20120829 1004 Global Commodities Related News.

Isaac to Creep Ashore Soaking New Orleans on Katrina Date(Bloomberg)
Hurricane Isaac made landfall in the Plaquemines parish of southeastern Louisiana, flooding the coast and creating a storm surge of almost 9 feet (2.7 meters). Isaac hit land at 6:45 p.m. local time just southwest of the Mississippi River’s mouth, the National Hurricane Center said in an update at 7 p.m. The storm, expected to drop large amounts of rain and rake the region with tree-toppling winds for hours, was 10 miles (16 kilometers) southwest of the Mississippi River’s mouth and 90 miles southeast of New Orleans. The storm was moving northwest at 8 miles per hour, compared with 12 mph earlier today. Isaac’s top winds were 80 mph, making it a Category 1 hurricane. The center said in a 6 p.m. advisory that tropical storm-force winds of 39 mph or more have started slapping southern Louisiana, which was hit by Hurricane Katrina on Aug. 29, 2005. Levees protecting New Orleans failed then and 1,800 people died.
“It’s not going to be Katrina in terms of wind and it’s not going to be Katrina in terms of storm surge, but the area where it will beat out Katrina is rain,” said John Feerick, an expert senior meteorologist at AccuWeather Inc. in State College, Pennsylvania. “The rainfall is going to be the big story as it crawls northwestward toward Morgan City, probably moving no more than 5 mph the whole time.” A storm surge of 8.8 feet was reported by the National Ocean Service at Shell Beach, Louisiana, the hurricane center said. Another 5.5-foot surge was reported in Waveland, Mississippi.

Hurricane Isaac Makes Landfall in Louisiana With Dangerous Surge(Bloomberg)
Hurricane Isaac came ashore in southeast Louisiana’s swamps about 6:45 p.m. local time, bringing with it gale winds and a powerful storm surge. The storm, which extends about 185 miles (298 kilometers) from its center, touched the coast in Plaquemines Parish just southwest of the Mississippi River’s mouth, the National Hurricane Center reported. Its center was about 90 miles southeast of New Orleans and winds had top speeds of 80 miles per hour. Mandatory evacuations were ordered in at least eight parishes in the New Orleans area while officials in six others urged residents to leave. Mayor Mitch Landrieu said the city is in “the hunker-down phase” at a news briefing. Humvees patrolled the streets. The storm was set to hit the city about 1 a.m. local time. On Aug. 29, 2005 -- almost seven years to the day -- Hurricane Katrina flooded 80 percent of New Orleans after levees protecting the city failed. That storm killed 1,800 people and displaced 250,000. Landrieu predicted rebuilt levees would hold.
In the Lafourche Parish town of Larose, in the storm’s path, a thick ceiling of clouds rushed by. Lights went out on the southeast side of Bayou Lafourche about 7:20 p.m. as the skies turned battleship gray in the distance. The ship- and oil-platform-building community imposed a curfew and law officers cruised the streets, flashing lights at cars that lingered.

DTN Closing Grain Comments 08/28 14:29 Grains Finish Mostly Lower Tuesday (CME)
Corn and wheat continued to slide lower Tuesday while soybeans recovered from early sharp losses to close higher. Soybeans were supported by another round of export sales as the demand argument remains strong.

Pro Farmer: After the Bell Wheat Recap(CME)
Wheat futures saw a choppy day of trade and favored the downside into the close. Chicago wheat led to the downside with losses of 1 to 7 1/4 cents. Kansas City and Minneapolis wheat ended with slight losses in most contracts. Wheat took its cue from the corn market today as it lacked the significant fundamental news the market needs to rally on its own merits.

Wheat Market Recap Report(CME)
December Wheat finished down 5 3/4 at 875 1/2, 14 off the high and 4 1/4 up from the low. March Wheat closed down 5 1/2 at 886 1/2. This was 3 3/4 up from the low and 12 3/4 off the high.
December corn finished the day slightly lower in what was cited as a low volume trading session. Early weakness in wheat was linked to spillover pressure from corn and soybeans and improved soil moisture conditions for the western plains. A private analyst out of Ukraine cut their forecast for Ukraine's 2012/13 wheat export forecast to 6.3 million tonnes vs. prior estimates of 7 and the current USDA forecast is 6 million tonnes. Rainfall in Australia continues to disappoint which is offering underlying support to the wheat market. The lack of precipitation could begin to stress crops as it enters maturity as soon as 2 weeks from now. Major importers continue to tender for wheat as wheat prices correct lower. Tunisia and Jordan have both issued wheat import tenders this week. The wheat market closed near the low end of today's trading range as profit taking took over, despite the lower US Dollar.

Pro Farmer: After the Bell Corn Recap(CME)
Corn futures closed out a choppy day of trade with losses of 4 3/4 to 5 1/5 cents in the September through July contracts. Far-deferred contracts ended slightly firmer. Fresh news was lacking in the corn market today, which led to the choppy price action. While crop condition ratings continue to decline, that's already largely factored into the market.

Corn Market Recap for 8/28/2012(CME)
December Corn finished down 5 1/4 at 795 1/2, 9 1/4 off the high and 1 1/4 up from the low. March Corn closed down 5 at 796 1/2. This was 1 1/4 up from the low and 8 1/2 off the high.
December corn traded slightly lower into the close but held near the 800 level for most of the day. Traders noted that volume was exceptionally light which resulted in a choppy, two-sided trade range. The overall weakness in corn was linked to profit taking by traders and early harvest hedge pressure. Midsession strength was due in part to a rise in corn basis bids at various locations in the US Midwest as cash corn movement slowed. Basis levels in the Gulf of Mexico may see support in the short term due to the suspension of barge traffic from Baton Rouge, LA to the US Gulf and the temporary closure of multiple commercial export facilities. These actions are a result of Tropical Storm Isaac. Heavy rain and high wind could push as far north as western Tennessee, Arkansas, and Illinois towards the end of this week which could damage harvest ready corn in the respective areas. The corn market maintained a lower trend in the last hour of trading despite the sharply lower US Dollar.
November Rice finished up 0.08 at 15.675, equal to the high and equal to the low.

Wheat Has Longest Slump in 11 Months as Export Demand Declines(Bloomberg)
Wheat fell, capping the longest slump in 11 months, after Egypt, the world’s biggest importer of the grain, shunned U.S. inventories and bought supplies from Russia. Egypt on Aug. 25 bought 120,000 metric tons of Russian wheat and 60,000 tons of Romanian wheat, the state-run General Authority for Supply Commodities said. Russian production of the grain may fall 27 percent this year after drought cut yields. The U.S. is expected in 2012-2013 to be the biggest exporter of wheat, followed by Australia, Canada and Russia. “The biggest problem with wheat is the market rallied on exports expected to come our way because of small Russian exports, but they continue to sell to Egypt,” Brian Hoops, the president of Midwest Market Solutions in Springfield, Missouri, said by telephone. “Despite rumors that they’re out of the export market, they’re a competing force with the U.S.”
Wheat futures for December delivery dropped 0.7 percent to settle at $8.755 a bushel at 2 p.m. on the Chicago Board of Trade. The price fell for the fifth straight session, the longest slide since September. The grain has gained 34 percent this year amid expectations that livestock producers would use more wheat for feed after corn prices surged. Drought also reduced the Russian crop.

Soybeans Rise on China Demand for Reduced U.S. Crop; Corn Drops(Bloomberg)
Soybeans rose for the second time in three sessions on increased U.S. export sales to China, the world’s biggest buyer and consumer of the oilseed. Corn declined. China bought 110,000 metric tons for delivery after Sept. 1, the U.S. Department of Agriculture said today. U.S. export sales in the year that starts Sept. 1 have jumped 53 percent to a record 16.8 million tons from a year earlier, USDA data show. China may need to cut imports by 5 million tons for delivery from September to February because U.S. production will fall 12 percent this year, researcher Oil World said today. “China continues to buy U.S. soybeans,” Gregg Hunt, a market analyst and broker at Archer Financial Services Inc. in Chicago, said in a telephone interview. “For China, it’s pay up or do without. Prices will keep climbing until demand slows.”
Soybean futures for November delivery rose 0.2 percent to close at $17.2225 a bushel at 2 p.m. on the Chicago Board of Trade. Yesterday, the most-active contract reached a record $17.605. Prices fluctuated between gains and losses today, dropping as much as 1 percent. Corn futures for December delivery slid 0.7 percent to $7.955 a bushel. It was a fifth consecutive drop, the longest slide since June 2011. The grain touched a record $8.49 on Aug. 10, after the government said production would fall 13 percent this year to the lowest since 2008. Corn is the biggest U.S. crop, valued at $76.5 billion in 2011, followed by soybeans at $35.8 billion, government figures show.

US corn harvest slows with rains; farmers maintain record pace (Reuters)
The U.S. corn harvest inched forward during the past week,  government data showed on Monday, as farmers gave crops more time to dry down to save them the cost of machine drying.

Ukraine 12/13 grain export forecast cut by 2.2 mln T(Reuters)
The UkrAgroConsult consultancy cut its forecast for Ukraine's 2012/13 grain exports to 21.15 million tonnes from an estimate in July of 23.33 million due to a smaller-than-expected harvest of maize and barley.

GRAINS: U.S. soybeans inched higher as concerns about tight supplies from the drought-striken Midwest lingered, while corn firmed amid concerns over potential damage from Tropical Storm Isaac. Wheat also rose for the first time in five sessions on worries about global supplies.(Reuters)

SOFTS: Raw sugar futures on ICE turned higher after hitting an 11-week low early in the day, with the market looking to consolidate after recent weakness. ICE arabica coffee and cocoa were lower, slipping back slightly after the prior session's strong advances.(Reuters)

ICCO trims 2011/12 global cocoa deficit forecast(Reuters)
The International Cocoa Organization on Tuesday cut its forecast for the size of an anticipated global cocoa deficit in 2011/12 to 19,000 tonnes from a previous forecast of 43,000 tonnes.

China to sell up to 300,000 tonnes of reserve cotton -trade(Reuters)
The Chinese government will soon auction cotton from its state reserves to meet local demand, but the market impact will be limited as the volume is much smaller than earlier expected, traders said on Tuesday.

Cotton Futures Decline on Demand Concerns; Orange Juice Advances(Bloomberg)
Cotton futures fell on concern that demand will ebb amid signs of slowing economies. Orange juice increased. Japan’s government today downgraded its assessment of the world’s third-biggest economy for the first time in 10 months, the Cabinet Office said in a monthly report released in Tokyo. Risks include a “further slowing down of overseas economies and sharp fluctuations in the financial and capital markets,” according to the report. “A slower world economy has a negative impact on cotton, as purchases can be delayed, unlike food commodities,” Sid Love, the president of Joe Kropf & Sid Love Consulting in Overland Park, Kansas, said in an e-mail. Cotton for December delivery dropped 0.7 percent to settle at 75.62 cents a pound at 2:30 p.m. on ICE Futures U.S. in New York.
China, the world’s biggest cotton user, may sell about 1 million metric tons from stockpiles and release 400,000 tons of import quota to help textile companies cope with increased raw- material costs and weak export demand, said Dong Shuangwei, an analyst at Beijing Capital Futures Co. Hurricane Isaac may bring heavy rain to the lower Mississippi Valley and cut the quality of the cotton crop in the region. Flooding from storm surge and rainfall is expected, according to the National Hurricane Center in Miami. The U.S. is the world’s biggest exporter of the fiber. “In the short run, possible damage from Isaac is a support,” for prices, Love said. Orange-juice futures for November delivery rose 0.2 percent to $1.14 a pound in New York, the first gain in four sessions.

Big Coal Faces Steel Slowdown Amid Shale-Gas Pain: Commodities(Bloomberg)
Four of the largest U.S. coal producers made $20 billion of acquisitions last year to reduce their dependence on the domestic power industry. Instead those deals have added to the companies’ pain. Alpha Natural Resources Inc. (ANR), Peabody Energy Corp. (BTU), Arch Coal Inc. (ACI) and Walter Energy Inc. (WLT) completed takeovers that boosted sales of metallurgical coal used in steelmaking. The companies bet that the coal, which sells for a higher price than the thermal variety burned to generate electricity, would benefit from booming Asian demand and counter threats from falling natural-gas prices and extra environmental regulation.
That strategy hasn’t worked out as planned. Prices for metallurgical coal, which were forecast by JPMorgan Chase & Co. in November to jump 50 percent in 2012, have fallen 16 percent so far this year amid slowing steel output in China and Europe. That may mean the U.S. coal industry, which has already seen the bankruptcy of Patriot Coal Corp. (PCXCQ) in July, will continue to burn through free cash for another year. “There was some belief that there was countercyclicality between met and thermal,” said David Gagliano, an analyst at Barclays Plc in New York. “What we’ve learned is that they aren’t that different.” U.S. coal producers have been closing mines and firing workers this year as some power plants switch from coal to gas, which is trading close to a decade-low amid booming output from shale rock.

G-7 Countries Call for Increased Oil Output to Meet Demand(Bloomberg)
The Group of Seven nations called on oil-producing countries to increase output and is monitoring the threats to their economies posed by high oil prices, according to a joint statement issued today by the U.S. Treasury Department. “We remain vigilant of the risks to the global economy,” the G-7 said. “In this context and mindful of the substantial risks posed by elevated oil prices, we are monitoring the situation in oil markets closely.” The G-7 said it’s prepared to call upon the International Energy Agency, a 28-member group of oil consuming countries, “to take appropriate action to ensure that the market is fully and timely supplied.” The IEA’s countries made available 60 million barrels of crude and oil products in June 2011 after Libyan output was disrupted by an armed uprising against Muammar Qaddafi.
Oil has advanced 24 percent since reaching a 2012 low in June as stockpiles fell and the U.S. and Europe tightened sanctions against Iran, limiting the country’s ability to sell its crude. Rising prices have raised speculation that President Barack Obama may release supplies from the Strategic Petroleum Reserve. “The EU and the U.S. have sanctions against Iranian oil which have taken a million barrels a day off the market in conjunction with a hurricane that has shut in 90 percent of Gulf production,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.

Oil Drops From Week High as Isaac Makes Landfall, Supplies Rise(Bloomberg)
Oil fell from the highest closing price in a week in New York after Hurricane Isaac made landfall and a report showed inventories rose the most since May in the U.S., the world’s biggest crude consumer. Futures slipped as much as 0.5 percent. Isaac struck the coast of southeastern Louisiana at 6:45 p.m. local time, the National Hurricane Center said. Flooding from the rain is a risk to demand by oil refineries, according to Goldman Sachs Group Inc. Crude stockpiles gained 5.5 million barrels last week, data from the American Petroleum Institute showed yesterday. An Energy Department report today may show inventories slid 1.75 million barrels, according to a Bloomberg News survey. Oil for October delivery declined as much as 45 cents to $95.88 a barrel in electronic trading on the New York Mercantile Exchange and was at $95.98 at 11:24 a.m. Sydney time. The contract yesterday climbed 0.9 percent to $96.33, the highest close since Aug. 22. Prices are 2.9 percent lower this year.
Brent oil for October settlement fell 25 cents to $112.33 a barrel on the London-based ICE Futures Europe exchange. The European benchmark grade’s premium to West Texas Intermediate was $16.35, from $16.25 yesterday. “While production and imports might continue to be impacted for a couple more days after the hurricane has passed, crude demand has also been impacted,” Stefan Wieler, an analyst at Goldman in New York, said in a note e-mailed today. “The main concerns rest on the refinery side.”

Amuay, Isaac ambush complacent oil market
--Robert Campbell is a Reuters market analyst. The views expressed are his own--
WASHINGTON, Aug 27 (Reuters) - Oil products markets are facing a potentially devastating one-two punch after a summer of complacency over falling fuel inventories looks primed to blow up in traders' faces.
For months markets have largely shrugged at dwindling Atlantic basin distillate inventories while stubbornly tight gasoline stocks only recently came into focus.

China's CNOOC tenders another 26 offshore blocks, many in South China Sea
BEIJING, Aug 28 (Reuters) - CNOOC, China's top offshore oil producer, is inviting foreign companies to explore for oil and gas in another 26 blocks, including 22 in the strategically important South China Sea, although an analyst said none of these were in disputed territory.
Experts said the tender, which also covers blocks in the Bohai Sea off north China and in the East China Sea, was probably the largest offered by China National Offshore Oil Corp (CNOOC) since the 1990s, in the latest sign the oil giant wants to beef up exploration as its output growth slows.

IEA may release oil reserves as soon as Sept-report
PARIS/NEW YORK, Aug 24 (Reuters) - World oil consumers are poised to tap into emergency oil inventories as soon as early September after the International Energy Agency (IEA) dropped its resistance to a U.S.-led plan, a source and an oil journal said on Friday.
Just one week after its chief said there was no discussion of possible emergency action, the IEA is now thought to have agreed to the idea, the industry journal Petroleum Economist reported on Friday, citing unnamed sources. The release could be as large or larger than last year's 60 million barrel injection.

OIL-Oil steady below $113; Isaac stokes supply worries
LONDON, Aug 28 (Reuters) - Oil was steady below $113 a barrel as tropical storm Issac bore down on the Gulf of Mexico and forced companies to close down U.S. oil production.
"Because U.S. Gulf Coast refiners are operating near full utilization, the potential for disruption to oil product markets is particularly pronounced," J.P. Morgan analysts, led by Colin Fenton, said in a report.

Australia Mining Slowdown Hitting Economy Never Down on Its Luck(Bloomberg)
Australia, known as the lucky country for its resource abundance and temperate climate, is about to find out how long its latest winning streak will last. BHP Billiton Ltd. (BHP), the world’s biggest miner, last week mothballed projects valued at more than A$50 billion ($52 billion) by Credit Suisse Group AG and Deutsche Bank AG. At the same time, Australia’s resources minister called the end of a bull run in commodity prices, and the central bank chief predicted the cresting of the investment wave within two years. The deceleration of the industry that helped secure 21 recession-free years heightens focus on the views of a minority seeing economic contraction in a nation where consumers took on more debt than Americans at the height of the mortgage bubble. While Bloomberg News surveys indicate growth exceeding 3 percent in 2013 and 2014, Deutsche Bank sees the danger of a recession.
“There is a view around Australia that says this is a different economy,” said Adam Boyton, chief economist for Australia at Deutsche Bank in Sydney, who previously worked at the nation’s Treasury. “My point is: was it skill or luck that drove iron ore and coking-coal prices higher from the Australian perspective,” he said. “It was more luck than skill.” The windfall Australia gets from exports, called the terms of trade, will slump 15 percent in the final three months of 2012 from a year before, a magnitude that presaged a recession in three of the five times it’s happened in the past half century, according to Boyton. The central bank estimates the terms of trade reached a 140-year high last year.

Gold Declines After Jump to Four-Month High Spurs Sales(Bloomberg)
Gold dropped the most in two weeks on speculation that the Federal Reserve will delay announcing stimulus measures amid signs the U.S. economy is recovering. Home prices in 20 U.S. cities climbed in June for the first time in almost two years, a private report showed today. The Commerce Department’s first revision to second-quarter gross domestic product tomorrow may show faster growth than earlier reported, according to the Bloomberg survey median. Fed Chairman Ben S. Bernanke will speak on Aug. 31 at an annual meeting in Jackson Hole, Wyoming. At the event in 2010, he foreshadowed a $600 billion second round of bond buying. “The market is in a wait-and-watch mode ahead of the meeting,” Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago, said in a telephone interview. “We are also witnessing some profit taking.”
Gold futures for December delivery fell 0.4 percent to settle at $1,669.70 an ounce at 1:48 p.m. on the Comex in New York, the biggest loss for a most-active contract since Aug. 14. Prices 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. The metal gained 3.3 percent last week, the most since January, amid expectations that any new stimulus measure would boost economic growth and spur rising consumer prices. Silver futures for December delivery dropped 0.6 percent to $30.963 an ounce on the Comex. The price climbed in the previous six sessions, the longest rally since October. On the New York Mercantile Exchange, platinum futures for October delivery declined 2.1 percent to $1,520.40 an ounce. Palladium futures for September delivery retreated 2.3 percent to $640.95 an ounce.

Silver Market Recap Report(CME)
The silver market also showed some initial weakness and was able to throw off the worst of the pressure and bounce into mid session. Perhaps silver was indirectly lifted by fresh easing hopes in the wake of some very soft US Consumer confidence readings. In fact, weak consumer confidence readings in the US just ahead of elections are likely to get significant headline play and that trade is already looking for any reason to suspect that the Fed is poised to act.

Gold Market Recap Report(CME)
The gold market saw some weak action in the morning trade before regaining some footing in the early afternoon. Weakness in the dollar, combined with a fresh wave of US easing hopes today to boost gold prices, as softer than expected US data rekindled QE hopes just ahead of the annual Fed meeting in Jackson Hole. However, while gold was able to throw off a large portion of the initial losses, the December gold contract ended up spending a large portion of the trading session in negative ground.