Tuesday, October 9, 2012

20121009 0940 Global Commodities Related News.

DTN Closing Grain Comments 10/08 14:31 (CME)
Corn, Beans Continue Slide
Corn and beans extended their respective downtrends on continued noncommercial long-liquidation. Wheat was able to close higher, albeit modestly in a quiet day.

Russia's Deputy PM sees 2012 grain crop at 70 mln tones (Reuters)
Russia, one of the world's key wheat exporters, is expected to harvest about 70 million tonnes of grain this year, Deputy Prime Minister Arkady Dvorkovich said during a government meeting on Monday.

France cuts wheat crop estimate to 35.9 mln tonnes (Reuters)
The French farm ministry on Monday reduced its estimate of this year's soft wheat crop in France to 35.9 million tonnes from 36.5 million tonnes seen last month.

Sugar ships stranded off Iraq as government axes contract (Reuters)
Up to 150,000 tonnes of refined sugar is marooned and deteriorating off Iraq's main cargo port Umm Qasr over a trade spat with the government, as the country struggles to untangle bureaucratic turmoil that has dogged its economy.

Informa ups U.S. corn, soy harvest view after rains-trade (Reuters)
Private analytical firm Informa Economics expects the U.S. government to raise its forecasts for domestic corn and soybean production in its monthly crop report next week, trade sources said on Friday.

Pro Farmer: After The Bell Wheat Recap (CME)
Wheat futures favored a firmer tone in light and choppy trade today and finished slightly higher in most contracts at all three exchanges. Wheat futures were supported by global crop and weather concerns. Dryness remains an issue in several key production areas, including U.S. winter wheat areas and in Western Australia.

Wheat Market Recap Report (CME)
December Wheat finished up 3 1/2 at 861, 6 1/2 off the high and 6 up from the low. March Wheat closed up 2 1/2 at 871 1/4. This was 4 1/2 up from the low and 7 off the high.
December Chicago wheat ended the day in positive territory but well off session highs. Kansas City and Minneapolis wheat traded higher as well with KC leading all three wheat markets on the day. Support was linked to fears that freezing temperatures in parts of Oklahoma, Nebraska, and Colorado may have damaged emerging wheat and some replanting may be needed. Furthermore, nearly a quarter of the Hard Red Winter wheat growing area remains drier than normal. Long term support in wheat continues to come from thoughts that the world wheat balance sheet is tightening which could spur on US exports later this year. US wheat continues to be overpriced in the world market as France and Australia step in to cover business in the Middle East. Iraq made no purchase on their 50,000 tonne wheat tender and it's estimated that Russia exported 10.29 million tonnes of wheat in the first 8 months of 2012. Outside markets added a slightly negative tilt to commodity complex throughout the day with US stocks trading lower and the US Dollar higher on the day.
December Oats closed up 3 1/4 at 370 1/2. This was 5 up from the low and 1 off the high.

Pro Farmer: After The Bell Corn Recap (CME)
December through July corn futures softened into the close to finish 6 to 7 3/4 cents lower. Deferred contracts settled narrowly mixed. Strength in the U.S. dollar index and a lack of fresh news due to USDA being closed for Columbus Day kept corn on the defensive into the close. Traders are also more actively evening positions ahead of Thursday's reports, which could result in choppy price action ahead of the report as traders look for USDA to lower carryover.

Corn Market Recap for 10/8/2012 (CME)
December Corn finished down 6 at 742, 6 off the high and 2 up from the low. March Corn closed down 6 1/2 at 742. This was 1 3/4 up from the low and 6 1/4 off the high.
December corn ended the day slightly lower in what was a low volume session and the weaker trade was linked to profit taking ahead of this Thursday's USDA report. Marginal support was seen from a higher wheat market but this was largely offset by a surging US Dollar and weaker soybean market. Weekend rainfall was extensive in growing regions of Argentina which should benefit early planted corn. Argentina's government believes that 4.97 million hectares of corn will be planted this year vs. 5 million in 2011/12. The weather outlook also included better rainfall for central Brazil by this weekend and again in the 11-15 day forecast. This should benefit dry areas in Brazil and early planted corn. The US forecast looks favorable for harvest progress with showers limited to the southern plains later this week and the trade believes corn harvest is close to 70% complete. Corn basis was steady throughout the day as futures declined but farmers have been reluctant sellers of anymore cash corn in hopes that prices will move higher later this quarter.
November Rice finished up 0.26 at 15.365, equal to the high and 0.045 up from the low.

Traders Eye Grain Prices Rebound as Supply Set to Tighten (Bloomberg)
Grain prices that tumbled in recent weeks may rebound as demand stays robust while global stockpiles tighten after drought hurt crops from the U.S. to Russia. Corn on the Chicago Board of Trade, the global benchmark, has slipped 13 percent since reaching a record $8.49 a bushel on Aug. 10, and wheat traded in Paris is down 4.8 percent from a 14-month high in July. While farmers are harvesting crops across the Northern Hemisphere, temporarily inflating supplies, world corn and soybean stockpiles as a percentage of consumption may drop to a 37-year low after dry weather in the U.S., South America and Europe, U.S. Department of Agriculture data show.
Corn may rally to $10 before this time next year because cattle and hog producers haven’t culled herds even as feed costs rose, Hussein Allidina, head of commodities research at Morgan Stanley, said Oct. 3 in an interview at Bloomberg News offices in London. Wheat prices also will be supported as livestock farmers substitute more of the grain in feed for high-cost corn, he said. Barclays Plc analyst Sudakshina Unnikrishnan expects CBOT soybean prices to rally to $18 a bushel, above the all-time high of $17.89 set Sept. 4. “It’s a time to keep your nerve and wait for the markets to rebound, because they probably will,” said David Sheppard, managing director at Gainsborough, England-based grain exporter Gleadell Agriculture Ltd. “We’re in the calm before the storm with world grain markets. Russia and Ukraine are running out of exportable surpluses. France is selling quite aggressively into recent tenders, and if it carries on at the same rate they’ll probably be overselling.”

GRAINS: U.S. corn slid for a second consecutive session as investors took into account analyst forecasts estimating higher production ahead of a key U.S. government report on supply and demand of agricultural products due out later this week. Wheat rose 0.6 percent, recouping some of Friday's losses, as forecasts of dry weather this week in much of Australia's grain belt raised concerns about a further reduction in yields in the world's second largest exporter. (Reuters)

SOFTS: Worries over the outlook for the global economy weighed on sugar, coffee and cocoa futures prices on ICE in light volumes in early trading. (Reuters)

Natural Gas Futures Drop as Warmer Weather to Cut Heating Demand (Bloomberg)
Natural gas futures fell for the third time in four days as forecasts for warmer-than-normal weather signaled reduced demand for the heating fuel. Gas declined as much as 2 percent. Temperatures will be above normal in the central U.S. from Oct. 13 through Oct. 17 before spreading to the East Coast over the next 11 to 15 days, according to Commodity Weather Group LLC in Bethesda, Maryland. The Energy Department expects gas stockpiles to rise to a record before demand begins to rise with colder weather. “Winter is one of the main events in the natural gas market, it’s just not there yet,” said Tom Saal, senior vice president of energy trading at INTL Hencorp Futures LLC in Miami. “We have a lot of inventory. It’s keeping the market actually a little bit below where it was a year ago.” Natural gas for November delivery dropped 3.1 cents, or 0.9 percent, to $3.365 per million British thermal units at 9:55 a.m. on the New York Mercantile Exchange. The futures are down 3.3 percent from a year ago.
The low temperature in Chicago on Oct. 17 may be 49 degrees Fahrenheit (9 Celsius), 4 above normal, and Detroit may be 6 above normal at 50 degrees, according to AccuWeather Inc. in State College, Pennsylvania. New York’s low on Oct. 22 will be 54 degrees, 6 above the usual reading. Heating needs in the lower 48 states will be 59 percent below normal Oct. 14 through Oct. 18, data from Weather Derivatives in Belton, Missouri, show. The months from November through March make up the peak period for U.S. gas consumption. U.S. inventories totaled 3.653 billion cubic feet in the week ended Sept. 28, 8.3 percent above the five-year average for the period, the department said last week. Record gas demand from electricity generators because of an unusually hot summer and decade-low seasonal prices reduced the supply surplus from a six-year high of 61 percent on March 30.
The department expects stockpiles to reach an all-time high of 3.95 trillion cubic feet by the end of October before the heating season, according to its monthly Short-Term Energy Outlook Sept. 11.

Oil Rises First Time in Three Days as Discount to Brent Widens (Bloomberg)
Oil rose for the first time in three days in New York, rebounding from a decline that sent the benchmark U.S. grade to the biggest discount versus European futures in almost a year. West Texas Intermediate crude gained as much as 1 percent after sliding 2.6 percent in the prior two days. Prices advanced after reaching technical-support levels. The contract’s discount to London’s Brent oil widened to $22.49 yesterday, the largest gap since Oct. 20, 2011. The U.S. Energy Department releases its weekly report on production and stockpiles tomorrow. Crude for November delivery climbed as much as 89 cents to $90.22 a barrel in electronic trading on the New York Mercantile Exchange and was at $90.20 at 11:38 a.m. Sydney time. The contract dropped 55 cents to $89.33 on Oct. 8, the lowest close since Oct. 3. Prices are down 8.7 percent this year.
Brent oil for November settlement climbed 95 cents, or 0.9 percent, to $112.77 a barrel on the London-based ICE Futures Europe exchange. Prices are up 5 percent this year. The premium to WTI was at $22.57. Oil is rising in New York after rebounding from its lower Bollinger Band for a second day yesterday, signaling technical support, according to data compiled by Bloomberg. This indicator is at $88.03 a barrel today. Buy orders tend to be clustered near chart-support levels. Crude’s 30-day stochastic oscillators have been below 30, a reading that indicates futures have fallen too far for further losses to be sustained.

Recap Energy Market Report  (CME)
After an early morning push down toward last week's low of $87.70, November crude oil spent most of the US trading session trending higher. Early weakness in the market came on the latest downwardly revised Asian growth forecast from the World Bank that put pressure on the global oil demand outlook. However, relative strength in the Brent crude oil market helped WTI rally more than $1 from the morning low. Another source of support for the crude oil market came as officials in Turkey requested international support with its conflict in Syria.

China’s Copper Consumption Set to Drop 8.5% in 2012, Hunt Says (Bloomberg)
Copper consumption in China will contract this year for the first time since 2008 as demand falters and inventories climb in the largest user, before rebounding in 2013, according to Simon Hunt Strategic Services. Consumption will decline about 8.5 percent to 5.6 million metric tons in 2012, said Simon Hunt, chief executive officer of the Weybridge, Surrey-based consultancy, which compiles research and analysis on the global market. Next year, usage may expand about 5.6 percent to 5.9 million tons, Hunt said in an interview in Singapore after visiting China for two weeks last month.
Hunt’s assessment adds to signs that China’s slowdown is hurting demand for commodities. Copper, used in wires and cables, helps set the pace for other base metals and the drop in China’s consumption may hurt prices and cut profits at mining companies including Freeport-McMoRan Copper & Gold Inc. (FCX) Copper rose 6.8 percent last quarter as central banks in the U.S., China, Japan and Europe expanded stimulus to try to revive economic growth. “The safety valve of exports has gone, the domestic economy is slowing down, they have a problem of surplus capacity and cash is extraordinarily tight,” said Hunt, who estimated total copper reserves in China at 3.5 million tons, including reported and unreported stockpiles. “There are no signals of a recovery in heavy industry and manufacturing.”
Three-month copper futures on the London Metal Exchange, which tumbled 21 percent last year as Europe’s debt crisis hurt global growth, traded at $8,186 a ton yesterday. The price touched $8,422 on Sept. 19, a week after the U.S. Federal Reserve announced a third round of so-called quantitative easing. The U.S. is the world’s second-largest copper user.

Gold Falls for Second Straight Session on Dollar Rally (Bloomberg)
Gold futures fell for the second straight session as the dollar’s advance curbed demand for the metal as an alternative investment. The greenback rose as much as 0.5 percent against a basket of major currencies amid speculation that Spain is struggling to avoid a bailout from mounting sovereign debt. On Oct. 5, gold reached the highest in almost 11 months after the U.S. unemployment rate fell to the lowest since January 2009, easing pressure on the Federal Reserve to expand monetary stimulus. “The dollar is keeping the market quiet,” Pratik Sharma, a fund manager at Miami-based Atyant Capital, said in a telephone interview. “There is also some profit-taking.” Gold futures for December delivery fell 0.3 percent to settle at $1,775.70 an ounce at 1:41 p.m. on the Comex in New York. On Oct. 5, the metal reached $1,798.10, the highest for a most-active contract since Nov. 9.
In September, gold advanced 5.1 percent as stimulus programs in the U.S., Europe and Japan and low interest rates enhanced the appeal of the metal as an alternative to currencies. Silver futures for December delivery slumped 1.6 percent to $34.017 an ounce on the Comex, the biggest drop since Sept. 24. Platinum futures for January delivery fell 0.5 percent to $1,698.80 an ounce on the New York Mercantile Exchange. Palladium futures for December delivery declined 0.9 percent to $656.95 an ounce.

Silver Market Recap Report (CME)
The silver market forged a massive range of trade today but unfortunately for the bull camp most of that action favored the downward tilt. The bull camp might suggest that silver was able to hold together somewhat impressively given the early pressure and also in the face the weakness seen in a number of outside markets. While adverse currency market action probably added some additional pressure to silver prices today, silver probably outdistanced gold on the downside today because of weakness in equities and because of weakness in other industrial/Physical commodity prices.

Gold Market Recap Report (CME)
The gold market started out sharply lower today but the bull camp was able to manage a somewhat impressive recovery off the initial lows. Like other commodity markets, gold was probably a little overbought technically and it is also possible that many gold longs were overly confident in the prospect of additional easing and with the controversial unemployment report from last Friday the debate over additional easing has heated up significantly. Gold was probably undermined as a result of slackening global growth expectations and gold might also have been undermined by weakness in a number of physical commodity markets.

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