Wednesday, September 5, 2012

20120905 0956 Global Commodities Related News.

DTN Closing Grain Comments 09/04 14:31 Grains Finish Mostly Higher Tuesday (CME)
Corn and bean contracts were able to finish to the plus side but well off session highs, while the three wheat markets closed near unchanged due to a lack of interest from either side of the market.

Pro Farmer: After the Bell Wheat Recap (CME)
Wheat futures saw a choppy day of trade and ended low-range. Chicago and Minneapolis wheat closed narrowly mixed, while Kansas City wheat settled with slight gains in all but the front-month, which was fractionally lower. A flurry of wheat export buys this weekend and today initially supported wheat futures, but as gains in the corn market waned, attention shifted to the fact many countries were meeting their wheat needs via cheaper alternatives to U.S. supplies.

Wheat Market Recap Report (CME)
December Wheat finished down 3/4 at 888 3/4, 15 1/4 off the high and 7 3/4 up from the low. March Wheat closed unchanged at 899 1/2. This was 7 1/2 up from the low and 13 1/2 off the high. December Chicago wheat ended the day slightly lower but the July 2013 contract saw marginal gains into the close. Traders cited calendar spread selling was active in today's session. Kansas City and Minneapolis wheat finished the day lower as well. Support came from thoughts that the pace of Russian exports could stall in the next 1-3 months after this year's drought slashed wheat yields, which could push more demand to the US later this year. The Russian Agriculture of Ministry reported that Russian grain yields have fallen 27% from last year to 1.89 tonnes per hectare with 65% of the harvest complete as of September 3rd. Export inspections for the week ending August 30th were pegged at 25.45 million bushels vs. 18.89 the week prior and were well above market expectations of 10-15 million bushels.
The current inspection pace is 21.5% of the USDA estimate for this crop year vs. the 5 year average of 25%. The US Dollar traded slightly higher through the day which offered a bit of resistance to price gains. December Oats closed down 2 1/4 at 395 1/4. This was 10 3/4 up from the low and 18 3/4 off the high.

Pro Farmer: After the Bell Corn Recap (CME)
Corn futures fought back from an early afternoon price slump to end 3 3/4 to 7 3/4 cents higher, although that was well off session highs. Corn futures got the bulk of their price support from the soybean market today. But news that Japan purchased 180,000 metric tons of U.S. corn for 2013-14 did provide some fundamental support.

Corn Market Recap for 9/4/2012 (CME)
December Corn finished up 5 1/4 at 805, 10 off the high and 8 up from the low.
March Corn closed up 5 3/4 at 807 3/4. This was 7 3/4 up from the low and 9 off the high. December corn ended the day slightly higher but well off session highs made Monday night. Underlying support was seen from a sharply higher soybean market but calendar spread selling added resistance to gains in the September and December contracts. The USDA announced that US exporters sold 180,000 tonnes of corn to Japan for 2013/14 delivery this morning which added to the positive tone of the market but the price trend turned lower following reports that the Argentina government had approved 2.75 million tonnes of corn exports in 2011/12. The market continues to hear reports of worse than expected yields as harvest advances across the Corn Belt and the trade believes harvest could be near 11% complete in this afternoons harvest progress report.
Numerous private yield and production forecasts will be issued this week ahead of the September 12th USDA report which may have triggered buying interest early in today's session. Export inspections for corn for the week ending August 30th were pegged at 6.37 million bushels vs. 15.06 the week prior. This was well below trade expectations of 12-15 million bushels. The US Dollar traded slightly higher for most of today's session which added pressure to commodity markets, including corn. November Rice finished down 0.11 at 15.175, 0.085 off the high and 0.015 up from the low.

Indonesia corn imports seen down 35 pct in 2012 –association (Reuters)
High global corn prices will contribute to Indonesian imports falling by about 35 percent to 2 million tonnes this year, an industry group said on Tuesday.

GRAINS: Chicago soybeans climbed to a record high as falling exports from Brazil highlighted the decline in global supplies after poor production in South America and a historic drought in the United States.Corn and wheat jumped around 1 percent with rising expectations of global economic stimulus measures underpinning the commodity markets, including oil and metals. (Reuters)

SOFTS: ICE raw sugar and arabica coffee futures edged up in early trading readjusting to the London market after the U.S. Labor Day holiday in the prior session.ICE cocoa made a technical correction lower from overbought positions last week, as dealers tracked weather conditions in the main growing regions of West Africa before the start of the main crops.  (Reuters)

Thai 2012/13 sugar output could miss previous forecast (Reuters)
The 2012/13 sugar crop in Thailand, the world's second-biggest exporter of the sweetener, is expected to be slightly lower than a forecast of 10.2 million to 10.4 million tonnes because the crop was hit by poor rain, a senior government official said.

‘Mounting Evidence’ of Bug-Resistant Corn Seen by EPA (Bloomberg)
There’s “mounting evidence” that Monsanto Co. (MON) corn that’s genetically modified to control insects is losing its effectiveness in the Midwest, the U.S. Environmental Protection Agency said. The EPA commented in response to questions about a scientific study last month that found western corn rootworms on two Illinois farms had developed resistance to insecticide produced by Monsanto’s corn. Rootworms affect corn’s ability to draw water and nutrients from the soil and were responsible for about $1 billion a year in damages and pesticide bills until seeds with built-in insecticide were developed a decade ago. The agency’s latest statement on rootworm resistance comes a year after the problem was first documented and just as U.S. corn yields are forecast to be the lowest in 17 years amid drought in the Corn Belt. Corn is St. Louis-based Monsanto’s biggest business line, accounting for $4.81 billion of sales, or 41 percent of total revenue, in its 2011 fiscal year.
“There is mounting evidence raising concerns that insect resistance is developing in parts of the corn belt,” the EPA said Aug. 31 in an e-mail. The studies of rootworms in Illinois and Iowa don’t confirm resistance in the field, Kelly J. Clauss, a spokeswoman for St. Louis-based Monsanto, said in an e-mail. More data is needed to prove resistance and the company is working with the EPA to investigate and respond to fields where rootworms cause “greater-than-expected damage,” Clauss said.

Cotton Glut Seen Extending Slump as Levi’s Costs Slide (Bloomberg)
Cotton warehouses from China to Australia are bulging with the biggest-ever glut, a year after record prices spurred farmers to expand output. Harvests will exceed demand for a third year, swelling stockpiles by 10 percent to 74.67 million 480-pound bales by August, the U.S. Department of Agriculture estimates. Inventories in China, the biggest user, will triple over two years to a record as domestic demand slumps to the lowest since 2005, USDA data show. Cotton may drop 10 percent to 67.87 cents a pound by the end of the year, according to the average of 20 analyst and merchant estimates compiled by Bloomberg. Slowing economic growth means the surplus will widen even as China, Australia, Brazil and India produce less this season, leading to the first global output decline in three years, the USDA predicts. Prices already plunged 66 percent from last year’s peak of $2.197 a pound, reducing costs for buyers from Hanesbrands Inc. (HBI), the maker of Champion apparel, to San Francisco-based Levi Strauss & Co.
“There’s an awful lot of cotton around,” said David Wookey, a managing director and trader at Isis Commodities Ltd., a cotton merchant in Boston, England, founded 17 years ago. “You’ve got a large stocks situation that’s been coupled with weaker global consumption.”

Oil Advances From One-Week Low as Crude Stockpiles Seen Falling (Bloomberg)
Oil rose from the lowest level in almost a week before a report that may show stockpiles fell the most since July in the U.S., the world’s biggest crude user. Futures advanced as much as 0.3 percent in New York after dropping 1.2 percent yesterday. Inventories probably slipped 5.5 million barrels last week, the most since the period ended July 27, as Hurricane Isaac shut crude output in the Gulf of Mexico, according to a Bloomberg News survey before an Energy Department report tomorrow. The American Petroleum Institute will release separate supply data today. Oil for October delivery increased as much as 32 cents to $95.62 a barrel in electronic trading on the New York Mercantile Exchange and was at $95.55 at 9:24 a.m. Sydney time. The contract decreased $1.17 yesterday to close at $95.30, the lowest level since Aug. 30. Front-month prices are down 3.3 percent this year.
Brent oil for October settlement declined $1.60, or 1.4 percent, to $114.18 a barrel on the London-based ICE Futures Europe exchange yesterday. The European benchmark grade’s premium to West Texas Intermediate closed at $18.88. U.S. gasoline stockpiles probably fell 3 million barrels last week, according to the median estimate of nine analysts in the Bloomberg survey. Distillate supplies, a category that includes heating oil and diesel, dropped 1.5 million barrels, the survey shows. Production lost because of Isaac totals about 7.8 million barrels of oil and 33.7 billion cubic feet of natural gas, LCI Energy Insight, an energy analysis firm in El Paso, Texas, said on its website. About 52 percent of crude output and 29 percent of gas production from the Gulf of Mexico remained shut as of 12:30 p.m. East Coast time yesterday, the Bureau of Safety and Environmental Enforcement said on its website.

OIL-Oil up at around $116 on stimulus hopes
LONDON, Sept 4 (Reuters) - Oil prices rose for a fourth day to around $116 per barrel, supported by hopes for further stimulus measures from central banks in the United States and Europe, and a slow restart in the Gulf of Mexico after Hurricane Isaac.
"The main driver at the moment is the expectation around an ECB announcement on Thursday - investors are looking for some indications of more bond buying," said Filip Petersson, Commodity Strategist at SEB Commodity Research.

Iraq oil exports rise to 2.565 mln bpd in August-SOMO
BAGHDAD, Sept 1 (Reuters) - Iraq's oil exports rose to 2.565 million barrels per day (bpd) on average in August, their highest level for three decades, the head of the State Oil Marketing Organisation (SOMO) told Reuters on Saturday.   Iraq exported 2.516 million bpd in July.
Exports from Basra in the south were 2.252 million bpd in August while shipments from northern Kirkuk were 313,000 bpd, including around 6,000 bpd by truck through Jordan, SOMO chief Falah Alamri said.  "It's the highest export level in three decades and we are moving ahead to reach another record next month," Alamri said.

Russia's Aug oil hits post-Soviet high of 10.38 mln bpd
MOSCOW, Sept 2 (Reuters) - Russia extracted oil at a record pace of 10.38 million barrels per day in August, a level unseen since the collapse of the Soviet Union, as companies took advantage of high oil prices, Energy Ministry data showed on Sunday.
Rising production will be welcomed by the administration of President Vladimir Putin, who embarked on a social programme spending spree prior to his election campaign and return to the Kremlin in May. Oil and gas sales account for about half of state revenues.

Bullion Industry Says India May Raise Import Tax to Cut Deficit (Bloomberg)
India, the largest gold buyer, may raise an import duty for a third time this year to curb purchases and reduce a record current-account deficit, according to industry executives, who said an increase would hurt demand. “The government may look at increasing the duty to 7.5 percent,” Prithviraj Kothari, president of the Bombay Bullion Association, said in a phone interview. D.S. Malik, a finance ministry spokesman in New Delhi, declined to comment. The tax on bars and coins was doubled to 4 percent in March after imports jumped to a record 969 metric tons in 2011. A further increase may deter jewelry buyers and investors during India’s festival season, which starts this month, as a decline in the rupee against the dollar boosts domestic gold prices to an all-time high. Imports plunged 42 percent to 340 tons in the first half, according to the producer-funded World Gold Council.
“Any increase in duty will play havoc on the industry,” said Bachhraj Bamalwa, chairman of the All India Gems & Jewellery Trade Federation. “The industry is grappling with high gold prices and demand is slow.” Gold priced in dollars has risen 8.2 percent this year, supported by investor demand as central banks may add stimulus to support the recovery. Immediate-delivery bullion, which reached a record $1,921.15 an ounce in September last year, traded at $1,691.65 an ounce at 8:20 a.m. in Singapore.

Gold Tops $1,700 on Bets Central Banks to Boost Stimulus (Bloomberg)
Gold futures topped $1,700 an ounce for the first time since March on speculation that a sluggish global economy will spur central bankers to boost monetary stimulus, increasing demand for the metal as an inflation hedge. In August, a U.S. factory index showed contraction for the third straight month, and manufacturing in the euro area shrank more than estimated, suggesting the region’s economy may struggle to avoid a recession in the third quarter. Last month, gold’s jumped 4.5 percent, the most since January. “Bad economic news is good for gold,” Pratik Sharma, a fund manager at Miami-based Atyant Capital, said in a telephone interview. “People are getting additional confirmation that central banks are ready to unleash more stimulus measures.”
Gold futures for December delivery gained 0.5 percent from Aug. 31 to settle at $1,696 at 1:36 p.m. on the Comex in New York. Earlier, the price reached $1,701.60, the highest for a most-active contract since March 13. Floor trading was closed yesterday for a U.S. holiday. Federal Reserve Chairman Ben S. Bernanke said on Aug. 31 that the U.S. central bank will provide additional stimulus as needed. The European Central Bank may reveal details of a plan to buy bonds of debt-saddled nations when officials meet on Sept. 6. Gold 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 quantitative easing. Silver futures for December delivery rose 3.1 percent to $32.411 an ounce on the Comex, after reaching $32.435, the highest since April 13.
On the New York Mercantile Exchange, platinum futures for October delivery advanced 2 percent to $1,567.50 an ounce. Palladium futures for December delivery gained 1.9 percent to $641.45 an ounce.

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