N. Korea May Adopt China-Style Reforms: Mobius (Source: Bloomberg)
North Korea’s leadership transition will probably be smooth and its new rulers may be willing to embrace economic reforms similar to those in China, said Franklin Templeton Investments’ Mark Mobius. A regime change in the communist nation is unlikely to have “immediate substantive impact” on other North Asian financial markets, Mobius, executive chairman of Templeton Emerging Markets Group, wrote in his blog. The company is still holding on to South Korean equities, he said in an interview with Bloomberg Television today. South Korea’s Kospi (KOSPI) slumped 3.4 percent on Dec. 19 after the death of North Korean leader Kim Jong Il sparked concerns over succession in the totalitarian nation. The gauge has risen 5.1 percent since then. The focus now is on his son Kim Jong Un, who is thought to be in his late 20s and was named to senior military and party posts last year.
Yen Weakens as Signs of U.S. Economic Recovery Damp Demand for Havens (Source: Bloomberg)
The yen was set to fall against all of its 16 major peers this week before U.S. reports forecast to show consumer spending and new-home sales increased in the world’s largest economy. Australia’s dollar climbed to the highest in two weeks versus the Japanese currency as Asian shares extended a global rally, boosting demand for higher-yielding assets. The euro was within 1 percent of an 11-month low against the dollar as Italy prepares to sell debt next week. South Korea’s won strengthened after the central bank and Finance Ministry said they will try to reduce the currency’s volatility. “You may see a bit of optimism in the early part of January,” said Thomas Averill, managing director at Rochford Capital, a currency and interest-rate risk management company in Sydney. “For me, there’s no intrinsic value holding the yen over the long term.”
GLOBAL MARKETS-Asian shares up as U.S. data drives year-end gains
SINGAPORE, Dec 23 (Reuters) - Asian stocks edged up on Friday, as signs of a strengthening economy in the United States encouraged a modest year-end rally in riskier assets.
Wall Street stocks had risen for a third straight day on Thursday, leaving the S&P 500 index virtually flat for the year, after data showed new claims for unemployment benefit dropped to their lowest in 3-1/2 years.
Oil up on supply worry, supportive U.S. data
NEW YORK, Dec 22 (Reuters) - Oil rose for a fourth straight day on Thursday in thin, choppy trading on fears of potential supply disruptions from Iraq and Iran and supportive U.S. economic data.
"Iran and the broader Middle East, including Iraq now that the United States is gone, will continue to act on the oil market with exposure for price spikes at any time. The geopolitics of the region are once again on the radar," he said.
S.Korea Nov crude oil imports down 5.2 pct y/y
SEOUL, Dec 23 (Reuters) - Crude imports by South Korea, the world's fifth-largest crude buyer, fell 5.2 percent in November from a year earlier, as refining margins eased and domestic demand for oil products declined, state-run Korea National Oil Corp (KNOC) said on Friday.
South Korea imported 73.17 million barrels of crude oil last month compared with 77.2 million barrels imported a year ago, after marking the highest import growth in October since July, the KNOC data showed.
NYMEX-Natgas ends up slightly for 3rd day after seesaw session
NEW YORK, Dec 22 (Reuters) - U.S. natural gas futures ended a seesaw session slightly higher on Thursday, with short covering ahead of the long holiday weekend countered by concerns about record-high supplies and mild weather forecasts that should slow demand.
"Aside from those that may be short covering ahead of the long holiday period I am not sure why anyone would want to go long natural gas at this point in time based on the outlook or the weather," Energy Management Institute's Dominick Chirichella said in a report, which said fundamentals for gas, like weather and storage, were still bearish.
Friday, December 23, 2011
20111223 0932 Global Economic Related News.
Japan: Economy to grow 2.2% in next fiscal year, government says
Japan’s economy will grow 2.2% in the year starting April 2012 as the nation rebuilds after this year’s earthquake, the government forecasts. The estimate was released by the Cabinet Office in Tokyo yesterday. The government estimates that the economy will shrink 0.1% this fiscal year after the 11 March earthquake and tsunami devastated supply chains, the yen’s strength hurt exporters, and Europe’s debt crisis damped demand and confidence. The projected increase for next year is higher than is likely for any of the other Group of Seven nations in calendar 2012, according to Organization for Economic Cooperation and Development estimates. (Bloomberg)
India: ‘Fiscal Stress’ may worsen on subsidies, Reserve Bank says
India’s “fiscal stress” may deteriorate on widening subsidies and slowing taxes, the central bank said, signaling government spending and a weakening currency may keep inflation elevated. “The stress is likely to aggravate as the risks of fiscal slippage have increased during the current year,” the Reserve Bank of India said in its Financial Stability Report yesterday. Inflation holding above 9% all year has prompted the central bank to raise interest rates by a record pace before pausing monetary tightening this month. (Bloomberg)
EU: Greece’s creditors said to resist IMF push for more losses
Greece’s creditors are resisting pressure from the International Monetary Fund to accept bigger losses on holdings of the indebted nation’s government bonds, said three people with direct knowledge of the discussions. Lenders want the EUR70bn (USD91bn) of new bonds the government will issue in return for existing securities to carry a coupon of about 5%, said the people, who declined to be identified because the negotiations are private. The IMF is pushing for creditors to accept a smaller coupon in order to reduce Greece’s debt-to-gross domestic product ratio to 120% by 2020, a key element of the 27 Oct agreement by European Union leaders, the people said. (Bloomberg)
UK: Economic growth accelerates as BOE says surge won’t last
UK economic growth accelerated more than previously estimated in the third quarter in a surge that the Bank of England says is unlikely to be repeated as Europe’s debt crisis curbs bank lending and dents confidence. GDP rose 0.6% from the previous quarter, faster than the 0.5% reported last month, the Office for National Statistics said yesterday. The Bank of England, which has restarted bond purchases to aid the recovery, has said that the UK economy may fail to grow in the current quarter and the first part of 2012. In addition to turmoil in Europe, expansion in Britain may be restrained by unemployment at a 17-year high and the government’s ongoing fiscal squeeze. (Bloomberg)
US: Jobless claims fall, consumer comfort climbs
Fewer Americans than forecast sought jobless benefits and consumer confidence climbed, giving the world’s largest economy a boost heading into 2012. Unemployment claims fell by 4,000 to 364,000 in the week ended 17 Dec, the lowest level since April 2008, Labor Department figures showed yesterday. The Bloomberg Consumer Comfort Index improved to minus 45 in the period ended 18 Dec from a reading of minus 49.9 the prior week, marking the biggest seven-day gain since January. A decline in firings and the cheapest gasoline prices since February are helping revive retail sales during the busiest shopping season of the year. A stronger consumer, whose spending accounts for 70% of the economy, raises the odds the US can ride out the debt crisis in Europe or failure by Congress to extend tax cuts. (Bloomberg)
Japan’s economy will grow 2.2% in the year starting April 2012 as the nation rebuilds after this year’s earthquake, the government forecasts. The estimate was released by the Cabinet Office in Tokyo yesterday. The government estimates that the economy will shrink 0.1% this fiscal year after the 11 March earthquake and tsunami devastated supply chains, the yen’s strength hurt exporters, and Europe’s debt crisis damped demand and confidence. The projected increase for next year is higher than is likely for any of the other Group of Seven nations in calendar 2012, according to Organization for Economic Cooperation and Development estimates. (Bloomberg)
India: ‘Fiscal Stress’ may worsen on subsidies, Reserve Bank says
India’s “fiscal stress” may deteriorate on widening subsidies and slowing taxes, the central bank said, signaling government spending and a weakening currency may keep inflation elevated. “The stress is likely to aggravate as the risks of fiscal slippage have increased during the current year,” the Reserve Bank of India said in its Financial Stability Report yesterday. Inflation holding above 9% all year has prompted the central bank to raise interest rates by a record pace before pausing monetary tightening this month. (Bloomberg)
EU: Greece’s creditors said to resist IMF push for more losses
Greece’s creditors are resisting pressure from the International Monetary Fund to accept bigger losses on holdings of the indebted nation’s government bonds, said three people with direct knowledge of the discussions. Lenders want the EUR70bn (USD91bn) of new bonds the government will issue in return for existing securities to carry a coupon of about 5%, said the people, who declined to be identified because the negotiations are private. The IMF is pushing for creditors to accept a smaller coupon in order to reduce Greece’s debt-to-gross domestic product ratio to 120% by 2020, a key element of the 27 Oct agreement by European Union leaders, the people said. (Bloomberg)
UK: Economic growth accelerates as BOE says surge won’t last
UK economic growth accelerated more than previously estimated in the third quarter in a surge that the Bank of England says is unlikely to be repeated as Europe’s debt crisis curbs bank lending and dents confidence. GDP rose 0.6% from the previous quarter, faster than the 0.5% reported last month, the Office for National Statistics said yesterday. The Bank of England, which has restarted bond purchases to aid the recovery, has said that the UK economy may fail to grow in the current quarter and the first part of 2012. In addition to turmoil in Europe, expansion in Britain may be restrained by unemployment at a 17-year high and the government’s ongoing fiscal squeeze. (Bloomberg)
US: Jobless claims fall, consumer comfort climbs
Fewer Americans than forecast sought jobless benefits and consumer confidence climbed, giving the world’s largest economy a boost heading into 2012. Unemployment claims fell by 4,000 to 364,000 in the week ended 17 Dec, the lowest level since April 2008, Labor Department figures showed yesterday. The Bloomberg Consumer Comfort Index improved to minus 45 in the period ended 18 Dec from a reading of minus 49.9 the prior week, marking the biggest seven-day gain since January. A decline in firings and the cheapest gasoline prices since February are helping revive retail sales during the busiest shopping season of the year. A stronger consumer, whose spending accounts for 70% of the economy, raises the odds the US can ride out the debt crisis in Europe or failure by Congress to extend tax cuts. (Bloomberg)
20111223 0931 Malaysia Corporate Related News.
Muhibbah Australian JV secures RM1.05bn contract
Muhibbah Engineering (M) Bhd has announced that its 50:50 JV with Australian’s Monadelphous Group Ltd has won a AUD330m (RM1.06bn) contract for the construction of an approach jetty and ship berth in Queensland, Australia. The facilities will be constructed for a project by Wiggins Island Coal Export Terminal Pty Ltd (Wicet), which is privately owned and funded by a group of Queensland coal exporters. “This marks another new era for Muhibbah group’s expansion of marine-related business into advanced countries such as Australia,” said in an announcement to Bursa. (Financial Daily)
MAS to suspend four more Sabah regional network routes
Malaysia Airlines (MAS) will suspend four more routes involving its Sabah regional network early next year. This is an addition to the rationalization exercise involving eight routes of its international network announced last week. The suspension covers the twice-weekly Kota Kinabalu-Osaka service from 6 Jan, thrice-weekly Kota Kinabalu-Perth from 31 Jan, 4 times weekly Kota Kinabalu-Haneda from 1 Feb and 4 times weekly Kota Kinabalu-Seoul. “This suspension is until further notice and is part of our regional network consolidation involving single-aisle aircraft operations,” said its CEO, Ahmad Jauhari Yahya. (Financial Daily)
Kulim gets shareholder nod for RM700m land buy
Kulim (Malaysia) Bhd shareholders yesterday gave the go-ahead for the company to buy six parcels of oil palm plantation land in Johor for RM700m cash from Johor Corp (JCorp). While the shareholders’ approval indicate their optimism of the purchase and of Kulim’s outlook, for JCorp, the RM700m it will get from the sale means it will have cash to meet its obligations on a bond maturing end of July next year. The sale is a major component of the JCorp group’s rationalisation exercise. The RM700m cash accruing from the estates’ disposal is the first out of the expected RM1bn cash to be generated before 31 July 2012. The balance of RM300m will come from internally generated funds. JCorp president and CEO Kamaruzzaman Abu Kassim said in a statement yesterday that the group is finalizing a plan for repayment of its remaining debts. (BT)
MRCB clinches RM14m EPF contract via tender
Property developer Malaysian Resources Corp Bhd (MRCB) has clinched a RM13.93m contract to renovate and upgrade the EPF building in Sabah. MRCB announced that its wholly-owned subsidiary MRCB Engineering SB (MESB), which tendered for the project in July last year, was awarded the contract to design, build and upgrading works of EPF’s 400,000 sq ft building in KK. (Malaysian Reserve)
Proton sale will involve a general offer
The sale of Proton Holdings would be subjected to a GO as Khazanah Nasional is looking at selling its entire 42.7% equity stake in the national carmaker. Khazanah MD Tan Sri Azman Mokhtar said in written replies to The Edge weekly that it has been receiving offers for various forms of collaboration, including acquiring its controlling stake in Proton but have not arrived at any decision to sell to any particular offeror. He said Khazanah would have to take into account how the divestment would help upgrade Proton. “For minority shareholders, we can confirm that Khazanah views any sale to be done on the full 42.7% of its stake and that would mean that it would therefore, under the takeover code, be subjected to a GO,” he said. (Financial Daily)
Muhibbah Engineering (M) Bhd has announced that its 50:50 JV with Australian’s Monadelphous Group Ltd has won a AUD330m (RM1.06bn) contract for the construction of an approach jetty and ship berth in Queensland, Australia. The facilities will be constructed for a project by Wiggins Island Coal Export Terminal Pty Ltd (Wicet), which is privately owned and funded by a group of Queensland coal exporters. “This marks another new era for Muhibbah group’s expansion of marine-related business into advanced countries such as Australia,” said in an announcement to Bursa. (Financial Daily)
MAS to suspend four more Sabah regional network routes
Malaysia Airlines (MAS) will suspend four more routes involving its Sabah regional network early next year. This is an addition to the rationalization exercise involving eight routes of its international network announced last week. The suspension covers the twice-weekly Kota Kinabalu-Osaka service from 6 Jan, thrice-weekly Kota Kinabalu-Perth from 31 Jan, 4 times weekly Kota Kinabalu-Haneda from 1 Feb and 4 times weekly Kota Kinabalu-Seoul. “This suspension is until further notice and is part of our regional network consolidation involving single-aisle aircraft operations,” said its CEO, Ahmad Jauhari Yahya. (Financial Daily)
Kulim gets shareholder nod for RM700m land buy
Kulim (Malaysia) Bhd shareholders yesterday gave the go-ahead for the company to buy six parcels of oil palm plantation land in Johor for RM700m cash from Johor Corp (JCorp). While the shareholders’ approval indicate their optimism of the purchase and of Kulim’s outlook, for JCorp, the RM700m it will get from the sale means it will have cash to meet its obligations on a bond maturing end of July next year. The sale is a major component of the JCorp group’s rationalisation exercise. The RM700m cash accruing from the estates’ disposal is the first out of the expected RM1bn cash to be generated before 31 July 2012. The balance of RM300m will come from internally generated funds. JCorp president and CEO Kamaruzzaman Abu Kassim said in a statement yesterday that the group is finalizing a plan for repayment of its remaining debts. (BT)
MRCB clinches RM14m EPF contract via tender
Property developer Malaysian Resources Corp Bhd (MRCB) has clinched a RM13.93m contract to renovate and upgrade the EPF building in Sabah. MRCB announced that its wholly-owned subsidiary MRCB Engineering SB (MESB), which tendered for the project in July last year, was awarded the contract to design, build and upgrading works of EPF’s 400,000 sq ft building in KK. (Malaysian Reserve)
Proton sale will involve a general offer
The sale of Proton Holdings would be subjected to a GO as Khazanah Nasional is looking at selling its entire 42.7% equity stake in the national carmaker. Khazanah MD Tan Sri Azman Mokhtar said in written replies to The Edge weekly that it has been receiving offers for various forms of collaboration, including acquiring its controlling stake in Proton but have not arrived at any decision to sell to any particular offeror. He said Khazanah would have to take into account how the divestment would help upgrade Proton. “For minority shareholders, we can confirm that Khazanah views any sale to be done on the full 42.7% of its stake and that would mean that it would therefore, under the takeover code, be subjected to a GO,” he said. (Financial Daily)
20111223 0925 Global Market Related News.
Asia Stocks Rise on U.S. Optimism (Source: Bloomberg)
Asian stocks (MXAP) rose, with a regional index heading for its first gain in three weeks, as a drop in U.S. jobless claims and an increase in consumer confidence added to signs the world’s biggest economy is weathering Europe’s debt crisis. Samsung Electronics Co., South Korea’s biggest exporter of consumer electronics, advanced 1.7 percent in Seoul. James Hardie Industries SE (JHX), a supplier of building materials the counts the U.S. as its largest market, climbed 3.1 percent in Sydney. Gloucester Coal Ltd. surged 25 percent after Yanzhou Coal Mining Co. offered to buy the Sydney-based company for A$700 million ($709 million) and merge it with Yanzhou’s Australian unit. The MSCI Asia Pacific Excluding Japan Index (MXAPJ) gained 0.4 percent to 394.26 as 8:47 a.m. in Hong Kong, heading for a 1.4 percent advance this week. About five shares gained for each that fell in the gauge. Japanese markets are closed today for a holiday.
U.S. Stocks Advance Amid Better-Than-Estimated Economic Reports (Source: Bloomberg)
U.S. stocks rose, sending the Standard & Poor’s 500 Index higher for a third day, as better- than-estimated jobless claims, consumer confidence and leading indicators bolstered optimism in the world’s largest economy. Financial (S5FINL) shares had the biggest gain in the S&P 500 among 10 industries as Morgan Stanley (MS), Citigroup (C) Inc. and Bank of America Corp. (BAC) jumped more than 4.5 percent. General Electric Co. (GE) and Exxon Mobil Corp. (XOM) added at least 1.4 percent, pacing gains among companies most-tied to economic growth. Akamai Technologies Inc. surged 19 percent after agreeing to buy Cotendo to expand (AKAM) Internet-based and mobile services. The S&P 500 advanced 0.8 percent to 1,254 at 4 p.m. New York time, rallying 4 percent in three days. The Dow Jones Industrial Average gained 61.91 points, or 0.5 percent, to 12,169.65 today. About 6 billion shares changed hands on U.S. exchanges, or 25 percent below the three-month average.
European Stocks Advance as U.S. Jobless Claims Fall; IAG Rallies (Source: Bloomberg)
European stocks advanced, extending this week’s gains, after U.S. jobless claims unexpectedly fell last week to the lowest since April 2008, indicating the recovery in the world’s largest economy is on track. International Consolidated Airlines Group SA and Deutsche Lufthansa AG (LHA) climbed after the parent of British Airways reached a binding agreement to buy Lufthansa’s BMI unit. Deutsche Bank AG (DBK) and BNP Paribas (BNP) SA jumped more than 3 percent, as banks pared some of this year’s slump. Stagecoach Group Plc (SGC) slid 3.4 percent after JPMorgan Chase & Co. advised selling the shares. The Stoxx Europe 600 Index added 1.1 percent to 239.78 at the close in London, bringing this week’s gains to 2.6 percent. The benchmark measure has rallied 12 percent from this year’s low on Sept. 22 amid optimism that U.S. economic growth is holding firm and euro-area leaders are moving to stem the region’s debt crisis.
U.S. Jobless Claims Dip, Consumer Views Gain (Source: Bloomberg)
Fewer Americans than forecast sought jobless benefits and consumer confidence climbed, giving the world’s largest economy a boost heading into 2012. Unemployment claims fell by 4,000 to 364,000 in the week ended Dec. 17, the lowest level since April 2008, Labor Department figures showed today in Washington. The Bloomberg Consumer Comfort Index improved to minus 45 in the period ended Dec. 18 from a reading of minus 49.9 the prior week, marking the biggest seven-day gain since January. A decline in firings and the cheapest gasoline prices since February are helping revive retail sales during the busiest shopping season of the year. A stronger consumer, whose spending accounts for 70 percent of the economy, raises the odds the U.S. can ride out the debt crisis in Europe or failure by Congress to extend tax cuts.
Republicans Agree to End Payroll Tax Deadlock (Source: Bloomberg)
House Speaker John Boehner agreed to extend a U.S. payroll-tax cut past its Dec. 31 expiration, backing down under pressure from Senate Republicans and President Barack Obama. The agreement capped a month of wrangling that led to a revolt by House Republicans over a two-month bipartisan deal passed by the Senate Dec. 17 in an 89-10 vote. Amid polling that showed Republicans losing ground politically during the standoff, Obama and Senate Republicans urged Boehner to bring his caucus to agreement. Boehner said at a news conference in Washington today his members decided to “do the right thing for the American people even if it’s not exactly what we want.”
Foreclosures May Delay Housing Rebound to 2013 (Source: Bloomberg)
The two-bedroom Denver row house that Kyle and Jennifer Zinth bought in 2005 is a tight fit now that they have an 18-month-old son, Max, and a coonhound named Beauregard. They plan to put it up for sale next month, hoping to at least break even so they can buy a larger home. “My understanding is it’s a better time to buy than sell,” Kyle Zinth, 34, a paralegal, said in a telephone interview. “If we can get out of this one without financial harm and get a good deal on the next place, then that’s ideal under present market realities.” The Zinths are wading back into a U.S. housing market where prices may fall further under the weight of foreclosures and not rebound until 2013, even as the economy builds momentum and mortgage rates fall to record lows, according to a survey of 109 economists released this week by Zillow Inc. When values do rise, the gains probably won’t match those seen in the years prior to the bursting of the bubble in 2006.
Decline in U.S. Home Values to Be Smallest in Four Years, Zillow Reports (Source: Bloomberg)
U.S. home values probably will have their smallest decrease in four years in 2011 after the decline in property prices slowed, Zillow Inc. said today. The total value of the country’s housing probably fell by more than $681 billion, about 35 percent less than the $1.1 trillion lost in 2010, the Seattle-based company said in a statement today. A projected decline of $227 billion from July to the end of this month compares with $454 billion lost in the first half of the year, according to Zillow. An increase in buyer demand is needed before property values can begin to recover, Zillow said. Low borrowing costs may be helping, with sales of existing homes rising in November to a 10-month high, according to a National Association of Realtors report yesterday.
IMF May Delay Boosting China’s Role as Members Fail to Back Quota Changes (Source: Bloomberg)
The International Monetary Fund said today it lacks the necessary votes to implement a 2010 decision to double its permanent resources and boost the voting power of emerging markets. As of Dec. 12, members agreeing to the increase in so- called quotas, which determine nations’ voting rights and access to funding, accounted for 36 percent of total quotas, compared with the 70 percent required for the measure to pass, according to an IMF staff report released today. A related measure on executive-board seats obtained 30 percent of member votes, compared with the 85 percent required. The delay deprives the Washington-based IMF of new resources as it seeks more funds to meet potential loan demand linked to the European debt crisis. It also pushes back changes that will make China the third-largest member at the 187-country IMF and weaken European influence.
Monti’s Budget Plan Gets Final Approval in Italy Parliament (Source: Bloomberg)
Prime Minister Mario Monti’s emergency budget plan won final approval in Parliament today as Italy struggles to tame surging borrowing costs before facing 53 billion euros ($69 billion) in debt repayments early next year. The Senate voted 257 to 41 to approve the 30 billion-euro package in a confidence vote in Rome. The legislation, dubbed by Monti the “Save Italy Decree” and the nation’s third austerity plan since June, was passed by the Chamber of Deputies in a 402- to-75 vote last week. The plan includes a pension overhaul, a levy on primary residences and a crackdown on tax cheats, all measures aimed at convincing investors Monti is serious about cutting the euro region’s second-largest debt and meet the commitment of balancing the budget in 2013. It may also push Italy, which must sell 440 billion euros in debt next year, deeper into a recession that is forecast to begin in the current quarter.
U.K. Grew 0.6% in Third Quarter, Faster Than Originally Estimated: Economy (Source: Bloomberg)
U.K. economic growth accelerated more than previously estimated in the third quarter in a surge that the Bank of England says is unlikely to be repeated as Europe’s debt crisis curbs bank lending and dents confidence. Gross domestic product rose 0.6 percent from the previous quarter, faster than the 0.5 percent reported last month, the Office for National Statistics said today in London. Separate data showed the current account deficit widened to a record, partly due falling profits at U.K. banks’ foreign units. The Bank of England, which has restarted bond purchases to aid the recovery, has said that the U.K. economy may fail to grow in the current quarter and the first part of 2012. In addition to turmoil in Europe, expansion in Britain may be restrained by unemployment at a 17-year high and the government’s ongoing fiscal squeeze.
King Says Crisis Threatens Europe’s Economy as Stability Outlook Worsens (Source: Bloomberg)
Mervyn King, vice chairman of the European Systemic Risk Board, said Europe’s sovereign debt crisis is threatening to hurt the real economy and the outlook for financial stability has worsened. Growth prospects “have deteriorated” since September, King, who is also governor of the Bank of England, said at a briefing hosted by the European Central Bank in Frankfurt yesterday. “Investors lack confidence to continue to provide normal levels of funding. Dependence on central banks has risen.” The ECB loaned banks a record 489 billion euros ($636 billion) for three years on Dec. 21 to avert a credit crunch from the sovereign debt crisis. The central bank said earlier this week that the turmoil has taken on systemic proportions not seen since the 2008 collapse of Lehman Brothers Holdings Inc.
Asian stocks (MXAP) rose, with a regional index heading for its first gain in three weeks, as a drop in U.S. jobless claims and an increase in consumer confidence added to signs the world’s biggest economy is weathering Europe’s debt crisis. Samsung Electronics Co., South Korea’s biggest exporter of consumer electronics, advanced 1.7 percent in Seoul. James Hardie Industries SE (JHX), a supplier of building materials the counts the U.S. as its largest market, climbed 3.1 percent in Sydney. Gloucester Coal Ltd. surged 25 percent after Yanzhou Coal Mining Co. offered to buy the Sydney-based company for A$700 million ($709 million) and merge it with Yanzhou’s Australian unit. The MSCI Asia Pacific Excluding Japan Index (MXAPJ) gained 0.4 percent to 394.26 as 8:47 a.m. in Hong Kong, heading for a 1.4 percent advance this week. About five shares gained for each that fell in the gauge. Japanese markets are closed today for a holiday.
U.S. Stocks Advance Amid Better-Than-Estimated Economic Reports (Source: Bloomberg)
U.S. stocks rose, sending the Standard & Poor’s 500 Index higher for a third day, as better- than-estimated jobless claims, consumer confidence and leading indicators bolstered optimism in the world’s largest economy. Financial (S5FINL) shares had the biggest gain in the S&P 500 among 10 industries as Morgan Stanley (MS), Citigroup (C) Inc. and Bank of America Corp. (BAC) jumped more than 4.5 percent. General Electric Co. (GE) and Exxon Mobil Corp. (XOM) added at least 1.4 percent, pacing gains among companies most-tied to economic growth. Akamai Technologies Inc. surged 19 percent after agreeing to buy Cotendo to expand (AKAM) Internet-based and mobile services. The S&P 500 advanced 0.8 percent to 1,254 at 4 p.m. New York time, rallying 4 percent in three days. The Dow Jones Industrial Average gained 61.91 points, or 0.5 percent, to 12,169.65 today. About 6 billion shares changed hands on U.S. exchanges, or 25 percent below the three-month average.
European Stocks Advance as U.S. Jobless Claims Fall; IAG Rallies (Source: Bloomberg)
European stocks advanced, extending this week’s gains, after U.S. jobless claims unexpectedly fell last week to the lowest since April 2008, indicating the recovery in the world’s largest economy is on track. International Consolidated Airlines Group SA and Deutsche Lufthansa AG (LHA) climbed after the parent of British Airways reached a binding agreement to buy Lufthansa’s BMI unit. Deutsche Bank AG (DBK) and BNP Paribas (BNP) SA jumped more than 3 percent, as banks pared some of this year’s slump. Stagecoach Group Plc (SGC) slid 3.4 percent after JPMorgan Chase & Co. advised selling the shares. The Stoxx Europe 600 Index added 1.1 percent to 239.78 at the close in London, bringing this week’s gains to 2.6 percent. The benchmark measure has rallied 12 percent from this year’s low on Sept. 22 amid optimism that U.S. economic growth is holding firm and euro-area leaders are moving to stem the region’s debt crisis.
U.S. Jobless Claims Dip, Consumer Views Gain (Source: Bloomberg)
Fewer Americans than forecast sought jobless benefits and consumer confidence climbed, giving the world’s largest economy a boost heading into 2012. Unemployment claims fell by 4,000 to 364,000 in the week ended Dec. 17, the lowest level since April 2008, Labor Department figures showed today in Washington. The Bloomberg Consumer Comfort Index improved to minus 45 in the period ended Dec. 18 from a reading of minus 49.9 the prior week, marking the biggest seven-day gain since January. A decline in firings and the cheapest gasoline prices since February are helping revive retail sales during the busiest shopping season of the year. A stronger consumer, whose spending accounts for 70 percent of the economy, raises the odds the U.S. can ride out the debt crisis in Europe or failure by Congress to extend tax cuts.
Republicans Agree to End Payroll Tax Deadlock (Source: Bloomberg)
House Speaker John Boehner agreed to extend a U.S. payroll-tax cut past its Dec. 31 expiration, backing down under pressure from Senate Republicans and President Barack Obama. The agreement capped a month of wrangling that led to a revolt by House Republicans over a two-month bipartisan deal passed by the Senate Dec. 17 in an 89-10 vote. Amid polling that showed Republicans losing ground politically during the standoff, Obama and Senate Republicans urged Boehner to bring his caucus to agreement. Boehner said at a news conference in Washington today his members decided to “do the right thing for the American people even if it’s not exactly what we want.”
Foreclosures May Delay Housing Rebound to 2013 (Source: Bloomberg)
The two-bedroom Denver row house that Kyle and Jennifer Zinth bought in 2005 is a tight fit now that they have an 18-month-old son, Max, and a coonhound named Beauregard. They plan to put it up for sale next month, hoping to at least break even so they can buy a larger home. “My understanding is it’s a better time to buy than sell,” Kyle Zinth, 34, a paralegal, said in a telephone interview. “If we can get out of this one without financial harm and get a good deal on the next place, then that’s ideal under present market realities.” The Zinths are wading back into a U.S. housing market where prices may fall further under the weight of foreclosures and not rebound until 2013, even as the economy builds momentum and mortgage rates fall to record lows, according to a survey of 109 economists released this week by Zillow Inc. When values do rise, the gains probably won’t match those seen in the years prior to the bursting of the bubble in 2006.
Decline in U.S. Home Values to Be Smallest in Four Years, Zillow Reports (Source: Bloomberg)
U.S. home values probably will have their smallest decrease in four years in 2011 after the decline in property prices slowed, Zillow Inc. said today. The total value of the country’s housing probably fell by more than $681 billion, about 35 percent less than the $1.1 trillion lost in 2010, the Seattle-based company said in a statement today. A projected decline of $227 billion from July to the end of this month compares with $454 billion lost in the first half of the year, according to Zillow. An increase in buyer demand is needed before property values can begin to recover, Zillow said. Low borrowing costs may be helping, with sales of existing homes rising in November to a 10-month high, according to a National Association of Realtors report yesterday.
IMF May Delay Boosting China’s Role as Members Fail to Back Quota Changes (Source: Bloomberg)
The International Monetary Fund said today it lacks the necessary votes to implement a 2010 decision to double its permanent resources and boost the voting power of emerging markets. As of Dec. 12, members agreeing to the increase in so- called quotas, which determine nations’ voting rights and access to funding, accounted for 36 percent of total quotas, compared with the 70 percent required for the measure to pass, according to an IMF staff report released today. A related measure on executive-board seats obtained 30 percent of member votes, compared with the 85 percent required. The delay deprives the Washington-based IMF of new resources as it seeks more funds to meet potential loan demand linked to the European debt crisis. It also pushes back changes that will make China the third-largest member at the 187-country IMF and weaken European influence.
Monti’s Budget Plan Gets Final Approval in Italy Parliament (Source: Bloomberg)
Prime Minister Mario Monti’s emergency budget plan won final approval in Parliament today as Italy struggles to tame surging borrowing costs before facing 53 billion euros ($69 billion) in debt repayments early next year. The Senate voted 257 to 41 to approve the 30 billion-euro package in a confidence vote in Rome. The legislation, dubbed by Monti the “Save Italy Decree” and the nation’s third austerity plan since June, was passed by the Chamber of Deputies in a 402- to-75 vote last week. The plan includes a pension overhaul, a levy on primary residences and a crackdown on tax cheats, all measures aimed at convincing investors Monti is serious about cutting the euro region’s second-largest debt and meet the commitment of balancing the budget in 2013. It may also push Italy, which must sell 440 billion euros in debt next year, deeper into a recession that is forecast to begin in the current quarter.
U.K. Grew 0.6% in Third Quarter, Faster Than Originally Estimated: Economy (Source: Bloomberg)
U.K. economic growth accelerated more than previously estimated in the third quarter in a surge that the Bank of England says is unlikely to be repeated as Europe’s debt crisis curbs bank lending and dents confidence. Gross domestic product rose 0.6 percent from the previous quarter, faster than the 0.5 percent reported last month, the Office for National Statistics said today in London. Separate data showed the current account deficit widened to a record, partly due falling profits at U.K. banks’ foreign units. The Bank of England, which has restarted bond purchases to aid the recovery, has said that the U.K. economy may fail to grow in the current quarter and the first part of 2012. In addition to turmoil in Europe, expansion in Britain may be restrained by unemployment at a 17-year high and the government’s ongoing fiscal squeeze.
King Says Crisis Threatens Europe’s Economy as Stability Outlook Worsens (Source: Bloomberg)
Mervyn King, vice chairman of the European Systemic Risk Board, said Europe’s sovereign debt crisis is threatening to hurt the real economy and the outlook for financial stability has worsened. Growth prospects “have deteriorated” since September, King, who is also governor of the Bank of England, said at a briefing hosted by the European Central Bank in Frankfurt yesterday. “Investors lack confidence to continue to provide normal levels of funding. Dependence on central banks has risen.” The ECB loaned banks a record 489 billion euros ($636 billion) for three years on Dec. 21 to avert a credit crunch from the sovereign debt crisis. The central bank said earlier this week that the turmoil has taken on systemic proportions not seen since the 2008 collapse of Lehman Brothers Holdings Inc.
20111223 0924 Global Commodities Related News.
Worst Is Yet To Come From La Nina Weather Phenomenon - NASA (Source: CME)
Chances are high of a drought again next year in the U.S. corn and wheat belt because the worst is still to come from weather phenomenon La Nina, William C. Patzert, climatologist at the National Aeronautics and Space Administration said. "Drought in the U.S. corn and wheat belt has the strong possibility of repeating itself," NASA's Patzert said. "After 22 December, the first day of winter, the main event kicks in. Classic La Nina impacts are during winter through spring." La Nina is a periodic climatic phenomenon that brings more rain to the western Pacific, and to a lesser extent, to the eastern Pacific. Climatologists and commodity analysts blamed La Nina for drought that ravaged the U.S. wheat crop and dryness across the U.S. corn belt earlier this year. Last summer was the hottest since the 1950s in the heart of the corn belt, including Iowa and Illinois. Although this year's La Nina is weaker than a year ago, the muted 2011-12 reoccurence will certainly have surprises, Patzert said.
"As winter officially begins, the cool sea surface temperatures are only 1.5 degrees Celsius below normal, compared to the 3 degrees Celsius cooling of one year ago," Patzert said. Texas and Oklahoma already this year have seen wheat, corn and cotton wither in the hot, dry weather. Cattle ranchers were also forced to shrink their herds because of the parched grazing lands. The harvest in Texas, the country's second-largest producer of high-quality, hard red winter wheat, dropped nearly 60% this year to a five-year low of 52 million bushels. Winter wheat is planted from late August through October and then harvested the following spring. Some serves as a feed for cattle, which graze on it. Sentiment toward commodities lying in the traditional path of La Nina has started to turn more bullish, as Chicago and European futures grain markets advanced this week on fears over crop conditions in South America. Agritel, in line with NASA views, warned that the most critical period was yet to come in January.
Corn (Source: CME)
U.S. corn futures settled at a 1-month high, extending the current uptrend for the 5th consecutive day. Traders continue to add risk premium to prices, fearful that hot, dry weather in Argentina and Brazil will lead to smaller South American crops, analyst say. Investors are worried that the worst weather in yet to come, and that could lead to higher US export demand and place increased pressure on already tight projected US inventories, said PFG Best analyst Tim Hannagan. Larger-than-expected weekly export sales added some fresh support to buoy prices. CBOT March corn ended up 1c at $6.17 1/2/bushel.
Wheat (Source: CME)
U.S. wheat finished higher, fueled by short covering as traders attempt to reduce risk exposure before the Christmas holiday and end of year. Wheat is vulnerable to short-covering rallies because speculators have a large net short position in the market. The absence of fresh fundamental news keep wheat traders eyeing corn prices, as both markets compete in the livestock feed industry, analysts say. CBOT March wheat end up 4 3/4c to $6.21 3/4/bushel, MGEX March, up 2c to $8.43 3/4, and KCBT March end up 1 1/2c to $6.72 1/2.
Rice (Source: CME)
U.S. rice futures end lower as the market pulls back from recent gains despite broad commodity strength. The market had climbed the previous five days, helping to stop the downward momentum that has sent the market tumbling in recent months. Weak demand hangs over the market. Other commodities, including corn, wheat and soybeans, rallied. CBOT Jan. rice ends down 10c, or 0.7%, to $14.05 per hundredweight. The market held above Wednesday's lows.
Soy eases from 4-wk top on Europe funding doubts
SINGAPORE, Dec 22 (Reuters) - U.S. soy slid 0.7 percent, snapping five straight sessions of gains as broad weakness in global markets, fed by doubts over funding of European banks, weighed on agricultural futures.
"The euro is under pressure on concerns over the European situation, which is having some negative impact on the agricultural markets," said Ker Chung Yang at Phillip Futures in Singapore.
German wheat sowings for 2012 crop up 2 pct
HAMBURG, Dec 22 (Reuters) - German winter wheat sowings for the summer 2012 crop have been expanded by 2.0 percent on the year to 3.233 million hectares, the German national statistics agency said on Thursday.
Winter grain sowings of all types have been expanded by 3.2 percent on the year to 5.516 million hectares, the agency said in its first estimate of grain plantings for the 2012 harvest.
EU wheat not competitive for export -Toepfer
HAMBURG, Dec 21 (Reuters) - European Union wheat and barley are still uncompetitive on global export markets despite the euro's recent weakness, Germany's largest grain trading house Toepfer International said on Wednesday.
"EU wheat is not competitive compared to exports from Argentine, Ukraine and Russia," Toepfer said in a market report.
China May Halt Buying of Corn Until Price Falls to $5 a Bushel, Yigu Says (Source: Bloomberg)
China, the second-biggest corn consumer, may import more of the grain if global prices fall 19 percent to about $5 a bushel, a level that is significantly below domestic prices, said Yigu Information Consulting Ltd. China’s corn supply is sufficient after a record harvest and the government may import to boost stockpiles only if there is a “clear price advantage,” said Feng Lichen, general manager of Yigu, China’s largest corn information portal. Corn, used as an ingredient in feed and in ethanol, has plunged 20 percent since Aug. 31 on high global grain supplies and concerns that Europe’s deepening debt crisis and a slowing global economy may sap demand. Morgan Stanley on Dec. 13 lowered its price forecasts for agricultural commodities including corn because of rising supplies.
Ukraine sees 11/12 grain export capped at 23 mln T
KIEV, Dec 21 (Reuters) - Ukraine's grain exports are unlikely to exceed 22-23 million tonnes in the 2011/12 season despite a record harvest because of aggressive exports from neighbouring Russia, Ukraine's Farm Minister Mykola Prysyazhnyuk said on Wednesday.
"We have lost time in the first months of this season, allowing Russia to earn a lot (from exports) without competition from our side," Prysyazhnyuk told Reuters in an interview.
January USDA report may reignite the corn market: 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, Dec 22 (Reuters) - With spot corn prices more than 20 percent off their early September highs and trading volumes stunted as investors and businesses wind down activity for the year, it is tempting to consider the corn market rally that saw prices more than double between mid-2010 and mid-2011 to be well and truly over
But with emerging crops encountering challenging growing conditions in South America, and the USDA looking likely to make a further downward adjustment to the U.S. corn yield for the 2011/12 crop, the corn market may start 2012 with a bullish bang that could set it on course to remain the crop to watch as a new U.S. planting season gets underway in the spring.
Corn, Soybeans Rise to One-Month Highs on Argentina Dry Spell; Wheat Gains (Source: Bloomberg)
Soybeans capped the longest rally since July and corn rose to a one-month high on speculation that hot, dry weather is hurting crops in South America. Wheat gained for the fifth straight session. As much as 40 percent of Argentina’s corn-growing region will remain under stress for at least two weeks because overnight rains were lighter than expected, the Commodity Weather Group LLC said in a report. In Brazil, a quarter of the corn and soybean crops will remain under stress after showers in the next four days, the private forecaster said. “The market is adding some weather premium because the crop potential is declining in South America,” Jason Ward, a market analyst for Northstar Commodity Investment Co. in Minneapolis, said in a telephone interview. “The corn and soybean crops are entering the most important period for determining yields.”
Soybean futures for March delivery rose 0.7 percent to close at $11.7175 a bushel at 1:15 p.m. on the Chicago Board of Trade, the sixth straight gain and the longest rally since July 15. The price earlier touched $11.775, the highest since Nov. 18.
Corn Crop Heads for Sixth Record Year to Feed 1 Billion Cows: Commodities (Source: Bloomberg)
Farmers will reap a record corn crop for a sixth consecutive season in 2012, slowing a slump in stockpiles of livestock feed as global meat demand approaches a quarter of a billion metric tons. Production will rise 4.8 percent to 867.5 million metric tons in 2011-12, curbing the drop in inventories to 0.8 percent, the smallest decline in three years, the U.S. Department of Agriculture estimates. With harvests expanding from Argentina to China, prices will fall as much as 31 percent to $4.305 a bushel in Chicago trading next year, according to the median of 24 analyst estimates compiled by Bloomberg News. Corn prices doubled in the past two years as farmers failed to keep up with meat consumption that expanded 62 percent in a generation. Stockpiles fell in eight of the past 12 years and are down 34 percent since 2000, contributing to a surge in world food costs. Growers are now planting the most corn ever and more feed will come from a projected record wheat harvest.
For want of a seed, a corn crop at risk
CHICAGO, Dec 22 (Reuters) - Illinois farmer Dave Ebert intends to drive nearly five hours early next year to buy thousands of pounds of a specialized, high-yield corn seed he needs to sow a bumper crop this spring. Dealers near his farm in Gilman are already sold out.
In Iowa, the top corn-producing state, Bret Davis -- a farmer who also sells Monsanto's DEKALB brand -- says he has not been able to get his hands on enough corn seed for his customers or himself. He'll rely on a mix of existing varieties in sowing his 1,600 acres, lacking the new, high-quality seeds.
UK 2011 Wheat Harvest Up 3% On Year, Barley 2% Higher - Defra (Source: CME)
The U.K. 2011 wheat harvest totaled 15.3 million metric tons, up 3% on the year, the farm ministry said in its final figure for the year. "This is a result of a 2% increase in the wheat area to 2.0 million hectares combined with a 1% increase in the yield to 7.7 tons per hectare," the Department for Environment, Food and Rural Affairs said. "This small increase comes as farmers try to maximize their wheat areas to take advantage of better cereal prices." The ministry said that the English regions with the highest yields were in the North East, Yorkshire and the Humber. U.K. barley production in 2011 rose by 5% on year to 5.5 million tons, the farm ministry added. "This increase in production is mainly due to the 13% increase in the area of spring barley which more than compensates for the 6% reduction in the winter barley area," the ministry said. "The increase in the spring barley area is partly due to spring crops being planted in place of wheat after late harvested sugar beet."
Arabicas ease, above one-year low, sugar steady
LONDON, Dec 22 (Reuters) - ICE arabica coffee futures eased but traded above Monday's one-year low in early business, while raw sugar was little changed and cocoa edged down underpinned by a softer dollar.
Arabica coffee futures on ICE dipped in holiday-thinned volumes and traded above Monday's one-year low, underpinned by rising European stocks and a stronger euro.
Philippines cuts 2011/12 sugar output forecast by 7 pct
MANILA, Dec 22 (Reuters) - The Philippines lowered its estimate for 2011/12 raw sugar output by 7 percent to 2.24 million tonnes due to a decline in cane tonnage, the government said on Thursday.
The Southeast Asian country, however, is keeping its target of exporting more than a fourth of its downscaled crop estimate.
Cocoa flows from Brazil's Bahia faster than average
SAO PAULO, Dec 21 (Reuters) - Deliveries of cocoa to warehouses in Brazil's Bahia state kept up a swift pace in the last week at a time when the October-April main crop is usually beginning to decline, Bahia Commercial Association data showed.
Bahia-based cocoa analyst Thomas Hartmann said forecasts indicated that the final outturn of the main crop could reach 850,000 bags, the middle of a range of 800,000-900,000 bags projected at the outset of the main crop.
Brazil's '11/12 coffee crop biggest ever off-year
BRASILIA, Dec 21 (Reuters) - Brazil's now-finished 2011/12 coffee harvest produced 43.5 million 60-kg bags this year, government crop supply agency Conab said on Wednesday, a record for an off-year in the biennial up-and-down cycle in the world's top coffee producer.
Conab raised its previous estimate from September of 43.15 million bags due to higher-than-expected productivity of plantations towards the end of the harvest which runs from May to September.
Shipper dispute cuts Ghana cocoa exports - Cocobod
ACCRA, Dec 21 (Reuters) - A dispute over port fees slashed Ghana's cocoa exports to 33,000 tonnes in November from 90,000 tonnes in October, but talks are underway to resolve the impasse, the head of cocoa regulator Cocobod said on Wednesday.
"Our cocoa shipments are going out but at a slower pace because our major shippers are not loading due to differences between them and the port authorities," Tony Fofie, head of Cocobod, told a news conference.
Brent steady above $107; U.S. stocks, euro zone eyed
SINGAPORE, Dec 22 (Reuters) - Brent futures were steady above $107 a barrel, as investors weighed a sharp drop in U.S. crude stocks against persistent worries the euro zone debt crisis would curtail global oil demand.
"I was surprised by the size of the drawdown, which is helping support oil prices," said Ken Hasegawa, a derivatives manager with brokerage Newedge in Tokyo. "But there's still a lot of uncertainty over Europe."
Oil Heads for Biggest Weekly Gain in Two Months on U.S. Economic Reports (Source: Bloomberg)
Oil headed for its biggest weekly gain in almost two months in New York after U.S. economic reports indicated that growth in the world’s biggest crude consumer will accelerate. Futures were little changed today after advancing 0.9 percent yesterday as the reports showed U.S. jobless claims dropped to the lowest level since April 2008, leading indicators climbed more than forecast in November, and consumer sentiment improved this month. U.S. oil supplies fell the most in a decade last week, the Energy Department said Dec 23. Crude oil for February delivery was at $99.30 a barrel, down 23 cents, in electronic trading on the New York Mercantile Exchange at 7:46 a.m. Singapore time. The contract yesterday rose 86 cents to $99.53, the highest settlement since Dec. 13.
Chinese producers key to 2012 nickel prices
LONDON, Dec 21 (Reuters) - High-cost nickel producers in China will limit price moves in either direction next year, even while the market accelerates a move into over-supply as several new projects start up and demand falters.
Chinese producers of nickel in pig iron (NPI), a lower grade of nickel used to make stainless steel, will exert a major influence on the market as those with the highest costs turn output on and off swiftly according to their profit margins.
Japan 2012/13 steel, ethylene output outlook-IEEJ
TOKYO, Dec 21 (Reuters) - Japan's crude steel production will rise 2.8 percent to 110.55 million tonnes in the financial year starting in April if nuclear plants resume operations from next summer onwards, the nation's top energy forecaster said on Wednesday.
That marks a recovery from a projected 2.9 percent decline in the current financial year ending next March, the Institute of Energy Economics said in its annual outlook.
Taiwan October crude imports up 12 pct from September
Dec 22 (Reuters) - Taiwan's October crude imports rose 12 percent to their highest volume this year, as the country purchased more crude from Kuwait, Angola and Iran, government data showed on Wednesday.
Taiwan bought 28.6 million barrels of crude in October, up from the previous month's 25.4 million barrels.
Copper Traders Most Bullish in Two Months on Demand Outlook: Commodities (Source: Bloomberg)
Copper traders are the most bullish since October as global inventories at a two-year low add to signs that demand is improving. Sixteen of 28 analysts surveyed by Bloomberg expect the metal to advance next week, the first positive outlook in three weeks and the highest proportion since Oct. 14. Global copper stockpiles monitored by exchanges in London, Shanghai and New York fell 23 percent since March and this month were at the lowest level since October 2009, Bloomberg data show. European copper demand will rebound after this quarter and prices will climb 26 percent in the next 12 months, Goldman Sachs Group Inc. said Dec. 20. The European Central Bank awarded a record 489 billion euros ($638 billion) to euro-area banks for three years on Dec. 21 to keep credit flowing amid a debt crisis that helped wipe more than $10 trillion from the value of equities since May and pushed copper down 22 percent this year.
Japan Nov rolled copper output down 10.4 pct yr/yr
TOKYO, Dec 22 (Reuters) - Japan's output of rolled copper product plunged 10.4 percent from a year earlier to 65,030 tonnes in November on a seasonally adjusted basis, due to sluggish demand from chip and electronics sectors, an industry body said on Thursday.
That marked the fifth-consecutive month of year-on-year declines, though it was also a 1 percent rise from October, the Japan Copper and Brass Association said.
Refined copper deficit 170,000 T in Jan-Sept - ICSG
LONDON, Dec 21 (Reuters) - The world refined copper market was in deficit of 170,000 tonnes in the first nine months of the year, compared with a deficit of 429,000 tonnes in the same period a year earlier, an industry report showed on Wednesday.
The International Copper Study group (ICSG) said in its latest monthly bulletin that the global copper market was in a production deficit of 13,000 tonnes in September, but with seasonal adjustments production showed a surplus of 18,000 tonnes on the month.
China Nov refined copper imports second highest ever
HONG KONG, Dec 21 (Reuters) - China's refined copper imports jumped by nearly half on the year in November to reach the second-highest on record, as an open arbitrage between London and Shanghai bolstered a trend of increased imports for financing.
Refined copper shipments into the world's top consumer of the metal have risen continuously for the past six months, driven in part by investors buying copper and other metals for use as collateral for short-term loans.
METALS-Copper slips after 2 days of gains on doubts over ECB move
KUALA LUMPUR, Dec 22 (Reuters) - London copper slipped on Thursday, following two days of gains, on investor concerns that the latest round of European Central Bank loans to banks were insufficient to help pull the euro zone out of a two-year-old sovereign debt crisis.
"People are willing to buy in small batches for nearby contracts but they don't want to be carrying stocks if credit is tight," said Nick Trevethan, a Singapore-based senior metals strategist at ANZ Bank.
PRECIOUS-Gold inches down as Europe debt worries persist
SINGAPORE, Dec 22 (Reuters) - Gold prices inched down in thin trade on Thursday as investors remained sceptical of the euro zone's ability to tackle its debt crisis after the European Central Bank's latest moves to keep credit flowing in the region.
"We will probably be trapped in the range of $1,575 and $1,650 until the year-end," said a Hong Kong-based dealer, "The market is still focused on the euro zone -- if there will be new agreement, if the euro zone economy will slide next year, etc."
Gold Drops as U.S. Jobless Claims Slow, Investors Reduce Holding of ETFs (Source: Bloomberg)
Gold declined in New York for the third time in four days on signs of a strengthening U.S. job market and a drop in holdings by exchange-traded fund investors. Applications for unemployment benefits unexpectedly dropped last week to the lowest since April 2008, the government reported today, boosting the dollar and reducing demand for gold as an alternative asset. Holdings in bullion-backed ETFs fell for a fifth day to the lowest level since Nov. 16, as investors sold the metal to cover losses in other markets, data compiled by Bloomberg show. “The jobless numbers were better than expected, and we’re seeing the dollar strengthen again,” Dennis Cajigas, a senior market strategist at Zaner Group in Chicago, said in a telephone interview. “The U.S. economy is starting to find some traction. The ETF numbers are also a factor.”
Chances are high of a drought again next year in the U.S. corn and wheat belt because the worst is still to come from weather phenomenon La Nina, William C. Patzert, climatologist at the National Aeronautics and Space Administration said. "Drought in the U.S. corn and wheat belt has the strong possibility of repeating itself," NASA's Patzert said. "After 22 December, the first day of winter, the main event kicks in. Classic La Nina impacts are during winter through spring." La Nina is a periodic climatic phenomenon that brings more rain to the western Pacific, and to a lesser extent, to the eastern Pacific. Climatologists and commodity analysts blamed La Nina for drought that ravaged the U.S. wheat crop and dryness across the U.S. corn belt earlier this year. Last summer was the hottest since the 1950s in the heart of the corn belt, including Iowa and Illinois. Although this year's La Nina is weaker than a year ago, the muted 2011-12 reoccurence will certainly have surprises, Patzert said.
"As winter officially begins, the cool sea surface temperatures are only 1.5 degrees Celsius below normal, compared to the 3 degrees Celsius cooling of one year ago," Patzert said. Texas and Oklahoma already this year have seen wheat, corn and cotton wither in the hot, dry weather. Cattle ranchers were also forced to shrink their herds because of the parched grazing lands. The harvest in Texas, the country's second-largest producer of high-quality, hard red winter wheat, dropped nearly 60% this year to a five-year low of 52 million bushels. Winter wheat is planted from late August through October and then harvested the following spring. Some serves as a feed for cattle, which graze on it. Sentiment toward commodities lying in the traditional path of La Nina has started to turn more bullish, as Chicago and European futures grain markets advanced this week on fears over crop conditions in South America. Agritel, in line with NASA views, warned that the most critical period was yet to come in January.
Corn (Source: CME)
U.S. corn futures settled at a 1-month high, extending the current uptrend for the 5th consecutive day. Traders continue to add risk premium to prices, fearful that hot, dry weather in Argentina and Brazil will lead to smaller South American crops, analyst say. Investors are worried that the worst weather in yet to come, and that could lead to higher US export demand and place increased pressure on already tight projected US inventories, said PFG Best analyst Tim Hannagan. Larger-than-expected weekly export sales added some fresh support to buoy prices. CBOT March corn ended up 1c at $6.17 1/2/bushel.
Wheat (Source: CME)
U.S. wheat finished higher, fueled by short covering as traders attempt to reduce risk exposure before the Christmas holiday and end of year. Wheat is vulnerable to short-covering rallies because speculators have a large net short position in the market. The absence of fresh fundamental news keep wheat traders eyeing corn prices, as both markets compete in the livestock feed industry, analysts say. CBOT March wheat end up 4 3/4c to $6.21 3/4/bushel, MGEX March, up 2c to $8.43 3/4, and KCBT March end up 1 1/2c to $6.72 1/2.
Rice (Source: CME)
U.S. rice futures end lower as the market pulls back from recent gains despite broad commodity strength. The market had climbed the previous five days, helping to stop the downward momentum that has sent the market tumbling in recent months. Weak demand hangs over the market. Other commodities, including corn, wheat and soybeans, rallied. CBOT Jan. rice ends down 10c, or 0.7%, to $14.05 per hundredweight. The market held above Wednesday's lows.
Soy eases from 4-wk top on Europe funding doubts
SINGAPORE, Dec 22 (Reuters) - U.S. soy slid 0.7 percent, snapping five straight sessions of gains as broad weakness in global markets, fed by doubts over funding of European banks, weighed on agricultural futures.
"The euro is under pressure on concerns over the European situation, which is having some negative impact on the agricultural markets," said Ker Chung Yang at Phillip Futures in Singapore.
German wheat sowings for 2012 crop up 2 pct
HAMBURG, Dec 22 (Reuters) - German winter wheat sowings for the summer 2012 crop have been expanded by 2.0 percent on the year to 3.233 million hectares, the German national statistics agency said on Thursday.
Winter grain sowings of all types have been expanded by 3.2 percent on the year to 5.516 million hectares, the agency said in its first estimate of grain plantings for the 2012 harvest.
EU wheat not competitive for export -Toepfer
HAMBURG, Dec 21 (Reuters) - European Union wheat and barley are still uncompetitive on global export markets despite the euro's recent weakness, Germany's largest grain trading house Toepfer International said on Wednesday.
"EU wheat is not competitive compared to exports from Argentine, Ukraine and Russia," Toepfer said in a market report.
China May Halt Buying of Corn Until Price Falls to $5 a Bushel, Yigu Says (Source: Bloomberg)
China, the second-biggest corn consumer, may import more of the grain if global prices fall 19 percent to about $5 a bushel, a level that is significantly below domestic prices, said Yigu Information Consulting Ltd. China’s corn supply is sufficient after a record harvest and the government may import to boost stockpiles only if there is a “clear price advantage,” said Feng Lichen, general manager of Yigu, China’s largest corn information portal. Corn, used as an ingredient in feed and in ethanol, has plunged 20 percent since Aug. 31 on high global grain supplies and concerns that Europe’s deepening debt crisis and a slowing global economy may sap demand. Morgan Stanley on Dec. 13 lowered its price forecasts for agricultural commodities including corn because of rising supplies.
Ukraine sees 11/12 grain export capped at 23 mln T
KIEV, Dec 21 (Reuters) - Ukraine's grain exports are unlikely to exceed 22-23 million tonnes in the 2011/12 season despite a record harvest because of aggressive exports from neighbouring Russia, Ukraine's Farm Minister Mykola Prysyazhnyuk said on Wednesday.
"We have lost time in the first months of this season, allowing Russia to earn a lot (from exports) without competition from our side," Prysyazhnyuk told Reuters in an interview.
January USDA report may reignite the corn market: 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, Dec 22 (Reuters) - With spot corn prices more than 20 percent off their early September highs and trading volumes stunted as investors and businesses wind down activity for the year, it is tempting to consider the corn market rally that saw prices more than double between mid-2010 and mid-2011 to be well and truly over
But with emerging crops encountering challenging growing conditions in South America, and the USDA looking likely to make a further downward adjustment to the U.S. corn yield for the 2011/12 crop, the corn market may start 2012 with a bullish bang that could set it on course to remain the crop to watch as a new U.S. planting season gets underway in the spring.
Corn, Soybeans Rise to One-Month Highs on Argentina Dry Spell; Wheat Gains (Source: Bloomberg)
Soybeans capped the longest rally since July and corn rose to a one-month high on speculation that hot, dry weather is hurting crops in South America. Wheat gained for the fifth straight session. As much as 40 percent of Argentina’s corn-growing region will remain under stress for at least two weeks because overnight rains were lighter than expected, the Commodity Weather Group LLC said in a report. In Brazil, a quarter of the corn and soybean crops will remain under stress after showers in the next four days, the private forecaster said. “The market is adding some weather premium because the crop potential is declining in South America,” Jason Ward, a market analyst for Northstar Commodity Investment Co. in Minneapolis, said in a telephone interview. “The corn and soybean crops are entering the most important period for determining yields.”
Soybean futures for March delivery rose 0.7 percent to close at $11.7175 a bushel at 1:15 p.m. on the Chicago Board of Trade, the sixth straight gain and the longest rally since July 15. The price earlier touched $11.775, the highest since Nov. 18.
Corn Crop Heads for Sixth Record Year to Feed 1 Billion Cows: Commodities (Source: Bloomberg)
Farmers will reap a record corn crop for a sixth consecutive season in 2012, slowing a slump in stockpiles of livestock feed as global meat demand approaches a quarter of a billion metric tons. Production will rise 4.8 percent to 867.5 million metric tons in 2011-12, curbing the drop in inventories to 0.8 percent, the smallest decline in three years, the U.S. Department of Agriculture estimates. With harvests expanding from Argentina to China, prices will fall as much as 31 percent to $4.305 a bushel in Chicago trading next year, according to the median of 24 analyst estimates compiled by Bloomberg News. Corn prices doubled in the past two years as farmers failed to keep up with meat consumption that expanded 62 percent in a generation. Stockpiles fell in eight of the past 12 years and are down 34 percent since 2000, contributing to a surge in world food costs. Growers are now planting the most corn ever and more feed will come from a projected record wheat harvest.
For want of a seed, a corn crop at risk
CHICAGO, Dec 22 (Reuters) - Illinois farmer Dave Ebert intends to drive nearly five hours early next year to buy thousands of pounds of a specialized, high-yield corn seed he needs to sow a bumper crop this spring. Dealers near his farm in Gilman are already sold out.
In Iowa, the top corn-producing state, Bret Davis -- a farmer who also sells Monsanto's DEKALB brand -- says he has not been able to get his hands on enough corn seed for his customers or himself. He'll rely on a mix of existing varieties in sowing his 1,600 acres, lacking the new, high-quality seeds.
UK 2011 Wheat Harvest Up 3% On Year, Barley 2% Higher - Defra (Source: CME)
The U.K. 2011 wheat harvest totaled 15.3 million metric tons, up 3% on the year, the farm ministry said in its final figure for the year. "This is a result of a 2% increase in the wheat area to 2.0 million hectares combined with a 1% increase in the yield to 7.7 tons per hectare," the Department for Environment, Food and Rural Affairs said. "This small increase comes as farmers try to maximize their wheat areas to take advantage of better cereal prices." The ministry said that the English regions with the highest yields were in the North East, Yorkshire and the Humber. U.K. barley production in 2011 rose by 5% on year to 5.5 million tons, the farm ministry added. "This increase in production is mainly due to the 13% increase in the area of spring barley which more than compensates for the 6% reduction in the winter barley area," the ministry said. "The increase in the spring barley area is partly due to spring crops being planted in place of wheat after late harvested sugar beet."
Arabicas ease, above one-year low, sugar steady
LONDON, Dec 22 (Reuters) - ICE arabica coffee futures eased but traded above Monday's one-year low in early business, while raw sugar was little changed and cocoa edged down underpinned by a softer dollar.
Arabica coffee futures on ICE dipped in holiday-thinned volumes and traded above Monday's one-year low, underpinned by rising European stocks and a stronger euro.
Philippines cuts 2011/12 sugar output forecast by 7 pct
MANILA, Dec 22 (Reuters) - The Philippines lowered its estimate for 2011/12 raw sugar output by 7 percent to 2.24 million tonnes due to a decline in cane tonnage, the government said on Thursday.
The Southeast Asian country, however, is keeping its target of exporting more than a fourth of its downscaled crop estimate.
Cocoa flows from Brazil's Bahia faster than average
SAO PAULO, Dec 21 (Reuters) - Deliveries of cocoa to warehouses in Brazil's Bahia state kept up a swift pace in the last week at a time when the October-April main crop is usually beginning to decline, Bahia Commercial Association data showed.
Bahia-based cocoa analyst Thomas Hartmann said forecasts indicated that the final outturn of the main crop could reach 850,000 bags, the middle of a range of 800,000-900,000 bags projected at the outset of the main crop.
Brazil's '11/12 coffee crop biggest ever off-year
BRASILIA, Dec 21 (Reuters) - Brazil's now-finished 2011/12 coffee harvest produced 43.5 million 60-kg bags this year, government crop supply agency Conab said on Wednesday, a record for an off-year in the biennial up-and-down cycle in the world's top coffee producer.
Conab raised its previous estimate from September of 43.15 million bags due to higher-than-expected productivity of plantations towards the end of the harvest which runs from May to September.
Shipper dispute cuts Ghana cocoa exports - Cocobod
ACCRA, Dec 21 (Reuters) - A dispute over port fees slashed Ghana's cocoa exports to 33,000 tonnes in November from 90,000 tonnes in October, but talks are underway to resolve the impasse, the head of cocoa regulator Cocobod said on Wednesday.
"Our cocoa shipments are going out but at a slower pace because our major shippers are not loading due to differences between them and the port authorities," Tony Fofie, head of Cocobod, told a news conference.
Brent steady above $107; U.S. stocks, euro zone eyed
SINGAPORE, Dec 22 (Reuters) - Brent futures were steady above $107 a barrel, as investors weighed a sharp drop in U.S. crude stocks against persistent worries the euro zone debt crisis would curtail global oil demand.
"I was surprised by the size of the drawdown, which is helping support oil prices," said Ken Hasegawa, a derivatives manager with brokerage Newedge in Tokyo. "But there's still a lot of uncertainty over Europe."
Oil Heads for Biggest Weekly Gain in Two Months on U.S. Economic Reports (Source: Bloomberg)
Oil headed for its biggest weekly gain in almost two months in New York after U.S. economic reports indicated that growth in the world’s biggest crude consumer will accelerate. Futures were little changed today after advancing 0.9 percent yesterday as the reports showed U.S. jobless claims dropped to the lowest level since April 2008, leading indicators climbed more than forecast in November, and consumer sentiment improved this month. U.S. oil supplies fell the most in a decade last week, the Energy Department said Dec 23. Crude oil for February delivery was at $99.30 a barrel, down 23 cents, in electronic trading on the New York Mercantile Exchange at 7:46 a.m. Singapore time. The contract yesterday rose 86 cents to $99.53, the highest settlement since Dec. 13.
Chinese producers key to 2012 nickel prices
LONDON, Dec 21 (Reuters) - High-cost nickel producers in China will limit price moves in either direction next year, even while the market accelerates a move into over-supply as several new projects start up and demand falters.
Chinese producers of nickel in pig iron (NPI), a lower grade of nickel used to make stainless steel, will exert a major influence on the market as those with the highest costs turn output on and off swiftly according to their profit margins.
Japan 2012/13 steel, ethylene output outlook-IEEJ
TOKYO, Dec 21 (Reuters) - Japan's crude steel production will rise 2.8 percent to 110.55 million tonnes in the financial year starting in April if nuclear plants resume operations from next summer onwards, the nation's top energy forecaster said on Wednesday.
That marks a recovery from a projected 2.9 percent decline in the current financial year ending next March, the Institute of Energy Economics said in its annual outlook.
Taiwan October crude imports up 12 pct from September
Dec 22 (Reuters) - Taiwan's October crude imports rose 12 percent to their highest volume this year, as the country purchased more crude from Kuwait, Angola and Iran, government data showed on Wednesday.
Taiwan bought 28.6 million barrels of crude in October, up from the previous month's 25.4 million barrels.
Copper Traders Most Bullish in Two Months on Demand Outlook: Commodities (Source: Bloomberg)
Copper traders are the most bullish since October as global inventories at a two-year low add to signs that demand is improving. Sixteen of 28 analysts surveyed by Bloomberg expect the metal to advance next week, the first positive outlook in three weeks and the highest proportion since Oct. 14. Global copper stockpiles monitored by exchanges in London, Shanghai and New York fell 23 percent since March and this month were at the lowest level since October 2009, Bloomberg data show. European copper demand will rebound after this quarter and prices will climb 26 percent in the next 12 months, Goldman Sachs Group Inc. said Dec. 20. The European Central Bank awarded a record 489 billion euros ($638 billion) to euro-area banks for three years on Dec. 21 to keep credit flowing amid a debt crisis that helped wipe more than $10 trillion from the value of equities since May and pushed copper down 22 percent this year.
Japan Nov rolled copper output down 10.4 pct yr/yr
TOKYO, Dec 22 (Reuters) - Japan's output of rolled copper product plunged 10.4 percent from a year earlier to 65,030 tonnes in November on a seasonally adjusted basis, due to sluggish demand from chip and electronics sectors, an industry body said on Thursday.
That marked the fifth-consecutive month of year-on-year declines, though it was also a 1 percent rise from October, the Japan Copper and Brass Association said.
Refined copper deficit 170,000 T in Jan-Sept - ICSG
LONDON, Dec 21 (Reuters) - The world refined copper market was in deficit of 170,000 tonnes in the first nine months of the year, compared with a deficit of 429,000 tonnes in the same period a year earlier, an industry report showed on Wednesday.
The International Copper Study group (ICSG) said in its latest monthly bulletin that the global copper market was in a production deficit of 13,000 tonnes in September, but with seasonal adjustments production showed a surplus of 18,000 tonnes on the month.
China Nov refined copper imports second highest ever
HONG KONG, Dec 21 (Reuters) - China's refined copper imports jumped by nearly half on the year in November to reach the second-highest on record, as an open arbitrage between London and Shanghai bolstered a trend of increased imports for financing.
Refined copper shipments into the world's top consumer of the metal have risen continuously for the past six months, driven in part by investors buying copper and other metals for use as collateral for short-term loans.
METALS-Copper slips after 2 days of gains on doubts over ECB move
KUALA LUMPUR, Dec 22 (Reuters) - London copper slipped on Thursday, following two days of gains, on investor concerns that the latest round of European Central Bank loans to banks were insufficient to help pull the euro zone out of a two-year-old sovereign debt crisis.
"People are willing to buy in small batches for nearby contracts but they don't want to be carrying stocks if credit is tight," said Nick Trevethan, a Singapore-based senior metals strategist at ANZ Bank.
PRECIOUS-Gold inches down as Europe debt worries persist
SINGAPORE, Dec 22 (Reuters) - Gold prices inched down in thin trade on Thursday as investors remained sceptical of the euro zone's ability to tackle its debt crisis after the European Central Bank's latest moves to keep credit flowing in the region.
"We will probably be trapped in the range of $1,575 and $1,650 until the year-end," said a Hong Kong-based dealer, "The market is still focused on the euro zone -- if there will be new agreement, if the euro zone economy will slide next year, etc."
Gold Drops as U.S. Jobless Claims Slow, Investors Reduce Holding of ETFs (Source: Bloomberg)
Gold declined in New York for the third time in four days on signs of a strengthening U.S. job market and a drop in holdings by exchange-traded fund investors. Applications for unemployment benefits unexpectedly dropped last week to the lowest since April 2008, the government reported today, boosting the dollar and reducing demand for gold as an alternative asset. Holdings in bullion-backed ETFs fell for a fifth day to the lowest level since Nov. 16, as investors sold the metal to cover losses in other markets, data compiled by Bloomberg show. “The jobless numbers were better than expected, and we’re seeing the dollar strengthen again,” Dennis Cajigas, a senior market strategist at Zaner Group in Chicago, said in a telephone interview. “The U.S. economy is starting to find some traction. The ETF numbers are also a factor.”
20111223 0923 Soy Oil & Palm Oil Related News.
Soybeans (Source: CME)
US soybean futures ended higher, settling up for the sixth straight day as traders continued to cover shorts, fearful of a drier weather trend in South America. Investors that amassed short positions in the market as prices slid to 14 month lows last week are reducing risk ahead of the Christmas holiday and end of year, analysts say. Traders are putting some value back into prices, as a threat to South American crops could lead of increased US export demand, analysts add. CBOT March soy ended up 8 1/2c at $11.71 3/4/bushel.
Soybean Meal/Oil (Source: CME)
Soy-product futures end mixed, with soyoil rising on spillover support from crude oil and spreading between it and soymeal. It drifted lower as traders booked profits amid lagging domestic demand. CBOT March soymeal ended down 50c at $302.30/short ton while March soyoil jumped 2% to 50.08c/pound.
Palm oil at near two-week high on weather concerns
SINGAPORE, Dec 22 (Reuters) - Malaysian crude palm oil futures edged up as traders focused more on heavy rains potentially disrupting production than fixating on concerns of euro debt crisis eroding global economic growth.
"The market has shifted from demand driven to output driven. There's short covering on weather vagaries," said a trader with a local commodities brokerage, referring to the heavy local rain fall as well as the La Nina weather pattern.
Indonesia keeps Jan palm oil, cocoa export tax unchanged
JAKARTA, Dec 22 (Reuters) - Indonesia, the world's top palm oil producer, has kept its export tax for crude palm oil at 15 percent for January, unchanged from the previous month, an industry ministry official said on Thursday.
The government also left its January cocoa bean export tax at last month's level of 5 percent, said Deddy Saleh, director general of foreign trade at the Indonesian trade ministry.
Top Brazil soy state on brink of record harvest
SAO PAULO, Dec 21 (Reuters) - Producers in Brazil's largest soy producing state, Mato Grosso, are days away from beginning the harvest of record corn and soy crops, while tenacious dry weather elsewhere in Brazil's grain belt threaten to hurt yields.
Rainfall patterns this season are exhibiting how a typical La Nina phenomena affects Brazil's grain belt: Moisture in the southern states such as Rio Grande do Sul falls below average, while tending toward above average further to the north in the center-west states such as Mato Grosso.
US soybean futures ended higher, settling up for the sixth straight day as traders continued to cover shorts, fearful of a drier weather trend in South America. Investors that amassed short positions in the market as prices slid to 14 month lows last week are reducing risk ahead of the Christmas holiday and end of year, analysts say. Traders are putting some value back into prices, as a threat to South American crops could lead of increased US export demand, analysts add. CBOT March soy ended up 8 1/2c at $11.71 3/4/bushel.
Soybean Meal/Oil (Source: CME)
Soy-product futures end mixed, with soyoil rising on spillover support from crude oil and spreading between it and soymeal. It drifted lower as traders booked profits amid lagging domestic demand. CBOT March soymeal ended down 50c at $302.30/short ton while March soyoil jumped 2% to 50.08c/pound.
Palm oil at near two-week high on weather concerns
SINGAPORE, Dec 22 (Reuters) - Malaysian crude palm oil futures edged up as traders focused more on heavy rains potentially disrupting production than fixating on concerns of euro debt crisis eroding global economic growth.
"The market has shifted from demand driven to output driven. There's short covering on weather vagaries," said a trader with a local commodities brokerage, referring to the heavy local rain fall as well as the La Nina weather pattern.
Indonesia keeps Jan palm oil, cocoa export tax unchanged
JAKARTA, Dec 22 (Reuters) - Indonesia, the world's top palm oil producer, has kept its export tax for crude palm oil at 15 percent for January, unchanged from the previous month, an industry ministry official said on Thursday.
The government also left its January cocoa bean export tax at last month's level of 5 percent, said Deddy Saleh, director general of foreign trade at the Indonesian trade ministry.
Top Brazil soy state on brink of record harvest
SAO PAULO, Dec 21 (Reuters) - Producers in Brazil's largest soy producing state, Mato Grosso, are days away from beginning the harvest of record corn and soy crops, while tenacious dry weather elsewhere in Brazil's grain belt threaten to hurt yields.
Rainfall patterns this season are exhibiting how a typical La Nina phenomena affects Brazil's grain belt: Moisture in the southern states such as Rio Grande do Sul falls below average, while tending toward above average further to the north in the center-west states such as Mato Grosso.
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