Corn (Source: CME)
US corn futures finish mixed as traders wait for USDA to update supply and demand estimates in a monthly crop report tomorrow. Market participants evened up positions as recent crop reports have shocked markets. Expectations for an increase in corn inventories are likely priced in after USDA issued a larger-than-expected stockpile estimate June 30, says Mike Krueger of The Money Farm. If Tuesday's reports offer no surprises, traders will refocus on external markets and the weather, he says. CBOT December corn ends down 4 1/4c at $6.32 3/4 a bushel.
Wheat (Source: CME)
US wheat futures end lower as the climbing dollar pressures prices. Traders worry foreign demand will drop as a firmer greenback makes US grains less attractive pricewise, fueling expectations for a decline in overseas demand. The US already faces increased competition for export business from Russia, which lifted a ban on grain exports July 1. Russian farmers are expected to bring in a good harvest due to favorable conditions. CBOT July wheat slides 12c to $6.39 1/4 a bushel, KCBT July loses 16c to $7.11 1/4 and MGE July sinks 22 3/4c to $7.94 1/4.
Rice (Source: CME)
US rice futures end down the one-day limit of 50c on profit-taking. The market pulls back after nearing a five-month high Friday on concerns about output. Prices had surged since USDA on June 30 slashed its estimate for how much crop was planted. Traders on tomorrow will review fresh supply and demand estimates from USDA. CBOT September rice falls 3.1% to $15.63 per hundredweight. The daily limit expands to 75c Tuesday.
U.S. wheat slips on harvest pressure, corn down
SINGAPORE, July 11 (Reuters) - Chicago corn and wheat futures slid on Monday as weak economic data from China and the United States weighed, following last week's gains that were led by strong physical demand.
"In terms what we are seeing in wider markets, we have crude oil trading touch lower and U.S. dollar higher, which is continuation of risk aversion that swept through global markets on Friday," said Luke Mathews, commodity strategist at Commonwealth Bank of Australia.
U.S. spring wheat production limited by floods
CHICAGO, July 8 (Reuters) - U.S. spring wheat production is expected to fall to the lowest level in three years as flooding throughout the northern U.S. Plains curtailed planting and reduced yield potential, analysts said.
A Reuters poll of analysts predicted that an upcoming U.S. Agriculture Department report will forecast spring wheat production (excluding durum) at 551 million bushels, the smallest since 2008 when flooding also hampered farmers' efforts.
AGROKHLEB-Russia 2011 grain crop fcst raised to 87-92 mln tonnes
MOSCOW, July 11 - SovEcon has raised its forecast for Russia's grain production in 2011 to 87-92 million tonnes from 82-86 million tonnes due to improved weather conditions in the European part of the country and in the Urals.
Rains in the end of June and in the first 10 days of July have created favourable conditions to the new crop formation.
Argentina wheat sowing speeds up, good crop weather
BUENOS AIRES, July 8 (Reuters) - Favorable crop weather allowed Argentine farmers to forge ahead with 2011/12 wheat planting last week, the government said on Friday.
Argentina is a leading wheat grower and exports the bulk of its crop to neighboring Brazil. Planting began last month and is progressing at a good pace despite some dryness.
Russia grain output to rebound to 85.5 mln tonnes-attache
WASHINGTON, July 8 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in Russia: "Russia's grain production this year is expected to rebound from last year's drought-affected crops, and assuming normal summer weather in the grain producing provinces, FAS Moscow forecasts Russia's grain (including legumes) crop at 85.5 million tonnes.
The government of Russia has announced that Russian grain exports will be able to restart on July 1, 2011, although some uncertainty remains on future export policies. FAS Moscow forecasts total grain exports in MY 2011 at 12.5 million tonnes, nearly triple last year's level."
Informa pares U.S. corn, soy production forecasts
CHICAGO, July 8 (Reuters) - Analytical firm Informa Economics lowered its forecasts for U.S. 2011 corn and soybean production, trade sources said on Friday.
For corn, Informa forecast U.S. 2011 corn production at 13.759 billion bushels, below its previous estimate of 13.891 billion but above the U.S. Department of Agriculture's June 9 estimate of 13.2 billion.
Australia wheat production estimate too optimistic-farmers
PARKES, Australia, July 8 (Reuters) - An Australian government forecast of a near record 2011/12 wheat crop could be too optimistic because it did not take into account risks that lie ahead before the harvest starts in October, farmers interviewed during a crop tour this week said.
According to farmers in the top eastern grain growing state of New South Wales, the actual harvest by the world's fourth largest wheat exporter, could be impacted by anything from weather to an explosion in the mice population that causes crops to be devoured.
Corn and soybean crops get a boost
Plentiful soil moisture reserves combined with warmer and drier weather over the next week will give corn and soybean crops a boost.
A high pressure ridge may shift eastward next week, leading to hotter temperatures. There is the potential for scattered showers in the northwest and north-central areas.
Andersons add cheap US wheat to corn-based ethanol
KANSAS CITY, Mo.,July 8 (Reuters) - The Andersons Inc , a major U.S. ethanol producer, has started mixing a small percentage of wheat along with costlier corn to make the alternative fuel, diversifying its sourcing amid increasingly tight corn supplies.
Andersons, which operates three U.S. ethanol plants with total capacity of 300 million gallons, confirmed it has started using soft red winter wheat along with corn, taking advantage of a rare inversion in prices for the grains.
China 2011 Summer Grain Output 126.27 Mln Tons, Up 2.5% On Year -Bureau (Source: CME)
China's 2011 summer grain output reached 126.27 million metric tons, up 3.12 million tons or 2.5% from a year earlier, the National Bureau of Statistics said. The rise will help ease grain supply concerns in the world's most populous country and stabilize food prices, after the consumer price index hit three-year high of 6.4% in June, mainly led by soaring food prices. Winter wheat output rose for the eighth consecutive year in 2011 to 110.79 million tons, up 2.12 million tons from last year, it said. Per-hectare wheat output rose 1.6% from a year earlier to 4.9 tons. Summer grain output roughly accounts for around a quarter of the nation's total grain output. The majority of China's grain output is summer grain, including corn, rice and soybeans.
The government is "confident" of a good grain harvest this year, despite unfavorable weather, but it isn't clear whether China can could increase grain output for the eighth consecutive year, the state-run China Daily reported last week. "We have achieved a marvelous harvest for the first half of this year," the newspaper quoted Chen Xiwen, general director of the Office of the Central Rural Work Leading Group, as saying. "Everything now depends on the autumn crop." China's grain output rose 2.9% to 546.4 million tons last year, marking the seventh consecutive year of growth.
India Allows 1M Tons Rice Exports; Defers Wheat Decision (Source: CME)
An Indian ministerial panel allowed private traders to export 1.0 million metric tons of rice, but deferred a decision on permitting wheat shipments, two food ministry officials said. Rice exports have been allowed at a minimum $400 a ton, a food ministry official said. "A decision on wheat exports was deferred because it won't be commercially viable," the second official said. "The issue is likely to be taken up again at the next meeting of the ministerial panel." Over and above the rice exports allowed to private trade, the panel also permitted exports of 500,000 tons each of wheat and rice to honor diplomatic commitments, Food Minister K.V. Thomas said. Exports by India, the world's second largest rice producer, are likely to dampen international prices of the grain currently quoting in a range of $430-$500/ton.
The South Asian country has maintained a ban on wheat shipments since 2007 and on rice since 2008 to keep a lid on prices, but has allowed exports of small quantities from time to time to honor diplomatic commitments. The food minister also said that the panel is open to allowing wheat exports to the private trade in future, whenever it made commercial sense. "The issue [of wheat exports] is likely to be taken up again at the next meeting of the ministerial panel," one of the ministry officials said. The panel has allowed wheat exports of 650,000 tons during this fiscal year, virtually extending a policy that allowed similar quantities of shipments in the last two financial years. So far the government has been extremely cautious in considering wheat and rice exports as it is preparing to introduce a food security law that guarantees cheap foodgrains to nearly 70% of the population.
However, wheat and rice stocks have hit an all-time high, forcing government agencies to store mounds of grain in the open, leaving them at the mercy of rain and rodents. Thomas also said the ministerial panel has approved the draft of the proposed food security law, and it will soon come before the cabinet for approval. It will need to be ratified by the parliament before it becomes law. "We expect to introduce the bill during the monsoon session," the minister said, referring to the upcoming parliamentary session that starts Aug. 1. The Congress Party-ruled government is expected to push through the law this year ahead of key state elections around Christmas, because it would be popular with people living in rural areas who have been hit by prolonged high inflation.
Tariff Move Is Bad Timing for Brazil (Source: CME)
To Brazilian sugarcane producers who have long wanted to export ethanol to the U.S., news that Congress may finally tear down trade barriers protecting U.S. fuel from competition comes at a bad time. An agreement by senators this past week to end a tax of 54 cents a gallon on imported ethanol was cheered by the Brazilian sugarcane industry. For years, Brazil's government and industry have chided the U.S. for protecting its corn-based ethanol producers from potential imports of Brazilian sugarcane-based ethanol, which is considered to be more energy-efficient. But Brazil's current sugarcane harvest is expected to decline for the first time in many years, and, with heavy demand pressure coming from both domestic drivers and global sugar consumers, experts doubt there will be any ethanol left over to ship abroad.
"The irony of it all is that precisely when the U.S. looks ready to reduce tariffs on ethanol imports, Brazil structurally is not in a position to reap the potential benefits," said Christopher Garman, a Brazil analyst at Eurasia Group. Brazil's weak harvest is also driving global sugar prices higher, as buyers scramble for limited supplies. Raw sugar for October delivery traded on the IntercontinentalExchange has risen nearly 18% in the past month. Officials from sugarcane association Unica said this week that the crop now being harvested in Brazil's main producing region could yield less sugar and ethanol this year than last. Sugarcane fields are faltering as a result of both weather conditions and a lack of investment during the global financial crisis. With global sugar prices so high, Brazilian mills would be unlikely to ramp up production of ethanol this year, even if there was sugarcane to spare.
"Production of sugar is more attractive" for the mills, said Michael McDougall, a senior vice president at brokerage Newedge. In addition, Brazilian ethanol producers can get much higher prices at home than in the U.S. In the first six months of the year, ethanol prices averaged $5 a gallon in Brazil compared with $3 in the U.S. And demand for the fuel in Brazil is expected to keep growing, as the nation's consumption-driven economic boom is expected to increase sales of new cars -- more than 80% of which are capable of running on pure ethanol or gasoline -- about 5% higher this year. Given the circumstances, the government would almost certainly respond to a surge in ethanol exports with trade barriers of its own, several analysts said. The Brazilian government, concerned with rising inflation that has in part been fed by high fuel prices, has put the National Petroleum Agency in charge of regulating ethanol production to avoid future shortfalls.
Possible means to that end include requiring sugarcane millers to keep mandatory stockpiles of ethanol, officials say. The government is also considering reducing to as low as 18% the amount of anhydrous ethanol blended with gasoline, from the current 25%. Though drivers also consume massive amounts of hydrous ethanol, virtually pure alcohol, such a measure would ease demand for the biofuel. Sugar watchers doubt it would rattle the futures market much, given the struggling sugarcane harvest. "The situation is bad," said Arnaldo Correa, a sugar market analyst at Archer Consulting, adding that some cane growers are already concerned that next year's harvest won't bring much of a recovery. "There's no way out." In the long term, however, lower U.S. trade barriers would boost incentives for sugarcane producers to invest in capacity improvements.
"It provides a tremendous boost in incentive for new investments in ethanol production in Brazil, to the extent that Brazil can be a platform for exports to the U.S. market into the long term," Eurasia's Mr. Garman said. It's. . .a stimulus for the sector."
Cocoa Seen Advancing to New Highs on Africa-Indonesia Fix: Freight Markets (Source: Bloomberg)
The U.S., the world’s biggest market for chocolate, is importing the most West African cocoa in three years as disease and taxes curb Indonesian supply, driving prices to a three-decade high. Cargoes from Ivory Coast, Ghana, Togo and Nigeria rose 2.6 percent to 145,394 metric tons in the first four months while those from Indonesia fell 88 percent to 7,301 tons, U.S. trade data show. Increased competition for beans will mean cocoa averaging $3,300 a ton in the fourth quarter on ICE Futures U.S. in New York, 8.2 percent more than now and the most since 1979, said Kona Haque, the analyst at Macquarie Group Ltd. in London who correctly predicted a rally in February.
Sugar falls as strong dollar weighs on commodities
LONDON, July 11 (Reuters) - ICE raw sugar futures fell on Monday as a stronger dollar weighed on the commodities complex, while cocoa and coffee prices also eased. ICE raw sugar futures trimmed gains, as the firmer dollar weighed, after sugar prices rose around 7 percent last week.
Uganda coffee exports up 58 pct yr/yr in June
KAMPALA, July 8 (Reuters) - Coffee exports from Uganda, one of Africa's leading exporters of the beans, rose by 58 percent in June compared with the year ago period, a source at state-run Uganda Coffee Development Authority (UCDA) said on Friday.
The rise was partly due to a good harvest and the weakening local currency, which has been weak against the dollar in recent months, and hit a record low of 2,710 on June 30 against the U.S. currency before the central bank stepped in to prop it up.
Ivorian cocoa arrivals hit 1,285,716 T by June 30
ABIDJAN, July 8 (Reuters) - Cocoa arrivals at ports in top grower Ivory Coast reached 1,285,716 tonnes by June 30, up from 1,052,181 tonnes in the same period a year ago, according to data from Bourse du Cafe et Cacao (BCC) obtained by Reuters on Friday.
The figures included 18,601 tonnes of cocoa that had been declared late, with 5,616 tonnes of beans declared at the ports of Abidjan and San Pedro from June 27 to June 30.
India, China set for cotton wars on stubborn yields
MUMBAI, July 11 (Reuters) - India, the world's second biggest exporter of cotton, could turn into an importer within three or four years as production peaks out because of falling yields, forcing the country's textile mills to compete for supplies with top importer China.
Despite rising acreage, India's cotton yields are down to about 475 kg per hectare, or 38 percent below the global average, as plants need to be spaced widely for hand picking, in contrast to other leading growers, such as the United States and Australia, which use machines.
Crude Oil Trades Near One-Week Low in New York on European Debt Concern (Source: Bloomberg)
Crude oil traded near the lowest in more than a week in New York as concern that the European debt crisis will spread to Italy stoked speculation that fuel demand may falter. Futures were little changed after dropping 1.1 percent yesterday. The European Central Bank is forecasting a regional bailout fund may have to double to cover a crisis in Italy, according to German newspaper Die Welt. An Energy Department report tomorrow may show U.S. gasoline supplies rose for the first time in four weeks, according to a Bloomberg News survey of analysts.
SapuraCrest, Kencana Plan to Combine in $3.9 Billion Malaysian Oil Deal (Source: Bloomberg)
SapuraCrest Petroleum Bhd. (SCRES) and Kencana Petroleum Bhd. (KEPB) plan to combine in an 11.9 billion ringgit ($3.9 billion) deal, creating Malaysia’s biggest listed oilfield services company by assets. Integral Key Sdn., a company set up by a bank to facilitate the merger, bid 4.60 ringgit per share in stock and cash for SapuraCrest and the equivalent of 3 ringgit per share for Kencana, the companies said yesterday. They would have combined assets of about 6 billion ringgit when the merger is completed in eight months, they said.
Coal miners say Australia carbon tax treatment unfair
SYDNEY, July 10 (Reuters) - Australia's powerful coal mining industry on Sunday warned it was being unfairly singled out under the country's new carbon emissions trading scheme, predicting it will lead to job losses and fewer collieries at a time when buyers are paying top dollar for coal.
Xstrata , one of the country's biggest coal mining companies, said it was "disappointed at the government's lack of genuine consultation" before unveiling its plan to slap a carbon tax of A$23 a tonne on its 500 worst polluters.
U.S. coal use up 4 pct from previous week-Genscape
HOUSTON, July 8 (Reuters) - U.S. coal consumption was up 4 percent in the past week, Genscape said Friday, as power demand in the North surged over the Fourth of July weekend.
Use of coal for the week ended Thursday fell 4 percent from the same week in 2010, the power industry data monitor said. Temperatures were cooler than during the same week last year.
Euro Coal-Futures edge up but fail to break $130/mt
LONDON, July 8 (Reuters) - European coal futures moved slightly upward on Friday but lacked clear price signals in any direction ahead of the weekend.
The API2 2012 futures coal contract opened at $129.25 a tonne on Friday morning and traded up a notch to around $129.40 a tonne by 1445 GMT.
Alcoa Profit Doubles as Aluminum Price Increase Outweighs Costs (Source: Bloomberg)
Alcoa Inc., the largest U.S. aluminum producer, said second-quarter profit more than doubled after higher prices for the lightweight metal outweighed increasing raw-material costs.
Iron Ore-Spot prices at over 2-wk high as Chinese mills restock
SINGAPORE, July 11 (Reuters) - Spot iron ore prices may build on recent gains this week as Chinese steel mills, encouraged by rising steel prices, restock the raw material.
Iron ore prices rose to more than two-week highs at the end of last week as Chinese buyers, the world's biggest consumers of the steelmaking component, returned to the market. Further gains may be in store with Shanghai steel futures rising to their highest in more than a month on Monday.
India's 2011/12 iron ore exports seen at 85-90 mln tonnes-trade body
NEW DELHI, July 11 (Reuters) - India's iron ore exports are expected at 85-90 million tonnes in 2011/12, 10.5 percent below an earlier forecast, R.K. Sharma, secretary-general of the Federation of Indian Mineral Industries (FIMI), told Reuters on Monday.
In late June, he had projected exports at 90-95 million tonnes for the year ending next March, saying this would be about the same as last year.
Indonesia June tin exports up 35pct on weather, price recovery
JAKARTA, July 11 (Reuters) - Indonesia's refined tin exports rose 35.4 percent in June from the year-ago period, as improving weather boosted mining and producers cashed in on a global price recovery to increase shipments, industry sources said on Monday.
Resilient demand and tight global supply will keep tin prices supported this year, despite the impact of the earthquake on big consumer Japan and increasing exports from Indonesia, the world's top tin exporter, a Reuters survey of metals analysts in April showed.
China says to close 2 mln T smelting capacity in 2011
HONG KONG, July 11 (Reuters) - China has ordered local governments to phase out a total 2.0431 million tonnes of aluminium, copper, lead and zinc smelting capacity in 2011 as part of a multi-year plan to crack down on energy-intensive and polluting industries.
The target, contained in a statement on the Ministry of Industry and Information Technology website, is 13 percent higher that set in May, when Beijing said it aimed to phase out a total 1.813 million tonnes of outdated aluminium, copper, lead and zinc smelting capacity this year.
China's copper demand stages comeback in June
SHANGHAI, July 10 (Reuters) - China's copper staged a strong comeback in June, but the outlook was marred by falls in a list of other key commodities, showing that Beijing's cooling measures were weighing on the economy.
Crude oil imports fell 11.5 percent from a year ago to their lowest in eight months, while aluminium dropped about 14 percent, iron ore was down 4.3 percent and soybean shed 5.7 percent from May.
Freeport Indonesia copper mine strike extended a week
TIMIKA, Indonesia, July 8 (Reuters) - A strike paralyzing production at Freeport Indonesia's Grasberg mine, one of the world's largest sources of copper and gold, will extend into a second week after talks broke down between the company and workers, a union official said on Friday.
The union, which represents 8,000 workers who have been on strike since Monday, asked U.S.-based Freeport-McMoRan Copper & Gold to send Chairman James Moffett to the remote Indonesian mine to negotiate.
Chile's giant mines recover after winter storm
SANTIAGO, July 9 (Reuters) - Some of the world's top copper mines started to return to normal on Saturday after a once in half a century winter storm dissipated over Chile's copper-rich north, companies' officials and union leaders said.
A week of heavy rains and sporadic snow hit mining operations in a region that produces about a fifth of the world's mined copper, helping lift global copper prices to three-month highs and en route to another historical record.
Big funds boost bullish copper bets to 12-week high
NEW YORK, July 8 (Reuters) - Hedge funds and other big speculators jacked up their bullish bets on U.S. copper futures to the highest in 12 weeks as the metal embarked on its most sustained rally this year, data showed on Friday.
Managed money in COMEX copper added 13,008 lots in the latest week, boosting their net long position to 21,901 lots, which marked the largest holding for the key speculator group since the week of April 17, when they held 28,030 lots. U.S. Commodity Futures Trading Commission figures showed.
METALS-Copper slips on Italy debt worries, but supply in focus
July 11 (Reuters) - Copper fell on Tuesday, as concerns over Italy's sovereign debt curtailed appetite for risky assets, but a series of strikes in producer countries highlighted supply constraints and lent support to prices.
Three-month copper on the London Metal Exchange traded at $9,628.50 a tonne at 1000 GMT, down from the $9,661 close on Friday.
PRECIOUS-Gold steady, euro-gold at record on crisis fear
LONDON, July 11 (Reuters) - Gold steadied on Monday, having risen for five days in a row, supported by investor concerns over the spread of the euro zone debt crisis and by U.S. data that showed the poorest jobs growth in nine months in June.
The euro fell 1 percent against the dollar after European Union officials held an emergency meeting to discuss whether the troubles that have plagued Greece, Portugal and Ireland could spread to Italy.
Gold Tops $1,550 on Concern Europe’s Sovereign-Debt Crisis Will Escalate (Source: Bloomberg)
Gold climbed to a two-week high, topping $1,550 an ounce, on demand for a store of value amid escalating concerns that Europe’s sovereign-debt woes will widen. European equities tumbled the most in seven weeks, led by banks and insurers, as contagion from Greece’s debt crisis threatened to spread to Italy and Spain. Gold priced in euros and the U.K. pound climbed to records. The metal gained 4 percent last week on signs that U.S. interest rates will remain low.
Baltic index drops, cargo demand momentum falters
LONDON, July 8 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, turned negative on Friday as cargo demand on the larger capesize vessels slowed after active bookings earlier this week.
The overall index fell 0.28 percent or 4 points to 1,449 points after having risen for three sessions previously. The index has stayed erratic in recent weeks and has declined close to 20 percent this year.
