Friday, March 30, 2012

20120330 1145 Global Commodities Related News.

Report Shows "2012 Corn Seedings to be Smaller Than Expected, Soybeans as Expected”  (Source: CME)
By CME Group - Thu 29 Mar 2012 15:18:45 CT
Chief Economist AG Resource, Bill Tierney suggests Corn Seedings to Be Smaller Than Industry Expectations at 93.6 – 93.7 Million Acres. He suggests that this would tend to be “Friendly new crop and Bearish old crop”  but warns Dec Corn futures historically does not respond dramatically to stocks report.  Soybeans as expected

Corn futures softened into the close to finish roughly 16 cents lower in old-crop futures, while December through July contracts were around 12 cents lower. Traders were squarely focused on evening positions ahead of USDA’s key reports tomorrow morning.  (Source: CME)

Corn Market Recap for 3/29/2012  (Source: CME)
Thu 29 Mar 2012 14:39:00 CT
May Corn finished down 16 1/4 at 604, 19 1/2 off the high and 1 up from the low. July Corn closed down 15 3/4 at 603 3/4. This was 1 1/4 up from the low and 18 3/4 off the high. May corn closed sharply lower on the session as the aggressive long liquidation selling trend from fund traders in corn and in many other commodity markets helped to pressure. The lowest weekly export sales since June of last year and a continued long liquidation selling trend from fund traders helped to pressure the market early in the day and the selling continued for much of the day. This helped push the market to the lowest level since January 19th and December corn to the lowest since March 17th. Weekly export sales came in at just 130,700 metric tonnes for the current marketing year and 27,000 for the next marketing year for a total of 157,700 which was sharply below trade expectations. Cumulative corn sales stand at 76.7% of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 72.7%. Sales of 432,000 metric tonnes are needed each week to reach the USDA forecast. On top of the weekly sales, exporters reported sales of 120,000 tonnes of US corn to China for the 2011/12 season and 120,000 tonnes of US corn to unknown destination for the 2012/13 season. May corn is down as much as 53 cents from Monday's highs and 72 3/4 cents off of last week's highs. May Rice finished up 0.16 at 14.9, 0.1 off the high and 0.04 up from the low.

Normal U.S. Weather Seen Producing Bumper Corn Crop  (Source: CME)
By Thomson Reuters - Thu 29 Mar 2012 11:06:37 CT
Prospects for normal crop weather in the U.S. heartland combined with the largest planted area in almost seven decades could lead to a record large corn crop of nearly 14.0 billion bushels, an agricultural meteorologist said on Thursday. Meteorologist Kyle Tapley of MDA EarthSat Weather, also known as Cropcast Weather, said his firm was pegging corn yield per acre at 161 bushels and corn production at a record 13.9 billion bushels, above the previous record of 13.1 billion.  

Wheat futures extended losses into the close, with Chicago and Kansas City posting double-digit losses in the teens. Minneapolis wheat closed 6 1/2 to 13 3/4 cents lower. As selling picked up in the corn pit, wheat followed in the absence of fresh positive news. Focus in the market was on evening positions ahead of tomorrow morning's key USDA reports.  (Source: CME)

Wheat Market Recap Report  (Source: CME)
Thu 29 Mar 2012 14:39:00 CT
May Wheat finished down 18 1/4 at 612 1/2, 22 1/2 off the high and 1 1/4 up from the low. July Wheat closed down 16 1/4 at 627 1/4. This was 1 up from the low and 19 3/4 off the high. May wheat collapsed to close sharply lower on the session as fund traders were active sellers across a wide range of commodity markets. The lack of a freeze in the forecast for the plains next week and beyond plus a continued long liquidation trend from speculators in corn and other commodity markets helped to pressure the market early today. Talk that the weather is turning a little wetter in Western Europe into later next week was also seen as a negative force as the rain should ease dryness concerns. The aggressive selling today pushed the market to the lowest level since December 19th. Weekly export sales for wheat came in at 226,100 metric tonnes for the current marketing year and 177,000 for the next marketing year for a total of 403,100 which was below trade expectations. As of March 22nd, cumulative wheat sales stand at 93.4% of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 92.0%. Sales of 178,000 metric tonnes are needed each week to reach the USDA forecast. May wheat is down as much as 59 1/4 cents from Monday's peak. With specs already heavily net short coming into the week, it may take negative news from the USDA reports in the morning just to justify this week's collapse. The European Union this week granted export licenses for 210,000 tonnes of wheat which pushed the exports for the season to 10.5 million tonnes as compared with 15.4 million last year by this date. May Oats closed down 6 3/4 at 335 1/2. This was 2 1/2 up from the low and 11 off the high.

GRAINS-Soy rises on supply concerns, market eyes USDA report
SINGAPORE, March 29 (Reuters) - Chicago soybean futures rose around half a percent as strong global oilseed demand and shrinking supplies after a drought in South America continued to support the market.
"The corn market is a little bit bearish pricing in Friday's report as there are going to be more planted acres for corn," said Abah Ofon, commodities analyst at Standard Chartered in Singapore.  

China mills eye more U.S. corn after 6 cargoes-trade
CHICAGO/BEIJING, March 29 (Reuters) - Private Chinese importers have bought six cargoes, or about 360,000 tonnes, of U.S. corn for shipment in May and June from the U.S. Pacific Northwest in the first large sale to the country since late February, trade sources said.
The latest purchases, together with 120,000 tonnes in February, have swelled imports this year by China, the world's second largest consumer, to nearly 500,000 tonnes.

Mosaic profit misses Street on potash sales drop
NEW YORK, March 28 (Reuters) - Mosaic Co  posted a stark drop in quarterly profit as farmers bought less potash fertilizer and costs jumped in the phosphate fertilizer segment.
High prices for potash kept many customers from buying ahead of the spring planting season, which begins shortly in North America.

Vietnam rice exports to China set to soar -report
HANOI, March 29 (Reuters) - Vietnam's rice exports to neighbouring China could soar sixfold this year, a Vietnamese industry official was quoted as saying on Thursday, helping to keep domestic prices stable during the peak of a major harvest.
The growth in shipments, set to rise to between 1.5 million and 2 million tonnes, could be reached via official and unofficial trade channels, Deputy Chairman Pham Van Bay of the Vietnam Food Association was quoted as saying by the Ho Chi Minh City Law newspaper.

Russia could export as much grain again in 2012/13
VORONEZH, Russia, March 28 (Reuters) - Prime Minister Vladimir Putin said on Wednesday that Russia could export almost as much grain in the coming crop year or even match the 27 million tonne level forecast for 2011/12, when exports have been running at record levels.
Russian grain exports are expected to reach between 25 million and 27 million tonnes in the 2012/13 crop year, Putin said during a meeting on spring sowing on Wednesday.

Kazakh port starts loading wheat for Iran
ASTANA/HAMBURG, March 28 (Reuters) - Kazakhstan's only grain-exporting port has loaded its first 15,000 tonnes of wheat as well as 15,000 tonnes of barley, all destined for Iran, in the past 12 days, a port official told Reuters on Wednesday.
Yerkin Delmanov, deputy chairman of the Ak Bidai grain terminal in the Caspian Sea port of Aktau, said 30,000 tonnes of grain had been loaded for Iran since March 16.

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.

Cotton futures traded on both sides of unchanged and settled split with nearby contracts 20 and 49 points lower and 2013 contracts marginally firmer. Today, cotton traders focused on readying positions for USDA’s Prospective Plantings Report tomorrow morning. Pre-report expectations are for 2012-13 plantings to total 12.74 million acres, which compares to 2011’s total of 14.73 million acres.  (Source: CME)

SOFTS-Arabica coffee on ICE edges up early, cocoa lower
LONDON, March 29 (Reuters) - Arabica coffee futures on ICE were slightly higher early with the market looking to consolidate above a recent 17-month low while raw sugar was little changed and cocoa posted modest losses, dealers said.
Arabica coffee futures on ICE edged up early, aided partly by a slightly weaker dollar.  May arabicas on ICE were up 0.85 cents or 0.5 percent at $1.8285 per lb. The front month had rebounded from a 17-month low of $1.7445 set last week but showed renewed signs of weakness on Wednesday.

COLUMN: Wheat-versus-corn spread worth watching, again
-- Gavin Maguire is a Reuters market analyst. The views expressed are his own. --
CHICAGO, March 28 (Reuters) - The corn-versus-wheat spread may sound very "last year", but could prove to be a popular trading strategy again in 2012 as the U.S. winter wheat harvest and corn planting season approach.
Dryness concerns in key growing regions fueled a strengthening in winter wheat prices earlier this year - and led to a widening in the wheat/corn spread as wheat values advanced relative to corn. However, the latest condition reports for winter wheat suggest crop quality has improved in many top producing areas to pave the way potentially for a fresh downward leg in the spread this spring.

Saudi minister doesn't promise more oil
--John Kemp is a Reuters market analyst. The views expressed are his own--
LONDON, March 28 (Reuters) - Saudi Oil Minister Ali al-Naimi repeated previous criticisms about how traders and the media misunderstand the oil market and the country's policies, but made no promise of an immediate output increase, in an opinion article for the Financial Times on Wednesday.
Naimi wrote bluntly that "there is no rational reason for high oil prices." Instead he argued "fundamentally the market remains balanced. It is the perceived shortage of oil keeping prices high - not the reality on the ground. There is no lack of supply. There is no demand which cannot be met."

Brent near $124 as U.S. crude stocks rise offsets Iran
SINGAPORE, March 29 (Reuters) - Brent crude held steady near $124 as news of a surge in U.S. crude inventories and Western nations' talks on releasing strategic oil reserves offset supply disruption concerns over tension in the Middle East.
"There is residual selling from news flow overnight," said Ben Le Brun, a Sydney-based market analyst at brokerage OptionsXpress, pointing to the large build in U.S. crude inventories and the talks on releasing strategic oil stocks.

Vietnam March crude oil output rises 8.2 pct y/y-govt
HANOI, March 29 (Reuters) - Vietnam's crude oil production reached an estimated 1.37 million tonnes, or 324,000 barrels per day (bpd), in March, up 8.2 percent from the same month in 2011, the government said on Thursday.
February's output was revised down to 1.27 million tonnes from an earlier estimate of 1.28 million tonnes. The actual amount was up 11.4 percent from 1.14 million tonnes pumped in February 2011, the General Statistics Office said in its monthly report.

France discussing strategic oil release with UK, US
PARIS, March 28 (Reuters) - France is in talks with the United States and Britain on a possible release of strategic oil stocks to push fuel prices lower, French ministers said on  Wed nesday, four weeks before the country's presidential election.
Earlier in March, British sources said London was prepared to cooperate with Washington on a release of strategic oil stocks that was expected within months, in a bid to prevent fuel prices from choking economic growth in what is also a U.S. election year.

Oil Rebounds From Year’s Biggest Decline on Iran Tension (Source: Bloomberg)
Oil rose in New York, trimming a third weekly drop, as investors bet that sanctions on Iran will tighten and that yesterday’s decline, the biggest this year, was exaggerated. Crude advanced for the first time in three days after the 2.5 percent drop, the most since December. Futures rebounded after a technical indicator signaled they may have fallen too far and U.S. lawmakers introduced a bill seeking to expand sanctions on Iran. Prices have slipped this week amid rising U.S. stockpiles and speculation that western countries may tap emergency reserves. “Any rhetoric concerning the tightening of sanctions will increase pressure on the region and as a result, you have to expect it to extend to oil prices,” said Jonathan Barratt, chief executive of Barratt’s Bulletin, a commodity markets newsletter in Sydney. “We did break below the very important support of $104 a barrel, and I think we’ve had a technical reaction on the back of that.”
Oil for May delivery gained as much as 67 cents, or 0.7 percent, to $103.45 a barrel in electronic trading on the New York Mercantile Exchange and was at $103.44 at 11:55 a.m. Sydney time. It slumped yesterday to $102.78, the lowest close since Feb. 16. Brent oil for May settlement was at $122.80 a barrel, up 41 cents, on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to New York-traded WTI was at $19.38, compared with yesterday’s close of $19.61, the widest gap in five months.

Copper Traders Most Bearish in Two Months on China: Commodities (Source: Bloomberg)
Copper traders are the most bearish in two months after stockpiles tracked by the biggest metals bourse rose for the first time in five weeks and Goldman Sachs Group Inc. cut its recommendation on commodities to neutral. Eleven of 25 analysts surveyed by Bloomberg expect copper to drop next week, the highest proportion since Jan. 6. Seven were neutral. Inventories reported by the London Metal Exchange rose 1.4 percent on March 27, the first gain since Feb. 22. Reserves in Shanghai’s bonded warehouses tripled since November and any strengthening in demand next quarter may be “tepid,” Barclays Capital said in a report March 28.
China is the biggest copper buyer, using two in every five metric tons, and Premier Wen Jiabao cut the nation’s growth target to 7.5 percent earlier this month, the lowest since 2004. Economists surveyed by Bloomberg anticipate a recession in Europe, which accounts for 18 percent of copper demand. That’s outweighing signs of an accelerating U.S. expansion and paring this year’s rally in prices of as much as 15 percent. “There is a disconnect between the physical and economic evidence coming out of China and what’s happening within the industrial metals,” said Jeremy Baker, who helps manage $925 million of assets for the Belvista Commodity Fund, part of the Vontobel Group in Zurich. “The U.S. is improving, but the U.S. is still a very small proportion of a total consumption equation for metals. We need to have some kind of a shakeout.”

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 14 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, 32 percent more than now, according to the median estimate of 11 analysts surveyed by Bloomberg. They expect a gain of 15 percent for gold, 13 percent for silver and 11 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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