Commodities fall hits Asian markets, oil up
MELBOURNE, May 12 (Reuters) - Asian share markets fell on Thursday after a second big sell-off in commodities in less than a week cut investor appetite for riskier investments and boosted the U.S. dollar, although oil prices clawed back some losses in early trade.
"There are a lot of hedge funds pulling (commodity) positions. They've been long, and it will be choppy and remain choppy while China is slowing," said Macquarie Equities strategist Neale Goldston-Morris.
US exports hit record high, trade gap widens on oil
WASHINGTON, May 11 (Reuters) - U.S. exports hit a record high in March, buoyed by the weak dollar and strengthening global demand as U.S. trade returned to levels last seen before the global financial crisis.
U.S. exports grew 4.6 percent in March to $172.7 billion, surpassing the record set in July 2008 before world trade took a sharp downturn. The March export rise was the biggest month-to-month gain in 17 years, the Commerce Department said in a report on Wednesday.
Commodity price margins: art, science or politics?
NEW YORK, May 12 (Reuters) - Recent nerve-shattering hikes in the amount of money exchanges require to trade commodities have stoked concerns over an often overlooked cornerstone of managing risk in futures markets: setting effective margins.
The CME , which operates the world's leading energy, grain and precious metal markets, portrayed a series of five increases in silver margins, and this week's 25 percent rise in escrow requirements for oil, as prudent responses to unusual volatility as prices surged to historic levels, then swooned.
India's April vegoil imports seen up as local supply dips
NEW DELHI, May 11 (Reuters) - India's vegetable oil imports may have risen by 15.5 percent in April because of lower local supplies after the end of the rapeseed harvest season, a Reuters survey showed on Wednesday, signalling the first rise in overseas purchases since December.
The rising trend is expected to continue next month, supporting global vegetable oil prices which have risen this year along with crude as they can be used as alternatives in the energy sector.
Corn at 6-week low on improved supply outlook, wheat dips
SINGAPORE, May 12 (Reuters) - Chicago corn futures lost more ground falling to a six-week low, while wheat slid half a percent to its lowest in almost a week as grains remained under pressure a day after a U.S. government report eased concerns over tight supplies.
"USDA was a contributing factor to the very large selloff that we saw in agricultural markets," said Luke Mathews, an agricultural commodities strategist at Commonwealth Bank of Australia. "It was a more bearish report than what the market was expecting with respect to corn in particular."
Kingsman nearly doubles 2011/12 global sugar surplus estimate
SINGAPORE, May 12 (Reuters) - Global sugar surplus is expected to surge to 10.575 million tonnes in the 2011/12 crop year, almost double an earlier estimate of 5.607 million tonnes, the Kingsman consultancy said on Thursday.
Kingsman also lifted its global output estimate, but lowered its consumption forecast for 2011/12.
China soy oil imports to rise from June, more Argentina imports-CNGOIC
BEIJING, May 12 (Reuters) - China's soy oil imports from June to September are likely to reach 600,000 tonnes, sharply up from about 50,000 tonnes expected for May, said an official think tank, the China National Grain and Oils Information Center (CNGOIC).
The center, citing market talk, said that China may sign a deal to import between 300,000 to 400,000 tonnes of soy oil from Argentina, the world's largest exporter.
U.S. farm exports hit $75 bln in first half of FY11
WASHINGTON, May 11 (Reuters) - U.S. farm exports reached an all-time high of $75 billion during the first half of fiscal 2011, said the Agriculture Department on Wednesday.
Agriculture Secretary Tom Vilsack said sales were on track for the record $135.5 billion in exports forecast for this year.
Sugar output in Brazil Parana down 26 pct by May 1
SAO PAULO, Brazil, May 11 (Reuters) - Early sugar output in Brazil's Parana was 26 percent below a year ago as of May 1 after rains hindered cane harvesting in the No. 4 producer state, local milling association Alcopar said on Wednesday.
Mills in Parana produced 182,000 tonnes of sugar, the equivalent of 5.27 percent of its total expected output in 2011/12 (April-March).
Brazil's cocoa mid crop gets started in Bahia
SAO PAULO, May 11 (Reuters) - Brazil's mid-crop harvest has begun in the main cocoa producing state of Bahia, cocoa analyst Thomas Hartmann said, confounding earlier predictions that growers would have to wait until mid-June to start picking.
Deliveries in the first week of the mid crop, and of the new season which began on May 1, totaled 27,136 60-kg bags, a typical quantity for the time of year, Hartmann said.
Copper falls under weight of China slowdown fears
NEW YORK/LONDON, May 11 (Reuters) - Copper crumbled to its lowest since December on Wednesday, as signs of a growth slowdown in China signaled sustained softness in demand from the world's largest metals consumer.
"I think the time to be long has passed. I am not sure the time to be short is upon us. I think the time for copper is to do nothing, just like the Chinese monetary authorities will be doing."
Zambia copper output up 4.1 pct yr/yr
LUSAKA, May 11 (Reuters) - Copper output in Zambia, Africa's top producer of the metal, rose by 4.1 percent in the first quarter of 2011 and is expected to rise higher as new projects start production, the central bank said on Wednesday.
January to March copper output rose to 204,597 tonnes in the first quarter of 2011 from 196,466 tonnes, the central bank said, while exports increased to 200,037 tonnes from 198,247 tonnes in the same period last year.
Silver, gold rebound after sell-off; dollar caps gains
SINGAPORE, May 12 (Reuters) - Spot silver rebounded as much as 2.3 percent and gold edged up after losses in the previous session, supported by light buying in Asia, while a firm dollar weighed on market sentiment.
"People are still worried about commodities -- we have seen some short-covering, some buying on dips today, but the buying is not substantial," said Dick Poon, manager of precious metals at Heraeus in Hong Kong.
Eastern Platinum posts Q1 loss; workers halt flagship mine
May 12 (Reuters) - Eastern Platinum Ltd posted a quarterly loss on lower output and the Canadian company said its flagship Crocodile River Mine project in South Africa was damaged following a wage dispute with the National Union of Mineworkers (NUM).
After Eastern's revised wage offer was rejected last week by the union, about 180 workers occupied the Zandfontein and Maroelabult mines and damaged facilities.
US ethanol production down, corn usage lags outlook
KANSAS CITY, May 11 (Reuters) - U.S. ethanol production fell again in the latest week, the government said on Wednesday, continuing a downward trend.
Ethanol output totaled 862,000 barrels per day (bpd) for the week ended May 6, down 13,000 bpd from the prior week, the Energy Information Administration said.
Indonesia's 2010/11 coffee output seen down 15-20 pct
JAKARTA, May 11 (Reuters) - Indonesia's coffee output may fall by 15-20 percent in the 2010/11 (Oct/Sept) crop year to as low as 520,000 tonnes as rains damage coffee cherries, the Indonesian Coffee Exporters Association said on Wednesday.
The estimate was similar to a forecast by the International Coffee Organization in April that output from the world's second biggest producer of robusta would fall by 25.3 percent to 8.5 million bags of 60-kg each, or 510,000 tonnes.
Indonesia 2011 coal output seen at 340 mln T - industry
JAKARTA, May 11 (Reuters) - Increased coal output from small-scale Indonesian miners will help offset wet weather and boost output by 17 percent this year in the world's largest exporter of thermal coal, the Indonesian Coal Society said on Wednesday.
Indonesia is expected to produce 340 million tonnes of coal, from around 290 million tonnes last year, Singgih Widagdo, the director of the industry group, told Reuters.
Thursday, May 12, 2011
20110512 1234 Global Commodities Related News.
GLOBAL MARKETS: Commodities fall hits Asian markets, oil up
MELBOURNE, May 12 (Reuters) - Asian share markets fell on Thursday after a second big sell-off in commodities in less than a week sparked a retreat from riskier investments, including stocks, although oil and silver managed to claw back some of their losses.
Oil prices tumbled over 4 percent on Wednesday after an unexpected rise in gasoline stocks and concerns about slowing demand triggered a rout across the commodities complex that pushed the Reuters/Jeffries CRB index, a broad measure of commodities performance, down 3 percent.
OIL: Oil rebounds above $99 after sharp gasoline-led sell-off
SINGAPORE, May 12 (Reuters) - U.S. oil rose on Thursday, rebounding from a sharp sell-off the previous session driven by an unexpected rise in U.S. gasoline stocks.
U.S. crude oil stocks rose to a two-year high and gasoline inventories climbed for the first time in 12 weeks as demand for the motor fuel dropped from year-ago levels, the Energy Information Administration said.
NATURAL GAS: Natural gas ends down as weather, supplies weigh
NEW YORK, May 11 (Reuters) - Front-month U.S. natural gas futures ended lower on Wednesday, pressured for the seventh session in eight by concerns about high supplies and mild Northeast and Midwest weather that has dampened demand.
"There are no weather scares coming - there is some cooler weather ahead but not cool enough to stimulate demand," a Midwest trader said, adding weak crude prices, down more than $5 a barrel on Wednesday, might also have dragged gas lower.
EUROCOAL : Prices dip 25-75c/T with lower oil
LONDON, May 11 (Reuters) - European coal prices slipped by a marginal 25-75 cents a tonne on Wednesday in line with oil's $3 fall, traders and utilities said.
"Oil came off a little but as usual coal only moved down a touch," one European trader said. "Stocks are still lower than they were last year in ARA but while Rhine water levels are low, nobody will be in a hurry to buy anything prompt," a utility source said.
COMMODITIES: CRB dives 3 pct as gasoline leads second big slump
NEW YORK, May 11 (Reuters) - Commodities dove 3 percent on Wednesday as news of weak Chinese industrial growth, improving global grain supplies and rising U.S. gasoline stocks triggered the second major sell-off in a week.
"The commodity sector had been in such an aggressive, almost parabolic move, particularly in markets like silver," said David Meger, director of metals trading of broker/dealer Vision Financial Markets.
Big Oil: ending US tax breaks would up fuel price
WASHINGTON, May 11 (Reuters) - The world's biggest oil companies on Wednesday launched broadsides against Democratic plans to pare back some of their cherished U.S. tax breaks, saying the measure was "un-American" and would only push up already high gasoline prices.
Top executives from the five biggest oil companies will testify about the tax breaks on Thursday before the Senate Finance Committee. A day before the hearing companies and lawmakers traded barbs over the effort that Democrats say could help cut the deficit by about $21 billion over a decade.
MELBOURNE, May 12 (Reuters) - Asian share markets fell on Thursday after a second big sell-off in commodities in less than a week sparked a retreat from riskier investments, including stocks, although oil and silver managed to claw back some of their losses.
Oil prices tumbled over 4 percent on Wednesday after an unexpected rise in gasoline stocks and concerns about slowing demand triggered a rout across the commodities complex that pushed the Reuters/Jeffries CRB index, a broad measure of commodities performance, down 3 percent.
OIL: Oil rebounds above $99 after sharp gasoline-led sell-off
SINGAPORE, May 12 (Reuters) - U.S. oil rose on Thursday, rebounding from a sharp sell-off the previous session driven by an unexpected rise in U.S. gasoline stocks.
U.S. crude oil stocks rose to a two-year high and gasoline inventories climbed for the first time in 12 weeks as demand for the motor fuel dropped from year-ago levels, the Energy Information Administration said.
NATURAL GAS: Natural gas ends down as weather, supplies weigh
NEW YORK, May 11 (Reuters) - Front-month U.S. natural gas futures ended lower on Wednesday, pressured for the seventh session in eight by concerns about high supplies and mild Northeast and Midwest weather that has dampened demand.
"There are no weather scares coming - there is some cooler weather ahead but not cool enough to stimulate demand," a Midwest trader said, adding weak crude prices, down more than $5 a barrel on Wednesday, might also have dragged gas lower.
EUROCOAL : Prices dip 25-75c/T with lower oil
LONDON, May 11 (Reuters) - European coal prices slipped by a marginal 25-75 cents a tonne on Wednesday in line with oil's $3 fall, traders and utilities said.
"Oil came off a little but as usual coal only moved down a touch," one European trader said. "Stocks are still lower than they were last year in ARA but while Rhine water levels are low, nobody will be in a hurry to buy anything prompt," a utility source said.
COMMODITIES: CRB dives 3 pct as gasoline leads second big slump
NEW YORK, May 11 (Reuters) - Commodities dove 3 percent on Wednesday as news of weak Chinese industrial growth, improving global grain supplies and rising U.S. gasoline stocks triggered the second major sell-off in a week.
"The commodity sector had been in such an aggressive, almost parabolic move, particularly in markets like silver," said David Meger, director of metals trading of broker/dealer Vision Financial Markets.
Big Oil: ending US tax breaks would up fuel price
WASHINGTON, May 11 (Reuters) - The world's biggest oil companies on Wednesday launched broadsides against Democratic plans to pare back some of their cherished U.S. tax breaks, saying the measure was "un-American" and would only push up already high gasoline prices.
Top executives from the five biggest oil companies will testify about the tax breaks on Thursday before the Senate Finance Committee. A day before the hearing companies and lawmakers traded barbs over the effort that Democrats say could help cut the deficit by about $21 billion over a decade.
20110512 1008 Local & Global Economic Related News.
FDI: Mida eyes RM5b US investments. Malaysian Investment Development Authority (Mida) expects to secure RM5b worth of new investments from the United States when a delegation headed by Prime Minister Datuk Seri Najib Tun Razak hold a roundtable business meeting in New York next week. (Source: The Star)
Malaysia: Production growth slowed in March on mining, utilities
Malaysia’s industrial production growth slowed in March as mining and power companies decreased output and Japan’s record earthquake disrupted trade in Asia. Production at factories, utilities and mines rose 2.4% y-o-y after gaining a revised 5.2% in February. (Bloomberg)
South Korea: Unemployment rate declines to a 3-month low
South Korea’s unemployment rate fell to a 3-month low as an economic recovery spurred hiring at manufacturers and health and social welfare service providers. The jobless rate fell to 3.6% in April from 4% in March. (Bloomberg)
Australia: Cuts spending to cool inflation, projects surplus
Australia’s government will end 23 years of spending growth to ease inflation from a mining boom and support the return to a budget surplus, even as it plans measures to help companies hurt by a record-high currency. The underlying cash deficit will narrow to AUD22.6bn in the 12 months to 30 June 2012, less than half the AUD49.4bn gap this fiscal year. (Bloomberg)
China: Inflation spreading beyond food adds tightening pressure
China’s inflation is spreading beyond food, signaling Premier Wen Jiabao’s strategy of quarter point interest rate increases every 2 months has yet to contain consumer prices. Clothing costs climbed 1.4% in April from a year earlier, the biggest gain since 1997 while non-food inflation held at 2.7%, the fastest pace in at least 6 years. Overall consumer prices rose 5.3%. (Bloomberg)
Germany: April inflation accelerated
Inflation in Germany accelerated more than initially estimated in April after energy costs surged. The inflation rate jumped 2.7% from 2.3% in March. Consumer prices also rose 0.3% from March. (Bloomberg)
UK: King says inflation may reach 5% as BOE cuts growth forecast
Bank of England (BOE) Governor Mervyn King said that inflation remains “uncomfortably high” and officials signaled they may need to raise interest rates later this year even as the economy struggles to build momentum. King highlighted that “inflation remains uncomfortably high and well above the 2% target. And there is a good chance that, if utility prices rise further later in the year, inflation will reach 5%.”(Bloomberg)
US: Job openings increase to highest level since 2008
Job openings in the US increased in March to the highest level in more than 2 years, an indication employers are becoming more optimistic about bringing on new workers. The number of positions waiting to be filled rose by 99k to 3.1m, the most since Sept 2008. (Bloomberg)
US: Budget deficit shrank in April as tax revenue climbed
The US government’s monthly budget deficit narrowed to USD40.5bn in April from USD82.7bn a year earlier as tax revenue climbed. The White House and Congress are struggling to rein in the budget deficit and agree to terms to raise a legal limit on the national debt. (Bloomberg)
U.S: Trade deficit widened in March on oil imports. The trade gap rose 6% MoM to USD 48.2b, the biggest since June, from USD 45.4b in February. Sales abroad climbed by the most in 17 years. (Source: Bloomberg)
Malaysia: Production growth slowed in March on mining, utilities
Malaysia’s industrial production growth slowed in March as mining and power companies decreased output and Japan’s record earthquake disrupted trade in Asia. Production at factories, utilities and mines rose 2.4% y-o-y after gaining a revised 5.2% in February. (Bloomberg)
South Korea: Unemployment rate declines to a 3-month low
South Korea’s unemployment rate fell to a 3-month low as an economic recovery spurred hiring at manufacturers and health and social welfare service providers. The jobless rate fell to 3.6% in April from 4% in March. (Bloomberg)
Australia: Cuts spending to cool inflation, projects surplus
Australia’s government will end 23 years of spending growth to ease inflation from a mining boom and support the return to a budget surplus, even as it plans measures to help companies hurt by a record-high currency. The underlying cash deficit will narrow to AUD22.6bn in the 12 months to 30 June 2012, less than half the AUD49.4bn gap this fiscal year. (Bloomberg)
China: Inflation spreading beyond food adds tightening pressure
China’s inflation is spreading beyond food, signaling Premier Wen Jiabao’s strategy of quarter point interest rate increases every 2 months has yet to contain consumer prices. Clothing costs climbed 1.4% in April from a year earlier, the biggest gain since 1997 while non-food inflation held at 2.7%, the fastest pace in at least 6 years. Overall consumer prices rose 5.3%. (Bloomberg)
Germany: April inflation accelerated
Inflation in Germany accelerated more than initially estimated in April after energy costs surged. The inflation rate jumped 2.7% from 2.3% in March. Consumer prices also rose 0.3% from March. (Bloomberg)
UK: King says inflation may reach 5% as BOE cuts growth forecast
Bank of England (BOE) Governor Mervyn King said that inflation remains “uncomfortably high” and officials signaled they may need to raise interest rates later this year even as the economy struggles to build momentum. King highlighted that “inflation remains uncomfortably high and well above the 2% target. And there is a good chance that, if utility prices rise further later in the year, inflation will reach 5%.”(Bloomberg)
US: Job openings increase to highest level since 2008
Job openings in the US increased in March to the highest level in more than 2 years, an indication employers are becoming more optimistic about bringing on new workers. The number of positions waiting to be filled rose by 99k to 3.1m, the most since Sept 2008. (Bloomberg)
US: Budget deficit shrank in April as tax revenue climbed
The US government’s monthly budget deficit narrowed to USD40.5bn in April from USD82.7bn a year earlier as tax revenue climbed. The White House and Congress are struggling to rein in the budget deficit and agree to terms to raise a legal limit on the national debt. (Bloomberg)
U.S: Trade deficit widened in March on oil imports. The trade gap rose 6% MoM to USD 48.2b, the biggest since June, from USD 45.4b in February. Sales abroad climbed by the most in 17 years. (Source: Bloomberg)
20110512 1007 Malaysia Corporate Related News.
KLCI chart reading :
side way range bound little downside biased.
US stocks decline as commodities tumble amid a stronger dollar
US stocks slumped, giving the Standard & Poor’s 500 Index its biggest decline since March, as commodities tumbled amid a strengthening dollar and concern that accelerating global inflation may curb economic growth. Freeport-McMoRan Copper & Gold Inc. and Halliburton Co. fell at least 4% as data from China raised expectations about higher interest rates. Yahoo! Inc. dropped 7.3% on concern that its stake in a Chinese Internet business may lose value after a transfer of ownership in the company’s online payment business. Walt Disney Co., the biggest theme-park operator, slumped 5.4% after profit missed estimates. The S&P 500 dropped 1.1% to 1,342.08 at 4 pm in New York, snapping a three-day rally. The Dow Jones Industrial Average slid 130.33 points, or 1%, to 12,630.03. Oil fell below USD100 as a report showed that US supplies surged. (Bloomberg)
Wah Seong to demerge O&G businesses
Wah Seong Corp (WSC) has proposed to demerge the oil and gas businesses currently held under its whollyowned Wasco Energy Ltd (WEL). Wah Seong said that the proposed demerger was to enable WEL and its subsidiaries to operate as a separate and fast-growing public-listed entity. It added that a proposed listing of WEL on the Main Market of Bursa Securities would be sought in conjunction with the proposed demerger. (StarBiz)
Petra Perdana gets RM73m charter contracts
Petra Perdana has secured RM73m worth of new charter contracts for three mid-size anchor handling tug supply (AHTS) vessels. Petra Perdana said that in the first contract, a 12,000 BHP AHTS was on a six-month charter from 1 May for deployment in Labuan, while in the second contract another 12,000 BHP AHTS was an 18-month charter from 7 May to work from its Kemaman base. Each of the charters can be extended for up to two months, it said. Petra Perdana said it had also secured a one-year charter renewal for a 10,800 BHP AHTS vessel that was currently supporting Petronas Carigali operations. The new contract is effective from 23 June, 2011, it said. (Financial Daily)
UOA gears up for IPO
Soon-to-be listed property developer UOA Development signed a retail underwriting agreement with its underwriters, ahead of its initial public offering (IPO) on the Main Market of Bursa Malaysia next month. The underwriters for the IPO were CIMB Investment Bank, RHB Investment Bank, OSK Investment Bank, HwangDBS Investment Bank and Hong Leong Investment Bank, it said in a statement. UOA has received approval from the Securities Commission for the proposed listing of its entire enlarged issued and paid-up share capital of up to 1.2bn 5 sen shares. The IPO consists of an institutional offering of up to of 337m shares to Malaysian and foreign institutional and selected investors (including bumiputra investors approved by the International Trade and Industry Ministry) and a retail offering of 70m shares to the Malaysian public, eligible directors and employees of UOA Development, its subsidiaries and persons who have contributed to the success of UOA and its subsidiaries. (StarBiz)
Govt to acquire Selangor water bonds?
The federal government and Pengurusan Aset Air (PAAB) are said to have finalized a RM6.5bn proposal to take over the Selangor state water-related bonds, sources familiar with the matter told The Edge Financial daily. It is understood that an offer is likely to be made within the next 2 weeks to the bond holders, which include Great Eastern Life Assurance (M), CIMB Group, the Employees Provident Fund (EPF) and Kumpulan Wang Amanah Pencen. Considering some of the bonds require payments as early as July, the offer period is likely to be a short one. (Financial Daily)
Motor cover directive
Bank Negara Malaysia (BNM) wants all composite takaful operators to offer motor insurance coverage within the next three months, sources said. In a meeting with eight composite takaful companies last Friday, BNM said motor insurance cover must be provided by all operators or they could risk losing their operating licence. It is learnt that out of the eight, only four provide motor insurance coverage. BNM wants all general takaful companies to come into the Malaysian Motor Insurance Pool (MMIP) to create a level playing field with their conventional insurance counterparts, the sources said. (BT)
Hong Leong Financial Group targets RM100m gross premiums for takaful
Hong Leong Financial Group (HLFG) hopes to achieve RM100m in gross premiums from its takaful business by the end of the current financial year in 30 June, 2011, it said on Wednesday, 11 May. This was an increase of nearly 67% from the RM60m registered in FY10. HLFG and Mitsui Sumitomo Insurance Co. Ltd’s (MSI) conventional insurance partnership has been expanded to include Islamic insurance with MSI acquiring a 35% stake in HLFG's takaful company. (Financial Daily)
Star: Issues RM200m notes. Star Publications (M) Bhd has made the first issuance of RM200m in nominal value in pursuant to its RM750m medium-term notes (MTNs) programme. (Source: Bursa Malaysia)
Hua Yang: Buys prime land in KL. Hua Yang Bhd has acquired 1.55 acres of prime land in Desa Pandan Commercial Centre worth RM32m. It plans to develop the land into a mixed serviced apartment and commercial centre with a gross development value of RM160m. (Source: Bursa Malaysia)
Green Packet: Packet One wants more spectrum. Packet One Networks Sdn Bhd (P1), a unit of Green Packet Bhd, has applied for an additional 30Mhz of the 2.3G spectrum given the growth rates of its broadband service. (Source: The Star)
20110512 0956 Global Market Related News.
DJIA chart reading : correction range bound upside biased.
Hang Seng chart reading : pullback correction downside biased.
Asian Stocks, Commodities Drop on Inflation Concern (Source: Bloomberg)
Asian stocks fell, dragging a regional benchmark index down for the first day this week as commodity prices tumbled amid concern that China will enact further monetary tightening.
World stocks tick higher; euro, oil fall
LONDON, May 11 (Reuters) - World stocks rose for a second straight day thanks to favourable U.S. and European corporate earnings, while the euro slipped on uncertainty over whether debt-laden Greece would need additional financial aid. Oil prices and the euro dipped after China's April inflation came in slightly above expectations, but other data, including industrial output, suggested slower activity and less room for aggressive tightening to curb growth.
Trade Deficit in U.S. Widened in March on Oil Imports (Source: Bloomberg)
The U.S. trade deficit widened more than forecast in March as the highest oil prices in more than two years boosted imports, eclipsing record exports .
U.S. Budget Deficit Narrowed to $40.5 Billion in April as Revenue Climbed (Source: Bloomberg)
The U.S. government’s monthly budget deficit narrowed to $40.5 billion in April from a year earlier as tax revenue climbed. Last month’s figure compares with a shortfall of $82.7 billion in April 2010, according to the Treasury Department’s monthly budget statement, released today in Washington. The White House and Congress are struggling to rein in the budget deficit and agree to terms to raise a legal limit on the national debt. Without an increase in the debt cap, the Treasury’s borrowing authority will probably run out in early August, according to official estimates. “We have seen income tax increases start to trend higher,” said Sean Incremona, a senior economist at 4Cast Inc in New York. “There is an underlying positive trend.” Incremona forecast a deficit of $41 billion.
U.S. Stocks Fall as Commodities Drop Amid Concern Interest Rates Will Rise (Source: Bloomberg)
U.S. stocks slumped, giving the Standard & Poor’s 500 Index its biggest decline since March, as commodities tumbled amid a strengthening dollar and concern that accelerating global inflation may curb economic growth. Freeport-McMoRan Copper & Gold Inc. (FCX) and Halliburton Co. (HAL) fell at least 4 percent as data from China raised expectations about higher interest rates. Yahoo! Inc. dropped 7.3 percent on concern that its stake in a Chinese Internet business may lose value after a transfer of ownership in the company’s online payment business. Walt Disney Co. (DIS), the biggest theme-park operator, slumped 5.4 percent after profit missed estimates.
Skype Gets 40% Markup With Microsoft Bid Dwarfing Owners’ Filing: Real M&A (Source: Bloomberg)
Microsoft Corp. (MSFT) is paying a dot-com era price for Skype Technologies SA, almost 40 percent more than the world’s most popular Internet calling service itself says the business is worth. Microsoft, the world’s largest software company, agreed to pay $8.5 billion for Luxembourg-based Skype, which lost money in four of the past five years even as it quadrupled sales. The takeover, the largest for an Internet company since May 2000, is 32 times Skype’s adjusted earnings before interest, taxes, depreciation and amortization, according to data compiled by Bloomberg. That’s 39 percent more than the multiple Skype used to value its own equity in an April regulatory filing.
US import, small business data point to inflation
WASHINGTON, May 10 (Reuters) - The cost of imported products in the United States rose for a seventh straight month in April thanks to a weaker dollar, and more owners of small businesses raised prices, in potentially worrying signs of inflation.
Import costs rose 2.2 percent after increasing 2.6 percent in March, the Labor Department said on Tuesday. While the rate of increase slowed as food and energy costs moderated, it surpassed economists' expectations for a 1.8 percent gain.
China's economy cools, limiting need for tighter policy
BEIJING, May 11 (Reuters) - China's industrial output growth eased much more than expected in April to suggest the world's second-biggest economy is cooling, reducing the need for further aggressive monetary policy tightening even as inflation remains stubbornly high.
Consumer inflation eased modestly to 5.3 percent in April from a 32-month high in March of 5.4 percent. The outcome topped expectations but still underlined the view that price pressures are peaking and may start to ease in the second half of 2011.
China Inflation Spreading Beyond Food Adds Pressure (Source: Bloomberg)
China’s inflation is spreading beyond food, signaling Premier Wen Jiabao’s strategy of quarter-point interest-rate increases every two months has yet to contain consumer prices. Clothing costs climbed 1.4 percent in April from a year earlier, the biggest gain since 1997, a statistics bureau report showed yesterday. Non-food inflation held at 2.7 percent, the fastest pace in at least six years, while overall consumer prices rose 5.3 percent.
China Pledges Increased Access for U.S. Companies Without Budging on Yuan (Source: Bloomberg)
China pledged to open more of its markets to U.S. companies after a two-day gathering of top officials that underscored the gap between the two nations over how fast the Chinese currency should rise. Treasury Secretary Timothy F. Geithner continued his push for a stronger yuan, which lawmakers say would boost American competiveness and job growth. Chinese officials agreed on the upward direction of the currency, while splitting on the pace. “We have differences on the degree of appreciation,” Deputy Finance Minister Zhu Guangyao said yesterday in Washington.
Japanese Stocks Retreat First Time in Three Days as Oil, Metals Tumble (Source: Bloomberg)
Japanese stocks declined for the first time in three days as commodities tumbled amid concern that accelerating global inflation may curb economic growth.
Indonesia May Extend Pause in Rate Increase Amid Slowing Inflation, Growth (Source: Bloomberg)
Indonesia’s central bank will probably keep interest rates unchanged for a third consecutive meeting to support the economy, allowing gains in the rupiah to reduce inflationary pressures. Bank Indonesia will keep its benchmark reference rate at 6.75 percent, according to all 10 economists surveyed by Bloomberg News. The central bank is due to release its decision in Jakarta tomorrow.
Bank of England Signals Rate Increase This Year as Inflation Accelerates (Source: Bloomberg)
Bank of England Governor Mervyn King said that inflation remains “uncomfortably high,” and officials signaled they may need to raise interest rates later this year even as the economy struggles to build momentum.
German Inflation Accelerated More Than First Estimated Last Month to 2.7% (Source: Bloomberg)
Inflation in Germany, Europe’s largest economy, accelerated more than initially estimated in April after energy costs surged. The inflation rate, calculated using a harmonized European Union method, jumped to 2.7 percent from 2.3 percent in March, the Federal Statistics Office in Wiesbaden said today. That’s an upward revision from the first estimate of 2.6 percent on April 27. From March, consumer prices rose 0.3 percent, more than the 0.2 percent initially reported.
Salgado Says Spanish Budget Deficit Is Shrinking, No New Measures Needed (Source: Bloomberg)
Spain doesn’t plan additional budget cuts as the deficit is already narrowing in line with the government’s plans, Finance Minister Elena Salgado said. “The deficit is being reduced in line with forecasts, revenues are in line with forecasts and the reduction in spending is as we expected, so there will be no additional measures,” she told lawmakers in Parliament today when asked if the government is planning new cuts.
Euro Trades Near 3-Week Low on Greece Concern (Source: Bloomberg)
The euro traded 0.3 percent from a three-week low against the dollar on concern Greece may not receive additional aid fast enough to avoid debt restructuring. The common currency maintained its loss against most of its major counterparts after European leaders slowed Greece’s drive for extra aid, saying the debt-wracked nation must first make good on pledges to overhaul its economy. The yen snapped yesterday’s 1.3 percent gain against the euro before a report today forecast to show Japan’s trade surplus narrowed in March following the nation’s worst earthquake.
Real Weakens on Plunge in Commodities, International Gains for U.S. Dollar (Source: Bloomberg)
Brazil’s reall fell the most in a week as commodity prices declined and the dollar gained against currencies from countries that export raw materials. The real weakened 1.1 percent to 1.6218 per dollar at 5 p.m. in New York, from 1.6037 yesterday. The currency declined 1.9 percent on May 4.
Australia seeks to harness mining boom, avoid inflation
CANBERRA, May 10 (Reuters) - Australia expects a fiscal surplus in 2012/13 and will seek to ease a shortage of skilled workers that threatens to fuel inflation as the economy rides an historic resources boom, the minority Labour government said in its first budget on Tuesday.
Treasurer Wayne Swan said Australia -- the only major developed nation to avoid recession during the global financial crisis -- faced major hurdles in handling the Asia-led resources boom, a soaring Australian dollar and a two-speed economy that has left non-mining industries struggling.
FOREX-Euro hurt by Greek debt worry; sterling rises
LONDON, May 11 (Reuters) - The euro slipped on Wednesday, with risks to the downside on mounting uncertainty over whether euro zone officials would provide timely financial aid to debt-laden Greece and Portugal.
Sterling hit a 6-week high against the euro after the Bank of England raised its medium-term inflation forecasts in its Quarterly Inflation Report, with markets now expecting a UK rate hike by year-end.
Asian stocks fell, dragging a regional benchmark index down for the first day this week as commodity prices tumbled amid concern that China will enact further monetary tightening.
World stocks tick higher; euro, oil fall
LONDON, May 11 (Reuters) - World stocks rose for a second straight day thanks to favourable U.S. and European corporate earnings, while the euro slipped on uncertainty over whether debt-laden Greece would need additional financial aid. Oil prices and the euro dipped after China's April inflation came in slightly above expectations, but other data, including industrial output, suggested slower activity and less room for aggressive tightening to curb growth.
Trade Deficit in U.S. Widened in March on Oil Imports (Source: Bloomberg)
The U.S. trade deficit widened more than forecast in March as the highest oil prices in more than two years boosted imports, eclipsing record exports .
U.S. Budget Deficit Narrowed to $40.5 Billion in April as Revenue Climbed (Source: Bloomberg)
The U.S. government’s monthly budget deficit narrowed to $40.5 billion in April from a year earlier as tax revenue climbed. Last month’s figure compares with a shortfall of $82.7 billion in April 2010, according to the Treasury Department’s monthly budget statement, released today in Washington. The White House and Congress are struggling to rein in the budget deficit and agree to terms to raise a legal limit on the national debt. Without an increase in the debt cap, the Treasury’s borrowing authority will probably run out in early August, according to official estimates. “We have seen income tax increases start to trend higher,” said Sean Incremona, a senior economist at 4Cast Inc in New York. “There is an underlying positive trend.” Incremona forecast a deficit of $41 billion.
U.S. Stocks Fall as Commodities Drop Amid Concern Interest Rates Will Rise (Source: Bloomberg)
U.S. stocks slumped, giving the Standard & Poor’s 500 Index its biggest decline since March, as commodities tumbled amid a strengthening dollar and concern that accelerating global inflation may curb economic growth. Freeport-McMoRan Copper & Gold Inc. (FCX) and Halliburton Co. (HAL) fell at least 4 percent as data from China raised expectations about higher interest rates. Yahoo! Inc. dropped 7.3 percent on concern that its stake in a Chinese Internet business may lose value after a transfer of ownership in the company’s online payment business. Walt Disney Co. (DIS), the biggest theme-park operator, slumped 5.4 percent after profit missed estimates.
Skype Gets 40% Markup With Microsoft Bid Dwarfing Owners’ Filing: Real M&A (Source: Bloomberg)
Microsoft Corp. (MSFT) is paying a dot-com era price for Skype Technologies SA, almost 40 percent more than the world’s most popular Internet calling service itself says the business is worth. Microsoft, the world’s largest software company, agreed to pay $8.5 billion for Luxembourg-based Skype, which lost money in four of the past five years even as it quadrupled sales. The takeover, the largest for an Internet company since May 2000, is 32 times Skype’s adjusted earnings before interest, taxes, depreciation and amortization, according to data compiled by Bloomberg. That’s 39 percent more than the multiple Skype used to value its own equity in an April regulatory filing.
US import, small business data point to inflation
WASHINGTON, May 10 (Reuters) - The cost of imported products in the United States rose for a seventh straight month in April thanks to a weaker dollar, and more owners of small businesses raised prices, in potentially worrying signs of inflation.
Import costs rose 2.2 percent after increasing 2.6 percent in March, the Labor Department said on Tuesday. While the rate of increase slowed as food and energy costs moderated, it surpassed economists' expectations for a 1.8 percent gain.
China's economy cools, limiting need for tighter policy
BEIJING, May 11 (Reuters) - China's industrial output growth eased much more than expected in April to suggest the world's second-biggest economy is cooling, reducing the need for further aggressive monetary policy tightening even as inflation remains stubbornly high.
Consumer inflation eased modestly to 5.3 percent in April from a 32-month high in March of 5.4 percent. The outcome topped expectations but still underlined the view that price pressures are peaking and may start to ease in the second half of 2011.
China Inflation Spreading Beyond Food Adds Pressure (Source: Bloomberg)
China’s inflation is spreading beyond food, signaling Premier Wen Jiabao’s strategy of quarter-point interest-rate increases every two months has yet to contain consumer prices. Clothing costs climbed 1.4 percent in April from a year earlier, the biggest gain since 1997, a statistics bureau report showed yesterday. Non-food inflation held at 2.7 percent, the fastest pace in at least six years, while overall consumer prices rose 5.3 percent.
China Pledges Increased Access for U.S. Companies Without Budging on Yuan (Source: Bloomberg)
China pledged to open more of its markets to U.S. companies after a two-day gathering of top officials that underscored the gap between the two nations over how fast the Chinese currency should rise. Treasury Secretary Timothy F. Geithner continued his push for a stronger yuan, which lawmakers say would boost American competiveness and job growth. Chinese officials agreed on the upward direction of the currency, while splitting on the pace. “We have differences on the degree of appreciation,” Deputy Finance Minister Zhu Guangyao said yesterday in Washington.
Japanese Stocks Retreat First Time in Three Days as Oil, Metals Tumble (Source: Bloomberg)
Japanese stocks declined for the first time in three days as commodities tumbled amid concern that accelerating global inflation may curb economic growth.
Indonesia May Extend Pause in Rate Increase Amid Slowing Inflation, Growth (Source: Bloomberg)
Indonesia’s central bank will probably keep interest rates unchanged for a third consecutive meeting to support the economy, allowing gains in the rupiah to reduce inflationary pressures. Bank Indonesia will keep its benchmark reference rate at 6.75 percent, according to all 10 economists surveyed by Bloomberg News. The central bank is due to release its decision in Jakarta tomorrow.
Bank of England Signals Rate Increase This Year as Inflation Accelerates (Source: Bloomberg)
Bank of England Governor Mervyn King said that inflation remains “uncomfortably high,” and officials signaled they may need to raise interest rates later this year even as the economy struggles to build momentum.
German Inflation Accelerated More Than First Estimated Last Month to 2.7% (Source: Bloomberg)
Inflation in Germany, Europe’s largest economy, accelerated more than initially estimated in April after energy costs surged. The inflation rate, calculated using a harmonized European Union method, jumped to 2.7 percent from 2.3 percent in March, the Federal Statistics Office in Wiesbaden said today. That’s an upward revision from the first estimate of 2.6 percent on April 27. From March, consumer prices rose 0.3 percent, more than the 0.2 percent initially reported.
Salgado Says Spanish Budget Deficit Is Shrinking, No New Measures Needed (Source: Bloomberg)
Spain doesn’t plan additional budget cuts as the deficit is already narrowing in line with the government’s plans, Finance Minister Elena Salgado said. “The deficit is being reduced in line with forecasts, revenues are in line with forecasts and the reduction in spending is as we expected, so there will be no additional measures,” she told lawmakers in Parliament today when asked if the government is planning new cuts.
Euro Trades Near 3-Week Low on Greece Concern (Source: Bloomberg)
The euro traded 0.3 percent from a three-week low against the dollar on concern Greece may not receive additional aid fast enough to avoid debt restructuring. The common currency maintained its loss against most of its major counterparts after European leaders slowed Greece’s drive for extra aid, saying the debt-wracked nation must first make good on pledges to overhaul its economy. The yen snapped yesterday’s 1.3 percent gain against the euro before a report today forecast to show Japan’s trade surplus narrowed in March following the nation’s worst earthquake.
Real Weakens on Plunge in Commodities, International Gains for U.S. Dollar (Source: Bloomberg)
Brazil’s reall fell the most in a week as commodity prices declined and the dollar gained against currencies from countries that export raw materials. The real weakened 1.1 percent to 1.6218 per dollar at 5 p.m. in New York, from 1.6037 yesterday. The currency declined 1.9 percent on May 4.
Australia seeks to harness mining boom, avoid inflation
CANBERRA, May 10 (Reuters) - Australia expects a fiscal surplus in 2012/13 and will seek to ease a shortage of skilled workers that threatens to fuel inflation as the economy rides an historic resources boom, the minority Labour government said in its first budget on Tuesday.
Treasurer Wayne Swan said Australia -- the only major developed nation to avoid recession during the global financial crisis -- faced major hurdles in handling the Asia-led resources boom, a soaring Australian dollar and a two-speed economy that has left non-mining industries struggling.
FOREX-Euro hurt by Greek debt worry; sterling rises
LONDON, May 11 (Reuters) - The euro slipped on Wednesday, with risks to the downside on mounting uncertainty over whether euro zone officials would provide timely financial aid to debt-laden Greece and Portugal.
Sterling hit a 6-week high against the euro after the Bank of England raised its medium-term inflation forecasts in its Quarterly Inflation Report, with markets now expecting a UK rate hike by year-end.
20110512 0953 Global Commodities Related News.
Corn (Source: CME)
US corn futures finish limit down as USDA's increased inventory estimate surprises traders expecting supplies to decline or stay steady. The 8% increase in projected season-end supplies eases concerns that drove prices to record highs last month. Yet, grain users remain jittery about the potential for poor weather to reduce the size of the next harvest. Corn's focus will quickly return to the weather and prospects for continued planting delays in the eastern Corn Belt, according to Susquehanna International. CBOT July corn drops 30c to $6.77 1/4 a bushel. The limit expands to 45c Thursday.
Wheat (Source: CME)
US wheat futures close sharply lower on spillover selling from a limit-down drop in the corn market. Corn fell on an increased USDA inventory projection, dragging down wheat because both grains are used for animal feed. Adjustments to USDA's wheat estimates in monthly crop reports issued were uneventful. "I didn't see anything that would stick out that would be wildly bearish," Citigroup analyst Terry Reilly says. CBOT July wheat sinks 39 3/4c to $7.59 a bushel; KCBT July drops 28 1/2c to $9; MGE July slides 33 3/4c to $9.25 1/2.
Rice (Source: CME)
US rice futures tumble on spillover selling from the sliding wheat and corn markets. Rice feels pressure from the other grains because wheat and rice are both global food staples and the markets often influence one another. It was difficult for wheat and rice to fight off losses as corn was limit-down amid an unexpected inventory-forecast increase. CBOT July rice sinks 21 1/2c to $13.95 1/2 per hundredweight.
USDA: FSU Wheat Exports To Double in 2011-12, Cutting EU, US Hopes (Source: CME)
Wheat exports from the Former Soviet Union are expected to double next season, the U.S. Department of Agriculture said, sapping demand for European and U.S. grain. In its first forecast for world wheat production in 2011-12, the USDA estimated exports from the region would rebound to 26 million metric tons. That includes 10 million tons from Russia, 8.5 million tons from Ukraine and 7.5 million tons from Kazakhstan. Exports from this season are forecast at just 13.1 million tons after the region's two top producers, Russia and Ukraine, limited exports because drought devastated their 2010 harvest. The forecast is well below the peak of FSU exports three years ago. Still, the USDA said the arrival of FSU wheat on world markets is expected to cut U.S. exports by 18% to 1.05 billion bushels, or 28.6 million tons. European Union exports are expected to fall 19% to a four-year low of 18 million tons in 2011-12.
"Export prospects are sharply diminished with reduced [U.S. hard red wheat] production and increasing competition as Black Sea production and exports are projected to rebound," said the report. The estimate adds weight to hopes that Russia may soon lift a ban on grain shipments imposed last summer after drought slashed the country's harvest by around a third. Officials are due to meet at the end of May to discuss whether to allow exports this year as production improves. But traders remain skeptical over whether the Kremlin will lift the embargo after comments from Prime Minster Vladimir Putin, stating that the "crop results must convince us that we fully satisfy our internal necessities."
Corn, Sugar Demand Driven By Emerging Markets - Distinction (Source: CME)
Demand for corn, soybeans and sugar will continue to be driven by imports from emerging markets, said Patrick Armstrong, Managing Partner of Distinction Asset Management. Patrick Armstrong said year-end corn inventories fell by 16% from the previous year, and he expects Chinese imports of corn to rise from 1.5 million metric tons to well over 10 million tons in the next three years. "The long-term demand case is driven by income growth and increased purchasing power from emerging markets consumers," Armstrong said. Regarding last week's sell-off, "we have rebuilt positions in Agricultural commodities in our Multi-Asset Real Return funds following last week's broad-based commodity sell-off," said Armstrong. Armstrong attributed last week's sell-off to silver, "the canary in the coalmine." He added, "the sell-off was led by silver, a commodity very much in a bubble driven by speculative activity. It's also a commodity that can be manipulated by investment banks and the hedgefunds."
At present, 6% of Distinction's portfolio exposure lies with agriculture. The asset manager medium-term adopts a bullish stance for sugar, despite the recent losses witnessed in futures markets. "Short-term supply of sugar does exceed demand. But further out, with China consuming more coffee and coca-cola, the supply picture will most definitely change," Armstrong added. Armstrong said inventory draw down would definitely be witnessed in corn markets however over the next 12 months. Regarding Asia growth, Armstrong said China would not be able to sustain growth forever and concerns of inflation are now noted by the government. "A shift from an export driven economy to an economy that deals primarily with internal consumption could happen, leading to a sustainable trajectory growth for the country."
Libya Food Stocks Could Run Out By July -WFP Spokeswoman (Source: CME)
Libya could run out of food in the next six to eight weeks if humanitarian supply lines are not dramatically improved, a spokeswoman for the United Nations' relief body said. The World Food Program's Caroline Huford said that the heavily import-reliant country is on the brink of a "full-blown food security crisis" which could affect the entire population within two months. "Replenishment of public and private food stocks is a critical issue," she said. "Current stocks will be used up in one and a half to two months, based on current consumption." Food shortages are particularly critical in the rebel-held east of the country, where heavy fighting is disrupting supply lines. Only one aid ship a week is reaching the port city of Misrata, a spokesman for the insurgents said last week. The European Union said it plans to open an office in the Libyan city of Benghazi to improve the flow of aid to the authorities there. But Huford said the food shortage is already having a severe impact on Libya's poor.
They normally rely heavily on government support programs to afford food, but the subsidies have been stopped since fighting began in February. "Many food items had increased up to 40% in price, which is of extreme concern as social safety nets and subsidy schemes have been disrupted," she said. Libya is especially vulnerable to food shortages as it relies heavily on international markets for supplies. The desert country imports 90% of its food and with what little production there is concentrated in western regions. Huford said the WFP has distributed food assistance to around a quarter of a million people in 15 locations in eastern parts of the country to date. A supply line has also been opened into Western Libya from the Tunisian border where its partner agency the Libyan Red Crescent is distributing 250 tons of food.
Flood Soaks Mississippi Casinos, Farmlands (Source: CME)
The Mississippi River crested at Memphis, Tenn., and kept rising to the south, dealing a blow to Mississippi's gambling and agriculture industries. Fifteen of the state's 19 riverside casinos have been closed because of flooding, with another scheduled to shut down, said Larry Gregory, executive director of the Mississippi Gaming Commission. The gambling facilities, stretching from Tunica in the north to Natchez in the south, employ about 13,000 people and generate some $13 million a month in state and local taxes. The casinos themselves float, but access ramps and parking lots are under water. It could take weeks for the casinos to reopen, said Mr. Gregory. The state's gambling industry "has been hit hard by the recession," said Webster Franklin, president of the Tunica Convention and Visitors Bureau. "The flood has come at a time when we'd hoped to begin rebounding." In Memphis, the river hit its expected high of 47.8 feet, but it will take weeks for the water to recede. Area levees were holding.
Barges continued to navigate the Mississippi, but smaller ports have had to shut down because the equipment used to load and unload goods was submerged. Three conveyor belts used to handle agricultural goods were underwater at the Port of Rosedale, in the heart of the Delta about 115 miles southwest of Memphis. "Everything's shut down now, and we're looking to be down another four to five weeks," said Butch James, the terminal manager. He spent much of Tuesday in his office, gazing out at the engorged river. "We won't be doing nothing," he said. Some residents in the lowest-lying areas evacuated weeks ago in anticipation of the rising waters, which authorities said were expected to crest as soon as Tuesday night in the northernmost part of the state. About 600 people who live around the fishing camps of Tunica Cutoff have fled to relatives' homes or a local shelter, said Larry Liddell, public information officer for Tunica County.
Statewide, 585 homes have been affected by flooding, according to Mike Womack, executive director of the Mississippi Emergency Management Agency. But the flood-protection system along the Mississippi was holding. "We think the main levee system is in good shape," he said. What concerns him is the expected flooding of the Yazoo River basin as the tributary gets backed up from where it meets the Mississippi at Vicksburg. Mr. Womack estimates that flooding in the area could reach 850 homes and between 300,000 and 600,000 acres of land, much of which is devoted to agriculture. Fields of recently planted corn, cotton and soybeans throughout the Delta have been inundated, officials said. "I really can't compare it to anything," said Andy Prosser, head of marketing at the state Department of Agriculture and Commerce. "This is unprecedented territory." Yet some Delta residents seemed unfazed.
In the town of Gunnison, 60-year-old Odessa Jackson Owens has spent three decades living with her husband in a house right next to the levee. "We're not worried about it at all," she said Tuesday, as she cooked up ham and spaghetti. Though Bolivar County, where Gunnison is located, suffered a major levee break in the historic flood of 1927, Ms. Owens isn't budging. "We didn't have this tall levee then," she said.
USDA Raises Predictions For Corn, Soybean Supplies (Source: CME)
End-of-season corn inventories in the U.S. won't be as tight as previously expected, federal forecasters said, easing supply concerns that had driven prices to record highs. The U.S. Department of Agriculture, in a monthly crop report, now projects corn supplies at 730 million bushels as of Aug. 31, up 8% from last month's estimate, as it cut expected exports. The agency increased its outlook for U.S. soybean inventories, also on slowing exports. Recent federal data show export demand cooling as high prices curb interest from foreign buyers. The increase in projected corn inventories caught traders and grain buyers by surprise as many expected the USDA to keep its forecast unchanged, particularly since last month's report was widely viewed as underestimating demand. "There is nothing friendly about today's report," said Joseph Vaclavik, a broker for MF Global in Chicago. "A cut in exports for both commodities is an indicator that demand may be softening at high price levels."
The report also reflected slowing demand for cotton with lower exports from the U.S., the world's top exporter of the fiber. Federal forecasters in Wednesday's report raised their soybean inventory forecast 21% from last month to 170 million bushels. The increase was widely expected by analysts as exports have been seen cooling for some time now and domestic demand has remained relatively flat. The new USDA forecast for U.S. soybean exports for 2010-11 crop year is 1.55 billion bushels, down from 1.58 billion bushels. The forecast for Brazil's soybean production continues to grow and the country's crop is expected to take more pressure off U.S. supplies. The USDA raised its forecast for Brazil production to 73 million metric tons, up from last month's forecast of 72 million tons. As for corn, federal forecaster now see exports at 1.9 billion bushels in the 2010-11 marketing year, down from a 1.95 billion-bushel estimate a month ago.
The USDA also tweaked its expectations for U.S. corn imports, increasing them to 25 million bushels from 20 million bushels a month ago. Meanwhile, the USDA lowered its forecast for winter-wheat production this year to 1.42 billion bushels, a 4% drop from last year. Dry weather conditions in Great Plains states have taken a sharp toll on the production forecast. Farmers in the region grow hard red winter wheat, which is milled into flour used to bake bread. Hard red winter wheat production in the U.S. is now forecast at just 762 million bushels, a 25% drop from last year. Farmers will begin harvesting the crop in the next few weeks.
FAO:One Third Of Human World Food Production Wasted Each Year (Source: CME)
Approximately one third of food produced in the world for human consumption, roughly 1.3 billion metric tons, is wasted each year, the Food and Agriculture Organization of the United Nations said with reference to a commissioned study. The document, Global Food Losses and Food Waste, was commissioned by FAO from the Swedish Institute for Food and Biotechnology. "Every year, consumers in rich countries waste almost as much food (222 million tonnes) as the entire net food production of sub-Saharan Africa (230 million tons). The amount of food lost or wasted every year is equivalent to more than half of the world's annual cereals crop (2.3 billion tonnes in 2009/2010)," the FAO said.
Mississippi Floodwaters Move South (Source: Bloomberg)
Communities between Memphis, Tennessee, and the Gulf of Mexico inspected levees and packed sandbags as they watched the Mississippi River’s floodwaters roll south toward refineries, riverboat casinos and farms. As many as 3,900 people may be affected by flooding in northern Louisiana, above the point where officials may have to open a spillway that would inundate more than 3 million acres to the south, Governor Bobby Jindal said at a press conference today in Baton Rouge. In Mississippi, officials are most concerned about tributary flooding in the fertile Delta region in the northwestern corner of the state, Governor Haley Barbour told reporters today in Greenville.
Jim Rogers Says Dollar Is Long Term ‘Total Disaster,’ Yuan May be ‘Safe’ (Source: Bloomberg)
The U.S. dollar is going to be a “total disaster” in the long term because of the country’s position as the world’s largest debtor and the policies being pursued by Federal Reserve Chairman Ben S. Bernanke, according to investor Jim Rogers. The Chinese yuan is likely to be a “safe” currency, although it is difficult for investors to buy, Rogers, the chairman of Rogers Holdings, told a conference in Edinburgh. “The situation is getting worse and I expect to see severe problems in the U.S.,” Rogers said today. “Dr Bernanke doesn’t understand economics, he doesn’t understand finance, he only understands printing money and we can’t quadruple the amount of money in the next slowdown.” U.S. government debt is currently 93 percent of gross domestic product compared with 60 percent before the financial crisis and is set to rise further in the next few years. The dollar has fallen over the past year against every currency in a basket of 16 major currencies.
The euro has gained about 7 percent against the dollar this year. It traded at $1.4311 as of 3:20 p.m. in London.
Drought seen starting to cut European wheat yields
HAMBURG, May 10 (Reuters) - Concern is growing that dryness is now damaging wheat in the European Union's top producers France, Germany and Britain but late rain could still save the crops, analysts said on Tuesday.
Some yield damage may have occurred in top EU wheat producer France, where harvest forecasts are being scaled back. In number two producer Germany, a bumper crop is no longer expected but late rain could still change the picture, analysts said.
Canadian Wheat Board ex-CEOs see tough road ahead
WINNIPEG, Manitoba, May 10 (Reuters) - The Canadian Wheat Board faces a tough battle to survive as a voluntary pool competing against grain-handling heavyweights, two former chief executives of the monopoly seller say.
The big three Canadian grain handlers, Viterra Inc , Richardson International Limited and Cargill Inc [CARG.UL], won't easily welcome a new competitor and the board is hobbled without elevators and port terminals, said Greg Arason, who headed the Winnipeg-based Wheat Board from 1999-2002 and 2006-2008.
Drought-hit French wheat crop to shed 5 pct-expert
PARIS, May 10 (Reuters) - A drought that has been running in France for more than a month will cut wheat output by at least 5 percent in the European Union's largest grain producer, the scientific director of France's grains technical institute said.
"We know we won't get last year's yields," Arvalis' Philippe Gate told Reuters in an interview on Tuesday.
Australia 2011/12 wheat output may shrink, quality improve -analysts
SYDNEY, May 10 (Reuters) - Australia's 2011/12 wheat crop may shrink from last year's record output, but quality is expected to improve as weather conditions return to normal, after rain and floods reduced the quality of last season's eastern harvest, analysts said on Tuesday.
Favourable weather in eastern Australia has raised hopes for a good 2011/12 wheat harvest, but focus remains on Western Australia, usually the top grain exporting state, where rain is needed by July to ensure a reasonable crop.
Cold spring chills US corn stocks outlook
WASHINGTON, May 11 (Reuters) - U.S. farmers could still produce a record corn crop this year despite their slow start getting to the fields because of the cold, wet spring, the government is expected to show in its first projections of this year's crop on Wednesday.
Even if the farmers do recover from the flooding in the U.S. Midwest, traders say the harvest will do little to alleviate the razor-thin corn stockpile.
Corn, Wheat, Soybean Futures Decline as USDA Supply Outlook Tops Forecast (Source: Bloomberg)
Corn plunged the most allowed by the Chicago Board of Trade, and wheat and soybeans fell after the government said U.S. inventories will be bigger than analysts expected, easing supply concerns for food and fuel. Corn stockpiles before next year’s harvest may climb to 900 million bushels from a 15-year low of 730 million this year, the Department of Agriculture said today. The price as much as doubled in the past year, helping to send world food costs to a record in February and boosting costs for livestock producers including Tyson Foods Inc. (TSN) and JBS SA, and makers of ethanol including Archer Daniels Midland Co.
Sugar Surplus Seen for a Second Year, Cutting Costs for Coca-Cola (Source: Bloomberg)
Sugar output may exceed demand for a second year after farmers boosted planting as futures surged, pushing prices lower, Standard Chartered Bank said. That may lower costs for drinks makers like units of Coca-Cola Co.
Sugar steady; arabicas dip, near 34-year high
LONDON, May 11 (Reuters) - ICE sugar futures were steady, while arabica coffee prices dipped in choppy early trading and were in sight of last week's 34-year high. Sugar futures consolidated in early trading after a rally on Tuesday, with a focus on a line-up of ships at Brazilian ports.
Australia's sugar crushing season to start early - industry
SYDNEY, May 11 (Reuters) - Australia, a leading raw sugar exporter, will start its 2011 sugarcane crush about four weeks earlier than usual due to signs of sugar content peaking early in some districts, industry officials said on Wednesday.
Sucrogen, Australia's largest sugar miller and refiner, now owned by Singapore's Wilmar International , will start crushing at its Pioneer Mill in the Burdekin region on May 18, in the north-eastern state of Queensland, a company spokeswoman said.
Thin sugar supplies congest Brazil ports
LONDON/SAO PAULO, May 10 (Reuters) - A line of vessels waiting to load sugar at Brazilian ports has swelled because supplies of the sweetener from the new cane harvest have been slow to hit terminals, trade and shipping sources said on Tuesday.
There are currently 55 ships to load sugar at the country's main two ports -- Santos and Paranagua, compared with 36 vessels a year ago, according to Santos-based SA Commodities/Unimar shipping agency.
Brazil's CS sugar output seen up, ethanol down
SAO PAULO, May 10 (Reuters) - Sugar output in Brazil's main center-south cane producing region will rise to record volume this season, despite a drop in yields caused by dry weather in 2010, the government crop supply agency Conab said Tuesday.
But ethanol output is expected to fall as mills favor sugar production in search of higher returns, Conab said, in its first estimate for the new season (April-March).
Tumbling prices, global surplus in focus at sugar meet
SINGAPORE, May 11 (Reuters) - Record cane crop in Brazil, soaring sugar output in Thailand, exports from India, a global surplus and a dramatic fall in prices from 30-year highs will be in the spotlight at an industry gathering this week.
Mounting worries that supply will outstrip demand have dragged down sugar prices by nearly 40 percent from a peak of around 36 U.S. cents/lb hit in February, when fears of damage to the crop in Australia -- one of the biggest exporters of the sweetener -- from cyclone Yasi ignited a rally.
Indonesia coffee woes keep global prices on the boil
SINGAPORE, May 10 (Reuters) - Global robusta coffee prices may challenge a recent three-year peak as continued heavy rains in Indonesia's Sumatra island cause severe damage to unripe cherries and threaten the upcoming harvest, leading exporters to cancel shipments from the world's second largest producer.
As inventories drop in the main growing island of Sumatra, dealers are also struggling to meet demand from domestic roasters, with annual consumption in Southeast Asia's largest economy growing by an average around 4 percent since the mid-1980s.
Kenya 2010/11 coffee export earnings seen higher
NAIROBI May 10 (Reuters) - Kenya expects its coffee export earnings to rise by 5-10 percent in the 2010/11 season thanks to good prices and improved output, the ministry of agriculture's top official said on Tuesday.
Statistics from industry regulator Coffee Board of Kenya showed east Africa's biggest economy earned 16 billion Kenyan shillings ($189.7 million) from the 2009/10 (Oct-Sept) coffee season, a 50 percent jump from the previous year.
Oil Gains, Recovering from ‘Very Hard’ Decline, on Mississippi Flooding (Source: Bloomberg)
Oil advanced from a three-day low in New York on renewed speculation flooding on the Mississippi River will disrupt U.S. fuel supplies before the start of the driving season in the world’s biggest crude-consuming nation.
Oil Drops Below $100 a Barrel, Gasoline Tumbles, After U.S. Supplies Surge (Source: Bloomberg)
Oil fell below $100 a barrel in New York and gasoline tumbled the most in more than two years after an Energy Department report showed that U.S. supplies surged and fuel demand slipped. Crude dropped 5.5 percent after the department said stockpiles jumped 3.78 million barrels to 370.3 million last week. Gasoline inventories unexpectedly increased 1.28 million barrels to 205.8 million, the first gain in 12 weeks. Total fuel consumption declined 0.9 percent to 18.2 million barrels a day, the lowest level since June 2009.
India’s April Coal Imports From South Africa Decline 29%; China Buys More (Source: Bloomberg)
India’s imports of coal from South Africa fell 29 percent in April from a year earlier while Chinese purchases rose, according to mjunction Services Ltd. South Africa supplied 1.21 million metric tons of the fuel last month to India from a year earlier, the Kolkata-based trader said in an e-mail. That was 18 percent lower than the 1.48 million in March. China’s purchases rose 12 percent to 504,000 tons in April from March, and none in a year earlier period, it said.
Gold, Silver Futures Slump in New York as Dollar Strengthens Against Euro (Source: Bloomberg)
Gold fell in New York, halting a three-session rally, as a stronger dollar eroded the appeal of the precious metal as an alternative asset. Silver also declined. The dollar rose against the euro on speculation that European leaders may not grant Greece additional aid, forcing the nation to restructure its debt. Gold touched a record $1,577.40 an ounce on May 2 before dropping 4.2 percent last week as the greenback climbed.
COPPER-Major market developments in April
LONDON, May 10 (Reuters) - Copper prices fell in April and tumbled further still last week in a rout across commodities markets, but supplies of the metal remain tight and the market could set its sights higher if China starts buying again.
"We expect copper prices to recover very strongly from where they are now. The question is just one of timing," said Barclays Capital analyst Gayle Berry.
ALUMINIUM-Major market developments in April
LONDON, May 10 (Reuters) - Aluminium prices made gains in April and, despite being knocked back by last week's broad-based sell-off the metal's near term fundamentals remain robust, some analysts say, while others think it will head lower.
"I think the short term fundamental picture is very strong, demand is still growing very strongly across all regions," said Barclays Capital analyst Gayle Berry. "This is a trend which is going to continue and that's going to help support the price."
China aluminium output seen fresh record in May after April high
HONG KONG, May 11 (Reuters) - China's production of primary aluminium hit monthly records in April for the second consecutive month and output may rise further in May as extra capacity comes online, which could weigh on domestic prices.
But refined copper production in the world's top copper consuming nation, China is likely to be restricted by scrap supply, a cheaper alternative of copper concentrate for refined production, analysts and smelter official said on Wednesday.
China April daily steel output hits record 1.97 mln T
BEIJING, May 11 (Reuters) - China's daily crude steel output reached a record 1.968 million tonnes in April, buoyed by strong seasonal demand in the world's second-biggest economy, but looming power shortages in summer could hurt production over the coming months.
Chinese steel mills ramped up steel production to meet an expected pick up in construction demand during the second quarter, shrugging off a margin squeeze brought on by surging raw material costs.
NICKEL-Major market developments in April
LONDON, May 10 (Reuters) - Nickel prices held up well in April only to fall sharply in the recent broad sell-off while the prospect of rising supply suggests they could remain under pressure through the rest of the year.
"I would expect nickel to struggle. I think we've had the highs for the year," said David Wilson, analyst at Societe Generale.
Europe zinc premiums firm, prices attract buyers
LONDON, May 10 (Reuters) - Premiums for physical zinc have firmed in the past few weeks, traders said, as lower prices of the metal on futures markets attracted more buying.
Premiums are the amount paid over and above the London Metal Exchange (LME) cash price to cover the cost of shipping and delivering metal.
METALS-Copper confidence crumbles after China output data
LONDON, May 11 (Reuters) - Copper clambered lower on Wednesday after data from China suggested a cooling economy and potentially less demand from the world's largest consumer, but analysts say growth is still strong.
Weighing on investor sentiment was a generally firmer dollar across a basket of currencies.
PRECIOUS-Gold set for 4th day of gains, China in focus
LONDON, May 11 (Reuters) - Gold was headed for a fourth day of gains on Wednesday, while silver was on course for its strongest weekly performance in two years, driven by the prospects of greater demand from China and a softer dollar.
Data from China, a major consumer of silver and the second largest consumer of gold, showed inflation picked up more than expected in April, while industrial output slowed.
US corn futures finish limit down as USDA's increased inventory estimate surprises traders expecting supplies to decline or stay steady. The 8% increase in projected season-end supplies eases concerns that drove prices to record highs last month. Yet, grain users remain jittery about the potential for poor weather to reduce the size of the next harvest. Corn's focus will quickly return to the weather and prospects for continued planting delays in the eastern Corn Belt, according to Susquehanna International. CBOT July corn drops 30c to $6.77 1/4 a bushel. The limit expands to 45c Thursday.
Wheat (Source: CME)
US wheat futures close sharply lower on spillover selling from a limit-down drop in the corn market. Corn fell on an increased USDA inventory projection, dragging down wheat because both grains are used for animal feed. Adjustments to USDA's wheat estimates in monthly crop reports issued were uneventful. "I didn't see anything that would stick out that would be wildly bearish," Citigroup analyst Terry Reilly says. CBOT July wheat sinks 39 3/4c to $7.59 a bushel; KCBT July drops 28 1/2c to $9; MGE July slides 33 3/4c to $9.25 1/2.
Rice (Source: CME)
US rice futures tumble on spillover selling from the sliding wheat and corn markets. Rice feels pressure from the other grains because wheat and rice are both global food staples and the markets often influence one another. It was difficult for wheat and rice to fight off losses as corn was limit-down amid an unexpected inventory-forecast increase. CBOT July rice sinks 21 1/2c to $13.95 1/2 per hundredweight.
USDA: FSU Wheat Exports To Double in 2011-12, Cutting EU, US Hopes (Source: CME)
Wheat exports from the Former Soviet Union are expected to double next season, the U.S. Department of Agriculture said, sapping demand for European and U.S. grain. In its first forecast for world wheat production in 2011-12, the USDA estimated exports from the region would rebound to 26 million metric tons. That includes 10 million tons from Russia, 8.5 million tons from Ukraine and 7.5 million tons from Kazakhstan. Exports from this season are forecast at just 13.1 million tons after the region's two top producers, Russia and Ukraine, limited exports because drought devastated their 2010 harvest. The forecast is well below the peak of FSU exports three years ago. Still, the USDA said the arrival of FSU wheat on world markets is expected to cut U.S. exports by 18% to 1.05 billion bushels, or 28.6 million tons. European Union exports are expected to fall 19% to a four-year low of 18 million tons in 2011-12.
"Export prospects are sharply diminished with reduced [U.S. hard red wheat] production and increasing competition as Black Sea production and exports are projected to rebound," said the report. The estimate adds weight to hopes that Russia may soon lift a ban on grain shipments imposed last summer after drought slashed the country's harvest by around a third. Officials are due to meet at the end of May to discuss whether to allow exports this year as production improves. But traders remain skeptical over whether the Kremlin will lift the embargo after comments from Prime Minster Vladimir Putin, stating that the "crop results must convince us that we fully satisfy our internal necessities."
Corn, Sugar Demand Driven By Emerging Markets - Distinction (Source: CME)
Demand for corn, soybeans and sugar will continue to be driven by imports from emerging markets, said Patrick Armstrong, Managing Partner of Distinction Asset Management. Patrick Armstrong said year-end corn inventories fell by 16% from the previous year, and he expects Chinese imports of corn to rise from 1.5 million metric tons to well over 10 million tons in the next three years. "The long-term demand case is driven by income growth and increased purchasing power from emerging markets consumers," Armstrong said. Regarding last week's sell-off, "we have rebuilt positions in Agricultural commodities in our Multi-Asset Real Return funds following last week's broad-based commodity sell-off," said Armstrong. Armstrong attributed last week's sell-off to silver, "the canary in the coalmine." He added, "the sell-off was led by silver, a commodity very much in a bubble driven by speculative activity. It's also a commodity that can be manipulated by investment banks and the hedgefunds."
At present, 6% of Distinction's portfolio exposure lies with agriculture. The asset manager medium-term adopts a bullish stance for sugar, despite the recent losses witnessed in futures markets. "Short-term supply of sugar does exceed demand. But further out, with China consuming more coffee and coca-cola, the supply picture will most definitely change," Armstrong added. Armstrong said inventory draw down would definitely be witnessed in corn markets however over the next 12 months. Regarding Asia growth, Armstrong said China would not be able to sustain growth forever and concerns of inflation are now noted by the government. "A shift from an export driven economy to an economy that deals primarily with internal consumption could happen, leading to a sustainable trajectory growth for the country."
Libya Food Stocks Could Run Out By July -WFP Spokeswoman (Source: CME)
Libya could run out of food in the next six to eight weeks if humanitarian supply lines are not dramatically improved, a spokeswoman for the United Nations' relief body said. The World Food Program's Caroline Huford said that the heavily import-reliant country is on the brink of a "full-blown food security crisis" which could affect the entire population within two months. "Replenishment of public and private food stocks is a critical issue," she said. "Current stocks will be used up in one and a half to two months, based on current consumption." Food shortages are particularly critical in the rebel-held east of the country, where heavy fighting is disrupting supply lines. Only one aid ship a week is reaching the port city of Misrata, a spokesman for the insurgents said last week. The European Union said it plans to open an office in the Libyan city of Benghazi to improve the flow of aid to the authorities there. But Huford said the food shortage is already having a severe impact on Libya's poor.
They normally rely heavily on government support programs to afford food, but the subsidies have been stopped since fighting began in February. "Many food items had increased up to 40% in price, which is of extreme concern as social safety nets and subsidy schemes have been disrupted," she said. Libya is especially vulnerable to food shortages as it relies heavily on international markets for supplies. The desert country imports 90% of its food and with what little production there is concentrated in western regions. Huford said the WFP has distributed food assistance to around a quarter of a million people in 15 locations in eastern parts of the country to date. A supply line has also been opened into Western Libya from the Tunisian border where its partner agency the Libyan Red Crescent is distributing 250 tons of food.
Flood Soaks Mississippi Casinos, Farmlands (Source: CME)
The Mississippi River crested at Memphis, Tenn., and kept rising to the south, dealing a blow to Mississippi's gambling and agriculture industries. Fifteen of the state's 19 riverside casinos have been closed because of flooding, with another scheduled to shut down, said Larry Gregory, executive director of the Mississippi Gaming Commission. The gambling facilities, stretching from Tunica in the north to Natchez in the south, employ about 13,000 people and generate some $13 million a month in state and local taxes. The casinos themselves float, but access ramps and parking lots are under water. It could take weeks for the casinos to reopen, said Mr. Gregory. The state's gambling industry "has been hit hard by the recession," said Webster Franklin, president of the Tunica Convention and Visitors Bureau. "The flood has come at a time when we'd hoped to begin rebounding." In Memphis, the river hit its expected high of 47.8 feet, but it will take weeks for the water to recede. Area levees were holding.
Barges continued to navigate the Mississippi, but smaller ports have had to shut down because the equipment used to load and unload goods was submerged. Three conveyor belts used to handle agricultural goods were underwater at the Port of Rosedale, in the heart of the Delta about 115 miles southwest of Memphis. "Everything's shut down now, and we're looking to be down another four to five weeks," said Butch James, the terminal manager. He spent much of Tuesday in his office, gazing out at the engorged river. "We won't be doing nothing," he said. Some residents in the lowest-lying areas evacuated weeks ago in anticipation of the rising waters, which authorities said were expected to crest as soon as Tuesday night in the northernmost part of the state. About 600 people who live around the fishing camps of Tunica Cutoff have fled to relatives' homes or a local shelter, said Larry Liddell, public information officer for Tunica County.
Statewide, 585 homes have been affected by flooding, according to Mike Womack, executive director of the Mississippi Emergency Management Agency. But the flood-protection system along the Mississippi was holding. "We think the main levee system is in good shape," he said. What concerns him is the expected flooding of the Yazoo River basin as the tributary gets backed up from where it meets the Mississippi at Vicksburg. Mr. Womack estimates that flooding in the area could reach 850 homes and between 300,000 and 600,000 acres of land, much of which is devoted to agriculture. Fields of recently planted corn, cotton and soybeans throughout the Delta have been inundated, officials said. "I really can't compare it to anything," said Andy Prosser, head of marketing at the state Department of Agriculture and Commerce. "This is unprecedented territory." Yet some Delta residents seemed unfazed.
In the town of Gunnison, 60-year-old Odessa Jackson Owens has spent three decades living with her husband in a house right next to the levee. "We're not worried about it at all," she said Tuesday, as she cooked up ham and spaghetti. Though Bolivar County, where Gunnison is located, suffered a major levee break in the historic flood of 1927, Ms. Owens isn't budging. "We didn't have this tall levee then," she said.
USDA Raises Predictions For Corn, Soybean Supplies (Source: CME)
End-of-season corn inventories in the U.S. won't be as tight as previously expected, federal forecasters said, easing supply concerns that had driven prices to record highs. The U.S. Department of Agriculture, in a monthly crop report, now projects corn supplies at 730 million bushels as of Aug. 31, up 8% from last month's estimate, as it cut expected exports. The agency increased its outlook for U.S. soybean inventories, also on slowing exports. Recent federal data show export demand cooling as high prices curb interest from foreign buyers. The increase in projected corn inventories caught traders and grain buyers by surprise as many expected the USDA to keep its forecast unchanged, particularly since last month's report was widely viewed as underestimating demand. "There is nothing friendly about today's report," said Joseph Vaclavik, a broker for MF Global in Chicago. "A cut in exports for both commodities is an indicator that demand may be softening at high price levels."
The report also reflected slowing demand for cotton with lower exports from the U.S., the world's top exporter of the fiber. Federal forecasters in Wednesday's report raised their soybean inventory forecast 21% from last month to 170 million bushels. The increase was widely expected by analysts as exports have been seen cooling for some time now and domestic demand has remained relatively flat. The new USDA forecast for U.S. soybean exports for 2010-11 crop year is 1.55 billion bushels, down from 1.58 billion bushels. The forecast for Brazil's soybean production continues to grow and the country's crop is expected to take more pressure off U.S. supplies. The USDA raised its forecast for Brazil production to 73 million metric tons, up from last month's forecast of 72 million tons. As for corn, federal forecaster now see exports at 1.9 billion bushels in the 2010-11 marketing year, down from a 1.95 billion-bushel estimate a month ago.
The USDA also tweaked its expectations for U.S. corn imports, increasing them to 25 million bushels from 20 million bushels a month ago. Meanwhile, the USDA lowered its forecast for winter-wheat production this year to 1.42 billion bushels, a 4% drop from last year. Dry weather conditions in Great Plains states have taken a sharp toll on the production forecast. Farmers in the region grow hard red winter wheat, which is milled into flour used to bake bread. Hard red winter wheat production in the U.S. is now forecast at just 762 million bushels, a 25% drop from last year. Farmers will begin harvesting the crop in the next few weeks.
FAO:One Third Of Human World Food Production Wasted Each Year (Source: CME)
Approximately one third of food produced in the world for human consumption, roughly 1.3 billion metric tons, is wasted each year, the Food and Agriculture Organization of the United Nations said with reference to a commissioned study. The document, Global Food Losses and Food Waste, was commissioned by FAO from the Swedish Institute for Food and Biotechnology. "Every year, consumers in rich countries waste almost as much food (222 million tonnes) as the entire net food production of sub-Saharan Africa (230 million tons). The amount of food lost or wasted every year is equivalent to more than half of the world's annual cereals crop (2.3 billion tonnes in 2009/2010)," the FAO said.
Mississippi Floodwaters Move South (Source: Bloomberg)
Communities between Memphis, Tennessee, and the Gulf of Mexico inspected levees and packed sandbags as they watched the Mississippi River’s floodwaters roll south toward refineries, riverboat casinos and farms. As many as 3,900 people may be affected by flooding in northern Louisiana, above the point where officials may have to open a spillway that would inundate more than 3 million acres to the south, Governor Bobby Jindal said at a press conference today in Baton Rouge. In Mississippi, officials are most concerned about tributary flooding in the fertile Delta region in the northwestern corner of the state, Governor Haley Barbour told reporters today in Greenville.
Jim Rogers Says Dollar Is Long Term ‘Total Disaster,’ Yuan May be ‘Safe’ (Source: Bloomberg)
The U.S. dollar is going to be a “total disaster” in the long term because of the country’s position as the world’s largest debtor and the policies being pursued by Federal Reserve Chairman Ben S. Bernanke, according to investor Jim Rogers. The Chinese yuan is likely to be a “safe” currency, although it is difficult for investors to buy, Rogers, the chairman of Rogers Holdings, told a conference in Edinburgh. “The situation is getting worse and I expect to see severe problems in the U.S.,” Rogers said today. “Dr Bernanke doesn’t understand economics, he doesn’t understand finance, he only understands printing money and we can’t quadruple the amount of money in the next slowdown.” U.S. government debt is currently 93 percent of gross domestic product compared with 60 percent before the financial crisis and is set to rise further in the next few years. The dollar has fallen over the past year against every currency in a basket of 16 major currencies.
The euro has gained about 7 percent against the dollar this year. It traded at $1.4311 as of 3:20 p.m. in London.
Drought seen starting to cut European wheat yields
HAMBURG, May 10 (Reuters) - Concern is growing that dryness is now damaging wheat in the European Union's top producers France, Germany and Britain but late rain could still save the crops, analysts said on Tuesday.
Some yield damage may have occurred in top EU wheat producer France, where harvest forecasts are being scaled back. In number two producer Germany, a bumper crop is no longer expected but late rain could still change the picture, analysts said.
Canadian Wheat Board ex-CEOs see tough road ahead
WINNIPEG, Manitoba, May 10 (Reuters) - The Canadian Wheat Board faces a tough battle to survive as a voluntary pool competing against grain-handling heavyweights, two former chief executives of the monopoly seller say.
The big three Canadian grain handlers, Viterra Inc , Richardson International Limited and Cargill Inc [CARG.UL], won't easily welcome a new competitor and the board is hobbled without elevators and port terminals, said Greg Arason, who headed the Winnipeg-based Wheat Board from 1999-2002 and 2006-2008.
Drought-hit French wheat crop to shed 5 pct-expert
PARIS, May 10 (Reuters) - A drought that has been running in France for more than a month will cut wheat output by at least 5 percent in the European Union's largest grain producer, the scientific director of France's grains technical institute said.
"We know we won't get last year's yields," Arvalis' Philippe Gate told Reuters in an interview on Tuesday.
Australia 2011/12 wheat output may shrink, quality improve -analysts
SYDNEY, May 10 (Reuters) - Australia's 2011/12 wheat crop may shrink from last year's record output, but quality is expected to improve as weather conditions return to normal, after rain and floods reduced the quality of last season's eastern harvest, analysts said on Tuesday.
Favourable weather in eastern Australia has raised hopes for a good 2011/12 wheat harvest, but focus remains on Western Australia, usually the top grain exporting state, where rain is needed by July to ensure a reasonable crop.
Cold spring chills US corn stocks outlook
WASHINGTON, May 11 (Reuters) - U.S. farmers could still produce a record corn crop this year despite their slow start getting to the fields because of the cold, wet spring, the government is expected to show in its first projections of this year's crop on Wednesday.
Even if the farmers do recover from the flooding in the U.S. Midwest, traders say the harvest will do little to alleviate the razor-thin corn stockpile.
Corn, Wheat, Soybean Futures Decline as USDA Supply Outlook Tops Forecast (Source: Bloomberg)
Corn plunged the most allowed by the Chicago Board of Trade, and wheat and soybeans fell after the government said U.S. inventories will be bigger than analysts expected, easing supply concerns for food and fuel. Corn stockpiles before next year’s harvest may climb to 900 million bushels from a 15-year low of 730 million this year, the Department of Agriculture said today. The price as much as doubled in the past year, helping to send world food costs to a record in February and boosting costs for livestock producers including Tyson Foods Inc. (TSN) and JBS SA, and makers of ethanol including Archer Daniels Midland Co.
Sugar Surplus Seen for a Second Year, Cutting Costs for Coca-Cola (Source: Bloomberg)
Sugar output may exceed demand for a second year after farmers boosted planting as futures surged, pushing prices lower, Standard Chartered Bank said. That may lower costs for drinks makers like units of Coca-Cola Co.
Sugar steady; arabicas dip, near 34-year high
LONDON, May 11 (Reuters) - ICE sugar futures were steady, while arabica coffee prices dipped in choppy early trading and were in sight of last week's 34-year high. Sugar futures consolidated in early trading after a rally on Tuesday, with a focus on a line-up of ships at Brazilian ports.
Australia's sugar crushing season to start early - industry
SYDNEY, May 11 (Reuters) - Australia, a leading raw sugar exporter, will start its 2011 sugarcane crush about four weeks earlier than usual due to signs of sugar content peaking early in some districts, industry officials said on Wednesday.
Sucrogen, Australia's largest sugar miller and refiner, now owned by Singapore's Wilmar International , will start crushing at its Pioneer Mill in the Burdekin region on May 18, in the north-eastern state of Queensland, a company spokeswoman said.
Thin sugar supplies congest Brazil ports
LONDON/SAO PAULO, May 10 (Reuters) - A line of vessels waiting to load sugar at Brazilian ports has swelled because supplies of the sweetener from the new cane harvest have been slow to hit terminals, trade and shipping sources said on Tuesday.
There are currently 55 ships to load sugar at the country's main two ports -- Santos and Paranagua, compared with 36 vessels a year ago, according to Santos-based SA Commodities/Unimar shipping agency.
Brazil's CS sugar output seen up, ethanol down
SAO PAULO, May 10 (Reuters) - Sugar output in Brazil's main center-south cane producing region will rise to record volume this season, despite a drop in yields caused by dry weather in 2010, the government crop supply agency Conab said Tuesday.
But ethanol output is expected to fall as mills favor sugar production in search of higher returns, Conab said, in its first estimate for the new season (April-March).
Tumbling prices, global surplus in focus at sugar meet
SINGAPORE, May 11 (Reuters) - Record cane crop in Brazil, soaring sugar output in Thailand, exports from India, a global surplus and a dramatic fall in prices from 30-year highs will be in the spotlight at an industry gathering this week.
Mounting worries that supply will outstrip demand have dragged down sugar prices by nearly 40 percent from a peak of around 36 U.S. cents/lb hit in February, when fears of damage to the crop in Australia -- one of the biggest exporters of the sweetener -- from cyclone Yasi ignited a rally.
Indonesia coffee woes keep global prices on the boil
SINGAPORE, May 10 (Reuters) - Global robusta coffee prices may challenge a recent three-year peak as continued heavy rains in Indonesia's Sumatra island cause severe damage to unripe cherries and threaten the upcoming harvest, leading exporters to cancel shipments from the world's second largest producer.
As inventories drop in the main growing island of Sumatra, dealers are also struggling to meet demand from domestic roasters, with annual consumption in Southeast Asia's largest economy growing by an average around 4 percent since the mid-1980s.
Kenya 2010/11 coffee export earnings seen higher
NAIROBI May 10 (Reuters) - Kenya expects its coffee export earnings to rise by 5-10 percent in the 2010/11 season thanks to good prices and improved output, the ministry of agriculture's top official said on Tuesday.
Statistics from industry regulator Coffee Board of Kenya showed east Africa's biggest economy earned 16 billion Kenyan shillings ($189.7 million) from the 2009/10 (Oct-Sept) coffee season, a 50 percent jump from the previous year.
Oil Gains, Recovering from ‘Very Hard’ Decline, on Mississippi Flooding (Source: Bloomberg)
Oil advanced from a three-day low in New York on renewed speculation flooding on the Mississippi River will disrupt U.S. fuel supplies before the start of the driving season in the world’s biggest crude-consuming nation.
Oil Drops Below $100 a Barrel, Gasoline Tumbles, After U.S. Supplies Surge (Source: Bloomberg)
Oil fell below $100 a barrel in New York and gasoline tumbled the most in more than two years after an Energy Department report showed that U.S. supplies surged and fuel demand slipped. Crude dropped 5.5 percent after the department said stockpiles jumped 3.78 million barrels to 370.3 million last week. Gasoline inventories unexpectedly increased 1.28 million barrels to 205.8 million, the first gain in 12 weeks. Total fuel consumption declined 0.9 percent to 18.2 million barrels a day, the lowest level since June 2009.
India’s April Coal Imports From South Africa Decline 29%; China Buys More (Source: Bloomberg)
India’s imports of coal from South Africa fell 29 percent in April from a year earlier while Chinese purchases rose, according to mjunction Services Ltd. South Africa supplied 1.21 million metric tons of the fuel last month to India from a year earlier, the Kolkata-based trader said in an e-mail. That was 18 percent lower than the 1.48 million in March. China’s purchases rose 12 percent to 504,000 tons in April from March, and none in a year earlier period, it said.
Gold, Silver Futures Slump in New York as Dollar Strengthens Against Euro (Source: Bloomberg)
Gold fell in New York, halting a three-session rally, as a stronger dollar eroded the appeal of the precious metal as an alternative asset. Silver also declined. The dollar rose against the euro on speculation that European leaders may not grant Greece additional aid, forcing the nation to restructure its debt. Gold touched a record $1,577.40 an ounce on May 2 before dropping 4.2 percent last week as the greenback climbed.
COPPER-Major market developments in April
LONDON, May 10 (Reuters) - Copper prices fell in April and tumbled further still last week in a rout across commodities markets, but supplies of the metal remain tight and the market could set its sights higher if China starts buying again.
"We expect copper prices to recover very strongly from where they are now. The question is just one of timing," said Barclays Capital analyst Gayle Berry.
ALUMINIUM-Major market developments in April
LONDON, May 10 (Reuters) - Aluminium prices made gains in April and, despite being knocked back by last week's broad-based sell-off the metal's near term fundamentals remain robust, some analysts say, while others think it will head lower.
"I think the short term fundamental picture is very strong, demand is still growing very strongly across all regions," said Barclays Capital analyst Gayle Berry. "This is a trend which is going to continue and that's going to help support the price."
China aluminium output seen fresh record in May after April high
HONG KONG, May 11 (Reuters) - China's production of primary aluminium hit monthly records in April for the second consecutive month and output may rise further in May as extra capacity comes online, which could weigh on domestic prices.
But refined copper production in the world's top copper consuming nation, China is likely to be restricted by scrap supply, a cheaper alternative of copper concentrate for refined production, analysts and smelter official said on Wednesday.
China April daily steel output hits record 1.97 mln T
BEIJING, May 11 (Reuters) - China's daily crude steel output reached a record 1.968 million tonnes in April, buoyed by strong seasonal demand in the world's second-biggest economy, but looming power shortages in summer could hurt production over the coming months.
Chinese steel mills ramped up steel production to meet an expected pick up in construction demand during the second quarter, shrugging off a margin squeeze brought on by surging raw material costs.
NICKEL-Major market developments in April
LONDON, May 10 (Reuters) - Nickel prices held up well in April only to fall sharply in the recent broad sell-off while the prospect of rising supply suggests they could remain under pressure through the rest of the year.
"I would expect nickel to struggle. I think we've had the highs for the year," said David Wilson, analyst at Societe Generale.
Europe zinc premiums firm, prices attract buyers
LONDON, May 10 (Reuters) - Premiums for physical zinc have firmed in the past few weeks, traders said, as lower prices of the metal on futures markets attracted more buying.
Premiums are the amount paid over and above the London Metal Exchange (LME) cash price to cover the cost of shipping and delivering metal.
METALS-Copper confidence crumbles after China output data
LONDON, May 11 (Reuters) - Copper clambered lower on Wednesday after data from China suggested a cooling economy and potentially less demand from the world's largest consumer, but analysts say growth is still strong.
Weighing on investor sentiment was a generally firmer dollar across a basket of currencies.
PRECIOUS-Gold set for 4th day of gains, China in focus
LONDON, May 11 (Reuters) - Gold was headed for a fourth day of gains on Wednesday, while silver was on course for its strongest weekly performance in two years, driven by the prospects of greater demand from China and a softer dollar.
Data from China, a major consumer of silver and the second largest consumer of gold, showed inflation picked up more than expected in April, while industrial output slowed.
20110512 0952 Soy Oil & Palm Oil Related News.
Soy Oil chart reading : correction range bound downside biased.
Soybeans (Source: CME)
US soybean futures stumble on less-threatening supply forecasts and a tumble in corn. The USDA increased how much old crop it expects there to be at the end of this season, reflecting slower export demand amid increased competition from record South American production. Meanwhile, the threat of some intended corn acres shifting to soybeans in the eastern Midwest due to wet conditions aided today's lower theme. But a precariously tight new-crop inventory projection limited losses, said Global Commodity Analytic's Mike Zuzolo. CBOT July soybeans fell 6 1/4c to $13.31 3/4 a bushel and new-crop November slipped 0.1% to $13.21.
Soybean Meal/Oil (Source: CME)
Soy-product futures fall, with soyoil being hit by higher supply forecasts and spillover weakness from plunging crude futures. CBOT July soyoil ended down 0.9% at 56.29c/pound while July soymeal dropped 0.8% to $347.60/short ton. The declines are larger than that seen in soybeans.
Palm up 3rd day ahead of USDA report, strong demand eyed
KUALA LUMPUR, May 11 (Reuters) - Malaysian palm oil futures extended gains to a third day ahead of a key U.S. agriculture report that may show tighter grains and oilseeds supply in the months to come. "External markets are giving a boost to palm oil ahead of the U.S. report. There are some weather concerns in Europe with regards to grains that could boost all the agriculture markets," said a trader with a foreign commodities brokerage.
Brazil soy crop seen up at record 73.6 mln T-gov't
SAO PAULO, May 10 (Reuters) - Brazil's 2010/11 soybean crop was forecast at a record 73.6 million tonnes, up from 72.2 million tonnes estimated in April, government crop supply agency Conab said Tuesday.
This is Conab's eighth estimate of the crop. Brazil, which is finishing harvesting the 2010/11 crop, brought in 68.7 million tonnes of soybeans in the previous season.
Conab highlighted an increase in planted area and good weather conditions as key factors behind the rise in output for the harvest, set to finish in the second half of this month.
Subscribe to:
Posts (Atom)