Hedge Funds Cut Bullish Bets by Most in Seven Weeks on Europe: Commodities (Source: Bloomberg)
Hedge funds cut bullish commodity bets by the most in seven weeks on mounting concern that Europe’s debt crisis will restrain global economic growth and demand for raw materials. Money managers reduced combined net-long positions across 18 U.S. futures and options by 10 percent to 754,558 contracts in the week ended Nov. 15, Commodity Futures Trading Commission data show. That’s the biggest decline since the seven days ended Sept. 27. Sugar wagers fell 30 percent, the most since December 2008, and bets on lower copper prices almost doubled.
More than $2 trillion was erased from the value of global equities last week as the MSCI All-Country World Index fell for five consecutive days, the longest losing streak since August. Rates on French, Belgian, Spanish and Austrian bonds rose to euro-era records above German bunds and the cost of insuring against default on Western European debt reached an all-time high. The European Central Bank bought sovereign debt for five days as policy makers failed to agree on containing the crisis.
Corn (Source: CME)
US corn futures end lower on weak export demand and technical selling. The market was unable to maintain early gains, instead extending losses after a 4% drop Thursday. Lackluster export demand is looming over the market, and the market's recent losses have added technical pressure. The only consolation for bulls is that the market held above $6/bushel and rebounded some. CBOT December corn finished down 4 1/4c at $6.10, off 28 1/4c on the week.
Wheat (Source: CME)
US wheat futures end mostly higher, rebounding from yesterday's steep losses amid short-covering and end-user buying. Market rebounded after falling to fresh four-month low Thursday, as poor export demand has loomed over the market. However, farmer selling has remained tight, and worries about the hard red winter wheat crop have underpinned prices. Traders note spread trade today, with buying of wheat and selling of corn. CBOT Dec wheat ends up 5 3/4c, or 1%, to $5.98 1/4 a bushel, but loses 17 1/2c on the week. KCBT Dec wheat ends up 2c to $6.68 1/2; MGEX Dec wheat ends down 7 3/4c to $9.17 1/4.
Rice (Source: CME)
US rice futures continue to slump, ending lower as weak demand and speculative selling weigh on prices. Jan futures now down 15.6% since Oct 25, and prices are at four-month lows. Poor export demand the key bearish factor. Price Futures Group VP Jack Scoville says end-users are buying at these cheaper prices, however. Jan CBOT Rice ends down 3 1/2c to $14.68 a hundredweight.
US soy, wheat rise after selloff, corn struggles
SINGAPORE, Nov 18 (Reuters) - U.S. soy rose half a percent as the market recovered after two straight days of losses on hopes of strong demand from China, while wheat gained on bargain-hunting following a decline to a four-month low.
"We see bargain hunting taking place because of the sharp drop yesterday as China will take this opportunity to buy more soybeans," said Ker Chung Yang, an analyst at Phillip Futures in Singapore.
EU to import less corn as harvests big crop-Toepfer
HAMBURG, Nov 17 (Reuters) - The harvest of a large European Union maize crop, now underway, means the EU is likely to import less corn in coming months, Germany's largest grain trading house Toepfer International said on Thursday.
Toepfer forecasts the EU 2011 corn crop will amount to 64.014 million tonnes, sharply up from 54.605 million tonnes last year.
Drier weather speeds U.S. harvest this week
CHICAGO, Nov 17 (Reuters) - Drier weather in the U.S. Midwest through Saturday will help boost final harvest of the 2011 corn and soybean crops, an agricultural meteorologist said on Thursday.
Most of the heavier rainfall this week has been in the far southeast, away from the big harvest areas of the Midwest.
Russia harvests 97.5 mln T grain so far-AgMin
MOSCOW, Nov 17 (Reuters) - Russia has harvested 97.5 million tonnes of grain by bunker weight from 98.1 percent of the harvesting area of 42.98 million hectares by Nov. 16, Agriculture Ministry data showed on Thursday.
The grain crop was up from 63.7 million tonnes a year ago, but down from the 101.9 million harvested by the same date in 2009.
Italy 2011 maize output up, wheat down-ISTAT
MILAN, Nov 17 (Reuters) - Maize output in Italy, a major producer in Europe, rose nearly 12 percent to 9.58 million tonnes this year due to increased planted areas, Italy's statistics agency ISTAT said on Thursday in its first estimate of the 2011 maize crop.
Maize output rose from 8.57 million tonnes in 2010 driven by an increase of plantings to 1.02 million hectares in 2011 from 926,776 ha last year, ISTAT data showed.
Canada Cuts Grain, Oilseed Forecasts (Source: CME)
Ending stocks of the major grains and oilseeds in Canada at the close of the 2011/12 (Aug/Jul) crop year are forecast to be down slightly from earlier estimates, according to the latest supply/demand tables from Agriculture and Agri-Food Canada's market analysis division released Thursday. Canola was the only crop that saw any major adjustments on the month, with projected export and domestic demand both seeing a slight increase. Ending stocks of the eight major grains and oilseeds in 2011/12 were pegged at 10.140 million metric tons, which was down slightly from the October projection of 10.290 million and well below the 2010/11 level of 13.041 million. The eight major grains and oilseeds include: canola, flaxseed, soybeans, wheat, oats, barley, corn and rye. Production of the eight major grains and oilseeds in 2011/12 was left unchanged from October at 62.676 million tons. This compares with the 2010/11 level of 62.973 million.
Total exports of the eight major grains and oilseeds in the 2011/12 crop year were projected at 31.203 million tons. This would be a small increase from the 31.103 million tons estimated in October but below the 2010/11 level of 32.143 million. Total domestic usage of the various grains and oilseeds for the 2011/12 crop year was estimated at 36.498 million tons. This was up fractionally from the October projection of 36.447 million tons and above the 2010/11 level of 35.680 million. November estimates for Canadian 2011/12 and 2010/11 grain and oilseed supply and demand. Domestic usage numbers include food and industrial use as well as feed, waste, and dockage.
Argentina Exchange Lifts Soy, Wheat Forecast (Source: CME)
Argentina's farmers are going to plant more soybeans than originally forecast thanks to good planting conditions and the resilience of the crop ahead of a dry spell expected last through the first half of January, the Buenos Aires Cereals Exchange said Thursday. Soy planting area is now seen at 18.85 million hectares, up from 18.60 million hectares estimated last week, according to data published on the exchange's website. So far 37.4% of the expected soy has been planted. The Buenos Aires Cereals Exchange has yet to forecast production, but the Rosario Grain Exchange is expecting the soy crop to total 49.5 million metric tons, the second-largest ever. Argentina is the world's top soymeal and soyoil exporter and ranks third in global soybean exports. The 2009-10 season holds the record for total soybean production, when 54.5 million tons were harvested. The beans are Argentina's top export and a key source of hard currency and tax revenue for the government.
Planting conditions are good after recent showers soaked Argentina's fields, but farmers are concerned that a developing La Nina weather system could bring dry conditions as it did in 2008-09. However, weather specialists expect the La Nina effect to be relatively mild this season. La Nina is seen bringing a long dry stretch from November through the first half of January, before rains bring relief to thirsty crops. La Nina refers to cooling of the equatorial Pacific Ocean that usually brings dry weather to the farm belts of Argentina, Uruguay, Paraguay and the south of Brazil. El Nino is the opposite, with warming ocean temperatures and heavier-than-normal rainfall in those areas. The Buenos Aires exchange also raised its forecast for 2011-12 wheat production to 13 million tons, up from 12.6 million tons estimated last week. That's down 17% on the year, according to the exchange.
Argentina is a leading global wheat exporter, with most shipments going to neighboring Brazil. So far 14.1% of the crop has been harvested. Estimates for Argentina's 2011-12 crop production in millions of hectares (HA) or millions of metric tons (MT) (One hectare equals 2.47 acres).
Kazakhstan Stops Issuing Grain Export Licenses (Source: CME)
Kazakhstan will stop issuing licenses for grain exports from Feb. 1 in an attempt to ease administrative pressure on its agriculture sector, the Ukrainian Grain Association said. The UGA said the Ministry of Agriculture of Kazakhstan plans to cancel issuing the licenses to "ease the work of entrepreneurs." Currently, traders are required to have a license to export grains from Kazakhstan, which takes around 10 days after appropriate documents are provided to the government, the UGA said. Cheaper wheat from the Black Sea region is giving European grain a run for its money, with production in the Commonwealth of Independent States, a regional organization of former Soviet countries, exceeding expectations. Last week the U.S. Department of Agriculture said it expects Kazakhstan to reap 21 million metric tons of wheat in 2011-12, and export around 11 million tons.
Kazakhstan's grain total grain harvest was 12.2 million tons last year because of drought, and the country exported only 5.9 million tons of grain in 2010-2011.
China Corn Prices To Remain Stable (Source: CME)
China's corn prices will likely remain mostly stable despite a bumper harvest, the State Grain Administration said in a statement on its website. The statement gave no details on the size of the harvest. China's National Grain and Oils Information Center, the administration's research arm, estimated the crop at a record 184.5 million metric tons this year, up 4% from last year. The administration also said the government will stockpile corn this year, but didn't elaborate on quantity and price. The stockpiling will likely prevent domestic corn prices from falling further, analysts said. Corn prices have fallen more than 15% since reaching a record in September, as supply was tight before harvest time.
India May Drop Rice Boost Plan (Source: CME)
India may drop its plan to pay more than the state-fixed minimum purchase price for rice this marketing year as procurement by government agencies is progressing well without paying any extra incentives to farmers, two farm ministry officials said. The government was planning to pay an additional INR80 ($1.56) to the current minimum purchase price of INR1,080 per 100 kilograms to encourage farmers to sell to state-run agencies. The agencies have so far been able to procure sufficient quantities from the new season's crop and government stocks are expected to be comfortable without paying the additional price, the officials, who didn't want to be named, told Dow Jones Newswires. Paying the additional price now may only have an indirect impact on inflation, while achieving little in boosting supplies. Until Tuesday, state-run agencies had bought 9.9 million metric tons of rice from farmers and the government's rice stocks are more than double of what it requires for welfare programs.
The government had procured around 34 million tons of rice in 2010-11.
ICE sugar, cocoa edge off lows as dollar eases
LONDON, Nov 18 (Reuters) - ICE sugar, cocoa and arabica coffee futures edged up, supported partly by a slightly weaker dollar but concerns about the deepening debt crisis in the euro zone helped to cap gains.
Raw sugar futures edged up, rebounding slightly from the prior session's five-month low.
Ghana's Cocobod says carriers' strike over
ACCRA, Nov 17 (Reuters) - Ghana's cocoa regulator Cocobod said port carriers had called off a week-long strike over pay and conditions and that exports from the world's second biggest grower could resume shortly.
Cocobod spokesman Noah Amenyah said the next load of cocoa had been due to leave docks on Dec. 1 but added: "Now that the strike is over the ships may push forward the loading dates. But I cannot confirm yet any new date."
ISO sees wider global sugar surplus in 2011/12
LONDON, Nov 17 (Reuters) - The International Sugar Organization on Thursday forecast a global sugar surplus of 4.46 million tonnes in 2011/12, but was not certain that the surplus phase would continue into 2012/13.
"First tentative indications show that next season (2012/13) world production may equal global use of sugar," said the report.
India's Maharashtra so far produces 20 pct less sugar in 2011/12
MUMBAI, Nov 17 (Reuters) - India's top sugar producer Maharashtra has so far produced 20 percent less sugar than at the same point last year as cane crushing faced delays over a cane price dispute, an industry official said.
Crushing momentum has now picked up, however, after farmers and millers agreed on cane pricing, said the official at the Maharashtra State Cooperative Sugar Factories Foundation, who declined to be named.
Euro Coal-Prices little changed by strike, lower oil
LONDON, Nov 17 (Reuters) - Prompt physical coal prices rose by a marginal 25 cents a tonne on Thursday, little affected by a strike and by falls in oil prices and equities, while few trades were reported.
Such a minimal price movement percent in coal does not indicate any significant change in demand or supply, traders said.
India coal stocks fall slightly to 11 million T
LONDON, Nov 17 (Reuters) - Coal stockpiles at India's ports fell slightly since mid-September to 11 million tonnes from 12 million, importers said, but weak cement sector demand and rail bottlenecks are likely to keep stock levels high, according to some of India's biggest importers.
Until the unsold tonnage shrinks, which could take months, Indian buyers are unlikely to return to the spot market for large fresh purchases despite the growing coal supply crisis which is causing power shortages across the country
Asia Coal-Australia thermal coal prices drop with China demand
PERTH, Nov 17 (Reuters) - Australia's thermal coal prices fell below $114 per tonne during the past week as demand from China, the world's largest consumer of the fuel, remained weak.
Thermal coal on the global COAL Newcastle index for the week to date closed at $113.50 per tonne on Wednesday, down from $116.50 per tonne a week earlier, with a bid for January delivery at $113.50 per tonne.
Oil Drops a Third Day as Japanese Exports Drop, Singapore Sees Slowdown (Source: Bloomberg)
Oil dropped for a third day in New York as investors speculated that fuel demand may falter amid signs of slowing global economic growth in Asia and debt crises in the U.S. and Europe. Futures slipped as much as 0.6 percent after falling 1.4 percent on Nov. 18. Japan reported the first decline in exports in three months and Singapore said economic growth may slow next year. Spain replaced its government in elections, while a U.S. congressional supercommittee may announce today it has failed to agree on cutting the federal budget deficit. The oil market is balanced and there is no oversupply, Saudi Arabian Oil Minister Ali Al-Naimi said. “The market got ahead of itself a little too quickly,” said Jonathan Barratt, a managing director of Commodity Broking Services Pty in Sydney. “There’s still issues in Europe and there appears to be problems with the super committee.”
Myanmar's diesel imports up 40 pct on economic growth - traders
SINGAPORE, Nov 18 (Reuters) - Myanmar's monthly diesel imports have increased by more than 40 percent since October to fuel its growing manufacturing, agriculture and transport sectors, industry sources said.
Myanmar's imports of the product have increased from 35,000 tonnes a month to about 50,000 tonnes a month currently, according to estimates by three sources dealing directly with the country's diesel market.
India's Oct iron ore exports down by a third-trade
Nov 16 (Reuters) - Indian iron ore exporters shipped about 33 percent less of the steel-making ingredient in October as a fall in global prices made high costs unviable, although they are seen benefiting from this month's price reversal and a weaker rupee.
Iron ore exports from India, the world's third biggest exporter of the raw material, fell to 4.55 million tonnes in October from 6.87 million tonnes a year ago, the Federation of Indian Mineral Industries said in a statement.
Copper Traders Most Bearish in Two Months on European Crisis: Commodities (Source: Bloomberg)
Copper traders and analysts are the most bearish in almost two months because of mounting concern that Europe’s debt crisis will curb demand in the region that accounts for about 19 percent of global consumption. Eleven of 23 surveyed by Bloomberg expect the metal to decline, the second consecutive week that their outlook worsened and the highest proportion since Sept. 23. The last time so many were bearish, prices dropped 4.6 percent the following week. The commodity fell more than 20 percent into a bear market since reaching a record in February on signs that economic growth is slowing. European industrial production fell the most in 2 1/2 years in September as governments grappled with sovereign debt crises that have toppled governments in Greece and Italy. Copper demand contracted 0.9 percent in 2008 as economies contended with the worst recession since World War II.
Gold Prices to Stay ‘Strong for Some Time’, Australia’s St. Barbara Says (Source: Bloomberg)
St. Barbara Ltd., an Australian gold producer, said it is focused on reducing costs amid forecasts for the price of the metal to “remain strong.” “I think the price, and the consensus seems to be that the price, is going to remain strong for some time,” St. Barbara Chief Executive Officer Tim Lehany said in an interview on the Australian Broadcasting Corp.’s “Inside Business” program today. “There will be a lot of short-term volatility.” Gold is in the 11th year of a bull market and futures reached a record $1,923.70 an ounce on Sept. 6 as investors sought alternatives to slumping equities and some depreciating currencies. Gold for delivery in December on Nov. 18 advanced 0.3 percent to $1,725.10 on the Comex in New York.
MF Trustee: Goal To Return 100% Of Customer Assets (Source: CME)
The trustee unwinding MF Global Holdings Ltd.'s (MFGLQ) brokerage said that his primary goal is to return 100% of customer assets as quickly as possible but that ultimate distributions are dependent upon assets available. The trustee, James W. Giddens, said that there is no assurance of a 100% return. He said he hopes to return the assets as promptly as permitted by the Commodities Exchange Act and the Securities Investor Protection Act and authorization by the U.S. Bankruptcy Court. The plan for the resolutions of commodities claims is to make distributions through "bulk transfers" to future commission merchants willing to accept the transfers. The first bulk transfer has recently been compiled and the second bulk transfer is underway, Giddens said. The feasibility of any bulk transfer is dependent upon finding future commission merchants to receive such assets, he noted.
The first transfer was aimed at avoiding forced liquidations of future positions held by claimants and severe market disruption, with more than 3 million positions worth $100 billion. Upon approval by a judge, the positions of approximately 14,500 customers were transferred to the future commission merchants, Giddens said. Customers, upon notifications, had immediate access to their accounts. The second bulk transfer to approximately 23,000 customers holding cash only in the accounts as of the date of Oct. 31, the date of the company's bankruptcy, was authorized by the bankruptcy court on Thursday. Giddens said second transfer's success requires finding future commission merchants to process the transfers. It is expected that funds will be accessible within a week or so, he said. The third phase of distributions is a proposed additional bulk transfer for all claimants to "true-up" the value of their distributions to 60% of the net equity in their accounts.
Giddens said the assets he has control of are substantially less than the estimated allowed commodities claims. He noted efforts are ongoing to analyze the cause of the "short-fall" and to seek a solution with regulators and law enforcement officials. Giddens has already received court permission to transfer nearly all the 38,000 accounts he's overseeing in the wake of MF Global's collapse. While the holding company is in bankruptcy, Giddens is unwinding the brokerage under the terms of the Securities Investor Protection Act. MF Global filed for bankruptcy protection last month after a tentative deal to sell its assets to Interactive Brokers Group Inc. (IBKR) collapsed. Its brokerage is being liquidated, but the holding company has been in talks to obtain debtor-in-possession financing that could possibly allow it to restructure.
$100 crude oil bad news for grain freight: Gavin Maguire
-- Gavin Maguire is a Reuters market analyst. The views expressed are his own. To get his real-time views on the market, please join the Global Ags Forum. --
CHICAGO, Nov 18 (Reuters) - Sluggish global grain trade has been one of the factors weighing heavily on crop prices in recent weeks, but things could get worse in the months ahead if crude oil prices continue their upward climb to increase the cost of importing goods and commodities.
Crude oil in the New York futures market this week topped $100 per barrel for the first time in nearly four months.
Baltic sea index up, ship industry turmoil grows
LONDON, Nov 17 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, rose for a third day on Thursday helped by firm iron ore bookings to China.
Nevertheless, the shipping sector was set to see more turmoil in the coming months as a supply glut and growing economic gloom would keep earnings under pressure.
Shipping companies show strain as industry struggles
COPENHAGEN, Nov 17 (Reuters) - Oil tanker company General Maritime Corp filed for bankruptcy protection and Denmark's Torm said it was in talks with creditors on Thursday as both fell victim to a glut of ships in the world fleet and gathering global economic gloom.
Bankers expect more bankruptcies and restructuring in the sector as companies struggle with a worsening world economic crisis and lower earnings driven by a build-up of ships ordered when times were good.
Asia Dry Bulk-Rates to rise on strong China iron ore demand
SINGAPORE, Nov 17 (Reuters) - Freight rates for capesize dry bulk carriers on key Asian routes are expected to increase over the next week as iron ore shipments to China rise, shipbrokers said on Thursday.
Fixture rates for capesize vessels on the Brazil-China route rose to a two-week high of $27.646 a tonne on Wednesday from $25.592 last week, supported by a recovery in Chinese demand and rising iron ore spot prices.
