Corn (Source: CME)
US corn futures finish firmer on concerns hot, dry weather will reduce output. Prices trim gains after surging at the opening of trading as midday forecasts looked somewhat wetter and cooler, traders say. Yet, grain users remain nervous about potential weather threats as farmers need favorable weather to grow a large crop to replenish low supplies. Traders expect USDA will make cuts to crop condition ratings next Monday due to heat this week. The government lowered the good-to-excellent rating more than expected yesterday. CBOT December corn rises 10 1/4c to $6.87 1/4 a bushel.
Wheat (Source: CME)
US wheat futures close higher on spillover support from rising corn prices. The markets are linked as both grains are used for livestock feed. Weakness in the US dollar added support, as it makes dollar-denominated commodities more attractive to foreign buyers, an analysts notes. Hard red winter wheat, traded at KCBT, gains the most on expectations for increased foreign demand, he adds. CBOT September wheat rises 4c to $6.93 1/2 a bushel; KCBT September jumps 17c to $7.78; MGEX September advances 10 1/2c to $8.33.
Rice (Source: CME)
US rough rice futures decline as traders continue to book profits following sharp gains of the past two weeks. Rice on Friday reached its highest prices since October 2008, after the government earlier in the week issued lower-than-expected inventory estimates. The absence of fresh fundamental news left futures overvalued, analysts say. CBOT September rice dropped 26 1/2 cents, or 1.6%, to $16.55 1/2 per hundredweight.
US corn rebounds as hot weather hurts crop, wheat firm
SINGAPORE, July 19 (Reuters) - U.S. corn futures bounced back , rising more than 1 percent, while soybeans were steady following a U.S. government report which showed more-than-expected decline in crop ratings as a result of hot weather.
"The reduction in crop ratings was more than what some had expected, so it is contributing to the strength today," said Adam Davis, a senior commodity analyst at Melbourne-based fund Merricks Capital.
India Raises 2010-11 Wheat, Rice Output Estimates (Source: CME)
India raised its estimates for wheat and rice production in the crop year ended June 30, likely easing supply worries and boosting chances that the government may allow more grain exports. Wheat output hit a record 85.93 million metric tons while rice production rose to 95.32 million tons, government data showed. The previous estimate for wheat was 84.27 million tons and for rice was 94.11 million tons. The total foodgrain output increased 2.5% over the previous estimate to 241.56 million tons in the last crop year. "Sustained efforts to increase farm credit, higher minimum support price to farmers and better availability of seeds and fertilizers helped India achieve record foodgrain output in 2010-11," Farm Secretary P.K. Basu told reporters. Higher output will give more comfort to the government as it aims to push through a food security law, but it also poses worries over storage as granaries are choked.
Traders say the only safety valve could be permitting some more exports, beyond a million tons of rice that was allowed last week by a ministerial panel. According to latest estimates, output of pulses likely grew to a record 18.09 million tons. India, the world's largest importer of pulses, may no longer need to buy the protein-rich staple in coming years as the country can lift its output to 20 million tons in the next five years, Basu said. He said he was optimistic about next year's foodgrain crop as well, and that rice output could climb to as high as 102 million tons with the country's eastern rice-growing belt receiving good monsoon rains. Output of oilseeds in 2010-11 was pegged at 31.10 million tons, up from 24.88 million tons the previous year, while cotton production is estimated to have jumped 38% to a record 33.43 million bales. Corn output for 2010-11 is estimated to have risen 27% to 21.28 million tons.
Corn, Soybeans Called Higher as U.S. Crop Outlook Worsens; Wheat May Gain (Source: Bloomberg)
What follows are opening calls for U.S. grain and oilseed markets.
-- Corn futures are called to open 12 cents to 15 cents a bushel higher on the Chicago Board of Trade after a government report yesterday showed U.S. crop conditions worsened last week, Jim Gerlach, the president of A/C Trading Inc. in Fowler, Indiana, said in a telephone interview. Hot, dry weather this week will increase the stress on plants, he said.
-- Soybean futures may open 10 cents to 15 cents a bushel higher in Chicago on speculation that hot, dry weather will continue next month, when plants in the U.S. begin to set pods and fill them with beans, Gerlach said. Soybean-oil futures are expected to open 0.45 cent to 0.65 cent a pound higher, and soybean-meal futures may open up $3 to $4 for 2,000 pounds.
-- Wheat futures may open 22 cents to 26 cents a bushel higher on the CBOT, the Kansas City Board of Trade and the Minneapolis Grain Exchange on speculation that adverse weather in parts of Europe, Russia and Ukraine may damage maturing crops, and that a return to La Nina weather conditions may reduce yield potential in the Southern Hemisphere later this year, Gerlach said.
Philippines likely hit Q2 rice output forecast-official
MANILA, July 19 (Reuters) - The Philippines may have hit a forecast 3.57 million tonnes unmilled rice harvest in the second quarter based on preliminary data, putting it on course to meet a target of a record full-year output of 17.46 million tonnes, a farm official said on Tuesday.
Good weather and government support via improved irrigation would lift output this year, allowing the country to achieve a target growth in output of 10 percent in 2011, Maura Lizarondo, assistant director at the Bureau of Agricultural Statistics (BAS), told Reuters.
Kenya 2012 wheat imports seen at record level-attache
WASHINGTON, July 18 (Reuters) - "On June 8, the GOK announced a continuation of its tariff-abatement policy on imported foodstuffs (corn, wheat, and rice). Under the new abatement, 18 Kenyan registered millers will be allowed to import wheat duty free for one year beginning on July 4, 2011. As a result, FAS/Nairobi expects that Kenya will import record quantities of wheat commercially through this marketing year. Subsequently, the MY 2012 import forecast has been revised upward, slightly more than the MY 2011 estimate.
Despite the GOK's efforts to eliminate the duty on imported wheat, Kenyan consumers continue to pay high prices for wheat flour and wheat-based products. Local retail prices of wheat flour increased 19 percent from January 2010 to January 2011 to $1.54 per 2 kilogram packet, and have continued to rise."
Russian gross grain crop 14.6 mln T so far - AgMin
MOSCOW, July 18 (Reuters) - Russia has harvested 14.6 million tonnes of grain by bunker weight in the year to date, the Agriculture Ministry said on Monday, lower than a year ago when farmers had to accelerate harvesting due to drought.
The Ministry did not provide a comparison to year-ago acreage, but last year it said the country had harvested 21 million tonnes of grain by July 20.
Iraq sees lower 2011 wheat harvest on drought
BAGHDAD, July 18 (Reuters) - Iraq forecasts its 2011 wheat harvest at 1.75 million tonnes for 2011, below expectations and down from 1.866 million tonnes produced last year, due to drought, Hassan Ibrahim, Iraq's grain board chief told Reuters in an interview on Monday.
Ibrahim said Iraq will issue on Tuesday a tender to buy 100,000 tonnes of wheat from any origin.
Iraq sees drought cutting wheat crop
BAGHDAD, July 18 (Reuters) - Iraq expects drought will cut its 2011 national wheat harvest to 1.75 million tonnes, below expectations and lower than 1.866 million tonnes produced last year, Hassan Ibrahim, Iraq's grain board chief told Reuters in an interview on Monday.
"Weather conditions and the drought that hit the (northern) areas were the main reasons. Rains came late," he said.
Corn, soy ratings seen falling due to hot weather
CHICAGO, July 18 (Reuters) - U.S. corn and soybean ratings were expected to drop by 1 percentage point after hot weather arrived in some growing areas and took a toll on plant health, analysts said.
The U.S. Agriculture Department's weekly crop progress report due Monday afternoon was forecast to show the corn crop rated 68 percent good to excellent, based on the average of estimates given by 10 analysts.
Low EU rapeseed crop to create import surge
AMSTERDAM/HAMBURG, July 18 (Reuters) - A poor European Union rapeseed crop is likely to blast a large gap in Europe's oilseeds supplies which could spell a business boost to other producers, especially Asian palm oil.
Poor rapeseed crops around the world mean EU producers will probably not simply be able to import alternative rapeseed supplies from other countries to completely compensate for what is expected to be a small harvest, analysts said.
Spain stocks low as Black Sea wheat awaited -trade
MADRID, July 18 (Reuters) - Spain has barely enough grain in port silos to last the rest of the month in the import-dependent country, but port and trade sources say hefty shipments from Black Sea countries are expected soon.
Silos in Spain's leading grains port Tarragona held an estimated 120,000 tonnes of wheat, maize, sorghum and barley, while clients were loading 6,000-7,000 tonnes a day.
ICE sugar resumes uptrend, coffee rises
LONDON, July 19 (Reuters) - Sugar, coffee and cocoa futures on ICE bounced in early trade , consolidating after risk averse sentiment triggered by the worsening euro zone and U.S. debt crisis dragged on commodities the previous session. ICE raw sugar futures resumed their prolonged uptrend, buoyed by gains in crude oil and a weaker dollar.
Vietnam revises down June coffee exports to 1.12 mln bags
HANOI, July 19 (Reuters) - Vietnam's actual coffee shipment last month stood at 67,000 tonnes, or 1.12 million bags, the customs department said on Tuesday, revising down a government estimate of 1.63 million bags.
The volume in June brought exports of the commodity from Vietnam in the first half of 2011 to nearly 865,000 tonnes, or 14.42 million 60-kg bags, up 27.2 percent from a year ago, the Finance Ministry-run Vietnam Customs said in a report.
Indonesia's Sulawesi H1 cocoa exports down 41 pct yr/yr
JAKARTA, July 19 (Reuters) - Indonesia's cocoa bean exports from the main growing island of Sulawesi dropped more than 40 percent to 64,591 tonnes in January-June as bad harvest hit production in the world's third-largest producer, industry data showed on Tuesday.
Indonesia could see full-year output falling to its lowest since at least 2004 at 420,000 tonnes after erratic weather triggered the spread of a deadly fungal disease in Sulawesi.
Ghana sees cocoa output hitting 1 mln tonnes
ACCRA, July 18 (Reuters) - Cocoa output in Ghana this season should hit a million tonnes by the end of August, the industry regulator said on Monday, enabling it to reach an official target that had been set for the 2012/13 season two years early.
"Total output now is more than 980,000 tonnes and we should be hitting 1 million by August ending," Cocobod Deputy Chief Executive Yaw Adu-Ampomah told Reuters.
Ivorian rainy weather mixed for cocoa crop-farmers
July 18 (Reuters) - Rainy weather punctuated by occasional bursts of sunshine in Ivory Coast's principal cocoa regions last week had mixed results on the last stage of the mid-crop, farmers said on Monday.
The mid-crop in Ivory Coast, which runs from April to September, is tailing off. Farmers say they needs rainfall to decrease and to see more sun to strengthen the development of pods to be harvested until September, farmers said.
Cocoa 2011/12 global deficit seen at 50,000 tonnes
LONDON, July 18 (Reuters) - Less favourable weather in West Africa and a return to the long-term decline in Ivory Coast production are expected to switch the global cocoa market into deficit in 2011/12, a Reuters poll showed on Monday.
World 2011/12 cocoa demand is expected to outstrip production by 50,000 tonnes, according to the poll's median forecast.
Insurance, Credit Would Help Africa Combat Drought - Experts (Source: CME)
Extending financial instruments to smallholder farmers could help mitigate the effects of severe weather problems like the drought currently gripping the Horn of Africa, experts said. Some 10 million people face starvation in East Africa after the worst drought in 60 years has devastated the region's crops. Scientists warn such events could become more frequent as climate change affects weather patterns. Craig McIntosh, an associate professor of economics at the University of California, is working on a project to offer crop insurance and credit to 30,000 Ethiopian farmers with the United Nations that he believes can help stop the "the boom-and-bust cycle" that often affects rural markets. "In the case of the current drought, by all means the product can help," he said. "Insurance allows farmers to move into the following planting season with assets intact...[and] by pumping money into local economies at a time when everyone is otherwise destitute."
Financial instruments are key for helping smallholder farmers, who make up the bulk of African agriculture, allowing them to invest in crop-boosting inputs like fertilizer. Yet because of their vulnerability to problems like weather, they are often deemed too risky to lend to by private companies. "This is an important piece of the puzzle in the poorest countries," said Keith Collins, former chief economist of the U.S. Department of Agriculture.
EU OKs Biofuel Certification; Land Use Debate Goes On (Source: CME)
The European Union approved seven voluntary schemes designed to ensure biofuels used in the bloc are environmentally sustainable and don't undermine global biodiversity. Biofuels are an integral part of the EU's effort to reduce carbon emissions by 20% by 2020 because much of this cut has to come from using more renewable energy in transport, mainly biofuels. "We need to make sure that tropical forests and carbon rich peatlands are not turned into oil palm or sugarcane plantations," the Commission said. "We also have to guarantee that compared to fossil fuels biofuels used in the EU deliver tangible greenhouse gas savings." But critics said the move will have little impact as the Commission, the EU's executive arm, has ducked the key issue of indirect land use change--the idea that converting land to grow biofuels can release more carbon than they save by displacing arable crops into other areas.
EU reports leaked last week claimed using Asian palm oil, South American soybeans and EU rapeseed to make biodiesel has a bigger overall impact than conventional diesel on climate change, partly because wetlands and forests are then converted to grow food. "The Commission claimed the certification scheme for biofuels will certify the sustainability of these biofuels but if the [indirect land use change] is not taken into account them how can they say they are sustainable?" said Greenpeace spokesman Sebastian Risso. The schemes authorized will certify the environmental compatibility of biofuels, including that fuel crops aren't produced by converting carbon-storing forests or wet lands into plantations. They will allow only biofuels that emit at least 35% less greenhouse gas than fossil fuels from production to use. This threshold will rise to 50% in 2017 and to 60% in 2018. But the decision on indirect land use change will be delayed until later in the year, the Commission said.
Originally the decision was due in December. "We don't want a situation where on a field where you used to grow food, you are now growing biofuels," Energy Commissioner Guenther Oettinger said during a press conference. "This is an evolution that we cannot accept." The systems that commission recognized are ISCC, Bonsucro EU, RTRS EU RED, RSB EU RED, 2BSvs, RSBA, and Greenergy. They will cover both biofuels produced in the EU and those outside. But biofuels supporters said the current scheme should be enough to ensure that Europe's targets are environmentally sustainable while preserving the bloc's $17 billion biofuels market. "A truly level-playing field is the best guarantee to avoid potential indirect land use effects," said secretary general of pro biofuels lobby group ePure, Rob Vierhout. "We don't need contentious ILUC science when we already have such practical solutions at our disposal."
Oil Climbs for Second Day on Shrinking Crude Stockpiles, Stronger Economy (Source: Bloomberg)
Oil advanced for a second day in New York as investors bet that shrinking stockpiles and signs of economic recovery in the U.S. indicate fuel demand will increase in the world’s biggest crude-consuming nation. Futures gained as much as 0.9 percent after the industry- funded American Petroleum Institute said supplies fell the most in six weeks. An Energy Department report today may show inventories dropped for a seventh week, the longest run of declines in two years. Prices rose yesterday after U.S. housing starts surged more than economists forecast. “We continue to see stock draws,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne, who predicts oil in New York will average $113 a barrel in the third quarter. “Crude supplies are still relatively high compared with history but it’s undoubtedly positive for oil prices.”
TABLE-Zinc mkt has 214,000 T surplus in Jan-May'11 -ILZSG
LONDON, July 18 (Reuters) - The global zinc market was in surplus by 214,000 tonnes in the first five months of 2011, the latest monthly bulletin from the Lisbon-based International Lead and Zinc Study Group (ILZSG) showed on Monday.
The latest figures show global refined zinc use was 5.112 million tonnes in January-May 2011, compared with 5.008 million a year earlier.
TABLE-Lead mkt has 73,000 T surplus in Jan-May'11-ILZSG
LONDON, July 18 (Reuters) - The global lead market was in surplus by 74,000 tonnes in the first five months of the year, the latest monthly bulletin from the Lisbon-based International Lead and Zinc Study Group (ILZSG) showed on Monday.
Latest figures show global refined lead use was 4.040 million tonnes, up from 3.616 million in the same period last year.
Russia offers Germany help on rare earths16:33 18Jul11 -Russia offers Germany help on rare earths
WOLFSBURG, Germany, July 18 (Reuters) - Russia is offering Germany closer cooperation on rare earths as well as gas and oil supplies, a Russian official said on Monday ahead of an annual bilateral summit in Germany.
Berlin has been trying to improve German industry's access to the prized metals, which are used to manufacture a range of high-tech products and whose supply has been hit by export curbs by dominant producer China, among other factors.
Western Areas sees 2011/12 nickel output at 25,000-27,000T
SYDNEY, July 19 (Reuters) - Western Areas , Australia's third-largest nickel miner, is forecasting fiscal 2011/12 nickel production of 25,000-27,000 tonnes, versus a bumper 32,222 tonnes in the previous year, a company executive said on Tuesday.
The forecast for lower production comes less than a week after no. 2 producer in Australia, Minara Resources , trimmed its 2011 guidance and as other producers face curtailments.
China July 1-10 daily steel output dips 3.1 pct
SHANGHAI, July 19 (Reuters) - Daily output of crude steel from Chinese mills fell 3.1 percent in the first 10 days of July to 1.955 million tonnes, data by the country's steel industry association showed on Tuesday.
The figure amounts to 713.6 million tonnes when calculated on an annual basis, nearly 14 percent higher than last year.
Tokyo Steel keeps August prices unchanged
TOKYO, July 19 (Reuters) - Tokyo Steel Manufacturing Co , Japan's biggest construction steelmaker, kept its prices of all products for August shipment unchanged, saying that political confusion and the yen's strength were clouding the market outlook.
The company kept its price for H-beams, used in construction of buildings, at 76,000 yen ($961) per tonne for a third straight month.
Copper Reaches Three-Month High as U.S. Housing Starts May Gain (Source: Bloomberg)
Copper rose to a three-month high in New York before figures that may show builders in the U.S. broke ground on more houses, signaling stronger demand for the metal. Construction began on 575,000 houses at an annual rate, up 2.7 percent from May, according to the median projection of economists surveyed by Bloomberg News. Copper, used in pipes, wiring and roofing, has gained this month even as concern about Europe’s debt crisis and talks to raise the U.S. borrowing limit spurred some investors to shun risk. “U.S. housing-starts and building-permits data will be released today, which are important for base-metals prices,” Edelweiss Comtrade Ltd. said in a report.
Japan June copper cable shipments up 2.4 pct yr/yr
TOKYO, July 19 (Reuters) - Japanese copper wire and cable shipments rose 2.4 percent from a year earlier in June but the level stayed at the third-lowest for the month in 35 years amid a slump in exports to China, the world's biggest copper consumer.
June shipments totalled an estimated 58,000 tonnes, data from the Japanese Electric Wire and Cable Makers' Association showed on Tuesday.
Oz Minerals Q2 copper output up 9 pct Q/Q; on track for guidance
SYDNEY, July 19 (Reuters) - Oz Minerals , Australia's third-largest copper producer, on Tuesday reported a 9 percent rise in second-quarter copper output versus the previous quarter and said it was on track for full-year production of 100,000 to 110,000 tonnes.
Its Prominent Hill mine yielded 28,017 tonnes over the three months to June 30 as work continued to expand operations, Oz Minerals said in its quarterly production report.
METALS-Copper gains on dollar, China demand hopes
July 19 (Reuters) - Copper hit its highest since mid-April on Tuesday as a weaker dollar and hopes Chinese demand will remain firm helped offset investor anxiety over U.S. and European sovereign debt concerns.
Three-month copper on the London Metal Exchange (LME) traded at $9,800.25 a tonne by 0825 GMT compared with Monday's close of $9,694 a tonne.
PRECIOUS-Gold steadies off record highs, eyes euro summit
LONDON July 19 (Reuters) - Gold hit record highs in Europe on Tuesday as investors bought the metal as a haven from risk on heightened concerns that the debt crisis engulfing Greece may ensnare Italy and Spain, and as time grew short for raising the U.S. debt ceiling.
A slight rebound in assets seen as higher risk, such as shares and the euro, took some of the heat out of the market after the metal broke through the key psychological $1,600 barrier on Monday, however, pulling prices back from highs.
Gold May Drop for Second Day as Obama Endorses Plan to Avert U.S. Default (Source: Bloomberg)
Gold may decline for a second day, extending a drop from a record, after President Barack Obama backed a plan to cut the deficit, potentially paving the way for raising the U.S. debt ceiling and avoiding default. Immediate-delivery gold was little changed at $1,589.35 an ounce at 10:13 a.m. in Singapore after touching an all-time high of $1,610.10 yesterday and closing 1 percent lower. Before that, gold gained for 11 days, the best run since 1980, according to Bloomberg data. On July 18, gold’s 14-day relative-strength index topped 74, signaling a possible drop after the rally. Obama called the $3.7 trillion debt-cutting proposal by a bipartisan group of senators “broadly consistent” with what he’s sought and “a very significant step” in so-far deadlocked negotiations. The plan would combine tax increases and spending cuts and may allow policy makers to agree on raising the $14.3 trillion debt ceiling before a potential default on August 2.
Gold to Extend Record Rally If U.S. Increases Debt Limit: Chart of the Day (Source: Bloomberg)
Gold may rally further from this month’s record if President Barack Obama wins lawmakers’ agreement to raise the U.S.’s debt ceiling, weakening the dollar and boosting demand for the precious metal as a store of value, according to Korea Investment & Securities Co. The CHART OF THE DAY shows the spot gold price in dollars has climbed along with increases in the U.S.’s statutory debt limit over the past 16 years. Immediate-delivery gold reached a record $1,610.10 an ounce yesterday, as concerns that debt crises in Europe and the U.S. will roil global financial markets boosted demand for the precious metal as a haven. “Gold’s rally is quite explosive,” said Julia Yoo, a Seoul-based analyst at Korea Investment. “Increasing the debt limit means you print more dollars, which will weaken the dollar and consequently lift the gold price,” adding to gains this year that were driven by demand from countries including China, she said.
