DTN Closing Grain Comments 07/03 13:08 : Grains Extend Impressive Run (Source: CME)
Free-falling crop conditions in corn and beans sparked another sharp rally in grains with new highs posted for the move. Sweltering temperatures over the next five days will put additional stress on the row-crops and spring wheat something that provided additional support. The CME will be closed until 9:30 (CDT) Thursday morning in observance of the Fourth of 4th holiday.
Pro-Farmer: Grains Recap (Source: CME)
Corn futures enjoyed moderate gains throughout the session and rallied into the close to finish just off their daily highs with gains of 26 1/4 cents in the July contract, while deferred months closed 17 1/2 to 21 3/4 cents higher. Funds bought an estimated 15,000 contracts (75 million bu.) of corn today. Traders focused on building weather premium into prices today as USDA's slash to its crop condition ratings yesterday emphasized the quickly deteriorating condition of the crop -- especially with 25% of it sulking as of July 1.
Soybean futures finished 34 3/4 to 40 cents higher in the July through January 2013 contracts. Far-deferred futures posted slightly lesser gains. All contracts ended near session highs. Weather was again the source of support in the soybean market today. After USDA lowered crop condition ratings more than anticipated yesterday afternoon, traders responded by building more weather premium into the market.
Wheat futures closed mostly 20-plus cents higher in Chicago and Kansas City, while Minneapolis wheat finished mostly 30-plus cents higher. Futures at all three exchanges finished high-range. With the corn and soybean markets leading the way, wheat futures rallied sharply into the Fourth of July break. Additional fundamental support came from crop concerns in areas of Europe, the Former Soviet Union, Australia and China.
Cotton futures enjoyed tentative short-covering today and rallied into the close to finish at or near their daily highs with gains of 41 to 60 points. Yesterday's Crop Condition Report from USDA helped cotton futures to extend their corrective rebound as it raised some concerns about the U.S. crop.
Wheat Market Recap Report (Source: CME)
September Wheat finished up 26 3/4 at 799 1/4, 1 1/2 off the high and 25 up from the low. December Wheat closed up 23 at 813 3/4. This was 23 up from the low and 1 1/4 off the high. Chicago September wheat traded sharply higher to end the day but Minneapolis September wheat was the leader, up 32 1/4 cents. Kansas City September traded 26 cents higher into the close. The wheat markets saw support from a sharply higher energy and corn markets. The 5-day weather outlook calls for very hot and dry conditions for the Midwest and northern Delta region. Wheat was a follower of corn on the move higher. Spring wheat in the Black Sea is expected to see showers this week but long term forecasts call for drier conditions. The Prime Minister of Ukraine announced that no plans are being made to limit gain exports for the 2012/13 crop year and the India government has approved 2 million tonnes of wheat exports for overseas shipment. Wheat shook off the bearish news and traded higher with corn. Paris Matif Wheat future traded to new contract high on spillover from U.S. wheat markets. September Oats closed up 3 3/4 at 351. This was 4 up from the low and 7 3/4 off the high.
Corn Market Recap for 7/3/2012 (Source: CME)
September Corn finished up 21 3/4 at 674, 1 1/4 off the high and 16 3/4 up from the low. December Corn closed up 18 3/4 at 674 1/2. This was 13 3/4 up from the low and 1 1/2 off the high. The corn market traded higher into close after the December contract moved above the August 2011 highs of 6.73 1/2 and closed near the highs of the day. Cash corn in the Gulf of Mexico was steady today but futures rallied on blistering heat and lack of rainfall. The 5-day weather outlook calls for very hot and dry conditions for the Midwest and northern Delta region. The 6-10 day forecast calls for cooler temperatures but still lacks any significant rain accumulation. While the moisture and cooler temperatures will be welcomed, the rainfall is not expected to improve soil moisture conditions for the driest areas of the Corn Belt. The corn market rallied a day after Crop Condition reports showed sharply lower decreases in corn condition ratings. The report noted that 25% of the U.S. corn crop is silking as of Sunday. Traders believe that next Monday's report will show another round of lower ratings as the pollination pace increases with the unusually warm temperatures. Corn was also supported after energy markets rallied and the U.S. Dollar trading slightly weaker. September Rice finished up 0.325 at 15.005, equal to the high and 0.015 up from the low.
Corn rally needs fresh bull interest
--Gavin Maguire is a Reuters market analyst. The views expressed are his own.--
CHICAGO, July 3 (Reuters) - The recent sustained price strength in corn has occurred amid intensifying concern about how this season's stretch of hot and dry weather across the Midwest has caused widespread damage to the emerging crop, and has given the impression of bullish buying interest flowing into this arena.
But most of the trading action seen has actually been traders exiting short positions rather than establishing long exposure, leaving this market in dire need of fresh bullish buying interest if it is to extend its recent gains.
Corn jumps to 10-month top, soy near 4-year high
SINGAPORE, July 3 (Reuters) - Chicago corn rose to a 10-month top stretching gains into a third straight session, while soybeans surged to their highest in almost four years as a U.S. report cut crop condition ratings in a fresh blow to world corn and soy supplies.
"The yields are going to be decimated if this hot weather continues in the U.S. and the huge crops that we are looking for are not going to be achieved."
India's farm minister says no worry yet as rains stall
NEW DELHI, July 3 (Reuters) - India's crucial monsoons should improve next week, Farm Minister Sharad Pawar said on Tuesday, amid growing concern over a halt in the progress of the June to September rains that has hit sowing of some crops in the major food producer and consumer.
"By and large the situation may not be fully satisfactory but it is not bad either ... There is ample opportunity to cover the delay," Pawar said in a meeting with journalists after newspapers reported rising worry over low rainfall.
Ukraine grain exports at 21.8 mln T in 11/12 - AgMin
KIEV, July 3 (Reuters) - Ukraine's grain exports totalled 21.8 million tonnes in the July-June 2011/12 season against 12.8 million tonnes in 2010/11, the Agriculture Ministry said on Tuesday.
The ministry said in a statement the former Soviet republic had exported 1.96 million tonnes of grain in June, the last month of the 2011/12 season.
Northeast US Corn Belt to get a bit wetter
CHICAGO, July 2 (Reuters) - Midday forecasts called for slightly wetter weather in parts of the U.S. Midwest, but much of the region will still face relentless heat and dryness, trimming corn and soybean crop prospects, meteorologists said.
"The 1- to 5-day (forecast) is slightly wetter in Michigan, northern Indiana and northwestern Ohio," said Paul Markert, meteorologist for Cropcast.
IGC cuts 2012/13 wheat crop outlook, raises maize
LONDON, July 2 (Reuters) - The International Grains Council on Monday cut its forecast for global wheat production in 2012/13 as the outlook for the crop in key exporter Russia deteriorated.
World wheat production was cut to 665 million tonnes from a previous forecast of 671 million and now stands well below the prior season's 695 million.
US corn and soy wilt from unrelenting heat and dryness
CHICAGO, July 2 (Reuters) - The soybean and corn crops in the U.S. Midwest will get hit hard again this week by unrelenting high heat and dryness, said an agricultural meteorologist on Monday.
"We're still looking at a scenario providing below-average rainfall for at least the next 10 days," said John Dee of Global Weather Monitoring.
Sugar up on Brazil delays, arabicas build on gains
LONDON, July 3 (Reuters) - Sugar futures on ICE edged higher consolidating gains after the October contract hit a two-month high the previous session, boosted by delays to top producer Brazil's harvest after wet weather.
Arabica coffee was also supported by concerns over the impact of rain on the quality of the coming crop, with prices firming in early trading, while cocoa was up slightly.
Brazil sugar producer turns futures buyer amid delays
BRASILIA/NEW YORK, July 2 (Reuters) - Top Brazilian sugar grower Copersucar S.A. has turned buyer, becoming what is believed to be the first producer to take physical delivery from the futures market in over half a century.
Copersucar will take delivery of 2,216 lots, or 112,578 tonnes, of sugar against the ICE Futures U.S. July expiry last Friday, Copersucar spokesman Guilherme Pena said, confirming market speculation. He declined to make any further comment. The delivery has a notional value of over $50 million.
Coffee exports from Honduras, Costa Rica rise in June
TEGUCIGALPA, July 2 (Reuters) - Coffee exports from Honduras, Central America's top producer, nearly doubled in June compared with the same month a year ago, reaching 788,129 60-kg bags for the month.
Honduras' coffee association IHCAFE said exports through the first nine months of the 2011/2012 harvesting season totaled 4.49 million bags.
Brazil coffee exports down sharply on yr in June
BRASILIA, July 2 (Reuters) - Exports of green coffee from world top producer Brazil fell to 1.69 million bags in June, down from 2.2 million bags this time last year, trade ministry data showed.
The shipments are from the 2011/12 season, which was a smaller harvest, accounting for some of the dip.
Brazil's Bahia cocoa flow hits cruising speed
SAO PAULO, July 2 (Reuters) - Cocoa arrivals in Brazil's main cocoa state Bahia have risen to near peak flow from the mid-crop harvest and the supplies look set to continue strong in July and August, according to commercial data and comments from a local analyst.
Deliveries from other smaller cocoa-growing states dipped during the week through June 24 due to logistics problems in the state of Para, Bahia-based cocoa analyst Thomas Hartmann said in a weekly crop bulletin without giving more details.
Ivorian rains boost 2012/13 main crop, sun needed
ABIDJAN, July 2 (Reuters) - More sun is needed to strengthen the development of Ivory Coast's 2012/13 main cocoa crop, which was helped by abundant rainfall last week in most regions, farmers and analysts said on Monday.
Farmers said flowering for the main crop has started in the world's largest producer of cocoa, and a good mix of rain and sunshine is crucial in July to trigger more flowering and boost growth.
India's 2012/13 sugar output seen at 25 mln T-industry
NEW DELHI, July 2 (Reuters) - India may produce 25 million tonnes of sugar in the next marketing year starting Oct. 1, the main producers' body said on Monday, down by 1 million tonnes from the likely output in the year to September.
India, the world's top producer after Brazil, is expected to produce a total 26 million tonnes in the 12 months from Oct. 1, 2011 - about 4 million tonnes higher than its annual demand. Around 3 million tonnes of exports have already been approved.
China may change fuel pricing, boosting transparency
--Clyde Russell is a Reuters market analyst. The views expressed are his own.--
LAUNCESTON, Australia, July 3 (Reuters) - China may soon cut fuel prices for a third time this year, but more importantly, it may also change the pricing formula, a move that would take Asia's largest economy further along the transparency road.
The current system allows for oil product prices to drop if a basket of three crudes declines by more than four percent over a 22-day period, a condition that has been met since the last adjustment on June 9
OIL-Oil rises to $99 on stimulus hopes, Iran
LONDON, July 3 (Reuters) - Oil rose to $99 a barrel as investors bet on further policy action to support global economic growth and tension over Iran and a strike in Norway kept oil supply concerns in focus.
"Iran is always a factor and it has the potential to have a dramatic impact on oil prices," said Ben Le Brun, a markets analyst at OptionsXpress in Sydney.
POLL-US crude stocks seen falling on storm outages
July 2 (Reuters) - U.S. commercial crude oil stockpiles were forecast to have fallen last week on production cuts in the Gulf of Mexico because of Tropical Storm Debby, a preliminary Reuters poll showed on Monday.
The survey of six analysts, ahead of weekly inventory reports from industry group American Petroleum Institute (API) and the U.S. Energy Information Administration (EIA), forecast on average that crude stocks would drop 2.2 million barrels for the week ended June 29.
Oil Trades Near One-Month High on Factory Orders, Iran Tension (Source: Bloomberg)
Oil traded near the highest close in a month in New York after U.S. factory orders rose for the first time in three months and Iran said sanctions threaten the Persian Gulf country’s national security. Futures were little changed after climbing 4.7 percent yesterday. Orders placed with factories rose 0.7 percent in May following a revised 0.7 percent drop in the prior month, beating economists’ estimates. A European Union ban on Iranian crude exports is an “antagonistic move,” Foreign Ministry spokesman Ramin Mehmanparast said in Tehran. U.S. oil stockpiles fell 3 million barrels last week, according to a report from the American Petroleum Institute. Oil for August delivery was at $87.73 a barrel, up 7 cents, in electronic trading on the New York Mercantile Exchange at 9:23 a.m. Sydney time. The contract yesterday surged $3.91 to $87.66, the highest close since May 30. Prices are 11 percent lower this year. Floor trading will be closed July 4 for the U.S. Independence Day holiday.
Brent oil for August settlement gained $3.34, or 3.4 percent, to $100.68 a barrel on the London-based ICE Futures Europe exchange yesterday. The European benchmark’s premium to West Texas Intermediate closed at $13.02.
Gold Set to Gain as ETP Holdings Rise to Record on Stimulus Bets (Source: Bloomberg)
Gold may climb for a second day on signs of increased investment demand amid speculation that central banks will take more steps to boost growth. Spot gold was little changed at $1,618.25 an ounce by 8:28 a.m. in Singapore, after climbing 1.3 percent yesterday to a two-week high. Holdings in exchange-traded products backed by bullion expanded to a record 2,412.422 metric tons yesterday, data compiled by Bloomberg showed. “It’s about protecting purchasing power,” Ben Davies, co- founder of Hinde Capital Ltd. and manager of the Hinde Gold Fund, said in a Bloomberg Television interview. “We’ll migrate to $2,000 by year-end.” Manufacturing deteriorated from the U.S. to China, according to data this week, prompting increased speculation central banks will add to stimulus. That helped commodities rally to a five-week high yesterday.
August-delivery bullion fell 0.2 percent to $1,619.20 an ounce on the Comex in New York, after advancing 1.5 percent yesterday. U.S. markets are closed today for the Independence Day holiday.
Gold Climbs on Speculation Central Banks to Spur Growth (Source: Bloomberg)
Gold climbed to the highest price in two weeks amid speculation that central banks will take more action to spur growth, boosting demand for the metal as an inflation hedge. Reports showed yesterday that euro-area manufacturing output contracted for an 11th straight month in June and manufacturing in the U.S. unexpectedly shrank. European Central Bank officials are forecast to cut their main interest rate to an all-time low on July 5, according to the median forecast in a Bloomberg survey of economists. “People are expecting some form of easing both in the U.S. and Europe,” Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago, said in a telephone interview. “The chatter is growing louder.” Gold futures for August delivery rose 1.5 percent to settle at $1,621.80 an ounce at 1:41 p.m. on the Comex in New York, after climbing to $1,625.70, the highest for a most-active contract since June 19.
The metal is up 3.5 percent this year. Prices surged 70 percent from the end of December 2008 to June 2011 as the Federal Reserve kept borrowing costs at a record low and bought $2.3 trillion of debt in two rounds of so-called quantitative easing. Silver futures for September delivery gained 2.8 percent to $28.28 an ounce on the Comex. Earlier, prices touched $28.445, the highest since June 20.
Silver Market Recap Report (Source: CME)
With crude oil and copper flashing higher this morning it is possible that silver was garnering a lift from classic economic optimism. While silver and other physical commodity markets might be disappointed with the eventual action from the ECB and Fed in the near term a number of markets might be content to buy the rumor of action directly ahead. With the Euro managing to shake off initial weakness today, crude oil prices at times rising by more that $4.00 a barrel and September silver reaching up to the highest level since June 20th it's a good bet that silver prices were lifted by a combination of fundamental and technical developments.
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