Corn (Source: CME)
US corn futures end lower, stumbling on a lack of demand and technical selling. Strength in soybeans was not enough to save corn, where losses accelerated during the session after prices fell below a recent trading range to a 3-week low, prompting more selling. The market lacks a fresh catalyst to rally and may not get one until spring planting starts to take shape, traders say. Meanwhile, corn's recent weakness versus soybeans means an expected surge in corn plantings this year may not be as strong as many have assumed, traders add. CBOT corn ends down 6 1/2c at $6.27/bushel.
Wheat (Source: CME)
U.S. wheat futures end mostly lower on overflowing world supplies and pressure from corn. The market falls to 3-week lows, along with corn, despite gains in soybeans. Traders say wheat supplies are large enough to offset recent Black Sea region supply disruptions, and that export demand could continue to struggle. Increased feed wheat demand could limit losses however, traders say. Spot CBOT futures settle just above 50-day and 100-day moving averages. CBOT March wheat ends down 9c to $6.26 a bushel, KCBT March wheat down 5 1/2c to $6.70. MGEX March wheat closes down 1c to $8.11
Rice (Source: CME)
U.S. rice futures end slightly lower as a lack of demand continues to hang over the market. Rice prices retreat after briefly climbing to a fresh two-week high. Large world supplies and weak demand for U.S. rice, both domestically and internationally, hangs over the market. CBOT March rice ends down 4c to $14.34 1/2 per hundredweight.
US soy dips from 4-month high; corn, wheat firm
SINGAPORE, Feb 15 (Reuters) - Chicago soybeans fell as the market took a breather after prices climbed to a four-month high in the last session, boosted by the prospect of more U.S. exports as hot and dry conditions threaten Brazil's crop.
"There is a bit of profit-taking on soybeans, as they were the only ones rallying last night," said Brett Cooper, a senior manager of markets at FCStone Australia.
Ukraine says no plans to limit grain exports
KIEV, Feb 15 (Reuters) - Ukraine, which risks losing a large part of its winter grains due to poor weather conditions, has no immediate plans to curb exports of grain, Agriculture Minister Mykola Prysyazhnyuk said on Wednesday, commenting on market players' concerns.
"There are no plans to limit grain exports," he told reporters.
Collision disrupts grain exports at Brazil port
SAO PAULO, Feb 14 (Reuters) - About a quarter of Brazil's shipments of soy and corn to world markets were disrupted on Tuesday, a day after a dry bulk carrier collided with and damaged a major grain terminal at Santos Port.
Late on Monday, the dry bulk carrier MV Milagro, under the Maltese flag, knocked into the water one of the four grain loaders at the Guaruja Grain Terminals (TGG) complex at Santos, Latin America's largest port, a TGG representative said on Tuesday.
Ship collides with grain loader at Brazil terminal
SAO PAULO, Feb 14 (Reuters) - A soy ship collided with a grain loader of the Guaruja Grains Terminal at Brazil's Santos Port late on Monday temporarily disrupting operations, port officials said Tuesday.
The dry bulk carrier MV Milagro under Maltese flag collided with one of four grain loaders at the grain terminal at the Guaruja Grain Terminal complex, destroying the loader, the press spokeswoman for the Guaruja Grains Terminal said.
Ukraine loses 3 mln ha of 2012 winter crops -AgMin
KIEV, Feb 14 (Reuters) - Ukraine's Farm Ministry said on Tuesday that poor weather during sowing and wintering had damaged up to 3 million hectares of winter crops, which could be reseeded this spring.
"Farms are preparing for the spring sowing and reseeding of 2.5 to 3.0 million hectares of winter crops," the ministry said in a statement.
Western Australia 2011-12 Grain Harvest Exceeds 15 Mln Tons -CBH (Source: CME)
Western Australia state's grain harvest has surpassed 15 million metric tons for the first time, paving the way for a landmark export campaign, Cooperative Bulk Handling Ltd. said. Late grain deliveries have brought the harvest in the crop year ending March 31 to record territory, CBH said. This comes a few weeks after receivals of winter grains--including wheat, barley and canola--eclipsed the 2003-04 record of 14.69 million tons. CBH's Group General Manager of Operations Colin Tutt welcomed the milestone, but said in a statement that "challenging times" will continue in the coming months as the grower cooperative moves the crop to the state's ports for export. Japan and China, the two biggest importers of Western Australian grains last season, will likely remain prominent in the coming export campaign, a CBH spokeswoman said. Saudi Arabia was the third-largest destination in 2010-11, following the recommencement of bulk exports, and CBH has said it plans to build up this market.
Typically, 70% of the Western Australian harvest is wheat, and deliveries to CBH account for 90% of total state production, nearly all of which is exported. Western Australia is the biggest wheat-producing state in Australia.
Wheat Advances in Chicago as Frost May Reduce Ukraine Production, Exports (Source: Bloomberg)
Wheat futures rose for the second time this week on speculation that freezing weather will curb Ukrainian production and exports. Dormant crops in Ukraine, the world’s seventh-largest wheat exporter, endured “extreme cold weather” in the past three weeks, hurting plants that lacked protective snow cover, Telvent DTN said in a report yesterday. Ice at ports and in shipping lanes is slowing deliveries from the country, said Christopher Gadd, an analyst at Macquarie Group Ltd. “The ports are frozen up, and moving grain around right now is a nightmare,” Gadd said by telephone from London. “There are massive issues that are limiting grain exports out of the region. You can’t see selling pressure come back to the wheat complex until you see the weather abate in the Black Sea region.”
India 2011-12 Basmati Rice Exports May Hit Record (Source: CME)
India's exports of premier, aromatic basmati rice are likely to reach a record 2.5 million metric tons in the fiscal year ending March 31, 2012, despite payment problems snagging shipments to Iran, the largest market, a government official and an industry executive said. "Demand has been good from Dubai, Saudi Arabia and Europe," A.K. Gupta, advisor to the state-backed Agricultural and Processed Food Products Export Development Authority, told Dow Jones Newswires. All basmati rice export contracts from India need to be registered with Apeda. India exported 2.2 million tons of basmati rice last fiscal year. Exports in the first 10 months of this year rose 10% to around 2 million tons, another government official, who didn't wish to be named, said. Doubts over export growth surfaced after Iranian buyers started withholding payments due to a sharp slide in the value of the Iranian currency after US sanctions made India's rice far more expensive for them.
The payment system with Iran also became more complicated, virtually depriving Indian shippers of a market that traditionally accounts for more than half of basmati exports. However, a decision by an Indian ministerial panel last week to lower the minimum export price by $200/ton to $700/ton has opened the gateway for exports to other countries, who have negotiated deals in the $700-$800/ton range. "We expect basmati exports to gain momentum the moment a formal order is issued on the [lower] minimum export price," Vijay Setia, president of the All India Rice Exporters Association, said. India is expected to ship out 600,000-700,000 tons under new deals as soon as the order is issued. Basmati supply is abundant in the country this year after a bumper crop, estimated between 3.8 million tons and 4.0 million tons.
U.S. Plains' 4Q Farm Values Jump 25%; Absentee Landlords Sell (Source: CME)
Farmland values in the heart of the U.S. Plains continued to soar at the end of 2011 as absentee landowners increasingly put their farms up for sale, the Federal Reserve Bank of Kansas City said. Farmland values in the region, which includes Kansas, Nebraska, Oklahoma and Colorado, were up 25% in the fourth quarter from a year ago, and climbed 9% during the quarter. Farmers were the main buyers, but outside investor interest in farmland for rental income or capital gains remained high, the Kansas City Fed said. It added that absentee landowners putting their farms up for sale were turning to land auctions as they sought "top-dollar prices." Historically, high crop and livestock prices, which have resulted in strong farmer incomes, have driven the farmland boom across the U.S. over the past year. The gains came despite a severe drought that plagued much of the region, particularly Kansas and Oklahoma, in 2011.
The Kansas City Fed noted that farmers' incomes were volatile due to the drought, and that the drought limited gains in farmland values for nonirrigated land in Oklahoma while driving up the value of irrigated land. Farmland values increased most sharply in Nebraska, where non-irrigated values jumped 37.8% from a year ago. About one-third of bankers in the district expect farmland prices to increase further in 2012, along with the number of sales, the Kansas City Fed said. The stronger farm income improved farm credit conditions generally in the fourth quarter, with the Kansas City Fed noting better loan repayments and fewer loan renewals or extensions.
Farmland values have also soared elsewhere in the U.S. heartland, including in top corn-producing states such as Iowa and Illinois. The rapid gains have prompted some concerns about a potential bubble, but many economists said that a crash in prices is unlikely as crop prices are high and farmers don't have nearly as much debt as they had in the 1980s, when a farmland bubble popped.
EU, US Agree To Mutually Recognize Organic Products (Source: CME)
The European Union and the United States agreed to mutually recognize their certificates for organic products, in a move that will facilitate transatlantic sales in a market worth roughly EUR40 billion, the EU's executive body said. The agreement opens up trade between the U.S. and the EU in a sector which is experiencing growing demand from health-conscious consumers keen to have more naturally produced food. It is also a step forward in the trade relations between the two regions that have clashed repeatedly in the past, arguing over issues ranging from genetically modified produce to the use of hormones in raising livestock. "This partnership will open new markets for American farmers and ranchers, create more opportunities for small businesses, and result in good jobs for Americans who package, ship, and market organic products," U.S. Agriculture Deputy Secretary Kathleen Merrigan said.
Starting June 1, products certified as organic in the EU or the U.S. will be allowed for sale in both regions, the European Commission said in a statement. EU Agriculture Commissioner Dacian Ciolos, Merrigan, and U.S. Trade Representative Chief Agricultural Negotiator Isi Siddiqui signed letters creating the partnership in Nuremberg, Germany, the statement said. The commission explained that all products traded under the new agreement had to be shipped with a certificate that will show details such as the production location, a guarantee that prohibited substances and methods weren't used, and will allow a tracking of the good.
Iowa Visit To Spotlight Perks Of Chinese Trade (Source: CME)
Chinese Vice President Xi Jinping's visit to Iowa this week is designed in large part to make a point to U.S. critics of Beijing's economic policies: China is good for the U.S. farm belt. Mr. Xi was scheduled to arrive in Iowa during a U.S. tour to burnish his credentials as a statesman ahead of his expected selection as China's top leader this year. The stop in farm country will highlight Mr. Xi's personal connection with a part of the U.S. he first visited 27 years ago. But it is also intended to draw a contrast with the bashing Beijing usually gets in Washington for the big U.S. trade deficit with China, by highlighting how China's growing dependence on America to feed its swelling middle-class population is a big reason that the U.S. farm belt is experiencing an economic boom. China was the biggest foreign buyer of U.S. agricultural goods in 2011, and much of what it bought were commodities big in Iowa, such as soybeans, pork and corn.
Grain farmers in Iowa have enjoyed record returns in the past two years, and the state has the nation's sixth-lowest unemployment rate, at 5.6%. That makes the Hawkeye state welcoming terrain. U.S. farmers "know the Chinese market is growing, and they can make better money," said Yang Guoqiang, the Chinese consul general in Chicago. "I think the whole Midwest has different feelings from what D.C. is talking about." Mr. Xi's first stop in Iowa is the small city of Muscatine, to reconnect with families who hosted him during a visit to the U.S. in 1985, when he was a regional Communist Party official making what is believed to be his first trip outside China. The afternoon reunion over tea will last just an hour. The Chinese leader will spend most of his two days in Iowa at agriculture events. He plans to visit a farm about 20 miles outside Des Moines, attend a symposium on U.S.-China farm ties, and attend a gala dinner sponsored by Iowa's trade associations for pork, corn and soybeans.
He departs Thursday for Los Angeles. Beijing is often attacked by U.S. politicians for the trade deficit with China, which grew by 8% last year to $295.5 billion. Iowa is the nation's biggest grower of the top U.S. export to China: soybeans for making cooking oil and fattening hogs and chickens. It bought $10.5 billion worth in 2011, four times as much as in 2006 and far surpassing any other category, including aircraft, cars and semiconductors. Iowa Gov. Terry Branstad said the only visitors to Iowa that rival Mr. Xi in importance are Soviet Premier Nikita Khrushchev in 1959 and Pope John Paul II in 1979. Still, it is unclear whether China's boost to U.S. farmers wins it any political goodwill. While the USDA calculates that the $20 billion China spent importing U.S. agricultural goods in 2011 supported an estimated 160,000 domestic jobs, Midwest grain and hog farms are so highly automated that they aren't a big source of job growth.
Both of Iowa's senators, Republican Charles Grassley and Democrat Tom Harkin, voted in favor of a bill aimed at pressuring China to appreciate its currency that passed the Senate in October over strong objections from Beijing. The measure hasn't passed the House. Mr. Grassley, who this month called the country "Red China" in a tweet criticizing Beijing's stance on Syria, often targets the Chinese government's polices on human rights and other issues. "I am going to say what has to be said regardless of where the chips fall," he said in an interview.
Uganda's 2012 sugar production seen up 26 pct
KAMPALA, Feb 15 (Reuters) - Uganda's 2012 raw sugar production is forecast to rise 26 percent, boosted by expected good weather and higher cane supplies from outgrowers, an industry official said on Wednesday.
Wilberforce Mubiru, secretariat manager at Uganda Sugar Cane Technologists Association (USCTA), told Reuters the east African country would produce about 327,075 tonnes of sugar, up from last year's 259,413 tonnes.
Rains hamper key Colombian coffee flowering period
BOGOTA, Feb 14 (Reuters) - Colombia is likely to see a worse-than-expected main coffee harvest in late 2012 as heavy rains limit sunlight and damage flowering in key producing provinces, farmers and exporters said on Tuesday.
Flowering in the first few months of the year is critical for when Colombia harvests its main crop from September to December in six of its eastern and central provinces, which account for more than 61 percent of total national output.
Brazil sugar output minimal in interharvest -Unica
BRASILIA, Feb 14 (Reuters) - Brazil's center south cane crushing and sugar output was minimal in the last fortnight with only a handful of mills still crushing the mostly finished 2011/12 harvest, data from cane industry association Unica showed on Tuesday.
The total amount of sugar cane harvested between April 1 last year, when the season began, and Feb. 1 was down 11.4 percent to 493.5 million tonnes compared with the crush of the entire 2010/11 season.
Russia customs union raw sugar duty $140/T-commission
MOSCOW, Feb 14 (Reuters) - The customs union of Russia, Belarus and Kazakhstan has set its sugar import tariff at $140 per tonne from March 2012, the customs union web site said.
This tariff will be applied until the end of July 2012, it added.
Russia sugar from beet 5 mln tonnes vs 2.7 mln yr ago
MOSCOW, Feb 14 (Reuters) - Russia had refined 5.00 million tonnes of white sugar from beet by Feb. 13 from the start of the season in August, buoyed by a strong domestic beet crop after a 2010 drought.
Russia expects to produce up to 5.2 million tonnes of sugar from beet this year.
Indonesia plans 240,000 T raw sugar imports in 2012
JAKARTA, Feb 14 (Reuters) - Indonesia, Southeast Asia's largest sugar consumer, plans to import 240,000 tonnes of raws this year to make up for a white sugar shortage before the domestic milling season starts in May, the agriculture minister said on Tuesday.
Indonesia imports sugar because domestic production cannot catch up with demand, each year buying around 2 million tonnes of raw sugar, or half of its consumption, mostly from Thailand.
Oil price pain may curb China imports
--Clyde Russell is a Reuters market analyst. The views expressed are his own.--
SINGAPORE, Feb 15 (Reuters) - The recent strength in China's oil imports may be about to fade thanks to an 18 percent gain in Brent crude prices since October.
China's crude imports have shown resilience in the face of slowing economic growth in the world's second biggest oil consumer, as well as fears of renewed recession in Europe and a slow recovery in the United States.
Global ship fuel rules may bring diesel surprise
--Robert Campbell is a Reuters market analyst. The views expressed are his own--
NEW YORK, Feb 14 - A global shift to lower sulfur ship fuels from Jan. 1 appears to be giving an extra boost to demand for diesel fuel and the situation could worsen from August once tighter restrictions in North American waters take effect.
From Jan. 1 the International Maritime Organization has mandated a maximum 3.5 percent sulfur content in most marine bunker fuels, down from a previous 4.5 percent maximum.
U.S. crude futures start to look stretched
--John Kemp is a Reuters market analyst. The views expressed are his own--
LONDON, Feb 14 (Reuters) - Is the oil market heading for a repeat of last year: a big run up in prices during the first few months followed by a sudden crash when the inflows of investment money dry up and early entrants try to realise their gains?
There are eerie parallels. Like last year, strongly accommodative central bank policy from the Federal Reserve and signs of recovering economic activity in North America and Western Europe are coupling with physical supply disruptions to encourage a more bullish outlook for oil.
Oil at $118, supply worry trumps Europe gloom
LONDON, Feb 15 (Reuters) - Oil rose to $118 a barrel as real and threatened supply disruptions outweighed concern about the health of the global economy and Greece's struggle to avoid bankruptcy.
"The oil market continues to be caught between a deterioration in the global economy and supply issues, including actual supply disruptions in Sudan," said Jeremy Friesen, a commodity strategist at Societe Generale.
S.Korea's January LNG imports drop 41 pct yr/yr
SEOUL, Feb 15 (Reuters) - South Korea's imports of liquefied natural gas (LNG) fell 41 percent in January from a year earlier after building inventory via robust imports last December for winter demand, customs data showed on Wednesday.
The world's second-largest LNG buyer after Japan imported 2.89 million tonnes of LNG last month, compared with 4.93 million tonnes a year earlier, Korea Customs Service data showed.
Petronas restarts Malacca refinery after maintenance - trade
SINGAPORE, Feb 15 (Reuters) - Malaysia's national oil firm Petronas has resumed operations at its joint-venture refinery in Malacca after a brief planned maintenance last week, trade sources said on Wednesday.
The 140,000 barrels-per-day (bpd) refinery was shut for four days for a change of mechanical parts, they said.
Oil Trades Near Highest in Five Weeks on Report of Iran Crude Export Cut (Source: Bloomberg)
Oil traded near a five-week high in New York after reports that Iran halted shipments to Europe and crude inventories declined for the first time in four weeks in the U.S., the world’s biggest consumer of the commodity. Futures were little changed after climbing 1.1 percent yesterday. Iran stopped crude exports to France and the Netherlands and threatened to end shipments to four other European countries, state-run Mehr news agency reported, citing an unidentified official at the National Iranian Oil Co. U.S. stockpiles fell 171,000 barrels last week, data from the Energy Information Administration showed. They were projected to rise 1.5 million barrels, according to a Bloomberg News survey. “The markets is certainly watching what’s happening in Iran but I don’t think it’s willing to build in that escalation premium yet,” said David Lennox, an analyst at Fat Prophets in Sydney. “The U.S. inventory decline has a fairly short-term impact on prices.”
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