Investors Cut Bullish Agriculture Bets to One-Year Low on Supply Outlook (Source: Bloomberg)
Funds trimmed bets on rising agriculture prices for a third straight week, sending holdings to the lowest in a year as supply concerns eased. Speculators reduced their net-long position in 11 U.S. farm goods by 6.6 percent to 564,174 futures and options contracts in the week ended July 5, government data compiled by Bloomberg show. That’s the lowest since July 6, 2010. Investors more than doubled their net-short bets for wheat. Corn holdings slumped 16 percent.
Corn (Source: CME)
US corn futures finish sharply higher on concerns heat will reduce output. A "heat dome" will center over Iowa, the top corn producing state, by July 16, with temperatures topping 100 degrees, according to PFG Best. "The 8-14 day temperature outlook sees above normal temperatures and below normal rainfall across the entire Midwest," the firm says. Heat is a concern as corn is moving into a key stage of development called pollination. CBOT December corn ends up 21 1/2c at $6.37 a bushel.
Wheat (Source: CME)
US wheat futures close mostly higher on spillover support from surging corn market. Gains in corn lift wheat because both grains are used for livestock feed. Yet, spring wheat futures at MGEX bucked the trend, ending lower. Reports of good protein content in the hard red winter wheat crop, traded at KCBT, are "bearish" for spring wheat because grain users typically look to spring wheat for protein, according to Doane Advisory Services. CBOT September wheat jumps 16 3/4 to $6.51 1/4 a bushel; KCBT September rises 3 1/4c to $7.27 1/4; MGE September drops 7 3/4c to $8.17.
Rice (Source: CME)
US rice futures finish at a five-month high on concerns about reduced output. Heat is expected to cut yields in southern states, such as Texas, which has been suffering from a drought since last autumn. Poor weather this summer could exaggerate a sharp drop in plantings, reported last week in a USDA crop report. And high prices have not shut off demand. Weekly US export sales of 106,700 tons were up 60% from the previous week and 58% from the prior four-week average. CBOT September rice gains 6c to $16.13 per hundredweight.
Informa Pegs US Corn Crop At 13.759B Bushels (Source: CME)
U.S. farmers will harvest 13.759 billion bushels of corn in 2011 and U.S. soybean crop at 3.203 billion bushels according to projections made by private analytical firm Informa Economics, sources said. Informa also estimates corn yields at 162.5 bushels per acre, based on harvested acreage of 84.7 million acres. Soybean yields are estimated at 43.1 bushels, based on harvested acreage of 74.3 million acres. Informa's corn yield is 1.1 bushels below its previous forecast, but almost 10 bushels above last season's weather-reduced yield. Informa's 2011 harvested corn area is 200,000 acres below that estimated by U.S. Department of Agriculture in June, but 3.2 million above corn harvested in 2010. The July 1 soybean yield at 43.1 bushels an acre is down 1 bushel from Informa's previous forecast and would be 0.4 bushel below last year.
Informa tempered its yield forecast for several states due to this season's below-average start, Informa noted in the report, traders said. U.S. 2011 wheat production was projected at 2.095 billion bushels, 113 million less than last year, according to traders. The U.S. is expected to harvest 47.2 million acres of all wheat, 463,000 below last year. Informa's all wheat yield is forecast at 44.4 bushels per acre, 2.0 bushels below last year. All wheat production is forecast at 37 million bushels above that carried in USDA's June WASDE report, Informa reports, traders said. Informa is forecasting U.S. winter wheat production at 1.476 billion bushels, up 26 million from last month but 9 million below last year, traders said. The winter wheat yield is forecast to average 45.7 bushels per acre, 0.4 bushels above last month but 1.1 bushels below last year.
Hard red winter wheat production is forecast to total 788 million bushels. If realized, this will be the smallest hard red winter wheat harvest since 682 million bushels were produced in 2006, according to Informa. The hard red winter wheat yield of 36.6 bushels is 5.7 bushels per acre below last year. Soft red winter wheat production is forecast to total 449 million bushels, with an implied yield of 61.3 bushels per acre, 6.8 bushels above last year. White wheat production is forecast to total 240 million bushels, 11 million above last year. Spring wheat production is forecast at 555 million bushels, 61 million below last year. The average yield is forecast at 42.0 bushels per acre, 4.1 bushels below last year, and would be the lowest spring wheat yield since 2008 when it averaged 40.5 bushels per acre, according to Informa.
Durum production is forecast at 64 million bushels, down more than 40% from last year. If realized, this would be the smallest durum harvest since 2005 when the crop totaled 53 million bushels, according to Informa. The durum yield is forecast to be 38.6 bushels, 3.8 bushels below last year. USDA is scheduled to release its wheat production forecasts and supply and demand projections July 12, 8:30 a.m. EDT (1230 GMT). Last year, U.S. corn output measured 12.447 billion bushels, soybean production came in at 3.329 billion, and U.S. wheat production measured 2.208 billion.
U.S. corn gains on Chinese buying; wheat, soy steady
SINGAPORE, July 8 (Reuters) - U.S. corn futures rose for a second straight session as China's purchases buoyed the market, which is on track to end the week on a positive note after three weekly losses.
"Last week and this week China has been buying U.S. corn and we expect they will continue to take more at these prices which is a very bullish factor," said Kazuhiko Saito, chief commodities analyst at Fujitomi, a Tokyo-based commodities trading company.
Indonesia may import rice from Thailand, Vietnam -Bulog
JAKARTA, July 8 (Reuters) - Indonesia may import rice from Vietnam or Thailand this year through a government agreement that allows buying of up to two million tonnes of the staple grain from the countries, said the head of state procurement agency Bulog on Friday.
The comments are the first indication by Indonesia that it could import significant volumes from August from the world's top two rice exporters, after bumper purchases in January surprised markets and boosted regional prices.
Argentina 2011/12 wheat area seen lower-exchange
BUENOS AIRES, July 7 (Reuters) - Argentina's 2011/12 wheat area will be 4.7 million hectares, down 5 percent from a previous forecast, the Buenos Aires Grains Exchange estimated in its weekly crop report Thursday.
The new forecast brings the exchange in line with the Argentine Agriculture Ministry, which also projected a 2011/12 wheat area of 4.7 million hectares.
Italy 2011 soft wheat output seen down 25 pct -ISTAT
MILAN, July 7 (Reuters) - Soft wheat output in Italy, a major grain buyer in Europe, is expected to fall 25 percent this year because of a drop in sown areas, according to preliminary data from Italy's statistics agency ISTAT.
Soft wheat output is estimated to have fallen to about 2.21 million tonnes this year from about 2.94 million tonnes in 2010 while sown areas dropped to 448,245 hectares (ha) from 548,867 ha, the data showed.
EU clears 110,000 tonnes wheat exports for July 1-5
PARIS, July 7 (Reuters) - The European Union granted export licences for 110,000 tonnes of soft wheat between July 1 and July 5 in the first award for the 2011/2012 season, official data showed on Thursday.
This compared with 246,000 tonnes of export licences cleared in the corresponding period last season.
EU barley harvest underway, smaller crop expected
HAMBURG, July 7 (Reuters) - Harvesting of winter barley for animal feed is now underway in key European Union producing countries and the crop is likely to fall on the year after a drought in several countries,analysts said on Thursday.
Rain in recent weeks was too late to save parched winter barley but the outlook for spring barley, used for malt and beer production, is better.
France sees 10 pct soft wheat crop fall to 32 mln t
PARIS, July 7 (Reuters) - France should harvest 31.99 million tonnes of soft wheat this year, down 10.3 percent on 2010, the farm ministry said on Thursday in a first estimate of the crop.
The ministry cited the impact of a spring drought. France's driest March-May period since 1900 and the hottest in 50 years has stressed crops.
Sugar eases early but Brazil outlook underpins
LONDON, July 8 (Reuters) - ICE raw sugar futures eased in early trade as a stronger dollar contributed to a modest setback after the prior session's surge while cocoa and coffee prices were little changed.
ICE raw sugar futures fell back slightly after the prior session's strong advance, weighed partly by a stronger dollar and weaker oil prices.
Low yields put dent in Brazil sugar, ethanol -Unica
BRASILIA, July 7 (Reuters) - Disappointing yields will cut Brazil's 2011/12 production of both sugar and ethanol biofuel below last year's levels, the technical director at Brazil's cane industry association Unica told Reuters on Thursday.
Antonio de Padua Rodrigues said sugar production in Brazil's center south sugar production would fall below last year's output of 33.5 million tonnes, a sharp drop from the association's existing official estimate of 34.6 million.
Indonesia coffee output may drop 30 pct in 2011
NUSA DUA, Indonesia, July 8 (Reuters) - Coffee production in Indonesia, the world's second-largest robusta producer after Vietnam, could fall as much as 30 percent to around 400,000 tonnes in 2011 due to a failure in pollination after last year's persistent rains, the Indonesian Coffee and Cocoa Research Institute said on Friday.
But next year's output could be normal as the dry season returned this year to coffee plantations in Indonesia, which accounts for about 6 percent of global output, said Soetanto Abdoellah, head of research division of the state-run institute.
Brazil June green coffee exports rise 30 pct on yr
BRASILIA, July 7 (Reuters) - Brazil exported 2.37 million 60-kg bags of unroasted, green coffee in June, a rise of 30 percent from the 1.83 million bags shipped in June 2010, the Cecafe coffee exporter association said on Thursday.
Total exports for Brazil's 2010/11 July/June season, including unroasted green and the soluble kind, reached a record high of 34.9 million 60-kg bags, up 17 percent from the 29.8 million bags shipped in the prior season.
China Coal-Prices flat, port stocks swell to nearly 8 mln T
SHANGHAI, July 8 (Reuters) - China's thermal coal prices were flat this week as power stations, already stuffed with summer stocks, paused their buying spree, but anticipation of another round of summer restocking later this month kept prices elevated.
Average weekly prices of coal with a heating value of 5,500 kcal/kg NAR steadied at 843 yuan ($130.38) a tonne, while 5,800 kcal/kg coal was also unchanged at 900 yuan, according to industry data website SXCOAL (www.sxcoal.com).
Indonesia's Bayan signs 100 mln tonne coal deal with Indian firm
JAKARTA, July 8 (Reuters) - Indonesian coal miner Bayan Resources Tbk has signed a deal with India's Universal Crescent Power Private Ltd to supply 100 million tonnes of coal over 15 years from 2015, the firm's chief financial officer said on Friday.
"It's an index linked contract based on the Newcastle index (and) is fully compliant with the minimum pricing regulation," Alastair McLeod told Reuters. "It's not a fixed price contract, and so it will vary every month on delivery of the contract."
Crude Oil Falls for a Second Day in New York as U.S. Jobless Rate Climbs (Source: Bloomberg)
Oil declined for a second day in New York as investors bet rising unemployment in the U.S. indicated that fuel demand may falter in the world’s biggest crude- consuming nation. Futures slipped as much as 0.5 percent after the Labor Department said July 8 that U.S. employers last month added the fewest workers in nine months and the unemployment rate rose to 9.2 percent, the highest this year. A report this week may show sales at U.S. retailers stagnated in June.
Iron Ore Imports by China Decline as Monsoon Rains in India Slow Shipments (Source: Bloomberg)
China, the world’s biggest buyer of iron ore, cut purchases by 4 percent in June from the previous month as India’s wet season curbed shipments and as Chinese mills sought supplies from domestic mines. Imports were 51.09 million metric tons last month compared with 53.3 million tons in May, according to China’s General Administration of Customs. That’s 8 percent higher than 47.2 million tons a year earlier, according to data compiled by Bloomberg.
Iron Ore-Spot up, Shanghai rebar has best week since April
SINGAPORE, July 8 (Reuters) - Spot iron ore prices rose on Friday as a firmer outlook for China's steel demand prompted mills to restock the raw material, with Shanghai steel futures edging up to three-week highs.
China's daily crude steel output hit a record high above 2 million tonnes towards the end of June, buoyed by increased construction of social housing units in the country.
Namibia 5-months diamond, uranium output down
WINDHOEK, July 8 (Reuters) - Namibia's diamond output fell nearly 9 percent in the first five months of this year, Ministry of Mines and Energy figures released by broking firm IJG showed on Friday.
Production to end-May totalled 528,333 carats, a drop of 8.9 percent from the corresponding period last year.
China's imported iron ore stocks at record high of 93.65 mln T-Mysteel
SHANGHAI, July 8 (Reuters) - China's imported iron ore inventories at major ports reached 93.65 million tonnes this week, 480,000 tonnes up on the week before, industry consultancy Mysteel said on Friday.
Ore from Australia rose 210,000 tonnes to 35.51 million tonnes, and that from Brazil rose 610,000 tonnes to 22.51 million tonnes.
China sets 2nd batch of coke, minor metals export quotas
SHANGHAI, July 8 (Reuters) - China has issued the second batch of export quotas for coke, silver and some minor metals, the Ministry of Commerce (MOFCOM) said on Friday.
The ministry has set the second batch of coke export quota at 3.82 million tonnes, bringing total quota for the full year to 8.42 million tonnes.
Alcoa profit seen higher on aluminum price surge
NEW YORK, July 7 (Reuters) - Alcoa Inc , often viewed as a bellwether of the U.S. economy, is looking at a big jump in second-quarter profit as a result of soaring aluminum prices and growing demand, especially from planemakers.
"When you compare year-over-year, the second quarter will be a lot higher, and most of that is in volume improvement," said analyst Bridget Freas, of Morningstar in Chicago.
Winter storm continues to hit Chile copper heartland
SANTIAGO, July 7 (Reuters) - The world's top copper mine, Escondida, halted extraction operations early Thursday due to heavy rains, its workers union said, as a rare winter storm curbed output across Chile's mining heartland.
Escondida's majority owner BHP Billiton said it was checking operations and had no details on any disruption at the deposit, which produces more than a million tonnes per year.
China June copper imports seen up, oil down
SHANGHAI, Jul 7 (Reuters) - China's copper imports are likely to rise on arbitrage trading in June from May, after two consecutive months of decline.
Preliminary data from China's General Administration of Customs is also expected to show a rise in imports in grains but a fall in crude oil and iron ore.
Shanghai warehouse copper stocks down 0.7 pct
SHANGHAI, JULY 8 - Copper inventories in warehouses monitored by the Shanghai Futures Exchange (ShFE) fell 0.7 percent from last Friday, the exchange said on Friday.
Aluminium fell 15,723 tonnes, or 6.2 percent, to 238,894 tonnes as buyers prefer to draw down from stocks rather than to import.
Copper Slides Most in Two Weeks on ‘Disappointing’ U.S. Employment Report (Source: Bloomberg)
Copper fell the most in almost two weeks after U.S. payrolls rose less than forecast in June, damping growth prospects. U.S. employers added 18,000 workers last month, the fewest in nine months, and the unemployment rate unexpectedly climbed, Labor Department data showed today. Economists expected a gain of 105,000, the median estimate in a Bloomberg News survey. The U.S. is the world’s largest copper consumer after China. “The market is selling off on a very disappointing jobs report,” said Adam Klopfenstein, a senior market strategist at Lind-Waldock in Chicago. “There’s a reassessment of the economic recovery in the U.S.”
METALS-LME copper steady on supply worries, US jobs data eyed
SHANGHAI, July 8 (Reuters) - LME copper was steady on Friday, hitting a new three-month high in the session, supported by supply disruptions in Indonesia and Chile and positive data from the United States.
Investors also kept an eye on key U.S. non-farm payrolls data due later in the day to gauge the health of the world's largest economy, after two separate employment reports showed improvement in the labour market
PRECIOUS-Gold holds steady in thin trade before US job data
SINGAPORE, July 8 (Reuters) - Spot gold was steady in thin trade on Friday, ahead of a key U.S. employment report that is expected to show improvement in the labour market and boost optimism on prospects for the world's largest economy.
But stronger-than-expected payrolls data could ease fears that the U.S. economy remains in a prolonged soft patch, potentially undermining safe-haven demand for bullion.
Baltic index rises for 3rd day, capesizes strong
LONDON, July 7 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, rose for a third session on Thursday as gains on the larger capesizes bolstered cargo demand.
But brokers said a potential drop in Chinese raw materials demand and fleet growth were likely to cap gains in the coming days.
Asia Dry Bulk-Panamax rates to rebound on tighter tonnage
SINGAPORE, July 7 (Reuters) - Rates for panamax dry bulk carriers on key Asian freight routes are expected to rebound slightly from two-month lows over the next week as unemployed vessels move to other routes, tightening available tonnage.
In the capesize market, rates are seen steady to higher on firm Chinese demand for Australian iron ore, shipbrokers said on Thursday.
Baltic ship futures screen users growing - exchange
LONDON, July 6 (Reuters) - The Baltic Exchange's platform for centralised electronic trading of dry freight derivatives has signed up 15 principals and five brokers in its first month and aims to boost liquidity in the coming months, the exchange said on Wednesday.
Freight forward agreements (FFAs), which allow a buyer to take a position on freight rates at a point in the future, had not previously traded on a central marketplace.
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