Corn (Source: CME)
US corn futures end higher on lack of farmer selling and outside market support. Farmers have been content to let supplies sit in their bins rather than sell at prices they think are unlikely to decline, traders say. Uncertainty about the US crop is also underpinning the market, although traders say worries about a supply crisis from earlier in the year have faded. Prices were also supported by rallies in numerous asset classes today. Meanwhile, weekly export sales were at the high end of expectations, though Jerry Gidel of North America Risk Management Services notes expectations were low. CBOT December corn ends up 8 1/2c at $6.53 1/2 a bushel.
Wheat (Source: CME)
US wheat futures end higher, joining other agricultural commodities in rallying amid support from higher equities. Wheat was also led higher by corn and soybeans, although wheat had its own support from worries about the hard-red winter wheat crop because of drought in the southern Plains. Lack of farmer selling also helped. However, export demand remains poor, as evidenced by weak weekly sales reported, and world supplies are considered ample. CBOT December wheat ends up 12 1/2c at $6.36/bushel while KCBT December rises 7c to $7.20 and MGEX December adds 6 3/4c to $9.17.
Wheat Plunging as Decade-High Stockpiles Ease World Shortages: Commodities (Source: Bloomberg)
Wheat is heading for the biggest slump in three years as the second-largest harvest on record swells stockpiles, easing shortages that drove global food costs to an all-time high. Prices that plunged 21 percent to $6.295 a bushel this year in Chicago will probably drop as low as $5.90 before the end of December, according to the median estimate of nine analysts and traders surveyed by Bloomberg. Supply in the 12 months ending June 30 will expand 5 percent to 684 million metric tons, boosting inventories to the highest in a decade, the London- based International Grains Council estimates. Production is expanding after last year’s 47 percent price rise led farmers to plant more grain, while Russia and Ukraine recovered from drought that ruined crops. Cheaper wheat will reduce strains caused by rising corn and rice prices and add to pressure on United Nations-monitored food costs that have declined 9 percent from a record in February.
FAO:Higher Supply,Strong Dollar Led To Wheat Price Falls (Source: CME)
World food prices fell to an 11-month low in October, led by sharp price declines in cereals, oils, sugar and dairy products, the United Nation's food body said. The Food and Agriculture Organization's food price index, which measures the monthly change in international prices of a basket of food commodities, averaged 216 points in October, down 4% on the prior month. Still, the body warned that world food prices are "generally higher than last year and remain very volatile." The U.N.'s food index, which has witnessed declines since June, was 9% lower in October than its historic high of 238 points attained in February. "An improved supply outlook for a number of commodities and uncertainty about global economic prospects is putting downward pressure on international prices," the FAO said. International grain prices, as measured by the FAO's cereal index, fell 5% in October to an average of 232 points.
Despite recent severe flooding in Thailand affecting rice production, international price fluctuations have been limited by large reserves, the FAO said. World cereal inventories are estimated to increase by 3.3%, from their reduced opening levels, to 507 million metric tons by the end of the season in 2012, the food agency said. "At this level, the world cereal stocks-to-use ratio for 2011/12 is expected to approach 22%, up only slightly from 2010/11," it said. The FAO sugar price index fell 5% since September to 361 points in October, the FAO said, due to large global supplies. Meanwhile, the FAO oils/fats price index pulled back 6% to 223 points, while the meat and dairy indexes also saw losses.
Rice (Source: CME)
U.S. rice futures continue to slump, ending lower on weak demand and technical selling. Market fell even as most other agriculture commodities rallied. "Poor export demand is offsetting a shorter U.S. crop and flood losses in Thailand," Arkansas Farm Bureau says. CBOT Nov. rice ends down 22c, or 1.4%, to $15.92 per hundredweight. That's down from an intraday high of $17.10 on Oct. 25.
Thai Rice Exports Seen Plunging 50% on Government Buying Program, Flooding (Source: Bloomberg)
Rice shipments from Thailand, the largest exporter, will drop by half from November to January as a state-buying policy raises costs and flooding disrupts transport, according to the Thai Rice Exporters Association. Exports may slump to 500,000 metric tons per month from an average of 1 million tons in the first nine months as state purchases lift local prices and make Thai rice less competitive, Honorary President Chookiat Ophaswongse said by phone yesterday. Thailand has implemented a state rice-buying policy at guaranteed prices since Oct. 7 to lift rural incomes even as the worst floods since 1942 wreak damage on farms and threaten Bangkok. Lower Thai exports may benefit rival growers including Vietnam and India, the second- and third-largest exporters. “The state policy will cause rice exports to fall by a greater extent than the effect of the flooding,” Chookiat said by phone. About 50,000 tons may be delayed by about a month as floods disrupt waterway and road transport, he said.
US soy rises on wet harvest weather; corn dips
SINGAPORE, Nov 3 (Reuters) - Chicago soybean futures rose around half a percent, supported by forecasts of wet weather in parts of the U.S. Midwest which is expected slow the last leg of harvest.
"The thing about corn is that it feels like the worst is over as far as the yield estimates are concerned," said Brett Cooper, a senior markets manager at INTL FCStone Australia.
Algeria scraps tax on durum wheat imports
ALGIERS, Nov 2 (Reuters) - Algeria's parliament on Wednesday approved a government measure to remove a tax imposed last year on private durum wheat imports, in apparent response to a drop in the domestic cereal harvest.
The tax was imposed in a supplementary budget for 2010 after a record cereals crop of 6.1 million tonnes the previous year.
Informa pegs 2011 US corn yield 149.5 bu/acre
CHICAGO, Nov 2 (Reuters) - Memphis-based analytical firm Informa Economics on Wednesday pegged 2011 U.S. corn yield per acre at 149.5 bushels per acre, unchanged from its outlook in October, trade sources said.
Informa forecast U.S. corn production at 12.549 billion bushels, up from the firm's October estimate for 12.519 billion.
Cuban food output edges upward, crisis persists
HAVANA, Nov 2 (Reuters) - Cuba registered big increases in rice and bean production through September as non-sugar agricultural production increased 7.2 percent, compared with the same period in 2010, the National Statistics Office reported this week.
Produce output was up 10.1 percent and livestock and related products 4.2 percent.
Argentina Hopes To Start Exporting Corn To China In Few Months (Source: CME)
Argentina hopes to start exporting corn to China in a few months but is still finalizing details of a bilateral market access agreement, a senior Argentinian official said. Soaring feed demand and depleted corn reserves have brought China back to the global grain market after a 15-year hiatus, and Argentinian authorities have been trying to cement agreements to supply the world's second-largest corn consumer. Lorenzo Basso, Argentinian Secretary of Agriculture, Livestock and Fisheries, told reporters that he hoped the bilateral pact would be signed by the end of the year, which would free China's potentially massive corn market for Argentina. The U.S. dominates China's corn trade--it accounted for 97% of the market in the first nine months this year. Argentina is the world's second-largest corn exporter after the U.S. China is only the U.S.'s eighth-largest import market by volume globally, mostly due to Beijing's reluctance to give up its policy of grain self-sufficiency.
But its demand is expected to rise quickly. Last year, China's corn imports grew 17 times over 2009 to 1.6 million metric tons. The state-backed China National Grain and Oils Information Center estimates this demand could reach 5 million tons this crop year that began Oct. 1. Argentina is keen on getting a foothold in the market, for which a bilateral phytosanitary agreement is needed to govern food safety and plant health. "We should be able to sign the agreement [with China] by the end of the year," Basso said. Bilateral trade could commence by March 2012 at the earliest, he said. He also said Argentina is expected to harvest about 25 million tons of corn next year, of which 15 million tons would be available for exports. A trade spat last year brought Argentinian agricultural exports to a halt but Argentina has sought to smooth relations, sending multiple high-level trade and diplomatic missions to Beijing this year.
Chinese companies, including farming giant Heilongjiang Beidahuang Nongken Group, are also working on land deals to develop agriculture in Argentina. Earlier this year, Beidahuang signed an initial agreement with Buenos Aires-based Cresud SA (CRESY) on cooperation in land purchases. Basso declined to comment on a similar deal for Beidahuang to develop farmland in Argentina's Patagonian Rio Negro province, saying the provincial government was taking the lead, but added that he understood the deal was "just in exploratory stages."
Sugar, coffee steady, eyes on Greek euro future
LONDON, Nov 3 (Reuters) - ICE sugar, coffee and cocoa futures were little changed in early trading as investors remained sidelined and focused on concerns over Greece's role in the euro zone.
Raw sugar futures were steady, hemmed in by a firmer dollar as leaders of the world's biggest economies began arriving in France for a G20 summit set to be dominated by the threat of a Greek exit from the euro zone.
Nicaragua hopes for record 2011/12 sugar harvest
MANAGUA, Nov 2 (Reuters) - Nicaragua expects to produce 604,602 tonnes of sugar in the 2011/12 harvest, 18.5 percent more than the previous cycle and the highest output in the country's history, the head of the National Sugar Producer's Committee said on Wednesday.
Mario Amador, the committee chief, told Reuters that the estimated record was due to an expansion of cultivation areas of sugar cane, by about 5,000 hectares, and better performance in plantations and sugar mills.
Guatemala coffee exports rise in October yr/yr
GUATEMALA CITY, Nov 2 (Reuters) - Coffee exports from Guatemala rose 47 percent in October to 99,301 60-kg bags, the national coffee association said on Wednesday.
The harvesting season in Central America and Mexico, which together produce more than one-fifth of the world's arabica coffee, begins in October and comes to a close in September.
Colombia bets on renovation to recover coffee output
BOGOTA, Nov 2 (Reuters) - A five-year-old campaign to renovate aging coffee trees in Colombia will not help the Andean nation meet its 2011 production target of 9 million bags because many trees were hit by roya fungus, growers and experts said.
Colombia, the world's largest producer of high-quality Arabica beans, has had two years of lower-than-expected coffee production due to bad weather, the spread of the roya fungus and a tree renovation program.
Ivorian cocoa arrivals hit 50,331 tonnes by Oct 23-BCC
ABIDJAN, Nov 2 (Reuters) - Cocoa arrivals at ports in top grower Ivory Coast reached 50,331 tonnes by Oct. 23, down from 89,388 tonnes in the same period a year ago, according to data from Bourse du Cafe et Cacao (BCC) obtained by Reuters on Wednesday.
The figures showed that 20,659 tonnes of beans were declared at the ports of Abidjan and San Pedro from Oct. 17 to Oct. 23 by exporters, down from 47,948 tonnes in the same week of the 2010/2011 season.
Russia's beet sugar output 42 pct up on year - lobby
MOSCOW, Nov 2 (Reuters) - Russia refined 2.6 million tonnes of white sugar from beet from the start of the season in August to Oct. 31, up 42 percent from year-ago volumes, the Russian Sugar Producers' Union industry lobby said on Wednesday.
Russia officially expects to produce a record 5 million tonnes of sugar from this year's domestic beet crop, although analysts say the final output may be lower. Last year's sugar crop was hit by the worst drought in decades.
Tate and Lyle Sugars urges fairer regime for cane
LONDON, Nov 2 (Reuters) - Tate and Lyle Sugars, which has processed cane sugar in London's east end for over a century, said its Silvertown refinery could ultimately close as a result of EU rules which favour beet sugar processors over cane.
Tate and Lyle Sugars is appealing for a fairer trade regime for the European cane refining industry and is seeking 35 million euros ($49 million) in compensation, arguing European Commission policies forced it to operate well below capacity levels.
Egypt's Government Bans All Cotton Imports -USDA (Source: CME)
Egypt's government has banned all cotton imports for the rest of the 2011-12 crop year, in order to stimulate domestic consumption and protect farmers, the U.S. Department of Agriculture said. Egypt faces a serious crisis, which threatens to break out into large-scale demonstrations, after farmers were encouraged by the government to plant cotton with the expectation of high returns. But, as global cotton production improved and demand fell, Egypt faced cheap imports until the ban was implemented, the USDA Cairo attache said in a report late Wednesday. Egyptian cotton production has soared by 37% this year on the same period a year earlier, according to figures from the USDA. After a meeting between the Egyptian farmers' union and ministers, farmers said that 2 million to 6 million workers could protest against the low prices and demand. Egypt has already refused the delivery of 1,500 metric tons of Greek cotton that has landed in the North African country, the USDA Cairo attache report said.
"The situation has gotten progressively worse on both fronts as importers are buying more imported cotton for quality and price preferences to supply the local textile industry," said the USDA report. One Egyptian cotton trader said he expects the ban on imports to be lifted after about six weeks, when domestic textile companies complete their contracts with local producers. Adil Ezzi, president of the Al Watani Cotton and Agricultural Development Company, said the Egyptian government regularly limits imports when global prices fall. Egypt typically imports about 2.2 million qantars (roughly 9,000 metric tons) of cotton every year on top of its average annual domestic harvest of 3.6 million qantars. Local Egyptian textile manufacturers seek lower-quality cotton from abroad, said Mr Ezzi, because Egypt's high-quality cotton is too expensive for many local processors.
The primary impact has been on purchases of short/medium staple Upper Egypt cotton, but also is affecting long and extra long staple cotton marketing." Global cotton consumption is expected to remain steady during the 2011-12 crop year at 24.6 million tons due to an expected slowdown in economic growth that will hit demand for cotton fiber, the International Cotton Advisory Committee said.
Indonesia approves Genting Oil's NW Natuna project
JAKARTA, Nov 3 (Reuters) - Indonesia has approved an $800 million oil and gas development project on Northwest Natuna block run by Genting Oil Natuna Pte Ltd, a subsidiary of Malaysia's Genting Bhd , the energy minister said on Thursday.
The company plans to start production at the Ande-Ande Lumut field by the end of 2014 at a production rate of 5,000 barrels oil per day (bopd).
UK offshore oil, gas industry could add $600 bln-PwC
LONDON, Nov 3 (Reuters) - Britain's offshore oil and gas industry could make more than $600 billion by 2050 in new revenues if lawmakers adopted new measures to entice investors with a stable fiscal regime, tax breaks and upgrading old infrastructure, a new report says.
"The Government also should view the UK continental shelf as an opportunity for investment and not simply as a 'cash cow' and also acknowledge the need for an attractive, transparent and stable fiscal regime," accounting firm PricewaterhouseCoopers said in the report.
Indonesia's Dec gasoil imports to remain steady from Nov
SINGAPORE, Nov 3 (Reuters) - Indonesian state energy firm Pertamina is expected to import about 3.5 million barrels of high sulphur gasoil in December, same volumes as this month, a source familiar with the matter said on Thursday.
It is expected to secure the volumes mainly through term imports and will likely not enter the spot market, the source said.
Asia 2012 refining profits to fall on new capacity, cooler demand
SINGAPORE, Nov 2 (Reuters) - Asian refiners could earn as much as 20 percent less in 2012 from processing a barrel of crude into fuel than this year's average, as they get pinched between new additions to capacity and expectations of slowing global demand growth.
Reduced earnings may mean complex refineries that are able to process cheaper heavier crudes into cleaner burning fuels will benefit at the cost of older, simpler plants that need more expensive higher quality oil to make such products. Tighter margins for the simpler plants could force them to cut output.
Oil Trades Near 3-Month High After ECB Cuts Rate, Greece Drops Vote Plan (Source: Bloomberg)
Oil traded near a three-month high in New York as signs that Europe will reach an agreement with Greece on its debt reduced concern that faltering global economic growth will limit fuel demand. Futures were little changed after climbing 1.7 percent yesterday. Prices are headed for a fifth weekly gain, the longest streak since April 2009. Greek Finance Minister Evangelos Venizelos told lawmakers in Athens yesterday the country won’t vote on a rescue package. Oil in New York failed to breach its 200-day moving average, which is at $94.84 a barrel today, according to data compiled by Bloomberg. “As we get some probability the Europe situation is being contained then people are willing to put risk back on,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney. “With the prospect of a low-growth economic environment and a still tight supply situation, that still puts a bit of a base under oil.”
Gartman Sees Gold in Euros at Record as Currency Slides: Chart of the Day (Source: Bloomberg)
Gold prices in euros will rise to a record as Europe’s sovereign-debt crisis erodes the appeal of the 17-nation currency and boosts demand for the precious metal as an alternative asset, according to economist Dennis Gartman. The CHART OF THE DAY shows gold has had an inverse relationship to the euro during the past week, as the metal jumped 3.8 percent and the currency slid 2.6 percent. The euro, which has declined in three of the last four months, may fall below $1.30 from about $1.38 yesterday, Gartman said. “The driving force in the gold market is the problems in the euro,” Gartman said in a telephone interview from Suffolk, Virginia, where he publishes his Gartman Letter. “Central banks in Europe and individuals will want to lower their euro holdings and buy gold since no one knows what is happening to the euro. The euro is heading towards parity once again.”
