Corn (Source: CME)
US corn futures end lower, retreating amid farmer selling and profit-taking after a USDA report failed to provide fresh support. Although prices climbed early in the session after USDA raised projected exports by 50M bushels, traders say that was well within expectations. The weaker close after early gains could be negative technically, traders add, prompting more selling. Analysts say farmers may be wary of missing out on chance to sell at prices well above historical norms. Still, projected US stockpiles are relatively small, and traders say it'll take a big crop to get back to comfortable supply levels. CBOT March corn ends down 5 1/2c to $6.37/bushel.
Wheat (Source: CME)
US wheat futures stumble, fueled by larger world wheat stock estimates from government forecasters. Bullish traders were disappointed with world supplies rising to new record-high levels, said analyst Dan Cekander Newedge USA in Chicago. Market also lacked any new bullish weather developments to justify pushing prices higher, Cekander added. Wheat had previous climbed on threats to Europe and Black Sea wheat, but with world supplies adequate to meet global demand even with crop losses, wheat futures were seen as overvalued. CBOT March wheat ended down 14 3/4c to $6.46/bushel; March KCBT wheat down 18c at $6.92; March MGEX wheat dropped 9 3/4c to $8.31 3/4.
Rice (Source: CME)
US rice futures end lower as the USDA continues to show large supplies and weak demand. The USDA cut projected US rice exports by 1 million metric tons to 89 million, while also raising world production and stockpile estimates. The market has been under pressure for months by weak fundamentals. CBOT March rice ends down 12 1/2c to $14.08 per hundredweight.
Soy ticks up, grains steady as market eyes USDA report
SINGAPORE, Feb 9 (Reuters) - U.S. soybeans edged higher to trade around a three-month top, while corn and wheat were little changed as investors squared positions ahead of a U.S. government report on global demand-supply of grains and oilseeds.
"I don't think the USDA will go as far as the market is at the moment," said Victor Thianpiriya, an agricultural commodity strategist at ANZ. "I think the market for Argentina and Brazil is probably somewhere around 46 million tonnes and 70 million tonnes respectively, but they may not make any change at all for Argentina and downgrade little bit for Brazil."
Philippines may limit 2013 rice imports to 100,000 T
MANILA, Feb 9 (Reuters) - The Philippines, one of the world's major rice buyers, may cut its rice imports to 100,000 tonnes next year as it aims to become self-sufficient in the grain by the end of 2013, a senior government official said on Wednesday.
The Southeast Asian country, which plans to import 500,000 tonnes of rice this year, will limit next year's purchases to cover its buffer stock needs, Assistant Secretary Dante De Lima told reporters.
Iran payment for India rice to unlock itself-secretary
NEW DELHI, Feb 9 (Reuters) - A payment problem over Indian rice exports to Iran will "unlock itself" once the trade settlement mechanism gets sorted out, India's trade secretary Rahul Khullar said on Thursday.
Iranian buyers have defaulted on payments for about 200,000 tonnes of rice from their top supplier India, a sign of the mounting pressure on Tehran from a new wave of Western sanctions.
Snow is answer to prayers for N.Africa grain growers
ALGIERS, Feb 8 (Reuters) - Cold weather spreading from Europe into North Africa has helped the grain crops in Algeria and Tunisia by dumping snow and rain, breaking a drought so severe that mosques had offered up prayers for rain.
Neighbouring Morocco though, missed out on the precipitation and a farmers' representative said the combination of cold and lack of rain could hurt crops there, with sugar beet and cane especially vulnerable.
Russia started grain loading in Novo port on Wed-Ifax
MOSCOW, Feb 8 (Reuters) - Russia resumed grain loading to the ships at the Black Sea port of Novorossiisk on Wednesday, Interfax news agency reported citing the port's representative.
The port began to load grain and metals for the ships, moored before the stormy weather started, Interfax reported. Loading to the ships currently at sea will start after the storm warning is lifted, it added.
Ukraine grain exports at 225,000 T Feb 1-6
KIEV, Feb 8 (Reuters) - Ukraine exported about 225,000 tonnes of grain, mostly maize, in the first six days in February, Kiev-based ProAgro consultancy said on Wednesday, citing data from Ukrainian sea ports.
ProAgro said Ukraine had exported about 195,000 tonnes of maize and 25,000 tonnes of wheat so far this month. No figures for the same year earlier period were immediately available.
Argentina Exchange Cuts Corn Forecast But Rain Helps Crops (Source: CME)
Surprisingly heavy rain storms soaked Argentina's parched crops just in time over the past two weeks, stemming damage to corn and putting soybeans on track for a good season. "It's a tremendous relief," Buenos Aires Cereals Exchange crop analyst Esteban Copati said in an interview. The exchange cut its forecast for 2011-12 corn production to 21.3 million metric tons, down from 22 million tons estimated last week, but the recent showers have stemmed the losses, Copati said. Early in the season, analysts had expected corn production of up to 30 million tons, but hot, dry weather in December and January baked many of the fields. Corn planted early in the season was hit hardest by the drought during key growing phases, but some of those losses will be made up by high yields in the northern fields where planting happened later and got a good soaking, Copati said. Argentina is the world's second-largest corn exporter, and fears of a lingering drought in South America had helped buoy global prices.
The U.S. Department of Agriculture also cut its corn estimate for Argentina to 22 million tons, down from its forecast of 26 million tons last month. Argentina's corn harvest will start later this month and continue through June. The storms also come as a blessing to the developing soy crop, which is entering key development phases and was desperate for a big drink. "The surprisingly big storms were great," Copati said. Argentina leads global soymeal and soyoil exports, and ranks third in soybean shipments. The exchange left its forecast for production at 46.2 million tons, but that could be upped if the weather continues to cooperate, Copati said. The USDA trimmed its forecast for Argentina's 2011-12 soybean production, pegging the crop at 48 million tons, compared to the 50.5 million tons estimated last month. The soy harvest will kick off in March and extend through July.
Cargill says still supplying Iran with grain
GENEVA, Feb 8 (Reuters) - U.S. agribusiness giant Cargill plans to continue grain shipments to Iran, its vice chairman said on Wednesday, despite signs the Islamic Republic is struggling to process payments as trade sanctions bite.
"Like all the international companies, we do business there, but you have to be very careful," Paul Conway told Reuters in an interview.
Signs build that Iran sanctions disrupt food imports
KUALA LUMPUR/TEHRAN, Feb 8 (Reuters) - More evidence emerged of the crippling impact of new sanctions on Iran, with international traders saying Tehran is having trouble buying rice, cooking oil and other staples to feed its 74 million people weeks before an election.
New U.S. financial sanctions imposed since the beginning of this year to punish Tehran over its nuclear programme are playing havoc with Iran's ability to buy imports and receive payment for its oil exports, commodities traders said.
World Food Prices Up In January For 1st Time Since July -FAO (Source: CME)
World food prices increased in January for the first time since July 2011, with an overall gain of almost 2% led by oils and cereals due to unfavorable weather in cultivating areas, the Food and Agricultural Organization said, adding to the potential for further gains in February. "There is scope for an upwards move for February's index as this month has already started on a high tone," Abdolreza Abbassian, grains analyst for the FAO warned. "Firmer equity markets, a weaker dollar, and high energy prices could support food prices this month," he added. Weather conditions in major food commodity producing nations remains another factor that adds to uncertainty for global food prices, Abdolreza warned. Food price inflation climbed toward the top of the international agenda after hitting successive record highs in the early part of last year amid global supply concerns of cereals, sugar and cocoa, before five straight months of decline--the longest slide in over two years.
Rising food prices were also partly blamed for sparking the unrest in the region--known as the Arab Spring--last year that saw the leaders of Tunisia, Egypt and Libya fall. But the FAO's Intergovernmental Group on Grains warned in December that prices could be bottoming out. The FAO's food price index averaged 214 points in January 2012, four points up from December, the Rome-based United Nations organization said. However, the index remains 7% below its corresponding value a year earlier. "Firming import demand for palm and soy oil, combined with a seasonal decline in palm oil production and the prospect of below average export availabilities of soy oil were the main driving forces behind the recovery in the index," the FAO said. In January, prices of all commodity groups that make up the index posted gains, with oils increasing the most, followed closely by cereals, sugar, dairy and meat, the FAO said.
The FAO oils/fats price index rose to 234 points in January, up 3% on December's levels, but remains below levels posted in the same period a year earlier. The price of cereals, one of the main components of the index, increased 2.3% in January, led primarily by price gains in corn, which rose 6% driven by a tight global supply-demand balance amid concerns over crop prospects in South America. Wheat prices also gained, but less sharply than those of corn. The wheat index was up 1.5% in January, the FAO said, citing rising corn prices as both are used for feed wheat, reduced Russian export levels and unfavorable weather in several important grain cultivating regions.
Meat prices nudged up half a percentage point in January, although the prices of various meat types followed mixed directions, the FAO said. Pig meat gained almost 3%, led by the anticipation of higher imports by China, but poultry prices fell by 1% weighed by the strength of the U.S. dollar against some major exporter currencies, especially Brazil. Dairy prices lifted 2.5% in January, marking the first upturn after five months of steady declines. "A rebounding of butter and cheese prices are behind this month's strength, as prices of both skim and whole milk powder were steady or slightly down," the FAO said. "Relatively low stocks of dairy products in the U.S. along with supply tightness in Oceania have sustained prices in the past two months."
Sugar prices were up 2.3%, albeit to levels 20% lower than in January last year, largely driven by unfavorable weather conditions in top producer Brazil, spurring fears that it could delay its harvest and cut production levels. Still, large harvests in India, the European Union, Russia and Thailand capped the increases. The World Bank estimates 44 million people may have been pushed into poverty by last year's price rises, and aid agencies warn high food costs threaten millions more.
Brazil's Jan. green coffee exports down 28 pct yr/yr
BRASILIA, Feb 8 (Reuters) - Top coffee producer Brazil shipped 1.86 million 60-kg bags of unroasted, green beans in January, down 28 percent from 2.59 million bags in the same month of 2011, the Council of Green Coffee Exporters, Cecafe, said on Wednesday.
Brazil's Bahia main cocoa crop peters out slowly
SAO PAULO, Feb 8 (Reuters) - Deliveries of cocoa to warehouses in Brazil's top growing state Bahia slipped in the past week, the Bahia Commercial Association said, but output for the time of year has kept above average for weeks even as the main crop fades.
Output from other states through Jan. 5 fell sharply from a week earlier, Bahia-based analyst Thomas Hartmann said, as producers finished clearing accumulated stocks that boosted sales in those areas in January.
Brazil center-south enjoys good cane crop weather
SAO PAULO, Feb 8 (Reuters) - Brazil's main center-south cane crop, which will kick off its crushing season in April, is getting hot and sunny weather after a wet January, perfect conditions for cane plants to make sugars, local forecasters Somar said on Wednesday.
Last season, Brazil's center-south cane region had its first drop in output in a decade, as aging cane plants and a few years of bad weather hurt yields in the region, the world's biggest producer of sugar.
S.Africa raises 2011/12 sugar output f'cast to 1.825 mln T
JOHANNESBURG, Feb 8 (Reuters) - South Africa's 2011/12 sugar output is estimated at 1.825 million tonnes, slightly up from a previous forecast of 1.82 million tonnes, the South African Sugar Association (SASA) said.
Sugarcane crush was forecast at 16.8 million tonnes from 16.787 million tonnes, the industry association, which represents producers and millers of the sweetener in Africa's biggest economy, said in a statement on its website.
Indian Sugar Industry Hopeful Of Deregulation Soon Following Panel Set Up (Source: CME)
Top players in India's sugar industry are cautiously optimistic of seeing an end to the present regime of tight controls as the government sets up a panel to look into the impact of deregulation. "Within a maximum of 6 months' time, the majority of the government controls will go," P. Chengal Reddy, secretary general of the Consortium of Indian Farmers Associations, told Zawya Dow Jones on the sidelines of the Kingsman sugar conference in Dubai recently. India, the world's second-largest sugar producer, sets the supply amount of the sweetener to be sold in the local market, as well as for welfare programs each month, in order to keep a cap on prices. However, Abinash Varma, Director General of Indian Sugar Mills Association, or ISMA, is more cautious. "I don't think the government will deregulate everything; they'll retain some tools to control the price and availability."
The present regulated regime has the government laying down the law right from the stage of setting up a sugar factory; the distance between two factories; the allocation of cane area from where a factory has to buy even if cane can be acquired cheaper elsewhere; and even the packaging of sugar. Varma wants the levy system--under which mills are obliged to supply 10% of their output to the public distribution system, often at a discount to the cost of production--to be removed immediately. "There should be no obligation on the mills. If the government wants to distribute sugar under the public distribution system to its [economically] vulnerable groups, they should bear the burden," he said, and as this would mean an additional $816 million annually for welfare program sales, the food ministry isn't keen on dismantling this control. "What we're asking is for them to remove all controls; let free market economy play its role," Reddy said.
Varma also wants the government to look at linking the sugarcane price to the sugar price, so that the cycle in production seen every 3 or 5 years can be controlled. "Today there's no linkage; the price of cane is politically fixed, while the price of sugar is artificially pushed down--there's no relationship between them." Reddy feels India's potential in sugar, ethanol and power capacities is exceptional but under-realized due to government regulation. "While ethanol can be helpful both to the Indian farmer and the industry, the government is not very liberal with the pricing. The price they pay for petroleum products is not paid for biofuels."
Copper Traders Turn Bullish as Inventories Drop to 2009 Low: Commodities (Source: Bloomberg)
Copper traders turned bullish for the first time in seven weeks on mounting confidence that global growth will strengthen, diminishing stockpiles after a year in which mine production fell by a record amount. Thirteen of 25 analysts surveyed by Bloomberg expect the metal to gain next week and three were neutral. Hedge funds and other money managers are holding their biggest bet on rising prices since early August, Commodity Futures Trading Commission data show. Inventories tracked by the London Metal Exchange are already at a two-year low after global mine output dropped by 200,000 metric tons in 2011, Barclays Capital estimates. Investments (.CMDOI) in commodities expanded at the quickest pace in six years in January on increasing confidence economies will skirt another recession, data compiled by Bloomberg show. Higher demand comes at a time when producers are struggling to keep up, as lower ore grades, strikes and slower-than-expected mine developments limit supply growth.
Barclays anticipates a third consecutive copper shortage in 2012 and another one next year.
Green Plains Renewable Energy CEO: Has Cut Ethanol Output At Two Plants (Source: CME)
The U.S. ethanol industry is rapidly scaling back production in response to a supply glut that has weighed heavily on producers' profit margins, the head of the nation's fourth-largest ethanol producer said. Green Plains Renewable Energy Inc. is among the companies cutting back, having scaled back production by 30% at two of its nine plants, CEO Todd Becker said. Becker said he is starting to hear of widespread moves to cut production, and that the industry has more discipline than many people realize, and can cut back more quickly than other industries that rely on corn. "This isn't like feeding chickens," Becker said in an interview after the company announced fourth-quarter earnings. "You can slow a plant down by pressing a button." Becker added that the company is assessing its production daily and will make further cuts if necessary.
Ethanol producers say that very strong margins in the fourth quarter of 2011 prompted plants to ramp up output. That increase was ill-timed, as it was met by surprisingly weak gasoline demand and declining ethanol exports to Brazil. Ethanol stocks of 21,063 barrels are up 23.4% in the past two months, according to the most recent data from the U.S. Energy Information Administration. Exports should remain an important part of the market, Becker said. He projected ethanol exports this year of 500 million gallons, versus 1 billion gallons in just the first 11 months of 2011. Green Plains's strategy contrasts with Archer Daniels Midland Co. (ADM), which said last week it sees little benefit to scaling back production and would continue to "run hard" at its plants. ADM announced the closure of a small ethanol plant last week, but cited the location of the North Dakota plant and its small scale, rather than market conditions.
For the fourth quarter, Omaha, Neb.-based Green Plains reported earnings of $13.3 million, or 36 cents per share, down from $16.4 million, or 44 cents, the prior year. Analysts polled by Thomson Reuters had been expecting earnings of $16.4 million, or 41 cents per share. Green Plains's revenue of $922.8 million was up from $757 million the prior year. The company has spent the past couple of years trying to diversify to protect against ethanol industry downturns. It has begun extracting corn oil during its ethanol production to provide a new revenue stream, and has added five million bushels of grain storage over the past year, bringing its total capacity to 39.1 million bushels. "We want to buy more elevators, we want to buy more terminal assets around distribution," he said. Becker said the company will also look for ethanol plants, but that "good ones are hard to buy."
Brent rises above $117 on demand hopes, Iran woes
SINGAPORE, Feb 9 (Reuters) - Brent crude held near six-month highs above $117 on hopes that demand would pick up as Greece inched closer to getting its debt crisis under control, while concerns over supply disruption from the Middle East provided support.
"There is hope that the Greek debt crisis will be sorted out soon with an agreement on all the components getting discussed," said Natalie Robertson, an analyst at ANZ bank. "On the supply side, there are a lot of risks at the moment and that will keep prices supported, particularly Brent."
China oil demand growth seen easing in 2012 -CNPC research
BEIJING, Feb 9 (Reuters) - China's implied oil demand will likely rise 5 percent this year to 9.9 million barrels per day, according to an industry research report, a pace slower than 2011, as easing economic expansion caps fuel consumption in the world's No.2 user.
National crude throughput could climb to 470 million tonnes, or 9.4 million bpd, an increase of 5.4 percent or about 480,000 bpd this year, according to a forecast by a research arm of top state energy group CNPC.
Oil Trades Near Three-Week High on U.S. Economic Outlook, Greek Debt Deal (Source: Bloomberg)
Oil traded near the highest price in three weeks in New York on speculation that fuel demand may increase after U.S. jobless claims fell and Greek politicians agreed on measures needed to qualify for international aid. Futures were little changed, heading for a weekly gain, after advancing for a third day yesterday in the longest winning streak this year. U.S. applications for jobless benefits slid by 15,000 to 358,000 in the week ended Feb. 4, according to the Labor Department. The Greek government agreed with political party leaders on austerity measures needed to qualify for the financing package, an e-mailed statement from Prime Minister Lucas Papademos’s office in Athens showed. Oil for March delivery was at $99.75 a barrel, down 9 cents, in electronic trading on the New York Mercantile Exchange at 10:21 a.m. Sydney time. The contract yesterday rose 1.1 percent to $99.84, the highest close since Jan. 19. Prices are up 2 percent this week and 15 percent higher the past year.
