Commodities Fall to One-Week Low on Greece Concerns, China Manufacturing (Source: Bloomberg)
Commodities fell to a one-week low, led by industrial metals, amid concern that Europe’s bailout of Greece will be derailed, while manufacturing in China slowed. The Standard & Poor’s GSCI index of 24 raw materials slumped 1 percent to settle at 641.69 at 3:46 p.m. New York time. Earlier, the gauge touched 627.96, the lowest since Oct. 21. In London, nickel tumbled 5 percent, while aluminum, lead and zinc fell more than 4 percent. European leaders pressed Greece to uphold the terms of a bailout in a bid to stop the deal from unraveling on the eve of a global summit. Greek Prime Minister George Papandreou said he would put the plan to a referendum. A manufacturing index fell to the lowest since February 2009 in China, the world’s leading user of industrial metals.
Corn (Source: CME)
US corn futures stage a surprising late rally, ending higher despite outside-market pressure, as end-user buying come in. Traders say bargain-hunters convinced prices were poised to climb boosted corn, although the extent of the rally, which occurred in the last 30 minutes of trade, suggested something else at play. Linn Group's Jim Riley says perhaps the rally stemmed from MF's liquidation, which "could mean liquidating shorts, too." He also notes traders were awaiting new crop estimates from FCStone due after the close. CBOT December corn ended up 7 1/4c at $6.54 1/4 per bushel, up 22c from its intraday low.
Wheat (Source: CME)
CBOT wheat futures end slightly higher, shrugging off outside market pressure and rebounding late on a rally in corn. Market ended well off its daily lows, as did corn, thanks to gains in the last 30 minutes of trade. Stronger US dollar and slumping equities had kept the market under pressure most of the day. Some analysts say that with lackluster demand, wheat will continue to depend on corn for price strength. Worries about hard red winter wheat crop because of drought in the Southern Plains limiting the market's downside. CBOT Dec wheat ends up 1 3/4c to $6.30, 16c off intraday low. MGEX Dec wheat ends down 3c to $9.05 3/4; KCBT Dec wheat closes down 6 1/2c to $7.18 1/2.
Rice (Source: CME)
US rice futures end lower on outside-market pressure and weak demand as analysts note weak export demand for US rice and comfortable world supplies. But traders are also watching Asian supplies as recent floods in the region have prompted worries. Closer to home, weaker equities and a stronger dollar hurt rice, with the CBOT November contract falling 10c to $16.54/hundredweight.
US corn drops for 2nd day, spooked by MF Global
SINGAPORE, Nov 1 (Reuters) - U.S. corn slid for a second straight day, while soybeans and wheat came under pressure as the collapse of broker-dealer MF Global prompted liquidation amid renewed concerns over Europe's debt crisis.
"The market is looking at continued uncertainty regarding the state of the European economy," said Luke Mathews, a commodity strategist at Commonwealth Bank of Australia.
Indonesia cuts 2011 rice output outlook to 65.4 mln T
JAKARTA, Nov 1 (Reuters) - Indonesia sees unmilled rice production at 65.4 million tonnes this year, down 3.9 percent from an earlier forecast and nearly 1 percent below last year's output, the statistics bureau said on Tuesday.
Hot weather and disease will push output below the July forecast of 68.06 million tonnes, and also down from the 66 million tonnes last year, it said.
Argentine truckers reach deal, end Rosario strike
BUENOS AIRES, Oct 31 (Reuters) - Argentine trucking companies reached a deal on Monday to lift a strike that they had called at the country's main grains hub Rosario.
The work stoppage was called last week but had not been in force long enough to reduce exports from agricultural powerhouse Argentina, which is the world's No. 1 supplier of soyoil and soymeal and its No. 2 supplier of corn.
U.S. harvest in eastern Midwest to stay slow
CHICAGO, Oct 31 (Reuters) - Some rainstorms on Wednesday and Thursday could further delay the U.S. corn and soybean harvests in areas east of the Mississippi River this week, an agricultural meteorologist said on Monday.
Western areas of the Corn Belt should remain dry during the next few days, but rain was forecast for the middle of the week which will cause farmers to slow their combines, Telvent DTN meteorologist Joel Burgio said.
Ukraine Wheat Supplies Emerge More Competitive Than Russian
Ukrainian origin wheat has emerged as more competitive than Russian supplies, the country's traditional competitor, after supplying the world's largest importer of wheat, Egypt, in a tender. Egypt's state-owned wheat buyer, the General Authority for Supply Commodities, or GASC, said it bought a total of 180,000 metric tons of Ukrainian and Russian wheat for shipment Jan. 21-31. GASC bought 60,000 tons of Ukrainian wheat from Toepfer for $247.92 a ton and 60,000 tons of Russian wheat from Aston for $252.50/ton, according to GASC officials. The wheat buyer also purchased 60,000 tons of Russian wheat from Nidera for $252.50/ton. GASC's purchase marks the second time the wheat-buyer has bought Ukrainian wheat since Egyptian authorities suspended wheat imports from Ukraine in 2008 over quality concerns. According to analysts, a lack of rail cars to transport wheat in Russia has been responsible for higher prices for the grain.
"A lack of rail cars has reduced trading and purchasing activity on the Russian grains market," Svetlana Sinkovskaya, marketing manager at Ukrainian agricultural analysis body APK-Inform said. "According to Russian market participants, because of the transportation issues, most trading companies cannot deliver timely grains to the destination place," Sinkovskaya added.
ASX Suspends Wool, Grain Trade Due To MF Global
Australia's bourse operator joined the list of global exchanges to limit MF Global Holdings Ltd's ability to trade, temporarily prohibiting not just the U.S. brokerage's trading of agricultural commodity contracts but suspending the entire nation's wool and grain derivatives trade. Analysts now warn the global wool market could face a long period of instability, because Australia is the largest exporter of the commodity. The Australian Securities Exchange, or ASX Ltd. took the decision to suspend trade in Australian wool and grains futures and options due to outstanding contracts held by the brokerage, a spokesman for the exchange told Dow Jones Newswires.
"Given the significant percentage of open interest held by MF Global U.K. Ltd. in grain and wool futures and options, these markets have been suspended in order to maintain a fair, orderly and transparent market, and to provide an opportunity for parties to consider the specific implications of the default of MF Global U.K. Ltd.," a spokesman for the ASX said. Exchanges CME Group Inc. and IntercontinentalExchange Inc. halted trading by MF Global employees in Chicago, New York, and Europe. Firms that used MF Global to clear their trades were limited to only liquidating existing positions. MF Global is one of the largest participants on Australia's agricultural bourse contracts by market share, with the brokerage executing over 80% of turnover for the country's wool contracts, the ASX said on its website.
The exchange said the wool futures and options market will reopen at 1030 local time Wednesday, while the grains market will reopen Wednesday at 1100. Benchmark wool futures in the world's biggest producer hit a high of $14.85 a kilo in June, double their price from a year ago, following devastating floods in Australia. The ASX offers futures contracts for western Australian wheat, canola, sorghum, Australian milling wheat and feed barley.
Sao Martinho takes stake in Brazil cane mill
RIO DE JANEIRO, Oct 31 (Reuters) - Brazilian sugar and ethanol producer Sao Martinho said it bought a 32 percent stake in cane mill Santa Cruz Acucar and an 18 percent stake in its agricultural management company Agropequaria Boa Vista for a combined 187.4 million reais ($110 million).
This is that latest in a long series of mergers and acquisitions that has swept through Brazil's cane industry since the financial crisis in 2008 weakened many over-leveraged mills to the point that they became soft takeover targets for deep-pocketed milling groups like Sao Martinho.
Brazil CS sugar output trimmed to 31.1 mln T-JOB
SAO PAULO, Oct 31 (Reuters) - Sugar production in Brazil's main center-south cane region should total 31.1 million tonnes, JOB Economia analysts said on Monday, down from its 32.3 million tonnes view from August but still closer to the high-end of most industry estimates.
Cane output in the center-south was put at 502 million tonnes, 20 million tonnes lower than JOB's forecast in August.
Ivorian cocoa arrivals pick up, quality a concern
ABIDJAN, Oct 31 (Reuters) - Ivorian cocoa arrivals picked up last week, and exporters said farmers had begun to sell some hoarded beans in order to pay school fees and prepare for an upcoming Muslim holiday, but bean quality was a concern.
Meanwhile, there were mixed weather reports from across the West African nation. Farmers in some areas complained that too much rain was causing disease to spread, while others said the balance of rain and sun was perfect.
World 2010/11 coffee exports hit record 103.1M bags-ICO
LONDON, Oct 31 (Reuters) - World coffee exports rose 9.4 percent in 2010/11 (October to September) to 103.1 million 60-kg bags, the International Coffee Organization said on Monday.
This compares with 94.3 million bags in 2009/10.
Ghana cocoa purchases 70 pct up after first week
ACCRA, Oct 31 (Reuters) - Ghana's cocoa purchases were 151,976 tonnes in the first week of the 2011/12 season, 70 percent higher than figures for the same stage last year, data from industry regulator Cocobod showed on Monday.
A top official at Cocobod said the high volume was "not surprising" and it was due to farmers and licensed buyers holding on to beans from the end of last season in the hope prices set by the government would be higher this year.
India ministers agree on sugar output, may allow exports soon
NEW DELHI, Oct 31 (Reuters) - India could produce 24.7 million to 25.0 million tonnes of sugar in the new season that began this month, Food Minister K.V. Thomas said on Monday, a figure agreed with the farm ministry which had previously forecast 26 million tonnes.
The agreement between the farm and food ministries over the 2011/12 output paves the way for the first tranche of sugar exports in the new season.
Oil Drops a Fourth Day Amid Concern Greek Referendum Raises Default Risk (Source: Bloomberg)
Oil fell for a fourth day amid concern that Greece will reject Europe’s bailout plan in a referendum, pushing the nation closer to default and worsening a debt crisis that threatens economic growth. Crude for December delivery slid as much as 75 cents, or 0.8 percent, to $91.44 a barrel in electronic trading on the New York Mercantile Exchange and was at $91.45 at 6:29 a.m. Singapore time. The contract yesterday declined 1.1 percent to $92.19. Prices are up 9 percent the past year. Brent oil dropped 2 cents to $109.54 a barrel on the London-based ICE Futures Europe exchange yesterday. The premium to Nymex crude widened to $17.35. The European benchmark traded at a $16.37 premium on Oct. 31, the narrowest since June 28.
Drilling boom heralds big oil output rise: John Kemp
--John Kemp is a Reuters market analyst. The views expressed are his own--
LONDON, Oct 31 (Reuters) - Soaring oil prices have spurred a worldwide drilling boom that should result in much-faster growth in oil production over the next 2-3 years, helping meet strong growth in consumption, and tempering upward pressure on prices.
The number of rotary rigs drilling for oil and gas stands at the highest level for over two decades, according to oilfield services company Baker Hughes.
Brent spreads point to easing oil market: John Kemp
LONDON, Oct 31 (Reuters) - Global oil markets have softened significantly in the last two weeks as mounting evidence of slowing consumption and the resumption of Libyan oil exports eases fears about near-term shortages.
While tightening of U.S. oil markets and WTI's shift into a small backwardation has captured the headlines, the Brent market, which is more representative of global supply and demand trends, has moved briskly in the other direction
Oil prices slip; FOMC, G20 meetings eyed
PERTH, Nov 1 (Reuters) - Oil prices slipped more than $1 on Tuesday on a stronger U.S. dollar, continuing uncertainty about the resolution of the euro zone's debt crisis and the collapse of MF Global Holdings.
"As cooler heads prevail and look around and actually start analysing the euro zone situation, they realise we still got a ways to go," said Tony Nunan, a risk manager with Tokyo-based Mitsubishi Corp.
Iraq oil exports 2.088 mln bpd in October-SOMO
BAGHDAD, Nov 1 (Reuters) - Iraq's oil exports were 2.088 million barrels per day in October versus 2.101 million bpd in September, the head of the State Oil Marketing Organisation said on Tuesday.
Exports included 1.628 million bpd from the southern oil hub of Basra and 460,000 bpd from the northern fields around Kirkuk, which included 8,000 bpd sent by truck to Jordan, SOMO chief Falah Alamri said.
Brazil crude exports to triple to 1.5-1.6 mln bpd by 2020-Petrobras
SINGAPORE, Nov 1 (Reuters) - Brazil's crude exports will triple to 1.5-1.6 million barrels per day (bpd) by 2020, from 520,000 bpd now, Petrobras chief executive officer Jose Sergio Gabrielli said on Tuesday.
He said crude exports to the United States and China will double to 400,000-450,000 bpd by 2020.
S.Korea Oct crude imports up 8.3 pct y/y -prelim data
SEOUL, Nov 1 (Reuters) - South Korea's crude oil imports in October rose 8.3 percent from a year earlier, tentative customs figures released by the economy ministry on Tuesday showed.
Final import figures will be available later in the month from state-run Korea National Oil Corp (KNOC). The country's crude imports in September rose 7.5 percent from a year earlier thanks to bullish regional demand for oil products.
Asia to reap rewards of Brazil's crude export boost
SINGAPORE, Nov 1 (Reuters) - Asian refiners look set to be big winners as Brazil boosts sweet crude production from its bountiful deepwater pre-salt region in the second half of the decade.
Exports from Brazil, home to four of the world's largest oil finds in the past 10 years, will have to look for buyers in fast-growing Asia as the United States will use more of its own shale oil output towards the end of the decade, pushing West African imports back to Europe.
IEA not looking at another oil stocks release
SINGAPORE, Nov 1 (Reuters) - The International Energy Agency is not looking at another release of emergency oil stocks as the global supply situation has changed from that prevailing when inventories were released earlier this year, Richard Jones, deputy director of the agency, said.
The release decision was taken with the supply situation in mind, and not oil prices, Jones said. The supply outlook is set to change with Libyan fields coming back on line and Iraq raising production.
Top Gold Forecasters See Bullion Rallying to Record by March: Commodities (Source: Bloomberg)
The most accurate forecasters say gold will rebound from its biggest monthly plunge since 2008 and reach a record by March because economic growth is stagnating and Europe’s debt crisis is unresolved. Futures traded in New York may rise 14 percent to $1,950 an ounce by the end of the first quarter, according to the median of estimates compiled by Bloomberg. The predictions are from eight of the top 10 analysts tracked by Bloomberg over the past eight quarters. Two declined to give forecasts. Holdings in exchange-traded products backed by bullion rose the most in three months in October, and the most-widely held option gives owners the right to buy gold at $2,000 by Nov. 22. Demand for the metal accelerated since May as slowing growth and mounting concern that European leaders will fail to contain the region’s debt crisis caused $7.5 trillion to be erased from the value of global equities.
Einhorn Bets Gold Mining Companies Will Beat Bullion (Source: Bloomberg)
Hedge-fund manager David Einhorn is betting that gold-mining companies will outperform bullion, reversing the trend from the past six months. “A substantial disconnect has developed between the price of gold and the mining companies,” Einhorn said today in a conference call discussing results at Greenlight Capital Re Ltd. (GLRE), the reinsurer where he is chairman. The reinsurer cut holdings of the commodity in the third quarter and moved funds into the Market Vectors Gold Miners ETF, Einhorn said. The exchange-traded fund lost 5.4 percent in the six months ended yesterday, while bullion gained 11 percent.
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