Corn (Source: CME)
US corn futures finish higher, with deferred contracts posting strongest gains on concerns about crop conditions. Traders worry output could fall short of expectations as USDA's weekly crop-progress report increased the amount of corn rated good-to-excellent and poor-to-very-poor. "People figured out it's an extremely variable crop out there," says Jack Scoville of Price Futures Group. Weakness in the US dollar and commodity fund buying of an estimated 15,000 contracts add support. CBOT December corn rises 19 3/4c at $6.80 1/4 a bushel.
Wheat (Source: CME)
US wheat futures finish stronger in a rebound from Monday's slide to 7 1/2-month lows. Weakness in the dollar helps spark gains, as it makes US grains more attractive to foreign buyers, analysts say. Poor weather adds support, with the northern Plains still too wet for growing spring wheat, they note. Drought has already reduced winter-wheat output in the southern Plains. The advancing winter-wheat harvest keeps a lid on KCBT prices. CBOT September wheat gains 9 3/4c to $7.05 1/2 a bushel; KCBT September edges up 1 1/2c to $8.21 1/2; MGE September rises 6 1/4c to $8.85 1/4.
Rice (Source: CME)
US rice futures settle slightly higher as weak US dollar and strong wheat market lift prices. Soft USD boosts the grains as it makes them more attractive to foreign buyers, while rising wheat prices support rice because both crops are global food staples. Crop threats aren't garnering too much attention, though conditions are too hot in the southern US after excessive rain hit some areas this spring, according to Price Futures Group. CBOT September rice advances 1c to $14.85 per hundredweight.
Wheat falls, trades near 6-1/2 month low; corn, soy rise
SINGAPORE, June 21 (Reuters) - Chicago wheat lost more ground to hover around a 6-1/2 month low as pressure from U.S. winter harvest and crop-friendly weather in Europe continued to weigh on the market.
"We are probably seeing some demand coming in with the dip in prices," said Abah Ofon, agricultural commodities analyst with Standard Chartered Bank in Singapore.
U.S. corn, soy ratings improve, match forecasts
CHICAGO, June 20 (Reuters) - The condition of the U.S. corn and soybean crops improved slightly during the past week, but excessive moisture threatens to derail crop development in the coming weeks.
The U.S. Agriculture Department's weekly crop progress report on Monday afternoon said that the corn crop was rated 70 percent good to excellent, matching the average of analysts' forecasts.
S.Africa's maize crop f'cast seen slightly down
JOHANNESBURG, June 21 (Reuters) - South Africa may slightly lower its May 2010-April 2011 season maize estimates as yields disappoint and heavy rains affect quality, a Reuters survey showed on Tuesday.
The average estimate of seven trading houses polled by Reuters showed that South Africa's maize output for the 2010/11 season is likely to be 10.87 million tonnes.
Italy wheat output seen down, area lower
MILAN, June 20 (Reuters) - Wheat output in Italy, a major grain buyer in Europe, is expected to fall more than 10 percent this year after a wet winter caused a considerable drop in sown areas, farmers group Coldiretti said citing official estimates.
"There will be a fall in wheat output due to smaller planted areas. There was a lot of rain (during the winter) and it was impossible to sow," Coldiretti's grains expert Paolo Abballe told Reuters on Monday.
Wheat falls, trades near 6-1/2 month low; corn, soy rise
SINGAPORE, June 21 (Reuters) - Chicago wheat lost more ground on Tuesday to hover around a 6-1/2 month low as pressure from U.S. winter harvest and crop-friendly weather in Europe continued to weigh on the market.
"We are probably seeing some demand coming in with the dip in prices," said Abah Ofon, agricultural commodities analyst with Standard Chartered Bank in Singapore.
Australia keeps 2011/12 sugar export fcast unchanged
SYDNEY, June 21 (Reuters) - Australian raw sugar exports are expected to rise 1.9 percent in the year to June 2012, in line with an earlier forecast, the government's chief commodities forecast said on Tuesday.
The Australian Bureau of Agricultural and Resource Economics (ABARES) forecast exports would rise to 2.476 million tonnes.
U.S. corn, soy ratings improve, match forecasts
CHICAGO, June 20 (Reuters) - The condition of the U.S. corn and soybean crops improved slightly during the past week, but excessive moisture threatens to derail crop development in the coming weeks.
The U.S. Agriculture Department's weekly crop progress report on Monday afternoon said that the corn crop was rated 70 percent good to excellent, matching the average of analysts' forecasts.
Ivorian rains mixed for the cocoa mid-crop-farmers
ABIDJAN, June 20 (Reuters) - Rain and sunshine in Ivory Coast's cocoa regions last week augured well for mid-crop development, but concerns remained about heavy rain in some areas damaging roads and harbouring disease, farmers said on Monday.
The correct mix of rain and sunshine is needed for cocoa to grow in this crucial stage of crop development. Too little rain and pods fail to produce enough beans. Too much and diseases like black pod can thrive and damage the harvest.
Vietnam 2011/12 coffee output seen up 10 pct-USDA
HANOI, June 21 (Reuters) - Vietnam's next 2011/2012 coffee crop could produce 20.6 million bags, up 10 percent from the previous season due to high yields and improved investment in production, a U.S. Department of Agriculture report said.
"Current high prices will motivate coffee growers and local traders to export most of their beans", which would cut the stock carried over to the next crop to 1.19 million bags, down 7.8 percent, said the report
Commodities least attractive asset class-BarCap survey
LONDON, June 20 (Reuters) - Commodities are now seen by institutional investors as the least attractive asset class, a survey carried out by Barclays Capital showed.
The Barclays Capital Global Macro Survey carried out in June canvassed views from 862 institutional investors.
China End-2010 Grain Storage Capacity 390 Million Tons (Source: CME)
China had significantly improved its grain storage facilities, with storage capacity reaching 390 million metric tons at the end of last year, up from 244 million tons in 1998, the State Administration of Grain said. Edible oil storage capacity at the end of 2010 totaled 14.08 million tons, the agency said in a statement Monday, without publishing actual grain and edible oil storage figures. By the end of 2010, the nation had 18,326 grain and edible oil storage enterprises, the statement said. A national inspection of state grains reserves in 2010 showed that 97.3% of grain stores were up to standard, it said.
India Monsoon Rains Likely Below Normal; May Not Hit Crops (Source: CME)
Monsoon rain in India will likely be slightly below normal this year but that may not affect crop output significantly as the rainfall is expected to be well distributed, top weather officials said. Rainfall in the June-September season is likely to be 95% of the 50-year average, Science and Technology Minister Pawan Kumar Bansal told reporters. That's lower than the India Meteorological Department's forecast in April of monsoon rain at 98% of the 50-year average of 89 centimeters. The department defines normal monsoon as 96% to 104% of the long-term average. The monsoon season brings about 70% of India's annual rainfall and is crucial for summer-sown crops such as rice, sugarcane, pulses, cotton and oilseeds as about 60% of the country's farmland is rain-fed. The rainfall forecast has been lowered because of weakening La Nina conditions, neutral temperatures over the Indian Ocean region and unfavorable North Atlantic pressure, said Ajit Tyagi, director general of the meteorological department.
La Nina, a weather event where surface sea temperatures across the equatorial eastern and central Pacific Ocean remain lower than normal, brought about heavy monsoon rain last year. "No adverse impact is likely on crops because the monsoon has set in on time. Rainfall is expected to be fairly well distributed," Tyagi said. This year, the monsoon entered India's mainland two to three days early from the southern state of Kerala on May 29. The seasonal rain was 11% above normal until June 20. Most regions have so far received normal or above-normal rains except the western state of Gujarat, the largest cotton producer, and the northeastern region. The monsoon's progress has now slowed and it is now two days behind the usual dates. It has advanced to half of the country and is expected to cover most regions by the first week of July, weather officials said.
The weather office also said that rainfall during July and August, which account for more than 60% of the seasonal showers, is expected to be 93% and 94% of the 50-year average, respectively. The below-normal rainfall forecast surprised analysts and raised concerns about further prolonging India's inflationary patch, where food prices are the main culprit. Though in recent weeks food prices have slipped, poor rainfall may stoke them up again. The year-on-year inflation rate for food articles decelerated slightly to 8.96% in the week to June 4 from 9.01% in the week before. "The next two to three weeks are crucial for the crop sowing, so if the delay continues then it might have an impact on productivity and yield," said Harish Galipelli, head of research at JRG Wealth Management.
Analysts said that the figure of 95% rainfall expected this year isn't alarming, but the monsoon's behavior during the crucial month of July holds the key to output of summer crops including rice as most of the plantings take place during the month. The slight delay in monsoon's progress to India's northern regions will be partly cushioned by good irrigation facilities in the region, said Madan Sabnavis, chief economist at Care Ratings. Northern India is known as the country's grain-bowl region, and the seasonal rainfall has so far touched only its peripheral parts in Uttar Pradesh state. India, the world's second-largest producer of wheat and rice, produced a record 235.9 million tons of foodgrains in the crop year through June, largely because of normal monsoon rain. The government has set its sight on achieving a higher foodgrain output of 240 million tons but it may miss the target if rains are erratic, analysts said.
Australia Forecasts Record 2011-12 Commodity Exports Of A$256.35 Bln (Source: CME)
Australia remains locked in a once-in-a-lifetime commodity boom fueled by demand from China and India, with sharp increases in shipments of minerals and energy set to send exports soaring again next fiscal year, according to official estimates. The Australian Bureau of Agricultural and Resource Economics and Sciences, the government's chief commodities forecaster, in a quarterly outlook publication forecast commodity exports to surge 18% to A$256.35 billion in the year starting July 1. This is 5.1% higher than Abares's previous estimate in March. Exports leapt 27% this year. Australia is a major global supplier of many mineral, energy and farm commodities--mining accounts for around a tenth of its economy. Minerals and energy products comprised two thirds of total merchandise exports and over half of goods and services exports this year.
Shipments of mineral resources, which include energy metals and other mineral products, will likely rise 20% to A$218.33 billion next year, Abares said, a 1.7% increase from its previous estimate. "Forecast increases in export prices and shipments for Australian iron ore and metallurgical coal are the main reasons for the expected increase in mineral resource exports," while exports of thermal coal, gold and alumina will likely also be strong, Abares acting Deputy Executive Director Kim Ritman said. Exports of farm products will rise 6.6% to A$34.12 billion next year, after jumping 12% this year, Abares said. The increases reflect higher farm production and a favorable outlook for agricultural prices on world markets, it said.
World Bank Pres: G20 Global Stocks Plan "Not Best Policy" (Source: CME)
Hopes for new measures to address food security took a further hit when the president of the World Bank said he expected key policies to be delayed or abandoned at a meeting of Group of 20 nations agriculture ministers this week. Robert B. Zoellick told reporters on a conference call he thought proposals to create an international network of food stocks was probably "not the best policy" and that would "have a hard time through the international politics" of the G20. U.S. officials have signalled their resistance to plans for the creation of regional food caches for emergency use--one step suggested for use by G20 countries to alleviate hunger in the developing world. Zoellick also warned that the policy could concern farmers who fear "that it would be used to control prices with releases." Officials are in Paris Wednesday and Thursday to wrangle a deal on how to address unprecedented volatility in food prices.
France, which has the presidency of the G20 this year, has been pushing hard to address issues of food security after prices surged to record highs in February. Key to this is increasing the regulation of investments by speculative investors in commodity markets, which French president Nicolas Sarkozy blames for much of the spike, through imposing position limits or a minimum cash deposit for commodity derivative transactions. But Zoellick said he thought such issues would be left for finance ministers to deal with later in the year. "On issues like position limits the G20 is going to rely on the financial groups to have more discussion about regulatory policy for futures and derivatives," he said. Ministers are, however, expected to announce the launch of the Agriculture Market Information System--or AMIS--an initiative designed to bring the same transparency to world agricultural markets as already exists in oil by providing regular updates on global food stocks and production.
Yet even this is expected to come up against resistance. Economists said it could be hard to get countries such as China--a large food importer--to contribute data that might give away their trade strategies. Russia is also said to be against controls on government intervention in markets which would stop a repeat of the embargo it imposed on grain exports last summer--a factor blamed for sparking the surge in food prices. Zoellick said he also expects "resistance from major agricultural producers to giving up the option of export bans as a tool."
World Bank Launches $4B Food Price Hedging Tool (Source: CME)
Farmers and consumers in the developing world will be able to access up to $4 billion in protection against sharp swings in food prices, under plans announced by the World Bank. The facility will be run by the group's private arm, the International Finance Corporation, in partnership with J.P. Morgan to allow producers, cooperatives and banks to hedge their risk exposure in agricultural markets. The launch comes as agriculture ministers from the Group of 20 developed and developing nations are due to meet in Paris this week to wrangle a deal on how to address unprecedented volatility in food prices. Proposals include improving transparency in physical and futures markets, building stocks to damp price swings and developing risk management tools for the most vulnerable. "This can show how financial instruments can bring security for millions of farmers and producers and consumers," said World Bank Group President Robert B. Zoellick on a conference call.
World food prices hit a record high in February, according to the United Nations, and in a report published last week the body forecast that food prices may be on average up to 30% higher over the next decade as slowing production growth fails to keep pace with rapidly expanding demand. Charities warn that the number of chronically hungry people is likely to rise above 1 billion this year due to the rising cost of living. World food output will have to rise 70% by 2050 to feed a forecast population of more than 9 billion people, according to the U.N. "High, uncertain and volatile food prices are the single gravest threat facing the most vulnerable in the developing world," said Zoellick. Under the debut facility--the Agriculture Price Risk Management tool--IFC will commit up to $200 million in credit exposure to clients that use specific price hedging products, which will be at least matched by J.P. Morgan. The World Bank expects these combined credit exposures to make up to $4 billion available.
The facility is particularly important as smaller emerging market producers and consumers often find it hard to access the sophisticated hedging devices available to producers and consumers in the developing world. Zoellick said the World Bank is in talks to expand the scheme with other banks.
Citi hiring spree focuses on Asia-commodities head
LONDON, June 21 (Reuters) - Citigroup is reviving its commodities role with a big hiring drive and tougher regulation in Europe and the United States means the focus will be on Asia, its global commodities head told Reuters.
Citi is finding it hard to attract staff to London because of high taxes, uncertainty on regulation and a general atmosphere of distrust of banks, Stuart Staley, Citi's global head of commodities, said at the bank's London head office.
Century of Hunger Is Warning From France as Farm Ministers From G-20 Meet (Source: Bloomberg)
World leaders risk making this “the century of hunger” unless they can agree to new rules on food supply, French Agriculture Minister Bruno Le Maire said before a meeting of Group of 20 farm ministers in Paris today. France, which holds the G-20 presidency, wants a central database on crops, limits on export bans, international market regulation, emergency stockpiles and a plan to raise global output. The ministers will most likely balk at the proposal on trade restrictions, said Robert Carlson, international relations director at the Washington-based National Farmers Union.
ICE sugar steady near 2-1/2-month high; coffee firms
LONDON, June 21 (Reuters) - ICE raw sugar futures were steady and traded below a 2-1/2-month peak in early trading on Tuesday, while arabica futures consolidated above a five-month low, pressured by a large
harvest in Brazil. Raw sugar futures on ICE traded below 2-1/2-month highs, underpinned by a softer dollar.
Vietnam 2011/12 coffee output seen up 10 pct-USDA
HANOI, June 21 (Reuters) - Vietnam's next 2011/2012 coffee crop could produce 20.6 million bags, up 10 percent from the previous season due to high yields and improved investment in production, a U.S. Department of Agriculture report said.
"Current high prices will motivate coffee growers and local traders to export most of their beans", which would cut the stock carried over to the next crop to 1.19 million bags, down 7.8 percent, said the report on Monday.
Australia keeps 2011/12 sugar export fcast unchanged
SYDNEY, June 21 (Reuters) - Australian raw sugar exports are expected to rise 1.9 percent in the year to June 2012, in line with an earlier forecast, the government's chief commodities forecast said on Tuesday.
The Australian Bureau of Agricultural and Resource Economics (ABARES) forecast exports would rise to 2.476 million tonnes.
Ivorian rains mixed for the cocoa mid-crop-farmers
ABIDJAN, June 20 (Reuters) - Rain and sunshine in Ivory Coast's cocoa regions last week augured well for mid-crop development, but concerns remained about heavy rain in some areas damaging roads and harbouring disease, farmers said on Monday.
The correct mix of rain and sunshine is needed for cocoa to grow in this crucial stage of crop development. Too little rain and pods fail to produce enough beans. Too much and diseases like black pod can thrive and
damage the harvest.
Ivorian cocoa arrivals seen 15 pct over yr-ago
ABIDJAN, June 20 (Reuters) - Ivory Coast cocoa output is running about 15 percent over last year and the industry is on track to beat a 1.3 million-tonne target for the season, exporters said on Monday.
The outlook is good news for the world's top cocoa grower, which is recovering from a months-long post-election power struggle that killed thousands and brought the economy to its knees before easing in April.
Brazil coffee zones set for dry warm week
BRASILIA, June 20 (Reuters) - Brazil's main coffee zones were set for another dry week with warm frost-free nights, forecaster Somar predicted Monday, providing ideal conditions to dry out the harvested produce and maximize quality.
Not a single millimeter of rain was forecast for the next five days in any of the 11 coffee regions Somar monitors, while the lowest temperature expected anywhere was 8 degrees Celsius, in the hilly Pocos de Caldas region which is one of the coolest coffee areas.
Oil Declines as Greece Still Faces Debt Challenges, OPEC Supply Increases (Source: Bloomberg)
Oil declined in New York as investors bet Greek Prime Minister George Papandreou’s victory in parliament won’t be enough to solve the country’s debt crisis, which threatens Europe’s economy and fuel demand. Futures slipped as much as 0.7 percent today after Papandreou won the support of 155 out of 300 lawmakers in a confidence vote in Athens. He still has to pass 78 billion euros ($112 billion) in budget cuts to stave off the threat of default. The International Energy Agency said Saudi Arabian oil production may be rising and JPMorgan Chase & Co. said output by the United Arab Emirates and Kuwait is increasing.
Brent crude falls as low as $111.11 as spread to WTI narrows
SINGAPORE, June 21 (Reuters) - Brent slipped on Tuesday on continued uncertainty over the Greek debt crisis, narrowing its premium to U.S. crude futures which rose on bargain hunting after losses in the previous session.
"The premium for Brent had just gone too high," said Ken Hasegawa, a commodity derivatives manager at Japan's Newedge brokerage. "That is why we are seeing the correction. Also, the market is very cautious because of the Greek debt issue."
Australia cuts coal export forecast, risk of further downgrade
SYDNEY, June 21 (Reuters) - Australia cut production and export forecasts for its huge coal-mining industry on Tuesday, reflecting growing concerns that the world's biggest supplier of steel-making coal could take another six months to bounce back from recent floods.
Coal is Australia's top export earner and flood and cyclone damage to the industry contributed to the country's biggest contraction in GDP for 20 year in the first quarter.
Copper Rises From Three-Week Low as Concern About Greek Debt Default Eases (Source: Bloomberg)
Copper rebounded from a three-week low as concern eased that Greece will default on its debt, boosting the outlook for commodity demand. The MSCI World Index of equities gained as much as 1.7 percent as renewed confidence in Greece buoyed the prospects for global growth. The Thomson Reuters/Jefferies CRB Index of 19 raw materials climbed for the second straight day.
Chinese aluminium output cranks up another gear
LONDON, June 14 (Reuters) - Rising Chinese power prices and the well-flagged potential for power rationing over the summer peak demand season have injected some bullish impetus into the aluminium market recently.
After all, aluminium smelters are some of the most intensive industrial users of electricity and are an obvious target if Beijing orders households to be prioritized over industry in the event of a summer power crunch.
India's NALCO issues 6,000 T aluminium export tender-source
BHUBANESWAR, India, June 21 (Reuters) - India's state-run National Aluminium Co. Ltd (NALCO) has issued a tender to export 6,000 tonnes of aluminium ingots, a senior company official said on Tuesday.
The last date for submission of bids is June 28, the official, who is close to the tendering process but could not be named due to company policy, told Reuters.
Quake hits Chile's mining north, no damage reported
SANTIAGO, June 20 (Reuters) - A 6.3 magnitude earthquake struck copper-rich northern Chile on Monday, but there were no reports of damage at major mines and authorities reported no injuries or risk of tsunami.
State miner Codelco the world's top copper producer, said its Chuquicamata, Radomiro Tomic and Al Abra mines were operating normally after the quake. Teck Resources also reported no impact at its Quebrada Blanca mine.
Luvata plans India cold chain expansion
LONDON, June 21 (Reuters) - Luvata is planning an expansion in India to help meet rapid growth in the food refrigeration market, the international copper product maker said on Tuesday.
The company expects a first large production facility aimed at the domestic market to be ready next year.
Indonesia offers part of Newmont mine stake to local govt
JAKARTA, June 21 (Reuters) - Indonesia's central government is offering a quarter of its 7 percent stake in the local unit of Newmont Mining Corp to the regional government where the company's copper and gold mine is located, the finance minister said on Tuesday.
Finance Minister Agus Martowardojo has come under pressure from parliament over the central government's purchase of the 7 percent stake, so the offer looks like a move to get lawmakers off his back and close a long-running saga over the mine's ownership.
China leads global steel production down in May
LONDON, June 20 (Reuters) - Global crude steel production dropped for the first time in three months in May from April as top producer China tried to tackle overcapacity after the government implemented credit tightening measures.
Global steel production slipped to 4.189 million tonnes a day in May from 4.231 million in April, World Steel Association figures showed on Monday.
METALS-Copper egdes up; focus on Greece crisis
LONDON, June 21 (Reuters) - Copper edged up on Tuesday as the dollar fell against the euro with investors betting European leaders will cobble together a deal to prevent Greece from defaulting but concerns about demand prospects remained.
Benchmark copper on the London Metal Exchange was up to $9,045.50 a tonne by 0936 GMT, paring losses after falling nearly 1 percent to $9,005 in the last session.
Copper up; Greek confidence vote and Fed decision eyed
SHANGHAI, June 21 (Reuters) - London copper ticked up on Tuesday in cautious range-bound trading on a weaker dollar as the euro rose on hopes that European policymakers would try to avoid a hard landing for the economy of heavily indebted Greece.
"Each day copper has been trading in limited ranges. We are waiting for more leads out of Europe in terms of the Greek concerns and what may come out of the FOMC meeting on interest rates later in the week," said Commodity Broking Services managing director Jonathan Barratt.
PRECIOUS-Gold rises as investors spooked by Greek debt
LONDON, June 21 (Reuters) - Gold prices rose on Tuesday as investors spooked by talk of a Greek debt default and contagion to other euro zone countries sought safety while a softer dollar also helped.
Spot gold was bid at $1,544.10 a troy ounce at 1126 GMT compared with $1,539.95 late in New York on Monday when it touched $1,545.90, its highest since June 9.
Gold ticks up near 2-week high; Greek crisis brews
SINGAPORE, June 21 (Reuters) - Gold edged up on Tuesday and held near its highest in two weeks, with no quick end in sight to economic turmoil in Europe after Greece was told to approve a new austerity package to avoid defaulting on its debt.
"We're still not seeing that huge flight-to-safety that is really needed for the sovereign debt crisis to actually propel gold higher," said a dealer in Singapore.
