Corn (Source: CME)
US corn futures end mixed, with near-term contracts rising on export demand while deferred months slide on fresh planting forecasts. Export sales to China and unknown destinations helped nearby corn futures as near-term supplies remain tight, traders say. But supplies could balloon later this year as the USDA projected domestic corn acreage of 94M, up 2.2% from 2011. CBOT March corn ends up 1 1/4c at $6.39 1/2 per bushel while December falls to a 1-month low and finishes down 5 3/4c at $5.58 3/4.
Wheat (Source: CME)
US wheat futures end lower, with losses led by Minneapolis futures amid expectations for increased acreage. The USDA projects 2012 wheat acreage of 58M, up from a baseline estimate of 56.5M. While traders already knew of a hard-red-winter wheat increase, the USDA notes spring acres, traded in Minneapolis, will increase as well. Meanwhile, demand is lackluster and global supplies are ample. MGEX March wheat ends down 17 1/4c at $8.01/bushel while CBOT March drops 2 3/4c to $6.41 3/4 and KCBT March falls 5c to $6.80.
Rice (Source: CME)
US rice futures end slightly higher as the market extends its modest rebound but stays rangebound. Rice supplies are ample and demand lackluster, but worries about US acreage limiting losses. The USDA projected total US acreage of 2.8M, up 2.3% from a year ago but down from the government's baseline estimate of 3M released earlier this month. CBOT March rice ends up 4 1/2c to $13.96 1/2 per hundredweight.
U.S. wheat, corn, soybean lower ahead of USDA data
NEW DELHI, Feb 23 (Reuters) - Chicago wheat, corn and soybeans were lower in line with a broader fall in global markets driven by concerns that Greece's debt crisis may plunge the euro zone into recession, but the fall was muted as the market awaits key USDA data.
"At the moment, the Chicago grains market is influenced by the outside market which has got some bearish bias," said Luke Matthews, a commodity strategist with Commonwealth Bank of Australia in Sydney.
Russia to keep wheat export volumes in 2012/13
SINGAPORE, Feb 22 (Reuters) - Russia will maintain export volumes of wheat and grain and may increase its grain output in 2012/13, while exports to Iran will continue until the government decides to ban them, Russian industry and government officials said on Wednesday.
The country expects to keep its wheat exports at around 22 million tonnes in the year to June 2013 with minimal damage to the winter crop so far from adverse weather, lobby group the Russian Grain Union said on Wednesday.
Port, rail capacity cap Kazakh grain exports to Iran
ASTANA, Feb 23 (Reuters) - Kazakhstan is maintaining grain supplies to Iran from its record post-Soviet crop, although volumes are constrained by limited port capacity and bad weather in the Caspian Sea, agricultural officials in the Central Asian country said this week.
Iran, an unpredictable wheat market participant, has bought more than 1 million tonnes of grain on world markets this month to meet an expected shortfall as Western financial sanctions restrict its ability to trade.
Kazakhstan 2011/12 wheat exports, output seen up-exporter
SINGAPORE, Feb 23 (Reuters) - Kazakhstan's 2011/12 wheat exports are seen at 10.5 million tonnes, up from 6 million tonnes a year ago, a Kazakhstan Food Company official said on Thursday.
Wheat output for 2011/12 is seen at 19 million tonnes, up from 12.5 million tonnes a year ago, Zaripov Almaz, director of the privately owned Kazakhstan Food Company, told reporters at an industry meet.
Ukraine 2012/13 corn exports seen up 15-20 pct y/y
SINGAPORE, Feb 23 (Reuters) - Corn exports from Ukraine in 2012/13 are expected to rise about 15 to 20 percent from a year ago to between 14 million and 15 million tonnes, an official of the State Food and Grain Corp of Ukraine said on Thursday.
By the end of September, the country's corn stocks are seen at 4.7 million tonnes, up from 1.2 million tonnes a year ago, the state-run firm's Andrew Druzyaka told reporters.
Ukraine denies curbing wheat exports
KIEV, Feb 22 (Reuters) - Ukraine's government said on Wednesday it had not urged grain traders to limit wheat exports, denying local media reports it had done so, and it forecast that there would be no shortages of grain on the domestic market.
"There are no recommendations to limit wheat exports," Agriculture Minister Mykola Prysyazhnyuk told reporters.
"Traders are telling us they will not be able to export more than 300,000-500,000 tonnes of wheat a month and our balance (of exports and consumption) allows for that."
Indian rice exporters expect Iran sales credit soon
DUBAI, Feb 22 (Reuters) - Iranian rice importers could open letters of credit in Indian rupees to pay for Indian rice this week, the president of the All India Rice Exporters Association said on Wednesday.
India said last week its exporters should be able to receive payments in the restricted rupee currency for sales to Iran to help maintain trade, despite U.S. banking sanctions.
Ukraine sees grain harvest at 50 mln T - AgMin
KIEV, Feb 22 (Reuters) - Ukraine will harvest 42 to 50 million tonnes of grain this year, including 15-16 million tonnes of wheat, Agriculture Minister Mykola Prysyazhnyuk said on Wednesday, adding that this would be enough to meet domestic demand.
Ukraine harvested a record of 56.7 million tonnes of grain in 2011, including 22.3 million tonnes of wheat. But this year's winter crops have been hit by drought and extreme cold.
Agriculture Dept Economist Projects Cooling In Farm Economy (Source: CME)
U.S. farmers this spring will plant the largest corn crop since 1944, growing supplies and driving down prices for most field crops, the U.S. Agriculture Department Chief Economist Joseph Glauber said. The U.S. farm economy has been booming, enjoying strong prices and record returns last year. Glauber expects a slight pullback in 2012 as supplies grow, prices soften and demand cools. Still, he projected farm income for the year will be the second highest on record and crop prices will remain above historic levels. "Prospects for U.S. agriculture continue to be strong," said Glauber, speaking here at the department's closely-watched annual outlook conference. He expects U.S. farmers to plant 94 million acres of corn and 75 million acres of soybeans for harvest in the upcoming crop year, which runs from September 2012 to August 2013.
The corn projection was identical to the department's baseline forecast issued this month, but an increase from plantings last spring. Farmers sowed 91.9 million acres of corn in 2011. The projection for soy plantings was up from a baseline forecast of 74 million acres and even with plantings a year ago. Recent high corn prices have made farmers more likely to plant corn instead of soybeans, according to analysts. The baseline projections to which Thursday's projection are often compared were compiled in November as part of the government's budget process. Glauber's planting estimates largely met expectations with futures prices for corn and soybeans largely unchanged in morning trading at the Chicago Board of Trade. Still, shares of some farm suppliers, such as equipment makers Deere & Co. and Agco Corp., came under some selling pressure. Glauber in his remarks forecast an 11.5% decrease from 2011 in income from farming, giving growers less money to spend on a range of products from tractors to fertilizer.
As for prices, the economist said average corn prices are likely to be around $5.00 a bushel in 2012-13, down nearly 20% from the previous year. Soybean prices are projected to fall 2% to $11.50 a bushel in 2012-13. Helping to pressure prices is a weaker outlook for exports compared with a year ago and softening of corn demand by ethanol makers. Total U.S. agricultural exports are likely to be $131 billion in the 2012 fiscal year, the second-highest on record behind 2011, as higher global crop production brings down prices and export volumes, Glauber said. He added exports to China are likely to fall 15% due to concentration of trade in bulk commodities like soybeans and cotton. Glauber said corn use for ethanol is likely to continue its slide. The amount of corn that went into ethanol in the 2011-12 marketing year fell to 5 billion bushels from 5.021 billion in 2010-11. The figure is likely to fall by another 50 million bushels more to 4.95 billion bushels in 2012-13.
The rapid rise of ethanol production in the U.S. over the past several years has come to a halt. The expiration of U.S. ethanol subsidies on Dec. 31, 2011 could limit production of the fuel this year to the 13.2 billion gallons that is required by Congress under the U.S. renewable fuel standard, if producers can't sell at attractive prices without the subsidies, Glauber said. Strong foreign demand for U.S. ethanol pushed production higher in 2011, but that driver is expected to weaken, Glauber said. As for other major crops, farmers are likely to plant 58 million acres of wheat, up from the baseline projection of 56.5 million acres and 54.4 million last year. Cotton plantings will likely be 13 million acres, up from a previous baseline forecast of 12 million. Glauber's projections are not based on surveys of farmers. Wheat prices will likely fall 14% to $6.30 a bushel and cotton prices will likely fall 11% to 80 cents a pound, according to Glauber's presentation.
Livestock and poultry are expected to show strength in 2012. Glauber projected beef prices will rise 9% in 2012 to a high of $1.25 a pound, while chicken prices will climb 7% to 84.5 cents a pound. Milk prices, however, are expected to fall by 8.9%, while pork will see a slight 1.7% decline.
Argentina 2011-12 Soy, Corn Harvest Forecasts Steady - Exchange (Source: CME)
The Buenos Aires Cereals Exchange kept its soy and corn production forecasts unchanged in its weekly crop report, after rain in recent weeks soaked thirsty fields across much of the farm belt. Argentina is the world's third-largest soybean exporter and ranks No.2 in corn exports. The exchange maintained its 2011-12 forecast for the soy harvest at 46.2 million metric tons. Rains have allowed the developing soy crop to recover from drought conditions in December and January that caused permanent damage to the corn crop. The exchange said it still expects farmers to harvest 21.3 million metric tons of corn and 3.5 million tons of sunflower seeds this season. Exports of grains and soybeans, including related products like soyoil and soymeal, are a source of government tax revenue and a major contributor to Argentina's trade surplus, which totaled $10.35 billion last year.
Spring Flood Potential In Manitoba Seen As Low -Govt (Source: CME)
The 2012 flood outlook for the province of Manitoba shows spring flood potential remains low at this time for the Red and Souris rivers, and moderate on the Pembina and Assiniboine rivers, and in the southern Interlake. The Manitoba Infrastructure and Transportation Flood Forecast Centre's first 2012 flood outlook said spring flooding was likely in portions of northern Manitoba including The Pas, where there are above-average soil-moisture conditions and there has been significant snowfall this season. The forecast notes that significant precipitation this spring could result in localized flooding including some portions of the upper Assiniboine and Souris river basins, and in The Pas area. The spring flood potential is still very dependent on weather conditions from now until the spring melt, the centre said. The amount of additional precipitation, the timing and rate of the spring thaw, and the timing of peak flows in Manitoba, the US and other provinces will have a significant effect on flood potential.
There is a risk of significant precipitation leading to localized flooding, however, this is less likely to affect the main stems of the Red and Assiniboine rivers. The chances of minor, localized flooding during the early part of the run-off period due to ice jams or snow blockages in drains, ditches and small streams is fairly low, the centre said. Although major ice jams are unlikely to occur, the possibility cannot be ruled out, especially in the Interlake region. Recovery efforts for the 2011 flood are still ongoing including financial compensation programs. To date, more than C$500 million has been provided in flood recovery assistance through various programs such as disaster financial assistance, the Building and Recovery Action Plan, excess moisture insurance and AgriRecovery.
Ukraine May Sustain Corn Export Surge In 2012-13 (Source: CME)
Ukraine will likely export a record amount of corn for the second successive year in the marketing year that starts Oct. 1 due to a surge in output and large inventories, an official with a state-run company said. Corn is now the chief export among agricultural commodities and shipments in 2012-13 may rise to 14 million or even 15 million metric tons, Andrew Druzyaka, an advisor in State Food and Grain Corporation of Ukraine, said on the sidelines of a grains conference. Analysts cite Ukraine's corn exports as the most important check on global prices, which hit a record high in June last year due to dwindling inventories in the U.S, the top exporter. Ukraine's corn exports this year are forecast at 12.5 million tons, compared with 5 million tons in 2010-11, and stocks by end-September will surge to 4.7 million tons, Druzyaka said.
A major part of Ukraine's incremental farm acreage this year went to corn and yields were also above average, pushing output up to 22.8 million tons, almost double from 2011-12, he said. Corn acreage has increased by a third to 3.5 million hectares, he said. "Our corn prices are very competitive compared with U.S. and other origins and this has given a boost to sales," he said. In the October-December quarter, Ukraine sold 1.2 million tons corn to Egypt, around 700,000 tons to Spain and 363,000 tons to Iran. Subsequently, it sold 800,000 tons corn to Japan, its largest buyer in Asia, he said. Druzyaka said wheat output rose by 5 million tons to 22 million tons in the marketing year that started July 1, but exports are unlikely to be more than 6.0 million tons due to greater demand for corn. Exports reached 4.2 million tons in 2010-11, when output was hit by drought.
Consequently, wheat stocks are likely to surge to 7.4 million tons by end-June from 2.8 million tons, Druzyaka said.
U.S. Sees Bigger Corn Crop as Farms Boost Acres to 1944 High;Wheat Expands (Source: Bloomberg)
The U.S. corn crop may rise as farmers plant the most acres since World War II, easing pressure on higher food and fuel prices, the government said. Soybean planting may be little changed while wheat expands. Farmers will sow corn on 94 million acres, up 2.3 percent from last year and the most since 1944, Joe Glauber, the chief economist for the U.S. Department of Agriculture, said today at a conference in Arlington, Virginia. The forecast was less than the 94.329 million expected by analysts in a Bloomberg News survey, and unchanged from an estimate in the USDA’s 10-year baseline report, released Feb. 13. Rising corn output and slowing demand for use in ethanol may boost U.S. inventories of the grain that shrank to a 16-year low in the past year. Average corn prices received by farmers in 2012 will be $5 a bushel, down 19 percent from last year, while wheat prices will slide 14 percent and soybeans may drop 1.7 percent, Glauber said.
Wheat Declines as Global Stockpiles May Increase to Record; Soybeans Gain (Source: Bloomberg)
Wheat fell in Chicago on speculation world stockpiles of the grain will touch an all-time high by the current marketing year’s end in May. Inventories may reach a record 213.1 million metric tons in the period, U.S. Department of Agriculture figures show. Global stocks may come to 220 million tons in the coming 2012-13 marketing year, Mike O’Dea, a senior risk manager at INTL FCStone Inc., said yesterday. Prices are down 1.5 percent this year, partly on speculation inventories would swell. “The inventory outlook is quite stable compared to corn and soybeans,” said Nick Higgins, a London-based analyst at Rabobank International. Wheat for May delivery dropped 0.4 percent to $6.4325 a bushel by 1:15 p.m. London time on the Chicago Board of Trade, this week’s second decline. Milling wheat for May delivery traded on NYSE Liffe in Paris gained 0.1 percent to 206.25 euros ($247.27) a ton.
Indonesia to only import raw sugar in future - trade min
JAKARTA, Feb 23 (Reuters) - Indonesia, Southeast Asia's largest sugar consumer, will only issue import permits for raw sugar and not white sugar in future, as it seeks to refine more sugar as part of a drive to boost manufacturing, the trade minister said on Thursday.
"For the coming years, we plan to issue raw sugar import permits only, not white sugar or other kind of sugar," Trade Minister Gita Wirjawan told Reuters. "This is aimed at adding value locally."
Brazil cocoa arrivals statistics delayed by Carnival
SAO PAULO, Feb 22 (Reuters) - Due to the Carnival festivities in Brazil, domestic cocoa arrivals statistics will not be posted this week, said Bahia Commercial Association.
The data for cocoa deliveries to warehouses in Brazil from Feb. 13 to 19 and Feb. 20 to 26 will be released in the next report due out on Feb. 29.
Sugar becomes dominant Fairtrade product in UK
LONDON, Feb 22 (Reuters) - Sugar has become the UK's leading Fairtrade-branded product, accounting for a third of the entire sugar market, and is likely to extend its dominance over other commodities such as bananas, coffee and cocoa, the head of the Fairtrade Foundation said.
"Sugar is now the largest product in the Fairtrade range" by wholesale value, Harriet Lamb, the foundation's executive director, told Reuters in an interview, ahead of the Fairtrade Fortnight promotion, which runs from Feb. 27 to March 11.
Copper Traders Most Bullish in Two Months as Hedge Funds Buy: Commodities (Source: Bloomberg)
Copper traders are the most bullish in two months on speculation that demand will strengthen from the U.S. to China at a time when stockpiles monitored by the world’s biggest metals exchange are at a 2 1/2 year low. Fourteen of 29 analysts surveyed by Bloomberg expect the metal to gain next week and 10 were neutral, the highest proportion since Dec. 23. Inventories tracked by the London Metal Exchange are set for a fifth consecutive monthly drop and money managers have their biggest bet on rising prices since early August, Commodity Futures Trading Commission data show. Global equities and commodities climbed to at least six- month highs this week after euro-area finance ministers approved 130 billion euros ($173 billion) in aid for Greece to avert an economic collapse. China said Feb. 18 that it will cut banks’ reserve requirements to boost growth and U.S. indicators pointed last week to sustained economic expansion as Barclays Capital anticipates a third consecutive copper shortage this year.
“Copper is benefiting from very positive sentiment and from high levels of liquidity,” said Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt. “It’s being driven by restrained supply and robust demand.”
Oil Heads for Longest Winning Streak Since January 2010 on Economic Growth (Source: Bloomberg)
Oil rose a seventh day, the longest winning streak since January 2010, as investors bet that fuel demand may climb after U.S. jobless claims held at a four-year low and German business confidence surpassed forecasts. Futures advanced from the highest close in more than nine months and headed for a third weekly gain. U.S. jobless claims were unchanged last week at 351,000, the fewest since March 2008, Labor Department data showed. Crude stockpiles at Cushing, Oklahoma, the delivery point for West Texas Intermediate oil fell for the first time in five weeks, according to an Energy Department report yesterday. Oil for April delivery rose as much as 0.8 percent to $108.69 a barrel in electronic trading on the New York Mercantile Exchange and was at $108.61 at 10:45 a.m. Sydney time. The contract yesterday gained 1.5 percent to $107.83, the highest close since May 4. Prices are 5.2 percent higher this week and up 12 percent the past year.
Libya is template for releasing oil stocks in 2012
--John Kemp is a Reuters market analyst. The views expressed are his own. Repeat fixes link to related column--
LONDON, Feb 22 (Reuters) - The loss of oil supplies from South Sudan, Syria, Yemen and Iran satisfies all the conditions for member countries of the International Energy Agency (IEA) to release crude and products from government-controlled stockpiles.
For the time being, the agency seems content to wait, relying on offers of extra crude from Saudi Arabia and its Gulf allies to make up shortfalls left by Iran and other countries. The spring maintenance season, when refineries' crude consumption is traditionally weakest, buys the agency time to see if Saudi Arabia can fill the gap.
This year's supply-side oil rally risks hard fall-Campbell
--Robert Campbell is a Reuters market analyst. The views expressed are his own--
NEW YORK, Feb 22 (Reuters) - For the year running, oil markets have started off shooting higher on fears of a sudden shortfall in crude oil output but unlike last year, when robust demand kept oil product markets buoyant, leading products like Asian distillates are lagging.
Since the start of the year, Brent crude has risen more than 13 percent, driven higher by a combination of renewed optimism about the state of the global economy and fears that escalating tensions between Iran and the West may lead to war.
Threat to economy could force IEA to release oil: Kemp
--John Kemp is a Reuters market analyst. The views expressed are his own--
LONDON, Feb 22 (Reuters) - Political leaders in the United States and Europe could soon face an uncomfortable choice between raising the pressure on Iran further or taking steps to safeguard their economies from the damage wrought by rising oil prices.
Confrontation with Iran and a series of supply disruptions in South Sudan, Syria and Yemen have pushed prices back to levels that derailed the recovery in the United States and Europe last year, and could do again in the first half of 2012.
Brent oil holds near $123 as Iran offsets economy worries
SINGAPORE, Feb 23 (Reuters) - Brent crude held steady near a nine-month high of about $123 as supply worries caused by eightened tension between Iran and the West offset concern that a slowdown in the global economy could curb oil demand.
"Any further news of escalating tensions in Iran or other Middle East or African countries will likely increase the risk remium, although our short-term view could be that prices could dip today on profit-taking as prices reach overbought erritory," said Natalie Robertson, a commodity strategist at ANZ bank.
Saudi Arabia says concern is to keep oil market well supplied
NEW DELHI, Feb 23 (Reuters) - Saudi Arabia's concern is to keep the global oil market well supplied, its deputy oil minister said on Thursday, as top Asian crude buyers look to the world's biggest producer to make up for cuts in supplies from sanctions-hit Iran.
Saudi Arabia is the only oil producer with significant spare capacity to replace a fall in supply from its regional rival Iran, which is facing Western sanctions aimed at crippling its contentious nuclear programme.
Tin Exports From Indonesia Seen Dropping to 2-Year Low as Rains Hurt Mines (Source: Bloomberg)
Refined-tin shipments from Indonesia, the world’s largest exporter, may decline in the first quarter to the lowest level in two years as monsoon rains disrupt mining, according to a Bloomberg News survey. Exports may drop 11 percent to 20,000 metric tons from 22,568 tons a year earlier, according to the median estimate in a survey of four company executives, an analyst and a trader this week. That’s the lowest for any quarter since the first three months of 2010 when sales were 19,975 tons, data from the trade ministry showed. Reduced shipments from Indonesia, which accounts for about 40 percent of global trade, may bolster this year’s 26 percent rally in London and boost earnings of producers including PT Timah (TINS), the world’s largest exporter. Rainfall in Bangka Belitung province, the main producing region, is hampering mining, according to Abrun Abubakar, corporate secretary at Timah.
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