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.
Strong start to 2012 but Europe remains a worry
NEW YORK, Jan 3 (Reuters) - Commodities began 2012 with a bang as a key market benchmark posted its largest gain in three months on Tuesday, but the unresolved European crisis and fears of last year's volatility continuing made analysts wonder if it was too early to rejoice.
"Funds are now investing again, taking a bit more risk after a poor year" in 2011, said Peter Fertig, analyst at Europe's Quantitative Commodity Research.
Corn (Source: CME)
US corn futures end flat, stabilizing after prices rallied to multi-week highs of late. Forecasts for rain to reach parched Argentina crops next week took the edge off prices, analysts say, so traders took profits after prices rose for the past 3 weeks. A firmer dollar and spillover weakness from slumping wheat futures attracted selling as well. However, selling was limited by lingering fears of irreversible yield losses in Argentina as private forecasts lower production prospects. CBOT March corn ended unchanged at $6.58 1/2 a bushel.
Wheat (Source: CME)
US wheat futures led a retreat in grain futures, as traders took profits on recent gains. Wheat continues to suffer from poor fundamental outlooks, as ample world supplies and heavy competition in global export markets paint a bearish picture for US wheat at current prices. Wheat also pressured by improved conditions for the next US crop. State crop reports released yesterday afternoon showed conditions overall improving in key states, with potential for strong winter wheat yields possible nationwide, analysts said. CBOT March wheat ended down 1% or 7c at $6.50/bushel; KCBT March wheat up 1 1/2c at $7.14; MGEX March wheat 5 1/4c lower at $8.39.
Rice (Source: CME)
US rice futures end slightly higher, stabilizing after recent swings in prices. Analysts say the market was consolidating after corrective price action in the past week. CBOT March rice added 1/2c, to finish at $14.65 per hundredweight.
Cropcast cuts Argentine corn, soy estimates
CHICAGO, Jan 3 (Reuters) - Cropcast, a weather information service widely followed by grain traders for its global crop outlooks, on Tuesday reduced its forecasts for Argentine corn and soybean production and said further cuts may be coming.
Cropcast lowered its estimate of the Argentine corn crop to 24.5 million tonnes, down 3 million tonnes from projections it gave last week, and soybeans by 1.6 million to 49.82 million as the leading global corn and soy producer suffers from drought.
US corn dips from 2-month peak; soy, wheat ease
SINGAPORE, Jan 4 (Reuters) - Chicago corn slid half a percent, falling from a near two-month top, while soy eased after a rally to its highest since end-October as increased selling by U.S. farmers pressured markets.
"It is generally a lower start across the grains and oilseeds markets, we are looking at a little bit of profit-taking after striking some resistance levels yesterday," said Luke Mathews, Commodities Strategist at Commonwealth Bank of Australia.
Ukraine exports 2 mln T of grain in Dec - analyst
KIEV, Jan 3 (Reuters) - Ukraine exported about 2.0 million tonnes of grain between Dec. 1 and 30, analyst ProAgro said on Tuesday.
The consultancy said in a report the volume included 1.56 million tonnes of maize, 413,000 tonnes of wheat and other cereals.
Argentina weather seen dry all week, corn at risk
BUENOS AIRES, Jan 3 (Reuters) - Argentine will remain dry on Tuesday and in the days ahead, adding to concern that 2011/12 corn and soy crops will be reduced by lack of rain, local weather forecasters said.
The National Meteorology Service (www.smn.gov.ar) issued a forecast for Tuesday that called for no substantial rains in any of the South American country's soy- or corn-growing areas during the day, although some scattered showers were possible in the southeastern part of La Pampa province.
Sugar softer in correction after rally, coffee dips
LONDON, Jan 4 (Reuters) - ICE sugar fell in early trading in a technical correction after the prior session's strong rally, pressured by a firmer dollar and weaker financial markets, while coffee and cocoa eased in light volumes.
ICE benchmark raw sugar futures edged down 0.1 cent or 0.4 percent to 24.41 cents a lb at 0942 GMT, below a seven-week peak of 24.55 cents per lb touched on Tuesday.
Indonesia's Sulawesi Dec cocoa bean exports drop 21 pct y/y- industry
JAKARTA, Jan 4 (Reuters) - Indonesia's cocoa bean exports from its main growing island of Sulawesi slumped 21 percent to 12,051.72 tonnes in December from 15,169.12 tonnes a year earlier, industry data showed on Wednesday.
Indonesia, the world's third-largest cocoa producer after the Ivory Coast and Ghana, is battling against disease and adverse weather conditions for its cocoa industry, which have hampered the country's cocoa supplies.
Global rubber output may rise 3.1 pct in 2012-ANRPC
BANGKOK, Jan 4 (Reuters) - Global natural rubber production is expected to rise by 3.1 percent to 10.415 million tonnes in 2012, little changed from the previous forecast of a 3.6 percent rise made in November, the Association of Natural Rubber Producing Countries (ANRPC) said on Wednesday.
"The downward revision results from the upward revision for the base year output," the ANRPC said in a report. It has revised up its forecast for 2011 output to 10.100 million tonnes from 10.023 million.
Costa Rica coffee exports edge up in Dec from year ago
SAN JOSE, Jan 3 (Reuters) - Costa Rica, a Central American producer of high-quality arabica coffee beans, exported 78,300 60-kg bags of coffee in December, 2.6 percent more than it exported the same month a year ago, the national coffee institute said.
The coffee harvesting season in the region begins in October and comes to a close in September.
Heavier rain a mixed blessing for Brazil coffee
BRASILIA, Jan 3 (Reuters) - Plentiful rain in Brazil's key coffee growing areas helped trees recover from overly dry weather in the last few months of the year, but relentless showers and little sun in some areas could bring more problems, forecaster Somar said on Tuesday.
The crop now developing in the world's top coffee producer will be a larger 'on year' crop, and a successful, good-sized harvest is critical for a global coffee market which has seen prices soar since mid-2010 due to a shortage of quality beans.
Vietnam expects coffee exports fall to 18.3 mln bags
HANOI, Jan 3 (Reuters) - Coffee exports from Vietnam, the world's second-biggest coffee producer after Brazil, are forecast to fall by around a fifth from 2011 to 1.1 million tonnes, or 18.33 million bags, the Agriculture Ministry said on Tuesday.
Revenues would reach $2 billion, the ministry said in a report, suggesting an average export price of $1,818 per tonne, free-on-board basis.
Indonesia rubber output to rise 6% in 2012-industry
JAKARTA, Jan 3 (Reuters) - Rubber output in Indonesia, the world's second-biggest producer, is likely to rise 6 percent this year to 3.27 million tonnes as production kicks in from areas replanted around five years ago, an official at the Indonesian Rubber Association said.
"Our natural rubber output in 2012 is estimated at 3.27 million tonnes, up from 3.088 million tonnes in 2011 because the 2006/2007 replanting program will be starting to produce rubber," said Suharto Honggokusumo, executive director at the association, known as Gapkindo, on Tuesday.
Oil Trades Near Eight-Month High on Shrinking Crude Supplies, Iran Tension (Source: Bloomberg)
Oil traded near the highest level in almost eight months in New York as investors speculated that shrinking U.S. crude stockpiles and tension over Iran’s nuclear program will tighten global supplies. Futures were little changed after gaining for a second day. U.S. inventories fell 4.43 million barrels last week, data from the American Petroleum Institute showed. French Foreign Minister Alain Juppe said he hopes a decision on a European Union embargo on Iran’s oil exports will be adopted at a Jan. 30 meeting. London-traded Brent may increase to $125 a barrel should the EU ban Iranian imports, according to Societe Generale SA. “The first look at the inventories was pretty bullish,” said Jeremy Friesen, a commodity strategist at Societe Generale SA in Hong Kong who forecasts West Texas Intermediate crude will average $98.50 a barrel in the first half of the year. “The risk premium remains with Iran and the Middle East.”
China Plans To Set Up State Oil Product Reserves In 2012 (Source: CME)
China plans to set up its first state reserves for refined oil products this year, a person familiar with the situation said. The move indicates Beijing's growing sense of urgency to secure crucial energy supply for an expanding economy and will likely give a fresh boost to global oil prices. The reserves of refined oil products such as gasoline and diesel will be in addition to China's existing crude-oil reserves, which were set up in 2006. The country's apparent consumption of refined oil products in the January-November period was 222.15 million metric tons, up 5%. China is also planning to establish fertilizer reserves, the person, who didn't wish to be named, said. Separately, the government plans to buy 6 million metric tons of rice this year for reserves expansion, the person said, adding that the authorities will also help some companies set up commercial pork reserves in a bid to mitigate volatile price swings. China is also set to raise imports of corn, soybeans, edible oil and cotton this year.
The government will continue to purchase rapeseed and cotton for reserves in 2012, and will curb expansion in industrial corn processing to keep corn prices stable, the person said.
Brent oil stays near $112 on Iran, upbeat data
SINGAPORE, Jan 4 (Reuters) - Brent crude held steady around $112 a barrel, supported by fears of possible supply disruptions from Iran and upbeat economic data from the United States and China.
"The market typically starts the year bullish," said Jeremy Friesen, commodity strategist at Societe Generale.
Oil gains a second day after EU reaches Iran sanctions agreement
NEW YORK, Jan 4 (Reuters) - Brent crude rose for the second straight session Wednesday, closing at a seven-week high after the European Union reached a preliminary agreement to ban imports of Iranian crude, escalating tensions in the West's standoff with Tehran that has gripped oil markets for weeks.
"India, China and some other Asia countries may end up getting a reduced price on Iranian oil and that could be good for their economies, but European countries will have to find other sources," said Gene McGillian, analyst for Tradition Energy in Stamford, Connecticut.
Natural gas gains 3 pct on cold, back over $3/mmBtu
NEW YORK, Jan 4 (Reuters) - U.S. natural gas futures rose more than 3 percent on Wednesday, backed by short covering amid frigid weather in the Northeast and settling above $3 per million British thermal units for the first time in three sessions.
"The weather has turned decidedly colder for a few days as an Arctic blast hits portions of the East Coast. This has resulted in acting as a floor in natural gas prices at the moment with a modest amount of short covering taking place," said Energy Management Institute's Dominick Chirichella.
China's CNPC says 2011 oil output rises to 107.5 mln T
SHANGHAI, Jan 5 (Reuters) - China National Petroleum Corp (CNPC) produced 107.54 million tonnes of crude oil in 2011, up 2.13 million tonnes from the year before, the country's largest oil and gas producer said on its website on Thursday.
The company said its total oil and gas reserves had increased to more than 1 billion tonnes, without giving a specific number.
US crude stocks dip with imports on tax play
Jan 4 (Reuters) - U.S. commercial crude oil stockpiles likely dropped slightly last week on lower imports as refiners kept trimming stored supplies for year-end tax purposes, an expanded Reuters poll ahead of weekly industry and government reports showed on Wednesday.
Averaging views of eleven analysts surveyed, domestic crude oil inventories were forecast down 200,000 barrels.
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