Corn (Source: CME)
US corn futures finish sharply higher on concerns that wet weather which is delaying planting will reduce output. Linn Group predicts plantings will fall short of the USDA's March estimate by 3% due to persistent rains keeping farmers out of their fields. Some farmers will shift corn acres to other crops or cash in on crop insurance because they were unable to plant in a timely manner. "Most states have final planting deadlines fast approaching," says John Roach, president of Roach Ag Marketing. CBOT July corn climbs 29 1/2c to $7.49 3/4 a bushel after hitting the 30c limit earlier in the session.
Wheat (Source: CME)
US wheat futures finish up sharply as harsh weather reduces output forecasts. Strategie Grains ditches expectations of a rise in French wheat production, saying drought has cut the country's crop to less than 35M tons from 35.6M in 2010. "We're getting confirmation in Europe now that the small crop is getting smaller," says Mike Zuzolo, president of Global Commodity Analytics & Consulting. Rains slow US spring wheat planting, boosting MGE prices. CBOT July wheat rises 53c to $8.17/bushel, KCBT July gains 43 1/2c to $9.38 and MGE July soars the 60c daily limit to $9.96 1/4.
Investors less upbeat on stocks, commodities - BofA poll
LONDON, May 17 (Reuters) - Investors turned less upbeat on stocks in May as uncertainty grew over global growth, while they also became less positive about commodities after a sharp selloff, a closely watched survey showed on Tuesday.
The monthly global fund managers' survey from Bank of America-Merrill Lynch showed a net 41 percent of respondents were overweight equities in May, down from 50 percent last month.
Commodities in long-term growth trend-Investec
LONDON, May 18 (Reuters) - Commodities are in a long-term trend of solid demand growth, and a recent sell-off in natural resources markets is likely to prove a technical downswing, Investec fund manager George Cheveley said.
"I believe in the long-term story," said Cheveley, who co-manages Investec's 326.5 million pound ($531 million) Enhanced Natural Resources Fund, a broad commodities resource equity fund.
Commodities Gain Most in a Week as Drought, Low Stockpiles May Curb Supply (Source: Bloomberg)
Commodities gained the most in a week as drought in Europe and the U.S., lower energy stockpiles and crop delays in Brazil revived speculation that supplies of food and raw materials will tighten. The Standard & Poor’s GSCI Index of 24 raw materials gained 2.7 percent to settle at 691.04 at 3:47 p.m. in New York, the biggest advance since May 9. Wheat led the rally, jumping 6.9 percent, while sugar surged 4.2 percent, crude oil climbed 3.3 percent and copper rose 3 percent.
Argentina To Host G20 Commodities Conference (Source: CME)
Argentina will host a meeting of agriculture ministers from the Group of 20 nations this week to discuss commodity prices. Delegates are expected to address concerns about high food prices and the volatility of global commodity prices. Representatives from the World Bank and International Monetary Fund, among other international organizations, have been invited to attend the conference. The run-up in prices of grains and other food staples earlier this year prompted the World Bank to warn in February that tens of millions of people had been pushed into poverty across the globe. Brazil and Argentina--two of the world's largest commodity producers and G-20 members--have opposed international efforts to regulate the trading and prices of commodities. France has been especially keen to push for greater regulation of commodities markets and prices. Argentina on the other hand has argued that the high prices for agriculture commodities are the result of sustained demand from China and India.
Last month, Argentina's Economy Minister Amado Boudou said the solution to high prices is to lift farm output. However, Argentine officials have shown some willingness to discuss greater regulation and transparency of derivatives markets. Argentina leads the world in soymeal and soyoil exports and is the third-largest soybean exporter. Argentina is also the world's No. 2 corn exporter. Taxes on grain exports are an important source of revenue for the government and underpinned the country's $12.06 billion trade surplus last year.
US corn rallies to 2-wk top as weather threatens crop
SINGAPORE, May 18 (Reuters) - Chicago corn rose to its highest in nearly two weeks, while wheat hit a one-week top as adverse crop weather in the United States and Europe continued to threaten output.
"There are certainly a lot of concerns around the European weather as minimal rains are expected in the next two weeks," said Adam Davis, a senior commodity analyst at Merricks Capital in a Melbourne.
Argentine wheat area seen up 25 pct -gov't
BUENOS AIRES, May 17 (Reuters) - Argentine farmers are expected to plant 25 percent more wheat in the 2011/12 season, a senior Agriculture Ministry official said on Tuesday as early sowing gets under way.
Growers in the South American country, one of the world's leading wheat exporters and a key supplier to neighboring Brazil, produced a healthy 14.7 million tonnes of the grain in the last harvest thanks to favorable weather.
Western U.S. Corn Belt sees freeze 2 straight days
CHICAGO, May 17 (Reuters) - The U.S. western Corn Belt saw frost for the second straight day as morning lows dipped to freezing, raising concerns about the condition of newly emerged corn plants, a forecaster said on Tuesday.
"There was a lot of scattered frost across the western Corn Belt," said Mike Palmerino, forecaster with Telvent DTN. "Most vulnerable to damage is Iowa and Nebraska where more corn is emerged."
EU wheat suffers drought, some rain for Germany
HAMBURG, May 17 (Reuters) - A drought in much of west Europe now looks certain to cut wheat harvest yields this summer but rain this week gave last-minute relief to German crops, analysts and traders said on Tuesday.
Parts of central Europe had less than 40 percent of their long-term average rainfall from February to April, said the Global Precipitation Climatology Centre.
Spanish rain adequate in run-up to grain harvest
MADRID, May 17 (Reuters) - Spanish rainfall was below average last week, according to the latest official data on Tuesday, but farmers say it has been enough to allow the winter wheat and barley harvest to develop.
Total water stocks declined by 0.2 percent since last week, but at 82.4 percent of capacity were still comfortably above a 10-year average of 68 percent.
Zambia's 2010/2011 maize ouput seen over 3 mln T
LUSAKA, May 17 (Reuters) - Zambia's maize production in the 2010/2011 season will rise to over 3 million tonnes from the 2.8 million produced last year, a crop forecast showed on Tuesday.
The forecast of another bumper harvest is a good sign for Zambia's economy, which is heavily dependent on mining and agriculture, and comes at a time when food inflation and security are major concerns on the world's poorest continent.
Drought damage to French wheat irreversible-expert
PARIS, May 17 (Reuters) - A drought in France has become so severe that there can be no recovery from crop losses, and this year's wheat output is likely to fall by far more than 5 percent in the European Union's largest grain producer, an expert said.
"Taking into account the weather, there is no possibility anymore to catch up on yields at a national scale after the long hydric stress of the past weeks," said Jean-Charles Deswartes, an engineer at France's grains technical institute Arvalis.
Corn plantings seen 60 pct done, soybeans 20 pct
KANSAS CITY, Mo., May 16 (Reuters) - U.S. farmers made good progress on closely watched corn plantings over the last week, but more rain in the forecast and a rapidly closing window for optimal seeding kept some industry players on edge.
The pace of both corn and soybean planting remains well behind schedule but picked up dramatically over the last week as farmers raced to take advantage of a break from incessantly wet spring weather, analysts surveyed by Reuters said on Monday morning.
Keeping Russia's Grain Ban This Year "Unjustified" - USDA Attache (Source: CME)
Keeping Russia's grain ban in place is unnecessary as the country is expected to post a 6 to 7 million metric ton surplus in the 2011-12 season, the U.S. Department of Agriculture's Moscow attache said. The attache said in a report that political considerations, including the lobbying of powerful livestock producers, means the Kremlin may keep the embargo in order to cap domestic grain prices. "From an economist's point of view the continuation of the grain ban is unjustified," said the report. "Unfortunately, Russian grain policy does not always follow the logic of economics." Russia's government imposed a ban on grain exports last year after the worst drought to hit the country in more than a century slashed the country's harvest by a third to around 63 million tons. But now the prospects of a larger crop in 2011-12 and plummeting internal prices have buoyed hopes that the Black Sea producer will reenter the markets again this year.
The USDA gave an optimistic estimate last week that Russia will export 10 million tons during the season. Russian officials are due to meet at the end of this month to debate whether to keep or lift the ban. The issue has become particularly pressing as sustained dryness in Europe and the U.S. is already damaging crop development and some forecasters fear supplies may not be enough to replenish low exporter stocks. Producer agencies are also urging the Kremlin to release supplies as up to 8 million tons of grain is estimated to be sitting in elevators in the south, taking up valuable storage space for the coming harvest. "If the ban remains in place some grain may rot in the fields as silos are already near capacity," said the report.
EU Wheat At 3-Month High On Worst Drought For Decades (Source: CME)
European wheat futures jumped to three-month highs as the worst drought for decades dimmed hopes for a rebound in output in the world's largest grain-producing region next season. Europe is in the grip of a drought which forecasters warn could have devastating effects on yields. Conditions are worsening daily in France, Germany, the U.K. and Poland--which account for around 65% of the 27-nation bloc's wheat crop--and more heat and dryness are expected in May. Influential analyst Strategie Grains ditched earlier expectations of a rise in French wheat production this year, saying the drought has cut the production potential of Western Europe's largest producer to less than 35 million tons, compared with 35.6 million tons in 2010. France has imposed limits on water restrictions in 28 out of 96 of its administrative regions because of the lack of rainfall, while the U.K. farm ministry is preparing contingency plans should conditions worsen.
"We are now in a state of crisis," French Ecology Minister Nathalie Kosciusko-Morizet said this week. Meanwhile, French risk manager Agritel gave an even more pessimistic estimate, forecasting that France's 2011-12 wheat crop will fall by 11.5% compared with 31.7 million tons in the 2010-11 season due to damage caused by the months-long drought in the country. In its first estimate for the 2011-2012 harvest, the risk manager said France's average wheat crop yield could fall by 13% to 6.31 tons a hectare, cancelling out a 2% rise in acreage to just over 5 million hectares. "This drop in expected yields is the direct consequence of a lack of rain during the past three months," Agritel said. In Germany, farming body Deutsche Raiffeisenberband said it expects the No. 2 European producer's grain harvest to fall to 40.7 million tons, down 8% from 2010 as "the drought of the past weeks has hit crops, particularly in the northeastern regions, and will cause considerable loss."
Across the Atlantic in the U.S., the world's largest exporter, weather is causing more problems. States in the northern Plains, such as North Dakota and Minnesota, have been too wet to sow spring wheat, while weather issues have caused a slump in quality expectations for the harvest. "Combine French drought with U.S. planting issues and you have higher wheat markets," said Kayla Hoffman, a grain merchandiser in North Dakota, the top U.S. producer of spring wheat. Wheat markets are particularly jittery after a poor world harvest last year cut global supplies. Although all major forecasting agencies are predicting an expansion in plantings in 2011-12, doubts remain about whether that will be enough to replenish poor stock levels with the estimated decline in yields. The U.S. Department of Agriculture's Brussels attache forecasts that European Union wheat stocks will fall to a record low of 10.7 million tons this season due to the rapid pace of exports from the bloc this season.
Wheat Threatened Across Europe as Driest Weather in Decades Withers Crops (Source: Bloomberg)
Europe’s wheat crop, making up a fifth of global output, is under threat in the U.K., France and Germany from the driest growing conditions in at least 36 years. France’s soft-wheat crop, the European Union’s largest, will drop 12 percent, and German output will slide 7.2 percent, local forecasters said today. Wheat jumped 4.5 percent to the highest level since Feb. 14.
ICE sugar, coffee rise, buoyed by soft dollar
LONDON, May 18 (Reuters) - ICE sugar bounced higher in early trade, buoyed by a weaker dollar, and were above an 8-month low, while arabicas firmed in sight of a 34-year peak, as softs consolidated after a recent slide in commodity markets. ICE raw sugar futures bounced higher, above the 8-month trough of 20.40 cents a lb touched on May 6, supported by a slow start to the new centre-south Brazilian harvest. Brazilian mills have focused on ethanol production early in the harvest period.
Brazil sugar shipments slow but improving
SAO PAULO, May 17 (Reuters) - The number of ships loading, waiting or arriving to export sugar from Brazil's two main ports is growing and should let up in the coming days, shipping agencies said.
The lineup of vessels reached 58 on Tuesday, slightly up from 55 a week ago. Although backlogs to haul sugar from the world's largest producer of the sweetener are not uncommon, these numbers are not normal for this early in the season.
Farmers threaten to boycott Morocco sugar refiner
RABAT, May 17 (Reuters) - Thousands of Moroccan sugar beet farmers are threatening to boycott the delivery of next year's crop to Cosumar to press the country's sole sugar refiner for better terms, farmers said.
If the farmers carry through with their threat, Cosumar -- which has an annual refined sugar output of 1.2 million tonnes -- could be forced to increase the amount of raw sugar it imports, with Brazil its main supplier.
ICO sees 2012/13 coffee output up
LONDON, May 17 (Reuters) - World 2012/13 coffee output is expected to rise almost 8 percent to around 140 million 60-kg bags due to an on-year in top producer Brazil's biennial production cycle, the International Coffee Organization said on Tuesday.
The ICO expects world 2011/12 coffee output at around 130 million bags.
Copper Trades at $9,060, May Decline After Gaining the Most in Two Months (Source: Bloomberg)
Copper in London may decline as some investors sell the metal to lock in gains after it rallied the most in two months. Three-month delivery copper on the London Metal Exchange fell fell as much as 0.2 percent to $9,046 a metric ton, and traded at $9,060 by 8:04 a.m. Singapore time. It climbed 3 percent yesterday, the most since March 17.
Copper surplus to pressure prices in 2013 - CRU
AMSTERDAM, May 17 (Reuters) - Global copper production is set to rise in the next two years, leading to a surplus which will put pressure on prices in 2013, said an analyst with industry consultants CRU Group on Tuesday.
Christine Meilton, chief consultant at CRU, said new copper production capacity would come onstream in North America and Australia in 2012 and 2013.
Zambia copper growth likely to ride out power costs
LUSAKA/LONDON, May 17 (Reuters) - A recent sharp increase in power costs for Zambian miners will dent their profitability, but not stop them developing the projects needed to feed the world's voracious appetite for copper.
Zambia, Africa's top copper producer, has huge potential with its vast high-grade reserves of the metal used in power and construction. Its output is already expected to more than double to around 2.0 million tonnes by 2015.
LME aluminium stocks hit record above 4.71 mln T
LONDON, May 18 (Reuters) - Stocks of aluminium in London Metal Exchange warehouses rose by 1,325 tonnes to hit a record high of 4,711,875 million tonnes, data showed on Wednesday.
A backwardation, or premium for the cash contract against the three-month contract, earlier this week has attracted metal to LME warehouses.
Zinc market has 111,000 T surplus in Q1'11-ILZSG
LONDON, May 18 (Reuters) - The global zinc market was in surplus by 111,000 tonnes in the first quarter of 2011, the latest monthly bulletin from Lisbon-based International Lead and Zinc Study Group (ILZSG) showed on Wednesday.
Global refined zinc use was 3.083 million tonnes, compared with 2.909 million in January-March 2011.
Lead market has 24,000 T surplus Jan-March-ILZSG
LONDON, May 18 (Reuters) - The global lead market was in surplus by 24,000 tonnes in the first quarter of the year, the latest monthly bulletin from the Lisbon-based International Lead and Zinc Study Group (ILZSG) showed on Wednesday.
Global refined lead use was 2.435 million tonnes, up from 2.156 million in January to March 2011.
World refined lead output was 2.459 million tonnes, up from 2.166 million tonnes a year earlier.
Gold Futures Jump Most This Month on Inflation Concerns; Silver Rebounds (Source: Bloomberg)
Gold futures rose the most this month as grain and energy prices surged, boosting the appeal of the precious metal as a hedge against inflation. Silver jumped almost 4 percent. The Thomson Reuters/Jefferies CRB Index of 19 raw materials gained as much as 2.6 percent. Global food costs are close to the highest ever, according to the United Nations, and crude oil topped $100 a barrel today. Analysts surveyed by Germany’s Ifo research institute raised their 2010 global inflation forecast to 3.8 percent from 3.4 percent.
METALS-Soft dollar fuels copper's rally to 1-week high
LONDON, May 18 (Reuters) - Copper rallied to a one-week high on Wednesday as the dollar slipped and investors returned to commodity markets, but doubts about short-term fundamentals are expected to cap prices.
Benchmark copper on the London Metal Exchange was trading at $8,926 a tonne at 0944 GMT from $8,799 at the close on Tuesday. The metal used in power and construction earlier touched $8,955 a tonne, its highest since May 11.
PRECIOUS-Gold breaks 3-day losing streak as dollar retreats
LONDON, May 18 (Reuters) - Gold prices rose back above $1,490 an ounce in Europe on Wednesday as a retreat in the dollar encouraged buyers to hunt bargains after the metal's three-day decline, and as oil prices rebounded.
Prices are down nearly 5 percent so far this week, with investor sentiment towards the precious metal turning more cautious as gold holders worried it may struggle to rise significantly after hitting record highs this month.
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