Market Recap: Wheat Futures (Source: CME)
Wheat futures closed 4 1/2 to 10 1/4 cents higher in Chicago, 7 to 13 cents higher in Kansas City and mostly 9 1/4 to 24 3/4 cents higher in Minneapolis. The winter wheat markets finished mid-range, while Minneapolis futures closed just off session highs. Fundamentally, wheat futures were supported by weather/crop concerns today.
Wheat Market Recap Report (Source: CME)
July Wheat finished up 10 1/4 at 608 1/2, 8 3/4 off the high and 11 up from the low. December Wheat closed up 8 1/2 at 643 3/4. This was 8 3/4 up from the low and 8 1/2 off the high. July wheat opened closed moderately higher on the session but did not take out the mid-day highs. A hot weather forecast for western Kansas just ahead and ideas that recent rains may not have been enough to avoid some further deterioration of winter wheat crop conditions helped to support the strong gains early in the session today. Crops rated good to excellent in Kansas slipped to 52% from 60% last week and traders see this as a factor which might have sparked active short-covering early in the session today. Spring wheat plantings reached a record fast 94% from 64% on average. Short-covering seemed to be the primary bullish force today as some potential weather issues in the Black Sea region, China and Kansas have helped to support. July Oats closed up 1 3/4 at 330 1/4. This was 3 1/4 up from the low and 4 1/2 off the high.
Market Recap: Corn Futures (Source: CME)
Corn futures were stronger throughout the day and rallied into the close to test the mid-morning highs. Corn finished 5 to 14 1/4 cents higher with the July contract leading gains. While the U.S. dollar was quiet overnight, it rallied sharply today, pressuring crude oil and gold futures.
Soybeans, Wheat, Corn Called to Open Higher on Weather (Source: Bloomberg)
What follows are opening calls for U.S. grain and oilseed markets.
-- Soybean futures may open 16 cents to 20 cents a bushel higher on the Chicago Board of Trade on speculation that warmer, drier weather than normal this month will deplete U.S. soil moisture and hurt crop yields, Greg Grow, the director of agribusiness for Archer Financial Services Inc. in Chicago, said in a telephone interview. Soybean-oil futures are expected to open 0.4 cent to 0.5 cent a pound higher, and soybean-meal futures may open $7 to $8 higher per 2,000 pounds.
-- Wheat futures may open 7 cents to 10 cents a bushel higher on the CBOT, the Kansas City Board of Trade and the Minneapolis Grain Exchange after a government report yesterday showed a drop in U.S. crop conditions, while dry weather threatens crops in parts of Russia and the Ukraine, Grow said.
-- Corn futures are called to open 4 cents to 6 cents a bushel higher in Chicago after last week’s drop to the lowest in seven months spurs increased demand for the grain, Grow said.
Wheat Jumps Most in Two Weeks as Dry Kansas Weather Curbs Yield (Source: Bloomberg)
Wheat rose the most in more than two weeks on speculation that dry weather will curb yields in Kansas, the biggest U.S. producer of winter varieties. About 52 percent of the Kansas crop was in good or excellent condition as of May 13, down from 60 percent a week earlier, the U.S. Department of Agriculture said in a report yesterday. Most of the state has received little or no rain in the past week, National Weather Service data show. Wheat prices have dropped 6.8 percent this year as favorable weather sped crop development. “We’re getting anecdotal evidence” from west-central Kansas that the crop potential is declining, Mike Zuzolo, the president of Global Commodity Analytics & Consulting in Lafayette, Indiana, said in a telephone interview. “The drop in the good-to-excellent conditions support that anecdotal evidence that we’re losing yield in Kansas.” Wheat futures for July delivery advanced 1.7 percent to $6.085 a bushel at 1:15 p.m. on the Chicago Board of Trade, the biggest jump since April 27.
Dry weather in parts of Ukraine and Russia also will boost prices, Zuzolo said, although east Ukraine and the North Caucasus region of Russia may get some precipitation in the next week, forecaster Telvent DTN said today in a report.
GRAINS-U.S. soybean futures rebound, wheat firms on Kansas weather worries
SYDNEY, May 15 (Reuters) - U.S. soybean futures rose after two straight days of losses, driven by fund liquidation of long positions and a risk-off phase that propelled the July oilseed contract to the lowest level in six weeks on Monday.
"Obviously we've had a massive selloff in the last few days, but ultimately we are going to see buyers back in this market, its just a matter of when," the trader said. "The fundamentals around soybeans haven't changed."
Kazakhstan eyes record grain exports, cuts rail costs
ASTANA, May 15 (Reuters) - Kazakhstan expects to ship a record 13 million tonnes of grain this season after agreeing to subsidise rail transport fees to give exporters better access to ports on the Black and Baltic Seas, Agriculture Minister Asylzhan Mamytbekov said on Tuesday.
Kazakhstan, which ranks among the world's top 10 wheat exporters, should export 5 million tonnes of grain between May and September, adding to the 8 million tonnes already shipped since September last year, Mamytbekov told reporters.
Corn, soy planting pace ahead of analysts view
CHICAGO, May 14 (Reuters) - U.S. farmers seeded corn and soybeans faster than analysts were expecting last week and their momentum was expected to continue amid calls for good weather around the Midwest.
The U.S. Agriculture Department said on Monday afternoon corn planting was 87 percent complete as of May 13 and soybean planting was 46 percent complete. The soybean planting pace matched farmers' efforts in 2005 while corn planting was in line with 2010.
Farms in main Argentina grains province to strike
BUENOS AIRES, May 14 (Reuters) - Farmers in Argentina's main agricultural province will call a strike this week against a proposed tax increase, but the planned five-day halt in crop sales should have little impact on exports.
Growers in Buenos Aires province - which produces most of Argentina's corn, soy and wheat - say a land tax hike proposal expected to be approved on We dnesday by local lawmakers will hurt already precarious profits and drive some out of business.
India's May 1 grain stocks sharply above targets
NEW DELHI, May 14 (Reuters) - India's wheat stocks at government warehouses on May 1 were 38.2 million tonnes, more than nine times the official target of 4.0 million tonnes for the quarter ending June 30, government sources said on Monday.
Rice inventory for the same period was 32.9 million tonnes against a target of 12.2 million tonnes.
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.
SOFTS-Sugar near 20-month low, coffee edges up
LONDON, May 15 (Reuters) - ICE sugar consolidated near a 20-month low, in line with steady commodity markets after a sell-off on Greece's uncertain euro zone future in the previous session dragged the CRB commodities price index to a 19-month low.
"The markets are now almost discounting a Greek exit from the currency and is more worried about knock-on effects on other indebted Eurozone countries," said Nick Penney of brokerage Sucden Financial.
Thailand may export record volume of sugar in 2012
BANGKOK, May 15 (Reuters) - Thailand, the world's second-biggest sugar exporter, has ended its 2011/12 crushing season and produced a record 10.2 million tonnes of sugar, the Office of Cane and Sugar Board (OCSB) said on Tuesday, adding that might lead to record exports this year.
Output was up from 9.6 million tonnes in the previous crop and higher than the forecast of 10.0 million tonnes.
El Salvador coffee exports drop 50 pct in April
MEXICO CITY, May 14 (Reuters) - Coffee exports from El Salvador fell 50 percent in April compared with the same month a year earlier, reaching 114,704 million 60-kg bags in the month, the country's coffee association CSC said on Monday.
CSC said exports through the first seven months of the 2011/2012 harvesting season totaled 693,061 bags.
Ghana cocoa purchases down 6.7 pct in year so far-data
ACCRA, May 14 (Reuters) - Cocoa purchases declared to Ghana's industry regulator Cocobod reached 744,298 tonnes by May 3 since the start of the season, down 6.7 percent on the same period last year, according to Cocobod data seen by Reuters on Monday.
Cocobod said in mid-April it might not meet a 950,000-tonne output target this season due to dry weather that has hampered growing. The world's second largest cocoa grower after Ivory Coast produced more than one million tonnes last year.
Cuban raw sugar output up 11.7 percent
HAVANA , May 14 (Reuters) - Cuban raw sugar production rose 11.7 percent, or an estimated 140,000 tonnes, this year over 2011's 1.2 million tonnes, with 29 of 46 mills still grinding, the state-run Trabajadores newspaper said on Monday.
According to the paper, the mills will continue grinding "until rains and industrial yields permit in an effort to come close to reaching the plan now at 92 percent."
Rains raise farmer hopes for ICoast cocoa mid-crop
ABIDJAN, May 14 (Reuters) - Abundant rains across most of Ivory Coast's main cocoa producing regions well into last week are helping create ideal conditions for the development of the mid-crop, farmers and analysts said on Monday.
The mid-crop in the world's top cocoa producer is marketed from April to September, but a five-month dry spell that carried into March has delayed the start of harvesting.
India's April natural rubber imports surge
May 14 (Reuters) - India's natural rubber imports in April nearly tripled from a year ago to 17,509 tonnes, state-run Rubber Board said on Monday, reflecting deals signed by local tyre makers earlier this year to cash in on lower prices overseas.
However, imports have fallen from March when they stood at 19,199 tonnes.
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.
China's Sinopec launches first shale gas project
BEIJING, May 15 (Reuters) - Sinopec Group, China's second largest oil and gas producer, has launched its first shale gas project and plans to develop production capacity of 300-500 million cubic metres a year by the end of this year, it said on Tuesday.
Production capacity at the Fuling block in the gas-rich southwestern city of Chongqing is expected to reach 1 billion cubic metres by 2013, Sinopec said on its website.
India targets 11 pct Iran oil import cut in 2012/13-minister
NEW DELHI, May 15 (Reuters) - India aims to cut imports of Iranian crude by 11 percent to 15.5 million tonnes in 2012/13, Junior Oil Minister Dharmendra Pradhan told parliament on Tuesday, equivalent to about 310,000 barrels per day (bpd).
Pradhan said India imported 17.44 million tonnes of oil in 2011/12, down 5.7 percent from the year earlier. Japan secured a waiver from U.S. sanctions with cuts of 15-22 percent in its imports.
POLL-US crude stocks seen higher, Cushing stocks up
May 14 (Reuters) - U.S. crude oil stockpiles were forecast higher for the eighth straight week last week as stockpiles at Cushing, Oklahoma, likely climbed to a new record, a preliminary Reuters poll ahead of weekly inventory reports showed on Monday.
Averaging the estimates from five analysts, crude inventories were forecast to have risen by 1.5 million barrels in the week to May 11, the survey showed.
Brent crude to stay well supported on rising demand
SINGAPORE, May 15 (Reuters) - Tight global oil supply outside the United States and healthy demand, particularly in Asia ahead of summer, will help keep Brent crude prices well supported, a senior trading executive at Southeast Asia's biggest bank said.
Prices have surged more than 17 percent so far this year due to supply concerns triggered by mounting Western sanctions on Iran over its nuclear programme. The U.S. and its allies suspect Iran is developing nuclear weapons, which Tehran denies.
OIL-Brent falls towards $111 on Greece jitters
SINGAPORE, May 15(Reuters) - Brent crude futures fell towards $111 a barrel as Greece's political and economic turmoil deepened and worries that the debt-laden country could leave the euro zone sparked a sell-off in dollar-denominated commodities.
"The risk-off turn in the market over the last week is due to a re-evaluation of global growth, particularly in China and Europe, which has been weighing on the market," said Natalie Robertson, an analyst at ANZ.
Oil Drops a Fourth Day on Rising U.S. Supplies, Greek Elections (Source: Bloomberg)
Oil dropped for a fourth day in New York after U.S. crude stockpiles increased and Greek talks to form a coalition government collapsed, raising concern the nation will exit the euro and worsen the region’s debt crisis. Futures slipped as much as 1 percent from the lowest settlement in almost five months yesterday. U.S. inventories rose 6.6 million barrels last week, American Petroleum Institute data showed. A government report today is forecast to post a gain of 1.8 million, according to a Bloomberg News survey. Greece will schedule new elections as early as June 10, which German Finance Minister Wolfgang Schaeuble called a referendum on whether the country stays in the euro. “Demand destruction is back on the agenda,” said Jonathan Barratt, chief executive of Barratt’s Bulletin, a commodity- markets newsletter in Sydney. “The market is going to remain weak over the next month or so until we get some clarity of what’s happening in the world. Greek turmoil is a problem.”
Crude for June delivery decreased as much as 93 cents to $93.05 a barrel in electronic trading on the New York Mercantile Exchange, and was at $93.37 at 11:14 a.m. Sydney time. The contract yesterday fell 0.8 percent to $93.98, the lowest close since Dec. 19. Prices are 5.5 percent lower this year.
Lead Shortage Looms in ’13 on Record Demand for Batteries (Source: Bloomberg)
Lead is poised to rally after erasing this year’s gains with the market returning to shortages following a five-year glut as miners fail to keep pace with record demand for batteries. Stockpiles monitored by the London Metal Exchange dropped 7.6 percent from the all-time high reached in October. Demand will exceed supply by 150,000 metric tons next year, equal to about six months of U.S. mine production, Macquarie Group Ltd. estimates. Prices will average $2,273 a ton in the fourth quarter, 13 percent more than now, according to the median of 18 analyst estimates compiled by Bloomberg. Consumption is being driven by industrialization and new technology, with lead usage in batteries for everything from fork-lift trucks to mobile phone towers growing at more than twice the speed of overall demand, BNP Paribas SA estimates.
Mine supply will expand at the slowest pace in three years in 2012 as producers fail to develop new deposits, Macquarie predicts. Xstrata Plc (XTA) will shut a Canadian mine next year after a half-century of digging exhausted all profitable ores. “If you’re adding demand you need new supply,” said Duncan Hobbs, an analyst at Macquarie in London. “In the next two, three years at least, on the supply side, there is no new primary mine lead supply coming to the market anywhere in the world outside China.”
Gold Eclipsed by Dollar Haven as Goldman Sees Rally (Source: Bloomberg)
Investors are reducing gold holdings for a third month, the longest stretch since 2004, and favoring the dollar as a haven from Europe’s debt crisis, even as Goldman Sachs Group Inc. predicts record prices for the metal. Bullion erased its gains for 2012 this week as the dollar rose against a basket of currencies for a record 12 straight days. Gold held in exchange-traded products fell 30.8 metric tons since reaching a record 2,410.2 tons on March 13, data compiled by Bloomberg show. Royal Bank of Scotland Plc, ABN Amro Bank NV and Barclays Plc cut their forecasts in May, though Goldman expects prices to rise 25 percent to $1,940 an ounce in 12 months. Gold rallied for 11 consecutive years and prices rose more than sevenfold, with demand accelerating in 2008 amid the global recession. Now, mounting concern that Greece may exit the 17- nation euro and prospects for faster U.S. growth are boosting the dollar, making it more attractive than bullion to some investors seeking to protect their wealth.
Hedge funds are the least bullish on the metal since December 2008. “Gold is just another risk asset,” said Michael Aronstein, the president of Marketfield Asset Management in New York, who predicted the 2008 slump that drove commodities down 66 percent in seven months and then the rebound in 2009. “It made you a lot of money if you took the risk eight or 10 years ago. A real safe haven would be a pile of high-denomination Swiss franc or dollar notes, stored in a safety deposit box.”
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