Bird Flu in H.K. Sparks Culling of 19,451 Birds (Source: Bloomberg)
Hong Kong culled 19,451 birds and banned the sale and import of live poultry until Jan. 12 after the deadly H5N1 bird flu virus was found in a chicken carcass at a wholesale market. The 30 chicken farms in Hong Kong were tested, with all samples free of avian influenza, the city government said in a press release yesterday evening. The Agricultural, Fisheries and Conservation Department will conduct further testing. Hong Kong takes a tough line on the highly pathogenic strain of flu virus, first recorded in humans in the city in 1997 and which has since spread through Asia, Europe and Africa, resulting in the deaths of tens of millions of birds and killing more than half of the people that caught it. The city of 7 million people was also hit by an outbreak of Severe Acute Respiratory Syndrome in 2003 in which 299 people died.
Hong Kong Culls Chickens As Avian Flu Resurfaces (Source: CME)
Hong Kong health authorities said they culled all 17,000 live poultry in a wholesale market after a dead chicken there tested positive for the H5N1 avian flu virus, the first new case since 2008. York Chow, Hong Kong's secretary for food and health, said the recent detection of H5N1 virus in local wild birds indicated that the disease remained a threat to the community, noting it's not certain at this stage whether the chicken came from a local farm or was imported. The city's government has raised the response level against the avian flu to "serious" from "alert" and suspended live poultry imports for 21 days. "It is unfortunate that an avian influenza case is detected before the Winter Solstice (Dec 22), necessitating a halt to the supply of live chickens. I understand that it will cause inconvenience to the public, and the poultry trade will also encounter losses," Chow said at a news conference.
"However, to safeguard public health, we need to adopt decisive and effective measures to prevent and control the spread of the virus," Chow added. The news could hit public sentiment as the financial center struggles with the impact of the global economic slowdown. Hong Kong, a special administrative region of China, narrowly skirted the technical recession in third quarter. Top officials have warned the economic outlook is not optimistic and recession in the city is possible in coming quarters. Hong Kong has detected bird flu in poultry occasionally, but has had no major outbreaks since 1997, when the virus killed six people and led to a slaughter of the territory's 1.5 million birds.
Colombia Farms Hit By La Nina - USDA (Source: CME)
Heavy rainfall, induced by weather phenomenon La Nina, continues to impact on the quality and quantity of Colombia's agricultural products, the U.S. Department of Agriculture's Bogota attache. But lower food supply in Colombia due to La Nina has not resulted in higher food prices in the third-quarter of 2011, as farmers pushed their crops to harvest before the rainy season, the USDA said, adding that the quality was impacted. The transport of agricultural products has been affected, with the road connecting the port of Buenaventura to Bogota now not operating at full capacity due to recurring landslides. "This road transports 120,000 tons of cargo daily. Our source indicated the alternative route will add an extra five hours to the travel time which would result in daily commercial losses of $5 million," the USDA said.
English Farmland Values To Rise In 2012 (Source: CME)
English farmland values are expected to rebound in the first half of 2012, property consultancy Knight Frank said, after values continued to edge downwards in the third quarter of 2011. "I think that values will rise by 7%-10% in the first half of 2012, and then remain steady for the rest of the year as an increase in supply pegs back growth," Clive Hopkins, head of Knight Frank's Farm and Estate Sales team said. "The early part of the year tends to be when we see most activity in the market as subsidy checks arrive and farmers put into action the plans they have been making over the winter," Hopkins said. English farmland prices gained on average 4% during the year, following consecutive drops of almost 1% in each of the final two quarters. The on-going reform of the Common Agricultural Policy continues to overhang the market, especially the proposed new rules on how subsidy payments will be allocated. However, Hopkins said the impact of this would be minor.
"This is not like 2005 when there was a fundamental shift in the way subsidies were paid and the market ground to a halt due to all the uncertainty. It could complicate some sales and provide some interesting conundrums for the lawyers to sort out, but I think the market will cope this time around," Hopkins said.
Temasek Acquires 6.5% Stake In Mosaic Co (Source: CME)
Singapore state investment firm Temasek Holdings has acquired a 6.5% stake in New York-listed fertilizer maker Mosaic Co. (MOS), according to a filing to the Securities Exchange Commission. The filing, dated Dec. 13, said Temasek now holds 17.9 million shares, which, based on Tuesday's closing price of US$49.93, values the stake at US$893.1 million. A regulatory filing to the SEC dated Sep. 30 showed Temasek held 108,026 Mosaic shares.
China Looks To Remove Vegetable Tax (Source: CME)
China's government is proposing to eliminate its value-added tax on the distribution of vegetables in its latest effort to shield consumers from higher food prices. The proposal comes a year after Beijing launched a wide-ranging government drive to increase food supplies, the key culprits behind inflationary pressures. Improving the nation's agricultural production distribution is part of that effort, officials say. A VAT of 17% applies to enterprises engaged in import-export, production, distribution or retailing activities. The State Council, China's cabinet, on Tuesday published a draft policy inviting comments on the systemic reform, in which it said it wanted to refine the fiscal system for the distribution of agricultural goods. Lifting the VAT on vegetables would lower the cost of production for wholesale retailers, who typically pass the cost on to consumers.
"Distribution companies, especially wholesale companies, would benefit from the lower cost, but it's also generally a good policy for the business environment," said Gao Wang, analyst for Beijing Orient Agribusiness Consultant Ltd. The move underscores the fact that inflation remains a key concern, even though the government in recent weeks has signaled a shift away from taming prices and toward fostering growth. Vegetable prices rose 26% from the start of the year to 1.76 yuan (about 28 U.S. cents) a kilogram in July, its highest point this year, according to Ministry of Commerce data. Vegetable prices fell back to about 1.25 yuan per kilogram but have since been climbing again. The average wholesale price of 18 types of vegetables monitored by the Ministry of Commerce has been rising for six straight weeks, up 7.9% last week and up 28% since early November, the ministry said Tuesday.
Beijing's draft also encourages regional distribution companies to accelerate mergers and acquisitions, introduce more auctions, develop online retail business and build more refrigeration and storage facilities nationwide. It also said it wants to "establish and improve an agricultural reserve system," meaning stockpiles. It hasn't detailed any spending plan for the proposals yet. Last year, the government told farmers to raise vegetable acreage and vegetable production to roll back surging prices. The State Council also imposed selective price controls on flour and vegetable oil, which it had lifted by August as prices eased. Still, it was pork, rather than vegetables, that turned out to be the chief culprit for China's yearlong tussle with sharp inflation. China's pork prices reached a record 23.61 yuan a kilogram in mid-June, a 57% jump compared with a year earlier. Overall agricultural price pressures have eased in China as the country posted a record grain harvest this year.
Corn (Source: CME)
US corn futures rallied to their highest price in a month on support from crude oil and technical strength. The market shook off early losses on rains in South America, thanks in part to stronger crude. The market's surge improved the technical outlook, which prompted more buying, traders add. Today's gains, though, were limited by lackluster export demand and a lack of fresh news. CBOT March corn ends up 1.6% at $6.16 1/2 a bushel; it's up 6.4% since Thursday.
Wheat (Source: CME)
US wheat futures rally on short-covering and support from corn. With speculative funds net short the market, traders says it's primed for a short-covering rally, which was a factor today. Gains in corn and crude oil added to the supportive tone. "There really is no fundamental reason for the rally," says RCM Asset Management's Doug Bergman. Weak export demand limits gains. CBOT March wheat ends up 1.5%, or 9 1/4c, to $6.17 a bushel; KCBT wheat closes up 3c to $6.71; MGEX March wheat closes up 2 1/2c to $8.41 3/4.
Corn dips on S. America rain f'cast, soy steady
SINGAPORE, Dec 21 (Reuters) - U.S. corn fell, snapping three sessions of gains, while soybeans were little changed near a 4-week top on forecasts of rain in parts of Brazil and Argentina that had been hit by dry weather.
"If the rains come in significant total, then we may see this weather premium, which had started to creep its way into the market, erode," said Luke Mathews, commodities strategist at Commonwealth Bank of Australia.
Ukraine sees 11/12 grain export capped at 23 mln T
KIEV, Dec 21 (Reuters) - Ukraine's grain exports will be unlikely to exceed 22-23 million tonnes in the 2011/12 season despite a record harvest because of aggressive exports from neighbouring Russia, Ukraine's Farm Minister Mykola Prysyazhnyuk said on Wednesday.
"We have lost time in the first months of this season, allowing Russia to earn a lot (from exports) without competition from our side," Prysayzhnyuk told Reuters in an interview.
Argentina plowing ahead with grains export reform
BUENOS AIRES, Dec 20 (Reuters) - Argentina's Agriculture Ministry is about to present a proposal to overhaul a system of corn and wheat export quotas that is unpopular with farmers, the farm minister said on Tuesday.
The center-left government of President Cristina Fernandez only grants export permits once it has registered sufficient wheat and corn stocks to guarantee affordable domestic supplies.
Rain to bring short-term relief to S.American crops
CHICAGO, Dec 20 (Reuters) - Much-needed rains are expected through Thursday for soybean and corn fields in Argentina and southern Brazil, offering short-term relief from dry conditions as stressful weather returns next week, a U.S. meteorologist said Tuesday.
Storms through Thursday are likely to produce 0.5 to 1.25 inches (12 to 32 millimeters) of rain for southern Santa Fe and northwest Buenos Aires provinces, key Argentine corn areas, said agricultural meteorologist Drew Lerner of World Weather Inc.
Heavy snow boosts soil moisture for US Plains wheat
CHICAGO , Dec 20 (Reuters) - Heavy snowstorms hit the U.S. Plains Monday night and Tuesday morning, bringing as much as 15 inches of snow and boosting soil moisture reserves in big wheat growing areas that suffered from drought for much of 2011.
The snow provided relief to the dormant 2012 U.S. hard red winter wheat crop, ensuring that it will emerge in good condition this spring.
Drought and E.coli hit French farmers' 2011 revenue
PARIS, Dec 20 (Reuters) - French farmers' average revenue dipped in 2011 after a surge the previous year, hit by a severe drought in the spring and an E. coli outbreak that led consumers to shun fresh vegetables, the farm ministry said on Tuesday.
In 2011, the overall revenue per farm is expected to fall 3.6 percent, against a surge of 66 percent in 2010.
Corn Crop Heads for Sixth Record Year to Feed 1 Billion Cows: Commodities (Source: Bloomberg)
Farmers will reap a record corn crop for a sixth consecutive season in 2012, slowing a slump in stockpiles of livestock feed as global meat demand approaches a quarter of a billion metric tons. Production will rise 4.8 percent to 867.5 million metric tons in 2011-12, curbing the drop in inventories to 0.8 percent, the smallest decline in three years, the U.S. Department of Agriculture estimates. With harvests expanding from Argentina to China, prices will fall as much as 29 percent to $4.305 a bushel in Chicago trading next year, according to the median of 24 analyst estimates compiled by Bloomberg News. Corn prices doubled in the past two years as farmers failed to keep up with meat consumption that expanded 62 percent in a generation. Stockpiles fell in eight of the past 12 years and are down 34 percent since 2000, contributing to a surge in world food costs. Growers are now planting the most corn ever and more feed will come from a projected record wheat harvest.
Soybeans Head for Longest Rally in Two Months; Corn, Wheat Prices Rebound (Source: Bloomberg)
Soybean futures for March delivery rose 0.8 percent to $11.64 a bushel at 11:38 a.m. on the Chicago Board of Trade. The price was up for the fifth straight session, the longest rally since mid-October. Earlier, the oilseed dropped as much as 1.1 percent. Corn gained 1.3 percent in Chicago after declining as much as 1 percent. Wheat rose 0.9 percent after dropping as much as 1.3 percent.
Rice (Source: CME)
US rice futures further extend their recent rebound amid short-covering. After tumbling throughout the fall, the market has rattled off 5 straight days of gains. Analysts say the market was oversold, but there's little fresh news to change the outlook, which includes ample world supplies and weak US-export demand. Rice joined wheat and corn in rallying. CBOT January rice ended up 1.1% at $14.15/hundredweight
Arabicas dip, above one-year low, sugar steady
LONDON, Dec 21 (Reuters) - ICE arabica coffee futures eased but traded above Monday's one-year lows in early business, while raw sugar was little changed and cocoa edged up underpinned by a softer dollar.
Arabica coffee futures on ICE dipped and traded above Monday's one-year low, supported by rallying European stocks and a rising euro after upbeat U.S. and German data this week.
Australia's sugar cane harvest ends at near-record low
SYDNEY, Dec 21 (Reuters) - Australia's sugar cane harvest has ended with a crop of 27.9 million tonnes of cane, one of the worst on record, the Canegrowers trade group said on Wednesday.
Next year's crop could show a slight improvement of between 31 million and 32 million tonnes of cane unless severe wet conditions curtailing production persist, it said.
German 13th factory test sugar content 17.99 pct
HAMBURG, Dec 20 (Reuters) - The 13th factory test on the sugar beets delivered to refineries in Germany this season showed sugar content of 17.99 percent, compared with 17.95 percent in the previous test, the association of German sugar producers WVZ said on Tuesday.
The association did not publish a 13th test in 2010. The 12th 2011 test sugar content was up from 17.27 percent in the 12th test in 2010.
Ukraine produces 2.3 mln T sugar so far in 2011
KIEV, Dec 20 (Reuters) - Ukrainian sugar refineries produced about 2.3 million tonnes of white sugar from sugar beet as of Dec.19 or 50 percent more than at the same date in 2010, Ukraine's sugar union Ukrtsukor was quoted as saying on Tuesday.
Interfax Ukraine news agency quoted Ukrtsukor data as showing that refineries had received about 17.7 million tonnes of sugar beet and processed 17.2 million tonnes.
Ghana cocoa purchases hit 448,528 T by Dec. 8
ACCRA, Dec 20 (Reuters) - Cocoa purchases declared to Ghana's Cocobod reached 448,528 tonnes by Dec. 8 since the start of the season on Oct. 14, data from the industry regulator showed on Tuesday.
The figures compare with 421,711 tonnes of official purchases recorded during the corresponding eight weeks of the previous season, which ran from Oct. 1 to Nov. 25, according to the data seen by Reuters.
Uganda sees Dec coffee exports at 215,000 bags
KAMPALA, Dec 20 (Reuters) - Uganda expects coffee exports in December to slip from the same month a year earlier because rains have delayed harvesting and drying of beans, the Uganda Coffee Development Authority (UCDA) said on Tuesday.
UCDA said it expects 215,000 60 kg bags of coffee to be exported this month, down from 237,747 bags a year earlier. Uganda primarily cultivates the robusta variety and the crop is a major source of foreign exchange for the east African country.
Sugar Falls on Supply; Coffee Declines; Cocoa, Cotton Advance (Source: Bloomberg)
Sugar fell for the first time in four sessions on speculation that supplies will climb as harvesting accelerates in the Northern Hemisphere. Coffee declined, while cocoa and cotton climbed. Orange juice slid. Global sugar supplies will exceed demand by 11.1 million metric tons in the season that started Oct. 1, up 13 percent from a September estimate, Sucden, the trading arm of Sucres et Denrees SA, said today. Thailand, Russia and the European Union will have record crops, the Paris-based company said. “Importing countries are also relying on increased domestic production, resulting in a lack of demand on world export markets,” Emmanuel Jayet, a Sucden analyst, said in the report. “The nearly completed record crop in Russia, once the biggest importer of raw sugar, is heralding these changing fundamentals.”
Gold Futures Decline From One-Week High as Dollar Advances Against Euro (Source: Bloomberg)
Gold dropped from a one-week high as a rebound by the dollar curbed demand for the precious metal as alternative asset. The euro fell as much as 0.4 percent against the greenback on concern that European Central Bank measures to support its banking sector won’t be enough to stem the region’s debt crisis. Gold headed for the first quarterly decline in more than three years as Europe’s fiscal woes eroded prospects for the global economy and commodity demand. “As people take a closer look, they see that maybe things aren’t as good as they thought” in the European rescue effort, Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago, said in a telephone interview.
Brent rises above $107 on econ recovery hopes
SINGAPORE, Dec 21 (Reuters) - Brent crude futures rose above $107, gaining for a third straight day, after upbeat U.S. data pointed to a recovery in demand growth in the world's biggest oil consumer amid fears of a disruption in supplies.
"There are two main things that are solid indicators of a revival in the United States. One is employment and the other housing," said Tony Nunan, a risk manager at Mitsubishi Corp.
Japan crude stocks rise 1.5 pct to 2-mth high
TOKYO, Dec 21 (Reuters) - Japan's commercial crude inventories last week rose 1.5 percent to a two-month peak, reflecting increased imports as crude throughput rose to a four-month high.
Kerosene stocks fell for the second time in the past three weeks as the peak winter season began, after hitting a three-year high in the week to Nov. 26.
China end-Nov fuel stocks up, first rise in six months
BEIJING, Dec 21 (Reuters) - China's refined oil product inventories at the end of November rose 3.6 percent from a month earlier, the first rise in six months, the official Xinhua news agency said in a newsletter on Wednesday.
The country's commercial crude oil stocks at the end of November fell 1.34 percent from end-October, marking their second drop in a row after four consecutive gains, the China Oil, Gas and Petrochemicals reported.
Crude Futures Rise for Third Day as Inventories Decline Most in a Decade (Source: Bloomberg)
Oil rose for a third day as U.S. inventories declined the most in a decade. Crude gained 1.5 percent after the Energy Department reported supplies fell 10.6 million barrels to 323.6 million. It was the largest decline since Feb. 16, 2001, and almost five times the 2.13 million-barrel drop that was the median of 12 analyst estimates in a Bloomberg News survey. Oil also advanced as imports slipped to a three-year low. “This is a shocker and is going to be bullish for oil,” said Rich Ilczyszyn, chief market strategist and founder of Iitrader.com in Chicago. “This is definitely going to get some of the bears scared out of the market in the short term.”
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