Commodities saw $6 bln outflow in June-SocGen
Aug 3 (Reuters) - Investors pulled out a record $6 billion of net investments in commodities in June, mainly due to soured sentiment toward agricommodities and midyear portfolio rebalancing, Societe Generale said on Wednesday.
Agriculture made up the bulk, about $3.5 billion, of the outflows faced by all subsectors, including precious metals.
Corn (Source: CME)
US corn futures close lower on widespread selling of commodities. Strength in the US dollar and steep losses in equities and crude oil weigh on the grain markets as traders flee from riskier assets. "It's sort of a national down day," says Sid Love of Kropf & Love Consulting. Yet, corn trimmed losses ahead of the close as bargain hunters started stepping in. Grain users are nervous about the potential for poor weather to reduce output after an intense July heat wave. CBOT December corn ends down 11 1/2c at $7.01 1/2 a bushel.
Wheat (Source: CME)
US wheat futures end sharply lower amid broad weakness in commodities and equities. The selling knocks down grains, crude oil and precious metals as investors flee riskier assets. A rally in the US dollar adds pressure as it makes US grains less attractive to foreign buyers. Traders are already nervous about declining demand because of increased competition for export business from Russia. Egypt bought Russian and Romanian wheat and none from the US. CBOT September wheat drops 28 3/4c to $6.81 3/4 a bushel, KCBT September slides 27c to $7.71 and MGEX September falls 21 1/2c to $8.23 1/4.
Rice (Source: CME)
US rice futures finish weaker as selling engulfs commodity and equity markets. Strength in the dollar contributes to the negative tone, fueling concerns about waning demand for US grains. Meanwhile, weekly rice-export sales of 38,500 tons were down 35% from the prior 4-week average, according to the USDA. CBOT September rice drops 9 1/2c to $16.25/hundredweight.
U.S. corn falls for 2nd day on weather, economic woes
SINGAPORE, Aug 4 (Reuters) - Chicago corn slid 0.6 percent falling for a second straight day as forecasts for crop-friendly weather in the U.S. corn belt and concerns over slowing economic growth weighed on the market.
"Today's weakness is on cooler weather moving into the Midwest and weaker-than-expected data from the U.S," said Abah Ofon, agricultural commodities analyst with Standard Chartered Bank in Singapore.
India monsoon rains 22 pct below normal in past week - Met office
NEW DELHI, Aug 4 (Reuters) - India's key monsoon rains were 22 percent below normal in the week to Aug. 3 from 23 percent below average showers in the previous week, the weather office said on Thursday, and a second straight week of weakness.
The rains, which are crucial for 60 percent of the major rice and sugar producers' farms without irrigation, improved over south India and the western coast.
Brazil corn exports seen picking up in August
SAO PAULO, Brazil, Aug 3 (Reuters) - August is typically an important month for Brazilian corn shipments due to the harvest of its winter crop and ports' shipping schedules suggest exports of the grain will increase sixfold from July.
But despite the strong showing of corn exports from Brazil so far this year, exports will likely fall shy of last year's near record tally due to harsh weather that sapped some of the productive potential of the local crop this season.
Rain still delaying German grain crop -farming lobby
HAMBURG, Aug 3 (Reuters) - Rain is disrupting Germany's grain harvest and dry weather is needed to make progress with work, farming association DBV said on Wednesday.
Harvesting of Germany's key winter wheat crop has started but it is still too early to make a forecast of crop size or quality, the DBV said in its second harvest report.
Cargill, CHS Look To Expand Joint Venture In Northwest To Meet Asian Grain Demand (Source: CME)
Cargill Inc. and CHS Inc. are in talks to expand an existing joint venture in the Pacific Northwest, which is becoming increasingly important as a gateway for grain exports to Asia. Cargill, one of the world's largest grain merchandisers, and CHS, the largest U.S. farmer cooperative, said the talks are driven by demand for wheat, feed grains and oilseeds into Asia. They currently operate TEMCO, LLC, which consists of an export terminal in Tacoma, Wash. The announcement comes a month after Cargill and rival Louis Dreyfus Commodities said they would end a 10-year-old joint venture that exported grain from the Midwest. At the time, both companies said they planned to maintain a presence in the Pacific Northwest export market. China in particular is driving increased exports, as the nation's purchases of U.S. soybeans have exploded in recent years. China has also become a buyer of corn in the past year, and many analysts say the country is poised to become a larger, more consistent corn buyer.
Another grain merchandiser, Bunge Ltd. (BG), is building a new export terminal in the region that will open in the fall. The $200 million facility will be the first new terminal in the region in more than two decades, and Bunge officials have boasted that it will be the most efficient grain terminal in the region. Both Cargill and CHS are based outside of Minneapolis.
Canada's 2011-12 Grain Output Seen At 44.5M Tons - USDA Attache (Source: CME)
Poor plantings mean Canada's 2011-12 grain harvest is expected to be 44.5 million metric tons in 2011-12, below last season's poor crop, the U.S. Department of Agriculture's attache said. Wheat production in this crop year is forecast at 22.5 million tons, down 3% on year, but exports are likely to rise the same percentage, to 17 million tons, as grain is expected to be of better quality, the USDA said. "Despite farmers reporting intentions to seed more area to wheat in 2011-2012, expectations were not realized due to extremely wet conditions," said the USDA. "Exports will be limited by tight supplies." Barley production is expected to rise almost 8% from 2010-11 to 8.2 million tons as higher plantings--though "still below the expected production level suggested by seeding intentions"--and better yields aid output.
Corn exports are expected to be above average, despite a 5% fall in production due to the poor plantings, although they are expected to almost halve from the historic highs reached in 2010-11, the USDA added.
The Andersons 2Q Profit Soars As High Prices Boost Grain Storage (Source: CME)
The Andersons Inc. reported second-quarter earnings jumped nearly 80% on sharply higher grain prices that benefited its storage business. The results easily beat analyst expectations, and the Maumee, Ohio-based company's stock was up 7.2%, to $41.25 in after-hours trade. The company said strong gains in basis, or the difference between cash grain prices and futures, came earlier in the year than expected and helped fuel the earnings growth. Cash prices for corn surged above futures during the quarter as worries about near-term supplies grew, increasing the competition for supplies. This trend was especially pronounced in Indiana and Ohio, where the company has several of its facilities. Meanwhile, wheat storage rates during the period were four times higher than a year ago, BB+T Capital Markets said in a recent research note.
For the quarter, the company reported earnings of $45.2 million, or $2.42 per share, up from $25.2 million and $1.36 per share a year ago. Revenue totaled $1.3 billion. Analysts polled by Thomson Reuters had forecast earnings of $1.72 per share on revenue of $1.1 billion. The second quarter is typically a good one for The Andersons, but Chief Executive Mike Anderson said this year's results were especially strong "due to the significant and accelerated grain basis income." The ethanol producer and grain handler said earnings in its grain and ethanol group jumped to $45.3 million from $19.6 million. Its ethanol profits climbed 41%, to $8.8 million, as higher ethanol prices drove increased revenues. The company also reported increased profits in its fertilizer distribution business.
The Andersons' plant nutrient group, which includes fertilizer formulation and distribution, saw earnings climb to $24.1 million, up from $19 million the prior year, thanks to increased margins driven by strong global demand. The company managed the higher profits despite a very late planting season in Ohio and Indiana that had prompted worries that farmers would have a limited opportunity to apply fertilizer.
Oklahoma Suffers Up To $2.2 Billion In Farm Losses From Drought (Source: CME)
Oklahoma has suffered $1.6 billion to $2.2 billion in agricultural losses this year from a relentless drought baking the southern Plains, according to a preliminary estimate issued. The estimate, calculated by Oklahoma State University professor and livestock marketing specialist Derrell Peel, includes damage to crops and cattle. The losses account for about one-third of the state's annual agricultural production value, Peel said. "All of our summer crops are going to be severely reduced and in some places completely eliminated," he said. Farmers across Oklahoma saw their wheat harvests devastated by heat and dryness. The U.S. Department of Agriculture estimates the size of the crop, which was harvested this spring and earlier this summer, dropped by 38% from last year to 74.8 million bushels. Cotton, peanut, corn, soybean and sorghum crops will be harvested this autumn. They have all been ravaged by the drought, which has persisted for 10 months.
"For this growing season, it doesn't matter whether it rains or not. The damage is done," Peel said. Livestock producers have had to send cattle to slaughter earlier than usual because of a lack of hay and water, creating an increase in near-term beef supplies. Yet, the drought will likely tighten cattle supplies over the next several years because farmers are slaughtering the cows they normally would keep alive to produce the next generation, Peel said. Texas and Kansas also have suffered heavy farm losses from the extreme heat and dryness. In Texas, state data show since the drought began in October, it has been the driest 10 months since records were kept by at least an inch of rain. Forecasters see little relief in sight, with Texas State Climatologist John Nielsen-Gammon saying the weather "looks dry for at least the next month."
Wheat, Corn Decline as Global Economic Recovery Concern Dampens Demand (Source: Bloomberg)
Wheat extended losses after plunging by the most in five weeks and corn dropped for a third day on speculation that the global economy is faltering, hurting demand for grains used in food, livestock feed and fuel. Wheat futures for December delivery dropped as much as 2 percent to $7.1075 a bushel on the Chicago Board of Trade before trading at $7.1425 at 9:10 a.m. Singapore time. Yesterday, they lost 3.3 percent, the biggest drop since June 30. The most- active contract has decreased 9.5 percent this year. “Markets seem to be increasing their bets that the U.S. economic recovery indeed turns negative,” Luke Mathews, commodity strategist at Commonwealth Bank of Australia, said by phone from Sydney today. “As long as this wider risk-aversion persists, we think that grain markets are susceptible to further selling pressure.”
U.S. Wheat Prices Decline as Cheap Russian Grain May Reduce U.S. Exports (Source: Bloomberg)
Wheat futures dropped the most in five weeks on signs that importers favor cheaper Russian grain, reducing demand for supplies from the U.S., the world’s top exporter. Egypt, the largest importer, bought 180,000 metric tons from Russia in a tender today at $261.94 and $262.50 a ton. As of July 22, U.S. soft wheat for export traded at $275.30 a ton. On July 1, Russia lifted a ban on grain shipments imposed after a drought damaged last year’s crop. “Russia is playing the game of dumping their wheat in the export market, and U.S. exports are going to struggle,” Darrell Holaday, the president of Advanced Market Concepts in Wamego, Kansas, said in a telephone interview. “At these prices, I’m not optimistic.”
Corn, Soybeans, Wheat May Open Lower as Global Demand Ebbs, Dollar Rallies (Source: Bloomberg)
What follows are opening calls for U.S. grain and oilseed markets.
-- Corn futures are called to open 10 cents to 12 cents a bushel lower on the Chicago Board of Trade on speculation that the U.S. recovery is faltering, reducing global demand for grain to make animal feed, fuel and food, Don Roose, the president of U.S. Commodities Inc in West Des Moines, Iowa, said in a telephone interview.
-- Soybean futures may open 13 cents to 16 cents a bushel lower in Chicago on speculation that rain in the next 10 days will revive Midwest crops after a July heat wave, Roose said. The dollar’s rally may erode the appeal of U.S. exports, he said. Soybean-oil futures are expected to open down 0.3 cent to 0.5 cent a pound, and soybean-meal futures may open $2 to $3 lower for 2,000 pounds.
-- Wheat futures may open 10 cents to 12 cents a bushel lower on the CBOT, the Kansas City Board of Trade and the Minneapolis Grain Exchange on the greenback’s advance against major currencies, Roose said.
CE sugar, coffee rise, eyes on Brazil weather
LONDON, Aug 4 (Reuters) - ICE coffee and sugar futures rose as frost warnings for a Brazilian state supported both markets, while cocoa was also higher. Raw sugar futures rose, consolidating after choppy trading in recent sessions, as uncertainty over top producer Brazil's crop remained.
Indonesia says will not issue more sugar import permits in 2011
JAKARTA, Aug 4 (Reuters) - Indonesia, Southeast's Asia biggest sugar consumer, will not issue any additional import permits for raw or white sugar in 2011, Trade Minister Mari Pangestu told Reuters on Thursday.
Last month, the Indonesian Sugar Council (DGI) said the country may not import white sugar next year, given that its year-end inventory is expected to reach more than 1 million tonnes, above a safe level of 800,000 tonnes.
Brazil Bahia cocoa mid crop may have past peak
BRASILIA, Aug 3 (Reuters) - Cocoa deliveries to traders and grinders from Brazil's main cocoa state Bahia slipped in the last week, data from Bahia Commercial Association showed, in a possible indication that the harvest has now peaked.
Bahia-based cocoa analyst Thomas Hartmann said that the flow of cocoa from other states continued at a steady pace and that new areas in Para state in the north planted as part of a family agriculture program, were starting to bear pods.
Peru coffee exports jump 81 pct in value
LIMA, Aug 3 (Reuters) - Revenues from Peruvian coffee exports jumped 81 percent in the first half of 2011 from the same period a year earlier due to high international prices, the country's national council of coffee producers said on Wednesday.
If prices paid for coffee beans on international markets remain high, exports could be worth $1.2 billion in 2011, topping the record $860 million earned in 2010, Council President Cesar Rivas said in a statement.
New frost warning for small Brazil coffee state
BRASILIA, Aug 3 (Reuters) - Small coffee state Parana, which produces roughly 5 percent of Brazil's coffee, could face frost in the early hours of Thursday, forecaster Somar predicted, but the likelihood of significant crop damage is minimal.
Somar said the northern part of Parana, where much of the state's coffee is concentrated, said minimum temperatures would hit 1 Celsius in the early hours of Thursday and said the frost risk was "low" versus nil for other coffee-producing states.
India monsoon rains seen reviving next week-sources
NEW DELHI, Aug 3 (Reuters) - India's monsoon rains may revive over central and north India next week, weather officials said on Wednesday, setting aside fears of a third straight week of poor rainfall hitting output prospects for summer planted crops such as cane and cotton.
The monsoon, essential for the 60 percent of the country that does not have irrigation, was below normal in the last week of July, particularly due to poor rains over the rice growing areas of eastern India.
Uganda drought sparks sugar shortages, price hikes
KAMPALA, Aug 3 (Reuters) - Drought and a temporary closure of Uganda's second biggest raw sugar producer have caused severe shortages of the commodity in the east African nation, forcing prices to double, a senior industry official said on Wednesday.
The supply crunch has forced supermarkets in Kampala, the capital, and other major towns to start rationing the sweetener while some traders have been by members of the public and government accused of hoarding stocks and escalating the crisis.
Vietnam raises 2011 rubber, pepper export forecasts
HANOI, Aug 3 (Reuters) - Vietnam has raised its 2011 export forecasts for rubber and black pepper, citing additional rubber supply and good prices of the spice, the Agriculture Ministry said.
It forecast rubber export for calendar 2011 at 834,500 tonnes, compared with an earlier estimate of 833,700 tonnes and an industry target of 827,000 tonnes, the farm ministry said in a monthly report seen on Wednesday.
POLL-Brent premium to US oil to widen in next year
LONDON/NEW YORK/HOUSTON, Aug 4 (Reuters) - The record divergence of the two global crude oil price benchmarks, U.S. crude and Brent, is likely to widen further, having shocked hedge funds, roiled airlines and handed a bounty to some refiners since last year, a Reuters poll showed.
In the poll of 29 physical crude traders, bank analysts, refiners and hedge fund managers, 69 percent said Brent's premium to U.S. crude could surge past $30 a barrel at some stage in the next 12 months, with almost half of those predicting it could hit $40 a barrel or above.
OIL-Oil hits 4-week low on debt, demand concerns
LONDON, Aug 4 (Reuters) - Brent oil dived a dollar to its lowest in a month as sovereign debt mountains and economic pain threatened to dent fuel demand, while Japan's intervention to stem the rise in the yen boosted the U.S. currency.
"It's all about macroeconomics for the next five days basically," said Olivier Jakob of Petromatrix.
Oil Wipes Out 2011’s Gains on Signs Recovery Stalling (Source: Bloomberg)
Oil fell to the lowest level in five months in New York, erasing 2011 gains amid growing evidence the U.S. economic recovery is stalling and sapping demand in the world’s biggest consumer. Futures dropped 5.8 percent as a U.S. government report showed limited improvement in the labor market. The Dollar Index gained as much as 1.5 percent, curbing commodities’ appeal as an alternative investment, and the MSCI All-Country World Index of stocks slid 3.9 percent. “What you’re looking at here is concerns about what demand is going to be doing because of the economy,” said Adam Sieminski, chief energy economist at Deutsche Bank AG in Washington. “The result of all this could be slower growth and the result of slower growth is less oil demand.”
Oil Erases 2011’s Gains on Economy Concern (Source: Bloomberg)
Crude oil wiped out all of its gains for 2011 and natural gas closed below $4 for the first time since March in New York as concern the global economy is weakening sent raw materials prices tumbling around the world. Twenty-one of the 24 commodities on the Standard & Poor’s GSCI Index declined slipped as a rout in equities drove the Standard & Poor’s 500 Index to its worst nine-day slump since March 2009. Silver dropped 5.6 percent, gold retreated from a record and wheat slumped the most since June. “There’s a lot of pessimistic news on the macro-economic front and that’s hitting commodities,” said Michael Wittner, the head of oil-market research at Societe Generale SA in New York and the fourth-most-accurate forecaster for West Texas Intermediate oil among 26 analysts ranked by Bloomberg in the past eight quarters. “If the economy continues to slow, demand for oil will take a hit.”
Oil Heads for Biggest Weekly Decline Since May, Wiping Out Gains for Year (Source: Bloomberg)
Oil fell in New York, heading for the biggest weekly decline in three months and wiping out its gain for the year, on speculation fuel demand will falter as the U.S. economy weakens and the European debt crisis worsens. Futures dropped as much as 1.1 percent after slumping 5.8 percent yesterday. U.S. consumer confidence slid to the lowest in more than two months, a report showed. Italian and Spanish bonds surged to records amid speculation Europe will fail to contain its sovereign-debt crisis. Labor Department data today may show the U.S. failed to create enough jobs in July to reduce unemployment. “The market is nervous, people are panicking,” said Jonathan Barratt, a managing director of Commodity Broking Services Pty in Sydney, who predicts oil in New York will average $100 a barrel this year. “Everyone is liquidating and moving into cash and that’s understandable because every other commodity market is under pressure.”
Fifth UK Forties oil cargo delayed in August
LONDON, Aug 4 (Reuters) - A fifth cargo of North Sea Forties crude has been delayed in August, trade sources said on Thursday, reflecting the impact of production problems at the largest UK oilfield, Buzzard.
Nexen's F0815 cargo scheduled to load on Aug. 27-29 will be deferred by three days, they said. This is the fifth August-loading shipment to be delayed, according to a Reuters tally.
Reduced output at Nexen's Buzzard field in the North Sea has led to delays in the Forties loading programme since May.
Oil demand growth slows as economy falters-BarCap
LONDON, Aug 4 (Reuters) - Barclays Capital has cut its estimates of world oil demand growth for this year and 2012 to reflect a slower expansion of the global economy, and particularly a slowdown in the United States.
The investment bank, which has been one of the most bullish forecasters of oil prices this year, now sees global oil demand increasing by 1.1 million barrels per day (bpd) this year to 88.68 million bpd.
Brent crude falls to 4-week low as dollar rallies
SINGAPORE, Aug 4 (Reuters) - Brent crude dropped to a one-month low on Thursday after Japan intervened to stem the rise in its yen currency, sending the dollar soaring as investors steered clear of riskier assets, including commodities.
Worries about slowing global growth and Europe's worsening debt crisis dampened investor enthusiasm, after a tentative comeback in risk appetite that gave a modest boost to Asian shares.
U.S. crude oil, product inventories rise
NEW YORK, Aug 3 (Reuters) - U.S. crude oil inventories rose last week, in line with forecasts, while gasoline stocks rose more sharply than expected, according to the Energy Information Administration on Wednesday.
Domestic crude oil stocks for the week ending July 29 rose 950,000 barrels, compared with a forecast for a 900,000 barrel build, the report showed.
Oil demand growth forecasts cut as economies slow
LONDON, Aug 4 (Reuters) - A sharp slowdown in economic growth, particularly in the United States, is hitting consumers and companies and forcing economic forecasters and analysts to slash estimates for global oil demand.
In a report to be published in the next few days, Barclays Capital has cut its estimates of world oil demand growth for this year and 2012 to reflect the dramatic slowdown in the United States and elsewhere.
Copper Falls Most in 10 Weeks as Slower Economic Growth May Reduce Demand (Source: Bloomberg)
Copper futures fell the most in 10 weeks on signs that the global economic recovery is stalling, damping the outlook for commodity demand. The MSCI All-Country World Index, a measure of global equities, has dropped more than 10 percent from this year’s high in May. U.S. initial jobless claims fell last week to a level indicating limited improvement in the labor market. The Thomson Reuters/Jefferies CRB Index of 19 raw materials fell, erasing this year’s gain. “Sentiment has taken its turn for the worse,” Gayle Berry, an analyst at Barclays Capital in London, said in a telephone interview. “The markets are worried about what the implications of fiscal austerity mean for the trajectory of economic growth, and therefore for metal demand.”
METALS-LME copper up on Chile strike, short covering
SHANGHAI, Aug 4 (Reuters) - LME copper rose on Thursday, fuelled by continued supply fears and short-covering as it recovered from three-week lows struck the previous day after data on the U.S. services sector and factory orders disappointed markets.
Remarks by a former U.S. Federal Reserve official on Wednesday urging serious consideration to further monetary easing in the United States also helped lift sentiment.
PRECIOUS-Gold pares gains on dollar rally; debt, growth fears support
SINGAPORE, Aug 4 (Reuters) - Gold, pressured on Thursday by a surging dollar as Japan intervened to rein in its currency, scaled back earlier gains but remained firmly supported by worries about the widening euro zone debt crisis and slowing global growth.
"Gold seems to have wings at the moment as there are lots of macro and sovereign debt uncertainties," said David Thurtell, an analyst at Citigroup.
Gold Declines From Record as Equity Rout Spurs Metal Sales; Silver Tumbles (Source: Bloomberg)
Gold futures fell from a record $1,684.90 an ounce as some investors sold the metal to cover losses in other markets. Silver posted the biggest drop in almost three months. The MSCI World (MXWO) Index of equities has dropped 12 percent from this year’s May peak. The yen tumbled the most since 2008 versus the dollar as Japan intervened to drive down its currency. The euro fell against the greenback as the European Central Bank offered banks additional cash amid the debt crisis. Treasury two-year note yields plunged to a record. “A lot of people are being forced to exit their equity positions, and they’re turning to gold to cover their losses,” said Matthew Zeman, a strategist at Kingsview Financial in Chicago, said in a telephone interview.
