Corn (Source: CME)
US corn futures end just below Tuesday's close as traders evened positions ahead of key government crop reports Thursday. Futures were supported by outlooks for the USDA to report a tighter balance between US corn supply and demand while badly needed rains in drought-stricken parts of Argentina produced light price pressure. Still, losses were limited by fears the rains were too late to eliminate crop damage there, analysts add. CBOT March corn ended down 1/2c at $6.51 1/2 a bushel.
Wheat (Source: CME)
US wheat futures end higher, rebounding from early declines as traders positioned ahead of tomorrow's government crop reports. USDA will release supply/demand and winter wheat seedings estimates Thursday morning. Market rallied despite US dollar strength, as participants took some profits on short positions in an effort to reduce risk exposure, analysts say. MGEX futures led the bounce in wheat futures, as traders anticipate USDA will likely show tight supplies for hard red spring wheat, analysts add. MGEX March wheat ended up 4 1/4c to $8.16 1/2/bushel; March KCBT wheat up 3 3/4c at $7.01 3/4; CBOT March wheat up 1 1/4c at $6.41.
Rice (Source: CME)
US rice futures end slightly higher amid consolidation ahead of Thursday's key USDA reports. The reports on quarterly stockpiles and ending stocks projections will be pivotal for the entire grain complex, traders say. Rice fundamentals remain weak as demand is poor, but the market has traded in a tight, sideways pattern in recent days. Worries about Brazil's rice crop adds underlying support. CBOT March rice ends up 3 1/2c to $14.80 a hundredweight.
US corn, soy fall on Argentina rains, firm dollar
SINGAPORE, Jan 11 (Reuters) - U.S. corn and soy slid around half a percent, weighed down by a firm dollar and rains in Argentina that brought much-needed relief to parts of its drought-hit crop belt.
"Corn and soybeans are feeling a little bit of pressure from current rainfall in South America as we are seeing some relief to the drought-stressed crops," said Luke Mathews, Commodities Strategist at Commonwealth Bank of Australia.
Rains finally hit Argentina, help corn, soy
BUENOS AIRES, Jan 10 (Reuters) - Rain finally started to hit Argentina's grain belt on Tuesday and farmers in the major agricultural exporter hoped the showers would last long enough to revive soy and corn fields dried out by a drought that raised global supply worries.
A long drought has shrunk the corn crop in Argentina, which the world has been counting on to replenish international stocks after a disappointing U.S. harvest.
French July-Nov wheat exports down 13 pct -customs
PARIS, Jan 10 (Reuters) - French soft wheat exports for the July-November period were down 13 percent on year as a sharp drop in shipments outside the European Union continued to outweigh a rise in volumes within the EU, customs data showed on Tuesday.
France exported 1.75 million tonnes of soft wheat in November, bringing the volume since the start of the 2011/12 season on July 1 to 7.5 million tonnes, down from 8.6 million at the same stage last season, the data showed.
Rains expected to hit Argentina, reviving corn, soy
BUENOS AIRES, Jan 10 (Reuters) - Rains will hit Argentina's central grains belt late Tuesday and on Wednesday, helping to revive soy and corn crops that had been left panting for water after weeks of drought, forecasters said.
Some parts of Argentina, which supplies nearly half the world's soyoil and soymeal and about 20 percent of its corn, got scattered showers early on Tuesday. But most growers, who have already lost up to a fifth of their 2011/12 corn crops and are worried about their soy fields, will have to wait a bit longer.
Ukraine sees fall in 12/13 grain crops, exports
KIEV, Jan 10 (Reuters) - Ukraine's exports of wheat are likely to fall by 17 percent in the 2012/13 season to 6.3 million tonnes due to a sharp decrease in this year's wheat harvest after a severe drought, analyst UkrAgroConsult said on Tuesday.
The consultancy said the former Soviet republic could export 7.6 million tonnes of wheat in 2011/12. In November, it expected the exports at 9.7 million tonnes.
Rain Brings Some Relief To Argentina's Parched Fields (Source: CME)
Argentina's farmers breathed a sigh of relief on Wednesday after rain fell overnight across some of the most productive regions of the South American nation's drought-stricken farm belt. Argentina is the world's second-leading corn exporter behind the U.S. and ranks third in soybean exports. "Rainfall was decent in parts of Buenos Aires, Cordoba and Santa Fe provinces," said Pablo Mercuri, director of the federal government's national water and climate office. However, in other areas it appeared that precipitation may not have been sufficient to reverse drought damage, he said. "We're evaluating the situation and preparing a report later today that will review the results," Mercuri said. Farmers have voiced serious concerns about what they say could be the worst drought in decades. The drought has already damaged part of the 2011-12 corn crop and threatens soybeans.
Both crops are key revenue generators for farmers and the government, which collects billions of dollars each year through export taxes on agricultural goods. Farm leaders have called on the government to lower or suspend those taxes to help farmers handle the financial fallout from the drought. So far, government officials have demurred, saying the situation may not be that critical. In November, when analysts still expected December and January rain to alleviate the dry spell, the 2011-12 corn crop was on track to produce a record 24 million to 25 million metric tons, according to Ernesto Crinigan, president of the Buenos Aires Cereals Exchange. That forecast included only commercial corn, not corn grown for animal feed and used at the same farm where it was grown. But the lack of rain could cause losses totaling millions of metric tons of corn, according to Argentina's Agrarian Federation and the Argentine Rural Society.
The U.S. Department of Agriculture last month forecast that Argentina would produce 29 million tons of 2011-2012 corn, with 20 million tons of that for export. Agrarian Federation President Eduardo Buzzi said earlier this week that 10 million tons of corn had been lost to the drought. The 2011-2012 soybean crop is considered to be in much better shape given that soybeans typically need less water than corn and it's still early enough in the season for soy to recover. The USDA last month put Argentina's 2011-2012 soybean output at 52 million tons, with 10.8 million tons for export. Most of the remainder is processed into soyoil and soymeal for export. It could be days or weeks before accurate estimates can be made about the state of the crops, Mercuri said.
U.S. Wheat Expanding From Century Low as Glut Looms: Commodities (Source: Bloomberg)
U.S. farmers, the world’s biggest wheat exporters, probably planted the most winter grain in three years, expanding acreage from a century-low reached in 2009 just as a global supply glut swells to its biggest in a decade. About 41.02 million acres, an area bigger than Illinois, were sown from September to November, 0.9 percent more than a year earlier, according to the average of 16 analyst estimates compiled by Bloomberg. That will add to world inventories set to rise 4 percent to 207.7 million metric tons, the most since 2000, the survey showed. Winter wheat makes up 74 percent of the U.S. crop, and the government gives its first estimate tomorrow.
Wheat traded in Chicago fell 30 percent from a 29-month high in February as a 47 percent surge in 2010 spurred more planting. That helped global food prices tracked by the United Nations drop 9.6 percent from a record, easing costs that drove global inflation higher. The second most widely held option gives owners the right to sell wheat at $6 a bushel by February, 6.4 percent lower than now, Chicago Board of Trade data show.
La Nina May Weaken, Boosting Outlook for Grain Crops in Argentina, Brazil (Source: Bloomberg)
The La Nina weather event that parched crops in Argentina and Brazil and flooded plantations in Thailand and Malaysia may be weakening, said Telvent DTN Inc. The Southern Oscillation Index, used to measure its strength, has declined since peaking in December, signaling it “has topped out,” said Bryce Anderson, an agricultural meteorologist, who correctly predicted that wet conditions would delay U.S. corn planting last year. Dry weather has wilted crops in Argentina, the world’s second-biggest corn exporter, and in Brazil, the second-largest grower of soybeans. Corn futures have climbed 13 percent in Chicago since Dec. 15 on concern that the lack of rain would cut production. Soybeans and wheat have each rallied about 10 percent since the middle of last month.
ICA Warns On Sharp Price Swings In Cotton Market (Source: CME)
Sharp price swings in the global cotton market could hurt the supply chain of the fiber in the long term, a major industry regulator warned. Last March, cotton prices on ICE Futures U.S. surged to a record high of $2.27 a pound but the prices squashed global demand for the fiber and drove prices down 37% in 2011. The effects reverberated throughout the industry, crushing margins at apparel companies, commodity firms and textile mills. "It is easy to succumb to the attraction of short-term gains, but history shows that this will create irreparable damage that will affect the long-term economic sustainability of the cotton supply chain," Antonio Esteve, president of the Liverpool-based International Cotton Association, said in a statement. The International Cotton Association sets the rules for most of the world's cotton trade. Last year's price swings sparked a record number of legal disputes between cotton merchants and mills, the ICA said.
The ICA received 242 requests for arbitration in 2011, more than five times what it normally receives on average in a year. Many textile mills canceled orders for the fiber after prices fell. The ICA said it has developed a training course for spinners and cotton brokers to promote "responsible contracting." "The cotton supply chain is very long, but by reaching out in this way we know we can help promote a safer trading environment," said the group's statement.
Brazil sees record 2012 crop coffee despite dryness
BRASILIA, Jan 10 (Reuters) - Brazil will produce a record coffee crop in the 2012/13 harvest season, helped by increased investment and despite a harsh dry spell that cut productive potential at the season's outset, the crop supply agency Conab said on Tuesday.
Brazil should harvest 49 million to 52.3 million 60-kg bags compared with 48.1 million bags in the last 'on-year' crop in 2010, according to Conab estimates.
India's Dec rubber imports jump; trend seen continuing
MUMBAI, Jan 10 (Reuters) - India imported 21,734 tonnes of natural rubber in December, up 57 percent on year, state-run Rubber Board said, and traders expect the robust pace to continue as tyre makers resort to cheaper imports to make good a likely decline in domestic output.
India's rubber production rose just 1 percent to 104,000 tonnes in December, while consumption increased 4.39 percent to stood at 84,000 tonnes, the board said in a statement.
Vietnam 2015 coal output to rise to 55-58 mln T -govt
HANOI, Jan 11 (Reuters) - Vietnam plans to raise its coal output to 55-58 million tonnes in 2015 from an estimated 48.9 million tonnes this year, the government said.
The output is projected to rise to more than 75 million tonnes by 2030 thanks to the exploitation of new sites, the government said late on Tuesday in an approved plan for coal development.
Euro Coal-Prices dip with oil, utility selling
LONDON, Jan 9 (Reuters) - Prompt European physical coal prices fell by $1 to $2 per tonne on Monday, in line with weaker oil, as some smaller European utilities started to sell cargoes they would not need due to the mild winter.
Last week the market appeared to have steadied and tight near-term supply of South African coal boosted prices, which had slipped during the Christmas and New Year holidays.
S.Africa 2011 RBCT coal exports up y/y to 65.5 mln T
JOHANNESBURG, Jan 9 (Reuters) - South Africa exported 65.5 million tonnes of coal from the Richards Bay Coal Terminal in 2011, up from 63.4 million tonnes the previous year, the terminal said in a statement on Monday.
Coal stocks at the terminal stood at 3.3 million tonnes at the end of December, it added.
Brent rises above $113 after blast in Iran
SINGAPORE, Jan 11 (Reuters) - Brent crude rose above $113, reversing losses as a blast in Tehran added to concerns of supply disruption from Iran, overshadowing worries about demand growth due to Europe's debt crisis.
"The market could be reacting to headlines of the blast and further price gains are possible during London and New York trading time, depending on Iran's reaction," said Ken Hasegawa, a derivatives manager with brokerage Newedge in Tokyo.
Saudi oil output nearing capacity limit
DUBAI/RIYADH, Jan 10 (Reuters) - Top oil exporter Saudi Arabia is nearing its comfortable operational production limits and may struggle to do much to make up for shortages that arise from new sanctions imposed on Iran by the West, Gulf-based sources said.
The kingdom, now pumping just under record rates of 10 million barrels per day, has poured billions of dollars into its vast oil fields, which on paper should ensure it has the ability to ramp up to 12.5 million bpd.
U.S. oil supply growth to slow in 2013-EIA
WASHINGTON, Jan 10 (Reuters) - Despite the shale boom, U.S. oil production growth is seen slowing in 2013 after posting big gains over the past few years, the Energy Information Administration said on Tuesday.
U.S. oil output is expected to climb just 80,000 barrels per day to 5.82 million bpd in 2013, down from the 170,000 bpd increase estimated for this year, the EIA said in its monthly report.
China 2012 crude oil demand to grow faster - CPCIF
BEIJING, Jan 11 (Reuters) - China's apparent crude oil consumption could accelerate in 2012 from a year earlier due to ongoing strong demand for energy and chemical products, forecasts from an industry association showed on Wednesday.
The China Petroleum and Chemical Industry Federation estimated that apparent crude consumption will increase 5.3 percent year on year to 480 million tonnes in 2012, or 9.6 million barrels per day, compared with its forecast of a rise of around 3.5 percent in 2011.
Oil Gains on Bets Supplies May Be Curbed by Nigeria Strike, Iran Sanctions (Source: Bloomberg)
Oil rose from the lowest close this year in New York on signs that crude supplies may be reduced by a strike in Nigeria and the threat of sanctions on Iran. The Nigerian oil union Pengassan said it has started the process of shutting the platforms of Africa’s top petroleum producer to support demands for the return of fuel subsidies by labor unions. Japan may significantly reduce its imports of crude from Iran, the Yomiuri newspaper reported, without saying where it obtained the information. Futures for February settlement rose as much as 46 cents, or 0.5 percent, to $101.33 a barrel in electronic trading on the New York Mercantile Exchange. The contract was at $101.30 at 10:59 a.m. Sydney time. Crude yesterday slipped 1.3 percent to $100.87, the lowest close since Dec. 30.
China May Idle Most Aluminum Capacity Since 2009 on Prices: Commodities (Source: Bloomberg)
Chinese aluminum smelters may idle their annual capacity by one-third, the most in three years, as energy costs soar and prices slump. China may produce almost 20 million metric tons of the lightweight metal and its capacity may be as much as 30 million tons by the end of this year, said Luo Rongjin, a Beijing-based analyst with Bocom International Holdings Co. Monthly output from China, the world’s biggest producer, fell 8.3 percent in November from a record 1.6 million tons in August. Alcoa Inc. (AA), Rio Tinto Group and their global rivals are cutting production after prices dropped 19 percent last year, curbing profits. Alcoa, the largest U.S. producer that reported its first loss in two years this week, said China may use 70 percent of its capacity in 2012.
Iron Ore-Spot at 7-week top, Australian miners suspend loading
SINGAPORE, Jan 11 (Reuters) - Spot iron ore prices rose to seven-week highs, spurred by Chinese steel mills building inventories ahead of the Lunar New Year break later this month and expectations prices may climb further after the holiday.
News of supply disruption from top iron ore exporter Australia where miners Rio Tinto and Fortescue Metals Group have suspended loading operations ahead of a cyclone bearing down on west Australia should also support prices.
Cyclone shuts Australian iron ore ports & oil fields
SYDNEY/PERTH, Jan 11 (Reuters) - A tropical cyclone bearing down on west Australia forced the closure of some of the world's largest iron ore ports and several offshore oil fields on Wednesday, the first major series of shutdowns in what is forecast to be a tempestuous summer.
Ports serving the enormous iron ore mines of northwest Australia began closing on Tuesday night as Cyclone Heidi, packing winds of more than 100 kph (60 mph), swept across the Indian Ocean toward a stretch of coast where nearly two-thirds of the world's seaborne-traded iron ore is handled.
Venezuela 2011 iron ore output up 21 pct, but below capacity
CARACAS, Jan 10 (Reuters) - Venezuela boosted iron ore output to 17 million tonnes in 2011, up 21 percent from a year earlier, the country's primary iron producer Ferrominera Orinoco said, a figure still far short of its 25-million-tonne annual capacity.
The nation's state-run basic industries, which also include aluminum and steel, are producing well below capacity due to low investment, outdated technology, and a 2010 electricity crisis that the country never fully resolved.
China Dec iron ore imports down 0.2 pct -customs
BEIJING, Jan 10 (Reuters) - China's iron ore imports stayed near 10-month highs in December as lower prices encouraged stockpiling in the world's top buyer of the raw material despite uncertainty over the outlook for steel demand.
China imported 64.09 million tonnes of iron ore in December, down just 0.2 percent from the 10-month high in November, data from the country's customs authority showed on Tuesday.
German crude steel output seen flat in 2012
FRANKFURT, Jan 10 (Reuters) - Germany's crude steel output will probably remain almost flat this year as the euro zone debt crisis starts to affect the economy of Europe's largest steelmaker, and the risk of rising raw material prices weighs, a German industry body said.
The German Steel Federation said crude steel production last year rose 1 percent to 44.3 million tonnes, affected by a summer dip in demand that deepened into a second-half slump that forced capacity cuts in steel mills.
Copper vulnerable to price spikes due to shorts
LONDON/NEW YORK, Jan 10 (Reuters) - Copper is more vulnerable to price spikes than other metals because of a large buildup of short positions by money managers, which could lead to short-covering rallies on a change in market sentiment.
Money managers have been betting on falling copper prices for 16 straight weeks, according to the latest data from the U.S. Commodity Futures Trading Commission (CFTC), which showed net short positions in the week to Jan. 6 at 2,007 lots.
METALS-Copper slips as China buyers hold back after Dec imports
KUALA LUMPUR/SHANGHAI, Jan 11 (Reuters) - London copper fell erasing some of the previous session's gains, as Chinese consumers held back purchases ahead of the Lunar New Year holidays.
Prices were up more than 3 percent on Tuesday on record imports from top consumer China in December that brightened the demand outlook for industrial metals.
PRECIOUS-Gold edges up as Europe uncertainty supports
SINGAPORE, Jan 11 (Reuters) - Gold inched up to flirt with a key resistance level, shrugging off a stronger dollar, as persistent uncertainties on the euro zone debt crisis lured investors to the safety of bullion.
Bright economic prospects offered by Alcoa's upbeat outlook helped push Asian shares higher, although investors refrained from riskier bets before Italy and Spain put up bond auctions, seen as a test of investors' confidence in the euro zone.
Baltic index at 5-month low, to stay in doldrums
LONDON, Jan 10 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, fell to its lowest in five months on Tuesday as a growing slowdown in cargo bookings hurt sentiment.
The shipping sector in coming months is expected to face a supply glut and economic gloom, including concerns over the outlook for Chinese demand for raw materials, which will pressure earnings.
S.Korea, China battle to be king of the LNG shipyard
SEOUL/SINGAPORE, Jan 10 (Reuters) - The battle between South Korea and China to own Gaztransport & Technigaz, a firm that develops systems for storing liquefied natural gas (LNG) on ships, could ultimately be one of survival for Korean shipbuilders after the country lost most of its market share in the building of standard ships to China.
South Korean shipbuilders could take the unprecedented step of joining forces to compete against China in acquiring the French firm, with the winner poised to dominate the lucrative LNG carrier market for years.
