20120815 0937 Global Commodities Related News.

Australia says signs El Nino weather pattern forming(Reuters)
Australia's weather bureau said there were clear signs El Nino was developing in the eastern Pacific, raising concerns over the potential impact of the weather event on agriculture at time of soaring global food prices.

GRAINS: Chicago new-crop soybeans were little changed after previous session's losses as an improved weather outlook for the U.S. Midwest weighed on prices, while corn rose half a percent on supply worries. Wheat ticked up, after sliding 6 percent in the last two sessions to a near three-week low as fears of shortfalls in key global exporting regions eased.(Reuters)

DTN Closing Grain Comments 08/14 14:53 : Grains Drift Lower Tuesday(Source:CME)
It was a quiet day to say the least in grains with contracts locked in narrow ranges. Contracts closed mostly lower with wheat sustaining the largest decline on continued noncommercial long-liquidation.

Crop forecaster sees 20-30 pct yield drop in Urals, Siberia(Reuters)
Drought is expected to reduce grain yields in the 2012/13 crop year by 20-30 percent in Siberia and the Urals, the last of Russia's grain producing regions to start their harvest, the state crop weather forecaster said on Monday.

Wheat Climbs on Demand for U.S. Supplies; Corn, Soy Gain (Source: Bloomberg)
Wheat futures capped the biggest three-session slump in 14 months on signs that this year’s drought-fueled rally is eroding demand for grain from the U.S., the world’s largest exporter. Corn and soybeans declined. Egypt, the largest wheat importer, said today it bought 60,000 metric tons from Russia at $313 a ton and an equal amount from Ukraine at $313.88 a ton. Cargill Inc. had offered to sell U.S. supplies for $344.53 a ton, according to two traders with direct knowledge of the tender. Wheat futures rose as much as 51 percent since mid-June as drought damaged crops. “U.S. wheat is not competitive on the world markets,” Roy Huckabay, an executive vice president for the Linn Group in Chicago, said in a telephone interview. “Wheat’s premium to corn will also slow demand from domestic livestock producers.”
Wheat futures for December delivery slumped 2 percent to close at $8.5825 a bushel at 2 p.m. on the Chicago Board of Trade. The most-active contract dropped 7.4 percent since Aug. 9, the biggest three-session slide since June 2011. Wheat is a substitute for corn in animal-feed rations. The grain also fell because rain may improve conditions for crops in Australia, Argentina and parts of the southern U.S. Great Plains, Huckabay said. Above-average moisture may fall in parts of Nebraska, Kansas and Missouri from Aug. 19 to Aug. 23, boosting soil moisture for planting winter-wheat crops, Commodity Weather Group LLC said in a report today. Corn futures for delivery in December fell 0.4 percent to $7.89 a bushel in Chicago, capping a three-day drop of 4.2 percent. The most-active contract reached a record $8.49 on Aug. 10, after the government said the worst U.S. drought since 1956 reduced yields to the lowest since 1995.
Soybean futures for July delivery slid 0.2 percent to $15.98 a bushel on the CBOT. The price touched a record $16.915 on July 23. Corn is the most valuable U.S. crop, followed by soybeans, hay and wheat, USDA data show.

Wheat Market Recap Report (Source:CME)
September Wheat finished down 17 at 839 3/4, 26 1/4 off the high and 1 1/2 up from the low. December Wheat closed down 17 1/2 at 858 1/4. This was 1 up from the low and 26 1/4 off the high. September Chicago wheat traded sharply lower for the 3rd straight session after it was reported that Egypt bought another round of Russian and Ukrainian wheat in their second tender this week. Kansas City and Minneapolis wheat traded lower as well. Algeria, another major wheat importer, has also tendered for 50,000 tonnes of milling wheat. International importers continue to tender for wheat through October as the market becomes concerned with rising coarse grain prices going forward and the potential for lower export volume out of the Black Sea in 2013. Wheat shook off midday support from the corn market after technical selling took wheat near session lows. Recent rainfall in the Black Sea, Southwestern Australia, and the Western Midwest also pressured wheat as dry soil conditions saw marginal relief which should benefit wheat planting for next year's crop. Outside markets offered no support today with the US Dollar trading weaker early in the session and crude oil trading stronger on the day. September Oats closed down 3 3/4 at 368 1/2. This was 1 1/2 up from the low and 5 off the high.

Pro Farmer: After the Bell Wheat Recap(Source:CME)
Wheat futures softened as the day progressed, which resulted in Chicago and Kansas City wheat ending with losses mostly in the mid- to upper-teens. Minneapolis wheat closed with slightly lighter losses. Futures enjoyed gains early this morning, but as the corn market came under pressure, so too did wheat.

Corn Market Recap for 8/14/2012 (Source:CME)
September Corn finished down 3 at 779 3/4, 10 3/4 off the high and 2 up from the low. December Corn closed down 3 1/4 at 789. This was 2 1/2 up from the low and 11 off the high. December corn traded slightly lower into the close after seeing marginal gains midsession. The new crop contract saw support from end user buying but technical selling was ultimately too much pressure for the bulls. Corn was also pressured by sharp losses in Chicago Wheat market after Egypt bought another round of Black Sea wheat. Early yields in the Delta continue to be reported better than expected but traders anticipate lower yields and test weights as harvest moves to the northwest. Cash corn at the Gulf of Mexico export channels was weaker today and fell to a new 2 year low as new crop bushels make their way to the market and export demand weakens. Corn bulls remain nervous about the possibility of a cut to the Ethanol Mandate but recent studies show that blending economics and a surplus of RINS will keep ethanol in demand by blenders even if a the RFS is revised lower. Corn bears feel demand rationing has occurred in the livestock and export markets but more may need to be done if the average US corn yield falls below the August USDA estimate of 123.4 bushels/acre. Outside markets were mixed today with the US Dollar trading slightly higher and a higher crude oil market offered minimal support. September Rice finished down 0.365 at 15.29, 0.09 off the high and equal to the low.

Pro Farmer: After the Bell Corn Recap (Source:CME)
Corn futures saw two-sided trade but didn't stray too far from unchanged as traders reevaluated positions. Futures ended near session lows with losses mostly around 3 to 4 cents. Early gains were spurred by short-covering following back-to-back days of sharp price losses. Increased harvest-related pressure from the South limited the market's ability to rally and contributed to deterioration in Gulf basis.

China diverts up to 500,000 T of Brazilian sugar -dealers(Reuters)
China has diverted up to half a million tonnes of Brazilian sugar scheduled to reach its shores in the third quarter to destinations including India, Indonesia and Malaysia, as it looks to avoid a supply glut, five dealers said on Tuesday.

SOFTS: Raw sugar futures nudged higher after recent losses caused by improving prospects in top producers Brazil and India, while arabica coffee and ICE cocoa were firm.(Reuters)

Oil Falls After Industry Report Shows U.S. Crude Supply Gained (Source: Bloomberg)
Crude fell in New York after an industry report showed stockpiles in the U.S., the world’s biggest crude user, rose for the first time in three weeks. Futures dropped as much as 0.4 percent, reversing yesterday’s 0.8 percent gain, after the American Petroleum Institute reported that oil inventories climbed by 2.78 million barrels to 367.1 million last week. The U.S. Energy Department may report stockpiles fell by 1.5 million barrels when it releases data today, according to a survey of 10 analysts by Bloomberg News. “Increased inventory is something that’s taken very negatively,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney who predicts prices will trade lower than $98 a barrel for the next two to three months. “It becomes a bit of a barrier toward higher prices if there’s extra supply that can come on the market.”
Oil for September delivery fell as much as 37 cents to $93.06 a barrel on the New York Mercantile Exchange. It was at $93.19 at 9:52 a.m. Tokyo time. The contract yesterday advanced 70 cents to settle at $93.43. Prices are down 5.7 percent since the beginning of the year. Brent crude for September settlement, which expires Aug. 16, fell as much as 54 cents, or 0.5 percent, to $113.49 a barrel on the London-based ICE Futures Europe exchange. It yesterday lost 14 cents, or 0.1 percent, to $113.89. The European benchmark contract’s premium to New York futures was at $20.49 from yesterday’s close of $20.60.

OIL-Oil up despite weak Europe data, eyes U.S. stocks (Reuters)
Oil prices edged up to trade close to $114 a barrel after weak European economic data proved to be slightly less gloomy than anticipated and ahead of a U.S. report expected to show a drop in oil stockpiles. "Investors will be looking for a positive retail sales number in July to turn around a succession of weaker months,"  Ric Spooner, chief market analyst at CMC Markets, said in a note. Prices also remained supported by underlying supply worries stemming from tensions in the Middle East and falling North Sea production in September.

Oil price inflates as speculators bet on stimulus (Reuters)
LONDON, Aug 14 (Reuters) - Oil prices are racing higher as investors bet that central bank cash will soon boost a market afraid of Middle East war and worried about North Sea supplies, but the rally looks increasingly inflated by speculative guesswork.
Oil is up almost a third in six weeks at a time when the world economy, and hence fuel demand, are extremely weak.

Argentina to buy fewer LNG cargos than expected-source (Reuters)
BUENOS AIRES, Aug 13 (Reuters) - Argentina will buy about 30 percent less liquefied natural gas than originally expected this year due mainly to rising fuel imports from neighboring Bolivia, a source at state energy company ENARSA said on Monday.
Latin America's No. 3 economy, Argentina has seen its energy import bills spike while its own oil and gas output has fallen in recent years - prompting the controversial state takeover of top energy company YPF  earlier this year.

Rusal Beating Metal as Near-Record Reserves Elusive: Commodities (Source: Bloomberg)
Aluminum company shares are poised to return more than the metal they make as financial contracts mask a glut by limiting supplies and raising costs for buyers. United Co. Rusal, the biggest producer, will climb 35 percent in Hong Kong trading and Oslo-based Norsk Hydro ASA, 27 percent, the average of as many as 19 analyst estimates shows. The projected 21 percent gain for Alcoa Inc., the largest in the U.S., would extend this year’s 1.7 percent advance, compared with aluminum’s 8.4 percent drop. The metal will gain 19 percent to $2,200 a metric ton on the London Metal Exchange in 12 months, the median of 15 analysts surveyed by Bloomberg. Production of 45 million tons this year will exceed consumption of 44.6 million tons, while another 11.4 million is currently stored in warehouses, according to Morgan Stanley. About 65 percent of inventories is locked away in financial contracts, enough metal to supply the U.S. for two years.
“You cannot access this stuff because it’s tied up in inventory financing deals,” said Peter Richardson, chief metals economist at Morgan Stanley in Melbourne. “Given the scale of the material that’s around and the volume tied up in these deals, you are inevitably going to get a tighter market.” Aluminum tumbled into a bear market in mid September and retreated another 17 percent since then to $1,850, as output rose to the highest ever and the global economy slowed. The LMEX (LMEX) index of six industrial metals dropped 2 percent since the end of September as the Standard & Poor’s GSCI gauge climbed 11 percent, led by crops as drought parched fields from the U.S. to Australia. The MSCI All-Country World Index of equities rose 15 percent and Treasuries returned 3 percent, a Bank of America Corp. index shows.

Paulson, Soros Add Gold as Price Declines Most Since 2008 (Source: Bloomberg)
Billionaire investors George Soros and John Paulson increased their stakes in the biggest exchange- traded fund backed by gold as prices posted the largest quarterly drop since 2008. Soros Fund Management more than doubled its investment in the SPDR Gold Trust to 884,400 shares as of June 30, compared with three months earlier, a U.S. Securities and Exchange Commission filing for second-quarter holdings showed yesterday. Paulson & Co. increased its holdings by 26 percent to 21.8 million shares. Gold slumped 4 percent in the second quarter, the biggest such loss since Sept. 30, 2008. Prices fell as European Central Bank President Mario Draghi and Federal Reserve Chairman Ben S. Bernanke failed to increase stimulus measures, damping the outlook for global growth and demand for the metal as a hedge against inflation. The price is down 0.1 percent since June 30.
“It’s all about easing, and people are especially waiting for the Fed since investors expect prices will rise,” if the central bank announces more bond purchases, said Walter “Bucky” Hellwig, who helps manage $17 billion of assets at BB&T Wealth Management in Birmingham, Alabama. “People are willing to hold on to gold to see what the Fed will say.” The metal surged 70 percent from the end of December 2008 to June 2011 as the Fed kept borrowing costs at a record low and bought $2.3 trillion of debt in two rounds of so-called quantitative easing.

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 $16.2 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.”