DTN Closing Grain Comments 06/26 15:10 : Corn Prices Still Revealing Bullish Weather Concerns (Source: CME)
Bullish weather concerns for pollinating corn continued to motivate traders Tuesday, but the corn market avoided a second straight limit-up day. Other grain markets either slumped or posted relatively minor gains. Outside markets were mixed, the U.S. dollar index was weaker and the Dow Jones Industrial Average was higher.
CropCAST Agricultural Weather Outlook : Major Driver - El Nino/Southern Oscillation (ENSO) (Source: CME)
Corn and soybean planting began very early this year and progressed at a near record pace thanks to record warmth across the central U.S.
Corn and soybean planting progressed well ahead of the 5 year average and much faster than last year’s pace, when heavy spring rains and melting snow cover slowed planting in the northern Plains and Ohio Valley.
CropCAST expects planted acreage for corn to increase from USDA’s March report, but soybean acreage to be near or slightly below USDA’s March estimate.
Pro Farmer: After the Bell Wheat Recap (Source: CME)
Chicago and Kansas City wheat futures saw a choppy day of trade, but ended with slight to moderate gains. Minneapolis enjoyed double-digit gains most of the day, with the exception being the front-month contract, which ended 27 cents lower amid liquidation. Wheat largely followed corn today, with late-session strength in the corn market pulling wheat higher.
Wheat Market Recap Report (Source: CME)
September Wheat finished up 6 at 747, 8 1/4 off the high and 21 1/2 up from the low. December Wheat closed up 7 at 766 1/4. This was 21 3/4 up from the low and 6 1/2 off the high. September Chicago wheat traded higher into the close. Short covering in wheat was noted, following the gap higher open in corn this morning. Wheat futures traded lower to start the session on profit taking and news that India sold 200,000 tonnes of new crop wheat to the Middle East and rains were forecasted for drier areas of the Black Sea this week. Statistics Canada will release all wheat planting intentions tomorrow. Traders believe Canadian wheat planted acreage will decline. Friday's USDA Planting intentions are expected to show an increase in U.S. spring wheat plantings from the March estimate. September Chicago wheat made new highs for the move and pushed to the highest level since September and closed positive on the day on follow through support from the corn market. The market is now up 6 of the past 7 sessions. September Oats closed up 5 1/4 at 329 1/4. This was 4 1/4 up from the low and 17 1/4 off the high.
Pro Farmer: After the Bell Corn Recap (Source: CME)
Corn futures rallied into the close to finish near their highs. July corn closed 15 cents higher, while the September through July 2013 contracts ended with gains of 15 1/2 to 30 cents. Traders were again focused on building weather premium today as the 6-10 day forecast calls for heat to build in the Corn Belt with limited precip chances
Corn Market Recap for 6/26/2012 (Source: CME)
September Corn finished up 28 at 619 1/4, 3/4 off the high and 26 1/2 up from the low. December Corn closed up 29 1/4 at 623 1/4. This was 27 up from the low and 1 1/2 off the high. The corn market was trading sharply higher heading into the closing bell with December up 30 cents on the day. Corn bulls took profits midday on a slightly wetter 1 to 5 day weather forecast for parts of the Corn Belt but buyers reentered the market soon there-after. The afternoon 1-5 day update shows wetter conditions in northern Illinois, northern Indiana, and Wisconsin. The updated weather model also shows drier conditions for northeastern Missouri, central Illinois, and eastern South Dakota. Temperatures will reach triple digits in Central Illinois, Thursday and a warmer trend is expected for the central Midwest to finish out the week. December corn posted a new 9 month high for the move as market participants reduce new crop yield estimates ahead of the Grain Stocks and Planting Intentions report this Friday. September Rice finished up 0.09 at 15.03, 0.12 off the high and equal to the low.
Heat Wave Wilts Corn as Supplies Diminish Most Since 1996 (Source: Bloomberg)
Corn supplies in the U.S., the world’s biggest exporter, are declining at the fastest pace since 1996 just as a Midwest heat wave damages the world’s largest harvest for a third consecutive year. Stockpiles were probably 3.168 billion bushels (80.47 million metric tons) on June 1, 47 percent less than on March 1, the average of 22 analyst estimates compiled by Bloomberg shows. The worst Midwest drought in more than a decade is wilting a harvest that the U.S. Department of Agriculture says will be the biggest ever. The agency updates its inventory estimate June 29 and its production forecast two weeks later. Futures surged 23 percent since reaching a 20-month low June 15, and Morgan Stanley expects prices to advance another 12 percent to $7 a bushel in two months if the drought persists. The rally is boosting global food costs that the United Nations estimates dropped 14 percent from a record in February 2011 and widening losses for ethanol producers including Decatur, Illinois-based Archer Daniels Midland Co. “We have a potential disaster developing for the U.S. corn supply,” said Peter Meyer, the senior director for agricultural commodities at PIRA Energy Group in New York who cut his corn- crop forecast after surveying fields in Illinois, Indiana and Ohio last week. “This year may be the worst yet.”
COLUMN-Corn options outpace futures on crop fears
--Gavin Maguire is a Reuters market analyst. The views expressed are his own--
CHICAGO, June 26 (Reuters) - Traditionally, the Holy Grail for a grain trader was a limit move in your favor of the markets that you trade. And corn futures' limit-up surge on Monday on the back of hot and dry weather forecasts just as the crop enters its most rain-dependant development phase was certainly music to corn bulls' ears.
But the roughly 7 percent gains seen in corn futures prices Monday pale in comparison to the gains posted in the options arena, where $7 December corn calls surged by more than 100 percent in value to highlight how the options arena may offer outsized return potential should corn traders remain skittish about weather threats to the emerging crop.
Corn at 7-mth top on crop damage; wheat, soybeans fall
SYDNEY, June 26 (Reuters) - U.S. new-crop corn rose more than 2 percent to the highest since early November after corn quality deteriorated more than analysts expected, while wheat fell after touching a near nine-month high as traders locked in profits.
"We are seeing some profit-taking across wheat and soybeans after some very strong gains in the last few sessions," said Victor Thianpiriya, an agricultural commodity analyst at ANZ.
U.S. crops bake, raising fears of smaller yields
CHICAGO, June 25 (Reuters) - U.S. corn and soybeans are baking as a scorching dome of heat covers the center of the country, with little relief in sight until the weekend at the earliest, agricultural meteorologists said on Monday.
Updated forecasts at midday indicated good rains could move through the eastern Midwest by the weekend or early next week -- a big change from early morning outlooks that were bone dry through the next week to 10 says.
Spain drought hits EU's wheat, barley yield outlooks
BRUSSELS, June 25 (Reuters) - Persistent drought conditions in Spain led the European Commission's crop-monitoring unit to cut its forecast for the average yield of this year's EU soft wheat and barley crops.
The overall yield for the EU's main soft wheat crop was put at 5.60 tonnes per hectare for 2012, down slightly from 5.62 tonnes in the previous May forecast and 0.2 percent higher than in 2011.
Indonesians find campaign to curb rice hard to digest
JAKARTA, June 26 (Reuters) - After a hard morning's toil, most Indonesians like to refuel with a lunch that includes a generous helping of rice. But if it is a Tuesday, they will be out of luck at stalls in a suburb of Jakarta after the local mayor took the novel step of declaring it a "no rice day".
The move, part of a wider push to cut consumption as a step towards self-sufficiency in rice, has not gone down well with street vendor Toni, who said his customers have little appetite for alternatives to the staple grain.
Russia's Siberia rains ease, yields down in south
MOSCOW, June 26 (Reuters) - Rain is expected in Russia's southern agricultural regions in the coming days, although a dry spell persists in some regions of Siberia, where the harvest will start later, the state weather forecaster and an analyst said on Tuesday.
Logistical constraints mean little of Siberia's wheat is exported, so a drought there is unlikely to have a major effect on export volumes, unlike the spring drought in the southern breadbasket, where the winter wheat harvest is under way and rain is expected to help spring crops.
China's Wen signs accords, eyes Argentina's corn
BUENOS AIRES, June 25 (Reuters) - Chinese Premier Wen Jiabao said China is interested in buying more corn from Argentina, the world's second-biggest supplier after the United States, a senior Argentine Agriculture Ministry official told Reuters on Monday.
Argentina signed a deal with China on corn exports earlier this year, raising market expectations that Argentine corn would soon start heading to the world's most populous country.
Sugar, coffee firm, buoyed by weak dollar
LONDON, June 26 (Reuters) - Arabica coffee, raw sugar and cocoa futures on ICE edged up, supported by a weaker dollar and firmer financial markets, with sugar buoyed by delays in shipments in top producer Brazil. Arabica coffee futures extended gains after Monday's rise of nearly 2 percent, supported by concern that the Brazilian rains may have caused damage to the current crop's quality.
Cheaper coffee helps Egberts take on Kraft
LONDON/AMSTERDAM, June 26 (Reuters) - Cheaper arabica beans and ambitious goals have given Dutch group D.E. Master Blenders 1753 , maker of Douwe Egberts, a lift as it tries to overtake rival Kraft to become the second largest player in the coffee world.
It has the freedom and war chest to take on Kraft and emulate world No 1 Nestle as it invests in its one-cup Senseo system, looks to expand outside Western Europe and perk up instant coffee output.
Vietnam June coffee exports surge to 3.17 mln bags
HANOI, June 26 (Reuters) - Vietnam's coffee exports in June are set to surge to 190,000 tonnes, or 3.17 million bags, from 67,300 tonnes in June last year, well above market expectations, the Agriculture Ministry said on Tuesday.
The estimated volume, compared with 204,000 tonnes exported in May, would bring coffee shipments in the first half of 2012 to 1.09 million tonnes, or 18.17 million 60-kg bags, up 26.5 percent from the same period last year, the ministry said in its monthly report.
Thai rubber intervention plan lags, China sales eyed
BANGKOK, June 26 (Reuters) - Thailand has bought only a fraction of the 200,000 tonnes of rubber sheet it planned to purchase under a government intervention scheme and is now looking for sales to China to help prop up prices, the deputy agriculture minister said.
The government had approved a 15 billion baht ($471 million) budget in January to buy rubber from farmers in a bid to push up unsmoked rubber sheet (USS3) prices to above 120 baht per kg. But prices have continued to fall with the current 88 baht per kg even lower than January's 115 baht.
Cameroon robusta coffee exports plunge 46 pct in May
YAOUNDE, June 25 (Reuters) - Cameroon robusta coffee exports hit 11,755 tonnes by the end of May since the season started in December, falling 46.26 percent from the 21,872 tonnes exported during the same period a year ago, figures National Cocoa and Coffee Board showed on Monday.
The national regulator NCCB as well as industry body Cocoa and Coffee Interprofessional Board blamed the drop in exports on farmers stockpiling produce because of a fall in prices on the world market.
Rain helps cocoa in west Ivory Coast, hurts in east
ABIDJAN, June 25 (Reuters) - Abundant rains last week in Ivory Coast benefited cocoa crops in western regions in the last stage of the mid crop but triggered concerns in eastern regions about black pod disease, farmers and analysts said on Monday.
A five-month drought from November to March has lowered output expectations for the world's top cocoa producer's April-to-September mid-crop harvest. But abundant rains have returned in recent months.
Brazil rains to increase sugar output -Datagro
LONDON, June 25 (Reuters) - Wet weather in centre-south Brazil this month will boost sugar production in 2012/13 and mean that the harvest will go on longer than initially expected, a leading sugar analyst said on Monday.
The rain has delayed harvesting and led to a big lineup of vessels at Brazilian sugar ports, underpinning raw sugar futures prices on ICE, which are trading at below two-month highs.
Oil Trades Near Two-Day High on Economic Reports, Iran (Source: Bloomberg)
Oil traded near the highest level in two days in New York before reports that may show the U.S. economy improving and as Iran signaled that crude exports will fall as much as 30 percent starting next week. Futures were little changed after advancing as much as 0.3 percent. Iran’s exports will “gradually” decline because of maintenance on oil fields and reservoirs just as a European Union embargo begins, Deputy Oil Minister Ahmad Ghalebani said in Moscow yesterday. Brent crude traded near a one-week high in London. U.S. durable goods orders and pending homes sales probably rose in May, according to Bloomberg News surveys before data today. Oil for August delivery was at $79.34 a barrel, down 2 cents, in electronic trading on the New York Mercantile Exchange at 10:24 a.m. Sydney time. The contract yesterday rose 15 cents, or 0.2 percent, to $79.36, the highest close since June 22. Prices have fallen 23 percent this quarter, the biggest drop since the final three months of 2008.
Brent oil for August settlement slid 21 cents to $92.81 a barrel on the London-based ICE Futures Europe exchange, after surging 2.2 percent yesterday. The European benchmark’s premium to West Texas Intermediate was at $13.47, from $13.66 yesterday. Ghalebani said that “maybe, yes” Iran’s field maintenance was timed to coincide with the EU sanctions. The ban on oil imports from the second biggest exporter in the Organization of Petroleum Exporting Countries starts on July 1 as part of Western pressure to halt the Persian Gulf nation’s nuclear program.
Oil forecasters play snakes and ladders
--John Kemp is a Reuters market analyst. The views expressed are his own.--
LONDON, June 25 (Reuters) - With just a few days to go, researchers from Barclays and Deutsche Bank have emerged as the most accurate oil price forecasters in the first half of 2012, seizing the crown from 2011 champions Goldman Sachs, based on Brent prices since the start of January.
Back in December, Barclays and Deutsche were among the most bullish forecasters, predicting front-month Brent futures prices would average $115 per barrel in 2012, up from $111, and well above the mean forecast of $105.
Oil- Oil rises towards $92 ahead of EU meeting
LONDON, June 26 (Reuters) - Oil climbed towards $92 per barrel as the prospect of a decline in U.S. crude stockpiles offset concern that a meeting of European leaders would fail to resolve the region's debt crisis.
"Markets appear to be in risk-off mode, pricing in for disappointment ahead of the EU summit," ANZ analysts led by Mark Pervan said in a note.
"We think any progress could result in a commodity market rally, particularly in oil prices."
POLL-US crude stocks seen down on lower imports
June 25 (Reuters) - U.S. crude oil stockpiles were forecast to have fallen last week due to a drop in imports, a preliminary Reuters poll showed on Monday.
Averaging the estimates from five analysts, crude inventories were forecast to have fallen by 700,000 barrels in the week to June 22, the survey showed.
Gulf of Mexico energy ops resume after storm misses
HOUSTON, June 25 (Reuters) - Some of the Gulf of Mexico's biggest oil and gas producers began to restart production and restaff evacuated platforms on Mo nday as Tropical Storm Debby slowly headed for the Florida panhandle, away from energy infrastructure in the basin.
Debby, the first named storm of 2012 to disrupt energy operations in the Gulf, temporarily idled nearly half of its oil output -- nearly double the amount shut on Sunday -- and more than a third of natural gas output as producers shut down operations and evacuated staff at installations in the storm's projected path.
Indonesia refinery operations unaffected by workers' protest
JAKARTA, June 26 (Reuters) - Hundreds of workers at Indonesia's Balongan refinery held a protest on Tuesday but it did not affect operations at the 125,000 barrels per day (bpd) plant, state energy firm PT Pertamina said.
The protest in Balongan and Jatibarang, in West Java, was staged by contractors who demanded to be promoted to full staff at Pertamina, officials speaking for the company said.
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