Better supplies to drive world food prices lower in 2012
MILAN, March 12 (Reuters) - Improved grain supplies will help lower food prices this year after sharp rises in 2011 and take the wind out of price volatility, easing inflation concerns, a senior official at the United Nations' food agency told Reuters on Monday.
Over the next decade, however, prices are set to rise for major food and agricultural commodities, Abdolreza Abbassian, senior grain analyst and economist at the UN's Food and Agriculture Organisation (FAO), said at the Reuters Food and Agriculture Summit.
Corn (Source: CME)
US corn futures end higher but slow their rally that began Friday on speculation of large imminent Chinese purchases. The USDA said private exporters sold 240,000 metric tons of U.S. corn to "unknown destinations," which traders assume is China. But more purchases will be needed to sustain corn's rally, analysts say. Corn is also supported by tight cash markets and worries the USDA has overstated U.S. corn supplies. CBOT May corn ends up 2 1/2c or 0.4% at $6.62/bushel.
Wheat (Source: CME)
US wheat futures end lower, pressured by ample global supplies and the rally in corn slowing. Concerns about greater competition in export markets from Black Sea region supplies also weigh, with Kansas City wheat shows the most weakness. May futures slid 1.2% to $6.87 1/2 a bushel while CBOT May fell 2 1/4c to $6.49 and MGEX May drops 8 1/2c to $8.11.
Rice (Source: CME)
US rice futures end lower, stabilizing after recent gains. Poor export demand and spillover weakness from wheat futures left rice futures without a supportive influence to sustain recent advances, analysts say. However, losses were limited by the need for rice prices to remain competitive with other grains as they vie for spring acreage in the Delta, analysts add. CBOT May rice ended down 1c to $14.33 1/2/hundredweight.
US corn dips after rally, soy firm on tight supply
SINGAPORE, March 13 (Reuters) - Benchmark U.S. corn futures for May eased slightly after rallying 2 percent a day earlier on expectations of Chinese purchases, while soy was firm at multi-month highs on lower supply from South America.
"More plantings are likely to boost U.S. stockpiles, which is keeping a lid on the prices," said Ker Chung Yang, analyst at Phillip Futures in Singapore.
Destructive La Nina nearly dead -Aus forecasters
SYDNEY, March 13 (Reuters) - The La Nina weather pattern blamed for heavy rains and crop destruction in the Asia-Pacific region over the past two years is coming to an end, forecasters in Australia said on Tuesday.
The Australian Bureau of Meteorology said climate models suggest the recent period of La Nina should reach a "neutral" state by around April or May, echoing the findings of forecasters in the United States.
Ottawa signals openness to foreign Viterra bid
WINNIPEG, Manitoba/ZURICH, March 12 (Reuters) - Canada has signaled it would be open to allowing a foreign bidder such as Swiss-based Glencore to take over Viterra, sending shares of the country's largest grain handler sharply higher for a second session in a row on Monday.
Glencore is one of a handful of parties eyeing a bid for Viterra , a Swiss-based industry source said on Monday. But Canada's sometimes protectionist sentiments about natural resources have left some doubting a foreign takeover bid for Viterra would get a smooth ride.
Costs multiply in Argentine port strike-grains exchange
BUENOS AIRES, March 12 (Reuters) - An 11-day-old Argentine port workers' strike has halted key grains exports and could soon start affecting other commodities shipments around the world, the Rosario grains exchange said on Monday.
Specialized crews that moor ships in Argentina have walked off the job to demand more staff be assigned to work busy docking shifts. Scores of vessels have had to drop anchor at the mouth of the country's river ways while the dispute drags on.
Ukraine sees no grain export limits in 2012/13-PM
KIEV, March 12 (Reuters) - Ukraine will not impose grain export limits in the coming season because of expectations of an "average" harvest despite drought late last year followed by sharp frosts, Prime Minister Mykola Azarov said on Monday.
Azarov told Reuters in an interview that the former Soviet republic had enough milling grain to meet all domestic needs in 2012/13.
Experts develop salt-tolerant, high-yield wheat
HONG KONG, March 12 (Reuters) - Scientists in Australia have crossed a popular, commercial variety of wheat with an ancient species, producing a hardy, high-yielding plant that is tolerant of salty soil.
The researchers, who published their work on Monday in the journal Nature Biotechnology, hope the new strain will help address food shortages in arid and semi-arid places where farmers struggle with high salinity in the soil.
Indonesian feed corn imports to fall 57 pct in 2012
JAKARTA, March 13 (Reuters) - Indonesia's animal feed industry will import 57 percent less corn this year compared to 2012 due to a surge in domestic output, the chairman of the Indonesian Feed Mill Association (GPMT) said on Tuesday.
Indonesia will import 1.5 million tonnes in 2012, compared to 3.5 million tonnes last year, Franciscus Xaverius Sudirman told Reuters.
Argentina Corn Output Likely Stable Despite Drought (Source: CME)
Argentina's 2012 corn output will likely total 21.5 million-22 million metric tons, little changed from 2011, a senior Buenos Aires-based trading executive said. The country's corn output prospects are being closely tracked worldwide as it is the world's second-biggest exporter after the U.S. Due to dry weather, farmers planted some varieties of corn later than usual this year and they have generated above-average yields, Freddy Pranteda, Cosur SA's director for grains and oilseeds, said ahead of an international grains conference here. Global commodity trading company Cosur has large exposure to South American grains. Output has jumped outside the main corn-growing region, largely offsetting declines elsewhere. Argentina produced 21.6 million tons of corn last year. Last week, the Buenos Aires Cereals Exchange said drought damage to Argentina's corn crop was 500,000 tons more than expected, and production is expected to reach just 20.8 million tons.
"Some analysts are even forecasting less than 19 million tons but such projections are too pessimistic," Pranteda said. Recent rains were beneficial to the late plantings of corn, providing moisture at a critical juncture of crop development, which revived output prospects. Output could have been higher but for the La Nina weather phenomenon, which caused a long dry spell. The dry spell was more damaging for soybeans than corn and production has declined to 46 million-46.5 million tons from 49.7 million tons in 2011, he said, adding that this may drag down exports by 29% to 7.5 million tons. Despite weather-related woes, Argentina has already sold around 5 million tons of soybeans and 7 million tons of corn from the new crop ahead of the 2012 harvest, which will gather momentum next month. At least 4.5 million tons of new-crop soybeans have been sold to China alone, Pranteda said.
Most of the soybean sales are for April-June shipment, while corn shipments are for March-May, with a small volume for June shipment. The sales were made at a wide price range, but late last week Argentina's new-crop corn and soybeans for June shipment were offered free on board at premiums of 38 cents and 65 cents to July CBOT contracts, respectively. The government initially issued licenses for exports of 7.5 million tons of corn, but if permitted, exporters will try to ship out another 3.0 million tons, Pranteda said.
Grain Prices May Fall In 2Q On Ample Supply -FAO Official (Source: CME)
Global grain prices are likely to come under downward pressure for the next few months due to a rise in output in major growing and exporting countries and ample stock levels, a senior economist said. "If weather doesn't spring any surprises, the current supply situation shows it is quite possible that prices will decline much lower than current levels," Abdolreza Abbassian, a senior economist with United Nations's Food and Agriculture Organization, said. The most active wheat, corn and soybean futures on the Chicago Board of Trade are currently trading around $6.5, $6.6 and $13.3 a bushel, respectively, much lower than the 2011 highs of $8.9325, $7.9975 and $14.55 a bushel.
Rabobank Sees Slow Corn Yield Growth, 2012 Projection Below USDA (Source: CME)
Growth in U.S. corn yields is likely to be sluggish for the next few years, as farmers' expansion into the U.S. Plains and their abandonment of typical crop rotations limits average output, Rabobank said in a report. The Netherlands-based agricultural lender projected the average 2012 U.S. corn yield at 156 bushels per acre, which would be up sharply from the 2011 yield of 147.2 but well below the USDA's most recent projection of 164 bushels per acre. Such forecasts are largely speculative at this point in the season, as the crop hasn't been planted yet and will be affected by unforeseen weather conditions. Rabobank said the range of probable average yields extends from 146 bushels per acre to 168.
Rabobank said that in the longer term, yield projections based on past trends will likely be unreliable over the next few years due to structural changes in the U.S. corn crop, as farmers in the U.S. Plains, including Kansas and the Dakotas, are planting an increasing proportion of the country's corn acreage. High corn prices have encouraged more planting in those areas, which typically yield less than farms in Iowa, Minnesota, Illinois and Indiana. "The result of such a shift in yield expectations makes the probability of lower average per-acre production more likely over at least the next five years," Rabobank said in the report. High corn prices have also prompted more farmers in the best-yielding states to plant corn in consecutive years, rather than rotating a soybean crop every two or three years, Rabobank noted. While that decision can make economic sense for farmers, agronomists say that corn yields are typically lower when the soil has been planted with corn in consecutive years.
Rabobank added that farmers may have reached their limit, at least temporarily, on how many corn plants per acre they can plant. Increased plants-per-acre have been a key driver of yield growth, the bank said. Meanwhile, seed companies have "few yield game changers" on the horizon, the bank said. The slowing yield growth means farmers will need to continue planting a large corn crop to keep up with demand, and competition for corn supplies will remain intense, Rabobank said. The USDA has projected farmers will plant 94 million acres of corn this year, the most since World War II.
China Feb cotton imports rise 234 pct on yr-industry website
BEIJING, March 13 (Reuters) - China's cotton imports in February were at 616,000 tonnes, surging 234 percent from the same period last year, an industry website showed on Tuesday.
Imports last month rose 89 percent month on month, said the report on www.cncotton.com, a website operated by the China National Cotton Reserves Corp
Ivory Coast cocoa mid crop seen below 5-year average
LONDON, March 12 (Reuters) - Ivory Coast's 2011/12 mid crop output will fall slightly below the average production over the past five years due to dry weather, which is also likely to harm quality, international exporters said on Monday.
The average forecast, based on four exporters' estimates, pegged the April-September mid crop at around 323,000 tonnes, down sharply from last year's bumper 471,735 tonnes, when ideal weather boosted output.
Vietnam revises up Feb coffee exports at 202,000 T
HANOI, March 12 (Reuters) - Vietnam exported 202,000 tonnes, or 3.37 million bags, of coffee last month, up 40.3 percent from a year earlier, Vietnam Customs said, revising up an earlier government estimate of 180,000 tonnes.
But the actual loading volume in January-February fell 12.6 percent from the same period last year to nearly 313,700 tonnes, the customs department run by the Finance Ministry said in a report seen by Reuters on Monday.
India bans fresh cotton exports - for now
NEW DELHI, March 12 (Reuters) - India will now ban fresh cotton exports and allow only quantities already registered but not shipped, its trade secretary said on Monday, as the world's No.2 producer continued to flip-flop with its trade policy, fuelling market uncertainty.
The trade minister said on Sunday the government would lift a surprise ban on cotton exports imposed on March 5, after influential Farm Minister Sharad Pawar, a coalition ally, opposed the move and asked Prime Minister Manmohan Singh to revoke the ban.
Oil Trades Near 2-Day High as Economy Lifts U.S. Demand Outlook (Source: Bloomberg)
Oil traded near the highest price in two days in New York as investors speculated fuel demand may increase amid signs the U.S. economy is strengthening. Futures were little changed after advancing 0.4 percent yesterday as Commerce Department data showed U.S. retail sales rose the most in five months in February. The Federal Reserve lifted its assessment of the economy and said most of the nation’s biggest banks passed stress tests. Crude stockpiles gained a fifth week, while inventories declined for gasoline and distillates, a category that includes diesel and heating oil, a report showed after the settlement. “I can’t see any negative bits and pieces out there at the moment that will really stop oil trading back to the top end” of a range of $104 to $110 a barrel for New York crude, said Jonathan Barratt, chief executive of Barratt’s Bulletin, a commodity markets newsletter in Sydney. “Inventories continue to rise and that might put a cap on prices.”
Oil for April delivery was at $106.66 a barrel, down 5 cents, in electronic trading on the New York Mercantile Exchange at 11:45 a.m. Sydney time. The contract yesterday increased 37 cents to $106.71 a barrel, the highest close since March 9. Prices are 7.9 percent higher this year.
Surging U.S. oil exports cannot stay hidden forever
--Robert Campbell is a Reuters market analyst. The views expressed are his own--
NEW YORK, March 12 (Reuters) - America's periodic gasoline price debate is usually a mix of willful ignorance and cynicism that achieves little but oil executives must be hoping the latest episode dies down before the United States' massive fuel exports get much attention.
After all, exports of diesel fuel, and increasingly gasoline, are now crucial profit centers for many U.S. refineries, hard pressed by shrinking domestic demand.
Brent rebounds towards $126 ahead of Fed meet
SINGAPORE, March 13 (Reuters) - Brent crude rebounded towards $126 as investors awaited comments from the U.S. central bank after the outlook improved for the world's largest economy amid simmering tension between the West and Iran that could threaten oil supply.
"The FOMC could recognise that the economy has improved and this will have a positive impact on the market," said Tetsu Emori, a Tokyo-based commodities fund manager at Astmax Investments.
Gold Extends Slump on Signs Fed Won’t Expand Stimulus (Source: Bloomberg)
Gold fell to the lowest price since January after Federal Reserve policy makers raised their assessment of the economy, signaling that monetary stimulus won’t be expanded. Gold for immediate delivery fell 1.8 percent to $1,670.15 an ounce at 3:53 p.m. New York time, after slipping as much as 2.2 percent to $1,666.13, the lowest since Jan. 25. The Federal Open Market Committee said in a statement that the labor market was improving. The dollar climbed against a basket of major currencies, eroding the investment appeal of gold. On Feb. 29, the spot price of the metal plunged 4.9 percent, the most since December 2008, after Fed Chairman Ben S. Bernanke damped speculation that the central bank would take new steps to bolster liquidity. “This is a big disappointment for gold investors who are anticipating additional stimulus,” Phil Streible, a commodity broker at RJO Futures in Chicago, said in a telephone interview after the Fed statement at 2:15 p.m. “People are still favoring the dollar.”
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