Corn (Source: CME)
US corn futures trim gains as traders wait for federal forecasters to issue monthly supply and demand estimates Wednesday. Nearby contract months cling to moderate gains as the market continues to recover from last week's slide in commodity prices. Deferred contracts slip slightly. "The market is not in the mood to have any major selloff because we have a report tomorrow and we just came off a big selloff," says John Kleist of ebottrading.com. CBOT July corn recently up 8 1/2c at $7.16 a bushel; December corn stumbles 1/4c to $6.57 1/4.
Wheat (Source: CME)
US wheat futures finish firmer on concerns about poor weather reducing global output. The markets extended gains as dryness remains unfavorable for crops in the southern US Plains and Europe. The northern Plains are too wet to plant spring wheat. Yet, futures finished off session highs as crop losses have been widely discussed. "You can only talk about the weather or the reduced crop in the southern Plains for so long," says Prime Agricultural Consultants. CBOT July wheat rises 8 1/4c to $7.98 3/4 a bushel; KCBT July gains 14c to $9.28 1/2; MGE July adds 14 1/2c to $9.59 1/4.
Rice (Source: CME)
US rice futures finish slightly higher after the USDA reported ongoing delays in planting due to rains. Monday's weekly crop report said 57% of the rice crop was sown, up eight percentage points on week. The 5-year average for that time of year is 76%. Development also is delayed as 45% of the rice crop has emerged, below the average of 57%. CBOT July rice rises 4 1/2c to $14.17/hundredweight.
Commodities rally not dead after last week's rout
NEW YORK, May 9 (Reuters) - The commodities price crash last week is a "temporary setback" that will likely be reversed by lasting weakness in the dollar and demand growth in emerging markets, a manager at a commodities fund said.
Robert Hyman, portfolio manager for Jefferies' long-only $118 million Commodity Strategy Allocation Fund investing in commodity futures and equities, said the inverse relationship between commodities and the dollar would return to near perfect and boost the complex.
Three Million Acres May Be Flooded in Louisiana (Source: Bloomberg)
Three million acres, an area almost the size of Connecticut, may go under water as the Mississippi River flooding moves south and threatens Louisiana. “Based on inundation maps we are looking at, about 3 million acres in Louisiana will be under water,” Louisiana Governor Bobby Jindal said at a press conference in Baton Rouge. About 2,500 people inside the floodway may be affected and 22,500 may be affected by backwater flooding, he said.
Top funds dealt double-digit losses by commods crash
NEW YORK, May 9 (Reuters) - Several commodity hedge fund titans suffered double-digit losses last week as oil fell by a near-record $16, money managers who invest in the funds told Reuters on Monday.
While some of the losses will likely be recovered after Monday's price rebound of nearly $7 a barrel, last week's fund results underscore how oil's sharp fall caught some top traders off guard.
Wheat rises for 3rd day, corn dips on planting progress
SINGAPORE, May 10 (Reuters) - Chicago wheat rose 1 percent on Tuesday, notching up its biggest two-day gain in three weeks, as dry weather in parts of Europe and the U.S. crop areas continued to buoy the market, while soy added half a percent in a third straight session of gains. "There are weather concerns with wheat, we have issues in the U.S. hard red winter wheat belt and unusually warm conditions in Europe," said Garry Booth, a trader with MF Global Australia.
Philippine posts fastest Q1 yr/yr farm growth in 7 yrs
MANILA, May 10 (Reuters) - Philippine farm output grew 4.1 percent in the first quarter from a year earlier, the fastest first-quarter growth since 2004, as rains boosted corn harvests, and growth was set to pick up further, Agriculture Secretary Proceso Alcala said.
Unmilled rice output rose 15.6 percent in the March quarter from a year earlier to 4.037 million tonnes, more than half the first-half crop forecast, and corn production jumped 19.5 percent to 1.914 million tonnes.
US farmers make giant leap in corn seedings
CHICAGO, May 9 (Reuters) - U.S. farmers made a giant leap in seeding their rain-delayed corn crop last week, helping to allay concerns that time was running out for optimal yields to replenish extremely low stocks.
In a major surprise, the U.S. Agriculture Department said on Monday that 40 percent of the crop had been seeded as of Sunday, up from a worrisome 13 percent the previous week and coming within striking distance of the five-year average of 59 percent.
End-users face another year of tight US corn stocks
CHICAGO, May 9 (Reuters) - Producers of food and biofuel may face another year of tight U.S. corn supplies as a very wet spring has delayed plantings in the Corn Belt and threatened to reduce the harvest needed to replenish nearly empty storage bins this fall.
U.S. corn stocks are forecast to dwindle this summer to their lowest levels since the 1930s, and analysts polled by Reuters expect supplies to rise next year by just 20 percent -- hardly a comfort zone for end-users.
Rain idles Canada farmers, planting 3 pct done
WINNIPEG, Manitoba, May 9 (Reuters) - Rain on Monday and Tuesday in much of flooded Saskatchewan and Manitoba will keep farmers there idle this week, with planting already far behind normal progress, a Canadian Wheat Board official said Monday.
Farmers on the Canadian Prairies, who produce most of the country's grains and canola, have planted just 3 percent of their crops at a time when they're usually 38 percent finished, said Stuart McMillan, crop and weather analyst at the Wheat Board.
Corn plantings seen 31 pct done, soybeans 7 pct
CHICAGO, May 9 (Reuters) - Some dry weather in western stretches of the U.S. Corn Belt allowed farmers in those areas to plant their corn and soybean crops last week, but damp conditions kept farmers east of the Mississippi River on the sidelines, industry analysts said.
The pace of both corn and soybean planting was still well behind schedule as the deadline for optimal corn seeding approached, analysts surveyed by Reuters said on Monday morning.
Warm, dry weekend promotes planting in western US Corn Belt
CHICAGO, May 9 (Reuters) - A warm, dry weekend over most of the western U.S. Corn Belt provided an open planting window for farmers, but rains will move in at mid-week across the belt, a forecaster predicted Monday.
"Iowa and Nebraska had enough open weather over the weekend to allow for good planting progress," said Telvent DTN forecaster Mike Palmerino, adding that clear skies also reigned over northern and central Illinois and southern Minnesota.
US Crop Progress: Farmers Make Huge Strides In Corn Planting (Source: CME)
Farmers made huge strides planting corn in the western Midwest last week after cold, wet weather delayed earlier field work, according to government data. The crop was 40% planted as of Sunday, up from 13% a week earlier, the U.S. Department of Agriculture said in a weekly crop progress report. That beat expectations that plantings would be about 30% complete but still lagged the average of 59% for that time of year. Warmer, drier weather in the western Corn Belt allowed farmers to make significant progress. In Iowa, the country's top corn-producing state, farmers had sown 69% of the crop as of Sunday, up from 8% a week earlier and on par with the five-year average. Farmers had planted 57% of the crop in Nebraska, up from 15% a week earlier and behind the average of 62%. "We made some historic strides in Iowa. You planted 61% of the crop in just a few days," said Don Roose, president of U.S. Commodities, an Iowa-based brokerage firm. Yet, farmers in the eastern Midwest continued to struggle with poor weather.
Indiana's crop was just 4% planted as of Sunday, below the average of 49% for that time of year, and Ohio's crop was 2% planted, below the average of 54%, according to the USDA. The lack of progress in the eastern Midwest will likely keep the corn market on edge, as traders worry that planting delays will reduce the size of next fall's harvest, Roose said. Traders will continue to watch weather forecasts closely for signs of improving weather. Development of the crop also still lags behind normal. Overall, 7% of the country's corn had emerged as of Sunday, up from 5% a week earlier and below the average of 21% for that time of year, according to the USDA. Farmers need to harvest a large crop next fall to replenish inventories that are expected to drop to a 15-year low this year. Concerns about strong demand draining supplies pushed corn futures to record highs last month. "It truly is the eastern Corn Belt vs. the western Corn Belt," Roose said.
Farmers are less concerned about planting soybeans because that crop can be sown later in the spring without risking yield losses. Corn tends to produce lower yields in many areas if it is planted past the middle of May. Soybeans were 7% planted as of Sunday, below the average of 17% for that time of year. In Iowa, 10% of the crop was in the ground, behind the average of 18% for that time of year. The USDA did not report nationwide data for soybeans last week. Spring wheat planting also advanced after a slow start due to cold, wet weather in the northern Plains. Planting was 22% complete as of Sunday, up from 10% a week earlier and down from the average of 61%. In North Dakota, the top producer of spring wheat, farmers had planted 7% of the crop, up from 1% last week and below the average of 51%. More progress was made in South Dakota, where planting was 59% complete, up from 22% a week earlier and below the average of 85%.
Spring wheat, prized for its high protein content, is milled into flour used to make bread and blended with other, lower-quality varieties of wheat. Users of the grain worry farmers will sow fewer acres of spring wheat than previously expected due to the planting delays. The condition of winter wheat, meanwhile, continued to deteriorate due to a severe drought in the central and southern Plains. Overall, winter wheat was rated 33% good to excellent, down one percentage point from last week and from 66% a year ago. In Kansas, the country's top winter-wheat-producing state, the good-to-excellent rating dropped to 18% from 21% last week. Kansas and other Plains states grow hard red winter wheat, which is milled into flour used to make bread.
Crops, Oil Refineries Threatened By Mississippi River Flooding (Source: CME)
The surging Mississippi River is flooding hundreds of thousands of acres of farmland and limiting traffic along the waterway, delaying fuel shipments. Fields of recently planted corn, cotton and soybeans along the Mississippi Delta were inundated as the river overflowed, government officials said. Soaked soil is forcing thousands of other farmers to delay plantings this year. "I really can't compare it to anything. This is unprecedented territory right here," said Andy Prosser, head of marketing at the Mississippi Department of Agriculture and Commerce. The real problem for growers will be when the waters recede. "They don't know what kind of sand or silt, debris, may have been deposited on their farmland," said Tom Womack, a spokesman for the Tennessee Department of Agriculture. He estimated that 500,000 acres are already underwater in the state. The waters are likely to have washed away seeds and mineral-rich topsoil.
The U.S. Department of Agriculture has said U.S. stockpiles of key crops such as cotton and corn are at or near historic lows, due to rising global demand. July corn futures recently traded 1.2% higher on the Chicago Board of Trade, at $7.15 1/2 a bushel, while July delivery soybeans were up 0.7% at $13.44 a bushel. Cotton futures for July delivery were up 0.6% to $1.4631 a pound on IntercontinentalExchange. The surging river is also threatening energy production and transport throughout the South. Oil refineries are bracing for potential shutdowns and disruptions to fuel shipments ahead of the floodwaters now moving toward the Louisiana refining corridor. Motiva Enterprise LLC's 237,000 barrel-a-day Norco, La., refinery is preparing for supply disruptions due to the opening of flood gates, according to a spokesman for Royal Dutch Shell PLC, which is part of a joint venture operating the plant. Fuel products such as gasoline and diesel are distributed through pipelines, rail links and tankers.
The floods, which have already stalled some river traffic, could also force companies to halt pipeline flows or lead to congestion on railroads. U.S. gasoline stockpiles have fallen for 11 straight weeks, and analysts expect further declines in data due for release by the Energy Department on Wednesday. The floods, should they curtail refining in the region, could help push average U.S. retail gasoline prices above $4 a gallon, straining the budgets of consumers and businesses and potentially weighing on the economic recovery.
Sugar, coffee rise as commodities rebound
LONDON, May 10 (Reuters) - ICE sugar and arabica coffee bounced higher on Tuesday as commodity markets extended a rebound after last week's sharp sell-off, while ICE cocoa prices were steady.Sugar futures rose on investor buying in early trading, in sympathy with a rebound across commodity markets. However, the fundamental outlook for global sugar supplies remained bearish as the harvest in the centre-south of Brazil, the world's top producer and exporter, gathered pace, and due to larger than expected Thai output.
Indonesia scraps levy for coffee bean exports - govt
JAKARTA, May 10 (Reuters) - The trade ministry has lifted an levy for coffee bean exports that will cut costs for exporters and simplify paperwork to ship beans overseas, said a senior official at the trade ministry official.
Previously, coffee exporters had to pay 30 rupiah ($0.004)per kg as an export levy to the Indonesian Coffee Exporters Association (AEKI) as a requirement to get approval from the Trade Ministry to export coffee beans.
Vietnam Coffee-May export seen down 45 pct on thin stocks
HANOI, May 10 (Reuters) - Vietnam's coffee exports for May loading could fall to between 80,000 and 100,000 tonnes from around 130,000 tonnes last month, as domestic stocks were thinned by previously strong shipments to gain from high prices, traders said on Tuesday.
Lower export volumes from Vietnam, the world's second-largest coffee producer after Brazil, will exacerbate supply concerns and keep global robusta prices on an uptrend, after gaining in recent sessions on the back of ICE arabica, which hit a 34-year peak on May 3. [SOF/L]
Turkey 2011 sugar beet output seen at 14 mln tonnes-attache
WASHINGTON, May 9 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in Turkey: "The Sugar Board decreased the A sugar production quota to 2.2 million tonnes this marketing year to avoid a build-up of stocks. In response to lower production quotas, the MY 2011 sugar beet production in Turkey is estimated at 14 million tonnes. MY 2011 total centrifugal sugar production is estimated at just under 2.3 million tonnes. In 2010, bid results from attempted privatization were cancelled by the Council of State and privatization has been halted."
Rain boosts Ivorian cocoa crop, roads a worry
ABIDJAN, May 9 (Reuters) - Rain mixed with sun in Ivory Coast's cocoa growing regions last week will pave the way to a bumper mid-crop, but too much more rain could trigger disease and damage roads, farmers and analysts said on Monday.
The world's top cocoa grower resumed exports over the weekend after a roughly three-month halt cause by a violent post-election power struggle, and the government expects the full-year crop to hold at 1.3 million tonnes despite the turmoil.
Oil Trades Near Highest in a Week on Mississippi Floods and U.S. Earnings (Source: Bloomberg)
Oil traded close to a one-week high in New York as flooding of the Mississippi River stoked speculation fuel output will be disrupted and amid optimism over the U.S. economic recovery. Futures were little changed after advancing 1.3 percent yesterday as the flood moved south from Memphis, threatening refineries and shipping traffic before it empties into the Gulf of Mexico in about two weeks. U.S. equities strengthened as companies raised earnings forecasts, sending the Standard & Poor’s 500 Index higher for a third day.
Crude Oil Rises to Four-Day High on Mississippi Floods, Rally in Equities (Source: Bloomberg)
Crude oil rose to a four-day high as concern increased that flooding of the Mississippi River will disrupt fuel output and as equities climbed. Futures advanced 1.3 percent as the flood moved south from Memphis, threatening refineries and shipping traffic before emptying into the Gulf of Mexico in about two weeks. Stocks strengthened as companies raised earnings forecasts, sending the Standard & Poor’s 500 Index up for a third day.
PRECIOUS-Gold rises as dollar retreats, focus on Greece
LONDON, May 10 (Reuters) - Gold was set for a third daily rise on Tuesday, after a retreat in the dollar helped reverse earlier losses, while concern about Greece's debt crisis was expected to insulate the price from any severe declines.
A sharp rise in margins on U.S. oil futures dented the broader commodities complex but with so much investor focus on Greece and other indebted euro zone member states, gold was able to rally for a third day.
Gold Rises for Third Day as Europe Debt Concern Fuels Demand; Silver Gains (Source: Bloomberg)
Gold rose on concern that Europe’s debt crisis will drive the euro lower, spurring demand for precious metals as alternative assets. Silver had the biggest two-day rally in six months after plunging 27 percent last week. Standard & Poor’s yesterday downgraded Greece’s credit rating for the fourth time since April 2010, signaling that the region’s debt crisis is escalating. Gold advanced for the third straight session.
METALS-Copper rises on risk appetite following China data
LONDON, May 10 (Reuters) - Copper climbed on Tuesday, as robust China trade figures burnished demand expectations for the metal used in power and construction offsetting news that headline imports in April fell.
Benchmark copper on the London Metal Exchange traded at $8,939.75 a tonne at 0956 GMT, versus $8,890 a tonne on Monday's close.
China to cut copper, steel, aluminium capacity in 2011
BEIJING, May 10 (Reuters) - China will close down 291,000 tonnes of outdated copper smelting capacity this year as part of a wider crackdown on 18 heavy and polluting industries, the country's industry ministry said on Tuesday.
The Ministry of Industry and Information Technology will also close 600,000 tonnes of outdated aluminium smelting capacity by the end of the year, it said in a statement posted on the Chinese government website
China April copper imports sink nearly 14 pct as stocks used
SHANGHAI, May 10 (Reuters) - China imported 262,676 tonnes of unwrought copper in April, a nearly 14 percent decline from March, Customs data showed on Tuesday, as the world's biggest consumer of the metal shunned overseas supplies in favour of local producers and stockpiles.
The April import volume, which includes refined copper, anode, alloys and semi-finished products, was the second-lowest since January 2009, according to Customs data compiled by Reuters. Imports were even lower in February, but that was a shorter month with a week-long holiday.
Chile April copper export revs up 22 pct yr/yr
SANTIAGO, May 9 (Reuters) - Chile's copper export revenues rose 22 percent to $3.728 billion in April from a year ago, boosted by strong prices for the metal, the central bank said on Monday.
Last month, the government reported that copper export revenue was down from $3.876 billion for March. Chile is the world's top copper producer, mining about a third of global supply.
China April iron ore imports dip 11.1 pct to 52.9 mln T
BEIJING, May 10 (Reuters) - China imported 52.88 million tonnes of iron ore in April, down 11.1 percent from the previous month as supplies tightened, official data from China's customs authority showed.
"The main point to make is that this was supply-driven and not demand-driven -- there was just not enough material available," said Graeme Train, steel analyst with Macquarie Securities in Shanghai.
Nickel outlook least promising due to supply -BNP Paribas
SYDNEY, May 10 (Reuters) - BNP Paribas on Tuesday singled out nickel as the lone price under performer this year among base metals commodities, despite seeing a supply deficit for the second year running.
The bank's senior metals markets strategist Stephen Briggs forecast each of the major London Metal Exchange-traded metals to finish the fourth quarter of 2011 higher than when they started, except for nickel, which Briggs said is headed for an 11 percent drop.
Japan steelmakers bullish in output plans after quake
TOKYO, May 10 (Reuters) - Japanese steelmakers are bullish in their output plans for this quarter, counting on demand related to post-quake reconstruction to mostly offset weakness in the auto sector, a government survey showed on Tuesday.
Some analysts warned, however, that a large portion of this quarter's production may eventually end up as exports given the overall soft tone of demand in the domestic market.
Major market developments in April
LONDON, May 9 (Reuters) - Zinc prices fell in April and more sharply last week in a rout across commodities and other asset classes and vast inventories of the metal are likely to keep the market under pressure in coming months.
"We see reasonably substantial surpluses this year and next and we see prices softening," said Andrew Thomas of consultants Brook Hunt, the metals arm of Wood Mackenzie.
Major market developments in April
LONDON, May 9 (Reuters) - Lead prices lost ground in April and fell further in early May in a broad-based sell-off and, despite recovering some lost ground, softer fundamentals may peg them back near term.
"I think the lead market still looks a bit vulnerable, there's no particular shortage of supply," said David Wilson, analyst at Societe Generale.
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