Corn (Source: CME)
US corn futures end slightly lower amid tight trading, with some profit-taking occurring after recent gains. Traders lack fresh impetus to push the market higher after its recent strength ahead of Thursday's USDA report. Hoped from it is clues to the extent of South American crop losses and potential gains for US exports. Meanwhile, corn fell despite gains in crude and a weaker dollar as a lack of fresh exports is keeping a lid on the market. CBOT March corn ends down 2c at $6.42 1/4 per bushel.
Wheat (Source: CME)
US wheat futures end lower on profit-taking and lack of fresh supportive news. While the recent cold snap, and potential wheat damage in the Black Sea region, is supportive to prices, analysts say damage has been factored in, and there's been no fresh news out of the region to drive markets higher. Analysts add that traders were taking profits after recent gains with Thursday's USDA report looming. CBOT March wheat ends down 6 1/4c to $6.62 1/4 per bushel; MGEX wheat closes down 2 1/2c to $8.38 1/2; KCBT wheat down 7c to $7.12.
Rice (Source: CME)
US rice futures end higher as the market continues to correct following last week's plunge. Weak demand has weighed on futures for months, but traders say the prospect of reduced U.S. acreage could limit losses going forward. CBOT March rice ends up 16 1/2c to $14.10 1/2 per hundredweight. Prices still down 59c since Jan. 26.
USDA to cut S. American corn, soy crop view
CHICAGO, Feb 6 (Reuters) - The U.S. government will likely slash its estimate of corn and soybean harvests in key crop producers Argentina and Brazil due to drought-like conditions throughout much of the growing season, analysts polled by Reuters said.
Market watchers were preparing for a jolt from the government after scrutinizing the weather reports from South America for the past month.
Canadian Wheat Board 2.0 to roll out in weeks
WINNIPEG, Manitoba, Feb 3 (Reuters) - The 77-year-old Canadian Wheat Board, which will soon lose its monopoly hold over Prairie grain, will be ready to compete openly in the fierce global grain market within weeks, according to the man charged with transforming it.
For the first time in generations, the Wheat Board must compete against heavyweights like Cargill , Viterra and Richardson International for Western Canada's 2012/13 wheat, durum and barley, with its monopoly expiring before the next harvest begins.
Wheat, soy dip on strong dollar; USDA report eyed
SINGAPORE, Feb 7 (Reuters) - U.S. soybeans slid from a three-month top snapping five seesions of gains, while wheat fell around half a percent, pressured by a stronger dollar and Greek resistance to strict conditions attached to a bailout.
"I think you are going to see a little bit of position squaring before the USDA report," said Brett Cooper, senior manager of markets at FCStone Australia.
Ukraine to have 6.3 mln T wheat for export-consultant
KIEV, Feb 7 (Reuters) - Ukraine will have 6.3 million tonnes of wheat for export in the 2012/13 season, agricultural consultancy UkrAgroConsultant said on Tuesday.
Ukraine harvested 22.3 million tonnes of wheat in 2011 and exports could total 7-8 million tonnes in the 2011/12 season.
USDA moves crop analysts as budget tightens
WASHINGTON, Feb 6 (Reuters) - The Agriculture Department, the primary source of U.S. crop and livestock data, will create nine regional centers in a move to provide more in-depth analysis while saving money, said Agriculture Secretary Tom Vilsack on Monday.
The centers, due to open in 2013, will be staffed by analysts who now work in state offices. The centers are the latest change in USDA reporting as it adjusts to federal budget cuts. USDA has eliminated half a dozen reports in the past year and said it would not report as often on vegetables and 13 fruit crops.
Indonesia 2012 Wheat Imports May Rise To 5.8 Mln Tons (Source: CME)
Indonesia's 2012 wheat imports may rise to around 5.8 million metric tons or even higher, compared with 5.2 million tons last year, Fransiscus Welirang, Chairman of wheat flour association Aptindo, said. "We expect wheat imports to rise more than 10% this year due to an increase in demand," Welirang said on the sidelines of a conference on food security. Wheat flour imports will likely be unchanged around 1.0 million tons. Total wheat and wheat flour imports may be between 6.8 million and 7.0 million tons, making Indonesia the second-biggest importer after Egypt, he said. The increase in purchasing power and change in dietary habits of the younger generation is pushing up demand for wheat, said Welirang, who is also the chief executive of Bogasari Flour Mills, one of Asia's largest mills. For example, he said, last year the growth in wheat demand was driven by greater consumption of bakery products.
Indonesia's demand for feed wheat is also rising due to greater milk consumption, which is pushing up animal feed requirements, Welirang said. Though Russian and Australian wheat prices are nearly the same, millers are opting for Australian wheat due to traditional preferences, he said, adding that Russian wheat will have to become significantly cheaper to make inroads into the Indonesian market.
Iran defaults on rice payments to India-traders
NEW DELHI, Feb 7 (Reuters) - Iranian buyers have defaulted on payment for about 200,000 tonnes of rice from their top supplier India, exporters and rice millers said on Tuesday, as trade between the two countries comes under mounting pressure from a new wave of Western sanctions against Tehran.
While a sharply weakening rial has made forward purchases costlier, financial sanctions are making it difficult for Iranian traders to continue using an unofficial route involving middlemen based in Dubai to keep paying Indian suppliers.
Australia's QSL sees no major flood damage to sugar
DUBAI, Feb 7 (Reuters) - Flooding in Australia has so far caused no major damage to the sugar crop, the head of the country's main sugar exporter said on Tuesday.
"The flooding has been mainly in the areas west of where sugar grows, in northern New South Wales and southern Queensland," QSL CEO Greg Beashel told Reuters in an interview.
Australia Floods Disrupt Some Farm Industries -Participants (Source: CME)
Widespread flooding in northern New South Wales and Queensland states is disrupting some agricultural and transportation activities, including sorghum harvesting and cattle sales, though the impact of the wet weather isn't all negative, according to industry participants. Farmers in much of northern New South Wales are suffering the effects of a second flood in as many months after a harvest of winter crops was delayed and damaged, while Queensland farmers are experiencing their third major flood in two years. The two states are home to some of Australia's best agricultural land, including the Darling Downs west of Brisbane. More than two-thirds of Australia's A$500 million sorghum crop, which is estimated to yield 2.4 million metric tons, grows in Queensland, but most of the flood-affected areas are west of the major growing areas, resulting in only minor damage to crops and disruptions to the harvest, which is getting under way, GrainCorp Ltd. spokesman Angus Trigg said by phone.
Sorghum crops in northern New South Wales are mostly four-six weeks from harvest and could yet benefit from the wet conditions, he said. While there could be some disruption to grain haulage in the region due to the impact of floods on some rail lines, GrainCorp is working with customers to minimize any impact, he said. Meanwhile, the transportation of cattle to markets in Queensland, which accounts for about half of national output, is also being disrupted due to restrictions to weight loads on roads and bridges, with some sales halted, Tim McRae, chief analyst at marketing concern Meat & Livestock Australia Ltd., said by phone. While floods are easing in some areas, it could be two weeks before the situation normalizes and what happens during that period is unknown, he said.
There is some short-term pain in terms of cattle movement disruptions, but for many producers this rain is perfectly timed and underpins a pretty good start to the year, with its boost to pastures and therefore improved production outlook, he said. Many meat processors in these areas have been working reduced days anyway, as export markets are slow at the moment, and the flood situation isn't nearly as severe as a year ago--when Brisbane Port, which moves 60% of Australia's annual A$4.5 billion in beef exports, was closed for more than a week, McRae said.
Mexican Government Still Evaluating Need For Sugar Import Quota (Source: CME)
Mexico is still evaluating domestic sugar supply-and-demand fundamentals before approving a potential import quota for 400,000 tons, the country's Economy Ministry said. The amount approved for the import quota, referred to as an "umbrella" quota, would not necessarily be the quantity imported. Its main purpose would be to prevent sharp price increases that normally occur in spite of regular import quotas. The ministry began considering such a quota late last year and is still analyzing the possibility. Juan Cortina, president of the national sugar industry chamber, said the import quota, if approved, wouldn't be in response to supply scarcity. Cortina said drought and other weather problems have hurt national sugar production and that Mexico will revise its output forecast downward in late February or early March, but not to the extent it will leave the country without sugar. "Whatever happens, domestic supplies are guaranteed," he said.
Paraguay 2011-12 Cereal Exports Seen At Record 2.1M Tons Despite Low Rainfall - FAO (Source: CME)
Paraguay's cereal exports for the 2011-12 crop year are estimated to reach a record level of 2.1 million metric tons, despite low rainfall and occasional drought affected some growing regions, the United Nations food body warned. Production of Paraguay's 2011 spring-summer crops, currently being harvested, has suffered from losses in the main producing area of the Eastern region and sharply reduced yields due to below average precipitation in December and January. "The most affected crop is corn, with about 58% of losses according to preliminary official estimates. Other food crops affected by drought are pulses, cassava and groundnuts. Severe losses have also been reported for cash crops cotton and sesame and, in particular for soybeans," said the FAO. Although detailed estimates of crop damage are not yet available, early assessments already point to a reduction in yield ranging from 30-70%. The most affected departments are Itapúa, ParaguarÃ, Alto Paraná and Canindeyú.
Production of Paraguay's 2011 wheat, recently harvested, is expected to hit 1.2 million metric tons, some 17% short of 2010 levels, the Food and Agriculture Organization said. "This mainly reflects freezing temperatures in June and July in the main producing areas of the Eastern region reduced crop yields by some 11 percent," said the FAO. But, in contrast, the country's 2011 corn output is estimated at record levels, the FAO said, citing good output of the first season and a significant increase in the area planted of the second season.
Brazil Seen With Sufficient Ethanol Stocks To Meet Demand (Source: CME)
The key center-south region of Brazil has stocks of ethanol biofuel equivalent to meet three months of demand, which should allow prices at the pump to remain stable until the country's main sugarcane harvest resumes, research firm JOB Economia said. The current situation contrasts with this time in 2011, when ethanol stocks in the region, where nearly 90% of the country's sugarcane is grown, only amounted to two months of demand, JOB said in a note. That wasn't enough to prevent fuel prices from soaring last year in March and April, just before the center-south sugarcane harvest got underway, and contributing to a rise in the inflation rate. JOB said the center-south's total ethanol stocks, as of mid-January, stood at 4.8 billion liters. Sales of ethanol by producers reached 1.52 billion liters in December. Prices for hydrous ethanol, used on its own as a fuel, averaged 2.01 Brazilian reais ($1.17) a liter last week, according to the National Petroleum Agency, or ANP.
Brazil's nationwide average price for gasoline, which contains 20% anhydrous ethanol, stood at BRL2.74 a liter last week. Prices for both products have remained virtually unchanged for the past six months but are up 7.3% in the case of hydrous ethanol and 4.6% in the case of gasoline from year-earlier levels, after a weak 2011 sugarcane harvest drove up ethanol prices.
Smaller Corn Supplies Expected Amid South America Drought (Source: CME)
A government report this week will highlight the impact of drought on corn and soybean crops in South America, and to what extent U.S. exports could increase as a result. The shift could have the greatest impact on U.S. corn supplies, according to analysts surveyed by Dow Jones Newswires. On average, analysts project the U.S. Department of Agriculture will estimate U.S. corn stockpiles of 797 million bushels when the crop marketing year ends Aug. 31, down from a January estimate of 846 million. The shift is expected because corn supplies in Argentina, a key exporter, are dwindling thanks to a hot, dry summer there. With fewer opportunities to buy from Argentina, buyers should have to turn to the U.S. instead. The two countries have vied for ranking as the world's top corn exporter in recent years said Mike Zuzolo, president of Global Commodity Analytics and Consulting. The U.S. Department of Agriculture will release its monthly supply and demand estimates Thursday at 8:30 a.m. EST.
Analysts on average expect the USDA will estimate Argentina's 2012 corn crop at 22.5 million metric tons, down from a January estimate of 26 million. Traders have been widely assuming a crop reduction there as conditions have worsened, and a USDA attache in Argentina last week pegged the country's corn crop at 21.8 million metric tons. "Though the weather situation in both Argentina and Brazil has improved from what was seen in December and January, some damage has been done, particularly to the corn crop," Western Milling analyst Joel Karlin said. Karlin said there could be further losses depending on the weather to close out the season. The USDA's downgrade to Argentina's corn crop should be accompanied by an increase to U.S. exports, analysts said. The question for traders is whether the government will be conservative in cutting the size of the crop and increasing U.S. exports, as many assumed was the case with its January estimate.
"I'm assuming the USDA will take a staggered approach," said Zuzolo, whose corn stockpile projection of 796 million bushels was in line with the analyst average. Analysts see the USDA cutting Brazil's corn output to 59.8 million metric tons, down from a January estimate of 61 million. While South America will be a focus for the corn market, Mexico, could be a potential wildcard, analysts said. Mexico is suffering through severe drought that has devastated the crop in many areas, which could lead it to import more U.S. corn. The USDA's Argentina soybean crop projection is expected to be cut to 48.5 million from a January estimate of 50.5 million, and Brazil's soy crop is projected at 71.7 million, down from a January estimate of 74 million. Analysts see only a minor reduction in U.S. soybean stockpiles. On average, U.S. analysts project stockpiles at the end of the crop marketing year Aug. 31 of 269 million metric tons, down from 275 million in January.
Soybeans have a later growing season, and damage to South America crops is not as certain, analysts said. For wheat, analysts on average expect U.S. stockpiles as of May 31 to remain virtually unchanged at 868 million metric tons, versus a January estimate of 868 million. Analyst estimates ranged from 836 million to 935 million metric tons. A key question, analysts said, is how emerging supply worries in the Black Sea region could affect U.S. exports. Futures prices have rallied recently on cold temperatures that have threatened crops in the Ukraine and other parts of Europe, as well as expectations Russia will move to curb exports.
Brazil sugar harvest expected to start late-Kingsman
DUBAI, Feb 6 (Reuters) - Global sugar supplies will be tight before the next harvest of top producer Brazil, which is likely to start later than normal to allow time for sucrose to develop in cane, sugar analyst Jonathan Kingsman said on Monday.
But the market would have to absorb a sizeable surplus as new-crop supplies appear, he told Reuters TV in an interview, speaking on the sidelines of the Feb. 4-7 Kingsman Dubai sugar conference.
Uganda Jan coffee exports up 5.2 pct y/y - UCDA
KAMPALA, Feb 7 (Reuters) - Uganda's coffee exports rose 5.2 percent in January compared to the same month last year thanks to dry weather that facilitated faster bean drying and expanded acreage, sector officials said on Tuesday.
A source at the Uganda Coffee Development Authority (UCDA) said Uganda shipped 226,471 60-kilogramme bags of coffee in January, compared with 215,180 bags in the same month a year ago.
Kingsman sees fall in sugar surplus in 2012/13
DUBAI, Feb 7 (Reuters) - Consultancy Kingsman SA on Tuesday forecast a fall in the global sugar surplus to 4.7 million tonnes in 2012/13 from 8.2 million in 2011/12, based on national crop years.
Kingsman said the smaller surplus forecast was based in large part on an expected increase in global sugar consumption of just over 2.5 percent.
Australia's QSL sees no major flood damage to sugar
DUBAI, Feb 7 (Reuters) - Flooding in Australia has so far caused no major damage to the sugar crop, the head of the country's main sugar exporter said on Tuesday.
"The flooding has been mainly in the areas west of where sugar grows, in northern New South Wales and southern Queensland," QSL CEO Greg Beashel told Reuters in an interview.
Australia floods fail to dampen big cotton crop
SYDNEY, Feb 7 (Reuters) - Australia's projections for a bumper cotton crop remain on track despite a week-long deluge in major growing regions that forced thousands of residents from their homes and left rivers dangerously swollen.
Australia is the world's third-largest cotton and sugar exporter, fourth-largest wheat exporter and a big supplier of other agricultural and mineral commodities. Heavy rains a year ago contributed to one of Australia's biggest slumps in GDP in 20 years over the first quarter.
Ivory Coast rains raise hope on cocoa mid-crop
ABIDJAN, Feb 6 (Reuters) - Rainfall in most of Ivory Coast's main cocoa-growing regions last week raised hopes for the April-September mid-crop following a long dry spell, which dampened cocoa output expectations in the world's top grower, farmers said on Monday.
Cocoa watchers polled by Reuters last month expect total output for 2011/12 to be around 1.4 million tonnes, down around 10 percent on the International Cocoa Organisation's (ICCO) estimate for last year.
Dubai sugar silos expected to start in March
DUBAI, Feb 6 (Reuters) - Three new sugar storage silos at the Dubai Al Khaleej refinery, with a total capacity of 465,000 tonnes, are expected to start operations next month, site managers said on Monday.
The main dome-shaped raw sugar silo, with a capacity of 1 million tonnes, now holds some 250,000 tonnes of raw sugar, they added.
Oil Gains a Second Day on Demand Outlook as API Says U.S. Stockpiles Drop (Source: Bloomberg)
Oil gained a second day as investors speculated fuel demand may increase after an industry report showed crude stockpiles shrinking in the U.S., the world’s biggest consumer of the commodity. West Texas Intermediate futures climbed as much as 0.5 percent in New York from the highest close in a week yesterday. U.S. crude inventories fell 4.5 million barrels in the seven days ended Feb. 3, the first drop in three weeks, the American Petroleum Institute said after the settlement. An Energy Department report today may show supplies rose 2.5 million barrels, according to a Bloomberg News survey of analysts. “The API data provided momentum for the price gains,” said Ric Spooner, a chief analyst at CMC Markets in Sydney. “We remain in a range. Front-month prices for West Texas are in a trend channel pattern, with the range broadly between about $95.50 on the downside and $100.50 on the upside.”
After U.S. oil snub, Canada focuses on China
OTTAWA, Feb 6 (Reuters) - Canada will focus on exporting oil and other goods to China and other booming Asian economies even if Washington overturns its decision to block a pipeline that would have sent more Canadian crude to the United States.
Speaking ahead of Canada's most high-powered trade mission to Beijing for almost 15 years, Prime Minister Stephen Harper told Reuters that Canada must focus on markets that are growing, regardless of the fate of the Keystone XL pipeline, which is proposed to carry crude from the Alberta oil sands to Texas refineries.
Brent steady near $116 on cold snap, Iran sanctions
SINGAPORE, Feb 7 (Reuters) - Brent futures held steady near $116, after settling at a six-month high in the previous session, due to a cold spell in Europe and supply concerns from the Middle East, while fears Europe's debt crisis was worsening weighed on the market.
"The geopolitical events surrounding Iran and the Middle East and the severe cold weather sweeping across Europe are providing support for Brent," said Victor Shum, senior partner at oil consultancy Purvin & Gertz. "We continue to see more upside risks for oil, but Europe's debt crisis will weigh."
Aluminum Over Copper for Wires and Cables Helps Rusal, Alcoa: Commodities (Source: Bloomberg)
Copper has climbed to almost four times the price of aluminum, a record ratio that’s accelerating a switch by manufacturers to using the cheaper metal in electric cables and wires, a United Co. Rusal executive said. Demand for copper is shrinking by about 400,000 tons a year through substitution, or 2 percent of global use, according to Oleg Mukhamedshin, deputy chief executive officer of Rusal, the world’s largest aluminum producer, who cited market data the company uses in its forecasts. “More than half of this loss is to aluminum,” Mukhamedshin said in an interview in Moscow. “With copper prices at a record, further substitution is expected.”
China steel profits to weaken in 2012 on low demand -industry ministry
BEIJING, Feb 7 (Reuters) - Low demand and higher costs are expected to further erode profits in the Chinese steel sector in 2012, China industry ministry spokesman Zhu Hongren said on Tuesday.
He said many big steel enterprises suffered losses in the second half of last year, and the situation was unlikely to improve in 2012.
China steel output slips 1.3 pct in mid-Jan - CISA
SHANGHAI, Feb 6 (Reuters) - China produced 1.669 million tonnes of crude steel per day in the Jan. 11-20 period, down 1.3 percent compared with the previous 10 days, according to data issued by the China Iron and Steel Association on Monday.
Production normally drops in January as construction activity in northern China slow down for the winter.
METALS-Copper eases as China buyers out for the count
SHANGHAI, Feb 7 (Reuters) - London copper slipped on Tuesday on sluggish post-holiday purchases from top consumer China but investors betting on a bailout deal for Greece, and growing hopes of a global economic recovery, buttressed prices.
Three-month copper on the London Metal Exchange fell 0.37 percent to $8,462.75 a tonne by 0503 GMT, clawing back some losses from the previous session when it slipped by almost one percent. Copper hit a one week-high of $8,598.50 on Friday and rose for the fourth consecutive week last week.
PRECIOUS-Gold steady; traders watch Greece developments
SINGAPORE, Feb 7 (Reuters) - Gold held steady on Tuesday, as investors remain focused on the development in Greece's struggle with its debt crisis after Athens delayed its decision on accepting the terms of a new bailout.
Spot gold was little changed at $1,718.59 an ounce by 0041 GMT, after touching a 1-1/2-week low of $1,711.29 in the previous session.
