Corn (Source: CME)
US corn futures settle down the one-day limit in several contract months amid heavy fund selling. Funds sold an estimated 30,000 corn contracts, according to floor traders. They note talk that a large fund was liquidating positions in the grains and pre-placed sell orders were triggered as prices declined. "It seems like everybody hit the sell button today," says Jason Britt, president of Central States Commodities. CBOT December corn drops 30c, or 4.4%, to $6.50 1/4 a bushel. The daily limit expands to 45c Thursday.
Wheat (Source: CME)
US wheat futures close sharply lower as heavy selling hits grain markets. Commodity funds were unloading positions, including an estimated 8,000 wheat contracts at CBOT. Nearby July contract settles down 5.3%, or 36c, at a seven-month low of $6.38 1/4 a bushel. A selloff in European wheat futures added pressure to US prices. Slide should attract buyers, with traders predicting Egypt will issue a tender. Most-active CBOT Sep wheat drops 32 1/4c to $6.73 1/4; KCBT Sep loses 32 3/4c to $7.88 3/4; MGE Sep drops 33 3/4c to $8.51 1/2.
Rice (Source: CME)
Rice futures settle weaker as selling engulfs grain markets. Steep losses in wheat and a limit-down drop in corn dragged down rice, traders say. Wheat, which exerts the most influence on rice because both grains are global food staples, sank more than 5% to a seven-month low. CBOT September rice lost 22 1/2c, or 1.5%, to $14.62 1/2 per hundredweight.
Brazil brings farming muscle to corn and cotton
SAO PAULO, June 21 (Reuters) - After transforming global agriculture by quintupling their soybean production since 1980, Brazilian farmers are now on the brink of crop breakthroughs in cotton and corn, long dominated by growers in America.
Helped by high futures prices and a sustained local agricultural boom, cotton and corn acreage is spreading fast despite being twice as capital intensive as soybean crops.
Corn rises for 3rd day on weather woes, wheat firm
SINGAPORE, June 22 (Reuters) - Chicago corn gained around half a percent, rising for a third straight session on forecasts of hot weather moving into the U.S. corn belt, threatening crop prospects at a time when old-crop supplies are running tight.
"Corn has rallied in the last few sessions as investors are buying on dips because fundamentals are supportive for prices," said Lynette Tan, an analyst with Phillip Futures in Singapore.
Ukraine wheat exports to fall to 3.7 mln T in 10/11
KIEV, June 22 (Reuters) - Ukraine's wheat exports in the 2010/11 season which ends on June 30 will not exceed 3.7 million tonnes compared with 9.2 million in 2009/10, analyst ProAgro said on Wednesday.
"The export of wheat would be at the level of 3.7 million tonnes. A smaller harvest at 16.8 million tonnes and the export curbs that followed were the reason for the decrease," ProAgro said in a statement.
India 2011 monsoon rains seen just below normal
NEW DELHI, June 21 (Reuters) - India's vital monsoon this year is expected to be just below normal, the weather office said in a revised forecast on Tuesday, but the rains could pick up after July 15, during the key planting month for rice, sugar cane and corn.
India's Meteorological Department said in a statement this year's monsoon rains would be 95 percent of the long-term average overall, down from its April forecast of 98 percent and just short of the 96-104 percent range which counts as normal monsoon.
Sierra Leone seeks 50,000 tonnes rice from Vietnam
HANOI, June 22 (Reuters) - A delegation from Sierra Leone has held talks with Vinafood 2, Vietnam's top rice exporter, to import 50,000 tonnes of the grain, a government statement said, as the southeast Asian nation seeks to boost rice shipment to Africa.
The trade ministers of Sierra Leone and Vietnam signed a memorandum of understanding on rice trading in Hanoi on Tuesday, by which Vietnam hopes to sell more rice to African nations, the Industry and Trade Ministry said in the statement.
World Bank unveils hedging tool to aid poor farmers
WASHINGTON, June 21 (Reuters) - The World Bank on Tuesday launched a new agricultural hedging tool to help farmers in developing countries curb increasing food price volatility.
The launch of the Agricultural Price Risk Management facility together with JP Morgan Chase & Co precedes a June 22-23 meeting in Paris of G20 agriculture ministers seeking a deal on improving global food security amid increasing global commodity prices.
Heavy rains to affect Ukraine's grain harvesting
KIEV, June 22 (Reuters) - Heavy rains expected late this month across Ukraine's leading grain production areas in southern regions may affect grain harvesting and reduce the crop, a senior weather forecaster said on Wednesday.
"We expect heavy rains, rainstorms and squalls to arrive in Ukraine at the end of this month. They could damage some planting areas and poor weather in southern regions will delay harvesting," said Mykola Kulbida, the head of the country's weather forecasting centre.
Sarkozy Urges G-20 Agriculture Ministers To Back French Plan (Source: CME)
French President Nicolas Sarkozy urged agriculture ministers of the Group of 20 industrialized and emerging nations gathered for a meeting in Paris to back France's proposals to curb food price volatility, stressing they could help rebalance global growth. "In remedying the problem of volatility in agricultural markets and ensuring food security for the world of today and tomorrow, it is the entire edifice of capitalism that we are in the process of rebalancing," he told ministers in a speech at the Elysee palace at the opening of the G-20 summit. Echoing recent remarks made at the European Commission last week in Brussels on France's G-20 agenda for agriculture, Sarkozy said "rocketing" food prices are endangering the global food recovery. He called on agriculture ministers to agree on increasing transparency in physical commodities markets as well as to tighten oversight of food commodities derivatives markets. "Commodities markets are among the least transparent of all markets," he said.
France's proposals include the creation of a global data base on food stocks and agricultural production, similar to the one which exists for oil. "This lack of transparency fosters volatility." Even as Sarkozy said increasing food production globally to match rising demand is key in reducing food price volatility, he insisted the expansion of derivatives markets play a role in fueling erratic price swings. "The financialization of agricultural markets, even if it does not explain everything, is a major contributory factor in price volatility and food insecurity for the most vulnerable," Sarkozy said, underlining the need for stricter regulation of derivatives markets. In order to increase food security and prevent food crises, France is also suggesting that G-20 nations agree on a code of conduct to restrict export bans on agricultural products for humanitarian reasons. Another proposal involves setting up emergency food reserves that would be located in the most vulnerable regions of the world.
Brazil Minister: Raising Food Output Way To Curb Price Volatility (Source: CME)
Any attempt to regulate commodity prices won't work to curb food price volatility, and the best way to combat erratic price fluctuations is to dramatically increase food production, Wagner Rossi, Brazil's minister of agriculture, said. "Brazil's experience, which is no different from the experience of other countries in the world, shows that the only instrument capable of reducing food price volatility is to increase food production," Rossi said ahead of a meeting of agriculture ministers of the Group of 20 industrial and developing nations Wednesday and Thursday. As G-20 chair, France has put curbing commodity price volatility, which it sees as one of the main threats to world growth, at the top of its agenda.
French Agriculture Minister Bruno Le Maire intends to discuss with his G-20 peers an action plan revolving around five main proposals, which include increasing food production, improving the transparency of physical commodities markets through the creation of a global data base on stocks, setting up emergency food reserves for humanitarian purposes, as well as stepping up the oversight of soft commodities derivatives markets. Although he said Brazil agrees with most of the French proposals, Rossi warned such measures shouldn't be used to regulate food prices, which is bound to be counter-productive. "Our disagreement bears on the possibility of intervening to regulate or to curb prices. For the last 30 years, food prices in emerging markets have been low and during that time, no rich country has ever offered to come to Brazil to discuss how to increase revenues for food producers," Rossi said.
Brazil intends to play a significant role in meeting the rising need for food across the world in the coming years by raising its agricultural production, Rossi added. Intervening to regulate food prices is bound to fail eventually and even result in higher prices, Rossi said. "Every time you threaten producers to regulate food prices, this may succeed one year but lead to lower production and higher prices the following year," he stressed. Even as French President Nicolas Sarkozy has said on several occasions that France doesn't intend to regulate agricultural prices, Brazil's comments show that emerging food producers, which have benefited from the recent rise in commodity prices, remain wary that the French G-20 agenda could put a brake on their growth. "If you look at international exchanges, the part of the world producing industrial goods still has an advantage over those who produce commodities," Rossi said, describing the recent rise in food prices as slow and gradual.
"Food prices are not high. They are unstable," he said, adding the recent rise in commodity prices has been gradual.
FAO Warns Of More High Food Prices As Cuts World Crop Forecast (Source: CME)
World cereals markets face a second season of deficit as early forecasts for crops in Europe and the U.S. this year have been lowered "significantly" cutting hopes of a rebound in output, the United Nation's food body said. Food prices are expected to stay high and volatile into 2012, putting growing pressure on poor importing countries and causing headaches for policy makers, the Food and Agriculture Organization said in a report. "With total cereal production in 2011 below the anticipated utilization, international prices are likely to remain high, especially in the wheat and coarse grain markets," it said. The warning comes as agriculture ministers for the Group of 20 developing and developed nations are meeting in Paris to negotiate a deal on how best to rein in near record-high food prices and damp volatility.
Food-price inflation has been blamed for sparking the wave of unrest which has rocked the Arab world this year and the FAO warned that Libya, hit by months of civil unrest, is facing serious shortages. The FAO cut its forecast of world cereals output to 2.302 billion metric tons in 2011-12 from an earlier estimate of 2.315 billion tons, driven by a downgrade in output from the U.S and Europe. Wheat output is expected to come in "significantly" below earlier forecasts at 671 million tons, including 134 million tons from Europe, after drought cut hopes for yields. That still marks a 2.8% rise compared with 2010, however, due to a rebound in output from the Black Sea. World cereal stocks are expected to suffer as a result, falling to 486.2 million tons and cutting the world stocks-to-use ratio by 2.3% to just 20.7%.
"With grain inventories remaining at low levels, especially for maize, international grain prices are expected to stay not only high, but also volatile in the 2011-12 marketing season," said the report. Still, the FAO said favorable weather means North African countries--including the world's largest wheat importer Egypt--are likely to have to rely less on world imports. Output from the region is expected to rise 14% to 18 million tons in 2011, it said.
US Agriculture Secy Says US To Push For More Transparent Food Production, Open Mkts (Source: CME)
The United States will push for more transparent food production and open markets to reduce food price volatility at Thursday's meeting of big economy agricultural ministers, U.S. Secretary of Agriculture Tom Vilsack said. Speaking the day before the meeting of Group of 20 agriculture ministers, Vilsack said hoped countries could be discouraged from imposing food export bans, which were a factor in food price spikes in 2008 and again in the past year after Russia banned wheat exports in July 2010 amid a drought. "It's difficult to tell a country what they can and can't do," he said. But, he said there's an "international consensus on what are appropriate practices." Vilsack said Russia's desire to join the World Trade Organization should be a factor in it ceasing to ban exports in future. Such bans distort prices over the long term, he said. One contribution to reducing price volatility could be better knowledge of world food production and stocks.
G-20 host France hopes ministers will agree to set up a database at the Rome headquarters of the United Nations' Food and Agriculture Organization. A problem, however, is a lack of reliable data from developing countries: post-harvest losses might not be registered in remote areas. Vilsack said that the U.S. could help provide more accurate food data through satellite technology. "Many countries are faced with a significant difference of technology and capacity in rural and urban and suburban parts of the country," he said. "We're prepared to work with the international community." Greater transparency of stocks was likely a more efficient way to deal with potential food shortages in certain countries, he said--another possible solution, more emergency food reserves, was expensive and troublesome to manage.
"Historically we've had some reservations about reserves," he said. Instead, "You should know where stocks are... You should be able to use those stocks reasonably quickly. You have to ask what is the most efficient."
India To Be Net Corn Importer By 2014-15 -US Grain Council CEO (Source: CME)
India will join China to become a net corn importer by 2014-15, placing increased pressure on world corn markets, the head of the U.S. Grains Council said. Speaking at an agriculture investment summit here, Thomas Dorr forecast that India will import as much as 300,000 metric tons of corn in 2014-15, rising to 808,000 tons in 2018-19. In 2009-10 India exported 995,000 tons of corn. "We believe that in four short years India will turn into a consistent importer," he said. This shift is expected to come as Chinese demand for corn rockets. Dorr said that despite a push by Beijing to improve domestic production, the Asian giant will increasingly rely on imports to meet rising consumption by its rapidly-expanding livestock industry. "China's government is now coming to grips with the fact that food security and food self-sufficiency aren't necessarily the same thing," he said.
World corn production is expected to set a new record in the coming 2011-12 season and yet rising demand from emerging countries and ethanol blenders mean global corn ending stocks are expected to fall by 3 million tons, to near-historic lows. This pressure is only expected to increase in the future. According to the World Bank, developing country populations with incomes of more than $16,000 a year are expected to rise to 2.1 billion by 2030 from 352 million in 2000, driving demand for meat. Dorr, who is also former under secretary for rural development of the U.S. Department of Agriculture, said producers and investors have a huge opportunity to benefit from such demand growth, but it will require openness to technology, trade and investment. The use of genetically-modified crops, which is already widespread in the U.S. corn industry but extremely restricted in other parts of the world like the European Union, will also become increasingly important in order to meet growing demand, he said.
"Non-scientific objections [to GM] must be weighed against the moral imperative to feed a world of 9 billion people by 2050," he said.
Liffe robusta coffee hits 4-month low
LONDON, June 22 (Reuters) - Liffe robusta coffee set a four-month low in early trade bearish technicals helped to spark sales while ICE arabicas edged higher.
Cocoa prices were mixed with a firmer dollar weighing on ICE prices while sugar slipped back slightly but remained within striking distance of peaks set earlier this week.
Coffee premiums soar in Asia; supply scarcity worsens
SINGAPORE, June 22 (Reuters) - Premiums for robusta skyrocketed in Asia as supply scarcity worsened, with Indonesian beans changing hands at $200 above London futures and Vietnamese coffee at $150 premiums, raising fears of more delays and even default, dealers said on Wednesday.
Stocks were thinning in top robusta producer Vietnam ahead of the next crop later this year, while exporters in second-largest producer Indonesia are struggling to get beans after persistent rains caused a shift in harvesting time, which damaged coffee cherries.
Brazilian port to limit loading of bagged sugar
SAO PAULO, June 21 (Reuters) - Brazil's main sugar port of Santos will restrict the loading of bagged sugar in the public quay, a measure aimed at improving efficiency, an official said on Tuesday.
But shipping agents fear the decision could cause more congestion in the short term.
Drought, dust darken biggest U.S. cotton patch
LUBBOCK, Texas, June 21 (Reuters) - Punishing temperatures of more than 100 degrees left Wesley Butchey's 2,000 acres of West Texas cotton looking as if they had been zapped in a microwave.
Mother Nature followed up one afternoon with a 45-minute, 60-mile-per hour dust storm, battering tender green plants peeking out of the roasted soil.
US increases sugar import quota by 7 percent
WASHINGTON, June 21 (Reuters) - The U.S. sugar import quota was increased by 120,000 short tons, the second increase since April, the Agriculture Department said on Tuesday, because the freeze-shortened U.S. crop is too small to satisfy needs.
With the increase, the import quota for the year ending on Sept 30 is 1,676,497 tons raw value (1,520,892 tonnes), up 7 percent. The Office of the U.S. Trade Representative will apportion the increase among sugar-producing nations.
Crude Declines After Federal Reserve Lowers U.S. Economic Growth Forecast (Source: Bloomberg)
Oil declined for the first day in four in New York after the Federal Reserve lowered its economic growth outlook for the U.S., signaling that fuel demand in the world’s biggest crude-consuming nation may weaken. Futures slipped as much as 1.5 percent after Fed officials yesterday lowered their forecasts for growth and employment this year and next. An Energy Department report showed U.S. oil stockpiles fell less than forecast and inventories at Cushing, Oklahoma, the delivery point for the New York-traded West Texas Intermediate grade, increased for the first time in four weeks.
U.S. Govt cuts use of next-generation biofuels
WASHINGTON, June 21 (Reuters) - The dream of making a green motor fuel from switchgrass or wood chips got kicked down the road for a few more years after the U.S. government on Tuesday slashed its proposed mandate for next-generation biofuels.
For the second year in a row, the Environmental Protection Agency cut the amount of cellulosic ethanol that must be mixed into motor fuel.
Gold Futures Top $1,550 as Currencies Fluctuate (Source: Bloomberg)
Gold rose to a seven-week high as fluctuations in currency markets boosted demand for the precious metal as an alternative investment. The euro fell against the dollar in the two weeks ended June 17 on speculation that the Greek government will struggle to pass austerity measures to avoid a default. Gold prices in U.K. pounds rose to a record today. The metal gained for seventh straight sessions, the longest rally since April.
Copper market in 18,000 T surplus in March -ICSG
LONDON, June 22 (Reuters) - The refined copper market was in an 18,000 tonnes surplus in March, the International Copper Study Group (ICSG) said on Wednesday.
The apparent refined copper balance for the first quarter showed a production deficit of 33,000 tonnes, the Lisbon-based ICSG said in a statement. This compared with a surplus of 10,000 tonnes in the same quarter of 2010.
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.
Iron Ore-Spot prices fall for third day, Vale reroutes cargo
SINGAPORE, June 22 (Reuters) - Spot iron ore prices fell for a third day running and bids remained scarce on Wednesday as tighter credit and slower steel demand in top market China kept buyers at bay.
Key Chinese steelmakers, led by industry leader Baoshan Iron and Steel , have cut prices for July bookings, anticipating a seasonal decline in steel demand in the third quarter.
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.
China's global share of rare earth production to drop - report
BEIJING, June 22 (Reuters) - China's global share of rare earth output will drop steeply in the next two years as other countries ramp up production to compensate for domestic curbs on mining the minerals, a former government official and future rare earth group chief said.
The country's rare earth output would drop from 95 percent of global output to 60 percent, reversing global reliance on China, Wang Caifeng, a former Ministry of Industry and Information Technology (MIIT) official told the official China Daily.
METALS- Copper slips on dollar, eyes FOMC meet
LONDON, June 22 (Reuters) - Copper slipped on Wednesday as the dollar strengthened ahead of a U.S. rate statement and after Greek debt concerns eased, but signs of a slow demand ramp up from top consumer China underpinned prices.
Copper traded down around half a percent at $9,015 a tonne at 0938 GMT from $9,080 on Tuesday's close.
The metal used in power and construction hit a one-week low at $8,900 a tonne on Monday and remains more than 10 percent below record highs of $10,190 a tonne hit in February.
PRECIOUS-Gold dips ahead of Fed decision
June 22 (Reuters) - Gold eased modestly on Wednesday ahead of the outcome of a U.S. Federal Reserve meeting which could determine the near-term outlook for U.S. monetary policy, while the dollar edged up.
The Fed's two-day meeting ends on Wednesday and the central bank is widely expected to repeat its commitment to keeping U.S. interest rates low, but without fanning any expectations for a third round of quantitative easing.
