Corn (Source: CME)
US corn futures close up the daily, exchange-imposed 30c/bushel limit on the USDA's tighter-than-expected supply estimate. Government projected March 1 inventories were down 15% from a year earlier and 2.7% below the average analyst prediction. The data set the stage for a cut next week in the USDA's forecast for end-of-season supplies, already projected to reach a 15-year low. Prices need to rise to curb demand, analysts say. "The markets job is to destroy demand," contends Jim Gerlach, president of A/C Trading. CBOT May corn finishes at $6.93 1/4; Friday's daily limit will rise to 45c.
Wheat (Source: CME)
US wheat futures close sharply higher on spillover support from a limit-up rally in corn. Corn climbed 4.5% to its 30c limit after USDA said inventories as of March 1 were lower than expected. Corn's gains lift wheat, as both grains are used to feed livestock. USDA data issued Thursday was bearish for wheat, as federal forecasts for plantings and inventories exceeded expectations. CBOT May wheat ends up 36c to $7.63 1/4 a bushel, KCBT May climbs 46c to $9.08, and MGE May surges 37 3/4c to $9.23 3/4.
Rice (Source: CME)
US rice futures finish solidly higher as federal forecasters project smaller-than-expected rice plantings. Government pegs rice plantings at 3 million acres, down 17% from last year. Private analytical firm Informa Economics, a closely watched forecaster, recent projected a more-modest 12% decline. Farmers are turning away from rice in the southern US to plant more profitable crops like cotton and corn. CBOT May rice ends up 20 1/2c at $13.98 1/2 per hundredweight.
USDA survey expected to show big U.S. crop sowing
WASHINGTON, March 31 (Reuters) - U.S. farmers will respond to near-record prices by planting the second-largest amount of corn land in seven decades, a government survey is expected to show on Thursday, but supplies will stay tight well into 2012.
Relatively limited additional cropland in the Corn Belt can be put into crops this year, while growers in the Plains could plant wheat on land that was fallow or recently used for grazing, a USDA analyst said.
China reports wider outbreak of wheat diseases
BEIJING, March 31 (Reuters) - China's wheat crop is suffering from a serious outbreak of disease and the spread of pests this year due to the dry spring, the ministry of agriculture said.
Areas suffering crop damage from pests increased by as much as 110 percent, with the density of pests four times greater than last year in parts in the north, the country's bread basket, said the ministry.
Argentina corn crop seen at 21-22 million tonnes
BUENOS AIRES, March 30 (Reuters) - Argentina's 2010/11 corn harvest is expected to fall to between 21 million and 22 million tonnes, down from last season's record 22.7 million tonnes, the head of local corn group Maizar said on Wednesday.
Dry weather at the start of the corn season hit crop yields, dampening early production expectations for a crop of up to 26 million tonnes. However, rains since mid-January have helped some crops recover.
Dry weather not seen damaging French, German wheat
HAMBURG, March 30 (Reuters) - Dry weather in top European Union wheat producers France and Germany is not yet causing serious concern about damage and plants could recover if enough rain falls in the next two weeks, analysts said on Wednesday.
Limited rainfall in France this month has slowed development of winter grains but the situation is not critical and could be solved by rain in the coming fortnight, analysts said.
As US farmers prepare to plant, late decisions loom
OVERLAND PARK, Kan, March 30 (Reuters) - Gary Millershaski would love to see some rain. With more than 2,000 acres of his southwest Kansas farm planted with a young thirsty wheat crop, it's been dry far too long.
Some of Millershaski's neighbors are considering tearing up their drought-stricken wheat fields, which are harvested in the summer, and possibly planting corn this spring instead.
Low Season In Brazilian Harvest To Pressure Arabica Coffee Exports (Source: CME)
Fine quality Arabica coffee exports are set to tighten as Brazil enters its bi-annual low harvest season in 2011, the head of the International Coffee Organization said. "Price levels for fine coffee blends are very tight amid concerns that people are being forced to use low grade coffee instead," ICO acting head Jose Sette said. "We had good inflows of fine quality Arabica over the first few months of this year but it may be difficult to maintain this flow for the rest of the crop year because of the bi-annual low Brazilian season," Sette added. Low harvests in Colombia and Indonesia have led to tight supplies this season for fine quality coffee. Arabica prices are hovering at 14-year highs and analysts predict they could hit the previously-unseen level of $4 a pound, while robusta prices are at three-year highs.
But as Brazil goes into its bi-annual low season in 2011--production is set to fall five million bags to 43 million bags--and domestic consumption continues to rise, markets are likely to face increasing pressure in 2011-12. Regarding global coffee producer stocks, "there is no prospect of a significant recovery in the near future, what will be harvested over the next 9-12 months is to be the amount consumed. Stocks will continue to rest at very low levels by historical standards," Sette added. Rising demand in developing countries is expected to boost world consumption to 132.5 million bags, compared with 131.2 million bags in 2009, bringing the average annual growth rate in the past decade to 2.3%. According to ICO estimates, world stock levels fell by one third last year, to leave opening stocks this season of 13 million bags.
Inventories held in importing countries were estimated at 18.3 million bags at the end of 2010.
Tight Supplies, Plantings Raise Stakes For Crop Production (Source: CME)
Federal forecasters raised the stakes for the upcoming U.S. crop, cutting inventories for grains and soybeans more than expected. The U.S. Department of Agriculture reported farmers had 1.6% fewer soybeans and 15% less corn in storage as of March 1 than a year earlier. Analysts had been expecting a slight increase in soybean inventories and a more-modest cut in corn supplies. "Our margin of error has gotten even tighter," said Don Roose, president of U.S. Commodities, a brokerage firm in Iowa. The USDA in a separate report signaled farmers will reduce soybean plantings due to competition for acreage from corn and cotton, yet still will sow the third-largest crop on record. Farmers intend to plant the second-largest number of corn acres since 1944. Federal forecasters expect farmers to plant more wheat and cotton this year compared to 2010, as prices for those commodities, like corn and soybeans, have surged in the last year.
Tighter-than-expected crop supplies increase the importance for favorable growing weather this spring. Yet meteorologists warn wet weather in northern Plains states like North Dakota could prevent early planting of corn and potentially reduce output if farmers aren't able to get in their fields in a timely manner. The expanded acreage may not mean strong growth in cotton production for the U.S.--the world's largest exporter of the fiber--since bad weather, particularly in dry West Texas, could clip output. The decline in grain supplies reflects strong demand from global consumers, including producers of livestock and biofuels. The USDA reported in its weekly export data the largest sale of corn to date for the current crop year, buoyed by a 1.2-million-metric-ton deal announced last Friday that's suspected to be headed to China. The USDA earlier this month said corn supplies are expected to drop to a 15-year low by the end of the crop year on Aug. 31 and account for 14% of global supplies.
Last year, U.S. supplies accounted 30% of global stocks. U.S. soybean supplies are expected to account for 6.5% of global inventories at the end of the crop year, down from 7% a year ago. "The combination of extremely tight [soybean] stocks and declining acreage is a bullish combination," said Tomm Pfitzenmaier, analyst for Summit Commodity Brokerage in Iowa. As for plantings this spring, the USDA forecast farmers will sow 76.6 million acres of soybeans, down about 1% from last year. Analysts on average had expected 77 million acres. U.S. corn plantings are expected to be 92.2 million acres this year, a 5% jump from last year. Analysts on average expected farmers would sow 91.7 million acres. Cotton acreage is forecast to expand 15% to 12.566 million acres. The amount is still below analysts' expectations of just over 13 million acres. Plantings of wheat are projected at 58 million acres, up 8.2% from last year, when wet weather prevented planting in the Plains and Midwest.
That topped traders' expectations for plantings of 57.3 million acres.
Cocoa eases as Ouattara forces take key port (Source: Reuters)
ICE cocoa futures were lower on Wednesday as forces loyal to Ivory Coast president claimant Alassane Ouattara marched into the cocoa port of San Pedro, raising the prospect that cocoa could soon start to flow again from the world's top producer. Coffee prices edged up with the market slowly beginning to move higher again after suffering a major setback from a 34-year peak set earlier this month.
Australia 2010/11 cotton crop seen at record 4 mln bales-industry
CANBERRA, March 31 (Reuters) - Australia's cotton industry on Thursday upgraded its forecasts for the 2010/11 crop to a record of more than four million bales after growers managed to salvage more than expected from devastating summer floods across the nation's eastern states. Australia, one of the world's leading cotton exporters, will produce 4.05 million bales, well above the previous record of 3.5 million bales in 2001/02, and up from the prior forecast of 3.7 million bales, Cotton Australia chief executive Adam Kay said. Around 4.4 bales equals 1 tonne of cotton.
Oil Extends Gains on Concerns Libyan Conflict May Prolong Production Cuts (Source: Bloomberg)
Oil in New York rose for a second day amid concern the conflict in Libya, Africa’s third-largest producer, will prolong output cuts. Prices rose 2.4 percent yesterday to the highest in two- and-a-half years after troops loyal to Libyan leader Muammar Qaddafi retook control of the oil port of Ras Lanuf and shelled Brega, another energy hub. Libyan oil output fell 72 percent in March to a 49-year low, a Bloomberg News survey of oil companies, producers and analysts showed.
Crude Oil Advances as Much as 0.7% to $107.50 a Barrel in New York Trading (Source: Bloomberg)
Crude oil for May delivery rose as much as 78 cents, or 0.7 percent, to $107.50 a barrel in New York Mercantile Exchange electronic trading today.
Chile Feb copper output down 6.6 pct yr/yr
SANTIAGO, March 30 (Reuters) - Chile's copper output fell 6.6 percent in February compared with a year earlier to 368,243 tonnes, the National Statistics Institute (INE) said on Wednesday.
Chile, which holds by far the world's top copper reserves and is the globe's No.1 producer, is expected to steadily increase output in the next two years with new mine projects and upgrades.
China's Baosteel 'optimistic' about 2011 prices
BEIJING, March 31 (Reuters) - China's Baoshan Iron and Steel Corp , the country's biggest listed producer, said it remained positive about the direction of steel prices in 2011 even in the face of a weakening market.
"We are cautiously optimistic about steel product prices this year," said Chen Ying, the secretary of Baosteel's board of directors, during an online Q&A session for shareholders.
China to cap 2011 rare earth output at 93,800 T
BEIJING, March 31 (Reuters) - Dominant producer China will cap its total output of rare earth oxides at 93,800 tonnes this year, up 5 percent from last year, the country's land and resources ministry said in a statement posted on its website on Thursday.
The statement also said the ministry would not approve any new prospecting or production licenses for rare earths, tungsten or antimony until June 30, 2012.
METALS-Quiet China demand dents copper, but not for good
LONDON, March 31 (Reuters) - Copper rose on Thursday as dollar weakness attracted non-U.S. buyers but still was headed for its first quarterly loss since June due to soft Chinese demand, Japan's nuclear crisis and unrest in the Middle East.
"We're still in a longer-term uptrend for copper," Alex Heath, head of base metals at RBC Capital, said of the market.
PRECIOUS-Gold recovers as dollar slips, Mideast simmers
LONDON, March 31 (Reuters) - Gold rose in Europe on Thursday, rebounding after the previous session's late price retreat, as dollar weakness, concern over euro zone sovereign debt and unrest across the Middle East supported buying.
"Until we see a substantial decrease in liquidity or a rise in real interest rates, you would look for an upward trend, and all these other factors like the euro zone debt and Middle East, North Africa issues are also a short-term support," said Standard Bank analyst Walter de Wet.
