CME Amends Grain-Trading Plan After Industry Complained (Source: Bloomberg)
CME Group Inc. (CME), the world’s largest futures exchange, amended a proposal for expanded trading in grains to 21 hours a day after withdrawing an earlier plan for 22 hours that drew complaints from clients. Trading on CME Group’s Chicago Board of Trade will be from 5 p.m. to 2 p.m. Sunday through Friday, the company said today in a statement. The CBOT currently allows trading 17 hours a day. No date was set for the transition, which will occur “as soon as possible” and no later than June 4, said Chris Grams, a spokesman for the Chicago-based company. CME originally planned to expand access to markets including corn, soybeans and wheat on May 14 to thwart new competition from IntercontinentalExchange Inc. (ICE), the energy and agriculture market known as ICE, which began offering grain contracts for the first time this week. CME delayed its changes until May 20, after traders including R.J. O’Brien & Associates objected.
Yesterday, CME withdrew its 22-hour plan in a filing with the U.S. Commodity Futures Trading Commission. “I don’t think they’re confused, I just don’t think CME wants to do it, but ICE is forcing their hand,” said Dan Kuechenmeister, the manager of the commodities department at RBC Wealth Management in Minneapolis. “They were getting a lot of push-back from the clearing firms.”
Market Recap: Wheat Futures (Source: CME)
Chicago wheat futures finished 15 1/2 to 19 cents higher; Kansas City was 13 1/2 to 16 cents higher; and Minneapolis wheat ended steady to 9 cents higher. Wheat futures saw strong followthrough buying today thanks to ongoing concerns about dryness in winter wheat country, as well as fresh demand news. On the weather front, the Climate Prediction Center today released its extended weather forecasts which included expectations for above-normal temps for the southern half of the country through August.
Wheat Market Recap Report (Source: CME)
July Wheat finished up 19 at 657 3/4, 3/4 off the high and 20 up from the low. December Wheat closed up 17 3/4 at 688 3/4. This was 18 1/2 up from the low and 1/2 off the high. July wheat closed sharply higher on the day and is up now as much as 66 1/4 cents from Monday lows. A lack of rain in the forecast for the western plains in the next week or more and a heat-up in temperatures plus increased crop concerns for the Black Sea region wheat producers helped to drive the market moderately higher on the day. Hot and dry weather is in the forecast for this region and has traders nervous over lower production estimates ahead. Talk that Russia is likely to drop their grain production forecast by 2-3 million tonnes soon helped to support. Dry Australia weather is keeping the planting pace slow and also has provided some support. Net weekly export sales for wheat came in at 321,800 metric tonnes for the current marketing year and 389,600 for the next marketing year for a total of 711,400 which was well above trade expectations near 550,000. As of May 10th, cumulative wheat sales stand at 99.7% of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 97.6%. Sales of 23,000 metric tonnes are needed each week to reach the USDA forecast. On top of the weekly exports, the USDA reported a sale of 100,000 tonnes of US hard red winter wheat to Iraq for the 2012/13 season. Argentina officials pegged the 2012/13 wheat planted area at just 4 million hectares and some private traders see even lower plantings. For 2011/12, the USDA had 5 million hectares harvested. July Oats closed up 1 at 338 1/2. This was 8 1/2 up from the low and 5 1/2 off the high.
Market Recap: Corn Futures (Source: CME)
Corn futures finished mid- to high-range with July futures 5 cents higher and the rest of the market 1 to 3 cents higher. Futures benefitted from short-covering, encouraged by strength in the soybean market and ideas old-crop supplies need to be rationed. A very strong cash market serves as a reminder of strong demand and limited supply availability until the 2012 harvest begins.
Corn Market Recap for 5/17/2012 (Source: CME)
July Corn finished up 5 at 625, 1 1/2 off the high and 9 up from the low. December Corn closed up 2 at 528 1/4. This was 5 1/4 up from the low and 2 3/4 off the high. July corn closed higher and saw the highest close since May 1st as strength in the other grains and a bounce in gold was enough to offset another weak session for US equity markets. The market saw choppy and two-sided trade early in the session attempting to consolidate yesterday's strong gains. July corn is up as much as 54 1/4 cents from Friday's lows finding support from a surge in wheat prices and continued strong cash markets. Weather concerns for wheat seemed to be the main driver from buyers in grains today. Traders believe there are improving chances of better rain coverage for the central Midwest in the extended forecast models so weather was considered more negative today for corn than yesterday's forecast. Producer selling is still light in spite of historically high basis levels and a strong premium of old crop to new crop corn. Net weekly export sales for corn came in at 339,400 metric tonnes for the current marketing year and 525,700 for the next marketing year for a total of 865,100 tonnes which was well below expectations for near 1.1 million. As of May 10th, cumulative old crop sales stand at 87.7% of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 85.7%. Sales of 326,000 metric tonnes are needed each week to reach the USDA forecast. Argentina officials pegged the 2011/12 corn production at 20.1 million tonnes from 20.3 million as their previous estimate and compared with 21.5 million as the recent USDA forecast. July Rice finished up 0.15 at 15.265, equal to the high and equal to the low.
Corn Traders Most Bullish Since March on U.S. Heat: Commodities (Source: Bloomberg)
Corn traders are the most bullish since March on mounting concern that hot and dry weather will curb U.S. yields at a time of accelerating demand from China, the second largest buyer of U.S. farm goods. Nineteen of 27 analysts surveyed by Bloomberg expect prices to gain next week and three were neutral, the highest proportion since March 30. Iowa, Illinois and Indiana, which produce 40 percent of the U.S. crop, are poised for a seventh consecutive month of above-normal temperatures, the most since 1895, T-Storm Weather LLC said yesterday. U.S. export sales of corn surged 83 percent in the week ended May 10, from a week earlier, U.S. Department of Agriculture data show.
Corn jumped 7.3 percent since May 11, heading for the best week since July and rebounding from a slump caused by the USDA predicting a record crop a day before. Hedge funds and other speculators have raised bets on higher prices for two consecutive weeks, according to the Commodity Futures Trading Commission. Parts of the Midwest got 25 percent of normal rain in the past two weeks, National Weather Service data show. “People are starting to get worried about new crop yields,” said Nick Higgins, an analyst at Rabobank International in London. “We won’t really have a good idea until we see the late June and early July temperatures, because that’s when the majority of yields are really decided.”
GRAINS-Wheat at 2-week top on dry weather; corn, soy rise
SINGAPORE, May 17 (Reuters) - U.S. wheat jumped more than 1 percent , rising for a fourth straight session to its highest since May 1, as concerns over dry weather in top exporters the United States and Russia prompted short covering.
"We saw strong gains largely on short covering, which appears to be continuing this morning, led by wheat," said Luke Mathews, commodities strategist at Commonwealth Bank of Australia.
China sees tighter corn supply, imports to rise
BEIJING/SINGAPORE, May 17 (Reuters) - China's corn supply is expected remain tight in the year to September 2013, leading to higher imports, an official think-tank said, with a likely record harvest still falling short of a rapidly growing domestic demand.
China is estimated to consume 199 million tonnes of corn in 2012/2013, the China National Grain and Oils Information Center (CNGOIC) said on Thursday. Domestic production was projected at a record 197.5 million tonnes.
Morocco to keep low import duty regime for wheat
RABAT, May 16 (Reuters) - Morocco will keep import duties on soft wheat suspended until the end of May before raising them to 17.5 percent in the June 1 to end-December period as it braces for higher imports, official and trade sources said on Wednesday.
A combination of dry weather and long cold spells reduced the north African country's cereals crop to 4.8 million tonnes this year, down 43 percent from the previous season.
Exporters sell 900,000 T US corn to China-USDA
May 16 (Reuters) - China purchased 900,000 tonnes of U.S. corn in the eighth largest one-day corn sale ever, with most of the supplies for shipment in the next marketing year that begins Sept. 1, the U.S. Agriculture Department said on Wednesday.
Corn futures late last week plunged to a 14-month at the Chicago Board of Trade. China, the No. 2 global corn producer, likely took advantage of the drop in prices to augment domestic supplies, said Jefferies Bache analyst Shawn McCambridge.
Ukraine grain stocks may hit record-lobby
KIEV, May 16 (Reuters) - Ukraine's grain stocks could reach a record 12 million tonnes at the beginning of the new 2012/13 season due to a slow pace of exports, Ukrainian Agrarian Confederation (UAC) grain lobby said on Wednesday.
Ukraine had 5.1 million tonnes of grain in stocks as of July 1, 2011.
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.
SOFTS-ICE sugar steady near 20-month low, coffee flat
LONDON, May 17 (Reuters) - ICE sugar inched higher, and arabica coffee and cocoa futures were little changed early , weighed by soft financial markets linked to the deepening crisis in the euro zone. U.S. commodity company Cargill Inc said on Wednesday it has not changed its trading strategy despite its recent absence in the delivery of the sweetener to the raw sugar market, a process it dominated over more than a decade.
Mali sees higher cotton output despite instability
BAMAKO, May 16 (Reuters) - Mali confirmed on Wednesday its forecast for a strong rise in local cotton production for the 2012/2013 season despite unrest that included a March 22 military coup and a rebellion that has since gained control of the northern part of the country.
"The forecast is for 500,000 tonnes against 445,143 tonnes (for 2011/2012)," Ousmane Cisse, head of statistics for the CMDT cotton company told Reuters, adding that favourable rainfall plus steady local farmgate cotton prices would buoy output.
Russia sugar sowing goes well despite drought-lobby
MOSCOW, May 16 (Reuters) - Sugar beet sowings in most Russian planting areas were proceeding well, despite a drought in the country's Southern regions, the chairman of the industry lobby group and a sugar market analyst said on Wednesday.
Russia, formerly the third-largest sugar importer, produced a record 5.05 million tonnes of sugar last year. But this spring a drought in parts of Russia's southern sugar regions has raised concerns about the condition of the forthcoming crop.
Datagro sees cuts in Brazil CS sugar output, exports
NEW YORK, May 16 (Reuters) - The lingering impact of drought and weaker yields will cut sugar output and exports from top producer Brazil's new 2012/13 center-south cane crop, analysts Datagro said on Wednesday in their second update on the harvest.
Datagro President Plinio Nastari told the annual International Sugar Organization/Datagro sugar conference in New York that Brazil's center-south sugar production would hit 32.71 million tonnes in 2012/13, down 3.45 percent from a March forecast of 33.88 million tonnes.
Cameroon cocoa exports down 11 pct by end-April
YAOUNDE, May 16 (Reuters) - Cameroon's cocoa exports hit 167,944 tonnes by the end of April since the season began in August, putting them nearly 11 percent below the 188,163 tonnes shipped during the period a year ago, according to data from the National Cocoa and Coffee Board released on Wednesday.
Cocoa exports from the central African state, the world's fifth largest grower of cocoa, totalled 4,492 tonnes in April, roughly double the 2,282 tonnes exported during the same month last year, the NCCB figures showed.
Uganda sees May coffee exports falling 29 pct yr/yr
KAMPALA, May 16 (Reuters) - Uganda's coffee exports in May are projected to fall 29 percent compared to the same month a year ago, depressed by slow bean drying and transportation due to heavy rains, a state agency said on Wednesday.
Uganda was likely to export 180,000 60-KG bags of coffee in May, down from 253,270 bags in the same month last year, the state-run Uganda Coffee Development Authority (UCDA) said in a statement.
India set to ease new curbs on sugar mill exports
NEW DELHI, May 16 (Reuters) - India will allow sugar mills to apply for exports of up to 25,000 tonnes in one application, government sources said on Wednesday, easing a directive a day earlier that prohibited mills from seeking approval for more than 10,000 tonnes.
Ministers had agreed to lift all 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. It asked millers only to disclose the quantities they sold overseas.
Syria sugar refineries paralysed, smuggling seen soaring
LONDON, May 16 (Reuters) - Escalating violence in Syria has slowed sugar refining to a virtual standstill, with smuggling set to rise as Western sanctions hobble trade finance and disrupt imports of the staple sweetener, trade sources said.
The European Union, the United States and other Western countries have imposed sanctions on President Bashar al-Assad's government in response to the bloody crackdown on a revolt that has cost more than 9,000 lives.
Oil Near Six-Month Low on Economy; Brent Premium Narrows (Source: Bloomberg)
Oil traded near the lowest price in six months after a U.S. manufacturing gauge trailed estimates and Moody’s Investors Service downgraded 16 Spanish banks. Brent crude’s premium to West Texas Intermediate narrowed. Futures were little changed in New York, heading for the third weekly decline. Manufacturing in the Philadelphia region unexpectedly shrank in May, a report showed yesterday. Debt ratings at nine Spanish lenders were cut three notches and seven were kept on review for further reductions, Moody’s said. London-traded Brent’s premium to New York crude narrowed to the lowest since May 3 as Enbridge Inc. (ENB) and Enterprise Products Partners LP (EPD) prepared to reverse flows on the Seaway pipeline. Crude for June delivery was at $92.57 a barrel, up 1 cent, in electronic trading on the New York Mercantile Exchange at 9:34 a.m. Sydney time. The contract yesterday fell 25 cents to $92.56, the lowest close since Nov. 2. Prices are 3.7 percent lower this week and down 6.3 percent this year.
Brent oil for July settlement slid $2.26, or 2.1 percent, to $107.49 a barrel on the London-based ICE Futures Europe exchange yesterday. The front-month price for the European benchmark contract closed at a premium to West Texas Intermediate of $14.55.
OIL-Brent crude steady ahead of Seaway pipeline reversal
SINGAPORE, May 17 (Reuters) - Brent crude held steady above $109, supported by a rebound in U.S. oil prices on hopes that a reversal in oil flow for the Seaway pipeline will reduce a supply glut in the U.S. Midwest.
"The Seaway pipeline reversal starts today and this could support WTI," said Yusuke Seta, a commodity sales manager at Newedge Japan.
Pakistan cuts oil product requirements for May-July
SINGAPORE, May 17 (Reuters) - Pakistan State Oil has cut its total oil product requirements for May to July by 20 percent, after dropping plans to buy a jet fuel cargo and three low sulphur fuel oil cargoes, industry sources said on Thursday.
The company was seeking 1.17 million tonnes of oil products, including 910,000 tonnes of fuel oil, 210,000 tonnes of gasoline and 50,000 tonnes of jet fuel, for delivery over May to July through a tender.
US Senate to consider new Iran sanctions Thursday
WASHINGTON, May 16 (Reuters) - U.S. Senate Democratic leader Harry Reid will ask the chamber to approve a new package of oil and economic sanctions on Thursday aimed at further pressuring Iran to abandon its nuclear program, a Democratic leadership aide told Reuters.
The politically popular sanctions are focused on foreign banks that handle transactions for Iran's national oil and tanker companies, and include measures to close loopholes in existing sanctions.
Italy Iran oil imports edge up, Libya top supplier
MILAN, May 16 (Reuters) - Italy raised crude oil imports from Iran by about 6 percent in March from February ahead of the planned new sanctions against Tehran, while total crude import fell amid weak demand for refined oil products, according to oil industry body Unione Petrolifera (UP).
Italy, which relies on Iran to cover 10.4 percent of its crude oil import needs, raised oil purchases from the Islamic Republic to 425,200 tonnes in March from 401,600 tonnes in February, the UP data showed on Wednesday.
Japan Aluminum Buyers Said to Face Highest Premiums Since 1996 (Source: Bloomberg)
Aluminum buyers in Japan, Asia’s biggest importer, were asked to accept a 57 percent increase in fees starting in July, as supply decreased after smelters cut output and China boosted purchases. A producer offered to sell aluminum at $200 a metric ton over the London Metal Exchange cash price for the three months through September, an increase from the $127 surcharge this quarter, said three executives involved in the negotiations. They declined to be identified because the talks were private. Other producers have yet to make offers, they said. If agreed, the fee would be the highest since Japanese buyers began meeting the bulk of their needs through long-term contracts in 1996, surpassing the previous record of $125 to $130 for the first quarter of 2010.
Gold Rebounds as Slump to Year’s Low Prompts Purchases (Source: Bloomberg)
Gold jumped the most since October as a four-day slump and speculation that the Federal Reserve will announce more stimulus for the U.S. economy boosted demand for the precious metal. The metal tumbled 3.7 percent in the past four sessions as Greek politicians prepared for a second election, raising concern that the country may exit the euro bloc. The Philadelphia Fed’s general economic index, a gauge of regional manufacturing, fell to minus 5.8 in May, signaling contraction. Economists in a Bloomberg survey were expecting a rise to 10. “People are coming back to gold as prices have fallen very sharply,” Adam Klopfenstein, a market strategist at Archer Financial Services Inc. in Chicago, said in a telephone interview. “Murmurs about the Fed looking at some kind of easing because of soft U.S. data are gaining momentum, and that’s good for gold as any kind of easing is inflationary.”
Gold futures for June delivery rose 2.5 percent to $1,574.90 an ounce at 1:47 p.m. on the Comex in New York. That’s the biggest gain for a most-active contract since Oct. 25. Yesterday, prices retreated to $1,526.70, the lowest since Dec. 29.
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