20120309 0952 Global Commodities Related News.

World Food Prices Rose Again In February, FAO Says (Source: CME)
World food prices increased for the second consecutive month in February, driven by higher prices for sugar, cereals and oils, although dairy prices fell slightly after a marked rise in January, the United Nation's food body said. The index's rise in January was its first since July 2011, and it now stands 10%, or 23 points, below its peak in February 2011. Food price inflation climbed toward the top of the international agenda after hitting successive record highs in the early part of last year amid global supply concerns for cereals, sugar and cocoa, before five straight months of decline--the longest slide in over two years. The Food and Agriculture Organization's food price index, which measures the monthly change in international prices of a basket of food commodities, rose 2.4 points from January, to 215 points.
The FAO Sugar Price Index rose to 342 points in February, an increase of 2.4%, due to unfavorable weather conditions in Brazil, the world's largest producer and exporter of sugar, amid fears of  delayed harvests and short-term tightness in the market. However, large production in India, the European Union, Thailand and Russia kept prices from increasing further, the FAO said. Meanwhile, the FAO Cereal Price Index increased to 227 points in February, up 2% from January, as wheat markets were supported by tightening supplies and concerns over the effects of severe cold on this year's crops in Europe and the former Soviet Union. Corn prices also rose due to stronger import demand in Asia, concerns about crop prospects in South America and support from a weaker dollar and lower freight rates, the FAO said.
The FAO Oils/Fats Price Index also rose 2% in February, to 239 points, as poor monthly production growth in palm oil combined with the prospect of a tight supply and demand balance for total vegetable oils in 2011-12. However, the FAO Dairy Price Index dropped marginally to 205 points in February, due to falling skim milk powder and casein quotations, and on easing supplies in major exporting countries. Prices of butter, cheese and whole milk powder remained relatively steady, the FAO said.

Corn (Source: CME)
US corn futures hit a 2-week low as traders continued to reduce risk exposure ahead of Friday's USDA supply-and-demand reports. "The momentum of corn prices has turned negative as the market lacks enough new export news to give bullish traders hope," says Prime Ag Consultant's Chad Henderson. Anticipation of the USDA to disclose smaller South American crops and stronger demand is priced into the market, says Henderson, and without a fresh demand source, corn struggled. Corn also drew pressure Thursday from a larger Brazilian crop estimates and bean/corn spreading. CBOT May corn falls 3 1/4c to $6.35 1/2 a bushel.

Wheat (Source: CME)
US wheat futures end lower on weak fundamentals and investor positioning ahead of Friday's USDA supply-and-demand report. World wheat supplies are already ample and the US winter-wheat crop has positive growing conditions. "You've already got large supplies and you're going to add to it the way things look," says Tom Leffler of Leffler Commodities. Weekly US export sales, reported at the high end of analysts' expectations, failed to hold off selling pressure. CBOT's most-heavily traded May wheat contract falls 4 1/2c to $6.34 3/4 a bushel while KCBT May drops 5 1/2c to $6.78 1/4 and MGEX May declines 5 1/4c to $8.03 1/2.

Rice (Source: CME)
US rice futures tumbled to five-week lows, driven by speculative selling amid poor export demand. Weakness in other grain futures attracted sellers with traders concerned about export demand dwindling at higher price levels, analysts say. USDA confirmed the poor export outlooks in its weekly export sales report. Rice sales totaled 26,700 metric tons, down 33% from the previous week and down 63% from the prior four week average. CBOT May rice ended down 30c or 2.1% to $13.93/hundredweight.

Wheat, corn rebound on softer dollar, US data
SINGAPORE, March 8 (Reuters) - U.S. wheat futures rose for the first time in four days on Thursday, recovering from their biggest daily fall in two months in the previous session along with corn, helped by a softer dollar and upbeat U.S. jobs data.
"I doubt we'll see any great surprises from the USDA to get the market too excited," said Paul Deane, agricultural economist at Australia and New Zealand Bank.

S.Africa GM crop area hit record in 2011/12 -report
JOHANNESBURG, March 8 (Reuters) - South Africa's genetically modified (GM) crop area increased 100,000 hectares to a record 2.3 million hectares in the 2011/12 season from 2.2 million hectares in the season before, an industry report showed on Thursday.
The land area cultivated under the staple maize was 1.9 million hectares, while genetically modified soya beans were produced on 450,000 ha and cotton on 15,000 ha, the report issued by the International
service for the Acquisition of Agri-biotech Applications (ISAAA) showed.

Philippines 2011/12 wheat imports seen down-attache
March 7 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in the Philippines:
"The Philippines is one of the world's largest rice importers, a top five market for U.S. wheat and a minor importer of corn. Total rice imports are expected to increase from 1.3 million tonnes in MY10/11 to 1.5 million tonnes in MY11/12, inclusive of unregistered imports.

Argentine dock strike slows 20 grains ships -union
BUENOS AIRES, March 7 (Reuters) - About 20 grains vessels were slowed in Argentina on Wednesday, according to dock workers on strike since last week to demand fuller staffing of their shifts, a protest that could bog down key soy exports.
Sources in the SOMU labor union in the country's main agricultural shipping hub Rosario said the delays will continue as long as port authorities resist demands to put more workers on the job during busy docking shifts.

Wheat plantings seen higher in England/Wales-HGCA
LONDON, March 7 (Reuters) - The area planted to wheat in England and Wales by December 1, 2011 is estimated to have risen by 3 percent to 1.86 million hectares, the Home-Grown Cereals Authority said on Wednesday issuing results of a planting survey.
Rapeseed area climbed 6 percent to 698,000 hectares and winter barley rose 9 percent to 345,000 hectares.

Morocco's cereals crop may fall by half - state body
RABAT, March 7 (Reuters) - Morocco's cereals harvest this year will not reach half of last year's level, the head of a state-run agricultural research institute said on Wednesday, which would ratchet up the burden of imports on the country's frail balance of payments.
"This year will be very difficult for farming in Morocco ... It is the worst year as far as rainfalls are concerned since 2007," Mohamed Badraoui, head of the National Institute for Agricultural Research, told Reuters.

Drought Tightens Corn Supply Before Biggest Harvest on Record: Commodities (Source: Bloomberg)
Droughts from Mexico to Argentina are shrinking corn stockpiles to a five-year low, raising the prospect of a bull market before U.S. farmers start reaping the biggest crop ever. Global reserves will drop 4.2 percent to 123.43 million metric tons by Oct. 1, according to the average of 21 analyst estimates compiled by Bloomberg. That’s equal to 52 days of consumption, the fewest since 1974. Goldman Sachs Group Inc. expects prices to rise 10 percent to $7 a bushel before the U.S. harvest starts in September, 21 percent above the one-year closing low reached on the Chicago Board of Trade in December. Prices fell 16 percent in the last four months of 2011 as the USDA predicted Brazil and Argentina, accounting for almost 10 percent of global supply, would produce their biggest crops ever. Futures then rallied as drought spread across Central and South America, spurring the USDA to cut its forecasts twice in as many months.
While prices may keep rising for now, analysts anticipate declines by the end of the year as U.S. growers harvest the most acres planted since at least 1944. “There is no doubt that crops in South America were hurt by the hot, dry weather and that means more demand for U.S. supplies,” said Alberto Alvarez, the managing director of Chicago-based grains brokerage Fintec Group Inc. “There is an imminent explosion in corn prices.”

Argentina Exchange Cuts Corn Forecast To 20.8M Tons From 21.3M Tons (Source: CME)
Drought damage to Argentina's 2011-12 corn crop was slightly worse than expected and production prospects for the crop are now just 20.8 million metric tons, the Buenos Aires Cereals Exchange said in its weekly crop report. Last week, the exchange had forecast 21.3 million tons. Early in the season, analysts had expected corn production of up to 30 million tons, but hot, dry weather in December and January baked many of the fields. The drought hit the early-planted corn hard, but relatively wet conditions since the end of January have given the late-planted corn a boost, according to the exchange. The corn harvest is just getting started and will continue through June. Argentina is the world's second largest corn exporter.

Soybeans Rise on Shrinking South America Crops; Corn Drops (Source: Bloomberg)
Soybeans rose for a second time this week on signs that drought-reduced crops in South America are boosting demand for supplies from the U.S. Corn fell. In the week ended March 1, U.S. exporters sold 1.015 million metric tons of soybeans for delivery before Aug. 31, up 85 percent from the previous week, the Department of Agriculture said today. A separate report showed China, the world’s biggest consumer, bought 165,000 tons from exporters. The country may boost imports 5.7 percent next year, the agency said yesterday. “Soybean export demand is improving, and that is the story going forward,” Jim Riley, a grain broker for the Linn Group in Chicago, said in a telephone interview. “China will continue to be a big buyer.”
Soybean futures for May delivery advanced 0.4 percent to $13.3225 a bushel at 10:37 a.m. on the Chicago Board of Trade. Yesterday, the oilseed touched $13.39, the highest for the most- active futures since Sept. 21.

Dry Weather Hampers Brazil's Sugarcane Replanting -Datagro (Source: CME)
Old, less productive sugarcane across fields in Brazil will take years to replace, dashing growers' chances of dramatically improving output in the approaching season, forecaster Datagro said. "Aged cane fields produce lower yields," Datagro President Plinio Nastari said in a telephone interview. "Last year, the average age of cane fields was 3.8 years, when the considered normal levels would be 2.7 years." Growers usually replace the plants on a rotating basis, replanting part of their fields one year and the rest at a later date. But the process in Brazil has been delayed for several seasons, first due to tight credit in the economic crisis starting in 2008, and then by dry weather since 2010. Nastari said he expects the 2012-13 crop to be "not very different from last year," when sugar production in the main growing region totaled 31.2 million metric tons, down 6.9% from the previous record season.
"I think recovery will happen over time and it will a slow, painful process," he said, estimating that it could take three to four years to reach that level again. What Brazil needs now is rain. "The ability of producers to replant depends on adequate humidity in the soil and February has been particularly dry," he said. In addition, the cane currently in the ground produces less sugar if starved of moisture. A smaller Brazilian crop could push up sugar prices, since the nation produces more than one-fifth of the world's sugar, even though some major forecasters including the International Sugar Organization and U.K.-trade house Czarnikow expect a global sugar surplus this season. "It puts the surplus into doubt," said Newedge Senior Vice President Michael McDougall. He said raw futures could reach 28 cents a pound. In midday trade, raw sugar for May delivery was up 0.7% at 24.08 cents a pound.

Rabobank Seeks To Expand Lending In China's Agricultural Sector - Exec (Source: CME)
Rabobank Groep NV, the Dutch bank known as a bank for farmers, plans to expand lending -- both in the yuan and foreign currencies -- to Chinese food producers and processors, making it the latest foreign bank to embrace the country's vast agricultural sector. The Netherlands-based bank will focus on providing financing to Chinese food and agricultural companies to make purchases or acquisitions abroad, said Sipko Schat, a member of Rabobank's executive board and chairman of its international wholesale division, ahead of the Friday opening of the bank's first branch in Beijing. Rabobank already has a branch in Shanghai, its first in China. Schat said the bank intends to make loans both in the Chinese and foreign currencies. "It's our expectation that the use of the yuan will increase in global trade and investment over time," Schat said in an interview Thursday.
Rabobank's planned expansion in China's food and agricultural markets comes as foreign banks -- including HSBC Holdings PLC, Citigroup Inc., Standard Chartered PLC, and the Australia & New Zealand Banking Group Ltd. -- have flocked to China to set up rural operations, aiming to capitalize on Beijing's drive to boost incomes in rural areas. Chinese regulators also have made the rural-banking sector one of the few areas in the country's financial-services industry open to foreign competition. They have been encouraging foreign banks to invest in rural and agricultural finance as part of an effort to channel credit to the sectors that have been poorly served by China's state-owned banks. "It's a heavily regulated market, but it is opening up," Schat said, referring to China's banking sector.
But unlike some of its foreign rivals, Rabobank doesn't plan to set up banks in China's rural areas to provide financing to individual farmers, Mr. Schat said. Rather, it will focus on lending to food- and agriculture-related businesses through its branches in Beijing and Shanghai. With branches in nearly 38 countries, Rabobank has become a major lender for the food and agricultural sectors in the past decades. Currently, profits generated in Asia represent 10% of the bank's wholesale banking income. Rabobank executives plan to bump up that level to 25% in the next five years. "We certainly hope China will be a big part" of the increase, said Johnson Fu, the head of Rabobank in China, in the same interview.

China to add to squeeze on world corn supply
BEIJING/SINGAPORE, March 8 (Reuters) - Beijing and the influential U.S. agriculture department may have overstated China's corn crop by as much as 14 percent, pointing to higher imports from the world's second-largest consumer of the grain that could squeeze already tightening global supplies.
If China plugs the gap between projected and actual domestic supply with additional corn imports, it would drive up international prices already near four-month highs. Wheat markets could feel the impact too if Beijing snaps up the grain as a substitute to corn for animal feed.

Sucden to source up to 200,000T world cocoa in '12/13
ABIDJAN, March 7 (Reuters) - France-based commodities firm Sucden plans rapidly to grow its global cocoa operations to source up to 200,000 tonnes of world cocoa in 2012/13, after officially re-entering the market in July last year, its head of cocoa said on Wednesday.
Sucden (Groupe Sucres et Denrees) will consolidate its presence in the world's top cocoa grower Ivory Coast, opening an office in San Pedro in addition to the new office in Abidjan, Derek Chambers told Reuters.

India may give limited nod for cotton exports-sources
MUMBAI/NEW DELHI, March 7 (Reuters) - India could allow limited exports of cotton to cover existing sales commitments when ministers meet on the issue on Friday, government sources said, as exporters sought permission for 2.5 million bales to be released.
The world's second-largest cotton producer banned exports unexpectedly on Monday as domestic demand threatened to outstrip availability, boosting global prices on hopes the move would tighten a market beset by weak demand.

ICE coffee higher early as commodities advance
LONDON, March 8 (Reuters) - Arabica coffee futures on ICE rose in early trade on Thursday, rebounding from the prior session's 16-month low, supported by a weaker dollar and broad-based gains in commodity and equity markets.
Cocoa futures on ICE also edged higher while raw sugar was little changed after hitting a two-week low.

Brazil Feb green coffee exports lowest since 2008
BRASILIA, March 7 (Reuters) - Brazil's shipments of green coffee fell to 1.91 million 60-kg bags in February compared with 2.47 million bags in the same month last year, coffee exporter association Cecafe said on Wednesday.
Brazil's 2011/12 coffee harvest was a smaller off-year in the biennial cycle which causes output to rise and fall from one year to the next. February's total exports were the lowest for that month since 2008, Cecafe data showed.

Brazil '12/13 CS sugar output seen up at 33 mln tonnes
SAO PAULO, March 7 (Reuters) - Brazil's 2012/13 center-south sugar cane crop that will begin crushing in weeks was forecast at 33 million tonnes of sugar, up 5.3 percent from 31.3 million tonnes this season, crop analysts Agroconsult said Wednesday in its first forecast.
Brazil's main cane crop will recover from its first drop in output in 11 years to reach 540 million tonnes, up 9 percent from 494 million this season that ended crushing in December.

Philippines annual sugar exports to non-U.S. buyers seen at 21-yr high
MANILA, March 7 (Reuters) - The Philippines' exports of raw sugar to non-U.S. buyers for the current crop year are likely to increase at least eightfold to a 21-year high of 300,000 tonnes amid high global prices.
The projected export volume includes approved raw sugar exports of 55,590 tonnes for March delivery, the Philippines' Sugar Regulatory Administration said.

Uganda Feb coffee exports up 26 pct on good weather
KAMPALA, March 7 (Reuters) - Uganda's coffee exports in February jumped 26 percent from the same month last year, helped by better weather that yielded a bigger crop, a source at the state-run Uganda Coffee Development Authority (UCDA) told Reuters on Wednesday.
Uganda, which is east Africa's third-biggest economy, was Africa's leading exporter of the beans last year according to statistics from the International Coffee Organisation (ICO).  

Rubber Snaps Worst Streak This Year as Data Shows Strengthening Economies (Source: Bloomberg)
Rubber snapped the worst losing run this year, gaining for the first time in four days, on speculation that demand for the raw material used in tires will improve as economies strengthen. August-delivery gained as much as 1.5 percent to 329.5 yen a kilogram ($4,057 a metric ton) on the Tokyo Commodity Exchange, and settled at 327.4 yen. Futures reached 320.4 yen yesterday, the lowest level since Feb. 20. U.S. employers boosted hiring, according to data, while more investors joined a Greek debt swap, increasing prospects for the country’s second bailout. Oil and Asian stocks climbed after data showed that Japan’s economy shrank less than the government initially estimated. Concerns that Greece’s sovereign-debt crisis may worsen have eased, while the yen weakened against the dollar, improving investors’ appetite for yen-denominated contracts, said Gu Jiong, an analyst at commodity broker Yutaka Shoji Co.

Solar Panel Sales Seen Dropping First Time in Decade Feeding Glut: Energy (Source: Bloomberg)
Fewer solar panels will be installed this year as the first drop in more than a decade worsens a glut of the unsold devices that’s already slashed margins at the top five manufacturers, an analyst survey showed. Homes and businesses will put up 24.8 gigawatts of solar panels worldwide, according to the average of six forecasts compiled by Bloomberg News. That’s equal to the power of about 20 nuclear reactors and down 10 percent from the 27.7 gigawatts added last year. Installations have grown 61 percent a year on average since 1999, Bloomberg New Energy Finance estimates. The decline would be the first since Germany began offering premium rates for solar power in 2004, opening the way for mass, utility-scale installations. It will exacerbate price-cutting and a surge in inventories that last year forced Solyndra LLC into bankruptcy, prompted SunPower Corp. to seek a buyout and gutted margins at top manufacturers led by Suntech Power Holdings Co. and First Solar Inc.
“Overcapacity has been an overhang for this industry, and with Germany tightening it doesn’t seem like it will ease,” said Amir Rozwadowski, an analyst at Barclays Capital Inc. in New York. “It’s difficult to assess where there’s a significant push-out that would lead to accelerating demand, given the anticipated decline in Europe.”

Europe-U.S. Gasoline Cargoes Poised to Reach Eight-Week Low (Source: Bloomberg)
Gasoline shipments to the U.S. from Europe are set to fall to an eight-week low as consumption of the auto fuel weakens in the world’s biggest economy, a Bloomberg News survey showed. Traders and oil companies booked 10 tankers for the two weeks to March 22 and eight more are likely to be hired, according to the median estimate in a survey yesterday of seven shipbrokers, traders and owners who specialize in transporting gasoline. That’s the fewest since the two weeks begun Jan. 12. U.S. purchases of the fuel held below 60 million barrels for a 10th week in a row, MasterCard Inc.’s SpendingPulse report showed March 6. Refineries in the country are using stocks of winter-grade gasoline, lifting the amount available, according to Ehsan Ul-Haq, a senior consultant at KBC Energy Economics. Gasoline specifications can change as temperatures fluctuate because of government efforts to curb air pollution.
“U.S. refiners will also be drawing down their stocks of winter-specification gasoline before blending the European material into summer specs, so more domestically produced gasoline should be available,” Ul-Haq said by e-mail.

Oil Gains a Third Day on Demand Outlook After German Output, Greek Debt (Source: Bloomberg)
Oil climbed for a third day in New York as investors speculated that fuel demand may increase after German industrial output rose more than forecast and Greece moved closer to completing its debt swap. Futures advanced as much as 0.4 percent, heading for a weekly gain. German production increased 1.6 percent in January, according to the Economy Ministry in Berlin, compared with a median estimate of 1.1 percent in a Bloomberg News survey. Private investors agreed to swap about 85 percent of their Greek government bonds for new securities, said a banker briefed on the results who declined to be identified. Oil for April delivery rose as much as 37 cents to $106.95 a barrel in electronic trading on the New York Mercantile Exchange and was at $106.79 at 11:03 a.m. Sydney time. The contract yesterday climbed 0.4 percent to $106.58, the highest close since March 5. Prices are up 9 cents this week and have gained 8.1 percent this year.
Brent oil for April settlement advanced $1.32, or 1.1 percent, to $125.44 on the London-based ICE Futures Europe exchange yesterday. The European benchmark contract’s premium to New York-traded West Texas Intermediate closed at $18.86, the widest gap since Feb. 6. It reached a record $27.88 on Oct. 14.

Gold Bulls Strengthening as Bullion Wagers Reach $131 Billion: Commodities (Source: Bloomberg)
Gold traders are the most bullish in four months after investors accumulated more metal than ever and hedge funds raised bets on gains to a five-month high. Sixteen of 23 analysts surveyed by Bloomberg expect prices to gain next week and one was neutral, the highest proportion since Nov. 11. Investors increased their holdings in exchange- traded products backed by bullion for seven consecutive weeks and now hold 2,407 metric tons valued at $131 billion, data compiled by Bloomberg show. Demand for gold is strengthening as European leaders seek to contain the region’s debt crisis and governments from the U.S. to the U.K. keep interest rates at all-time lows to shore up growth. The Federal Reserve and Bank of England have bought debt and the European Central Bank offered unlimited three-year loans to the region’s lenders, actions that spurred some investors to buy gold as protection against inflation.