20120702 1001 Global Commodities Related News.

Funds Win With Bull Bets Before Biggest Rally Since ’09 (Source: Bloomberg)
Hedge funds lifted their bullish commodity bets for a third week, just before a European agreement to contain the region’s debt crisis spurred the biggest rally in raw-material prices in three years. Money managers increased their combined net-long positions across 18 U.S. futures and options by 15 percent to 724,783 contracts in the week ended June 26, Commodity Futures Trading Commission data show. That’s the biggest gain since January. Corn holdings rose to the most in five weeks, and sugar wagers climbed to the highest since mid-April. Most markets surged June 29 after European leaders agreed to a 120 billion-euro ($152 billion) plan to stimulate growth and ease terms for loans to Spanish banks. The Standard & Poor’s GSCI Spot Index of 24 commodities jumped 5.6 percent, the biggest gain since April 2009, the euro climbed the most this year and Spanish bonds rallied. Europe consumes 18 percent of the world’s copper and accounts for 22 percent of oil demand, data from Barclays Plc and BP Plc show.
Policy makers “are addressing a lot of issues that were taboo,” said Mihir Worah, who manages Pacific Investment Management Co.’s $22 billion Commodity Real Return Strategy Fund from Newport Beach, California. “Whether this plan works or not, the fact that they’re talking about them is important. Stable or growing economies support more commodity demand.”

Commodities Up Most in Six Months on Europe Optimism (Source: Bloomberg)
Commodities jumped the most in 39 months on optimism that Europe’s debt crisis may be contained after leaders agreed to ease repayment rules for emergency loans to Spanish banks and relax conditions on help for Italy. The Standard & Poor’s GSCI Spot Index (MXWD) of 24 raw materials rose 5.6 percent to 599.44, the biggest gain since April 2, 2009. The increase trimmed the quarterly loss to 13 percent, still the worst since the final three months of 2008. Crude oil jumped 9.4 percent, reducing its quarterly drop to 18 percent. After 12 hours of talks that ended at 4:30 a.m. in Brussels today, leaders of the 17 euro countries dropped the requirement that governments get preferred creditor status on crisis loans to Spain’s blighted banks, European Union President Herman Van Rompuy said. Banks can also be recapitalized directly with funds rather than going through governments, he said.
“We had a spark out of Europe that caused the fire to blow up,” said James Dailey, who manages $215 million at TEAM Financial Asset Management LLC in Harrisburg, Pennsylvania. “It’s the response to the news out of Europe combined with what had become deeply oversold conditions, specifically in crude oil, which basically fell off a cliff in the last couple of months.”

DTN Closing Grain Comments 06/29 15:14 : Hot Weather, Outside Markets Support Grains (Source: CME)
Traders shrugged off larger-than-expected row-crop planted acreage numbers, with bean contracts leading the grain complex higher. Corn trailed well behind in deferred contracts on profit-taking by investors despite hot weather that is causing more damage by the day to the once highly-touted bumper crop.

Pro Farmer: After the Bell Wheat Recap (Source: CME)
Wheat futures saw two-sided trade today, but the market rallied into the close to finish mostly around 7 to 15 cents higher. Wheat futures finished with sharp gains for the week. Wheat staged an impressive corrective rally this week, but this was largely thanks to the weather rally in corn. If corn continues to trend higher, so will wheat. But a reversal in corn would also send wheat lower... and weather rallies are typically short-lived.

Wheat Market Recap Report (Source: CME)
September Wheat finished up 11 1/4 at 757 1/4, 5 3/4 off the high and 17 1/4 up from the low. December Wheat closed up 10 at 776 3/4. This was 17 up from the low and 6 1/4 off the high. Chicago September wheat traded an outside-day-up but failed to take out the Wednesday high at 7.63 1/2. Minneapolis and Kansas City wheat traded higher following the lower than expected planted acreage number. The USDA reports this morning were considered mixed to slightly bullish, with the wheat market pushing higher and following the other grains up. The Chicago July contract gained on the September after no deliveries were made today. The USDA pegged total wheat planted acreage at 56.017 million acres compared with trade expectations for 56.679 million. Spring wheat planted area was 11.995 million acres compared with trade expectations at 12.558 million acres. June 1st wheat stocks came in at 742 million bushels compared with trade expectations near 723 million. The range was 723 to 748 million bushels. Commodity markets saw broad based support after positive news came out of the European Leaders Summit overnight and the US Dollar weakened. Crude oil surged nearly 9% into the closing bell which offered supplemental support to wheat, as well as other grains. September Oats closed up 2 at 338. This was 5 up from the low and 6 1/2 off the high.

Corn Market Recap for 6/29/2012 (Source: CME)
September Corn finished up 2 1/4 at 628 1/2, 19 1/2 off the high and 13 up from the low. December Corn closed up 2 1/4 at 634 1/2. This was 12 1/2 up from the low and 20 1/2 off the high. The corn market traded higher into the close but well off session highs. December corn had an outside day but failed to take out Wednesday's highs at 6.56 3/4. July corn gained on September corn as there were no deliveries on First Notice Day today. The USDA reports this morning were considered mixed against trade expectations and the market focus quickly shifted back to a threatening weather outlook. Weather forecasts call for slightly wetter conditions in parts of the central Midwest to eastern Midwest next Monday through Wednesday. The excessive heat is also expected to affect a smaller portion of the lower Midwest over the weekend. The northern Corn Belt saw showers this morning and afternoon. The storms systems should track southeast from Chicago and run through north-central Indiana and Ohio. The Argentina government approved the export of nearly 3 million more tonnes of old crop corn which tempered the sharply higher trade midday as corn demand weakens due to the sharp rally in prices. The USDA pegged corn planted acreage at 96.4 million acres compared with trade expectations near 95.9 and compared with 95.864 as the March estimate. This was slightly negative against expectations. June 1st stocks were pegged at 3.148 billion bushels as compared with trade expectations at 3.18 billion with a range of 2.98 to 3.5 billion. This was slightly positive. The corn market also saw support from broad based commodity buying after positive news was reported out of the European Leaders Summit. Crude oil was up 7.00% near the close as money jumped back into commodities after the U.S. Dollar sank to it's lowest level since June 20th. Crop Condition ratings are expected to decline sharply next Monday, which is adding to the firmer trade. September Rice finished down 0.415 at 14.49, 0.51 off the high and 0.085 up from the low.

Pro Farmer: After the Bell Corn Recap (Source: CME)
Corn futures posted sharp gains for the week, with new-crop futures ending slightly higher today amid dollar strength and yield concerns. December corn ended around 80 cents above last week's close. Next week will be key for the corn market. The crop has begun to pollinate and price trends are known to reverse or accelerate after the July 4th holiday. All eyes will be on the sky this weekend, as eastern and southern areas of the Corn Belt badly need moisture after this week's scorching temps.

USDA Ups Soybean Stocks, Acreage. Few Surprises in USDA’s Grain Stocks and Acreage Report (Source: CME)
There were few surprises in Friday morning's USDA Grain Stocks and Acreage reports for corn, while soybean acres came in toward the high end of expectations and quarterly soybean stocks were larger than traders expected. Despite the larger-than-expected jump in corn and bean acreage in Friday's report, the grain complex was posting strong gains at midday Friday. Hot, dry weather shrinking the size of the U.S. crop and supportive outside markets sparking a fresh inflow of investment money were the main factors in control of the grain complex, according to DTN Analyst John Sanow.

Crop Outlook for Summer 2012 (Source: CME)
The main U.S. crop areas go into the prime reproductive phase of the growing season— pollination for corn and blooming and pod--‐ setting for soybeans—with a pronounced stressful condition. There is considerable question over whether yields will be able to meet current USDA projections,

GRAINS-US corn rebounds, notches 15 pct gains this week
SINGAPORE, June 29 (Reuters) - Chicago corn bounced back on Friday, rising for five out of six sessions as a severe drought in the U.S. Midwest curbs yields of what was once estimated to be a record-large crop.
"The general mood is very bullish as the Midwest drought is expected to worsen and result in lower yields," said Ker Chung Yang, commodities analyst at Phillip Futures in Singapore. "The market is speculating lower output and it is pre-positioning before the report."

India releases 4.5 mln T non-levy sugar for July-Sept
June 29 (Reuters) - India has allowed millers to sell 4.5 million tonnes of sugar from July to September in the open market, unchanged from the previous quarter, according to a government statement on Friday.
The quantity of non-levy, or free-sale sugar that millers can sell on the open market is fixed by the federal government.

Larger US corn, soy area may not ease drought worry
WASHINGTON, June 29 (Reuters) - American farmers likely sowed far more soybean seeds than they had originally intended this year and planted the most corn acreage in 75 years, the U.S. government is expected to say on Friday in a report that has been overshadowed by a deepening drought in the Midwest.
The U.S. Agriculture Department's acreage and quarterly stockpile reports, normally among the most important of the year for estimating supplies from the world's top grower, may be set aside by traders who fear that intense heat and a lack of rain is damaging corn stalks every day. Those conditions also may have dissuaded some farmers from planting soybeans on recently harvested wheat fields.

Brazil boosts gov't farm credit by 7.5 pct
BRASILIA, June 28 (Reuters) - Brazil will make it easier and cheaper for its farmers to obtain loans this season, as global credit normally available to its world-leading growers of coffee, sugar and grains dries up.
The government will expand funds allocated to farm credit by 7.5 percent from last year to 115.2 billion reais ($55 billion) for investments in land, machinery, planting, harvesting and selling crops, Agriculture Minister Mendes Ribeiro said in the announcement of the annual Farm Plan on Thursday.

Argentina farmers plant wheat, weather helps
BUENOS AIRES, June 28 (Reuters) - Argentine wheat farmers have planted nearly half the area forecast for the 2012/13 crop, and seedlings are off to a good start due to favorable weather, the Buenos Aires Grains Exchange said on Thursday.
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. They say a government system of export quotas depresses prices in the local market.

Trade expects no CBOT July corn, soy deliveries
CHICAGO, June 28 (Reuters) - Tight grain supplies in the U.S. cash market should prevent any deliveries of corn and soybeans against Chicago Board of Trade July futures on Friday, traders and analysts said Thursday.
Friday is first notice day for deliveries of grain and soy against CBOT July futures contracts.

U.S. crops cook under Midwest heat dome
CHICAGO, June 28 (Reuters) - Stifling heat and bone dry conditions will persist across the center the U.S. Midwest for at least the next 10 days, adding more stress to young corn and soybean plants already suffering from a lack of rain, agricultural meteorologists said on Thursday.
A high pressure ridge hovering over the central Midwest is creating a heat dome, causing temperatures to spike to well over 100 degrees Fahrenheit.

Extreme heat spreads across U.S., could break records
KANSAS CITY, Mo, June 28 (Reuters) - The Midwest cities of Cincinnati, St. Louis, Chicago and Kansas City could approach or break heat records on Thursday, as a massive high pressure system sent temperatures higher throughout most of the country.
Drought conditions have contributed to the early and sustained heat, according to Alex Sosnowski, expert senior meteorologist at AccuWeather.com. He said both St. Louis and Kansas City, Missouri could hit 107 degrees Thursday. The high temperatures will move into the northeast Friday.

ICE sugar, coffee rise after EU summit
LONDON, June 29 (Reuters) - Sugar, coffee and cocoa futures on ICE rose , in line with other commodities, a fter euro zone leaders agreed at a summit to take emergency action to bring down Italy's and Spain's borrowing costs, buoying investors' spirits.
SUGAR Dealers said delays to shipments from Brazil had helped to tighten nearby supplies.

Ghana 2011/12 cocoa main crop total down 12.8 pct
ACCRA, June 28 (Reuters) - Total main crop purchases declared by private buyers to Ghana's industry regulator Cocobod were 798,736 tonnes, down 12.8 percent on the 916,810 tonnes produced in the same part of last year's season, according to Cocobod data.
The data, seen by Reuters, covered all 33 weeks of the 2011/12 main crop which began in October and closed on May 31. Ghana is the world's second largest grower after neighbouring Ivory Coast.

Colombia faces price pressure on coffee exports
GENEVA, June 28 (Reuters) - Coffee exporter Colombia will likely have to cut prices when its production eventually recovers from a three-decade low in order to win back lost buyers, analysts said on Thursday.
Colombia - a top producer of high quality arabica beans used for gourmet blends - has historically been able to command premiums over other arabica varieties.

Stray buoy lifts Brazil sugar vessel lineup
SAO PAULO, June 28 (Reuters) - The lineup of ships waiting to load sugar in Brazil jumped to 70 from 60 a week ago, after a channel buoy broke free and interupted ships moving through the main port of Santos for a day, Williams shipping agents said.
Normal shipping traffic resumed by Tuesday afternoon, after the buoy, which broke free of its moorings late on Monday and halted the movement of ships at Santos port, was put back.

Oil Little Changed After Rising Most in Three Years on Europe (Source: Bloomberg)
Oil was little changed in New York after rising the most in three years on speculation an agreement by European leaders will help contain the region’s debt crisis and sanctions on Iran’s crude shipments will curb supply. Futures traded near the highest close in more than three weeks after surging 9.4 percent June 29, the most since March 12, 2009. European Union leaders agreed last week to loosen bailout rules, lay the foundations for a banking union and break the link between sovereign and banking debt. An EU ban on the purchase, transport, financing and insurance of oil from Iran, OPEC’s second-largest producer, started yesterday. “Sentiment is still positive from the euro zone summit,” Paul Gamble, the head of research at Riyadh-based Jadwa Investment Co., said in an interview yesterday. “We’ve come down a long way pretty rapidly, so there is certainly room for prices to rise.”
Oil for August delivery was at $84.70 a barrel, down 26 cents, in electronic trading on the New York Mercantile Exchange at 9:28 a.m. Sydney time. The contract surged $7.27 on June 29 to $84.96, the highest close since June 6. Prices decreased 17.5 percent last quarter, the biggest decline since the final three months of 2008.

COLUMN-High prices result in soaring oil reserves
--John Kemp is a Reuters market analyst. The views expressed are his own--
LONDON, June 28 (Reuters) - For all that Malthusians worry about oil running out, and analysts cite the rising costs of exploration and production, the oil industry has been adding reserves faster than they are being consumed since 2005, as high prices spur an investment boom across the industry.
Contrary to the alarming predictions made a few years ago, and still periodically revived by peak oilers, there is no sense in which oil is running out.

Oil- Brent back up to $93, but deep quarter loss
LONDON, June 29 (Reuters) - Oil rallied with other commodities and the euro, rising over $2 after European leaders agreed on a strategy to tackle soaring borrowing costs in Italy and Spain, but was still set for the deepest quarterly loss since 2008.
"I think the expectation was there would take the EU most of the weekend to reach an agreement, so I think this has taken the market a bit by surprise," said Thorbjoern Bak Jensen, oil analyst at Global Risk Management.

POLL-Global oil demand growth seen at slowest since 2008
SINGAPORE/NEW YORK, June 29 (Reuters) - Global oil demand is expected to grow at the slowest pace this year since the financial crisis on mounting economic weakness, a Reuters poll showed, with China's slowing consumption growth expected to barely offset falling demand in developed economies.
While overall demand is still expected to rise, the rate of growth for this year and next has been lowered sharply since January, and with the latest batch of economic data pointing to a deepening slowdown in many major economies several analysts see further downward revisions as likely.

OPEC should consider output cut if surplus persists -Iraq's Shahristani
SINGAPORE, June 29 (Reuters) - Oil producer cartel the Organization of the Petroleum Exporting Countries (OPEC) should consider a production cut if an oil surplus continues much longer, Iraq's Deputy Prime Minister told reporters on Friday.
"The market now is oversupplied and if the surplus continues much longer, OPEC will need to revise oil production levels," Iraq's Deputy Prime Minister Hussain al-Shahristani, who is on a visit to Singapore, said when asked if OPEC should cut production.

Hong Kong Brightoil eyes slice of massive China crude market
SINGAPORE/BEIJING, June 29 (Reuters) - Hong Kong-listed Brightoil Petroleum (Holdings) Ltd  will commence crude trading operations in the third quarter, aiming to become a key supplier to China, the world's second-largest oil consumer, industry sources said on Friday.
Brightoil, with a market capitalisation of $3 billion, is eyeing a slice of China's massive 5-million-barrels-per-day crude import market that is dominated by state-owned PetroChina Co Ltd  , China Petroleum and Chemical Corp (Sinopec Corp) , China national Offshore Oil Corp (CNOOC Group)  and Sinochem Group.

Libya's largest refinery restart delayed-official
LONDON, June 29 (Reuters) - Libya's largest refinery at Ras Lanuf will not restart in early July as planned, but a petrochemical unit, which does not run on crude oil, will resume operations, a senior National Oil Corporation (NOC) official told Reuters on Friday.
Ras Lanuf, which can process 220,000 barrels of oil per day(bpd), accounts for well over half of Libya's oil refining capacity and is an important source of refined oil products in the Mediterranean region.

Iran-Oil Sanctions Risk Biggest OPEC Export Loss Since Libya (Source: Bloomberg)
European Union sanctions on Iran entered into full force yesterday after exemptions on some contracts and insurance ended, boosting crude prices and pressure on the Persian Gulf nation to halt its nuclear- enrichment program. The reduction in Iranian exports may become the biggest supply disruption from a member of the Organization of Petroleum Exporting Countries since an armed rebellion all but halted pumping in Libya last year, according to the International Energy Agency. It also comes as a strike by Norwegian workers is curbing flows from North Sea fields. “We expect Brent oil prices to be supported by Iranian oil sanctions and potential loss of supplies from the North Sea,” Gordon Kwan, the head of regional energy research at Mirae Asset Securities based in Hong Kong, said in a June 28 report. “The imminent EU insurance ban on tankers carrying Iranian crude could drive up demand for Brent and Dubai crude.”
Brent futures fell below $90 a barrel on June 21 for the first time in 18 months as concern that Europe’s debt crisis would spread sapped the outlook for fuel use worldwide. Now, the Iran embargo and Norwegian strike are stoking speculation about a rebound in prices, according to analysts such as Kwan and Ole Hansen at Saxo Bank A/S. Brent for August settlement surged 7 percent on June 29 to close at $97.80 a barrel on the ICE Futures Europe exchange.

Carbon Polluters, Coal Miners Pay in Australian Tax Overhaul (Source: Bloomberg)
Australia is charging its largest polluters for carbon emissions and taxing profits of iron ore and coal producers starting today in the biggest change since 2000 in how the government collects and spends money. The country will assess almost 300 of its largest polluters a fixed price of A$23 ($23.55) a metric ton for their greenhouse gases. Mining companies including BHP Billiton Ltd. (BHP), Rio Tinto Ltd. and Fortescue Metals Group Ltd. (FMG) face a separate levy on 30 percent of earnings from iron ore and coal starting today. Prime Minister Julia Gillard, who pushed her climate law through Parliament last year, is trailing in opinion polls behind the Liberal-National coalition led by Tony Abbott, who has vowed to repeal carbon pricing. Gillard is counting on payouts and credits worth about A$30 billion over the next four years to placate Australian business and households facing higher power bills.
“This is the most effective and efficient way to drive innovation to find better, less-polluting ways of producing power, goods and services,” Treasurer Wayne Swan said in his weekly economic note today. “It will help reduce Australia’s annual emissions by at least 159 million tons per annum by 2020, equivalent to taking 45 million cars off the road.”

Gold Traders Extend Bullish Call on European Debt Crisis (Source: Bloomberg)
Gold traders are bullish for a sixth week on speculation that Europe’s debt crisis will boost demand from investors seeking to protect their wealth and drive prices higher after moving to within 1 percentage of a bear market. Sixteen analysts surveyed by Bloomberg said they expect a rally next week and 10 were bearish. Another five were neutral. Investors added almost $2 billion to holdings in gold-backed exchange-traded products this month, the most since November, according to data compiled by Bloomberg. Hedge funds and other speculators have increased bets on a rally for four consecutive weeks, U.S. Commodity Futures Trading Commission data show. Spain formally asked for a bailout for its banks on June 25 and Cyprus that day became the fifth member of the 17-nation euro zone to ask for outside help. European leaders agreed today to ease repayment rules for emergency loans to Spanish banks and relax conditions on potential help for Italy.
Gold came close to a bear market in May as some investors sold bullion to cover losses in stock markets as $7 trillion was erased from global equities in about two months. “While demand has been weaker for bullion in recent months, it has picked up in the last month,” said Mark O’Byrne, the executive director of Dublin-based GoldCore Ltd., a brokerage that sells and stores everything from quarter-ounce British Sovereigns to 400-ounce bars. “A resolution to the crisis is not going to be seen in the short term. A lot more speculators could pile back into the market.”