Corn (Source: CME)
US corn futures finish mixed, with deferred contracts slipping on profit-taking after climbing recently on worries about planting delays. Weather conditions continue to look unfavorable for planting, as the Midwest is expected to remain cool and wet. The USDA on Monday confirmed planting was behind schedule. "Even though the news was kind of bullish overnight, you don't go up every day," says Jack Scoville of Price Futures Group. CBOT July corn rises 4 1/4c to $7.72 3/4 a bushel; December corn, which represents the crop that is being sown for harvest next fall, lost 5 3/4c to $6.75 3/4.
Wheat (Source: CME)
US wheat futures finish lower on profit-taking as markets pull back after climbing more than 3% yesterday. Prices retreated even though forecasts show dry weather will continue to stress winter wheat in southern US Plains and precipitation will delay planting of spring wheat in northern Plains. USDA yesterday lowered its crop rating for winter wheat and confirmed planting progress was lagging. CBOT July wheat falls 14 1/4c to $8.47 a bushel; KCBT July drops 10 1/4c to $9.60 3/4; MGE July loses 7 3/4c to $9.81 1/2.
Oats (Source: CME)
Oat futures ended lower, succumbing to profit taking pressure following recent advances. However, losses were limited by the ongoing threat of wet, cold weather in the northern plains and Canada causing planting delays. Oats for July delivery dropped 1.8% to $4.00 a bushel.
Rice (Source: CME)
US rice futures finish lower, giving back some recent gains. It seems as though worries about rains delaying planting in the US, which supported the market recently, have "run out steam," says Jack Scoville at Price Futures Group. Planting was 46% complete as of Sunday, below the average of 53% for that time of year, according to government data. CBOT July rice slides 14 1/2c to $14.66 1/2 per hundredweight.
U.S. corn planting seen 13 pct done, behind schedule
CHICAGO, April 25 (Reuters) - Damp soil and cold weather around the U.S. Midwest have likely put farmers well behind their ideal corn planting schedule and left them hoping for a quick warm-up as the deadline for optimal seeding approaches.
The U.S. Agriculture Department's weekly crop progress report on Monday afternoon is expected to show that farmers had planted 13 percent of their anticipated corn acreage as of April 24, based on an average of estimates given by nine analysts.
China To Limit Corn Use In Biofuel, Other Non-Feed Projects (Source: CME)
China will limit alcohol, biofuel and other non-animal-feed projects that use grain and edible oils as raw materials in an effort to secure grain supplies, China's top economic planner said. Corn is used to make non-feed products ranging from ethanol to starch and sweeteners, which consume about one-third of China's corn output. This consumption diverts supply from animal feed millers in the world's most populous country, raising the prospect of corn shortages, as consumption is expected to grow much faster than output. The government will also limit corn starch projects with processing capacity of less than 300,000 metric tons a year, and eliminate those projects with annual capacity of less than 100,000 tons, the National Development & Reform Commission said in industrial guidelines published on its website.
Beijing has failed to halt an unprecedented expansion of corn processing industries, whose combined annual capacity has risen to almost 70 million tons in the marketing year ending Sept.30, Shang Qiangmin, director of the state-backed China National Grain & Oil Information Center, told an industry forum last week. These industries are expected to consume about 50 million tons of corn in the current marketing year, or about 29% of total corn output in the 2010 calendar year, the CNGOIC said. Beijing recently ordered banks to stop lending to corn purchasers, and it has cancelled tax breaks for corn processors to limit their expansion. The NDRC said China will also limit soybean-crushing projects outside of major producing areas, which include the northeastern provinces of Heilongjiang and Jilin and the Inner Mongolia Autonomous Region.
Soybean crushers' capacity utilization rates averaged about 50% last year, analysts said. Total soybean crushing capacity is expected to exceed 100 million tons this year, Luan Richeng, president of Chinatex Corp., the nation's third-largest soybean crusher in terms of capacity, said last week.
India 2010-11 Basmati Exports Rebound Despite First Half Fall (Source: CME)
India's basmati rice exports likely rose by up to 15% in the fiscal year which ended March 31 after recovering from a fall in the initial six months, the head of the state-run farm exports body said. "Basmati exports were in negative territory until October...[but] the basmati trade has been very active in the last three months," Asit Tripathy, chairman of the Agricultural and Processed Food Products Export Development Authority, said. India, the world's largest basmati supplier, exported 2 million metric tons in the 2009-10 fiscal year. "Considering that we had nearly 30% growth in [basmati] volume in the 2009-10 fiscal year, this time it was expected that the growth would plateau in the sense that it was a huge base," Tripathy said. "Even so, there seems to be growth." India is the world's top producer and exporter of aromatic, premium basmati rice, and neighboring Pakistan is its main rival.
Tripathy said that basmati exports were able to maintain their growth due to increased domestic production of a variety called Pusa 1121 and brisk demand from traditional buyers in the Middle East as well as new markets such as the U.S. and Europe. India allows basmati shipments with a floor price of $900 a ton, while the export of non-basmati rice is banned. The country produced 4.0 million to 4.5 million tons of basmati rice in 2009-10. The harvest is likely to be 4.5 million-5 million tons in the year through June. Tripathy added also that the state-run agency would intervene if there are prolonged payment problems with Iran, one of the key buyers of Indian basmati. "Up to now, we have not intervened. But if the exporters are facing a problem in getting payments from Iran, then that's a legitimate concern, and we will address that," Tripathy said, without elaborating.
Indian traders say they have been finding it difficult to receive payments for exports after India's central bank in December stopped Iran-related payments going through a regional clearing house that the U.S. says Tehran is using to evade international sanctions. Tripathy said that the export growth of all farm products, led by basmati rice, likely crossed INR400 billion in 2010-11, from INR360 billion in the previous year. Exports of groundnuts, beverages, buffalo meat and processed food items were all showing buoyant growth. He said that contract farming of everything from fruits to vegetables has picked up across several regions, improving the quality and supply chain for exports.
Russian wheat exports loom, may pressure prices
SINGAPORE, April 26 (Reuters) - Russia is likely to resume wheat exports later this year which will add to the global surplus of the grain, putting pressure on international prices, a U.S.-based agriculture consultant said on Tuesday.
Russia, typically the world's third largest wheat exporter, banned overseas grain sales last year after a devastating drought ravaged the Black Sea region, pushing wheat prices higher on the benchmark Chicago Board of Trade.
Although it is difficult to quantify the volumes that are expected to hit the market from Russia, the nation will take small steps in easing export curbs, said Emily French, managing director of ConsiliAgra, a U.S.-based consultancy and brokerage.
Poor Black Sea Wheat Exports To Keep Markets Tight In 2011-12-Rabobank (Source: CME)
World wheat markets are expected to stay tight this season as Russia and Ukraine are unlikely to fill a predicted shortfall in supplies in other key growers, Rabobank said. Exports from Black Sea producers, which also include Kazakhstan, are expected to total 22 million metric tons in 2011-12, said the bank, up 9 million tons on year but still down 15 million tons from the high of 2008-09. Yet this rise in exports is unlikely to make up for the impact of poor weather in the U.S. and Europe. Rabobank predicts wheat production in major exporting countries will rebound more than 30 million tons in 2011-12, hampering the rebuilding of world inventories and keeping the combined stock-to-use ratio in exporting countries around 16%. World markets soared to near-record highs this year after a ban on grain exports from Russia last summer sparked a price rally.
High prices look set to continue, "supported by ongoing weather concerns and only a muted recovery in exportable surpluses from the Black Sea region," said the bank. Russia, the Black Sea region's largest exporter, is forecast to produce its second-smallest crop since 2007-08 at 51.5 million tons due to poor plantings. That would be 10 million more than last year but down 20% on 2008-09. Fear of rising food prices and the need to rebuild inventories after drought slashed the harvest last year mean the Kremlin is likely to keep a ban on grain exports in place until the fourth quarter of the year, said Rabobank, limiting exports to 5 million tons in 2011-12--13.5 million tons lower than 2009-10. Ukraine, therefore is likely to be the region's largest exporter, with production expected to rise more than 25% on year to 21 million tons and pushing exports to their second-highest level in 25 years at 11 million tons.
Still, with "already tight world grain inventory levels," Rabobank said "this on-going production uncertainty will continue to support wheat prices until new crop supplies are assured."
China's Cheap Vegetables Problem (Source: CME)
When China suffers inflation, food prices are always a significant part of the problem. But the conundrum China's leaders face with this latest round of inflation is somewhat bizarre: While the country's consumer price index is running at a near three-year high, vegetables are so cheap that tons and tons of them are being left to rot away in the fields. Of course, vegetables are still expensive in the cities, and only in the cities, and that's exactly where the problem is. According to the official Xinhua News Agency (in Chinese), fat, juicy Chinese cabbages are selling at one yuan per 500 grams in city markets -- ten times the price the cabbage growers can fetch in the countryside. Why, with urbanites paying such princely sums, are farmers leaving their cabbages on the ground? Because middlemen, transportation companies and the government itself are pocketing the bulk of the price differential.
Logistics-induced costs accounts for two thirds of the total cost for vegetables nationwide, Zhou Wangjun, vice director of the National Development and Reform Commission's price section, is quoted by Xinhua saying. It turns out the problem isn't limited to produce. Referring to official statistics, Xinhua also said logistics-related costs constitute as much as 21.3% of China's gross domestic product, compared with just around 10% in developed countries. In a rather baffling example, Xinhua said it costs between 6 and 8 yuan to move one kilogram of goods via land transport from Shanghai to Guizhou, a province in the southwest, while it costs only 1.5 yuan to fly the same amount from Shanghai to New York. According to estimates by Wang Tongsan (in Chinese), a researcher at the Chinese Academy of Social Sciences, 82% of the world's toll-charging highways are in China, with road tolls accounting for as much as 50%-70% of logistics costs nationwide.
In the current climate, the logistics squeeze has had dire effects on more than just urban grocery budgets. Earlier this month, according to a report in the China Economic Times (in Chinese), the recent plunge in vegetable prices triggered the decision of a farmer in Shandong province to end his own life. Transport-related charges, some of which are a result of arbitrary decisions by local governments, also were at the heart of a trucker strike that gummed up Shanghai's large container handling ports last week. The strikes fizzled out yesterday as authorities pledged to cut some of the fees and offered new relief to the truckers. Economic officials and central bankers in Beijing have repeatedly stressed the importance of managing inflation expectations in the country's fight against rising consumer prices, but the vegetable price dilemma is a stark reminder that taming the China's inflation tiger won't be so easy.
Food Costs Seen Reaching a Record High This Year as Inflation Accelerates (Source: Bloomberg)
Global food prices may rise 4.4 percent to a record by the end of the year, driven by demand for meat, oilseeds and grains used to make ethanol, adding to costs that mean inflation is accelerating from the U.S. to China. The United Nations’ Food Price Index may climb to 240 points from 229.84 last month, said William Adams, a fund manager at Zurich-based Resilience AG, which has $22.2 million of assets. Global corn stockpiles are shrinking the most in seven years, inventories of nine edible oils will drop to the lowest since 1974 and U.S. beef stocks will be the smallest since 1999, the U.S. Department of Agriculture estimates.
Arabicas drift from near 34-year high, sugar dips
ICE arabica coffee futures eased in early trade, after touching a 34-year high on April 20, while sugar eased in a range, pressured by ample supplies from Brazil and Thailand. Arabica coffee futures on ICE eased, having touched a 34-year peak above the psychological $3 a lb level on April 20, with losses limited by tight supplies of mild washed arabicas.
India may consider more sugar exports-official
NEW DELHI, April 26 (Reuters) - India may consider additional unrestricted sugar exports after receiving final output figures for the current season from October, Food Secretary B.C. Gupta said on Tuesday.
"Let the final output come, we will review it," Gupta told reporters responding to a query on whether the government will allow more sugar exports.
China "imported enough sugar to ensure 2011 supply"
BEIJING, April 25 (Reuters) - China's 2010/2011 sugar output is expected to slip this year to 10.5 million tonnes, down from 10.74 million tonnes last year, but the government has already stocked enough imports to cover any deficit, an industry website quoted government officials as saying on Monday.
"We have already imported quite a volume to replenish reserves, far more than needed to cover the deficit in producing areas, and also enough to ensure the supply for the current year," said Liu Xiaonan from the National Development and Reform Commission, the government's top economic planning body.
Vietnam to cut coffee area but keep output stable by 2020
HANOI, April 24 (Reuters) - Vietnam, the world's second-largest coffee producer after Brazil, planned to cut its total coffee acreage by 13.5 percent to 480,000 hectares (1.19 million acres) while keeping output stable by the end of this decade, state-run media reported. The area would be trimmed from 555,000 hectares, while Vietnam will aim to produce about 1.1 million tonnes, or 18.33 million 60-kg bags, of coffee a year, similar to the output of the 2010/2011 crop, the official Vietnam News Agency said.
Japan rolled copper output logs biggest drop in 17 months
TOKYO, April 26 (Reuters) - Japan's output of rolled copper product slid 3.7 percent in March from the same month last year, its biggest fall in 17 months,
after the devastating March 11 earthquake and tsunami disrupted supply chains at automakers -- big consumers of copper parts.
Seasonally adjusted output totaled 68,620 tonnes in March, down 2 percent from February, preliminary data from the Japan Copper and Brass Association showed
on Tuesday.
US brass mill imports, exports fall in Feb yr/yr
NEW YORK, April 25 (Reuters) - U.S. imports of brass mill products declined by 2.2 percent in February compared with February 2010, and exports slid 13.3
percent from the year ago period, an industry group said on Monday.
Imports of all brass mill products into the United States in February fell to 33,583,095 lbs from 34,333,993 lbs in the year-ago period, the Copper and Brass
Fabricators Council said in its monthly report.
Zinc market has 52,000 T surplus Jan-Feb'11- ILZSG
LONDON, April 26 (Reuters) - The global zinc market was in surplus by 52,000 tonnes in the first two months of 2011, a monthly bulletin from Lisbon-based
International Lead and Zinc Study Group (ILZSG) showed.
Global refined zinc use was 2.037 million tonnes, compared with 1.880 million in January-February 2010.
Lead market has 17,000 T surplus Jan-Feb - ILZSG
LONDON, April 26 (Reuters) - The global lead market was in surplus by 17,000 tonnes in the first two months of the year, a monthly bulletin from the
Lisbon-based International Lead and Zinc Study Group (ILZSG) showed.
Global refined lead use was 1.591 million tonnes, up from 1.423 million in January to February 2010.
Indonesia's Timah says tin output may rise 5 pct this year
PANGKAL PINANG, Indonesia, April 26 (Reuters) - Production at Indonesia's state-owned Timah , the world's largest integrated tin miner, may rise 5 percent
this year as the firm prepares to use a new dredging boat, the CEO said on Tuesday.
Timah said its current production forecast was 40,000 to 50,000 tonnes, Chief Executive Wachid Usman said at a tin conference.
China raises 2011 minor metals output quotas
BEIJING, April 25 (Reuters) - China has set 2011 mining quotas for several minor metals, the Ministry of Industry and
Information Technology said on Monday, increasing the permitted output of tungsten, tin, antimony, molybdenum and rare earths.
The quotas limit output of tungsten ores to 87,000 tonnes, tin ores to 73,000 tonnes, antimony ores to 105,000 tonnes, molybdenum ores to 200,000 tonnes. The
limits refer to metal content of the ores for tin and antimony, or 65 percent tungsten trioxide and 45 percent molybdenum content.
METALS-Copper falls on China data, rising inventories
LONDON, April 26 (Reuters) - Copper fell on Tuesday as investors returned from the Easter long weekend digested data showing a plunge in China's imports of
refined copper and rising inventories of the metal used in construction and power.
Three-month copper on the London Metal Exchange was $9,491 a tonne in official rings from $9,700 when the market closed on Thursday before the long weekend
started on Friday. The metal has fallen around 7 percent from a record high $10,190 hit in February.
PRECIOUS-Gold, silver retreat from records, eyes on Fed
LONDON, April 26 (Reuters) - Silver and gold tumbled on Tuesday as investors sold on uncertainty about the direction of monetary policy in the United States,
but a softer dollar helped support prices and sentiment.
Spot silver ceded nearly 5 percent to $44.61 an ounce after touching $49.31 an ounce on Monday, within reach of $49.48 hit in January 1980
Oil Trades Near One-Week Low on Demand Concern as U.S. Home Prices Slide (Source: Bloomberg)
Oil traded near the lowest in almost a week on speculation fuel demand in the world’s biggest crude-consuming nation may falter after U.S. residential real- estate prices dropped the most in more than a year. Futures slipped today as the S&P/Case-Shiller index of property values in 20 cities fell 3.3 percent from February 2010, outweighing a gain in the Conference Board’s confidence index. An industry-funded report showed crude supplies increased the most in four weeks and U.S. Treasury Secretary Timothy Geithner said oil prices are an obstacle to economic growth.
Crude falls more than $1 on uncertainty ahead of Fed meet
SINGAPORE, April 26 (Reuters) - U.S. crude futures fell more than $1 as investors reduced risk ahead of a meeting of the U.S. Federal Reserve and after Saudi Aramco's chief executive said the kingdom was not comfortable with current oil prices. "We are not comfortable with oil prices where they are today...I am concerned about the impact it could have on the global economy," Khalid al-Falih, Aramco's chief executive, told an industry gathering in Seoul.
