Hedge Funds Cut Bullish Wagers by the Most in Four Months (Source: Bloomberg)
Hedge funds cut their bets on higher commodity prices by the most in four months on mounting concern that Europe’s debt crisis will derail global growth and curb demand for raw materials. Money managers lowered net-long positions across 18 U.S. futures and options by 11 percent to 898,022 contracts in the week ended April 17, the most since Dec. 20, data from the Commodity Futures Trading Commission show. Bets on rising sugar prices fell the most in more than three years, while the funds anticipate declines in cotton, wheat, coffee and natural gas.
A surge in unemployment from Spain to Italy to Greece is undermining efforts to quell the region’s debt as borrowing costs rise. U.S. industrial production stalled for a second month in March, the Federal Reserve said April 17. Home prices in China fell last month in a record 37 of 70 cities tracked by the government, data showed April 18. The “super cycle” that drove an almost fourfold gain in commodity prices since the end of 2001 may be ending, Citigroup Inc. said last week. “Concerns about a global slowdown are growing,” said Walter ‘Bucky’ Hellwig, who helps manage $17 billion of assets at BB&T Wealth Management in Birmingham, Alabama. “The conditions just aren’t favorable for a commodity rally.”
Rain helps Spanish grain crop in north, not south (Source: CME)
Spain's wheat and barley crops in the northern grain belt may benefit from recent rain after a long drought, but prospects are less encouraging in the south of the major grain importer, a government specialist said on Thursday.
Rainfall in Spain has been above average for the past two weeks. But the crop cycle in the south was already advanced by the end of the driest December-to-February period in 65 years.
GRAINS-U.S. corn rises for 2nd day, soy up on strong demand
SINGAPORE, April 20 (Reuters) - Chicago corn edged higher , building on gains as the market was lifted by talk of Chinese purchases, which could further tighten U.S. supplies estimated at a 16-year low by the end of summer.
"There have been strong rumours that China was buying U.S. corn overnight, but that has yet to be confirmed," said Victor Thianpiriya, an agricultural commodity strategist at ANZ.
POLL-S.Africa maize output f'cast seen down to 11.12 mln T
JOHANNESBURG, April 20 (Reuters) - South Africa is likely to further cut its maize output forecast for the 2011/12 season as a late-season drought weighs on yields, a Reuters survey showed on Friday.
The government's Crop Estimates Committee's (CEC) last month cut the its forecast for the season to 11.3 million tonnes on drought worries.
Spring barley favoured as Western Europe replants
LONDON, April 20 (Reuters) - Farmers in western Europe are turning to spring barley and maize as they are forced to replant large swathes of land where severe frosts have destroyed winter crops.
Losses due to severe frost in early February are estimated to have led to the resowing of about 600,000 hectares of winter crops in France, the top cereals producer in the European Union, mainly in the northeast.
India eyes record-large grain harvest -report
SINGAPORE, April 20 (Reuters) - India raised its estimate for wheat and rice output to a record-large 252.56 million tonnes in the year to June, up 3.2 percent from a year ago on crop-friendly weather, the Wall Street Journal reported, quoting unnamed farm ministry officials.
The latest forecast is about 2 million tonnes more than a prior projection of 250.46 million tonnes. The higher estimate is largely because of better-than-expected wheat production following a prolonged winter chill in February and March which improved yields, the report said.
Argentina cuts soy, corn output estimates
BUENOS AIRES, April 19 (Reuters) - Argentina cut its official estimates for this season's soy and corn crops, citing bad weather, while a top grains exchange said lower-than-expected yields may force it to trim its expectations as well.
Argentina, the world's second largest exporter of corn and third largest supplier of soybeans, is set to produce 42.9 million tonnes of soy and 20.3 million tonnes of corn in this crop year, the Agriculture Ministry said on Thursday.
India eyes record-large grain harvest (Source: CME)
India raised its estimate for wheat and rice output to a record-large 252.56 million tonnes in the year to June, up 3.2 percent from a year ago on crop-friendly weather, the Wall Street Journal reported, quoting unnamed farm ministry officials. The latest forecast is about 2 million tonnes more than a prior projection of 250.46 million tonnes. The higher estimate is largely because of better-than-expected wheat production following a prolonged winter chill in February and March which improved yields, the report said.
Recap: Wheat Futures (Source: CME)
Wheat futures settled low-range with nearby contracts leading losses. Chicago wheat ended down 2 3/4 to 9 cents, Kansas City settled 8 to 11 1/2 cents lower and Minneapolis finished roughly a dime to 18 cents lower. Chicago wheat remains in an extended downtrend. The winter wheat crop is off to an early and favorable start, according to USDA’s weekly condition data.
Wheat Market Recap Report (Source: CME)
July Wheat finished down 7 at 623, 11 off the high and 2 1/4 up from the low. December Wheat closed down 5 1/2 at 661 3/4. This was 3 1/4 up from the low and 8 3/4 off the high. May wheat closed 9 cents lower on the session and down 7 3/4 cents for the week. A lack of new crop production concerns, talk of improving crop conditions and the move from higher to lower for the corn market helped to spark the selling pressures. Spring wheat concerns for cold weather into the weekend helped to provide some light support early but sellers were active when corn pushed lower and the market closed lower on the week and experienced "lower lows" for the move this week which will keep technical traders bearish. The UN Food and Agriculture Organization believes that Iran wheat imports for the 2012/13 season will be down 32% to 1.7 million tonnes due to high carryover stocks. July Oats closed down 1 1/2 at 324 1/4. This was 1 1/4 up from the low and 5 1/4 off the high.
Recap: Corn (Source: CME)
Corn ended the day under pressure and posted sharp losses for the week. Futures were supported yesterday by rumors China was on a U.S.-corn-buying binge. That rumor provided followthrough initially this morning, but the lack of confirmation led to late profit-taking. If the Chinese corn purchases are confirmed, key will be whether they are for the current marketing year, new-crop corn or a combination of both.
Corn Market Recap for 4/20/2012 (Source: CME)
July Corn finished down 9 at 603, 16 off the high and 3 1/2 up from the low. December Corn closed down 5 at 536 3/4. This was 4 1/2 up from the low and 8 off the high. May corn closed 8 1/2 cents lower on the session and down 16 3/4 cents for the week. A continued strong cash market and supportive trade in outside markets helped to spark the early rally to just shy of the highs for the week. However, the outlook for favorable planting weather next week may have been a factor to spark selling pressures with the market pushing moderately lower on the day into the mid-session. Rumors of China buying old crop corn were left unconfirmed with no new export sales news from the USDA this morning and this may have added to the negative tone. In addition, bean/corn spread buying may have pressured the market as well. July Rice finished up 0.165 at 15.76, 0.02 off the high and 0.17 up from the low.
U.S. corn rises for 2nd day (Source: CME)
Chicago corn edged higher , building on gains as the market was lifted by talk of Chinese purchases, which could further tighten U.S. supplies estimated at a 16-year low by the end of summer. "There have been strong rumours that China was buying U.S. corn overnight, but that has yet to be confirmed," said Victor Thianpiriya, an agricultural commodity strategist at ANZ.
SOFTS-ICE sugar firms, near 11-month low, coffee up
LONDON, April 20 (Reuters) - Raw sugar futures on ICE rose in early trading, bouncing off an 11-month low hit the previous session, while arabica coffee also rose, consolidating above Monday's 18-month low. Raw sugar futures were higher, after falling in the previous session as dealers eyed potential additional exports from India, the world's number 2 producer.
Kingsman trims 2012/13 c/s Brazil cane forecast
LONDON, April 20 (Reuters) - Consultancy Kingsman SA on Friday trimmed its forecast for 2012/13 cane output in centre-south Brazil to 510 million tonnes, from a previous forecast of 520 million tonnes estimated in January.
"The end result is an unchanged sugar estimate of 32.8 million tonnes," Lausanne-based Kingsman said in a statement.
N America Q1 2012 cocoa grind down 4.04 pct yr/yr
NEW YORK, April 19 (Reuters) - North American cocoa grindings in the first quarter dropped 4.04 percent from the upwardly revised year-ago figure, data from the National Confectioners Association showed on Thursday, falling into the lower end of estimates.
Grindings reached 119,022 tonnes in the first quarter, up from the revised data for the first quarter of 2011 at 124,028 tonnes, which was originally reported at 118,633 tonnes.
Brazil 12/13 sugar exports seen up 2 pct-attache
April 19 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in Brazil:
"Brazil's MY 2012/13 sugarcane crop is forecast at 565 million tonnes, up 4 million tonnes from the previous season (561 million tonnes). Approximately 48.63 percent of the crop should be diverted to sugar, up 0.56 percentage points compared to MY 2011/12 due to continued strong international demand for the product. Total exports for MY 2012/13 are projected at 25.25 million tonnes, raw value, up 2 percent from MY 2011/12."
Analyst says Brazil CS cane crop to fall for 2nd yr
SAO PAULO, April 19 (Reuters) - Leading Brazilian sugar cane analyst Canaplan sees another year of decline in output from the world's largest supplier of sugar, after lingering dry weather crimped the main crop, a local news service said on Thursday.
Canaplan's lead analyst Luiz Carlos Correa Carvalho pegged the 2012/13 center-south cane crush at 470 million tonnes, down from the 493 million crushed last season, in his first forecast of the year published by the Agencia Estado newswire.
Forecasts for Brazil's 2012/13 CS cane crop
April 19 (Reuters) - Brazil's center-south 2012/13 sugarcane harvest is struggling to expand this year after disappointing output in the 2011/12 season due to a mixture of bad weather and overdue replanting of ageing cane plants.
The new crushing season started in April. Although planting of cane has expanded, dry weather persists over the main growing areas which will limit the recovery of the crop in the world's largest sugar exporter.
Oil Trades Near Three-Day High in New York Before Economic Data (Source: Bloomberg)
Oil traded near the highest close in three days before reports that may show a strengthening of the economy in the U.S., the world’s biggest crude consumer. Futures were little changed in New York after rising 0.2 percent last week. Consumer purchases that account for about 70 percent of the U.S. economy probably climbed by the most since the end of 2010, according to a Bloomberg News survey before an April 27 Commerce Department report. Iraq halted crude exports from northern fields because of a technical fault at a pipeline network in neighboring Turkey, the Oil Ministry said. Crude for June delivery was at $103.77 a barrel, down 11 cents, in electronic trading on the New York Mercantile Exchange at 9:40 a.m. Sydney time. The contract rose 1.1 percent to $103.88 on April 20, the highest close since April 17. Front- month prices are 5 percent higher this year.
Brent oil for June settlement was at $118.63 a barrel, down 13 cents, on the London-based ICE Futures Europe exchange. The European benchmark contract’s front month premium to West Texas Intermediate was at $14.85, from $14.88 on April 20. Iraq’s crude exports stopped at 7:45 p.m. on April 21, the ministry said in a statement on the website of the official National Media Center yesterday. The nation normally exports 450,000 to 500,000 barrels a day from northern fields through Turkey. It ships most of its oil from the south on tankers sailing from the Persian Gulf.
Cheap European gasoline set to hit U.S. market
--Robert Campbell is a Reuters market analyst. The views expressed are his own--
NEW YORK, April 19 (Reuters) - U.S. gasoline traders are bracing for higher imports from Europe as a slump in European benchmark prices has re-opened the door to arbitrage shipments to the New York Harbor.
European cash gasoline prices spiked in late March as heavy regional refinery maintenance cut into supplies, sending cash Eurobob gasoline blendstock prices in the Amsterdam-Rotterdam-Antwerp hub above New York Harbor cash RBOB gasoline prices.
OIL-Brent steady above $118, eyeing biggest weekly loss since Jan
SINGAPORE, April 20 (Reuters) - Brent crude held above $118 a barrel on Friday, but prices were headed for their steepest weekly drop in more than three months as Spain's high borrowing cost kept intact fears that the euro zone debt crisis could flare up again.
"The Spain sovereign debt auction went rather well, but the European economy is still very unstable which is affecting Brent prices," said Yusuke Seta, a Tokyo-based broker at Newedge.
Copper Traders Turn Bullish for First Time in Six Weeks (Source: Bloomberg)
Copper traders are bullish for the first time in six weeks on mounting confidence that demand will accelerate in line with economies at a time when mining companies are already failing to keep up with consumption. Eleven of 29 analysts surveyed by Bloomberg expect the metal to climb next week and 10 were neutral. Rio Tinto Group (RIO), based in London, said April 17 that its first-quarter copper output slid 18 percent because the ore mined contained less metal. Codelco, the largest copper producer, said the following day that it sees no weakening in Chinese buying. Barclays Capital is predicting a third consecutive year of shortages.
The International Monetary Fund raised its global growth forecast for the first time in more than a year on April 17. Industrial production in China, the biggest copper consumer, expanded 11.9 percent in March, exceeding economists’ forecasts, the government said April 13. The Bank of Japan is “committed” to monetary easing to shore up the economy, Governor Masaaki Shirakawa said April 18. “You’re beginning to see an improvement in global growth,” said Nic Brown, the head of research at Natixis Commodity Markets Ltd. in London. “China has a slightly slower growth rate, but the economy itself is growing so rapidly that it represents a very substantial increase in demand. You’re going to have a very substantial copper deficit this year.”
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