Corn (Source: CME)
US corn futures finish higher, with deferred contracts rising the most as forecasts show wet weather will continue to delay plantings. Market rebounds after sinking yesterday as meteorologists say conditions look soggy into early May. Yet, farmers can plant the crop quickly if the weather improves. "At some point the planting window will open and prices will fall," predicts Tim Hannagan, analyst for PFG Best. CBOT July corn ends up 4c at $7.44 1/2 a bushel. CBOT December corn, which represents the crop being planted for harvest next fall, was up 10c at $6.65 1/2.
Wheat (Source: CME)
US wheat futures finish stronger as poor weather threatens production. Extreme dryness continues to stress winter wheat in the southern Plains, while wetness delays plantings of spring wheat in North and South Dakota. It's unlikely farmers will sow 5% more acres with spring wheat than last year, as projected by the USDA, predicts Alan Brugler, president of Brugler Marketing & Management. "You've got too many guys running late," he says. CBOT July wheat rises 14c to $8.34 3/4 a bushel; KCBT July gains 12 1/4c to $9.43; MGE May adds 12 1/4c to $9.60 3/4.
Rice (Source: CME)
US rice futures settle higher with neighboring grain markets. Trading was subdued ahead of the holiday weekend, as rice stayed within Wednesday's price range. The market felt spillover support from an ongoing rally in wheat, as both grains are global food staples, an analyst says. Traders note there is no shortage of rice in the world. CBOT July rice rises 9c to $14.31 per hundredweight. The CBOT is closed Friday for Good Friday.
US corn rebounds from near 3-wk low, wheat gains
Chicago corn futures edged higher, regaining some ground on short-covering after sliding 2 percent in the last session, while wheat rose on worries about dry weather threatening crops in the world's top suppliers. "It looks like there is going to be rain but not as heavy as it has been in the last week, so the weather is improving," said Adam Davis, a senior commodity analyst at Merricks Capital, a Melbourne-based funds manager that invests in agriculture.
IGC raises global 2011/12 grain crop forecast
LONDON, April 20 (Reuters) - A record corn crop forecast for 2011/12 has boosted the outlook for global grain production, but stocks are expected to remain low, the International Grains Council said on Wednesday. Prospects for the next global grains harvest remain broadly favourable, with a marked upturn in output expected, although adversely dry conditions and a delayed start to spring seeding in parts of the northern hemisphere may affect the final outcome," the IGC said.
'Point of no return' for U.S. hard winter wheat
KANSAS CITY, Mo., April 20 (Reuters) - Clear skies cursing U.S. wheat farmers could give way to raindrops over the next few days, but it may be too little too late for much of the new hard red winter wheat crop. Prolonged drought conditions through Texas, Oklahoma and southern areas of Kansas, the top U.S. wheat growing state, have left wheat industry experts fearing there is little hope for much of the new wheat crop due to be harvested this summer.
BarCap says commodity AUM rise to $412 bln in Q1
LONDON, April 20 (Reuters) - Commodities assets under management rose to $412 billion in the first quarter of this year, from $376 billion in the fourth quarter of last year, as prices rose and inventories dwindled, Barclays Capital said.
Energy and agricultural markets captured investor inflows of $6.8 billion and $7.1 billion respectively, dwarfing the $300 million that went into precious metals in the first quarter, BarCap said in a research noted.
Corn, Soybeans Rally as Wet Midwest Weather May Delay Planting, Cut Yields (Source: Bloomberg)
Corn and soybeans rose on speculation that wet, cold weather across the U.S. Midwest will limit planting and reduce yields. Fields from central Arkansas to Detroit may get as much as 8 inches (20 centimeters) of rain the next 10 days, keeping soils saturated, said Tim Bowden, a senior meteorologist for Planalytics Inc. in Berwyn, Pennsylvania. Farms from Nebraska to northern Indiana will receive as much as 4 inches of rain, and the cool weather will slow evaporation, Bowden said.
Weather patterns point to bad year for global wheat (Source: Reuters)
Global wheat output this year is threatened by a combination of drought, wet weather and flooding while corn and soy production should stay solid despite early seeding delays in the United States, a meteorologist told the Reuters Global Ags Forum on Wednesday. A bad year for wheat, I do believe," said Donald Kenney, senior ag meteorologist for Cropcast, a division of MDA Information Systems.
McDonald's Sales Shine, But Commodity Costs A Concern (Source: CME)
McDonald's Corp, which posted an 11% rise in first-quarter earnings thanks to strong global sales, warned commodity costs continue to be a growing concern, so much a concern that the fast-food giant doubled the expected jump in its U.S. commodity costs for the year. Even with its massive pricing power, McDonald's now projects it will spend 4% to 4.5% more in the U.S. and in Europe for commodities, compared with previous estimates of a 2.0% to 2.5% increase in the U.S. and 3.5% to 4.5% rise in Europe. Investors honed in on the commodity news, pushing shares down 2% to $76.86 in recent trading despite second-quarter global same-store sales on track to meet or beat the first quarter's 4.2% rise. McDonald's isn't alone in fighting higher commodity costs. This week several other restaurant chains like Yum Brands Inc. and Chipotle Mexican Grill Inc. noted rising commodity pressures during their earnings reports.
"We believe our supply chain continues to be a competitive advantage for the McDonald's system," said McDonald's Chief Financial Officer Peter Bensen on a conference call. "We have successfully managed this in the past and are confident we can do so again." McDonald's is raising prices to help margins. The company typically opts for implementing smaller menu price increases over the course of the year, rather than a large increase in one fell swoop, to avoid sticker shock for customers. In the U.S. and Europe, it raised menu prices 1% in the first quarter, not including value-added-tax-related increases. "Our pricing elasticity in the brand moves up and down based on inflation, consumer spending and consumer confidence," said Chief Executive Jim Skinner. "And we're not worried. We have the capability to take price over this next number of months in the U.S....It's a matter of timing and when it makes sense for us."
The company hopes to avoid passing on the entirety of its costs increases to consumers directly. During the downturn, McDonald's competitive pricing was part of what helped it outperform much of the industry. Internationally, McDonald's and Yum have been in a battle for fast food business in China. McDonald's same-store sales there, up 6.5% in the first quarter, pale in comparison to Yum's impressive 13% gain. McDonald's says its sales increase is meaningful in that it's not just from raising menu prices, but "tremendous guest count growth," driven by breakfast and lunch value promotions, said Chief Operating Officer Don Thompson. McDonald's U.S. same-store sales for the first quarter were up 2.9%, outshining its competitor Yum's 1% domestic decrease. McDonald's says U.S. traffic rose from promotions of its McCafe beverages, new oatmeal, 20-piece chicken nuggets and Chipotle BBQ Bacon Angus Burger. In the product pipeline, it has new smoothie flavors, chicken promotions and salads on the short-term horizon.
It's in early testing phases to potentially bring spicy chicken sandwiches and McBites snacking items from overseas to the U.S. Same-store sales increased 5.7% in Europe as it focused on everyday value and classic core menu offerings. Growth in Australia and China drove a 3.2% increase in the Asia Pacific, Middle East and Africa division with limited-time offers, delivery and extended hours contributing to the growth. McDonald's posted a profit of $1.21 billion, or $1.15 a share, from $1.09 billion, or $1 a share, a year earlier. In the latest period, the results had a 3-cent boost per share from foreign exchange and bottom-line growth was increased by 3 percentage points because of costs last year related to Japan restaurant closings. Revenue increased 8.9% to $6.11 billion. Excluding currency fluctuations, the increase was 7%.
China March Corn Imports Rise As Most Agricultural Imports Decline (Source: CME)
China's agricultural imports were mostly lower in March compared to the same month last year, with the exception of corn, customs data showed. Import volumes for cotton, sugar, palm oil, soyoil, soybeans and wheat fell between 12% and 61%, reflecting seasonal demand weakness and a complex-wide surge in global agricultural prices. Corn imports bucked the trend, rising 11% from a year earlier and more than doubling on month to 2,303 metric tons, despite a surge in global corn prices in the first quarter. China's corn imports are closely watched as top government officials have repeatedly hinted at strains on state stockpiles and tested markets' reactions to the likely need for increased corn imports later in the year. This week, however, officials from state grain agencies played down prospects for high-volume imports, saying the country couldn't afford to allow consumption to rise to the point that heavy imports would be needed, as global corn prices are about 23% higher than local prices.
The comments followed moves by the government last week to limit corn consumption by non-feed processors--including manufacturers of ethanol and sweeteners--to keep prices down and supplies available for the domestic feed industry. Officials sold about 30 million tons of corn reserves last year to limit downstream price increases, and they have continued with weekly releases of stocks this year. The state-backed China National Grain & Oil Information Center said in a report Wednesday that imports in the marketing year to Sept. 30 will likely reach only 600,000 tons, well below private sector analysts' forecasts of 5 million-8 million tons. Chinese buyers may hold off for now, hoping for a downward correction, but uncertain global supply and sharply rising biofuel and feed demand underpin the market, analysts said. "The U.S. Department of Agriculture's quarterly stocks report showed that corn demand remains strong despite the high prices," Rabobank said in a research note this week.
Elsewhere in the complex, higher agriculture prices deterred import demand. March soybean imports rose 16% in value from a year earlier, but fell 12% in volume. Cotton imports rose 52% in value, but volume was down 15% to 276,436 tons. High global prices in the first quarter and a seasonal lull also dragged sugar import volumes lower. "(But) sugar imports usually tick up closer to mid-year, and importers are starting to ramp up orders as global prices come off first-quarter highs," Dalu Futures Co. analyst Yuan Xichao said. Wheat imports fell 61% on year to 75,300 tons, as drought-related concerns evaporated amid signs that domestic supply is stabilizing.
Argentina Pres Reiterates Plan To Limit Foreign Land Ownership (Source: CME)
Argentine President Cristina Fernandez on Wednesday reiterated plans to limit the ability of foreigners to purchase farmland. Fernandez said she would submit a bill to Congress this year to "protect the jurisdiction of land so it will continue to belong to the Argentine Republic." Fernandez made a similar announcement on March 1. As she said back then, the bill will not be "xenophobic or chauvinistic.” In what seemed like a campaign speech, Fernandez told an arena full of supporters late Wednesday that Argentina won't be "inventing anything new" with this bill. Instead, she the bill will be similar to related laws already in place in other countries. Pressure has been building in Argentina to limit the amount of land that foreigners can buy, as record prices for grain and derivative products fuel concerns that deep-pocketed overseas investors might end up controlling a significant percentage of the country's farmland.
Last year, congressmen from across Argentina's political spectrum sponsored about 12 different bills that would have put limits on foreign land ownership. Agriculture exports were largely responsible for Argentina's $12.06 billion trade surplus last year, while taxes on farm exports accounted for a significant percentage of the federal government's tax revenue. Argentina is the world leader in soymeal and soyoil exports, ranks No. 2 in corn exports, and third in soybeans. It is also one of the world's top beef exporters. As global commodity prices soar, investors have increasingly looked to the fertile farmlands of Argentina and Brazil for investment opportunities. That has helped fuel surging land prices in recent years. At the end of 2010, prime farmland in Argentina's Buenos Aires Province was selling for $15,000 a hectare (2.47 acres), according to local daily La Nacion. That is about double the price in 2007 and over five times prices in 2002 when the country was in the midst of an economic crisis.
Argentina's northern neighbor, Brazil, has already taken steps to protect its national sovereignty over farmland. Last year, Brazil's former President Luiz Inacio Lula da Silva placed limits on foreign ownership. In Argentina, about 7%, or 20 million hectares, of the country's productive farmland is in the hands of foreigners already, according to the Argentine Agrarian Federation.
U.K. Wheat Export Pace Slows But Still Up 57% On Year - Customs (Source: CME)
The pace of U.K. wheat exports slowed further in February, customs data showed, although total exports for the season are still running 57% ahead of the same time last year. Just over 119,000 metric tons of wheat were shipped from the U.K. two months ago, the data showed. That compared with 190,879 tons at the same time last year and a monthly export peak of 439,156 tons in November. That brings total exports for the 2010-11 marketing year to 2.2 million tons, compared with 1.4 million tons the previous year. The government's farm ministry predicted U.K. wheat ending stocks at 1.6 million tons for this season, though this is expected to be revised lower in May. U.K. feed wheat May futures on London's Liffe exchange spiked to a record high of GBP222/ton Wednesday in a move market participants say reflects the tightness of old crop supplies. "Export pace in the last months has slowed from the rapid pace experienced in the first half of the season," said the Home Grown Cereals Authority.
"However, the price discount existing between old crop and new crop prices implies that the market will carry minimum stock levels into 2011-12."
IEA Exec Says Biofuels Can Boost World Food Output (Source: CME)
Increasing the world's use of biofuels could actually help boost global food production by encouraging investment in agriculture, the head of the International Energy Agency's renewable unit said, turning on its head a long-standing debate over the use of agricultural land for fuel crops. This week, the IEA launched a report that forecast biofuels could provide up to 27% of the world's transport fuels by 2050, compared with 2% now. Biofuels made from starch, sugar and oilseed crops could displace substantial volumes of fossil fuels, the report said, saving 2.1 gigatons of carbon dioxide annually. But critics argue that increasing the amount of land devoted to growing crops for fuel will further strain already hard-pressed agricultural resources. Others opponents say biofuels are actually unsustainable as they can encourage deforestation in the developing world, releasing more carbon into the atmosphere than is offset by burning the fuel.
"We're not pretending that biofuels are the answer to everything but we think they can provide an impetus to improve sustainable policies," said Paolo Frankl. "If you do the right things with policies biofuels can have a positive impact on the broader environment." World food prices surged to record highs in February after poor harvests this season. This second price spike in four years has reignited the debate over government incentives for biofuels, schemes which some international agencies have blamed for sparking the food crisis of 2007-08. "Large increases in biofuels production in the United States and Europe are the main reason behind the steep rise in global food prices," a World Bank policy research paper concluded in 2008, although another in 2010 said its effects may have been "not as large as originally thought." Frankl said the debate is not as simple as "food vs fuel."
He said that by using more sustainable forms of biofuels, such as food and forestry waste resources, and focussing government po licies on better land use management, increasing biofuels production to meet 27% of demand will only need 100 million hectares worldwide, around 5% of global agricultural land. He also dismissed arguments put forward by some analysts that the rise in the oil price, which hit a 2.5-year high of over $127 a barrel for Brent crude on April 11, would encourage farmers to divert more food to biofuels this year. "In reality, the amount of what is diverted to biofuels right now is determined more by policy than the price of oil," he said. "Actually, biofuels play a role at the margins of the oil price; they represent a small quantity in absolute [of around 2%] but have an important influence on the price of oil." He acknowledged biofuels policy can impact on specific markets.
U.S. corn prices hit record highs this year, driven in part by U.S. Department of Agriculture forecasts that a record 5 billion bushels--around 40% of the country's crop--will be used for ethanol despite stocks at near 15-year lows. "If 40% of U.S. corn is devoted to ethanol this will have an impact on that specific chain," he said. "I'm just saying we should not over simplify and make the specific case into a general conclusion."
India Farm Secretary: 2011-12 Grain Output To Rise On Normal Rains (Source: CME)
India's foodgrain output is expected to rise in the next crop year starting July 1 from an all-time high of 235.9 million metric tons in 2010-11 because of a forecast of normal monsoon rains, Farm Secretary P.K. Basu said. India, the world's second-largest grower of rice and wheat, expects to produce between 240 million and 242 million tons of foodgrains in 2011-12, Basu said. The weather office Tuesday predicted rainfall in 2011 would be 98% of a 50-year average, which is considered normal. The June-September monsoon is crucial as more than 60% of farmland is rain-fed and crops such as rice, sugarcane and cotton are sown on its arrival. "The indication is that there is no cause for worry about the monsoon. So we are confident of achieving the desired production target in 2011-12," Basu said. A bumper crop in 2011-12 should curb food prices further, Basu said, offering some respite to policy makers who are struggling to keep inflation from spiraling.
The year-on-year food inflation rate fell to 8.28% in the week to April 2 from 9.18% the previous week, which is still beyond the comfort level of the central bank, which has been forced to raise key policy rates eight times since March 2010 to cool inflation. Basu said the country expects to produce 100 million tons of rice in 2011-12, up from 94.11 million tons this year. The government is also hoping for a bumper harvest of more than 84 million tons of wheat, around 40 million tons of coarse cereals and 18 million tons of pulses in 2011-12, he added. The country is expected to produce 84.27 million tons of wheat, 40.21 million tons of coarse cereals and 17.29 million tons of pulses in 2010-11.
Arabica coffee ends at 34-year peak, sugar surges (Source: Reuters)
Arabica coffee prices closed at a 34-year high but pared gains after jumping above $3 per lb on Wednesday, on a high-quality bean shortage, bullish charts and a broad commodities rally fueled by a weaker dollar. "People just want to buy, that's basically it. The dollar's at a new low. People want to own things. You don't want to be short," said Nick Gentile, head of trading at Atlantic Capital Advisors in Jersey City.
China's extended drought negative for cotton seedlings - association
BEIJING, April 21 (Reuters) - A drought in China's main cotton-growing region in the north is likely to continue, damaging cotton seedlings there, the China Cotton Association said on Thursday. "Most northern areas will see little precipitation and high temperatures in the coming 30 days, extending the drought and having a negative impact on crop seedlings including cotton," the association said in a statement published on its website.
Brazil cocoa arrivals typical of interharvest lull
SAO PAULO, April 20 (Reuters) - Cocoa deliveries from Brazil's main growing regions remained low in the last week, data from Bahia Commercial Association showed, with the forthcoming mid-crop still several weeks off. The mid-crop in the top cocoa state of Bahia is likely to fall about 15 percent from last year to around 1.1 million 60-kg bags (66,000 tonnes), according to some estimates, cocoa analyst Thomas Hartmann said in a weekly crop update.
Dryness helps Brazil cane crush, 130 mills reopen
SAO PAULO, April 20 (Reuters) - Weather in Brazil's main center-south cane producing region should remain dry over the coming days, favoring harvesting of the new crop just beginning, Somar meteorologists said on Wednesday. About 130 out of the 335 mills in the region have started to crush new season cane, and helped by dry weather, 195 plants are expected to be operational by Monday, cane industry association Unica said.
Gold Climbs to Record as Debt Concern, Inflation Boost Investment Demand (Source: Bloomberg)
Gold rose to a record for the fifth straight session, settling above $1,500 an ounce for the first time, as a weaker dollar and debt concerns boosted demand for an alternative investment. Silver rose above $46 an ounce. Gold reached an all-time high $1,509.60 in New York as the dollar slid to the lowest since August 2008 against a basket of six major currencies. Greek two- and 10-year government-bond yields reached euro-era records amid speculation the nation won’t be able to avoid restructuring its debts.
PRECIOUS-Gold hits fresh record as dollar slides, oil rises
LONDON, April 241 (Reuters) - Gold prices hit record highs for a fifth session on Thursday, and silver rallied to its strongest since 1980 as the dollar slid to a three-year low against a basket of major currencies and oil prices rose.
The action in the oil and currency markets added fuel to a rally sparked by concerns over the U.S. economic outlook, rising inflation, worries over euro zone debt and historically low interest rates in the United States, analysts said.
Copper market surplus 118,000 T in Jan/Feb -WBMS
LONDON, April 20 (Reuters) - The copper market recorded a surplus of 118,000 tonnes in January and February, up from 32,000 tonnes for the whole of last year, the World Bureau of Metal Statistics (WBMS) said on Wednesday.
Refined copper production was 1.52 million tonnes in February 2011, and consumption was 1.43 million tonnes.
WBMS said refined copper production in the first two months of this year rose by 1.1 percent to 3.11 million tonnes from the same period last year.
Noranda Aluminum sees strong demand from emerging mkts
April 20 (Reuters) - Noranda Aluminum Holding Corp posted strong quarterly revenue, and said it expects emerging markets to drive demand for the metal.
"We remain bullish about aluminum over the medium- and long-term. We believe global demand will continue to increase," said Chief Executive Layle Kip in a conference call.
The increase in need for aluminum will also be driven by substitution for other metals such as copper, Kip added.
Sucden sees China back in copper market at $8800/T
LONDON, April 20 (Reuters) - Chinese physical copper buyers will come back to the market if LME copper falls to $8,800 per tonne, Steve Hardcastle, brokers Sucden Financial's head of client liaison, told reporters on Wednesday.
Demand for physical copper was expected to pick up significantly in China, the world's top consumer of the metal, after the Lunar New Year holiday in February, but purchases have not been as high as many were expecting.
China March refined copper imports fall 43 pct on year
HONG KONG, April 21 (Reuters) - China's refined copper imports dropped 43 percent in March from the same month last year due to high stocks and strong international prices, although the figure was a rebound from the holiday-shortened month of February.
The General Administration of Customs released breakdowns of the March trade data on Thursday, which showed imports of refined copper, the most popular type in the domestic and international markets, at 192,161 tonnes, a monthly rise of 21.5 percent after falling 35.6 percent in February.
Japan March copper wire shipments down 8.1 pct
TOKYO, April 21 (Reuters) - Japanese copper wire and cable shipments tumbled 8.1 percent in March, marking their biggest fall in 18 months, as last month's devastating earthquake and tsunami disrupted global parts supply chains for automakers and other manufacturers, depressing domestic demand.
March shipments totalled an estimated 55,300 tonnes, down from revised February shipments of 57,926 tonnes, an industry body said on Thursday.
World steel production hits new monthly record
LONDON, April 20 (Reuters) - Global crude steel production hit a new monthly record in March, data showed on Wednesday, driven by growth in Asia even while Japan's production slipped after earthquakes and a tsunami hit.
Global crude steel production was at 129.3 million tonnes in March, up 7 percent from March 2010, according to data from the World Steel Association (Worldsteel).
China daily steel output at record high
SHANGHAI, April 21 (Reuters) - China's daily crude steel output hit an all-time high of 1.979 million tonnes in the first 10 days of April, lured by rebounding steel prices since mid-March, data from the China Iron & Steel Association showed on Thursday.
This suggests an annualised output of 722 million tonnes in the world's top steel-producing country this year.
"The current dynamic in China - with production continuing to ramp up and exports increasing as well - makes us concerned about the risk of continued further acceleration of exports which would continue to put downward pressure on prices in the global market," Steel Market Intelligence said in a research note.
India state to issue iron ore export permits next week
MUMBAI, April 21(Reuters) - India's southern Karnataka state, which lifted an export ban on iron ore imposed last year on Wednesday after a court directive, will start issuing transport permits for export from the state by next week, two sources in the mining department told Reuters.
"We are at it, we will do it fast. By next week we would issue transport permits," said a source with the department of mines and geology with the Karnataka state.
METALS-Copper edges up, focus on tight supply
LONDON, April 21 (Reuters) - Copper jumped to its highest in more than a week on Thursday as investors focused on supply tightness after miner Anglo American Plc showed a sharp production fall and the dollar weakened.
Benchmark copper on the London Metal Exchange hit $9,630.75 a tonne, its highest since April 13.
