Friday, June 8, 2012

20120608 1030 Global Commodities Related News.

Pro Farmer: After the Bell Wheat Recap (Source: CME)
Strong gains in the bean market helped wheat to surge into the close. Minneapolis led the charge higher with roughly 18- to 21-cent gains. Chicago wheat ended 17 1/4 to 19 cents higher, and Kansas City wheat closed 13 1/2 to 15 cents higher. Most wheat futures trimmed gains by 4 or more cents in after-hours trade. Wheat futures benefited from generally improved appetite toward risk and spillover support from corn today.

Wheat Market Recap Report (Source: CME)
July Wheat finished up 17 1/2 at 641 3/4, 3 off the high and 21 1/2 up from the low. December Wheat closed up 17 1/4 at 682 1/4. This was 21 1/4 up from the low and 1 off the high. July wheat was trading up 14 cents on the day late in the trading session after trading at a mid-session peak of up 20 1/2 cents on the day. Short-covering emerged with strength in the other grains and a slightly positive tilt to outside markets to support the strong gains into the mid-session. The ongoing harvest for winter wheat, slow weekly export sales news and news of hefty supply from India were factors which may have limited the advance. Weekly export sales came in at just 165,700 metric tonnes which was well below expectations. Traders see a decline in production and ending stocks for the US and the world for the reports on Tuesday. US ending stocks for both the old crop and new crop seasons are expected to slip about 20 million bushels. Old crop ending stocks were 768 million bushels last month and new crop was 735 million bushels. Traders see a 50-60 million bushel decline in winter wheat production from 1.694 billion bushels projected in May. Traders also see world ending stocks slipping down about 3 million tonnes from 188.13 million in May but there are some expectations for a 4-6 million tonne drop in Russia and a 2-3 million tonne drop in China due to weather. The Buenos Aires Grains Exchange lowered their estimate for the new season wheat plantings to 3.8 million hectares from 4.0 million as their previous forecast. This is down from 4.6 million last year. July Oats closed up 5 3/4 at 300. This was 6 3/4 up from the low and 4 off the high.

Pro Farmer: After the Bell Corn Recap (Source: CME)
Corn futures closed 7 3/4 to 17 cents higher, which was good for a high-range close in all but the July contract, which ended mid-range. Support came on spillover from weakness in the U.S. dollar index and sharp gains in the soybean market. Traders reacted to news China has announced it will reduce its target interest rate to stimulate its economy -- bolstering demand expectations.

Corn Market Recap for 6/7/2012 (Source: CME)
July Corn finished up 7 3/4 at 594, 7 1/2 off the high and 9 1/2 up from the low. December Corn closed up 17 at 536 1/2. This was 18 1/2 up from the low and 1 off the high. July corn was trading near 7 cents higher on the day late in the session with December up 17 cents. Funds were noted as heavy buyers on the day. Outside positive forces eased into the mid-day but a drier forecast for next week helped to spark more concerns for declining crop conditions into the key pollination period ahead. The 11-15 day forecast models also turned hotter with talk of mid-90's into the Corn Belt a possibility. Weather in China is also a concern with some areas turning hot and dry. Old crop ending stocks are expected to decline by 25-30 million bushels for the supply/demand update next week as compared with 851 posted last month. New crop ending stocks are expected near 1.75 billion bushels from 1.881 billion last month. Traders see Argentina corn production revised down by about 1 million tonnes from last month's estimate of 21.5 million tonnes. From the May to the June report, the USDA has on occasion lowered their yield forecast in the supply/demand reports but this is usually due to late plantings. Declines occurred in 2009 (down 2 bushels per acre), 2008 (down 5), 2002 (down 2.1) and 1995 (down 5.9). Net weekly export sales came in at 251,800 metric tonnes for the current marketing year and 147,200 for the next marketing year for a total of 399,000 which was below trade expectations. Cumulative corn sales stand at 89.1% of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 89.8%. Sales of 355,000 metric tonnes are needed each week to reach the USDA forecast. July Rice finished up 0.16 at 14.225, equal to the high and equal to the low.

GRAINS-Corn hits 2-wk high, soy up for 3rd day on risk appetite
SINGAPORE, June 7 (Reuters) - U.S. corn edged up to a two-week high, gaining for three out of four sessions, while soy rose for a third consecutive day as growing hopes for monetary easing and the rescue of Spain's troubled banks boosted risk sentiment.
"There has been a reversal in attitude in the past 24 hours within the commodity markets which has been influenced by improved investor risk appetite," said Luke Mathews, commodities strategist at the Commonwealth Bank of Australia.

POLL-Australia's wheat output seen lower on dry weather
SYDNEY/SINGAPORE, June 7 (Reuters) - Australia's wheat output in the year to June 2013 is likely to be almost 4 percent lower than the government's March estimate of 26 million tonnes and more than 15 percent below last year's record-large production as dry weather threatens yields.
The country is estimated to produce 25 million tonnes of wheat in 2012/13, according to a Reuters survey of 10 analysts, as farmers in the world's second largest exporter wrap up planting later this month.

India monsoon rains 36 pct below average in first week
NEW DELHI, June 7 (Reuters) - India's monsoon rains were 36 percent below average in the week to June 6, the weather office said on Thursday, reflecting the delay in the arrival of the seasonal rains over south India from the usual June 1 start date.
The four-month long rainy season is in the initial stages and crops are not greatly affected by the quantity of rains now, with distribution of rainfall in mid-July after the monsoon covers the entire country more important for their growth.
India's grains stocks at record high, exposed to rot
NEW DELHI, June 7 (Reuters) - India's wheat stocks at government warehouses surged to a record 50.2 million tonnes on June 1, well above the official target of 4.0 million tonnes for the quarter ending June 30, government sources said on Thursday.
Rice inventory for the same period was 32.1 million tonnes against a target of 12.2 million tonnes. The government has an extra 3 million tonnes of wheat and 2 million tonnes of rice as strategic reserves over and above the monthly stocks.
Russia's AgMin says drought worries have passed
GELENDZHIK, Russia, June 7 (Reuters) - Concerns about damage from a spring drought in Russia's south passed and Agriculture Ministry is retaining its forecast for a grain harvest of 94 million tonnes in the new season, a deputy agriculture minister said on Thursday.
"Our forecasts haven't changed and are not likely to change. We estimate the harvest at 94 million tonnes. Yes, there were concerns, but we think they have passed because it has rained," deputy minister Ilya Shestakov said at the Russian Grain Union's XIII International Grain Round in a Black Sea resort town.

Rains improve crops in Russia's parched south
MOSCOW, June 6 (Reuters) - Heavy rains in Russia's southern breadbasket in the past two weeks have halted damage to crops from a late spring drought and the yield outlook could improve if favourable weather lasts through the harvest, the state crop weather forecaster said.
"We expect the total harvest to be less than last (2011/12) year," Anna Strashnaya, the head of the agricultural forecasting department at Russia's Federal Hydrometeorology and Environment Monitoring Service (Rosgidromet), said in an interview.
Australia approves Glencore's takeover of Viterra
MELBOURNE, June 7 (Reuters) - Australia's competition regulator approved a friendly takeover bid by Swiss commodities trader Glencore International Plc  of Viterra Inc , clearing another hurdle for the biggest deal in years in the global agricultural sector.
Glencore offered Viterra C$16.25 per share, or C$6.l billion, in March for the company, which owns the biggest share of Western Canada's grain storage and farm supply outlets, as well as nearly all grain storage capacity in South Australia.
Canada farm groups want curbs on Agrium's clout
WINNIPEG, Manitoba, June 6 (Reuters) - Two influential Canadian farm groups will urge the country's Competition Bureau to scale back Agrium Inc's   proposed purchase of Viterra Inc  assets, saying Agrium might become too powerful in the sale of fertilizer and other crop supplies.
In a C$6.1 billion ($5.9 billion) deal, global commodities giant Glencore International PLC  will buy Viterra, Canada's biggest grain handler, this summer, pending regulatory approval.
Morocco grain imports to jump; neighbours buy less
June 6 (Reuters) - Morocco's soft wheat imports may be its highest since 1981 after unfavourable weather left it with the worst cereal campaign among North African countries this year, while Algeria and Egypt expect lower purchases because of good local harvests.  
Morocco's agriculture ministry expects a 43 percent drop in this year's cereal harvest that would include 2.6 million tonnes of soft wheat, one million tonnes of durum wheat and 1.2 million tonnes of barley.

SOFTS-Sugar extends gains, rain delays Brazil harvest
LONDON, June 7 (Reuters) - Raw sugar held above 20 cents, as wet weather in top producer Brazil was expected to cause harvest delays.
“New York July cocoa  faces a resistance at $2,227 per tonne, a break above which will trigger a further gain to $2,275, according to Reuters market analyst Wang Tao.”

Colombia coffee output up for second month in a row
BOGOTA, June 6 (Reuters) - Colombia's coffee output rose 2 percent in May, the second monthly increase in a row, showing crops are recovering after a slump in production caused by months of heavy rains, the growers federation said on Wednesday.
Colombia, the world's top producer of high quality Arabica beans, produced 689,000 60-kg bags in May, the federation said. Exports fell to 592,000 bags last month, 1,000 bags less than during the same month last year.
Brazil's Bahia churns out cocoa at fastest in 4 yrs
SAO PAULO, June 6 (Reuters) - Brazil's main cocoa producing state Bahia churned out beans last week at its fastest pace in four years, data from the Bahia Commercial Association said, while output also rose sharply in other states.
Bahia warehouses took delivery of 93,267 60-kg bags of cocoa in the week to June 3, 24 percent more than in the same period  last season, the data showed.
Ghana cocoa crop likely well below target-Cocobod
DAVOS, Switzerland, June 6 (Reuters) - Ghana's cocoa production is likely to be around 850,000 tonnes this season, well below its target of 950,000 tonnes, due to dry weather and a fall in prices, the head of regulator Cocobod said in an interview.
"We were expecting rainfall and the rain didn't come - that has been a problem. The way things are going the target will be difficult," said Cocobod chief executive Tony Fofie, citing 850,000 tonnes as the likely output figure.

Oil Drops a Second Day After Bernanke Holds Off on U.S. Stimulus (Source: Bloomberg)
Oil fell for a second day in New York after Federal Reserve Chairman Ben S. Bernanke said the central bank will wait before deciding if economic stimulus is needed for the U.S., the world’s biggest crude user. Futures dropped as much as 1.5 percent, trimming the first weekly increase in six. Fed officials need to assess the risk from Europe’s debt crisis and U.S. budget cuts, Bernanke said to the Joint Economic Committee yesterday, without specifying the options to boost growth. Crude slumped 17 percent in May, the biggest monthly drop in more than three years, on speculation Europe’s debt crisis may worsen and curb fuel demand. Oil for July delivery decreased as much as $1.30 to $83.52 a barrel in electronic trading on the New York Mercantile Exchange, and was at $83.90 at 9:37 a.m. Sydney time. The contract yesterday slipped 0.2 percent to $84.82, the lowest close since June 5. Prices are up 0.8 percent this week and down 15 percent this year.
Brent oil for July settlement slid 71 cents, or 0.7 percent, to $99.93 a barrel on the London-based ICE Futures Europe exchange yesterday. The European benchmark contract’s premium to West Texas Intermediate closed at $15.11. China, the world’s second-biggest oil user, may today announce its biggest cut to gasoline and diesel prices since at least 2008 after the slump in global crude. State-controlled fuel will drop by 620 yuan ($97) a metric ton, equivalent to 28 cents a gallon, starting tomorrow, according to C1 Energy, a commodity researcher that has correctly reported the timing and size of changes before government announcements.

India cuts May Iran oil imports 38 pct-trade
NEW DELHI, June 7 (Reuters) - Indian refiners cut imports from Iran by 38 percent in May from a year ago, tanker discharge data showed, in a second month of steep reductions as they switch suppliers to cushion the impact of new U.S. sanctions on Tehran.
The cutbacks raise New Delhi's chances of winning a waiver similar to that granted by the United States to Japan and some European countries after "substantial" reductions in their imports.

OIL-Brent falls on weak demand, eyes Fed stimulus hopes
SINGAPORE/LONDON, June 7 (Reuters) - Brent crude dipped  due to slack demand while prices were supported around $100 by signs Europe would find a way to deal with Spain's banking crisis and the United States might embark on monetary stimulus.
"The price of oil has rebounded well from its June 1 lows. However, the price increase is just a flow-through effect of the risk-on mentality from investors," Miguel Audencial, sales trader at CMC Markets, said in a report.

China Set to Announce Steepest Fuel-Price Cut Since 2008 (Source: Bloomberg)
China, the world’s second-biggest oil user, may today announce its biggest cut to gasoline and diesel prices since at least 2008 after a slump in global crude costs. State-controlled fuel prices will drop by 620 yuan ($97) a metric ton, equivalent to 28 cents a gallon, starting tomorrow, according to C1 Energy, a Shanghai-based commodity researcher that has correctly reported the timing and size of changes before government announcements. Costs at the pump are “almost certain” to be adjusted under rules set by the National Development and Reform Commission, the nation’s top economic planner, the official Xinhua News Agency reported June 6.
A cut in fuel prices threatens to counter falling crude costs for China Petroleum & Chemical Corp. (600028) and PetroChina Co. (857), the nation’s biggest refiners, and extend processing losses that widened last quarter. Brent crude in London, a benchmark grade tracked by China’s government, entered a so-called bear market on June 1 after sliding more than 20 percent from this year’s high. The reduction forecast by C1 Energy on its website yesterday is equivalent to 6.4 percent, according to Bloomberg calculations based on nationwide average retail gasoline prices published by the government. A 620-yuan cut would be the steepest since the current pricing system was introduced in December 2008. The NDRC considers adjusting fuel rates when the 22-day moving average of Brent, Dubai and Indonesia’s Cinta crude changes more than 4 percent from the previous revision. Today is the 22nd working day after the last adjustment on May 10, Xinhua said.

Japan LNG imports may rise 10 pct in 2012/13
KUALA LUMPUR, June 7 (Reuters) - Japan will need to import as much as 90 million tonnes of LNG this fiscal year, up nearly 10 percent from 2011, to generate the power needed to compensate for shut nuclear reactors, the chairman of the Japan Gas Association said on Thursday.
The world's largest importer of liquefied natural gas has relied heavily on LNG after the March 2011 tsunami wrecked the Fukushima nuclear plant, shattered public confidence in atomic safety and led to the shutdown of all of the country's reactors. Japan's heavy buying has driven up Asian gas prices.

Copper Trade Most Bullish Since March as China Cuts: Commodities (Source: Bloomberg)
Copper traders are the most bullish in three months as China, the biggest buyer, reduced interest rates to bolster growth, increasing expectations that prices will rebound from the longest slump in two years. Sixteen of 31 analysts surveyed by Bloomberg expect the metal to gain next week and eight were neutral, the highest proportion since March 9. Stockpiles in warehouses monitored by the London Metal Exchange, the world’s largest metals bourse, declined 38 percent this year and Morgan Stanley is predicting at least another year of supply shortages. China, which accounts for 41 percent of global demand, cut interest rates for the first time since 2008 yesterday after growth slowed for five consecutive quarters. Federal Reserve Chairman Ben S. Bernanke told Congress yesterday the central bank is ready to act should economic conditions worsen. Copper tripled as the Fed bought $2.3 trillion of debt in two rounds of so-called quantitative easing ending in June 2011.
“Since China is the biggest user of copper that rate cut should give a little boost,” said Donald Selkin, the New York- based chief market strategist at National Securities Corp., which manages about $3 billion of assets. “The potential for some kind of stimulus package should result in copper finally turning around.”

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