Australia Selling the Farm as Prices Lure Global Funds (Source: Bloomberg)
Winston Heywood ended a 200-year family history when he sold his parched wheat fields to a fund managed by U.S. investor Westchester Group Investment Management Inc. for more than A$6 million ($6.4 million). “They offered me the money I could live off for the rest of my life,” said the 62-year-old, who in August left for the New South Wales coastal town of Coffs Harbour after enduring his driest season since 2000. “My kids didn’t want to go through the ups and downs I went through.” At least four other funds are seeking A$1.6 billion to buy similar assets in Australia, lured by fresh rain, the prospect of bumper crops, and land prices that have dropped 20 percent nationwide, and in some areas have fallen by half, since the end of 2007. Now, three years after billionaire James Packer sold off cattle ranches larger than the Netherlands, rural land prices may have bottomed, according to Colliers International.
Corn (Source: CME)
US corn futures retreat, ending lower on profit-taking and outside macro pressures. The market was primed for a pullback after sharp gains last week, traders say, and a stronger dollar--along with weaker equities thanks to Europe's debt crisis--sent buyers to the sidelines Monday. Analysts add that cash-market prices, which propelled futures last week, have since weakened, with Gulf basis sliding sharply. Traders also note there were beneficial South America rains over the weekend, though that is more of help for soy than corn at this stage of the growing season. CBOT March corn ends down 10c at $6.31 3/4 per bushel.
Wheat (Source: CME)
US wheat futures decline on pressure from corn and macroeconomic markets. Wheat was the strongest market in the grains complex but succumbed to outside pressure as corn sank and commodities generally fell amid a stronger dollar and European worries. Still, traders are nervous about a cold snap in Europe that could threaten wheat crops there, although it will be weeks before any damage is confirmed. Analysts add that speculative funds' large net-short position in wheat leaves it open to short-covering rallies. CBOT March wheat ends down 2 1/2c at $6.44 3/4 a bushel, KCBT March fell 2 1/2c to $6.97 and MGEX March declined 7 1/4c to $8.19.
Rice (Source: CME)
U.S. rice futures end lower on outside market pressure and weak demand. Worries about Europe's debt crisis drove the dollar higher and equities lower, weighing on commodities generally. Rice is suffering from weak demand, both domestically and internationally, but remains in a range established Jan. 12. CBOT March rice ends down 18c to $14.45 1/2 per hundredweight.
U.S. wheat firm on output concerns; corn, soy dip
NEW DELHI, Jan 30 (Reuters) - Chicago wheat futures were a touch higher, driven by concerns over output in the Black Sea region and talk that Russia, which has emerged as a major global supplier of the grain, may curb exports to bolster domestic supplies.
"Yes, there has been some speculation about Russia applying brakes on wheat exports, but the market will have to wait for some clear signal," said Lynette Tan, analyst with Phillip Futures in Singapore.
Vietnam Q1 rice exports seen down 39 pct y/y -newspaper
HANOI, Jan 30 (Reuters) - Vietnam's rice exports in the first quarter of 2012 are expected to fall 39 percent from a year ago to around 1.1 million tonnes due to fierce competition from Indian and other Asian grains in its major markets, a state-run newspaper said on Monday.
Exporters of 25 percent broken grain have been losing market share in Africa to India, Myanmar and Pakistan, the Vietnam Economic Times quoted Truong Thanh Phong, chairman of the Vietnam Food Association (VFA), as saying.
Extreme heat hurts wheat yields as world warms-study
SINGAPORE, Jan 30 (Reuters) - Extreme heat can cause wheat crops to age faster and reduce yields, a U.S.-led study shows, underscoring the challenge of feeding a rapidly growing population as the world warms.
Scientists and farmers have long known that high heat can hurt some crops and the Stanford University-led study, released on Monday, revealed how the damage is done by tracking rates of wheat ageing, or senescence.
Myanmar to sell Indonesia 200,000 tonnes rice a year
YANGON, Jan 28 (Reuters) - Myanmar will sell Indonesia about 200,000 tonnes of rice a year under an agreement signed on Saturday with Indonesia's state procurement agency, Bulog, Myanmar industry officials said.
Bulog imported 1.9 million tonnes of rice last year from Thailand, Vietnam and India but said on Jan. 5 it wanted to avoid imports this year. Indonesia aims to be self-sufficient, as it was in the early 1980s.
Argentina says rain came too late for some corn
BUENOS AIRES, Jan 27 (Reuters) - The dryness that blighted Argentine farm areas in December and early January will cut yields of early-planted corn while later-seeded fields have been revived by recent rains, the government said on Friday.
A scorching Southern Hemisphere summer sun has dried up hope that Argentina might replenish global corn supplies after a lacklustre U.S. harvest. The South American country is the No. 2 exporter of corn and the No. 3 supplier of soybeans, which serve as a major source of protein for the world.
Ohio ethanol makers reject vomitoxin corn
CHICAGO, Jan 27 (Reuters) - Ohio ethanol makers have rejected corn from that state containing vomitoxin, the byproduct of a fungal disease usually found in wheat, and corn prices rose further on the hot U.S. cash market, merchants and farmers said.
Vomitoxin, which sickens livestock if consumed in large amounts, thrived under cool, wet weather this past autumn in Ohio.
EU wheat now competitive for export -Toepfer
HAMBURG, Jan 27 (Reuters) - European Union milling wheat is now competitively priced in global export markets and is likely to gain sales as rival Black Sea supplies become tighter, Germany's largest grain trading house Toepfer International said on Friday.
"(EU) milling wheat has become competitive internationally and in January export sales were made to Algeria, Tunisia and Egypt," Toepfer said in a market report.
Rains lift Brazil's cane crop, sunny days ahead
SAO PAULO, Jan 27 (Reuters) - Rains in Brazil's main center-south cane region are helping the development of plants; sunny and dry weather was forecast for the next 10 days, meteorologists Somar said Friday.
Brazil is the world's largest sugar exporter, and the center-south accounts for around 90 percent of the national cane crop.
Rain Boosts Argentina's Parched Fields, But Much More Needed (Source: CME)
Argentina's parched fields got a moderate soaking from showers across much of the farm belt over the weekend, but much more is needed to replenish depleted soil moisture levels and fuel a recovery of the developing soy crop. "It helped, but didn't reverse the dryness," said agricultural weather specialist Tomas Parenti of the Rosario Grain Exchange. More showers are hoped for Monday night and Tuesday, and farmers will be watching closely for sufficient rain to boost water reserves enough to get the crops through the summer season, Parenti said. As of midday Monday, up to 25 millimeters of rain had fallen across the southern areas of the central farm belt, according to the exchange's climate report, known as the GEA. Argentina is the world's second-largest corn exporter, leads soyoil and soymeal exports and ranks third in global soybean exports. Global grain traders have been watching weather conditions in both Argentina and Brazil closely for signs of a break in the drought, which would stem crop losses.
However, the corn crop has already suffered major losses with potential production down by over a quarter. Early in the season, many had expected production to top 30 million tons. Now, the Rosario exchange is predicting corn output of just 21.4 metric tons. "This is going to be an average-to-bad season for corn," Parenti said. While there is still time for the soybean crop to rebound, some yield losses are irreversible and many fields have low soybean pod counts, he added. Analysts are predicting 2011-12 soybean production of between 45 million and 49.5 million tons--well short of the record 54.5 million tons harvested in the 2009-10 season. While recent showers are a boon, below-average rainfall is expected to continue in the coming months due to the La Nina weather phenomenon. La Nina involves the periodic cooling of the equatorial Pacific Ocean that usually brings dry weather to the farm belts of Argentina, Uruguay, Paraguay and the south of Brazil.
La Nina is expected to fade in March or April, but its effects will linger through the southern hemisphere winter with dryness continuing until October or November, according to Eduardo Sierra, chief climatologist for the Buenos Aires Cereals Exchange.
Thailand May Lose World's Top Rice Exporter Title; Over 40% Fall Likely In 2012 (Source: CME)
Thai rice exports could fall by more than 40% to multiyear lows, on the back of uncompetitive prices and government buying above market rates, a top industry official said Monday, potentially putting Thailand below Vietnam and India as the world's top exporter of rice. Thai rice exports reached a record 10.6 million metric tons in 2011, but are likely to fall to 6 million tons this year, Korbsook Iamsuri, president of the Thai Rice Exporters' Association told Dow Jones Newswires in an interview. Korbsook said that in recent months, Thailand has lost most of its share in global trade of parboiled grades to India, whose offers are cheaper by up to $100/ton. India resumed exporting non-Basmati rice in September after a gap of more than three years when they were banned to curb domestic inflation. Before India lifted its ban on exports, Thailand was exporting up to 400,000 tons of parboiled rice each month but shipments are now less than 100,000 tons, Korbsook said.
She said Thailand's exports of white raw rice, too, have slowed because of a lack of supply. Thailand lost close to 20% of the main rice crop that was harvested between October and December due to last year's floods while another 25% of its harvest last year was procured by the government to boost growers' earnings. The next harvest will only begin at the end of March, Korbsook said, and government procurement may be even higher because of rise in output and localized surpluses. The fall in exports is likely even as Thailand is set to reap a bumper crop of almost 8 million tons of unmilled rice in the secondary harvest, up from the usual 5 million-6 million tons. Close to 5 million tons may be procured by the government this year, she said. The bulk of the secondary harvest is in central Thailand, where farmers produce large surpluses, whereas production in northeast is dominated by small growers who cultivate mostly for self consumption, Korbsook said.
One consequence of government procurement is that the stockpile of rice will rise sharply at the expense of exports to more than 8.5 million tons. This is equivalent to exports of over eight months. She said the government already has 1.5 million tons rice in milled terms from previous years, has procured 3.5 million tons from the latest harvest and likely to buy a similar volume from the next harvest. The Thai government's policy of disposing of its stockpile isn't clear but exports may be higher than expected if the government sells to other governments overseas, Korbsook said.
Croatia Wheat 12-13 Production Forecast At 832,000 Tons - USDA (Source: CME)
Croatia's wheat production during the 2012-13 crop year will likely hit 832,000 metric tons, leaving the country with around 280,000 tons of grain for export, according to the U..S Department of Agriculture's Zagreb attache. Croatia's 2012-13 corn production is forecast to hit 2 million metric tons, creating a surplus of around 300,000 tons for potential exports, the attache said. Croatian barley production in 2012-13 is forecast at 190,000 metric tons, which won't meet domestic demand needs, so imports of around 30,000 metric tons are expected, the USDA said.
Sucden sees Brazil cane output modest recovery in 2012/13
LONDON, Jan 30 (Reuters) - Trade house Sucden Brazil anticipates a modest recovery in sugarcane production in centre-south Brazil to around 520 million tonnes in 2012/13.
Jeremy Austin, director of Sucden Brazil, said aging cane plants would make it hard for farmers to boost production, and that it could take some three years to bring down the average age of the cane to more reasonable levels.
ICE extends raw sugar trading hours, eyes Asia
SINGAPORE/NEW YORK, Jan 26 (Reuters) - Extended trading hours for New York sugar futures will offer Asian consumers a chance to hedge on the exchange which sets the tone for global prices, but liquidity may take some time to pick up.
China's interest also remains to be seen, with the expansion of the trading hours at the ICE FUTURES U.S. from next week designed to overlap with the end of trading in the Zhengzhou Commodity Exchange by 30 minutes.
BASF sees crop science expansion in move to U.S.
Jan 27 (Reuters) - German chemical company BASF is honing in on the Americas in the profitable biotech crop arena and giving up on the European market, where it has been frustrated by opposition to crops with genetically modified organisms, a top executive said on Friday.
BASF, one of the world's largest chemical companies, said last week it was transferring the headquarters of BASF Plant Science from Limburgerhof in Germany, to Raleigh, North Carolina. Development and commercialization of all products targeted solely at cultivation in the European market will be halted, the company said.
Brazil to sell 2009 arabica coffee stocks
BRASILIA, Jan 27 (Reuters) - Brazil will start selling arabica coffee stocks it bought to bolster prices in 2009, the agriculture ministry's coffee director told Reuters on Friday, with coffee prices now roughly $1 higher than when the stocks were first acquired.
The 1.4 million 60-kg bags of arabica (84,000 tonnes) should begin to be sold from February now that almost all the older public coffee stocks, some more than 30 years old, have been almost completely sold off, Edilson Alcantara said.
Coal-Carrier Rates Seen Dropping to Decade-Low on Capacity Glut: Freight (Source: Bloomberg)
The greatest number of coal cargoes in history still won’t be enough to eliminate a glut of Panamax vessels, driving charter rates to the lowest in a decade. Shipments will rise 3.6 percent to 956 million metric tons this year, according to London-based Clarkson Plc, the world’s biggest shipbroker. Rates for Panamaxes, each about 750-feet long, will average $12,744 a day in 2012, the lowest since 2002, the median of 10 analyst estimates compiled by Bloomberg shows. While that implies losses for ship owners, investors may profit by buying forward freight agreements, traded by brokers and used to bet on future costs, which anticipate $10,107.
Panamax charter costs already tumbled 53 percent since Jan. 1, the worst start to a year since at least 1999, as the fleet expanded for a 35th consecutive month. The slump is masking growth in economic activity, with Clarkson predicting record cargoes of everything from iron ore to oil to manufactured goods. The International Monetary Fund expects a third consecutive annual gain in world trade as economies recover from the worst global recession since World War II.
Euro Coal-Prices tick higher with oil, power
LONDON, Jan 27 (Reuters) - A rise in oil, European power values and tight prompt supply of South African coal pushed coal swaps and physical prices higher by around 50 cents to $1.00 U.S. a tonne on Friday.
But prices could start to sag again and dip towards $100 if China stays out of the spot market for another few weeks after the end of the Lunar New Year holidays, traders and utilities said.
Oil Increases as Much as 0.5% in New York to $99.28 on Economic Reports (Source: Bloomberg)
Oil rose in New York, gaining as much as 0.5 percent, on signs of better-than-expected increases in Japanese industrial production during December. Crude for March delivery climbed 50 cents to $99.28 a barrel in electronic trading on the New York Mercantile Exchange. It was at $99.26 at 8:48 a.m. Singapore time.
Oil dips below $111, EU and Iran eyed
LONDON, Jan 30 (Reuters) - Oil prices retreated, dipping below $111 a barrel after an expected Iranian vote to suspend crude exports to Europe was postponed and markets continued to wait for a deal on Greek debt.
"The newsflow regarding Iran will continue to drive prices. If there are further comments about stopping oil exports to Europe, prices will rise, but I rather doubt this will happen. It is just jawboning," said Carsten Fritsch, an energy analyst at Commerzbank in Frankfurt.
Russia oil export to rise 100kbpd in '12-dep oilmin
MOSCOW, Jan 30 (Reuters) - Russia, which lacks spare capacity to step in with extra oil if Iranian crude supplies are cut, can increase exports by about 100,000 barrels per day this year, its deputy energy minister said, roughly in line with expected output growth.
"This year we are planning (export) growth of 5 million tonnes (100,000 barrels per day) due to increased output," Deputy Energy Minister Sergei Kudryashov said on Monday after a meeting with oil companies on production sharing agreements.
S.Korea's Lee to visit Middle East to secure crude
SEOUL, Jan 30 (Reuters) - South Korean President Lee Myung-bak will visit major oil producing countries in the Middle East next month amid growing pressure from key ally the United States to join sanctions against Tehran by cutting crude oil imports from Iran.
Lee will visit Saudi Arabia, Qatar and the United Arab Emirates over four days starting Feb. 7 to secure "stable sources of energy," his office said in a statement.
Myanmar has no plans to export new gas finds
NAYPYITAW, Myanmar, Jan 27 (Reuters) - Myanmar will keep natural gas from new projects beyond 2013 for domestic consumption, a shift of policy aimed at powering its development, the country's energy minister said on Friday.
Myanmar has opened up to the outside world with astonishing speed since a civilian government took office last March after five decades of army rule. The prospect of the end of Western sanctions has prompted a surge of interest from investors.
Silver Powering 20 Million Homes as Supply Surplus Subsides: Commodities (Source: Bloomberg)
Record industrial demand for silver and resurging investor interest is diminishing a supply surplus, driving the metal used in everything from solar panels to batteries into its best start to a year in almost three decades. Manufacturers will use 15,415 metric tons, 2.5 percent more than in 2011 and reducing the glut by 41 percent to 3,297 tons, Barclays Capital estimates. Investors may buy 2,000 tons through exchange-traded products, after selling 1,300 tons last year, Morgan Stanley predicts. Prices will average $37.50 an ounce in the fourth quarter, 12 percent more than now, the median estimate in a Bloomberg survey of 13 analysts shows. The metal rallied 23 percent since closing at an 11-month low in December, entering a bull market on mounting confidence that another global recession will be avoided even as the World Bank and International Monetary Fund cut their growth forecasts.
Prices had plunged 44 percent in eight months, making it the most volatile of any metal tracked by Bloomberg, as expansion slowed from Europe to China, crimping demand for commodities.
Iron Ore-Shanghai rebar hits 3-1/2-month top as China returns
SINGAPORE, Jan 30 (Reuters) - Shanghai steel futures rose to their highest level in 3-1/2 months on Monday as the Chinese returned from a week-long Lunar New Year break, boosting expectations steel producers may replenish iron ore stockpiles.
But the modest gain in steel futures, sizeable imported iron ore stocks at Chinese ports and the likelihood that most buyers may only return to the market later this month, suggest iron ore may be in for a limited price rise.
China's steel output up 3.9 pct in early Jan-CISA
BEIJING, Jan 29 (Reuters) - China's daily crude steel output rose 3.94 percent in the first 10 days of January to 1.691 million tonnes, according to data issued by the China Iron and Steel Association (CISA) on Sunday.
Daily runs over the period were at their highest level since late October, with mills boosting production ahead of the week-long Chinese new year holiday beginning on Jan. 22.
Asia Dry Bulk-Rates to rise from 3-yr low after China break
SINGAPORE, Jan 26 (Reuters) - Rates for panamax carriers on key Asian routes could recover slightly from three-year lows over the next week as Chinese traders return from holiday, ship brokers said on Thursday.
PANAMAX/SUPRAMAX
The rate for panamax vessels travelling via the transpacific route tumbled to a three-year low of $5,915 a day on Wednesday from $6,717 last week as a flood of new vessels continued to weigh on an already oversupplied market.
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