Corn (Source: CME)
US corn futures finish sharply higher as USDA's smaller-than-expected increase in ending stocks renews concerns about supplies. The government pegs 2011-12 inventories at 870M bushels, below traders' estimates for 1B bushels. That means supplies will drop from the 880M bushels forecast for the end of the current 2010-11 marketing year, which ends in August. Additional support for prices comes from worries about hot weather stressing crops in the Midwest next week. CBOT December corn rises 25 1/4c to $6.58 a bushel.
Wheat (Source: CME)
Most US wheat futures finish sharply higher as increased demand is expected to eat into inventories. The USDA raised its forecast for wheat exports amid reduced competition for business from Canada. "Not many people were looking for that 100M bushel increase in exports, and the ending-stocks figure was lower than expected," says Dan Manternach of Doane Advisory Services. A surge in corn prices adds support to wheat. CBOT September advances 32 3/4c to $6.72/bushel while KCBT September gains 21 3/4c to $7.33. MGE September slips 1 1/4c to $7.93 as increased spring-wheat condition ratings lifted harvest expectations.
Rice (Source: CME)
US rice futures surge as USDA slashes its supply outlook. Government cuts 2011-12 inventory forecast 30% from last month to 29.6M hundredweight. That's down 42% from the forecast for supplies at the end of the 2010-11 marketing year, which ends this month. The outlook suffers after USDA on June 30 reduced its estimate for rice plantings. CBOT September rice soars 56c to $16.19 per hundredweight.
Corn Rallies to Highest Price This Month on Inventory Drop; Soybeans Gain (Source: Bloomberg)
Corn rose to the highest price this month after the government said U.S. stockpiles will be smaller than expected, heightening concern that costs for food and fuel will climb. Soybean prices also gained. U.S. corn inventories before next year’s harvest may total 870 million bushels, the lowest since 1996, the Department of Agriculture said today. Analysts in a Bloomberg News survey expected 1.029 billion. The USDA boosted its export forecast and said a record 5.15 billion bushels will be used to make ethanol, more than estimated last month.
Wheat, corn drop on supply prospects, euro zone woes
SINGAPORE, July 12 (Reuters) - U.S. wheat futures slid around 2.5 percent , while corn lost around 1 percent, losing more ground on prospects of higher supplies and fears that the euro zone debt crisis could spread to Italy.
"Grains will be weaker across the board because of the U.S. dollar strength and euro zone crisis," said Adam Davis, a senior commodity analyst at Melbourne-based funds Merricks Capital.
Weather satisfactory for Russian crop to July 20
MOSCOW, July 12 (Reuters) - Weather conditions in most of European Russia will be satisfactory for grain harvesting, and average for crop development in its Asian part until July 20, weather forecasting service Rosgidromet said on Tuesday.
However, in the North Caucasus Federal District, one of the country's important breadbaskets, rains will continue to slow the harvest campaign and cause plants' layering in some parts, it said in a statement.
U.S. corn, soy health unchanged as weather heats up
CHICAGO, July 11 (Reuters) - U.S. corn and soybean ratings held steady even as temperatures rose in key growing regions, but the market will be watching for crop deterioration in the coming weeks as hot weather dries out soils.
Corn ratings fell below market expectations while soybean condition matched analyst forecasts.
US corn and soy surviving high temps, for now
CHICAGO, July 11 (Reuters) - Rising temperatures around the U.S. Midwest were not yet hurting corn and soybean crops because there was plenty of moisture stored up in the soil after a spring of heavy rains, analysts said.
U.S. corn ratings were expected to rise one percentage point while soybean ratings were seen unchanged when the U.S. Agriculture Department releases its latest update on crop conditions Monday afternoon.
India panel allows rice, wheat exports, okays food bill
NEW DELHI, July 11 (Reuters) - India has agreed to allow 1 million tonnes of common rice exports and an unspecified amount of wheat, government sources said on Monday, as it weighs managing millions of tonnes of grains stockpiles with fighting persistently high inflation.
The sources said after a meeting of a panel of ministers that the exact quantity of wheat exports will be decided later. Sources had told Reuters it could be one million tonnes also. India has banned wheat exports since 2007 to ensure local supplies.
China Buys Nearly 4 Mln Tons U.S. Corn -Executive (Source: CME)
China has bought 3.7 million metric tons of corn from the U.S. so far this year, with sales for the full year likely to reach 5 million tons, an executive with a major state-owned grain trading company said. Such a volume would dwarf last year's 1.6 million tons of corn imports and mark the second consecutive year China has reversed its net trading position in the yellow grain to set the world's second-largest economy on course for record corn import volumes in 2011. Driven by low stockpiles and soaring meat demand, China's purchases lifted prices last week after the U.S. Department of Agriculture disclosed that the Asian giant had bought 540,000 tons for delivery after August, exceeding the USDA's earlier 500,000-ton estimate for the full year. China's total corn imports for the year will likely use up 70%-80% of the government's annual tariff-rate quota of 7.4 million tons, an influential China agriculture research house forecast.
"The volume of corn purchased in the second half is likely to be no less than the amount bought in the first half, which was about 2 million tons," Shanghai JC Intelligence analyst Xiao Jun said. In the last few weeks alone, China imported 1.2 million to 1.6 million tons, Xiao said. However, China is unlikely to breach its import quota, which sets higher tariff rates for purchases outside the cap, which is part of a system of controls aimed at self-sufficiency in grain supply. "Ten million tons [of corn imports] would likely be too high as it would exceed the quota," Xiao said. Even if China imports 5 million tons for the full year, it would be more than its last record corn import volume of at 4.29 million tons, reached in 1995. The USDA reported last week that an additional 1.4 million tons of corn purchases were headed for "unknown destinations," widely believed to be China.
China's corn purchases are closely watched because they are a narrative of large shifts in the global food trade, as the world's second-largest corn consumer runs low on arable land amid soaring domestic demand. China became a net corn importer only last year, after 15 years of net exports. Its feed industry continues to grow at nearly 10% a year. Pork prices have been in an uptrend since March 2010, hitting a record CNY23.61 a kilogram in mid-June. Analysts, including Rabobank Group, have forecast that China could become the world's largest corn importer in five years. In 2009, China wasn't even among the top 10 corn importers globally. Even as they downplayed grain purchases, some agriculture policy officials have been hinting that China may not be able to meet sharply rising food demand through domestic resources alone.
"We have to raise output in this area but our techniques and resources can't keep up," Chen Xiwen, director of the State Council's executive office on rural policy and director of the ruling Communist Party's rural affairs office, said in March. While stocks of other major grain categories, including wheat and rice, remained among the world's largest, China's corn stockpiles have been running low because the government has been releasing stocks to rein in inflation. The country's stocks-to-use ratio for corn, an indicator of how much supply China held in store as a proportion of its consumption, was around 35.7% in 2010-11, down sharply from 85% in 2000-01, Standard Chartered said. In another departure from past policy, China's corn purchases this year have so far been directly handled by its official stockpiling agency, China Grain Reserves Corp., known as Sinograin, the grain trading executive said.
"Sinograin is now directly dealing with U.S. exporters," the executive said. China is the U.S.'s top agricultural export market. Unlike its broader trade patterns, China usually runs a trade deficit with the U.S. in the agriculture sector, importing $17.5 billion a year on average, compared with $3 billion a year in Chinese agriculture-related exports to the U.S.
Russia Harvests 4.6M Tons Grain To July 12 (Source: CME)
Russia harvested 4.6 million metric tons of grain to July 12 on 1.1 million hectares, with the average yield of 4.2 tons a hectare, the agriculture ministry reported. The ministry said winter barley and wheat were being harvested in the Southern region of Russia and in the North Caucuses, where prolonged rains were slowing down the harvesting campaign. The harvest has also begun in the republics of Kalmykia and Ingushetia. The ministry didn't give last year's figures for comparison but, according to its past reports, Russia harvested to July 14 2010 11.9 million tons of grain on 3.7 million hectares with the average yield of 3.23 tons a hectare. Because of drought harvest began in Russia last year 7-10 days earlier than usual. Russia will harvest grain this year on 44 million hectares, including 14 million hectares winter grains, the ministry said.
The agriculture ministry expects this year's harvest at 85 million metric tons. Last year's harvest fell to 60.9 million tons from 97.1 million tons in 2009 due to the summer drought.
Australia 2011-12 Wheat Crop Likely 25.25 Mln Tons -Rabobank (Source: CME)
Most of Australia's winter cropping areas have had their best start to the season for several years, although wheat output will likely fall slightly to 25.25 million metric tons from a bumper crop of 26.1 million tons last year, major agricultural lender Rabobank Australia said in a forecast. Australian crop conditions are mostly favorable, with rain showers across the wheat belt in Western Australia--normally the source of up to 40% of the country's wheat--and strong subsoil moisture across the east coast and South Australia state, providing an optimal base for crop growth, Rabobank analyst Tracey Allen said in a quarterly crop report. "The general success of the winter crop planting season has given farmers an air of optimism" for the crop year ending March 31, 2012, she said. Rabobank's 2011-12 forecast is up from a previous estimate by 250,000 tons, but below a forecast of 26.2 million tons by the official Australian Bureau of Agricultural and Resource Economics and Sciences.
Still, Allen said that regular rainfall will be important in the coming months to maximize crop output, particularly in Western Australia, she said. Dry topsoil in some areas in the eastern states and a mice plague that could affect crop germination are also concerns, she said. The volume of wheat exports so far in the marketing year ending Sept. 30 indicate that total shipments could outstrip their five-year average to reach 17.4 million tons, she said. This would be an encouraging result following quality downgrades of a significant portion of last year's crop, below-average production in Western Australia, and a strong Australian dollar, she said. Australia is able to export the balance of its wheat output after domestic demand of about 6 million tons a year is met, making it a major supplier to the global trade. Export volumes are likely to rise even further next year if international demand allows, she said.
Allen said that cotton output from the crop planted this calendar year that will be harvested next year likely will reach record levels between 1.07 million and 1.14 million tons of lint, up from 897,000 tons this year.
Rice Advances to Highest Level Since November 2008 in Chicago on Supplies (Source: Bloomberg)
Rice for September delivery advanced as much as 2.2 percent to $16.54 per 100 pounds on the Chicago Board of Trade, the most expensive level for the most active contract since November 2008, and traded at $16.42 at 8:25 a.m. in Singapore.
India extends duty-free sugar import deadline to Aug
NEW DELHI, July 6 (Reuters) - India will keep sugar imports tax-free until August, extending the zero duty by two months from a June 30 expiry date, a statement on a finance ministry website showed on Wednesday.
Traders say the latest move will have no impact on the market as India, the world's biggest producer behind Brazil, has emerged as a net exporter of the sweetener in the current year to September.
Fall on euro debt concern
LONDON, July 12 (Reuters) - Sugar, coffee and cocoa futures eased as growing concerns over euro zone debt triggered risk aversion amongst investors. The debt worries also drove investors into safe-have currencies
causing the dollar to strengthen against a basket of currencies. ICE raw sugar futures eased further from the contract high hit last week, as the firmer dollar and concerns over euro zone debt weighed, after sugar prices rose around 7 percent last week.
Mexico June coffee exports jump 50 pct vs yr ago
MEXICO CITY, July 11 (Reuters) - Coffee exports from Mexico jumped more than 50 percent in June compared with the same month last year but overall shipments for the harvest have slipped so far, the national coffee association Amecafe said on Monday.
Mexico is expecting a slightly smaller coffee crop this year after plants were damaged by frost in some states. The coffee harvesting season in the region begins in October and comes to a close in September.
Poor weather could hit Ivorian cocoa - farmers
ABIDJAN, July 11 (Reuters) - Damp conditions and a lack of sun could hurt Ivory Coast's cocoa harvest over coming weeks, farmers said on Monday, citing the appearance of the black pod fungal disease in some areas.
Ivory Coast, which produces one third of the world's cocoa, is recovering from a four-month political crisis in which farmers were driven off their land and exports were halted. Despite concerns over the weather and months of political upheaval, exporters on Monday said 1.3 million tonnes of cocoa had already arrived at ports this season and total exports could reach a record breaking 1.5 million tonnes in 2011.
Brazil coffee areas dry, warmer for the next week
BRASILIA, July 11 (Reuters) - Coffee areas in world top grower Brazil will stay warm and dry over the next week, with no new waves of cold expected, leaving little chance of crop-damaging frost, forecaster Somar predicted Monday.
Minimum temperatures will be in the double digits in all areas Somar monitors except in the cooler, mountainous part of the coffee belt in southern Minas Gerais, Pocos de Caldas, where temperatures may near freezing on two nights this week.
Ivorian cocoa output seen to breach all-time record
ABIDJAN, July 11 (Reuters) - Ivorian cocoa production is expected to breach an all-time record and hit 1.5 million tonnes in the current season after exporters said arrivals at ports reached over 1.3 million tonnes on Monday.
Arrivals at ports in the world's top cocoa producer are estimated to have surpassed the government's forecast of 1.3 million tonnes by July 10, and are set to break the 1.4 million tonnes record production of the 2003-2004 season.
Indonesia rubber price seen above $4/kg in H2
JAKARTA, July 11 (Reuters) - Indonesian rubber prices could stay above $4 a kg in the second half of this year on steady demand from tyre makers, but are unlikely to revisit a life-time high struck earlier this year, the Indonesian Rubber Association (Gapkindo) said on Monday.
"Demand is still strong, despite China's tight money policy," said Suharto Honggokusumo, executive director of Gapkindo, referring to the world's largest consumer.
Weak rains may hit India's 2011/12 cotton exports
MUMBAI, July 6 (Reuters) - India's cotton exports in 2011/12 could fall from the 6.5 million bales approved the previous year as poor rains reduce the amount of land sown with the crop in the world's second-largest producer and exporter.
Initially the country's cotton acreage was expected to rise 15 percent in 2011/12 on record high prices, but scant rainfall in key growing areas may prompt farmers to go for other crops like corn and soybean and even trim per hectare yield of cotton.
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.
Oil Drops From Three-Day High on Rising U.S. Crude Supplies, Europe Crisis (Source: Bloomberg)
Oil declined from a three-day high in New York as investors bet that increasing U.S. crude supplies and signs that Europe’s debt crisis is spreading indicated demand for raw materials may falter. Futures fell as much as 0.9 percent after the American Petroleum Institute said crude inventories rose for the first time in six weeks. An Energy Department report today may show supplies shrank. Prices also dropped after Ireland joined Portugal and Greece as the third euro-area nation to have its credit rating reduced to below investment grade.
China unlikely to yield on rare earths despite WTO
BRUSSELS, July 11 (Reuters) - China will probably not yield to demands to ease export restrictions on rare earths, unlike its flexibility in some previous trade disputes, even after the World Trade Organization ruled against it in a related case.
The WTO ruled last week that China breached trade law by curbing exports of eight raw materials including bauxite and zinc.
World aluminium demand to double in 10 years -Amag
LONDON, July 11 (Reuters) - World demand for aluminium will double in the next decade, driven by growing use in aircraft, transportation and luxury cars, the head of major European products maker Amag said on Monday.
"We forecast that demand for aluminium will double within the next 10 to 12 years, so a global growth rate of 7 percent. This is a nice picture," Gerhard Falch, the Austrian aluminium group's chief executive, told Reuters.
Alcoa Q2 profit jumps on metal, alumina prices
NEW YORK, July 11 (Reuters) - Alcoa Inc , America's biggest aluminum producer, posted a big jump in second-quarter profit on Monday, matching Wall Street estimates, partly due to soaring prices for the metal and alumina, its raw material.
But some analysts said a recent softening of aluminum prices might affect the company's third-quarter results and Alcoa's stock slipped 7 cents to $15.84 in after-hours trade on the New York Stock Exchange.
Wuhan Steel to keep hot-rolled coil prices unchanged for August
SHANGHAI, July 12 (Reuters) - China's Wuhan Steel will keep its hot-rolled coil prices unchanged for August bookings, market sources said.
The company will raise its cold-rolled coil prices for some grades by 30-50 yuan ($4.60-7.70) per tonne for August, industry consultancy Custeel.com said, basically in line with the pricing moves made by Baosteel on Monday.
Freeport Indonesia workers stay on strike as union demands more
TIMIKA, Indonesia, July 12 (Reuters) - Workers have yet to return to Freeport-McMoRan Copper & Gold's Indonesia mine as they wait for the outcome of further talks between the union and the firm's local CEO before ending their strike, union officials told Reuters on Tuesday.
A late-night deal was struck on Monday to end the week-long strike that has paralysed output at one of the world's top suppliers of copper and gold, but the union is threatening to revoke the agreement if its demands are not met.
Zambia Jan-May 2011 copper output down -c.bank
LUSAKA, July 11 (Reuters) - Copper output in Zambia, Africa's top producer of the metal, declined by about 5 percent in the first five months of 2011 from a year ago as mines scaled down production due to heavy rain, the central bank said on Monday. Copper output dropped to 308,777 tonnes for January to May from 326,877 tonnes in the same period last year, the central bank said in a fortnightly statistics report.
METALS-Copper falls as dollar rises, euro debt worries spread
LONDON, July 12 (Reuters) - Copper fell on Tuesday on a deepening debt crisis in the euro zone that has prompted investors to off-load assets perceived as risky, including the euro currency, but strikes in top producer countries helped limit further losses.
Investors dumped the euro, peripheral euro zone government debt, and European shares on Tuesday as officials struggled to contain fears that the euro zone debt crisis was spreading to Italy and Spain.
PRECIOUS-Gold in euros hits record as debt crisis spreads
LONDON, July 12 (Reuters) - Gold priced in euros hit record highs for a second day on Tuesday after European Union officials' pledges on handling the region's debt problems did not quell investor fears about the spread of the crisis to other euro zone members.
The strength of the dollar pushed down the price of gold in the U.S. currency, while bullion priced in sterling, Australian dollars, rand and other high-yielding currencies rallied.
Gold Futures Rise to Record Settlement Price on Mounting Europe Debt Woes (Source: Bloomberg)
Gold futures rose to a record settlement as Europe’s escalating debt crisis boosted demand for the metal as a haven investment. On the Comex in New York, gold futures for August delivery gained $13.10, or 0.8 percent, to settle at $1,562.30 an ounce at 1:39 p.m. on the Comex in New York. The previous record was $1,557.10 on May 2, when the intraday price reached an all-time high of $1,577.40. The euro fell to a four-month low against the dollar after a meeting of European Union finance ministers failed to defuse the region’s fiscal woes, hunting for ways to reduce Greece’s debt burden. Bond yields surged in Italy and Spain, and European equities posted the biggest three-session slump since March. Gold priced in euros and pounds rose to records.
