Commodities Tumble Most in a Week, Led by Oil, Nickel on Economic Concerns (Source: Bloomberg)
Commodities fell the most in a week, led by oil, nickel and wheat, on a bigger-than-expected gain in crude inventories and speculation that demand for U.S. grain will shrink as the global economy falters. The Standard & Poor’s GSCI Index of 24 raw materials dropped 1.8 percent after oil declined the most in more than three weeks in New York. The index retreated for the first time in four days as commodity prices declined amid concern that European debt-crisis talks are stalling. Gold and silver rose. “The markets that fell were working based on their own fundamentals and the economic outlook,” said Mike Armbruster, a commodities analyst at Altavest Worldwide Trading in Mission Viejo, California. Crude’s supply increase “was a nice excuse for that market to pull back.” The S&P GSCI index dropped to 637.76. Commodity prices have rebounded 11 percent from a 10-month low on Oct. 4. Eighteen of the commodities in the index declined today.
Corn (Source: CME)
CBOT corn futures end lower, dragged down by outside market influences, including a stronger US dollar and weaker crude oil. USD, which climbed as worries about Europe's debt crisis persist, makes US exports less attractive. Traders already worried about demand after recent gains, although USDA announced fresh sales of 110K tons Wednesday. An abundance of feed wheat around the world is also limiting to corn demand, analysts say. Prices fall to their lowest level since Thursday, but remain well above a Sept 30 intraday low of $5.72 1/4. CBOT Dec. corn ends down 13 1/2c, or 2.1%, to $6.37 1/4.
Wheat (Source: CME)
U.S. wheat futures stumble, ending lower on outside market pressure and lackluster demand. Wheat and other commodities sagged under pressure from a stronger dollar, which makes exports less attractive. Traders are also nervously eying the EU crisis to see if a resolution is forthcoming. Wheat already is pressured by lackluster demand and a lack of supply worries worldwide. Traders do still have concerns about the U.S. crop, however, particularly the winter wheat crop, which is off to a slow start due to drought in the southern Plains. CBOT Dec wheat ends down 16 3/4c, or 2.6%, to $6.19 1/2 per bushel, while KCBT wheat ends down 17 1/2c to $7.16. MGEX Dec wheat ends down 6 1/4c to $9.10 1/4.
Rice (Source: CME)
US rice futures close lower as strength in the dollar puts broad pressure on grain markets. Rice falls with corn, soybeans and wheat. Grain traders anxiously await news from European debt summit amid worries a global economic slowdown could dent demand. Losses in rice are a turnaround from sharp gains earlier this week fueled by increasing concerns about floods hurting output in Thailand, the world's top rice exporter. CBOT January rice sinks 21 1/2c to $17.17/hundredweight.
U.S. grains turn higher; EU summit eyed
SYDNEY, Oct 26 (Reuters) - U.S. corn, wheat and soybeans futures turned firmer, though volumes were light as traders took to the sidelines while European leaders struggled to come up with a concrete plan to solve the euro-zone debt crisis.
"It is fairly quiet today which is mostly a reflection of a fairly benign market in the U.S.," said Simon Clancy, a broker at Advance Trading Australasia.
Kazakh new-crop grain exports could reach 15 mln T
ASTANA, Oct 26 (Reuters) - Kazakhstan could potentially export more than 15 million tonnes of grain from this year's crop, forecast to be the biggest since independence from the Soviet Union, Agriculture Minister Asylzhan Mamytbekov said on Wednesday.
Grain exports from Kazakhstan, the world's seventh- or eighth-largest wheat exporter in a typical season, will provide competition to Russian and Ukrainian suppliers in the Black Sea region this season.
Australia weather bureau sees weaker La Nina
SYDNEY, Oct 26 (Reuters) - A developing La Nina weather event will be considerably weaker than the record strong 2010/11 La Nina that wreaked havoc along Australia's eastern seaboard, Australia's weather bureau said on Wednesday.
The recent La Nina caused devastating floods, ruined crops and disrupted coal shipments but the Australian Bureau of Meteorology said mid-southern summer models indicated a weaker event for 2011/12.
Putin warns grain traders over "excessive" exports
SHAPOVSKY DISTRICT, Russia, Oct 25 (Reuters) - Russian Prime Minister Vladimir Putin told grain traders they had fair warning of plans to introduce protective tariffs on grain if their exports threatened domestic supplies, and told them to avoid signing "excessive" contracts.
"Russia will approximately export 24-25 million tonnes of grain...After that we will introduce certain limits in order not to leave the country with no bread and for us to accumulate reserves that will make up next year`s reserves," Putin told a meeting with agricultural workers on a campaign stop in Russia's south.
EU wheat exports face more Black Sea pressure
PARIS, Oct 25 (Reuters) - European wheat exports could slow in the coming weeks as stiffening competition from Black Sea producers puts a brake on shipments that held up better than expected in the early part of the season, grain traders said.
A spectacular return by Russia to wheat export markets, following the end of a near year-long grain embargo in July, has already curbed European sales in the 2011/12 (July-June) season, notably by claiming the bulk of sales to Egypt's state buyer.
Russian grain harvesting 96 percent over - AgMin
MOSCOW, Oct 25 (Reuters) - Russia had harvested 95 million tonnes of grain by bunker weight by Oct. 25 from 41.1 million hectares, or from 96 percent of the targeted area of 44.1 million hectares, the Agriculture Ministry said on Tuesday.
It did not provide data for the same date a year ago.
S.Africa's maize plantings seen up, wheat output down
JOHANNESBURG, Oct 25 (Reuters) - South African maize farmers intend to cultivate more land in the 2011/12 season as they are lured by strong prices, while wheat output for 2011 is seen down from a previous forecast, an official survey showed on Tuesday.
The government's Crop Estimates Committee (CEC) said farmers intended to plant 2.602 million hectares of the staple grain in the 2011/12 season compared with 2.37 million hectares in the previous season.
Canadian Wheat Board Launches Lawsuit Against Canada Govt (Source: CME)
The board of directors at the Canadian Wheat Board announced it will launch a lawsuit against the country's Conservative government in an attempt to derail its plans to dismantle the agency. "We have no choice but to take this last stand on behalf of farmers. We will not be intimidated by bullies," said Allen Oberg, the board's chairman and an Alberta farmer. The agency, which acts as the single buyer of wheat and barley from western Canadian farmers, said it would argue before the Federal Court of Canada that the Canadian government violated the law when it introduced legislation to repeal the CWB of its powers. According to the wheat board, the current law compels federal authorities to conduct a plebiscite of affected producers - which it didn't do.
The Canadian Wheat Board conducted its own plebiscite, and results released in September indicated 62% of wheat farmers who voted backed the status quo. Barley farmers also backed the board, but by a smaller margin, with 51% of respondents voting in favor of keeping the monopoly. More than 49,000 votes were cast in the plebiscite. The board's plebiscite didn't influence the Conservative government, with Agriculture Minister Gerry Ritz introducing legislation last week that would strip the agency of its powers. At a media conference held in Winnipeg, Oberg said the lawsuit is intended to persuade the government to change its mind - but stopped short of suggesting the board wants to stop the government from implementing its proposed legislation.
"This is a desire for the government to obey the law. Governments can obey the law and change the law, but they cannot ignore the law - which is what has happened here," Oberg said. "What actions the court may take are speculative on my part." The board has yet to file legal documents backing its case, and Oberg said the directors had yet to hire lawyers to fight on their behalf. Further, Oberg said there was "no consensus" among the agency's 15 directors - 10 of which are elected by farmers and five appointed by the federal government. In fact, one elected board member resigned Wednesday, based on the board's decision to take legal action against the government. Henry Vos, who represents farmers in northern Alberta and northern British Columbia, said in a letter the wheat board's lawsuit decision "is simply wrong," because it's clear it wouldn't change the outcome or timing of the government's actions.
"What is happening at the CWB today is, in a word, wrong. To continue to work within the existing dysfunctional CWB board would be a disservice to those who voted me for me as their director," Vos said in the letter, which was obtained by Dow Jones Newswires. A spokeswoman for Ritz, the agriculture minister, wasn't immediately available for comment.
USDA Chief To Visit China, Vietnam To Promote Agriculture Trade (Source: CME)
U.S. Agriculture Secretary Tom Vilsack will travel to China and Vietnam next month in an effort to bolster already booming U.S. agricultural exports to those countries, USDA officials said. "In terms of exports, we are experiencing the best years in America's history," Vilsack said. "Partnerships with growing markets like those in China and Vietnam are integral to the strength of the U.S. economy in the decades ahead." China moved ahead of Mexico and Canada in 2010 to become the largest foreign market for U.S. agricultural commodities. Over the past ten years Vietnam has risen to the fifteenth-largest foreign buyer of U.S. agriculture products, up from fiftieth.
Russia Harvests 95M Tons Grain To Oct 25 (Source: CME)
Russia harvested 95 million metric tons of grain to Oct. 25 on 41.1 million hectares, or 96% of the total area to be harvested, the agriculture ministry reported. Russia's Prime Minister Vladimir Putin said Oct. 5 the country would harvest 95 million tons of grain this year. Last year's harvest fell to 60.9 million tons from 97.1 million tons in 2009 due to the summer drought.
Queensland Introduces Bill To Protect Strategic Cropping Land (Source: CME)
The government of resource-rich Queensland state late Tuesday introduced legislation to parliament to protect strategic cropping lands from the ravages of mining, a move welcomed by the state's farming lobby. "The Strategic Cropping Land Bill is a significant policy shift," Finance and Natural Resources Minister Rachel Nolan told parliament while introducing the bill. "Queensland's best farm land is a precious resource that must be protected for future generations," she said. Queensland produces nearly all of Australia's sugar, about half its beef and cotton and large quantities of winter and summer grains, and is an important supplier of horticultural products to main population centers to the south. But there is also increasing pressure from mining. Queensland will, in several years, become a major world supplier of liquefied natural gas through several projects based on coal seam gas that build on an existing substantial coal export industry, Nolan said.
"But we don't and have never supported resource development at any cost," Nolan said. The government has identified around 4% of the state, or 7.5 million hectares, as strategic cropping land, within an area that extends south from Mossman town in the north to the New South Wales border and up to about 500 kilometers inland from the east coast, she said. The state's minerals and energy industries lobby, the Queensland Resources Council, acknowledged that the government has recognised the prior investment of tens of millions of dollars in advanced projects and is also providing avenues for these projects to work within the legislative framework. The 4% of Queensland to be covered under the legislation compares favorably with the 0.09% of the state's land physically disturbed by resource sector operations, the council's chief executive, Michael Roche, said. "Queensland deserves strong resources and agriculture sectors, and there is room for both," he said in a statement.
Queensland Farmers' Federation Chief Executive Dan Galligan said farmers have been waiting since February 2010 to see the bill, and its introduction to parliament represents a historic moment "when we finally see some legal basis for the protection of our finite soil resources." Farmers, the government and the mining industry have put in considerable work to strike the right balance in the legislation. While the introduction of the bill isn't the end of that process, it is an important milestone, Galligan said in a statement issued Wednesday. The bill has been referred to a parliamentary committee for further consideration.
Sugar, coffee rise, eyes on euro summit
LONDON, Oct 26 (Reuters) - ICE raw sugar, arabica coffee and cocoa futures rose in light volumes in early trade on Wednesday, as investors stayed cautious before a summit expected to deliver pledges to tackle the euro zone's debt crisis rather than firm commitments.
Raw sugar futures edged higher, supported by a weaker dollar and steadiness in outside markets including oil.
Egypt sugar beet, cane planting area seen steady-paper
CAIRO, Oct 26 (Reuters) - The area planted with sugar beet and cane in Egypt in the 2011/2012 season will hold steady, an official said in remarks published on Wednesday, dousing talk that lucrative prices offered by the state for wheat would encourage a switch.
Abdel Wahab Allam, president of Egyptian Sugar Crop Council, said he expected farmers to plant 400,000 feddans (168,000 hectares) with sugar beet and 320,000 feddans with cane this season, al-Borsa newspaper reported.
El Salvador cuts 11/12 coffee crop estimate on rains
SAN SALVADOR, Oct 25 (Reuters) - El Salvador cut its forecast for the upcoming coffee harvest by 6 percent on Tuesday after assessing the potential damages to crops from weeks of non-stop downpours.
The coffee association Procafe said the Central American country, which produces top quality arabica coffee, said it now saw the 2011/12 crop reaching 1.33 million 60-kg bags, more than 30 percent less than produced in the 2010/11 season.
Kraft to invest over $100 mln in Russia coffee plant
MOSCOW, Oct 25 (Reuters) - Kraft Foods Inc said it would invest more than $100 million into its Russian coffee plant until 2015 to double production and meet growing demand for the beverage in the fast-growing market.
The move comes a week after Nestle , the world's biggest food group, completed an extension of its coffee plant in Russia's southern Krasnodar region, which now has become its biggest soluble coffee factory in Europe.
Poland's top sugar maker mulls investment in cane
WARSAW, Oct 25 (Reuters) - Poland's leading sugar producer KSC is looking into buying a foreign sugarcane producer and setting up a cane refinery in Poland in a move to diversify its beet-dominated output, KSC CEO Marcin Kulicki said on Tuesday.
The investment is aimed at diversifying risk for KSC and preparing production capacities ahead of the European Union's sugar market liberalisation planned for 2015.
Euro Coal-Prices stable in quiet trade
LONDON, Oct 25 (Reuters) - Prompt physical coal prices were steady on Tuesday, with slow activity keeping the market in a tight range.
Coal traders have said in recent days that buyers are few and that a lot of the players with long positions cannot burn coal as utilities do or stockpile it at ports as big miners can.
Crude Declines on U.S. Inventory Gain and European Debt Meeting Concern (Source: Bloomberg)
Crude oil dropped the most in more than three weeks after a government report showed a larger-than- projected gain in U.S. stockpiles and amid concern that European debt-crisis talks are stalling. Futures fell 3.2 percent after the Energy Department said supplies rose 4.74 million barrels to 337.6 million last week, more than triple the gain estimated by analysts surveyed by Bloomberg News. EU leaders are meeting for the second summit in four days in an attempt to reach an agreement to bolster a rescue fund, strengthen banks and bail out Greece. “The crude number was very bearish,” said Todd Horwitz, chief strategist at Adam Mesh Trading Group in New York. “If we were trading on the inventories alone, we would be in the lower $80s.”
Crude oil for December delivery fell $2.97 to settle at $90.20 a barrel on the New York Mercantile Exchange. The contract’s drop was the biggest since Sept. 30. Futures increased 2.1 percent to $93.17 yesterday, the highest settlement since Aug. 2, and have gained 15 percent in October.
Japan's JX plans Nov crude refining down 2 pct y/y
TOKYO, Oct 26 (Reuters) - Japan's top oil refiner JX Nippon Oil & Energy Corp plans to refine 5.93 million kilolitres (1.24 million barrels per day) of crude oil in November for domestic consumption, down 2 percent from a year earlier, a company executive said on Wednesday.
"If demand turns out to be weaker than expected, we may lower crude runs although we'll make sure we provide enough supplies to the (quake-hit) Tohoku region," said Tsutomu Sugimori, senior vice president in charge of retail fuel sales.
CNOOC Q3 production fall 9.1 pct y/y
BEIJING, Oct 26 (Reuters) - China's top offshore oil and gas producer CNOOC Ltd said on Wednesday production in the third quarter fell 9.1 percent on year to 80.9 million barrels of oil equivalent, mainly due to halted production at Penglai 19-3 oilfield in Bohai Bay and the natural decline of certain fields.
The unaudited oil and gas sales revenue in the period totalled 46.26 billion yuan, up 23.7 percent from a year earlier, it said. The company's total revenue for the third quarter was 46.52 million yuan ($7.3 million).
Oil Gains as European Debt Talks Progress; U.S. Fuel Stockpiles Decline (Source: Bloomberg)
Oil advanced in New York on speculation fuel demand may increase as Europe made progress in talks to rein in a sovereign debt crisis that threatens to slow global economic growth and curb demand for commodities. Futures rose as much as 0.9 percent after yesterday sliding 3.2 percent. European leaders agreed on recapitalizing banks and bolstering a rescue fund. French President Nicolas Sarkozy will call Chinese leader Hu Jintao today to discuss China contributing to the fund, said a person familiar with the matter. U.S. fuel stockpiles fell last week even as crude supplies increased, an Energy Department report showed. Crude oil for December delivery climbed as much as 80 cents to $91 a barrel in electronic trading on the New York Mercantile Exchange and was at $90.95 at 9:48 a.m. Sydney time. The contract yesterday declined the most in three weeks, sliding $2.97 to $90.20. Prices are down 0.5 percent this year.
Brent oil for December settlement dropped $2.01, or 1.8 percent, to $108.91 a barrel on the London-based ICE Futures Europe exchange yesterday. The European benchmark contract closed at a premium of $18.71 to New York crude, compared with a record settlement of $27.88 on Oct. 14.
Pig Iron’s Pain Proves Boon for Nickel Miners Norilsk, Vale: Commodities (Source: Bloomberg)
Nickel, the second-worst performing metal on the London Metals Exchange in the past six months, is set to rebound as Chinese steelmakers lead a recovery in demand. Nickel’s 20 percent slump this year has made it cheaper than pig iron, a substitute made from low-grade ore from Indonesia and the Philippines. Nickel, used to strengthen stainless steel in everything from kitchen sinks to aircraft- fuel tanks, may rise 16 percent next year as mills boost purchases, Societe Generale SA said. Baosteel Group Corp., China’s biggest publicly traded steelmaker, said it may start buying more refined nickel this month because pig iron has become too expensive. That will boost profits at nickel miners including BHP Billiton Ltd. (BHP), Vale SA (VALE3) and OAO GMK Norilsk Nickel, the world’s largest producer.
“We have seen less nickel pig iron production, which is the most flexible part of the nickel output,” Anton Berlin, head of marketing at Norilsk Nickel said in an Oct. 21 interview in Moscow. “If the price stays low, we’ll probably see further shutdowns.
Japan steel firms cut outlook as market deteriorates
TOKYO, Oct 26 (Reuters) - Japan's top steelmakers Nippon Steel Corp and JFE Holdings Inc slashed full-year profit outlook by 20 percent, hit by a rapid deterioration in Asia's steel market, after booking about 50 percent fall in quarterly earnings.
Ebbing demand in China, the world's biggest consumer and producer, and an uncertain global economy are weighing heavily on the profits of Asian's steelmakers, already reeling from a supply glut and sagging prices in the region.
Iron Ore-Spot falls more than 7 pct in steepest drop ever
SINGAPORE, Oct 26 (Reuters) - Spot iron ore prices slumped more than 7 percent in the deepest decline ever for the steelmaking raw material on thin demand from top importer China, where slower growth has dented steel consumption, with offers falling further on Wednesday.
Iron ore has lost nearly 30 percent since early September when falling steel prices in China suggested slowing demand from the construction sector, which was behind the surge in steel production to a record pace earlier this year.
Chinese copper end-users buy more refined on lack of scrap
HONG KONG, Oct 25 (Reuters) - Chinese fabricators are buying more spot refined copper because of reduced supply of alternative feed scrap and to rebuild stocks given low prices, traders said on Tuesday.
Increased demand had prompted importers to buy copper already in bonded warehouses in Shanghai, lifting premiums for and driving down volumes of bonded stocks, which are popular with Chinese buyers thanks to a short delivery time.
U.S. steelmakers see gloomy future
Oct 25 (Reuters) - U.S. Steel and AK Steel gave gloomy forecasts for the rest of the year, citing weak economies in Europe and North America, depressed steel prices and higher raw materials, and their shares plummeted.
U.S. Steel's Chief Executive Officer John Surma forecast lower fourth-quarter results, saying demand for steel was "just OK" with some strength in automotive, but nowhere near where it was before 2008.
World no. 2 zinc mine posts 11 pct output drop in Q3
SYDNEY, Oct 26 (Reuters) - Output from the world's second largest zinc mine, Century in Australia, dropped by 11 percent to 122,015 tonnes of contained metal in the September quarter versus the same period a year ago, owner Minmetals said on Wednesday.
The mine, which is expected to roughly maintain production levels until it runs out of ore in about four years, recorded nine-month output of 363,276 tonnes of contained metal, down 3 percent year-on-year, Minmetals said.
METALS - Copper up on China demand; Europe worries weigh
SHANGHAI, Oct 26 (Reuters) - Copper rose on Wednesday on short-covering and import orders by Chinese consumers, but growing doubts over a resolution to the euro zone debt crisis ahead of a key European Union summit later in the day are expected to keep investors on edge.
Three-month copper on the London Metal Exchange rose 2.4 percent to $7,707.25 a tonne by 0335 GMT, after a 1.4-percent drop in the previous session.
PRECIOUS - Gold hits one-month high ahead of EU summit
SINGAPORE, Oct 26 (Reuters) - Spot gold rose nearly 1 percent on Wednesday to its highest level in more than a month, as safe-haven demand returned on growing doubts over a resolution to the euro zone debt crisis ahead of a key European Union summit later in the day.
Deep disagreement remained on critical aspects of the potential agreement among European policymakers on how to solve the debt crisis, dimming prospects for a comprehensive deal at the summit.
Baltic index firmer, iron ore prices in focus
LONDON, Oct 25 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, inched higher on Tuesday helped by Chinese interest in buying iron ore and coal.
Brokers said they were watching iron ore price developments, which were driving seaborne activity.
