Corn (Source: CME)
US corn futures rebound from heavy selling, with nearby July contract ending higher after touching a three-month low. Early sell-off was considered overdone as it followed a limit-down drop Wednesday. Grain users saw decline as an opportunity to secure grain and buy back previously sold positions, traders say. Concerns about a global economic slowdown weighed on prices, although uncertainty about plantings and supplies keeps grain users on edge. CBOT July corn rises 3c to $6.80 1/2 a bushel after trading in a wide 49c range. December corn slips 4 1/4c to $6.46.
Wheat (Source: CME)
US wheat futures finish mixed, as July contract rebounds from sharp, early losses. Nearby contract drifted higher after reaching lowest price since July 2010. Traders saw the declines as an opportunity to book grain and buy back previously sold positions, traders say. Demand for soft red winter wheat expected to increase as livestock producers search for alternative feed ingredients to high-priced corn, an analyst notes. CBOT July wheat rises 10 3/4c to $6.49 a bushel, while September wheat falls 4c to $6.69 1/4. KCBT September loses 10 1/2c to $7.78 1/4; MGE September sheds 16c to $8.35 1/2.
Rice (Source: CME)
US rice futures finish higher in a rebound from a two-month low. Traders say the decline was overdone and predict it will increase demand for the grain. Weekly US rice export sales of 76,500 tons for the week ended June 16 were up 23% from the prior four-week average. Major buyers included Turkey, which booked 52,100 tons, and Mexico, which bought 20,000 tons, according to federal data. CBOT September rice rises 11c to $14.73 1/2 per hundredweight.
GRAINS-U.S. corn slides to 6-week low as selloff continues
SINGAPORE, June 23 (Reuters) - U.S. corn futures fell 1.6 percent on Thursday, dropping to a six-week low, while wheat lost 0.2 percent to trade near its lowest in almost 11 months as long liquidation, sparked by Black Sea wheat continued to hammer the grain markets.
"The thing with corn is that at what point does the market think it is overdone," said Brett Cooper, senior manager of markets at FCStone Australia.
Mexico sees some corn losses due dry weather
MEXICO CITY, June 22 (Reuters) - Mexico's 2011 corn crop will come in slightly below forecasts as late rains hit production but next year's crop is likely to bounce back, the deputy agriculture minister told Reuters on Wednesday.
Mexico's corn harvest was first hit this year by a hard frost in February that wiped out most of the crops in the major producing state of Sinaloa. Farmers quickly organized a massive replanting effort but their output will fall short of expectations on a recent spate of dry weather.
G20 to include market regulation in farm deal-source
PARIS, June 23 (Reuters) - G20 agriculture ministers have agreed to include the divisive issue of reforming food commodity markets regulation in the final communique for their meeting in Paris, a source attending the negotiations said on Thursday.
"There is a deal on regulation, including a reference on position limits," the source told Reuters as ministers continued to discuss France's action plan to curb food price volatility.
Russia ends spring sowing, keeps grain crop forecast
MOSCOW, June 23 (Reuters) - Russia has completed its spring sowing and still expects this year's grain crop to reach 85 million tonnes, the Agriculture Ministry said on Thursday.
"Under favourable weather conditions we may reap 85 million tonnes of grain," Minister Yelena Skrynnik said in a statement.
Mexican corn miller Gruma refinances some debt
MEXICO CITY, June 22 (Reuters) - Mexican corn miller Gruma said on Wednesday it refinanced part of its debt in a move that will save $72 million over the life of the loans.
The company said it entered new arrangements that include a seven-year syndicated loan for 1.2 billion pesos ($102 million), a seven-year bank loan for 600 million pesos, a new credit line and an extension and increase of an existing line of credit. At the same time, it paid off a more expensive loan of 3.4 billion pesos.
Egypt won't buy Russia wheat until new harvest
CAIRO, June 22 (Reuters) - Egypt's main state wheat buyer said on Wednesday it had postponed any purchase of Russian wheat until the new Russian harvest was gathered in July so that it could ensure the purchases meet Egyptian conditions.
Nomani Nomani, vice chairman of the General Authority for Supply Commodities (GASC), said purchases of Russian wheat "are postponed until their new harvest is in place and until GASC ensures it matches its conditions."
Regulation key stumbling block in G20 farm talks
PARIS, June 22 (Reuters) - French calls for tighter regulation of commodity markets proved a stumbling block at G20 agricultural talks on Wednesday, which agreed to pool farm data to help curb volatile food prices.
Two officials leaving after a ministerial dinner opposite the Presidential Elysee Palace said there had been progress but no overall deal yet as farm ministers were set to negotiate late into the night before a final session on Thursday.
Toepfer Raises Hopes For Germany's Grain Crop On May Rains (Source: CME)
Germany is set to harvest between 42 million and 43 million tons of grain in the 2011-12 season, Toepfer International said, raising its previous forecast slightly due to improving weather. The country's largest grain merchant said it expects farmers to produce 23 million-23.5 million tons of wheat, only slightly below last year's output of 23.8 million tons after recent rainfall revived parched crops. The corn crop is expected to come in at 4.1 million to 4.6 million tons, and barley 9 million to 9.5 million tons, down from 10.4 million tons last year. "Even a high thousand kernel weight is no longer expected to be able to compensate for the low number of ears per square meter," said Toepfer. Still, rapeseed yields are expected to remain stunted after drought compounded the effects of a poor planting season.
Production in Europe's largest producer is estimated at 4.3 million to 4.7 million tons, down from 5.7 million tons the year before. "The decline in yields will probably be even more noticeable in the case of rapeseed, with low crop density and poor pod setting across practically the whole country," Toepfer said in a note.
G20 Deal Disappoints Hopes For World Food Markets Shakeup (Source: CME)
A deal by agriculture ministers from the Group of 20 nations announced does not go far enough toward tackling the growing threats to food security and rising prices, critics said. Farm ministers of the world's biggest economies said they would set up a monitoring system for food stocks and production and push to improve agricultural investments in the developing world. Minsters also announced measures to protect the world's poor from production shocks after world food prices hit a record high this year, including creating a network of stocks in vulnerable countries and halting export bans on food aid. Food security has risen to the top of the political agenda this year after the second spike in four years was blamed for sparking the wave of unrest that has rocked the Arab world, causing headaches for policy makers.
Yet critics of the deal said ministers passed the buck on two of the most important issues facing world food markets: the growing use of food crops to create biofuels and the role of speculators in financial markets. "The action plan adopted today addresses the symptoms of price volatility on agricultural markets, but it fails to address the causes," said the United Nations' special rapporteur on the right to food Olivier De Schutter. A report for the G20 by 10 agencies, including the World Bank and World Trade Organization, found that "biofuel production will exert considerable upward pressure on [food] prices" and recommended policymakers "remove ... policies that subsidize or mandate biofuels production or consumption." The G20's statement, however, said that it will "address the challenges and opportunities posed by biofuels, in view of the world's food security, energy and sustainable development needs" but made no definite statement on changing government policies on use of the fuel.
"The European ethanol industry welcomes the decision by the G20 to vanquish the myth that biofuels are responsible for food price volatility," said pro-biofuels lobby group ePure Secretary General Rob Vierhout. But Jean-Cyril Dagorn, policy advisor for Oxfam, slammed the "sticking plaster approach" adopted by the meeting and said only "reforming flawed biofuels policies which divert food into fuel and helping poor countries build up buffer stocks" would help poor countries deal with food shortages. Another issue, but one heralded as key to stopping food price rises by France, was also left on the sidelines: regulating commodity markets. France has vowed to crack down on speculation on food commodities and has blamed the meteoric expansion of commodities derivatives markets--the size of which far exceeds that of physical markets--for fueling food price volatility. But countries such as Brazil, the U.S. and Europe argue that tempering futures markets could be tantamount to price controls.
Minsters said they "strongly encourage G20 Finance Ministers and Central Bank Governors to take the appropriate decisions for a better regulation and supervision of agricultural financial markets" when they meet in July. A European Union source said he was optimistic this would be addressed next month. But the U.N.'s De Schutter said the statement missed the point. "Speculation typically results not from the manipulation of prices by one single financial actor taking excessive positions, but from the combined actions of a large number of actors adopting a herding behaviour," he said.
G-20 Ministers Agree to Limit Crop-Export Bans, Start Agriculture Database (Source: Bloomberg)
Group of 20 farm ministers agreed to a plan to set limits on export bans and create a crop database to tackle what French President Nicolas Sarkozy called the “plague” of rising food prices. The agreement includes a call for international market regulation, more agriculture production and the development of a proposal for emergency food reserves, the ministers said in a declaration after a two-day meeting wrapped up in Paris today. Food for humanitarian purposes will be exempt from export bans, they said.
China, India, Brazil Back France’s Plan to Tackle ‘Plague’ of Food Prices (Source: Bloomberg)
China, India and Brazil were among Group of 20 countries that backed new rules for global agriculture at a meeting in Paris today, France said. Farm ministers from the U.S., the U.K., Australia and Argentina hadn’t stated their positions on the plan yet, French agriculture ministry spokesman Bertrand Sirven said in a briefing at a meeting of G-20 agriculture ministers in Paris.
China Envoy: Govt Doesn't Advocate Companies Buying Africa Farmland (Source: CME)
A top China envoy to Africa said the government doesn't advocate Chinese companies' acquisition of farmland in Africa and hasn't encouraged Chinese farmers to move to the continent. While China has sought to strengthen ties with Africa in part to feed its need for resources, the comments by Liu Guijin, China's special envoy for African affairs, at a briefing to reporters on China-Africa relations, distance government policy from what the ambassador called a "sensitive" issue of an apparent rising presence of Chinese agricultural interests in developing foreign farmland for domestic food security purposes. On whether Beijing was behind the migration of Chinese farmers from Hebei province to Africa, Liu acknowledged that some Chinese farmers had moved to some African nations in private capacity, but said the government wasn't helping them. "The government knows that grabbing farmland is a very sensitive issue...and will not encourage it," he said.
Media reports have suggested that thousands of Hebei farmers have moved to more than a dozen African countries in recent years, setting up farming businesses in places such as Nigeria, Zambia, Sudan and Kenya. Liu said some private Chinese companies may have their own projects in placing local personnel in Africa to develop agriculture, but Beijing's policy is aimed at sharing agricultural technology with Africa. China is home to a fifth of the world's population but has only about 7% of global arable land, making food security a top government priority. Chinese companies have made strides in similar ventures in Latin America and Southeast Asia. Earlier this month, one of China's largest farming companies, Heilongjiang Beidahuang Nongken Group, signed a joint venture with Argentina's Cresud SA to buy land and farm soybeans. Cresud is one of Argentina's top farming companies, controlling more than 1 million hectares of farmland.
Heilongjiang Beidahuang's chairman, Sui Fengfu, told Dow Jones Newswires in March that the company planned to buy 200,000 hectares of overseas farmland this year, and that Latin America was a key target. The company is already farming 2 million hectares outside China. Heilongjiang Beidahuang is also spending $1.5 billion to lease and develop farms on 300,000 hectares in Argentina's Rio Negro Province. The company plans to grow wheat, corn, soybeans, fruits, vegetables and wine grapes for export to China over 5-10 years. However, the Latin American deals are not land acquisition projects and appear to be crafted to avoid a backlash against foreign ownership of farmland in Argentina. Argentina's President Cristina Fernandez has introduced legislation limiting land purchases by foreign individuals and companies to 1,000 hectares in rural areas. Chinese companies are also playing an increasingly important role in developing farmland in the Philippines and Cuba, among other countries.
Indian Panel Meets To Identify Ways Of Plugging Food Wastage (Source: CME)
An Indian government-appointed panel, which is preparing a massive drive to stop rampant wastage of food, held its first meeting to identify measures that could help feed millions of people who go hungry. Food Minister K.V. Thomas told reporters after the panel's meeting that the government wants to first launch a nationwide awareness campaign as well as appeals to hotels and institutions to distribute their leftover food to charities. "We will also conduct a survey on food wastage to assess the implications," he said. "Our talks are still preliminary but these measures are already in our mind." Nearly 30% of the country's fruits and vegetables perish due to a lack of cold storage facilities, while thousands of tons of food grain spoil in ill-equipped warehouses. Also, 15%-20% of cooked food at weddings, parties or restaurants is wasted as well. Distribution losses of more than 30% of the grain supplied also plagues the government's giant distribution network, and food often doesn't reach the poor.
Liffe robusta coffee hits 4-month low, sugar steady
LONDON, June 23 (Reuters) - Liffe robusta coffee extended losses to hit a fresh four-month low in early trade on Thursday, hovering above key technical support levels, while ICE arabicas edged higher.
Sugar was steady, consolidating gains, while cocoa was also near unchanged.
Liffe robusta coffee futures fell to a four-month low on light investor selling in early trade, before steadying above key technical support of $2,246 a tonne.
Brazil cocoa arrivals nudge higher after pause
BRASILIA, June 22 (Reuters) - Deliveries of cocoa to warehouses in Brazil picked up again in the last week following a dip a week prior, data from the commercial association of the top cocoa state Bahia showed.
Output from the mid crop harvest which began last month, rose in both Bahia and outlying cocoa states.
India may decide on more sugar exports Thursday-minister
NEW DELHI, June 23 (Reuters) - India's government could decide to allow more sugar exports at a meeting later on Thursday, Food Minister K.V. Thomas said, after industry calls for extra sales over the 500,000 tonnes allowed under Open General Licence (OGL) in December.
India, the world's top sugar consumer and biggest producer after Brazil, had stocks of 23.26 million tonnes on June 1, well above last year and at least a year's supply, and sugar mills have sought permission to export an extra 1.5 million tonnes.
EU on track to okay sugar exports if well-supplied
BRUSSELS, June 23 (Reuters) - The EU is on track to approve some 700,000 tonnes of sugar exports if the EU market is well supplied, Lars Hoelgaard, deputy director general, agriculture and rural development, of the EU Commission, said on Thursday.
"If things go normally - if there is a rebalancing of supply and demand in the world market, and alleviaton of the situation internally, and we would expect to have a normal harvest, I don't see why not (approve exports)," he said in a question-and-answer session at an F.O. Licht sugar conference.
Demand for sustainable cocoa to surge-Fairtrade
ABIDJAN, June 22 (Reuters) - Global demand for sustainable cocoa that pays a stable price to farmers and protects the environment is set to surge well over fivefold to more than 200,000 tonnes a year by 2020, Fairtrade said on Wednesday.
Alex Assanvo, global product manager of the Fairtrade Labelling Organisation, told Reuters on a visit to top cocoa grower Ivory Coast that his projection was partly based on targets set by chocolate maker Mars which appear increasingly likely to be met.
Sugar prices seen strong near term, to fall in Q4
BRUSSELS, June 22 (Reuters) - Sugar futures prices are expected to stay fairly strong in the near term on worries over Brazilian output and port congestion, but prices should ease in the fourth quarter as new harvests roll in.
A rally to 2-1/2-month highs had been driven by worries over shipping bottlenecks in top producer Brazil, mainly centred on a terminal at Santos due to big orders from China, as well as delays in number two exporter Thailand.
US ethanol production up 2 pct in week
KANSAS CITY, Mo., June 22 (Reuters) - U.S. ethanol production rose 2.4 percent in the latest reporting week, edging higher after a slide the prior week, the government said on Wednesday.
Ethanol output totaled 901,000 barrels per day (bpd) for the week ended June 17, down up 21,000 bpd over the previous week, even as ethanol stocks fell 236,000 barrels to 19.51 million barrels, the Energy Information Administration said in its weekly petroleum report.
Oil Rises on Concern IEA Crude Release May Limit Future Supply Responses (Source: Bloomberg)
Oil rose in New York, reversing yesterday’s plunge, on concerns that stockpile releases by consuming nations may limit the ability to respond to supply disruptions in future. Crude climbed as much as 1.5 percent today after sliding 4.6 percent yesterday. The International Energy Agency agreed to release 60 million barrels to buyers. Oil stockpiles among the 28 member countries of the IEA declined by 340,000 barrels a day during the first quarter of this year, the Agency said in its monthly Oil Market Report on June 16.
‘Head-Scratcher’ Crude Release Plunges Oil Stocks (Source: Bloomberg)
Oil producers tumbled the most in more than a year after the U.S. government announced plans to pour as much as 1 million barrels of stockpiled crude a day into an already-glutted market. The U.S. and 27 other nations pledged today to tap government-controlled oil inventories after civil war in Libya disrupted crude shipments and Saudi Arabia failed to persuade fellow members of the Organization of Petroleum Exporting Countries to plug the gap with increased output. Crude futures plunged more than $5 a barrel in New York trading.
Obama Faulted for Tapping U.S. Petroleum Reserves by Republicans, Industry (Source: Bloomberg)
Republicans called the Obama administration’s plan to tap the Strategic Petroleum Reserve a political move, while some Democrats said the effort to ease shortages may be too little, too late. The U.S. release of 30 million barrels of oil accounts for half the amount the International Energy Agency plans to deliver to the market to ease shortages of Middle East supplies triggered by the strife in Libya, the Energy Department said today in a statement. Republicans joined the oil industry in saying the release wasn’t needed and more drilling is.
Gold Drops Most in Seven Weeks as Slow Economy, Oil Slump Ease Inflation (Source: Bloomberg)
Gold futures plunged the most in seven weeks as a slowing economy and a rising dollar eroded the appeal of commodities as an investment and eased the risk of accelerating inflation. The U.S. economy is recovering at a “moderate pace, though somewhat more slowly” than expected, Federal Reserve Chairman Ben S. Bernanke said yesterday. The Dollar Index gained as much as 1.4 percent, while a plunge in oil to the lowest price since February led the Standard & Poor’s GSCI Index of 24 raw materials to drop as much as 4.7 percent today.
Brazil gov't may double mine royalties
BRASILIA, June 22 (Reuters) - Brazil could double mining royalties to 4 percent as part of efforts to boost revenue from its soaring output of minerals such as iron ore, copper and gold, the country's Mines and Energy Minister said on Wednesday.
The increase, which would come as part of an overhaul of Brazil's mining code, may raise the cost of raw materials for industry worldwide and cut profit at mining giant Vale , the world's top iron ore miner.
Japan smelters win copper TC/RCs double last yr-sources
TOKYO, June 23 (Reuters) - Japanese smelters have agreed mid-term copper treatment and refining charges at more than double last year's level, two sources said, as reduced buying of copper concentrates by China and Japan resulted in a glut of ore, pushing up smelters' treatment charges.
Japanese smelters have agreed a treatment charge of $85 per tonne and refining charge of 8.5 cents per pound, two trading sources told Reuters, up from an estimated $40/4 cents fees last year.
Copper market sees surplus in Jan-April -WBMS
LONDON, June 22 (Reuters) - The global copper market saw a surplus of 116,900 tonnes in the January to April 2011 period compared with a surplus of 40,000 tonnes for the whole of last year, the World Bureau of Metals Statistics said on Wednesday.
World mine production in the first four months of 2011 was 5.20 million tonnes, up 2.3 percent from the same period last year, and refined production at 6.37 million tonnes was up 1.3 percent over the same period.
China copper imports may rise in 2nd half-Aurubis
HAMBURG, May 22 (Reuters) - China's copper imports are likely to rise in the second half of 2011 after a fall in past months as the country uses up its domestic stocks, Aurubis , Europe's biggest copper producer, said on Wednesday.
Imports into the world's top copper buyer in May fell to 149,235 tonnes from April's 160,236 tonnes and by 46.7 percent from May 2010, a breakdown of the May data by the General Administration of Customs showed on Tuesday.
Underground operations halted at Zambia nickel mine
LUSAKA, June 22 (Reuters) - Underground operations at Zambia's Munali nickel mine have been suspended since Friday because of ventilation problems and should resume in three weeks, officials said on Wednesday.
Ventilation fans had to be switched off after a sink hole was discovered and the mine was evacuated but no one was hurt.
The mine is run by Australia-listed Albidon , 50 percent owned by China's Jinchuan Group, and was expected to produce around 56,000 tonnes of nickel concentrate this year.
China lead output seen falling into July on crackdown, poor demand
HONG KONG, June 23 (Reuters) - Refined lead production cuts in China that followed a crackdown on polluting plants launched in May and a growing supply-demand gap will extend into July as more units shut or curtail output for repairs and cleanup, industry sources said on Thursday.
China's production of refined lead fell 13.3 percent in May, partly because Beijing ordered tighter controls over lead producers and lead-acid batteries makers accused of poisoning more than 100 children and scores of adults in eastern Zhejiang province by careless handling of the highly toxic metal.
Indonesia's Timah sees tin price between $23,000-27,000/T in H2
JAKARTA, June 23 (Reuters) - Timah , the world's largest integrated tin miner, said on Thursday it saw tin prices trading at $23,000 to $27,000 per tonne in the second half of this year, lower than its full year target price.
Tin for three-month delivery on the London Metal Exchange traded at $25,160 a tonne at 1007 GMT. The metal, used in solders and tinplate, touched its lowest level since December 2010 at $24,510 per tonne on June 14.
METALS-Copper falls on dollar, growth concerns
LONDON, June 23 (Reuters) - Copper fell on Thursday on a stronger dollar and concerns about demand in the United States after the Federal Reserve cut its forecasts for economic growth in the world's largest economy.
Data showing big metal consumer China's factory sector was close to stalling, and a meeting later on Thursday of European leaders over the Greek crisis also soured sentiment.
PRECIOUS-Gold cuts 4-day rally as Fed boosts dollar
LONDON, June 23 (Reuters) - Gold broke a four-day rally on Thursday after the Federal Reserve acknowledged U.S. growth was slowing but gave no hint that it needed to provide additional economic stimulus, which bolstered the dollar.
Following a two-day meeting on Wednesday, the Fed cut its forecasts for U.S. growth but did not suggest it would conduct a third round of quantitative easing, while at the same time signalling it would shift its focus to headline rather than core inflation.
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