20120816 0955 Global Commodities Related News.

DTN Closing Grain Comments 08/15 14:52 : Soybeans Lead Grains Higher (Source:CME)
Strong buying interest from both sides of the market sparked a sharp rally in soybeans. Corn staged an impressive rally of its own, closing back above $8.00. Chicago wheat lagged well behind due to a lack of interest from either side of the market.

Wheat Market Recap Report(Source:CME)
December Wheat finished up 8 at 866 1/4, 3 3/4 off the high and 7 3/4 up from the low. March Wheat closed up 8 1/2 at 876. This was 6 1/2 up from the low and 2 1/4 off the high. September Chicago wheat traded slightly higher midday after falling nearly $1 dollar off the highs made last Friday. Wheat saw support from a higher corn market and on concern that a developing El Nino pattern could have a dramatic impact on Australian wheat crops in the next couple of months. Kansas City and Minneapolis wheat traded higher with Chicago. Wheat markets continue to see nearby pressure from weak nearby cash markets and sluggish export demand, however lower production and exports in the Black Sea could be supportive long term. The Russian Agriculture Ministry reports that Russian grain yields have fallen 28.6% below last year's levels with 47% of the harvest complete. The USDA recently cut Russia's wheat production estimate to 43 million tonnes vs. 49 in the July report. Argentina will see timely rainfall over the next two weeks which should promote good soil moisture to start their winter wheat crop year. The US Dollar traded higher today which offered slight resistance to gains. December Oats closed up 7 3/4 at 376 1/4. This was 11 1/4 up from the low and 3 1/2 off the high.

Pro Farmer: After the Bell Wheat Recap (Source:CME)
Wheat futures enjoyed gains for most of the session but pared gains into the close. Nearby Chicago wheat futures closed around 7 to 8 cents higher; nearby Kansas City wheat saw gains of roughly 3 to 4 cents; and nearby Minneapolis wheat ended around a dime higher. There was little fresh news for the wheat market today, leaving it to again follow corn.

Corn Market Recap for 8/15/2012(Source:CME)
December Corn finished up 15 at 804, 2 off the high and 17 up from the low. March Corn closed up 13 at 804 1/4. This was 14 3/4 up from the low and 2 1/4 off the high. December corn traded sharply higher into the close after the release of a positive ethanol report and a sharply higher soybean market. Cash corn in the Gulf of Mexico fell to a 2 year low this week but stabilized today as physical traders began moving corn north on the Mississippi River to ethanol facilities. Export demand remains light with South American and Ukraine supplies quoted at cheaper levels. Ethanol production for the week ending August 10 averaged 819,000 barrels per day. This is up 0.24% vs. last week and down 8.90% vs. last year. Nearby ethanol futures continue to trade a sharp discount to gasoline which supports ethanol use in blends going forward. Corn used in last week's production is estimated at 87.2 million bushels vs. 87.03 the week prior. This is the 3rd straight week that corn usage has increased. Corn use needs to average 105.7 million bushels per week to meet this crop year's USDA estimate of 5 billion bushels. Ethanol Stocks were 18.447 million barrels vs. 18.651 the week prior. This is the 8th week of the past 11 that ethanol stocks are dropping so implied demand for ethanol is stronger than the weekly production numbers.

Pro Farmer: After the Bell Corn Recap (Source:CME)
Corn futures favored a stronger tone through the day, with nearbys posting double-digit gains and high-range closes. Far-deferred futures were mixed. Corn was largely supported by spillover from the soybean pit and nearby corn contracts strengthened into the close amid concerns about tight supplies. Additional support today came from indications of a smaller Chinese crop due to significant army worm infestations.

Lower Temperatures and Rain Won’t Be Enough to Ease U.S. Drought(Source:Bloomberg)
Lower temperatures and rain forecast for parts of the Midwest won’t be enough to reverse the drought that has pushed crop prices up for months. In July, drought covered 57.2 percent of the contiguous 48 U.S. states, the worst since December 1956 when 57.6 percent of the country was dry, according to the latest Palmer Drought Index. The Palmer records, which date to 1895, are used to make comparisons to drought years before 2000. “The primary corn and soybean agriculture belt has been especially hard-hit by drought the last four months,” the Palmer index showed. “By the end of July 2012, about 86 percent of the primary corn and soybean belt was experiencing moderate to extreme drought, surpassing all previous droughts except those in 1988 and the 1930s.”
A large part of the Midwest will be drier than normal through the end of the month even with the rain and lower temperatures, said Joel Widenor, co-founder of Commodity Weather Group LLC in Bethesda, Maryland. He said time may be running out for soybean yields. “Once you get past the end of the 10-day forecast the soybean crop will be too far along in most areas to benefit from rain as far as yield potential goes,” Widenor said.

Soybeans, Corn Rise on Shrinking U.S. Harvests; Wheat Gains(Source:Bloomberg)
Soybeans and corn rose for the first time this week on speculation that the U.S. government may have underestimated crop damage from the hottest July since 1936. Wheat gained. Rain during the next week will be light, and the drought stress will expand to about 45 percent of the Midwest from 35 percent today, the Commodity Weather Group LLC said in a report. The U.S. Department of Agriculture on Aug. 10 said domestic corn output will drop 13 percent to a six-year low of 10.78 billion bushels this year while the soybean harvest slips to 2.692 billion bushels, the lowest since 2007. “Early harvest results are disappointing, and if they are indicative of the rest of the Midwest, then the risk is for crops to get smaller than the USDA is forecasting,” Jim Gerlach, the president of A/C Trading Inc. in Fowler, Indiana, said in a telephone interview. “Traders are focused on higher prices to slow global demand for shrinking U.S. crops, especially for soybeans.”
Soybean futures for November delivery gained 2.2 percent to $16.325 a bushel at 10:01 a.m. on the Chicago Board of Trade, after falling 2.8 percent in the first two days of this week. The price touched a record $16.915 on July 23. Corn futures for December delivery rose 1.1 percent to $7.98 a bushel in Chicago, the first gain in three sessions. The most-active contract touched a record $8.49 on Aug. 10. Wheat futures for December delivery advanced 0.8 percent to $8.655 a bushel on the CBOT, after yesterday touching $8.5725, the lowest since Aug. 2. The price fell 7.4 percent the past three sessions, the biggest such slide since June 2011.

Soybeans Rise on Signs Demand Remains Robust After Record High(Source:Bloomberg)
Soybeans rose in Chicago for the first time this week on signs demand has yet to slow even after the worst U.S. drought in a half century lifted prices to a record last month. Corn and wheat gained. U.S. processors crushed 137.4 million bushels of soybeans in July, up 2.4 percent from June, the National Oilseed Processors Association said yesterday. The amount of soybeans inspected for export surged 22 percent in the week ended Aug. 9, government data show. The oilseed is up 34 percent this year as dry weather left U.S. crops in the worst shape since 1988, after drought slashed supplies in South America last season. “We maintain a bullish outlook for soybeans,” Australia & New Zealand Banking Group Ltd. analysts including Paul Deane wrote today in an e-mailed report. “The market needs to ration a record amount of supply before the next South American crop.”
Soybeans for November delivery rose 0.8 percent to $16.105 a bushel on the Chicago Board of Trade by 12:54 p.m. London time. Prices fell 2.8 percent in the previous two days and are down 4.8 percent since reaching a record $16.915 on July 23. Areas of central Iowa and Illinois have chances of rain tomorrow before conditions turn drier, National Weather Service data show. Much of those states, the biggest U.S. corn and soybean growers, had less than half the normal amount of rain in the past 60 days.

China's soy imports to dwindle as price rally spooks buyers (Reuters)
China's unrelenting imports of soybean could hit a wall soon as oilseed processors in the world's top buyer cut purchases, with margins being eroded by a drought-driven rally in the United States and domestic price curbs urged by Beijing.

China 2012 corn output estimate revised lower to 197 mln T-CNGOIC (Reuters)
Corn output in China, the world's second largest corn consumer, is estimated to rise 2.19 percent in 2012 compared to a year ago to 197 million tonnes, think tank China National Grain and Oils Information Center said in a monthly report issued on Wednesday.

Rice Harvest in India Set to Drop as Drought Curbs Sowing(Source:Bloomberg)
Rice production in India, the world’s second-biggest grower, is poised to slump from a record as the worst monsoon since 2009 reduces planting, potentially lowering exports and boosting global prices. The monsoon-sown harvest may be between 5 million metric tons and 7 million tons below a record 91.5 million tons a year earlier, said P.K. Joshi, director for the South Asia region at the Washington-based International Food Policy Research Institute. Production of food grains, including corn and lentils, may slide as much as 12 percent from 129.9 million tons a year earlier, he said. Rice has rallied 7.4 percent in Chicago since the end of May on prospects for a lower Indian crop and export curbs, adding to global food costs that the United Nations estimates jumped 6.2 percent in July. Corn and soybeans have soared to records as the worst U.S. drought in half a century killed crops. Global rice production this year will be smaller than previously forecast, according to the UN’s Food & Agriculture Organization.
“A lot of importing countries looking toward India for more competitive prices are likely to shift to Thailand or Vietnam,” Abah Ofon, an analyst at Standard Chartered Plc, said by phone from Singapore. “If we see a drop in India’s rice output, it is not going to have a significant impact on global inventories. There may be slight moderation in exports.”

Top buyers snap up wheat fearing ongoing price hike (Reuters)
Leading wheat importers Egypt and Algeria seized a modest correction in grains prices this week to resume buying in what traders said reflected market fears that high prices are here to stay due to a devastating U.S. drought and an expected Russian export ban.

GRAINS: U.S. wheat edged up, after suffering its biggest three-day decline since July last year in a selloff triggered by Russia's exports to Egypt in two tenders this week, which eased concerns over supplies from the Black Sea region. Corn and soybeans rose, underpinned by tightening global supplies following the U.S. grain belt's worst drought in more than five decades. (Reuters)

SOFTS: Raw sugar futures were slightly higher, pausing after 11 consecutive lower closes as crop prospects in top growers improved, while arabica coffee and ICE cocoa were steady. (Reuters)

Ivory Coast investigates cocoa bugs after Brazil ban (Reuters)
Ivory Coast is investigating how two shipments of cocoa beans exported last month became infested by insects causing the receiving country, Brazil, to suspend imports from the world's top grower, an official with the country's marketing board said.

Indonesia to issue 250,000 T of raw sugar import permits (Reuters)
Indonesia, Southeast Asia's largest sugar consumer, is to issue import permits for 250,000 tonnes of raw sugar, a trade ministry official said on Tuesday, to help plug a domestic shortage of the sweetener for industrial use.

Coffee Extends Slump on Supplies; Cocoa, Sugar, Cotton Advance(Source:Bloomberg)
Arabica-coffee futures fell, heading for the longest slump in six months, on persistent signs that supplies will remain ample. Cocoa, sugar, cotton and orange juice advanced. Stockpiles of coffee at warehouses monitored by ICE Futures U.S. rose 0.1 percent yesterday, taking this month’s climb to 4 percent and the inventories to the highest level since October 2010, exchange data showed. Dry weather in Brazil, the world’s largest producer, has allowed the harvest to accelerate in the main growing areas according to Cooperativa Regional de Cafeicultores em Guaxupe Ltda, the biggest coffee cooperative. “The rising stocks are a psychological bearish factor,” Joe Scaduto, the president of JPS Commodities LLC, a broker in New York, said in a telephone interview. “Brazil’s weather is also good for the crop.”
Arabica-coffee futures for December delivery dropped 2.4 percent to $1.62205 a pound at 11:08 a.m. on ICE in New York, after reaching $1.618, the lowest for a most-active contract since June 28. A close at that level will mark the seventh straight loss, the longest decline since Feb. 16. Cocoa futures for December delivery increased 0.4 percent to $2,450 a metric ton on ICE. Also in New York, raw-sugar futures advanced 0.3 percent to 20.39 cents a pound, heading for the first gain in 12 sessions. Cotton futures for December delivery climbed 0.2 percent to 72.25 cents a pound. Orange-juice futures for November delivery rose 1.2 percent to $1.0575 a pound, headed for the first gain since Aug. 8.

Thailand, Indonesia, Malaysia Agree Moves to Boost Rubber(Source:Bloomberg)
Thailand, Indonesia and Malaysia, representing about 70 percent of global natural-rubber supply, agreed steps to boost prices, said Yium Tavarolit, chief secretary of the International Rubber Consortium Ltd. The measures will be announced by ministers tomorrow, said Yium, who declined to give details. Global supply and demand for natural rubber is in balance, with no surplus, he said in an interview after a one-day meeting in Bangkok. State agencies from the three countries and an exporter representative from Thailand participated. Rubber plunged 43 percent in the past year and reached the lowest in almost three years as growth slowed in China, the top consumer, and Europe. Demand in China may drop 5 percent this year as declining truck sales cut tire use, Hangzhou Zhongce Rubber Co., the biggest tiremaker, said last month. The three producers cut exports by 690,000 metric tons from January to July 2009 to combat a 56 percent decline in prices a year earlier. Rubber surged 103 percent in 2009.
The steps “will have a positive outcome, moving prices higher,” said Yium. China’s imports are still growing, he said. The International Rubber Consortium is an arm of the International Tripartite Rubber Council, which represents growers and exporters from the three countries. January-delivery rubber gained 0.9 percent to close at 209.5 yen a kilogram ($2,654 a metric ton) on the Tokyo Commodity Exchange after settling yesterday at the lowest level for the most-active contract since October 2009.

OIL-Brent holds around $114 on supply risk, QE hopes
LONDON, Aug 15 (Reuters) - Brent crude oil futures held steady around $114, near a three-month high, supported by supply disruption concerns and hopes of central bank intervention to bolster the ailing global economy.
"The market is still waiting for any indication that there will be an announcement on quantitative easing by (Federal Reserve Chairman) Ben Bernanke, and we'll be in a holding pattern," Gareth Lewis-Davies at BNP Paribas said.

Oil Gains as Supplies Decline More Than Expected(Source:Bloomberg)
Oil traded near a three-month high after U.S. stockpiles dropped to the lowest in four months amid rising demand in the world’s biggest crude consumer. Futures were little changed after advancing 1 percent yesterday. Inventories dropped 3.7 million barrels and total oil use reached the highest level in nine months last week, the Department of Energy said in a report. Middle East tension grew as Saudi Arabia, the United Arab Emirates and Qatar called on their citizens to leave Lebanon because of a kidnapping threat. “When you look at the inventory data you expect something and when it comes in above that, you have a major reaction,” said Jonathan Barratt, the chief executive officer of Barratt’s Bulletin, a commodity-markets newsletter in Sydney, who predicted that prices will still stay below $95.20 until there is broader global economic growth. Oil for September delivery was up 12 cents at $94.45 a barrel in electronic trading on the New York Mercantile Exchange at 9:32 a.m. in Tokyo.
Yesterday’s settlement was the highest since May 14. Prices have rallied 11 percent since June and are down 4.4 percent this year. Brent crude for September settlement, which expires today, rose was unchanged at $116.25 after climbing 2 percent yesterday on the London-based ICE Futures Europe exchange. The more actively traded October future was 28 cents higher at $114.59. Brent’s premium to WTI narrowed 12 cents to $21.80 a barrel after reaching a nine-month high.

Gold Rises as Consumer-Price Outlook Boosts Bets on Fed Stimulus(Source:Bloomberg)
Gold advanced after a U.S. report showing stagnant consumer prices bolstered prospects that the Federal Reserve will take further steps to spur growth, reviving inflation and demand for the metal as a hedge. Consumer prices were unchanged in July and are up 1.4 percent over the past 12 months, the smallest year-to-year increase since November 2010, the Labor Department reported today. Gold has dropped 6.1 percent since the end of February as the Fed failed to announce any new easing measures besides extending its program in June of replacing short-term bonds with longer-term debt by $267 billion through the end of 2012. “The CPI numbers have removed one roadblock in the path of some announcement on the easing front,” David Meger, the director of metal trading at Vision Financial Markets in Chicago, said in a telephone interview. Gold futures for December delivery advanced 0.3 percent to settle at $1,606.60 an ounce at 1:39 p.m. on the Comex in New York. Prices have risen 2.5 percent this year.
Bullion gained 0.8 percent last week amid speculation that China, the U.S. and Europe may take more steps to boost economic growth, reviving demand for gold as an inflation hedge. 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.