Corn (Source: CME)
US corn futures end mixed, retreating from early gains that sent July to a new all-time record for front-month corn. July surged as high as $7.99 on dwindling near-term supplies before prices retreated. Although USDA kept old crop end stocks at 730 million bushels Thursday, not all of that is "going to be available in the marketplace," as farmers think they'll get better prices later on, Tom Leffler of Leffler Commodities says. Deferred contracts slipped amid a stronger dollar and profit-taking. July CBOT corn ends up 1 1/2 cents to $7.87 while Dec corn closes down 1 1/2 cents to $7.12 1.2.
Wheat (Source: CME)
US wheat futures finished mixed, with soft red wheat traded in Chicago rallying on expectations for increased demand from livestock producers looking for cheaper feed ingredients to corn. Corn is trading at premium to wheat, reaching an all-time high in the process. Prices for wheat are normally higher than corn, and the divergence could lead to more wheat feeding. CBOT July wheat jumped 1.9% to $7.59 1/4 a bushel while KCBT July dropped 3 1/4c to $8.68 and MGE July fell 2% to $10.00.
Rice (Source: CME)
US rice futures end slightly lower in a correction from recent gains, as a stronger dollar pressures commodities generally. Prices had rallied Thursday after the USDA slashed production estimates thanks to bad weather in the US South. But world supplies of rice are considered ample. CBOT July rice ends down 4 1/2 cents to $14.89 1/2 per hundredweight.
Corn eases from record high, fundamentals strong
SYDNEY, June 10 (Reuters) - U.S. corn futures pulled back from record highs struck on Thursday when the U.S. government estimated U.S. and global stocks were likely to be tighter than the market had expected. "Corn stocks in 2011/12 are now expected to be tighter than the current season, implying that the current record high prices will need to persist for some time yet," Luke Mathews, an agricultural commodities strategist at Commonwealth Bank of Australia, said in a market report.
Global corn supply tightens as U.S. grows less
WASHINGTON, June 9 (Reuters) - Global corn supplies will be much tighter next year than forecast a month ago, the U.S. government said on Thursday as it unexpectedly cut its estimate for the U.S. crop and forecast a jump in demand from China.
Chicago corn futures briefly spiked to an all-time high after the U.S. Agriculture Department (USDA) said rains and floods prevented farmers from planting all the corn they had intended, cutting the likely size of the crop by 2 percent, an unusual revision just weeks ahead of its annual June survey.
Ageing farmers threaten Indonesian food security
KARAWANG, Indonesia, June 10 (Reuters Life!) - Indonesia, the world's fourth most populous nation, has committed itself to beefing up food security plans as a result.
It aims for self-sufficiency in rice by increasing output to 75.7 million tonnes by 2014 through improving yields and increasing crop areas in east Indonesia. The 2009 yield was around 50 million tonnes.
Russia ministries back grain export tariff-report
MOSCOW, June 10 (Reuters) - Russia's economy and agriculture ministries support a proposal by central bank governor Sergei Ignatyev to introduce a floating tariff on grain exports, a source at the agriculture ministry told Kommersant newspaper.
Ignatyev mooted the proposal, which would be modelled on the country's floating oil export duty, earlier this month in order to curb domestic prices when Russia returns to the export market in July.
Ukraine grain exports jump in June 1-8
KIEV, June 10 (Reuters) - Ukraine boosted its grain exports to 159,400 tonnes in June 1-8 from 32,700 in the same period in May after the government removed export restrictions, ProAgro agriculture consultancy said on Friday.
ProAgro said Ukraine had exported 101,300 tonnes of maize and 58,100 tonnes of wheat so far this month.
China floods kill 34 in drought-hit provinces
BEIJING, June 10 (Reuters) - Torrential rain in two drought-stricken central China provinces triggered landslides and brought down houses, killing at least 34 people and leaving 30 missing, state media said on Friday.
The two provinces were among the worst hit by a severe drought in recent months that hit millions of hectares of farmland in central and southern China along the middle and lower reaches of the Yangtze river.
UK Declares Drought In Some Parts; Crops Yields Fall (Source: CME)
Parts of the U.K. are now in the grip of drought and the affected zone could spread if areas of central and south-eastern England do not receive rainfall soon, the U.K.'s farm ministry and Environment Agency said. Parts of Lincolnshire, Cambridgeshire, Bedfordshire, Northamptonshire and western Norfolk are all suffering following the driest spring on record in south-east and central southern England, with parts of the Midlands, south-west and south-east of England in a "near-drought" state. "Water companies are confident that supplies are high enough so that widespread restrictions to the public are unlikely," said Environment Secretary Caroline Spelman. Farmers, water companies and environment groups will discuss ways to conserve water usage and another meeting is planned towards the end of the month, a spokeswoman for the agency said. Worst-hit East Anglia accounts for 53% of the U.K.'s sugar beet output, 17% of wheat and 13% of barley output.
Forecaster WeatherEdge Ltd. warned wheat yields could drop as much as 15% in 2011-12 due to the dry weather, putting pressure on already near-record-high prices for U.K. feed wheat. "If the dry weather continues, yields could be severely affected in the driest regions," said the Home Grown Cereals Authority. The news comes as farmers in Western Europe's largest wheat growers, France and Germany, are in a state of crisis. France will make available around EUR1 billion of aid through a variety of mechanisms to help farmers suffering from the impact of drought, French Prime Minister Francois Fillon said Thursday. Across the Atlantic, U.S. farmers' production hopes are diminishing due to extremes of dryness and rainfall in key growing regions, causing fears of a return to supply deficit in world wheat markets in the 2011-12 crop. In the U.K., the situation is less severe, with widespread hosepipe bans looking unlikely at this stage.
But the head of communications for Severn Trent Water Rob Salmon said the company may bring in restrictions in some areas "unless we see a return to seasonal average rainfall." "Low river flows also impact on business, as it abstracts millions of gallons from rivers on a daily basis and we need to ensure this is sustainable," said Paul Leinster, Environment Agency's chief executive. Some analysts are drawing comparison with the drought of 1976, when the U.K. government imposed a widespread ban on water use after a dry winter and spring sapped groundwater supplies. Crop losses amounted to an estimated GBP500 million that year, sending food prices surging 12%. U.K. wheat prices have surged 15% on the back of the drought and analysts forecast European prices may top the three-year highs reached in February if the drought continues to hurt output.
Chief economist at the U.K.'s National Farmers Union Phil Bicknell said losses are unlikely to rise to that kind of level this year as the problems are much more localized. But he added that the broader picture of drought in Europe and problems in the U.S. would put pressure on U.K. prices going forward. "As an industry we're increasingly adapting to our environment but to do that we need investment and to do that we need a profitable farming industry," he said.
Philippine group sees no need for extra feed wheat imports
MANILA, June 10 (Reuters) - Philippine feed millers have secured deals for the supply of 600,000 tonnes of feed wheat early this year and are not inclined to buy more for the rest of 2011 given higher output and stable local corn price, an industry official said.
The Southeast Asian country's feed wheat purchases this year could be limited to just about two-thirds of the 2010 volume of 900,000 tonnes, Norman Ramos, president of the Philippine Association of Feed Millers Inc (PAFMI), told reporters late on Thursday.
China feed mills shifting to more cheap wheat from corn
BEIJING, June 10 (Reuters) - China's feed mills are using more cheap wheat as a substitute for corn, with wheat prices now 9.3 percent below corn as the wheat harvest nears, traders said on Friday.
Chinese farmers have finished harvesting half their wheat crop this week and the government has said it expects a bumper harvest.
India On Track For Bumper Rice Output With Key States Eyeing Jump (Source: CME)
Two of India's top rice-producing regions are expecting a jump in output during the main summer season with the timely arrival of seasonal monsoon rains, putting the country on track for a bumper output of the grain. While the southern state of Andhra Pradesh is expecting its rice output to rise by 21% to 9.1 million metric tons, the northern state of Uttar Pradesh expects production of the grain staple to climb to an all-time high of 13.5 million tons. "Rice Production is going to be on the higher side with a normal monsoon," M. Sudhakar, special secretary of agriculture, Andhra Pradesh government, said. He said the rice cultivation area is expected to increase only marginally during this summer season to 2.95 million hectares, but better distribution of fertilizers, hybrid seeds as well as rains will all help boost the output of India's top rice producer.
Higher rice production in the two states will be critical to India achieving its target of harvesting around 100 million tons of rice during 2011-12 as the country gears up to introduce a food security law that guarantees cheap grains to nearly 70% of the population. India's rice output is estimated at 94.11 million tons during the crop year ending June. Rice sowing starts with the monsoon's arrival, which has covered the southern state of Andhra Pradesh after reaching India's mainland two days before the forecast May 31. The rains have since maintained their progress, but they usually reach the northern state of Uttar Pradesh by the end of June.
India raises rice purchase price 8 pct
NEW DELHI, June 9 (Reuters) - India raised the support price at which it buys rice from farmers by around eight percent, the government said in a statement on Thursday, a move aimed at encouraging more planting of the food crop during the current monsoon season.
India already has bulging stocks of rice after a bumper harvest last year and expectations are for at least the same amount of acreage to be planted in the coming crop year as for 2010/11.
Australian 2011-12 Wheat Crop Outlook Upbeat (Source: CME)
Australia's winter cropping season has started well in the major growing regions and big crops are forecast, although the winter rainfall outlook for Western Australia--usually the nation's largest grain producer--suggests below-average falls are likely there. In South Australia, Queensland, New South Wales and Victoria states, "conditions remain highly favorable for above-average yields" while the decay of the La Nina climate event in the Pacific "augurs well for a high quality grain harvest" late in 2011, agricultural lender Rabobank Australia. The U.S. Department of Agriculture added 500,000 metric tons to its Australian wheat production forecast for this crop year to 25.0 million tons, which is consistent with other projections. The government's chief commodities forecaster, the Australian Bureau of Agricultural & Resource Economics & Sciences, estimates output at 24.3 million tons this crop year ending March 31, which if achieved would be down 7.6% from a year ago.
Australia is usually among the world's top wheat exporters, along with the U.S., Russia, Canada and Europe. After annual domestic demand of around 6.0 million tons is met, the balance is available for exports. Australian output last crop year was crimped by a severe drought in Western Australia, where output fell to 4.7 million tons from 8.1 million tons the previous year. But Western Australia received drought-breaking rains in May, and Rabobank projects output will rise to 7.6 million tons this crop year, a forecast that it said seems more likely now than even just a few weeks ago. While the government's Bureau of Meteorology expects winter rainfall to be below average in winter, the timing of rainfall during the growing season will be critical, Rabobank reported.
China Corn Storage Facilities "Well Under Capacity" - USGC (Source: CME)
Corn is competing with fruits, vegetables and urbanization for land in China this year, while corn storage facilities appeared to be under-used, the U.S. Grains Council in a new report. The report, concluded after a recent study trip to China by a council team, suggests corn stock levels remained relatively low. "We had the opportunity to visit some private corn storage facilities, which we felt were well under capacity," the report quoted Ken Kindler of Dow AgriSciences LLC, adding there was no certainty on measurements of state corn stock levels. "Farmers sold most of their 2010 production at harvest." China emerged last year as a net corn importer, and analysts expect the import trend to rise given the speed and scale of China's demand for commodities. Still, China's corn production this year may rise. Corn planting acreage for 2011 is expected to increase marginally, as farmers switched to corn after a price rally in 2010, the USGC team said.
But the council noted that "there is also increased competition for acres from fruits and vegetables, particularly near urban areas. Some land was unplanted and attributed to increased urban encroachment." In the major producing provinces of Heilongjiang and Jilin, the council team noted that corn emergence was behind normal levels due to rainy weather and low temperatures, and that germination was "spotty" in some locations.
Coffee, cocoa rise, sugar steady, firm dollar weighs
LONDON, June 10 (Reuters) - ICE arabica coffee futures firmed early with upside capped by Brazil's harvest and a stronger dollar, while cocoa edged up, with gains limited by a steady flow of supplies from top producer Ivory Coast. Liffe white sugar futures were little changed around two-month highs, underpinned by tight supplies during a period of high demand before Ramadan in August.
Crude Oil Declines for a Second Day on U.S., China Economic Growth Concern (Source: Bloomberg)
Oil dropped for a second day in New York ahead of reports that may show slowing economic growth in the U.S. and China, curbing fuel demand in the world’s two largest crude consumers. Future slumped as much as 0.6 percent, extending declines after the biggest single-session drop in four weeks on June 10. Sales at U.S. retailers probably fell in May for the first time in 11 months as car buying eased and elevated gasoline costs restrained consumers. A report tomorrow may show China’s industrial production slowed.
Essar to Buy More Indonesian, Australian Resources to Meet India’s Demand (Source: Bloomberg)
Essar Group plans to acquire more coal and iron ore assets in Indonesia, Australia and Africa as it seeks to boost supply to meet domestic Indian needs, Chief Executive Officer Prashant Ruia said. “We’re looking at investing overseas, including in Indonesia, Australia and Africa to access natural resources,” Ruia said in a Bloomberg TV interview at the World Economic Forum on East Asia in Jakarta yesterday. “Coal and iron ore are two major possibilities and, going forward, oil and gas.”
Europe metals premiums steady, Chinese demand eyed
LONDON, June 10 (Reuters) - Premiums for physical metals in Europe remained little changed in the past week, with traders eyeing the return of top consumer China.
The premium for copper in Rotterdam , paid above the London Metal Exchange (LME) cash price , was at around $75-85 a tonne versus $70-80 in late May, traders said.
Chinese aluminium prices seen capped in June-July by new capacity
HONG KONG, June 9 (Reuters) - Chinese aluminium prices may be capped by record production and weaker demand over the coming two months as new capacity comes online, which could lead to a boost semi-finished product exports, industry sources said on Thursday.
Monthly production in China, the world's top producer and consumer of primary aluminium, is expected to reach fresh record highs in June and July as an estimated 1.5 million tonnes of new annual capacity is slated to come on stream.
China May copper imports fall 3 pct, seen up in June
HONG KONG, June 10 (Reuters) - China's imports of unwrought copper and semi-finished copper products dropped 3 percent on the month in May because of high stocks, but traders said extra bookings placed in May will raise June arrivals.
High bonded stocks in Shanghai limited China's imports of refined copper, the most popular form of the metal in the Chinese and international markets, missing analyst forecasts for a small increase.
US copper imports up despite weaker housing sector
NEW YORK, June 9 (Reuters) - Inbound shipments of copper into the United States rose for a second-straight month in April to their highest levels since March 2009, as fragments of the economy continued to thrive even as housing weakened further.
Data from the U.S. international Trade Commission on Thursday showed April copper imports climbed to 73,061 tonnes from 66,166 tonnes in March, to stand at their highest since March 2009, when imports came to 79,975 tonnes.
Strike nears end at Chile copper mine, output rises
SANTIAGO, June 9 (Reuters) - Output should return to normal in days at the world's No. 5 copper mine, El Teniente in Chile, after thousands of contractors abandoned a 16-day strike that seems near its end, the company said.
Staff workers also decided to return to work on Friday after strikers began wage talks with their employers to resolve a sometimes violent 16-day walkout that is losing strength.
China's iron ore imports up 0.8 pct in May, June may fall
SHANGHAI, June 10 (Reuters) - China's iron ore imports rose 0.8 percent to 53.3 million tonnes in May from the previous month, official data from China's customs authority showed on Friday.
Chinese steel mills, which usually consume two-thirds of seaborne iron ore, have raced to expand production since this year, despite Beijing's tightening moves to tame inflation and curb the hot property market.
METALS-Copper down after Chinese May imports fall
LONDON, June 10 (Reuters) - Copper dipped on Friday after Chinese trade data showed a surprising fall in copper imports last month, but expectations that June inflows could pick up limited losses.
Three-month copper on the London Metal Exchange was down 0.5 percent at $9,010 a tonne at 0954 GMT, after closing at $9,055 on Thursday.
PRECIOUS-Gold holds near $1,540/oz as debt crisis simmers
LONDON, June 10 (Reuters) - Gold prices retreated a touch on Friday, under pressure from a firmer dollar, but concerns over the euro zone debt crisis kept prices firmly underpinned as they boosted the metal's haven appeal.
Spot gold was bid at $1,540.11 an ounce at 1137 GMT, against $1,543.60 late in New York on Thursday. U.S. gold futures for August delivery eased $1.30 to $1,541.40.
