Corn (Source: CME)
US corn futures end sharply higher on renewed talk of sales to China and concerns wet weather will delay planting. Chatter about sales to China, a non-traditional customer, revved up again after cooling the past two days as the government failed to confirm the business. "Now I think the opinion is going more toward, 'They bought some. We're just not hearing about it,'" says Alan Brugler of Brugler Marketing & Management. Rallying wheat futures added spillover strength to corn. CBOT May corn ends up 21 1/2c to $7.02 1/2.
Wheat (Source: CME)
US wheat futures finish sharply higher as forecasts call for dry weather to continue threatening crops in the Plains. Outlooks for dryness in the key growing area were a turnaround from expectations for beneficial precipitation that pressured prices Wednesday. The Plains have been too dry since hard red winter wheat was sown there last fall. CBOT May wheat ends up 25 1/4c at $7.39 1/2 a bushel, KCBT May gains 23 1/4c to $8.53 1/4 and MGE May rises 24 1/4c to $8.83 1/4.
IGC Ups 2010-11 World Wheat Output 1M Tons (Source: CME)
Global wheat production for the 2010-11 crop was revised slightly higher to 649 million metric tons and is forecast to rise by 3.7% the following crop year, the International Grains Council said. Global wheat production, which was previously estimated in February at 648 million tons, is now forecast to fall 4.3% on the year, largely due to adverse weather conditions such as a severe drought in Russia and Kazakhstan which damaged harvests. Global wheat production is forecast to rise to 673 million tons in 2011-12 and stay broadly balanced with demand, which should lead to higher stocks, the IGC said. "Surpluses in the major exporters are expected to be adequate to meet the forecast upturn in 2011-12 imports, placed at 127 million tons, assisted by some recovery in the Black Sea region and by relatively ample old crop stocks in other countries, notably the U.S. and Australia," the organization said.
Global grain output for the 2010-11 crop year was cut by 2 million tons to 1.726 billion tons and is now forecast to fall 3.7% on the year. Global grain consumption for the 2010-2011 crop year was revised lower to 1.788 billion tons and is forecast to rise by 1.1% the following crop year, the IGC said. The IGC held steady its forecast for global grain trade at 243 million tons in 2011-2012 and is now forecast to increase by 1.24% the following crop year. "Increased trade in wheat and barley, with additional feed-grade supplies are likely to be available in the Black Sea region," the IGC said.
China Official Hints At Strain In Food Source (Source: CME)
China may not be able to meet sharply rising food demand from its domestic resources, a senior Chinese agriculture official said, indicating room for further growth in imports. Chen Xiwen, director of the State Council's executive office on rural policy, questioned the policy wisdom of setting increasingly higher targets for grain output as China struggles to wring more yield out of scarce arable resources. His comments seemed to depart from statements by other parts of China's government that emphasized trying to meet the country's demand for key grains from domestic supplies. Just a day earlier, the State Council vowed to take all necessary measures to ensure an eighth consecutive record grain harvest this year, with officials saying higher output is necessary to combat inflation -- the government's top economic priority this year.
"Chasing ever-higher output levels may mean overfertilization and unsafe agriculture," said Mr. Chen, who is also director of the ruling Communist Party's rural affairs office. "Of course, we have to raise output in this area but our techniques and resources can't keep up." China's government has long emphasized the need to produce enough grain to meet almost all the demands of its huge population, to avoid becoming dependent on foreign suppliers. In recent decades, it has dropped the self-sufficiency goal for some crops, like soybeans, but continues to categorize corn, wheat and rice as key grains, of which it maintains formidable stockpiles. Mr. Chen said current stockpiles of key grains total 200 million metric tons, including both private and public stocks -- about two-fifths of annual consumption and among the largest such reserves in the world.
But China's grain imports have risen in recent years across major categories, soaring in some categories last year to their highest levels in more than a decade. For corn, the most prominent example of the shift, China broke its 15-year status as a net exporter last year as imports exploded, in part because drought damped domestic output. Wheat and rice imports also grew. Driving the shift in large part are dietary changes as China's population becomes wealthier. Those changes mean "our ability to meet consumption levels is clearly insufficient," Mr. Chen said. He said genetically modified foods, increased fertilization and organic farming are partial solutions, but pose inherent problems, such as pollution and potentially unsafe or overly expensive food. Mr. Chen said China is maintaining self-sufficiency in grains, but he also highlighted the value of trade. He pointed to soybeans, imports of which overtook domestic output around 2004 to meet sharply rising Chinese demand.
"China used to be the world's largest soybean producer, now it's the world's largest soybean importer," Mr. Chen said. China last year posted a record 54.8 million tons of soybean imports. Mr. Chen also swatted at perceptions in China of rising foreign control in some parts of the domestic agriculture sector. Some foreign grain processors last year came under public criticism, as rising food prices helped push inflation to a three-year high. "The government is committed to welcoming foreign competition in the downstream agricultural processing sector . . . and it is not true that foreign companies control agriculture prices in China," he said. Foreign agriculture companies have "contributed innovation," and developing China's agriculture sector doesn't mean having to squeeze out foreign competitors, he added.
Australia Government Moves To Reward Farmers Cutting Carbon Emissions (Source: CME)
Legislation to reward Australian farmers and landholders who cut pollution was introduced into the House of Representatives by Climate Change Minister Greg Combet. The legislation aims to limit emissions of greenhouses gases, mostly carbon dioxide, establish a carbon credit mechanism and create abatement or carbon offset projects in the land sector, which accounts for around a quarter of Australia's total, such as storing carbon in soils or vegetation, Combet said. In February, Prime Minister Julia Gillard outlined plans to tax carbon emissions by Australia's 1,000 largest emitters in a bid to cut pollution and shift investment towards a greener economy and renewable energy projects. The government says it will give details, including pricing, closer to the middle of the year, and will legislate in the second half of the year. The plan won't include carbon emissions on farm production, as this is "too complex," Gillard said at the time.
The Carbon Credits (Carbon Farming Initiative) Bill 2011 "is critical to providing long-term investment certainty and enabling the land sector to be part of Australia's climate change solution," Combet said in a statement. The government wants to encourage private and commercial investment in areas such as carbon sinks, forests, native forest protection, landscape restoration and more sustainable, carbon-efficient farming practices, he said. Agriculture Minister Joe Ludwig said that under the initiative, farmers and other landholders will be encouraged to generate carbon credits from a range of activities such as fertilizer management, reduced livestock emissions and reforestation. The government wants it approved by July 1, the minister said. Ross Garnaut, one of the government's chief climate change advisors, noted that the rural sector is a major source of emissions, but that it could play a significant role in Australia's carbon mitigation efforts.
"These opportunities could also significantly improve the economic prospects for Australian farmers," he said earlier this month in a paper entitled Transforming Rural Land Use. The National Farmers Federation said earlier this year it supports the initiative, commenting that it is "prudent in gearing farmers up to engage as and when carbon markets develop."
Australia government agrees to repay royalties under mine tax
CANBERRA, March 24 (Reuters) - Australia's biggest mining companies won a major concession over a planned new 30 percent profits tax on Thursday, with the government agreeing to refund any future increases in state-based royalty charges.
The widely expected decision could save miners hundreds of millions of dollars in future royalty payments in resource states such as Western Australia and Queensland, and silence any new industry campaign against the tax.
METALS-Demand prospects lift copper, aluminium
LONDON, March 24 (Reuters) - Copper prices rose on Thursday to their highest in almost three weeks, weathering dismal U.S. housing data and taking strength from improving demand in other sectors, including
transportation.
"Copper has impressed me," said Barclays Capital analyst Gayle Berry.
PRECIOUS-Gold climbs towards record on euro zone jitters
LONDON, March 24 (Reuters) - Gold and silver prices rose on Thursday as jitters over the euro zone sovereign debt crisis, violence in the Middle East and worries over radiation leaks in Japan conspired to blunt risk appetite.
"Given the geopolitical environment, concerns about Portugal and other peripheral countries, euro zone debt concerns and the still extremely low interest rate environment, it is not surprising the trend is your friend," said Commerzbank analyst Eugen Weinberg.
Technical signs, strong dollar push coffee lower
NEW YORK/LONDON, March 23 (Reuters) - Arabica coffee futures closed down on Wednesday, easing further away from a 34-year high touched earlier this month, while cocoa was little changed as an export ban in top grower Ivory Coast kept things at a standstill. "I would expect prices will start rising again after the Japanese and Libyan crises settle because (2011/12) crop forecasts will not be adequate to meet demand."
The rumor that just won't die: Did China buy US corn?
CHICAGO, March 24 (Reuters) - As one of the last great bastions of open-outcry trading, the Chicago grain market pits are among the most efficient at processing rumors, with traders quickly separating the likely from the far fetched.
But despite officials denials from Beijing and the absence of confirmation from the U.S. government, rumors of a fresh round of big Chinese corn imports from the United States have failed to fade even a week later, an eternity in market time.
US corn export sales robust despite Japan quake
CHICAGO, March 23 (Reuters) - U.S. corn export sales likely slipped last week from a three-week peak as demand from earthquake-shattered Japan eased, trade sources said ahead of a weekly U.S. Agriculture Department export sales report.
But the reduced sales to Japan, the world's top corn importer, were mostly offset by increased buying by other big importers such as South Korea and Mexico as prices fell to two-month lows and the dollar slid to multi-month lows.
Tanzania's sugar output seen up 18 pct
DAR ES SALAAM, March 23 (Reuters) - Fine weather will boost Tanzania's 2010/11 (April-March) sugar output by 18 percent this year but imports will still be needed, the industry regulator told Reuters on Wednesday.
"Sugar production will likely approach 310,000 tonnes this season because of better-than-expected weather," Matthew Kombe, director general of state-run Sugar Board of Tanzania said in an interview.
Worst Texas Drought in 44 Years Damaging Wheat Crop, Reducing Cattle Herds (Source: Bloomberg)
The worst Texas drought in 44 years is damaging the state’s wheat crop and forcing ranchers to reduce cattle herds, as rising demand for U.S. food sends grain and meat prices higher.
Gold Futures Decline on Lack of ‘Follow-Through’ After Climbing to Record (Source: Bloomberg)
Gold futures jumped to a record of $1,448.60 an ounce as turmoil in Libya, Japan and Europe spurred demand for the precious metal as an alternative investment.
