Corn (Source: CME)
US corn futures close lower as Russia fuels fears of reduced demand by confirming it will restart grain exports. Russia is expected to export grain to Asian buyers that will replace corn as animal feed. "The popular idea is that Russia has a bunch of poor wheat that they will sell into the Far East," says Sid Love, analyst for Kropf & Love Consulting. End-of-the-month fund selling and forecasts for favorable crop weather in the US Midwest add pressure to prices, traders note. CBOT July corn slide 11c at $7.47 1/2 a bushel.
Wheat (Source: CME)
US wheat futures finish sharply lower on expectations exporters will lose business to Russia when it returns to the global market. Russia's government confirmed it will lift a nearly year-long grain-export ban July 1 amid expectations for large harvests. "They tend to be the low price leaders in the world wheat trade," says Dale Durchholz, analyst for AgriVisor. Russia's move followed Ukraine's decision last week to abolish existing grain export quotas. CBOT July wheat falls 37 1/2c to $7.82 1/4 a bushel; KCBT July wheat loses 35c to $9.08; MGE July sinks 31 1/4c to $10.25.
Rice (Source: CME)
US rice futures end lower with the wheat markets amid expectation for reduced demand. Russia's plan to re-enter the global grain trade knocked down wheat, dragging down rice as both are global food staples. End-of-month profit-taking adds pressure, traders say. Market participants will digest weekly crop data due at 4:00pm EDT for updates on US rice planting and crop development. Progress has been delayed so far this spring by persistent rains in the southern US. CBOT July rice stumbles 12 1/2c to $15.06 per hundredweight.
Rabobank: China 2011 Corn Imports To At Least Double (Source: CME)
China's corn imports this year will likely rise several times over last year's volume as increasing rural incomes underpin steady growth in pork consumption, a senior agriculture industry analyst with Rabobank International said. "It's hard to estimate [this year's corn import volume] exactly, but it may be several times larger than last year," said Chenjun Pan, a Beijing-based expert on food and agribusiness research for the bank, agreeing that this would mean at least double last year's volume. Corn is an important component of feedmeal for the rising hog population in China, which has sharply rebounded from the culling that followed outbreaks of foot-and-mouth disease and swine flu in previous years. China's hog population is likely to rise 1% this year from 453 million heads in 2010, driving historic increases in China's corn imports, she said. "The (demand) pressure on corn is coming from large hog farms that are entering the industry, while small farms are exiting the industry," she said.
Smaller hog farms tend to rely less on corn for feed purposes, using more non-conventional byproducts of rice and wheat crops, whereas large-scale farms use conventional feed in which corn is a heavily featured component, Pan said. Last year, China imported 1.6 million metric tons of corn, a 15-year high that was 17 times larger than the volume imported in 2009. This year, the country is estimated to have already purchased more than 1 million tons of corn as of last month.
French Wheat Harvest Will Suffer From Drought (Source: CME)
France's worst drought on record is set to weigh heavily on its wheat harvest, French Agriculture Minister Bruno Le Maire said, and that could further increase global wheat prices. According to a report released by French government weather agency Meteo France, this spring has been both the warmest and the driest on record, with a higher average temperature and less rain than in 1976, which had the most severe drought since the agency began compiling the data. The impact of the damage will depend on the weather in the coming weeks. A hot summer would make things worse and lead to an even lower yield from the wheat crop, while rain could improve the situation. Overall, some damage to France's wheat crop is already unavoidable, Le Maire said. "It is impossible to know the loss of yield now, but we already know there will be a loss," Le Maire told reporters. France is Western's Europe's largest producer of soft wheat: a low-protein variety used to make pastries and snack foods.
It also can be used as a feed for animals, and already prices have been rising as the drought in France and parts of Germany has left farmland parched. About half of France is under water rationing, facing restrictions on watering gardens, filling private swimming pools and washing cars. Hydropower plants have also limited their production as reservoirs are emptying fast. If the drought were to worsen, nuclear power plants may have to cut back generation because of a lack of water to cool nuclear reactors. Electricite de France (EDF.FR), the country's only nuclear generator, said there is no indication that any of its 58 plants is close to that situation. Forecasters say the Paris new-crop November milling-wheat contract may revisit February's three-year highs of EUR281 per ton. Benchmark wheat price rose 1.4% to a high of EUR242 a metric ton. In the year to June, the country yielded about 37.14 million tons of soft wheat and exported a record 12.8 million tons.
Traders now estimate the drought could cut that exportable surplus to just 5 million tons in 2011-12.
Wheat slides as Russia to resume exports
SYDNEY, May 31 (Reuters) - U.S. wheat futures slid in Asian trade after Russia said it was ending its export ban and could ship up to 20 million tonnes of grain from this year's crop. Prime Minister Vladimir Putin announced at the weekend that the Russia, formerly the world's third-largest wheat exporter, would lift a grain export ban from July 1.
Western Australia grain crop gets a boost from rains
SYDNEY, May 31 (Reuters) - Western Australia, a top grain producing state, received substantial rainfall this week, boosting hopes for a robust winter crop after a 16 month drought, but analysts said it was too early to call an end to the dry spell.
"This rain has really been a godsend to really get the season going before we hit the winter months." Wayne Gordon, a senior commodities analysts at Rabobank said on Tuesday.
"But I think it's probably too early to be saying that the season is in the bag as you would say," he added.
China expects bumper wheat harvest despite drought -ag ministry
BEIJING, May 31 (Reuters) - China, the world's top wheat producer, is likely to reap a bumper wheat harvest in 2011 despite drought earlier this year in most of its wheat-growing areas in the north, the agriculture ministry said.
China's winter wheat, accounting for more than 90 percent of the country's total wheat harvest, may increase for the eighth year, agriculture minister Han Changfu was cited as saying in a report posted on the ministry's web site. Han did not give any figures.
W.Canada crop planting 73 pct done, forecast grim
WINNIPEG, Manitoba, May 30 (Reuters) - Crop planting on the Canadian Prairies has climbed to nearly three-quarters complete, equaling progress from a year ago, but cool, wet temperatures this week may prematurely end planting in some areas, a Canadian Wheat Board official said on Monday.
Canada is the biggest exporter of spring wheat, durum, oats and canola.
Farmers made good progress from the 53 percent completion level of a week ago, but rain on Monday and Tuesday is expected to cover most of the Prairies, including the wettest regions of south-central and eastern Saskatchewan as well as western Manitoba.
EU wheat falls as Russia says will end export ban
HAMBURG, May 30 (Reuters) - Russian Prime Minister Vladimir Putin said on Saturday Russia will lift a grain export ban from July 1, resuming international sales from what was formerly the world's third-largest wheat exporter. "This announcement by Russian prime minister Putin is likely to been seen by the wheat market as a sign that this...region is expected to ease the otherwise tight global market," Germany's Commerzbank said in a report. A resumption of Russian exports after the ban imposed last August following a drought-ravaged harvest had been widely expected but the announcement by Putin still stirred the market.
Buyers cool as Russia eyes big grain exports
MOSCOW, May 30 (Reuters) - Russia geared up to ship as much as much as 20 million tonnes of new-harvest grain to tight markets after lifting its export ban at the weekend, but buyers said the Black Sea powerhouse had to prove its reliability anew.
The head of Russia's Grains Union lobby said Russia could export 20 million tonnes of grain from this year's crop if the harvest reaches 85-90 million tonnes, in line with official forecasts.
"The export potential is 15 million. Maybe we can even export 20 million if the harvest reaches 85-90 million tonnes," Arkady Zlochevsky said.
Egypt says will be cautious over Russian wheat
CAIRO, May 30 (Reuters) - Egypt, the world's biggest wheat importer, said on Monday it welcomed the lifting of a Russian grain export ban but would exercise caution in its purchases from grower which had once been its biggest supplier.
Nomani Nomani, vice chairman of the General Authority for Supply Commodities (GASC), told Reuters that GASC had sufficient funds to finance wheat purchases in international tenders and that economic problems following an uprising that ousted former President Hosni Mubarak have not affected its budget.
Indonesia sees higher 2011 rice output, no need for imports
JAKARTA, May 30 (Reuters) - Indonesia sees higher unmilled rice paddy output of 70.6 million tonnes this year, leading to a greater surplus that means there is no need for further imports of the staple in 2011, said an agriculture ministry official.
This was up 2.6 percent from the ministry's previous December forecast, and the comments may weigh on regional prices since bumper purchases by the country surprised markets in the first quarter and had led to the possibility of more in 2011.
The ministry's previous forecast was for 68.8 million tonnes, while Indonesia's statistics bureau said in March it expected output up 1.4 percent to 67.31 million tonnes of unmilled grain this year.
Vietnam Coffee-Prices advance as stocks shrink
HANOI, May 31 (Reuters) - Vietnam is the world's top robusta producer and slow sales there, along with an expected fall in output in second-biggest robusta producer Indonesia, could tighten supplies of the bitter variety in coming weeks and push up prices.
Vietnamese coffee stocks available for sale now are estimated at between 150,000 tonnes to 245,000 tonnes, or 2.5 million to 4.08 million bags, traders said.
The estimated average inventory level would represent a drop of 23.5 percent from the 4.3 million bags estimated at the end of May 2010.
Brazil coffee zone set for chill, frost unlikely
BRASILIA, May 30 (Reuters) - A hilly corner of Brazil's top coffee state, Minas Gerais, is expected to see temperatures dip as low as 2 Celsius on Monday night, forecaster Somar said on Monday, but it said the chance of frost was "low".
Monday's expected cold snap should be shortlived, with the minimum temperature rising to 5 Celsius by Tuesday night, still fairly low for the time of year. But a weak polar air mass causing the chill would dissipate in a few days, Somar said.
Ivorian cocoa arrivals hit 1,103,166 T by May 22
ABIDJAN, May 30 (Reuters) - Cocoa arrivals at ports in top grower Ivory Coast increased by over 14 percent compared with a year ago, but exporters said they were worried about the size and quality of beans coming out of the bush.
Exporters had estimated arrivals of 1,093,000 tonnes for the period.
Exporters said they expected arrivals to reach around 1,128,000 tonnes by May 29, with about 25,000 tonnes of beans delivered to the ports of Abidjan and San Pedro between May 23 to May 29.
Australia's Queensland To Ban Mining On Key Agricultural Land (Source: CME)
The government of Australia's coal-rich Queensland state said it will prohibit mining on a vast area it considers the best land for crops, clashing with some in the mining industry who warn the move will deter investment. Environment and Resource Management Minister Kate Jones released maps covering 4.78 million hectares, including much of southern Queensland, that she said will be granted protection. Mining and other development projects that aren't well advanced in the approvals process will now be subject to the legislation when it is introduced later in the year, she said. "Through this policy, we are protecting our important food bowls across the state," Jones said in a statement. "New mining projects that will permanently render strategic cropping land unusable in the protection areas will not be able to go ahead." She said the state government will soon release a draft planning policy to ensure approvals for development include appropriate consideration of agricultural land.
Queensland is the world's largest exporter of seaborne coking coal, with the Bowen Basin region accounting for almost 40% of global output of the raw material in steel production. Australia is expected to produce 163 million metric tons of coking coal and 232 million tons of thermal coal this year, driven by strong economic growth in developing Asian economies which is underpinning demand for steel, according to data released in March by the Australian Bureau of Agriculture and Resource Economics and Sciences. The Queensland government expects its policy on agricultural land will be replicated in other states. Neighboring New South Wales to the south last week placed an immediate 60-day moratorium on granting new coal, coal seam gas and petroleum exploration licenses in a move it said was aimed at striking a balance between agriculture, mining and energy. The government said all new drilling and mining applications would now need to include an agriculture impact statement and be opened for public comment.
The Association of Mining and Exploration Companies, an industry body, said the areas defined by the Queensland government for protection are so vast they will impede the mining industry. "Queensland would be an economic wreck without mining, yet the state government seems determined to ignore the financial impact of ruling out mining across a massive area," said Ross Musgrove, state manager for the association. "This wholesale mining lockout will scare potential investors and raise doubts about the sovereign risk attached to doing business in Queensland." Amec members include Anglo American PLC, Fortescue Metals Group Ltd. and Teck Resources Ltd.
Shipping Rates Seen Dropping as French Wheat Cargoes Sink: Freight Markets (Source: Bloomberg)
The 59 percent drop in French wheat shipments in the past two months means no return to panic buying from northern African nations and a 25 percent slump in freight costs in the third quarter. Shipments from Rouen, France’s biggest grain hub, fell to 99,585 metric tons in the week ended May 25, from 242,187 tons at the end of March, port data show. Third-quarter rates for handysizes, the ships most commonly used at Rouen, will drop to $8,600 a day, from $11,526 now, said Martin Korsvold from Pareto Securities AS, whose ratings on shipping lines returned 16 percent in a year. Investors are anticipating no such decline in wheat, with futures on the Chicago Board of Trade, a global benchmark, predicting rising prices for at least two more years.
Commodities See Biggest Monthly Drop in a Year (Source: Bloomberg)
Commodities posted the biggest monthly drop in a year as the sovereign-debt crisis in Europe and accelerating inflation in China fanned speculation that global economic growth will slow. This month, the Standard & Poor’s GSCI Spot Index of 24 raw materials dropped 6.8 percent, the first decline since August and the biggest drop since May 2010. Silver led the slide, slumping 21 percent, followed by nickel, and crude oil slid almost 10 percent. The gauge gained 1.2 percent today.
Holdings in physical copper ETP up by 122T TO 3,399T
LONDON, May 27 (Reuters) - The amount of copper held to back the physical copper exchange traded product rose by 122 tonnes to 3,399 tonnes as of May 26, according to ETF Securities' website on Friday.
Total holdings in the physical tin ETP fell by 45 tonnes to 165 tonnes, the data showed.
Commod index investments rise 5 pct in April
NEW YORK, May 27 (Reuters) - Net long index investment into commodity markets rose for a fifth month in April, up 5 percent or $13 billion from the previous month as passive investors piled into the market just ahead of the biggest correction since 2008.
Net long holdings rose to a total $256 billion in April, with long-only indexes adding $22.4 billion to $358.4 billion to extend a months-long trend, according to the Commodity Futures Trading Commission's monthly report on futures positions connected to index-based investment.
World copper demand growth to slow in '11, cautious on
SHANGHAI, May 29 (Reuters) - Global demand growth for copper is expected to slow to 8.4 percent in 2011-12, slowing substantially from the average growth of 16.4 percent between 2005-2010, the International Wrought Copper Council (IWCC) said.
China's demand for the red metal, used extensively in the electrical manufacturing, construction and power sectors, is expected to grow by 7 percent this year, down from a double-digit growth in 2010, the general secretary of the International Wrought Copper Council Mark Loveitt said on Sunday.
Japan April copper exports plunge 51 pct yr/yr
TOKYO, May 30 (Reuters) - Japan's refined copper exports plunged 51 percent in April from a year earlier to 23,582 tonnes for a seventh straight month of year-on-year declines, partly reflecting weak demand from China, the world's top consumer of the metal.
The Ministry of Finance data showed on Monday that of total copper exports, 29 percent went to China, down sharply from 48.5 percent in March, while Taiwan was the top importer of refined copper from Japan accounting for 32 percent, up from 21 percent in March.
Chile April copper output down 3.9 pct vs year-ago
SANTIAGO, May 30 (Reuters) - Chile's copper output fell 3.9 percent in April compared with a year earlier to 438,340 tonnes, the National Statistics Institute (INE) said on Monday.
April was the third straight month that copper production fell from a year earlier in Chile, the world's top producer.
China crude steel output seen at 680 mln T in 2011-planning official
SHANGHAI, May 29 (Reuters) - China, the world's largest steel producer, is expected to produce a record 680 million tonnes of crude steel this year, a senior official at an industry planning institute said, as demand remains strong in the investment-driven economy.
"Steel production will still see high growth, despite that Beijing may make further tightening moves in the second half of this year," Li Xinchuang, head of the China Metallurgical Industry Planning and Research Institute, told a conference.
Japan April zinc exports plunge 40 pct yr/yr
TOKYO, May 30 (Reuters) - Japan's refined zinc exports for April plunged 40 percent from a year earlier to 5,047 tonnes, widening from March's year-on-year decrease of 34.6 percent, Ministry of Finance data showed on Monday.
The wider year-on-year drop in April reflected the impact from a March 11 earthquake which devastated northeast Japan and shut nearly 65 percent of the country's production capacity of zinc, used in automotive steel sheet and construction materials.
China lead TCs up 20 pct in May, could rise further
HONG KONG, May 31 (Reuters) - Treatment charges that Chinese smelters receive for converting spot lead concentrates into metal may rise further after gains of 20 percent in the past month, which could prompt higher output in the fourth quarter, industry sources said on Tuesday.
Spot TCs in the world's top lead importer traded at $120-$150 a tonne versus about $100 in April for lead concentrate with low levels of silver content, the most popular type. TCs traded at about $180 for concentrate with high contained silver.
China tightens controls over lead-battery powered e-bikes
HONG KONG, May 31 (Reuters) - China plans to phase out battery-powered electric-bicycles (e-bikes) that exceed speed and weight limits published 12 years ago, a move that could force small manufacturing plants to close and cut demand for lead in the world's top consumer of the metal.
A statement posted on Tuesday on the Ministry of Industry and information Technology website requires local governments, police, regional industry and commerce offices to tighten management of e-bike manufacturing plants and use by e-bikers.
Japan April rare earths imports from China up 2.6 pct m/m
TOKYO, May 30 (Reuters) - Japan's imports of rare earths from China inched up 2.6 percent in April from March but some market players say demand may slow in the third quarter, partly because stocks were likely to be unused in the wake of the March earthquake.
Imports of rare earths from China stood at 1,646 tonnes in April, finance ministry data showed, up from 1,603.6 tonnes in March. China accounted for about 73 percent of Japan's rare earths imports in April.
METALS-Copper hits four-week high as euro gains
LONDON, May 31 (Reuters) - Copper rose to a four-week high on Tuesday, supported by a firmer euro after expectations built that a second aid package would be agreed for Greece.
London Metal Exchange copper for delivery in three months traded at $9,237 a tonne in official rings from a close of $9,199 on Friday. It hit $9,251 a tonne, its highest since May 4.
PRECIOUS-Gold steadies near 4-week high; Greece in focus
LONDON, May 31 (Reuters) - Gold steadied around its highest in nearly four weeks on Tuesday, supported by investor nervousness over the race in Europe to avert a Greek debt default, although stronger equities and oil tempered gains.
A Wall Street Journal report that Germany could make concessions on efforts to put together a bailout for Greece lifted the euro and boosted equities and base metals at the expense of perceived safe-havens such as gold or bonds.
Oil Rises for Third Day on Optimism Over Greek Aid; U.S. Supplies May Drop (Source: Bloomberg)
Oil gained for a third day in New York as signals that the European Union will approve aid for Greece without forcing a debt default stoked speculation fuel demand will increase.
