Commodity outflows slow in June-BlackRock
LONDON, July 15 (Reuters) - Outflows from commodity exchange traded products (ETPs) slowed in June to $238 million, after haemorrhaging over $2.6 billion in May, but only agriculture and precious metals recorded net inflows, according to data from BlackRock and ETF Securities.
Instead equities were in favour, with over $8.98 billion of net inflows globally according to BlackRock, with high dividend paying sectors such as healthcare and real estate in favour.
Corn (Source: CME)
US corn futures end mostly higher on next week's heat wave, and concerns it will continue through the end of the month. Hot weather next week comes at a bad time, with some of the crop in pollination. Question is how long it will last. Prices pulled back from early highs after updated weather forecasts. "There was a little hint today that maybe temps aren't going to be as extreme," says Western Milling analyst Joel Karlin. Direction of Sunday evening's trade will likely be decided by weather forecasts. CBOT September corn up 10 1/2c (1.5%) to $7.01 1/4; Dec corn up 6 1/2c to $6.85.
Wheat (Source: CME)
US wheat futures end lower, backpedaling from early gains on concerns about US exports. News that Egypt passed on US supplies in favor of buying Russian wheat weighed on prices. Results of Egypt's latest tender Friday reminded traders of just how competitive the wheat market is and how US prices are overvalued in world export markets. The market was concerned that Russian prices were $30 a ton cheaper than French wheat and $30 to $50 a ton cheaper than US offers, said Rich Nelson, director of research at Allendale Inc. CBOT Sept wheat end down 1.7% at $6.94 3/4, KCBT September wheat dropped 0.1% to $7.64 1/4 and MGEX September wheat end down 0.6% to $8.23 3/4.
Rice (Source: CME)
CBOT rice futures finish little changed as the market took a pause from recent sharp gains. The market is up 8.7% since Monday's close, but some traders say gains are not supported by cash prices, which have lagged. Worries about a scorched US crop, reduced acreage and strong world prices have supported the market's rally. CBOT September rice ends down 1/2c at $16.99 1/2 per hundredweight while other contracts finished slightly higher.
Wheat Slides for a Second Day as Importers May Favor Russia Over U.S., EU (Source: Bloomberg)
Wheat fell for a second day in Chicago on speculation buyers of the grain will turn to Russian supplies and shun the U.S. and the European Union. Rice slid. Russia’s overall grain harvest may total 90 million metric tons in 2011 and exporters will ship 1.5 million tons in July, First Deputy Prime Minister Viktor Zubkov said yesterday. That’s up from the 85 million tons forecast by Prime Minister Vladimir Putin last month. Egypt, the world’s biggest wheat importer, said this week it may add Romania and Ukraine as suppliers.
Soybeans Cap Longest Rally Since 2007 on U.S. Weather Woes; Corn Climbs (Source: Bloomberg)
Soybeans rose, capping the longest rally since 2007, and corn climbed to a one-month high on speculation that hot, dry weather will reduce crop yields in the U.S., the world’s leading exporter. High temperatures will rise to as much as 12 degrees Fahrenheit above normal for seven days starting tomorrow in the Midwest, Mike Tannura, the president of T-storm Weather LLC, said in a telephone interview. As much as 46 percent of the corn crop and 44 percent of soybeans have drier-than-normal topsoil, and the adverse conditions may extend into August, he said.
Wheat up, on track for biggest weekly rise since May
SINGAPORE, July 15 (Reuters) - Chicago wheat rose 0.4 percent on Friday, lifted by short-covering and speculative buying which has put the commodity on track for its biggest weekly gain since late May.
"The price action in wheat has been certainly of investment flows coming back to the market," said Paul Deane, agricultural commodity strategist at ANZ.
Russian grain yields higher depsite rain-hit harvest
MOSCOW, July 15 (Reuters) - Russia has so far reaped less grain than a year ago, as the harvesting was delayed by rains in the south, while higher yields could help the country to achieve a large crop, Agriculture Ministry data showed on Friday.
Farmers harvested 6.5 million tonnes of grain by bunker weight by July 13, down from 10.3 million a year ago, when the country had to accelerate the harvesting campaign due to a severe drought, the data showed.
India's monsoon 19 pct below normal, concerns over rice
NEW DELHI, July 14 (Reuters) - India's crucial monsoon rains were 19 percent below normal in the week to July 13, a slight pick up from a quarter below average in the previous week, but the fall off in rains is raising concerns particularly over rice production.
The rains had been expected to slow in the first two weeks of July, the key month for planting, and are still forecast to be only slightly below normal for the entire June to September season with a pick-up seen in most areas next week.
Hot weather to stress US corn night and day
CHICAGO, July 14 (Reuters) - A heatwave forecast to hit the U.S. Midwest next week is expected to stress developing corn throughout the day and night, providing no relief for a crop that needs a break when the sun sets to realize its full potential.
After hot nights, corn leaves are often curled up, much like they typically are in the middle of the day, evidence that the plant was working throughout the night and burning through its much needed sugar reserves and using up water in the soil.
Dryness hastens Argentina wheat planting-exchange
BUENOS AIRES, July 7 (Reuters) - Dry weather hastened 2011/12 wheat planting last week in Argentina, where 4.7 million hectares are expected to be seeded with the grain this season, the Buenos Aires Grains Exchange said on Thursday. Argentina is a leading wheat exporter and sends most of its output to neighboring Brazil.
"The lack of rains during the last seven days helped with the planting process in central and western portions of Buenos Aires (province)," which produces about half of the country's wheat, the Buenos Aires exchange said in its weekly crop progress report.
Dire drought worsens in US Plains, creeps into Kansas
CHICAGO, July 14 (Reuters) - The worst drought in decades tightened its grip on the southern U.S. Plains in the past week as triple-digit temperatures and a lack of rain scorched cattle grazing pastures and parched crops, according to a report issued by U.S. climatologists on Thursday.
Exceptional drought, the most severe category measured by climatologists, now encompassed more than 70 percent of Texas and more than 40 percent of Oklahoma.
Most Saskatchewan spring crops in good/fair shape
WINNIPEG, Manitoba, July 14 (Reuters) - Most Saskatchewan spring-seeded crops are in good or fair condition, although a little more than half of them are developing more slowly than normal, the provincial government said on Thursday in a weekly report. 81 percent of spring wheat and lentils are in good to fair condition, along with 80 percent of durum and 74 percent of canola. 82 percent of winter wheat and 79 percent of peas are in good to excellent condition.
Russian 2011 grain crop seen 90 mln T - deputy PM
MOSCOW, July 14 (Reuters) - Russia on Thursday increased its forecast for this year's grain crop and confirmed it sees no need to restrict exports, which are picking up following the lifting of an export ban at the start of this month.
Russia's grain crop may reach 90 million tonnes this year, up from an official estimate of 85 million tonnes and from last year's 61 million tonnes, First Deputy Prime Minister Viktor Zubkov told a cabinet meeting.
Indonesia's Bulog may import rice from six countries
JAKARTA, July 14 (Reuters) - Indonesia's state procurement agency Bulog could import rice from six countries which have a surplus of the staple, CEO Sutarto Alimoeso said on Thursday.
"We are exploring all possibilities that include importing rice from India, Pakistan, Thailand, Vietnam, Cambodia and Myanmar. We are hoping to import from those countries through a government-to-government scheme," Alimoeso told reporters at parliament.
Farmers Seek More Operating Loans As Fuel, Fertilizer Costs Climb -KC Fed (Source: CME)
U.S. agricultural lenders issued more operating loans in the second quarter versus a year ago as farmers grappled with rising fertilizer, fuel and feed costs, the Federal Reserve Bank of Kansas City said. Non-real-estate farm loan volumes jumped 14% in the second quarter from a year ago, the bank said. The average size of short-term operating loans jumped 36%, driven by the rising input costs. Meanwhile, capital spending in the farm sector cooled, the bank said, leading to a drop in loan volumes for farm machinery and equipment. The volume of such loans "plunged from a first quarter spike" and were down 36% from a year ago, the bank said. The bank's quarterly report is a compilation of national and regional agricultural finance data. The report noted that agricultural bank profits were strong in the first quarter, but said a rise in delinquency rates could "hinder future profits."
Real estate farm loan delinquency rates, after dipping at the end of 2010, climbed to almost 3% during the first quarter. The bank also noted that the share of real estate loans 30 to 89 days past due also climbed, "setting the stage for rising delinquency rates in the coming months." Farmers have enjoyed a surge in crop prices this year that has boosted profits and also sent farmland values soaring, with first quarter land prices jumping at least 20% in Iowa, Minnesota, Nebraska, Kansas and North Dakota. However, the crop prices mean higher feed costs for livestock producers, and prices for crop inputs including fertilizer and seeds are climbing as companies seek to take advantage of farmers' higher profits. The Kansas City Fed has warned that a sharp drop in crop prices or tightening of the Federal Reserve's monetary policy could lead to a significant drop in farmland values, although many analysts say there is no farmland bubble and that loan-to-asset ratios have remained low.
Brazilian Exports To Arab Nations Leap 33% On Year, Food Leads (Source: CME)
Brazilian exports to Arab nations leapt by 33% on the year in the first half of 2011, led by growth of sales of food commodities and iron ore, the Brazil-Arab News Agency said, citing data compiled by the Arab Brazilian Chamber of Commerce. The value of Brazilian exports to Arab nations over the period were $6.41 billion, the agency said. The growth in Brazilian exports to Arab nations was seen mainly in meats, sugar, grains, vegetable oil, seeds, oleaginous grains and iron ore. The agency said the rise reflected efforts in Arab nations to establish healthy stocks due to their own inability to produce enough food commodities and iron ore. The approaching Muslim fasting month of Ramadan was also a contributing factor bumping up Arab imports of Brazilian food commodities over the period, the statement said. Arab nations stockpile sugar and grains in advance of Ramadan to adhere to customs of donating large quantities of food to charity.
Brazilian wheat exports to Arab nations this year "attracted the most attention," even though the country isn't a traditional exporter of the commodity. "The wheat produced in the last crop is not the most appropriate for the bread industry in Brazil," the statement said. "There was, therefore, a surplus that could be exported." However, Brazil's wheat however is suitable to be used to make bread that doesn't need to rise, such as pita bread, consumed heavily in the typical Arab diet. Demand from Arab nations for Brazilian iron ore was "heated," the statement said, adding that Arab nations, in particular Egypt, traditionally sourced iron ore from India but have been looking for alternative sources after the Indian government's decision to limit exports.
China 2011 Grain Output May Grow Slower Than Last Year (Source: CME)
China's agriculture ministry is forecasting steady grain output this year, while also seeking to assure consumers that a ready supply of pork will be hitting markets in coming months. "We think it's very difficult to achieve an increase this year in output of autumn grain," the ministry's chief economist and spokesman, Chen Mengshan, according to a transcript on the ministry's website. At the same time, Chen said, "We expect pig production to rise gradually in the second half, and supply is secure." The comments come on the same day that the Ministry of Commerce announced it will release pork reserves to help contain sharply rising pork prices, which have been cited as being major contributors to China's 6.4% inflation rate in June. Chen's forecast of a stable autumn grain harvest suggest that China's grain output this year will grow slower than last year, as autumn output of grains--including corn, rice and soybeans--accounts for about 75% of the nation's total grain production.
In 2010, total output increased 2.9% from a year earlier to 546.41 million metric tons. China's meteorological officials expect a drought between July and November in major corn-producing areas of northeastern China as well as in the main rice area south of the Yangtze River, he said, adding that crops may be damaged by insects. Autumn grain acreage will likely rise 0.6% from a year earlier to 77.1 million hectares, with corn and rice areas increasing "considerably," Chen said. Corn acreage totalled nearly 33.3 million hectares, an increase of 2% from a year earlier, while mid-season rice area reached 18 million hectares, an increase of 3.1%, the National Development and Reform Commission said in a separate report. NDRC said soybean area this year will likely fall 11% from last year to 7.6 million hectares. Harvest of autumn grain is expected to be "good" if there is no major natural disasters, the NDRC said in a statement.
China's 2011 summer grain output, most of which is wheat, reached 126.27 million tons, up 3.12 million tons, or 2.5%, from 2010, the National Bureau of Statistics said Monday. Hog production has shown signs of recovering, with pig inventories rising for a fourth consecutive month in June, Chen said. The Ministry of Commerce's plan to release pork reserves may not have much of an impact on prices or availability, as stocks total around 200,000 tons, equivalent to merely 1.5 times the nation's daily pork consumption of around 140,000 tons, underscoring the difficulties the government faces in using such stockpiles to manage demand. Wholesale pork reached a record price of CNY26.09 a kilogram as of July 8, an increase of 71% from a year earlier, the ministry's data showed.
China Grain Officials Visit US; Signals Easing DDG Tensions (Source: CME)
A Chinese business mission including senior industry officials visited the U.S. to tour of its dried distillers grain industry recently, the U.S. Grains Council said in a report, signaling a further easing of trade tensions between the two countries. Tensions were ramped up late last year, when the U.S Trade Representative complained about Chinese wind-power subsidies, apparently sparking a Chinese antidumping probe into DDG--corn-based animal feed--in December. Late last month, the China National Grain and Oils Information Center said preliminary government findings in the probe were likely to favor "lower-than-expected" antidumping duties. The high-level delegation included the deputy director-general of China's National Animal Husbandry Service and the division chief of the China Feed Industry Association. Senior representatives from some of China's largest livestock and feed companies, including Guangdong Haid Group Co. and Shandong Liuhe Group, were also part of the mission, the USGC said.
The council, which didn't specify when the mission was held, said it briefed the Chinese team on U.S. DDG and ethanol production, regulation and shipping methods.
Investors Boost Bullish Commodity Bets as Gold Demand Jumped on Debt Woes (Source: Bloomberg)
Funds boosted bets on rising commodity prices by the most in almost a year as traders snapped up gold amid escalating debt woes in the U.S. and Europe. Speculators raised their net-long positions in 18 commodities by 15 percent to 1.09 million futures and options contracts in the week ended July 12, government data compiled by Bloomberg show. That’s the biggest gain since early August. Gold holdings surged the most since September 2009 as prices climbed to a record last week. A measure of bullish agriculture bets climbed the most in 11 months.
India's June natural rubber imports jump 60 pct
MUMBAI, July 15 (Reuters) - India's natural rubber imports in June jumped 60 percent on year to 19,118 tonnes as tyre makers raised overseas purchases to cash in on lower prices in other Asian countries, and the trend is likely to continue in coming months also as rubber is still expensive in the country.
Rubber production in June rose 4.1 percent on year to 59,200 tonnes, while consumption of rubber in the month rose to 80,500 tonnes, from 74,450 tonnes in the year earlier period, the state-run Rubber Board said on Friday.
Ghana cocoa farmers receive industry info by mobile
Dakar, July 14 (Reuters) - Ghanaian cocoa farmers have begun receiving vital industry information through short messages to their mobile phones, the Ghana Cocoa Board (Cocobod) said on Thursday, in the latest innovation aimed at boosting output.
Cocobod said the programme known as 'CocoaLink' has been tested since March, with 1,500 farmers currently hooked up. It is due to cover some 100,000 farmers over the next three years.
Colombia coffee production falls for third month
BOGOTA, July 14 (Reuters) - Colombia's coffee output fell for the third straight month in June, declining 40 percent to 471,000 60-kg bags as heavy rains affected flowering, the country's coffee growers federation said on Thursday.
Colombia, the world's top producer of high-quality arabica, was hit by bad weather and fungus in the previous two years, cutting output by about a third of its norm. The country's coffee is among the world's most prized and has a big impact on global markets.
Brazil Govt Still Studying A Lower Ethanol Blend In Gasoline (Source: CME)
Brazil's government continues to study a possible reduction in the percentage of anhydrous ethanol that is mixed into the gasoline blend at fueling stations, the Ministry of Mines and Energy said. "There's no decision yet on that issue. It could happen or it couldn't," an official at the ministry said, confirming an earlier report in local news media citing Mines and Energy Minister Edison Lobao. Lobao told Brazil's Agencia Estado news agency that the change could be made as early as September. Gasoline sold at Brazilian fuel pumps contains 25% anhydrous ethanol, a level that regulators can reduce to as low as 18%, although such a move would mean importing more gasoline. Also sold across Brazil is pure, hydrous ethanol, an alternative available to the country's growing fleet of flex-fuel vehicles. Brazilian sugar-cane producers in the main center-south growing region have harvested about a third of this year's crop, and the result so far has been an 18% drop in output.
Mills process their cane into either sugar or ethanol fuel. The government, struggling to rein in high inflation, is wary of any ensuing rise in fuel prices, with ethanol production in the center-south now expected by sugar-cane association Unica to fall 11% from the previous crop to 22.55 billion liters. Steadily expanding fuel demand and dwindling ethanol inventories caused a sharp increase in prices at the pump during March and April, before the sugar-cane harvest picked up. To avoid a repeat scenario in the next interharvest period, authorities are hammering out possible measures to regulate ethanol production more, such as requiring that producers hold minimum ethanol stocks. In the event of a serious ethanol shortage, President Dilma Rousseff remains open to the idea of taxing sugar exports, a position opposed by other parts of her government, Sao Paulo's Valor Economico newspaper noted in a report.
Brazil is the world's top producer and exporter of sugar and is the leading producer of sugar cane-based ethanol.
S.Korea's June coal imports fall 2 pct yr/yr
SEOUL, July 15 (Reuters) - South Korea's June coal imports declined 2 percent to 8.50 million tonnes from 8.69 million tonnes a year earlier, data from Korea Customs Service showed on Friday.
Customs data also showed earlier that the country's imports of liquefied natural gas (LNG) rose by 5 percent to 2.12 million tonnes in June from a year earlier.
Euro Coal-Prices stable, Aug S.African trades at $114.75
LONDON, July 14 (Reuters) - Prompt physical coal prices were stable on Thursday but few trades were reported.
Oil moved slightly higher by around 40 cents after opening weaker but coal currently lacks clear direction, utilities and traders said.
Asia Coal-Australia thermal coal prices dip in week
PERTH, July 14 (Reuters) - Australian thermal coal prices slipped about $2 in the week ended on Wednesday as summer buying in Asia, especially from China, slowed to a halt and Japanese demand remained weak.
Thermal coal on the globalCOAL Newcastle index for the week settled at $120.71 per tonne on Wednesday, down from $122.63 a week earlier and down from $122.45 on Friday.
Crude Oil Futures Advance for a Second Day in New York, Climbing 0.2% (Source: Bloomberg)
Oil rose for a second day in New York as investors bet that fuel demand may increase on signs of an improving U.S. economy and after the European Central Bank said Europe can overcome its debt crisis.
China's latest rare earth move disappoints EU, US
BEIJING/SHANGHAI, July 14 (Reuters) - China eased export curbs for rare earth elements on Thursday, restoring them to near-2010 levels in a bid to appease trading partners, but the European Union said the move did not ensure stable supplies and the United States said the Chinese were heading the wrong way.
China accounts for around 97 percent of the world's output of the 17 rare earth metals, which are crucial for global electronics production and the defense and renewable-energy industries. They are are used in a wide range of consumer products, from iPhones to electric car motors.
China's imported iron ore stocks hit record in week ending July 15
SHANGHAI, July 15 (Reuters) - Imported iron ore inventories at major Chinese ports hit a record 94.04 mln tonnes in the week ending July 15, data from industry consultancy Mysteel said on Friday.
Stocks rose 0.4 percent from 93.65 million tonnes last Friday.
Iron Ore-Spot extends gains on firm Chinese steel demand
SHANGHAI/SINGAPORE, July 15 (Reuters) - Spot iron ore prices extended gains on Friday, driving a key global index to near two-month peaks, as steel mills in top producer China continued to restock the raw material in anticipation of strong steel output and demand.
Spot offers for Indian 63.5/63-grade ore rose for a third day, by another dollar to $182-$184 a tonne, including freight, said Chinese consultancy Umetal.
China's imported iron ore stocks hit record in week ending July 15
SHANGHAI, July 15 (Reuters) - Imported iron ore inventories at major Chinese ports hit a record 94.04 mln tonnes in the week ending July 15, data from industry consultancy Mysteel said on Friday.
Stocks rose 0.4 percent from 93.65 million tonnes last Friday.
NICKEL-Major market developments in June
LONDON, July 14 (Reuters) - Nickel prices rebounded from a sharp fall in June, but slow demand and concerns about an impending sharp rise in output will exert downward presure, or at least limit upside prospects in the next month or two.
"We've got a situation of rising production and slowing stainless demand growth," said independent consultant Angus MacMillan.
SAfrica steel firms, striking union reach deal
JOHANNESBURG, July 15 (Reuters) - South African steel and engineering firms reached a wage deal with the National Union of Metalworkers of South Africa (NUMSA) to end a two-week long strike, a union official said on Friday, while a fuel sector strike showed no signs of ending.
Tens of thousands of steel workers downed tools nearly two weeks ago demanding a 13 percent wage rise -- almost three times the inflation rate and nearly double the employers' offer of 7 percent.
Freeport Indonesia production, shipments resume-workers
JAKARTA, July 15 (Reuters) - Production at Freeport McMoRan Copper & Gold's giant Indonesia mine gradually resumed on Thursday, as workers returned following a strike, and two cargoes carrying 65,000 tonnes of concentrate were ready for shipping on Friday, workers said.
The union representing around 8,000 workers at the Grasberg mine said on Tuesday they had struck a deal to end a strike that began on July 4, though further talks and safety checks at the mine effectively meant work began on Thursday, the union said.
Shanghai warehouse copper stocks up 22 pct
SHANGHAI, July 15 (Reuters) - Copper inventories in warehouses monitored by the Shanghai Futures Exchange rose 22.3 percent from last Friday, the exchange said on Friday.
"Today is the last trading day for the prompt month July contract, so many sellers may be putting stocks so that they can deliver sold cargoes to buyers over the next few days. If the increase is mainly due to this, the data may be slightly misleading," said Jinrui Futures analyst Zhao Kai.
US building slump squeezes scrap copper market
NEW YORK, July 14 (Reuters) - Supplies in the U.S. copper scrap market remained tight at the start of the third quarter, as a lingering slump in industrial demolition rates made material, especially higher-grade material, harder to come by.
The prolonged downturn in the housing sector has squeezed supplies, along with a general reluctance from producers and owners to release more metal into the marketplace as smaller quantities of the secondary scrap metal have limited their ability to quickly fill shipment containers.
METALS-Copper steady, eyes on China consumption
July 15 (Reuters) - Copper traded steady on Friday, paring earlier gains, as markets awaited the results of European bank stress tests later in the day and investors also eyed trends in top consumer China.
Three-month copper on the London Metal Exchange was untraded in official rings but bid at $9,626 a tonne from $9,630 a tonne at the close on Thursday.
PRECIOUS-Gold undermined by Bernanke, firm dollar
LONDON, July 15 (Reuters) - Gold slipped on Friday undermined by growing perceptions further stimulus measures from the United States were unlikely and by a higher dollar against the euro, which was under pressure from concern about the results of European bank stress tests.
Spot gold was bid at $1,581.10 a troy ounce at 1126 GMT from $1,586.75 an ounce late in New York on Thursday when the precious metal hit a record high of $1,594.16.
Gold Advances, Extending Gains to Record for Immediate Delivery, Futures (Source: Bloomberg)
Gold futures gained as much as 0.5 percent to a record $1,597.90 an ounce in New York. The metal traded at $1,596.80 at 8:11 a.m. in Melbourne. Gold for immediate delivery rose as much as 0.3 percent to a record $1,597.73 an ounce.
Baltic index drops 16 points on weak demand
LONDON, July 14 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, fell 16 points to 1367 points on Thursday due to continued weak freight demand.
The index -- which gauges the cost of shipping commodities including iron ore, cement, grain, coal and fertiliser -- the index has been erratic this year, trading between 1,300-1,500 points as ship oversupply out paces demand to ship commodities.
Asia Dry Bulk-Rates under pressure from weak N.Pacific demand
SINGAPORE, July 14 (Reuters) - Rates for panamax dry bulk carriers on key Asian freight routes are expected to remain under pressure over the next week due to weak demand in the North Pacific and ample vessel availability.
In the capesize market, rates are seen lower as freight activity slows on the key benchmark Australia to China iron ore route, shipbrokers said on Thursday.
