Funds Cut Bullish Bets, Goldman Goes Neutral: Commodities (Source: Bloomberg)
Investors pared bullish commodity bets on signs of slowing growth in China and as Goldman Sachs Group Inc. cut its recommendation on raw materials. Hedge funds and other money managers reduced combined net- long positions across 18 U.S. futures and options by 1.8 percent to 1.14 million contracts in the week ended March 27, Commodity Futures Trading Commission data show. Bullish wagers on hogs fell the most, dropping 31 percent to the lowest since June, while those on gold had the biggest gain, rising 15 percent, the largest increase since the end of January. The Standard & Poor’s GSCI Spot Index of 24 raw materials tumbled 2.1 percent last week, paring this year’s advance to 6.8 percent. Goldman cut its three-month recommendation on March 28, warning that the economy will “soften” this quarter.
Societe Generale SA said March 27 that Chinese corporate profits won’t grow at all this year, and Federal Reserve Chairman Ben S. Bernanke said two days later that the pace of the U.S recovery has been “extremely sluggish.” “The story over the near term is probably one of weakness,” said Anthony Valeri, a market strategist at LPL Financial in San Diego, which oversees $330 billion of assets. “There are some renewed concerns over China’s economic growth. That’s been the negative for commodities.”
GRAINS-U.S. wheat rises from 2-month low, USDA report eyed
SINGAPORE, March 30 (Reuters) - Chicago wheat edged higher taking a breather after sliding to a two-month low in the last session in a selloff before a key U.S. quarterly report on plantings and stocks.
"It is mainly position squaring and there is nothing much to do with physical activity, the market is more concerned about plantings for the next year," said Ker Chung Yang, an analyst at Phillip Futures in Singapore.
Brazil 2012/13 corn output seen record high
March 29 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in Brazil:
"2012/13 corn production is forecast at a record 68 million tonnes, with exports placed at 12.5 million tonnes. 2012/13 wheat and rough rice production are forecast to recover planted area lost to production in 2011/12 and to reach 6.1 million tonnes and 13.5 million tonnes, respectively. 2011/12 rice exports are forecast at 900,000 tonnes.
"U.S. wheat exports in 2011/12 are estimated to reach 700,000 tonnes, the second highest level on record. With the 2011/12 rice prices and trade environment, rice exports are projected at 700,000 tonnes without the support of government programs."
French farmers, seedmakers appeal government GMO ban
PARIS, March 29 (Reuters) - French maize growers and seed companies appealed a ban on the cultivation of a strain of genetically modified maize to the country's highest court on Thursday, saying it was unjustified and economically harmful for farmers.
France placed a temporary ban on the growth of Monsanto's MON810 GMO maize (corn) earlier this month after a previous moratorium was annulled by the country's top court in November on the basis that it was not sufficiently justified.
China may buy 2 mln T of Vietnamese rice, support prices
HANOI, March 29 (Reuters) - Vietnam's rice exports to neighbouring China could climb six-fold this year, a Vietnamese industry official was quoted as saying on Thursday, supporting domestic prices during the peak harvest season.
Two million tonnes of rice imports will bring China close to the world's top buyers, Indonesia and Nigeria, even though some traders were sceptical about a large jump in purchases by the world's biggest producer and consumer of the staple.
Weather, Not Economics, May Alter USDA projections (Source: CME)
By CME Group - Fri 30 Mar 2012 09:03:02 CT
In a presentation to CME Group Customers and media on the USDA Prospective Plantings report today, Chief Economist AG Resource, Bill Tierney suggests "Weather intervenes preventing farmers from planting all their acreage. It’s weather that causes changes, and not necessarily economic incentives. Mostly these reports are accurate with the exception of some unexpected weather events.” He added that this typically means farmers may plant more corn that the report suggests, but not necessarily more soybeans.
Commodities Demand From China Will Grow (Source: CME)
By CME Group - Fri 30 Mar 2012 09:21:41 CT
In a presentation to CME Group customers and media on the USDA Prospective Plantings report today, Scott Shellady, Derivatives Manager for ICAP US said. “In the next 2-3 years, I think we’re going to have some sort of banking crisis in China, along with increased demand... The demand from China will only grow.” He added that this will especially impact corn.
USDA Spring Wheat Projections “Right on the Nose” (Source: CME)
By CME Group - Fri 30 Mar 2012 09:07:57 CT
In a presentation to CME Group customers and media on the USDA Prospective Plantings report today Jerrod Kitt, Director of Research at Linn Group suggested, “12 million spring wheat acreage is right on the nose. The USDA hit it out of the park.” He added that the competition for acreage between wheat and other commodities like oats in places like the Dakotas will be worth watching.
Soybean, Wheat Acres below Market Estimates; Corn Acres Pegged Higher (Source: CME)
Summary of USDA Reports from DTN/The Progressive Farmer
WASHINGTON (DTN) -- USDA's prospective planting report on Friday bumped up estimated corn planting this spring by 1.9 million acres from earlier forecasts at the expense of lowering projected acreage for both soybeans and wheat. The higher corn acreage reflects greater demand as USDA also totaled corn quarterly stocks to 6.01 billion bushels, which is lower than pre-report estimates from analysts. USDA projected farmers will plant 95.9 million acres of corn this spring - the highest acreage level since 1937. In bumping up corn acreage, USDA lowered soybean acreage to 73.9 million acres.
Soybean futures reacted with sharp gains to this morning's shockingly low soybean plantings intention figure from USDA. Beans closed mostly 40-plus cents higher today, with May beans moving to their highest level since mid-August and closed above the psychological $14.00 level. May beans ended 37 1/4 cents above last week's close. What today's report told traders is the market has not yet done its job of bidding for soybean acres. (Source: CME)
May corn futures closed limit up (40 cents) while the July contract finished just a 1/2 cent shy of today's limit. The September contract forward ended 13 3/4 to 18 1/2 cents higher. Despite today's strong to limit-up gains, corn futures ended lower for the week -- slightly lower in old-crop contracts; sharply lower in new-crop futures. The strong close to the week points to followthrough buying next week. (Source: CME)
Wheat futures surged sharply higher today. All locations settled with gains falling within the range of 38 1/2 to 51 1/2 cents, with most contracts ending near the top of this range. This helped Chicago wheat to finish with slight weekly gains. Today’s bullish USDA report data for wheat sets the market up to start the month of March on a bullish note, as all wheat plantings of 55.9 million acres were well below expectations as were quarterly grain stocks of 1.2 billion bushels. (Source: CME)
Cotton futures traded on both sides of unchanged today, but ultimately settled high-range with slight gains of 16 to 28 points in all but April contract, which was 2 points lower. Cotton futures wrapped up the month of March and the week with strong gains. Next week, an Indian ministerial panel will decide whether to grant new cotton export permits. (Source: CME)
USDA Grain Stocks Report: Wheat Down from 2011 (Source: CME)
By CME Group - Fri 30 Mar 2012 08:36:35 CT
All wheat stored on March 1, 2012, totalling 1.20 billion bushels, decreased 16% from a year ago. On-farm stocks were down 25% from last March at 217 million bushels. Off-farm stocks were down 14% from a year ago, and estimated at 983 million bushels. Wheat stored from December 2011 - February 2012 lost 462 million bushels, down 9% from the same period a year earlier.
U.S. Wheat Rises From 2-month Low, USDA Report Eyed (Source: CME)
By Thomson Reuters - Fri 30 Mar 2012 09:32:24 CT
Chicago wheat edged higher , taking a breather after sliding to a two-month low in the last session in a selloff before a key U.S. quarterly report on plantings and stocks. "It is mainly position squaring and there is nothing much to do with physical activity, the market is more concerned about plantings for the next year," said Ker Chung Yang, an analyst at Phillip Futures in Singapore.
Pre-Opening Wheat Market Report (Source: CME)
Sun 01 Apr 2012 24:00:17 CT
May wheat was trading 1 1/4 cents higher late in the overnight session. Outside market forces look supportive this morning with a weaker US dollar and strength in equity markets. Traders await the results of the USDA stocks and planted acreage reports for direction this morning. Traders see planted acreage near 57.4 million acres which is down 600,000 acres from the USDA Outlook Forum in late February but up near 3 million acres from last year. Traders see March 1st stocks near 1.223 billion bushels which is down 202 million from last year. May wheat collapsed to close sharply lower on the session yesterday 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. 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 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. 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 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.
Wheat Market Recap Report (Source: CME)
Sun 01 Apr 2012 24:00:17 CT
May Wheat finished up 48 1/4 at 660 3/4, 8 off the high and 48 up from the low. July Wheat closed up 46 3/4 at 674. This was 46 1/4 up from the low and 6 off the high. May wheat closed 48 1/4 cents higher on the session and up 6 1/2 cents higher for the week. The steep drop in plantings for spring wheat plus ideas that funds needed to exit shorts helped to drive the market sharply higher. A steady flow of speculative buying with some of the buying thought to be fund trader short covering helped to drive the market to new highs for the day into the mid-session. Bullish news for the corn and soybean markets plus much smaller than expected planted acreage for the spring wheat crop helped to support the buying. The USDA pegged total wheat planted acreage for 2012 at 55.908 million acres compared with trade expectations for 57.4 million. Spring wheat planted area was just 11.976 million acres compared with trade expectations at 13.3 million. March 1st wheat stocks came in at 1.201 billion bushels compared with trade expectations near 1.223 billion. Weather looks mostly negative with some rain in the forecast for Europe next week and a lack of freezing temperatures for the US. May Oats closed up 5 3/4 at 341 1/4. This was 5 1/4 up from the low and 8 3/4 off the high.
Corn Market Recap for 3/30/2012 (Source: CME)
Sun 01 Apr 2012 24:00:00 CT
May Corn finished up 40 at 644, equal to the high and 40 up from the low. July Corn closed up 39 1/2 at 643 1/4. This was 39 1/2 up from the low and 1/2 off the high. May corn closed 40 cents higher on the session and down just 2 1/2 cents for the week. Aggressive speculative buying supported the higher opening and the buying continued to drive the market higher into the mid-session with the market closing limit-up on the day with a 6.6% gain. December corn closed 16 cents higher with an outside-day. The USDA pegged corn planted acreage at 95.864 million acres compared versus trade expectations at 94.7 million. This is the highest planted acreage since 1937. Increases were noted for North Dakota, (up 1.17) Minnesota, (up 600,000) Nebraska, (450,000) and Ohio (400,000). March 1st stocks were pegged at just 6.009 billion bushels compared with trade expectations at 6.15 billion. The report news is mixed, as planted acres came in higher than expected but stocks lower. The stocks report showed that there are about 140 million fewer bushels of corn than expected. Weather looks favorable for planting in the next few weeks. Traders see the stocks number as an important indicator for better than expected demand over the past quarter and this could drive ending stocks to historically tight levels. May Rice finished down 0.135 at 14.765, 0.215 off the high and 0.215 up from the low.
Corn, Wheat, Soy Rise, Renewing Food-Inflation Concern (Source: Bloomberg)
Corn prices surged the most since June 2010, wheat had its biggest gain in five months, and soybeans rallied after government forecasts signaled tighter U.S. crop supplies, renewing concerns that food inflation will quicken. Corn inventories on March 1 fell more than analysts forecast to the lowest for this time of year since 2004, the U.S. Department of Agriculture said today in a report. Wheat reserves dropped to a three-year low, and planting intentions trailed estimates. Farmers will sow 73.902 million acres with soybeans this year, down 1.4 percent from 2011 and the lowest in five years, the agency said after surveying farmers. Global food prices rose to an all-time high last year, triggering unrest in northern Africa and the Middle East. The United Nations said this month that grain imports by the world’s poorest countries will climb to a record in the 12 months ending June 30. The U.S. was the world’s biggest exporter of corn, soybeans and wheat last year.
“There is no question we will see higher food prices this year,” Steve Nicholson, a commodity procurement specialist at International Food Production Corp. in Fenton, Missouri, said in a telephone interview. “You have to see prices go up to stimulate global production and ration declining supplies.” On the Chicago Board of Trade, corn futures for May delivery jumped by the exchange limit of 40 cents, or 6.6 percent, to close at $6.44 a bushel at 1:15 p.m. That was the biggest gain for a most-active contract since June 30, 2010. The advance pared the decline for the quarter to 0.4 percent.
Corn Futures Gain as Much as 1.6% to Highest Level in One Week (Source: Bloomberg)
Corn for May delivery climbed as much as 1.6 percent to $6.545 a bushel on the Chicago Board of Trade, the highest since March 26. Futures traded at $6.54 by 9:26 a.m. Melbourne time. Soybeans for May delivery rose 0.6 percent to $14.1175 a bushel, while May-delivery wheat gained 0.5 percent to $6.6425 a bushel.
Mexico considering 250,000-MT sugar import quota-industry
MEXICO CITY, March 29 (Reuters) - Mexico's economy ministry could approve sugar imports of 250,000 tonnes next month due to shortages from a long drought, sugar industry sources said.
A proposal for the quota is currently with the ministry's regulatory commission and if approved would likely be published in April, even though local sugar producers are against more imports, Mexico's cane growers' union on Thursday.
Colombia's southern provinces to help spur coffee output
BOGOTA, March 29 (Reuters) - Colombia's southern provinces have emerged as new coffee power-houses that may help the Andean nation recover from a three-year output slump with expansion of production areas at a time when traditional coffee regions face continued decline.
Provinces such as Huila, which has overtaken the traditional coffee-growing areas of Antioquia, will be crucial in helping Colombia recover its historic output battered by torrential rains, a fungus outbreak, and coffee renovation program that has cut production.
Brazil to turn credit weapon on falling coffee price
BRASILIA, March 29 (Reuters) - Brazil plans to boost loans to coffee producers in hopes of supporting prices by encouraging them to stockpile beans during the large upcoming harvest, the agriculture ministry's top coffee official said.
The plan is to increase lending from the main government credit line to coffee growers specifically for the purpose of tiding growers over financially when they defer sales, and avoid an early rush to the market that would drive prices down.
Brazil industry leader urges ethanol tax cuts
LONDON, March 29 (Reuters) - Brazil's ethanol taxes should be cut to make biofuel more competitive with gasoline for the Brazilian motorist, cane industry leader Marcos Jank said on Thursday.
Jank, president and CEO of sugarcane industry association Unica, told Reuters the ethanol industry in Brazil faces low margins, which is discouraging new investments.
Oil Rises a Second Day as China Economy Boosts Demand Outlook (Source: Bloomberg)
Oil advanced for a second day in New York on signs that the economy is improving in China, the world’s second-biggest crude-consuming nation. Futures rose as much as 0.5 percent after a purchasing managers’ index climbed to a one-year high in March. Oil capped a 4.2 percent gain in the first quarter as President Barack Obama said March 30 that world supplies are sufficient to proceed with new sanctions against Iran. “The firmer tone relates to the official Chinese PMI reading, and that reverses the negative sentiment we’ve seen around China,” said Michael McCarthy, a chief market strategist at CMC Markets Asia Pacific Pty in Sydney. “That speaks well to demand. The Middle East seems to be quietly boiling away without any signs at this stage of a blow-up.” Oil for May delivery gained as much as 56 cents to $103.58 a barrel in electronic trading on the New York Mercantile Exchange and was at $103.34 at noon Sydney time. While prices rose in the first quarter, they fell 3.8 percent in March.
Brent oil for May settlement increased 44 cents, or 0.4 percent, to $123.32 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to New York-traded West Texas Intermediate was at $20, up from $19.86 on March 30, the most since Oct. 24.
Oil firmer on weak dollar, supply worries
LONDON, March 30 (Reuters) - Oil rose above $123 a barrel, reversing three straight sessions of losses, supported by a weaker dollar and expectations of tight gasoline supplies in the world's largest oil consumer the United States.
"Prices are still very rangebound," said Amrita Sen from Barclays in London. "Overall prices are within a range, still constrained by fears on upside of strategic petroleum release and on the downside by the strong fundamentals and geopolitical concerns."
Russia gasoline, gasoil, fuel oil exports fell in February
MOSCOW, March 30 (Reuters) - Russian refined products exports fell in February month-on-month, while domestic supplies rose, Energy Ministry data showed.
Exports of gasoline fell by 16.9 percent versus January, mostly on account of Surgutneftegas` and Gaspromneftekhim Salavat. The companies reduced supplies abroad by 50 and 40.8 percent respectively compared to previous month.
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