Corn
US corn futures end higher, with December settling at a new high, as the market continues to factor in potential crop losses while attempting to find price levels that will cool demand for new-crop inventories projected to dwindle down to precariously low levels. But John Kleist at ebottrading.com notes the market was unable to expand on early highs as traders await government crop ratings for signals on production potential while traders are cautious about pushing prices amid an uncertain global economy. CBOT December corn ends up 5 1/2c at $7.20/bushel.
Wheat
US wheat futures rose, climbing on fresh export demand and spillover support from neighboring corn futures. The announcement of a weekend sale of U.S. wheat to Saudi Arabia and news of Algeria buying wheat in world markets was a supportive feature, analysts say. The demand shows prices had reached levels that were spurring fresh buying. However, advances were limited by concerns the market could not sustain demand with prices extending higher, analyst add. CBOT Sept wheat was up 10c at $7.12 1/2/bushel, KCBT Sept wheat end up 15c at $8.11, and MGEX Sept wheat end up 11 1/2c at $8.72 3/4.
Rice
US rice futures finish higher, retracing losses sustained following last week's surprising increase in inventories forecast by USDA. The dominant factor in the market is weather and its impact on crops. Lingering uncertainties about how much August heat will hurt crops in the southern US was enough to rekindle buying, as traders add risk premium to prices, analysts say. CBOT Nov rice end up 23 1/2c or 1.4% at $17.36 1/2/hundredweight.
Funds Slash Commodity Bets by Most in 18 Months on Economic-Growth Concern (Source: Bloomberg)
Funds reduced bets on rising commodity prices by the most in any week since February 2010 on mounting concern that a weakening global economy will slow demand for raw materials. In the week ended Aug. 9, speculators cut their net-long positions in 18 commodities by 19 percent to 989,110 futures and options contracts, government data compiled by Bloomberg show. Copper holdings plunged 61 percent, the most since June 2010, and bullish gold bets fell to a five-week low. The Standard & Poor’s 500 Index slumped 13 percent in the three weeks ended Aug. 11. About $2.3 trillion was erased from U.S. equity values over the period amid Europe’s debt crisis, speculation that the economy is slowing and S&P’s downgrade of the government’s AAA credit rating. The benchmark gauge for U.S. shares dropped to within 11 points of a bear market.
US Farm Income, Spending Under Pressure
Extreme weather and rising feed and fuel costs across the U.S. Midwest crimped spending on farm equipment during the second quarter, according to a Federal Reserve survey published. Bankers canvassed by the Kansas City Federal Bank also predicted a slowdown in purchases of tractors and other equipment after farmers upgraded their machinery at the end of last year, though the land values that have underpinned investment continue to rise. The quarterly survey suggests expectations that U.S. farm receipts could hit a record this year may be revised downward after farm income and capital spending fell for the first time in three quarters. Though crop prices remain at elevated historical levels, last week's commodity sell-off was the sharpest in a year and the impact on suppliers will be closely scrutinized Wednesday when Deere & Co. (DE), the world's largest farm equipment maker by revenue, reports fiscal third-quarter earnings.
Soaring crop and livestock prices have helped U.S. farmers repair balance sheets and spurred record sales of tractors, tillers and other equipment, particularly the powerful machines in which Deere specializes. The company forecast in May that total cash receipts for the 2010-11 U.S. harvest could hit a record $371.4 billion, but many analysts have since cut their own outlooks. The U.S. Agriculture Department will update its own outlook at the end of the month. The combination of drought and floods has made some farmers more reliant on crop insurance and government payments to supplement income, while the Kansas City Fed noted an uptick in loan demand, with banks offering easier terms to win business after a weak period of lending demand. Cropland values in the heart of the Great Plains still climbed 20% in the second quarter versus a year earlier, despite the weather impact.
Values of both cropland and ranchland edged up modestly from the prior quarter, the bank said in its quarterly survey of agricultural credit conditions. Ranchland in the bank's district, which includes Nebraska, Kansas, Oklahoma, Colorado, Wyoming and parts of New Mexico and Missouri, was up 11% from a year earlier. Gains were greatest in Nebraska, which saw non-irrigated farmland values jump 30% from a year earlier, while Kansas posted a 21% jump. Meanwhile Oklahoma, which has been hit harder by this year's drought, saw cropland climb 10.5% from a year earlier and ranchland climb 6.4%. Drought strengthened its grip on the district during the quarter, particularly in southern areas, where it hurt the wheat crop and prompted ranchers to liquidate cattle herds as suitable grazing land withered away. One silver lining for landowners in drought-stricken areas: land lease revenues from energy exploration will support farmland values, "particularly in Oklahoma and the mountain states," the K.C. Fed said.
Farmland values across the nation's mid-section, from the Dakotas to Indiana, have soared during the past year along with crop prices, which have rallied thanks to disappointing crops and relentless global demand. The K.C. Fed said three-quarters of respondents expected farmland values to level off in the coming months, but that most "expected that strong demand for farmland and tight supplies would keep prices elevated near current levels." The jump in land values across the Midwest has prompted some concern about a potential bubble, particularly within the K.C. Fed, which has said prices could drop substantially once the Federal Reserve raises interest rates. That particular concern has been pushed back after the Fed said last week it was unlikely to raise its core interest rate until mid-2013.
German 2011 Grain Harvest Seen Down 8.3% On Year - DRV
Germany's grain harvest for 2011 is expected to fall 8.3% on the year, compared with the previous forecast of a 6% drop, agricultural association Deutsche Raiffeisenverband said, as dry weather during the early summer hit cereal and rapeseed harvest. DRV expects the 2011 grain harvest to be 40.3 million metric tons, down from the previous forecast of 41.2 million tons, and 44.0 million tons last year. Together with dryness, torrential rains disrupted harvesting time and endangered the quality of the harvest constantly, the association said. It is particularly concerned with the situation in the Northern and north-eastern region of Germany, where rain has brought harvesting to a standstill, adding to a significant loss to quality with an increase in the proportion of wheat feed in the fields, the association said.
The rapeseed harvest is expected to be around four million tons, compared with a previous expectations of 4.3 million tons. Last year rapeseed harvest amounted to 5.7 million tons. Germany's DRV is an umbrella organization including all of Germany's agricultural and food management cooperatives, to which nearly all farmers, horticultural businesses and wine growers belong.
Rice Poised to Rise With Thailand Imposing Curbs as U.S. Crop Shrinks 20% (Source: Bloomberg)
The smallest increase in rice stockpiles in five years means global grain inventories will extend a decline that already drove food costs to a record. Combined global stores of wheat, corn and rice will drop 2.5 percent to a four-year low as farmers fail to keep pace with demand, the U.S. Department of Agriculture estimates. Rice prices will rise more than 20 percent by December as inventories expand 1.1 percent, compared with a 29 percent gain in the past four years, a Bloomberg survey of 13 millers and traders showed. While wheat and corn prices as much as doubled last year, rice retreated as the United Nations’ global food-inflation index jumped 25 percent. Rice advanced 15 percent since May, potentially worsening the lives of the 1.1 billion the World Bank says live on less than $1 a day. Wheat fell 20 percent since the middle of February on prospects for a bigger crop.
Wheat extends rally on strong demand, corn at 2-week top
SINGAPORE, Aug 15 (Reuters) - Chicago wheat jumped more than 1 percent, building on last week's rally as strong demand led by Saudi Arabia and concerns over the U.S. spring wheat crop propelled the market.
"Fundamentally, the wheat market is supported by Saudi Arabia taking a large chunk of U.S. wheat over the weekend, which is in addition to big purchases Algeria announced earlier," said Luke Mathews, commodity strategist at Commonwealth Bank of Australia.
Philippines sees H2 rice output up 6.2 pct yr/yr
MANILA, Aug 15 (Reuters) - The Philippines' unmilled rice output in the second half is forecast to rise 6.2 percent from a year earlier to 9.72 million tonnes, with the full-year production seen at 17.29 million tonnes, slightly lower than earlier forecasts, the government said on Monday.
Rice production in July to September alone was expected to reach 3.21 million tonnes, up 21.3 percent from a year earlier, the agricultural statistics office said in a report on its website.
Philippine H1 farm output up 5.48 pct, reverses yr-ago fall
MANILA, Aug 15 (Reuters) - Philippine farm output grew 5.48 percent in the first half of 2011 from a year earlier, higher than government forecasts, led by a 14.5 percent increase in rice production, data from the Bureau of Agricultural Statistics showed on Monday.
Agriculture Secretary Proceso Alcala said last week annual farm output in January to June was likely to be more than 4 percent, thanks to good weather.
N.Korea imports more volume of cheaper grains-S.Korean report
SEOUL, Aug 14 (Reuters) - Destitute North Korea imported more stocks of relatively cheaper food grains from China during the first half of this year than in the same time of 2010, apparently due to a lack of foreign reserves, a South Korean analysis report said on Sunday.
North Korea's imports of corn and flour from China in the six-month period accounted for 38.2 percent and 37.5 percent, respectively, of the overall grain purchase from the neighbouring country, compared with 16.9 percent for rice and 7.2 percent for beans, the South's Yonhap news agency quoted the report from the state-funded Korea Rural Economic Institute (KREI) as saying.
Vietnam's Mekong Delta expects high floods in 2011, boost for rice
HANOI, Aug 13 (Reuters) - Seasonal floods this year in Vietnam's Mekong Delta are expected to rise to the highest level in nine years, a state-run newspaper said on Saturday, which could help boost rice output in the world's second-largest exporter of the grain.
High floods on the Mekong river that runs from the Tibetan plateau through China, Laos, Thailand, Cambodia and Vietnam would bring fertile soil much needed for rice plants in the Mekong Delta.
Argentine wheat thriving on moist soils- gov't
BUENOS AIRES, Aug 12 (Reuters) - Argentine 2011/12 wheat is flourishing thanks to good soil moisture and favorable weather in many growing regions, the Agriculture Ministry said on Friday in its weekly report.
Argentina is a top global wheat exporter and Brazil is its biggest market.
Tight corn supplies provide opportunity for Brazil
GOIANIA, Brazil, Aug 12 (Reuters) - Brazil has a golden opportunity to expand corn production as world supplies grow tighter and as improved technology boosts yields of the cereal, specialists at an agribusiness fair said on Friday.
Export opportunities are opening up with a smaller-than-expected harvest in the world top grower, the United States, since few other major producers can respond to strong demand driven by growing meat consumption.
Italy 5-month wheat imports down, maize up -Anacer
MILAN, Aug 12 (Reuters) - Imports of wheat into Italy, a major grain buyer in Europe, fell in the first five months of 2011 year-on-year, while imports of maize jumped 30.6 percent, industry body Anacer said on Friday.
Imports of soft wheat fell 1 percent to 1,910,442 tonnes in the January-May period, while imports of durum wheat used for making pasta fell 6.6 percent to 735,313 tonnes from 787,203 tonnes, Anacer said in a statement.
Ukraine 2011 wheat, barley harvests almost complete
KIEV, Aug 12 (Reuters) - Ukrainian farmers have almost completed the 2011 wheat harvest, threshing 22.6 million tonnes of the commodity bunker weight from 98 percent of the sown area as of August 12, the Farm Ministry said on Friday.
The ministry said in a statement that farms had also harvested 9.3 million tonnes of barley from 98 percent of the sown area.
Crop disease to push Indonesia cocoa exports down 40 pct-group
JAKARTA, Aug 15 (Reuters) - Cocoa exports from Indonesia may slump almost 40 percent this year as a fungal disease wrecks crops in the world's third-largest cocoa producer, the Indonesian Cocoa Association (Askindo) said on Monday.
The latest estimate is sharply higher than the association's previous forecast of a 12.5 percent fall in cocoa exports from Southeast Asia's largest economy.
India allows further 500,000 T sugar exports-minister
NEW DELHI, Aug 12 (Reuters) - India has decided to allow another 500,000 tonnes of unrestricted sugar exports, a government minister said on Friday, which would come on top of one million tonnes of shipments allowed so far this year.
Science and Technology Minister Vilasrao Deshmukh announced the decision for exports under the Open General Licence (OGL) scheme after a meeting of a panel of ministers which is empowered to decide on the issue.
Asia sugar surplus strains prices, eyes on China
Manila, Aug 12 (Reuters) - Bumper sugar harvests in Thailand, India and the Philippines are tilting the global balance into surplus, sparking fierce competition and piling pressure on prices as fears over a slowdown in the world economy knocked futures off highs.
New York raw sugar futures have slid more than 11 percent since hitting a five-month high at 31.68 U.S. cents in late July, weighed down by fears of a global recession, although worries about lower output in Brazil cushioned the fall.
Cameroon cocoa output hits record
YAOUNDE, Aug 12 (Reuters) - Cocoa production in Cameroon, the world's fifth largest grower, hit a record 236,701 tonnes during the 2010-11 season, according to preliminary figures released by the state agricultural regulator on Friday.
The bumper crop adds to record volumes from other top producers in West Africa like Ivory Coast and Ghana that promises to swell global stockpiles of the bean, the raw ingredient in chocolate.
Australian farmers want land protected from miners
CANBERRA, Aug 15 (Reuters) - Australian farmers demanded greater protection against coal seam gas miners eyeing their land for exploration as a political fight surrounding the $70 billion gas industry on Monday threatened to splinter the surging conservative opposition.
After months of tensions between farmers and miners over rapid expansion of the potentially lucrative industry across prime agricultural land, the influential Greens party called for new laws to give farmers stronger rights to keep coal seam exploration rigs off their land.
Euro Coal - Prices up $1 on firmer buying
LONDON, Aug 12 (Reuters) - Prompt physical coal prices rose around $1 on Friday, help by fresh buying and more positive sentiment on the wider oil market.
Oil was up above $108 a barrel on Friday, as equity markets strengthened and U.S. retail sales painted an encouraging picture for demand in the world's biggest oil consumer.
Colombia coal output up 0.5 pct in Q2-regulator
BOGOTA, Aug 12 (Reuters) - Coal production in Colombia, the world's No. 4 coal exporter, rose a paltry 0.5 percent in the second quarter to 20.3 million tonnes versus the same period last year, the country's mining regulator said on Friday.
Colombia's coal industry is dominated by big thermal producers with their own port and rail facilities such as Glencore, Drummond and Cerrejon, which is owned equally by BHP Billiton , Anglo American and Xstrata .
Crude Oil Falls as Investors Speculate Slowing Economy to Sap Fuel Demand (Source: Bloomberg)
Oil dropped from the highest in almost two weeks in New York as investors bet that signs of a slowing global economy indicate fuel demand will falter in the world’s biggest crude-consuming nation. Futures slid as much as 0.7 percent today before reports which may show U.S. housing starts and building permits fell in July and European growth eased last quarter. Manufacturing in the New York region unexpectedly contracted in August for a third month, a report yesterday showed. “The U.S. economy is a little bit weaker than any of us were expecting at this time of the year and a lot of the indicators out of Europe have been weak as well,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne, who predicts oil in New York will average $93 a barrel in the third quarter. “We all knew that it was going to take a long time for these areas to get back on their feet and there would be this lull in activity after all the stimulus had washed out.”
Brent edges up above $108 as risk aversion eases
LONDON, Aug 15 (Reuters) - Oil rose on Monday after data from the United States and Japan helped ease worries over a looming recession, encouraging investors back into riskier assets.
"This week could be relatively calm after all the frenzy of the last few weeks," said Eugen Weinberg, head of commodities research at Commerzbank in Frankfurt. "But it is much too early to call this a bottom to the market."
Iran sees return to normal oil exports to India in August -Fars
TEHRAN, Aug 14 (Reuters) - Iran hopes oil deliveries to India will return to a normal level now a long-running payment problem has been resolved, the head of international affairs at the National Iranian Oil Co. said in an interview published on Sunday.
Talking to the semi-official Fars news agency, Mohsen Ghamsari, confirmed that all Indian customers had started to pay debts that had built up over the year and said if there had been a slowdown in supply in August due to the dispute, that was now over.
Iron Ore-Shanghai rebar extends gains to 4th day, to buoy ore
SINGAPORE, Aug 15 (Reuters) - Shanghai rebar futures rose for a fourth straight day on Monday to their highest in more than a week, spurred by expectations of firm demand in top consumer China.
Hopes that Chinese steel demand will stay strong ahead of the peak consumption season from mid-September should renew interest among mills to restock iron ore, the key steelmaking material, this week and boost prices that had dropped for most of last week.
ALUMINIUM-Major market developments in July
LONDON, Aug 12 (Reuters) - Aluminium prices made gains in July only to fall sharply in early August as global demand concerns weighed, and while further falls are possible near term, the threat to supply from higher cost producers may lend support.
"Prices where they are mean around 10 percent of the aluminium industry is losing money on a cash cost basis," said Nick Moore, global head of commodity strategy at RBS Global Banking and Markets
Chile Codelco sees lower 2011 output, higher profits
SEWELL CAMP, Chile, Aug 12 (Reuters) - Output at the world's top copper producer, Chile's Codelco, could fall below initial 2011 estimates, but higher prices for the industrial metal are expected to boost this year's profits, top executives said on Friday.
State copper giant Codelco will likely post a bigger profit this year than in 2010, Chairman Gerardo Jofre said at Sewell Camp near the El Teniente deposit. He said output might be under the latest 1.7 million tonne estimate for 2011.
Chile Codelco sees lower 2011 output, higher profits
SEWELL CAMP, Chile, Aug 12 (Reuters) - Output at the world's top copper producer, Chile's Codelco, could fall below initial 2011 estimates, but higher prices for the industrial metal are expected to boost this year's profits, top executives said on Friday.
State copper giant Codelco will likely post a bigger profit this year than in 2010, Chairman Gerardo Jofre said at Sewell Camp near the El Teniente deposit. He said output might be under the latest 1.7 million tonne estimate for 2011.
METALS-Copper steady, Japan data, soft dollar support
Aug 15 (Reuters) - Copper was steady on Monday, supported by glimmers of economic resilience in Japan, a drawdown in inventories of the metal, and a softer dollar, but investors were wary after wild market swings last week.
Copper for three-month delivery on the London Metal Exchange (LME) was down less than a percent at $8,860 per tonne from Friday's $8,865 close.
Soros, Mindich Cut Stake in SPDR Gold Holding as Cohen’s SAC Adds Options (Source: Bloomberg)
George Soros, Eric Mindich and Scout Capital Management LLC cut their holdings in SPDR Gold Trust as prices rallied to a record during the second quarter, while Steven A. Cohen’s SAC Capital Advisors LP bought options on the exchange-traded fund, government records show. Soros Fund Management LLC held 42,800 shares of SPDR Gold Trust as of June 30, compared with 49,400 at the end of the second quarter, the filing yesterday with the U.S. Securities and Exchange Commission showed. Mindich’s Eton Park Capital Management LP reduced its stake to 813,000 shares from 2.328 million, a separate filing showed. SAC Capital purchased call options linked to the SPDR Gold Trust valued at $627.7 million.
Gold prices have surged 45 percent in the past year, touching a record $1,817.60 an ounce in New York last week, as Europe’s debt crisis and the prospect of a global economic slowdown boosted demand for the metal as a haven. Some investors may have sold the metal amid the financial turmoil, according to James Dailey of TEAM Financial Management LLC.
40 years on from gold standard, bugs crow
LONDON, Aug 11 (Reuters) - Gold, and only gold, will be our salvation when the value of companies, banks, countries and even money itself melts away. Gold, not shifting currencies, is the foundation of wealth and security. Gold is back, for good.
This is the song of the "gold bugs" - the fervent fans of the precious metal who have clung to its investment value for three generations and now glow in the reflected lustre of a record price approaching $2,000 for just one ounce.
PRECIOUS-Gold extends losses as stock markets recover
LONDON, Aug 15 (Reuters) - Gold prices eased for a third session on Monday as stock markets and cyclical assets like industrial commodities continued to recover from the rout they suffered early last week, diverting investment away from the precious metal.
Gold hit a record $1,813.79 an ounce on Thursday and posted its biggest weekly gain since April 2009 as European stock markets fell to two-year lows, hit by concerns over euro zone debt levels. Investors flocked to gold as a haven from risk.
Baltic index up for 3rd day, eyes more modest gains
LONDON, Aug 12 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, rose for a third day on Friday with iron ore and coal cargo activity providing support.
Brokers said the spectre of growing financial turmoil, tighter bank financing and rapid fleet growth would keep dry bulk freight rates under pressure in the coming months.
