Wednesday, October 3, 2012

20121003 0948 Global Commodities Related News.

Pro Farmer: After The Bell Wheat Recap (Source:CME)
Wheat futures faced pressure throughout the day, but they did move off their lows into the close. Losses ranged from 10 1/2 to 14 3/4 cents in nearby contracts. Spillover from soybeans along with investor risk aversion encouraged more selling pressure in the wheat market today. Plus yesterday's Crop Progress Report confirmed that recent rain has sped winter wheat planting in the Southern Plains.

Wheat Market Recap Report (Source:CME)
December Wheat finished down 12 3/4 at 871 1/2, 13 1/2 off the high and 7 3/4 up from the low. March Wheat closed down 13 at 883. This was 7 1/2 up from the low and 13 1/2 off the high.
December Chicago wheat ended the day sharply lower while KC and Minneapolis followed. Traders took profits for the second day in a row after it was reported that more Black Sea wheat was offered in the latest Iraq tender at a discount to other world origins. US exports remain behind the pace needed to reach this year's USDA forecast which continues to add pressure to prices. Romanian wheat was reportedly the cheapest offer on the tender since they have stepped into the export market as Russia moves aside. Russia may release 500,000 tonnes of wheat out of their domestic reserves amid rising food prices due to this year's lower grain production. The weekly Winter Wheat Planting report showed 40% of winter wheat planting was complete compared to 25% last week and 36% last year. Recent rainfall in Oklahoma and southern Kansas has helped soil conditions and early germination however Nebraska, central Kansas, and north central Kansas continue to suffer from dry conditions which could add support to prices down the  road. The US Dollar was lower on the day but most commodity markets underperformed as Eurozone fears resurfaced overnight. December Oats closed down 6 1/4 at 360 1/4. This was 2 up from the low and 7 off the high.

Corn Goes Against the Flow (Source:CME)
Corn closed 1 1/2 cents higher in the December and 1/4 cent lower in the March. Soybeans closed 29 3/4 cents lower in the November and 29 3/4 cents lower in the January. Wheat closed 12 3/4 cents lower in the December Chicago, 14 3/4 cents lower in the December Kansas City, and 13 1/4 cents lower in the December Minneapolis. The U.S. dollar index is 0.111 lower at 79.713. December gold is $7.40 lower at $1,775.90 while December silver is $0.337 lower and December copper is $0.0080 higher. The Dow Jones Industrial Average is down 60 points at 13,455. November crude oil is $0.71 lower at $91.77. November heating oil is $0.0056 lower while November RBOB gasoline is $0.0560 lower and November natural gas is $0.045 higher.

Pro Farmer: After The Bell Corn Recap (Source:CME)
Corn futures faced pressure for much of the day, but rebounded late to finish narrowly mixed. Given a lack of bullish news today, corn futures were pressured by heavy spillover from the soybean and wheat markets and macro-economic uncertainty. But with harvest surging past the halfway point and given the tight supply situation, selling interest proved to be light.

Corn Market Recap for 10/2/2012 (Source:CME)
December Corn finished up 1 1/2 at 758 1/4, 1 3/4 off the high and 12 1/4 up from the low. March Corn closed down 1/4 at 759 3/4. This was 10 3/4 up from the low and 3 off the high. December corn ended the session slightly higher after trading lower early in the day. Bull spreading was prevalent and outright buying support was seen following last Friday's bullish USDA report. Harvest pressure, weak demand, and unstable outside markets added to the short term negative tone. The weekly Corn Harvest report showed 54% of the US harvest was complete compared to 39%. This was slightly below market expectations but favorable harvest conditions continue to push harvest along at a record pace. Corn basis was marginally higher for some areas of the Midwest, specifically for ethanol markets in Illinois and Iowa. Reports that farmers have shut off any further sales as they anticipate higher prices down the road added support to cash markets.
The US Dollar traded sharply lower throughout the day which added slight support  to the corn market but marginal gains were offset by a sharply lower wheat market. November Rice finished up 0.13 at 15.37, equal to the high and 0.07 up from the low.

U.S. Corn, Soy Harvests Seen by FCStone Topping USDA Forecasts (Bloomberg)
Corn and soybean production in the U.S., the world’s largest grower and exporter last year, will exceed a government forecast, according to estimates by INTL FCStone Inc. (INTL) Corn output will be 10.824 billion bushels, up from 10.727 billion forecast last month by the U.S. Department of Agriculture, FCStone said today in an e-mail report from its West Des Moines, Iowa, office. A month ago, the commodity researcher and brokerage company said production would fall to 10.607 billion, compared with 12.358 billion a year ago. The soybean harvest will be 2.849 billion bushels, compared with 2.739 billion estimated in September, FCStone said. Last month, the USDA projected 2.634 billion, down from 3.094 billion a year earlier. The USDA will update its forecasts on Oct. 11. Corn is the biggest U.S. crop, valued at $76.5 billion in 2011, followed by soybeans at $35.8 billion, government figures show.
Corn futures on the Chicago Board of Trade rose to a record $8.49 a bushel on Aug. 10, and soybeans surged to an all-time high of $17.89 a bushel on Sept. 4.

Ukraine wheat exports at 2.6 mln T so far 12/13 – lobby (Reuters)
Ukrainian wheat exports have reached 2.6 million tonnes so far this season or 65 percent of the maximum volume agreed by the traders and government, Ukrainian Agrarian Confederation grain lobby said on Tuesday.

Brazil corn exports at record, ethanol up on US drought (Reuters)
Brazilian corn exports set a record in September and ethanol  shipments reached their highest level since July 2009, the Trade Ministry said on Monday, after the worst U.S. drought in eight decades tightened world supplies.

GRAINS: Chicago soybeans slid to a three-month low as the record pace of the U.S. harvest and evidence of better-than-expected yields weighed on the market, while corn ticked higher amid tightening supplies. Wheat lost more ground, falling for a second consecutive day on forecasts of rain in the drought-parched U.S. Plains, which is expected to boost winter wheat planting. (Reuters)

SOFTS: Arabica coffee and sugar futures were firm as commodity markets consolidated gains after a strong start to the fourth quarter of the year. Liffe cocoa futures edged lower to hit a fresh two-month low as funds exited the market. (Reuters)

Indonesia's Sulawesi Sept cocoa bean exports up 133 pct y/y-industry (Reuters)
Indonesia's cocoa bean exports from its main growing island of Sulawesi rose 133 percent in September, industry data showed on Tuesday, after exporters released larger than usual stocks.

Rubber Bulls Back as Exporters Cut Most Since 2009: Commodities (Bloomberg)
The biggest restrictions on rubber exports since 2009 and record consumption are sending prices back to a bull market after a five-month slump, increasing costs for Bridgestone Corp. (5108) and other tiremakers. Thailand, Indonesia and Malaysia, accounting for 70 percent of global output, agreed to cut shipments by 300,000 metric tons, starting yesterday. That’s as much as China, the biggest user, imports in about five weeks and exceeds the 2013 supply surplus forecast by the International Rubber Study Group, which represents 35 nations. Tokyo-traded futures, a global benchmark, will advance 9.8 percent to 300 yen a kilogram ($3,841 a ton) by the end of the year, according to the median of 12 analyst estimates compiled by Bloomberg. Producers are cutting sales to boost prices that tumbled 49 percent since reaching a record in February 2011 because of a supply glut and weaker economic growth. When they reduced cargoes in 2009, futures more than doubled that year.
The latest curbs are coming as policy makers from the Federal Reserve to the European Central Bank pledge to buy more debt to bolster economies. The Singapore-based rubber group predicts record demand again in 2013. “The bear market is over,” said Makoto Sugitani, the head of commodity derivatives sales at Newedge Japan Inc. in Tokyo who correctly predicted in September 2010 that prices would advance 20 percent within six months. “The easing has spurred fund flows into equities and commodities and export cuts by the three producers will support prices.”

Natural Gas Fluctuates Near 10-Month High on Weather (Bloomberg)
Natural gas futures gained for a sixth day in New York, rising to a 10-month high, on speculation that cold weather next week will boost demand for heating fuels. Gas rose 1.5 percent as Commodity Weather Group LLC in Bethesda, Maryland, predicted below-normal temperatures in the Northeast and Midwest over the next six to 15 days. Gas broke resistance of $3.40 per million British thermal units yesterday, finding support there, said Chris Kostas, senior gas analyst for Energy Security Analysis Inc. in Andover, Massachusetts. “The market is building up a little enthusiasm,” said Dominick Chirichella, senior partner at the Energy Management Institute in New York. “There is a lot of cold weather coming in the next couple of weeks.” Natural gas for November delivery rose 5.1 cents to $3.531 per million Btu on the Nymex, the highest settlement price since Dec. 2. The futures are up 18 percent this year.
November $3.75 calls, bets that prices will rise, were the most active gas options in electronic trading. They rose 1.4 cents to 6.6 cents on volume of 1,913 contracts as of 2:20 p.m. Calls accounted for 61 percent of options volume. The low temperature in Chicago on Oct. 12 may be 39 degrees Fahrenheit (4 Celsius), 8 below normal, and New York City may be 7 below normal at 44 degrees, according to AccuWeather Inc. in State College, Pennsylvania. Heating demand in the lower 48 states may be 60 percent above normal Oct. 8 through Oct. 12, data show from Weather Derivatives in Belton, Missouri.

Oil Drops a Second Day as Crude Stockpiles Advance a Fourth Week (Bloomberg)
Oil dropped for a second day in New York after an industry-funded report showed stockpiles climbed a fourth week in the U.S., the world’s biggest crude user. Futures fell as much as 0.4 percent after the American Petroleum Institute said crude inventories rose 462,000 barrels last week for the longest run of gains since May. An Energy Department report today may show supplies increased 1.5 million barrels, according to a Bloomberg News survey. Iraq, OPEC’s second-biggest oil producer, is “happy” with prices at current levels, according to Thamir Ghadhban, a senior adviser to Prime Minister Nouri al-Maliki. “The U.S. has been very sloppy demand-wise for a number of years,” said David Lennox, an analyst at Fat Prophets in Sydney. “We’ve seen those figures turn to increasing stockpiles. The market may be expecting that trend to continue.”
Crude for November delivery decreased as much as 35 cents to $91.54 a barrel in electronic trading on the New York Mercantile Exchange and was at $91.62 at 11 a.m. Sydney time. The contract yesterday fell 59 cents, or 0.6 percent, to $91.89, the lowest close since Sept. 27 and the first drop in four days. Prices are 7.3 percent lower this year. Brent oil for November settlement slipped 24 cents, or 0.2 percent, to $111.33 a barrel on the London-based ICE Futures Europe exchange. The European benchmark grade’s premium to West Texas Intermediate was at $19.71, from $19.68 yesterday.

OIL-Oil slips towards $112 as growth worries weigh
LONDON, Oct 2 (Reuters) - Brent crude oil slipped to around $112 a barrel as investors weighed a weaker outlook for fuel demand and sluggish economic growth against the risk of possible supply disruptions.
"Economic data is bearish for oil and the immediate risk for prices is to the downside," said Tamas Varga, oil analyst at brokers PVM Oil Associates in London.

POLL-U.S. crude inventories seen up on higher imports
Oct 1 (Reuters) - U.S. crude oil inventories are expected to have risen last week as imports increased, a preliminary Reuters poll of analysts showed on Monday.
The poll forecast crude stockpiles to have risen 1.5 million barrels for the week ended Sept. 28, on expectations of a rebound in shipments of foreign crude following a steep drop the previous week. All five analysts saw a build in stockpiles.

Russia's Sept oil output at new high of 10.41 mln bpd
MOSCOW, Oct 2 (Reuters) - Russia's oil output, the world's largest, edged up 0.3 percent in September compared with August to reach a new post-Soviet high of 10.41 million barrels per day (bpd) on the back of oil price increases, Energy Ministry data showed on Tuesday.
In tonnes, Russia's crude production stood at 42.59 million last month, the ministry said. The country is set to increase oil production this year to 514-515 million tonnes from 511 million tonnes in 2011.

Iraq oil exports hit highest level in 3 decades
DUBAI, Oct 2 (Reuters) - Iraq's oil exports rose to 2.6 million barrels per day on average in September, the highest in more than three decades, compared to 2.565 million bpd in August, an Iraqi oil ministry spokesman said on Monday.
Exports from Basra in the south were 2.18 million bpd in August, while shipments from northern Kirkuk were 420,000 bpd, including around 10,000 bpd taken by truck through Jordan, Asim Jihad said.

Recap Energy Market Report (Source:CME)
November crude oil prices traded higher during the initial morning hours, supported in part by a rally in risk assets and weakness in the US dollar. It seemed that morning weakness in global equity markets took some of the support away from the complex as slowing economic growth concerns festered. Meanwhile, lingering threats of Middle East supply disruptions seemed to offer a measure of support to the market. November crude oil prices drifted to their session lows late in the session. Expectations for this week's US crude oil inventory report are for supplies to have increased in the range of 1.5 million barrels last week.

Norway Port Set to Boom With Iron Ore Shipped to China: Freight (Bloomberg)
Three yellow construction cranes tower over heavy machinery and clusters of workers as they bustle in the Norwegian Arctic drizzle to get a new iron ore terminal ready by the beginning of next year. The port of Narvik, where the waters around a ship at the existing loading quay are tainted red by iron ore dust, is preparing for an economic boom. Iron ore from neighboring Sweden via Narvik is forecast by the port to surge fivefold by 2025, much of it bound for China. That is bringing wealth to a city lacking the oil riches most of Norway enjoys. Narvik is banking on Northland Resources SA (NAUR) which, like Sweden’s LKAB, is ramping up production at its Swedish iron ore mines. Northland plans to start extraction in Kaunisvaara in the fourth quarter and make its first shipments from Narvik early next year. The stock could more than double in value in the coming 12 months, according to the average share price estimate of five analysts surveyed by Bloomberg.
“Narvik is the optimal port solution for us,” said Northland Resources Chief Executive Officer Karl-Axel Waplan in a phone interview, noting the port’s proximity to Northland’s Swedish mines and its capacity to take the biggest vessels, which isn’t the case for Sweden’s Baltic ports. “Demand for iron ore will rise.” Even if Chinese annual growth falls to 7 percent, he said, Northland forecasts prices averaging 15 percent higher than today’s level over the next 15 to 20 years. The ice-free Narvik port, almost a two-hour flight north from Oslo, is 250 kilometers (155 miles) from Northland’s mine in Kaunisvaara, Sweden. Volumes may rise to 33 million metric tons by 2015 and to as much as 100 million tons by 2025, Rune Arnoey, head of the Port of Narvik, said in an interview. In comparison, northwestern Europe’s fourth-largest port, Amsterdam, handled 93 million tons of cargo in 2011.

Iron Ore Heads for Longest Bear Market in 20 Years: Commodities (Bloomberg)
Iron ore, the commodity most leveraged to China’s growth and Australia’s biggest export earner, is heading for the longest bear market in 20 years. Vale SA (VALE3), Rio Tinto Group and BHP Billiton Ltd. (BHP), which control about two-thirds of seaborne iron ore supply, are spending about $47 billion on new and bigger iron ore mines from Brazil to Australia. The new cargoes are set to reach the global market just as China changes gear to lower growth expectations, following what may become its weakest performance since 1990. “We’re already seeing the beginning of the end of the first phase of economic development in China,” Alberto Calderon, chief commercial officer of Melbourne-based BHP, which is spending about $1 billion a month on its ore mines in Australia, said last month at a conference in Canberra. “The pace of demand for iron ore from China has slowed down by more than half.”
Prices reached a record $191.90 a metric ton on Feb. 16 last year and may plunge as low as $50 a metric ton before the middle of next year, according to Andy Xie, a former Morgan Stanley chief Asia-Pacific economist. They haven’t traded at that level since contract prices were set at $47 a ton in 2006. The supply of iron ore to China, the world’s second-biggest economy, has helped secure 21 recession-free years for Australia, forecast to earn about $65 billion from the commodity this year.

Gold Falls From 10-Month High Amid Weaker Demand in Asia (Bloomberg)
Gold futures fell from a 10-month high in New York on renewed concern that demand in Asia will remain slow. Silver also declined. Imports of gold by India, the world’s top buyer, fell 56 percent in the second quarter, according to the World Gold Council. Standard Bank Plc said in a report today that weak bullion demand has been in place since mid-September and is the most severe in more than a year. In the three months ended Sept. 30, prices jumped 11 percent, the most since June 2010, as a third round of monetary stimulus in the U.S. revived demand for the metal as a hedge against future inflation. “While the market has been going up on the stimulus fever, lack of support from physical demand is putting some pressure on prices,” Marc Ground, a commodity strategist at Standard Bank in Johannesburg, said in a telephone interview.
Gold futures for December delivery fell 0.4 percent to settle at $1,775.60 an ounce at 1:35 p.m. on the Comex in New York, dropping for the second time in three sessions. Yesterday, prices reached $1,794.40, the highest for a most-active contract since Nov. 14. Silver futures for December delivery slid 0.8 percent to $34.669 an ounce in New York, after reaching $35.445 yesterday, the highest since March 2. Holdings in silver-backed exchange-traded funds slid 122.8 metric tons yesterday to 18,503.6 tons, data compiled by Bloomberg show. Platinum futures for January delivery rose 0.1 percent to $1,687.20 an ounce on the New York Mercantile Exchange, the sixth-straight increase. Palladium futures for December delivery jumped 1.3 percent to $654.20 an ounce on the Nymex.

Gold Market Recap Report (Source:CME)
The gold market lacked a definitive direction today as the focus and hope for additional US easing was probably dealt a bit of a blow today. In fact, with a series of favorable scheduled data points over the last 36 hours or trade and expectations calling for a rather large gain in jobs in the ADP jobs report, it wasn't surprising to see gold undermined by good data today. While gold at times has benefited from increased flight to quality fears from Spain, seeing renewed anxiety toward the Euro zone debt situation might have given some gold longs pause today. With gold in the last COT report positing a non commercial and non reportable net long of 293,171 and gold to this week's highs reaching another $28 an ounce above the level where the COT report was measured it is possible that some traders view gold as overbought.

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