20111109 0959 Global Commodities Related News.

Corn (Source: CME)
US corn futures ended higher on outside market support as traders await Wednesday's USDA report. Market lifted by a strong rally in wheat, along with background support from a weaker dollar and higher crude oil. Traders expecting USDA to cut supply outlook Wednesday. But export demand remains weak, limiting market's upside. Dec. CBOT corn ends up 7 1/2c, or 1.1%, to $6.60 1/2 a bushel.

Wheat (Source: CME)
US wheat futures rallied amid lack of farmer selling ahead of Wednesday's USDA report. Tight-fisted farmers have helped drive cash prices higher, which is supporting futures, traders say. Initial rally led by Minneapolis spring wheat. Traders expect slight supply cut in Wednesday's USDA report, but weak export demand keeping a lid on prices. Dec. CBOT wheat ends up 18 1/4c, or 2.9%, to $6.57 a bushel, MGEX Dec. wheat ends up 18c to $9.46 1/4 and KCBT Dec. wheat ends up 14c to $7.38.

Rice (Source: CME)
US rice futures resumed their tumble on weak demand and technical selling. After halting a 6-session slide by squeezing out small gains Monday, the market fell to a fresh 1-month low today, finishing at session lows. Poor export demand continues to overshadow concerns about flood damage to Asia crops. CBOT November rice ends down 19c at $15.71/hundredweight.

Soy ticks up after losses, market eyes USDA report
SINGAPORE, Nov 8 (Reuters) - Chicago soybean futures rose half a percent, regaining some ground on bargain hunting after two
sessions of losses sparked by forecasts of a record large crop in Brazil and slowing U.S. exports.
"Soybeans have been under pressure on Brazilian crop forecast and harvest pressure in the United States but today we expect
trading volumes to be thin before the USDA report," said Ker Chung Yang, an analyst at Phillip Futures in Singapore.

S Korea corn imports revised up to 8 mln tonnes-attache
Nov 7 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in South
Korea:
"MY 2011/12 wheat import estimate is unchanged at 4.2 million tonnes with 2.2 million tonnes for milling and 2 million tonnes
for feed. Imports of U.S. wheat are expected to be 1.3 million tonnes due to lower-than-expected exports of U.S. feed grade
wheat.

French farm office ups maize estimate to 15 mln T
PARIS, Nov 7 (Reuters) - French farm office FranceAgriMer raised its estimates of France's 2011 maize crop to 15.02 million
tonnes from 14.75 million estimated last month, for a jump of 8.6 percent on last year, data showed on Monday.
The office said the average yield in the harvest, now virtually over in France, was 9.8 tonnes per hectare, an estimate
revised up from 9.6 tonnes last month. In 2010, the yield was at 9.0 tonnes per hectare.

Ukraine grain harvest 95 pct complete at 52.4 mln T
KIEV, Nov 7 (Reuters) - Ukraine harvested 52.4 million tonnes of grain by bunker weight as of November 7 from 95 percent of
the planting area compared with 40.7 million tonnes at the same date in 2010, Agriculture Ministry said on Monday.
The ministry said in a report the yield averaged 3.6 tonnes per hectare in 2011 against 2.82 tonnes in 2010, when the harvest
was hit by severe drought.

Kazakh 2011 gross grain crop record 29.7 mln T-agency
ALMATY, Nov 7 (Reuters) - Kazakhstan's gross grain crop more than doubled this year, hitting a record 29.7 million tonnes,
Interfax news agency quoted the Agriculture Ministry as saying on Monday.
The ministry gave no data for this year's crop by clean weight.

Ukraine could lose 30 pct of its '12 winter grains
KIEV, Nov 7 (Reuters) - Ukraine could lose up to 30 percent of its winter grains sown for the 2012 harvest due to a severe
drought, which has covered almost all Ukrainian regions and caused a critical delay in sowing, weather forecasters said on
Monday.
"About 50 percent of the sown areas have not sprouted so far or are in poor state," Tetyana Adamenko, the head of the
agricultural department of Ukraine's meteorological centre, told Reuters.

Ukraine grain exports fall 12 pct in Oct vs Sept
KIEV, Nov 7 (Reuters) - Ukraine's grain exports fell to about 1.28 million tonnes in October from 1.45 million in September,
consultancy UkrAgroConsult said on Monday.
It said in a report that the volume had included 760,800 tonnes of maize, 193,900 of wheat and 310,700 of barley.

S Korea 2011-12 Corn Imports At 8M Tons On Feed Demand (Source: CME)
South Korea's 2011-12 corn imports are expected to hit 8 million metric tons, the U.S. Department of Agriculture's Seoul attache said, 300,000 metric tons more than its previous forecast, due to higher feed demand in the poultry and beef cattle sectors. The USDA kept its 2011-12 wheat import estimate at 4.2 million tons, with 2.2 million tons for milling and 2 million tons for feed, but said imports of U.S. wheat are likely to be 1.3 million tons, due to lower-than-expected exports of U.S. feed grade wheat. South Korea's 2011-12 wheat production is estimated to increase 12% on the year to 44,000 tons because of increased harvested area, the USDA said, as the government's loan program to finance purchases helped increase demand for domestic milling wheat. The government also provided drying and storing facilities to local wheat producers.
The USDA said Korean wheat farmers are expected to continue increasing the planted area in the near future in response to greater demand from the local bakery and confectionary sectors. South Korean corn production is negligible, accounting for less than 1% of total consumption. The planted area for 2011-12 is around 15,828 hectares, the USDA said, with an estimated production of 78,000 metric tons based on the preceding five-year average yield.

Western Australia To Release 15,200 Hectares Of New Farm Land (Source: CME)
Western Australia announced it will make available 15,200 hectares of new irrigable farm land near Kununurra in the state's deep north, more than doubling the size of an existing irrigation area, with the government hoping to attract interest from foreign investors. The existing Ord River irrigation area was set up in the 1960s aiming to combine use of some of the massive volumes of water available in the wet season and vast areas of unused land. The area currently comprises 14,000 hectares of farms, growing a variety of crops including cotton, rice, chia, sorghum, pumpkins, melons, mangoes and sandalwood, and even some sugar cane with varying degrees of success over the years. State Premier Colin Barnett said the new land release will further cement the Ord River irrigation area's reputation as a world-class agricultural precinct and provides opportunities for short, medium and long-term agricultural land development for a variety of crops.
The release of the land comes at a time of increasing concern within Australia and some other countries about purchases of farm land by foreigners. Last year, Brazil decided to limit the amount of land foreigners can buy. But State Regional Development and Lands Minister Brendon Grylls said the area was already attracting significant interest and this latest land release would help draw private sector investment into the growing region. "The multiple land release will draw both national and international attention from purchasers looking to benefit from the Ord's reliable water supply, productive soils and ideal growing climate," he said in a joint statement.

AB Foods Says Commodity Costs Easing (Source: CME)
Associated British Foods PLC said commodity cost pressures that have put earnings under pressure recently are easing, as it posted a rise in fiscal-year revenue. The maker of Silver Spoon sugar, Kingsmill bread and Twinings tea has been phasing in price increases to recover spiralling costs of corn oil, spices, barley and chocolate. It has also absorbed cost inflation to safeguard the price leadership position of its stellar-performing discount clothing chain Primark, even as rising cotton prices, increased sales tax and higher freight costs have put margins under pressure. Still, Chief Executive George Weston said the input cost situation today is very different from a year ago. "I think it is easing. Commodity prices are not going up any more and in some cases they have come down. Cotton is the big one for us. At its peak, it was trading at about 220 U.S. cents a pound. It is now sitting at about 100," he said in an interview.
"I struggle to think of any which are going up, even if some still sit at high levels. The increases that we saw last year seem to be behind us." Weston also said the declining price of cotton will bolster Primark's margins in the second half. Primark, which is in a strong competitive position in the U.K. as a result of its high volume, low price offer, has been a consistent outperformer for AB Foods, which is 55%-owned by a family holding of CEO Weston.

German 2011/12 sugar output seen up sharply
HAMBURG, Nov 8 (Reuters) - Germany's refined sugar output in the current 2011/12 season will rise to 4.67 million tonnes,
from 3.44 million tonnes in 2010/11, Germany's sugar industry association WVZ said on Tuesday.
A major rise had been expected following an expansion of German sugar beet plantings and favourable weather that has
increased beet sugar content.

China to import 3.3 mln tonnes of cotton this year
MUMBAI, Nov 7 (Reuters) - China is seen importing 3.3 million tonnes cotton this year, up 22.22 percent from last year's 2.7
million tonnes, a top industry body official said on Monday.
The international  cotton year is from August to July.
 
Zambia Sugar sees lower output this year
LUSAKA, Nov 7 (Reuters) - Zambia Sugar , the country's largest sugar producer, said on Monday sugar output in the current
financial year would be below last year's 385,000 tonnes due to lower cane yields and reduced sucrose levels.
However, the company, a unit of South Africa's Illovo Sugar , said improved factory performance would offset some of the
reduced production.

India cautious as its mills seek big sugar exports
MUMBAI/LONDON, Nov 4 (Reuters) - Sugar market heavyweight India is likely to delay half of this year's expected one million
tonnes of unrestricted exports until early 2012 due to output delays, a decision that would protect Indian consumers and
limit the country's impact on world prices.      
India, the world's top sugar consumer and biggest producer after Brazil, can cause big gyrations in international sugar
futures prices because of its clout as either an exporter or an importer, depending on the progress of its crop.

Roasted Green Mountain Coffee shares can rebound
Nov 7 (Reuters) - Green Mountain Coffee Roasters Inc , the leading U.S. single-cup coffee company, can shake off short seller
David Einhorn's warnings and again serve up a heady brew for investors, as its growth and earnings potential are sound.
The company's shares slumped almost 40 percent to a 7-month low after the Greenlight Capital hedge fund founder said in an
investor presentation last month that he turned negative on the stock and cast doubt on Green Mountain's business model,
accounting standards and long-term earnings potential.

Aluminum Slump Means 25% of Global Smelters Now Losing Money: Commodities (Source: Bloomberg)
The biggest decline in aluminum prices since the global recession means at least 25 percent of the world’s smelters may be unprofitable. The metal fell 23 percent to $2,135.50 a metric ton on the London Metal Exchange since May 1 and energy costs gained 16 percent in the past month. Twenty-five percent of production loses money below $2,350 and 50 percent under $2,000, according to estimates by Bloomberg Industries. About 10 percent of output may be shut by the first quarter, said Jochen Hitzfeld, the analyst at UniCredit SpA in Munich ranked by Bloomberg as the most-accurate price forecaster over two years.
Alcoa Inc. (AA), the largest U.S. producer, said last week that a “significant” part of global capacity is marginal. Aluminum Corp. of China Ltd. said in October that prices are close to output costs. When demand and prices weakened in 2009, smelters curbed supply by about 5 percent in the first half of the year, according to the International Aluminium Institute. Futures rallied 37 percent in the following six months.

Six major challenges for oil and gas in 2012: John Kemp
--John Kemp is a Reuters market analyst. The views expressed are his own--
LONDON, Nov 7 (Reuters) - In a presentation for clients, Reuters analyst John Kemp discusses the six major challenges confronting oil and gas markets in 2012 and beyond. The views expressed are his own.
Politics and regulation as much as economics and geology will determine how the industry develops and the outlook for prices.

China's CNOOC makes rare diesel purchase -sources
BEIJING, Nov 8 (Reuters) - China National Offshore Oil Corp (CNOOC), the country's third largest oil company, imported about 100,000 tonnes of diesel last month, joining bigger rivals in a buying spree to cover domestic diesel shortages, industry sources said on Tuesday.
It is the second-ever diesel purchase made by CNOOC, parent of Hong Kong-listed offshore oil and gas specialist CNOOC Ltd  .

Oil Rises a Sixth Day on Optimism Europe Nearer to Resolving Debt Crisis (Source: Bloomberg)
Oil rose for a sixth day in New York. Crude for December delivery gained as much as 47 cents, or 0.5 percent, to $97.17 a barrel in electronic trading on the New York Mercantile Exchange and was at $96.95 at 12:01 p.m. Sydney time. The contract yesterday advanced $1.28 to $96.80, the highest settlement since July 28, as investors speculated that an offer to resign by Italy’s Prime Minister Silvio Berlusconi brings Europe closer to resolving its debt crisis.

Frying The Friendly Skies (Source: CME)
Americans are getting used to burning ethanol in their daily commute. Now, pond scum and french-fry grease could help fuel their next business trip. United Airlines flew from Houston to Chicago with a 40% blend of biofuel made from algae -- the first biofuel-powered commercial flight in the U.S. On Wednesday, Alaska Airlines launches the first of 75 flights powered by a 20% biofuel blend made from used cooking oil. Scientists in recent years have figured out how to make jet fuel from animal fat, garbage, shrubbery and dozens of other substances. But as the new fuels make their way from the lab to 30,000 feet, the economics are proving tricky. "This is expensive. It's about six times what we normally pay for fuel," said Bill Ayer, chairman and CEO of Alaska Airlines. "So the hope is as this industry develops, and it becomes scalable, the price comes down."
Airlines are eager to fly on fuel that can reduce carbon emissions up to 80% while diversifying the supply of their biggest expense. The price of jet fuel has jumped 87% since 2009 to $3.11 a gallon. But because of small-scale production, renewable jet fuel costs even more. "The capability's there," said chemist Jose Olivares, executive director of the National Alliance for Advanced Biofuels and Bio-products, a consortium of private companies, universities and laboratories. "Whether we can do it economically and at the same price of petroleum fuels, that's the challenge." Seattle-based Alaska Air Group Inc., parent of Alaska Airlines, bought 28,000 gallons of biofuel -- at $17 per gallon -- from Dynamic Fuels in Geismar, La., a joint venture of Tyson Foods Inc. and synthetic-fuel company Syntroleum Corp. Dynamic mostly makes diesel out of inedible animal parts from Tyson's factories and used cooking oil, some from area restaurants.
But its renewable jet fuel -- which must be able to withstand more extreme temperatures than diesel or gasoline -- is made only as ordered, and the plant won't ramp up production until there's demand to match. "Before we commit the capital, we've got to understand that the economics support it -- versus build it and they will come," said Bob Ames, Tyson's vice president of renewable energy.

METALS-Copper up on new Greek govt; Italy's finances weigh
SHANGHAI, Nov 8 (Reuters) - Copper edged up on Tuesday as Greek politicians compromised and worked to form a new unity cabinet to push through the bailout package, easing fears of a disorderly default by the indebted nation.
"The new Greek government is providing some optimism, but going forward, the markets are expected to turn their focus to Italy, which is too big to fail, yet too big to bail," said Phillip Futures analyst Ong Yiling.

PRECIOUS-Gold steady on mounting Italy debt worry
SINGAPORE, Nov 8 (Reuters) - Gold prices hovered above $1,790 on Tuesday, after soaring more than 2 percent in the previous session, supported by safe haven demand as Italy took centre stage in the euro zone debt crisis.
Italian government bond yields soared to near 15-year highs, putting the euro zone's third largest economy front and centre of the region's debt crisis, despite efforts by policymakers scrambling to stem growing contagion.

Gold Futures Rise, Topping $1,800 as Europe Crisis Spurs Investor Demand (Source: Bloomberg)
Gold futures topped $1,800 an ounce for the first time in almost seven weeks on concern that European leaders will be unable to contain the region’s debt crisis, fueling demand for the precious metal as a haven. Italian Prime Minister Silvio Berlusconi failed to muster an absolute majority on a routine parliamentary ballot today, fueling more calls for his resignation. Federal Reserve Chairman Ben S. Bernanke signaled more monetary stimulus may be needed to cut unemployment, while the European Central Bank last week unexpectedly lowered interest rates. Gold has rallied more than 11 percent since the end of September. “The turmoil in Europe has brought the fear trade back to gold,” Lance Roberts, the chief executive officer of Houston- based Streettalk Advisors, said in a telephone interview. “Also, a renewed wave of policy easing by central banks is helping gold.”