Australian Bureau Warns Of Heavy Rain, Floods In NSW State (Source: CME)
The government's Bureau of Meteorology updated its severe weather and flood warnings for a vast region of central and southern New South Wales state. The heavy weather is already forcing evacuations in some country towns. The area includes some of Australia's prime agricultural land, and includes irrigated horticultural districts, rice growing areas and big licks of ground suitable for winter crops including wheat. It also includes cities and towns that service farming and other industries. The floods and heavy rain will disrupt the movement of livestock to sale yards in the short term, but longer term will underpin vigorous pasture growth and favorable planting conditions for the start of the winter cropping season in April and May, a spokesman for a rural merchandiser said by phone while requesting anonymity.
The severe weather in central and southern areas of the state follows floods across huge areas in the north, with these still working their way downstream through swollen river systems. These floods have already damaged summer crops including cotton and sorghum. The rains this year come after what the Bureau of Meteorology reported was Australia's "wettest two-year period on record" in 2010 and 2011, fueled by back-to-back La Nina events. A rain band with embedded thunderstorms now extends across much of southern and northwestern New South Wales, and areas of heavy rain within the band are likely to produce flash flooding over the coming days, the bureau said in a statement issued late Thursday morning. Among heavy falls already recorded, both Albury city and Nowra town received more than 100 mm in the 24 hours ended 2200 GMT, it said.
Three-day rainfall totals to Saturday are expected to be in the range of 70 millimeters to 200 mm within the warning area, with isolated larger totals possible, the bureau said. There is a greater than 70% chance of flooding in a host of river valleys throughout the state over the rest of this week, it said. Heavy rain may also lead to flash flooding in Victoria's East Gippsland and North East districts, the bureau said. New South Wales state emergency service has issued evacuation orders for parts of Cowra, Goulburn, Cooma and Queanbeyan, and said similar orders are likely to be issued for low-lying areas near the Hawkesbury Nepean River System, northwest of Sydney.
Commodities Rally to Highest Level Since May, Led by Soaring Energy Prices (Source: Bloomberg)
Commodities rose to the highest since May, led by surging energy prices, as tensions in the Middle East escalated and improving economic data signaled rising demand for raw materials. The Standard & Poor’s GSCI Spot Index of 24 raw materials rose 1.4 percent to settle at 713.18 at 3:48 p.m. New York time, after touching 717.45, the highest since May 5. Crude oil topped $110 a barrel for the first time in 10 months, and gold futures rebounded from the biggest decline of the year. Crude-oil futures surged after a report of a pipeline explosion in Saudi Arabia added to concern that supplies may be disrupted as the U.S. steps up pressure on Iran to stop developing nuclear weapons. Commodities also gained as data showed a third straight monthly expansion in Chinese manufacturing, and U.S. auto sales and jobless claims that were better than analysts forecast.
Corn (Source: CME)
US corn futures ended lower, succumbing to profit-taking pressure amid fears of slowing demand. Lower than expected weekly export sales and concerns about low ethanol margins are threatening demand outlooks, encouraging traders to take some profits off the table, analysts say. Expectations for a hefty increase in 2012 US corn plantings and concerns futures were overbought after failing to challenge Wednesday's multi-week highs attracted selling as well, analysts add. CBOT May corn ended down 4c at $6.54/bushel.
Wheat (Source: CME)
US wheat futures end mixed, with winter-wheat contracts slumping on bearish supply outlooks. Ample world supplies make it hard for wheat in general to rally, particularly with improved weather conditions for winter-wheat crops in the Plains, analysts say. Spring-wheat futures meanwhile, were underpinned as the higher-protein product continue to see good demand, notes Sterling Smith at Country Hedging. CBOT May wheat falls 4c to $6.64/bushel while May KCBT drops 2 1/2c to $7.06 and May MGEX climbed 6c to $8.17.
Bearish bets build in new-crop corn
-- Gavin Maguire is a Reuters market analyst. The views expressed are his own.--
CHICAGO, Feb 29 (Reuters) - Prospects for a record-sized U.S. corn crop this year have triggered a wave of defensive positioning by grain traders in the options arena in recent weeks, indicating expectations that new-crop corn prices will succumb to further downside pressure going forward.
Open positions in December corn puts at the $5.00 per bushel strike price - some 60 cents below current prices - are up by more than 50 percent since the beginning of the month, while buy-side options at the $7 strike price have actually declined as traders seemingly reached a bearish consensus on new-crop corn in the wake of hefty planted acreage projections by the U.S. Department of Agriculture.
Wheat falls from 3-week top, soy dips after Feb rally
SINGAPORE, March 1 (Reuters) - U.S. wheat slid from a three-week top as the market was pressured by ample supplies, while soy dipped after posting its biggest monthly gains in a year on strong demand and concerns over South American output. "I think there is a bit of profit-taking in the market, particularly soybeans as the upside has been so strong," said Abah Ofon, commodities analyst at Standard Chartered in Singapore.
Argentina corn sales to China to lag despite deal
BUENOS AIRES, Feb 29 (Reuters) - Argentina is unlikely to sell much corn to China even though the countries reached an initial trade deal this month, as industry sources say the accord leaves too much room for China to reject shipments.
Argentine corn farmers are eager for access to China, whose growing economy has fueled an upsurge in global commodities demand. China is already a key market for Argentine soybeans and soyoil but the big Asian consumer prohibits many of the genetically modified corn strains produced in the South American country.
Argentine barley seen stealing acres from wheat
BUENOS AIRES, Feb 29 (Reuters) - Argentine farmers could beat this season's record barley crop in the next campaign as low prices in the local market discourage them from sowing wheat, industry analysts said on Wednesday.
Argentina's barley output rose 38 percent to 4.1 million tonnes in the 2011/12 harvest that finished in January, according to the Agriculture Ministry, boosted by growers' disillusion with government wheat policy.
Warm weather speeds up growth of U.S. wheat crop
CHICAGO, Feb 29 (Reuters) - Warm weather has sped up the growth of wheat crops in the southern U.S. Plains, raising concerns about the potential for damage down the line.
Crop development is ahead of schedule in Kansas, Oklahoma and Texas, top states for producing the variety of wheat used to make bread, according to government reports and an agronomist. That increases the risk of losses if a freeze hits this spring, as plants become more vulnerable to damage as they grow.
Cold spell may cut French wheat crop by 1 mln T
PARIS, Feb 29 (Reuters) - Severe winter weather in the past month could cut this year's wheat crop in France, the European Union's top producer, by about 1 million tonnes or roughly 3 percent after plants were damaged in some regions, analysts said on Wednesday.
Parts of eastern and northeast France could lose 5-10 percent of the area sown with winter soft wheat, analysts Agritel and Offre & Demande Agricole (ODA) said in its first estimates of losses based on surveys of farmers.
Ukraine sees sharp rise in corn sowing area
KIEV, Feb 29 (Reuters) - Ukraine's Agriculture Ministry expects the area sown to corn to increase to 4.5 million-5.0 million hectares this year from 3.6 million hectares in 2011, it said on Wednesday, making up for winter grain plantings lost to drought and cold weather.
"The total area sown to grains will be 15.8 million tonnes, roughly the same as in 2011," Leonid Sukhomlin, the head of the ministry's grains unit, told an industry conference.
U.S. Exporters Sell 120,000 Tons of Wheat to Iran, Most Since August 2008 (Source: Bloomberg)
U.S. exporters sold the most wheat to Iran in more than three years, the government said, raising speculation that the Persian Gulf country may be boosting stockpiles after production from last year’s crop declined. The sale of 120,000 metric tons of hard, red winter wheat is for delivery in the marketing year that ends May 31, the U.S. Department of Agriculture said today in an e-mailed statement. The sale was the biggest since Iran purchased 689,310 tons in a deal announced on Aug. 15, 2008. The U.S. hasn’t exported any wheat to Iran since a 54,267-ton shipment was sent in November 2009, USDA data show. Iran’s production of wheat, the country’s biggest crop, fell to 13.75 million tons in 2011, 13 percent less than a year earlier, the USDA estimates. While Iran is facing international sanctions over its nuclear program, U.S. restrictions provide exemptions for “licensed exports of agricultural commodities,” according to the Office of Foreign Assets Control, a division of the Treasury Department.
Wheat Drops for Second Day as U.S. Storms May Moisten Soil; Soybeans Fall (Source: Bloomberg)
Wheat fell for a second day in Chicago on speculation storms in parts of the U.S., the world’s biggest exporter, will boost soil moisture. Soybeans declined, threatening this year’s longest rally. Snow this week in parts of North Dakota, the biggest U.S. grower of wheat, will ease concerns about dry soil, Telvent DTN agricultural meteorologist Bryce Anderson said in a report yesterday. The storm will miss parts of eastern North Dakota and western Minnesota. Rain in parts of the southern Great Plains including Kansas, the second-biggest producer, will boost crops. “There is speculation that winter storms in the northern U.S. will increase soil-moisture levels in the run-up to the spring sowing period over the next two months,” said Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt.
Wheat for May delivery dropped 0.6 percent to $6.6375 a bushel by 1:15 p.m. London time on the Chicago Board of Trade. The grain rose 0.3 percent last month. Milling wheat for May delivery traded on NYSE Liffe in Paris fell 0.5 percent to 207.25 euros ($275.93) a ton.
Spring Road Restrictions Seen Limiting Grain Movement In Western Canada (Source: CME)
Spring road restrictions in the Western Canadian provinces of Alberta, Saskatchewan and Manitoba have been, or are, in the process of being implemented and are expected to limit the producer's ability to move grain for the next couple of months, according to industry officials. There have already been select roads in Alberta which have had weight restrictions implemented. An official with Alberta's Transportation Department said the spring road restrictions, which have been implemented, will likely be kept in place until the end of April or May, with the actual lifting of the limitation dependent on how soon the frost is out of the ground. Depending on the highway, there are different restrictions, the official said. The limitations to be implemented range from 75% of legal weight to 90%. Meanwhile, Saskatchewan Highways and Transportation has issued an advisory to all truckers, farmers and drivers carrying heavy loads warning that spring road bans have been implemented in select areas of the province.
Typically, restrictions are implemented in early March in the southwest of the province and progress in a north-easterly manner across the province, the official said. Road restrictions may be in place for up to six weeks from the date of implementation. The official said the restrictions apply to secondary weight highways only. The road restrictions will likely be in place until May, but the limitation in the southern regions would probably be lifted first and then gradually move northwards. Spring road restrictions for all of Manitoba will be implemented March 11, information from Manitoba's Highways and Transportation said.
Cargill Says Took Nearly 880,000 MT Of Sugar Delivery (Source: CME)
Commodities trade giant Cargill Inc. took delivery of every lot of sugar delivered against the March contract on the ICE Futures U.S. exchange, a company spokeswoman said. The delivery of 17,325 lots, more than 880,000 metric tons, was the largest delivery since last May. "They have a place for the sugar, I assume, or they could also maybe have concerns about future supply from Brazil," said Mike McDougall, senior vice president at Newedge. Cargill had also taken delivery of nearly 1 million metric tons of sugar against the March contract a year ago. "Following the expiry of the ICE March raw sugar futures contract yesterday we can confirm that Cargill took delivery of 17,325 lots which comes to just over 880k tons," said a Cargill spokeswoman in an email. Sugar was delivered from Brazil, Thailand, the Philippines and several Central American countries. Sugar for May delivery on the ICE U.S. Futures exchange is down 1.5% at 24.64c/lb., below the key psychological level of 25c/lb.
"I think (the market's) taking the delivery maybe a little negatively, but generally we'll get a little trend move off the hype," McDougall said.
S.Africa sugar output f'cast at 1.822 mln T
JOHANNESBURG, March 1 (Reuters) - South Africa's 2011/12 sugar output is estimated at 1.822 million tonnes, slightly down from a previous forecast of25 million tonnes, the South African Sugar Association (SASA) said.
The sugarcane crush forecast was left unchanged at 16.8 million tonnes, said the industry association, which represents producers and millers of the sweetener in Africa's biggest economy, in a statement on its website.
India's Oct-Feb coffee exports ease 2.4 pct y/y
MUMBAI, March 1 (Reuters) - Indian coffee exports eased 2.4 percent on year to 114,049 tonnes in the first five months of the coffee year from October, the state-run Coffee Board said in a statement on Thursday.
India, the world's fifth biggest producer, accounts for only 4.5 percent of the world's output, but exports 70-80 percent of its produce. Italy, Russia and Germany are the top three buyers of Indian coffee.
Indonesia's Sulawesi Feb cocoa bean exports fall 20 pct y/y- industry
JAKARTA, March 1 (Reuters) - Indonesia's cocoa bean exports from its main growing island of Sulawesi slipped 20 percent in February from the same month a year ago, and was down 11 percent from the previous month, industry data showed on Thursday.
Sulawesi cocoa exports were at 7,917.7 tonnes in February from 9,871.4 tonnes a year ago, data from the Indonesia Cocoa Association showed. January exports were at 8,904.25 tonnes.
Brazil's northeast enjoys sweet sugar cane crop
SAO PAULO, Feb 29 (Reuters) - Record output from Brazil's northeast sugarcane crop, an often overlooked but key source of global supply, will help offset losses from the struggling main center-south cane region this year partly due to an irrigation push that is giving it an edge.
The rise in cane output in the northeast, which churns out almost as much sugar as Russia, has allowed the region to become one of the world's top 10 producers, at a time when strong global demand and weak output from the massive center-south region has pushed sugar futures above 25 cents per lb .
Brazil's 2012/13 cane crush to start late - Unica
SAO PAULO, Feb 29 (Reuters) - Brazil's 2012/13 (April-March) center-south cane crushing season will start about 10 days later on average than last year's harvest began, the cane industry association Unica said on Wednesday.
Dry weather during planting in early 2011 slowed the growth of the cane crop, which will delay deliveries of ripe cane for the new crushing season, analysts say.
India 2012/13 cotton area seen falling 10 percent
MUMBAI, Feb 29 (Reuters) - The area under cotton cultivation in India could fall up to 10 percent in 2012/13 season beginning in October, as lower returns from the fibre in 2011 may prompt farmers to switch to other crops, said the Cotton Association of India (CAI), a trade body.
Farmers are expected to increase area under crops such as soybean, guar, groundnuts and pulses as returns from these were higher than from cotton in 2011, Dhiren N. Sheth, president of the association, told Reuters.
December data underscores weak U.S. gasoline demand
--Robert Campbell is a Reuters market analyst. The views expressed are his own.--
NEW YORK, Feb 29 (Reuters) - Monthly data for December 2011 released on Wednesday shows U.S. gasoline demand continued to come in well below year-ago levels even as the economy accelerated, suggesting some of the weakness seen in more recent monthly data may not be out of place.
Analysts have questioned the picture painted of U.S. gasoline demand by the Energy Information Administration's weekly "product supplied" estimate as it has regularly come in down 5 percent or more from year-ago levels.
US ethanol production slides, lowest since October
Feb 29 (Reuters) - U.S. ethanol production slid 2.5 percent in the last week, falling to the lowest point since early October, while stocks continued to build, the Energy Information Administration reported Wednesday.
U.S. ethanol production totaled 896,000 barrels per day in the seven days to Feb. 24, down 23,000 barrels per day from the previous week's production.
China oil, copper imports decouple from PMIs
--Clyde Russell is a Reuters market analyst. The views expressed are his own.--
SINGAPORE, March 1 (Reuters) - The health of China's giant manufacturing sector is often cited when talking about the nation's commodity demand, but it appears that imports of crude oil and copper have decoupled from the industrial data.
The release of the two monthly Purchasing Managers' Indexes, one by the government's statistics office and the other by HSBC, is invariably accompanied by lots of talk on whether China's economy is cooling too fast or at just the right pace.
Brent steady above $122 on supply woes, China, U.S.
SINGAPORE, March 1 (Reuters) - Brent crude futures held steady above $122, drawing support from faster-than-expected expansion of the U.S. economy and better factory data from China amid concerns of supply disruption from the Middle East.
"There are just too many geopolitical risk factors out there that are supporting oil," said Tony Nunan, a risk manager at Mitsubishi Corp.
Western sanctions tighten squeeze on Iran oil exports
WASHINGTON, March 1 (Reuters) - Western trade sanctions against Iran are strangling its oil exports even before they go into effect, a U.S. advisory body has found, amid warnings that any shortages will only push up crude prices and strain a weak global economy.
With crude prices trading around 10-month highs and limited spare production capacity worldwide, the United States may offer Iran's biggest customers waivers from the oil sanctions, which take effect June 28.
Iraq capable of doubling oil output by 2015-IEA
BAGHDAD, Feb 29 (Reuters) - Iraq is capable of more than doubling its crude oil production within three years, with the pace of further growth slowing steeply afterwards, the West's energy agency said on Wednesday.
Iraq, which sits on the world's fourth-largest reserves, signed deals with major oil firms to boost production levels - currently at about 2.9 million bpd - to as high as 12 million bpd by 2017, betting on rivalling top global producers Russia and Saudi Arabia.
Oil Trades Near One-Week High on Economic Recovery, Middle East Tension (Source: Bloomberg)
Oil traded near the highest price in almost a week in New York on speculation signs of a U.S. economic recovery will lift fuel demand and concern that tension with Iran will disrupt crude supplies. Futures were little changed after climbing 1.7 percent yesterday, trimming the first weekly decline in four. U.S. jobless claims fell to an almost four-year low and consumer confidence held close to an almost four-year high last week, reports showed. Iranians vote today in the Persian Gulf nation’s first election since 2009, as a dispute with the West over the country’s nuclear program raises the prospect of military conflict in a region that holds more than half the world’s oil. Oil for April delivery was at $108.87 a barrel, up 3 cents in electronic trading on the New York Mercantile Exchange at 10:55 a.m. Sydney time. The contract yesterday rose $1.77 to $108.84, the highest close since Feb. 24. Prices are down 0.8 percent this week and 6.5 percent higher the past year.
Iron Ore Extends Bull Market as Supply Growth Declines (Source: Bloomberg)
Iron ore, the world’s second-biggest commodity cargo after crude oil, is extending a bull market after rallying 22 percent from a 22-month low in October as the slowest expansion in exports in 11 years restricts supplies. Seaborne supply will advance 3.8 percent to 1.09 billion metric tons this year, the smallest gain since 2001, according to Clarkson Plc, the largest shipbroker. Prices in China, the biggest importer, may rise 10 percent to an average of $157.50 a ton in the fourth quarter, the median of 11 analyst estimates compiled by Bloomberg shows. Shares of Vale SA (VALE), which ships more ore than any other company, will rise 19 percent to $30.42 in the next 12 months, the average of 16 estimates shows.
New mines and expansions of existing ones are being postponed by rising costs and licensing delays. Morgan Stanley cut its forecast for export supply by 9.6 percent since October and expects a 99 million-ton deficit in the seaborne market this year, at least the ninth consecutive annual shortage. Vale will report its second-biggest profit ever this year, the mean of 11 analyst estimates compiled by Bloomberg shows. “The wall of additional iron-ore supply that investors have been fearing is going to be late,” said Neil Gregson, who helps manage about $7.4 billion of commodity assets at JPMorgan Asset Management in London. “Iron ore remains a tight market.”
Copper Bull Streak Extends to Longest Since October on Demand: Commodities (Source: Bloomberg)
Copper traders are bullish for a fourth consecutive week, the longest streak since October, as manufacturing strengthens from China to the U.S. and stockpiles decline to the lowest in more than two years. Thirteen of 29 analysts surveyed by Bloomberg expect the metal to gain next week and six were neutral. Inventories tracked by the London Metal Exchange fell to 292,250 metric tons yesterday, the lowest since August 2009, and orders to withdraw more metal are close to an eight-year high, bourse data show. Manufacturing from China to the U.S. is expanding as the American recovery strengthens and European leaders work to contain the region’s debt crisis. That’s boosting demand for raw materials from consumers and investors, with Barclays Capital predicting a third consecutive annual shortage in global copper supplies in 2012. Commodities beat stocks, bonds and the dollar for the first time since July last month.
“People feel that the U.S. is on a gradually improving trend and overall the tone is better,” said Carole Ferguson, an analyst at Fairfax IS in London. “If you get a demand-led story in copper then it can rally again. It’s supported by the long- term supply and demand picture.”
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