20120911 0929 Global Commodities Related News.

Tropical Storm Leslie May Mean Heavy Rain in Newfoundland (Bloomberg)
Tropical Storm Leslie gained strength as it sped toward Newfoundland, where it may bring flooding rains and a storm surge up Placentia Bay if it arrives at high tide, according to Canadian and U.S. forecasters. From 4 to 6 inches (10 to 15 centimeters) of rain are expected to fall when the storm passes the island tomorrow. If it picks up speed and arrives at 6 a.m. local time, a “hazardous” surge may sweep up the bay, according to the statement by the agency in Dartmouth, Nova Scotia. The storm is currently expected to strike about 9 a.m. Korea National Oil Corp.’s 115,000-barrel-a-day North Atlantic Refinery is located at the head of the bay in Come By Chance, Newfoundland. “Torrential rainfall impacts from this storm include the possibility of street flooding, property erosion and road washouts,” the agency said. “Wind impacts include the possibility of some tree damage over eastern Newfoundland.”
Hurricane Igor raked the area in September 2010, washing out roads, isolating cities and towns and killing at least one person there. Leslie, the 12th named storm of the 2012 Atlantic season, was 550 miles (885 kilometers) southwest of Cape Race, Newfoundland, as of 5 p.m. East Coast time with top winds of 70 miles per hour, up from 60 mph, according to the U.S. National Hurricane Center in Miami. The system was moving north-northeast at 35 mph, the center said.

Hedge Funds Lifted Wagers to 16-Month High Before Rally (Bloomberg)
Hedge funds raised bullish commodity bets to the highest in 16 months before speculation that policy makers in the U.S., China and Europe will revive global growth pushed prices higher for a sixth week. Money managers increased their net-long positions across 18 U.S. futures and options by 2.3 percent to 1.33 million contracts in the week ended Sept. 4, the highest since May 3, 2011, U.S. Commodity Futures Trading Commission data show. Wagers on a silver rally climbed for a sixth week and to the highest since Feb. 28, while those for cocoa jumped 57 percent to the most since May 2010.
U.S. unemployment stayed above 8 percent for a 43rd month in August, and the stagnating labor market means the Federal Reserve will move closer to adding fresh stimulus measures, according to Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co. European Central Bank President Mario Draghi announced a bond-buying program Sept. 6 and China’s government approved plans for 1,254 miles of roads, subway projects in 18 cities and other infrastructure projects. “The European fears have calmed to an extent, and China may see a bottoming over the next two quarters,” said James Paulsen, the Minneapolis-based chief investment strategist at Wells Capital Management, which oversees about $325 billion. “Commodities have probably turned a corner, and optimism about easing in the U.S. is putting a bid under prices.”

DTN Closing Grain Comments 09/10 14:32 Grains Stumble to Begin Week (CME)
Selling interest slowly picked up throughout the day leading to sharp losses across the grain complex. Corn breached key support, setting the stage for increased long-liquidation this week.

Pro Farmer: After the Bell Wheat Recap (CME)
Wheat ventured into positive territory at times today, but such moves were short-lived. Futures at all three locations ended at or near their daily lows with losses in the teens for Chicago and Kansas City wheat; Minneapolis wheat ended 20-plus cents lower in most contracts. Traders in the wheat market focused on minimizing risk ahead of what is expected to be a slightly negative carryover adjustment by USDA Wednesday.

Wheat Market Recap Report (CME)
December Wheat finished down 15 1/4 at 889 3/4, 27 3/4 off the high and 2 3/4 up from the low. March Wheat closed down 14 at 901 1/2. This was 2 3/4 up from the low and 25 1/2 off the high.
December Chicago wheat traded sharply lower into the close and Kansas City and Minneapolis wheat followed. The lower trade was linked to weakness in the corn market and profit taking following gains seen last week. Unfavorable weather in Australia provided a positive tilt to the wheat market early in the session but buying interest became exhausted and wheat traded lower the remainder of the day. Forecasts suggest a drier pattern the next two weeks which is a key time period in the growth stage of their wheat crop. The Australian government agency ABARES will release their September production estimate tonight and most in the trade expect a revision lower from their current forecast of 24.1 million tonnes vs. the current USDA estimate of 26 million tonnes. Export inspections for the week ending September 6th were pegged at 19.6 million bushels which was slightly below trade estimates of 23 million bushels. The current inspection pace is 23% of the USDA forecast for 2012/13 and 24 million bushels are needed each week to reach the USDA forecast. The US Dollar traded into positive territory late in the session which may have added to the negative tone. December Oats closed down 4 at 386 1/2. This was 3 1/2 up from the low and 4 1/2 off the high.

Pro Farmer: After the Bell Corn Recap (CME)
Corn futures finished with losses in the 14- to 16-cent range in the September through July contracts. Far-deferred futures posted lesser declines. Pressure on corn futures built around mid-morning as funds led a round of long liquidation. With USDA's September crop reports out Wednesday and the Fed monetary policy meeting ending Thursday, traders opted to lighten their long exposure. For the day, funds were sellers of an estimated 8,000 contracts (40 million bu.) of corn.

Corn Market Recap for 9/10/2012 (CME)
December Corn finished down 16 1/4 at 783 1/4, 23 1/4 off the high and 2 1/4 up from the low. March Corn closed down 15 1/4 at 787 1/4. This was 2 3/4 up from the low and 21 3/4 off the high. December corn traded sharply lower into the close and touched a 6 week low on weakness linked to technical selling and liquidation. Corn led the grain complex lower midday as traders took profits ahead of Wednesday's USDA crop report. A return to warmer and drier weather conditions will enable harvest progress to continue at record pace this week which could be a drag on futures and basis gains. Weather conditions in South America are being watched closely as planting attempts to begin; however the dry conditions have delayed any such progress in areas of Northern Brazil. Traders expect Wednesday's USDA report to show a yield near 120 bushels per acre with production near 10.4 billion bushels, down about 400 million bushels from last month. Export inspections for the week ending September 6th were pegged at 9.8 million bushels which was below trade estimates of 13-17 million bushels. Inspections needed each week to meet the USDA forecast for the 2012/13 crop year is 25.10 million bushels. The US Dollar traded slightly higher for most of the day which added marginal resistance to price gains. November Rice finished down 0.185 at 14.77, 0.09 off the high and equal to the low.

Algeria cuts grain harvest forecast – minister (Reuters)
Algeria expects its grain harvest for this year to be between 5.2 and 5.4 million tonnes, Agriculture Minister Rachid Benaissa said on Sunday, cutting a previous forecast of 5.8 million tonnes.

GRAINS: Chicago soybeans edged lower falling for five out of six sessions on hopes that late season rains in the United States would help salvage some of an oilseed crop battered by devastating drought across the grain belt. Wheat rose for a third straight session on expectations Russia, the world's fourth largest exporter, would soon announce export curbs and as adverse weather hit crops in Australia, the No. 2 supplier. (Reuters)

SOFTS: ICE raw sugar and coffee futures rose in early trade with both markets rebounding from recent weakness although ample supplies looks likely to cap advances.Cocoa futures were lower, slipping back from last week's ten-month peak. (Reuters)

India 12/13 sugar output seen at 24 mln tonnes-trade body (Reuters)
India's sugar output in the next season starting October is expected to drop 4 percent from a previous forecast due to a  drought, a leading trade body said on Monday, but analysts still see some exportable surplus.

China's August oil demand dips to 22-mth low
BEIJING, Sept 10 (Reuters) - Implied oil demand in China, the world's second-largest oil user, dropped to its lowest since October 2010, Reuters calculations based on government data showed, as industrial activity in the world's No.2 economy slowed.
China consumed roughly 8.92 million barrels of oil per day, 0.8 percent lower than a year earlier and 3.7 percent, or 340,000 bpd, below the July rate, figures showed, extending a weak trend started in April when demand fell for the first time in over three years.  

China to raise fuel prices 6-6.5 pct -industry consultancy
BEIJING, Sept 10 (Reuters) - China will raise retail prices of gasoline and diesel by 6 percent to 6.5 percent from Tuesday to track climbing crude prices, an industry website reported on Monday, a move that could help pare refining losses at oil firms.
The expected price hike, if confirmed by the government, would be the second in about a month and the fourth time this year. The increase would bring China's fuel prices to a touch below an all-time high reached in late March.

OIL-Brent climbs towards $115 despite soft China demand
LONDON, Sept 10 (Reuters) - Brent crude oil climbed towards $115 per barrel, buoyed by expectations of economic stimulus measures from the United States, despite worse-than-expected Chinese trade data.
"The market is clearly betting on a third round of quantitative easing from the United States," said Tamas Varga, analyst at brokers PvM Oil Associates in London.

Oil Drops From Three-Week High on U.S. Fed Meeting, Saudi Arabia (Bloomberg)
Oil dropped from the highest level in almost three weeks in New York as investors waited to see if U.S. policy makers will add stimulus to the economy and Saudi Arabia said rising prices are unjustified. Futures fell as much as 0.4 percent, declining for the first time in five days. Global supply, demand and inventories of crude don’t justify the current increase in prices, Saudi Arabian Oil Minister Ali al-Naimi said yesterday, according to the nation’s official press agency. The Federal Open Market Committee starts a two-day policy meeting tomorrow amid slowing jobs growth in the U.S., the world’s biggest oil user. Crude for October delivery decreased as much as 34 cents to $96.20 a barrel in electronic trading on the New York Mercantile Exchange and was at $96.28 at 9:42 a.m. Sydney time. The contract yesterday rose 12 cents to $96.54, the highest close since Aug. 22. Prices are 2.6 percent lower this year.
Brent oil for October settlement climbed 56 cents, or 0.5 percent, to $114.81 a barrel on the London-based ICE Futures Europe exchange yesterday. The European benchmark grade’s premium to West Texas Intermediate closed at $18.27. Brent, a benchmark grade for more than half of the world’s oil, has risen 29 percent since this year’s lowest close on June 21, as a European Union embargo on crude purchases from Iran took full effect on July 1. The price isn’t supported by fundamentals and the market is well balanced, al-Naimi said yesterday, according to the official Saudi Press Agency. The kingdom is the world’s largest crude exporter. The U.S. added 96,000 workers in August compared with 141,000 in July, Labor Department figures showed Sept. 7. The report boosted speculation that the Fed will implement a third round of asset purchases, or quantitative easing, to bolster the economy.

Iron Ore Climbs Most in Four Years on Subways-to-Railways Spend (Bloomberg)
Iron ore jumped the most in almost four years and derivatives rebounded from a collapse as Chinese steel mills accelerated purchases following government plans to boost spending on subways, railroads and other projects. The commodity at the Chinese port of Tianjin rose 6.7 percent to $95 a metric ton, the largest one-day gain since December 2008, according to data from The Steel Index Ltd. Swaps to bet on, or hedge, the price in October exceeded $100 a ton for the first time in three weeks, according to Clarkson Securities Ltd., a unit of the world’s largest shipbroker. China said last week it will increase spending on railways and subways and also backed construction of 1,254 miles of roads, nine sewage-treatment plants, five port and warehouse projects, and two waterway improvements. Traders are speculating the developments will fuel demand for iron ore from the world’s largest importer of the steelmaking raw material, Alex Gray, chief executive officer of Clarkson Securities, said by phone.
“China has shown its hand,” Richard Lee, an iron ore and dry-bulk trader at Barclays Plc in London, said by e-mail today. “It intends to add a number of new projects and mills are now short, and therefore they are restocking.” October swaps traded at between $106 a ton and $107 a ton at about 2:00 p.m. in London compared with $97 a ton on Sept. 7, according to Clarkson data. The last time they exceeded $100 was Aug. 20, according to Gray. Shipping costs for the raw material, the largest dry-bulk cargo transported by sea, advanced for the first day in three. Rates for Capesize vessels jumped 1 percent to $3,485 a day, according to the Baltic Exchange in London, a publisher of freight rates on more than 50 maritime routes.