Commodities Drop After Fed Cuts Growth Estimates; Euro Declines (Source: Bloomberg)
Commodities and the euro retreated after the Federal Reserve cut growth estimates and expanded its stimulus program less than some investors had expected. Stocks gained and New Zealand’s dollar rose to a seven-week high. Oil, copper and nickel fell more than 1 percent by 9:49 a.m. in Tokyo. The euro snapped a two-day advance against the dollar and yen as Spain prepared to sell bonds today, while New Zealand’s so-called kiwi rose 0.6 percent after data showed the economy expanded more than predicted. The MSCI Asia Pacific (MXAP) Index rose 0.2 percent while Standard & Poor’s 500 Index futures fell 0.1 percent. Fed officials cut their estimate for gross domestic product growth in 2012 to between 1.9 percent and 2.4 percent from 2.4 percent to 2.9 percent, and extended the program of replacing short-term bonds with longer-term debt by $267 billion through the end of 2012. New Zealand’s economy grew at the fastest pace in five years last quarter.
“Markets had been hoping for a little bit more from the Fed,” said Stan Shamu, a market strategist at IG Markets in Melbourne, a provider of trading services in stocks, bonds and commodities. “Sentiment has really slumped after the lower growth forecast.”
Recap: Grains (Source: CME)
Corn futures reversed course heading into the close with July softening to finish fractionally lower while deferred months rallied late to end with fractional to 3-cent gains through the September 2013 contract. Most contracts softened slightly in after-hours trade. Traders took some profits out of the corn market today, encouraged by a slightly better chances for rains. But showers are expected to provide only limited relief.
Soybean futures settled 9 3/4 to 15 3/4 cents higher, which was near session highs. In after-hours trade, the market trimmed gains. Soybean futures were supported by weather and crop concerns. While some forecasters are calling for slightly better rain chances and moderating temps, relief for the driest areas is expected to be very limited.
Wheat futures closed mostly around 10 to 14 cents higher in Chicago and Kansas City, while Minneapolis wheat posted stronger gains with the July contract more than 40 cents higher on the day. Minneapolis wheat futures led price gains today amid concerns about tight supplies of high-protein spring wheat given too much precip in areas of the U.S. Northern Plains and Canadian Prairies.
July cotton futures plummeted their 500-point limit lower today, but the contract moved slightly off these levels at the close to finish 481 points lower. Deferred months ended mid-range with losses of 136 to 231 points. After seeing very strong gains last week and earlier this week, buying interest fizzled today and the front-month contract plummeted, triggering sell stops on the way down.
DTN Closing Grain Comments 06/20 15:14 : Grains Rally Late (Source: CME)
Grain contracts closed at or near session highs following a late surge. Soybeans led the way, with the wheat complex right on its heels. Corn was lethargic throughout the session before its bullish close.
Wheat Market Recap Report (Source: CME)
September Wheat finished up 9 1/2 at 678 1/2, 5 1/4 off the high and 20 up from the low. December Wheat closed up 8 1/4 at 701 3/4. This was 18 1/4 up from the low and 4 3/4 off the high. Chicago wheat traded 12-14 cents higher late in the session today on short covering and a decent recovery in the other grains. This was prompted by the idea that the USDA will decrease the world production estimates next month. Eastern Spring Wheat areas of Ukraine could trend warmer and drier to finish out the month and could possibly continue into July. The 6-10 day precipitation forecast calls for.25-1.5 inches of rain for the FSU winter and spring wheat crops. European wheat futures saw late gains and reached a new 3 week high after U.S. wheat futures began to rally. Paris Wheat saw follow through buying after it was announced that France likely sold Algeria 600,000 tonnes of milling wheat. Iraq has issued a tender to buy at least 50,000 tonnes of all origin wheat and exports sales are estimated at near 400,000 tonnes in tomorrow morning's export sales report. Chicago July wheat rallied into the close today, despite a firmer U.S. Dollar. September Oats closed down 4 at 302 3/4. This was 1/2 up from the low and 7 1/2 off the high.
Corn Market Recap for 6/20/2012 (Source: CME)
September Corn finished up 1 1/4 at 568 3/4, 1 off the high and 16 1/4 up from the low. December Corn closed up 3 at 566 1/2. This was 17 3/4 up from the low and 1 off the high. December corn traded a 19 cent range today and finished positive near the end of trading today. The 11-15 day forecast is unchanged with cooler temperatures for most of the Corn Belt but extremely light rainfall. December corn saw profit taking after yesterday's rally but found support on an uninspiring weather forecast to finish out the month of June and heading into July. Southern Midwest and northern Delta regions should begin pollination next week and the prospect for higher than normal temperatures and below normal rainfall will likely reduce yield. Traders see weekly export sales for corn near 550,000 tonnes for the release for tomorrow morning. December corn settled near the highs of the day despite a firmer U.S. Dollar following statements made by the Fed this afternoon. September Rice finished down 0.005 at 14.745, 0.105 off the high and equal to the low.
U.S. corn falls on profit taking, market monitors weather
SYDNEY, June 20 (Reuters) - U.S. corn slid as traders locked in profits after the contract jumped 10 percent in the previous two sessions on concerns that hot, dry weather in the Midwest will reduce new-crop yields.
"There is perhaps a little bit of profit taking going on while people wait for fresh news on the weather map," Brett Cooper, senior manager of markets at FCStone Australia said.
Rain clogs Brazil's commodities ports with ships
SAO PAULO, June 19 (Reuters) - Rain in southern Brazil is extending ship lineups at the country's largest agricultural commodities ports Santos and Paranagua, where more than 250 vessels are waiting to unload or load fertilizers, grains, sugar and other cargoes, the authorities said on Tuesday.
Brazil is the world's leading exporter of sugar and No.2 soybean exporter after the United States. Global futures prices often respond to delays or interruptions to shipments of these commodities out of Brazil.
Argentine fuel truckers defy the government and strike
BUENOS AIRES, June 19 (Reuters) - Argentina's truck drivers defied a government order for talks and called a three-day strike targeting fuel distribution on Tuesday, their second protest over pay and taxes this month.
Argentina is one of the world's biggest exporters of grains and the vast majority of farm goods are shifted to port by truck.
Fertilizer makers rise on corn production forecasts
June 19 (Reuters) - Shares of fertilizer makers including CF Industries Holdings Inc , Terra Nitrogen Co LP and CVR Partners LP rose on expectations that an anticipated fall in U.S. corn production this summer will force farmers to spend more on crop nutrients in the next planting season.
Corn futures hit a one-month high on Tuesday as the hot and dry weather in the U.S. Midwest threatened crop prospects for the summer.
Rains help EU barley, larger crop expected
HAMBURG, June 19 (Reuters) - Rain in the past weeks has helped European Union barley recover from a dry spring and a larger crop is expected of the grain, used for animal feed, beer and malt production, traders and analysts said on Tuesday.
"The wetter weather in much of Europe has sharply improved the harvest outlook," one barley trader said. "I think we are now expecting much larger barley supplies than only four weeks ago which will be good news for animal feed makers and beer brewers."
Argentina agrees export of 6 mln tonnes new-crop wheat
BUENOS AIRES, June 19 (Reuters) - Argentina's government authorized on Tuesday the export of 6 million tonnes of 2012/13 wheat as farmers advance with early plantings, officials said.
Argentina is the world's sixth-biggest wheat exporter and the key supplier to neighboring Brazil, but growers have been planting less of the crop in recent years due to complaints about the government's export quota system.
US corn, soybeans keep wilting in hot, dry weather
CHICAGO, June 18 (Reuters) - Hot and dry weather has hurt U.S. corn and soybean crops more than analysts expected, the U.S.
Department of Agriculture (USDA) said in its latest weekly report on Monday.
The USDA crop progress report said 63 percent of the U.S. corn crop last week was in good-to-excellent condition -- below last week's USDA rating of 66 percent and also below an average of analysts' estimates for 64 percent.
SovEcon cuts outlook for Russia 2012/13 harvest
MOSCOW, June 19 (Reuters) - A top Russian grain analyst lowered his 2012/13 grain harvest forecast by 4.5 percent and his wheat harvest forecast by 5.7 percent from previous estimates and said the outlook could be reduced further due to falling yields.
SovEcon Chief Executive Andrei Sizov Sr. forecast Russia's 2012/2013 grain harvest at 85 million tonnes, down from 94 million tonnes in 2011/2012.
ICE coffee, sugar, cocoa dip, await Fed
LONDON, June 20 (Reuters) - Arabica coffee and raw sugar futures on ICE eased in thin volumes, as investors waited to see if the U.S. Federal Reserve will adopt further monetary stimulus to help counter faltering economic growth.
"New York July coffee KCN2 is expected to rise to $1.6105 per lb, as indicated by its wave pattern and a Fibonacci retracement analysis," according to Reuters market analyst Wang Tao.
Centam, Mexico, Colombia coffee exports up 5.8 pct in May
GUATEMALA CITY, June 19 (Reuters) - Coffee exports from Central America, Mexico, Colombia, Peru and the Dominican Republic
rose 5.8 percent in May from the same month last year, reaching 2.89 million 60-kg bags in the month.
Guatemala's coffee association Anacafe, which collates figures from the arabica growing region, said exports through the first eight months of the 2011/2012 harvesting season totaled nearly 18 million bags, down 4.4 percent from the same period during the 2010/11 season.
ETH to invest $500 mln to raise Brazil cane output
BRASILIA, June 19 (Reuters) - Brazilian ethanol producer ETH plans to invest 1 billion reais ($490 million) this year, most of which will go to planting more sugar cane to help alleviate a supply shortage, the Folha de Sao Paulo newspaper said on Tuesday.
The investment will help the company roughly double its cane output versus two seasons ago by adding 115,000 hectares of cane on top of 100,000 hectares it planted last season, according to the report quoting ETH President Luiz de Mendonca.
Oil Drops a Second Day on U.S. Crude Stockpile Increase (Source: Bloomberg)
Oil fell for a second day after crude stockpiles unexpectedly climbed to the highest level in 22 years in the U.S., the world’s biggest user of the commodity. Futures slipped as much as 0.8 percent in New York after dropping 2.7 percent yesterday. Inventories increased 2.86 million barrels last week to 387.3 million, the highest level since July 1990, an Energy Department report showed. Supplies were forecast to shrink 1.3 million barrels, according to a Bloomberg News survey of analysts. The price decline accelerated after Federal Reserve policy makers lowered their outlook for U.S. economic growth and employment. Oil for August delivery slipped as much as 63 cents to $80.82 a barrel in electronic trading on the New York Mercantile Exchange, and was at $80.86 at 9:17 a.m. Sydney time. The July contract, which expired yesterday, fell $2.23 to $81.80, the lowest close since Oct. 5. Front-month prices are down 18 percent this year.
Brent oil for August settlement decreased $3.07, or 3.2 percent, to $92.69 a barrel on the London-based ICE Futures Europe exchange yesterday. The front-month price for the European benchmark contract closed at a premium to West Texas Intermediate of $11.24, the lowest level since January.
China end-May crude stocks up 0.2 pct on month-Xinhua
BEIJING, June 20 (Reuters) - China's commercial crude oil stocks rose 0.2 percent by the end of May from a month earlier, while fuel inventories slid 0.7 percent, the official Xinhua news agency reported in a newsletter on Wednesday.
The slight increase in commercial crude oil stocks could indicate more oil was moved to strategic oil reserves, after China imported a record 6.0 million barrels per day (bpd) of crude oil last month but daily refinery crude runs only climbed 0.4 percent from April.
China's Unipec asks Iran to deliver July crude -sources
BEIJING, June 20 (Reuters) - China's Unipec, trading arm of top Asian refiner Sinopec Corp , has requested Iran to deliver July-loading crude cargoes to Chinese ports, ahead of a European insurance ban on Iranian oil exports that takes effect from July 1.
"There is a company mandate requesting the July Iranian supplies to be on a delivered basis," said one oil official.
Sanctions hit Iran as oil users battle to avert disruptions
In less than two weeks, Iran's biggest oil buyers will lose access to the London-based insurance market as European Union sanctions aimed at hurting Tehran’s nuclear programme kick in, disrupting payments between OPEC's second-biggest supplier and its energy-hungry customers in Asia.
OIL-Brent oil slips, Europe worries weigh
LONDON, June 20 (Reuters) - Brent crude oil fell , pinned near 17-month lows, hit by worries over Spain's high borrowing costs and prospects for global demand growth.
"Oil has really decided it has no interest in the FOMC, it has not priced in any significant stimulus," said David Morrison, analyst at GFT Global.
Founder of $125 Billion Gold ETP Market Stymied on Copper (Source: Bloomberg)
Graham Tuckwell, who created a $125 billion market in exchange-traded gold in less than a decade, is struggling to convince regulators and investors he can do the same for industrial metals. More than a year after he sought permission to start an exchange-traded product backed by copper held in warehouses, the U.S. Securities and Exchange Commission has yet to approve the plan. Investors in a similar London-listed fund from Tuckwell’s ETF Securities Ltd. accumulated just $13.2 million of copper since December 2010, equal to about 46 minutes of global demand, data compiled by Bloomberg show. While Tuckwell created a class of securities now backed by 2,405 metric tons of gold, exceeding the reserves of all but four central banks, he’s had less success with industrial metals. The new products are opposed by some consumers concerned they will cause shortages of materials used in everything from cables to cars, while the U.S. Commodity Futures Trading Commission is trying to limit speculation.
“As you move away from the typical investment products to things that would be viewed to be more usable commodities, regulators become more concerned,” said Deborah Fuhr, a co- founder of London-based research group ETFGI LLP and the former head of ETF research at BlackRock Inc. “Graham really was the guy who brought the first exchange-traded gold product to the markets. As you move into other commodities, though, they tend not to be seen as an investment by most investors.”
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