Corn (Source: CME)
US corn futures finish mixed as old-crop contracts slide to a 2-week low. After setting a fresh all-time record of $7.83 3/4 on Monday, the market has been dragged lower this week by profit-taking and pressure from other commodities due to worries about the global economy and demand. Meanwhile, new-crop contracts managed to shrug off the pressure that nearby contracts faced. A number of weather concerns raise the threat of planting delays, which is underpinning new crop contracts, says Sterling Smith with St. Paul brokerage Country Hedging. Corn for May delivery, the most actively traded contract, ended down 1.6% at $7.42/bushel on the CBOT while new-crop December rose 1/2c to $6.56.
Wheat (Source: CME)
US wheat futures end mostly higher, with Chicago wheat futures leading the gains on ideas of increased soft red winter wheat feeding as corn crept above CBOT wheat for the first time in 15 years this week. The potential for increased wheat feeding and end-of-week risk reduction allowed futures to shake off pressure from wet weather expected to improve winter wheat crop ratings in the Plains, said Chad Henderson from Prime Ag Consulting. CBOT May wheat rose 3 3/4c to $7.44 1/4 a bushel.
Rice (Source: CME)
US rough rice futures end lower, backpedaling from earlier gains as traders reduced risk exposure ahead of the weekend. The market's losses were limited by solid export demand reported Thursday and concerns about dryness adversely impacting rice crops in Texas, analysts said. CBOT May rice settled 3c lower at $13.63 1/2 a bushel.
U.S. wheat rises, corn steady on supply concerns
SINGAPORE, April 15 (Reuters) - U.S. wheat futures rose around half a percent and corn was steady, with tight supplies and broad-based strength across commodities continuing to support grains. "We have seen a firmer open in the grains and oilseed complex which is correlating with a firmer open in the crude oil market as well," said Luke Mathews, a commodity strategist with Commonwealth Bank of Australia in Sydney.
Ukraine to double grain exports to 23.4 mln T 11/12
KIEV, April 15 (Reuters) - A jump in Ukraine's 2011 grain harvest and high stocks will allow the ex-Soviet republic to boost exports to 23.36 million tonnes in 2011/12 from about 11 million in 2010/11, analyst UkrAgroConsult said on Friday.
The consultancy, which previously forecast the export of 21.51 million tonnes next season, said in a report that it predicted higher exports of wheat and maize but expected a smaller export of barley.
India rice, soybean areas seen receiving good rains
PUNE, India, April 15 (Reuters) - Rice and soybean growing areas of southern and central India could receive above-normal to normal monsoon rains in 2011, sources attending a global weather meeting said on Friday, but cane and corn growing areas could see below-normal rainfall.
The monsoon is crucial for Asia's third-largest economy and a bad season can force the country into the international markets as a foodstuffs buyer, pushing up global prices. Good rains can boost its exports, helping governments throughout Asia to battle food inflation. .
Cocoa steady after grind data; coffee rises
Cocoa prices were steady after first-quarter grindings rose in Malaysia, North America and Europe, as cocoa processors utilised capacity around the world to compensate for the lost capacity in Ivory Coast. Below are highlights for the cocoa, coffee and sugar markets. Arabica coffee futures on ICE strengthened in early trade as a shortage of high quality beans helped prices edge toward the 34-year high hit in March.
Ivory Coast lifts ban on cocoa exports, taxes
ABIDJAN, April 14 (Reuters) - Ivory Coast's President Alassane Ouattara formally lifted a nearly three-month ban on cocoa and coffee exports as well as on related tax payments, his television channel said on Thursday.
"The president of the republic orders that the measures suspending coffee and cocoa exports as well as tax payments be lifted," TCI television said.
Crushing of Brazil cane crop spreads, yields up
SAO PAULO, April 14 (Reuters) - Ninety mills have begun crushing Brazil's 2011/12 cane crop (April-March), industry association Unica said Thursday, adding that about 200 more are expected to begin operating over the next few weeks.
A year ago, the number of mills working was much higher as there were 60 million tonnes of cane left uncut from the previous cycle that were ready to be harvested.
Malaysian cocoa grindings up 10.8 pct in Q1
JAKARTA, April 15 (Reuters) - Cocoa grindings in Malaysia, Asia's largest grinder, rose 10.8 percent in the first quarter of 2011 from a year before, the Malaysian Cocoa Board said on Friday, similar to gains in North America and Germany.Fears that unrest in Ivory Coast could disrupt the supply of beans gave a boost to grinders in Asia, Europe and North America earlier this year, with chocolate makers also stocking up ahead of the Easter holiday.
Regulators outline commodities market crackdown
LONDON, April 15 (Reuters) - Global regulators unveiled plans on Friday to tighten supervision of commodities markets but said there was still no evidence to pin price swings on speculators.
The International Organisation of Securities Commissions (IOSCO) published a list of draft actions it will finalise for a meeting of finance ministers from the world's top 20 economies (G20) to endorse in October for global implementation.
Hoenig: Fed Stimulus Policies Exacerbate Ag Commodity Inflation (Source: CME)
Government efforts to stimulate the economy are complicating agricultural commodity markets' ability to respond to supply shocks, Federal Reserve Bank of Kansas City President Thomas Hoenig said. Hoenig, an outspoken critic of the Fed's efforts to pump money into the economy, acknowledged that agricultural commodity prices are driven by factors such as weather and technology, but said Fed policies are also fueling "the inflationary impulse." Crop and livestock prices have soared since last summer, thanks in part to lackluster crops around the world and continued demand growth. Corn prices hit an all-time high this week at the Chicago Board of Trade. Farmland prices are also up sharply throughout the Midwest, and Hoenig remains concerned that low interest rates and increased liquidity are pushing those prices higher and building a bubble. "We can extend the boom, and make the bust more difficult," Hoenig said at a panel discussion on food prices at Purdue University.
He said that interest rates can't stay near zero forever, and that investment in farmland is "gambling." Hoenig also said that worries about inflation should extend beyond the core Consumer Price Index, which doesn't include food or energy. "I think it is an error to look at just core inflation, except for a very short period of time," he said. Hoenig added that he sees no risk in the foreseeable future that the U.S. dollar would be unseated as the world's reserve currency, citing the importance of the U.S. economy and absence of an alternative.
China 2011 Grain Area 110.3 Mln Hectares, Up 0.4% On Year (Source: CME)
China's grain area this year will reach about 110.3 million hectares, up 400,000 hectares, or 0.4%, from 2010, the National Bureau of Statistics said. Area under summer grains, including wheat and rapeseed, is expected to increase by 50,000 hectares to 27.5 million hectares, said Sheng Laiyun, a spokesman with the bureau. The survey is based on more than 70,000 farming households nationwide, he said. In the first quarter of this year, meat output increased 1.8% from a year earlier to 21.4 million metric tons. Pork output was up 1.7% to 14.5 million tons.
EU Soft Wheat Export Licenses Rise 198,000 Tons On Week (Source: CME)
European Union licenses to export soft wheat increased 198,000 metric tons for the week ended April 12, E.U. data showed. This takes total EU wheat exports, 41 weeks into the 2010-11 marketing year, to 15.9 million tons, up 13% from 14.1 tons million over the same period the previous year. EU total grain exports increased 367,000 tons on the week to 23.4 million tons for the year so far, compared with 17.8 million tons over the same period the previous year. EU wheat imports, 41 weeks into the marketing year, increased 31,000 tons on the week to 1.82 million tons compared with 2.76 million tons over the same period the previous year. Total grain imports to date are 9.98 million tons, compared with 6.68 million tons in the previous year.
India To Add 4 Mln Tons Grain Storage Capacity By March 2012 (Source: CME)
India plans to ramp up its grain storage capacity by 4 million tons by the end of the fiscal year through March 2012, the chairman of state-run Food Corp. of India said, as granaries are overflowing after two successive good harvests. Siraj Hussain said the country is aiming to add a total capacity of 15 million tons over the next two years, which is likely to take care of storage needs until 2017. India's current grain storage capacity is 43.56 million tons. Food Corp. is the federal government's main grain procurement agency. The government is aiming to procure 26 million tons of wheat in the marketing year through June, which is 15% more than last year, as the country is expecting a record crop of 84.27 million tons in 2010-11. This could mean that the government will have to store some quantity in the open, putting it at risk from rain or other extreme weather conditions.
Nearly 6,000 tons of wheat was damaged in the 2010-11 fiscal year due to heavy showers and other rough weather conditions, Hussain said. Harvest of the new wheat crop in the northern grain bowl states of Punjab and Haryana started on March 15 and is likely to peak by the end of April. Wheat is sown in the winter months of October-November and good rain as well as high state-fixed minimum price for wheat encouraged farmers to sow more of the staple. The government has approved a one-time bonus of INR500/ton for farmers, over and above the minimum state-fixed purchase price of INR11,200/ton to build stocks as it is planning a law that will widen subsidized grain sales to the poor, two food ministry officials said. "The state governments of Punjab and Haryana have been asked to ensure safe storage of wheat...We will also move some wheat stocks [from key producing regions] so that there is no choking of grain stocks," Food Corp.'s Hussain said.
The government plans to add storage space of 5.12 million tons in Punjab and 3.88 million tons in Haryana in the next two years, he added. Grain stocks with Food Corp. swelled to around 46 million tons as of March 1, which is more than double the requirement for state-run welfare programs. Trade officials have been lobbying the government to lift a four-year export ban on wheat to ease storage space.
Goldman Commodity View Subtler Than Just 'Sell' (Source: CME)
Commodity prices will dip in coming months before rebounding later this year, Goldman Sachs said in a research report, expanding its view after a recommendation to sell commodities earlier this week helped spark a broad market decline. In a weekly commodities report from the investment bank--which often moves markets with its recommendations to buy or sell--analysts provided a broader outlook on raw materials that suggested any short-term correction in commodities would be trumped by rising prices over the next year. Goldman expects gold, soybeans and grains to post gains heading into 2012 and sees a drop in copper stockpiles next year. Still, the bank cut its forecast for the return on commodities over the 12 months to 10% from 14.3%. "While we have lowered our near-term allocation recommendation based on expected returns, the role of commodities as a portfolio diversifier and inflation hedge increases its attractiveness in the current environment," analysts said.
The report provided nuance to the bank's commodity outlook after a brief update earlier in the week sent traders fleeing gold, grains, crude oil and other markets. In the recommendations released Monday, Goldman suggested clients sell a popular basket of commodities and said there were "nascent signs of oil demand destruction." The note--from a traditional bull on the oil market--followed reports from the Organization of Petroleum Exporting Countries and from the Paris-based International Energy Agency that also suggested demand was falling. "The Goldman note, on the day it was released, had a significant impact on prices," said Sean McGillivray, a broker with Great Pacific Wealth Management. "When Goldman says, 'Hey, we're pulling this off,' the headlines can create enough of a liquidation to move markets." Goldman wasn't immediately available for comment.
Goldman recommends underweight commodities for 3-6 months
SINGAPORE, April 15 (Reuters) - Goldman Sachs recommended investors go underweight commodities over a three to six month horizon, echoing its call from Monday, saying oil prices are higher than justified by current supply and demand.
The bank maintained an overweight recommendation for the sector over a 12-month horizon as fundamentals are expected to tighten over the next year.
Mexico Sees 5M-6M Tons Of Spring-Summer White Corn Hedged (Source: CME)
Mexico will hedge between 5 million and 6 million tons of white corn during the spring-summer harvest, contributing to a stabilization of prices, an official with the Agriculture Ministry's marketing service, said Aserca. The fall-winter cycle closed recently with 9 million tons of white corn hedged, said Cesar Ortega, director of financial markets for Aserca. The season's figure surpasses Aserca's goal of hedging at least 6.5 million tons during the period, when a majority of the country's white corn is produced. The Mexican service purchases futures options in Chicago for farmers, giving them certainty that their product will have a buyer and that prices will be stable. The international market for corn has been bullish, and high prices have contributed to a rise in the cost of tortillas in Mexico, which averaged 10.88 pesos ($0.93) per kilogram at tortilla shops on April 15, up from MXN9.81 at tortilla shops during the same week last year.
Freezes in February in the north of the country destroyed millions of tons of corn, but replanting efforts are expected to make up for some of the losses. Mexico now expects a 2011 production of 23.3 million tons, most of it white corn, down from initial expectations of 25 million tons. Aserca director Manuel Martinez de Leo said prices are expected to drop from this point forward. "The worst of prices is behind us," he said. He said the livestock industry has transferred at least 380,000 tons of white corn to be used for human consumption, to help cover production shortfalls. "Lots of corn that was in storage houses for animal consumption is going toward human consumption," said Martinez de Leo. Mexicans eat mostly white corn. The replanted corn crop in the northern state of Sinaloa, where a majority of the freeze damage occurred, is expected to be harvest in June instead of May. Imports arriving in May are expected to offset the temporary shortfall.
Commodity prices plummeted Monday and Tuesday on concerns that the high prices of raw materials were raising costs for businesses and consumers, and weighing on global economic growth. In the later report, Goldman analysts raised 12-month price forecasts for West Texas Intermediate and Brent crude-oil futures, reformulated gasoline, heating oil, Nymex natural gas, U.K. NBP natural gas, corn and cocoa from previous estimates released in late March. The most significant increase was in corn, which saw a 20% bump up in its one-year forecast from $5.80 a bushel to $7.00 a bushel. The bank increased its 12-month forecasts for WTI and Brent crude oil by 50 cents each, to $103.50 a barrel and $107 a barrel respectively.
China copper, aluminium output set for new record in April
HONG KONG, April 15 (Reuters) - China's copper and aluminium production are set for another record month in April, after a March surge, resulting from expanded capacity and rosy demand forecasts by producers.
China produced a record 470,000 tonnes of refined copper in March, up nearly 6 percent from a peak set in December 2010, data from the National Bureau of Statistics showed on Friday.
U.S. metal imports slow in Feb, Q2 recovery seen
NEW YORK, April 14 (Reuters) - Mother Nature's wrath likely had a hand in slowing U.S. imports of aluminum and copper in February, but if seasonal demand trends hold true, shipments should recover in the months ahead.
Data from the U.S. International Trade Commission on Tuesday showed copper imports fell for a third straight month in February to 50,494 tonnes.
China steel output may hit 700 ml T this yr -NDRC
SHANGHAI, April 15 (Reuters) - China's crude steel output may hit 700 million tonnes this year on expectations of strong demand, the country's economy watchdog said on Thursday.
The National Development & Reform Commission (NDRC) gave the forecast in a statement on its website based on output figures released by the China Iron & Steel Association (CISA), mainly on behalf of China's medium- and large-sized steel mills.
China March steel output stayed high, outlook cautious
SHANGHAI, April 15 (Reuters) - Steel mills in China shrugged off overcapacity, higher interest rates, rising iron ore costs and narrow profit margins in March and focused on improving demand prospects to keep daily output near last month's record high.
Daily crude steel output in March fell slightly to 1.92 million tonnes, compared to 1.94 million tonnes a day in February, a Reuters calculation showed based on data from the National Bureau of Statistics released on Friday.
Zinc premiums hold steady, inventories jump
LONDON, April 15 (Reuters) - Premiums for physical zinc in Europe held steady this week, traders said, with demand little changed and a recent jump in stocks having little impact because the metal went into New Orleans, far from consumers' reach.
Zinc premiums to the London Metal Exchange (LME) cash price were at $110-130 a tonne this week, according to traders, unchanged from the previous week's quote.
Major market developments in March
LONDON, April 14 (Reuters) - Prices for battery material lead made some headway in March, helped by robust demand expectations, but the market is well supplied and may move lower in the near term.
"The lead price is rich at this level and we could see it back to $2,400," said Fastmarkets analyst Will Adams.
Tight supply, brisk demand to keep tin aloft
LONDON, April 15 (Reuters) - Tight supplies and resilient demand will keep tin prices high this year, despite the impact of the earthquake on big consumer Japan and increasing exports from Indonesia, a Reuters survey of metals analysts showed.
The consensus of 10 forecasts showed tin will average $30,285 per tonne, up from a forecast of $27,000 a tonne in a January survey.
Supply constraints point to uranium rebound
ZURICH, April 14 (Reuters) - Uranium prices and shares in uranium miners have fallen since Japan's Fukushima crisis clouded the future of nuclear energy, but these could rebound as uranium supplies are not enough to meet global demand, an industry executive said.
"Supply and demand fundamentals don't tell us we should be writing an obituary for the industry any time soon," Amir Adnani, Chief Executive of Amex-listed miner Uranium Energy Corp told Reuters this week.
OMH to keep some HK listing funds for Malaysia smelter
KUALA LUMPUR, April 15 (Reuters) - Australia's OM Holdings (OMH) will use some of the funds generated from a planned secondary listing in Hong Kong to finance a manganese and ferro silicon smelter in Malaysia's Borneo island state of Sarawak, its chief said on Friday.
The miner expects to spend up to $400 million to build the smelter with 600,000 tonnes of annual capacity in its quest to join BHP Billiton and Vale as top producers of the steel components.
METALS-Copper under pressure as inflation rises globally
LONDON, April 15 (Reuters) - Copper fell on Friday, heading for a fifth straight session of losses as investors worried Chinese inflation at a 32-month high would lead to tighter monetary policy hitting demand in the world's top metals buyer.
Chinese consumer price inflation sped to 5.4 percent in the year to March, the fastest since July 2008 and topping market forecasts for a 5.2 percent increase. Gross domestic product eased a touch in the world's top copper buyer.
PRECIOUS-Gold holds near record high on haven, inflation appeal
LONDON, April 15 (Reuters) - Gold held near record highs on Friday as euro zone sovereign debt concerns, worries over inflation and expectations U.S. interest rates will stay low all conspired to support the precious metal.
Gold and silver retreated a touch after a decision by rating agency Moody's to cut Ireland's debt rating to just above junk pressured the euro, but remain firmly underpinned. Silver is holding near its earlier 31-year high at $42.64.
Gold Climbs to Record on Concern Pace of Global Inflation Is Accelerating (Source: Bloomberg)
Gold advanced to a record for a third day as mounting inflation across the globe and Europe’s sovereign-debt crisis prompted investors to seek a store of value. Silver climbed to the highest price in 31 years.
Oil declined for the first time in four days in New York after Saudi Arabia, the world’s biggest exporter, said the global market has adequate crude supplies. (Source: Bloomberg)
Futures slipped as much as 0.5 percent after Saudi Arabia’s Oil Minister Ali al-Naimi said yesterday that the “market is oversupplied.” Crude fell 2.8 percent last week on speculation gains in prices, spurred by conflicts in the Middle East, will curb economic expansion. The World Bank said last month East Asia needs to tighten monetary policy and governments should let stimulus packages lapse.
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