Corn (Source: CME)
US corn futures finished lower as forecasts indicate crops in Midwest will be safe from severe weather into early July. "The core of the hot, dry weather remains south of the Midwest for the foreseeable future," says Mike Palmerino, meteorologist for Telvent DTN. Selling extended losses for the week after prices dropped the one-day limit Wednesday. "There are a lot of people who feel that the highs of the year are in for corn, especially with the benign weather," says Brian Hoops of Midwest Market Solutions. CBOT December corn drops 14c to $6.32 a bushel.
Wheat (Source: CME)
US wheat futures ended down as harvest advances in the Northern Hemisphere, bringing fresh supplies in from the fields. Kansas, the top U.S. winter-wheat growing state, saw "another day of great harvest weather," according to producers' group Kansas Wheat. That "means Kansas farmers are continuing to make rapid progress on the 2011 wheat crop," it says. Russia's agriculture ministry notes its grain harvest began yesterday. CBOT September wheat loses 8 1/4c to $6.61 a bushel; KCBT September slides 11c to $7.67 1/4; MGE September sinks 17c to $8.18 1/2.
Rice (Source: CME)
US rice futures settled lower on spillover selling from losses in the wheat market. Strength in the US dollar keeps lid on grains, as it makes dollar-denominated commodities less attractive to foreign buyers. Additional pressure stems from beneficial rains that eased concerns about dryness in India, a major rice producer, an analyst notes. Yet, the market traded within yesterday's range. CBOT September rice falls 23c to $14.50 1/2 per hundredweight.
U.S. corn gains for 2nd day, soy rebounds on Greece news
SINGAPORE, June 24 (Reuters) - U.S. corn futures rose more than 1 percent on Friday, extending previous session's gains, while soybeans bounced back amid a broad-based strength in commodities following Greece's deal with international lenders for a new austerity plan.
"It's a rebound after sharp drop as people are buying on the dip with external factors such as the Greece deal supporting the grain markets," said Ker Chung Yang, analyst at Phillip Futures in Singapore.
Hungry world needs sun to shine on US corn
CHICAGO, June 23 (Reuters) - Rarely have the inches of rainfall in Iowa or the hours of sunshine in Ohio been more pivotal to soaring global food prices and inflation than they will be this summer.
The U.S. Midwest needs good crop weather to produce a corn crop bountiful enough to fill export demand and to help rein in galloping inflation in countries like China and India.
Vietnam ships 3.63 mln tonnes rice so far in 2011
HANOI, June 24 (Reuters) - Vietnam, the world's second-largest rice exporter after Thailand, has shipped 3.63 million tonnes of the grain so far this year, up 14.5 percent from a year ago, the Vietnam Food Association said on Friday.
The rise in shipments suggests Vietnam could export another record volume this year, which may help ease concern over adverse weather affecting global grain output.
Rains could reduce Argentina's wheat area-exchange
BUENOS AIRES, June 23 (Reuters) - The heavy rains that have slowed the planting of 2011/12 wheat in Argentina could cause a reduction in wheat area for the season, the Buenos Aires Grains Exchange said on Thursday.
The exchange has estimated that farmers will seed 4.95 million hectares of 2011/12 wheat while the government expects 4.7 million hectares.
France sees G20 farm deal as a first step
PARIS, June 23 (Reuters) - A G20 farm deal agreed on Thursday is a good initial effort to tackle food price volatility and fight shortages and should encourage investment in agricultural output, France's agriculture minister said.
"This is the way I see this agreement. A first step, a positive step, and also an impetus that has been given to investment in agriculture," Bruno Le Maire told Reuters Insider TV shortly after G20 farm ministers agreed an action plan to curb food price volatility.
G20 clinches first farm deal, dodges regulation
PARIS, June 23 (Reuters) - G20 farm ministers agreed to tackle high food prices on Thursday in a deal that steered clear of divisive details on issues such as regulation, paving the way to more global cooperation on sensitive agricultural issues.
The action plan to boost agricultural output, food market transparency and policy coordination reflected many of France's ambitious proposals for its G20 presidency this year but it fell short of calls by Paris for a tough crackdown on speculators.
Northern US crops to see more rain, flooding
CHICAGO, June 23 (Reuters) - The northern U.S. Corn Belt will stay wet keeping crop development slow and add more water to flooded rivers while the southern belt will turn hotter and drier, boosting plant growth, said a forecaster on Thursday.
"There are indications that a high-pressure ridge is building across much of the southern United States. It could poke its way into the southern Midwest which could be positive -- increase growing degree day units to move this crop along," said Telvent DTN forecast Mike Palmerino referring to corn, soybean and spring wheat plants.
Barley output to fall in France, rise in Spain
LONDON, June 23 (Reuters) - Smaller barley crops in France and Germany, where drought has reduced yields prospects, should be offset by the highest crop in three years in Spain where rain has been more plentiful, crop analysts said on Thursday.
Rains earlier this month in top European Union producer France have also led to better-than-expected yields in early harvesting of winter barley.
Wet weather cuts Canada wheat estimate, may cut more
WINNIPEG, Manitoba, June 23 (Reuters) - Canada's farmers planted less wheat this spring than planned due to wet weather, Statistics Canada reported on Thursday, but analysts say plantings are likely even smaller than the report indicates because flooding worsened after the agency's farmer survey.
Statscan reported that canola plantings rose from the earlier estimate to a record high, but the trade doubts the crop forecasts are realistic.
S.Africa slightly raises maize output forecast
JOHANNESBURG, June 23 (Reuters) - South Africa slightly raised its May 2010-April 2011 maize output forecast on Thursday, beating market expectations, boosted by a rise in yellow maize yields.
The government Crop Estimates Committee (CEC) expected a harvest of 10.998 million tonnes of maize, little changed from the 10.99 million tonnes forecast in its previous estimate.
U.S Corn Shipments Reach Chinese Ports; More Buying Seen (Source: CME)
The first U.S. corn shipments of this year to China have arrived at Chinese ports, the U.S. Grains Council said Friday. China purchased 1 million metric tons of U.S. corn in March to replenish dwindling state reserves, fueling speculation that the country which turned a net corn importer last year, after a long gap of 15 years, may be scouting the market for more bargains. The imported corn arrived at the ports of Zhejiang and Shekou, the council said in a report. Two more shipments are expected at ports in Guangxi and Shenzhen next week, it said. "Council sources anticipate another eight-to-10 shipments to arrive over the next few months, intended for the national reserve," it said. "Reportedly, the shipments have begun unloading without any problems." China places a high policy premium on its grain security, and has sought to refill depleted state corn stockpile run low by successive auctions as Beijing tried to hold down inflationary pressures from late last year.
Chicago Board of Trade corn prices reached a record $7.72 a bushel in April fueled by suspicions at the time--only confirmed in May--about the Chinese purchase, which was driven in part by soaring Chinese demand for pork. Corn is a major feedmeal ingredient used by the sector. Chinese average wholesale pork prices reached a record on June 17. Global corn prices softened in June along with a weaker commodity complex, prompting market speculation that Chinese companies are again in the market for large corn purchases in the range of another 1 million tons. However, Cofco Ltd., one of China's grain trading vehicles, isn't involved in such possible purchases, an executive with a major grain trading company told Dow Jones Newswires this week. The other likely candidate for such a sizable state corn purchase, China Grain Reserves Corp., also called Sinograin, hasn't commented on its position. Sinograin bought the March cargoes tax-free in its role as state stockpiler.
Among major grains, China currently has the lowest stocks-to-use ratio in corn, an indicator of domestic stocks as a proportion of consumption. Based on U.S. Department of Agriculture data, Standard Chartered Bank analysts estimated last month that this ratio was around 35.7% in 2010-11, down sharply from 85% in 2000-01. China imported 12,010 tons of corn in May, more than double the volume in the same period last year. However, customs data also showed that China may be moving to diversify its sources of foreign corn away from the U.S., the world's largest corn producer and exporter. About three quarters of China's May corn shipments came from Myanmar--a volume that's more than double all of Myanmar's corn exports to China in 2010.
South Australian Grain Exports To Stay Strong -Viterra (Source: CME)
Grain exports from ports in South Australia state will remain strong in coming months, building on record shipments in the last six months, Viterra Inc. (VTA.AU), the state's main grain storage and export terminal operator, said Friday. "Viterra expects shipments from South Australia to remain strong given the significant crop in storage, the favourable commodity pricing environment and strong demand," Viterra's President for Southeast Asia, Rob Gordon, said in a statement. The company, which entered the domestic industry in 2009 after buying ABB Grain Ltd., reported record shipments of more than 4.3 million metric tons of grain from South Australian ports in the six months ended May 31. South Australian ports exported an average of 4.3 million tons of grain a year during the last 10 years, most of it wheat.
South Australia and Western Australia usually supply most of Australia's winter grain exports, but after record production last crop year ended March 31, the eastern states and South Australia are providing most of the nation's exports this year. Gordon said there is a highly competitive market for South Australian grain, with 14 active exporters accounting for the record shipments in the last six months. More than two thirds of exports were shipped by companies other than Viterra, whereas only three years ago, there was only one single-desk exporter of bulk wheat, AWB Ltd. (AWBZY). He said the result highlights strength in the South Australian grains industry, with the record exports indicating an efficient shipping program and effective management of shipping and port arrangements.
India Rice Sowing Falls On Delay In Monsoon (Source: CME)
Rice plantings in India fell 8.2% so far this summer season due to a two- to four-day delay in monsoon's arrival in the northern grain-bowl region, but a pickup in rains this week has calmed concerns over a fall in output. Rice sowing, which starts with the arrival of monsoon rains, fell to 1.90 million hectares until Friday from 2.07 million hectares a year earlier, government data showed. While the monsoon advanced well in time over the southern rice-producing hubs such as Andhra Pradesh, the rains were delayed over both eastern and northern centers, hurting sowing. Sowing of other major crops such as oilseeds and pulses also fell during the same period, although the area under sugar cane rose 4.5%, the data showed
China Expects 'Strong' Summer Grain Harvest, Minister Says (Source: CME)
China has reaped a "strong" summer grain harvest, Agriculture Minister Han Changfu said. Han, in a report on his ministry's website published Thursday, didn't specify an estimated volume. His comment is in line with general sentiment regarding the summer harvest, which consists largely of wheat, as officials have reported no major problems during the harvest, which is around 90% complete. "This year, China overcame severe drought and floods, and got another strong harvest," Han said in the statement, which quoted his remarks at a meeting of agriculture ministers of the Group of 20 industrialized and emerging nations in Paris. Last year's summer grain harvest fell 0.3% compared with the previous year, to 123.1 million metric tons, prompting concern about China's grain output and a boom in global agriculture commodity prices.
G20 Deal Disappoints Hopes For World Food Markets Shakeup (Source: CME)
A deal by agriculture ministers from the Group of 20 nations announced Thursday does not go far enough toward tackling the growing threats to food security and rising prices, critics said. Farm ministers of the world's biggest economies said they would set up a monitoring system for food stocks and production and push to improve agricultural investments in the developing world. Minsters also announced measures to protect the world's poor from production shocks after world food prices hit a record high this year, including creating a network of stocks in vulnerable countries and halting export bans on food aid. Food security has risen to the top of the political agenda this year after the second spike in four years was blamed for sparking the wave of unrest that has rocked the Arab world, causing headaches for policy makers.
Yet critics of the deal said ministers passed the buck on two of the most important issues facing world food markets: the growing use of food crops to create biofuels and the role of speculators in financial markets. "The action plan adopted today addresses the symptoms of price volatility on agricultural markets, but it fails to address the causes," said the United Nations' special rapporteur on the right to food Olivier De Schutter. A report for the G20 by 10 agencies, including the World Bank and World Trade Organization, found that "biofuel production will exert considerable upward pressure on [food] prices" and recommended policymakers "remove ... policies that subsidize or mandate biofuels production or consumption." The G20's statement, however, said that it will "address the challenges and opportunities posed by biofuels, in view of the world's food security, energy and sustainable development needs" but made no definite statement on changing government policies on use of the fuel.
"The European ethanol industry welcomes the decision by the G20 to vanquish the myth that biofuels are responsible for food price volatility," said pro-biofuels lobby group ePure Secretary General Rob Vierhout. But Jean-Cyril Dagorn, policy advisor for Oxfam, slammed the "sticking plaster approach" adopted by the meeting and said only "reforming flawed biofuels policies which divert food into fuel and helping poor countries build up buffer stocks" would help poor countries deal with food shortages. Another issue, but one heralded as key to stopping food price rises by France, was also left on the sidelines: regulating commodity markets. France has vowed to crack down on speculation on food commodities and has blamed the meteoric expansion of commodities derivatives markets--the size of which far exceeds that of physical markets--for fueling food price volatility. But countries such as Brazil, the U.S. and Europe argue that tempering futures markets could be tantamount to price controls.
Minsters said they "strongly encourage G20 Finance Ministers and Central Bank Governors to take the appropriate decisions for a better regulation and supervision of agricultural financial markets" when they meet in July. A European Union source said he was optimistic this would be addressed next month. But the U.N.'s De Schutter said the statement missed the point. "Speculation typically results not from the manipulation of prices by one single financial actor taking excessive positions, but from the combined actions of a large number of actors adopting a herding behaviour," he said.
Speculators Cut Agriculture Bets as Improving Weather Eases Supply Concern (Source: Bloomberg)
Funds slashed bets on rising agriculture prices by the most in three months, led by declines in holdings of wheat and coffee, as supply concerns eased amid signs the global economy may slow.
Supply to influence commodity prices more in Q3-BarCap
LONDON, June 23 (Reuters) - Supply trends will be a greater differentiator of commodity price performance in the third quarter, with crude oil, copper and corn among the most interesting plays, Barclays Capital said in its Global Outlook.
"The headwinds have got stronger for commodities, but our view is that now is not the time to underweight commodities exposure," said Kevin Norrish, managing director, commodities research at Barclays Capital speaking at a briefing in London on Thursday.
Hedge funds fear commodity bull run may be over
MONACO, June 23 (Reuters) - The price of gold, copper and other commodities may have peaked, say hedge fund managers meeting in Monaco this week, who are avoiding the sector for fear that last month's sharp sell-off may herald further falls.
Executives at the GAIM conference said gold and base metals, which have boomed in recent years thanks to rising demand and low interest rates, along with the recent wave of high-profile mining company flotations, looked over-priced.
Baltic index index rises, coal buying slower
LONDON, June 23 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, turned positive on Thursday helped by light iron ore cargo business to China on the larger capsizes vessels.
Analysts and brokers said mounting fleet growth and slower imports of coal and iron ore due to high stocks were capping potential for gains.
Asia Dry Bulk-Panamax rates to fall on weak China, Japan demand
SINGAPORE, June 23 (Reuters) - Rates for panamax dry bulk carriers on key Asian freight routes are expected to fall over the next week due to waning freight demand from China and Japan, shipbrokers said on Thursday.
In the capesize market, rates are seen steady to lower in the short term on expectations for a slowdown in iron ore shipments to China.
Liffe robusta coffee above 4-month low, sugar dips
LONDON, June 24 (Reuters) - Liffe robusta coffee edged up above a four-month low in early trade on Friday, while ICE arabicas were just above five-month lows, weighed by Brazil's harvest.
ICE raw sugar futures edged down, underpinned by downward revisions to Brazilian output forecasts, while cocoa firmed, with upside weighed by ample supplies from West Africa.
Australia record cotton harvest nears completion
SYDNEY, June 24 (Reuters) - Australia's 2010/11 cotton harvest is likely to be completed by the end of June even though recent rain has slowed harvesting, Westpac Banking Corp said in a crop outlook on Friday.
Australia, the world's third largest cotton exporter is expected to ship record quantities of the fibre in the coming year.
Westpac, the country's third largest bank said crop quality was generally good across irrigated and dryland areas in the cotton growing states of Queensland and New South Wales.
India to export 500,000 tonnes more sugar, NY prices fall
NEW DELHI, June 23 (Reuters) - India's government decided to allow another 500,000 tonnes of unrestricted sugar exports, doubling its overseas sales this year and sending international prices four percent lower.
Rural Development Minister Vilasrao Deshmukh announced the decision on Thursday for exports under the Open General Licence (OGL) scheme after a meeting of a panel of ministers which is empowered to take a final decision on the issue.
Asia Coal-Prices climb as rains pound Australian coalfields
SHANGHAI, June 24 (Reuters) - Australia's thermal coal prices rose by more than $2 per tonne from last week to tip past $121 per tonne, defying downward pressure in the broader energy complex, as heavy rains at coalfields in the Hunter Valley region slowed output.
Thermal coal on the globalCOAL Newcastle index for the week to date was $121.26 per tonne on Thursday, up from $118.93 a week earlier, as price negotiations between Australian suppliers and their Japanese customers continue.
Euro Coal-Prices dip 50c to $1/T with oil steep fall
LONDON, June 23 (Reuters) - Prompt physical coal values softened by around 50 cents to $1.00 a tonne on Thursday in a limited reaction to oil's $8 a barrel price dive, traders and utilities said.
Oil crashed by more than $8 to a four-month low on Thursday after the world's consumer nations said they would band together to aid the global economic recovery by releasing emergency oil reserves for the third time ever.
Oil Falls on Outlook for Slowing Demand; IEA May Release More Stockpiles (Source: Bloomberg)
Oil fell in New York on concern the economic expansion in the U.S. is slowing and as the International Energy Agency said it’s prepared to release more stockpiles to stabilize prices. Futures dropped as much as 0.8 percent before reports this week that may show U.S. consumer spending climbed at the slowest pace in almost a year and manufacturing cooled. Greek lawmakers will vote on a five-year austerity plan that must pass for the cash-strapped nation to secure more international aid. The IEA, adviser to 28 nations, will act again if needed, Executive Director Nobuo Tanaka said in Beijing on June 25.
Industrial nations tap oil reserves to boost growth
PARIS/WASHINGTON, June 23 (Reuters) - Industrialized nations agreed to release oil from emergency stockpiles for the third time in history, sending crude prices tumbling and providing some support to a faltering global economy.
The unexpected decision to release 60 million barrels over the next month, the culmination of a plan that President Barack Obama put in motion more than a month ago, showed the deepening concern among Western leaders over the damage of high energy costs to a worsening global economy.
Iron Ore-Key indexes at 3-month lows on thin Chinese buying
SHANGHAI/SINGAPORE, June 24 (Reuters) - Spot iron ore prices lost more ground on Friday as steel mills in top buyer China continued to limit purchases in anticipation of slackening steel demand, dragging down key global iron ore indexes to their lowest in nearly three months.
Weaker steel demand in the summer as well as high iron ore inventories at Chinese ports have dampened steel mills' interest to build up stockpiles.
Indonesia's Timah sees tin price between $23,000-27,000/T in H2
JAKARTA, June 23 (Reuters) - Timah , the world's largest integrated tin miner, said on Thursday it saw tin prices trading at $23,000 to $27,000 per tonne in the second half of this year, lower than its full year target price.
Tin for three-month delivery on the London Metal Exchange traded at $25,160 a tonne at 1007 GMT. The metal, used in solders and tinplate, touched its lowest level since December 2010 at $24,510 per tonne on June 14.
Aluminium smelter pipeline needs filling fast
MADRID/LONDON, June 24 (Reuters) - More primary aluminium smelter projects must make their way onto the drawing board soon to avert a looming gulf between supply and demand around the end of the decade.
Compounding the problem is the likely difficulty in opening new bauxite mines to feed those smelters due to the spread of resource nationalism and rising development costs.
China’s Copper Demand Figures Depressed by Usage of Scrap, Macquarie Says (Source: Bloomberg)
China’s copper demand figures have been depressed by usage of scrap metal and supplies taken out of bonded warehouses, Macquarie Group Ltd said in a report. Over the past two months, about 200,000 metric tons of copper may have been removed from bonded warehouses in China, which should be added to demand estimates, Macquarie said in a report dated tomorrow. Not counting that metal, apparent copper demand was down 8.5 percent in January through May from the same period last year, Macquarie said. “Another factor depressing refined copper consumption has been greater use of copper scrap as a substitute for refined copper but the most recent reports suggest availability of scrap is now greatly reduced,” Macquarie said.
Europe copper premiums within range, eyes on China
LONDON, June 23 (Reuters) - European copper premiums nudged higher from earlier this month but remained within their recent range with traders saying the market would remain quiet as the summer season takes hold.
The premium for copper in Rotterdam , paid above the London Metal Exchange (LME) cash price , was around $85-90 a tonne from $75-85 in early June, traders said.
METALS-Copper ends lower in commodity-wide risk retreat
NEW YORK/LONDON, June 23 (Reuters) - Copper ended down for a second straight day on Thursday as a strengthening dollar and heightened concerns about slowing global economic growth triggered a wave of risk aversion across the commodities complex.
From a bleak assessment of U.S. growth prospects by Federal Reserve Chairman Ben Bernanke on Wednesday to slower factory sector growth in China and Europe this month, raw material demand prospects remained unclear, spurring investors to reduce exposure in everything from industrials to energies.
Gold steadies as investors mull Greek crisis
LONDON, June 24 (Reuters) - Gold eased on Friday, adding to losses after a fall of as much as 2 percent the day before, after a rally in the dollar gathered pace as investors grew increasingly doubtful over Greece's ability to remain solvent.
Gold was still set for its largest weekly decline since the so-called commodities "flash crash" of early May, which saw the raw materials complex stage its biggest weekly fall on record.
Gold May Drop as Greek Rescue Plan, Crude-Oil Decline Erodes Haven Demand (Source: Bloomberg)
Gold may extend losses, after capping the biggest weekly drop in seven weeks, as weaker oil prices and a pledge by European Union leaders to avert a Greek default slashed the metal’s appeal as a haven.
