FAO sees crop concerns driving higher food prices
ASTANA, May 3 (Reuters) - World food prices are set to rise again as concerns persist over Chinese and U.S. winter crops and global production lags increasing demand, the head of the United Nations' Food and Agriculture Organisation said on Tuesday.
FAO Director General Jacques Diouf told Reuters Insider that rising output of biofuels was also contributing to food shortages, consuming more than 100 million tonnes a year of cereals that would otherwise be used in food production.
Corn (Source: CME)
US corn futures close higher as supply worries boost the market even as other commodities stumble. Concern about extremely tight supplies this summer fueled gains, along with the sluggish start to the planting season. Farmers unable to plant corn on time will switch to soybeans instead because corn yields drop the later the crop is planted. "I think the trade is starting to contemplate yield reductions, if not acreage reductions," says Western Milling analyst Joel Karlin. May CBOT corn climbs 7 1/2c to $7.26 1/2 per bushel.
Wheat (Source: CME)
US wheat futures fall to the lower end of their recent trading range, dropping more than 2% on a broad commodity selloff and reports of less-fearful crop conditions from the Kansas winter wheat tour. Product for July delivery ended down 21 1/4c at $7.72/bushel at the CBOT. Investors broadly reduced risk exposure, overshadowing supportive crop concerns as the threat of smaller production prospects amid declining winter wheat crop conditions and wet weather idling spring wheat seedings in the northern Plains. Some analysts say the market was overvalued based on world supply and demand, and without any surprises from the tour, futures had little to support them.
Rice (Source: CME)
The most-actively traded US rough rice futures contract finished limit down as the market was caught up in a broader commodity selloff. Weakness in the cash market adding to the defensive tone, said Jack Scoville at Price Futures Group. The cash market never responded to the previous rally, and once funds began to exit commodities, futures lacked strength to withstand the pressure. However, rice still has some serious production issues limiting losses, with dryness in Texas and wet conditions delaying plantings in the Delta supportive features, Scoville noted. CBOT July rice finished down 50c at $14.89/hundredweight. The daily limit expands Thursday to 75c.
Corn Futures Advance 0.6% to $7.335 Per Bushel; Wheat Is Little Changed (Source: Bloomberg)
Corn for July delivery advanced 0.6 percent to $7.335 per bushel on the Chicago Board of Trade at 8:01 a.m. in Singapore, while soybeans for delivery the same month slipped 0.2 percent to $13.4875 per bushel. Wheat futures were little changed at $7.7175 per bushel.
US corn, wheat, soy fall on firmer dollar, weather outlook
SYDNEY, May 4 (Reuters) - U.S. corn futures extended falls as a stronger dollar and falling oil prices weighed on the soft commodities complex."On a macro theme all commodities seem to be overbought and perhaps the catalyst for a correction will be a stronger U.S. dollar," said Adam Davis, senior grains trader at Merricks Capital in Melbourne which invests in agricultural commodities.
Dryness now damaging German grain crops - farmers
HAMBURG, May 4 (Reuters) - The prolonged period of dry weather in Germany has now started to damage grain and rapeseed crops, German farming association DBV said on Wednesday.
Rapeseed had especially suffered from a very cold winter followed by dry weather, it said. There is also concern about grain crops.
China's top wheat area hit by extended drought-paper
BEIJING, May 4 (Reuters) - China's Henan province, the country's largest wheat area, has hit by lingering dry weather, and local authorities urged farmers to water their crops at the crucial growing stage despite the high costs it could incur, state media reported on Wednesday.
China Securities Journal cited Henan Government Office of Flood Control and Drought Relief Headquarters as saying that 1.078 million hectares of wheat in the province was affected by drought. The province produces about 26 percent of China's total wheat output.
Dry weather pressures wheat potential in western Kansas
COLBY, Kansas, May 3 (Reuters) - Wheat fields in northern and central Kansas showed yield potential that was slightly below average as dry weather hampered development of the crop in western portions of the top wheat-producing state, crop scouts on annual tour found on Tuesday.
Scouts on the Wheat Quality Council's tour of hard red winter wheat fields in Kansas pegged average yields in northern and central regions of the state at 40.0 bushels per acre. The first day's results of the tour have averaged 41.5 bushels per acre during the past nine years. In 2010, the results from the first day of the three-day tour estimated yields at 40.7 bushels per acre.
US winter wheat may fall to 5-year low on drought
CHICAGO, May 3 (Reuters) - A severe drought has slashed the U.S. winter wheat crop to the smallest in five years, a Reuters Poll showed, but bread lovers will be spared the pinch in their wallets as the shortfall has been factored into wheat futures.
Tuesday was the first day for a tour of wheat fields in the U.S. Plains hard red winter wheat region and crop scouts said central Kansas wheat showed good yield potential after receiving some timely rains last week.
Corn OTC volume jumps as weather threatens crop
CHICAGO, May 3 (Reuters) - A big trade of 8,000 contracts in over the counter (OTC) corn in the July/December spread on Monday was tied to wet weather that is slowing U.S. corn plantings and a slowdown in export demand for U.S. corn.
"There were 8,000 July/December traded over the counter after the crop progress report was released yesterday afternoon. This allowed players to hedge their risk in a very efficient manner," said John Murphy, Atlas Commodities, a prominent company in the OTC grain business.
Open window to plant U.S. corn, wheat limited
CHICAGO, May 3 (Reuters) - The U.S. Corn Belt is getting a break from recent rains but heavy showers return on Thursday with eastern belt to see the most, keeping farmers stalled from planting corn, a forecaster said.
"There is no sight of a long stretch of open weather to cause planting progress to surge. We can hope for steady progress in the western Corn Belt and that the east will dry out a little," said Mike Palmerino, meteorologist with Telvent DTN weather service.
Average To Below Normal Temperatures Seen In W Canada's Grain Growing Areas (Source: CME)
Producers in western Canada who are anxious to start seeding grain and oilseed crops for the 2011-12 (August through July) crop year continue to keep a close watch on the weather and new maps issued by Environment Canada are calling for average to below normal temperatures and above average precipitation over the next couple of months. Updated weather outlooks issued by Environment Canada for May through July 2011 call for average readings in the eastern half of British Columbia, central Alberta, central and southern Saskatchewan and much of Manitoba. Much of Ontario was also seen experiencing average temperatures. Below normal readings were expected along the western Coast of British Columbia and much of southern Alberta. In Quebec and the most of the Maritimes, temperatures will be above normal, based on the Environment Canada weather models.
Precipitation during the May through July period was forecast by Environment Canada to be above average throughout much of British Columbia, Alberta, Saskatchewan, Manitoba and across most of Ontario. Average precipitation was anticipated across western Quebec while above normal precipitation was seen occurring in eastern Quebec and the Maritimes. Heading into August, Environment Canada forecast that temperatures across western and eastern Canada will be above normal. However, precipitation across the Canadian prairies in August was seen as being above normal. Below normal precipitation was forecast by Environment Canada for the coast line along British Columbia and the more northerly areas of Ontario and western Quebec. The eastern areas of Quebec and the Maritime province were forecast to see above normal precipitation levels.
EU Agricultural Exports Surge (Source: CME)
European Union agricultural exports jumped 21% in value to a record EUR91 billion in 2010, data published by the EU's executive arm late Tuesday showed, making the bloc a net exporter for the first time in four years. "We estimate that 75% of the increase in value of exports is driven by an increase in volume of sales, reflecting stronger demand, while 25% may be attributed to an increase in prices" said the European Commission. Exports were buoyed by a surge in demand from emerging economies such as China and Russia as a rebound in the global economy boosted world trade by 12% to a record high, the Commission said. Rising commodities prices and a weakening euro also helped the 27-nation bloc swing to an agricultural trade surplus of EUR6 billion, and it is now the world's second-largest agricultural exporter behind the U.S. "The surplus is largely due to growth in the value of exports after the contraction of trade in 2009 linked to economic crisis and the drop in commodity prices," the report said.
"Exchange rate fluctuations may also have contributed to the upsurge in exports, given the continued weakening of the euro against a number of major currencies in 2010." Exports to China and Hong Kong both posted a record-breaking 50% jump, with the value of sales to both now generating more than EUR1 billion each, the report said. But the largest absolute increase was to Russia, where the value of agricultural imports from the EU rose nearly one-third to EUR2.2 billion, making Russia the EU's second-largest market after the U.S. Severe drought in the Black Sea, which prompted both Kiev and Moscow to restrict grain exports, are also estimated to have given EU wheat exports a EUR557 million boost and cut imports by EUR270 million, the Commission said. Wheat was the EU's second-highest value export in 2010 at EUR3.4 billion.
The EU also remains by far the world's biggest agricultural importer with imports worth EUR83 billion in 2008-10, well ahead of the U.S. More than 70% of total EU imports come from developing countries, the report said.
Sugar Falls to Seven-Month Low on Thai Output Gain; Coffee, Cocoa Decline (Source: Bloomberg)
Sugar fell to the lowest since September on forecasts for increased exports from Thailand, the world’s second-largest shipper, and that China may take further steps to slow growth. Coffee and cocoa also retreated. Thailand’s sugar exports may reach a record 7 million tons this season, according to researcher F.O. Licht. The People’s Bank of China said stabilizing consumer prices and managing inflation expectations are “critical,” after policy makers from India and Brazil yesterday signaled further interest-rate increases are possible. Raw-sugar futures have plunged 34 percent this year.
Arabica coffee eases, near 34-year peak; sugar lower
LONDON, May 4 (Reuters) - ICE arabica coffee futures edged lower in early trade but remained within sight of the prior session's 34-year peak, while sugar edged lower, weighed by an improving supply outlook. Arabica coffee futures on ICE dipped in early trade with the market looking to consolidate just below the prior session's 34-year peak.
Indonesia sugar output seen at 1.77 mln tonnes-attache
WASHINGTON, May 3 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in Indonesia: "In marketing year 2010/11 Indonesia is estimated to produce 1.77 million tonnes of plantation white sugar, a decrease from 1.91 million tonnes produced in the previous year. Imports of raw sugar are forecast to increase to 2.84 million tonnes compared to 2.6 million tonnes in 2009/10. This increase is attributed to lower domestic production and an increased operational demand as new Indonesian sugar refineries have come on-line.
Ivorian cocoa exports to start soon, midcrop worry
ABIDJAN, May 3 (Reuters) - Ivory Coast cocoa exports are likely to resume by Friday, but forecasts for its mid-crop harvest may be cut by a third from the expected 300,000 tonnes over security and logistics concerns in the hinterland.
Cocoa exporters said on Tuesday they were making final preparations to resume exports after resolving a row with the new government of president Alassane Ouattara last week over taxes.
Ghana poised to crush cocoa output target
ACCRA, May 3 (Reuters) - Ghana's cocoa output is running more than 50 percent higher than a year ago, easing the market impact of delayed shipments from neighbouring Ivory Coast and putting the country on track to beat its full-season target.
Purchases declared by private buyers to industry regulator Cocobod -- the best reflection of output from the world's No. 2 grower -- hit 797,847 tonnes by April 21 since the start of the season in October, according to official data seen on Tuesday.
Ivory Coast patchy rains nurture cocoa mid-crop
ABIDJAN, May 3 (Reuters) - Patchy rains punctuated by hot weather in Ivory Coast's main cocoa-growing regions last week augured well for a mid-crop seen longer than last season's, farmers and analysts said on Tuesday.
The world's top cocoa grower is gradually recovering from a bloody post-election power struggle, with exports due to restart any day and exporters forecasting a mid-crop of between 250,000 and 300,000 tonnes.
S.Africa 2011/12 sugar output fcast at 1.923 mln T
JOHANNESBURG, May 3 (Reuters) - South Africa's 2011/12 sugar output is estimated at 1.923 million tonnes, up from the previous season's output of 1.909 million tonnes, according to data from the South African Sugar Association (SASA) seen by Reuters on Tuesday.
Sugarcane crush is forecast at 16.537 million tonnes, up from the previous season's output of 16.016 million, the industry association, which represents producers and millers of the sweetener in Africa's biggest economy, said on its website.
Oil Falls for Fourth Day as U.S. Economic Recovery Slows, Stockpiles Gain (Source: Bloomberg)
Oil declined a fourth day in New York, the longest losing streak in almost eight weeks, as rising U.S. supplies and slowing economic growth stoked speculation fuel demand may weaken in the world’s biggest crude consumer. Futures dropped as much as 0.7 percent after an Energy Department report yesterday showed stockpiles rose to the highest level since October. Prices also slipped after separate reports showed a lower-than-forecast expansion in service industries and employment. Labor Department data tomorrow may show the U.S. generated fewer jobs in April than in March.
Silver Has Biggest Three-Day Drop Since 1983 (Source: Bloomberg)
Silver had its biggest three-day drop since March 1983, crude oil tumbled to a two-week low and gold, copper and grains fell after money managers made near-record bets on high commodity prices in April. Silver plummeted 19 percent since April 29 as increases in Comex margin requirements drove investors away, and oil declined after a U.S. report showed supplies surged. A drop in a gauge of U.S. service industries and lower-than-forecast jobs growth damped economic optimism. Twenty-two of 24 commodities in the Standard & Poor’s GSCI Total Return Index fell. Treasuries rose.
ETF Securities aluminium, zinc, lead ETCs list on LSE
LONDON, May 3 (Reuters) - ETF Securities listed physically backed exchange-traded commodities (ETCs) for aluminium, zinc and lead on the London Stock Exchange on Tuesday, it said.
The physically backed industrial metal ETCs, ETFS Physical Aluminium, ETFS Physical Lead and ETFS Physical Zinc follow previous listings of copper , nickel and tin , which launched on the LSE on Dec 10, 2010.
ETF Securities said in December it expected a first-quarter listing for the products.
China aluminium plate exports up on fears of rebate cut-industry
HONG KONG, May 4 (Reuters) - Aluminium plate exports from China are expected to remain robust in the second quarter as firms rush deals on fears that Beijing may cut or cancel export rebates that make the shipments attractive when paired with high LME prices, industry sources said on Wednesday.
Exports of aluminium plates, sheets and strips, made mainly from primary aluminium, rose 73 percent rise in the first quarter of this year.
Copper demand, price to remain high-Aurubis
PIRDOP, Bulgaria, May 4 (Reuters) - Europe's biggest copper maker, Aurubis , expects overall demand for copper to remain strong this year with prices picking up at times again to $10,000 a tonne, a senior manager of the company said.
Peter Willbrandt, member of the executive board in charge of primary copper production said late on Tuesday that a recovering economy in emerging markets and Europe, and the need for reconstruction of Japan was increasing demand for copper.
Inco's Indonesian investment to rise 27 pct in 2011
JAKARTA, May 4 (Reuters) - International Nickel Indonesia (Inco) will invest an estimated $232 million at its Sulawesi mines in 2011, up 27 percent from the previous year, the firm said on Wednesday.
The investment will include $120 million for sustaining capital, $97 million for growth capital and $15 million for health, safety and the environment, Inco said in an emailed statement to Reuters.
S.Korea seeks 1,000 T zinc ingot
SEOUL, May 4 (Reuters) - South Korea has issued a tender to buy 1,000 tonnes of zinc ingot for shipment by July 15 to the port of Incheon, state-run Public Procurement Service said.
The tender will close at 2 p.m. (0500 GMT) on May 12, the agency said on its website Tuesday.
METALS-Copper dented by concerns over China tightening
LONDON, May 4 (Reuters) - Copper dropped to a seven-week low on Wednesday as investors, worried that tightening measures in top consumer China would constrict demand, scaled back exposure to commodities.
Three-month copper on the London Metal Exchange was untraded in official rings but was quoted at $9,195/9,200, down from Tuesday's close at $9,350 a tonne. The metal used in power and construction earlier hit its lowest since March 15 at $9,155.50 a tonne.
Signs of further plans by Beijing to draw in monetary policy, despite manufacturing data that showed its economy is cooling, have reignited worries about a knock-on to copper consumption.
PRECIOUS-Silver hits three-week low, drags down gold
LONDON, May 4 (Reuters) - Silver fell to a three-week low day on Wednesday and gold eased as precious metals came under pressure to correct after a strong rally in the last few weeks.
U.S. silver futures have lost 14 percent over the past four sessions, wiping out gains from the previous three weeks that took the price to a 31-year top just below $50 on April 25.
