Monday, January 9, 2012

20120109 1027 Global Commodities Related News.

Corn (Source: CME)
US corn futures close flat to slightly lower under pressure from soybeans and uncertainty about South America's crop prospects. A wetter forecast for Argentina has put the brakes on a recent rally, but traders are uncertain about how the forecast could shift over the weekend. Crops there badly need soaking rains, analysts say. Traders also wary of next week's January USDA reports, which have been huge market-movers in recent years. A late swoon in soybeans and pressure from a stronger US dollar also kept a lid on corn, traders say. CBOT March corn ends flat at $6.43 1/2 a bushel, down 3c on the week. Other contracts close lower.

Wheat (Source: CME)
US wheat futures fell, with Minneapolis spring wheat tumbling to multi-month lows. Investors saw little incentive to buy wheat amid sluggish export demand, ample global wheat supplies and improved winter wheat crop conditions, analysts say. There is no threatening weather for wheat crops and with much better moisture for winter wheat crops in the U.S. southern plains, traders view wheat futures as overpriced, analysts say. CBOT March wheat ends down 4 1/2c at $6.24 3/4 while MGEX March wheat slides 2.1% to $8.01 and KCBT March wheat dropped 6c to $6.80.

Rice (Source: CME)
US soybean futures end lower, hitting a 1-week low as the market lacked fundamental support to justify higher prices. The market doesn't have overtly bullish news to sustain advances, says ebottrading's John Kleist. He adds the market has no strong demand, dire crop consequences in South America or global supply tightness. Today's declines were accelerated by technical selling as traders viewed the market as overbought with rains due to move into Argentina next week. CBOT March soybeans end down 12 1/2c at $11.96 1/2 a bushel.

Corn, soy steady; Argentine rain forecast weighs
SINGAPORE, Jan 6 (Reuters) - U.S. corn and soybean futures were little changed, after last session's heavy losses, as forecasts of rain across parched farms in Argentina continued to weigh on sentiment.  
"Rain for Monday and Tuesday looks certain for Argentina, but overall they are still below average," said Adam Davis, a senior commodity analyst at Merricks Capital in Melbourne.

Warm weather threatens to extend U.S. drought
Jan 5 (Reuters) - A New Year's Eve "heat wave" melted away welcomed winter snow that had brought some drought relief to the U.S. Plains, reviving fears that harmfully warm and dry conditions will persist into 2012, U.S. climatologists said in a report issued Thursday.  
"The return of warm, dry weather to the nation's southern tier could be suggestive of an increasingly La Nina-driven atmospheric regime," said the U.S. Drought Monitor report, issued weekly by a team of national, state and academic climatology experts.

Snowless winter a worry for U.S. crops
CHICAGO, Jan 5 (Reuters) - It is early January, a time when farm fields in the U.S. Midwest should be blanketed with white snow.
Instead, the only color is brown. The soil lies uncovered missed by this season's snow storms and deprived of moisture needed to give crops a proper start this spring and during the hot summer growing season.

La Nina - herald of drought - may linger into spring
ORLANDO, Fla., Jan 5 (Reuters) - La Nina, the weather phenomenon blamed for searing drought in the southern United States and South America, may last longer than expected into the Northern Hemisphere spring and could spark another crop-killing dry spell, the U.S. Climate Prediction Center warned  on Thursday.
The CPC's monthly update said the latest sea-temperature data suggests La Nina "will be of weak-to-moderate strength this winter, and will continue thereafter as a weak event until it likely dissipates sometime between March and May".
 
Argentine corn, soy to get ample rains-exchange
BUENOS AIRES, Jan 5 (Reuters) - The Buenos Aires Grains exchange kept its estimate for Argentina's 2011/12 commercial corn area unchanged on Thursday, predicting that rains over the two weeks ahead will revive parched fields.
Farmers in grains exporting powerhouse Argentina have been worried about recent dry weather and a feared repetition of the devastating drought of 2009, which scorched grains fields and wiped out entire herds of cattle.

Drought dents hope for bumper Brazil soy, corn crop
SAO PAULO, Jan 5 (Reuters) - Two important Brazilian corn and soy producers Parana and Rio Grande do Sul made sharp cuts to crop forecasts on Thursday after weeks of harsh, dry weather dented prospects for a soy crop that as recently as this week some still expected to be a record.
Brazil's biggest soy state Mato Grosso which grows nearly a third of the crop has been spared weather havoc this year but traders are closely watching losses in other states and in Argentina. Markets grow more tense with each dry day.

Argentine farm areas seen dry until next week
BUENOS AIRES, Jan 5 (Reuters) - Grains-exporting powerhouse Argentina is expected to remain dry until next week, when showers are predicted for the main soy and corn producing province of Buenos Aires, a climatologist said on Thursday.
Dryness related to the La Nina phenomenon has prompted analysts to cut their 2011/12 corn output predictions while soy farmers hope that rains expected for late January and February will revive their parched fields.

Argentina Eases Wheat Export Restrictions In Nod To Farmers (Source: CME)
Argentina's federal government has formally agreed to ease restrictions on wheat exports, in a concession to farmers who say the outgoing permitting system forced them to sell their grain at a steep discount. "This mechanism protects the first 7 million [metric] tons that Argentina needs for domestic consumption. All of the rest is available to producers who can sell it as they see fit," Agriculture Minister Norberto Yauhar said in a press conference late Thursday afternoon. Argentina tightly regulates corn and wheat exports to keep local food prices low, with the government issuing export permits only when it decides that enough grain has been set aside to meet domestic demand. Argentina is the world's No. 2 corn exporter and a major supplier of wheat to neighboring Brazil. Yauhar said the new system is the product of negotiations between the government and farm groups. "An agreement was reached that satisfies everybody."
Under the new permitting system, the government will conduct a preliminary survey of wheat stocks Jan. 31 of each year, at which time it will authorize some exports. All excess stocks will be eligible for export once a final survey is completed in February. The Buenos Aires Cereals Exchange on Thursday raised its forecast for the 2011-12 wheat harvest to 14 million metric tons, an increase of 400,000 tons from its previous estimate. So far, farmers have finished about 93% of the harvest, which ends later this month. Exports of soybeans, corn, wheat and related products like soyoil are Argentina's main source of hard currency and a major source of taxes. Export taxes, mainly on grains, accounted for 10% of the federal government's 540 billion pesos ($125 billion) in total tax revenue in 2011. Farmers have long complained that the old system of issuing export permits in a handful of tranches throughout the year stifled competition between exporters and local buyers.
Critics say those regulations have also stunted the futures market and forced farmers to sell their crops on the spot market or bear the expense of storing the grains. President Cristina Kirchner, who was sworn in for a second term last month after winning re-election with 54% of the vote, went to great lengths to mend fences with farmers in the runup to the election. In 2008, Kirchner faced a rebellion by rich and poor farmers who blocked highways to protest her attempt to raise taxes on grain producers. High global prices for soy and grains have also helped to smooth over the lingering resentment between the Kirchner administration and farm groups.

Imperial Sugar 4Q Loss Widens On Charges, Lower Sales Volume (Source: CME)
Imperial Sugar Co.'s fiscal fourth-quarter loss widened, reflecting impairment charges and a 27% drop in the refined-sugar processor's sales volume. High raw sugar prices and competitive refined sugar pricing continue to weigh on Imperial Sugar. In November, the company decided to suspended its quarterly dividend amid margin and liquidity pressure. To improve its balance sheet, the company sold its 50% interest in the Mexican marketing venture Comercializadora Santos Imperial S. de R.L. de C.V. and sold its one-third stake in Louisiana Sugar Refining LLC. Imperial is also reviewing strategic alternatives for its 50% interest in Wholesome Sweeteners. For the quarter ended Sept. 30, Imperial reported a loss of $32.5 million, or $2.73 a share, compared with a loss of $2.31 million, or 19 cents, a year earlier. The most-recent quarter included impairment charges totaling $7.1 million. Sales dropped 12% to $231.4 million.
Analysts polled by Thomson Reuters had most recently forecast a loss of 79 cents on revenue of $219 million. Gross margin swung to negative 3.5% from positive 2.7%.

Sugar, arabicas consolidate after slide
LONDON, Jan 6 (Reuters) - ICE sugar and arabica coffee consolidated in early trade on Friday, after sharp slides on Thursday, while cocoa eased in thin volume pressured by abundant supplies from West Africa.
ICE benchmark raw sugar futures  firmed 0.25 cent or 1.1 percent to 23.38 cents a lb underpinned by a soft dollar at 0933 GMT, below a seven-week peak of 24.65 cents per lb touched on Wednesday.

Uganda's Dec coffee exports rise 2.3 pct yr/yr
KAMPALA, Jan 6 (Reuters) - Uganda's coffee exports rose 2.3 percent in December compared to the same month in the previous year, helped by favourable weather, a source at the Uganda Coffee Development Authority (UCDA) said on Friday.  
The east African country, which is on the cusp of becoming a top-50 crude oil producer, is one of Africa's leading exporters of the beans and earnings from the crop are a major source of foreign exchange.
 
India extends sugar export permit deadline to Feb 15
NEW DELHI, Jan 6 (Reuters) - India has extended the deadline for mills and factories to apply for sugar export permits, the government said on Friday, a move expected to boost sluggish exports from the world's second biggest producer.
Factories wishing to export from their own sugar stock can apply for the permit until Jan. 31, while those plan to export sugar bought from elsewhere can apply for the permit until Feb. 15, it said.

Ivory Coast targets 260,000 T of cotton in 2012/13
ABIDJAN, Jan 5 (Reuters) - Ivory Coast will grow at least 260,000 tonnes of cotton in the 2012/13 season versus an expected 240,000 tonnes in 2011/12, boosted by reforms in the sector, the executive secretary of the Ivorian ginners association said on Thursday.
Both forecasts are up on the West African state's 175,000-tonne output during the 2010/11 season.

Oil Trades Near One-Week Low as Europe Debt Concern Counters Iran Tension (Source: Bloomberg)
Oil fell for a third day in New York as bets that Europe’s debt crisis will worsen and curb fuel demand countered concern that tension with Iran may disrupt Middle East crude exports. Futures declined as much as 0.5 percent before German and French leaders meet in Berlin today as they seek to craft a plan for rescuing the euro over the next three months. The U.S. will act to reopen the Strait of Hormuz if Iran blocks the channel, Joint Chiefs of Staff chairman General Martin Dempsey said in an interview on the CBS “Face the Nation” program yesterday. Brent oil’s premium to West Texas Intermediate crude rose to the highest in almost two months. “It’s a matter of two factors for the market,” said Ric Spooner, a chief analyst at CMC Markets in Sydney. “We have concerns about potentially significantly reduced economic activity emanating from Europe, and Iran. Any potential disruptions have to be taken seriously because it won’t take much to put us into a supply problem.”

Brent steady at about $113 as growth concerns counter Iran
SINGAPORE, Jan 6 (Reuters) - Brent crude was flat at about $113 a barrel as unabated euro zone debt woes and a surprise build in U.S. oil stockpiles tempered gains from supply disruption fears on mounting tensions between Iran and the West.
"Oil could see-saw as the U.S. and Iran play brinkmanship," said Tony Nunan, a risk manager at Mitsubishi Corp, adding that the global oil demand outlook was murky as the euro zone crisis dragged on.

Japan crude stocks rise despite strong crude runs
TOKYO, Jan 6 (Reuters) - Japan's commercial crude inventories rose 1 percent last week, despite the highest weekly crude runs since March, implying that crude imports were robust in the final week of 2011, industry data showed on Friday.
Crude stocks in the world's third-biggest oil consumer increased by nearly 1 million barrels from the week before to 15.38 million kilolitres (96.7 million barrels) in the week to Dec. 31, the Petroleum Association of Japan (PAJ) said.

Euro Coal-Rises $1-2/t as buying picks up
LONDON, Jan 5 (Reuters) - South African physical prompt coal bids rose by around $1.00 a tonne percent on Thursday as buyers began to emerge after the end-year holiday hiatus.
Delays of two weeks to Colombian coal shipments by Drummond and Prodeco, two of the the country's biggest exporters, were a minor price-supporting factor which could turn into a more significant influence if the rains persist, traders and utilities said.

China's Nov coal output rises 4.4 pct to 321 mln T
SHANGHAI, Jan 4 (Reuters) - China's raw coal production in November rose 4.4 percent from a year ago to reach 321 million tonnes, while total output in the first 11 months of the year rose 11.6 percent to 3.46 billion tonnes, an industry website said on Wednesday.  Of the total year-to-date output, that from main state-owned coal mines reached 1.77 billion tonnes, up 12.1 percent from the same period last year, industry portal SXCOAL.com said, citing data from the China Coal Industry Association.

Iron Ore-Prices inch up but traders rule out big purchases
BEIJING, Jan 6 (Reuters) - Iron ore prices in China, the world's biggest market, inched up on Friday as customers sought to replenish stockpiles, but traders ruled out big purchases ahead of the lunar new year holiday later this month.
Offer prices for 61.5 percent Pilbara fines rose $1 to $139-141 per tonne including cost and freight on Friday, industry consultancy Umetal said, and they have now increased $3 since markets reopened on Wednesday.

China 2012 crude steel consumption seen at 700 mln T - CISA
BEIJING, Jan 5 (Reuters) - China's total apparent crude steel consumption is expected to rise about 4 percent to 700 million tonnes this year, the chairman of the China Iron and Steel Association said on Thursday.
Zhu Jimin, also head of Shougang Group, one of the country's biggest steelmakers, made the comments in a speech published on the association's website.

Spot Gold Declines for a Second Day, Dropping 0.2% to $1,615.20 an Ounce (Source: Bloomberg)
Gold for immediate delivery declined 0.2 percent to $1,615.20 an ounce, while bullion for February delivery in New York traded little changed at $1,616.40 an ounce. Silver for March delivery advanced 0.2 percent to $28.745 an ounce.

METALS-London copper rises as U.S. data improves outlook
KUALA LUMPUR, Jan 6 (Reuters) - London copper inched up on Friday, erasing declines from earlier this week, after jobs data pointed to a recovery in the U.S. economy which offset concerns that the euro zone crisis is dragging demand growth lower.
Asian buying also kept prices higher, with investors betting on an increase in demand in China as business activity expands in the world's second-largest economy.

PRECIOUS-Gold steady on Europe woes, dollar weighs
SINGAPORE, Jan 6 (Reuters) - Gold hovered around $1,620 an ounce on Friday as investors remained nervous over the euro zone debt crisis and sought safety in bullion, while a firm dollar weighed on sentiment.
The dollar hovered near a one-year high against a basket of currencies as worries about the euro zone's fiscal stability persisted.

Baltic index falls on weak freight demand
LONDON, Jan 5 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, continued a slide that began before Christmas due to weak demand for coal and iron ore freight and growing vessel supply.
The index, which gauges the cost of shipping commodities such as iron ore, cement, grain, coal and fertiliser, fell 126 points or 8.12 percent to 1,426 points.    

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