Hong Kong Exchanges Said to Seek Loan for Potential LME Purchase (Source: Bloomberg)
Hong Kong Exchanges & Clearing Ltd. (388) is seeking an acquisition loan to back a possible bid for the London Metal Exchange, according to two people familiar with the matter. The loan may be as much as $3 billion, the people said, asking not to be identified because the details are private. Hong Kong Exchanges spokesman Scott Sapp declined to comment on the potential financing package when contacted by telephone at his office in Hong Kong today. The company owns and operates the city’s stock exchange, futures exchange and their related clearinghouses.
The London Metal Exchange, the world’s biggest metals trading platform, said on March 29 it is in the process of answering questions from bidders, which must submit offers for the 135-year-old bourse by May 7. The LME got preliminary bids from CME Group Inc., NYSE Euronext and IntercontinentalExchange Inc., three people with direct knowledge of the matter said in February. Hong Kong Exchanges also bid, the South China Morning Post reported at the time, citing two people it didn’t identify.
ICE Futures Expands CME Rivalry With Plan to Offer Grains (Source: Bloomberg)
IntercontinentalExchange Inc. (ICE) plans to offer futures and options in U.S. grains and oilseeds, expanding competition with CME Group (CME) Inc., the leader in agriculture products. Futures in corn, wheat, soybeans, soybean oil and soybean meal will debut May 14 on ICE Futures U.S., subject to regulatory review, Atlanta-based IntercontinentalExchange said today in a statement. The contracts will settle on a cash basis linked to prices on CME Group’s Chicago Board of Trade. Sugar, coffee, cocoa, cotton and orange-juice futures currently trade on IntercontinentalExchange’s electronic platform. ICE Futures U.S., formerly the New York Board of Trade, ended futures floor trading in early 2008. The Chicago- based CME Group, owner of the world’s largest futures market, offers both pit and electronic trading. The two companies also offer competing energy contracts.
“Customers over the past several months have approached ICE about providing an alternate execution and clearing venue for grain products currently listed exclusively on the CBOT,” Lee Underwood, an ICE spokesman, said in an e-mail. “We believe ICE will provide value to this market by offering an alternate pool of liquidity, similar to what we did for the energy markets almost a decade ago.”
Frost, drought hit EU winter grain outlook-analyst (Source: CME)
Analyst Strategie Grains on Thursday cut again its forecasts for winter grain crops in the European Union this year due to the impact of both frost and drought, raising the prospect of tight wheat supply in Europe next season.
The analyst lowered by 4.3 million tonnes its forecast of the EU's main soft wheat crop to 126.8 million tonnes, now putting production below last year's 129.1 million tonnes.
DTN/The Progressive Farmer: USDA Leaves Corn Stocks Unchanged; Cuts South America Soy Production (Source: CME)
Corn, Soybean and Wheat Production Reviewed both North and South
USDA cut Brazil and Argentina's soybean production, as traders expected, which ate into the global ending stocks estimates. USDA left U.S. ending stocks for corn unchanged, which came in at the high end of traders' expectations, while trimming domestic soybean and wheat ending stocks. Read this factual report on Corn, Soybean and Wheat production, and the market's reaction.
GRAINS-US wheat rises for 2nd day on cold weather, corn firm
SYDNEY, April 12 (Reuters) - Chicago wheat rose for a second straight day, supported by cold weather which is threatening the newly sown spring wheat in the United States and some of the more mature winter crop.
"Given where we've come off from in wheat, you could blame people for taking a little bit of risk protection in case it (cold weather) does occur," said Brett Cooper, a senior manager of markets at FCStone Australia.
Frost, drought hit EU winter grain outlook-analyst
PARIS, April 12 (Reuters) - Analyst Strategie Grains on Thursday cut again its forecasts for winter grain crops in the European Union this year due to the impact of both frost and drought, raising the prospect of tight wheat supply in Europe next season.
The analyst lowered by 4.3 million tonnes its forecast of the EU's main soft wheat crop to 126.8 million tonnes, now putting production below last year's 129.1 million tonnes.
Strategie Grains cuts winter crop outlook on weather
PARIS, April 12 (Reuters) - Analyst Strategie Grains on Thursday cut again its forecasts for winter grain crops in the European Union this year due to the impact of both frost and drought, and further raised its outlook for production of spring-sown maize.
The analyst lowered by 4.3 million tonnes its forecast of the EU's main soft wheat crop to 126.8 million tonnes, putting production 2 percent below last year's harvest.
Ukraine to export 23.5 mln T grain in 11/12 season-report
KIEV, April 11 (Reuters) - Ukraine will export 23.5 million tonnes of grain in the current marketing season which runs from July to June, Interfax news agency quoted Agriculture Minister Mykola Prysyazhnyuk as saying on Wednesday.
Prysyazhnyuk said the former Soviet republic had already exported 16 million tonnes of grain so far this season.
After the Bell: Wheat Futures (Source: CME)
Wheat futures were supported by spillover from neighboring pits, with Chicago and Kansas City posting slight to moderate gains. Minneapolis ended narrowly mixed. Funds bought an estimated 4,000 contracts of Chicago wheat today. Early support came on spillover from weakness in the U.S. dollar index, which sank on rumors 1st-qtr. GDP from China (to be released overnight) will be more robust than originally thought.
Wheat Market Recap Report (Source: CME)
May Wheat finished up 11 1/4 at 639 1/4, 6 1/2 off the high and 11 1/4 up from the low. July Wheat closed up 11 at 644 1/2. This was 11 up from the low and 4 off the high. May wheat closed sharply higher on the session but the market put in the highs of the day in the first 1/2 hour of trade. Fears that the overnight temperatures were cold enough to cause some damage in the eastern and southern Corn Belt helped to spark short-covering after the higher opening and a run to an early peak which was sharply higher on the day. Funds held a hefty net short position in the last COT report. A bullish tone to outside market forces and talk that US wheat will be competitive on the export market ahead added to the positive tone. Weakness in the US dollar and a surge higher in other grains, gold and energy markets helped to support. Net weekly export sales came in at 452,100 metric tonnes for the current marketing year and 90,400 for the next marketing year for a total of 542,500. As of April 5th, cumulative wheat sales stand at 96.5% of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 94.3%. Sales of 116,000 metric tonnes are needed each week to reach the USDA forecast. Weather looks favorable for the central and southern plains ahead and there are also better rains for Europe in the forecast for next weekend. With good weather for planting ahead, Minneapolis July wheat closed slightly lower on the session. May Oats closed up 4 3/4 at 334. This was 4 up from the low and 1 off the high.
US wheat rises for 2nd day on cold weather, corn firm (Source: CME)
Chicago wheat rose for a second straight day, supported by cold weather which is threatening the newly sown spring wheat in the United States and some of the more mature winter crop. "Given where we've come off from in wheat, you could blame people for taking a little bit of risk protection in case it (cold weather) does occur," said Brett Cooper, a senior manager of markets at FCStone Australia.
After the Bell: Corn Futures (Source: CME)
Trimmed GainsCorn futures trimmed gains into the close to finish pennies higher in the nearby contracts. September corn ended steady, with new-crop ending 2 cents lower to 1/2 cent higher. Funds bought an estimated 5,000 contracts of corn today. Corn had plenty of news to pull support from this morning. The combination of a stronger-than-expected weekly export sales tally and help from positive outside markets returned buyers to the pit.
Corn Market Recap for 4/12/2012 (Source: CME)
May Corn finished up 1 1/2 at 637 1/2, 7 off the high and 1 up from the low. July Corn closed up 2 at 629. This was 2 up from the low and 6 off the high. May corn managed to close slightly higher on the session and December corn unchanged on the day as late selling drove the market down sharply from the early peak. Long liquidation selling emerged late in the day to pressure. The surge higher in wheat, fears that some of the early planted corn may need to be replanted and ideas that frosted corn which was not totally lost will still see slower development ahead helped to spark renewed interest in buying old crop corn early in the session today. Since the USDA is counting on August corn to avoid extreme tightness into September 1st, demand for May and July corn was stronger than buying in December. The very strong cash market, continued rumors of demand from China and solid weekly export sales added to the positive tone. Mid-day weather models were considered somewhat negative with less cold weather for the Midwest early next week and a shift to more rain for the western and northern sections of the Corn Belt which have been the driest. Net weekly export sales for corn came in at 959,100 metric tonnes for the current marketing year and 16,700 for the next marketing year for a total of 975,800 which was higher than expected. As of April 5th, cumulative corn sales stand at 81.1% of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 76.4%. Sales of 383,000 metric tonnes are needed each week to reach the USDA forecast. Traders see wet weather in the next 3-4 days as a factor which could slow plantings but warmer and drier weather beginning in the middle of next week should help keep corn plantings on a record fast pace. May Rice finished up 0.43 at 15.365, equal to the high and 0.165 up from the low.
Corn, Wheat Advance as Freezing Weather Threatens Crops (Source: Bloomberg)
Corn climbed for the first time this week and wheat gained as freezing weather threatened crops in the U.S., the world’s largest shipper of both grains. Soybeans also rose. Temperatures dropped as low as 26 degrees Fahrenheit (minus 3.3 degrees Celsius) in eastern parts of the Midwest overnight, Telvent DTN said. About 17 percent of the corn crop in Illinois, the largest U.S. grower after Iowa, had been planted as of April 8, ahead of the previous five-year average of 1 percent, Department of Agriculture data show. “Freezing temperatures across the U.S. Midwest may have damaged emerging corn crops, according to U.S. weather forecasters,” Luke Mathews, a commodity strategist at Commonwealth Bank of Australia (CBA), said in a report e-mailed today. “Supporting values were concerns that cold temperatures may have damaged U.S. wheat crops.”
July-delivery corn advanced 0.3 percent to $6.2875 a bushel on the Chicago Board of Trade by 1:14 p.m. London time, after dropping 4.7 percent in the previous three days. Wheat futures for July delivery gained 0.6 percent to $6.3725 a bushel. The benchmark Chicago wheat contract primarily reflects the soft, red winter-wheat grown in the Midwest. In Paris, November-delivery milling wheat gained 0.4 percent to 202.50 euros ($266.35) a metric ton on NYSE Liffe, after dropping 1.5 percent the previous two days. Wheat-growing areas in most of Europe had “much needed rain” last week, the Kenilworth, England-based Home-Grown Cereals Authority said in a report yesterday. Rains may persist across areas of France, Spain, Germany and the U.K. in the next five days, according to AccuWeather Inc. “There are rains in France, and this could push prices lower,” Arnaud Saulais, a broker at Starsupply Commodity Brokers, said by phone from Nyon, Switzerland.
Soybeans for delivery in November gained 0.7 percent to $13.68 a bushel in Chicago.
Sugar Traders Extend Longest Bear Streak Since ‘07: Commodities (Source: Bloomberg)
Sugar traders are bearish for a seventh consecutive week, the longest stretch since at least 2007, on prospects for the first supply glut in four years. Sixteen of 22 analysts expect raw-sugar prices to decline next week and one was neutral, according to Bloomberg’s weekly sentiment survey that began in April 2007. Global production will exceed demand by 10 million metric tons in the 12 months ending in September, equal to about a year of U.S. consumption, according to Singapore-based Olam International Ltd., which trades and processes commodities in 65 countries. Prices that surged to a 30-year high in February last year spurred farmers to plant more cane and beet, expanding global production to a record this season. Futures traded in New York slumped 10 percent in the past three weeks on mounting concern about another glut next season. Thailand, the world’s second- biggest exporter, may ship the most supply ever this year, the country’s Office of the Cane & Sugar Board said this week.
“We have a surplus this year and it looks like we will have another one next year and that is more bearish than we initially thought,” said John Stansfield, a senior analyst at Olam in London. “The last time the glut for two consecutive years was so big, prices were significantly lower.”
SOFTS-Sugar steady before Brazil data, cocoa dips
LONDON, April 12 (Reuters) - Raw sugar futures were little changed in early trade with dealers awaiting the release of the first 2012/13 centre-south Brazil output forecast by industry group Unica, which is expected later in the day. May raw sugar on ICE was up a marginal 0.06 cent or 0.25 percent at 24.01 cents a lb at 0839 GMT. On Tuesday, front-month futures eased to 23.80 cents, the lowest level in almost one month.
World 2011/2012 coffee output seen down 2.4 pct y/y-ICO
HANOI, April 12 (Reuters) - World coffee production in the current 2011/2012 crop year will fall 2.4 percent to nearly 131 million bags mainly due to lower production following adverse weather in key growing regions, the International Coffee Organization (ICO) said.
The estimate by the London-based organisation in its March report seen by Reuters on Thursday is slightly higher than its earlier forecast in February.
Brazil cocoa arrivals slip due to Easter break
SAO PAULO, April 11 (Reuters) - Deliveries of cocoa from Brazil's main producing state Bahia and other regions slowed in the last week due to the Easter holiday and poor weather conditions in growing areas in the north of the country, the Bahia Commercial Association said.
Cumulative arrivals from the start of the season on May 1, 2011 are down 3 percent from the prior season at 3.82 million 60-kg bags. Higher imports of beans compensated for a drop in overall output this season in the two annual harvests.
Brazil sugarcane gets needed rain, more looms
SAO PAULO, April 11 (Reuters) - Rain fell over nearly all of Brazil's main center-south sugar cane region over the past week, alleviating much of the crop stress stemming from dry weather in March, local meteorologists Somar said on Wednesday.
Brazil's 2012/13 cane crop that begins harvest in April is forecast to recover from last year when output declined for the first time in 11 years due to bad weather and a lack of replanting. The government on Tuesday estimated Brazil's sugar output would grow 5 percent this season.
Views diverge before Europe, US cocoa grind data
NEW YORK, April 11 (Reuters) - Forecasts for upcoming first-quarter grind data, anticipated by the cocoa industry as an indicator of demand in Europe and North America, range more widely than usual amid uncertainty about global economic forces and processing rates in top-grower Ivory Coast.
The diverging views on whether cocoa grinding rates will rise or fall in the Northern Hemisphere reflect the uncertainty surrounding the strength of demand for cocoa, the primary ingredient in chocolate, which has traditionally been considered a recession-proof consumer product.
DJ US Cotton Exports Register Net Cancellations For Second Week (Source: CME)
NEW YORK (Dow Jones)--Export sales of U.S.-grown cotton were canceled for the second week in a row, the U.S. Department of Agriculture said Thursday. It was the first time since August 2011 that the U.S., the world's top cotton shipper, registered net cancellations two weeks in a row for the upland variety of the fiber. In the week ended April 5, the U.S. had net sales cancellations of 53,600 bales, mostly from China, which had been the main factor in net cancellations of 143,700 bales the week before. Analysts said it was a sign that the China's cotton-stockpiling program was winding down. The program, which began last year after cotton prices pulled back from record highs, has helped prop up the cotton market in recent weeks. "My guess is that it was possible that the cotton had to be on board [a ship headed for China] by March 31," said independent cotton analyst Mike Stevens.
Last week, the USDA forecast global supplies by the end of the 2011-12 season to reach a record 66.07 million bales. But it said more than one-third of that will be in China. "The government of China's accumulation of cotton in the national reserves is constraining free supplies, thereby boosting its imports while limiting consumption," the USDA said. But the consistent cancellations are bringing back memories of the effects of last year's sharp price swing. By the end of 2011, front-month cotton on ICE Futures U.S. had dropped nearly 60% from the record high of $2.27 a pound hit in March of that year.
After the Bell: Cotton Futures Boosted by Dollar Weakness (Source: CME)
Cotton futures were boosted by dollar weakness today, with futures ending 87 to 169 points higher -- with nearbys leading gains. The U.S. dollar index weakened sharply today as talk surfaced China's 1st-qtr. GDP will come in at 9% -- more lofty than expectations for 8.4% growth for the data to be released overnight.
Oil Trades Near Week High on Central Bank Stimulus Signs (Source: Bloomberg)
Oil traded near the highest price in more than a week in New York after central bank officials in the U.S. and Japan indicated they will use monetary policies to stimulate their economies. Futures were little changed, heading for a second weekly gain. Federal Reserve Vice Chairman Janet Yellen and William C. Dudley, president of the Federal Reserve Bank of New York, endorsed the view that borrowing costs will stay near zero through 2014. The Bank of Japan (8301) “will pursue powerful easing” to overcome deflation, according to Governor Masaaki Shirakawa. Iran’s crude output may drop by as much as 950,000 barrels a day by July as embargoes take effect, the International Energy Agency said. Crude for May delivery was at $103.81 a barrel, up 17 cents, in electronic trading on the New York Mercantile Exchange at 9:22 a.m. Sydney time. The contract yesterday increased 94 cents, or 0.9 percent, to $103.64, the highest close since April 3. Prices are 0.4 percent higher this week.
Brent oil for May settlement gained $1.53, or 1.3 percent, to $121.71 a barrel on the London-based ICE Futures Europe exchange yesterday. The European benchmark contract’s premium to New York-traded West Texas Intermediate closed at $18.07.
Brent steady above $120 as growth worries ease
SINGAPORE, April 12 (Reuters) - Brent crude held steady above $120 as a weaker dollar helped recoup losses made earlier in the day, while comments from the U.S. Federal Reserve and the European Central Bank eased worries about growth in oil demand.
"The overall expectation is that Europe would be able to manage this crisis," said Tetsu Emori, a Tokyo-based commodities fund manager at Astmax Investments. "The ECB has measures that it can take. If you look at Greece, all its problems may not be over, but the region is taking measures to tackle them."
Oil market fundamentals easing, IEA says
LONDON, April 12 (Reuters) - Increased output from OPEC coupled with sluggish demand could see the oil market turn a corner, the International Energy Agency (IEA) said on Thursday.
The combination of these factors had led to a potential global build in stocks of 1 million barrels over the last quarter, the agency said in its monthly report.
Russia on self-help drive to stop spending oil profits
MOSCOW, April 12 (Reuters) - Russia's commitment to economic reform will soon be tested by a plan to place its fragile public finances on a stable footing - primarily by weaning them off the ups and downs of the global oil market.
Various proposals are being floated, but the main idea is to cap the amount of money energy-rich Russia can spend from its oil profits, saving windfalls instead.
Saudi hikes oil output 100,000 bpd to 10 mln bpd
SEOUL, April 12 (Reuters) - Top oil exporter Saudi Arabia has hiked output to around 10 million barrels per day (bpd) in April, up about 100,000 bpd on the month, and the country's oil minister said on Thursday the kingdom would pump more if needed.
Output of 10 million bpd would be the highest since November, when the kingdom pumped more than it had done for decades.
CME Group Cuts Silver, Copper, Palladium Futures Margins (Source: Bloomberg)
CME Group Inc. (CME) cut margins for silver and copper futures on the Comex and palladium on the New York Mercantile Exchange. The amount that speculators must keep on deposit for an initial account in silver futures was reduced 13 percent to $18,900 from $21,600, CME Group said today in a statement on its website. Silver prices tumbled after the Chicago-based CME boosted margins 84 percent in two weeks from late April to early May. The copper margin was cut to $5,400 from $6,750, and palladium was reduced to $5,225 from $5,775.
Top Analysts See Copper Rising Even as China Slows: Commodities (Source: Bloomberg)
The third consecutive annual copper shortage and accelerating U.S. growth will drive prices to the highest in a year in the next quarter, according to the most accurate forecasters. Supply will fall 278,000 metric tons short of demand in 2012, more than North America uses in a month, Barclays Capital estimates. Hedge funds, which were betting on lower prices as recently as January, are now the most bullish in eight months, Commodity Futures Trading Commission data show. The metal will average $9,000 a ton in the third quarter, 9.5 percent more than now, according to the median estimate of the top five analysts in Bloomberg Rankings in the past eight quarters.
Copper is rebounding from a 21 percent slump in 2011 as data showed a strengthening U.S. economy and as European leaders moved to contain the region’s debt crisis. North America and Europe account for 29 percent of demand, Barclays estimates. While China cut its growth target to the lowest in eight years last month, the world’s biggest copper buyer will still be expanding at more than twice the global pace predicted by the International Monetary Fund. “The U.S. economy is pretty good,” said James Paulsen, the chief investment strategist at Minneapolis-based Wells Capital Management, which oversees about $333 billion of assets. “Emerging markets should start to pick up. Some time by the end of the year we may look back at commodity prices in general and copper in particular and say this was a good time to buy.”
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