Thursday, March 29, 2012

20120329 0948 Global Commodities Related News.

U.S. Heat Waves to Intensify From New York to Los Angeles (Source: Bloomberg)
Heat waves are likely to intensify and last longer from California to the U.S. East Coast as global warming takes hold, according to the United Nations’s most comprehensive report on extreme weather events. Average wind speeds of hurricanes are likely to increase, with projected sea level rises compounding the impact of surges associated with the storms, the UN’s Intergovernmental Panel on Climate Change said in a 594-page report today that examines weather impacts from Alaska to Africa and Australia. Coastal areas around the world, especially large cities and small islands, are particularly vulnerable to the impact of climate change and as much as $35 trillion, or 9 percent of projected global economic output in 2070, may be exposed to climate-related hazards in ports, the panel said. That may increase the need for migration, according to the authors.
“The decision about whether or not to move is achingly difficult and it’s one that the world community is going to have to face with increasing frequency in the future,” Chris Field, one of the report’s authors and a professor at Stanford University, said today on a conference call with reporters.

GRAINS-Soy rebounds on Chinese demand, corn near 1-month low
SINGAPORE, March 28 (Reuters) - Chicago soybeans bounced back, rising for three out of four sessions with support from China's off-season demand for U.S. cargoes following tight supplies from drought-hit South America.
"The focus is turning on plantings report but beans are supported around the current levels as China is showing pretty strong buying interest," said Ker Chung Yang, an analyst at Phillip Futures in Singapore.

Bangladesh to end ban on aromatic rice exports -minister
DHAKA, March 28 (Reuters) - Bangladesh will soon end a three-year-old ban on exports of aromatic rice due to bulging domestic reserves and record crops, a government minister said on Wednesday.
Bangladesh, the world's fourth-biggest rice producer, banned overseas shipments of common varieties in May 2008 following a sharp drop in domestic stocks, and banned the export of all varieties one year later.

Japan to import 6.5 pct less food wheat in 2012/13
TOKYO, March 28 (Reuters) - Japan, the world's fifth-biggest wheat importer, plans to buy 6.5 percent less foreign food wheat in the year to March 2013  in anticipation of higher local production, helped by government initiatives to lift food self sufficiency.
A panel of experts on Wednesday approved a plan by the Ministry of Agriculture to buy 4.78 million tonnes of foreign wheat for milling use in 2012/13, compared with the 2011/12 plan for 5.11 million tonnes.

EU wheat too expensive for export -Toepfer
HAMBURG, March 27 (Reuters) - European Union milling wheat is currently too expensive for export, Germany's leading grain trading house Toepfer International said on Tuesday.
"The prices for EU milling wheat are currently supported by a brisk demand for feed wheat within the EU," Toepfer said. "In addition, bad harvest prospects in Spain due to a recent lack of rainfall made prices firm for (delivery) positions after the next harvest."

Drought hits South African maize output
JOHANNESBURG, March 27 (Reuters) - South Africa on Tuesday cut its maize output forecast for the 2011/12 season by 3 percent, exactly in line with market expectations, after late-season drought weighed on yields.
Africa's biggest maize producer would harvest 11.3 million tonnes for the season, compared with 11.7 million tonnes in the previous forecast, the government's Crop Estimates Committee (CEC) said.

Corn futures closed mostly 10 1/2 to 14 cents lower, which was on or near session lows. Corn futures faced aggressive liquidation pressure with funds leading the selloff as traders prepare for what they expect will be bearish report data from USDA Friday morning. Funds sold an estimated 20,000 contracts (100 million bu.) of corn today. (Source: CME)

Corn Market Recap for 3/28/2012 (Source: CME)
Wed 28 Mar 2012 14:15:00 CT
May Corn finished down 10 1/2 at 620 1/4, 14 1/2 off the high and 1 1/4 up from the low. July Corn closed down 11 1/4 at 619 1/2. This was 1 1/4 up from the low and 15 off the high. May corn opened higher and closed sharply lower on the session which is a pattern seen in the past three sessions. Funds have been aggressive sellers (thought to be long liquidation) ahead of key reports for Friday and ahead of what appears to be the fastest planting period on record just ahead, The market is already down more than 55 cents from last weeks highs and nearly 40 cents off of Monday's peak. Ideas that the market was oversold and talk that China may be a buyer on further weakness helped to support the market overnight and early today. There were rumors that private buyers from China bought 3-6 cargoes of US corn with some of the total for old crop delivery. Weak ethanol production, a higher US dollar and weakness in crude oil and metal markets helped to spark some selling early which may have sparked more fund selling. The move under yesterday's lows attracted more selling and a push to the lowest level since January 23rd. Ethanol production for the week ending March 23rd averaged 889,000 barrels per day. This is down 0.45% vs. last week and down 1.55% vs. last year. Corn used in last week's production is estimated at 94.7 million bushels. Corn use needs to average 94.128 million bushels per week to meet this crop year's USDA estimate. Stocks were 22.628 million barrels. This is down 0.37% vs. last week and up 12.62% vs. last year. December corn pushed lower on more talk of excellent weather for a record fast start to the planting season next week and the selling pushed the market to the lowest level since December 16th. Long liquidation selling ahead of the USDA reports Friday remain as a dominate force. May Rice finished down 0.355 at 14.74, 0.02 off the high and 0.08 up from the low.

Wheat futures sank into the close, with front-month contracts at all three exchanges ending 8 1/2 to 9 cents lower. Wheat followed corn, which posted even stiffer daily losses. A combination of strength in the U.S. dollar index and position squaring ahead of Friday's key USDA reports led to heavy fund selling. (Source: CME)

Wheat Market Recap Report (Source: CME)
Wed 28 Mar 2012 14:15:00 CT
May Wheat finished down 9 at 630 3/4, 15 1/2 off the high and 3/4 up from the low. July Wheat closed down 9 1/4 at 643 1/2. This was 1 up from the low and 15 1/2 off the high. May wheat opened higher and closed sharply lower on the session to experience the lowest close since January 20th. The push higher in the US dollar and weakness in other key commodity markets including corn helped to pressure the market into the mid-session after a firm start. In addition, mid-day weather models were a little warmer for the 11-15 day outlook which helped ease fears of cold weather damage. May wheat is already down as much as 40 1/2 cents from Monday's highs. Egypt bought 120,000 tonnes of wheat at their tender with half going to Argentina and the US. Russia grain exports for the 2012/13 season are expected to come in near 25-27 million tonnes, according to Prime Minister Putin. He also indicated production would be flat against last year at 94 million tonnes. European weather looks too dry for the two week outlook which might help to provide some underlying support. Ukraine producers are expected to harvest 50 million tonnes of grain this year according to the deputy agriculture minister but the wheat harvest may be as low as 10 million tonnes from 22 million last year. May Oats closed up 2 1/4 at 342 1/4. This was 3 1/4 up from the low and 2 3/4 off the high.

Soy Rebounds On Chinese Demand, Corn Near 1-Month Low (Source: CME)
By Thomson Reuters - Wed 28 Mar 2012 10:36:59 CT
Chicago soybeans bounced back, rising for three out of four sessions with support from China's off-season demand for U.S. cargoes following tight supplies from drought-hit South America. "The focus is turning on plantings report but beans are supported around the current levels as China is showing pretty strong buying interest," said Ker Chung Yang, an analyst at Phillip Futures in Singapore.

Cotton futures rallied into the close to finish 21 to 144 points higher in the 2012 contract, with 2013 contracts up 1 to 20 points. Much of today's support came from comments made by the China Cotton Association, as it reduced its forecast of the country's cotton acreage. It's most recent survey suggests Chinese cotton acreage will decline by 16.7% from year-ago compared to a previous forecast for a 10.5% decline in cotton plantings. (Source: CME)

Rise in Brazil sugar output seen moderate-FOLicht
SAO PAULO, March 27 (Reuters) - Brazil's cane crop, source for half the world's sugar trade, will stage only a moderate recovery in 2012/13 as fields in the center-south region claw back from their first decline in a decade, global sugar analysts F.O. Licht forecast on Tuesday.
Crushing in the region, which begins officially in April, will put out 32.3 million tonnes of sugar, 1 million tonnes more than for 2011/12, senior sugar analyst Stefan Uhlenbrock said at F.O. Licht's annual sugar and ethanol event in Sao Paulo.

Warm, Dry Weather to Threaten Some U.S. Crops, Earthsat Says (Source: Bloomberg)
Warmer, drier weather expected during the next five months will aid early U.S. crop planting this year and threaten some yields in already parched fields from Texas to North Dakota, according to Earthsat Weather. The decaying La Nina weather pattern that damaged crops in South America with dry weather during the past three months will lead to a fast U.S. planting season, increasing the yield potential for crops east of a line from eastern Texas to western Minnesota, Kyle Tapley, a meteorologist at Earthsat, a Gaithersburg, Maryland-based MDA Information Systems Inc. unit, said today at the company’s conference in Chicago. A weather pattern that is warmer and drier than normal from June to August may trim corn and soybeans yields in the western Midwest, with normal weather seen in the heart of the Midwest, he said. There is a 25 percent risk that the period will be cooler than the official forecast, Tapley said.
Adverse weather in parts of the Midwest will have a limited impact on production because the fast start to U.S. sowing will boost areas planted and accelerate crop development for the hottest summer weather, Tapley said. U.S. corn yields may rise to 161 bushels an acre, increasing production 15 percent to 13.923 billion bushels, compared with 12.358 billion a year earlier with a yield of 147.2 bushels an acre, Tapley said. Soybean output may rise 9.7 percent to 3.245 billion bushels from 3.056 billion in 2011, he said.

Oil Trades Near One-Week Low on Stockpile Gain, Reserves (Source: Bloomberg)
Oil traded near the lowest close in almost a week in New York after U.S. inventories surged and Western countries discussed tapping emergency reserves. West Texas Intermediate futures were little changed after falling 1.8 percent yesterday. Crude stockpiles rose 7.1 million barrels last week, the biggest increase since July 2010, according to the Energy Department. They were forecast to gain by 2.6 million barrels, a Bloomberg News survey showed. The U.S. proposed releasing oil from strategic reserves, French Industry Minister Eric Besson said. A White House official said no decision has been made. “We’ve had a weak demand scenario for some time in the U.S.,” said Michael McCarthy, a chief market strategist at CMC Markets Asia Pacific Pty in Sydney. “Any actual release of strategic reserves would probably take us below $100 a barrel for West Texas.”
Oil for May delivery was at $105.44 a barrel, up 3 cents, in electronic trading on the New York Mercantile Exchange at 11:57 a.m. Sydney time. It slumped yesterday to $105.41, the lowest close since March 22. Prices are 6.9 percent higher this year, heading for a second quarterly gain.

Brent breaches $125 on US crude stocks rise, possible release
SINGAPORE, March 28 (Reuters) - Brent crude fell for a second session, breaching $125, on the possibility of a release of strategic oil reserves by the United States even after crude stockpiles in the world's largest oil user rose more than expected last week.
"Markets have arrived at a level where they probably need to see evidence of better economic growth and demand before they take things higher," said Ric Spooner, Sydney-based chief market analyst at CMC Markets.

Australian manufacturers seek cap on gas exports
SYDNEY, March 28 (Reuters) - A group of eight top Australian manufacturers has urged the government to cap gas exports to protect domestic industries from sharp price rises they would face if forced to compete with overseas buyers for the fuel.
The companies, which have formed the lobby group Manufacturing Australia, said domestic manufacturers faced export-level prices for future gas contracts that are double  production costs, hurting their competitiveness.

Myanmar's govt details oil, gas output and reserves
YANGON, March 28 (Reuters) - Myanmar currently produces 19,600 barrels per day of crude oil and 1.475 billion cubic feet a day of natural gas, a senior government energy official said on Wednesay.
Htin Aung, director general of the Ministry of Energy's Energy Planning Department, gave the figures at a conference that organisers say is the first major oil industry gathering in Myanmar since the Southeast Asian country's transition to a civilian government last year.

Palladium Seen Beating Gold With Record Car Sales: Commodities (Source: Bloomberg)
Investors are buying palladium at the fastest pace in more than a year as analysts predict rising demand and declining supply will turn this quarter’s worst- performing precious metal into the best by December. Holdings in palladium-backed exchange-traded products rose 13 percent this year, poised for the best quarter since the end of 2010, data compiled by Bloomberg show. The metal will average $850 an ounce in the final three months of 2012, 30 percent more than now, according to the median estimate of 11 analysts surveyed by Bloomberg. They expect a gain of 13 percent for gold, 11 percent for silver and 9.8 percent for platinum. Palladium lagged behind other metals this year on concern about slowing growth in vehicle sales in China, the world’s largest car market. Autocatalysts account for 65 percent of demand, according to Barclays Capital.
Prices are poised to rise because carmakers are still using the most metal ever, with the prospect of shortages because of less supply from state reserves in Russia, the biggest producer, the bank estimates. “I like palladium the best among precious metals, it’s relatively cheap compared to the others,” said Bart Melek, the head of commodity strategy at TD Securities Inc. in Toronto and the most accurate price forecaster tracked by Bloomberg Rankings in the eight quarters through the end of 2011. “Autocatalyst demand for palladium should grow. Russian government stocks will limit supply growth.”

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