Malaysia's FELDA in talks with global trading houses for strategic tie-up
KUALA LUMPUR/SINGAPORE, Dec 13 (Reuters) - Malaysia's Federal Land Development Authority (FELDA), the state-run plantation operator, is discussing a strategic alliance with five global trading houses, including Archer Daniels Midlands Co , Bunge Ltd and Cargill Ltd [CARG.UL], two sources with direct knowledge of the deal told Reuters on Tuesday.
The strategic tie-up, likely by February, is expected to shore up investor interest ahead of FELDA's $2 billion listing of its agri- business arm FELDA Global in mid-2012, turn the unit into a commodity trading powerhouse, sources said.
Buffett’s Surging Silo Sales Boosting Grain Costs for Cargill: Commodities (Source: Bloomberg)
In a year of record agricultural earnings in the U.S., Steve Ruh spent a chunk of his income to build what’s become an increasingly common sight at farms across the Midwest -- grain storage bins. The Illinois corn grower started with 250,000 bushels (2 million gallons) of storage capacity in 2009 and added 100,000 this year to avoid wasting precious harvest time in line at grain elevators. He can now hold crops in gluts, hoping to sell at higher prices when grain is scarcer, and is storing half the 400,000-bushel corn crop this season at his farm in Sugar Grove. “I like the control,” said the 42-year-old, who works 3,000 acres (1,214 hectares) of corn, soybeans, wheat and alfalfa. “This allows me to market 12 months out of the year instead of half that time.”
Corn-belt farmers like Ruh have pushed up U.S. oilseed and grain storage capacity to the highest in two decades, enriching bin makers from GSI Holdings Corp. to Brock Grain Systems, which is controlled by Warren Buffett’s Berkshire Hathaway Inc., while raising costs for Cargill Inc. and other grain traders.
Corn (Source: CME)
US corn futures end slightly higher in a see-saw session, with a rally in crude oil providing support. The market has little fresh supportive news to rally on, but the gains in crude, along with uncertainty about South American soy crops, provided underlying support. Analysts add the market has not been quite so sensitive to shifting sentiment on Europe. Still, traders note that export demand is weak and unlikely to improve soon. CBOT Dec. corn ends up 3c to $5.88 1/2, most-active March corn ends up 1/2c to $5.94 1/2.
Wheat (Source: CME)
US wheat futures rallied, driven by traders covering short positions in the absence of fresh bearish news. Wheat was supported by optimistic outlooks for futures demand, as US offers for white wheat in the most recent Egyptian wheat tender were competitive, a signal that prices are near fair market value, analysts say. Spillover support soybeans, as well as higher crude oil futures served as an incentive for wheat traders liquidate some of large short positions held in the market, analysts add. CBOT March wheat ended up 6 1/4c at $6.00 1/2/bushel, March MGEX wheat finished up 6 1/2c at $8.30, and March KCBT wheat ended up 3 3/4c at $6.56.
Rice (Source: CME)
U.S. rice ends up slightly in a modest short-covering bounce following recent losses. Weak demand and ample world supplies have sent prices tumbling throughout the fall, but traders say that at current prices many farmers may decide to plant less rice. Jan CBOT rice ends up 5 1/2c to $13.85. The contract is down nearly $5 from a September high.
US soy rises for 2nd day on LatAm weather concerns
SINGAPORE, Dec 13 (Reuters) - U.S. soybeans rose for a second straight day as concerns over dry weather in South America supported the market but the gains were capped by economic uncertainty fuelled by Europe's debt crisis.
"Soy is a key player at the moment, it is recovering from Friday's losses due to some concerns about South American crop weather," said Ker Chung Yang at Phillip Futures in Singapore.
Vietnam's 2012 rice export seen steady, to ship to Malaysia
HANOI, Dec 13 (Reuters) - Vietnam will export 300,000 tonnes of rice to Malaysia in 2012, part of its plan to keep exports steady and retain its market share in the face of competition from cheaper Indian and Pakistani grain.
Vietnam targets exports of 7 million tonnes of rice next year, matching the record-high volume expected in 2011, a state-run newspaper quoted a government minister on Tuesday as saying.
Indonesia 10/11 rice output revised down-attache
Dec 12 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in Indonesia:
"Post recommends a revision in marketing year (MY) 2010/11 Indonesian rice production estimates to 35.5 million tonnes of milled rice equivalent, down from an earlier estimate of 37 million tonnes. This adjustment is based on the third forecast figures recently released by the Indonesian National Statistics Agency (BPS). Post also estimates Indonesian rice imports will increase by over 140 percent to 2.775 million tonnes in MY 2010/11 compared to 1.15 million tonnes in MY 2009/10."
Viterra sees strong 2012 grain handling volumes
WINNIPEG, Manitoba, Dec 12 (Reuters) - Grain handler Viterra said on Monday that it expects to have strong volumes of grain to handle and market in 2012, after farmers harvested big crops in Western Canada and South Australia.
According to government reports, South Australia harvested a record large grain crop in 2011, while Western Canada produced a 10 percent larger grain harvest this autumn than last year.
World Bank: Agriculture Prices Hit By Improved Supply (Source: CME)
Agriculture prices fell by 3.9% in November on improving supply conditions and weak demand, the World Bank said in its monthly Commodity Markets Review, the sixth decrease in the past seven months. Sugar fell 5.6% following news that Brazilian and Russian sugar crops will be much larger than anticipated, the World Bank said, while India and the European Union announced intentions to export sugar, putting additional pressure on global prices. The World Bank added that cocoa prices decreased 5.7% due to a large crop in West Africa and further concerns about demand in major consuming regions, particularly Europe. Meanwhile, cotton prices fell 5% on continued weak demand from the textile industry and robust supply gains. Indeed, agriculture was the worst performing sector in the Dow Jones-UBS Commodity Index Total Return in November, falling 6.2% over the month, as concerns over a slowdown in global growth reduced demand expectations.
"While macroeconomic concerns are likely to continue to operate as headwinds, fundamentals remain strong for many key commodities [and] the agriculture sector also remains vulnerable to supply shocks," Nelson Louie, Global Head of Commodities in Credit Suisse's Asset Management division, said Monday.
Australia 2011-12 Wheat Crop Could Top 29 Mln Tons (Source: CME)
Australia's wheat output could top 29 million metric tons, higher even than an official record estimate of 28.3 million tons, this crop year, Steve Burt, managing director of trading and exporting concern PentAG Nidera Pty. Ltd., said. Burt's estimate highlights the abundant supplies of wheat available after what looks to be two successive record crops in Australia, usually one of the top five suppliers to the global trade. The wheat crop in the year that ends March 31"will be in the vicinity of 29 million tons," adding to the already massive amount of wheat available from Australia, he told Dow Jones Newswires by telephone. "There's very few stories where yields have disappointed." When combined with the carryover of old-crop inventories of more than 8.0 million tons into the new marketing year that began Oct. 1, the Australian industry has a big export task ahead of it, he said.
"It is a very big crop on top of a big crop [in 2010-11], and we need to be very competitive to access non-traditional markets for Australia wheat to achieve Abares's 21.6 million-ton export estimate," which the official government forecaster issued on Dec. 6 for this marketing year, he said. The rainfall at harvest isn't nearly as bad as last year's, he said. Burt estimated about three quarters of the national wheat crop has been harvested and stored, and about 3.0 million tons might have been downgraded to livestock feed from the usual milling grades for human consumption, he said. "It isn't as bad as last year, but it is on top of last year so it's adding to a bad situation" in terms of plentiful supplies both within Australia and overseas, putting downward pressure on domestic and global prices, he said.
EU Set For Good Harvest In 2011-12 (Source: CME)
The European Union is set to have a good harvest this year, with total cereal production pegged at more than 283 million metric tons, farming lobby group Copa-Cogeca said, although it warned of some quality concerns due to poor weather conditions. The bloc's soft wheat production in the 2011-12 crop year is estimated at 127.98 million tons, Copa-Cogeca said, with corn output expected to hit 64.78 million tons. "Forecasts for next year show production is stable, with the [total cereals] sowing area predicted to total 55.75 million hectares, but this will not reach the levels of 2008," said Ian Backhouse, chairman of the lobby group's cereals working party. He added that this year's good corn harvest has encouraged farmers to maintain the same sowing area for 2012 but that the market balance is expected to stay tight.
Copa-Cogeca also warned that there is uncertainty in the cereals outlook as input prices are continuing to squeeze producers on the continent, especially through fertilizer prices which are near the record highs of 2009. "Copa-Cogeca is consequently calling for more transparency on the fertilizer market and believes more competition is required in this monopolistic world market," Backhouse said.
La Nina In Place In Pacific (Source: CME)
A La Nina climate event remains in place over the Pacific Ocean, with a key indicator--the Southern Oscillation Index--continuing its steady rise, the government's Bureau of Meteorology reported Tuesday. The SOI registered a value of +16.8 in the 30 days ended Dec. 10, rising from +14.3 in the 30 days ended Dec. 3 and from +13.8 in November, which was the highest monthly value since April, when a previous La Nina was in rapid decline, the bureau reported in a weekly tropical climate note. Sustained positive values of the SOI above +8 may indicate a La Nina. The SOI during the 2010-11 La Nina peaked at more than 30. "Forecast models surveyed by the Bureau suggest the la Nina event is likely to persist for the majority of the north Australian wet season," which ends in April, the bureau reported. La Nina periods are typically associated with above-average rainfall across northern Australia during the wet season, while daytime temperatures are typically cooler from December onward, the bureau reported.
"The risk of tropical cyclone formation in the Australian region is likely to remain above average for most of December, with increased rainfall across northern Australia during this period," it said. There are early indications of the monsoon trough developing in the southern hemisphere, and as is typical for La Nina years, it is likely that the "top end" will come under the influence of the monsoon before Christmas, it said.
Soybeans, Corn Rise in Chicago as Dry Weather Threatens South America Crop (Source: Bloomberg)
Soybeans rose the most in more than a week and corn gained for the first time in three sessions as adverse weather threatens to reduce crop yields in South America. Dry weather in the next 10 days will reduce soil moisture and increase stress on crops in parts of Argentina, Paraguay and Brazil, T-Storm Weather LLC said in a report. About 40 percent of the growing area has been drier than normal since Nov. 15 in Brazil, which the U.S. government ranks as the biggest global shipper of soybeans this year. “After a fast start to planting crops in the last two months, the drier weather is becoming a concern,” Greg Grow, the director of agribusiness for Archer Financial Services Inc. in Chicago, said in a telephone interview. “People have been betting on record or near-record production in South America, and that is now coming into question.”
Vietnam says actual Nov coffee exports at 70,700 tonnes, higher than 50,000 T forecast earlier- Customs
HANOI, Dec 13 (Reuters) - Vietnam exported 70,700 tonnes of coffee in November, more than double the previous month and higher than the 50,000 tonnes the government had forecast for the month, the customs department said on Tuesday.
Vietnam exported 32,000 tonnes of coffee in October. November's shipment raised the amount of coffee exported since January to 1.1 million tonnes, or 18.33 million 60-kg bags, which represents a 4.4 percent increase on the same year-ago period, Vietnam Customs said in a monthly report.
China Nov cotton imports up 199.6 pct on yr - industry
BEIJING, Dec 13 (Reuters) - China, the world's top cotton consumer, imported 378,200 tonnes of the fibre in November, a rise of 199.6 percent from a year earlier, according to customs data cited by an industry website (www.cncotton.com).
The November figure brings the country's total imports in the first 11 months to 2.57 million tonnes, up 8.4 percent year on year, the data showed.
Indonesia 11/12 coffee output seen down 20 pct-attache
Dec 12 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in Indonesia:
"Indonesian coffee production is predicted to decline by 20 percent to 7.5 million 60-kg bags in MY 2011/2012. Indonesian domestic coffee consumption has grown from 1.78 million bags in MY 2009/2010 to 1.9 million bags in MY 2011/2012. Indonesian coffee exports are expected to decline by 23 percent to 6.35 million bags in MY 2011/2012."
Dry weather is concern in most Ivorian cocoa zones
ABIDJAN, Dec 12 (Reuters) - Dry, warm weather in most Ivory Coast cocoa-growing regions raised worries production of the main ingredient in chocolate could drop after January, farmers said on Monday.
Ivory Coast is the world's top cocoa grower, accounting for more than a third of global supply.
op cocoa trader Olam warns of global deficit
LONDON, Dec 12 (Reuters) - Leading cocoa trader Olam International Ltd warned on Monday of a tightening global market in 2012, with supplies moving into deficit after this year's record surplus drove prices too low.
Spot cocoa futures prices in New York and London surged 10 percent off their session lows after Gerry Manley, the head of Olam's cocoa division, told Reuters he expects world 2011/12 production to fall around 100,000 tonnes short of grindings. Other traders have generally seen the market as balanced.
Olam sees 2011/12 global cocoa deficit of 100,000 tonnes
LONDON, Dec 12 (Reuters) - World 2011/12 cocoa production is expected to fall around 100,000 tonnes short of grindings, as the market switches back to deficit after a record surplus the previous year, said the head of cocoa at Olam International Ltd .
"We think there's a likelihood the deficit could increase; the arrivals at the moment look good and we believe that's because of some carry over from last year," Gerry Manley told Reuters, forecasting a dramatic drop in arrivals from January onwards.
Oil Trades Near One-Week High in New York Before OPEC Meeting on Output (Source: Bloomberg)
Oil traded near the highest level in one week in New York amid signs the Organization of Petroleum Exporting Countries will set a production ceiling when it meets in Vienna today. Futures were little changed after climbing the most in almost four weeks yesterday following a report from the state- run Fars news agency that Iran will hold drills to practice closing the Strait of Hormuz. Iranian Foreign Ministry spokesman Ramin Mehmanparast said speculation about the closure was untrue. OPEC members agreed that the group should set a output ceiling for the first half of next year of 30 million barrels a day, said a delegate who declined to be identified. Crude for January delivery was at $99.95 a barrel, down 19 cents, in electronic trading on the New York Mercantile Exchange at 10:58 a.m. Sydney time. The contract yesterday surged 2.4 percent to $100.14, the highest close since Dec. 7. Prices are 9.4 percent higher this year after climbing 15 percent in 2010.
Gold Extends Slump to Seven-Week Low as Fed Refrains From More Stimulus (Source: Bloomberg)
Gold futures slumped to a seven-week low after the Federal Reserve refrained from taking new actions to boost growth. Most U.S. stocks fell and the dollar extended gains against the euro after the Fed took no additional monetary policy steps to stimulate the U.S. economy. The central bank said the U.S. is “expanding moderately, notwithstanding some apparent slowing in global growth.” “There were no substantial changes to the policies and, hence, nothing to boost gold,” William O’Neill, a partner at Logic Advisors in Upper Saddle River, New Jersey, said in a telephone interview. “The cautious statements from Fed will continue to push investors towards risk-off trade.”
