Corn (Source: CME)
US corn futures will be increasingly influenced by external markets after crumbling under pressure today from falling crude oil and the climbing US dollar, says Tim Hannagan, analyst for PFG Best. Grain traders will look to external markets for direction as they wait for USDA to update crop estimates June 30, he notes. Oil is linked to the grains because ethanol is made from corn and funds often trade in a basket of commodities. CBOT July corn ends down 29 3/4c at $7.25 3/4 a bushel.
Wheat (Source: CME)
US wheat futures end lower on spillover pressure from the steep fall in corn. Both grains are used for livestock feed. The drop in crude oil added pressure, as it was largely responsible for corn's slide, traders say. Additional selling was linked to the advancing US harvest. Weather conditions "should allow a fairly quick finish" in Oklahoma and Texas, according to Freese-Notis Weather. CBOT July wheat falls 22 3/4c to $7.08 1/2 a bushel; KCBT July loses 20 1/2c to $8.19 1/4; MGE July slides 31 1/2c to $9.37.
Corn, Soybeans Fall on Bets Sluggish U.S. Economy to Damp Commodity Use (Source: Bloomberg)
Corn fell, extending a slide to a four-week low, and soybeans declined on bets that the sluggish economy will curtail demand for food, animal feed and biofuel. Industrial production in the U.S. rose less than forecast in May and confidence among U.S. homebuilders slumped in June to the lowest in nine months, government and industry reports said today. Last week, output of ethanol, made mostly from corn, fell 3.8 percent, the biggest drop since mid-April.
Wheat Falls for Second Straight Day; Soybeans Gain; Corn Is Little Changed (Source: Bloomberg)
Wheat futures for September delivery fell 2.25 cents, or 0.3 percent, to $7.5975 a bushel at 9:34 a.m. on the Chicago Board of Trade. The price dropped 1.8 percent yesterday. Soybeans climbed, and corn was little changed.
Rice (Source: CME)
US rice futures weaken with the rest of the grains amid pressure from external markets. A slide in crude oil and rally in the US dollar put heavy pressure on corn, wheat and rice. Concerns about the world economy were seen as a negative factor for commodities as fears mounted about Greece. CBOT July rice drops 13c to $14.20 1/2 per hundredweight.
Saudi to import 2 mln tonnes wheat in 2011
RIYADH, June 14 (Reuters) - Saudi Arabia expects about 2 million tonnes of wheat imports this year unchanged from 2010, and aims to double its reserves to one year's consumption by 2014, the kingdom's Minister of Agriculture said on Tuesday.
The world's top oil exporter, which has emerged as a major buyer of wheat, wants to build up reserves of basic commodities such as wheat, rice, oils and sugar to protect itself against the impact of a spike in global food prices and to support its rapidly growing population.
US ethanol plants toy with wheat, committed to corn
KANSAS CITY, June 15 (Reuters) - A rare inversion in prices of corn and wheat is prompting some ethanol plants to consider a previously unthinkable measure -- using wheat as their feedstock for producing the popular biofuel.
With the price of Chicago corn surging 5 percent, or more than 40 cents, above wheat, the economics of a short-term switch are asserting themselves.
U.S. may need to import more sugar by fall of 2011
NEW YORK, June 14 (Reuters) - The United States may need to import 100,000 tonnes of sugar by the end of this summer due to possible delays in harvesting the beet crop and uncertainty overhanging supplies from neighboring Mexico.
Brian O'Malley, president and chief executive of Domino Sugar, told Reuters in an interview on Tuesday the United States is at risk of being forced to buy sugar in the world market. The last time the country had to import sugar outside of its regular import program was in 2008.
C.Agricole sees tight corn supply buoying grains
LONDON, June 14 (Reuters) - Low corn stocks and growing demand are likely to bolster grain prices for several years, an executive at French bank Credit Agricole told Reuters.
"The corn story over the next 24-36 months looks pretty bullish because it's going to be hard to rebuild inventories from their current levels," said Bruce Tozer, head of EMEA sales softs and agricultural products at Credit Agricole Corporate and Investment Bank.
U.S. corn firm after selloff, Senate vote supports
SINGAPORE, June 15 (Reuters) - Chicago corn rose on Wednesday, ending a two-day losing streak as a proposal to end subsidies for the U.S. ethanol industry failed in the Senate, supporting prices amid tight old-crop supplies.
"Our position on corn is bullish, the reason being that the U.S. balance sheet remains relatively tight," said Abah Ofon, agricultural commodities analyst with Standard Chartered Bank in Singapore.
Australia wheat crop faces risk from mice
SYDNEY, June 15 (Reuters) - An exploding population of mice is threatening some of Australia's key wheat growing areas, feeding on new crops and posing a threat to the 2011/12 crop of one of the world's top wheat exporters.
"It's been a very big problem as it has got the potential to cost us a lot money if they do get out hand," said Chris Groves , a grain grower in New South Wales state.
Australia wheat exports set to jump 9 pct to record
SYDNEY, June 15 (Reuters) - Australia's wheat exports are set to jump nearly 9 percent to a record in the year to September 2012, the government's chief commodities forecaster said on Wednesday, with favourable weather in what is usually the world's fourth-biggest shipper.
The 2011-12 crop has several months before harvest at the end of the year so any harsh weather, which has in previous years led to sharp reductions in Australian crop forecasts, could alter the outlook.
EU approves 210 mln euro aid to E.coli-hit farmers
BRUSSELS, June 14 (Reuters) - A committee of European Union experts has approved financial aid of 210 million euros ($304 million) for fruit and vegetable farmers whose sales have been hit by a deadly E.coli outbreak, the bloc's executive said on Tuesday.
The European Commission said last week it had increased its aid offer from an initial 150 million euros after farm ministers from the bloc's 27 countries said that figure was too low.
Rains improve outlook for western Europe wheat
LONDON, June 14 (Reuters) - Rains have boosted the outlook for wheat crops in parts of western Europe, helping to revive parched plants in Germany and Britain.
In France, the European Union's top wheat producer, the benefits were, however, less clearcut.
Morocco cbank sees 7.8 mln T grain harvest
RABAT, June 14 (Reuters) - Morocco's grain harvest this season will be 7.8 million tonnes, the central bank governor said on Tuesday, slightly up on last year's figure but below the agriculture ministry's estimate of 8.8 million tonnes.
"To round up the figure we expect it to reach 8 million tonnes. It (the central bank's forecast for the harvest) actually stands at 7.8 million tonnes," Abdelatif Jouahri told a news conference.
Heavy rains move to U.S. Midwest, more flooding
CHICAGO, June 14 (Reuters) - Rains return to the U.S. Midwest this week, increasing the risk of more farms flooding along the Missouri River and add to slowdowns in moving grain by rail, a forecaster said on Tuesday.
"At this point most of the planting is done -- you have to be concerned of the increase river flood potential with the levy breaking at Hamburg (Iowa) yesterday," said Mike Palmerino, forecaster with Telvent DTN weather service.
African Nations, Development Groups Seek G-20 Help With Food Information Network, Infrastructure (Source: CME)
African countries and development organizations called on the Group of 20 nations to help build transport and storage infrastructure and a food information network in order to deal with possible future food shortages. The call came at a meeting of the Sahel and West Africa Club--a group affiliated with the Organization for Economic Cooperation and Development--ahead of next week's conference of G-20 agriculture ministers. The club said that the removal of tariff barriers and better transport would be key factors in facilitating trade in the region. "Well-functioning regional markets need to be developed to open up intra-regional trade opportunities and better link farmers to markets," the club said in a statement. Delegates said they wanted to build a network of food stocks, so that countries could help neighbors stricken by food shortages. Currently, governments keep track of their own food stocks.
But a network of such data could help them better respond to problems in other countries. "Sometimes some countries have very good harvests," while others face shortages, said Alhousseini Bretaudeau, executive secretary of the Permanent Inter-State Committee for Drought Control in the Sahel. "The idea is that they should exchange information on this."
Drought Concerns Far From Over For UK - Environment Agency (Source: CME)
Drought concerns in the U.K. are far from being over despite recent episodes of rainfall across the country, the U.K.'s Environment Agency warned. "There has been nowhere near enough rainfall to alleviate the current drought status declared in parts of the U.K. such as Lincolnshire, Cambridgeshire and Bedfordshire," a spokesperson for the agency said. Parts of Lincolnshire, Cambridgeshire, Bedfordshire, Northamptonshire and western Norfolk are all suffering following the driest spring on record in southeast and central-southern England, with parts of the Midlands, southwest and southeast of England in a "near-drought" state. "It would take a period of sustained rainfall over the next few weeks to remove drought concerns," the agency spokesperson said. "A lot of the rainfall cannot be even absorbed by the soil right now as the land is so dry.
The river flows pick up slightly but then drop rapidly." The U.K.'s Environment agency said meetings continue to take place on a daily basis to monitor the situation across the country. The spokesperson said the environment agency has been asked to prepare a report for the U.K.'s farming agency Defra to examine the impact of drought and outline projections for the worst case scenarios. Worst-hit East Anglia accounts for 53% of the U.K.'s sugar beet output, 17% of wheat and 13% of barley output. England's wheat farmers are expected to produce their lowest yielding crop since the late 1980s next season, according to a survey by the National Farmers' Union released. Wheat production is expected to fall 2 million metric tons to below 12 million tons in 2011-12, 15% below the five-year average, due to poor growing conditions this year, the survey of farmers in the East Midlands, East Anglia and the South East found.
According to weather forecasts from the U.K. Met office, East Anglia is expected to receive some bursts of heavy showers over the next two weeks. "It remains changeable through the rest of the period with further showers or rain likely to affect many parts of the country. However, there should also be some drier, brighter and slightly warmer periods, these most likely in the south and southeast of the U.K.," the Met office said.
Invivo Trading Head: World 11-12 Wheat Output Largely Stable (Source: CME)
World wheat production is expected to remain largely stable next season but poor crops in the U.S. and Europe will see demand shift eastward, the head of trading at France's largest grain exporter said. Speaking on the sidelines of the cereals conference in England, Pierre Duclos of farming cooperative Invivo said recent rains over the north of France have made him hopeful wheat production will be 1 million-2 million tons above his previous prediction of 31 million tons. He said results from the barley harvest in Western France had yielded 5 tons a hectare compared with estimates of as low as 3 to 4 tons a hectare. "If we extend this vision to the rest of the country with wheat we could come back with 32 million tons, maybe 33," Duclos said.
Yet with France's exports likely to be limited to 7 million-7.5 million tons in the 2011-12 season, down from more than 12 million tons this crop year, and wheat output in the world's top exporter the U.S. likely to fall about 6 million tons, Duclos said exporters are likely to stick to their target markets. "We should stay more selective and more in a relationship with our traditional outlets," he said. In France's case, he said he expects to sell to Algeria, parts of West Africa, Cuba and even Morocco, which is expected to import around 2 million-2.5 million tons after rain damaged the quality of its domestic crop. Other large buyers who have turned to France and the U.S. this year, like the world's largest wheat importer Egypt, are likely to buy from the Black Sea, after Russia and Ukraine said they will remove export barriers on grain imposed in the wake of last year's drought.
"The allocation of supply from Russia will be more to Egypt, the far East, Tunisia, maybe a bit to Libya and also to Bangladesh," Duclos said. And while buyers like Egypt remain wary of committing to Russian origins right now due to uncertainty over the size of the country's harvest, Duclos said he expects buyers to become more keen on Black Sea wheat as the harvest approaches in September to October. Egypt bought 120,000 tons of wheat this week in its first tender since February but opted for more expensive French wheat over Russian or Ukrainian origin. "We have the feeling that maybe at this point the Egyptian government is not so confident in the Russian origination, which could disappear for political reasons at any time," Duclos said.
CWB Sees Large Unseeded Acres In Western Canada (Source: CME)
Western Canadian farmers dealing with the second year in a row of excessively wet conditions are expected to leave roughly 6.5 million acres of cropland unseeded this year, according to estimates from the Canadian Wheat Board released Tuesday at the CWB's annual weather and crop briefing in Winnipeg. Most of that unseeded land will be in Manitoba and Saskatchewan. While the number is better than the 10 million acres unseeded in 2010, only 500,000 acres would go unseeded in a normal year, said Bruce Burnett, director of weather and market analysis with the CWB. There is an estimated total of 63 million to 65 million acres of cropland in western Canada. "We have too much moisture in the south and too much dryness in the north," said Burnett, pointing to rainfall and snowpack maps showing the wettest areas in eastern Saskatchewan and western Manitoba.
Seeding of major crops was estimated to be about 86% complete across western Canada, which compares with a normal year which would see seeding at 100%, said Burnett. While the planting pace has increased over the past few weeks, Burnett noted the late start to seeding saw the bulk of the crop planted after May 15 and most crops were at least two weeks behind normal in development. "That brings in extra risks in terms of crop quality at the end of the growing season," said Burnett adding "hopefully we'll see an extended growing season this year, because we'll need those extra days to preserve quality and keep frost away from the latest crops." The CWB forecast total western Canadian spring wheat acres at 15.92 million, which would be down from the 2010 level of 16.21 million and the Statistics Canada early intentions report placing acres at 17.78 million. Durum acres were forecast at 4.01 million by the CWB, up from 3.15 million a year ago, but below the 5.05 million acre StatsCan forecast.
Barley acres were projected at 6.66 million by the CWB, from 6.42 million a year ago. However, Burnett said the lateness of spring planting could cause some acres to switch out of other crops and into barley. Total all-wheat production for western Canada is forecast at 17.7 million to 21.6 million metric tons, with a most likely projection near 20.3 million metric tons, according to the CWB. That would compare with 22.4 million tons in 2010/11 (Aug/Jul). Of that total, spring wheat production was forecast at around 15.9 million tons, from 17.1 million a year ago. Durum was pegged at 3.8 million tons, from 3 million in 2010, and barley production was forecast at 7.7 million, from 7 million.
Carrefour CEO Sees Higher Prices, No Quick Fix On Commodities (Source: CME)
French retail giant Carrefour SA's chief executive said shoppers can expect to see rising retail prices of consumer products in the short term and warned there is no quick fix to escalating global commodity costs. "In the short term, we are probably likely to see higher price levels," Lars Olofsson said at the Consumer Goods Forum's Global Summit. Olofsson also warned that prices of fruit and vegetables in Europe will go up. "The season has started off difficult. This will be a difficult year for the farmers. Prices will increase in this area." The CEO said there is no quick global solution to rising raw materials input prices. "There is not going to be a quick fix.
The scarcity of raw materials is not on the same path as demand." Olofsson added that more investment is needed in agriculture and energy to fight the trend. In April, Carrefour reported a 3.9% rise in first-quarter sales as purchases in the fast-growing, emerging markets of Brazil and China helped to offset stubbornly weak consumption in Western and Southern Europe.
Coffee weakens as dollar strengthens, sugar firms
LONDON, June 15 (Reuters) - ICE coffee futures fell under pressure from a strengthening dollar in early trade on Wednesday, while sugar firmed to probe near two-month highs underpinned by delays in Brazilian and Thai ports. ICE arabica coffee futures fell, weighed by the stronger dollar and Brazil's harvest, and were underpinned by a shortage of quality beans and the looming frost season in Brazil although dealers' fears over frost appeared to recede.
Ivorian cocoa arrivals up 14 pct, quality slips
ABIDJAN, June 14 (Reuters) - Cocoa output from top grower Ivory Coast is running 14 percent higher than last year, but recent heavy rains have caused quality to slip, exporters said on Tuesday.
Some 1,171,000 tonnes of cocoa beans reached the West African state's two ports by June 12 since the start of the season in October, exporters estimated, up from 1,024,690 tonnes in the same period a year ago.
Heavy rains could hurt Ivorian cocoa quality
ABIDJAN, June 14 (Reuters) - Abundant rains in Ivory Coast's cocoa growing regions last week raised concerns over bean quality from the top grower country during the remainder of the April-September midcrop, farmers and analysts said.
Farmers need the rain -- which picks up seasonally in June and July -- to boost crop growth, but too much of it can flood plantations, hinder sun-drying operations, and lead to diseases like black pod.
Oil Rises After Slumping to Four-Month Low; U.S. Distillate Demand Drops (Source: Bloomberg)
Oil rose from the lowest in almost four months in New York amid speculation that yesterday’s 4.6 percent slump was exaggerated. Futures climbed as much as 0.7 percent after plunging the most since May 11 yesterday. Prices closed below the lower Bollinger Band, a technical indicator which may signal prices have fallen too far. Crude’s 14-day relative strength index, a measure of how rapidly prices are advancing or declining, dropped to 38 yesterday, the lowest in four weeks.
Oil Tumbles Below $95 a Barrel on U.S. Economy and European Debt Concern (Source: Bloomberg)
Crude oil tumbled below $95 a barrel for the first time since February on concern that Europe’s debt crisis will deepen and on signals the U.S. economy is slowing, reducing fuel consumption. Futures dropped 4.6 percent as European finance ministers struggled to break a deadlock on a second rescue plan for Greece, sending the euro and most commodities lower. The Federal Reserve Bank of New York’s general economic index slipped to the lowest level since November. An Energy Department report today showed U.S. fuel demand fell for the first time in five weeks.
Japan iron ore demand to rebound in Q4-Vale
GENEVA, June 14 (Reuters) - Iron ore demand in Japan is expected to reach 90 percent of pre-financial crisis levels in the fourth quarter, and all markets are recovering well, an executive at Brazilian miner Vale said.
Demand in Europe is back at around 85 percent of pre-crisis levels, global marketing director Pedro Gutemberg told Reuters in an interview on the sidelines of a conference in Geneva.
Copper in London Drops for Second Day on Concern Global Economy Is Slowing (Source: Bloomberg)
Copper in London dropped for a second day on concern about the stability of the global economy as China may extend credit tightening measures and the debt crisis in Europe remains unresolved. The metal for three-month delivery on the London Metal Exchange fell as much as 0.7 percent to $9,090 a metric ton by 8:06 a.m. Singapore time.
China to return to copper market, deficit on cards
LONDON, June 15 (Reuters) - China is likely to return to the copper market and vindicate predictions of a deficit this year, easing current concerns that its absence could fuel a surplus.
The second quarter is when China traditionally buys copper ahead of strong construction and industrial activity in the third quarter. But this year purchases have been deferred, mostly because of record high prices.
METALS-Copper rises to 2-week high after euro zone data
LONDON, June 15 (Reuters) - Copper rose to its highest in two weeks on Wednesday after a surprise rise in euro zone industrial output, but a strong dollar limited gains and investors remained wary ahead U.S. data later in the day.
Three-month copper on the London Metal Exchange was up 0.14 percent at $9,181 a tonne at 0948 GMT, after closing the last session up 2.9 percent. It hit a session high of $9,213, its highest since June 1.
PRECIOUS-Sovereign debt concerns help buoy gold prices
LONDON, June 15 (Reuters) - Gold slipped on Wednesday as a stronger dollar prompted a flurry of sales, but investor buying sparked by sovereign debt concerns and inflationary pressures.
Spot gold was bid at $1,518.29 a troy ounce at 0905 GMT from $1,523.25 an ounce late in New York on Tuesday. The precious metal hit a three-week low of $1,511.11 on Monday.
Gold Rises on Haven Demand as Euro Slumps Amid Escalating Greek Debt Woes (Source: Bloomberg)
Gold rose for the second straight day as Greek bailout talks stalled, driving the euro lower and boosting the appeal of the precious metal as a haven. The euro fell as much as 2 percent against the dollar and European equities slid as the region’s finance ministers failed to reach an agreement on another rescue package. BNP Paribas SA, France’s biggest bank, and rivals Societe Generale SA and Credit Agricole SA may have their credit ratings cut by Moody’s Investors Service because of their holdings in Greece.
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