Metals, Oil Lead Commodities Higher After European Debt-Crisis Agreement (Source: Bloomberg)
Commodities advanced to a six-week high, led by metals and gasoline, after European leaders agreed to expand a rescue fund designed to stem the region’s sovereign debt crisis and as the U.S. economy grew in the third quarter at the fastest pace in a year. The Standard & Poor’s GSCI Index rose 3 percent to 657.14, the highest level since Sept. 15, as 20 of the 24 commodities tracked by the gauge climbed. Copper, which was poised for a weekly record rally, led the gains. Lead, silver, zinc and crude oil rounded out the top five movers. European leaders persuaded bondholders to take 50 percent losses on Greek debt and boosted the firepower of the bailout fund to 1 trillion euros ($1.4 trillion), responding to global pressure to step up the fight against the financial crisis. Gross domestic product in the U.S. rose at a 2.5 percent annual rate in the three months through September, according to the Commerce Department.
“We are not out of the woods, and the U.S. economy is not completely recovered, but the European debt deal and the U.S. GDP number have restored some confidence,” said Jason Schenker, an Austin, Texas-based energy consultant.
Corn (Source: CME)
US corn futures end higher on broad-based strength in commodities and equities on optimism about Europe's debt problems. An EU plan to address the crisis cheered investors and eased worries about a global crisis that would hurt commodity demand. A weaker dollar and surging equities added to the positive environment for commodities, traders say. Speculation that China, a key grain buyer, may take steps to stimulate its economy also supportive, traders add. Longer-term, analysts say corn supplies are going to remain uncomfortably tight, regardless of what happens with the economy. CBOT Dec. corn ends down 14 1/4c, or 2.2%, to $6.51 1/2 a bushel.
Wheat (Source: CME)
US wheat futures end higher as plan to resolve Europe's debt crisis fuels investor optimism. Wheat joined other commodities and equities in the rally, which for the moment eases worries about a global economic slump. Weaker US dollar added to the support. Wheat's own supply/demand fundamentals took a back seat, but traders say worries about US winter wheat crop provide underlying support. However, export demand for US wheat remains lackluster and global supplies are comfortable, traders add. CBOT Dec wheat ends up 24 1/2c, or 4.0%, to $6.44 a bushel; KCBT wheat up 22c to $7.38; MGEX wheat up 12 3/4c to $9.23.
Rice (Source: CME)
US rice futures close higher as broad buying lifts commodities in general. Traders increased risk exposure as Europe's latest plan to address the euro zone's debt crisis eases concerns about a global economic slowdown. Yet, rice futures have a muted reaction to the news following strong gains earlier this week, analysts say. Prices had been rising on crop-damaging floods in Thailand. CBOT January rice gains 7c to $17.24/hundredweight.
Wheat jumps 1.7 pct, corn rebounds on EU rescue plan
SINGAPORE, Oct 27 (Reuters) - U.S. wheat rose 1.7 percent , while corn firmed following its biggest drop in a month as a move by European leaders to boost the region's rescue fund sparked a broad-based rally in the commodity markets.
"We are seeing a strong session across all risk assets, including agricultural commodities, and it appears to be linked to the optimism that the markets have displayed following the European summit," said Luke Mathews, a commodity strategist at Commonwealth Bank of Australia.
Zimbabwe secures $300 mln Brazil farm loan - paper
HARARE, Oct 27 (Reuters) - Zimbabwe has secured a $300 million loan from Brazil to finance agriculture and boost crop production after successive years of food deficits, state media reported on Thursday.
The loan is part of Brazil's aid programme for Africa, the state-controlled Herald newspaper said.
Philippines sees 2012 rice imports around 500,000T
MANILA, Oct 27 (Reuters) - The Philippines' rice purchases next year may still be around an earlier estimate of 500,000 tonnes despite damages from recent typhoons and will unlikely match imports of the grain in 2011, the Agriculture secretary said on Thursday.
Manila, one of the world's biggest rice buyers, bought a total 860,000 tonnes of the grain this year.
Indonesia says Thai, Vietnam rice deals unaffected by floods
JAKARTA, Oct 27 (Reuters) - Flooding in top rice producers Thailand and Vietnam has not led to the cancellation of export deals to Indonesia for 1.05 million tonnes, state procurement agency Bulog said on Thursday.
The agency, which has an official permit to import 1.6 million tonnes in 2011, currently has a 900,000-tonne government-to-government deal with Vietnam, and a 150,000-tonne commercial pact with Thailand, said Bulog official, Sentot Hariwibowo.
Argentine trucking companies say will expand strike
BUENOS AIRES, Oct 26 (Reuters) - Trucking companies that haul grains to Argentina's key dispatch point, Rosario, said they will go on strike on Thursday if Buenos Aires province does not establish a minimal hauling rate.
The FETRA group of trucking companies started a strike earlier this week in Buenos Aires province and on Wednesday vowed to increase the area covered by the work stoppage to the key port of Rosario in the neighboring province of Santa Fe.
French maize crop close to 16 mln tonnes - growers
PARIS, Oct 26 (Reuters) - France is expected to produce some 16 million tonnes of maize grain this year on the back of an estimated record yield of between 10.4 and 10.5 tonnes per hectare, maize growers group AGPM said on Wednesday.
The expected average yield would pass a previous record of 9.7 tonnes a hectare in 2007/08 as estimated by French farm office FranceAgriMer.
S.Africa maize deliveries rise to 9.404 mln T- SAGIS
JOHANNESBURG, Oct 26 (Reuters) - Maize deliveries to South African silos rose to 9.404 million tonnes in the week to Oct. 21, up from a revised 9.371 million tonnes in the week before, data showed on Wednesday.
White maize deliveries rose to 5.705 million tonnes from a revised 5.684 million tonnes, while yellow maize submissions increased to 3.699 million tonnes from a revised 3.687 million tonnes, the South African Grain Information Service (SAGIS) said.
Bullish bets build again in corn: Gavin Maguire
--Gavin Maguire is a Reuters market analyst. The views expressed are his own. To get his real-time views on the market, please join the Global Ags Forum. --
CHICAGO, Oct 27 (Reuters) - December corn futures are trading around $6.50 a bushel, in the lower third of their trading range for the year, as harvest pressure and broad concerns about the global economy keep buying interest in check.
But a growing number of traders appear to be betting on a strong rebound in corn values within the coming weeks. Open interest in $7 December corn calls is up nearly 40 percent from mid-September levels, and is now close to all-time highs at more than 66,000 contracts -- representing more than 330 million bushels of potential buying interest should corn prices climb by a further 10 percent or so.
IGC Raises World 11-12 Corn Output View 10M Tons To 855M Tons (Source: CME)
World corn production is expected to rise 3.5% from last season to a record 855 million metric tons in 2011-12, the International Grains Council said, raising its previous estimate by 10 million tons. Output from Europe is pegged at an unprecedented 63.8 million tons, above its previous record of three years ago and up 8 million tons from 2010-11, the London-based body said. China is expected to produce 183 million tons--3 million tons more than predicted in September--while crops in South American producers Brazil and Argentina are both seen higher at 27 million and 60 million tons, respectively. "World maize production prospects have improved during the past month, with crops forecast to be at, or close to, record highs in many leading growers," said the IGC. Although more grain is available than previously expected, usage is also expected to rise, so ending stocks are seen only 5 million tons higher at 123 million tons.
China's corn imports are revised up by 1 million tons to 4 million tons--still well below industry forecasts--while Europe is also expected to use more of the grain for feed. "Improved availabilities are expected to encourage additional feeding in some countries," said the body. Prospects for the world's wheat crop are improving too, with output now expected to hit 684 million tons, up 5 million tons from the IGC's previous forecast, and boosting carryover stocks to a 10-year high of 202 million tons. Total grain output is seen at 1.819 billion tons, up 13 million tons from the previous forecast, the IGC said.
Ukraine Harvests 48.9 Mln Tons Grain To October 26 (Source: CME)
Ukraine harvested 48.9 million metric tons of grain to Oct. 26 on 14 million hectares, 92% of the total area to be harvested, the Agriculture Ministry reported. The average yield to date was 3.48 tons a hectare, compared with 2.77 tons a hectare a year ago. The government expects this year's grain harvest at 52 million-53 million tons. Ukraine's grain harvest in 2010 fell by 14.8% on the year to 39.23 million tons in clean weight because of drought.
China 2011-12 Corn Imports May Surge To 4.0 Mln Tons -Morgan Stanley (Source: CME)
China's corn imports may increase fourfold to 4.0 million metric tons this marketing year, due to increasing demand to feed industry and livestock that can't be met by domestic production, Morgan Stanley said. In September and October, China has imported around 1.4 million tons of corn from the U.S., the investment bank said in a recent report, 40% more than the U.S. Department of Agriculture's estimate of 1.0 million tons for all of China's imports in the U.S. marketing year that ended Aug. 31. Most of China's corn imports are from the U.S., though some is also imported from Southeast Asian neighbors. China, which in theory aims for self-sufficiency in grains, started to import large quantities of U.S. corn last year. Industrial use of corn has surged to 43 million tons in China, accounting for around 20% of projected consumption in 2011 from around 10 million tons a year a decade ago, Morgan Stanley said, noting that this makes it the second-largest industrial user of the grain after the U.S.
With a growing livestock population--mostly hogs, reflecting the Chinese preference for pork--and continued consolidation of the livestock industry, demand for corn as animal feed has increased 2.1% a year over the past decade, it said. Corn as livestock feed accounts for 70% of domestic consumption of the grain. China's corn production has grown at a slightly slower average annual rate of 2% over the past decade, to 177 million tons in 2010-11 and forecast at almost 180 million tons this year, Morgan Stanley said. Area under corn has increased by 2% during the last 10 years, mostly at the expense of soybeans, it said. While annual soybean production has held mostly steady over the past decade at 14 million-15 million tons, increasing demand has pushed up imports. China's soybean imports are forecast at 57 million tons this year, up from 52 million tons in 2010-11, it said. China is world's largest importer of soybeans.
Soybean, Corn Futures Advance on European Debt Deal, U.S. Economic Growth (Source: Bloomberg)
Soybeans and corn rose the most in more than two weeks as European leaders agreed to boost the region’s rescue fund in a bid to stem the debt crisis, bolstering prospects for commodity demand. The MSCI All-Country World Index jumped as much as 4.8 percent, and the euro rose to a seven-week high against the dollar, after European leaders agreed to expand a bailout fund to about 1 trillion euros ($1.4 billion). The U.S. economy grew at a 2.5 percent annual rate in the third quarter as household spending gained 2.4 percent, more than forecast, the government reported today. “Europe has avoided a default disaster for now, and the short-term trend is to buy riskier assets including the grains,” Mark Schultz, the chief analyst at Northstar Commodity Investment Co. in Minneapolis, said in a telephone interview. “Improved consumer spending and a weaker dollar may help to boost overseas buying. Export demand needs to improve to sustain the rally.”
Soybean futures for January delivery rose 2 percent to close at $12.44 a bushel at 1:15 p.m. on the Chicago Board of Trade, the biggest gain since Oct. 11.
Wheat Rises as EU Debt Plan Weakens Dollar, Boosts U.S. Export Prospects (Source: Bloomberg)
Wheat futures rose the most in two weeks as Europe’s plan to ease the region’s debt crisis eroded the value of the dollar and bolstered prospects for U.S. grain exports. The dollar tumbled to a seven-week low against a basket of six major currencies, and global equities rallied, after European leaders agreed to expand a bailout. The Standard & Poor’s GSCI Index of 24 commodities climbed to the highest in almost six weeks. Yesterday, commodities including wheat fell on concern that failure to reach an agreement on a debt plan in Europe would limit economic growth. “Today, our dollar is plummeting, and that’s giving our grain markets some strength,” Tom Leffler, the owner of Leffler Commodities LLC in Augusta, Kansas, said in a telephone interview. “We’re going to recover from yesterday’s losses, thanks to the European situation and the dollar being down hard.”
Sugar, coffee rise, lifted by euro zone deal
LONDON, Oct 27 (Reuters) - ICE sugar, coffee and cocoa futures rose in early trade, after European leaders struck a deal to resolve a two-year-old sovereign debt crisis.
Raw sugar futures firmed, supported by stronger outside financial markets, bolstered by the euro zone debt deal.
Egypt imposes temporary cotton import ban - paper
CAIRO, Oct 27 (Reuters) - Egypt has imposed a temporary ban on cotton imports until the local crop has been sold, a financial newspaper reported on Thursday, saying there were problems marketing the domestic harvest.
"This procedure will help solve the marketing problem for local cotton which is currently facing difficulties," Salah Moawad, president of the agricultural services sector at the Agriculture Ministry, told newspaper al-Mal.
Pakistan cuts cotton output estimate to 12.22 mln bales
ISLAMABAD, Oct 27 (Reuters) - Pakistan has cut its forecast for cotton output to 12.22 million bales for the 2011/12 fiscal year, down nearly 800,000 bales, or about 6 percent, from earlier projections, hit by losses from heavy monsoon rains, a government textile body said.
The world's fourth-larget cotton producer was hoping for record cotton production of 15 million bales before monsoon floods lashed the second-largest cotton-growing province of Sindh in August and September.
Ivory Coast expects record 1.6 mln T cocoa this season
ACCRA, Oct 26 (Reuters) - Ivory Coast authorities are expecting to set a new record of 1.6 million tonnes of cocoa output for the 2011/12 season, a senior government cocoa adviser said on Wednesday.
"Our new season ... is going well. The forecast is 1.6 million (tonnes) after the preliminary assessment -- that is what we are working towards," Malick Tohe, special adviser on cocoa to Prime Minister Guillaume Soro, told Reuters on the sidelines of the World Cocoa Foundation conference in neighbouring Ghana.
Brazil CS sugar output trails last season by 3 pct
BRASILIA, Oct 26 (Reuters) - Sugar output from Brazil's center south cane crop totaled 27.7 million tonnes from the start of the season through Oct. 16, down 3 percent from a year ago helped by an unexpected rise in yields late in the season, cane industry association Unica said on Wednesday.
Cane crushing in the region totaled 436.5 million tonnes, down 7 percent from the same period last year. Ethanol production fell 16 percent to 18.2 billion liters.
Brazil coffee crop seen around 55 mln bags - Illy CEO
SAO PAULO, Oct 26 (Reuters) - The chief executive of Illycaffe said on Wednesday he expected Brazil's new 2012/13 coffee crop to reach 55 million 60-kg bags.
Illycaffe is inaugurating its first coffee shop in Sao Paulo, Brazil, the world's largest producer and exporter of coffee.
Crude Oil Drops in New York, Heads for Biggest Weekly Gain in Eight Months (Source: Bloomberg)
Oil fell in New York, trimming its biggest weekly gain since February, as a drop in Japanese industrial output countered speculation U.S. economic growth and a deal to tame Europe’s debt crisis will boost fuel demand. Futures slipped as much as 0.5 percent after Japanese factory production declined 4 percent in September from the previous month, almost twice as much as the median economist estimate in a Bloomberg News survey. Prices surged yesterday after the U.S. economy grew in the third quarter at the fastest pace in a year and European leaders agreed a deal to curb the region’s debt crisis. Crude oil for December delivery decreased as much as 43 cents to $93.53 a barrel in electronic trading on the New York Mercantile Exchange and was at $93.66 at 11:47 a.m. Sydney time. The contract yesterday advanced $3.76 to $93.96, the highest close since Aug. 1. Prices are 7.2 percent higher this week, the biggest gain since the period ended Feb. 25. Futures have gained 2.5 percent this year.
Copper Traders See End to Record Rally as China Demand Slows: Commodities (Source: Bloomberg)
Copper traders and analysts are forecasting an end to the biggest weekly rally since at least 1986 on concern demand will slow in China while Europe’s lingering financial crisis limits growth. Eleven of 23 people surveyed by Bloomberg say copper will drop next week, eight predicted a gain, and four said prices will be little changed. The last time respondents were mostly bearish, on Sept. 23, the metal slumped 4.6 percent in the following week. Traders also predicted lower sugar prices next week, and gains in gold, corn and soybeans.
While copper surged 14 percent this week as European leaders agreed to expand the region’s bailout fund, the metal is down 20 percent from a record on Feb. 15, the common definition of a bear market. Global output exceeded demand in the eight months through August, the World Bureau of Metal Statistics said on Oct. 19. Goldman Sachs Group Inc. and UBS AG cut their copper forecasts for 2012 this month, and economists surveyed by Bloomberg predict slower growth next year in Europe and China, the world’s largest metal user.
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