Grain-Pit Traders Squeezed Out as CME Expands to Match ICE Hours (Source: Bloomberg)
CME Group Inc. (CME), the world’s largest futures exchange, extends grain-trading hours today in response to the threat of competitors seeking a share of the electronic transactions that now dominate the market. Access to the CME’s Chicago Board of Trade, which first offered corn futures in 1877, is rising to 21 hours a day from 17, a week after the 12-year-old IntercontinentalExchange Inc. (ICE), or ICE, introduced a 22-hour session and its first-ever grain contracts. The Kansas City Board of Trade and Minneapolis Grain Exchange also start expanded hours today. While CBOT corn, wheat and soybean trading rose more than 15 percent to 182.8 million contracts last year, 93 percent of the volume was electronic rather than through open outcry in its Chicago trading pits, exchange data show. That compares with 63 percent in 2007. ICE had sought to lure speculators by allowing transactions to continue when market-moving U.S. government crop reports are issued and CBOT markets were closed.
“The electronic platform is a big, giant liquidity pool that is sometimes an inch deep and other times a mile deep,” said Douglas Carper, the principal of Omaha, Nebraska-based DEC Capital Inc., a commodity trading adviser and hedge-fund consultant. “Grains will become more or less an institutional and professional market, just like it is already in stocks, foreign exchange and global bond markets.”
Market Recap: Wheat Futures (Source: Bloomberg)
Wheat futures surged today, finishing 26 to 37 cents higher in Chicago, 29 to 33 cents higher in Kansas City and mostly 19 to 24 cents higher in Minneapolis. For the week, Chicago and Kansas City futures rallied around $1, while Minneapolis futures posted slightly lesser gains. Bulls have the strong upper hand heading into next week. But the challenge will be build on upside momentum, especially with scattered rains in the forecast for areas of the Southern Plains during the weekend and early next week.
Wheat Market Recap Report (Source: Bloomberg)
July Wheat finished up 37 1/2 at 695 1/4, 2 1/4 off the high and 42 3/4 up from the low. December Wheat closed up 31 1/4 at 720. This was 36 1/2 up from the low and 5 1/4 off the high. July wheat capped off a strong up week with a surge higher on the day. European milling wheat futures surged more than 5% to see 11-month highs. The late call was just 3-5 cents higher so the market found strong buying again early in the session today to drive the market sharply higher on the day into the mid-session pushing to the highest level since February 3rd. The market was up as much as $1.05 1/4 from Monday's lows. Weather concerns for western plains in the US and portions of Ukraine and Russia for next week helped spark the buying and short-covering has emerged again to help support. Outside market forces were somewhat positive with a little more stability in the US equity market and a strong gain in gold and corn helping to provide some support. July Oats closed up 1 1/2 at 340. This was 5 up from the low and 1 off the high.
Market Recap: Corn Futures (Source: Bloomberg)
Corn futures ended firmer today to post sharp gains for the week. July corn ended 54 1/2 cents higher than last week's close, with December corn up 31 3/4 cents. Key for corn futures to build on this week's gains is how outside markets and the cash market performs. Gulf basis surged this week on additional Chinese purchases to reflect the tight supply situation. But if the dollar continues its move higher, traders would be less concerned about rationing remaining old-crop supplies as they would anticipate a slowdown in exports.
Corn Market Recap for 5/18/2012 (Source: Bloomberg)
July Corn finished up 10 1/2 at 635 1/2, 3 off the high and 16 up from the low. December Corn closed up 8 3/4 at 537. This was 15 up from the low and 5 1/2 off the high. December corn took over as the leader for the first time in a long time as a less than perfect weather outlook and some second-guessing on using a record yield helped to support. July corn opened 6 cents higher on the session but found strength from wheat and strong cash markets to drive sharply higher and pushed to the highest level since April 10th. A continued firm cash market and some continued uncertainty over a generally warmer and drier outlook for portions of the Midwest helped to support. In addition, a more positive tilt to outside market forces with a jump in wheat and gold prices and a firm tone to the US equity markets helped to support. After closing at 581 last week, July corn closed sharply higher on the week. July Rice finished down 0.09 at 15.175, 0.005 off the high and equal to the low.
GRAINS-US wheat off 6-week top, heads for best week since July
SYDNEY, May 18 (Reuters) - U.S. wheat fell 0.7 percent as the market took a breather after climbing to a six-week high in the previous session on fears that dry conditions in the United States and Russia could curb global supply.
"The macroeconomic picture remains bleak, the Australian dollar is down significantly, crude oil is down, and the U.S. dollar if firmer, all of these are weighing on grains," he said.
Italy wheat, maize imports fell in Jan-Feb - Anacer
MILAN, May 18 (Reuters) - Imports of wheat and maize into Italy, a major grain buyer in Europe, fell sharply in the first two months of this year compared to the same period of 2011 when they jumped, Italian cereals body Anacer said on Friday.
Imports of soft wheat rose 17 percent to 689,270 tonnes in the January-February period of 2012 while maize imports dropped 29 percent to 387,632 tonnes and imports of durum wheat used for making pasta fell to 196,165 tonnes from 366,024 tonnes, Anacer said in a statement.
India considering wheat exports to Iran - govt source
NEW DELHI, May 18 (Reuters) - India plans to export wheat to Iran, a government source said on Friday, as New Delhi, which has huge stockpiles of grains, hopes to boost exports to the sanctions-hit nation to help settle a part of its oil imports bill through a bilateral mechanism.
"That is under consideration," a government source told reporters on Friday, when asked whether the government would export the grain to Iran.
Farmers plant guar early, spurred by high prices
MUMBAI, May 18 (Reuters) - Farmers in India are planting guar seed at least a month ahead of normal as they hope to take advantage of high prices, raising expectations supply shortages will ease earlier than previously forecast, traders and farmers said.
State government officials of Rajasthan, Haryana and Punjab -- major guar growing areas -- confirmed farmers were sowing now instead of waiting for the start of monsoon rains in June, which increase soil moisture, but declined to give further details.
Argentina farm lobby blitz halts provincial tax hike
BUENOS AIRES, May 17 (Reuters) - A last-minute lobbying blitz by farmers in Argentina's top grains-producing province stopped lawmakers from approving a tax increase that some growers said would force them to sell their fields.
Buenos Aires provincial lawmakers loyal to presidential hopeful Gov. Daniel Scioli failed to assemble a quorum in the Chamber of Deputies on Thursday after two days of demonstrations and legislative arm-twisting by farmers in provincial capital La Plata.
Russia could cut grain crop forecast -source
MOSCOW, May 17 (Reuters) - Russia may cut its 2012/13 grain crop forecast in May from the current 94 million tonnes due to spring drought, a government source told Reuters on Thursday.
"It is clear now that the forecast should be decreased, but it is too early to do it now. We need to wait for a week and a half," the source said, adding that weather conditions will determine the extent of the losses in the coming weeks.
Heat, wind sap wheat crop's potential in key grower Kansas
May 17 (Reuters) - The promise of a bumper U.S. hard red winter wheat crop is eroding by the hour as scorching temperatures and high winds in key growing areas of the U.S. Plains sap soils of needed moisture, wheat experts said on Thursday.
In Kansas, the nation's top producer of the favored bread-making hard red winter wheat, harvest is slated to begin next week, about three weeks earlier than is typical.
Russia may export up to 26 mln T of grain in 2011/12-RIA
MOSCOW, May 17 (Reuters) - Russia may export up to one million tonnes of grain by July in addition to 25 million tonnes already exported in 2011/12 season, Russian state news agency RIA Novosti quoted Deputy Agriculture Minister Ilya Shestakov as saying on Thursday.
"I think from 800,000 to one million tonnes could be exported in the next one month and a half. But, of course, everything will depend on global prices," Shestakov told RIA Novosti in Tel Aviv.
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.
Dry weather threatens Australia wheat output -farmers
SYDNEY, May 17 (Reuters) - Dry weather in grain belts on both sides of Australia, one of the world's biggest wheat exporters, is delaying planting and threatening to hurt crop yields of the grain in 2012/13, representatives of farming groups said on Thursday.
Farmers are growing increasingly concerned volumes will be affected, although analysts say it is too early to say if the country's forecast 24-million-tonne crop this year will be significantly hit.
SOFTS-ICE sugar, coffee dip, euro zone crisis weighs
LONDON, May 18 (Reuters) - ICE sugar and arabica coffee eased, as the worsening euro zone debt crisis and a stronger dollar weighed on the commodity complex.
Cocoa was steady, with market fundamentals overshadowed by the gloomy macroeconomic outlook.
Arabica coffee futures on ICE edged lower, as commodities were swept up in the weakness across capital markets.
London July robusta coffee was near unchanged, trading up $2 at $2,189 per tonne, below the previous session's eight-month high of $2,220.
Vietnam April coffee exports drop, local prices jump
HANOI, May 18 (Reuters) - Vietnam's actual coffee export loading in April dropped 19 percent from the previous month to 168,200 tonnes, or 2.8 million 60-kg bags, the Vietnam Customs said on Friday, while domestic prices rose to their highest in almost seven months.
Coffee exports in the first four months of 2012 eased 0.5 percent year-on-year to 699,600 tonnes, the Finance Ministry-run customs department said in its monthly report.
Mix of rain, drought threaten Brazil's sugar cane
BRASILIA, May 17 (Reuters) - Excess rain is slowing the progress of Brazil's cane harvest and could threaten output if the winter turns out wetter this year as expected, forecaster Somar said this week, while the opposite problem of drought is now afflicting the country's northeast.
The world's top sugar producer is struggling to raise output after a combination of bad weather and aging cane plants caused the harvest to shrink last year for the first time in at least a decade, after years of steady expansion.
Cameroon robusta coffee exports nosedive
YAOUNDE, May 17 (Reuters) - Cameroon robusta coffee exports hit 7,433 tonnes by the end of April since the season started in December, marking a nearly 60 percent decline from the 18,042 tonnes exported during the same period a year ago, according to official figures.
The National Cocoa and Coffee Board, which released the figures late on Wednesday, said the decline in exports may be due to farmers stockpiling coffee beans in hopes prices will rise later in the season.
El Nino could cut global 2012/13 cocoa output - ICCO
LONDON, May 17 (Reuters) - Possible El Nino weather conditions later this year could exacerbate a potential global cocoa deficit in the coming 2012/13 season, causing prices to climb, the International Cocoa Organization (ICCO) said.
"We know that when we have El Nino conditions it's likely that this will impact negatively on world cocoa production. We would have less production and this would have an impact on price," ICCO statistician Laurent Pipitone told Reuters.
OIL-Brent hits 2012 low on Europe turmoil, weak US data
SINGAPORE, May 18 (Reuters) - Brent crude slipped below $107 per barrel to its lowest in 2012 as a worsening euro zone crisis and weak U.S. economic data raised fears of a global slowdown that could dent oil demand.
"We've got a bit of a perfect storm at the moment," Michael McCarthy, a markets strategist at CMC Global Markets in Sydney said, pointing to the worsening euro zone crisis, lower demand as industrial output slows and bloated crude inventories in the United States.
Qatar says its condensate output to beat crude 'very soon'
SEOUL, May 18 (Reuters) - Gas-rich Qatar expects its condensate production to exceed its crude output 'very soon', even while it produces its maximum OPEC quota of oil, the Gulf Arab country's energy minister said on Friday.
Qatar, one of the OPEC's smallest producers, is producing a about 1.45 to 1.5 million barrels per day (bpd) of crude oil and condensate together on average, Qatari energy minister Mohammed al-Sada told reporters in Seoul.
Vietnam Jan-April crude exports -16.4 pct y/y - customs
HANOI, May 18 (Reuters) - Vietnam's crude oil exports in the first four months fell 16.4 percent from a year ago to 2.37 million tonnes (144,700 barrels per day), versus the government's initial estimate of 2.42 million tonnes, Vietnam Customs said on Friday.
The country imported 2.99 million tonnes of oil products, down 27.8 percent from the same period last year, the Finance Ministry's customs department said in monthly reports.
Oil Gains First Day in Seven; Goldman Sees Tighter Market (Source: Bloomberg)
Oil rose for the first time in seven days after Goldman Sachs Group Inc. said the balance between supply and demand of crude is tightening and China’s government pledged to boost the nation’s economy. Futures gained as much as 0.6 percent after falling to the lowest close in almost seven months on May 18. The extent of oil’s decline was unwarranted, Goldman said in a report e-mailed today. China, the world’s second-biggest crude user, will focus more on bolstering economic growth, the official Xinhua News Agency reported yesterday, citing Premier Wen Jiabao. Prices slid earlier after Saudi Arabia’s output in March climbed to the second-highest level in at least 31 years before a European Union embargo on Iran that starts in July.
“With Saudi ramping up production to meet the need for oil once sanctions against Iran come into full effect, the oil market was pushed into surplus this year,” David Greely, head of energy research at Goldman Sachs in New York, said in the report. “However, as Iranian supplies are increasingly shut out from the market as the sanctions take effect, that surplus is disappearing.” Crude for June delivery rose as much as 56 cents to $92.04 a barrel in electronic trading on the New York Mercantile Exchange and was at $91.93 at 12:04 p.m. Sydney time. It fell 1.2 percent on May 18 to $91.48, the lowest close since Oct. 26. The more-actively traded July contract climbed 43 cents to $92.23 today. Front-month prices are 7 percent lower this year.
Crude Rises First Day in Seven; Goldman Says Decline Unwarranted (Source: Bloomberg)
Oil for June delivery rose as much as 49 cents, or 0.5 percent, to $91.97 a barrel in electronic trading on the New York Mercantile Exchange, and was at $91.93 at 11:36 a.m. Sydney time. Prices have fallen the past six days and are down 12 percent this month. The extent of the sell-off was unwarranted as the balance between supply and demand is tightening, Goldman Sachs Group Inc. said in a report e-mailed today.
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