Tuesday, May 15, 2012

20120515 1005 Global Commodities Related News.

Wheat Market Recap Report  (Source: CME)
July Wheat finished up 1 1/4 at 598 1/4, 3 3/4 off the high and 6 up from the low. December Wheat closed down 1/4 at 635 1/4. This was 5 3/4 up from the low and 4 off the high. July wheat closed slightly higher with an inside trading session. Bearish outside market forces clashed with talk of the oversold condition and talk that the recent set-back in prices could attract increased demand. A bearish tilt to outside market forces with financial problems in Europe and political issues in Greece and Germany helping to drive the US dollar higher and other commodity markets lower early in the day helped to spark the lower opening. Ideas that the market is oversold and talk that the market has already priced-in a large crop ahead helped to support the bounce to higher on the day. Weekly export inspections came in at 28 million bushels which was well above trade expectations and compares with 20.7 million bushels per week to reach the USDA projection. May 1st stocks of wheat in India reached 38.2 million tonnes which is more than 9 times higher than the official June 30th target of 4 million tonnes as compared with 19.9 million tonnes last month. July Oats closed down 3 1/2 at 328 1/2. This was 2 1/2 up from the low and 3 3/4 off the high

Market Recap: Wheat Futures  (Source: CME)
Wheat futures were choppy today, with buying limited by negative outside markets. Chicago and Minneapolis wheat ended narrowly mixed, with Kansas City wheat mostly around 4 cents higher. Early pressure was tied to strength in the U.S. dollar index, which moved to its highest level in nearly a month on concerns political unrest in Greece will impact debt issues and worsen the economic crisis across the euro-zone.

Corn Market Recap for 5/14/2012 (Source: CME)
July Corn finished up 2 at 583, 3 3/4 off the high and 6 3/4 up from the low. December Corn closed up 1/4 at 505 1/2. This was 2 1/4 up from the low and 7 1/4 off the high. July corn closed slightly higher on the day and stayed inside of the early range for the reset of the session and today's range is inside of Friday's range. Weakness in soybeans and a bearish tilt to outside market forces helped to pressure the market early. Good weather in the forecast and the outlook for a record yield were seen as negative forces but talk of the oversold condition of the market after the sharp break last week helped to provide some underlying support. Traders see corn plantings near 86% complete for tonight's weekly update and a good start for the crops already emerged. Weekly export inspections came in at 26.8 million bushels which was slightly below trade expectations and compares with 34.6 million bushels per week to reach the USDA projection. While none of the Midwest needs rain right now, traders see the southern Midwest as too dry in the two week outlook and if this forecast is correct, this region may be in need of wetter weather ahead and the dry outlook may have helped slow the selling. December corn closed slightly higher on the session but down 7 1/4 cents from the early peak. July Rice finished down 0.105 at 15.6, 0.08 off the high and 0.08 up from the low.

Market Recap: Corn Futures (Source: CME)
May corn futures expired steady at $6.08; July through May 2013 futures were steady to 3 1/4 cents higher; and farther deferred months were pennies lower. This was a low-range close for most contracts. Corn futures initially benefitted from some spread unwinding amid concern about tight old-crop supplies.

GRAINS-U.S. soybean futures hit 6-wk low as funds sell long positions
SYDNEY, May 14 (Reuters) - U.S. soybean futures fell to six-week lows, dragged down by continued selling of long positions by funds and on concerns over the strength of the global economy.
"There has been a lot of talk about funds being very long on beans, and this is more liquidation after the U.S. Department of Agriculture report last week," said Brett Cooper, senior manager, markets at FC Stone Australia.

Thailand pushes regional rice pact again as exports slump
BANGKOK, May 14 (Reuters) - Thailand, the world's biggest rice exporter, is trying to reach a deal on rice cooperation with Vietnam and Cambodia as Thai  government stocks are at record highs, but similar efforts have failed in the past and traders expect little success this time.
"We are to hold a meeting in Bangkok by the end of May and there will be senior officials from those countries at the meeting," said Manat Soiploy, who oversees the rice trade at the Commerce Ministry. He had no precise date for the meeting.

Argentine grains workers end strike, agree to talk
BUENOS AIRES, May 11 (Reuters) - Workers at one of Argentina's biggest grains ports have lifted a strike and agreed to respect a Labor Ministry order for talks to resolve the pay dispute, union and industry sources said on Friday.
High inflation is fueling labor unrest in the South American country -- one of the world's biggest suppliers of soy, corn and wheat. But the government has been intervening swiftly to avert disruption to the nation's key agriculture exports.

Ag Growth profit rises on strong equipment demand
May 8 (Reuters) - Ag Growth International Inc , a portable grain handling equipment maker, reported a 13 percent rise in quarterly profit on strong demand.
The company, which makes grain handling equipment, storage bins and belt conveyors, said it expects a strong corn planting season in the United States to drive demand for its portable grain handling equipment.

DJ Arabica-Robusta Price Gap Narrows; Blends Unlikely To Change
-Difference in prices ends day at 81.419 cents a pound
--Roasters likely to keep current blends as long as customers buy
--Arabica prices down more than 23% this year, while robusta is up 20%
By Leslie Josephs and Neena Rai Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--The price gap between arabica and robusta coffee is near its narrowest in almost two years, as arabica prices slip while robusta perks up. The front-month spread settled Monday at 81.419 cents a pound. Robusta for May delivery on London's Liffe exchange settled up 0.8% at $2,116 a ton, while arabica for May delivery gained 0.5% to settle at $1.7740 a pound on the ICE Futures U.S. exchange. The difference in prices is closely watched by coffee roasters, who often substitute some less-expensive robusta for arabica in their beverages when arabica prices are high. This time, however, it is unlikely that roasters will change their blends. "If they maximized the number of robustas, if it was accepted by the customers, there's really no reason to go back," said an executive at a major U.S. coffee roaster. "In the end, it's the customer who dictates what they buy."
Substitution was in earnest last year, when arabica prices soared to a 14-year high. This year, arabica futures have dropped more than 23% as a larger on-cycle harvest from top grower Brazil has weighed on prices. At the same time, robusta futures have gained close to 20%, in part due to farmers in Vietnam, the world's largest producer of the coffee variety, holding on to their crops while waiting for higher prices. Brazilian farmers are expected to use that same strategy later this year, which could support prices for arabica. "The expectation is that the roaster buying should materialize in the coming months and that Brazilian [farmers] selling as soon as they have the beans might be overly optimistic," said Keith Flury, a senior commodities analyst at Rabobank. Roberio Oliveira Silva, head of the London-based International Coffee Organization, recently said arabica prices will likely rise in the second half of 2012.
"There is strong demand, but actually, we're not seeing much coffee on the market. And I don't think the Brazil crop will bring loads of coffee. So, the future is definitely brighter," he said in an interview.

Ivory Coast's Sifca looks to central Africa
ADDIS ABABA, May 11 (Reuters) - Ivory Coast agro-industry group Sifca is looking to set up rubber and palm oil plantations in central Africa to boost output and is also eyeing rice production at home, the company's chairman said on Friday
Sifca, one of the biggest companies in the West African country, is part-owned by Singapore's Olam International  and Wilmar International .

India issues formal order freeing up sugar exports
NEW DELHI, May 14 (Reuters) - India has issued a formal order freeing up sugar exports, a government statement said, after ministers agreed to permit shipments without any cap on May 2 to help mills clear some dues they owe to cane growers.  
Exporters would not need permission for shipments from the food ministry but they must disclose the quantities sold overseas, said the statement issued late on Friday.

Brazil's 2012/13 coffee crop 55.3 mln bags-Neumann
HAMBURG, May 11 (Reuters) - Brazil's 2012/13 coffee harvest now starting will reach 55.3 million 60-kg bags, giant German coffee trader Neumann Kaffee Gruppe (NKG) said in a report seen by Reuters on Friday.
This will comprise 36.5 million bags of arabica and 18.8 million bags of conillon robusta, Neumann forecast.

ISO sees global sugar surplus halving to 3 mln t 2012/13
LONDON, May 11 (Reuters) - The global sugar surplus is forecast to halve to around 3 million tonnes in 2012/13 (October-September) from a surplus of 6.5 million tonnes in 2011/12, the International Sugar Organization (ISO) said on Friday.
The London-based ISO said in its latest quarterly report that key producers were unlikely to increase their output to keep pace with a 2 percent rise in annual demand.

 Maintenance neglect to hurt Ivorian cocoa output
SOUBRE, Ivory Coast, May 11 (Reuters) - Cocoa farmers in Ivory Coast's south and southwestern regions expect a drop in output this year due to a lack of maintenance on plantations and poor weather, though quality is improving as the mid-crop harvest gains momentum.
Farmers in Duekoue, Soubre, Gagnoa and Divo said they have lacked the funds to invest in fertilisers and chemical treatments on plantations in the regions, which count for around half of production in the world's top cocoa producer.

Australia says shale could double its gas resources
ADELAIDE, May 14 (Reuters) - Australia, the world's fourth-largest exporter of liquefied natural gas (LNG), could have enough shale gas resources to double its gas resource base and expand its growing export industry, a government report said on Monday.    
Australia has around 390 trillion cubic feet in gas resources, excluding shale gas, ranking third behind coal and uranium as the country's largest energy resource, according to the report conducted by Geoscience Australia and the Australian Bureau of Resources and Energy Economics.

Saudi wish for $100 oil may be hard to grant
--Clyde Russell is a Reuters market analyst. The views expressed are his own--
ADELAIDE, Australia, May 14 (Reuters) - It's all very well for Saudi Arabia to say Brent crude should drop to $100 a barrel, but it's another matter entirely as to whether the world's biggest oil exporter can actually make that happen.
The problem is that when producers wish to raise prices by reducing supply, they are generally successful.
But when they want to lower prices, mainly by boosting supply, they are less successful as more oil in the market doesn't necessarily remove the reasons prices are high in the first place.

OIL-Brent drops below $112 as Greece clouds demand outlook
SINGAPORE, May 14 (Reuters) - Brent crude slipped below $112 on a worsening oil demand outlook after talks to form a new government in Greece failed, and as signs of a slowing Chinese economy outweighed the country's latest move to ease monetary conditions.
"The path of least resistance for oil is down, on sentiment on the euro zone and weak data from China on Friday," said Ben Le Brun, market analyst at OptionsXpress in Sydney.

Oil Falls for Third Day as U.S. Stockpiles Seen Rising in Survey (Source: Bloomberg)
Oil fell for a third day in New York before a report that may show U.S. crude stockpiles rose to the highest level in almost 22 years. Futures dropped as much as 0.9 percent, after closing yesterday at the lowest price in almost five months. U.S. crude stockpiles probably climbed 1.5 million barrels last week to 381 million, the most since August 1990, according to the median estimate in a Bloomberg News survey before a government report this week. Oil also declined with stocks and the euro as Greece struggled to form a government, raising concern that Europe’s debt crisis will worsen. Crude for June delivery fell as much as 87 cents to $93.91 a barrel in electronic trading on the New York Mercantile Exchange and was at $94.28 at 7:49 a.m. Singapore time. Prices dropped 1.4 percent to $94.78 yesterday, the lowest close since Dec. 19, and are down 4.6 percent this year.
Brent for June settlement slid 69 cents, or 0.6 percent, to $111.57 a barrel on the London-based ICE Futures Europe exchange yesterday. The European benchmark contract’s premium to West Texas Intermediate closed at $16.79, the highest since April 13. Talks between Greece’s main parties following elections on May 6 have failed to reach agreement on forming a coalition. The nation, whose 10-year debt yields more than 25 percent, decides today whether to pay 436 million euros ($559 million) to bondholders who shunned a debt swap last month.


Biggest Ship Hedge Fund Turns Bullish on Supertankers: Freight (Source: Bloomberg)
The biggest hedge fund in shipping is turning bullish on the largest oil tankers for the first time in four years as the U.S. push toward energy independence provides China with a greater share of global crude supply. The U.S. is importing the least in 13 years as China buys more than ever, lengthening voyages for tankers and effectively reducing the fleet’s capacity, government data show. Very large crude carriers, each hauling 2 million barrels, will earn $40,000 a day this year, 81 percent more than in 2011, said Andreas Vergottis, the Hong Kong-based research director of Tufton Oceanic Ltd., which manages about $1.3 billion of assets.
Chinese demand for tankers jumped 39 percent in the past three years to fuel an economy expanding at more than three times the pace of the U.S. The buying extends from Angola to Venezuela, changing trade patterns and boosting demand for the largest vessels. The rate projected by Vergottis is almost twice the $20,946 anticipated by forward freight agreements, traded by brokers and used to bet on future costs. “No one has yet woken up to this new regime,” he said. “The reduction in U.S. oil imports is actually good, because VLCCs will take that oil to Asia long-haul from the Atlantic.”

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