Grain bulls: Don't fall for central bank trap: 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. --
By Gavin Maguire
CHICAGO, Nov 30 (Reuters) - The overnight central bank action to alleviate financial sector stress may have served to kick-start a fresh rally across stocks and commodities, but traders should be wary of getting caught in a bull trap in grains and oilseeds as the recent outflow of trader funds in those markets suggests participants are dialing down their interest in the arena for now.
Further, given the recent elevation in short-sided interest in the major crop markets, any near-term price strength is just as likely to be driven by short covering as by fresh buying, and so should not be interpreted as a purely bullish market development.
Corn (Source: CME)
US corn futures end lower, fueled by sluggish export demand and the absence of an outside catalyst to attract buyers. The market faces pressure from traders trying figure out if USDA export forecast is low enough, says Dan Cekander, analyst with Newedge in Chicago. Poor sales in recent weeks stoke fears that government forecasts will lower demand forecasts next week and show corn carryout is less threatening, he adds. Light profit taking on recent gains aided the declines. CBOT March corn ended down 6 1/2c at $6.01 1/2/bushel.
Wheat (Source: CME)
US wheat futures end higher, avoiding the price pressure that consumed grain and oilseed futures. Stability in external markets allowed traders to focus on wheat-specific fundamentals. High-protein US spring wheat remains in tight supply and commands a strong price premium, says Sterling Smith at Country Hedging. He added that MGEX wheat is seen as a bargain at current levels amid oversold conditions, concerns about Australia's wheat crop and decent weekly exports. MGEX March wheat ended up 8 3/4c at $8.32 1/4 a bushel as CBOT March rose 1/4c to $6.14 1/4 and March KCBT climbed 8c to $6.69.
Rice (Source: CME)
US rice futures close lower as profit-taking following Wednesday's sharp gains weighed on prices. Lagging demand appears to be limiting buying as well, with cash-basis levels remaining very wide even with the move lower due to the lack of overall demand. CBOT January rice ends down 6c at $14.77 1/2 per hundredweight.
Wheat climbs 1.4 pct on short-covering, liquidity move
SINGAPORE, Dec 1 (Reuters) - U.S. wheat jumped 1.4 percent, while soybeans and corn rose for a fourth straight session, supported by the world's major central banks' move to tame a liquidity crunch for European banks by providing cheaper dollar funding.
"It is perhaps some more short-covering by funds which are very short in wheat and today is the first day of the month," said Adam Davis, a senior commodity analyst at Merricks Capital in Melbourne. "Corn and soy are trying to catch up while wheat is certainly the leader."
Bumper EU maize crop to cut import needs
HAMBURG, Nov 30 (Reuters) - The European Union is expected to have harvested much more maize (corn) this year, which will greatly reduce EU maize import requirements in coming months, analysts said on Wednesday.
"The signs are the EU has gathered an excellent maize crop with dry weather in parts of Europe in past weeks helping harvest work," said Claus Keller, grains analyst at German commodity analysts FO Licht.
Russia could harvest 97 mln T grain in '12-SovEcon
MOSCOW, Nov 30 (Reuters) - Russia could harvest around 97 million tonnes of grain next year, equivalent to the 2009 crop which was one of post-Soviet Russia's largest, a leading Russian analyst said on Wednesday.
The forecast was based on a winter grain harvest forecast of 45.5 million tonnes -- including 39.5 million tonnes of winter wheat -- as well as prevailing weather and multi-year averages.
Russia closing 11/12 wheat stocks seen at 10 mln T
MOSCOW, Nov 30 (Reuters) - Months of record grain exports have sapped Russia's wheat stocks, which are likely to end the 2011/12 crop year at 10 million tonnes, lower than the 11.7 million tonnes the previous year when a third of the crop was destroyed by drought.
"The wheat balance is fragile," Sovecon President and CEO Andrei Sizov Sr. told a conference of grain growers, traders and corporate analysts. "Stocks in the south and centre have been decimated."
Russia Could Harvest 95-100M Tons Grain Next Year - SovEcon (Source: CME)
Russia could harvest between 95 and 100 million metric tons of grain next year, similar to levels reaped during 2008, one of the country's largest harvest on record, Andrey Sizov Sr., senior economist and CEO of analysis body SovEcon said. The forecast, part of an early 2012 winter grain harvest projection, included 45.5 million tons of winter grains, of which 39.5 million tons is winter wheat, SovEcon's Sizov Sr. said. "The healthy projection forecast is a result of an increase in acreage and improved winter planting conditions," Sizov Sr. said. This year, Russia is expected to harvest 92 million tons of grain, of which 34.7 million tons is winter wheat. In 2008, Russia harvested a total of 108 million tons of grain. Sizov Sr. said market concerns that winter sowings in the south of the country would not develop properly remain "premature to judge just yet and there was no evidence the plantings would die necessarily."
SovEcon predicts for the 2011-12 crop year, that total grain and wheat exports will total 24.5 million tons and 19 million tons respectively. A flood of cheap wheat from the Black Sea region has recently kept a lid on European futures markets, a trend analysts say is likely to continue for the remainder of the 2011-12 crop year. Cheaper wheat supplies from countries such as Russia has made it harder for European wheat suppliers to maintain competitiveness with countries to which it traditionally exports. Andrey Sizov Jr., managing director of SovEcon, said an influx of cheap wheat from Argentina has also pressured European wheat prices. Argentine wheat--of which around 7.5 million tons, or 58% of the country's total production is exported--has been in strong demand.
Saudi-Ukraine Grains Deal Comes Amid Supply Fears - APK (Source: CME)
Saudi Arabia's new grain import agreement with Ukraine has come as its imports of barley from the European country are likely to halve this year, analysis body APK-Inform said. "Saudi Arabia is definitely worried about barley supplies for the current year and even further out, after the Ukrainian government imposed export duties earlier this year," Svetlana Synkovska, marketing manager at APK, told Dow Jones Newswires. Saudi Arabia, the Arab world's largest economy, is likely to import 2 million metric tons of Ukrainian barley in the 2011-12 crop year, compared with 3.9 million tons a year earlier. Synkovsa said that Ukraine would export a total of 2.7 million metric tons of barley this crop year, making Saudi Arabia as its major customer. The Ukrainian government imposed export duties on grain July 1 as a result of last year's drought. In October, Ukraine's President Viktor Yanukovich abolished the export tax for wheat and corn but the barley export duty of 14% still remains intact.
The duty is paid by Saudi Arabia, making its grain purchases more expensive. A few days ago, Saudi Arabia reached an agreement with Ukraine to import grains, mainly barley, the kingdom's Finance Ministry said, giving few details. "The agreement highlights that Saudi Arabia is worried the country will have a shortfall in barley supplies, especially if the export duties aren't lifted for the next season," APK's Synkovska said. Ukraine exported 6.808 million tons of grain between July 1, the beginning of the current marketing year, and Nov. 28, which is 1.68 million tons more than in the corresponding period last year, its Agriculture Ministry said. The total included 2.14 million tons of wheat, including 1.155 million tons of milling wheat and 0.985 million tons feed wheat, 1.836 million tons of barley and 2.756 million tons of corn. Ukraine is likely to export 27 million metric tons of grain in the 2011-2012 marketing year, compared with 12.1 million tons a year earlier.
Colombia coffee growers see long-term weather issues
BOGOTA, Nov 30 (Reuters) - Colombian coffee growers must be ready to face more frequent bad weather in the long-term while a tree renovation program should guarantee production at historical averages, the coffee federation said on Wednesday.
The world's top producer of high-quality Arabica faces a third consecutive year of lower-than-expected coffee production in 2011 as bad weather, fungus and a tree renovation program keep output below historic averages of 11 million 60-kg bags.
Cuba aims to boost sugar yields - minister
LONDON, Nov 30 (Reuters) - Cuba aims to boost sugar production yields by 15-20 percent a year by 2016, exceeding 45 tonnes per hectare of cane, Cuban Vice-Minister for Sugar Lourdes Castellanos Jimenez said on Wednesday.
She told the annual International Sugar Organization (ISO) seminar that Cuba aimed to boost sugar production to around 2.5 million tonnes by 2016.
Global sugar refining capacity rising -Al Khaleej
LONDON, Nov 30 (Reuters) - Global sugar refining capacity is set to rise in the next few years, more than doubling between 2008-13, and the white sugar should have no difficulty finding buyers, a senior refinery official said on Wednesday.
Abhishek Nanda, manager, trading with Al Khaleej Sugar in Dubai, told the annual International Sugar Organization (ISO) seminar that global toll/destination refining capacity was set to rise by 3.8 million tonnes to 18.3 million tonnes a year in 2013.
Brazil centre-south cane crop below 500 mln T -Bunge
LONDON, Nov 30 (Reuters) - Sugarcane production in the centre-south of top producer Brazil is expected to stand at below 500 million tonnes in 2011/12, Rob Coviello, head of global sugar trading at Bunge Ltd in the United States, said on Wednesday.
"I would say we follow what's in the market consensus -- under the 500 million tonnes," he told Reuters on the sidelines of the annual International Sugar Organization (ISO) seminar.
India coffee exports down 10 pct in Oct-Nov
MUMBAI, Dec 1 (Reuters) - Coffee exports from India fell 10.2 percent to 38,598 tonnes in the first two months of the coffee year, the state-run Coffee Board said in a statement on Thursday.
In value terms, exports were at $116.27 million from October to November, up from $100.38 million from the same period last year.
US ethanol output up 1.4 pct, most in nearly a year
Nov 30 (Reuters) - U.S. ethanol production rose 1.4 percent last week to the highest in nearly a year, while stocks fell more than 2 percent, the Energy Information Administration reported on Wednesday.
U.S. ethanol production totaled 930,000 barrels per day in the seven days to Nov. 25, up 13,000 bpd from the previous week. Output was last that strong when it hit 937,000 bpd for the week ended Dec. 10, 2010.
S.Korea Nov crude imports down 5.8 pct y/y -prelim data
SEOUL, Dec 1 (Reuters) - South Korea's crude oil imports in November fell 5.8 percent from a year earlier, tentative customs figures released by the economy ministry on Thursday showed.
Final import figures will be available later in the month from state-run Korea National Oil Corp (KNOC).
Qatar keeps Jan crude supply to Asia steady -source
TOKYO, Dec 1 (Reuters) - Qatar, one of OPEC's smallest producers, has notified at least one Asian buyer that it will supply Marine and Land crude at full contracted volumes for January, unchanged from December, a trading source familiar with the matter said on Thursday.
Qatar has been supplying both grades to customers at full contracted volumes since August 2009.
Oil Heads for Weekly Gain to $100 As Iran Tension Counters Demand Concern (Source: Bloomberg)
Oil headed for its first weekly gain in three as the clash between Iran and the West heightened speculation Middle East supply may be at risk, countering concern demand may falter in the U.S., China and Europe. Futures were little changed near $100 a barrel, heading for a 3.3 percent gain this week. The U.K. ordered Iran, the second- biggest oil producer in the Organization of Petroleum Exporting Countries, to close its embassy in London yesterday after a mob attack on the British Embassy in Tehran that bought international condemnation. Prices still fell for the first time in five days after U.S. jobless claims rose and manufacturing in Europe and China shrank. Crude oil for January delivery was at $99.97 a barrel, down 23 cents, or 0.2 percent, in electronic trading on the New York Mercantile Exchange at 8:08 a.m. in Tokyo today. It earlier declined as much as 31 cents to $99.89 a barrel. Futures rose 7.7 percent in November.
Iraq oil exports rise in Nov. to 2.135 mln bpd - SOMO
BAGHDAD, Dec 1 (Reuters) - Iraq's oil exports averaged 2.135 million barrels per day in November compared with 2.088 million bpd in October, Falah Alamri, head of the State Oil Marketing Organisation (SOMO), said on Thursday.
Iraq exported 1.712 million bpd from the southern oil hub of Basra and 423,000 bpd from the northern oilfields around Kirkuk, including 10,000 bpd shipped by trucks to Jordan, he said.
Copper Traders Turn Bullish For the First Time Since October: Commodities (Source: Bloomberg)
Copper traders are bullish for the first time in six weeks on signs that demand is still expanding as global inventories decline to an 11-month low and central banks cut funding costs to shore up growth. Twelve of 24 surveyed by Bloomberg expect the metal to advance next week and two were neutral. The last time they were bullish overall, in the week ended Oct. 21, prices surged more than 14 percent in the following five days. Global stockpiles monitored by exchanges in London, New York and Shanghai fell 23 percent since March, data compiled by Bloomberg show. Copper rallied the most in a month on Nov. 30 as China, the biggest consumer of the metal, cut the reserve requirement ratio for banks for the first time since 2008. More than $1.2 trillion was added to value of global equities that day as the central banks of the U.S., the euro region, Canada, the U.K., Japan and Switzerland agreed to cut the cost of providing dollar funding, to ease strains from Europe’s debt crisis.
Gold Futures Advance 0.5% to $1,748.90 an Ounce, Silver for March Gains (Source: Bloomberg)
Gold for February delivery in New York rose 0.5 percent to $1,748.90 an ounce at 10:10 a.m. in Melbourne. Silver for March delivery advanced 0.3 percent to $32.87 an ounce, while gold for immediate delivery traded little changed at $1,745.43 an ounce.
