Corn (Source: CME)
US corn futures extend their rally, ending higher on continued supply worries. Concerns about lost acres from Missouri River flooding, along with acres that aren't getting planted at all in the eastern corn belt due to wet weather, are supportive. Analysts say a record crop that was needed to help replenish historically low supplies seems increasingly unlikely. Today's trade also narrowed the spread between old and new crop, with July rising 8c to $7.66 1/2 per bushel and December jumping 22c to $6.95.
Wheat (Source: CME)
US wheat futures end higher, rebounding from losses earlier this week on support from corn and lingering crop worries. Rains in the northern Plains will continue to hamper planting there, analysts say. They also note that while the market has fallen this week due to the end of a Russian export ban, declining prices versus corn will make wheat more attractive as a feed option, boosting demand. July CBOT wheat ends up 9 3/4c to $7.69/bushel, KCBT July jumps 17 1/2c to $9.09 and MGEX July rises 14c to $10.19 1/2.
Rice (Source: CME)
US rice futures end higher in a very modest rebound from Wednesday's limit-down tumble. In addition to better-than-expected planting progress, Wednesday's slide was prompted by a decline in wheat. But wheat futures also rebounded, boosting rice. July CBOT rice settles up 1 cent to $14.57 per hundredweight. It remains well below the May high of $15.55 but well above the May low of $13.64.
Wheat Futures Gain 0.5%, Advance for Second Day in Chicago; Corn Declines (Source: Bloomberg)
Wheat futures advanced for a second day, adding 0.4 percent to $7.725 a bushel on the Chicago Board of Trade at 8:05 a.m. Singapore time. Corn futures slipped 0.3 percent to $7.645 a bushel, while soybeans were little changed at $14.0575 a bushel.
Rainfall Expected To Bring Some Relief To Parched European Wheat Crop (Source: CME)
France and Germany are likely to see scattered/widespread showers this weekend that could last until the end of next week, conditions likely to add some relief to wheat yield declines, weather forecasters and grain analysts have said. Eastern France and Germany face the risk of substantial losses in wheat yields as a severe lack of rainfall caused by a blocking high pressure continues to stop the normal procession of Atlantic Depressions from bringing dynamic rainfall to Europe. France's worst drought on record is set to weigh heavily on its wheat harvest, French Agriculture Minister Bruno Le Maire said this week, potentially denting global wheat supplies. But ANZ bank analysts said Western Europe will see showers this weekend adding some relief to parched crops in France and Germany. "The weather focus remains on Germany and France, with limited rainfall forecast until the weekend. A lack of moisture continues to stress the French wheat and rapeseed crops and reduce yields," ANZ bank analysts said.
ANZ bank analysts added: "However, rainfall beginning on the weekend is forecast across much of France and Germany. In particular this rainfall is timely for Germany, which is a later crop than in France, helping to limit yield declines at this stage." "Looking at the latest run, the showery conditions should last at least until the end of next week," Edward Smith Meteorological Consultant at WeatherEdge forecasters said. "Whether the showers will provide enough rainfall is debatable. Areas where they develop will get good figures of rainfall but there will be areas that may miss them. It will give some improvement though to the wheat crop," Smith said.
Traders Say Egypt Eager For Russian Wheat But GASC Cautious (Source: CME)
Egypt's state grain buyer remains wary of purchasing Russian wheat after losing hundreds of thousands of tons after the Kremlin banned exports last year, its head of purchasing said. But traders said the world's largest wheat buyer is already planning tenders this month in anticipation of an influx of cheap Russian wheat when the embargo on shipments is lifted on July 1. Mohammed Abdullah of Egypt's General Authority for Supply Commodities said he fears the Kremlin may still find a way of limiting exports again if faced with a shortfall in supplies. Many grain traders declared force majeure--a get out clause for contracts in the case of unexpected circumstances--in the wake of a ban, leaving GASC to seek more expensive supplies elsewhere. "I do not want to go with all my heart and make a public announcement because of the problem that we had before," he said. "There are 690,000 [metric] tons that we contracted but we did not get them because there was a period of time that we could not import from Russia.
"We expect that this will happen again." As the world's largest wheat importer, Egypt suffered last year when Russia's ban on exports sent prices soaring to three-year highs. The cost of GASC's subsidy scheme, which produces 80 billion loaves of low-cost bread a year for the millions of Egyptians who live on the poverty line, is expected to rise around 50% to $4.4 billion this year. Yet traders in Russia said GASC, like state grain buyers in other importing countries in the Arab world, are "desperately waiting for Russia to open the gates." One said GASC is talking down its interest to keep down prices. "GASC in no way can ignore Russian wheat," he said. "It's the quality but even more the attractive price. At the moment they talk the way they do as they are not interested in firming prices." News that Russia would lift its grain ban came as little surprise to the market.
Industry body the Russian Grain Union estimates there are up to 15 million tons of stocks in the country, taking up much-needed storage space for the 2011-12 harvest, which the Kremlin pegs at up to 90 million tons. Yet European wheat futures have pulled back around 8% from their highs on Friday, before the ban was announced, tumbling 5% on Monday alone in the wake of the announcement. Abdullah said he expects global wheat prices to fall by 10% to 15% when cheap exports begin to make their way into the market. An Egyptian trader said buyers are delaying buys in the hope that prices will fall further but GASC is likely to launch a tender in the coming weeks. "Till now GASC hasn't tendered but I think they will be obliged to start by the end of June, synchronizing with the Russian start," he said. Still, the stress on Egypt's budget should to some extent be mitigated by a good domestic crop this year.
Abdullah said this year's harvest, which ends in July, is expected to be around about 8 million tons, of which GASC is likely to purchase around 3 million tons.
Corn dips on planting hopes, wheat steady after selloff
SINGAPORE, June 2 (Reuters) - Chicago corn fell around half a percent on Thursday, while soybeans were little changed on forecasts of dry weather boosting prospects for U.S. Midwest plantings, which have been delayed by excessive rains.
"Limiting gains in corn was a dry weather outlook for the corn belt which should boost the pace of sowing this week to close to 97 percent," ANZ said in a report.
Brazil soy, sugar, iron, crude exports rise in May
SAO PAULO, June 1 (Reuters) - Brazilian exports of soybeans, soy meal, raw sugar, coffee, iron ore and crude oil rose in May from April, contributing to the strongest monthly trade surplus so far in 2011, trade ministry data showed on Wednesday.
Brazil finished harvesting a record soybean harvest of roughly 72 million tonnes in May. Soybean exports jumped to 5.3 million tonnes last month from 5.1 million tonnes in April, but were still shy of the 5.7 million tonnes shipped a year ago.
Russia c.bank, grains lobby urge export limits
MOSCOW, June 1 (Reuters) - Russia should consider introducing export limits on grain linked to domestic prices through a system of floating import duties, its central bank governor and an industry lobby said on Wednesday.
"To soften the effect on domestic prices of the end of the ban we could temporarily, say for one year, introduce a mechanism of floating" tariffs, RIA quoted central bank governor Sergei Ignatyev as saying.
India's May 21 food price index up 8.06 pct y/y vs 8.55 pct week ago - govt
NEW DELHI, June 2 (Reuters) - India's food price index rose 8.06 percent in the year to May 21, government data showed on Thursday, slowing down from an annual rise of 8.55 percent a week ago.
The fuel price index climbed 12.54 percent compared with a rise of 12.11 percent a week earlier.
Russia bans EU vegetables over E.coli, EU protests
MOSCOW/LONDON, June 2 (Reuters) - Russia banned imports of raw vegetables from the European Union on Thursday
because of a deadly E.coli outbreak centred in Germany, a move branded "disproportionate" by Brussels.
German health officials said the infections, which have killed 17 people and made more than 1,500 others ill in
eight European countries, could go on for months and their precise source may never be pinned down.
Russian grain exporters return, duty threat looms
LONDON, June 1 (Reuters) - Russian grain exporters were back in business on Wednesday, offering supplies at an
international wheat tender as they looked to make a quick start to shipments when a nearly year-old ban is lifted
at the start of July.
A sharp rise in domestic prices since plans to lift the export ban were announced on Saturday, however, threatens
to undermine Russia's efforts to control inflation and triggered calls for floating export duties to be imposed.
High coffee prices to stay for years
LONDON, June 1 (Reuters) - Coffee prices are set to remain high, as farmers increased maintenance and fertilizer
use will not boost production enough to match growing demand.
Arabica coffee prices hit a 34-year high in May on tight supplies of high quality beans, but as coffee trees take
around three years to produce crop, output is not keeping pace with demand.
ICE sugar edges up early, coffee little changed
LONDON, June 2 (Reuters) - ICE sugar prices edged up in early trade on Thursday in a modest rebound following the prior session's steep setback, while coffee and cocoa were little changed.
ICE raw sugar futures rose early as the market clawed back some of Wednesday's heavy losses supported partly by sentiment that the production outlook in top exporter Brazil may need to be downwardly revised.
China 2011 cotton planting area seen up 6.6 pct on yr -assn
BEIJING, June 2 (Reuters) - China's cotton planting area this year is expected to rise 6.6 percent from 2010, said China Cotton Association on Thursday.
Total cotton area is estimated at 5.472 million hectares, said the association in a statement published on its website, adding that cotton planting is nearly complete.
Brazil CS sugar output view may fall more -Raizen
PIRACICABA, Brazil, June 1 (Reuters) - Sugar and ethanol output in Brazil's center-south could fall from current forecasts unless cane's sugar content picks up as the harvest advances, the country's largest cane group, Raizen, said on Wednesday.
Raizen said sugar output could fall to as low as 31.1 million tonnes compared with a current industry estimate of 34.6 million. Ethanol production could fall slightly to 25.2 billion liters, below the current industry estimate of 25.5 billion.
Tariff hikes, coal price cap cure for China power ills
SHANGHAI/BEIJING, June 2 (Reuters) - A cap on spot coal prices and further power tariff hikes might be the strong medicine Beijing has to apply to cure the nation's crippling power malaise and prevent widespread summer blackouts.
Yet even if Beijing is prepared to increase electricity prices again -- a drastic move given the country's battle against inflation -- it would still be a band-aid applied to a perennial problem that could worsen in coming years.
Oil Heads for Second Weekly Gain; U.S. Crude Stockpiles Unexpectedly Rise (Source: Bloomberg)
Oil climbed in New York, heading for a second week of gains, as traders said a weaker dollar against the euro countered a rise in crude inventories in the world’s biggest consumer of the commodity. Futures gained as much as 0.5 percent and the euro advanced against the dollar as Moody’s Investors Service said it may place the U.S. government’s rating under review for possible downgrade. Crude earlier fell after a government report showed an unexpected increase in inventories to the highest level in two years.
Crude Oil Futures Rise as Dollar Weakens After Moody’s Downgrade Warning (Source: Bloomberg)
Oil rose as the dollar weakened after Moody’s Investors Service said it may place the U.S. government’s rating under review for possible downgrade. Crude advanced 11 cents as the euro extended gains following the Moody’s announcement that it may review the rating if there is no progress on increasing the debt limit. Futures fell earlier after a U.S. government report showed an unexpected increase in inventories to the highest level in two years. Crude reversed in the last 30 minutes of floor trading.
Crude Oil Futures Advance in New York, Reversing Earlier Decline of 1.8% (Source: Bloomberg)
New York crude oil rose, reversing an earlier decline of as much as 1.8 percent. Crude oil futures for July delivery increased 42 cents, or 0.4 percent, to $100.71 a barrel at 2:01 p.m. on the New York Mercantile Exchange. Oil earlier fell as low as $98.46 a barrel.
China alumina prices drop 7 pct since March, exports mulled
HONG KONG, June 2 (Reuters) - China's alumina prices have fallen 7 percent since March due to increased supply, prompting merchants to consider exporting the raw material used for primary aluminium production to a steadier international market, industry sources said on Thursday.
China, the world's top aluminium producer, was previously the biggest alumina buyer in the international market, but it has ramped up its alumina output. Monthly imports dropped to 130,561 tonnes in April from nearly 680,000 at the start of 2010.
Titanium sponge hits highest since Feb 2008
LONDON, June 1 (Reuters) - Prices of titanium sponge hit the highest since February 2008 on increasing demand from the aerospace industry and tight supply.
Titanium sponge rose to $11-13 a kg on the European spot market this week from $10-12 per kg last week.
METALS-Copper under pressure after US jobless data
LONDON, June 2 (Reuters) - Copper remained under pressure on Thursday after U.S. weekly jobless claims fell less than expected, heightening concerns about the world's biggest economy but a weaker dollar prevented further losses.
Benchmark copper on the London Metal Exchange was $9,045 a tonne at 1248 GMT, from $9,102 a tonne at the close on Wednesday. Trading volumes were light due to a religious holiday that closed offices in most European countries.
PRECIOUS-Gold gains for second day as US worries mount
LONDON, June 2 (Reuters) - Gold rose for a second day on Thursday, nearing one-month highs, as concerns grew about the outlook for the U.S. economy and the dollar weakened.
Fears mounted the U.S. economy may be running out of steam as data showed companies had hired far fewer workers than expected in May and that output in the manufacturing sector hit its lowest level since 2009.
Gold Falls as Euro’s Rebound Erodes Demand for Metal as Investment Haven (Source: Bloomberg)
Gold futures fell the most in two weeks as the euro climbed, eroding demand for the precious metal as a haven asset. Silver also tumbled. The euro rose as much as 1.3 percent against the dollar to a three-week high after German Chancellor Angela Merkel said she is committed to the common currency. Last month, gold fell 1.3 percent after reaching a record $1,557.40 an ounce on May 2.
