20120817 1034 Global Commodities Related News.

The right kind of rain could cure U.S. drought (Reuters)
U.S. weather experts know exactly what would officially end this year's killing drought: nine to 15 inches of rain falling in one month over the hardest-hit parts of the country.

Dryness threatens Western Australia's wheat crop (Reuters)
Dry weather is threatening wheat output from Australia's top producing and exporting region, deepening concerns over global grain supplies after a devastating drought in the U.S. grain belt and a decline in the Russian harvest.

DTN Closing Grain Comments 08/16 14:46 : Wheat, Corn Finish Higher; Beans Drift Lower(Source: CME)
The wheat complex received a boost Thursday from sagging global production numbers providing spillover support to corn in the process. Soybeans struggled throughout the day as rains moved across Iowa and the central Corn Belt.

GRAINS: Chicago soybeans slid 0.8 percent, giving up some of the last session's strong gains on slowing demand from importers, stung by a rally in prices caused by the worst drought in the U.S. grain belt in more than half a century. New-crop corn slipped after gaining almost 2 percent in the last session on shrinking global supplies, while wheat lost 0.6 percent, falling for four of five sessions. (Reuters)

SOFTS: Raw sugar futures on ICE were steady as the market looked to consolidate after dipping to a seven-week low earlier this week, while arabica coffee and cocoa futures eased. (Reuters)

Wheat Market Recap Report (Source: CME)
December Wheat finished up 15 1/2 at 881 3/4, 7 off the high and 21 up from the low. March Wheat closed up 15 1/2 at 891 1/2. This was 21 1/4 up from the low and 5 1/2 off the high. September Chicago wheat traded sharply higher on the day. Kansas City and Minneapolis traded higher as well. A private Russian analyst reported that Russian grain stocks at farms are near 15.73 million tonnes as of August 1st which is the lowest level since 2006. Wheat stocks also fell to 10.61 million tonnes, which is the lowest level since 2003 and it is estimated that sales volume has increased by 60%. Yield reports continue to be reported far below year ago levels. Algeria bought at least 350,000 tonnes of milling wheat for September-October shipment. Total net weekly export sales for the week ending August 9th came in at 396,700 tonnes. This was down from 665,000 tonnes the week prior and well below trade expectations. The Argentina Agriculture Ministry trimmed their wheat planted acreage estimate for 2012/13 from 3.82 million hectares to 3.7. Southwestern Australia continues to trend drier which was support to the wheat market today. December Oats closed up 7 at 383 1/4. This was 9 up from the low and 3/4 off the high.

Corn Market Recap for 8/16/2012(Source: CME)
December Corn finished up 3 1/2 at 807 1/2, 3 1/4 off the high and 8 1/4 up from the low. March Corn closed up 3 at 807 1/4. This was 7 1/4 up from the low and 2 3/4 off the high. December corn traded slightly higher into the close after being supported by a sharply higher wheat market today. Early yield reports continue to show corn yields that are below, and in some cases, sharply below expectations. The firm tone to the market is also linked to reports that harvested acres could be lower than the current USDA estimate of 87.4 million acres due to farmers cutting lower yielding acreage for silage. Export sales were reported below market expectations with total sales of 253,300. The market was expecting sales between 350,000-600,000 tonnes. Corn also saw pressure from reports that a large commercial trading company in Brazil may export more corn into the US due to the sharp decline in US supply and record Brazilian crop. Argentina's Agriculture Ministry held it's corn production estimate for 2011/12 at 21 million tonnes.

Top rubber producers to curb exports as prices slump (Reuters)
Thailand, Indonesia and Malaysia have agreed to cut down rubber trees and trim exports by 300,000 tonnes, or about 3 percent of global production this year, in their latest attempt to shore up slumping global prices.

U.S. ethanol output rises; stocks down 1.1 percent (Reuters)
U.S. ethanol production rose slightly last week, the third consecutive week of climbing output in a market pinched by high corn prices and squeezed profits.

Oil Trims Third Weekly Gain on Speculation Advance Was Excessive (Source: Bloomberg)
Oil fell for the first time in four days in New York, trimming a third weekly gain, on speculation that its rise to a three-month high yesterday was excessive. Futures dropped as much as 0.4 percent, reversing yesterday’s 1.4 percent increase to more than $95 a barrel. Crude is trimming gains after its 14-day relative strength index reached the highest since March 1 and prices failed to close above technical resistance levels. Oil may fall next week on concern that slower economic growth in the U.S. may reduce demand, a Bloomberg survey showed. Losses are caused by “traders repositioning themselves in light of the overnight moves,” said Michael McCarthy, a chief market strategist at CMC Markets in Sydney. Oil for September delivery fell as much as 40 cents to $95.20 a barrel on the New York Mercantile Exchange. It was at $95.44 at 10:35 a.m. Tokyo time. The contract increased $1.27 to settle at $95.60 yesterday, the highest since May 11.
Brent crude for October settlement fell as much as 0.8 percent to $114.40 a barrel on the London-based ICE Futures Europe exchange. The September future expired yesterday at $116.90, up 0.6 percent. October Brent’s premium to New York oil for the same month was at $18.96 a barrel. Oil in New York has climbed 2.8 percent this week after reports showed increases in U.S. retail sales, industrial output and building permits for July exceeded expectations. Crude also gained as U.S. stockpiles dropped 3.7 million barrels last week and consumption reached a nine-month high, according to Energy Department data released on Aug. 15.

OIL-Oil steady near 3-month highs on supply worries
LONDON, Aug 16 (Reuters) - Oil steadied near three-month highs supported by worries over possible disruptions to supply from the Middle East and a steep fall in U.S. oil inventories.
"As long as it keeps focusing on the chances of war in the Middle East and the possibility of quantitative easing in the United States, this market will stay strong," said Carsten Fritsch, commodity analyst at Commerzbank in Frankfurt.

Copper Swings Between Gains and Losses on China Easing (Source: Bloomberg)
Copper rose the most in more than a week as U.S. building permits jumped to a four-year high, adding to signs of improvement in the housing market. Building permits, a proxy for future construction, increased to an 812,000 annual pace in July, the most since August 2008, Commerce Department figures showed today. Construction generates about 40 percent of demand for the metal, used in pipes and wiring, according to the Copper Development Association. The Standard & Poor’s GSCI Index of 24 raw materials climbed as much as 0.9 percent. “Any time you see a positive report on housing, that’s bullish for copper,” Adam Klopfenstein, the senior market strategist at Archer Financial Services Inc. in Chicago, said in a telephone interview. “Signs of stability and traction in the housing market will lend support to copper, and we’re seeing broader strength in commodities and equities.”
Copper futures for December delivery rose 1 percent to settle at $3.3935 a pound at 1:12 p.m. on the Comex in New York, the biggest gain since Aug. 7. The metal has fallen 2.9 percent this quarter on concerns that the debt crisis in Europe and slowing growth in China would erode demand. The permits figures add to signs of recovery in the U.S. real-estate market. A private report yesterday showed builder confidence climbed in August to the highest level in more than five years.

Gold Runs Out in Lisbon as Price Drop Compounds Money Misery (Source: Bloomberg)
Paulo Oliveira and his wife sold their wedding rings to pay the rent after he lost his job as a builder last month. They were the couple’s last pieces of jewelry. “We have no more gold to save us from being kicked out this month,” the 46-year-old said as he stood in the area of downtown Lisbon popular with cash-for-gold stores. “Everyone I know is struggling, even the gold stores are empty because nobody has any more gold left to sell.” Oliveira encapsulates a growing trend in debt crisis- stricken Europe as household gold supplies dry up after record prices and a deepening recession prompted a proliferation of places to exchange the metal for money. In Portugal, the historical home of some of Europe’s biggest gold reserves, the number of jewelry stores, which include cash-for-gold shops, increased 29 percent in 2011 from a year earlier, a study commissioned by parliament found. In the first quarter, an average of two new stores opened every day, the report said. Now some of them are closing.
“Business has gone from great to terrible in a matter of months,” Luis Almeida, whose family has owned a gold store near Lisbon’s Rossio Square for more than 40 years, said in an interview. “The sad truth is that most of my clients have already sold all of their gold rings.”

CPM: Further Downside Likely for Gold Prices (Source:CPM Group)
Plodding Global Economy Dampening Investor Demand
Gold, down over 15% from an all-time high above $1,900 an ounce last September, may push even lower in 2013 as the world’s “plodding” economies offer investors little incentive to seek safe havens, consultant CPM Group said in a report.
Investors seem to be adopting the view that instead of a catastrophic failure of the international financial system, the most likely scenario is the world continues to suffer from a "slow burn" of constrained economic growth, low inflation and high unemployment. That’s led to lower investor demand for gold.
"The future of gold prices lies with investors and their reactions to economic, political, and fiscal conditions over the coming months," CPM Group said. "Overall, the economy has unfolded this year as had been expected, with no gold-positive shocks or surprises to the economy." Next year is expected to be "more of the same."
CPM Group projected gold futures may decline to a quarterly average low of about $1,535 a year from now and will trade between $1,350 and $1,700 over that period. In late trading August 15, August gold futures on COMEX rose $3.30 to $1,602.70.