Corn (Source:CME)
US corn futures continue to wrestle with tight near-term supplies versus expectations stockpiles could balloon in the months ahead. Futures end mixed, with nearby contracts climbing on short-term supplies, and the possibility of Chinese purchases. Deferred contracts, meanwhile, slide on the USDA's outlook for 94 million corn acres this year, a number some traders say could grow even larger if warm weather allows farmers to plant early. CBOT March corn ends up 3 3/4c to $6.44 1/2 a bushel, Dec corn ends down 1c to $5.57.
Wheat (Source:CME)
US wheat futures end higher on strength in soybeans and short-covering. Traders say that speculators' huge net-short position leaves the market primed for gains as they cover those. Fundamentally, the market has little supportive news as world supplies are abundant and weather is favorable for US crops. But persistent gains in soybeans, driven by South American crop concerns, are underpinning the whole grains complex, traders say. CBOT March wheat ends up 4 3/4c at $6.45 3/4 per bushel, KCBT March rises 4c to $6.85 and MGEX March adds 4 1/4c to $7.90 3/4.
Rice (Source:CME)
US rice futures end flat as weak world demand and domestic acreage concerns keep the market range-bound. Shawn Hackett of Hackett Financial says the market could be poised for a rally as exports pick up, with purchases from China potentially serving as a spark. CBOT March rice closes down 1/2c at $14.20/hundredweight.
U.S. soy, wheat up; corn drops on record f'cast
NEW DELHI, Feb 27 (Reuters) - U.S. soybean futures rose on robust demand from China, while wheat gained despite Friday's higher output forecast by the U.S. Department of Agriculture.
"There are a lot of orders for soybeans from China and most market participants believe the demand is going to be very strong in the days to come," said Jonathan Barratt, chief executive of BarrattBulletin, a Sydney-based commodity research firm.
Vietnam's Jan-Feb rice exports down 26.6 pct y/y-Ag Min
HANOI, Feb 27 (Reuters) - Vietnam's rice exports in the first two months of 2012 dropped 26.6 percent from the same period of 2011 to an estimated 756,000 tonnes, the Agriculture Ministry said on Monday.
Rice-export revenue in January-February fell 16 percent from a year ago to an estimated $437 million, the ministry said in its monthly report.
Drought-weary Texans welcome rains, wildflowers
SAN ANTONIO, Feb 26 (Reuters) - San Antonio resident Janet Garibay is starting the process of bringing her lawn back from the dead.
"Our yard was destroyed by the drought," said Garibay, who visited a local home-improvement store on Saturday to pick up shrubs, plants and grass seed. "We're hoping that this rainier weather will help us put it together again."
Argentine farmers finish seeding soy, corn- gov't
BUENOS AIRES, Feb 24 (Reuters) - Argentine farmers have finished planting the 2011/12 soybean and corn crops, both of which suffered from a drought earlier in the season, the government said on Friday in its weekly crop report.
Argentina is one of the world's top exporters of corn, soybeans, soyoil and soymeal. The government forecasts soy production of 43.5 million to 45 million tonnes, and corn output of between 20.5 million and 22 million tonnes.
Manitoba court will not suspend Canada Wheat Board law
Feb 24 (Reuters) - A Manitoba court cleared away some of the uncertainty surrounding Western Canada's move to an open grain market on Friday, rejecting a request to suspend a federal law that ends the Canadian Wheat Board's marketing monopoly.
The court case, one of several challenges to Ottawa's decision to scrap the Canadian Wheat Board's monopoly, was launched by eight former directors of the CWB who wanted farmers to decide whether to keep the monopoly.
Argentine grains truck owners vow strike in March
BUENOS AIRES, Feb 24 (Reuters) - Owners of Argentine grain trucks vowed on Friday to strike starting March 19 to demand higher transport rates, a protest that could disrupt hauling during early corn and soy harvesting.
Argentina is one of the world's top exporters of corn, soybeans and soy products, most of which are moved to port by truck. Strike threats are common at this time of year as labor unions seek annual wage hikes.
EU seeks tighter CO2 grip on farms, forests -draft
BRUSSELS, Feb 24 (Reuters) - The EU forestry and farming sectors will have to monitor and report from 2013 changes to land use that could affect greenhouse gas emissions, as part of the bloc's measures to curb climate change, under a draft law seen by Reuters.
The proposal, expected to be published officially next week, does not go as far as setting firm targets for limiting land-use change.
Kazakhstan plans to create national grain company
ASTANA, Feb 24 (Reuters) - Kazakhstan, a top-10 world wheat exporter, unveiled a tentative plan on Friday to create a national grain company funded by the state and private business that would equip the former Soviet republic with better infrastructure to move its grain to market.
The company, a response to President Nursultan Nazarbayev's call to better organise the grain business, would trade Kazakh grain on international markets and invest in new elevators, rail and port capacity, the Agriculture Ministry said.
Farmers Put Squeeze On Corn (Source:CME)
A new phenomenon is underpinning corn prices: prosperous farmers. Having benefited from high prices last year, farmers are becoming more choosy about when they sell their corn. Right now, some are opting to stockpile some of their harvest, rather than sell it, a decision analysts say is helping keep corn prices relatively high. Farmers now hold about 64% of the nation's corn in storage, up from 62.7% a little over a year ago and the highest in two years, according to the latest quarterly government survey. The increase, while modest, comes as the U.S. Department of Agriculture projects global corn stockpiles will drop to the lowest level since the 1973-74 crop year, in terms of days of use. This is causing an unusual supply squeeze in parts of the Midwest, driving prices higher for grain processors, livestock ranchers and ethanol makers. The added cost could pinch buyers' profit margins and could spur them to try to pass the added costs onto customers.
"The producer does have a stronger hand," says Rich Feltes, vice president for research at futures broker R.J. O'Brien in Chicago. Rick Elliott, a farmer in Monmouth, Ill., has about 350,000 bushels of corn in storage, up from his typical 300,000 bushels at this time of year. He has invested in new grain bins that have helped him and his family more than double their storage space in 10 years. "Bins have always made us money," he says. "It gives us lots of options." The stockpiling has upended the usual price cycle for corn. The grain is typically plentiful in the Midwest -- where most U.S. corn is grown -- at this time of year, in the months after the harvest, and often sells there at a 10-cent to 30-cent discount to the price in the futures market, R.J. O'Brien's Mr. Feltes says.
But this year, some buyers in parts of the Midwest are paying a premium. On Friday, Cargill Inc., one of the nation's largest grain processors, offered 25 cents a bushel above the base-line futures price for corn at its grain elevator in Bloomingburg, Ohio. Overall, corn prices in the U.S. futures market have nearly doubled since mid-2010, when worries about a weak corn harvest were at their peak. They have slipped slightly from a 2011 record, and farmers are expected to plant lots of corn this year. Corn futures for March delivery edged up 0.2% Friday to settle at $6.4075 per bushel, still down 0.9% so far this year. By holding onto corn, farmers are betting prices will resume their recent upswing. The strategy carries risks, including the chance that corn prices could drop sharply. Mr. Elliott, the western Illinois farmer, protects himself by buying options that, in effect, guarantee him a certain floor price.
The U.S. Department of Agriculture recently forecast that farmers would plant more acres of corn than at any point since 1944. If the prediction proves correct, a large crop could undercut prices. Higher crop prices helped push net farm income to $98.1 billion last year, up 24% from 2010, according to the USDA. A shrinking debt load among U.S. farmers also is contributing to their ability to hang onto corn. Last year, the total debt of all farms added up to 10.5% of assets, the lowest level since 2007, according to the USDA. Debt as a percentage of assets is significantly lower than a decade ago, and the proportion is half that of 1986, when it was 21%. That mountain of debt triggered the 1980s farm crisis, as farmers who had borrowed heavily as property values soared faced foreclosure when the prices reversed.
"Farmers are paying off loans," says Jason Henderson, an economist at the Federal Reserve Bank of Kansas City and the top executive of its Omaha, Neb., branch. They are using cash to pay for seeds and fertilizer for this year's crop, rather than buying on credit, he says. To store their inventory, farmers are investing in grain bins that can hold tens of thousands -- or even hundreds of thousands -- of bushels of corn that can often be stockpiled for months. Farmers have 12.8 billion bushels of total grain storage capacity, according to the latest U.S. government figures, up 10% from 11.7 billion in 2006. The current capacity would hold last year's entire corn harvest. Mr. Elliott says he isn't trying to drive prices up by holding on to his corn, and can't sway the market as an individual farming operation, but plans to wait until prices have risen before selling. There are other reasons why corn is piling up in some places. It can be a logistical challenge to get a bumper crop to market quickly.
But some farmers are simply waiting for higher prices, says Lance Tarochione, who grows corn in London Mills, Ill., and also works with other farmers as a seed agronomist. "Although historically these prices are amazing, they're not as high as they were a while ago. I think guys are just thinking this will come back," he says. "They're gambling that holding it is going to make them money."
Soybean Reserves Shrinking Most Since ’96 Amid Brazil Drought: Commodities (Source: Bloomberg)
Global reserves of soybeans are shrinking the most in 16 years as demand for food, feed and fuel rises, creating the biggest-ever exports for U.S. farmers. Inventories (US38ESWR) at the start of the next season on Oct. 1 will be 20 percent lower than a year earlier, Jefferies Bache LLC predicts. Prices that rose 7.8 percent since Dec. 30 will gain another 7.5 percent to $14 a bushel by June, the New York-based commodities trader estimates. China signed deals in the week ended Feb. 17 to buy 13.4 million metric tons from the U.S., about what its own farmers grow in a year. The U.S. Department of Agriculture anticipates record global exports in 2012. The oilseed’s gains contrast with outlooks for wheat and corn, with the United Nations forecasting record supplies of cereals this year in response to prices that more than doubled since 2005.
Soybean futures in Chicago fell to a 14-month low in December, spurring U.S. farmers, the world’s top growers, to consider switching more land to grains just as drought curbed harvests in South America, the largest producing region. “Tight supplies will continue until the end of next year,” said Dan Cekander, the director of grain research at Newedge USA LLC, the biggest broker on the Chicago Board of Trade, where contracts for about 24.4 million tons of soybeans traded daily last year. “The smaller crop in South America means China will buy record quantities of U.S. soybeans.”
Soybean Futures Advance on Signs U.S. Exports to Increase; Corn Rebounds (Source: Bloomberg)
Soybean futures rallied to a five- month high on speculation that demand will increase for U.S. exports after drought damaged crops in South America. Corn also rose. Soybean output in Brazil, the world’s largest grower after the U.S., will drop to 68 million metric tons this year from 75.3 million in 2011, researcher AgRural Commodities Agricolas, based in the state of Parana, said today. The crop in Argentina (US38PRAR) will be 44.5 million tons, down from a January forecast of 49 million, the Rosario Cereals Exchange said Feb. 23. “Smaller crops in South America continue to provide support for the market,” Roy Huckabay, an executive vice president at the Linn Group in Chicago, said in a telephone interview. “People are looking for China to switch some purchases from South America to U.S. origin.”
Soybean futures for May delivery rose 1.2 percent to close at $13.025 a bushel at 1:15 p.m. on the Chicago Board of Trade, after reaching $13.04, the highest for the most-active futures since Sept. 22. Prices rose for a sixth straight session, the longest rally this year. The commodity is up 8.6 percent in February, heading for the biggest monthly gain since December 2010. Corn futures for May delivery advanced 0.7 percent to $6.485 a bushel on the CBOT, the fourth straight gain. The grain rose on speculation that China may boost purchases from the U.S. to rebuild inventories before the growing season, after domestic prices reached a five-month high, Huckabay said. “It’s cheaper to import U.S. corn into China than to use domestic supplies,” Huckabay said. The U.S. was the world’s largest exporter of both commodities in the year that ended Sept. 30, according to government estimates. Corn is the biggest U.S. crop, valued at $76.5 billion in 2011, followed by soybeans at $35.8 billion.
Vietnam Feb coffee exports jump, no impact on price
HANOI, Feb 27 (Reuters) - Vietnam's coffee exports this month rose at least a quarter from a year ago, but traders said the volume would not affect prices as the beans were mostly going to roasters, and February shipment only offset a decline in a holiday-shortened January.
The government's General Statistics Office (GSO) estimated February shipment at 180,000 tonnes, below a projection of 200,000 tonnes by the Agriculture Ministry, but still in line with market expectations of between 120,000-200,000 tonnes.
China cotton imports down 1 mln ba in 2012/13-USDA
WASHINGTON, Feb 24 (Reuters) - China will cut its cotton imports by 1 million bales to 16 million bales of cotton in 2012/13 from the previous year, the U.S. Agriculture Department said on Friday, as world cotton consumption rises for the first time in three years.
At its annual Outlook Forum, USDA said China's domestic support price, which is higher than projected world prices, "is likely to constrain consumption growth and support demand for imported raw cotton and yarn, as well as synthetic fibers."
China May Double Rare Earth Exports as Demand Rises on Price (Source: Bloomberg)
China, the biggest supplier of rare earths, may almost double exports this year and meet quotas set by the government as lower prices stimulate demand. Chinese exports were 49 percent of the government-alloted quota in the first 11 months of last year because the slowing global economy sapped demand, the Ministry of Commerce said in a Dec. 27 statement. Overseas sales quotas may be virtually unchanged this year at 31,130 metric tons, based on Bloomberg calculations. “Export quotas may be met this year as overseas demand recovers,” Wang Caifeng, a former official overseeing the rare- earth industry with the Ministry of Industry and Information Technology, said in an interview in Beijing. “High prices last year had deterred purchases and led to inventories’ depletion. Smuggling also hampered exports through illegal channels.”
Euro Coal-Trades sideways, producers seek $125 Newc
LONDON, Feb 24 (Reuters) - Prompt physical coal prices held steady on Friday after a day dominated by index-linked Q4 rather than fixed-price trades and despite a rise in oil and falls in gas and power.
Utilities have continued to shed unwanted DES ARA coal for next winter and show little interest in prompt cargoes because stockpiles are high and warmer weather has cut demand for power and heating.
US coal consumption fell 7 pct last week - Genscape
HOUSTON, Feb. 24 (Reuters)- - U.S. coal consumption fell 7 percent last week from the previous week and was down 8 percent from the same week a year ago, power industry data monitor Genscape said Friday.
Coal use swings up and down seasonally, and varies from week to week and region to region, depending on electricity demand to run air-conditioners or power heaters.
Brent slips below $125 but supply concerns support
SINGAPORE, Feb 27 (Reuters) - Brent crude slipped below $125 and snapped five days of gains with investors booking profits after prices surged to 10-month highs due to concerns over supply disruption as tension rose over Iran's disputed nuclear programme.
"There were big gains in the oil market in the last 10 days because of the Iran issue," said Ken Hasegawa, a Tokyo-based commodity sales manager at Newedge Japan. "We may see prices come down $2 to $3 a barrel in the next few days unless there is
some change in the fundamental factors."
Oil Drops a Second Day on Concern Prices Near 9-Month High May Curb Demand (Source: Bloomberg)
Oil dropped for a second day in New York as investors bet rising U.S. stockpiles signal easing fuel demand amid prices near the highest in nine months. West Texas Intermediate futures slipped as much as 0.6 percent after falling for the first time in eight days yesterday. U.S. supplies probably rose 1.1 million barrels last week, according to a Bloomberg News survey before a government report tomorrow. Consumer demand for oil may deteriorate after prices for Brent crude breached a record in euros and pounds, according to Morgan Stanley. “U.S. demand is particularly weak,” Michael McCarthy, a chief market strategist at CMC Markets Asia Pacific Pty, said by telephone today. “West Texas and Brent contracts hit technical levels and so we saw some pullback.”
Oil for April delivery fell as much as 66 cents to $107.90 a barrel in electronic trading on the New York Mercantile Exchange and was at $108 at 11:26 a.m. Sydney time. The contract yesterday slid 1.1 percent to $108.56, snapping the longest winning streak since January 2010. Prices rose 6.3 percent last week to the highest since May 3.
Japan's Iran crude imports fall 12.2 pct yr/yr in Jan
TOKYO, Feb 27 (Reuters) - Japan's customs-cleared crude imports from Iran fell 12.2 percent in January from the same month a year ago, a much sharper decline than for overall imports, as Japan strives to avoid U.S. sanctions, Ministry of Finance data showed on Monday.
The cuts were much sharper than the fall of 2.1 percent in the nation's total crude imports last month. But crude imports from Iran were higher in January than December, as January and February tend to be the two peak months of imports in the winter season.
Gold’s Use to Back Value of Dollar Would be Impractical or ‘Even Damaging’ (Source: Bloomberg)
Gold’s use to back the value of the dollar would be impractical and there is little scope for the metal to play a more formal role in the international monetary system, U.K. research institute Chatham House said. While a higher gold price may reflect a lack of confidence in key currencies and low returns on other assets, there’s no consistent correlation between bullion and economic variables that could be used to inform policy decision making, according to a task force that discussed possible roles for gold. The metal can be used to hedge against currency devaluation and other risks as part of a portfolio, but not on its own, it said.
Richard Nixon, the former U.S. president, abandoned the Bretton Woods arrangement four decades ago. Between 1968 and 1971, the metal and the dollar were officially exchanged at a fixed rate after the system had tied gold at about $35 an ounce, according to the World Gold Council. Central banks are expanding bullion reserves for the first time in a generation as prices gained for 11 consecutive years, reaching a record in September.
Iron Ore-Shanghai rebar rises 1.4 pct on demand hopes
SINGAPORE, Feb 27 (Reuters) - China steel futures rose the most in nearly six weeks on Monday, spurred by hopes demand in the world's No. 1 steel consumer and producer would bounce back next month and boost appetite for raw material iron ore.
Traders expect a resumption in construction activity in China, and expectations of a change in Beijing's leadership during an annual parliamentary session in early March, may lead to measures that would boost steel demand.
China imported iron ore stocks dip in wk ending Feb 24
BEIJING, Feb 24 (Reuters) - Stockpiles of imported iron ore at major Chinese ports fell fractionally this week to end Friday at 98.94 million tonnes, according to data from industry consultancy Mysteel.
Inventories have now fallen for three successive weeks after hitting a record 101 million tonnes in early February.
Baltic sea index rises on higher capesize rates
Feb 24 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, jumped on Friday as rates for large capesize vessels rose on increasing iron ore activity.
The overall index, a gauge of the cost of shipping commodities such as iron ore, cement, grain, coal and fertiliser, rose 12 points or 1.7 percent to 718 points.
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