Corn (Source: CME)
US corn futures end sharply higher as the market rebounds from a drop to 3 1/2-month lows last week. "Prices were oversold by a fairly large extent. The market just gathered some support there," says Shawn McCambridge, senior grains analyst for Prudential Bache. Projections for increased demand added strength to prices, as users are expected to use last week's sell-off as a buying opportunity. Talk circulated of additional purchases by China, which was suspected of buying 1.14 million tons of corn last week. CBOT December corn rises 15 3/4c to $6.12 1/2 a bushel.
Wheat (Source: CME)
US wheat futures end stronger on projections for increased demand. Foreign buyers are expected to take advantage of last week's slide in prices by ramping up purchases. US wheat looks competitive for business on the world market with wheat from the Black Sea region, known for its low cost, analysts say. Sales by farmers, who are harvesting wheat, have slowed following the price drop, temporarily reducing the available supply. CBOT September wheat rises 23 1/4c to $6.35 1/2 a bushel; KCBT September gains 15 1/4c to $7.36; MGE September jumps 28 1/2c to $8.33.
Rice (Source: CME)
US rice futures close solidly higher as India's farm minister switches course to say he will not push for grain exports. The news supported prices as Farm Minister Sharad Pawar favored exports of rice and wheat as recently as last month, analysts say. A continued ban on grain exports from India likely means increased demand for rice from other countries. CBOT September rice jumps 38c to $15.29 per hundredweight.
Wheat Prices Jump Most in Seven Weeks as Storms May Hit Kansas, Nebraska (Source: Bloomberg)
Wheat futures had the biggest gain in almost seven weeks on concern that wet weather in the Great Plains will slow the harvest in the U.S., the world’s leading exporter. Parts of Kansas, the biggest U.S. winter-wheat growing state, may have thunderstorms with as much as 1.5 inches of rain (3.8 centimeters) for two days starting tomorrow, said Joel Widenor, the director of agricultural services at the Commodity Weather Group LLC in Bethesda, Maryland. Some areas in Nebraska may get as much as 4 inches of rain in the period, he said.
Wheat Called Higher on Global Supply Concerns; Corn, Soybeans May Advance (Source: Bloomberg)
-- Wheat futures may open 20 cents to 23 cents a bushel higher on the Chicago Board of Trade, the Kansas City Board of Trade and the Minneapolis Grain Exchange on speculation that adverse weather will curtail growth in global output, said Greg Grow, the director of agribusiness for Archer Financial Services Inc. in Chicago.
-- Corn futures are called to open 10 cents to 13 cents a bushel higher on the CBOT as demand for U.S. supplies climbs in China and South Korea following a slump in prices to the lowest in six months, Grow said.
-- Soybean futures may open 10 cents to 15 cents a bushel higher in Chicago after U.S. farmers told the government they planted less this year, while hot, dry weather later in July may damage Midwest crops, Grow said. Soybean-meal futures may open $3 to $4 higher per 2,000 pounds, and soybean oil is expected to open up 0.25 cent to 0.35 cent a pound.
Wheat, Corn Gain on Speculation Lowest Prices of 2011 Attracted Importers (Source: Bloomberg)
Wheat and corn rose in Chicago on speculation this year’s lowest prices may have fueled demand from importers. Rice climbed to the highest level in almost six weeks. Exporters in the U.S., the world’s largest corn grower and shipper, sold 1.14 million metric tons of the grain for unknown destinations, the Department of Agriculture said July 1. China may have been the buyer, researcher Grain.gov.cn said yesterday. Grains fell last week after the USDA raised estimates for national plantings and stockpiles.
U.S. corn, wheat rebound on bargain hunting, demand
SINGAPORE, July 5 (Reuters) - Chicago corn jumped more than 1 percent , while wheat climbed nearly 2 percent on strong physical demand and improved global risk appetite following last week's selloff that was prompted by prospects of higher U.S. supplies.
"European shares rose for the sixth straight day on Monday and jitters about Greece continued to ease," Commonwealth Bank of Australia said in a report. "European wheat prices climbed higher overnight, supported by thoughts that the June price slump was overdone and will uncover solid physical demand."
Australia grain farmers turn cautious on early crop
GUNNEDAH, Australia, July 5 (Reuters) - Australia's grain farmers, forecast to produce a close to record wheat crop in 2011/12, are becoming less optimistic about a bumper harvest as soils around the country start to dry out because of low rainfall.
Reuters is conducting a crop tour in some key grain growing districts of New South Wales state in eastern Australia, where farmers who have faced years of drought until recently have also been struggling with higher fuel and fertilizer costs.
India aims for record grains output in 2011/12
NEW DELHI, July 4 (Reuters) - India aims to produce a record 245 million tonnes of grains in the crop year that started on July 1, Farm Secretary P.K. Basu said on Monday, a rise of about 3.9 percent on the previous year, as the government looks at allowing limited exports.
"We aim to produce a record 245 million tonnes of grains in 2011/12. Given the current trend there are no worries," he told reporters.
Patchy rains hinder Argentina corn harvest - gov't
BUENOS AIRES, July 4 (Reuters) - Rainfall in some Argentine corn growing areas delayed the 2010/11 harvest last week, but gathering progressed as normal in drier areas, the Agriculture Ministry said in its weekly crop progress report.
Argentina is the second-largest corn exporter in the world after the United States, and farmers are expected to harvest high yields despite dryness caused by the La Nina weather anomaly in December and early January.
India aims for record grains output in 2011/12
NEW DELHI, July 4 (Reuters) - India aims to produce a record 245 million tonnes of grains in the crop year that started on July 1, Farm Secretary P.K. Basu said on Monday, a rise of about 3.9 percent on the previous year, as the government looks at allowing limited exports.
"We aim to produce a record 245 million tonnes of grains in 2011/12. Given the current trend there are no worries," he told reporters.
Black Sea Grain Sales Slow On Falling World Prices
Sales in Black Sea grain exporters Russia and Ukraine are slowing as a slump in international prices has dampened trade, analysts and dealers said Monday. Prices are falling in Russia even as the country opens its borders to exports after more than a year, as buyers hold out for better international prices, according to Moscow-based analyst SovEcon. "As the international markets keep going down and buyers remain cautious, we expect domestic prices to continue declining," the analyst said in a note. "Prices of $200 per ton may be reached in the nearest future." Meanwhile, farmers in Ukraine are refusing to sell their grain after a collapse in international prices and government policy has made prices less attractive, according to local traders. Paris wheat futures have lost more than a quarter of their value from the peaks of early May as the return of Russia to world markets and improving prospects for Europe's harvest have weighed on prices.
Markets tumbled further last week after a raft of bearish data from the U.S. Department of Agriculture and the International Grains Council eased concerns of a shortage of world grain supplies. SovEcon also said many buyers in Russia have already bought enough supplies ahead of the end of the ban last Friday. Russian customs approved one million metric tons of grain for shipping abroad on the first day the country resumed grain exports, according to Deputy Prime Minister Viktor Zubkov. One trader said eight million tons of excess stocks held in the country have already been contracted for export. "The reason behind the halt is not only the downward trend on the world markets, but the fact that many traders have built sufficient stocks to cover already signed contracts," said SovEcon. In Ukraine, government export duties on grain and a decision to stop refunding the value added tax that grain traders pay to farmers are also making prices less attractive, said the traders.
"A combination of a drop in world price, a changed VAT law to farmer's disadvantage, and introduction of export duties has caused price collapse," said one senior trader. "The farmer is a very reluctant seller at the moment." Ukraine exported 11.95 million metric tons of grain in the 2010-11 marketing year from July to June, down from nearly 22 million tons in the previous marketing year, Ukraine Agrarian Confederation said Friday.
China Corn Demand Strong As Hog Ratio Gains
China sold 120,440 metric tons of corn or 45% of the volume it offered from state reserves in an auction Tuesday, while an indicator of profitability for hog farmers rose to a record level, government agencies said. The ratio of sales to offer volumes was the highest this year, according to Dow Jones Newswires calculations, indicating strong demand for below-market-price state corn reserves as breeders expand hog production amid record high pork prices. China offered 266,028 tons of corn in the Wednesday auction, the National Grain and Oil Trade Center said, down sharply from around 420,000 tons a week earlier. It was offering around 1.8 million tons each week early this year, but reduced offer volumes to about 600,000 tons per week from April due to dwindling stocks. Strong demand from processors and feed mills has driven corn prices 20% higher so far this year, and the government's weekly sales have done little to cap the price gains, as only some feed-mills and animal breeders are qualified to participate.
The ratio of sale prices for hogs to corn prices, an indicator of profitability for pig farmers, was at 8.47 as of June 29, the National Development and Reform Commission said separately, the highest level since the country's top economic planner began publishing the indicator in May 2009. The hog-to-corn-price ratio was 4.8 last June, when pig farmers suffering deep losses. A ratio of 6 is roughly a break-even level for pig farmers.
India Farm Ministry Not Pushing For Grain Exports - Minister
India's farm ministry isn't pushing for export of grains such as rice and wheat, Farm Minister Sharad Pawar said, reversing his previous stand. "We are not in a position to push for exports as we are waiting for the national food security bill, which is likely to come up in parliament," Pawar told reporters. Pawar last month favored rice and wheat exports as the country has surplus stocks and is likely heading to another year of a bumper output. India's foodgrain stocks are at an all-time high of 65.47 million metric tons, about two-and-a-half times more than the annual requirement for state welfare programs. Still, the government is cautious on exports due to inflation fears and its plan to enact a law that seeks to expand the supply of subsidized grains to the poor.
"Our policy on exports will depend after we decide on price and quantum of foodgrain to be distributed under the proposed act," Pawar said. A decision on grain exports will be taken in a ministerial panel's meeting in July. India has maintained a ban on wheat shipments since 2007 and on rice since 2008 to keep a lid on prices.
India To Complete Fresh Cotton Export Allocations On Time
India will by Wednesday complete allocations for cotton exports of an additional 1.0 million bales for this marketing year through September, the head of a trade ministry wing said, brushing off concerns about a delay after some exporters objected to new rules. "There is no direction for any change [in the process of allocations]. We are on track," Anup K. Pujari, Director General of Foreign Trade, told Dow Jones Newswires. "We are hoping to complete the allocation process by tomorrow." "If the whole thing gets delayed, then exports may not be possible," he said, when asked whether there was any chance of a delay. India is the world's second-largest cotton producer and exporter, and a delay in fresh supplies from the South Asian country would have pushed up international prices. In June, the government allowed exports of one million bales of 170 kg each--but it said that only exporters with an established track record over the past two marketing years could apply.
The new rule came after a scramble for licences in November, when the government allowed cotton exports of 5.5 million bales of 170 kilograms each for the marketing year through September. Many sought licenses without getting orders, but several traders with assured buyers lost out on getting permits as they waited for order confirmations before applying. As a result, a large number of traders failed to export the quantities allowed to them within the Dec. 15, 2010, deadline. In January, the government had to issue fresh licenses to allow the export of 1.9 million bales which were unshipped. Again, it had a tough time dealing with a deluge of applications. According to the new rules, traders will be fined up to five times of the goods' value if they fail to export by Sept. 15, 2011.
Defaulters will be barred from further exports, should the government decide to raise the shipment quota again in 2010-11. Industry officials said that one or two exporters had objected and moved court against the new rules, particularly as they barred new entrants to the market.
Crude Oil Trades Near Three-Week High on Forecast Drop in U.S. Stockpiles (Source: Bloomberg)
Oil traded near a three-week high in New York on speculation crude inventories declined for a fifth week in the U.S., signaling fuel demand may be rising in the world’s biggest consumer of the commodity. Futures were little changed, after advancing 2.1 percent yesterday, before an Energy Department report tomorrow that may show crude stockpiles dropped 2.5 million barrels last week, the longest streak since January. The industry-funded American Petroleum Institute will report its own data today. Supplies are shrinking amid peak gasoline demand in the U.S. and the start of the Atlantic hurricane season.
Bear Market in Tin Ending as Shortages Mean PT Timah’s Profit Advances 55% (Source: Bloomberg)
Erfandi’s fleet of bamboo rafts are dredging 33 percent less tin ore from the rivers of Indonesia’s Bangka Island than in 2008, as miners fail to keep pace with consumption that jumped 14 percent in two years.
Collahuasi suffers bad weather again, operations up
SANTIAGO, July 4 (Reuters) - Chile's giant Collahuasi copper mine said on Monday it was operating under a contingency plan due to bad weather that has delayed a workers' shift, a company spokeswoman said on Monday.
Collahuasi, the world's No. 3 copper mine, saw output dwindle in the first quarter due to heavy rains that disrupted operations.
Chile Codelco seeks to avert 24-hr workers' strike
SANTIAGO, July 4 (Reuters) - Chile's Codelco on Monday sought to avert a 24-hour strike by workers demanding a bigger say in the restructuring of the world's top copper miner, the company's top executives said on Monday.
Union leaders called for a walkout on July 11 to halt operations at all six mines owned by Codelco, which produces 9 percent of the world's total mined copper. Workers at each mine still have to ratify the strike action in a vote.
Kazakhstan, Slovakia to develop large lead deposit
ASTANA, July 4 (Reuters) - Kazakhstan's state-run miner Tau-Kent Samruk clinched a deal with Slovak firm Radington Industrial Consulting on Monday, aiming to develop jointly a large lead deposit in the Central Asian state.
"We initially estimate this project will need an investment of around $50 million," Bolat Svyatov, chief executive of Tau-Kent Samruk, told reporters after the two sides signed a framework agreement on developing the Alaigyr deposit.
Sugar near 4-month peak, coffee dips as dollar firms
LONDON, July 5 (Reuters) - ICE raw sugar futures firmed to four-month highs in early trading , underpinned by concerns over the Brazilian crop, while coffee eased weighed by a stronger dollar and cocoa firmed. ICE raw sugar futures rose to four-month highs as the market adjusted to London white sugar futures prices after a long weekend for a U.S. holiday.
Vietnam Coffee-July exports to dip, premiums jump
HANOI, July 5 (Reuters) - Vietnam is expected to export between 45,000 tonnes and 70,000 tonnes, or 750,000 and 1.17 million bags, of coffee this month, down from an estimated loading of 80,000 tonnes in June, further pushing up premium levels, traders said on Tuesday.
This could prompt buyers to seek alternative supplies in Europe, where stocks in warehouses are high, while hopes also hinge on the release of volumes in Vietnam when prices touch a sufficiently high level, traders said.
Ivorian rains boost cocoa, more sun needed-farmers
ABIDJAN, July 4 (Reuters) - Rains in Ivory Coast's key cocoa growing regions last week were ample for the development of the mid-crop until late August, but cloudy weather raised concerns about pests, farmers said on Monday.
Ivory Coast is on the entering the last three months of the 2010/11 season in what is expected to be a bumper crop well ahead of the government's 1.3 million target, thanks largely to good rains.
Bumper Ghana cocoa crop strains local storage
ACCRA, July 4 (Reuters) - Cocoa purchases in world No. 2 grower Ghana reached 940,000 tonnes by mid-June, putting output over 50 percent ahead of last year, the head of the Ghana Cocoa Board (Cocobod) said on Monday.
Cocobod Chief Executive Tony Fofie told Reuters the bumper harvest had strained storage facilities and led to some congestion at some port and depot facilities.
Ivorian cocoa arrivals approach 1.3 mln T target
ABIDJAN, July 4 (Reuters) - Cocoa arrivals at ports in top grower Ivory Coast were creeping closer towards the government's 1.3 million tonne target for the season last week, reaching around 1,287,000 tonnes by July 3, exporters said on Monday.
The figure showed deliveries to the main ports of Abidjan and San Pedro running 20 percent ahead of the same period of the previous season, in which 1,058,911 tonnes were delivered.
Indonesia cocoa output may fall to 420,000 T
SINGAPORE, July 4 (Reuters) - Indonesia, the world's third-largest cocoa producer, may see this year's output fall to its lowest since at least 2004 at 420,000 tonnes due to erratic weather and a fungal disease, the Indonesian Cocoa Association (Askindo) said on Monday.
Concerns about supply from Indonesia, which accounts for 10 percent of global output, could offer support for New York cocoa futures , which have dropped from a 32-year peak hit in March partly due to the return of peace in top grower Ivory Coast.
Crop, economic outlook in focus at cocoa meet
SINGAPORE, July 4 (Reuters) - Rising production in Africa, a surplus in international markets, erratic weather in Indonesia, global economic health and hopes for a recovery in the grinding sector will dominate a cocoa conference in the Indonesian resort island of Bali this week.
Cocoa futures soared to a 32-year top at $3,775 a tonne in early March after a deadly post-election conflict in the world's largest producer, Ivory Coast, fuelled fears of a civil war. But prices have since slipped as peace gradually returned.
METALS-Copper steadies as relief rally peters out
July 5 (Reuters) - Copper steadied on Tuesday as a pick up in demand for risky assets petered out and markets awaited U.S. data for fresh direction, while some wondered if copper prices have climbed too far too fast, given still-scant signs of demand from China.
Three-month copper on the London Metal Exchange traded at $9,445 a tonne, compared with a close of $9,455 a tonne on Monday.
PRECIOUS-Gold climbs as risk aversion picks up
LONDON, July 5 (Reuters) - Gold prices rose back above $1,500 an ounce in Europe on Tuesday as risk aversion returned to the financial markets, stoked by concerns over the outlook for the Chinese economy and plans to roll over Greek debt.
Spot gold was bid at $1,502.39 an ounce at 1110 GMT, against $1,495.54 late in New York on Monday. U.S. gold futures for August delivery rose $20.50 an ounce to $1,503.10.
Pacific Climate Indicators Remain Near Neutral
Oceanic and atmospheric indicators of La Nina or El Nino climate events in the Pacific Basin remain around neutral levels, with a key indicator falling to its lowest level since April 2010, the government's Bureau of Meteorology reported. "Climate models surveyed by the Bureau of Meteorology suggest that the Pacific Ocean will continue to warm over the coming months, with neutral conditions likely to persist into late 2011," the bureau reported in its weekly tropical climate note. The bureau's Southern Oscillation Index registered a value of +1.6 in the 30 days ended July 2, compared with +3.8 in the 30 days ended June 20, it said. Sustained positive values of the SOI above +8 may indicate a La Nina, while sustained negative values below -8 may indicate an El Nino.
Values of between about +8 and -8 generally indicate neutral conditions. The key indicator of a La Nina is cooler-than-average sea surface temperatures in the central and eastern tropical Pacific. By contrast, the opposite of a La Nina event--El Nino--is associated with warmer-than-average temperatures in the eastern Pacific. Typically, El Nino conditions result in below average rainfall over much of eastern Australia while a La Nina results in above average rainfall over most of the continent.
