Thursday, May 17, 2012

20120517 1021 Global Commodities Related News.

Commodities Sink Canadian Stocks as Jobs, Housing Boom (Source: Bloomberg)
Canada’s commodity shares have fallen to their cheapest prices since the recession, wiping out the stock market’s best start to the year since 2004 as global economic concerns overshadowed the best two-month job growth in more than 30 years. Energy (STENRS) and materials stocks in the Standard & Poor’s/TSX Composite Index (SPTSX) trade for 15.3 times and 11.9 times reported earnings, the lowest since 2009. Both groups traded for as much as 29 times earnings in March last year. The S&P/TSX has fallen 7.9 percent this month, and is off 5.3 percent in 2012 after rallying 5.8 percent in January and February.
While employment rose by 58,200 in April after a 82,300 jump in March and housing starts rose to their highest since September 2007 last month, energy and mining shares are dragging the country’s stock benchmark toward a second-straight yearly loss. Commodity stocks account for 44 percent of the S&P/TSX compared with 17 percent in the MSCI World Index, which has gained 1.9 percent in 2012, and 14 percent in the S&P 500 Index, up 5.3 percent. “For the gold and energy companies, people aren’t valuing the fundamentals or cash flow,” Craig Basinger, chief investment officer for Macquarie Group Ltd.’s Canadian private wealth unit in Toronto, said in a May 7 telephone interview. The unit oversees about C$15 billion ($14.9 billion) of assets. “Those factors are taking a back seat to a lot of the global market events we’re seeing develop around the world.”

GRAINS-Soy, corn dip on economic concerns; wheat firm on weather
SINGAPORE, May 16 (Reuters) - U.S. soybeans edged lower on Wednesday, falling for three out of four sessions, while corn lost ground amid a broadbased weakness in financial markets triggered by fears of Greece's exit from the euro zone.
"The U.S. dollar is a little bit higher which is adding pressure on prices," said Victor Thianpiriya, an agricultural commodity strategist at ANZ.

Russian wheat exports flat in April m/m -analyst
MOSCOW, May 16 (Reuters) - Russian wheat exports remained flat in April compared to the previous month at 1.3 million tonnes, after increased shipments to Turkey compensated for reduced supplies to Egypt, SovEcon agricultural analysts said in a note on Wednesday.
Russia could become the world's No. 2 wheat exporter after the United States this year, rebounding after a catastrophic 2010 drought, although a lack of rainfall this spring could damage the forthcoming crop in some key southern export regions.

China 2012 corn output seen at record 197.5 mln T, soy down -CNGOIC
BEIJING, May 16 (Reuters) - China, the world's second largest corn consumer, will reap another record harvest of the grain this year as it planted more acres to meet surging demand at home, while soy output is set to drop again, according to estimates from an official think-tank.
China, traditionally a net corn exporter, has become a major importer of the grain in recent years as Beijing strives to supply livestock feed to meet fast-growing demand for meat amid near-record domestic corn prices.

Russia spring drought damaged crop in South-analyst
MOSCOW, May 15 (Reuters) - A spring drought in parts of Russia's southern grain export regions has raised concerns about the condition of the forthcoming crop, although rains could bring relief to some areas in coming days.
"Drought conditions create concern among the producers and market participants across the vast region of Rostov, Stavropol, Volgograd, some parts of Krasnodar and Voronezh," Dmitry Rylko, head of the Institute for Agricultural Market Studies, told Reuters in an emailed market comment.

Ukraine seeks grain trade deal with China
KIEV, May 15 (Reuters) - Ukraine, which plans to boost its corn exports this season, hopes to secure a quarantine agreement with China to gain access to its huge market, Ukrainian Agriculture Minister Mykola Prysyazhnyuk said on Tuesday.
"We are in talks on a quarantine agreement. We are waiting for the delegation from the Chinese agriculture ministry (to arrive) within a month,' Prysyazhnyuk told Reuters.

India's 2012 monsoon rains to arrive on time
May 15 (Reuters) - India's 2012 monsoon rains are likely to hit the southern coast on time on June 1, the weather department said on Tuesday, brightening farm output prospects as farmers can plant crops like cotton and paddy on time and reap good yields.
The four-month long rainy season starts over the Kerala coast and covers the rest of India and neighbouring countries by mid-July.

Wheat Jumps Most Since March as Dry Weather Hampers Kansas Crop (Source: Bloomberg)
Wheat rose the most since March on speculation that hot, dry weather will curb production in Kansas, the biggest U.S. grower of winter varieties. Little or no rain has fallen in parts of southwest and central Kansas in the past month, National Weather Service data show. The dry weather has affected the critical filling stage when grain forms inside the head of the wheat plant, Kansas State University agronomist Jim Shroyer said. Plants turned white, and heads formed with little or no grain inside, he said. “The center part of the state is one of the worst areas, and dry areas are expanding because we haven’t had any moisture,” Larry Glenn, an analyst at Frontier Ag in Quinter, Kansas, said by telephone. “We have another chance for rain this weekend, but they’re talking about spotty thundershowers, and that’s not what we need.”
Wheat futures for July delivery gained 5 percent to settle at $6.3875 a bushel at 1:15 p.m. on the Chicago Board of Trade, the biggest one-day gain since March 30. The commodity earlier touched $6.3975, the highest since May 2. The price has jumped 7 percent this week on the dry Kansas weather.

Market Recap: Wheat Futures (Source: CME)
Wheat futures rallied into the close, with Chicago and Kansas City wheat finishing mostly 20-plus cents higher, while Minneapolis wheat was around 3 to 12 cents higher. Wheat futures benefitted from a wave of technical buying and short-covering heading into the close.

Wheat Market Recap Report (Source: CME)
July Wheat finished up 30 1/4 at 638 3/4, 1 off the high and 34 3/4 up from the low. December Wheat closed up 27 1/4 at 671. This was 32 1/2 up from the low and 3/4 off the high. July wheat closed more than 30 cents higher on the session as a steady flow of short-covering from fund traders helped to drive the market higher for much of the day and to new highs right into the close. Traders have taken some of the rain out of the winter wheat area forecast and traders remain concerned over possible deteriorating crop conditions in western Kansas. Traders see mostly dry weather for the plains for the next ten days. Talk of a hefty net short position by fund traders in wheat and ideas that demand could be strong over the near-term helped to support. Iraq plans on buying 400,000 tonnes of wheat from the US, Australia and FSU countries. For the weekly export sales report, traders see sales near 500,000 tonnes as compared with 550,500 tonnes last week. July Oats closed up 7 1/4 at 337 1/2. This was 8 1/2 up from the low and equal to the high.

Market Recap: Corn Futures (Source: CME)
Corn futures reversed overnight price declines to close 10 to 22 3/4 cents higher and just off session highs. Funds were active on the long side of the market today, buying an estimated 18,000 contracts (90 million bu.) of corn. With the strong, high-range close, market bulls carry momentum into the overnight session. Futures fought off macro-economic concerns that pressured the market overnight and sparked relatively widespread risk aversion throughout the investment world.

Corn Market Recap for 5/16/2012 (Source: CME)
July Corn finished up 22 3/4 at 620, 3/4 off the high and 29 1/4 up from the low. December Corn closed up 11 3/4 at 526 1/4. This was 19 up from the low and 1 3/4 off the high. July corn closed sharply higher on the session and to a 5-session peak. Less than expected selling pressures from outside market forces and news of continued buying from China helped support the higher opening and buyers remained active for much of the session with a push to new highs for the day late in the session. Private exporters reported to the USDA sales of 900,000 metric tonnes of US corn for China. The breakdown was 180,000 tonnes for the 2011/12 season and 720,000 for the 2012/13 season. Of this total, only 240,000 tonnes for 2012/13 season were new sales as the rest was previously reported as "unknown" destination. Ethanol production for the week ending May 11th averaged 904,000 barrels per day. This is up 0.78% vs. last week and up 0.44% vs. last year. Corn used in last week's production is estimated at 96.3 million bushels. Corn use needs to average 93.9 million bushels per week to meet the USDA estimate for the season. Stocks were 20.63 million barrels. This is down 3.5% vs. last week and the drawdown in stocks combined with the highest weekly production since March 2nd leaves an implied weekly demand for ethanol at 7.32 million barrels, up from 5.88 million just a few weeks ago and the highest weekly implied demand total since December 9th, 2011. While buying in December corn was limited by the perception of excellent weather for a fast start to the crop, strong cash basis levels and a lack of producer selling in spite of the strong basis continues to support the old crop corn. For the weekly export sales report, traders see sales near 1.1 million tonnes as compared with 473,400 tonnes last week. July Rice finished down 0.36 at 15.115, equal to the high and equal to the low.

SOFTS-ICE sugar, coffee slip as commodities retreat
LONDON, May 16 (Reuters) - ICE sugar, coffee and cocoa futures all fell in early trade , tracking a broad-based setback in commodity markets linked to the deepening crisis in the euro zone.
Raw sugar futures on ICE were lower as investors sold riskier assets in a move linked to concern about a possible Greek exit from the euro zone.

Nicaragua coffee exports up 10 pct in April
MANAGUA, May 15 (Reuters) - Coffee exports from Nicaragua rose 10 percent in April compared with the same month a year ago, reaching 214,710 60-kg bags in the month, the national coffee association CETREX said on Tuesday.  
CETREX said exports through the first seven months of the 2011/2012 harvesting season totaled 756,174 bags, a 23 percent drop from the same period for the previous season.

Indian sugar mills oppose 10,000 T export cap
NEW DELHI, May 15 (Reuters) - The Indian government should withdraw an order that prohibits  sugar exporters from seeking approval for overseas sales of more than 10,000 tonnes in one application, a leading industry body said on Tuesday as it goes against a decision to free exports.
Ministers agreed to lift restrictions on sugar exports on May 2 and the food ministry on Friday issued a formal order removing the need for its permission for shipments. But it asked millers to disclose the quantities they sold overseas.

Ivorian cocoa prices rise on quality, demand-farmers
May 15 (Reuters) - Farmgate cocoa prices in Ivory Coast's main growing regions rose last week, supported by improved quality of beans and firm demand from buyers for export and local grinding, farmers and buyers said on Tuesday.
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 delayed the start of harvesting. Farmers said the first beans of the crop are now starting to leave the bush.  

Pakistan approves export of 200,000 T white sugar
ISLAMABAD, May 15 (Reuters) - Pakistan on Tuesday allowed the export of 200,000 tonnes of white sugar and directed the state trading corporation to buy 200,000 tonnes from local mills for domestic stocks, the chairman of the Pakistan Sugar Mills Association (PSMA) said.
"The export will be handled by the mills themselves," Javed Kayani told Reuters.

ICO sees 2011 coffee consumption below avg growth
LONDON, May 15 (Reuters) - The International Coffee Organization (ICO) estimates global coffee consumption grew 1.7 percent in 2011 though growth was below the average annual rate.
In its first 2011 forecast, the ICO said world consumption hit around 137.9 million 60-kg bags, but the rate of growth fell below the 12-year average of 2.5 percent.

Roadblocks extortion endangers Ivorian cocoa reform
SAN PEDRO, Ivory Coast, May 15 (Reuters) - The government's failure to dismantle extortion rackets run by police, soldiers and customs agents is cutting into the profits of Ivory Coast's cocoa growers and threatens to undermine a  current major reform of the sector, farmers say.
The world's top cocoa producer is emerging from a decade-long political crisis that ended with a four-month civil war last year.  

OIL-Oil falls on euro zone, WTI at six-month low
LONDON, May 16 (Reuters) - Oil prices slid with world shares and the euro as investors fled from riskier assets, while a surprise build in U.S. crude inventories helped send the WTI benchmark to a more than six-month low.  
"One element contributing to the decline in oil prices is general investor risk aversion stemming from euro zone concerns and an increased risk of a general economic slowdown," said Gareth Lewis-Davies, a senior energy strategist at BNP Paribas.

Oil Advances After Japan’s Economy Expands Faster Than Forecast (Source: Bloomberg)
Oil rose for the first time in five days in New York after Japan’s economy expanded faster than forecast and technical indicators signaled declines in crude prices may be exaggerated. Futures advanced as much as 0.6 percent. Japan’s gross domestic product gained an annualized 4.1 percent in the first quarter, the Cabinet Office said today in Tokyo. The median estimate of 27 economists surveyed by Bloomberg News was for a 3.5 percent expansion. Oil, down 11 percent this month, also rebounded after falling to long-term technical support. Crude for June delivery rose as much as 57 cents to $93.38 a barrel in electronic trading on the New York Mercantile Exchange, and was at $93.31 at 11:12 a.m. Sydney time. The contract yesterday fell 1.2 percent to $92.81, the lowest close since Nov. 2. Prices are 5.6 percent lower this year. Brent oil for July settlement dropped 23 cents to $109.52 a barrel on the London-based ICE Futures Europe exchange.
The European benchmark contract was at a premium to West Texas Intermediate of $15.80. Oil advanced in New York after reaching technical support at $92.75 a barrel, according to data compiled by Bloomberg. On the daily chart, that’s the 50 percent Fibonacci retracement of the rise from October’s intraday low of $74.95 to the March high of $110.55 and is where futures reversed a decline in December.

Gold Tumbles Into Bear Market on Greece Euro-Exit Concern (Source: Bloomberg)
Gold, on the brink of a bear market, declined for a fourth straight session as concern that Greece will have to leave the euro boosted the dollar and cut the metal’s appeal as an alternative asset. The U.S. Dollar Index, a measure against six major counterparts, rose for a 13th day to a four-month high after Greece’s political leaders failed to form a ruling coalition. “The market no longer seems to be seems pricing in whether Greece will leave the Europe Union, rather when it will happen,” Steve Scacalossi, a New York-based vice president at TD Securities Inc., wrote in a report. “The risk-off tone continued.” Gold futures for June delivery fell 1.3 percent to settle at $1,536.60 at 1:45 p.m. on the Comex in New York. The settlement leaves prices down 19 percent from a record close of $1,891.90 reached on Aug. 22, about 1 percentage point shy of a bear market.
Earlier, bullion slumped to $1,526.70, the lowest since Dec. 29 and 21 percent below the record $1,923.70 it touched on Sept. 6. The metal erased its gains for the year on May 14. Investor George Soros increased his holdings in the SPDR Gold Trust, the biggest gold-backed exchange-traded fund, in the first quarter, while billionaire John Paulson maintained his stake, filings showed yesterday.

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