Wednesday, January 4, 2012

20120104 1011 Global Commodities Related News.

FAO Chief Sees Less Food Price Volatility  (Source: CME)
The new head of the Food and Agricultural Organization said he didn't expect food prices to be as volatile in the near term as they have been in the recent past. Jose Graziano da Silva, speaking at his first press conference since becoming director-general at the Rome-based United Nations agency, said he didn't expect food prices to rise as fast as they have at times during the past few years, nor for sharp drops to be reported either. He noted that recent food price fluctuations have been partly driven by foreign currency movements as well as by low levels of food stocks--which he called a necessary "base for speculative volatility." Da Silva also said his top priority at FAO will be the "total elimination" of hunger and undernourishment from the world. "There is no time to lose," as the goal should be to cut the number of those suffering from hunger by half by 2015, when his term ends, he said.
He listed as his other strategic priorities promoting a move towards more sustainable systems of food production and consumption, achieving greater "fairness" in the global management of food, expanding south-south cooperation and completing internal institutional reforms at the FAO. Da Silva, who won kudos for his poverty-reduction efforts as a minister in Brazil, said he will visit Africa later this month, and include a visit to the Horn of Africa where food security crises are currently extreme, he said. Resources "won't be used equally," he said, noting that crisis areas and Africa in particular would remain a priority. Da Silva, the first Latin American to hold the top job at the FAO, also vowed to boost efficiency and cut bureaucracy at the agency and to move more of its activities to the local level.
"I will look to cut costs at the bureaucracy here at headquarters and put the resources freed up to those working on the ground," da Silva said. He emphasized that he considered "fieldwork" to be an essential counterpart to the theoretical and other "normative" research done at FAO. He also said it was crucial to squeeze out waste from food production and the distribution system, citing multiple cases where foods considered nutritional--and even delicious--are thrown away. Referring to the risks of a European economic recession on FAO's operations, da Silva said he didn't think it would have any affect on funding but would mean "we'd have a lot more work to do" catering to increasing numbers of hungry people in the world.

Hedge Funds Raise Bullish Raw-Material Bets Most in 16 Months: Commodities (Source: Bloomberg)
Speculators increased wagers (.MMLOSH) on rising commodity prices by the most since August 2010 on signs that sustained economic growth will drive a rebound in raw materials from their first annual slump since the recession. Hedge funds and other money managers increased combined net-long positions across 18 U.S. futures and options by 18 percent to 536,907 contracts in the week ended Dec. 27, Commodity Futures Trading Commission data show. Soybean holdings jumped more than ninefold and those for corn reached a five-week high. Speculators trimmed bets on declining prices for copper, cocoa, wheat, and soybean oil and meal.
While the Standard & Poor’s GSCI Total Return Index of 24 commodities declined 1.2 percent last year, it rallied 12 percent from a 10-month low reached in October on mounting optimism about growth. Confidence among American consumers rose in December to the highest level in eight months and pending sales of existing homes jumped in November for a second month. More than $3.3 trillion was added to the value of global equities since Oct. 4, data (WCAUWRLD) compiled by Bloomberg show.

Commodities Jump Most in Eight Months After Gains in Global Manufacturing (Source: Bloomberg)
Commodities posted the biggest rally in almost eight months on speculation that increased factory output from China to the U.S. heralds rising raw-material demand. The Standard & Poor’s GSCI Spot Index (SPGSCI) of 24 commodities rose 3.4 percent to settle at 666.55 at 4:19 p.m. in New York, the largest gain since May 9. Silver jumped the most since July, leading the advances, and crude oil closed at a seven-month high. Manufacturing in December improved in Switzerland, China, India, the U.K. and Australia, according to data released this week, while the Institute for Supply Management said today that U.S. factories expanded (NAPMPMI) at the fastest pace in six months. Signs of growth are helping assuage investors who sold commodities last month amid mounting concern that the European debt crisis would hinder the global economy.

Raw Materials Seen Rebounding as Global Economy Skirts Slump: Commodities (Source: Bloomberg)
Commodities may rebound from their first retreat in three years as developing economies shore up global growth, driving demand higher at a time when raw-material producers are already struggling to keep up. Precious metals will advance 27 percent or more, industrial metals at least 17 percent and grains 5 percent, according to the median estimates in a Bloomberg survey of 143 analysts, traders and investors. Nine of the 15 commodities covered by a similar survey a year earlier reached their predicted highs in 2011, with another five no more than 4 percent away. The Standard & Poor’s GSCI Total Return Index of 24 raw materials rose 16 percent through April, before tumbling 15 percent on mounting concern that Europe’s debt crisis and slower Chinese growth would curb demand for commodities. A 6.1 percent expansion in developing economies this year will help sustain global growth at 4 percent, above the average (IGDCWRLD) over the past decade, the International Monetary Fund predicts.

Corn (Source: CME)
US corn futures end sharply higher, climbing to a fresh 8-week high, as worries about South America's crop persist. Hot, dry Argentina weather and forecasts for it to continue all week adds to concern about the crop. A smaller one would shift export demand to the US. Corn and other grains also get a boost from outside markets, including surging crude oil, a weaker dollar and sharply higher equities to start 2012. Corn prices were volatile late in the session, with analysts saying index-fund buying may have boosted the market late. CBOT March corn ended up 12c at $6.58 1/2 a bushel.

Wheat (Source: CME)
US wheat futures finished mixed as CBOT wheat gets spillover support from corn and macro markets, climbing to a fresh three-month high before trimming gains. Hot, dry South America weather that is boosting corn prices is fueling wheat, with traders also noting a weaker dollar and surging equities adding support Tuesday. Front-month CBOT wheat climbs to its highest price since September, still, after falling off the highs traders say the market may be running out of steam. Wheat lacks its own fundamental strength as world supplies are ample, they say. CBOT March wheat ends up 4 1/4c to $6.57 a bushel. KCBT wheat closes down 4 1/2c to $7.12 1/2 and MGEX wheat slips 5 1/4c to $8.44 1/4

Rice (Source: CME)
US rice futures closed lower, retreating from recent gains amid comfortable world supplies. The market fell despite support from a weaker dollar and higher equities, which pushed other grains higher. Rice had surged late last week, but analysts say there was little fundamental reason and that the move was heightened by a thin holiday market. Global supplies are ample and export demand for US rice weak, analysts add. CBOT Jan. rice sets a fresh 1-month high before retreating, but fails to take out a Dec. 1 high of $14.95. Ends down 21c to $14.39 1/2 per hundredweight.

Indonesia sees 2012 unmilled rice output up 10 pct
JAKARTA, Jan 2 (Reuters) - Indonesia's unmilled rice output is expected to rise 10 percent to 72.02 million tonnes this year as it expands plantation areas in line with its 2014 self-sufficiency target, a government minister said on Monday.
Southeast Asia's biggest economy has forecast that unmilled rice output would hit 65.4 million tonnes for 2011, less than it previously estimated, as hot weather and disease hit production.

Managers Shed Short Positions In Corn, Wheat (Source: CME)
Money managers have shed short positions in Chicago Board of Trade corn and wheat futures recently as prices climbed on worries about the South America crop, according to government data Friday. The Commodity Futures Trading Commission's report affirmed that short-covering helped drive prices higher in the week ended Tuesday. Large managed funds, including hedge funds, added to their net long position in corn and cut their net short position in wheat by slashing the number of short contracts held. Money managers were net long 148,653 contracts in corn, an increase of 17.5% from the prior week, according to CFTC data. Corn prices surged during that time period on hot, dry weather in Argentina and Brazil that has threatened the crop as it nears its crucial pollination phase. A smaller crop there would likely mean more export demand for U.S. corn.
Wheat futures have mostly been following corn prices, according to analysts. Because speculators have held a large net short position, CBOT futures have been poised for short-covering rallies, they said. Money managers were net short 29,252 contracts in CBOT wheat as of Tuesday, down 30.2% from the prior week. Soybean prices have also rallied recently on the South America concerns, and money managers extended their net long position in futures more-than-eight-fold, to 23,683 contracts. In live cattle futures, money managers also extended their net long position, by 11% to 68,105 contracts. They cut their net long position in lean hog futures, however, by 16.5% to 35,913 contracts.

Cotton Arbitration Claims Quintuple On Year (Source: CME)
Sharp price swings in the cotton market last year sparked a record number of legal disputes between cotton merchants and mills, a major industry group said Tuesday. The Liverpool-based International Cotton Association, which sets the rules for most of the world's cotton trade, said it received 242 requests for arbitration in 2011, more than five times what it normally receives on average in a year. Cotton prices touched a record of $2.27 a pound in March 2011 after mills tried to order enough fiber to last the year, fearing a shortage following floods in fourth-largest producer Pakistan and export restrictions in India, the world's No. 2 grower behind China. But the high prices also curbed demand, and once prices plummeted, scores of mills canceled orders. Merchants requested ICA arbitration for many of those canceled orders. Mills and merchants prefer ICA arbitration over courts in each country because the process is more efficient, uniform and less expensive.
Cotton prices on ICE Futures U.S. have declined 59% since their peak, trading recently at 92.03 cents a pound for delivery in March.

Sugar firms, cocoa up after weak 2011
LONDON, Jan 3 (Reuters) - ICE sugar rose, along with other financial markets, supported by a softer dollar in early trading, while arabica coffee eased and cocoa rose, with potential upside limited by ample African supplies.
ICE benchmark raw sugar futures edged up 0.16 cent to 23.46 cents a lb early on the first trading day of 2012, below a three-week peak of 24.0 cents per lb touched on Dec. 28.

India's Oct 1-Dec 31 sugar output up 1.1 mln T y/y
NEW DELHI, Jan 3 (Reuters) - India has produced 7.6 million tonnes of sugar between Oct. 1 and Dec. 31, up 1.1 million tonnes from the year-ago period, the Indian Sugar Mills Association, a producers' body, said on Tuesday.
Higher output could boost the chances of more sugar exports by the government which has already allowed 1 million tonnes of overseas sales in the 2011/12 season.

Vietnam 2011 rubber imports jump, exports hit record
HANOI, Jan 3 (Reuters) - Vietnam, the world's fourth-largest exporter of natural rubber,  stepped up its imports of the commodity last year which helped enable record shipments in 2011, customs data show.
The Southeast Asian nation imported 343,000 tonnes of rubber as of Dec. 15, 2011, or 14.7 percent above the amount it imported during the whole of 2010, Vietnam Customs data seen by Reuters on Tuesday showed.

Dry, windy weather darkens Ivorian cocoa outlook
ABIDJAN, Jan 2 (Reuters) - Dry and windy weather in most of Ivory Coast's main cocoa growing regions last week has deepened fears about the development of the crop after January, farmers said on Monday.
The world's top grower is entering the last stage of the October-to-March main crop with an output surplus over last year , but if there is no rain plantations could turn out to be short of beans in the coming weeks.

Indonesia's Lampung Dec cocoa exports rise 25 pct y/y
BANDAR LAMPUNG, Indonesia, Jan 2 (Reuters) - Cocoa bean exports from Indonesia's Lampung province on Sumatra island rose 25 percent in December from a year ago, government trade office data showed on Monday.
Lampung's exports have been volatile in recent months,   although mostly falling throughout the year, as the Indonesian industry battles with pests and disease.

Indonesia's Dec Sumatra coffee bean exports fall 68 pct y/y
JAKARTA, Jan 2 (Reuters) - Indonesia's robusta coffee bean exports from the main growing area in southern Sumatra slumped 68 percent in December from a year ago, government trade data showed on Monday, as adverse weather conditions hit output.
Indonesia shipped 8,415.400 tonnes of robusta coffee beans in December, versus 26,255.23 tonnes last December, Muchtar Lutfie, research head of the Indonesia Coffee Exporters Association's (AEKI) Lampung branch, said in a statement.

India's Maharashtra sugar output up 18.8 pct in Oct-Dec
MUMBAI, Jan 2 (Reuters) - Sugar output from India's Maharashtra state, top producer of the sweetener in the country, was 18.8 percent higher on year in the first three months of 2011/12 crushing season that started on Oct. 1, an industry official said.
The increase in production is because of higher sugar recovery rate and an increase in the number of mills that are operational this year, said the official, who declined to be named.

Vietnam's Jan coffee supply to slow in key area-official
HANOI, Dec 30 (Reuters) - Coffee supply from Daklak, Vietnam's largest growing province, is expected to slow next month when the harvest ends as most farmers and buying agents will hold back stocks to wait for higher prices, a senior provincial official said on Friday.
"Farmers who have small planting areas will have to sell beans for cash before Tet, but overall sales will not be as quick as last year because many others have better finances," said Nguyen Van Sinh, a deputy director of Daklak's Agriculture Department.

Vietnam coffee supply to slow next month
HANOI, Dec 30 (Reuters) - Coffee supply from Daklak, Vietnam's largest growing province, is expected to slow next month when the harvest ends as most farmers and buying agents will wait for higher prices before selling, a senior provincial official said on Friday.
Some analysts expect global coffee prices to surge early next year as tighter bank lending in top robusta producer Vietnam could choke off cash to exporters, cutting supply and pushing up premiums, even as the harvest rolls in.

Oil Trades Near 8-Month High on Demand, Iran Tension Amid Shrinking Supply (Source: Bloomberg)
Oil traded near the highest in almost eight months as investors speculated that further tension over Iran and shrinking U.S. crude stockpiles will tighten supply amid signals demand will increase. Futures were little changed after advancing 4.2 percent yesterday as the head of Iran’s army warned the U.S. against sending an aircraft carrier back to the Persian Gulf. An Energy Department report (DOEASCRD) tomorrow may show crude inventories dropped 500,000 barrels last week. Prices also increased after a report that manufacturing in the U.S., the world’s biggest oil user, expanded at the fastest pace in six months. Crude for February delivery was at $103.02 a barrel, up 6 cents, in electronic trading on the New York Mercantile Exchange at 10:31 a.m. Sydney time. The contract yesterday gained $4.13 to $102.96, the highest close since May 10. Prices climbed 8.2 percent in 2011, the third annual increase.

Russia 2011 oil output at new post-Soviet record high
MOSCOW, Jan 2 (Reuters) - Oil output in Russia edged up 1.2 percent to reach a new post-Soviet high of 10.27 million barrels per day (bpd) last year, as the world's top crude producer eased tax burden and launched pipeline flows to China, the Energy Ministry said on Monday.
That is a bit more than the 10.26 million bpd, expected by an analyst poll compiled a year ago, though the increase in 2011 has slackened from a 2.2 percent rise in 2010 when the country produced 10.145 mln bpd, up from 9.93 million bpd in 2009 and 9.78 million bpd in 2008.

Brazil, short of biofuel, can't open spigot to US
SAO PAULO, Dec 29 (Reuters) - For three decades, the U.S. government sought to protect American corn farmers and ethanol makers from a feared flood of Brazilian imports by imposing a tariff that had the South American country crying foul.
But as the contentious tax finally expires at year-end, American farmers' fears of being swamped by sugar-based tropical biofuel seem unfounded. With Brazil's ethanol industry struggling to meet booming local demand, it's U.S. producers instead who are shipping millions of gallons to the south.

Gold Rallies Most in 10 Weeks on Iran, Dollar (Source: Bloomberg)
Gold futures jumped the most in 10 weeks on demand for a haven following a report that Iran produced its first nuclear-fuel rod. Silver surged the most in five months as the dollar’s decline spurred a commodity rally. A domestically-made rod was inserted into the core of Tehran’s atomic-research reactor, the Iranian Students News Agency said yesterday. The dollar fell against a basket of currencies as global manufacturing expanded, spurring demand for raw materials perceived as riskier assets. Blackstone Group LP’s Byron Wien, who correctly predicted last year’s gain in gold, said the metal will rally 15 percent in 2012 to $1,800 an ounce. “Fear trade is back because of Iran,” Adam Klopfenstein, a market strategist at Archer Financial Services Inc. in Chicago, said in a telephone interview. “Also, we are seeing buying across commodities because of the weaker dollar.”

No comments: