Corn (Source: CME)
US corn futures end higher, rebounding from one-year lows amid bargain-hunting and a lack of farmer sales. The market fell in early trade to the lowest spot-month price since last December, but the drop did not prompt panic selling, traders say. "Basis is tight and farmers aren't selling a lot of corn, suggeting it's not there," says Joel Karlin of Western Milling. Other traders say farmers have grain to sell but are content to wait until prices rebound. Weak export demand looms over the market, but analysts say that regardless of what happens the next few months, domestic supplies will be tight well into next year. CBOT Dec. corn ends up 5c to $5.85 1/4 a bushel, up from an earlier low of $5.70. March corn up 5 1/2c to $5.96 1/2.
Wheat (Source: CME)
U.S. wheat futures end mostly higher on support from corn. Grains markets rebounded from early losses, with corn bouncing off of multi-month lows and giving wheat a lift as well. Both crops are used for livestock feed. Analysts worried about crop troubles in the Ukraine, but say other crop news is bearish, with bountiful wheat supplies coming from Canada and Australia. That is limiting prospects for U.S. exports. CBOT Dec. wheat ends flat at $5.98 3/4 while other contracts end up. KCBT Dec. wheat ends up 1/2c to $6.67 and MGEX Dec. wheat ends up 6c to $8.54 1/4.
Rice (Source: CME)
US rice futures end higher, rebounding from a recent slump as firmer cash prices underpinned the market. Futures, which have tumbled throughout the fall, are cheap compared to cash prices, notes Price Futures' Jack Scoville. "The cash market is pretty dead, but it's quoted higher." CBOT January rice ends up 21c at $14.59 1/2 per hundredweight.
U.S. grains slip as S&P warning erodes confidence
KUALA LUMPUR, Dec 6 (Reuters) - U.S. grain futures slipped, extending declines seen in the previous session after Standard & Poor's warned it may cut the credit ratings of euro zone countries as the region's leaders struggle to stem the spread of the debt crisis.
"General macro-economic sentiments are still influencing grain prices," said Lynette Tan, an analyst at Phillip Futures in Singapore.
Thai 2012 rice exports may halve on high prices
BANGKOK, Dec 6 (Reuters) - Thai rice exports in 2012 may fall by half from this year to around 5 million tonnes as its prices are too high compared with those of rivals Vietnam and India, exporters said on Tuesday.
The drop could topple it off its position as the world's top rice exporter behind Vietnam, which aims to sell a record of more than 7 million tonnes this year through lower prices even as the Thai intervention scheme keeps prices up.
Philippines keeps 2012 rice import plan at a low 500,000T
MANILA, Dec 6 (Reuters) - The Philippines, once the world's top rice buyer, will import 500,000 tonnes of the grain next year as originally planned, with most of the volume to be sourced possibly from Vietnam as early as January, the Agriculture chief said on Tuesday.
Departing from the practice in previous years where the government was the main importer of the staple, next year's purchases would be made solely by the private sector, Agriculture Secretary Proceso Alcala told reporters.
Argentina set to approve more old-crop corn exports
BUENOS AIRES, Dec 5 (Reuters) - Argentina's government is expected to approve the export of an additional 2-3 million tonnes of 2010/11 corn on Wednesday, a senior agriculture official said.
The government controls wheat and corn exports through a quota system designed to guarantee affordable local food supplies and help tame high inflation, a policy that irks farmers in one of the world's top grains suppliers.
Argentine corn may face dryness when flowering - forecaster
BUENOS AIRES, Dec 5 (Reuters) - Corn and soy crops in Argentina are in good shape for now but forecasts for several weeks of dry weather could affect corn fields that are in the flowering stage, an agricultural meteorologist said on Monday.
Argentine farming areas received plentiful rains in October and most of November and some analysts expect the country's farmers to produce a record harvest of both crops.
Informa boosts 2012 China corn view by 3 pct
CHICAGO, Dec 5 (Reuters) - Analytical firm Informa Economics on Monday raised its forecast of China's 2012 corn production by 5.5 million tonnes to 190 million tonnes due to improved yield estimates.
An official at Informa confirmed the numbers, which were first reported by trade sources.
Australia sees record wheat crop, rains to cut quality
SYDNEY, Dec 6 (Reuters) - Australia is heading for a record wheat crop and exports in 2011/12, the government's chief commodities forecaster said on Tuesday, although a deluge of rain affecting some areas as the harvest unfolds is set to reduce the quality of the crop.
More shipments from Australia, typically among the world's top four wheat exporters, will put pressure on international grains prices as farmers buy the cheap feed wheat to substitute for more expensive corn.
Kazakh grain crop more than doubles to record
ALMATY, Dec 5 (Reuters) - Kazakhstan's grain crop more than doubled this year to hit a record 26 million tonnes by clean weight, Novosti-Kazakhstan news agency quoted the Central Asian nation's state-owned grain trader as saying on Monday.
The vast steppe nation of 16.6 million people gathered 12.2 million tonnes of grain by clean weight in 2010, when the harvest was hit by a severe drought.
Agriculture Markets Hit By Good Harvests, Poor Technicals - Credit Suisse (Source: CME)
The outlook for agriculture markets has deteriorated, Credit Suisse said, as harvests have come in better than expected and long-term technical trends have turned negative in many markets. Analysts at the Swiss bank warned they had a negative outlook for most prices as agricultural markets do not yet provide good value, while the environment looks set to remain challenging given sluggish growth, persistent funding stress, and deleveraging pressure. For grains, Credit Suisse said corn's strong over valuation and neutral technicals continue to point to lower prices, despite positive short-term fundamentals in a tight market. The bank's analysts said corn prices need to fall below $5.00 a bushel to trade at fair levels, but revealed a $5.70/bushel 3-month forecast and $5.40/bushel 12-month forecast, due to positive cyclical support. Credit Suisse said its wheat outlook is now negative due to bearish technicals, neutral fundamentals and an undemanding valuation.
The bank's analysts said momentum is weak with wheat prices having failed to reach new highs since February, and the long-term trend now downward sloping. For softs, Credit Suisse said there are still substantial downside risks in the coffee market, as it's probably one of the most cyclical of all agricultural commodities. With economic growth in Europe slowing and coffee being significantly over priced, the bank's analysts said value is the dominating factor, making their 12-month outlook negative. Credit Suisse said the focus is on cocoa's technical analysis because of neutral valuation and fundamentals, but the trend has broken to the downside and momentum is deeply negative. This leaves the bank with a negative outlook for cocoa, with very few signs of consolidation before the technical situation can start to improve again. However, Credit Suisse said that sugar should be more stable than other agricultural markets given its neutral trend and valuation.
Despite the global sugar market heading towards a large surplus this year, capping upside from current levels, the bank said that such an over-supply is needed as inventories are at multi-year lows. Credit Suisse said that prices are likely to remain within the 21 to 25 cents/lb price range.
StatsCan Confirms Larger Canadian Canola, Wheat Crops (Source: CME)
The upward nudge in the crop-production estimates released by Statistics Canada on Dec. 6 for canola and all wheat grown in Canada during the 2011-12 (August-July) crop year was a bit bigger than expected while the forecast for oats and barley suggested a tight supply situation. Statistics Canada pegged Canadian 2011-12 canola output at a record 14.165 million metric tons. Pre-report estimates had called for canola production to be in the range of 13.5 million to 14.4 million tons. The December estimate was also larger than the forecast of 12.928 million tons made by the government agency in early October and compares with the 2010-11 level of 12.773 million. "Anything over 14.0 million tons for canola should be bearish for prices but, because demand from both the domestic and export sectors has been so strong, the market has not been able to respond in any kind of downward motion," said Ken Ball, a broker with Union Securities in Winnipeg.
"I would call the demand from the export and domestic sectors 'sensational' and the main reason a record large canola crop of over 14.0 million tons is not causing any major selloff in value," said Mike Jubinville, an analyst with ProFarmer Canada. All wheat output in Canada during the 2011-12 season was pegged by Statistics Canada at 25.261 million tons. Pre-report ideas had expected the production survey to show output in the area of 24.2 million to 25.2 million tons. In early October, the government agency forecast all wheat production at 24.160 million tons while output in 2010-11 totaled 23.167 million. Weather conditions for both canola and wheat resulted in yields coming in above expectations, said Ron Frost with Frost Consulting in Calgary. The harvest weather for both crops were also obviously optimal, he said.
One of the surprises in the survey was the forecast for barley. Statistics Canada projected 2011-12 barley output at 7.756 million tons. Pre-report ideas had forecast barley production to be in the range of 7.910 million to 8.400 million tons. In early October, the government agency had pegged barley production at 7.898 million tons; in 2010-11, barley output was 7.605 million. The lower-than-anticipated barley-production forecast was linked to both weather and acreage. "Barley must not have liked the late start to the growing season, which was a bit wetter than normal, which conversely had a negative impact on yield potential," Ball said. Jubinville linked the smaller barley crop to farmers not planting as much area to the crop than has been reported previously. "Basic economics in the spring suggested that barley returns were not as good as other crops, and this kind of production estimate confirms this idea," Jubinville said.
Softs, Grains Prices Fall Once Again In November - World Bank (Source: CME)
The average price of soft commodities and grains declined once again in November, the World Bank said, as agricultural markets were hit by demand concerns amid further economic gloom last month. Robusta coffee prices declined for the sixth month in a row to 214.4 cents/kg, down 20% from May, while arabica coffee prices fell for the second month in a row to 540.3 cents/kg, down 11% from September. Analysts expect coffee prices to fall further in 2012 due to large harvests from Brazil and Vietnam, but diminished stocks will likely keep risks high. Cocoa fell for the fourth month in a row to 252.74 cents/kg, the World Bank said, down 20% from July. An abundant supply from West Africa and better expectations for the 2011-12 crop are expected to lead prices lower next year. World sugar prices fell for the fourth month in a row to 52.95 cents/kg, down 15% from July, with lower prices forecast in 2012 as the market shifts into a surplus for the first time in three seasons.
Corn prices fell for the third month in a row to $274.39 a metric ton, the World Bank said, down 12% from August. Analysts expect lower corn prices than 2011 averages next year, with record production expected towards the end of 2012. Meanwhile, U.S. soft red wheat also fell for the third month in a row to $253.16/ton, down 8.8% from August. Neutral price direction is expected over the next 12 months as the second largest world wheat crop on record softens the fundamental outlook.
India sugar output up so far; more exports likely
NEW DELHI, Dec 5 (Reuters) - India's sugar output rose 22.2 percent in the first two months of the new season from October despite crushing delays in its top producing state, a leading industry body said on Monday, boosting the chances of more sugar exports by the government.
Last month, the world's top consumer of sugar, and the biggest producer after Brazil, allowed mills to export 1 million tonnes, kicking off the overseas sales of the sweetener in the 2011/12 season.
Indonesian coffee shipments normal despite missing forms
SINGAPORE, Dec 6 (Reuters) - Coffee shipments from Indonesia's main growing island of Sumatra have not been hit by a lack of official forms needed by traders to export commodities, industry sources said on Tuesday.
Earlier on Saturday, traders had said coffee, rubber and cocoa exports from Lampung port had stopped as the trade office had run out of certificate of origin (COO) forms.
Vietnam Dec coffee exports may triple to 150,000T-trade
HANOI, Dec 6 (Reuters) - Vietnam's coffee shipment this month could rise to between 110,000 tonnes and 150,000 tonnes, from 50,000 tonnes exported in November, due to ample supply at the harvest peak and higher demand for robusta beans, traders said on Tuesday.
"The shipment this month will contain newly harvested beans, with the volume from bonded warehouses accounting for a large part," a trader in Ho Chi Minh City said.
Brazil's exports of fine coffee climbing fast
SAO PAULO, Dec 5 (Reuters) - Brazil's exports of fine coffees will rise to almost one third of its arabica shipments in 2011, the exporter association said on Monday, because of the higher profits to be made from producing superior beans.
By the year's end shipments of specialty coffees will reach 7 million 60-kg bags, compared to 1 million in 2005, Guilherme Braga, the director of Brazil's Council of Green Coffee Exporters, Cecafe, told Reuters.
Ukraine produces 2.2 mln T sugar so far in 2011
KIEV, Dec 5 (Reuters) - Ukrainian sugar refineries produced about 2.2 million tonnes of white sugar from sugar beet as of Dec.5 or 44.5 percent more than at the same date in 2010, Ukraine's sugar union Ukrtsukor was quoted as saying on Monday.
Interfax Ukraine news agency quoted Ukrtsukor data as showing that refineries had received about 17.4 million tonnes of sugar beet and processed 16.3 million tonnes.
Dry weather darkens cocoa outlook in west I.Coast
ABIDJAN, Dec 5 (Reuters) - Continued hot and dry weather in western Ivory Coast, a key cocoa growing region, heightened worries among farmers that supply could drop off starting early next year.
Ivory Coast is the world's top cocoa producer, accounting for more than a third of global supply, and much of the output comes from plantations in the west.
Oil Trades Near Three-Week High on U.S. Stockpile Drop, Possible Iran Ban (Source: Bloomberg)
Oil traded near a three-week high in New York as investors speculated global supplies will shrink after U.S. crude stockpiles fell and the European Union indicated it may ban imports of Iranian crude. Futures were little changed after advancing for a third day. Crude inventories declined 5.04 million barrels last week, according to the industry-funded American Petroleum Institute. The EU may have reached an agreement to ban oil imports from Iran in a clampdown on the country’s nuclear program, EU Energy Commissioner Guenther Oettinger said yesterday. Crude for January delivery traded at $101.26 a barrel, down 2 cents, in electronic trading on the New York Mercantile at 10:57 a.m. Sydney time. The contract yesterday rose 29 cents to $101.28, the highest close since Nov. 16. Prices are 14 percent higher this year after climbing 15 percent in 2010.
POLL-China top refineries to keep Dec crude runs at Nov level
BEIJING, Dec 6 (Reuters) - Top Chinese refineries will maintain their December crude oil throughput at last month's levels, as a sharp increase in crude runs in CNOOC's Huizhou refinery was offset by moderate cuts in several other plants on regular maintenance, a Reuters poll showed.
The 12 plants, which account for nearly a third of China's capacity and mostly lie in coastal regions, plan to process 2.93 million barrels per day (bpd) of crude oil this month, the same as the actual throughput volumes in November, which was the highest level in a year.
Shell strikes shale gas in China
DOHA, Dec 6 (Reuters) - Royal Dutch Shell Plc has found shale gas in China, a development that could cap imports in a market natural gas producers are hoping will drive demand.
An official with Shell's partner, PetroChina , a unit of the country's top energy group, state-owned CNPC, said drilling results from two wells Shell drilled had been positive.
OPEC heading for oil target deal at near 30 mln bpd
DOHA/LONDON, Dec 5 (Reuters) - OPEC oil producers, at odds over supply policy since June, look set at a mid-December meeting to agree a new production target that legitimises current cartel output around 30 million barrels a day.
OPEC's leading price hawk Iran, appears to have given up its campaign to have Gulf Arab nations including top producer Saudi Arabia cut back supply.
EU thinks twice about Iran oil ban
NEW DELHI/LONDON Dec 5 (Reuters) - The European Union is becoming sceptical about slapping sanctions on imports of Iranian oil, diplomats and traders say, as awareness grows that the embargo could damage its own economy without doing much to undercut to Iran's oil revenues.
Oil accounts for 50 percent of Iranian budget revenues, and those arguing for sanctions say they can deprive Tehran of billions of dollars and derail what the West sees as Iran's attempts to build a nuclear bomb.
Gold May Advance on European Debt Optimism; ETP Holdings Climb to Record (Source: Bloomberg)
Gold may gain for a second day, rising alongside equities and the euro, on optimism that European leaders are making progress in efforts to contain the region’s debt crisis. Palladium rose to the highest in a month. Gold for immediate delivery was little changed at $1,730.45 an ounce at 8:09 a.m. in Singapore. Holdings in exchange-traded products expanded to a record 2,358.206 metric tons yesterday, according to data compiled by Bloomberg. February-delivery bullion rose 0.2 percent to $1,734.70 on the Comex in New York. “Gold and silver drifted higher as the U.S. dollar (DXY) eased,” Lachlan Shaw, an analyst at Commonwealth Bank of Australia, said in an e-mail today. Trading is “thin” as investors wait for the European Union summit, he said. European officials are negotiating a bigger rescue effort to present at this week’s crisis summit in Brussels, including running two separate bailout funds simultaneously, the Financial Times reported yesterday, driving stocks and the euro higher.
