Rich to Invest More in Commodities, Reduce Cash (Source: Bloomberg)
Wealthy investors plan to increase their allocations to commodities and private companies while decreasing their cash holdings this year, according to a survey released today. About 48 percent of respondents said they plan to add to commodities investments during 2012 and 55 percent said they intend to make more direct investments in private companies, according to a survey by the Institute for Private Investors. About 45 percent plan to increase real-estate holdings, said IPI’s survey of its members, who are families with at least $30 million in investable assets. “It’s part of that whole movement toward actually owning real assets,” Mindy Rosenthal, executive director of IPI, said in a telephone interview. “They’re looking at going back to the old school way of making money.”
Corn (Source: CME)
US corn futures stumble Thursday, ending lower on an improved Argentina weather forecast that eased concerns about the crop there. The market backtracked largely on the forecast calling for rains next week, traders say, though they add that a stronger dollar also factored in widespread losses in the grains. Traders also took profits after the market jumped more than 10% since mid-December. Demand questions remain, traders add. "Let's not lose sight of the fact that escalation in corn prices has turned beef cattle margins negative," says Joel Karlin, Western Milling analyst. He also notes ethanol margins are deep in the red, a situation exacerbated by the end of the blenders' tax credit. CBOT March corn ends down 15c, or 2.3%, to $6.43 1/2 a bushel.
Wheat (Source: CME)
US wheat futures end sharply lower on pressure from corn and a stronger dollar. The currency's surge against the euro weighed on grains generally and wheat specifically. "US wheat export prospects aren't good, and the cheaper euro makes them even worse," says RCM Asset Management's Doug Bergman. Meanwhile, corn's retreat amid a better outlook for Argentina's crop added to the pressure since it and wheat have been moving in tandem recently. Traders add the market was poised for some profit-taking after sharp recent gains. CBOT March wheat ends down 3.2% at $6.29 1/4 while MGEX March slides 2.4% to $8.18 1/2 and KCBT March tumbles 3.9% to $6.86.
Rice (Source: CME)
US rice futures end lower amid widespread losses in grains on a stronger US dollar. The market continues to pull back from one-month highs set Tuesday, as demand is weak. Stronger USD weighs on grains generally and an improved weather outlook for Argentina weighed on corn, adding to the negative tone. Some traders say the market will need to climb in order to convince farmers to plant more acres. CBOT Jan rice ends down 9c to $14.32 a hundredweight.
Wheat falls for 2nd day on risk aversion; soy steady
SINGAPORE, Jan 5 (Reuters) - Chicago wheat slid for a second straight session, weighed down by Europe's debt woes and the improved condition of the U.S. winter crop.
"It is Argentine weather playing out and this could remain as the main fundamental factor for price direction," said Lynette Tan, analyst with Phillip Futures in Singapore. "We are more bearish on wheat because of the poor fundamentals."
Zambia maize crop off to poor start-farm minister
LUSAKA, Jan 5 (Reuters) - Erratic rainfall has delayed planting of Zambia's staple maize crop that feeds the impoverished southern African nation, raising the specter of a poor harvest after several bumper seasons, the agriculture minister said on Thursday.
"The beginning has not been good. Although it's too early to tell how things will unfold we are very concerned. The rainfall pattern has been very patchy," Agriculture Minister Emmanuel Chenda told Reuters.
Indonesia targets zero rice imports in 2012 -Bulog
JAKARTA, Jan 5 (Reuters) - Indonesia will not import rice in 2012 and instead maintain high stock levels by buying 4 million tonnes of the staple grain from domestic sellers, state procurement agency Bulog said.
Southeast Asia's biggest economy and the world's third-largest rice grower, issued permits to import 1.9 million tonnes of rice last year, from Vietnam, Thailand and India.
La Nina, low stocks trigger corn, soy volatility
OXFORD, England, Jan 4 (Reuters) - Global corn and soybean stocks remain low, leaving both commodities vulnerable to the threat posed by the La Nina weather phenomenon to production in Argentina and southern Brazil, U.S. Department of Agriculture chief economist Joseph Glauber said on Wednesday.
"Stocks levels for both those commodities are still quite low. There is a lot of volatility because of that and I think that the markets are reflecting that uncertainty right now," he told Reuters in an interview.
Vietnam sees coffee, rice exports down in 2012, oil up -report
HANOI, Jan 5 (Reuters) - Vietnam plans to export 1.2 million tonnes, or 20 million bags, of coffee this year, down 4 percent from the amount shipped in 2011 but above a previous forecast of 1.1 million tonnes, a state-run newspaper reported on Thursday.
Annual rice exports were seen reaching 7 million tonnes this year, after Vietnam exported a record 7.1 million tonnes in 2011, according to the Cong Thuong (Industry and Trade) newspaper which cited annual targets from the Industry and Trade Ministry.
Morocco grain strong despite planting delay-attache
Jan 4 - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in Morocco:
"The 2011/12 grain planting season in Morocco had a late start, with the first significant rainfalls arriving the week of October 24. Despite the delay of planting, agricultural experts remain hopeful for a good grain harvest. The official estimates for the 2010/2011 grain production were revised slightly down, with soft wheat production at 4.17 million tonnes, durum wheat at 1.85 million tonnes and barley at 2.34 million tonnes.
Argentine crop weather seen dry and hot all week
BUENOS AIRES, Jan 4 (Reuters) - Argentina will stay hot and dry for the rest of the week, meteorologists said Wednesday, adding to worries that have boosted soy and corn futures in Chicago and led some forecasters to trim the South American country's 2011/12 crop production prospects.
The National Meteorology Service (www.smn.gov.ar) said it expected no major rains in Argentina's soy or corn areas during the day. Some scattered showers, however, were likely in southeastern Buenos Aires province.
Yellow Rust Disease Attacks India Wheat Crop In Two Small Pockets - Official (Source: CME)
The yellow rust fungal disease has struck India's wheat crop in two pockets of the breadbasket northern region, but the disease outbreak has been contained early and is unlikely to hit total output, a senior government official said. Farmers have been advised to monitor their crops closely and frequently as the disease is airborne and, if left unchecked, has the potential to spread quickly from a small area. Wheat is the most important winter-sown grain staple in India. India is betting on a repeat of last year's record wheat crop of around 86 million tons this year to shore up government stocks, pivotal to the rollout of a nationwide food security program expected this year. "Stripe or yellow rust [disease] has started appearing [on the wheat crop] in Una district of Himachal Pradesh and Ropar district of Punjab. Farmers have been advised to visit the crop frequently to spray fungicide," Indu Sharma, director of the Directorate of Wheat Research, told Dow Jones Newswires.
"We have come to know very quickly. I don't think there will be any [significant] losses due to the disease," she said. While weather conditions are largely favorable due to cold weather over key growing regions in northern India, government officials are working overtime to make sure farmers don't underplay the disease threat. "We have also advised farmers not to sow susceptible varieties," she added. Sowing of wheat this season has already begun and picked up since mid-November. It is expected to finish by the middle of January. The disease has manifested in those farmers' crops who ignored scientists' advice of a 20-day gap from the previous crop and started sowing at the end of October, Sharma said. Harvest of the crop usually begins in end-March or early April. The total area under wheat crop so far is about 0.1 million hectares less than the same period a year ago.
So far, the crop is in good shape though foggy conditions in the northern states of Haryana and Punjab have reduced availability of light that is important for the plant's nourishment. However, Sharma said that foggy weather affects the crop only if it prolongs for 20-25 days. "By and large, we can't say there will be any negative impact on the crop because of the fog," she added.
Higher Acreage May Cap Corn Prices If Weather Supportive -Credit Suisse (Source: CME)
Global corn prices will likely move sideways or lower over the next few months, but a supply disruption due to adverse weather could spark another rally, a senior Credit Suisse executive said. Growers in countries including the No. 1 producer, the U.S., responded to sharply higher corn prices in June by switching to corn from soybeans, which are direct substitutes for each other, Ric Deverell, Credit Suisse's head of global commodities research, told a conference. The near-month corn futures contract on the Chicago Board of Trade reached a record of almost $8 a bushel in June, and has swung as low as $6/bushel in the half year since. It settled at $6.585/bushel Wednesday. Deverell said higher production can keep prices in check for the time being, but overall fundamentals are strong because the global corn supply situation is about as tight as it has been in the past four decades. Last year, corn acreage expanded in the U.S., the world's biggest exporter, but production still fell due to adverse weather.
The country normally accounts for more than half of the global corn trade, but it is likely to slump this year, with inventories at the end of August forecast to fall to 21.6 million metric tons from 28.7 million tons a year earlier. Close to 40% of U.S. corn output is used to produce ethanol, which constrains exports, Deverell said. With crude oil above $100 a barrel and given government incentives, it is still economical to blend gasoline with ethanol, he added. However, global corn trade growth may also be slow if China's plans to boost output and minimize imports by shifting land from soybeans succeed, Deverell said. In April 2009, China became a major corn importer for the first time in almost 15 years, and traders have said that it may have purchased close to 4.0 million tons of U.S. corn between March and September last year. Deverell said weather will continue to be a crucial factor in determining corn prices, which may rise further if the current spell of dry weather in South America is prolonged.
The impact of dryness in Brazil and Argentina on size of the upcoming corn harvest isn't fully clear to date, but a drought could reduce output and push up prices again. Argentina is world's second-largest corn exporter. It shipped out 15.4 million tons in the marketing year ended June 30, 2011, up 19% from 2009-10, according to the International Grains Council.
Ukraine Winter Grains Could Rise 40% If Better Sited-Meteorologist (Source: CME)
Ukraine's winter grain production could be increased by up to 40% through careful choices over sowing areas for wheat, according to a meteorology expert, as the country continues to struggle with adverse weather conditions. Nikolai Kulbida, head of the Hydrometeorological Center of Ukraine, said the optimum placement of crops could increase harvested volumes by 20% to 40%, even without technology changes, after recent drought caused a deterioration in planting and growing conditions. However, Kulbida conceded that permanently higher temperatures would mean the country will face a significant increase in droughts and worsening conditions for agricultural production in future, the Ukrainian Grain Association said Thursday. Risk manager Agritel said the Ukrainian government has reaffirmed its plans to increase inventories in anticipation of potentially significant winter losses, with cereal production in 2012-13 estimated at 56.4 million metric tons, of which 22.4 million tons are winter wheat.
It added that no change in the weather is anticipated in coming days and it should remain wet and unusually warm for the season. Another risk manager Offre & Demande Agricole said farmers in Ukraine and across the Black Sea region will be hoping that conditions remain warm to help winter crops recover their normal development rates. It added that current precipitation levels are allowing soil water content to return to normal levels after a dry autumn.
Corn Seed Shortage Sows Farm Belt Woes (Source: CME)
As farmers across the U.S. prepare to plant this year's corn crop, they are running up against an unexpected obstacle: a lack of seed. By some estimates, U.S. production of corn seed was down 25% to 50% ahead of this planting season. Output of corn seed, which is grown from specialized plants, was sliced by drought conditions across the Midwest and the Great Plains last year. The shortage of seed threatens to scuttle what some expect to be the biggest planting of corn in the U.S., the world's largest producer, since World War II. Early forecasts have been calling for up to 95 million acres to be sown with corn this spring, a 3.4% increase from 2011. The problem could mean the second year in a row of tumult for the corn market. Last year, hot weather led to a smaller U.S. crop than traders had expected, fueling a historic rally in corn prices to a record $8 a bushel in late spring.
Corn prices slumped in the second half as the fall harvest replenished supplies. But in the past three weeks, corn futures prices have been on the rise, jumping 14% in the past three weeks. While much of that has been on the back of fears of lower-than-expected production in South America because of drought, the prospect of falling corn seed could propel prices even further, said Jason Britt, president of Central States Commodities, a Kansas City, Mo., brokerage. March corn futures trade around $6.50 a bushel at the Chicago Board of Trade. A disappointing crop could renew talk of corn reaching as much as $9 or $10 a bushel, Mr. Britt said. "The implications of having a crop like we had this year would be pretty extreme," Mr. Britt said. Traders are "going to have to question if that crop we're planting is starting off on the right foot." Monsanto Co. and other large seed companies remain sanguine about supplies.
Pioneer Hi-Bred, the seed subsidiary of DuPont Co., said farmers in some cases won't get their first choice of seed, but noted that this happens every year. The company doesn't expect major disruptions from tight supplies, said Terry Gardner, Pioneer's director of marketing and sales effectiveness. "We're in an excellent position as far as having an adequate supply of seed," Mr. Gardner said. Monsanto, the world's largest seed supplier by volume, is expected to provide an update on supplies when it reports quarterly earnings Thursday. A company spokeswoman declined to comment ahead of the report, but pointed to a November investor presentation in which an executive voiced confidence in supplies.
The shortage of corn seed is most acute in the northern Great Plains, an area that is becoming important as farmers try to keep pace with global demand. Already, it is clear farmers in North Dakota won't be able to plant as much corn as they would like, said Tom Lilja, executive director of the North Dakota Corn Growers Association. Given enough seed, farmers likely would have planted close to three million acres, he said, but the shortage will keep plantings closer to 2.5 million. Farmers in North Dakota planted 2.25 million acres last year. Further south in the heart of the corn belt, dealers said there aren't enough top-quality seeds, which are rated by how much corn they yield, to go around. "I really don't know that I've ever seen it quite this tight," said Skip Long, product manager for Merschman Seeds in West Point, Iowa. Mr. Long estimates U.S. seed corn production fell 40% to 45% in 2011.
Yield is a measurement of the number of bushels produced per acre, and lower yields result in smaller harvests. Yields often are volatile year to year, with last fall's crop averaging 146.7 bushels an acre, a 4% decline from the previous year. Corn seeds are kernels from a cob. Seed companies have bred and modified the plants genetically in a process that has resulted in hardier plants. Seed suppliers said they plan to turn to imports of seed from South America to make up for the weak U.S. seed crop. But turning to countries such as Chile and Argentina has its own risks. The drought conditions in South America that have hurt corn production also are imperiling the corn-seed crop. Moreover, a late harvest in South America or early planting season in North America could leave companies scrambling to get the seeds shipped, processed and into farmers' hands in time.
Sugar Drops Most Since September on Brazil Outlook; Coffee, Cocoa Falls (Source: Bloomberg)
Sugar fell the most since September as weather conditions improved for Brazil’s cane crop, the world’s largest, and a stronger dollar curbed the appeal of commodities as investments. Coffee and cocoa dropped. Brazil’s Center South, the world’s top sugar-producing region, will get rains in the next 10 days, easing concern that an earlier dry spell would erode yields from this year’s harvest, weather forecaster Somar Meteorologia said today. There are “some forecasts for rains in southern Brazil that could be beneficial,” Jack Scoville, a vice president for Price Futures Group in Chicago, said in an e-mail. Raw sugar for March delivery plunged 5.3 percent to settle at 23.13 cents a pound at 2 p.m. on ICE Futures in New York, the biggest decline since Sept. 16. The sweetener sank 27 percent in 2011 as crops expanded in Asia and Europe.
Sugar consolidates, robustas dip on crop pressure
LONDON, Jan 5 (Reuters) - ICE sugar consolidated in early trade on Thursday as prices adjusted to Tuesday's rally, while robusta coffee dipped holding above a 9-week low on crop pressure, and cocoa eased in thin volume.
ICE benchmark raw sugar futures edged down 0.08 cent or 0.3 percent to 24.34 cents a lb in choppy dealings at 0931 GMT, below a seven-week peak of 24.65 cents per lb touched on Wednesday.
Ghana cocoa purchases up
ACCRA, Jan 4 (Reuters) - Ghana's official cocoa purchases are running 9 percent over last year, according to figures from state regulator Cocobod, but recent transport delays have triggered congestion at the West African nation's warehouses.
Purchases reached 518,531 tonnes by Dec. 22 since the start of the season on Oct. 14 in the world's No. 2 grower, according to Cocobod data seen by Reuters on Wednesday, with some 37,019 tonnes registered in the most recent week.
Cameroon cocoa exports reach 106,347 T by end-Nov
YAOUNDE, Jan 4 (Reuters) - Cameroon exported 41,410 tonnes of cocoa beans in the month of November 2011, bringing the total for the season so far to 106,347 tonnes, according to statistics from the National Cocoa and Coffee Board (NCCB) released on Wednesday.
That is a slight drop from 109,045 tonnes exported by the same time last season.
India Oct-Dec coffee export down 10 pct
MUMBAI, Jan 4 (Reuters) - Coffee exports from India fell 10.07 percent to 58,115 tonnes in the first three months of the coffee year which ends in September 2012, according to information available on the state-run Coffee Board's website.
In value terms, exports were at $174.14 million from October to December, up from $153.35 million for the same period last year.
China to ease up on rubber imports ahead of wintering
MUMBAI, Jan 5 (Reuters) - China, the world's biggest importer of natural rubber, is unlikely to buy in bulk ahead of the lower-supply wintering months as it has enough stocks at home, a senior economist of the ANRPC grouping of rubber-producing nations, said.
China usually buys big going into the Lunar New Year holidays and ahead of wintering, when supplies dwindle and prices move higher.
Monsanto sees drop in 2012 US cotton planting
ORLANDO, Jan 4 (Reuters) - - American cotton plantings in 2012 are seen falling 15 percent to around 12.5 million acres although the final figure will depend a great deal on prices of cotton and rival grains, as well as the vagaries of weather, a top official of lifesciences firm Monsanto said.
"Cotton acres are going to be down," David Rhylander, the marketing lead for Monsanto's wholly owned cotton seed firm Deltapine, told Reuters in an interview late on Tuesday at the start of the annual Beltwide cotton conference here.
Brent rises near $114 as Iran offsets EU crisis
SINGAPORE, Jan 5 (Reuters) - Brent crude rose toward $114 a barrel as fears of an Iranian supply disruption mounted after the European Union agreed to cut off oil imports from the No. 2 OPEC producer, offsetting jitters over the euro zone crisis.
"It's a knee-jerk reaction as more countries are leaning to comply with the sanctions," said Ryoma Furumi, a commodity sales manager at Newedge Japan.
Qatar keeps Feb crude supply to Asia steady -source
TOKYO, Jan 5 (Reuters) - Qatar, one of OPEC's smallest producers, has notified at least one Asian buyer that it will supply Marine and Land crude at full contracted volumes for February, unchanged from January levels, a trade source said on Thursday.
Qatar gave buyers the option of asking for cargoes to be 5 percent more or less than contracted volumes, the same as the previous month, the source added.
Oil Declines a Second Day as U.S. Stockpiles, Europe Counter Iran Threat (Source: Bloomberg)
Oil fell for a second day, trimming a weekly gain, as investors speculated that increasing U.S. crude stockpiles and signs that Europe’s sovereign debt crisis will worsen indicate fuel demand may falter. Futures slid as much as 0.5 percent in New York after Energy Department data showed crude supplies climbed 2.2 million barrels (DOESCRUD) last week, compared with a forecast for a 1 million barrel decline in a Bloomberg News survey. Borrowing costs in France rose in the country’s first bond auction of the year and Hungary’s one-year bill yield climbed to the highest since 2009. Oil has gained 2.7 percent this week on concern that sanctions against Iran will curb supplies. Crude for February delivery slid as much as 50 cents to $101.31 a barrel in electronic trading on the New York Mercantile Exchange. It was at $101.50 at 10:38 a.m. Sydney time. The contract yesterday fell 1.4 percent to $101.81, the lowest close since Dec. 30. Prices gained 8.2 percent in 2011.
Copper Declines as Deepening European Woes Erode Demand Outlook for Metal (Source: Bloomberg)
Copper fell for the second straight day on concern that Europe’s debt crisis is deepening, eroding prospects for the economy and metal demand. European industrial orders rose less than forecast in October from the previous month, regional statistics showed. The euro (EURUSD) dropped to the lowest in almost 16 months against the dollar after French borrowing costs rose at a bond sale. “We are experiencing more euro-sourced angst, pressuring metals and energy in the process,” Edward Meir, an analyst at INTL FCStone Inc. in New York, said in a report.
Gold Traders Most Bullish in Month After Bear Market Averted: Commodities (Source: Bloomberg)
Gold traders are the most bullish in a month as Europe’s deepening debt crisis and increasing tensions over Iran drove the metal to its longest winning streak since October. Ten of 22 surveyed by Bloomberg expect the metal to gain next week and five were neutral, the highest proportion since Dec. 9. The U.S. Mint sold 45,500 ounces of American Eagle gold coins this month, compared with 65,500 ounces in the whole of December and 41,000 in November, data on its website showed. Britain and France will press the European Union to stop Iranian crude imports at a Jan. 30 meeting, in response to the country’s nuclear program. Iran is threatening to retaliate by blocking the Strait of Hormuz, a key chokepoint for global oil supplies. Greek Prime Minister Lucas Papademos warned his nation may face economic collapse as soon as March. Investors are holding (.GLDTONS) a near-record amount of gold through exchange-traded products after the metal rose for an 11th consecutive year.
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