Corn (Source: CME)
US corn futures finish sharply higher in a rebound from last week's 9% fall. Surging prices for crude oil and precious metals and weakness in the dollar supported the recovery as commodity funds re-entered the markets to buy, traders say. Funds bought an estimated 13,000 corn contracts at CBOT, a moderate amount, they note. Strength in the markets "marks the end of the correction in commodities in general," says Bill Gentry, analyst at Risk Management Commodities. CBOT July corn surges 21 1/4c to $7.07 1/2 a bushel.
Wheat (Source: CME)
US wheat futures soar more than 4% on increasing concerns about global output. Searing temperatures add stress to Kansas' wheat crop after months of drought. Farmers are "going to have a lot more abandonment than people realize," warns Sid Love, analyst for Kropf & Love Consulting. France and Germany also struggle with dryness. An 11.6% rally in Paris wheat prices helped fuel gains. Surging crude oil adds spillover support, as commodities recover from last week's slide. CBOT July wheat climbs 31c to $7.90 1/2 a bushel; KCBT July gains 40 1/2c to $9.14 1/2; MGE July rallies 41c to $9.44 3/4.
Rice (Source: CME)
US rice futures closed lower, bucking a trend of strong gains in wheat, corn and soybeans. The decline erases Friday's 1.5% rally and continues the weaker trend in rice. The market slipped almost 4% last week amid broad commodity selling. Traders today will review USDA's weekly crop progress report for an update on planting. It seems concerns about planting delays due to rains in the southern US have been priced into the market, an analyst notes. CBOT July rice drops 22 1/2c to $14.12 1/2 per hundredweight.
Commodities, stocks firm after selloff; euro shaky
HONG KONG, May 9 (Reuters) - Stocks and commodities rose from last week's lows after solid U.S. payrolls data showed the economic recovery in the world's biggest economy was picking up momentum, though big gains may be limited as some sellers may be waiting for a sharper bounce to take profits. "Certainly Friday felt like the end of the panic liquidation," said a metals trader at an Australian bank in Sydney.
What do analysts say about the commodities crash?
BANGALORE, May 9 (Reuters) - After commodities investors rushed for exits last week, analysts at different brokerages are taking stock of what led to the frenzy and what lies ahead.
The sharp fall on Thursday highlighted concerns that have bothered market participants for some time, including the negative impact on consumption of high commodities prices, especially for oil; a slowing in the pace of U.S. economic recovery; and relative softness in China's import demand for key commodities, such as copper and soybeans, analysts at Barclays Capital said in a note to clients.
Commodities Trading Is Banking’s New Battleground: Matthew Lynn (Source: Bloomberg)
Forget bonuses. Don’t worry about bailouts. That’s all history. The battleground that matters most for the banking and finance industry right now is the profits it is making from commodities trading. Over the last few days, prices have been bouncing all over the place, a reminder for everyone of just how unstable the market in food and raw materials has become. Now there is a backlash building. The banks should take note of that. If they don’t, they could easily be driven out of this business -- and they will only have themselves to blame.
ANALYSIS-Commodity scare may reinforce, not reflect growth
LONDON, May 6 (Reuters) - This week's commodity market fright at the cresting of world economic growth looks oddly panicky and easier oil and raw materials prices may themselves reinforce a more benign outlook than the market scare suggests.
For all that speculative ebb and flow is inherent in most financial markets, the sudden plunge in energy and metals prices was seeded by series of soft business surveys from the United States, China and elsewhere showing sky-high crude prices were starting to brake buoyant business confidence and activity.
U.S. wheat up 2 pct, corn rises on weather concerns
SINGAPORE, May 9 (Reuters) - Chicago wheat rose more than 2 percent, while corn added 1 percent, with both markets recovering from last week's over one-month lows as investors bought back grains on concerns over unfriendly crop weather in the United States and Europe."We are looking at the impact of weather on European crop and the picture of U.S. winter wheat doesn't look too good," said Abah Ofon, an analyst with Standard Chartered Bank in Singapore. "We get a weaker dollar, then we tend to see some compensation in commodity prices."
Philippine Q1 farm output likely up 4 pct y/y-source
MANILA, May 9 (Reuters) - Philippine farm output likely grew about 4 percent in the March quarter from a year earlier as the main rice crop rebounded strongly from last year's slump, a senior agriculture official said on Monday.
Preliminary estimates showed unmilled rice output rose 15.6 percent from a year earlier, the official, who spoke on condition of anonymity, told Reuters.
Informa sees US winter wheat crop at 1.441 bln bu
CHICAGO, May 6 (Reuters) - Analytical firm Informa Economics estimated U.S. winter wheat production for 2011 at 1.441 billion bushels, down from the firm's March 18 forecast of 1.496 billion, trade sources said Friday.
By class, Informa pegged U.S. production of hard red winter wheat at 792 million bushels, soft red winter wheat at 418 million and winter white wheat at 232 million.
Dry week raises worry about German grain crops
HAMBURG, May 6 (Reuters) - Another hot, dry week in Germany is raising concerns about possible damage to crop yields in the European Union's second-largest wheat producer and largest rapeseed grower, analysts said on Friday.
Germany's national weather service said only 38 percent of average monthly rain fell in April. Showers are forecast next week, but this may be too late for rapeseed, crop watchers said.
Climate change has spurred food prices-study
LONDON, May 6 (Reuters) - Climate change cut global wheat and corn output by more than 3 percent over the past three decades compared to growth projections without a rise in temperatures, a study found on Friday.
The impacts translated into up to 20 percent higher average commodity prices, before accounting for other factors, according to the paper published in the journal Science.
Dry weather prompts more irrigation curbs in France
PARIS, May 6 (Reuters) - A growing number of French local authorities are introducing restrictions on irrigation of crops after dry weather left water reserves below normal levels.
France is expecting warm weather and only localised showers in the coming week, offering little relief to farmland parched by one of hottest and driest Aprils on record, weather service Meteo France said on Thursday.
Sugar, coffee rise as commodities rebound
LONDON, May 9 (Reuters) - ICE sugar and coffee bounced higher on Monday as commodity markets rebounded following last week's sharp sell-off, while ICE cocoa prices were steady. Sugar futures rose in early trading, in line with a rebound across commodity markets, as a weaker dollar supported dollar priced commodities.
Ivory Coast resumes cocoa exports after crisis
ABIDJAN, May 9 (Reuters) - Ivory Coast resumed cocoa bean exports on Sunday more than three months after they were halted by the country's political conflict, officials and a Reuters witness said.
Workers were loading beans onto a ship owned by Bollore Africa Logistics from a warehouse brimming with cocoa sacks.
Indonesian coffee exporters cancel 3,000 T of shipments - trade
SINGAPORE, May 9 (Reuters) - Indonesian coffee exporters have cancelled the shipments of at least 3,000 tonnes of robusta beans for April and May delivery because of difficulties in getting supply after erratic harvests, dealers said on Monday.
Harvests in Indonesia's main growing island of Sumatra usually begin in March or April, but yields are down as farmers have been picking cherries since January after persistent rains caused the flowering season to begin earlier in some districts.
Vietnam growers invest to boost yields on firm prices
HANOI, May 9 (Reuters) - Coffee farmers in Vietnam are ploughing gains from steadily rising prices into fertiliser and water pumps to incrementally lift yields, betting the global market will remain in their favour for years before rivals can increase supply.
The world's top robusta coffee producer enjoyed a 107 percent surge in prices to 50 million dong ($2,428) a tonne on May 4 against the start of 2010, while output by No. 2 grower Indonesia could drop 30 percent on heavy rains linked to the La Nina weather pattern.
Uganda coffee exports up 16 pct in April-source
KAMPALA, May 7 (Reuters) - Uganda exported 176,561 60-kg bags of coffee in April this year, up from 152,640 bags exported in the same month of 2010, a source at Uganda Coffee Development Authority (UCDA) said on Saturday.
The rise is the second in a row following four straight months of export declines that were caused by drought and diseases in Africa's second largest grower.
Crisis will not shrink Ivorian cocoa crop -govt
ABIJDAN, May 6 (Reuters) - A bloody post-election crisis in the world's top cocoa grower Ivory Coast will not cut into this season's crop forecast, the nation's top agricultural official said on Friday, as ships arrived to load beans.
Exports from the West African state have been halted for more than three months by a violent power struggle that only eased last month with the arrest of former leader Laurent Gbagbo by forces loyal to new president Alassane Ouattara.
US Sugarbeet Farmers Expand Planting On Soggy Soil Delays (Source: CME)
Sugarbeet farmers in the Midwest are expanding planting areas of the crop, the source of more than half of U.S.-grown sugar, after soil waterlogged by snowmelt and rain caused severe delays in plantings. Now, Moorhead, M.N.-based American Crystal Sugar Company, the U.S.'s largest beet-sugar producer by volume, is increasing acreage by some 5% this year so production stays on target, company spokesman Jeff Schweitzer said. Schweitzer said that 8% of the acres have been planted, while planting last year was 95% complete by May 1. "We're certainty behind," he said. Minn-Dak Farmers Cooperative in Wahpeton, N.D., says it could see acreage increase by up to 7% because of the rain.
Other companies may follow suit. "The later it goes, the more they're going to have to increase acres," said Luther Markwart, executive vice president of the American Sugarbeet Growers Association, a Washington, D.C. trade group. Near-record snowfall and continued rainy and cool weather left soil in key Midwestern growing areas too soggy to plant. According to the U.S. Department of Agriculture's weekly Crop Progress report last week, 15% of sugarbeets in the top four grower states were planted as of May 1, down from 95% at the year-earlier point. Rainfall has let up and is expected to be "spotty" for the next week in the Red River Valley in North Dakota, a major growing region, said National Weather Service meteorologist Al Voelker.
A delay in sugar-beet plantings could reduce yields of the sweetener, since the root's sugar content increases the longer it is in the ground. After they are harvested, the beets are shredded and boiled to extract the sugar. The beets also need to be harvested by October, before cold weather hits. Lower yields could drive up sugar prices and force the country to allow for more imports of the sweetener, amounts that are tightly controlled to protect domestic farmers.
France, Germany Face Big Losses In Wheat Yields Due To Drought (Source: CME)
Eastern France and Germany face the risk of substantial losses in wheat yields as a severe lack of rainfall caused by a blocking high pressure continues to stop the normal procession of Atlantic Depressions from bringing dynamic rainfall to Europe. France's rainfalls in January, February, March and April were respectively 56%, 58%, 74% and 65% of the normal level, according to the French government's weather agency Meteo France. "We are hearing continued concerns about dryness, including Paris areas and further north. Northern Europe is a cause for concern, and the most recent weather forecasts are not seeing much in the way of relief for dry conditions," said soft commodities analyst Brenda Sullivan at Sucden Financial. "Below average rainfall in France, Germany and the U.K. are a growing concern, especially as temperatures build over the next two weeks," ANZ Bank said last week in a note to clients.
Drought issues in Europe occur at a time when buyers scramble to secure supplies from the region's top producer France due to export restrictions in Russia. The Kremlin banned grain exports last summer after the worst drought in more than a century slashed the harvest by around a third to 63 million metric tons. "French and German wheat that has received only 4-10mm of rain, which is at best 10% of normal, this spring is definitely in trouble," said Edward Smith Consultant Meteorologist at WeatherEdge Ltd. The east and southeast of England has also witnessed a lack of rainfall, according to risk manager Agritel. "My feelings are the situation will improve in the U.K. and southwest France, but eastern France and Germany are really at risk of substantial wheat yield falls," Smith added. WeatherEdge Ltd. forecast rainfall issues to become more unsettled for a period of 6-8 weeks from mid-May in Eastern France and Germany.
Non-profit organization France Export Cereales last week said French soft wheat exports outside the European Union are likely to hit 12.3 million metric tons in 2010-11, revising down their April forecast of 13 million tons. "In France the situation is deteriorating with no rainfall forecast for the next few days," said FEC analyst Leandro Pierbattisti.
Australian Agribusiness Conditions Deteriorate In 1Q - NAB (Source: CME)
Australian agribusiness conditions deteriorated further in the first quarter of 2011, but a quarterly survey issued by National Australia Bank Ltd., showed expectations for the year are fairly optimistic based on a solid production outlook and strong demand, despite a strong currency. The general manager of NAB's Agribusiness unit, Khan Horne, said flooding in January caused a fall in an index for business conditions by 10 points in the first quarter to -14, its lowest point since June 2009, reflecting a downturn in profitability, trading conditions and employment, the three indicators that make up the business conditions index. Significant supply disruptions from the floods increased purchase costs for materials and higher final product prices weren't sufficient to prevent sales margins contracting in the sector, comprising meatworks and other food and fiber related processing and manufacturing operations, he said in a statement.
Output in the first quarter was constrained by availability of raw materials, again caused by the flooding and as a result sales were also impacted despite solid global demand, he said. Despite these setbacks, long-term expectations in the post farm gate sector remain positive. The 12-month outlook is still strong with 39% of respondents predicting an increase in business conditions and 41% expecting an increase in profitability, Horne said. This optimism is based on improved dam storages and water allocations boosting production conditions, along with rising global food prices and constrained production in key competing nations, he said. Of those surveyed, 37% expect to increase capital expenditure over the next year, further evidence of optimism, Horne said. The bank surveys agribusiness as part of its wider quarterly business survey.
India Food Minister: To Be Cautious In Lifting Wheat, Rice Export Ban (Source: CME)
India will be cautious in lifting a more than three-year-old ban on wheat and rice exports, Food Minister K.V. Thomas said, although the country is expecting a bumper foodgrain crop and has bins overflowing. He said the country needs to weigh any such move carefully as it is planning to implement a food security law that will raise subsidized sales to the poor. The draft of the law is expected to be introduced in parliament this year for approval, the minister said. The ministry plans to supply 3.3 million tons of additional wheat and rice for subsidized sales, he said, without elaborating on details such as on the timing of the program.
Oil Declines From Three-Day High in New York as Investors Lock In Profits (Source: Bloomberg)
Oil declined in New York, slipping from a three-day high, as investors sold contracts to lock in profits after prices surged 5.5 percent, the biggest increase since February. Futures dropped as much as 1 percent before a report today from China’s custom bureau that may show export growth in the world’s largest energy user slowed last month, according to economists surveyed by Bloomberg News. Crude prices climbed yesterday from the biggest weekly decline since December 2008.
Gradual base metals recovery seen, hinges on China
LONDON, May 6 (Reuters) - Industrial metals prices will recover gradually from this week's sell-off as top consumer China returns to the table, commodities analysts said, although some argued copper had further to fall and could drag others down.
Metals were trying to steady on Friday after the broad falls across the commodities and other asset classes triggered by worries over slowing global growth.
Warehouse tie-ups lift aluminum premiums to record
NEW YORK, May 6 (Reuters) - U.S. Midwest spot aluminum premiums shot to record highs this week, closing in on the 10 cent-per-lb level, as lengthy lead times out of North American warehouses continued to choke off supply flows.
Premiums paid over the London Metal Exchange (LME) cash price climbed to an all-time peak at 9.5 to 9.75 cents per lb this week, up more than 45 percent since the start of the year.
Specs cut net longs in silver, gold, copper
NEW YORK, May 6 (Reuters) - Speculators scaled back their bullish bets in COMEX silver futures and options to the lowest level since early February, as prices lost 5 percent after briefly hit a record high near $50 an ounce, U.S. regulator data showed Friday.
Speculators in gold and copper futures and options also cut their net long positions in the week ended May 3 as metals prices fell in tandem with a weaker commodities sector, according to the latest report by the Commodity Futures Trading Commission.
Copper open interest hits lowest since Feb 2010
NEW YORK, May 6 (Reuters) - Open interest in U.S. copper futures fell on Friday to the lowest since February 2010, data from the COMEX exchange showed.
Open interest in copper amounted to 124,522 lots, down 1,736 lots from the day before and the lowest since Feb. 26, 2010, as the key July contract extended losses this week through the psychological $4 per lb level.
China April daily crude steel output at 1.93 mln t, up 1 pct on March - CISA
BEIJING, May 9 (Reuters) - China's daily crude steel output hit 1.93 million tonnes in April, up 1 percent from March, data from the China Iron & Steel Association (CISA) showed on Monday.
In the last 10 days of April, China's steel production rebounded to 1.94 million tonnes on a daily basis, up 1.9 percent from the preceding 10 days.
European steel pulls clear of margin squeeze in Q1
BRUSSELS, May 6 (Reuters) - European steelmakers were seen expanding squeezed margins at the start of 2011 as prices caught up with a spike in iron ore and coal costs and demand improved, particularly from the auto and engineering sectors.
ArcelorMittal , the world's largest steelmaker, kicks off sector earnings for the region next Wednesday, having already said core profit (EBITDA) for the January-March period would rebound from a very weak level at the end of 2010.
Indonesia's April tin exports rise 22 pct yr/yr
JAKARTA, May 9 (Reuters) - Indonesia's refined tin exports rose 22 percent in April from the same month last year, due to improving weather conditions, an official at the trade ministry said on Monday.
Indonesia, the world's top tin exporter, shipped 9,708.45 tonnes of refined tin in April, compared to 7,926.49 tonnes in April last year, trade ministry data showed.
METALS-Copper rebounds, helped by weaker dollar
LONDON, May 9 (Reuters) - Copper rose on Monday as a weaker dollar and upbeat U.S. employment data helped lure investors back after the commodities sell-off last week.
Copper for three-month delivery on the London Metal Exchange traded at $8,930 a tonne in rings versus $8,825 a tonne at Friday's close. The metal used in power and construction had hit $8,657.50 on Friday, its lowest since early December.
PRECIOUS-Gold rises, silver climbs 6 pct as dollar retreats
LONDON, May 9 (Reuters) - Gold climbed back above $1,500 an ounce on Monday and silver rallied more than 6 percent as a retreating dollar and a rebound in oil prices helped precious metals recover some ground after last week's hefty losses.
Spot gold rose as high as $1,510.40 an ounce and was bid at $1,506.30 an ounce at 1123 GMT, against $1,494.05 late in New York on Friday. Silver rallied more than 6 percent to a high of $37.94 and was later at $37.42 an ounce versus $35.60.
Gold extends gains on weak dollar; silver rises 3 pct
SINGAPORE, May 9 (Reuters) - Gold extended gains on a weaker dollar, after suffering its worst weekly loss since 2009, while silver rose nearly 3 percent as investors took advantage of last week's free fall in prices to enter the market.
"It is too early to say that silver has started to rebound, as it is still stuck in a descending channel. What will eventually decide the price trend in precious metals is the U.S. monetary policy," he said.
