Wednesday, May 23, 2012

20120523 1040 Global Commodities Related News.

Market Recap: Wheat Futures (Source: CME)
Nearby wheat futures in Chicago, Kansas City and Minneapolis ended with double-digit losses in all but some far-deferred contracts. Chicago wheat was the downside leader with losses of 12 3/4 to 18 1/2 in 2012 contracts. "After hours" trade was choppy with most contracts settling within pennies of the pit close. Futures enjoyed early gains thanks to continued deterioration in the quality of the winter wheat crop, but the market softened as the day progressed thanks to harvest pressure as well as better chances of rain for areas of the dry Former Soviet Union.

Wheat Market Recap Report (Source: CME)
July Wheat finished down 17 1/2 at 686 1/2, 15 3/4 off the high and 4 3/4 up from the low. December Wheat closed down 13 1/2 at 715 3/4. This was 2 3/4 up from the low and 14 3/4 off the high. The market sold off fairly sharply led by more active fund trader selling. Rumors of China canceling corn and soybean cargoes could not be confirmed by commercial traders but fund traders were aggressive sellers in many commodity markets on news of iron ore and coal cancellations. Improving weather also hit the other grains and this bleed over to the wheat market to pressure. July wheat took out yesterday's lows before a bounce and was trading near 16 cents lower near 1:30 cst. While the weekly crop update showed a sharp drop in Kansas crop ratings, traders believe that the current rally already priced-in the weather. Outside market forces plus the overbought technical condition of the market were seen as reasons for the selling. The US dollar is higher again today and there is some rain for the dry areas of Russia. The Kansas crop dropped to 43% good/excellent from 52% last week and this was seen as the largest one-week drop in 4 1/2 years. The crop rating is down 17 points in two weeks and down 26 points from 69% good to excellent since April 15th. The weekly Spring Wheat Planting report showed a record fast 99% of the crop is planted compared to 50% last year. The weekly Spring Wheat Conditions report showed 74% was rated good/excellent. Traders see continued moisture in spring wheat areas just ahead which should help keep crop growing conditions favorable. July Oats closed down 8 1/4 at 333 3/4. This was 1/2 up from the low and 10 1/4 off the high.

Market Recap: Corn Futures (Source: CME)
Corn closed 16 1/4 to 36 cents lower, with nearbys leading losses. Funds sold an estimated 25,000 contracts today. Futures trimmed losses in after-hours trade. Pressure was tied to negative outside markets and yesterday's crop condition ratings from USDA. The U.S. dollar index surged today after Fitch Ratings downgraded Japan's credit rating and hinted another could be on its way.

Corn Market Recap for 5/22/2012 (Source: CME)
July Corn finished down 31 3/4 at 601 1/4, 33 1/2 off the high and 6 1/4 up from the low. December Corn closed down 15 3/4 at 524 3/4. This was 4 3/4 up from the low and 20 1/2 off the high. July corn was trading down 31 cents on the session late in the day and the market has given back much of the gains of the past four trading sessions. Talk of improving weather for the Midwest for much of next week and an aggressive selling trend from fund traders in a wide range of other agricultural markets helped to pressure. Rumors of weaker basis at the gulf and reports that fund traders were sellers of near 25,000 contracts helped to encourage the selling. As of May 20th, a record 96% of the corn crop was planted and the crop was rated 77% good to excellent which was much higher than expected. Ideas that Midwest rain coverage might improve if the ridging pattern breaks down early next week helped to spark some fund trader selling. Other traders see the market as overbought after the six-day surge and this added to the selling pressure this morning after the hook reversal yesterday. Some traders see the weather outlook suggesting lower crop ratings ahead with too much heat and not enough rain for the southern half of the Corn Belt. July Rice finished down 0.185 at 15.245, equal to the high and equal to the low.

GRAINS-Wheat eases after 6-day rally, soy firm on weather
SINGAPORE, May 22 (Reuters) - U.S. wheat slid 1.2 percent on Tuesday, coming off an 8-1/2 month high hit in the previous session, as the market took a breather from a six-day rally sparked by crop-threatening dry weather in the United States and Russia.
"The rally has certainly priced wheat out of the feed rations, also the market will be looking for the extent of losses in the Black Sea region and Europe before another run," said Brett Cooper, a senior manager of markets at FCStone Australia.

Thailand aims to step up govt rice sales as exports slow
BANGKOK, May 22 (Reuters) - Thailand will step up efforts to sell rice in government-to-government deals over the rest of the year, senior Commerce Ministry officials said on Tuesday, after uncompetitive high prices caused shipments to drop sharply.  
"We are in talks with several foreign governments about rice sales and we expect to sell a significant amount of rice in the second half to boost exports to the target of 9 million tonnes," said Manat Soiploy, who oversees rice trade at the Commerce Ministry.

Egypt buys 1.1 mln tonnes of local wheat -official
ABU DHABI, May 22 (Reuters) - Egypt has bought 1.1 million tonnes of local wheat so far in the 2011/2012 season despite diesel shortages that have hampered harvesting, an official at the Ministry of Supply and Domestic Trade said late on Monday.
"The diesel shortages meant that farmers couldn't operate their machinery to harvest the crops properly, but the prices we are offering were very tempting for farmers so we managed to procure a good amount so far," Yehia Mahmoud, spokesperson for the ministry, said over the telephone.

Manila says seeks 100,000 T rice from Vietnam or Thailand
MANILA, May 22 (Reuters) - The Philippines' National Food Authority (NFA) said it would buy 100,000 tonnes of rice from either Vietnam or Thailand, and may open a tender later this year for 20,000 tonnes more to complete the country's import requirements.
The state grains procurement agency would seek offers on Tuesday from the world's two biggest rice exporters to ensure the shipment arrives before the start of the lean harvest season in July, NFA Administrator Angelito Banayo said.

Dry fields slash Kansas wheat ratings
CHICAGO, May 21 (Reuters) - Wheat in Kansas, the largest U.S. wheat producer, deteriorated this past week by the biggest ratings margin in 4-1/2 years as dry weather continued to grip the state, government data showed on Monday.
The U.S. Department of Agriculture rated 43 percent of the Kansas crop good to excellent as of Sunday, down 9 percentage points from the previous week and the steepest ratings decline since November 2007.

US corn, soy farmers plant in record time
CHICAGO, May 21 (Reuters) - U.S. farmers planted corn and soybeans in record time last week as they took advantage of the warm, dry weather throughout the U.S. Midwest, Monday's weekly  U.S. Agriculture Department planting data showed.
That progress puts farmers within striking distance of finishing all their planting tasks this week, particularly since dry weather is forecast to continue for much of the region. Showers are expected in northwestern areas of the Corn Belt.

Drought concerns lift Russia wheat prices
MOSCOW, May 21 (Reuters) - Russian wheat prices gained ground last week as concerns about the severity of a spring drought in key southern regions lifted global prices and as the weakening rouble boosted export profits in local currency terms, analysts said.
U.S wheat prices approached nine-month highs on Monday after dry weather stoked fears about losses in both the United States and Russia.

SOFTS-Robusta coffee off 8-1/2 month high, sugar dips
LONDON, May 22 (Reuters) - Robusta coffee futures on Liffe steadied on Monday after correcting below an 8-1/2 month high, while raw sugar and cocoa on ICE eased, under pressure from Europe's worsening debt crisis.
Boosting market regulation will be a priority for France when it negotiates the European common farm policy later this year, the country's newly appointed farm and agribusiness minister Stephane Le Foll said on Monday.

Ivorian cocoa arrivals seen at 1,126,000 T by May 20
ABIDJAN, May 21 (Reuters) - Cocoa arrivals at ports in top grower Ivory Coast reached around 1,126,000 tonnes by May 20, exporters estimated on Monday, compared with 1,103,169 tonnes in the same period of the previous season.
Exporters estimated around 16,000 tonnes of beans were delivered to the West African state's two ports between May 14 and May 20, down from 34,241 tonnes in the same week a year ago.

Ivorian rains, sun to improve cocoa volume, quality
May 21 (Reuters) - Abundant rains and sunshine that spread last week across most of Ivory Coast's main cocoa regions will ensure larger volumes of good quality beans in the coming weeks, farmers and analysts said on Monday.  
The mid-crop in the world's top cocoa producer is marketed from April to September, but harvesting is off to a slow start due to a five-month dry spell that carried into March.  

Italy 2012 wheat output seen up-ISMEA
MILAN, May 21 (Reuters) - Soft wheat output in Italy, a major grain importer in the European Union, is expected to jump 17.5 percent due to a considerable increase in planted areas, while maize output is seen flat on 2011, Italy's farm research centre ISMEA said on Monday.
Soft wheat plantings have risen 17 percent to 620,000 hectares (ha) and yields improved slightly, ISMEA said in a statement without providing an absolute figure for production.

Ukraine says Saudi Arabia to buy 4 mln T barley
KIEV, May 21 (Reuters) - Saudi Arabia is likely to buy 4 million tonnes of Ukrainian barley in the 2012/13 season, Ukraine's Farm Minister Mykola Prysyazhnyuk was quoted as saying on Monday.
"Representatives of Saudi agrarian sector are going to visit Ukraine at the beginning of June. A forward agreement on (buying) 4 million tonnes of barley is likely to be signed," the ministry quoted Prysyazhnyuk as saying.

India likely to take call on wheat exports this wk-source
NEW DELHI, May 21 (Reuters) - Indian ministers are likely to meet this week to decide whether to export wheat from bulging government stocks to countries such as Iran, a government source on Monday.
The ministers will also discuss the need to give incentives to exports due to lower global prices, the source said.

Rubber Seen Poised for Glut on Weaker Chinese Growth (Source: Bloomberg)
Supplies of rubber, used in tires and gloves, are set to exceed demand in the second half, reversing a shortage and pressuring global prices, as growth slows in Europe and China, the biggest consumer. Output may top consumption by 400,000 metric tons in the six months to December after a seasonal deficit of 150,000 tons in the first half, said Chris Pardey, chief executive officer of RCMA Commodities Asia, a Singapore-based trading company. A surplus will persist through 2014, said Prachaya Jumpasut, managing director of industry adviser The Rubber Economist. Futures have plunged 48 percent from a record in February 2011 as Europe struggled with its debt crisis and China expanded last quarter at its slowest pace in almost three years. Chinese vehicle sales dropped 1.3 percent in the first four months, the worst performance since 1998, according to industry data.
Price declines will threaten farmer incomes in Thailand, the biggest producer and exporter, and cut costs for tire makers such as Bridgestone Corp. (5108) and Michelin & Cie. “The market is still bearish because of Europe’s problems and as China’s economy slows,” said Kazunori Kokubo, managing director at Yutaka Shoji Singapore Pte., a commodities broker. The contract for October delivery gained 0.6 percent to 280.4 yen a kilogram ($3,517 a ton) on the Tokyo Commodity Exchange yesterday, the highest close in more than a week.

OIL-Brent rises above $109 ahead of EU summit, Iran talks
SINGAPORE, May 22 (Reuters) - Brent crude gained slightly above $109, as markets awaited the results of two meetings to tackle Europe's debt crisis and Iran's nuclear programme, which could affect global oil demand and supply.
"Prices just got to such a depressed point where there could be some speculative or technical buying," said Ben Le Brun, a Sydney-based markets analyst at OptionsXpress.

Less Iranian oil passing through the Suez Canal
DUBAI, May 22 (Reuters) - The number of Iranian crude vessels pasing through Egypt's Suez Canal has dropped this year as Western sanctions bite, an official from the Suez Canal Authority said on Tuesday.
"I can say there's been a 5-6 percent drop in Iranian crude ...since the first of January," Sayed Mariee, deputy director of planning, research and studies at Suez Canal Authority told Reuters on the sidelines of an industry event on Tuesday.

US Senate approves new Iran sanctions bill
WASHINGTON, May 21 (Reuters) - The U.S. Senate gave unanimous approval on Monday to a package of new economic sanctions on Iran's oil just days ahead of a meeting between major world powers and Tehran.
The West suspects Iran is working to build a nuclear bomb and the sanctions are meant to strip Tehran of revenue by shutting down financial deals with Iran's powerful state oil and tanker enterprises. Iran has said its nuclear program is for civilian purposes.

POLL-US crude stocks seen rising for 9th straight week
May 21 (Reuters) - U.S. commercial crude oil supplies were expected to have risen last week for a ninth straight week on higher imports, a preliminary Reuters poll showed on Monday.    
On average, domestic crude oil inventories were forecast up 1 million barrels in the week to May 18, according to the poll of seven analysts, with five out of seven projecting a build in inventories.

Oil Trades Near Two-Day Low on Iran Deal, Rising Supplies (Source: Bloomberg)
Oil declined for a second day in New York after Iran agreed to grant access to United Nations nuclear inspectors and U.S. crude stockpiles increased. Futures slid as much as 0.7 percent. UN atomic inspectors and Iran broke a five-year stalemate with a deal that gives the International Atomic Energy Agency access to the nation’s Parchin military complex, IAEA head Yukiya Amano said yesterday. Oil prices advanced in the first four months of this year on concern sanctions against Iran will disrupt supplies. U.S. crude inventories rose 1.5 million barrels last week, the American Petroleum Institute said. A government report today may show they gained 1.7 million barrels, a Bloomberg survey shows. “The agreement by Iran to let the inspectors in is a small step in potentially reducing the supply risk,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney. “That feeds into the overall situation where demand is steady to somewhat soft against a background of more than adequate supplies.”
Crude for July delivery declined as much as 60 cents to $91.25 a barrel in electronic trading on the New York Mercantile Exchange, and was at $91.27 at 10:55 a.m. Sydney time. The contract slid 1.1 percent to $91.85 yesterday, the lowest close since May 18. The June future, which expired, fell 91 cents to $91.66. Front-month prices are 7.6 percent lower this year. Brent oil for July settlement dropped 81 cents, or 0.8 percent, to $107.60 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to West Texas Intermediate was at $16.33, from $16.56 yesterday.

Mining Slump Feeds M&A as Projects Overrun Budgets: Commodities (Source: Bloomberg)
The world’s largest mining companies led by BHP Billiton Ltd. (BHP) are struggling with higher costs to complete $200 billion in new projects, prompting them to slow work and turn instead to acquisitions and asset sales. BHP and Rio Tinto Group (RIO), ranking first and third by sales, this month said they’ll ration capital spending because of escalating costs and a slower-than-expected global economy. “It’s been ‘build’ for quite some time, and now it’s pushing much more in favor of potentially ‘buy’ because there are bargains out there,” Michael Elliott, Sydney-based global mining and metals leader at Ernst & Young LLP, said by phone. Lower metals prices have made targets cheaper and spurred mining companies globally to announce $91 billion of deals in the year to date, up from $71.2 billion in the same period of 2011, according to data compiled by Bloomberg. First Quantum Minerals Ltd. (FM), African Minerals Ltd. (AMI) and Coal of Africa Ltd. are potential takeover candidates, Liberum Capital Ltd. said.

Two Parties Left in Race for LME as CME Said Removed (Source: Bloomberg)
IntercontinentalExchange Inc. (ICE) and Hong Kong Exchanges & Clearing Ltd. are the two companies left bidding for the London Metal Exchange, the world’s biggest metals market, after the CME Group Inc. (CME) was said to be removed. CME, the world’s biggest futures exchange, is no longer in the running to buy the LME, according to two people with direct knowledge of the matter, who declined to be identified because the information isn’t public. Two parties are still in the bidding process, according to an e-mailed statement from the bourse today, which didn’t name any companies. Discussions with the two remaining bidders will “involve obtaining a detailed understanding of their plans for the future governance and operation of the market and the deliver-ability of their respective proposals, as well as the value offered,” the LME said in the statement. The process will continue over the coming weeks, the bourse said.
The LME, which traded $15.4 trillion of industrial metals contracts last year, received multiple proposals by the May 7 deadline for a takeover, the bourse said May 8. CME Group, NYSE Euronext, ICE and Hong Kong Exchanges made offers for the exchange, said seven people who declined to be identified. NYSE Euronext, the biggest U.S. exchange owner, said last week it was removed from the list of bidders.

Fonterra expects dairy demand to keep growing
WELLINGTON, May 22 (Reuters) - New Zealand's Fonterra, the world's largest dairy exporter, said an 8 percent cut in its forecast payout for the next season is the best it could offer in the current market, but it was confident demand in the vital developing markets will keep growing.
The co-operative, which is New Zealand's biggest company, on Tuesday cut its forecast payout for the coming season because global prices have fallen sharply on oversupply.

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