Corn (Source: CME)
US corn futures finish sharply lower as traders take profits. Deferred contracts fell hardest on chatter about drier, long-range forecasts that looked more favorable for planting. AgResource predicted warmer temperatures and "more-normal" rainfall in early May. Yet, meteorologists see little improvement in near-term weather. "It doesn't look good," says Drew Lerner, president of World Weather. Slide triggered pre-placed sell orders, which accelerated the decline, traders note. CBOT July corn drops 16 1/2c to $7.40 1/2 a bushel; December corn loses 20 1/2c to $6.55 1/2.
Wheat (Source: CME)
US wheat futures close weaker as traders book profits following recent surges. KCBT wheat suffered the steepest fall after reaching a two-week high on concerns relentless dryness will hurt hard red winter wheat output. Forecasts don't offer much hope for improved weather in the southern Plains, where it may be too late to revitalize the crop in some areas. "They can't buy a drop of rain in Texas and Oklahoma," says Mike Palmerino, meteorologist at Telvent DTN. CBOT July wheat slips 1/4c to $8.20 3/4 a bushel; KCBT May drops 6c to $9.30 3/4; MGE May stumbles 3c to $9.48 1/2.
Rice (Source: CME)
US rice futures close higher on projections for increased demand. Consumers in Asia could ramp up rice purchases due to high wheat prices, as both grains are food staples, analysts say. Nearby wheat futures briefly traded above the lofty level of $8 a bushel at the CBOT on Wednesday due to concerns about poor weather reducing global output. World rice supplies are considered ample. CBOT July rice advances 20 1/2c to $14.22 per hundredweight.
U.S. wheat rises for 4th day on weather, corn up 1 pct
U.S. wheat futures gained around half a percent on Wednesday, rising for a fourth straight session as adverse weather threatened to curb supplies from top exporters the United States, Canada and Europe. " Farmers might be forced to switch to soybeans if corn plantings continue to get delayed, which will be bearish for soy and bullish for corn," said Ker Chung Yang, an analyst at Phillip Futures in Singapore. "
Upbeat company earnings boost stocks, commods (Source: Reuters)
Upbeat earnings from companies including chip maker Intel lifted stocks and boosted appetite for riskier assets on Wednesday, driving commodities higher and the Australian dollar to a 29-year high versus the dollar. While S&P grabbed some headlines earlier in the week, on a future event that may or may not happen, it seems things on the ground are coming up pretty good," said Philip Isherwood, European equities strategist at Evolution Securities.
India normal monsoon forecast to boost farm sector
NEW DELHI, April 19 (Reuters) - India on Tuesday forecast normal rains for the 2011 monsoon, strengthening the prospects of a plentiful farm output that could help bring relief to Asia's third-largest economy in its battle with high prices. Rainfall is likely to be 98 percent of the long-term average, Earth Sciences Minister Pawan Kumar Bansal told reporters, adding that the forecast would be reviewed in June when the monsoon, which irrigates 60 percent of Indian farms, arrives.
Bangladesh grain imports likely to drop in 2011/12
DHAKA, April 20 (Reuters) - Bangladesh's grain imports are likely to drop to 1.4 million tonnes in the fiscal year beginning in July from nearly 2.5 million tonnes in the current fiscal year, a senior food official said on Wednesday. The government will import 1 million tonnes of wheat and 400,000 tonnes of rice in the 2011/12 fiscal year to ensure food security, an official at the Directorate General of Food said. And another 150,000 tonnes of wheat and rice is expected to come as foreign grants.
Cool, wet weather halts U.S. Midwest corn planting
CHICAGO, April 19 (Reuters) - The U.S. Midwest will be cool and wet for at least the next 10 days, preventing farmers from planting corn through most of April, a forecaster said on Tuesday.Up to an inch of rain fell in northern Iowa, eastern Nebraska and southeastern South Dakota since early Monday while the eastern Corn Belt received 0.25 to 0.75 inch of rain.
Indonesia 10/11 wheat imports seen up 10 pct-attache
WASHINGTON, April 19 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in Indonesia: "In marketing year 2010/11, Post forecasts Indonesian wheat imports to increase by approximately 10 percent to 5.9 million tonnes, compared to 5.364 million tonnes in 2008/09. Indonesian corn imports are also estimated to increase to 2.5 million tonnes over the previous MY of 1.167 million tonnes. This is primarily due to the estimated decrease of corn production in MY 2010/11.
Goldman Sachs commodities risk up 60 pct in Q1
NEW YORK, April 19 (Reuters) - Goldman Sachs's commodities risk rose for the first time in a year during the first quarter as it staked 60 percent more money than the previous quarter to trade in rallying raw materials market.
Value-at-risk (VaR) for commodities at the No. 1 U.S. investment bank averaged $37 million in the three months to March 31, versus $23 million in the fourth quarter of 2010, results on Tuesday showed.
Commodity Assets at Record $412 Billion in March, Barclays Says (Source: Bloomberg)
Commodity assets under management rose to a record $412 billion in March, led by the biggest ever jump for agriculture products, Barclays Capital said. Investment flows into raw materials for the first quarter totaled $16.8 billion, with $7.1 billion added to agriculture and $6.8 billion to energy, Barclays analyst Roxana Mohammadian Molina said in a report e-mailed today. Precious metals got $300 million, the smallest ever, Barclays said. Commodities represented by the Standard & Poor’s GSCI Total Return Index of 24 raw materials climbed 4.4 percent in March, trading at a two-year high, led by gains in cotton, energy, silver, live cattle and corn. Pricier food contributed to riots across north Africa and Middle East this year, toppling leaders in Egypt and Tunisia and leading central banks from Brazil to China to raise interest rates.
Biofuels Could Supply 27% Of Transport Fuel By 2050-IEA (Source: CME)
Biofuels could supply up to 27% of the world's transport fuels by 2050, compared with just 2% today, provided the efficiency of the production process can be improved, the International Energy Agency said. Biofuels made from starch, sugar and oilseed crops could displace substantial volumes of diesel, kerosene and jet fuel currently produced from fossil oil, the IEA said. Biofuel use on that scale would also avoid 2.1 gigatons of carbon dioxide emissions annually, provided the biofuels were produced sustainably, it said. However, hitting the 27% level would require the use of 100 million hectares of land, the IEA said in a report, which poses "a considerable challenge given competition for land and feedstocks from rapidly growing demand for food and fibre. "To meet this vision, most conventional biofuel technologies need to improve conversion efficiency, cost and overall sustainability," which will require substantial investment in research and commercialization, the report said.
Technological improvements could make biofuels competitive on cost with fossil fuels by 2030. Long-term government support and a policy framework that encourages sustained investment will be essential, it said. Competition with the food supply will also need to be carefully avoided if this target is to be achieved, the IEA said.
IGC Widens 11-12 Grain Deficit View Despite Output Rise (Source: CME)
The International Grains Council more than tripled its estimate for a world shortfall in grain supplies next season even though it upped its forecast for world production. Global grain production in 2011-12 is forecast to rise 4.5% to 1.808 billion metric tons due to a recovery in output from key producers the European Union and Argentina, the IGC said, raising its previous estimate by 3 million tons. World corn output is expected to rise almost 5% on the year in 2011-12 to a record 847 million tons, while wheat production is pegged at 672 million tons--22 million tons higher than the current season. "Prospects for the next global grains harvest remain broadly favorable with a marked upturn in output expected," the IGC said in its monthly report. Yet despite the growth in world output, the IGC said it expects consumption to outpace demand by 10 million tons, more than three times as much as its previous forecast of 3 million tons.
Even though consumption growth is expected to fall to 1.5% as industrial use of grain slows, stocks are expected to hit a four-year low of 334 million tons, equivalent to 18.4% of demand, compared with 23% two seasons ago. "With consumption of grains forecast to remain higher than production, a further downturn in world carryover stocks is likely," the IGC said. Corn markets are particularly tight, with total supplies expected to fall by 0.8% this year, the first year-on-year decline since 2002-03. Inventories are expected to fall even further next season, with carryover stocks expected to decline 8 million tons from this season's low levels to 111 million tons. The reduction in stocks comes despite a forecast slowdown in corn demand next year. "Potentially tight supplies and firm market prices are expected to limit [corn] consumption growth to 1.3%," the IGC said. U.S. corn futures hit an unprecedented $7.80 a bushel earlier this month and some analysts say they could go above $8/bushel.
With prices at these levels, the IGC said it expects demand growth to be constrained as livestock producers switch to wheat for feed and global industrial use of the grain slowing.
Coming Weeks Crucial For European And U.S. Wheat Harvests-Analysts (Source: CME)
The coming weeks will be crucial for the development of next season's crop in the world's two largest wheat exporters, analysts said, helping to determine the outlook for a grain market that has hit near-record high prices this year. Leading prices higher were forecasts for continued dryness in key producers the U.S. and Europe. A good harvest in the 2011-12 season is vital to stabilize world supplies after poor weather cut into production last year and sent prices to near-record highs. Analysts warn that the next fortnight will be crucial in determining whether Europe's upcoming crop will be able to replenish stock levels. Dryness in top producers France, Germany and the U.K. is already stressing crops during the initial growing period. "Further moisture deficits could see Western Europe emerge as a major issue in May," said Australia and New Zealand Bank. Dealers are particularly nervous as near-record European exports have eaten into stocks this season.
Strategie Grains, an influential French forecaster, pegs inventories at the end of the 2010-11 season at 8.6 million tons--2 million tons less than the minimum needed to supply the market until next harvest. "In Europe, consequences could be seen on the crop in the next 10 days with the really early start of vegetative state," said risk-manager Agritel. In top exporter, the U.S., the situation is similarly uncertain. The outlook for hard red winter wheat, grown in the Plains states such as Kansas and Oklahoma, is poor as it has struggled with dryness since it was sown last autumn. The crop will be harvested late this spring and summer. The U.S. Department of Agriculture Monday rated 36% of the U.S. winter wheat crop as good-to-excellent, unchanged from last week. Although the estimate was above analysts' pessimistic expectations, it is well below 69% a year ago. Yet wheat is one of the best-supplied markets in the grain complex.
Corn and soybeans, also used as animal feed, both have critically low stock levels this year and analysts warn that even a record world harvest will not be enough to build up a buffer into 2011-12. Rabobank International analyst Erin FitzPatrick said that with concerns mounting over European and U.S. output, prices will need to stay high to ensure a large Southern Hemisphere harvest as well next season. She forecasts U.S. wheat prices will stay at $7.55/bushel into the third quarter of 2011, falling only slightly to $7.30/bushel by the end of the year. "The U.S. don't have enough acres to produce the record corn, wheat and soy crop that we need," she said. "We expect a price rally this year and we're not going to see the same drop off in prices in the way we did after the 2007-08 rally to incentivize Southern Hemisphere production."
Agricultural Companies Call For Increased USDA Research Funding (Source: CME)
A group of key U.S. agribusiness interests is calling for increased federal funding for agriculture research. Support for agricultural and food research is "totally inadequate and on the decline," the Global Harvest Initiative said in a policy paper released Wednesday. The group is a partnership formed by Monsanto Co., DuPont Co., Deere & Co. and Archer Daniels Midland Co. The group notes "considerable trepidation" in calling for increased research funding to the U.S. Department of Agriculture given the country's fiscal problems, but said USDA research supports the entire global agriculture industry. The report said private companies' research is directed toward their own sales and profits, and that federal research is needed to address long-term and overlooked needs. The group said that spending on USDA research is far outstripped by spending on the National Institute of Health and National Science Foundation.
India Farm Minister: Government Should Allow Wheat, Rice Exports (Source: CME)
India should lift a ban on exports of wheat and common grades of rice as the country has sufficient stocks and will likely harvest a second year of bumper foodgrains output because of normal monsoon rains, Farm Minister Sharad Pawar said. "There is ample availability of wheat and rice. The government should apply its mind whether to enter the global market now," he told reporters, adding that high global prices will provide good returns to farmers. India produced a record food grain output of 235.9 million tons in the crop year ending June, after last year's monsoon rainfall came in at 102% of the long-term average. State-run warehouses are bulging with stocks, even as the government prepares to store the newly harvested wheat crop. Pawar said global wheat and rice prices are attractive and exports by India will help farmers earn better returns. On the impact of the normal monsoon forecast for June-September, Pawar said it will help achieve at least 4% farm sector growth this fiscal year started April 1.
"India can easily afford to export 2 million tons each of wheat and rice given the current level of stocks and production we are heading towards," Farm Secretary P.K Basu said. India will aim to produce around 240 million tons of foodgrains in the 2011-12 crop year starting July, he said, when asked about the impact of normal rains. The quantity of monsoon rains alone is not enough and the geographical spread during the season is equally crucial for India's agriculture sector, which lacks irrigation facilities in more than half its farm land. Pre-monsoon rains have lashed the breadbasket northern region over the past eight to 10 days and are likely to intensify, while there have also been showers in southern India, mainly in Kerala and coastal Karnataka. Weather officials say there is no reason to suspect any delays or any other concern over this year's monsoon.
Monsoon rains usually enter India's mainland through the southern state of Kerala in the first week of June, gradually progressing to cover most of central and northern India by July, before retreating in September.
Arabica coffee nears 34-year high, cocoa up
Arabica coffee rose on Wednesday, edging closer to the 34-year high hit in early March, underpinned by a shortage of high-quality beans and a weaker dollar. Cocoa rose as all eyes remained on top producer Ivory Coast as dealers awaited news on the resumption of exports and the condition of the mid crop.
India asks sugar mills to register for exports-source
NEW DELHI, April 19 (Reuters) - India, which has allowed exports of 500,000 tonnes of sugar following a bumper crop, has asked mills to register starting Tuesday, a source in the food ministry said. The official, who is directly involved in the decision making process, said permission would be granted within three days of the applications and the mills would have to ship out within four and half months.
Venezuela sugar output seen flat in 2011-attache
WASHINGTON, April 19 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in Venezuela:"The Venezuelan sugar industry foresees continued essentially flat domestic production in 2011, due to the sector's marginal profitability and application of policies that do not effectively support cane output. Total imports are expected to thus remain strong at 800,000 tonnes. The government maintains the regulated consumer price at Bs. 3.73 per kilogram, an amount that domestic producers consider insufficient to cover rising production costs."
Crude Oil Trades Near an Eight-Day High After Equities Rise, Dollar Falls (Source: Bloomberg)
Oil traded near an eight-day high in New York after climbing as U.S. equities advanced amid optimism the economic recovery is accelerating, and the dollar tumbled, bolstering investor demand for commodities. Futures rose 2.9 percent yesterday, the most since March 17, as the Dow Jones Industrial Average advanced to the highest level since June 2008 after sales at companies from Intel Corp. to Yahoo! Inc. beat projections. Prices also gained after the Energy Department reported an unexpected drop in crude supplies. “The stock market is a leading economic indicator, so it shouldn’t be a surprise that oil is up as well,” said Adam Sieminski, chief energy economist at Deutsche Bank AG in Washington. “If the stock market is higher, there’s a good chance that oil demand will be up as well.”
Gold Gains to Record for Sixth Straight Day, Climbs to $1,506.32 Per Ounce (Source: Bloomberg)
Gold for immediate delivery climbed as much as 0.3 percent to an all-time high of $1,506.32 an ounce in Singapore today. The metal has risen to a record every day since April 13. Bullion futures for June delivery traded at $1,504.30 an ounce, near a record $1,506.50.
PRECIOUS-Gold breaks $1,500/oz as investors seek security
LONDON, April 20 (Reuters) - Gold shot up above $1,500 an ounce on Wednesday for the first time ever as worries over the health of the global economy boosted the metal as a safe haven.
Spot gold hit a high of $1,505.21 an ounce and was bid at $1,505.16 an ounce at 0942 GMT, against $1,493.90 late in New York on Tuesday. U.S. gold futures for June delivery rose $10.60 an ounce to $1,505.70.
China issues circular to restrict aluminium expansion
HONG KONG, April 20 (Reuters) - China on Wednesday called on central and provincial authorities to stop approving the construction of new aluminium smelting capacity in a circular posted on a government website.
Nine ministries and departments jointly issued the circular, which reiterates Beijing's policy of restricting aluminium capacity.
March daily average aluminium output 69,800 T -IAI
LONDON, April 20 (Reuters) - Daily average primary aluminium output rose to 69,800 tonnes in March from 69,600 tonnes in February, provisional figures from the International Aluminium Institute (IAI) showed on Wednesday.
Total production in March was 2.164 million tonnes, compared 1.949 million in February. Total production in March 2009 was 2.045 million tonnes.
Europe copper premiums up on short-term demand
LONDON, April 19 (Reuters) - The premium for physical copper in Europe edged up this week, supported by near-term demand and some market tightness in Rotterdam, traders said.
The premium for copper in Rotterdam -- paid above the London Metal Exchange (LME) cash price -- was at $65-90 a tonne, traders said, versus last week's quotes of $60-75 a tonne and versus $40 in early April.
Japan steel output falls only slightly in March despite quake impact
TOKYO, April 20 (Reuters) - Japan's crude steel output fell a smaller-than-expected 2.7 percent in March from a year earlier as strong overseas demand offset the impact of the devastating earthquake and tsunami, the steel industry association said on Wednesday.
Crude steel output came to 9.09 million tonnes in March, the Japan Iron and Steel Federation said. The data, which is not seasonally adjusted, marked an increase of 1.7 percent from February.
hina zinc stocks surge 50 percent to 1.5 mln T - trade
HONG KONG, April 20 (Reuters) - China's refined zinc stocks have risen by as much as 50 percent so far this year and may climb further in the second quarter as large smelters maintain full operations due to rosy demand forecasts, analysts and smelter officials said on Wednesday.
Increased stocks will weigh on domestic prices, which could cut China's purchases in the international market after an increase in refined zinc imports of 16 percent in the first two months of the year.
LME zinc stockpiles hit highest level since 1995
LONDON, April 20 (Reuters) - Stockpiles of zinc held in warehouses monitored by the London Metal Exchange surged past the 800,000 tonne mark for the first time since 1995, data showed on Wednesday.
Zinc stocks climbed by 26,550 tonnes to 812,100 tonnes, the latest LME data showed.
Tin premiums hold near record high, market tight
LONDON, April 19 (Reuters) - Premiums for physical tin in Europe held firm near record highs this week, supported by market tightness and robust demand, traders said.
Traders quoted premiums for Chinese material -- paid over the London Metal Exchange (LME) cash price -- at $500-$650 a tonne versus last week's $500-550 a tonne. This matched peaks in early March, which were the highest since records began in 1998.
METALS-Copper advances ahead of U.S. housing data
LONDON, April 20 (Reuters) - Copper climbed for a second session on Wednesday on hopes the U.S. housing sector will show further signs of revival in data due later, while aluminium rallied to new two-and-a-half-year highs.
Three month copper on the London Metal Exchange traded at $9,480 at 0947 GMT, up from a close of $9,340 a tonne on Tuesday. Aluminium pushed to fresh peaks.
