on higher commodity prices, aligning themselves with Morgan Stanley after Goldman Sachs Group Inc. said investors should reduce most of their holdings. Funds held a net 1.49 million futures and options in 18 commodities by April 26, 57 percent more than a year earlier, according to U.S. Commodity Futures Trading Commission data compiled by Bloomberg. The Standard & Poor’s GSCI Total Return Index of 24 commodities beat bonds, stocks and the dollar every month since December, the longest in at least 14 years. It rose in April for an eighth month, the best stretch since 2004.
U.S. corn flat on hopes of a pick-up in planting
SYDNEY, May 3 (Reuters) - Chicago corn futures held steady on Tuesday on hopes that improving weather this week will allow a pick-up in the seeding of the U.S. crop which has been hampered by wet weather in the Midwest corn belt.
"It is a weather market, there's no doubt about it," said Jonathan Barratt, chief executive of Sydney-based Commodity Broking Services.
US corn planting 13 pct complete, off average pace
CHICAGO, May 2 (Reuters) - Wet weather brought fieldwork to a standstill in the top corn-producing states east of the Mississippi River last week, pushing overall plantings below trader estimates and the average pace of seedings, U.S. Agriculture Department data showed late on Monday.
USDA put corn plantings at 13 percent complete as of Sunday, off last year's record pace of 66 percent complete and the five-year average of 40 percent.
Heavy rains hit US southern Corn Belt, more coming
CHICAGO, May 2 (Reuters) - Heavy rains fell across the southeast U.S. Corn Belt this weekend with more headed there the next two days, which will raise Midwest river levels to record levels and further stall crop planting, a forecaster said.
The southern portions of Ohio, Indiana and Illinois saw 3.5 to 5 inches (90 to 127 mm) of rain over the weekend. The area could see another couple inches the next two days.
Arabica coffee holds near 34-year peak, sugar lower
LONDON, May 3 (Reuters) - ICE arabica coffee futures were barely changed in early trade on Tuesday but remained within sight of the prior session's 34-year peak while sugar remained on the defensive, weighed by an improving supply outlook.
Arabica coffee futures on ICE were little changed in early trade with the market looking to consolidate just below the prior session's 34-year peak.
Indian white sugar under OGL offered at $670/T-trade
SINGAPORE, May 3 (Reuters) - Indian white sugar to be exported under a government-sanctioned scheme was offered at up to $670 a tonne free on board for prompt shipment, slightly cheaper than Thai sugar, but no deals were reported, dealers said on Tuesday.
India, the world's second-largest producer after Brazil, has approved around 30,000 tonnes of unrestricted sugar exports, kicking off overseas sales of a total 500,000 tonnes under its Open General Licence policy.
India's Oct-May 2 coffee exports jump to 210,826T-Board
MUMBAI, May 3 (Reuters) - India's coffee exports jumped to 210,826 tonnes during October to May 2, from 143,345 tonnes in the year-ago period, data from the Coffee Board showed on Tuesday.
In value terms, the exports surged to $601.17 million as against $306.64 million a year earlier, the board said.
Argentina 11/12 sugar exports seen at 280,000 tonnes-attache
WASHINGTON, May 2 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in Argentina: "Argentine sugar exports for marketing year 2011/12 are forecast to increase to 280,000 tonnes (raw value basis). Contacts indicate that the government is expected to closely control sugar exports as it wants to secure a well supplied domestic market.
Production is expected to grow as a result of more cane area and less severe cold weather during harvest. Planted area is estimated to grow significantly as a consequence of good returns and the expansion of the official ethanol mandate under the biofuels law.
Sulawesi April cocoa exports slide, 2011 output seen down
JAKARTA, May 2 (Reuters) - Indonesia's cocoa bean exports from the key-producing island of Sulawesi slumped 76 percent in April from a year ago to 1,570 tonnes, and cocoa output in the region is expected to fall up to 10 percent this year, an association official said on Monday.
The fall in exports last month was due to a rise in the cocoa bean export tax to 15 percent, though exports may pick up again in May as the world's third largest cocoa producer has cut the tax for shipments this month to 10 percent.
Philippines sees record dry season rice harvest
MANILA, May 3 (Reuters) - The Philippines' rice harvest in the current dry crop season may touch record high levels due to early rains in the first quarter, putting less pressure on the government to import more of the staple, Agriculture Secretary Proceso Alcala said.
Manila said last month it expects to surpass its rice production forecast of 7.6 million tonnes in the first half, which covers the dry crop period. It estimates total production this year to reach a record 17.46 million tonnes, more than 10 percent higher than last year's output.
Russia, India Wheat Exports Won't Calm World Markets - Analysts (Source: CME)
Deteriorating prospects for U.S. and European wheat crops mean even the return of exports from Russia and India to world markets this year would be unlikely to lower prices, analysts said. Futures markets for the world's second-most consumed grain have soared to within sight of record highs this year after a succession of natural disasters, including a historic drought in Russia, spurred fears of a shortage of supplies. But now even hopes that India will ship its first wheat abroad in five years and speculation that the Kremlin will lift a ban on Russia's exports as early as this summer look unlikely to calm nervous markets. "We don't expect that the Black Sea region will be able to come into the market in the way it did after the 2008 price rally to supply the world with a significant amount of cheap exports," said London-based Rabobank analyst Erin FitzPatrick. Grain dealers in Russia are starting to move stocks to ports in the hope that the government will allow exports as early as July.
Forecasts for Russia's 2011-12 exports range from around 3 million tons to as high as 10 million tons. Dmitry Rylko, of Russian forecaster Institute for Agricultural Market Studies, said dealers are hoping to free up storage space for the upcoming harvest. But Russian traders said companies are positioning grain in a bid to ship supplies quickly as soon as the ban is lifted. "I would assume the Russians want money quickly so, if they can sell, they will sell as soon as they can," said analyst James Dunsterville of Switzerland-based Agrimoney. In Asia, the U.S. Department of Agriculture's attache predicts that a record wheat crop of 84.2 million tons may prompt New Delhi to allow up to 2 million tons of exports, the first time in five years India would export grain. Still, with food security concerns high on the political agenda in both countries, a sudden surge in shipments looks unlikely.
Both Russia and India are struggling with near double-digit inflation despite holding excess government grain supplies in some areas. And with polls already under way in India and an election set for next year in Moscow, observers say domestic politics is likely to come ahead of international markets. Even exports from these producers are unlikely to make up for a fall in output in the U.S. and Europe. Wheat prices have rallied more than 20% since April 16 due to concerns for harvests in the world's two largest exporters as dryness has stressed crops in the ground and excessive rainfall has hindered planting.
Food Companies Face Test As Higher Prices Reach Shelves (Source: CME)
The appetite shoppers have for higher grocery prices is starting to be put to a serious test, as will be food makers' ability to make the increases stick. Shelf prices for packaged food have taken a meaningful step up in recent weeks, evidence that retailers are taking their turn in passing on the higher prices imposed on them from food companies like General Mills Inc., Kellogg Co. and Kraft Foods Inc. in recent months. But sales volumes are dropping as well, showing that consumers remain sensitive to higher shelf prices. The delicate balance between raising prices and how it affects volumes will take center stage as most large food companies begin to report quarterly earnings this week, including Kellogg on Wednesday and Kraft on Thursday. Retail prices for packaged-food products were up 3.2%, excluding volatile dairy items, for the four weeks ended April 11 versus last year, according to a Stifel Nicolaus & Co. analysis of Information Resources Inc. data, up from 1.9% from the prior four-week period.
The higher prices for packaged foods being reflected at retail are a welcome sign for investors, showing that retailers are both willing to pass on the higher prices to shoppers and that food makers are avoiding chasing market share with deep discounts. The higher prices provide both a boost to sales, as well as protection from higher costs. But the resulting hit to volumes has been noticeable as well, showing the risks in aggressively raising prices to counter higher costs. Sales volume, excluding dairy items, were down 3.8% in the latest four-week period compared with last year. "There's clearly a risk as to what happens to volume," Stifel analyst Christopher Growe said. "To be fair, they have no choice. It's a matter of managing their volumes." Growe estimates that food manufactures will broadly show volume growth for the year due to weak results last year, especially for cereal makers like General Mills and Kellogg.
Combined with cost cuts, he says that price increases averaging 2.9% can offset higher costs for the year for food companies. The food companies will be competing for a narrowing amount of consumer dollars. In addition to facing higher gasoline prices, shoppers are being confronted with higher prices for a bevy of household goods, from diapers and baby wipes, to paper towels and toilet paper. Clorox Co. said it would raise prices on Glad trash bags 9.5%. While shoppers feel reduced buying power, food- and household-product manufacturers hope that the fact prices are up across the board will lessen the impact. The companies also benefit by making products that are less discretionary than, say, clothes or electronics. "Almost everything [consumers] buy is costing them a bit more. It's not helping them feel more generous," Newell Rubbermaid Inc. Chief Executive Mark Ketchum said in an interview last week.
But, "these are products that people eventually need." Executives from Kimberly-Clark Corp., Procter & Gamble Co. and other companies also say that their price increases are less dramatic than those imposed during the last commodity spike in 2008. The economy is much improved since then, with the employment rate down and stock markets up, that may make the increases easier to swallow.
USDA Outsources Research As Seed Industry Seeks Faster Review (Source: CME)
The U.S. Department of Agriculture plans to start outsourcing research used in the review of new plant seeds to outside consultants and biotech companies seeking government approval. The pilot program comes as the seed industry complains the agency is taking too long to approve new products it says are needed at a time of surging crop prices and growing world food demand. Opponents of genetically modified crops, however, contend the USDA shouldn't be looking to streamline a process that already isn't doing enough to detect possible dangers. Under the two-year pilot, companies would agree to pay for a third-party contractor, chosen by the USDA's Animal and Plant Health Inspection Service, to conduct an environmental assessment of new products they want to commercialize. Companies also have the option of submitting their own research, which the USDA would use in developing its own assessment.
"This is very similar to what is done in a number of other agencies that have regulatory responsibility," said U.S. Agriculture Secretary Tom Vilsack in a recent interview. Biotech companies spend heavily on developing new seeds that can yield larger crops by making a plant resistant to a specific pest or tolerant of a certain herbicide. Before going to market, the USDA reviews a product to ensure it won't itself become a problem that potentially contaminates other fields or causes additional environmental problems. The U.S. Food and Drug Administration and U.S. Environmental Protection Agency also look at issues surrounding new seed proposals. The USDA pilot program could speed up the review of genetically modified crops.
It now takes seeds nearly seven times as long to win federal approval than it did when the first product was introduced in 1996, said Karen Batra, spokeswoman for the Biotechnology Industry Organization, a trade group that includes companies such as DuPont Co., Syngenta AG and Monsanto Co., as well as academic institutions. "Right now we've got 20-some products that are in the queue, waiting to be looked at," she said. "Some of these have been there for years." Yet opponents of genetically modified crops feel not enough work is being done to protect the public. The issue for the USDA should not be the time it takes to assess a proposed new crop, but the quality of that review, said Bill Freese, science-policy analyst for The Center For Food Safety, a nonprofit environmental group critical of genetically modified products.
Coffee Rises on Rain Threat to Colombia Crop; Sugar Gains; Cocoa Declines (Source: Bloomberg)
Arabica coffee rose to the highest price in almost 14 years as adverse weather threatened crops in Colombia, the world’s biggest producer after Brazil. Sugar gained, while cocoa declined. Colombia’s Agriculture Ministry on May 1 said a lack of sunshine will hurt coffee crops over the next few months. Plantations also have been damaged by rain and landslides and weather experts predict the worse is “yet to come,” Hamburg- based broker Eugen Atte GmbH said April 28 in a report. Prices have more than doubled in the past year. “With concern of excessive rains in Colombia and steady demand, coffee will continue to go even higher,” said Sterling Smith, an analyst at Country Hedging Inc. in St. Paul, Minnesota. “The scenario is very bullish.”
Oil Heads for Longest Losing Streak Since March as Crude Stockpiles Rise (Source: Bloomberg)
Oil declined for a third day in New York, matching the longest losing streak since March, as U.S. crude stockpiles increased and equities slipped, leading to concern demand for fuel will fall.
Oil fell to a two-week low as the Standard & Poor’s 500 Index dropped and on projections that a government report will show U.S. crude inventories climbed. (Source: Bloomberg)
Crude slipped 2.2 percent as the S&P 500 declined for a second day. U.S. oil supplies rose to a six-month high last week, according to a Bloomberg News survey before an Energy Department report tomorrow. Futures touched a 2 1/2-year high yesterday as investors assessed the impact of the May 1 killing of Osama bin Laden.
Silver Has Biggest Two-Day Drop Since 2008 on Margin Increase; Gold Falls (Source: Bloomberg)
Silver futures tumbled, capping the biggest two-day slide since October 2008, after margin requirements on the Comex increased for the second time in less than a week. Gold fell the most since mid-March. The minimum amount of cash that must be deposited when borrowing from brokers to trade silver futures will rise to $16,200 per contract at the close of business today from $14,513, CME Group Ltd., Comex’s owner, said yesterday. A year ago, the margin was $4,250. The metal, which tumbled 12 percent in two days, has doubled in the past 12 months.
US panel oks steep duties on Chinese aluminum goods
WASHINGTON, April 28 (Reuters) - A U.S. trade panel gave final approval on Thursday to duties ranging up to more than 400 percent on around $500 million of aluminum products from China used in the car and construction industry.
The move is the latest sign of trade friction between the world's two largest economies, but has been in the works for over a year.
Venezuela aluminum smelter in tough times-state daily
CARACAS, April 29 (Reuters) - Venezuela's government-run aluminum smelter Alcasa is in a "state of emergency" operationally and financially, an official newspaper said on Friday.
The South American country is an important global aluminum producer, but the industry has been plagued by labor disputes, outdated equipment and low investment over the last few years. Months of power rationing last year also hit the sector hard.
Zambia copper output at 2 mln t by 2015
LUSAKA, April 30 (Reuters) - Copper output in Zambia, Africa's top producer of the metal, will rise to 2 million tonnes by 2015 from around 900,000 tonnes this year as new mines open and others are expanded, the country's finance minister said on Saturday.
Situmbeko Musokotwane told Reuters new mines and expansion projects by Canada's First Quantum Minerals , Brazil's Vale , Equinox , London-listed Vedanta and Glencore International AG would boost copper production.
Shanghai bonded copper stocks seen falling on investors - trade
HONG KONG, April 28 (Reuters) - Investors are selling more Shanghai bonded copper stocks into the local market, which could dampen domestic prices in the near term, but also help re-open the spot import arbitrage window in the coming months, trading sources said on Thursday.
The world's top copper buyer, China has bought less from the international spot market this year since bonded stocks more than doubled from December, driving down quarterly imports by 21 percent.
Chile March copper output down 0.1 pct yr/yr
SANTIAGO, April 28 (Reuters) - Chile's copper output fell 0.1 percent in March compared with a year earlier to 450,507 tonnes, the National Statistics Institute (INE) said on Thursday.
Chile, which holds by far the world's top copper reserves and is the globe's No.1 producer, is expected to steadily increase output in the next two years with new mine projects and upgrades
China needs to tackle growing steel supply glut - CISA
BEIJING, April 29 (Reuters) - Controlling excess capacity and output remains one of the big tasks facing China's sprawling steel sector this year, with demand growth expected to slow to 2.6-4.6 percent per year from 2011 to 2015, the China Iron & Steel Association (CISA) said on Friday.
Steel output growth reached 9.3 percent in 2010, but CISA's vice-secretary general, Zhang Changfu, told a news conference that China could no longer rely on rapid increases in demand and had to put a stop to rampant capacity expansion.
Indonesia's Timah reports tin sales in Q1 down 18 pct y/y
JAKARTA, April 29 (Reuters) - Tin sales at Indonesian producer Timah fell 18 percent to 7,992 tonnes in the first quarter of 2011 compared the same period last year, the company said on Friday. The firm posted net profit for the first quarter at 354.7 billion rupiah ($41.3 million), up from a 141.8 billion rupiah during the same period last year.
METALS-Copper falls on China, U.S. data, dollar
LONDON, May 3 (Reuters) - Copper fell to its lowest since mid-March on Tuesday as manufacturing growth in big economies slowed and inventories of the metal rose, while key data was expected to give indications on the world's economic health.
Copper for three-month delivery on the London Metal Exchange (LME) fell to a low of $9,194.75 a tonne compared with a close of $9,320 at the close on Thursday before a long weekend that ended on Monday. It was at $9,251 in official rings.
Gold steadies after bin Laden; silver stabilises
LONDON, May 3 (Reuters) - Gold slipped on Tuesday from record highs above $1,570 an ounce the previous day, as the dollar rose and as safe-haven buying of the metal lost some momentum following the death of al Qaeda leader Osama bin Laden.
Spot silver also came under selling pressure after hitting a near two-week low of $42.58 an ounce on Monday, when the precious industrial metal saw its biggest one-day drop in 29 months.
