20110829 1003 Global Commodities Related News.

Corn (Source: CME)
US corn futures soar on supply worries, fresh export demand and outside market support. Prices pushed past recent technical resistance at $7.50/bushel as a stream of troubling reports of this year's crop continue to emerge. Traders say gains came in part amid anticipation of Pro Farmer crop tour yield projection, released after the close, at 147.9 bushels/acre. "It's confirmation of everybody's suspicions," RJ O'Brien analyst Rich Feltes says. Surprising sales of more than 360k metric tons of corn to unknown destinations added to the bullish tone. CBOT Sept corn up 2.8% to $7.55; Dec corn up 22 1/2c to $7.68. Dec corn up 5.9% for the week.

Wheat (Source: CME)
U.S. wheat futures end higher, following a sharp rally in corn and soybeans. The market was boosted by equities, traders said, and dragged higher as corn and soybeans jumped 2% to 3% in the session. Wheat subdued by comparison, as scattered crop concerns are balanced by ample Black Sea supplies. Still, wheat will continue to climb if corn gains, traders say. Both are used as animal feed. Sep CBOT wheat ends up 5c, or 0.7%, to $7.62 1/4. MGEX wheat, supported by worries about the spring wheat harvest, climbed 2.3%, or 21 1/2c, to $9.56 1/4, and KCBT wheat ended up 2.2%, or 18 1/4c, to $8.66.

Rice (Source: CME)
U.S. rice futures end higher on tightening supplies and outside market support. Market climbed along with corn and soybeans, which surged on supply worries. Traders say U.S. rice crop troubles priced in, but Doane analyst Bill Nelson notes that a USDA report on domestic rice stockpiles shows supplies are smaller than previously thought. CBOT Sep rice up 24c, or 1.4%, to $16.99.

Glencore sees opportunities in volatility as H1 rises
LONDON, Aug 25 (Reuters) - Commodities trader Glencore International Plc  warned of volatility ahead in its key markets but saw opportunities in the turbulence as demand remains strong, with resilient prices helping to boost its first-half profit by 50 percent.
A robust outlook and a more modest than expected quarter-on-quarter drop in its closely watched marketing business -- which trades commodities from grains to oil -- comforted investors, who sent the stock up as much as 6 percent.

Orders for LNG-powered ships to surge
LONDON, Aug 25 (Reuters) - Orders for ships powered by liquefied natural gas (LNG) could triple in the next year as stricter emissions targets drive a switch to cleaner-burning fuels, said a risk management firm DNV.
"By 2014 we should have at least 100 ships delivered," according to Lars Petter Blikom, director of LNG business development at DNV.

Pro Farmer Pegs 2011 US Corn Crop At 12.484 Billion Bushels (Source: CME)
Professional Farmers of America forecast the U.S. corn crop at 12.484 billion bushels, well below federal expectations, raising concerns the coming harvest won't replenish already tight inventories. The group, known as Pro Farmer, projected the U.S. soybean harvest above federal expectations, pegging it at 3.083 billion bushels. Pro Farmer estimated an average corn yield of 147.9 bushels an acre, while putting the average soybean yield at 41.8 bushels an acre. Pro Farmer's estimates came at the end of its annual tour through the U.S. corn belt to inspect the crop ahead of the fall harvest. Tour findings are only one part of how Pro Farmer arrives at its forecast. The forecast for the corn crop fell well below a closely watched federal estimate released earlier this month. Participants on the crop tour said a combination of stress from summer heat and dryness coupled with storm damage hampered corn yields.
The U.S. Department of Agriculture earlier this month estimated corn production at 12.914 billion bushels, with an average yield of 153 bushels an acre. Last year, the U.S. corn crop came in at 12.447 billion bushels with an average yield of 152.8 bushels an acre. The average yield for the U.S. crop hasn't been below 150 bushels an acre since 2006. Corn for December delivery closed up 23 1/2 cents, or 3.2%, at $7.67 a bushel at the Chicago Board of Trade. Prices climbed 5.9% this week as reports from the tour filtered back. The final Pro Farmer estimates were released after the market closed. As expected, the tour found the eastern U.S. corn belt on track for lower yields from a year ago. More surprising was the western corn belt where the tour found yields weren't strong enough to make up for the expected losses in the east, said Terry Johnston, a consultant for the Pro Farmer crop tour.
Tim Gregerson, a farmer from Nebraska who traveled on the tour's western leg, said the tour reaffirmed concerns that corn supplies will remain tight in 2012. Going into the harvest, the USDA estimates corn inventories at a 15-year low, while demand for the grain remains strong. As for soybeans, the crop has "good potential with no disease or insect problems, but will need some moisture in the next few weeks for the crop to finish the growing season well," said Chip Flory, editor of the Pro Farmer Newsletter. Federal forecasters earlier this month estimated the U.S. soybean crop at 3.056 billion bushels, with an average yield of 41.4 bushels an acre.

China Raises Capital Requirements For Seed Producers -Ministry (Source: CME)
China's Ministry of Agriculture published new measures, governing the nation's fragmented seed market, requiring increased registered capital and assets. The new measures aim to increase competitiveness and innovation in the domestic seed sector and to encourage mergers and acquisitions, the ministry said in a statement on its website. Effective as of September 25 this year, hybrid rice and hybrid corn seed producers must have minimum registered capital of CNY30 million, compared with CNY5 million now, it said. Companies producing other crop seeds must have minimum registered capital of CNY5 million. The measures don't apply to genetically modified seeds. Seed importers and exporters must have minimum registered capital of CNY30 million, up from CNY10 million now, the statement said.
China has more than 8,700 licensed seed companies, two-thirds of them small- and medium-sized firms with registered capital between CNY1-5 million. More than 90% of China's seed firms don't have research and development capacity, it said.

Canadian Wheat Board Facing Uncertain Future, Chairman Says (Source: CME)
The current crop year could be the last for the Canadian Wheat Board, if changes proposed by the federal government are put in place to end its marketing powers in time for the 2012-13 crop year, Chairman Allen Oberg said. "Whatever the future holds, one thing is certain, if the single desk is eliminated, the landscape of Prairie wheat marketing will change drastically," Oberg said at a news conference. "The CWB will end. If a new organization is created, it will bear no resemblance to the CWB that exists today." Canada's majority Conservative government intends to introduce legislation this fall to end the CWB's current single desk marketing powers for western Canadian wheat and barley. The government also intends to change the CWB Act in order to remove the need for a farmer plebiscite.
The CWB recently conducted its own survey of farmers and will release the results Sept. 9. Oberg said the CWB's farmer-controlled board of directors is calling on the federal government to respect the results and abide by the wishes of Prairie farmers. "We as Prairie farmers are facing an uncertain future," Oberg said. "The government intends to take our marketing power away. "We have not been consulted, nor has there been any government analysis of the impact on farm families and the grain industry from dismantling an economic model that adds an extra half billion dollars a year for Prairie farmers," he said. "The future is far from clear at this point, but whatever happens we must all work to ensure that farmers' interests are not put last."

Ukraine Mulls Scrapping New Grain Duty After July Exports Plummet (Source: CME)
The Ukrainian agriculture ministry has drafted amendments to the current legislation aimed at abolishing the present grain export taxes, deputy head of the ministry's agricultural markets department said. Anatoly Razgon said: "The government is not satisfied with the current pace of grain export," the ministry's press service reported. As a result of the imposition of export duties, Ukraine's grain export fell in July to 300,000 metric tons from 1.5 million tons in June. Ukrainian exporters cannot compete with their Russian counterparts, whose grain is at least $30 per ton cheaper, Razgon said in Kiev. "We have submitted our proposals to the Economy Ministry. I think the draft will be approved shortly," he said. The government imposed export duties on grain on July 1 as a result of last year's drought. Wheat export duty is 9% of the contract price but not less than EUR17 per metric ton. The corn export duty is 12% but not less than EUR20 per ton. The barley export duty is 14% but not less than EUR23 per ton.

Wall Street Goes Down On Farm For Real Dirt (Source: CME)
Jake Rothman, an analyst at Boston hedge-fund firm Mayo Capital Partners, slogged through a muddy cornfield near Remington, Ind, looking for clues about the size of this year's U.S. crop. Wearing an oversized raincoat borrowed from a farmer, the 35-year-old Mr. Rothman worked his way down one row until he was hidden in the tightly packed cornstalks. "There's more uncertainty this year," he said while riding in a van to the next field. The coming harvest will affect grain processor Archer-Daniels-Midland Co., fertilizer maker CF Industries Holdings Inc. and other agriculture companies followed by Mr. Rothman. Across the Midwest, dozens of analysts and investors are tramping corn and soybean fields this week in an annual ritual aimed at giving them an edge on their Wall Street rivals.
The four-day, seven-state marathon costs $80, not including travel costs, and is organized by Pro Farmer, an agriculture advisory firm. Participants walk dozens of fields and get details from farmers about the number of bushels likely to be harvested from each acre. Instead of relying on the spreadsheets left behind on their office computers, analysts and investors on the "corn tour" become "scouts" who disappear into each field with a 30-foot-long yellow rope. They run the rope along a row of stalks and count the number of ears. Along the 30-foot section, the scouts pull off the fifth, eighth and 11th ears -- and then rip off the husks to count the number of kernels along the circumference of each ear. The scouts put their arms up in front of their faces to protect themselves from sharply edged corn leaves.
Pro Farmer plans to release a forecast for the average U.S. corn yield, or the projected harvest by acre. The annual measurement often moves commodity and stock prices, and it will be watched closely as traders debate by how much the U.S. Department of Agriculture will reduce its forecast next month. On Thursday, corn for delivery in September rose 0.1% to a two-month high of $7.3225 a bushel on the Chicago Board of Trade. Corn futures are up 16% so far this year. The crop tour gives analysts and investors some down-to-earth numbers, gut instinct and dirty hands to go with the government's official data. Expectations are for a large corn crop, but no longer the record haul predicted earlier this year. Exact figures won't be known until farm combines have harvested tens of millions of acres, which will take months. The crop's size will ripple through the economy and financial markets.
Even though the U.S. continues to produce crops that are massive by historical standards, farmers can't keep up with world demand. U.S. forecasters predict that the nation's crop will fall short of demand by 246 million bushels in the next year. That will shrink inventories used to help prevent supply shortages. Also worrisome this year is the vast difference in the quality of corn growing in key corn-producing states. Because of all the unanswered questions, demand for the crop tour was so high this year that organizers turned people away for the first time in its 19-year history. Among those who got in were employees of Credit Suisse Group AG, mutual-fund manager OppenheimerFunds Inc. and private-equity firm Bain Capital Partners LLC. Securities firm Morgan Stanley brought along its own bus, with 17 people on board. Crop-tour participants without a seat on the bus joked that Morgan Stanley was on the "Gucci tour."
Morgan Stanley noted that it was a past participant in the tour and that it organized a bus in 2010. Hussein Allidina, head of commodities research at Morgan Stanley, says traveling to the farm belt can unlock important details like whether farmers will abandon rotating crops in favor of trying to plant as much corn as possible. "The key thing is meeting the farmers and appreciating the psychology," he says. Mr. Allidina had gone on the tour in the past but didn't attend this year.

Rice May Rally 22% on Thai Buying (Source: Bloomberg)
Rice may rally 22 percent by yearend as Thailand, the world’s largest exporter, buys the grain from farmers at above-market rates, pushing up costs for importers and fanning global inflation even as economic growth slows. The price of 100 percent grade-B Thai rice, the regional benchmark, may rally to $750 per metric ton by Dec. 31, according to the median estimate in a Bloomberg News survey of seven exporters, traders and millers conducted last week. That target is $50 higher than the median estimate in a separate Bloomberg survey undertaken in the first half of this month. The surge may complicate matters for central bankers and policy makers around Asia who are already struggling to cool rising prices. Rice was the only grain separating the world from a food crisis, Abdolreza Abbassian, senior economist at the United Nations Food & Agriculture Organization, or FAO, said in February when worldwide food costs rallied to a record.

Sugar up, crop concerns in China, Brazil support
LONDON, Aug 26 (Reuters) - Soft commodities rose , boosted by the weaker dollar, as agricultural markets continued to show resilience in the face of the global economic slowdown.
Raw sugar futures were higher in early trading, boosted by further reductions to top producer Brazil's crop prospects and concerns of dry weather reducing China's output.

Drought continues in China's top sugar region
BEIJING, Aug 26 (Reuters) - Showers earlier this week failed to end a lingering drought in China's top sugar region of Guangxi, which produces about 60 percent of the country's total sugar output, local agriculture officials said on Friday.
"We have some rains, but only in parts of the region. Some areas do not have enough and canes have already withered," an official with the Guangxi agriculture bureau told Reuters.
 
Asia Cocoa-Bloom period in Sulawesi; powder prices up
SINGAPORE, Aug 26 (Reuters) - Cocoa trees have started to bloom ahead of the mid-crop in Indonesia's main growing island of Sulawesi, but dry weather may limit overall production this year, dealers said on Friday.
Output in the world's third-largest producer after Ivory Coast and Ghana could fall about 33 percent to 400,000 tonnes in 2011 due to extreme wet weather earlier this year, which caused the spread of a deadly fungal disease   "Flowering has started but it's extremely hot here. I don't think the crop will yield much because the weather is not supportive," said a dealer in Makassar, the provincial capital of South Sulawesi.

Tight coffee supply to embolden Brazil producers
BRASILIA, Aug 26 (Reuters) - Coffee producers in Brazil, the world's top grower, will have the upper hand in trading their stocks in the long inter-harvest from October to May with a smaller 'off year' crop to sell and growing demand.
Global demand for the popular caffeine drink has continued to grow despite the economic storms of the past few years while supply growth lagged, as Brazil's trees take time to respond to improved use of inputs and husbandry.

Brazil sugar output down 11 pct so far on year
BRASILIA, Aug 25 (Reuters) - Sugar and ethanol output remained at a slower pace in the first half of August, as expected, cane industry association Unica said on Thursday, as analysts' forecasts for the crop only grew gloomier.
Sugar production in Brazil's center-south reached 17.4 million tonnes from the start of the season to Aug. 16, down 11 percent from the same date a year earlier, cane industry association Unica said on Thursday.

Orders for LNG-powered ships to surge
LONDON, Aug 25 (Reuters) - Orders for ships powered by liquefied natural gas (LNG) could triple in the next year as stricter emissions targets drive a switch to cleaner-burning fuels, said a risk management firm DNV.
"By 2014 we should have at least 100 ships delivered," according to Lars Petter Blikom, director of LNG business development at DNV.

Oil Trades Near Three-Day High; Refineries Normal as Irene Heads to Canada (Source: Bloomberg)
Oil traded near a three-day high in New York as investors speculated that growth will recover in the U.S., spurring demand in the biggest crude consumer. Refineries resumed output as Tropical Storm Irene headed toward Canada. Futures fluctuated after climbing as much as 0.4 percent. Federal Reserve Chairman Ben S. Bernanke said on Aug. 26 that U.S. growth is safe in the long run and the Fed still can aid the recovery. Oil refiners along the East Coast were operating plants at or near normal levels after Irene weakened from a hurricane. Rebels in Libya claimed full control of the country’s oil fields.
“Bernanke is suggesting that there are some good, some negative economic indicators and there is a chance of a double- dip, but overall he feels that the base has been laid for long- term growth,” said Jonathan Barratt, a managing director of Commodity Broking Services Pty in Sydney, who predicts crude in New York will average $100 a barrel this year. “You’ll find over the next three to six months there’ll be a marked improvement in terms of Libyan production.”

Oil slips, Bernanke's speech eyed
LONDON, Aug 26 (Reuters) - Oil prices inched down on Friday as investors looked ahead to a speech by the U.S. Federal Reserve chairman on the health of the world's largest economy and top oil consumer.
"The key question is whether Bernanke will announce a further round of quantitative easing of US monetary policy, as he did last year," Commerzbank analysts said.

Thai govt says to temporarily remove levy on some fuel
BANGKOK, Aug 26 (Reuters) - Thailand's Energy Ministry will temporarily remove a levy on certain fuel to bring down retail prices, the energy minister said on Friday.
The removal will cut the retail price of 91-octane by 7.17 baht per litre, 95-octane petrol by 8.02 baht and diesel by 3 baht from Saturday, Pichai Naripthaphan told reporters after a meeting of the National Energy Policy Council (NEPC).

India's July refinery output rises 3.9 pct y/y-govt
NEW DELHI, Aug 26 (Reuters) - Indian refiners processed 3.9 percent more crude in July from a year ago, the eighth consecutive monthly rise, with the pace of growth slowing slightly from June due to maintenance work at some refineries.
Domestic refiners processed 3.423 million barrels per day (bpd) of crude oil in July, while combined crude throughput of private refineries was down four percent, government data showed on Friday.

Iraq Q4 oil product imports near 1 mln tonnes
NEW YORK/LONDON, Aug 25 (Reuters) - Iraq, a major buyer of oil products, is set to import around 950,000 tonnes of gasoline and gas oil in the fourth quarter, the country's deputy oil minister told Reuters on Thursday.
Speaking by telephone from Iraq, Dr. Ahmed al-Shamma said rapidly growing demand meant the country would need to import 681,000 tonnes of gasoline and 270,000 tonnes of gas oil in the last three months of 2011.

Glencore sees opportunities in volatility as H1 rises
LONDON, Aug 25 (Reuters) - Commodities trader Glencore International Plc  warned of volatility ahead in its key markets but saw opportunities in the turbulence as demand remains strong, with resilient prices helping to boost its first-half profit by 50 percent.
A robust outlook and a more modest than expected quarter-on-quarter drop in its closely watched marketing business -- which trades commodities from grains to oil -- comforted investors, who sent the stock up as much as 6 percent.

Glencore CEO eyes iron ore opportunities
LONDON, Aug 25 (Reuters) - Commodities trader Glencore  aims to grow its presence in iron ore through additional marketing deals and could consider acquisitions, its Chief Executive Ivan Glasenberg told reporters on Thursday.
Glencore's iron ore marketing business has soared since it was launched in 2008 and it has carved out a growing share of the market for the steelmaking ingredient.

Indonesian Timah's refined H1 tin output down 5 pct
JAKARTA, Aug 25 (Reuters) - Refined tin production at Indonesia's Timah , the world's largest integrated tin miner, fell 5 percent in the first half of this year compared with a year ago, the state-owned company said on Thursday.
First-half refined tin production was 18,455 tonnes versus 19,501 tonnes last year, the company said in a statement.

Libya's uranium, chemical stocks secure - U.S.
WASHINGTON, Aug 25 (Reuters) - The U.S. State Department said on Thursday that it believes Libya's stockpiles of low-enriched uranium and mustard gas, built up by deposed leader Muammar Gaddafi, are secure.
Department spokeswoman Victoria Nuland said the United States was monitoring sites where the stockpiles are held through its "national technical means" -- a euphemism for spy satellites and other intelligence assets -- and was confident of their security.

Japan July rolled copper output down 4.1 pct yr/yr
TOKYO, Aug 26 (Reuters) - Japan's output of rolled copper product dropped 4.1 percent in July from a year earlier, its second consecutive year-on-year fall, due to sluggish demand from auto and chip makers, an industry association said on Friday.  
The preliminary data from the Japan Copper and Brass Association showed that rolled copper output totaled 71,978 tonnes in July on a seasonally adjusted basis. That marked an increase of 2.8 percent from June.

METALS-LME copper slips, Bernanke's speech eyed
SHANGHAI, Aug 26 (Reuters) - LME copper fell on Friday, after surging to its highest in almost three weeks in the previous session, as investors remained cautious ahead of a speech by Federal Reserve Chairman later in the day.
The base metals market is expected to be volatile during the day with many investors betting against the Fed unveiling new quantitative easing (QE) measures, while some looked forward to it offering positive signals about the faltering U.S. economy.

PRECIOUS-Gold edges lower before Bernanke speech
SINGAPORE, Aug 26 (Reuters) - Spot gold lost 0.4 percent on Friday, on course for its first weekly drop after seven straight weeks of gains, as investors awaited a speech by U.S. Federal Reserve Chairman Ben Bernanke later in the day.
All eyes are on Bernanke's speech in Jackson Hole scheduled for 1400 GMT, with markets eager to hear what the Fed's plan is to help a struggling U.S. economy, although the growing consensus is that the Fed's options to stimulate the economy are limited.

Gold Reverses Gain to Decline by 0.8%, Falling for the First Day in Three (Source: Bloomberg)
Gold for immediate delivery fell as much as 0.8 percent to $1,814.20 an ounce, and last traded at $1,816.55 by 8:11 a.m. Singapore time.

Gold Advances on Demand for Haven as Bernanke Offers No Fed Stimulus Plan (Source: Bloomberg)
Gold climbed for a third day after Federal Reserve Chairman Ben S. Bernanke refrained from offering more stimulus to shore up the economy, boosting the appeal of haven investments. Immediate-delivery gold advanced as much as 0.6 percent to $1,839.15 an ounce before trading at $1,834.74 at 6:20 a.m. Singapore time. The metal, which touched a record $1,913.50 on Aug. 23, slumped as much as 11 percent from its all-time high, as equities rebounded on optimism the Fed would act to bolster the economy at an annual forum last week. December delivery bullion in New York rose as much as 2.5 percent to $1,841.50. “The underlying reason for gold’s surge -- diminishing faith in government balance sheets -- remains intact,” JPMorgan Chase & Co. analysts led by chief market strategist Jan Loeys, wrote in a report dated Aug. 26.

Baltic index falls, rally loses steam
LONDON, Aug 25 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, fell on Thursday for the first time in over two weeks on Thursday as slower cargo bookings and rising fleet growth dented earnings.
The overall index fell 1.25 percent or 20 points to 1,582 points, after rising for 11 straight sessions previously and hitting a near-seven-month high this week. The index, which gauges the cost of shipping commodities including iron ore, coal and grain, had risen over 25 percent since first moving higher on Aug. 10.