20120827 1017 Global Commodities Related News.

Grain body slashes crop forecasts as droughts bite (Reuters)
Devastating droughts in the United States and Russia are set to drive global stocks of maize (corn) and wheat to multi-year lows, a world cereal body said on Thursday, heightening fears of  a food price crisis on a scale last seen in 2008.

Hedge Fund Bets Jump to 15-Month High on Bull Rally: Commodities (Source:Bloomberg)
Hedge funds boosted bets on rising commodities to the highest in 15 months, driving prices into a bull market as the U.S. drought worsened and the Federal Reserve signaled it may take more steps to spur economic growth. Money managers’ net-long position across 18 U.S. raw materials rose 10 percent to 1.32 million futures and options in the week ended Aug. 21, U.S. Commodity Futures Trading Commission data show. Holdings doubled in two months to the highest since May 2011. Bets on corn are the most bullish in 15 months amid the worst U.S. drought in 56 years, while wagers on gold rebounded and platinum more than doubled.
The Standard & Poor’s GSCI Spot Index of 24 raw materials ended the week up 20 percent from a June low, the common definition of a bull market. Minutes of the Fed’s last meeting, released Aug. 22, showed many policy makers favored “additional monetary accommodation” soon unless growth strengthens. Purchases of new U.S. homes rose more than forecast in July, matching a two-year high. People’s Bank of China Governor Zhou Xiaochuan said Aug. 23 that stimulus measures “can’t be ruled out” in the world’s second-largest economy. “The economic situation globally has improved,” said Adrian Day, the president of Adrian Day Asset Management in Annapolis, Maryland. “You have global growth, and prospects for added stimulus, and that’s good for commodities.”

GRAINS: Chicago soybeans bounced back and were on track for their biggest weekly gain in a month, supported by higher-than-expected U.S. exports which showed a drought-fed rally has done little to temper demand. Wheat firmed amid forecasts of below average rains in Australia, the world's second-largest exporter, and new cuts in Russian crops estimates, while new-corn rose after suffering its biggest one-day decline in two months on Thursday. (Reuters)

DTN Closing Grain Comments 08/24 14:33 : Grains Mixed Following Quiet Day (Source:CME)
Wheat and corn drifted lower while soybeans held strong throughout the day in quiet trade. Next week could get interesting with December corn continuing to consolidate and November beans closing near the record-high from Thursday.

Pro Farmer: After the Bell Wheat Recap  (Source:CME)
Wheat futures faced profit-taking today to end 2 to 7 cents lower in the nearby contracts at all three exchanges. For the week, futures posted slight losses. Wheat futures continue in their follower's role to corn and need fresh demand news to trade on their own fundamentals. Talk continues to circulate that Russia will impose restrictions on exports and exportable supplies from Europe and the Black Sea region are tightening quickly. This could return demand to U.S. wheat.

Wheat Market Recap Report  (Source:CME)
December Wheat finished down 6 1/4 at 888 1/2, 18 off the high and 1 1/4 up from the low. March Wheat closed down 5 3/4 at 898 1/2. This was 1 3/4 up from the low and 16 3/4 off the high. December Chicago wheat traded slightly lower to end the week. Kansas City and Minneapolis traded weaker as well. Early gains were wiped away after technical selling and profit taking began near 9:30 am cst. US wheat remains overpriced in world market and corn has taken on a slightly bearish, short term trend. Both factors forced bulls to the sideline ahead of the weekend. Wheat growing areas in parts of Kansas saw rainfall overnight and weekend rains are forecasted for Central Kansas and Oklahoma, which should relieve top soil dryness. Tropical Storm Isaac is expected to reach the Gulf Coast by early next week which could promote more favorable conditions for planting next year's Soft Red Winter wheat crop. The forecasted rainfall for wheat growing areas in the US offered a bearish tone to today's trade. The US Dollar was stronger which pressured prices throughout the day. December Oats closed up 1/2 at 391 1/2. This was 2 up from the low and 8 1/2 off the high.

Pro Farmer: After the Bell Corn Recap (Source:CME)
Corn futures ended marginally to 6 cents lower for the day, but for the week posted slight gains. Even though this week's Pro Farmer Midwest Crop Tour results were disappointing, upside potential for futures was limited as there are indications of demand destruction. The flip of the calendar to September could bring more focus to outside markets, as investors in the euro-zone return from vacations and focus on the financial situation -- which hasn't improved much. Head to ProFarmer.com for Pro Farmer's 2012 Corn and Soybean Crop Estimates.

Corn Market Recap for 8/24/2012 (Source:CME)
December Corn finished down 6 1/4 at 808 1/2, 14 1/2 off the high and 2 1/2 up from the low. March Corn closed down 5 3/4 at 808 1/2. This was 2 1/2 up from the low and 13 1/2 off the high. December corn traded slightly lower today and posted a new weekly low for the move. The corn market saw another round of technical selling and profit taking today which pressured prices for most of the afternoon session. Corn basis was steady to slightly firmer across the Corn Belt as barge freight rates increase and on good demand from ethanol facilities. Basis in the Gulf of Mexico was steady as new crop bushels flow south and export demand remains weak. Tropical Storm Isaac is expected to reach the Gulf Coast by early next week. The heavy rainfall and high winds could have a negative impact on row crops that have not been harvested yet. This week's crop tour estimated the US corn yield at 120.25 bushels/acre, plus or minus 1% vs. the current USDA estimate of 123.4. Production was estimated at 10.478 billion bushels. The US Dollar traded sharply higher which offered resistance to price gains. November Rice finished down 0.015 at 15.69, 0.02 off the high and 0.01 up from the low.

Global cotton surplus growing to 3 million tonnes - CotLook (Reuters)
The global cotton market surplus will total more than 3 million tonnes by next July from growing output and falling demand in China, the world's largest textile market, research firm Cotton Outlook said on Thursday.

SOFTS: Raw sugar futures on ICE hovered around an 11-week low, as Brazil's cane harvest accelerated, making up for some of the time lost due to wet weather.Coffee and cocoa were steady, as the firm dollar kept dollar-price commodities in check. (Reuters)

Oil Climbs First Time in Three Days as Storm Shuts Gulf Output (Source:Bloomberg)
Oil rose for the first time in three days as Tropical Storm Isaac shut almost a quarter of crude output in the Gulf of Mexico. Venezuela halted some production at its biggest refinery after a fire killed at least 39 people. Futures climbed as much as 1 percent in New York after gaining for a fourth week. About 24 percent of U.S. oil production and 8.2 percent of natural-gas output from the Gulf is shut because of Isaac, the Bureau of Safety and Environmental Enforcement said yesterday. Firefighters in Venezuela are working to extinguish two storage tanks after a gas explosion at the Amuay plant, part of the Paraguana complex. “There is concern about the hurricane in the Gulf of Mexico, depending on its track,” Robin Mills, head of consulting at Dubai-based Manaar Energy Consulting and Project Management, said in a telephone interview yesterday.
Oil for October delivery increased as much as 92 cents to $97.07 a barrel in electronic trading on the New York Mercantile Exchange and was at $96.88 at 9:42 a.m. Sydney time. The contract slid 12 cents to $96.15 on Aug. 24 and rose 0.2 percent last week. Prices are down 2 percent this year. Brent oil for October settlement rose 61 cents, or 0.5 percent, to $114.20 a barrel on the London-based ICE Futures Europe exchange. The European benchmark grade’s premium to West Texas Intermediate was at $17.32, from $17.44 on Aug. 24.

OIL-Oil slips below $115, set for fourth weekly gain
LONDON, Aug 24 (Reuters) - Oil fell below $115 a barrel as signs of weakness in the global economy weighed on the demand outlook, although a host of supply-side concerns kept losses in check.
"It's no secret that the global economy is in bad shape," said Tony Nunan, a risk manager at Mitsubishi Corp in Tokyo.