USDA Sees Food Inflation At 2.5%-3.5% In 2012 (Source: CME)
Federal forecasters left the outlook for U.S. food-price inflation unchanged at 2.5% to 3.5% in a monthly update. The U.S. Department of Agriculture continues to see a slight moderating of food inflation this year after a 3.7% jump in 2011. Food prices have averaged an annual increase of about 2.8% since 1990, according to the agency. Driving the recent gains in food prices has been a nearly two-year surge in crop prices as world demand climbs and harvests fall short of expectations. The USDA continues to see prices for meats, poultry and fish outpacing overall food inflation, forecasting a 3.5% to 4.5% increase this year. The only category federal forecasters changed from a month ago was what's known as other foods. It lifted the forecast range to 3% to 4% from 2% to 3%. Other food includes a variety of mostly processed items such as soups, baby food and frozen prepared foods.
Rising commodity prices tend to trickle down to such items last because of their long shelf life and the time it takes for them to move from raw materials on the farm to finished products in the grocery store, the agency said.
Corn (Source: CME)
US corn futures closed higher, fueled by speculative buying tied to a weaker U.S. dollar and spillover support from strong gains in soybean futures. Corn is rebounding from losses from earlier in the week, as traders even positions ahead of next week's closely watched prospective planting and stocks report from USDA, analysts say. The absence of fresh news to direct prices kept traders focused on movement in soybean futures. Corn can't afford to become a less attractive planting option economically compared to soybeans amid the need to rebuild depleted U.S. corn supplies next year. CBOT May corn ended up 2c at $6.46 1/2/bushel.
Wheat (Source: CME)
US wheat futures ended higher, with CBOT wheat settling at a one-week high. Speculative short covering ahead of the weekend and next week's key government crop reports encouraged traders to reduce risk exposure in the market, analysts say. Spring wheat futures garnered additional support from concerns farmer may opt to plant corn at the expense of wheat in the Northern Plains, analysts say. Otherwise, US dollar weakness provided general strength in commodity markets. CBOT May wheat ended up 8c at $6.54 1/4/bushel; May MGEX wheat finished up 10 1/4c to $8.17 1/4; and May KCBT wheat ended up 10 1/2c at $6.94 1/2.
Rice (Source: CME)
US rice futures closed higher, supported by broad strength in commodities, with crude oil and wheat and corn futures all up. CBOT May rice ends up 19 1/2c or 1.4% at $14.60 a hundredweight.
GRAINS-Soybeans edge back; wheat, corn extend gains
NEW DELHI, March 23 (Reuters) - Chicago grains rose with soybean prices fuelled by the prospect of drought in leading producers Brazil and Argentina, while wheat and corn benefited from robust export numbers
"Traders see a good deal of buying opportunity in soybean as prices dropped last night and that is the reason for soy to edge up," said Adam Davis, a senior commodity analyst at Merricks Capital in Melbourne.
Ukraine to harvest at least 45 mln T grain in 2012
KIEV, March 23 (Reuters) - Ukraine is likely to harvest no less than 45 million tonnes of grain in 2012 despite the poor weather which has damaged about a third of winter grain crops, the First Deputy Prime Minister Valery Khoroshkovsky said on Friday.
"Agricultural producers do not forecast a significant decrease in the grain harvest which could total 45 to 50 million tonnes this year," Khoroshkovsky told parliament.
Warmest March ever drives US farmers to plant early
CHICAGO, March 22 (Reuters) - Ethan Cox is sowing corn on his 5,000-acre Illinois farm earlier than ever this year, betting that the premium he may collect for delivering an early crop is worth the risk of a damaging late-spring frost.
Lured into the fields by what is so far the warmest March since records began in 1871, Cox is toiling alongside dozens of farmers across the Midwest who have begun seeding what may be a record crop weeks earlier than usual, according to agronomists, farm managers and analysts who keep close tabs on farm activity.
S.Africa maize output f'cast seen cut to 11.3 mln T
JOHANNESBURG, March 23 (Reuters) - South Africa is likely to lower its maize output forecast for the 2011/12 season as late-season drought hits some parts of the country, a Reuters survey showed on Friday.
The Crop Estimates Committee's (CEC) second survey of output may show that South Africa would harvest 11.3 million tonnes from 11.7 million tonnes in the previous government forecast, according to an average estimate
of seven trading houses polled by Reuters.
Argentine grains truckers agree to lift strike
BUENOS AIRES, March 22 (Reuters) - Argentine grain truckers have reached a deal to end a four-day-old strike over hauling rates that had delayed deliveries to export ports, a spokeswoman for the drivers said.
The FETRA group of trucking companies began the protest on Monday to press demands for a unified hauling tariff system, sharply reducing truck arrivals at terminals in the Rosario grains export hub.
Argentina sees 2011/12 corn crop at 21.2 mln T
BUENOS AIRES, March 22 (Reuters) - Argentina expects this season's corn crop to total 21.2 million tonnes versus its previous official estimate of 20.5 million to 22.0 million tonnes, the Agriculture Ministry said on Thursday.
The ministry, in its monthly crop report, also changed its 2011/12 soy harvest forecast to 44 million tonnes from a previous range of 43.5 million to 45.0 million tonnes.
Russia 2011/12 grain export may exceed 27 mln t
MOSCOW, March 22 (Reuters) - Russian grain exports could exceed official estimates of 27 million tonnes in 2011/12 as ports thaw and return to normal operations, new export outlets emerge, state stocks are sold and demand from Iran continues, SovEcon agricultural analysts said.
"Despite a noticeable export decline in January and February, total export of cereals, including flour, rice and legumes, reached 21.4 million tonnes from July to February, or 23.2 million tonnes, including an estimate for March," SovEcon said on Thursday.
EU clears 440,000 tonnes wheat exports this week
PARIS, March 22 (Reuters) - The European Union this week granted export licences for 440,000 tonnes of soft wheat, taking the total since the beginning of the 2011/12 (July-June) season to 10.3 million tonnes, official data showed on Thursday.
This was the highest volume of weekly export licences granted by the EU since mid-November.
Singapore Eyes Rice Futures Trading (Source: CME)
Singapore is exploring the feasibility of hosting international futures trading in rice as part of efforts to control price volatility across Southeast Asia, government and industry officials said. The viability of establishing a regional rice futures exchange in Singapore or launching rice futures through one of the existing exchanges is being examined, and Nanyang Technological University has been asked to conduct due diligence and solicit the views of various stakeholders, one of the government officials said. The initiative involves Singapore's National Policy Coordination Secretariat, the Ministry of Trade and Industry and the state-run International Enterprise Singapore. Experts from the government and private sector met Thursday and Friday at Nanyang Technological University to discuss the proposal.
Rice, the staple diet of billions of people, is a politically sensitive commodity. Record-high prices of more than $1,000 a metric ton reached in 2008 have led to a range of proposals intended to control price volatility, including creating regional buffer stocks and lowering trade barriers. The latest government-linked initiative reflects the importance of rice in official circles. Usually, bourses directly make a business decision to start futures trading in a commodity, subject to regulatory approval of authorities. Singapore is politically neutral and a major regional trading hub, so it is ideally suited to put a rice derivatives platform in place, a participant at the meeting said. However, most participants said establishing an international rice futures trading platform in Singapore would be a challenge because global trade in rice is relatively small while intervention of governments in pricing, import levels and tariffs is heavy and widespread.
Most rice is consumed where it is produced. Globally traded rice totals barely 30 million tons compared with 95 million tons in corn and 135 million tons in wheat, and the market structure is fragmented, said Mohammed Ismet, a Jakarta-based agricultural economist and former adviser to Indonesia's state-run procurement agency, Bulog. In addition, the number of grades and varieties makes it difficult to set a common standard for trading purposes, he noted. However, some analysts say such fragmentation and multiple grades is true of all agricultural commodities, and that futures trading in rice hasn't taken off in Asia because of massive government intervention. Government price intervention and a lack of liquidity are responsible for the low volume of trade in Thai rice futures, said Korbsook Iamsuri, president of Thai Rice Futures Association.
Strike Hits Argentine Grain Transport (Source: CME)
Not a single grain truck made it to the port complexes lining the Parana river, the hub for Argentine grain exports, on Thursday as a truckers' strike dragged on through it's third day, according to the Rosario Grain Exchange. Representatives with the transport union Fetra have been in talks with grain exporters and labor ministry officials, but little progress has been made in a dispute over minimum transport fees. "The indefinite [strike] measures continue," Fetra said in a statement Thursday. Earlier this week, Argentina's grain exchanges, exporters and farm groups asked for the government to step in to mediate the dispute. The Fetra strike is the latest in a series of union walkouts coinciding with the start of the corn and soybean harvests, when exporters face heavy pressure to reach a quick deal to get boats loaded. Argentina is the world's second-largest corn exporter, leads soymeal and soyoil exports, and ranks third in soybean shipments.
Exports are dominated by many of the leading international grain brokers, including Louis Dreyfus SA, Noble Argentina, Nidera, Vicentin, and the local units of Bunge Ltd. (BG) and Cargill Inc. Work stoppages are common this time of year but Argentina's grain exporters are gearing up for a particularly tense strike season this year as workers press for steep pay raises at a time of double-digit inflation. Economists have said those wage increases are the product of inflation most private-sector forecasters estimate at between 20% and 25%. While those strikes will delay many shipments and add costs, the overall impact on international markets is expected to be limited. Analysts have said a walkout would have to extend three weeks before grain importers shift buying to other markets like the U.S., where corn and soybeans are trading at a premium to South American grains.
China Corn Deficit Seen Worsening (Source: CME)
China's corn deficit may rise in coming years because of a swift increase in demand for corn used for processing, state-run Xinhua news agency reported Thursday, quoting a senior cabinet analyst. Cheng Guoqiang, the deputy director of the executive office of the State Council Development Research Center, the cabinet's think tank, was cited as saying that the balance of supply and demand of corn in China appeared to be reaching a tipping point, with demand now outpacing supply. Domestic corn-processing demand has risen 40% from 2008 to 45 million-50 million metric tons annually, he said, speaking at a conference. Even with a record harvests, China could see a supply deficit because of the swift rise of processing demand, he said at the Bo'ao Forum for Asia. Cheng said China imported about 5 million tons of corn in 2011, and he projected the figure to rise in 2012. The 2011 figure may include bookings that have not yet been delivered to China, according to Dow Jones Newswires' assessment of customs data.
Other local media reports said Cheng projected that by 2020 China may see a corn deficit of around 20 million tons annually.
Japanese Rice Growers Test Soil (Source: CME)
Japanese rice growers in north-eastern prefectures are testing soil for radiation levels before they embark on their 2012 plantings and preliminary indications are that production will be little changed on year at 7.7 million metric tons, industry officials said. Japan was hit by a devastating earthquake and tsunami in March last year that damaged the nuclear reactor in Fukushima and raised radioactive levels in the vicinity. Detailed testing of soil is being carried out, and in those fields where radiation levels are above normal, planting won't take place this year, General Manager of Tokyo Grain Exchange, Masahiro Yamashita, said on the sidelines of a meeting of rice experts here at the Nanyang Technological University. Last year, the Japanese government restricted the planting of rice in soil with more than 5,000 becquerels per kilogram of cesium.
Around 200,000 tons of rice was lost last year, mostly in north-eastern Japan due to lower plantings, damage to warehouses, or the inability to sell grain with high radiation levels, Yamashita said. Fukushima's rice production in milled terms fell to around 365,000 tons last year from an average of 420,000 tons and at least another 10% was unfit for consumption due to high radiation levels, President of Continental Rice Corp., Nobuyuki Chino, said. Rice plantings will take place in some areas such as Hokkaido in April but in the north-eastern prefectures it is mostly during mid-May to early-June period, Chino said. The quake and tsunami affected mainly the Aomori, Iwate, Miyagi and Fukishima prefectures which together account for about 17%-18% of Japan's annual rice production but timely plantings ensured that the harvest wasn't significantly affected, though many areas were also hit by saline ocean water.
Even though the country is self-sufficient in rice production and Japanese consumers have a very clear preference for domestically produced, higher quality rice, the government is required to import 770,000 tons of rice a year to meet various market access commitments under its international trade obligations. But the government rarely releases imported rice into the market as this can depress prices and drive high-cost domestic farmers out of business, Chino said. Imported rice is periodically sold off as animal feed to make room for fresh imports. When a global supply shortage pushed up international prices in 2008, the Japanese government was able to re-export some of the imported at a profit. Japanese rice prices are fixed through monthly or quarterly agreements between agricultural cooperatives and local wholesalers. Some supermarkets and retailers also have direct tie-ups with the cooperatives.
However, Chino said the re-launch of rice futures in Japan after more than 70 years in 2011 has created an alternative pricing tool and many growers are tracking the prices on Tokyo Grain Exchange Inc. The rice futures is yet to take off in a big way but open interest at one point did rise above 5,000 contracts and is currently around 3,000 contracts, Yamashita said. Around 500 contracts are traded daily but volume may pick up when the new crop is harvested later this year, he said.
Soybeans, Corn Climb as Smaller Argentina Crops Boost U.S. Sales (Source: Bloomberg)
Soybeans and corn rebounded from one-week lows on speculation that declining production in Argentina will boost demand for U.S. exports. Soybean output in Argentina, the world’s largest shipper of cooking oil and animal feed made from the oilseed, will fall to 44 million metric tons this year, down from 49 million collected in 2011 and 46.5 million estimated by the U.S. government this month, the Agriculture Ministry said yesterday. The corn harvest may fall to 21 million from 22.5 million last year. “Smaller crops in Argentina mean global supplies are getting tight, and that could boost overseas purchases from the U.S.,” Mark Schultz, the chief analyst for Northstar Commodity Investment Co. in Minneapolis, said in a telephone interview.
Soybean futures for May delivery advanced 1.2 percent to close at $13.6575 a bushel at 1:15 p.m. on the Chicago Board of Trade, after prices yesterday touched $13.385, the lowest since March 13. Still, the oilseed fell 0.6 percent this week, snapping five straight weekly gains.
India sugar seen going to Iran if exports approved
GENEVA, March 22 (Reuters) - Indian raw sugar from a possible fresh tranche of exports, which could be authorised by ministers next week, is likely to be destined for sanctions-hit Iran, European trade sources said.
The sources said a significant portion of so-called Open General Licence (OGL) sugar exports, which could be approved at a ministerial meeting in India on March 26, may be sold to Iran.
Water scarcity to cut key Indian state's sugar output
MUMBAI, March 22 (Reuters) - India's top sugar producing Maharashtra state is likely to see a nearly 17 percent drop in output in the next marketing year beginning from October as water scarcity is deterring farmers from cane cultivation, state government officials told Reuters.
Lower output in the state will trim the world's top consumer's total production and subsequently surplus available for exports in 2012/13.
Indonesia sugar price hits 14-month peak on import uncertainty
JAKARTA, March 22 (Reuters) - Domestic sugar prices in Indonesia, Southeast Asia's largest consumer, approached their highest levels in more than a year this week on uncertainty over when a government-appointed trading house would start importing the sweetener.
The average retailer's daily white sugar price was 11,099 rupiah ($1.21) per kg on Tuesday, up from 11,024 rupiah the previous day and not far from the 11,178 rupiah touched last January, Indonesian trade ministry data showed late on Wednesday.
Arabica Coffee Will Rebound on Tighter Supplies, Illy Says (Source: Bloomberg)
Arabica-coffee futures may rebound to as high as $2 a pound by year-end as global stockpiles tighten, world demand remains firm and climate change keeps production trailing demand, according to Illycaffe SpA. “World inventories are still very low at producing and importing countries,” Andrea Illy, chief executive officer of the Trieste, Italy-based specialty coffee company, said in an interview during the National Coffee Association’s annual conference in Charleston, South Carolina. Next year’s Brazilian crop, the world’s largest, will enter the low-cycle of the biennial harvest, reducing the small surplus left by the bigger production this year, Illy said. In addition, Colombia’s output, the second biggest grower of the arabica beans, has not recovered from weather-induced losses seen in the last three years, which may leave global stockpiles in a tight situation, as demand remains resilient, he said.
Climate changes have been disrupting global coffee production, as was the case in Colombia and parts of Central America in the last couple of years, Illy said during a presentation.
Wilmar sees world sugar surplus until 2013/14
SINGAPORE, March 22 (Reuters) - The world's sugar market is likely to continue in surplus until at least 2013/14, leading agricultural commodities firm Wilmar International said on Thursday, signalling a likely collapse in prices.
"If we enter into this type of big surplus cycle, the sugar market price will have to reach a point where production will be reduced," Wilmar managing director Jean-Luc Bohbot told Reuters in an interview.
Oil Trades Near Two-Day High on Economic Strength Signals (Source: Bloomberg)
Oil traded near the highest level in two days in New York before data this week that may show a strengthening U.S. economy, signaling rising fuel demand in the world’s biggest crude-consuming nation. Futures were little changed after climbing 1.4 percent on March 23. Manufacturers in the U.S. probably received more orders for durable goods in February and consumer purchases climbed the most in five months, economists said data this week will show. West Texas Intermediate crude prices have climbed this year on concern that tension with Iran may lead to military conflict in the Middle East, where more than half the world’s oil reserves are located.
“We’ve priced-in the major supply and demand issues and really in terms of West Texas it’s going to take a fair bit to break us out of that $103.50 to $108.50 a barrel range,” said Michael McCarthy, a chief market strategist at CMC Markets Asia Pacific Pty in Sydney. “The swing factor here is the U.S. economy and for that reason I expect, when or if we do see a break, it’s likely to be on the topside.” Oil for May delivery was at $106.66 a barrel, down 21 cents, in electronic trading on the New York Mercantile Exchange at 11:15 a.m. Sydney time. It rose $1.52 to $106.87 on March 23, the highest close since March 21. Prices slid 0.2 percent last week and are 7.9 percent higher this year.
Oil Rises Almost $3 a Barrel on Iran Report (Source: Bloomberg)
Oil climbed after Reuters reported Iranian oil exports will drop by 300,000 barrels a day this month because of tighter sanctions. Futures gained 1.4 percent on the New York Mercantile Exchange after earlier spiking more than 2 percent in three minutes, following the report, which cited Petrologistics, a Geneva-based consulting company. Stephen Schork, president of the Schork Group in Villanova, Pennsylvania, said the gain may have triggered traders’ automatic buy orders. “The Reuters item came out at the same time we spiked,” said John Kilduff, a partner at Again Capital LLC, a New York- based hedge fund that focuses on energy. “It doesn’t look like much, but it’s a reminder that the tensions will probably only increase. If there is a cutoff of Iranian oil, the Saudis will have a hard time making up for the lost supply.”
Crude oil for May delivery rose $1.52 to settle at $106.87 a barrel on the Nymex. It touched $108.25 a barrel, the highest intraday price since March 2. Futures dropped 19 cents this week and are up 8.1 percent this year.
India govt moves to quell $211 bln coal furore
NEW DELHI, March 22 (Reuters) - India lost up to $211 billion in revenue by selling coalfields too cheaply, a government auditor's draft report said, sparking a furore in parliament on Thursday that added to pressure on the prime minister after months of scandals and policy missteps.
The prime minister's office called the estimated loss "exceedingly misleading," after the report - leaked from the federal auditor and published in the Times of India - prompted lawmakers to demand an explanation and rattled investors.
Euro Coal-Prices stable, few trades seen
LONDON, March 22 (Reuters) - Prices of prompt physical coal were range-bound for a fourth day, with bids and offers too far apart for much to trade.
A May loading South African cargo traded early in the afternoon at $103.00, but the market still lacks clear enough direction for more players to take fresh positions.
Asia takes 78 pct of S.Africa's Feb coal
LONDON, March 22 (Reuters) - Asia's share of South Africa's coal exports rose to 78 percent or 4.7 million tonnes in February out of a total of 6 million, up from 61 percent in the previous month, exporters said.
Asia, including India, has taken an increasing proportion of South Africa's coal during the past few years and despite the substantial rise in monthly export tonnages seen since last June, while Europe's share has been shrinking.
China may miss new target to cut coal output growth
BEIJING/SHANGHAI, March 22 (Reuters) - China plans to slow annual growth in coal output to about 2 percent over the next four years from around 10 percent to conserve resources and protect the environment, but analysts said rising demand will make reaching that target difficult.
The government has set targets of overall production capacity of 4.1 billion tonnes and annual output of 3.9 billion tonnes by 2015, up 11 percent from the 3.52 billion tonnes dug last year, according to a plan issued by the National Development and Reform Commission (NDRC).
Indonesia govt keeps coal output forecast at 332 mln T in 2012
JAKARTA, March 22 (Reuters) - Indonesia's coal production will rise 1.5 percent to 332 million tonnes this year, unchanged from a previous forecast, Thamrin Sihite, the director general of coal and minerals, said on Thursday.
Indonesia, the world's largest exporter of thermal coal, produced 326.7 million tonnes last year, according to government data.
Brent holds above $123, supply worries support
SINGAPORE, March 23 (Reuters) - Brent was steady above $123 a barrel, as the possibility of supply disruptions put a floor under a market that fell sharply in the previous session on weak manufacturing activity in China.
"The Iran situation has a long way to run and that will keep the market tight and support crude oil," said Tony Nunan, a risk manager with Mitsubishi Corp in Tokyo. "The market had fallen enough yesterday and trading will be locked in a range for now."
India min: "systematic" plan for Iranian oil imports
NEW DELHI, March 23 (Reuters) - India will continue to import oil from Iran without violating any international law and has requested the United States and the European Union to take into account the country's oil needs, India's oil minister said on Friday.
"We have a systematic plan for receiving oil from Iran," Jaipal Reddy told reporters at the Asia Gas Partnership Summit, but did not elaborate.
Sri Lanka to buy Oman crude, reduce reliance on Iran
COLOMBO, March 23 (Reuters) - Sri Lanka has signed a deal to buy crude from Oman, as it looks to reduce its reliance on Iran for oil after pressure from the United States.
Sri Lanka, despite being a small player in the world crude market, is one of the 12 countries listed that buy Iranian oil and could be subject to U.S. sanctions unless they significantly cut purchases, a U.S. State Department official said on Wednesday.
IEA sees no disruption in global oil supplies
NEW DELHI, March 23 (Reuters) - The Iran dispute is unlikely to disrupt global oil supplies and there is no need to release oil from the strategic storage as of now, a senior official at the International Energy Agency (IEA) said on Friday.
Maria van der Hoeven, executive director at the IEA, is attending the Asia Gas Partnership Summit in the Indian capital.
EU agrees some Iran oil insurance exemptions
BRUSSELS, March 22 (Reuters) - The European Union will allow some insurance on Iranian oil shipments before its full embargo starts on July 1, member states agreed on Thursday, responding to concerns from Asian importers heavily reliant on the EU for their cover.
The decision, expected to be formally approved by EU foreign ministers on Friday, should make it easier for the likes of Japan and South Korea to import Iranian crude at least until the deadline, EU diplomats said.
Malaysia to halt Iranian oil imports from April -sources
KUALA LUMPUR/SINGAPORE, March 23 (Reuters) - Malaysia's state oil firm Petronas will halt all imports of Iranian crude from April, two months before a U.S. embargo takes effect, joining a growing list of buyers bowing to Western pressure to isolate Iran, Petronas sources said on Friday.
China, India, Japan and South Korea are the four biggest buyers of Iranian crude in Asia and all are cutting imports. Iran sells most of its 2.6 million barrels per day (bpd) of exports in the region.
Global oil outages at 1.2 mln bpd in March-survey
LONDON, March 23 (Reuters) - Global oil supply outages are running at more than a million barrels a day, a Reuters survey has found, helping provide justification for the United States and Britain should they release strategic reserves in a bid to cut oil prices.
Civil unrest, adverse weather and technical glitches disrupted 1.2 million barrels per day (bpd) of global oil output in March on the 90 million bpd world market, according to a Reuters calculation from information provided by companies, government agencies and traders.
No hard landing for the iron ore market
--Andy Home is a Reuters market analyst. The views expressed are his own.--
LONDON, Mar 22 (Reuters) - When BHP Billiton speaks the whole world listens.Ian Ashby, president of the resource giant's iron ore division, said on Tuesday that China's "steel growth rates will flatten and they have already flattened."
Markets immediately swooned, from Asian equities to the Aussie dollar to industrial touchstone copper
Iron Ore-Shanghai rebar falls on weak demand concerns
SHANGHAI, March 23 (Reuters) - China's benchmark steel futures slipped on Friday on lingering concerns about sluggish demand growth in the world's top steel consumer, but prices for iron ore remained firm as traders expect high steel output to support demand for the raw material.
"Demand for construction steel products will apparently improve in the second quarter from the previous period as more construction projects resume operations along with warmer weather," Xie Zhaowei, analyst with Huatai Great Wall Futures, said in a research note.
Steel price hikes set to boost Voestalpine-CEO
VIENNA, March 22 (Reuters) - Austrian steel group Voestalpine expects results to improve from April as it benefits from price hikes and solid demand, Chief Executive Wolfgang Eder told Reuters.
He also forecast business conditions would gradually improve over the course of the year as confidence slowly returns that the worst of the sovereign debt and banking crises are over.
Australia lifts iron ore exports forecast, bets on China demand
PERTH/SYDNEY, March 21 (Reuters) - Australia expects to produce record tonnages of iron ore through much of the decade, nearly all of which will be used to manufacture steel in China, shrugging off signs demand was cooling off and that prices would drop.
Australia raised its forecast on Wednesday for iron ore exports in the current fiscal year by nearly 3 percent to 473 million tonnes, and also sounded a bullish note on the outlook for shipments in the longer term.
Copper Bear Streak Extends as Manufacturing Shrinks (Source: Bloomberg)
Copper traders extended a bearish streak into a second week on mounting concern that demand is weakening after manufacturing contracted from China to Europe. Twelve of 29 analysts surveyed by Bloomberg expect the metal to decline next week and seven were neutral. Inventories at bonded warehouses in Shanghai more than doubled since the fourth quarter, a survey of seven traders and analysts showed. Separate stockpiles monitored by the Shanghai Futures Exchange are near the highest in at least nine years, bourse data show. China consumes 40 percent of the world’s copper. Factory output in Germany and France unexpectedly shrank in March, adding to signs Europe is sliding into recession, and a measure of China’s manufacturing fell to the weakest since November, reports showed yesterday. Chinese Premier Wen Jiabao cut the country’s annual growth target to 7.5 percent earlier this month, the lowest since 2004. Europe accounts for about 18 percent of global copper demand, Barclays Capital data show.
“A slowdown in Europe and China is not good for the long- term outlook,” said Jeffrey Sherman, who helps manage about $30 billion of assets for DoubleLine Capital in Los Angeles. “It feels that we could repeat 2011, where we had a good first half and then there was a correction.”
Spot Gold, Futures Advance After Weekly Gain; Silver Climbs (Source: Bloomberg)
Gold for immediate delivery gained 0.2 percent to $1,665.75 an ounce at 9:09 a.m. Melbourne time, while bullion for April delivery in New York advanced 0.2 percent to $1,665.60 an ounce. Futures advanced the most in four weeks on March 23 on speculation that investors will buy more bullion as an alternative to the slumping dollar. Silver for May delivery rose 0.2 percent to $32.335 an ounce.
Smaller vessels prop up Baltic sea index
March 22 (Reuters) - The Baltic Exchange's main sea freight index tracking rates for ships carrying dry commodities, rose on Thursday, a s rates for smaller vessels edged up due to high fixture activity in both the Atlantic and Pacific basins.
The overall index, which factors in the average daily earnings of capesize, panamax, supramax and handysize dry bulk transport vessels, climbed 6 points or 0.67 percent to 902 points.
Asia Dry Bulk-Rates to fall on weak iron ore demand
SINGAPORE, March 22 (Reuters) - Rates for capesize dry bulk carriers on key Asian freight routes are expected to fall next week because of slower Australian iron ore shipments to China, ship brokers said on Thursday.
"The Pacific has remained largely inactive with the exception of one miner covering a couple of positions and managing to bring the market down in the process," said broker Fearnleys.
Baltic sea index rises on Atlantic activity
March 21 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry commodities, rose for the 20th straight day on Wednesday as demand in the Atlantic basin pushed up rates of smaller vessels.
"The overall dry bulk market has continued to improve slowly, feeding off a much improving Atlantic basin," George Lazaridis of Intermodal Shipbrokers Co said.
