Corn (Source: CME)
US corn futures close mixed as deferred contract months continue to rally on concerns about cool, wet weather delaying planting. Farmers need favorable conditions to sow and harvest a large crop to rebuild low inventories. Yet, forecasts show soggy conditions will disrupt sowing near term. "We will not get anything done until May 1 at this stage," says Mike Zuzolo, president of Global Commodity Analytics & Consulting, about planting. Nearby contracts weaken on profit-taking. CBOT July corn slips 2 1/2c $7.57 a bushel; December corn jumps 7 3/4c to $6.76.
Wheat (Source: CME)
US wheat futures finish stronger as concerns build about dry weather hurting global output. In Texas, a major producer of hard red winter wheat, crop conditions are "bad and getting worse," says Mark Welch, grain marketing specialist at Texas A&M University's extension service. He predicts the state will produce about 33M bushels of wheat, roughly one-third its average harvest. That's sharply below USDA's recent forecast of 64.8M bushels. China and Western Europe also are dry. CBOT July wheat rises 10 1/4c to $8.21 a bushel; KCBT July surges 30 1/4c to $9.36 3/4; MGE July climbs 28 3/4c to $9.51 1/2.
Oats (Source: CME)
Oat futures strengthened on concerns cool, wet weather in the northern U.S. Plains and Canada will continue to delay planting. Planting in the U.S. was 39% complete as of Sunday, below the average of 46% for that time of year, according to government data issued Monday. Oats for July delivery rose 7 cents, or 1.8%, to $4.03 1/2 a bushel.
Rice (Source: CME)
US rice futures finish firmer as wheat rallies for a third consecutive day. Gains in wheat help lift rice because both grains are global food staples, analysts say. Some consumers, particularly those in Asia, will eat more rice if wheat becomes too pricey. Global rice supplies are ample, and farmers are planting the US crop at a faster-than-normal pace. Plantings were 37% complete as of Sunday, two percentage points above the average for that time of year. Farmers are sowing less rice than last year due to weak prices. CBOT July rice gains 4c to $14.01 1/2 per hundredweight.
First State Exec: World Food Prices At Investment "Tipping Point" (Source: CME)
World food prices have reached a "tipping point" where farmers are likely to boost their investments in increasing productivity, the manager of First State's Agribusiness Fund said.
International prices for agricultural commodities have surged to record highs this year, according to the United Nations, after a succession of weather problems dented output for crops as diverse as grains, oilseeds and sugar. Yet while this season's rally has been spurred by natural disasters, some investors argue it heralds a longer-term trend of rising food prices as the world struggles to increase output by 70% by 2050 in order to feed a predicted 9 billion people. "We're at the point now where we're incentivising farmers to increase production," said Renzo Casarotto, senior manager of the $26 million fund. "We're going to see more [research and development in order] to become more effective in improving yields." A major driver in the food-price rally this season has been a draw-down in world stock levels. Global sugar inventories are at a two-decade lows and grain production has fallen short of supply for the past seven seasons out of 11.
Yet while every major forecasting agency is expecting a rise in world food production next year, doubt remains as to whether this will sate demand given emaciated stocks, and prices are expected to remain high into next season. Although he gave no specific forecast, Casarotto said if prices stay at these levels for a sustained period farmers will "take gradual steps to invest once they see these levels are sustainable" in the way energy and metals producers have done. "The challenge is to produce more food with fewer resources," he said. "This will need investment." He cited U.N. figures estimating agriculture will need $80 billion a year to meet growing global demand. Launched less than a year ago, First State's Agribusiness Fund invests in a range of agriculture-related businesses in order to cash in on the predicted rise in farm investments.
Its largest holdings are in agricultural giants like Potash Corp. of Saskatchewan Inc., Deere & Co. and Mosaic Co., although it also invests in companies such as BRF-Brasil Foods SA and Sino-Forest Corp. Casarotto said the fund intends to expand more in regions like South America and Asia where output growth will be centered. In these countries, he said, price transmission to farmers can be slower due to inhibitors like greater transportation costs, but the agricultural potential is vast. "The transportation costs [for moving grains] from [Brazil's] Masso Grosso to Santo port is $3.50 a bushel so only now are farmers becoming incentivised to increase production," he said.
UK Farmland Prices Rise Fastest Since 2008 In Q1 2011 - Savills (Source: CME)
Growth in U.K. farmland prices this year has got off to the best start since 2008 as a growing number of buyers competed for less land, a report by Savills said. Values for average grade farmland rose 2.3% in the first quarter of 2011 to GBP5,400 per acre, the survey said, as the number of new applicants registering to buy rose 16%. The amount of land on offer, however, fell by 22% compared with the same time in 2010. In England, just under 13,500 acres were marketed between January and March, down around 1,000 acres from the same time last year. "Continued demand combined with a further reduction in the volume of available farmland has resulted in the best first quarter growth in farmland values since 2008," said the report. The figures show growing momentum in a market which recorded an 11% increase in land prices during 2010 and 7.2% in 2009. Arable land continues to show the strongest growth in prices across England, according to the survey.
However, with reforms to the European Union's farming support policies on the horizon, Savills said buyers may become increasingly price-sensitive next year. "The rate of growth may soften slightly in 2012 as the outcome of the latest CAP reform becomes clearer," said the report.
Bangladesh Buyers Delay Wheat Import Payments On Weak Currency (Source: CME)
Importers in Bangladesh have delayed payments for close to 100,000 metric tons of wheat due to lower domestic prices and a weaker local currency, trading executives said. Bangladesh is one of the world's largest wheat importers, but delays in payments may cause imports to slow amid adequate local supply. Payments of at least $30 million for Pakistan's wheat sales to Bangladesh are pending as importers have delayed obtaining letters of credit from banks, a Karachi-based commodities exporter said. Commodity importers in Bangladesh said many are delaying opening LCs due to a weakening Bangladeshi Taka, as foreign exchange reserves decline. The currency has declined to around BDT73.5 against the dollar from around BDT70 in December, a commodities trader in Dhaka said. He said to open LCs at current rates would result in importers being saddled with costlier grain at a time when local prices are falling.
Buyers were importing wheat from Pakistan around $360 a ton, cost and freight, earlier this year, while the local price is now equivalent to $260/ton. Even higher-quality Australian wheat is now trading around $325/ton in Bangladesh's markets. "Importers in Bangladesh are themselves to blame for the situation because they have overbought wheat, causing a glut in their market," said a Singapore-based executive at a commodities trading company. A grains importer in Dhaka said the country's wheat imports in the January-March period were close to 1.3 million tons. He said Bangladesh usually imports between 750,000 tons and 950,000 tons of wheat each quarter, and the above-average numbers are mostly because of aggressive purchases from Pakistan. However, local wheat prices have declined by around $70/ton since December, making it uneconomical for importers to take delivery of some of the pending contracts.
Some importers say they are ready to take delivery and make payments, but commercial banks are slow in opening LCs due to the country's widening trade deficit. Bangladesh's foreign exchange reserves fell around 4% in March, to $10.7 billion. "It is more of a balance sheet management issue [for commercial banks] rather than that of forex reserves," said a senior banking executive in Bangladesh. The delay in releasing payments through LCs is primarily because some commercial banks don't have sufficient local currency to buy dollars to meet import obligations, he said. The current foreign exchange reserves are sufficient for four to five months of overall imports, he said.
Lebanon 2010-11 Grain Imports To Hit Record High - UN's FAO (Source: CME)
Lebanon is likely to import a record amount of grain this season after disease savaged the country's harvest, the United Nations' food body said. Cereal purchases, mainly of wheat, are expected to rise to 846,000 metric tons in 2010-11, 5% above the five-year average, due to an 18% slump in domestic production to 134,000 tons, the Food and Agriculture organization said. "The poor performance [of the 2010 winter wheat crop] was mainly due to reduced yields following the outbreak of a new and virulent strain of yellow rust," said the FAO's report. Like many Arab countries, Lebanon is heavily reliant on grain imports to feed its population. Production only covers about 20% of annual demand, the FAO said, leaving the country vulnerable to near record-high world prices. Still, the FAO said it expects production to pick up in 2011 "following beneficial rainfall in March and April that boosted soil moisture for the wheat and barley crops."
US Corn's Tight Outlook Isn't Yet Rippling Through Cash Market (Source: CME)
Cash markets for U.S. corn remain calm even as supply concerns drive futures to trade at record high prices. Commercial users such as ethanol makers and livestock producers aren't bidding up cash prices for corn, a sign that there is no rush in the near term to lock up supplies. Heavy selling by farmers taking advantage of surging prices has provided adequate supplies to meet current demand. Yet the situation could reverse by late summer. While the nation's supply of corn isn't going to run out, the government projects pre-harvest supplies to decline to their lowest level since 1996. That could create pockets of shortages, depending on a buyer's location and the pace of the autumn harvest. For now, grain processors aren't boosting basis, which is the difference between local cash prices at elevators and futures prices on the Chicago Board of Trade. Typically, grain users push up basis levels when they need physical supplies, increasing the flow of corn into the cash market.
Prices of corn futures have surged to records highs of more than $7.80 a bushel following a federal report last month that showed grain inventories fell more than expected. In contrast, the average basis level in U.S. widened to 65 1/2 cents below current futures prices from 43 1/4 cents before the March 31 inventory report. Cash corn prices don't suggest supplies are that tight and have been a bit disappointing at a time when the U.S. Department of Agriculture is projecting tight, end-of-season supplies, said Joel Karlin, analyst with Western Milling, a California-based feed company.
Wheat rises half pct, corn steady as weather threatens crops
U.S. wheat futures rose around half a percent, building on the previous session's rally of 4 percent as dry weather threatened crops in top producers the United States, Europe and China."It is a weather-inspired rally, which has been made all the more impressive as it comes against the rising U.S. dollar," said Garry Booth, a trader at MF Global Australia.
China sells feed wheat, no new loans for corn processors-media
BEIJING, April 19 (Reuters) - China has sold 112,361 tonnes of feed wheat from state reserves on Tuesday, bringing total sales to 353,072 tonnes since the government initiated the sale late last month. Sales of feed wheat would help ease tight corn supplies for feed mills. Beijing has also restricted purchases of corn by processors from farmers to ensure ample supplies for mills.
India likely to forecast normal monsoon for 2011
NEW DELHI, April 19 (Reuters) - India's first official forecast for the 2011 monsoon on Tuesday is likely to match other outlooks for normal rains, which if met would bring relief to Asia's third-largest economy in its battle with high food prices. Hopes for normal rains have grown following a favourable forecast for South Asia by global weather experts last week. Good rainfall would boost food output in India, one of the world's top consumers and producers of a range of agricultural commodities, and also help governments throughout Asia to battle food inflation.
US farmers plant 7 pct of corn crop, below forecasts
CHICAGO, April 18 (Reuters) - U.S. farmers have seeded 7 percent of intended corn acreage so far this year, falling below trader expectations and the record planting pace of last year, U.S. Agriculture Department data showed on Monday. Analysts had forecast the government to put corn plantings at 8 percent complete as of April 17, which would have matched the five-year average, a Reuters poll showed.
U.S. corn planting seen hindered by rain, cold
CHICAGO, April 18 (Reuters) - U.S. farmers are expected to have planted 8 percent of the corn crop as of Sunday, a Reuters poll of 11 analysts showed, trailing last year's record pace of 19 percent. Cold weather and wet soil kept farmers out of the fields in the Midwest grain belt late last week. The U.S. Department of Agriculture will update its crop planting progress report on Monday afternoon. This year's corn crop has to be bountiful to help replenish the tightest stocks in the United States since the 1930s, a situation that fueled Chicago Board of Trade corn futures to a record high of $7.83-3/4 per bushel last week.
Worry grows about dry weather damage to EU wheat
HAMBURG, April 18 (Reuters) - Wheat plants in top three European Union producers France, Germany and the UK face an increased danger of damage from a long spell of dry weather in all three countries, analysts said on Monday."While millions of people will be hoping for a hot, sunny Easter holiday this weekend, tens of thousands of farmers will be hoping for lots of rain, clouds and horrible weather," one German analyst said. EU wheat prices rose on Monday and were supported last week by fears the prolonged dry period was stressing wheat plants at a critical time of development after winter dormancy.
US Midwest rains halt corn planting, rivers rising
CHICAGO, April 18 (Reuters) - A wet week ahead for the U.S. Corn Belt following heavy weekend rains will keep farmers sidelined from planting crops this week, a forecaster said on Monday. "It doesn't look good for planting for the five-day period or the six to 10-day period," said agricultural meteorologist Joel Burgio of Telvent DTN weather service.
German farmers see smaller 2011 grain crop
HAMBURG, April 18 (Reuters) - Germany is set for another disappointing grain crop in 2011 as the hard winter and recent dry weather has reduced yields, the German Farm Cooperatives Association said on Monday in its second harvest forecast.
Germany's 2011 grain crop of all types is likely to fall to 44.1 million tonnes from the weather-damaged 44.2 million tonne harvest in 2010, it said. This was 100,000 tonnes down on its previous estimate. The 2011 rapeseed crop is forecast to fall to 5.2 million tonnes from 5.73 million tonnes in 2010, it said.
Cocoa, sugar ease on demand worries
Cocoa and sugar futures eased in early trade , pressured by a weaker outlook for U.S. credit, while arabicas rose, underpinned by a shortage of arabica beans. Dealers remained focused on the resumption of exports from top producer Ivory Coast, following the lifting of an export ban and EU sanctions against the country after months of disrupted supply. News on the state of the country's coming mid-crop was also keenly awaited.
Cuba meets annual sugar plan as mills grind on
HAVANA, April 18 (Reuters) - The Cuban sugar industry has met its production plan of around 1.1 million tonnes of raw sugar for the season, with 18 of 39 mills still grinding, official media said on Monday. "The sugar production plan was met with a moderate increase (over the previous season)," announced the mid-day official television newscast, without providing further details.
India sugar ends steady; market eyes summer demand
MUMBAI, April 18 (Reuters) - India's sugar ended steady on Monday as an estimated rise in the production outweighed rising traditional summer demand for the sweetener, dealers said. Demand for the sweetener from ice-cream and cold-drink makers typically goes up during the summer months. "The market is getting a lift from the summer season. Weddings season is also there. It is likely to harden prices by 25-50 rupees (per 100 kg)," said Ashok Jain, president, Bombay Sugar Merchants Association (BSMA).
Floods cut 1 pct of Thai 2011 rubber output
BANGKOK, April 19 (Reuters) - Thailand should produce 3.46 million tonnes of rubber this year, down one percent from a January forecast due to heavy floods, the chief of an industry body in the world's biggest rubber producer and exporter said on Tuesday.That was still 15 percent above last year's annual production of 3.0 million tonnes.
"We still believe we can produce around 3.46 million tonnes this year, or around a 1 percent drop from the previous forecast," Luckchai Kittipol, president of the Thai Rubber Association, told Reuters, referring to a previous forecast of 3.49 million tonnes made in January.
Oil Near Two-Day High After U.S. Housing Starts Beat Economist Forecasts (Source: Bloomberg)
Oil traded near a two-day high in New York as better-than-estimated U.S. home construction figures and company earnings provided signs of an improving economic outlook, stoking speculation fuel demand may increase.
Gold Tops $1,500 on Outlook for Escalating U.S. Debt, Dollar (Source: Bloomberg)
Gold futures rose to a record $1,500.50 an ounce as U.S. debt concerns weighed on the dollar, boosting demand for the precious metal as an alternative investment. Silver surged to a 1980 high. The greenback dropped against the euro on speculation that the European Central Bank will continue to raise borrowing costs as some nations struggle to contain sovereign debt. Standard & Poor’s yesterday revised its long-term outlook on U.S. debt to negative from stable. Gold has climbed 32 percent in the past year, and silver prices have more than doubled.
PRECIOUS-Gold rises towards $1,500/oz, risk appetite fragile
LONDON, April 19 (Reuters) - Gold rose back towards the previous session's record high near $1,500 an ounce on Tuesday, with appetite for risk fragile after Standard & Poor's cut its U.S. outlook and as euro zone sovereign debt concerns simmered.
Prices rose to a record $1,497.20 an ounce on Monday after the S&P announcement rocked the markets but slipped back quickly after running into strong resistance at higher levels.
METALS-Copper bounces back, debt concerns weigh
LONDON, April 19 (Reuters) - Copper rose about 1 percent on Tuesday, clawing back some ground after six straight sessions of losses as the focus moved to long-term supportive fundamentals.
But investors remained nervous about debt problems in the United States and Europe.
Three-month copper on the London Metal Exchange rose to $9,333.25 a tonne by 0949 GMT from $9,225 at the close on Monday.
ETF Securities' physical copper ETP holdings rise
LONDON, April 18 (Reuters) - The amount of copper held to back the physical exchange-traded product of ETF Securities rose more than 250 tonnes to 3,251.550 tonnes on Monday, the company's website showed on Monday.
Total holdings in the physical nickel and physical tin exchange-traded products were unchanged at 77.913 tonnes and 405.006 tonnes, respectively.
Fears of end to bank aluminium deals are premature
LONDON, April 18 (Reuters) - Fears of an end to lucrative deals that have locked up large swathes of aluminium stocks are premature because it is likely to take many months for interest rates to reach levels that make them unprofitable.
Financing deals are estimated to have tied up a hefty 70 percent of record high aluminium stocks at around 4.6 million tonnes in London Metal Exchange warehouses.
China steel demand to improve, uncertainties remain -CISA
SHANGHAI, April 19 (Reuters) - Steel demand in China, the world's biggest producer, is expected to rise during the upcoming strong consumption season, but the government's clamp-down on liquidity may inject uncertainties in the market, the China Iron & Steel Association (CISA) said on Tuesday.
"The monetary policy is likely to be tightened further to ease rising inflationary pressure, which will cause capital shortage on (steel) enterprises and bring uncertainties on (steel) market demand," CISA said in its monthly report.
Global steel use to hit record in 2012 -Worldsteel
LONDON, April 18 (Reuters) - Overall global economic recovery will drive steel consumption to a record 1.441 billion tonnes next year, but austerity measures will slow growth in China, the World Steel Association said on Monday.
While demand in emerging countries in 2012 will be well above pre-crisis levels, steel consumption in developed economies will still lag behind the record levels hit in 2007-2008, Worldsteel data showed.
Overproduction, poor demand hit flat steel prices
LONDON, April 18 (Reuters) - European prices of domestically produced and imported flat steel products fell this week as the market was oversupplied and demand remained slow while unrest in the Middle East and North Africa weighed on sentiment.
Global crude steel production hit a new record in February while in the EU it registered a 7.9 percent increase from the previous month to 14.4 million tonnes, data from the World Steel Association showed.
Cash premium draws lead to LME warehouses -trade
LONDON, April 18 (Reuters) - Some 40,000-50,000 tonnes of lead are headed for Malaysian warehouses monitored by the London Metal Exchange as trading firms cash in on lofty prices for cash material over those for delivery at a later time, trader said.
Lead for cash delivery was trading on Monday at a $55 premium over the benchmark three-month contract on the LME, up from a small discount in the middle of February , in a market structure known as backwardation.
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