Corn (Source: CME)
US corn futures finish lower in a setback from record highs Tuesday. Traders book profits and unwind intermarket spreads in which they had bought corn and sold soybeans, which ended slightly higher Wednesday. Market participants wait for the USDA to update supply/demand estimates in a monthly crop report Friday and widely expect forecasters to cut their outlook for season-end corn inventories. CBOT May corn slips 3 3/4c to $7.63/bushel.
Wheat (Source: CME)
US wheat futures close lower on profit-taking following a rally to one-month highs at CBOT. Markets feel additional pressure as traders unwind spreads in which they bought wheat and sold soybeans, which end slightly higher, analysts say. Traders still worry wet conditions will delay spring-wheat plantings in the northern Plains, with Freese-Notis Weather predicting it'll be "quite a while" before much fieldwork takes place. CBOT May wheat falls 4c to $7.82 1/4 a bushel; KCBT May sinks 10 1/2c to $9.39 1/2; MGE May loses 7 3/4c to $9.54 1/2.
Rice (Source: CME)
US rice futures weaken on spillover pressure from losses in the neighboring wheat and corn markets. Traders book profits in the grains following recent rallies, with rice pulling back after reaching its highest price in more than a week early Wednesday. Market feels ongoing pressure from ample global supplies, despite persistent chatter that Japan needs to increase rice imports due to damage from earthquake and tsunami, analysts note. CBOT May rice closes down 3c at $14.08 per hundredweight.
Crude Oil Declines as Much as 0.4% to $108.40 a Barrel in New York Trade (Source: Bloomberg)
Crude oil for May delivery fell as much as 43 cents, or 0.4 percent, to $108.40 a barrel in electronic trading on the New York Mercantile Exchange today.
Oil Trades Near 30-Month High After NATO Escalates Air Strikes Over Libya (Source: Bloomberg)
Oil traded near a 30-month high in New York as NATO escalated its air campaign over Libya, and amid renewed concern that conflict in other energy-exporting countries may curtail supplies.
Russia Has 8M Tons More Grain Than Thought-Grain Union Executive (Source: CME)
Russia's grain supplies may be up to 8 million metric tons higher than previously thought, industry insiders said, raising hopes that the Kremlin may loosen its ban on exports before next year. Alexander Rabsky, department head at Russia Grain Union, said the influential lobby group has been pushing to allow farmers to ship their grain in order to free up badly-needed space in storage facilities and raise funds to finance the new crop. He estimated farmers may have hidden up to 3 million tons of grain from last year in the hope of higher prices. Combined with up to 5 million tons of grain still held in elevators in the south, he said Russia may have 7 million to 8 million tons more grain than government estimates. "We've been trying to convince the government to allow exports," he said. "It can be limited and controlled, but export is badly needed." "The farmers need money for the new planting and harvest campaign. Also they need somewhere to keep the newly harvested grain.
We'll have problems with this year's harvest because of this," he said. The Kremlin banned grain exports last summer after the worst drought to hit Russia in more than a century slashed the country's harvest by a third and sent domestic food inflation soaring. Although ministers have touted lifting the ban early, most dealers say it will be kept in place until September or October when the new harvest begins. But now improving prospects for the upcoming crop are pushing down prices and forcing farmers to ditch their grain to free up storage space. Last month Deputy Agriculture Minister Shamil Vakhitov raised the government estimate for the 2011 harvest to 90 million tons, up from 85 million tons. In the week to March 28, third-grade wheat in southern Russia declined to $198/ton from $215/ton, fourth-grade to $185/ton from $198/ton, and feed wheat to $178/ton from $188/ton, the Institute of Agricultural Market Studies said in a weekly note.
SovEcon agricultural analysts said feed wheat led the decline in European Russia, losing 275 rubles ($9.69) to reach RUB5,925/ton.
India Raises Subsidies On Key Fertilizer Imports (Source: CME)
India has raised subsidies on key imported fertilizers to keep down the cost of farm production as global prices of the vital agriculture inputs have soared, a senior fertilizer ministry official said. The government fixes benchmark rates at which companies can import key fertilizers and reimburses the companies the difference between their sale price to farmers and the benchmark import price. Indian companies have been finding it difficult to import fertilizers since the start of 2011, as global prices rose above the government-fixed benchmark rates due to a spike in the price of natural gas, a key feedstock to produce the farm nutrients. The government has raised the benchmark import price of urea--the most widely-used fertilizer in the country--to $350 a ton from $310.
The import price of di-ammonium phosphate, or DAP, crucial to plant growth and soil health, has been increased to $580 a ton from $450 and that of muriate of potash, or MoP, to $390 a ton from $350. India, the world's largest buyer of fertilizers, imports around one-fifth of the urea is consumes annually. It meets also most of its DAP and MoP requirements through purchases from overseas.
West Australian Drought Could Crimp 2011-12 Wheat Output - Rabobank (Source: CME)
Drought and parched soils in Western Australia--historically the source of up to 40% of national wheat output--could again crimp production this year, reducing the chance of a record Australian crop, Rabobank Australia said. With the winter crop planting window to open later this month in Western Australia, most of the cropping districts will need favorable and timely rainfall and below-average temperatures to fully replenish soil moisture levels, Rabobank analyst Tracey Allen said in a review of the seasonal outlook. "Current climate expectations aren't yet consistent with a bumper recovery year," she said. While Australian wheat production surged 20% in last crop year ended March 31 to 26.3 million metric tons, output in Western Australia slumped 42% to 4.7 million tons, or just 18% of national output, according to the government's chief commodities forecaster, the Australian Bureau of Agricultural and Resource Economics and Sciences.
Abares forecast national wheat output this crop year at 24.3 million tons. It didn't estimate Western Australian production, though it would likely have been around or above a five-year annual average of 7.3 million tons. After annual national domestic consumption of around 6.0 million tons is met, the balance of output is available for export, usually making Australia a major supplier to the global trade. Western Australia can be a major global supplier in its own right. When the state's production reached a record 11.1 million tons of wheat in 2003-04, it was the source of about 10% of the year's global traded wheat. Allen said tight physical supplies of wheat, and indeed most traded farm commodities, means global markets remain on a knife edge, with any significant production disappointments likely to cause another step-up in prices from already high levels.
Southwest Western Australia experienced its driest year on record in 2010, and it has since missed out on the record rains that have fallen in many other places in Australia this year, including grain-growing areas in the eastern states. For much of the eastern states, soil moisture is at capacity, which raises the possibility that more rain in the next two months could delay plantings, particularly for other winter crops such as canola and pulses, she said. The risk that La Nina conditions in the Pacific Ocean could return in 2011-12, bringing more abnormally heavy rains to the region, also weighs on the east coast grain outlook, she said. The Bureau of Meteorology said Tuesday that the warming of subsurface temperatures in the Pacific Ocean indicates that the La Nina weather event is weakening and in its final stages, but that signals from atmospheric indicators were less certain.
Fertilizers are key to improving crop yields in the country, where more than 60% of the population depends on farming for a livelihood. Demand for grain sold under the government's program to provide supplies to regions hurt by the drought is also falling. In the latest intervention government tender on March 31, officials managed to sell only 6,480 tons of grain, down from 20,486 the day before. "The main reasons are reports about unaccounted grain stocks on the farms and the outlook: that a crop of a minimum of 85 million tons is possible this year," said a grain trader with operations in Russia.
Copper demand seen surviving China rate hikes
SANTIAGO, April 5 (Reuters) - China's interest rate hikes are fanning fears of a deeper slowdown in the world's top copper consumer, but demand remains strong and is picking up in the United States and Europe, industry executives say.
The Chinese central bank raised rates on Tuesday for the fourth time since October as it seeks to counter price pressures, initially depressing prices, but copper ended firmer as tight supply underpins the market.
JP Morgan bullish on China commodity demand, warns on social tension
SINGAPORE, April 5 (Reuters) - Social tension in China remains an investment risk as strong demand for coal, grains and copper pushes up commodity raw material prices, Jing Ulrich, J.P. Morgan China managing director, told a conference on Tuesday.
"Investors are always looking for the potential risks that have not been discounted," Ulrich said.
Corn hovers near record high, rally may stretch
SYDNEY, April 6 (Reuters) - U.S. corn futures steadied near record highs as worries that U.S. supplies could run out kept a floor under prices, raising hopes bulls can extend a four-day rally ahead of key U.S. data on Friday. Corn has gained more than 15 percent in the four days to Tuesday, since a U.S. government report showed unexpectedly low stocks as of March 1, prompting concerns of a further cut to U.S. Department of Agriculture's end-of-season inventory estimate due out on Friday. "It has come as a surprise to me the last couple of trading sessions. I didn't think corn had the legs to do it but it certainly has," said Jonathan Barratt, managing director at Commodity Broking Services.
Vietnam's Q2 rice exports to rise 8 pct vs. Q1-govt
HANOI, April 6 (Reuters) - Vietnam's rice exports in the second quarter of this year would rise 8 percent from the previous three months to 2 million tonnes, the government said on Wednesday. The volume in the quarter ending June will bring rice exports from Vietnam in the first half of 2011 to 3.85 million tonnes, or 64 percent of the country's annual export target, the government said in a statement, citing Vietnam Food Association data.
India's 2011 wheat harvest seen at 84.3 mln tonnes-farm minister
NEW DELHI, April 6 (Reuters) - India's wheat harvest is seen at 84.3 million tonnes in 2011, Farm Minister Sharad Pawar said on Wednesday. The country's grains output is expected to be 235.8 million tonnes, he added. The government's previous forecast for wheat harvest this year was 81.47 million tonnes and for grains output, 232.07 million tonnes.
China's winter wheat rated above five-year average
BEIJING, April 6 (Reuters) - China's winter wheat crop has so far grown better than the same time a year ago or better than the average-level over the past five years despite dry weather earlier this year, a report by the Ministry of Agriculture showed.
Irrigation coupled with rains in late February eased the drought and 86 percent of winter wheat seedlings were rated as first and second-grade, or excellent to good condition, by the end of March. That was up by 3.1 percentage points from the year-earlier period or 2 percentage points higher than the average level in the past five years, the ministry said.
Exporters sell 101,600 T US corn to unknown-USDA
WASHINGTON, April 5 (Reuters) - Private exporters reported the sale of 101,600 tonnes of U.S. corn to unknown destinations for delivery next marketing year, said the Agriculture Department on Tuesday. The 2011/12 marketing year opens on Sept. 1. By law, exporters must report promptly the sale of 100,000 tonnes or more of a commodity to the same destination in one day but it sometimes can take a couple of days for the identity of a buyer to become known. Sales of smaller amounts are reported on a weekly basis.
Cocoa edges up as Ivory Coast deal nears
ICE cocoa futures edged up in early trade on Wednesday as the embattled political leader in top producer Ivory Coast negotiated the terms of his departure, which would allow exports to resume soon. The only thing left to discuss with Ivory Coast's Laurent Gbagbo is his departure, French Foreign Minister Alain Juppe said on Wednesday, terming it as "absurd" for him to hang on.Raw sugar futures on ICE firmed in early trade, underpinned by delays in the cane harvest in the centre-south of Brazil.
Mexico sugar output seen at 5.3 mln tonnes
MEXICO CITY, April 5 (Reuters) - Mexican sugar production should reach 5.3 million tonnes in the 2010/11 harvest cycle, according to official forecasts from the national sugar committee seen by Reuters on Tuesday. The committee had previously seen output reaching 5.25 million tonnes, still above the 2009/10 growing year, when Mexico's output dropped to its lowest levels in a decade because of bad weather.
Uganda coffee exports up in March yr/yr-UCDA source
KAMPALA, April 5 (Reuters) - Uganda exported 223,099, 60-kg bags of coffee in March this year, up from 217,809 bags exported in the same month last year, a source at Uganda Coffee Development Authority (UCDA) said on Tuesday. The rise follows four straight months of export declines that were caused by drought and diseases in Africa's second largest grower.
India 2010/11 cotton arrivals up 2 pct to 27 mln bales
MUMBAI, April 5 (Reuters) - Domestic cotton arrivals in Indian spot markets till April 4 in the 2010/11 season edged up by 2 percent on year, the state-run Cotton Corp of India said on Tuesday. Arrivals as on April 4 stood at 27 million bales of 170 kg each, compared with 26.5 million bales a year ago, the government body said on its website.
India's farm min says may consider allowing further cotton exports
NEW DELHI, April 6 (Reuters) - A panel of minister is likely to consider allowing further exports of cotton, India's farm minister Sharad Paswar told reporters on Wednesday.India, the world's second biggest producer of cotton, has allowed 5.5 million bales for exports in the current year that began on Oct. 1.
US corn stocks to dip on demand for food-fuel
CHICAGO, April 5 (Reuters) - U.S. corn stocks will drop to a new 15-year low this summer, with the stock-to-use ratio the tighest since the 1930s amid strong demand for use in food and fuel even at record high prices, a Reuters Poll showed. Corn futures at the Chicago Board of Trade hit a record high on Tuesday, rising to $7.70-3/4 per bushel to eclipse the $7.65 peak set during the 2008 global food crisis.
US Commodity sees agriculture as most popular investment
SINGAPORE, April 6 (Reuters) - United States Commodity Fund sees agriculture as the most popular commodity to invest in at the moment as red-hot demand and supply disruptions have boosted grains and other farm goods, while fears of an oil bubble should be ignored. "What seems to be clear right now, the greatest amount of buzz seems to be around agriculture," John Hyland, chief investment officer for the California-based firm, told Reuters on the sidelines of a commodities conference late Tuesday.
