20120824 0954 Global Commodities Related News.

DTN Closing Grain Comments 08/23 14:40 : Long Day for Market Bulls (Source:CME)
The grain complex came under increased pressure Thursday as contracts across the board closed sharply lower. Selling came from both sides of the market with investors pulling money off the table following the early-week rally.

Wheat Market Recap Report  (Source:CME)
December Wheat finished down 22 1/4 at 894 3/4, 29 1/4 off the high and 1 3/4 up from the low. March Wheat closed down 21 at 904 1/4. This was 3 up from the low and 27 1/4 off the high. December Chicago wheat saw massive losses today and closed near the lows of the day. Kansas City and Minneapolis wheat traded sharply lower as well. Early morning gains were wiped away after technical selling commenced in the corn market. Sell pressure was also linked to unwinding of calendar spreads. The wheat market saw support, early in the day after a private Russian grain analyst pegged Russian wheat production at 39 million tonnes. The International Grains Council also cut their wheat production forecast for Russia by 4 million tonnes to 41 million tonnes. Both estimates are near the low end of trader estimates. Russian wheat yields have fallen 31.5% from last year to 2.07 tonnes per hectare as of August 23rd. Export sales fell in line with market expectations with total net weekly sales of 474,800 tonnes. As of August 16, cumulative wheat sales stand at 32% of the USDA forecast for 2012/2013 vs. a 5 year average of 40.5%. The US Dollar traded lower on the day but offered no support to the grain complex. December Oats closed down 4 1/2 at 391. This was 1 1/2 up from the low and 4 3/4 off the high.

Pro Farmer: After the Bell Wheat Recap  (Source:CME)
Wheat futures fell victim to spillover from neighboring corn and soybean markets around midday, posting double-digit losses in the 20-cent range at all three exchanges. Futures started the day choppy but as selling picked up in the corn and soybean markets, sell stops were eventually triggered to sharply extend losses in the wheat pit as wheat remains in a follower's role.

Corn Market Recap for 8/23/2012  (Source:CME)
December Corn finished down 20 at 814 3/4, 24 off the high and 2 1/2 up from the low. March Corn closed down 19 at 814 1/4. This was 2 1/2 up from the low and 23 off the high. December corn traded sharply lower into the close after a closely followed crop tour reported better than expected corn yields in Illinois and Indiana the last two days. The tour made their way through Minnesota today and reports were worse than expected but technical selling and unwinding of calendar spreads forced December corn to a fresh 3 day low. The corn market saw positive news after the International Grains Council cut its forecast for global corn production by 26 million tonnes to 838 million tonnes. The cut in production is 11 million tonnes lower than the current USDA estimate. Net weekly export sales were in line with market estimates. Corn came in at 108,400 tonnes for the current marketing year and 217,000 for the next marketing year for a total of 325,400. As of August 16, cumulative corn sales stand at 24% of the USDA forecast for 2012/2013 vs. a 5 year average of 19%. Outside markets offered no direction today with the US Dollar trading lower, metals higher, and crude oil lower. November Rice finished down 0.16 at 15.705, 0.045 off the high and 0.025 up from the low.

Pro Farmer: After the Bell Corn Recap  (Source:CME)
Corn futures posted a low-range close to finish 15 3/4 to 21 1/2 cents lower in the September through July contracts. Far deferred futures ended mostly around 6 to 9 cents lower. Traders continue to be disappointed by yield results from the Pro Farmer Midwest Crop Tour, although yield reports this morning out of Minnesota and Iowa were better. Early losses turned sharp as sell stops were triggered. Tonight, results from Iowa and Minnesota will be released on www.profarmer.com.

GRAINS: Chicago soybeans hit a contract high, rising for a fourth session out of five, after a group of experts painted a bleak supply picture for the crop that has been scorched by the worst drought across the U.S. Midwest in 56 years. Corn also edged up after yields in Illinois were pegged at their lowest in 17 years by the Pro Farmer Midwest Crop Tour. Wheat dipped on better U.S. planting conditions and forecasts for a big Canadian wheat crop. (Reuters)

Corn Production Forecast Cut to 838 Million Tons by IGC (Source: Bloomberg)
World corn production will be smaller than estimated a month ago after dry weather damaged crops in the U.S., the International Grains Council forecast. Farmers across the world will harvest 838 million metric tons of corn in the 2012-13 crop year, down 3 percent from 864 million tons forecast on July 26 and below last year’s output of 875 million tons, the London-based council wrote in an e-mailed report today. Corn prices surged 64 percent since mid-June on the Chicago Board of Trade, touching a record $8.49 a bushel on Aug. 10, as the worst U.S. drought in a half century cut yields. “Drought has further stressed crops across the Northern Hemisphere,” the IGC said. “Exportable supplies in the U.S. and Ukraine have tightened and while the next crops in Brazil, Argentina and South Africa may be large, harvests are still several months away.”
Higher corn prices have boosted costs for ethanol makers including Archer Daniels Midland Co. and meat producers including Tyson Foods Inc. (TSN) and Smithfield Foods Inc. (SFD), which use grains and soybean meal in animal feed. The United Nations estimated that global food costs surged 6.2 percent in July, the most since November 2009, because of rising grain prices. Corn production in the U.S., the world’s biggest grower and exporter, may total 275 million tons, down from 300 million estimated last month, the IGC said. The U.S. Department of Agriculture has predicted a U.S. harvest of 273.8 million tons, the smallest in six years, and global production of 849 million tons.

Iran Curbs Drive Rice Exporter to Africa: Corporate India (Source: Bloomberg)
KRBL Ltd. (KRB), India’s biggest basmati rice exporter, plans to seek new markets in Africa to counter international sanctions against Iran and revive profit amid sliding grain prices. Rising demand among Indian immigrants and natives of Kenya, Senegal, Nigeria and Ethiopia for the aromatic, long variety may help reverse two years of decline in earnings, Chairman Anil Mittal said in a phone interview. Net income may almost double to 1.25 billion rupees ($23 million) in the year ending March 31, from 730 million rupees in the previous 12 months, he said. The cereal is used to make dishes including biryani and pilaf “For us, the new market will be east and west Africa as rising income there drives demand for these products,” Mittal said, without elaborating on the potential volume. “If the entire continent is covered, it will be a big quantity.”
A 25 percent drop in prices of basmati rice in the 12 months to March eroded earnings of the New Delhi-based company, while its shares have plunged 70 percent from a record high reached in October 2010. Trade restrictions on Iran, the world’s biggest buyer of the grain, have resulted in payment hurdles for Indian shippers, prompting KRBL to look elsewhere for growth. The All India Rice Exporters’ Association expects basmati exports to increase 25 percent this year.

Russia cuts 2012 grain crop forecast to 75 mln T (Reuters)
Russia's Agriculture Ministry cut its 2012 grain crop forecast to 75 million tonnes from 75-80 million tonnes, minister Nikolai Fyodorov said on Thursday.

Canada set for big wheat crop; canola view smaller (Reuters)
Canadian farmers are on track to harvest the second-largest wheat crop since 1996, while record canola output will fall short of what traders had expected, Statistics Canada data showed on Wednesday in its first production forecast of the year.

SOFTS: Raw sugar futures on ICE eased to an 11-week low, as favourable weather anticipated to expedite Brazil's harvest weighed on prices. Cocoa on ICE was firm, as technicals indicated the market could extend its recent correction lower, while arabica coffee was steady. (Reuters)

China issues more cotton quotas, plans reserve sales-sources (Reuters)
China, the world's top cotton buyer, has recently issued an additional 400,000 tonnes of cotton import quotas to textile mills to help them source more cheap international supplies, industry sources said on Thursday.

Ethanol Stays in Gasoline Even If Mandate Ends (Source: Bloomberg)
Ethanol, the best-performing energy commodity this year, is cheaper than gasoline, encouraging refiners to use the biofuel even if President Barack Obama’s administration ends a requirement to do so. A 48 cent-per-gallon discount to gasoline provides companies including Exxon Mobil Corp. and Valero Energy Corp. (VLO) an opportunity to profit by blending the corn-based additive into fuel, while easing prices at the pump for consumers. Marketers may use ethanol as they look for the cheapest way to boost engine performance and reduce pollution. The most severe U.S. drought in 56 years has prompted lawmakers from both parties to ask the Obama administration to suspend the mandate because of the potential impact on food costs. Ethanol will consume 42 percent of this year’s corn crop, according to government estimates, up from 41 percent last year. The biofuel has been blended into more gasoline than ever this year, Energy Department data show.
“It’s just ingrained in the supply and distribution and it’s having a moderating effect on pump prices,” John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy, said by phone. “As long as they were still allowed to use it, most would. The lower price and just the logistics of taking it out, most would still use it.” Denatured ethanol for September delivery slipped 2.7 cents, or 1 percent, to $2.637 a gallon at 12:28 p.m. on the Chicago Board of Trade. It’s climbed 20 percent this year, more than the 16 percent gain for gasoline on the New York Mercantile Exchange.

S.Korea imports Iran oil in July despite EU insurance bar
SEOUL, Aug 23 (Reuters) - South Korea imported crude from Iran in July, an unexpected move put down to shipment delays in June cargoes, after Seoul had previously said there would be no imports because of EU sanctions restricting insurance on tankers carrying Iranian oil.
Asia's fourth-largest economy imported 137,400 barrels per day (bpd), 42 percent lower than a year earlier, data from the state-run Korea National Oil Corp showed on Thursday.

Oil Falls a Second Day on U.S. Jobless Claims, European Crisis (Source: Bloomberg)
Oil declined for a second day amid concern that European leaders aren’t making progress on resolving the region’s debt crisis and as U.S. jobless claims rose to a one-month high. Futures fell as much as 0.4 percent after sliding 1 percent yesterday. Claims for unemployment benefits increased by 4,000 for a second week to 372,000 in the period ended Aug. 18, Labor Department data showed. German Chancellor Angela Merkel said she and French President Francois Hollande will coordinate their approach to Greece to keep pressure on the country at the heart of Europe’s debt crisis to overhaul its economy. Oil for October delivery fell as much as 41 cents to $95.86 a barrel in electronic trading on the New York Mercantile Exchange and was at $95.89 at 10 a.m. Sydney time. The contract yesterday dropped 1 percent to $96.27, the lowest close since Aug. 20. Prices are little changed for the week and 3 percent lower this year.
Brent oil for October settlement rose 10 cents to $115.01 a barrel on the London-based ICE Futures Europe exchange yesterday. The European benchmark grade’s premium to West Texas Intermediate closed at $18.74. New York crude may rise next week on speculation that the Federal Reserve will boost stimulus and on concern Middle East tension will disrupt supplies, according to a Bloomberg News survey. Twenty-seven of 47 analysts, or 57 percent, forecast oil will increase through Aug. 31. Fifteen respondents, or 32 percent, predicted that futures will fall and five said there will be little change in prices.

OIL-Oil tops $116 on Fed stimulus hopes
LONDON, Aug 23 (Reuters) - Oil prices rose by more than a dollar to top $116 a barrel on renewed hopes for a third round of monetary stimulus by the U.S. Federal Reserve despite weak economic data from China.
"Market sentiment after the Fed minutes suggests we'll see further price gains today," said Carsten Fritsch, an energy analyst at Commerzbank in Frankfurt.

Gold Bulls Strongest in Nine Months as Hoard Builds: Commodities (Source: Bloomberg)
Gold traders are the most bullish in nine months after investors’ bullion holdings expanded to a record on mounting speculation that central banks will do more to bolster economic growth. Twenty-nine of 35 analysts surveyed by Bloomberg expect prices to rise next week and three were bearish. A further three were neutral, making the proportion of bulls the highest since Nov. 11. Investors bought 46.9 metric tons valued at $2.5 billion through gold-backed exchange-traded products this month, the most since November, overtaking France as the world’s fourth-largest hoard when compared with national reserves.
Data released yesterday showed Chinese manufacturing at its weakest since November, signaling the nation may need more action to rebound from six quarters of slowing growth. European leaders are still struggling to contain the debt crisis. Minutes of the Federal Reserve’s most recent meeting showed many policy makers favor more stimulus. Gold rose 70 percent as the Fed bought $2.3 trillion of debt in two rounds of quantitative easing from December 2008 through June 2011. “Additional stimulus is inevitable, the question is how it comes,” said Charles Morris, who oversees about $2.5 billion of assets at HSBC Global Asset Management in London. “There’s no doubt about it, this is gold’s moment. All the long-term trend signals suggest that gold is in a very strong bull market.”

Heavy Shipping Poised for Takeovers as Financing Fades: Freight (Source: Bloomberg)
Shipping lines that carry generators and giant trucks for General Electric Co. (GE) and BHP Billiton Ltd. (BHP) are becoming takeover targets amid a lack of funding for the vessels needed to tap one of the most resilient cargo markets. The withdrawal of lenders such as Commerzbank AG, Lloyds Banking Group Plc (LLOY) and Societe Generale SA (GLE) from maritime finance as credit policies tighten is making life tougher for specialist lines that dominate heavy-lift shipping, while arousing interest from potential consolidators including private-equity firms. A merger last week between U.S-based Intermarine LLC, owned by New York buyout specialist New Mountain Capital, and Scan- Trans Holding of Denmark created the world’s No. 2 heavy-lift shipper and may herald a spate of takeovers in the sector, according to Al Stanley, who will head the enlarged company.
“If you’ve got a strong balance sheet and the ability to act quickly, opportunities come up when you’re in a turbulent industry,” Stanley, currently Intermarine’s chief executive officer, said in a phone interview from its base in Houston. Heavy-lift shippers, which transport everything from giant trucks used in Colombian mines to General Electric generators and 75-meter (245-feet) blades for Siemens AG (SIE) wind turbines, are luring investors as big-ticket items prove less dependent on the economy than the container market, which varies according to demand for Asian consumer goods in Europe and North America.