20121019 0957 Global Commodities Related News.

DTN Closing Grain Comments 10/18 14:32 (CME)
Grains Rally Sharply Thursday
Grains surged ahead on a strong inflow of investment buying and follow-through commercial interest. Beans were the leader again, supporting the argument a technical bottom has been formed, thereby allowing bullish fundamentals to take control.

Pro Farmer: After the Bell Wheat Recap (CME)
Wheat futures finished roughly 7 to 12 cents higher in Chicago, mostly 8 to 9 cents higher in Kansas City and 3 to 8 cents higher in Minneapolis. That was a mid-range close at all three exchanges. Wheat rode the coattails of strong gains in the soybean market today. Also supportive was the long-term weather outlook from the government, which calls for above-normal temps and below-normal rainfall for much of the Plains through January.

Wheat Market Recap Report (CME)
December Wheat finished up 12 1/4 at 868 1/2, 7 1/2 off the high and 13 up from the low. March Wheat closed up 12 at 880 3/4. This was 12 3/4 up from the low and 7 1/2 off the high. December Chicago wheat traded sharply higher on the day and support spilled over to KC and Minneapolis wheat as well. Surging corn and soybean prices helped support. Additional strength was linked to reports that plunging temperatures in areas of southern Australia may have caused serious damage to wheat crops and on news that Argentina's Ag Ministry pegged their wheat crop at 11.50 million tonnes vs. 13.2 last year. This morning's weekly export sales report may have given a boost to prices after beating market expectations. Total net weekly export sales for wheat, came in at 410,000 tonnes and as of October 11th and cumulative wheat sales stand at 44% of the USDA forecast for 2012/2013 marketing year vs. 5 year average of 59%. Plenty of export tenders are set to hit the market next week which could add further support to futures depending on who does the business and how completive US prices are compared to France. Rainfall looks limited for the western plains with some forecasts calling for warm and dry pattern over the next 10 days. South Dakota saw precipitation yesterday which should help moisture deficits. Overall, more rainfall is needed in the west while the eastern Soft Red Wheat areas remain more favorable. This could be positive for prices in the KC and Minneapolis wheat markets over time. December Oats closed down 1 3/4 at 394. This was 2 1/2 up from the low and 10 1/2 off the high.

Pro Farmer: After the Bell Corn Recap (CME)
Corn futures ended near session highs with gains of 12 to 15 1/4 cents through the September contract. Deferred months were around 8 cents higher. Strong gains in the soybean market encouraged corn traders to shift their attention back toward the supply side of the market today. Recent improvement in corn basis around the country remind traders that corn supplies are limited.

Corn Market Recap for 10/18/2012 (CME)
December Corn finished up 15 1/4 at 760 3/4, 1 1/4 off the high and 16 1/4 up from the low. March Corn closed up 14 1/2 at 759 1/4. This was 15 1/4 up from the low and 1 3/4 off the high. December corn surged higher on the day seeing double digit gains and closing near the highs of the day. The firm basis across the US Midwest and in South America added to the positive tone of the market. The stronger demand picture in the ethanol and livestock market in the US offset the ongoing sluggish trend to US exports. Net weekly export sales for corn, came in at 166,700 tonnes for the current marketing year which was slightly below market expectations but well above levels seen last week. As of October 11th, cumulative corn sales stand at 36% of the USDA forecast for 2012/2013 marketing year vs. a 5 year average of 41%. The bull camp is beginning to point to the fact that Ukraine and South America may not be able to supply global importers through the crop year which could add export demand to the US in 2013. This, along with a sharply higher soybean market added additional support to corn market throughout the day. November Rice finished down 0.21 at 14.925, 0.275 off the high and equal to the low.

Sugar Declines in New York on Indications of Ample Supply (Bloomberg)
Sugar fell to a four-week low on signs of increasing production in Brazil, the world’s biggest grower. Cocoa rose, while orange juice dropped. Sugar-cane output in Brazil’s center south, the main growing region, may climb to 538 million metric tons next season, compared with 512 million tons in the previous year, Jonathan Kingsman, the founder of Kingsman SA, said today at a conference in London. In an interview, Kingsman said he may revise his forecasts next week, with production in the 2013-2014 crop year as large as 575 million tons. Traders “worry about prices as everyone anticipates a larger Brazilian crop,” Michael McDougall, the head of the Brazil desk at Newedge Group in New York, said in an e-mailed report today. “Other countries appear to be producing large crops, even though prices have slid.” Raw-sugar for March delivery declined 1.6 percent to close at 19.79 cents a pound at 2 p.m. on ICE Futures U.S. in New York, after touching 19.67 cents, the lowest since Sept. 19.
Global supplies will outpace consumption by 6 million tons this year, according to Julio Borges, the director of JOB Economia & Planejamento, a researcher. Effective Nov. 5, the daily trading session for sugar futures and options contracts will be reduced by an hour, with trading starting at 2:30 a.m. New York time instead of 1:30 a.m., ICE said today in a statement. No changes were made to settlement hours. Cocoa futures for December delivery gained 2.2 percent to $2,438 a ton in New York. Also on ICE, orange-juice futures for January delivery declined 2 percent at $1.1425 a pound.

Peru Coffee Output May Gain 20% on Higher-Yield Crop (Bloomberg)
Coffee output in Peru, the third- largest producer in South America, may rise 20 percent next year as trees enter the higher-yielding cycle of the biennial crop, an industry group said. “Production may increase to 4.56 million bags from 3.8 million estimated for this year,” Eduardo Montauban, the head of Peru’s Coffee and Cocoa Chamber, said yesterday in a telephone interview from Lima. In 2011, output rose to a record 5 million bags, he said. Coffee-export income in 2012 may drop to $950 million from the all-time high of $1.578 billion last year, Montauban said. Germany is the biggest buyer, followed by the U.S., Belgium and Colombia, he said. Peruvian farmers typically collect the bulk of the harvest from March through September. A bag weighs 60 kilograms, or 132 pounds. Brazil is the world’s top producer, and Colombia is the second-biggest South American grower, according to the London- based International Coffee Organization.
This week, Peru started an agricultural census, the first since 1994, Montauban said. That may determine the size of the coffee crop and the number of farmers. “This could help the sector secure funds to increase productivity and the quality of beans” amid efforts to expand exports in Asia, Montauban said. He is an agent/broker for the local representative of Pully, Switzerland-based Ecom Agroindustrial Corp., one of the largest coffee traders. Arabica coffee for December delivery declined 0.8 percent to $1.615 a pound yesterday on ICE Futures U.S. in New York. This year, the price has tumbled 29 percent, the most among the 24 raw materials in the Standard & Poor’s GSCI Spot Index, partly because roasters are using more of the cheaper robusta beans.

Oil Heads for Weekly Gain; TransCanada Shuts Keystone Pipeline (Bloomberg)
Oil headed for a second weekly gain in New York. TransCanada Corp. (TRP) shut the Keystone pipeline that transports oil from Canada to the midcontinent. Futures were little changed after dropping 2 cents yesterday. TransCanada shut the 590,000 barrel-a-day line for three days for repairs after finding a “small anomaly” in a section running from Missouri to Illinois. The work cut oil flows to Midwestern refineries and Cushing, Oklahoma, the delivery point for New York futures. Crude for November delivery was at $92.11 a barrel, up 1 cent, in electronic trading on the New York Mercantile Exchange at 9:09 a.m. in Tokyo. Prices are up 0.3 percent this week and down 6.8 percent this year. Futures prices in New York have changed less than 25 cents in each of the past five trading days, the longest streak of moves that small in more than a decade.
Brent oil for December settlement rose 20 cents to $112.62 a barrel on the London-based ICE Futures Europe exchange. The front-month European benchmark grade’s premium to the corresponding West Texas Intermediate was at $20.09. It settled at $23.95 on Oct. 15, the widest gap since reaching a record on Oct. 14, 2011.

Recap Energy Market Report (CME)
December crude oil prices experienced another choppy session, trading down to the low of the session during the US morning hours but reversed to close just fractionally lower. The crude oil market came under pressure following weakness in equity markets and US labor market data that showed a larger than expected increase. Further downside came in response to reports that a key North Sea oil field would come back on line this weekend. Around midday, there were reports that TransCanada shut down its Keystone pipeline, which brings roughly 600,000 barrels per day of supply from Alberta Canada into the Midwestern US. The pipeline is expected to be out of operation for three days.

Copper Bears Cede to Bulls as Economy Seen Gaining: Commodities (Bloomberg)
Copper traders who a week ago were the most bearish in four months are now the most bullish in a year after economic reports signaled accelerating growth from China to the U.S. Seventeen analysts surveyed by Bloomberg said they expect prices to gain next week and four were bearish. A further three were neutral, making the proportion of bulls the highest since October 2011. They were the most negative since June 1 last week. Hedge funds’ bets on a rally are near the biggest in 14 months, U.S. Commodity Futures Trading Commission data show. China had accelerating industrial production, retail sales and fixed-asset investment last month, reports showed yesterday. After slowing for seven quarters, its growth will gain for the following four quarters, based on the median of estimates from 24 economists compiled by Bloomberg. New-home construction in the U.S. rose to a four-year high in September. China consumes about 40 percent of the world’s copper and North America 11 percent, according to Barclays Plc.
“The market has been way too pessimistic on China,” said Christin Tuxen, an analyst at Danske Bank A/S in Copenhagen. “China will eventually stabilize and avoid a hard landing and we’ve got some clear signals that it is actually happening. We will see commodities, and metals in particular, get some support in the coming months.”

Silver Market Recap Report (CME)
Like gold silver started out weak, fell somewhat aggressively into the first set of US data and then prices made several stair step recovery moves through the rest of the trading session. In general, silver spent a lot of time today trading modestly lower and with the rest of the metals complex weak, the silver market appeared to be put off balance by a partial risk-off vibe.

Gold Set for Second Weekly Drop as Data Damp Stimulus Outlook (Bloomberg)
Gold is poised for a second weekly decline as an improvement in economic data from the U.S. to China damped speculation of more stimulus around the world, reducing demand for bullion as an alternative investment. Spot gold was little changed at $1,742.70 an ounce at 9:02 a.m. in Singapore, 0.7 percent lower this week. The metal for December delivery was little changed at $1,743.30 an ounce on the Comex. Holdings in exchange-traded funds, which hit a record 2,582.98 metric tons on Oct. 11, are little changed this week at 2,580.589 tons yesterday, data compiled by Bloomberg show. Data this week showed China’s industrial production, retail sales and fixed-asset investment accelerated in September after a seven-quarter slowdown. U.S. reports showed housing starts jumped to a four-year high and an index of leading economic indicators rose in September by the most in seven months. Gold gained 11 percent in the last quarter after central banks in the U.S., China, Japan and Europe took action to stimulate growth.
“Gold is under a bit of pressure in the near term as economic data, while still uneven, are showing signs of improvement,” said Huang Fulong, an analyst at CITICS Futures Co., a unit of China’s largest brokerage by market value. “The longer-term outlook for higher gold prices remains intact as Europe’s problems still exist and this is evidenced by the resilience we’ve seen in ETF holdings.”

European Summit
European leaders conclude a two-day meeting in Brussels today after yesterday committing to their goal of creating a regional bank supervisor by year-end, putting the region closer to being able to provide direct bank aid from its firewall fund. That will set the stage for talks on how to handle failing banks and exploration of cost-sharing strategies, said European Union Economic and Monetary Affairs Commissioner Olli Rehn. Spot gold of 99.99 percent purity fell 0.3 percent to 351.05 yuan a gram ($1,748.11) on the Shanghai Gold Exchange. Volumes slipped to 2,555 kilograms yesterday from 3,759 kilograms on Oct. 17. Cash silver climbed 0.2 percent to $32.8475 an ounce, set for a third weekly drop. Spot platinum gained 0.2 percent to $1,644.50 an ounce, trimming a second weekly decline. Palladium rose 0.2 percent to $644.50 an ounce, set for a weekly advance.

Gold Market Recap Report (CME)
While gold violated some close-in support levels today and the market probably saw some initial spillover pressure from stocks and action in the Euro, the market might have seen some residual support from news that some South African gold mining workers were probably fired by not returning to work today. Therefore, the prospect of violence and uncertainty toward supply off labor issues probably gave some would-be shorts pause today. In retrospect, today's US scheduled data flow was countervailing as prices broke ahead of the early US data, recovered in the wake of that data and then prices clawed higher until the later data fostered a mid morning peak. However, into mid session gold prices recovered and that might have been the result of labor headline news flow for South Africa.