20120814 1004 Global Commodities Related News.

California Heat Lingers, Midwest May Stay Dry Through Next Week (Source:Bloomberg)
Heat will grip the western and southern U.S., pushing temperatures to 100 degrees Fahrenheit (38 Celsius) or more from Pasadena to Dallas today, while the Great Plains and Midwest remain parched. An excessive-heat warning has been issued for the mountains and valleys just north and east of Los Angeles as temperatures are expected to rise above 100 today and come close to that for the rest of the week, according to the National Weather Service. High temperatures pushed California electricity prices to their highest point in a month last week, while the drought gripping U.S. agricultural states has cut corn harvest projection to a six-year low and has kept crop prices high throughout the summer.
“It does seem like they are going to stay on the hotter- than-normal side but we don’t see them hitting the peaks of last week,” said Matt Rogers, president of Commodity Weather Group LLC in Bethesda, Maryland. “The impressive thing here is they haven’t seen the duration of this kind of heat for several years; you have to go back three years at least.” In Pasadena, California, about 10 miles northeast of Los Angeles, today’s high may reach 103 and in Burbank the high may be 100, the weather service said. Downtown Los Angeles is expected to hit 92.

DTN Closing Grain Comments 08/13 14:45 : Grains Sharply Lower Monday (Source:CME)
The grain complex took a beating on technical selling and noncommercial long-liquidation to begin the week. Initial support levels remain a distance away, meaning losses could build Tuesday.

Pro Farmer: After the Bell Wheat Recap (Source:CME)
Wheat futures saw followthrough from Friday's losses and spillover from neighboring pits to post double-digit losses at all three exchanges. Chicago wheat closed 21 1/2 to 28 1/2 cents lower in the September through May contracts, with Kansas City wheat down roughly 23 to 28 cents. Minneapolis wheat ended 19 1/4 to 24 1/4 cents lower. Traders still have USDA's higher-than-expected all wheat crop estimate on their minds.

Wheat Market Recap Report  (Source:CME)
September Wheat finished down 28 1/2 at 856 3/4, 28 1/2 off the high and 2 up from the low. December Wheat closed down 25 1/2 at 875 3/4. This was 2 up from the low and 25 1/2 off the high. September Chicago wheat traded sharply lower into the close and settled near session lows. Kansas City and Minneapolis wheat traded sharply lower as well. Outside markets added pressure with US Stocks and crude oil both trading weaker on the day. The US dollar was lower throughout the session which offered no support to the grain market. Sunday night losses were extended after it was reported that Egypt bought 120,000 tonnes of wheat from Russia over the weekend. Algeria is also tendering for 50,000 tonnes of milling wheat for September-October shipment. Export inspections for the week ending August 9th were reported at 22.2 million bushels vs. 20.901 last week. At the current pace, 23.8 million bushels are needed each week to reach the USDA goal for 2012/13. Scattered showers were seen in parts of the Black Sea recently which should aid in winter wheat planting but the outlook for extended dryness in Australia is offering long term support to the wheat market. The market remains concerned over the export capabilities in Russia past December 2012 as the country deals with rising flour prices following this year's drought. Chicago wheat was also pressured by a sharply lower corn market. September Oats closed down 16 at 372 1/4. This was 1/4 up from the low and 16 1/4 off the high.

Pro Farmer: After the Bell Corn Recap  (Source:CME)
Corn futures faced pressure throughout the session with selling pressure mounting into the close. September through July 2013 futures ended with losses in the mid-teens, while far-deferred months closed with slightly lighter losses. Today held little in terms of fresh news for corn , leaving the market vulnerable to profit-taking amid spillover pressure from soybeans.

GRAINS: Chicago corn edged lower, giving up more ground as the market took a breather from a drought-driven rally that lifted prices to an all-time high in the last session and raised fears of a food supply crisis. Soybeans slid around half a percent after rising on Friday, while wheat extended losses to nearly 4 percent over two sessions on smaller-than-expected cuts in global wheat production.(Reuters)

G20 plans response as food prices climb - report (Reuters)
The Group of 20 countries are planning a meeting to coordinate a response to surging food prices, the Financial Times reported on Monday, as the worst U.S. drought in more than half a century devastates crops, lifting grain prices to record highs.

U.S. corn, soy drought losses worse than expected-USDA(Reuters)
The worst drought in half a century slashed U.S. corn and soybean production more than expected, the government said on Friday, and tight supplies will mean the smallest corn use in six years and the lowest soy use in nine years.

Speculators go net long in cocoa after more than a year-CFTC(Reuters)
Speculators turned net long in cocoa contracts on ICE Futures U.S. for the first time in more than a year, in the week to Aug. 7 when the futures contract jumped to a 5-1/2-month high on weather concerns in main growing region West Africa, U.S. Commodity Futures Trading Commission (CFTC) data showed on Friday.

U.S. drought crop damage worsens, ethanol waiver urged(Reuters)
The worst U.S. drought in more than 50 years has caused more damage than expected to corn and soybean crops, the U.S. government said on Friday, heightening calls for a suspension of ethanol quotas to head off another global food crisis.

In Iowa, Obama to announce measures to soothe drought pain(Reuters)
President Barack Obama will announce on Monday that the Department of Agriculture intends to buy up to $170 million of pork, lamb, chicken and catfish to help support farmers suffering from the drought, a White House official said.

Corn Market Recap for 8/13/2012  (Source:CME)
September Corn finished down 17 1/2 at 782 1/2, 22 off the high and 5 3/4 up from the low. December Corn closed down 17 1/4 at 792. This was 6 up from the low and 21 3/4 off the high. December corn traded sharply lower into the close but saw brief rallies throughout the day as end users covered on the slide in prices. The lower trade is linked to weak technicals, signaling profit taking by some traders. The US Dollar traded lower today which offered marginal support to commodities but outside markets were slightly negative with crude oil and stocks trading lower today. The market is expecting crop condition ratings to hold steady at 23% good/excellent which is offering no direction to the corn market. Export inspections for the week ending August 9th were supportive to corn and were reported at 22.276 million bushels vs. 19.88 last week. The current pace is still well behind the current USDA goal for this marketing year with 29.8 million bushels needed each week to reach the current government estimate. Export and ethanol demand remain sluggish for corn with cash corn levels in the Gulf of Mexico under the 3 year average and Iowa Ethanol profit margins dropping to negative 33 cents/bushel, signaling a continuation of the slowdown in the ethanol demand sector going forward. September Rice finished down 0.29 at 15.655, 0.115 off the high and equal to the low.

Corn Falls as Rally May Curb Demand; Soy, Wheat Drop on Rain (Source:Bloomberg)
Corn fell the most in five weeks on speculation that demand is slowing after a crop-damaging U.S. drought sent prices to a record this month. Soybeans and wheat declined as rain aided parched fields from Kansas to Ohio. Premiums for corn delivered to export terminals near New Orleans fell to the lowest since January 2011, U.S. Department of Agriculture data show. The government is reviewing mandates for ethanol use after corn futures jumped more than 60 percent since mid-June, drawing complaints from livestock producers that too much grain is being diverted to make fuel. “We know there is a shortage of corn, but at current prices, the demand for the grain will slow, especially from overseas buyers,” Greg Grow, the director of agribusiness for Archer Financial Services in Chicago, said in a telephone interview. “The anti-ethanol campaign has encouraged traders to sell out long positions.”
Corn futures for December delivery dropped 2.1 percent to close at $7.9225 a bushel at 2 p.m. on the Chicago Board of Trade, the largest drop for the most-active contract since July 6. The grain used to make animal feed, fuel and food touched a record $8.49 on Aug. 10. The USDA forecast on Aug. 10 that corn demand will shrink 10 percent from a year earlier as a drought cuts production by 13 percent. Crop conditions on Aug. 5 were the worst since 1988. The agency estimated ethanol plants will consume 4.5 billion bushels of corn in the year that starts Sept. 1, down from 5 billion a year earlier. One bushel of the grain makes at least 2.75 gallons of ethanol.

Soybeans, Corn Advance as Drought May Persist in U.S. Midwest (Source:Bloomberg)
Soybeans gained on speculation that a 1 percentage point improvement in U.S. crop conditions won’t ease supply concerns as drought persists in the Midwest. Soybeans for November delivery advanced as much as 0.5 percent to $16.08 a bushel on the Chicago Board of Trade, and were at $16.0425 at 8:36 a.m. Singapore time. Corn for December delivery rose as much as 0.6 percent to $7.9725 a bushel and was last at $7.9275. Less rain than normal will probably fall from Montana to western New York, including the Midwest, from Aug. 18 to 22, according to Joel Widenor, the co-founder of Commodity Weather Group LLC. Soybean crop conditions remained at the worst level since 1988, with 30 percent rated good to excellent in the week to Aug. 12, up from 29 percent a week earlier, the U.S. Department of Agriculture said yesterday.
“We would caution that the improvement in crop conditions is small and does not change the overall bleak supply outlook,” Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, said in a report today. The U.S. soybean harvest, the world’s largest, will total 73.3 million metric tons in the year beginning Sept. 1, down from 83.2 million tons a year earlier, and smaller than the 83 million tons forecast last month, the USDA said Aug. 10. The share of the U.S. corn crop that’s rated poor to very poor expanded to 51 percent in the week ended Aug. 12, from 50 percent a week earlier. About 23 percent of the crop got the top ratings, unchanged from a week earlier and the smallest since 1988, according to the USDA.

Raw sugar futures steadied after sliding throughout last week, as monsoon rains in key grower India picked up and improved crop prospects, while arabica coffee and ICE cocoa eased.(Reuters)

Oil Rises From One-Week Low Amid Speculation U.S. Supply Shrank (Source:Bloomberg)
Oil rose from the lowest close in five days in New York before a government report forecast to show inventories declined a third week in the U.S., the world’s biggest consumer of crude. Futures advanced as much as 0.3 percent after dropping 0.2 percent earlier. U.S. fuel and crude stockpiles probably fell last week as refiners ran their plants at near the highest rates in five years, a Bloomberg survey shows before data released by the Energy Department tomorrow. U.S. retail sales probably expanded by 0.3 percent last month, the first increase since March, as employment picked up, a Bloomberg survey of economists showed before a report today.
“Markets are reluctant to take things much beyond here in the absence of fresh news that further changes the balance of risks,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney. “U.S. retail sales will be an interesting figure because it’ll provide an insight into whether the improvement that we saw in employment growth is in fact an indication of improving confidence levels.” Oil for September delivery gained as much as 27 cents to $93 a barrel in electronic trading on the New York Mercantile Exchange and was at $92.94 at 9:12 a.m. Singapore time. It slid 0.2 percent yesterday to $92.73, the lowest close since Aug. 6. Prices are 6 percent lower since the start of the year.

OIL-Oil hits 3-month high above $114 on supply concern
LONDON, Aug 13 (Reuters) - Oil rose above $114 per barrel to the highest in more than three months as concern about supplies and hopes that  governments will roll out more stimulus measures trumped signs of weakening fuel demand.
"The likelihood of some sort of intervention to stimulate economies is supporting the market," said Christopher Bellew, an oil broker at Jefferies Bache in London. "Also, the North Sea, Iran and the Middle East are still a factor." The supply concerns countered forecasts of weakening oil demand which have weighed on prices. The International Energy Agency on Friday cut its 2013 oil demand forecast by 400,000 barrels per day, citing a slowdown in global economic activity.

China July crude oil output rises 1.4 pct on year
SHANGHAI, Aug 13 (Reuters) - Crude oil production in China, the world's second-largest oil consumer, in July rose 1.4 percent from a year earlier to 17.03 million tonnes, data from the National Bureau of Statistics showed on Monday.
Oil production for the month was also up 3.2 percent from June's 16.5 million tonnes, data showed.

Euro Coal-Prices dip, Oct S.African trades at $91/T
LONDON, Aug 10 (Reuters) - Physical prompt South African coal prices dipped slightly on Friday, in line with weaker gas, oil and the euro, having fallen by $4 a tonne on the previous day.
Oil fell to around $112 a barrel on Friday as a slowdown in China's trade flows and weaker forecasts from the International Energy Agency added to concern about demand .

Midwest drought helps push U.S. gasoline prices higher
NEW YORK, Aug 12 (Reuters) - Gasoline prices in the United States rose over the past two weeks, driven partly by supply disruptions and a drought-induced rise in ethanol prices, a widely followed survey showed on Sunday.
The Lundberg Survey said the national average price of self-serve, regular gas was $3.69 on Aug. 10, up from $3.51 on July 27.

Iron Ore-Spot prices at 31-month low, may fall further
SINGAPORE, Aug 13 (Reuters) - Sellers of foreign iron ore cargoes to China slashed prices further on Monday as the benchmark rate dropped to its lowest in more than 2-1/2 years, with losses likely to deepen further as weak steel demand forces mills to cut output.
Iron ore has fallen 24 percent from this year's peak near $150 in April as demand from the world's top consumer sagged along with its economy.

Baosteel cuts Sept steel prices, 3rd cut since June
SHANGHAI, Aug 10 (Reuters) - China's biggest listed steelmaker, Baoshan Iron & Steel , said it would cut September prices of its main products, the company's third price cut since June as demand falls in the world's second-largest economy.
Baosteel's pricing decisions are generally regarded as a bellwether for the industry. A price cut for September is significant, because steel demand in China usually increases in September and October when construction picks up.

Silver Hoard Near Record as Hedge-Fund Bulls Recoil: Commodities (Source:Bloomberg)
At a time when hedge funds are the least bullish on silver in almost four years, investors’ holdings are near a record, siding with the analysts predicting a rally as central banks move to bolster growth. Speculators cut bets on higher prices by 72 percent since the end of February, mirroring changes in their copper wagers, which turned bearish in May, U.S. Commodity Futures Trading Commission data show. Silver held in exchange-traded products climbed for three months and is now valued at $16.3 billion, according to data compiled by Bloomberg. Prices will average $33.02 an ounce in the fourth quarter, 18 percent more than now, the median of 13 analyst estimates compiled by Bloomberg show.
Hedge funds anticipate slowing growth will curb demand for silver, 53 percent of which is used in products from televisions to batteries. Investors and analysts are bullish on expectations central banks will do more to stimulate economies, expanding consumption and increasing the allure of precious metals as a store of value. Prices tripled as the Federal Reserve bought $2.3 trillion of debt in two rounds of so-called quantitative easing from December 2008 to June 2011. “Since the beginning of the year it has reacted more like a base metal than a precious one,” said Frederique Dubrion, the Geneva-based president and chief investment officer of Blue Star Advisors SA, which manages metals and energy assets. “The main negatives are still in industry. We’re waiting for more quantitative easing, and that would be really positive.”

Managed money cuts gold longs, ups copper shorts
Aug 10 (Reuters) - Hedge funds and money managers cut their net long position in U.S. gold futures and options in the week to Aug. 7, as speculators reduced their bullish bets on doubts over more imminent monetary stimulus by the Federal Reserve and other central banks.
The group trimmed their net longs in gold by 10,689 to 85,510 lots in the period, data from the Commodity Futures Trading Commission's (CFTC) Commitments of Traders showed.

China refined copper output falls 6.8 pct in July
HONG KONG, Aug 13 (Reuters) - China's output of refined copper dropped 6.8 percent in July from the previous month's record high production, customs data showed on Monday, as large stockpiles and weak demand prompted smelters to lower production.
Refined copper output was 483,000 tonnes in July, versus a record 518,000 tonnes in June, data from the National Bureau of Statistics showed on Monday. The July output was up 0.8 percent higher from the same month a year ago.

China daily steel output dips 0.8 pct in July from June
SHANGHAI, Aug 13 (Reuters) - China's daily crude steel output fell 0.8 percent to 1.99 million tonnes in July from the previous month, data from the National Bureau of Statistics showed, as steelmakers scaled back output in the face of sharply falling prices.
Steel output in July stood at 61.69 million tonnes, up 2.5 percent from June and taking total production to 419.46 million tonnes for the first seven months of the year, up 2.1 percent from a year earlier.

China oil, iron ore imports slow in July with economy
SHANGHAI, Aug 10 (Reuters) - China's imports of crude oil sank in July to a nine-month low and those of iron ore fell for the fourth time in five months as refineries and steel mills cut output due to slackening demand as growth in the world's second-largest economy sputtered.
China is the top buyer of iron ore, coal and several industrial metals. Investors and miners around the world rely on Chinese appetite for imports to prop up commodities prices struggling with sluggish demand in the United States and Europe.

METALS-LME copper edges down, stimulus hopes support
Copper fell for a fourth session amid nagging worries about the global economy, but losses were limited by hopes that the spate of disappointing economic data around the world last week would spur governments to roll out more stimulus measures.
"The base metal markets are exceptionally quiet. Most metals are stuck in range and investors' interest is dwindling. Copper looks set to stay within a tight $7,400-$7,600 range," said a Shanghai-based trader with an international firm. "Even the usual Chinese copper bargain hunters seem largely absent today, probably because many have already done their shopping during earlier dips."

PRECIOUS-Gold steady on stimulus hopes; platinum discount at record
Gold edged up, extending its winning streak into a seventh session as dimming prospects for global growth support expectations of more stimulus measures from central banks around the world.
"The sentiment (on gold) has gotten better in the past few days with investors focusing on central banks," said Dominic Schnider, an analyst at UBS Wealth Management in Singapore.

Baltic index down as capesize, panamax rates weaken further
Aug 10 (Reuters) - The Baltic Exchange's main sea freight index, used to track rates for ships carrying dry commodities, fell on Thursday for the 24th straight day, as rates for panamax and capesize vessels continued to fall.
The main index, which reflects daily freight market prices for capesize, panamax, supramax and handysize dry bulk transport vessels, fell 16 points or 2 percent to 774 points, the lowest since March this year.