No inflation respite for Asia despite fall in food, fuel prices
NEW DELHI, Oct 4 (Reuters) - Anyone hoping that recent falls in commodity prices would provide a boost to powerhouse Asian economies and help lift the developed world out of recessionary danger will be disappointed. The region's focus remains firmly on inflation.
Commodities from crude to corn have slid in the last quarter, with many showing the most dramatic losses since 2008, when Lehman Brothers collapsed. The turnaround follows sharp gains earlier in 2011 when investors flocked to commodities on signs of strengthening economies.
Commodities Extend Slump to 10-Month Low, Led by Metals, on Europe’s Woes (Source: Bloomberg)
Commodities declined, extending a slump to a 10-month low, on concern that demand for energy, metals and crops will decline as Europe’s escalating debt woes choke the global economy. Goldman Sachs Group Inc. cut its global growth forecasts and predicted recessions in Germany and France. European governments hinted that bondholders may be saddled with bigger losses on Greek debt. The Standard & Poor’s GSCI index of raw materials has dropped 24 percent from a 32-month high in April. “We are seeing continuing pressure across the commodities complex from these concerns about the global growth prospects,” said Michael McCarthy, a chief market strategist at CMC Markets Asia Pacific Pty Ltd. in Sydney. “The markets are universally bearish.”
US corn, soy fall on recession fears, supply pressure
SINGAPORE, Oct 4 (Reuters) - Chicago corn slid 0.7 percent, while soy fell around half a percent amid growing fears of a global recession and a rapidly progressing U.S. harvest that is ensuring ample supplies.
"From a fundamentals perspective the market is looking to see at what point this pullback in prices starts to simulate demand," said Brett Cooper, senior manager of markets at FCStone Australia.
INTL FC Stone raises US 2011 corn yield by 1.6 pct
CHICAGO, Oct 3 (Reuters) - Commodity brokerage firm INTL FC Stone on Monday said it had raised its forecast of the U.S. 2011 corn yield to 148.7 bushels per acre (bpa), up 1.6 percent from its previous estimate of 146.3.
The firm estimated U.S. 2011 corn production at 12.553 billion bushels, above its Sept. 1 forecast of 12.350 billion.
La Nina-related dryness weighs on Argentine farming
BUENOS AIRES, Oct 3 (Reuters) - Parched Argentine wheat and corn crops should get some relief from rains later this week, easing the threat to future yields, a local weather forecaster said on Monday.
Scattered showers have done little over the last week to ease worries that the La Nina weather phenomenon will bring prolonged dryness for a second year running, but rains forecast for this week could help.
Western Canada crop harvest 92 pct complete
WINNIPEG, Manitoba, Oct 3 (Reuters) - Western Canadian farmers have harvested 92 percent of the overall crop, exceeding the average completion for this time of year, the Canadian Wheat Board said on Monday.
Normally, farmers would have harvested 88 percent of the crop by now, but last year only a little over half was in the bin, the CWB said in its weekly bulletin.
US harvest to quicken, dry Plains to finally see rains
CHICAGO, Oct 3 (Reuters) - Excellent weather for harvesting corn and soybeans and coming rains in the dry U.S. Plains highlight the week ahead for the U.S. crop belt, an agricultural meteorologist said on Monday.
"Near perfect harvest weather for the next week or even 10 days, about as perfect as one could order up," said John Dee, meteorologist for Global Weather Monitoring.
Ukraine grain exports rise 5.7 pct Sept/Aug
KIEV, Oct 3 (Reuters) - Ukraine's grain exports rose to about 1.48 million tonnes in September from 1.4 million in August, the director of Ukrainian Agrarian Confederation Serhiy Stoyanov said on Monday.
Stoyanov told Reuters the total volume had included about 800,000 tonnes of wheat.
Corn (Source: CME)
US corn futures stumble with the rest of the CBOT grain complex, but they managed to bounce off early lows as end-user buying surfaced to trim losses. The corn market is under pressure from global economic concerns and prospects for higher-than-expected US supplies. However, US inventories are projected to fall to historically low levels by next summer, and end users are starting to do some bargain shopping on recent price breaks, analysts say. CBOT December corn ends down 4 3/4c at $5.87 3/4 a bushel.
Wheat (Source: CME)
US wheat futures end lower on easing supply worries and outside market pressure. Weaker equities and technical momentum weighed on grains generally, and wheat in particular was pressured by rains in the forecast for the US and elsewhere. Still, Tom Leffler of Leffler Commodities says the development of the US hard red winter crop will remain slow because of dry conditions. CBOT Dec wheat ends down 15 1/2c, or 2.5%, to $6.04 a bushel; KCBT Dec wheat down 15 1/2c to $6.86 1/2; MGEX Dec wheat down 22 1/2c to $8.62 3/4.
Rice (Source: CME)
US rice futures end lower on weak demand and outside market pressure. Demand for US rice is weak, due in part to Brazilian exports, the US Rice Producers Association says in a newsletter. Adding to pressure, weakness in equities and general gloom about the economy, which helped send grains lower across the board. CBOT Nov rice ends down 14 1/2c, or 0.9%, to $15.84 1/2 per hundredweight.
India Rice Exports To Hit 2 Million To 5 Million Tons -Official (Source: CME)
India could export between two million and five million tons of rice after recently ending its export ban, the country's agriculture minister said. Rice exports have been brisk since resuming last month, although wheat exports, which also recently resumed, have stalled as India's price moved above world prices. Agriculture minister P.K. Basu said wheat exports could remain sluggish, but he told Dow Jones Newswires on the sidelines of a conference he expects rice exports to total two million to five million tons. Basu didn't specify a time period for when he expects that total to be reached. Exports of five million could top current assumptions. Two top industry executives recently said India could export as much as 2.5 million tons by March. India is expecting an all-time high rice output of 105 million tons in the crop year that began July 1.
Some wheat traders have said the country has been too slow to allow exports, and missed an opportunity with wheat. Basu said that the country's priority is to ensure stable food prices, and that releasing exports too soon would have "huge" political implications. Two straight years of favorable monsoons have boosted the country's agricultural production, and shifted concerns from whether the country could produce enough grain to whether it had enough storage space to prevent it from spoiling. Basu said an initiative to increase storage space should resolve the country's shortage in two or two-and-a-half years. Improving production remains a focus, however. Basu said that while the national government's regulatory approval process for genetically modified crops is "flawless," changes announced this summer that give provinces authority on whether to approve field trials subject the matter to politics and could slow adoption.
But he added that while some states in India are more cautious about genetically modified crops, "I don't think there are any states that are standing against the technology."
Australian Rains Lock In Wheat Output; Record Availability Forecast (Source: CME)
Rainfall in most-wheat growing districts in Australia over the past week has solidified forecasts for production of 24.5 million metric tons this crop year, but likely hasn't added to overall yields, a wheat exporter said Tuesday. Wheat production won't reach the record 26.3 million tons set in the crop year ended March 31, but the availability of the grain in the country likely will reach an all-time high due to the carryover of unsold grain into the marketing year that started Oct. 1, said Mike Chaseling, Deputy Chairman of Emerald Group Australia, a grain trader half owned by global trading giant Sumitomo Corp. "The rain probably doesn't add a lot of yield for this year, but it certainly locks in where the forecasts were, which is a really positive thing," he said by phone. Emerald forecasts wheat output this crop year 24.5 million tons. Chaseling said there will be a reasonable amount of carryover of unsold old-crop inventory into this marketing year.
"For the bulk handlers, it's like having a big crop again, the pipeline is all full," he said. Normal weather during harvest in coming months would produce a normal crop profile and allow opportunities for "judicious blending" of old-crop wheat downgraded to livestock feed with new-crop milling wheat, possibly creating more value, he said.
Egypt's GASC Ups Wheat Quality Spec; Mulls Ukraine As Supplier (Source: CME)
Egypt's state grain buyer will implement new quality criteria for wheat imports, a senior executive said, even as it considers resuming exports from Ukraine, with which it has previously fallen out over quality issues. Mohammed Abdullah, head of importing at Egypt's General Authority for Supply and Commodities Exchange, or GASC, said it has boosted its protein requirements as there is currently a large amount of quality wheat available throughout the world, at low prices. GASC has set the protein content at 12% for Russian sellers from the previous 11%, Abdullah said. For other suppliers, such as France, Australia and the U.S., the protein requirement has risen to 11.5% from 11%, he said. The move comes as GASC looks likely to add Ukraine to its list of approved suppliers for the first time since 2008. GASC officials are currently in Ukraine to examine renewing wheat imports from there in a bid to widen the world's largest wheat buyer's import base.
The Ukrainian Agrarian Confederation said Monday that GASC "is ready to return Ukraine in the list of its official suppliers if...a state-run body guarantees quality of Ukrainian grain." GASC stopped buying Ukrainian wheat three years ago after quality disputes soured trade relations. A fortnight ago, grain merchant Venus offered 60,000 metric tons of Ukrainian wheat at $260/ton in a GASC tender--priced below offers made for Russian supplies. Although the wheat was disqualified because of its origin, that it was offered at all is seen as an indication that Ukraine will soon be back on the list of suppliers. "Russian wheat is still the cheapest offer into Egypt, but the fact that Ukrainian wheat was offered cheaper (but not accepted) may point the way to the future, especially if current export duties are relaxed," said U.K.-based merchant, Gleadell.
The addition of Ukrainian supplies to GASC's closely-watched tenders could put more bearish pressure on wheat prices as supplies are being offered cheaper than from Russia, despite government-imposed export duties on Ukrainian grain. European wheat futures have lost more than 12% since the start of September and the lingering effects of the global economic crisis and weakening fundamentals are sending prices lower. Yet traders warned that export duties imposed by Kiev and the poor quality of much of Ukraine's harvest could hamper its competitiveness as a supplier to Egypt. They estimate around 70% of this year's harvest will be feed wheat due to poor weather. Ukraine's grain exports are already lagging last year despite a bigger harvest. Traders blame export duties for hampering shipments, which at 3.5 million tons in July-September are 200,000 tons below the year earlier.
Soybeans, Corn, Wheat Slide as Economic Slump May Reduce Exports From U.S. (Source: Bloomberg)
Soybeans tumbled to the lowest in almost a year and corn and wheat dropped on speculation that demand for the crops will shrink as the global economy falters, while the accelerating U.S. harvest boosts supplies. The Standard & Poor’s 500 Index of equities was poised to enter a bear market today after sliding more than 20 percent from the peak this year on concern that European leaders may need to renegotiate Greece’s bailout. About 21 percent of the U.S. corn crop and 19 percent of the soybeans were harvested as of Oct. 2, boosting supplies for makers of food, fuel and animal feed. “We have some harvest pressure, we have some weaker demand, we’ve got a stronger dollar, and we’ve got a weakening global economy,” Frank Cholly Sr., a senior market strategist at MF Global Holdings Inc., said by telephone from Chicago. “There are definitely a lot of negative forces at play all at the same time.”
Ukraine white sugar output rises 34 pct y/y
KIEV, Oct 4 (Reuters) - Ukrainian sugar refineries produced 498,000 tonnes of white sugar from sugar beet as of Oct. 3 or 34 percent more than at the same date in 2010, Ukraine's sugar union Ukrtsukor said on Tuesday.
The union said in a report that 71 refineries had received about 5.6 million tonnes of sugar beet and processed 4.2 million tonnes.
Costa Rica exports more coffee in 2010/11 season-Icafe
SAN JOSE, Costa Rica, Oct 3 (Reuters) - Costa Rica ended its 2010/11 coffee harvesting season with 2.8 percent more exports than during last year's cycle as producers took advantage of higher prices for their high-quality arabica beans, the national coffee institute Icafe said on Monday.
September coffee exports from the Central American country more than doubled from the same month in 2010 reaching 29,333 60-kg bags, Icafe said.
World cotton output seen up, US to miss forecast-ICAC
WASHINGTON, Oct 3 (Reuters) - World cotton output should increase in 2011/12, moderating the previous year's volatile prices, but United States production will miss government estimates, an international farm group said on Monday.
The International Cotton Advisory Committee secretariat said reports of crop failures in Texas and surveys of crop insurance claims in the United States suggest lower 2011/12 yields than the U.S. Department of Agriculture has projected.
Rain to set next Brazil coffee crop in motion
BRASILIA, Oct 3 (Reuters) - Rains will reach Brazil's southeastern coffee belt early this week, prompting trees to flower for the 2012 crop, forecaster Somar said on Monday, and allaying fears dryness could persist and cut output.
The next crop from the world's top grower would normally be larger next year as it falls in an 'on-year' in the biennial cycle, feeding a larger supply than this year into what remains a tightly supplied market.
Weather brightens Ivorian cocoa crop prospects
ABIDJAN, Oct 3 (Reuters) - Ivory Coast's cocoa growing regions got light rain mixed with hot weather last week, perfect conditions for the development of the 2011-12 main crop, farmers said on Monday.
The West African nation kicked off its new season on Monday after a record 2010-11 harvest that yielded close to 1.5 million tonnes, and farmers said the first three months of the new season will bring abundant supply and good quality.
Start of Ivorian cocoa season to rival last year
ABIDJAN, Oct 3 (Reuters) - - Ivory Coast's plantations could churn out around 350,000 tonnes of cocoa by the end of November, on a par with the start of last year's record crop, exporters said on Monday.
Soaring output from the world's top grower, which came despite a four-month post-election conflict that claimed over 3,000 lives, has fed a global supply surplus and dented futures prices.
I.Coast cocoa body proposes sector overhaul
ABIDJAN, Oct 3 (Reuters) - Ivory Coast's cocoa sector body CGFCC has proposed a guaranteed price system for farmers of the world's biggest cocoa crop in an industry overhaul designed to give them more reliable incomes, according to a CGFCC document obtained by Reuters.
The long-awaited reform was delayed by Ivory Coast's descent into a four-month conflict after last year's election and is the last remaining hurdle in the West African country's bid for a debt relief programme with international donors.
Indonesia cocoa exports fall for 7th month in Sept
JAKARTA, Oct 3 (Reuters) - Cocoa exports from the world's No. 3 producer Indonesia fell more than 60 percent in September, declining for a seventh month in a row, after wet weather earlier in the year damaged the main crop and triggered an outbreak of a deadly fungal disease.
Fewer shipments from Indonesia could take some pressure off New York cocoa futures , which ended the third quarter down 17.7 percent -- its weakest performance in three years -- on concerns about the health of the global economy.
Vietnam 2011/12 arabica output to rise 25 pct-top exporter
HANOI, Oct 3 (Reuters) - Vietnam's arabica output in the 2011/2012 crop year is forecast to rise by a quarter from the previous season to 50,000 tonnes, or 833,000 bags, thanks to an increase in both planting area and average yields, a leading exporter said on Monday.
Vietnam is the world's largest producer of robusta coffee but its arabica production is tiny compared with global producers.
Brent slips below $101 on Greek debt woes,Goldman outlook cut
SINGAPORE, Oct 4 (Reuters) - Brent crude slipped below $101, squeezed by growing fears that a Greek debt default could spread across the banking system and threaten the global economy.
"I think more people are getting more afraid," said Tony Nunan, a Tokyo-based risk manager at Mitsubishi Corp.
Kazakhstan sees 50 pct oil export growth by 2020
ASTANA, Oct 4 (Reuters) - Kazakhstan, Central Asia's largest oil producer, plans to raise annual crude exports to 110 million tonnes by 2020 from the 72 million tonnes forecast for this year, the country's oil and gas minister said on Tuesday.
Sauat Mynbayev said Kazakhstan's westward crude oil exports via an expanded Caspian Pipeline Consortium (CPC) would almost double by 2020. Shipments to China would also nearly double to 20 million tonnes from the 11 million tonnes forecast this year.
Libya sees major pick-up in oil output in Oct
TRIPOLI, Oct 3 (Reuters) - Libya will start pumping crude at two major oilfields in about two weeks, doubling production to 700,000 barrels a day by year-end, the country's top oil industry official told Reuters in the latest sign that output is being restored far quicker than many had expected.
While the resumption in operations at Repsol-operated Sharara field and Eni part-owned Elephant will help to boost output, the head of the National Oil Corp also warned that Libya's biggest oil terminal at Es-Sider may take more than a year to be fully repaired.
Crude Climbs First Day in Four After Surprise Decrease in U.S. Stockpiles (Source: Bloomberg)
Oil gained for the first day in four in New York after a surprise drop in U.S. crude stockpiles led investors to reduce bets that prices would continue to decline. Futures rose as much as 3.7 percent after falling 8 percent in the past three days. Crude inventories dropped 3.07 million barrels last week, the American Petroleum Institute said yesterday. An Energy Department report today is forecast to show a gain of 1.5 million barrels. Traders holding short positions in oil futures, or bets that prices will fall, must buy back contracts to book profits. “With so many short positions around anything can spark a violent rally,” said Michael McCarthy, chief market strategist at CMC Markets in Sydney. “We’ve seen positions by the more nimble groups taking shorts and it’s those people buying back.”
Copper Rout Unlikely to Halt Chile’s $67 Billion Bet on Mines: Commodities (Source: Bloomberg)
Chile, the world’s biggest copper- producing nation, expects mining companies to maintain their investment plans even after prices slumped by the most in three years and is seeing few signs of weaker Chinese demand. Spending on new or existing mines will reach $67 billion over the next eight years, Mining Minister Hernan de Solminihac said in an interview in London yesterday. Codelco, the state- owned copper company, will account for $20 billion of the total. While there has been “some adjustment” in China’s imports, the change hasn’t been “significant,” the minister said. Copper slumped 33 percent since reaching a record $10,190 a metric ton in February as mounting concern about growth eroded expectations for supply shortages. Goldman Sachs Group Inc., Barclays Capital and Standard Bank Plc cut their forecasts in the past week. Speculators in U.S. futures held their biggest bet on falling prices since July 2009 as of Sept. 20, Commodity Futures Trading Commission data show.
