Speculators Raise Bullish Wagers to Highest Since September: Commodities (Source: Bloomberg)
Hedge funds increased bets on rising commodity prices to the highest since September on mounting confidence that growth in the U.S. will strengthen demand. Money managers boosted their combined net-long positions across 18 U.S. futures and options by 13 percent to 929,199 contracts in the week ended Feb. 7, Commodity Futures Trading Commission data show. That’s the highest since Sept. 20. Bullish wagers on copper rose to a six-month high, and soybean holdings jumped by the most this year. The Standard & Poor’s GSCI Spot Index (SPGSCI) of 24 commodities rose to a six-month high on Feb. 9, a day after the MSCI All- Country World Index (MXWD) entered a bull market, as indicators signaled accelerating growth. Fewer Americans than forecast filed claims for jobless benefits in the week to Feb. 4, and consumer confidence rose to a one-year high. Investments in commodities expanded for a seventh week, the longest streak since February 2009, data compiled by Bloomberg show.
Corn (Source: CME)
US corn futures end lower amid broad-based commodity losses and lingering pressure from Thursday's USDA report. A stronger dollar and weaker equities as Europe debt worries escalated weighed on commodities generally. Corn in particular was pressured by Thursday's USDA report. While the report was considered neutral, the market's inability to push above its trading range over the past month is considered a negative sign, which has prompted selling, including from farmers, traders say. The market could stay rangebound until a clearer picture of US planting emerges, traders add. CBOT March corn ends down 5 1/4c to $6.31 3/4 per bushel.
Wheat (Source: CME)
US wheat futures stumble again, ending lower on broad commodity pressure and ample world supplies. A stronger dollar and worries about Europe's economy weigh on commodities generally, and wheat in particular has had added pressure from Thursday's USDA report, which showed world stockpiles climbing to record highs. That mitigates any concerns about a potential decline in exports from the Black Sea. CBOT March wheat ends down 16c to $6.30/bushel, KCBT March falls 19c to $6.73 and MGEX March slides 17 1/2c to $8.14 1/4.
Rice (Source: CME)
US rice futures end sharply lower on broad commodity pressure and poor demand. Rice prices pressured after USDA Thursday again cut its demand outlook for US rice. World supplies are also considered adequate. A stronger dollar weighed on commodities generally. Prices remain above a Feb. 1 intraday low of $13.50. CBOT March rice ends down 36 1/2c to $13.71 1/2 per hundredweight.
Wheat near 2-week low; corn, soy fall on crop data
SINGAPORE, Feb 10 (Reuters) - Chicago wheat slid almost 1 percent, falling for a fourth straight session and touching its lowest in almost two weeks, as record-large global supplies forecast by the U.S. government pressured the market.
"Going forward, we see more downside for corn as U.S plantings will be higher which will pressure prices in the coming weeks," said Lynette Tan, an analyst with Phillip Futures in Singapore.
Record world wheat stocks to offset S.America drought
WASHINGTON, Feb 9 (Reuters) - World wheat stocks will swell to a record this year and corn supplies will be larger than expected despite a crop-withering drought in South America, the U.S. government forecast on Thursday.
India will post a record rice crop of 102 million tonnes, up 2 million tonnes from a January estimate, due to beneficial monsoons and growing weather, the U.S. Department of Agriculture forecast, as the global grain outlook improves slightly after years of tight stocks and rising prices.
Argentine corn crop seen smaller due to drought
BUENOS AIRES, Feb 9 (Reuters) - Weeks of drought in Argentina caused irreversible damage to corn plants in the world's No. 2 exporter, prompting the Buenos Aires Grains Exchange to cut its 2011/12 crop estimate on Thursday.
The exchange dropped its forecast to 21.3 million tonnes from an earlier 22 million tonnes, saying recent rains that have benefited many parts of the grains belt came too late to help fields hardest hit by December and early January dryness exacerbated by an unforgiving Southern Hemisphere summer sun.
India 2011/12 rice, wheat output revised up-attache
Feb. 9 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in India:
"On February 3, 2012, the Ministry of Agriculture released the 'Second Advance Estimate for the Indian Crop Year 2011-12', forecasting record food grain production for a second consecutive year at 250.4 million tonnes. MOA also raised the 2010/11 final food grain production estimate to a record 244.8 million tonnes.
Consequently, the MY 2011/12 rice and wheat production forecasts are raised to 102 million tonnes and 86.87 million tonnes, respectively, and the MY 2010/11 rice production forecast is raised to 95.98 million tonnes. This rapid update is due to the release of the new official statistics which were not available when the last update was submitted on February 2, 2012."
Ukraine asks traders to export corn, not wheat
KIEV, Feb 9 (Reuters) - Ukraine's Farm Ministry has asked grain traders to focus their activity on exports of maize and barley but not on wheat, Interfax Ukraine news agency quoted a ministry official as saying on Thursday.
"We encourage traders ... do not include it (wheat) in the list of priorities. As for barley and maize, you are welcome to," said Serhiy Kvasha, the head of the ministry's market department.
La Nina to fade, but impact may hurt farmers
Feb 9 (Reuters) - The La Nina weather pattern will likely dissipate this spring but farmers in the southern United States and South America will have to contend with lingering dryness as they plant corn, soybeans, cotton and coffee.
The U.S. Climate Prediction Center (CPC) said in its monthly update on Thursday that computer models favor "a return to neutral conditions during the Northern Hemisphere spring, which are likely to continue into the summer."
Drought cuts S.America crops more-USDA
WASHINGTON, Feb 9 (Reuters) - Drought severely stunted South America's corn and soybean crops although not quite as badly as feared, the U.S. government said on Thursday, foreseeing larger U.S. corn exports to fill the gap.
The U.S. corn stockpile would shrink to its smallest size in 16 years this year, down 5 percent from the previous forecast but still slightly better than traders had anticipated, the Agriculture Department said in its montly crop forecast.
Wheat Slumps Most in Four Weeks on Outlook for Adequate Global Supplies (Source: Bloomberg)
Wheat fell the most in four weeks after the U.S. government yesterday projected record world stockpiles, easing concerns that food prices will rise and weather damage will cut supply. Global stockpiles before the 2012 Northern Hemisphere harvest will climb to 213.1 million metric tons, 6.2 percent more than last year, the Department of Agriculture said. World food costs are down 9.9 percent from a record last year, United Nations data show. Wheat prices fell 4.7 percent this week, after jumping 11 percent in the second half of January on concern extremely cold weather would hurt crops in Europe. Supplies are “more than adequate,” Jon Marcus, the president of Lakefront Futures and Options LLC in Chicago, said in a telephone interview. “You’ll see prices continue to drag, at least in the short run. There’s plenty around, so it’s not a concern.”
Ukraine Asks Traders to Limit Wheat Exports Due to Weather (Source: Bloomberg)
Ukraine asked grain traders to limit wheat exports after drought and frosts damaged the winter crop, Volodymyr Klymenko, head of the country’s Grain Association said. “The ministry asked us not to sign too many contracts for wheat,” Klymenko said in an interview from Kiev today. The former Soviet state will have to replant almost half of its winter grains with spring crops, Prime Minister Mykola Azarov said today, according to a statement on the government’s website. “We had severe frosts in January and we will have to re-sow 3.5 million hectares (8.6 million acres) with spring grains,” he said. Ukraine’s Agriculture Ministry estimated about 8.4 million hectares of winter grains, most of which was wheat, was planted for the 2012 harvest. About 1.84 million hectares, of 7.2 million hectares which sprouted, were in good condition, the ministry said yesterday.
Australian Floods Continue To Hamper Agriculture Sector Activity (Source: CME)
Widespread flooding in northern New South Wales and Queensland states is hampering the movement of livestock and curbing cattle supply in saleyards, with more rainfall forecast, marketing concern Meat & Livestock Australia Ltd. said. In Queensland, which accounts for about half of Australia's beef production, cattle sales were concentrated in the southeastern corner of the state, as most other physical markets were canceled this week due to flooding, the MLA said in a weekly report. The effects of localized flooding and waterlogged paddocks lingered in parts of northern New South Wales, where saleyard throughput was also restricted, it said. Meanwhile, Cotton Australia estimated Thursday that damage from the floods could cut output from the crop to be stripped in the coming months by about 10%, to around 1.02 million metric tons, a loss that the lobby group's Chief Executive Adam Kay estimated would cost the industry about A$250 million.
In a preliminary estimate this week, the New South Wales Department of Primary Industries said the floods would likely lead to losses totaling A$750 million--from damage to crops, infrastructure and livestock. The farmers in much of northern New South Wales are suffering the effects of a second flood in the past several months after a harvest of ripe winter crops late in 2011 was delayed and damaged, while Queensland farmers are experiencing their third major flood in two years. While the floods are easing in some areas, the MLA reported that wet conditions continued in eastern Australia this past week. "After weeks of solid rain, many towns throughout this region have experienced a record wet summer, with further rainfall forecast for the next seven days," it said in a statement. These latest rains come after what the Bureau of Meteorology said this week was Australia's "wettest two-year period on record" in 2010 and 2011.
Back-to-back La Nina events resulted in a two-year average rainfall across Australia for 2010 and 2011 of 1409 millimeters, surpassing the old record of 1407 millimeters set in 1973 and 1974, the bureau said. Some of the heaviest rains in 2010 and 2011 fell along the east coast, from Cape York to Sydney, with some areas receiving more than 3,600 millimeters in the period, while vast swathes of Queensland and northern New South Wales received falls in of 1,600-2,400 millimeters.
Cargill Continues To Supply Iran With Grains (Source: CME)
U.S.-based agribusiness giant Cargill plans to continue its grain shipments to Iran despite emerging signs the country is struggling with credit issues due to tightening sanctions, a spokesperson for the company said. "Cargill, like a variety of other multinational companies with a global agricultural footprint, does sell agricultural commodities to Iran as food is specifically excluded from the sanctions," the company said in an e-mailed statement to Dow Jones Newswires. Major European banks, including Rabobank, have halted trade finance for grain or any agricultural products bound for Iran. The European Union and U.S. have both introduced trade restrictions on the Central Bank of Iran to increase pressure on the Islamic Republic over its nuclear program. Cargill said that the agricultural commodities it sends to Iran are sourced "from around the world." Iran typically imports around 5 million metric tons of grain a year, most of which is corn.
"We take great care to ensure that these sales respect both the spirit and the letter of the law while trying to make sure that ordinary people are not deprived of basic foodstuffs," Cargill added. "From a food security standpoint, this is a potential unintended consequence of the sanctions," the company said. According to official port records, numerous vessels carrying foodstuffs have been waiting for several days to dock at Iranian ports, due to a "lack of readiness of cargo owners."
Vietnam's Jan coffee exports plunge, sales expected to pick up
HANOI, Feb 10 (Reuters) - Vietnam's coffee exports plunged nearly 48 percent in January from a year ago because of the Tet new year festival and as farmers held back beans in the expectation of higher prices later, but traders expect sales to pick up this month. Customs data showed January coffee exports dropped to a little more than 112,000 tonnes, or 1.87 million 60-kg bags, from 215,000 tonnes in the same month last year. Last month's bean exports were also down 27.9 percent from December levels.
Colombia coffee exports, output fall in Jan -growers
BOGOTA, Feb 9 (Reuters) - Colombia's coffee production in January fell 41 percent from a year earlier to 535,000 60-kg bags due to the continued effects of heavy rains on the crop, the country's coffee federation said on Thursday.
The world's top producer of high-quality Arabica beans posted a third consecutive year of lower-than-expected coffee production in 2011 as bad weather, fungus and a tree renovation program keep output below historic averages of 11 million bags.
Better sugar, ethanol prices lift Brazil Cosan net
SAO PAULO, Feb 9 (Reuters) - Quarterly profit more than doubled at Brazil's largest sugar exporter, Cosan , as the company produced less sugar and ethanol but enjoyed better prices for its main products.
A surge in ethanol export revenue more than offset a decline in sales of the cane-based biofuel in the domestic market and a drop in sugar sales at home and abroad.
Australian coal exports seen up in 2012, prices to fall
PERTH, Feb 10 (Reuters) - Australian coal exports are forecast to jump 12 percent in 2012 as producers recover from floods in coal-producing regions in late 2010 and early 2011, but prices are forecast to slip due to weak demand and more supplies, a Reuters poll shows.
Total coal exports from Australia will increase to 313 million tonnes this year from 279 million tonnes in 2011, the poll of 17 analysts showed.
Euro Coal-Prices slip again, ice blocks Danube river
LONDON, Feb 9 (Reuters) - Freezing weather continued to drive up gas and power prices but coal values fell again because utilities have more coal than they need and stockpiles are close to full, utilities and traders said.
Gas and power demand has surged across Europe due to the severe cold weather, but utilities, traders and producers are offering very prompt cargoes of Russian and multi-origin coal and finding few buyers.
Oil Rises From Three-Day Low as Greek Lawmakers Pass Austerity Measures (Source: Bloomberg)
Oil advanced from a three-day low after Greece’s parliament approved austerity measures needed to secure an international bailout, easing concern that Europe’s debt crisis will worsen and curb commodity demand. Futures rose as much as 0.9 percent in New York as 199 lawmakers supported the bill in a roll-call vote shown live on state-run Vouli TV, compared with 74 who were opposed. The measures will allow the country to secure a 130 billion-euro ($172 billion) second aid package. European Union countries account for about 16 percent of the world’s oil demand, according to BP Plc’s Statistical Review of World Energy. “It’s a confidence builder in terms of Greece’s willingness to implement reform,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney. “The market has made the adjustment it needed to make from being excessively pessimistic a few months ago and has now based itself on an assumption of moderate international growth.”
Brent drops below $118, China data stokes demand fears
SINGAPORE, Feb 10 (Reuters) - Brent crude slipped from a six-month high to below $118 a barrel as data from China showed a soaring trade surplus due to crumbling imports for January, stoking fears of a slowdown in demand from the world's second largest oil consumer.
"Demand has been affected by seasonal factors. We expect GDP growth to accelerate in China as the government implements more stimulatory measures, and this will be positive for oil demand," said Gordon Kwan, head of energy research at Mirae Asset Management in Hong Kong.
China Sinopec raises 2012 term Saudi crude imports -sources
BEIJING, Feb 10 (Reuters) - China's Sinopec Corp has agreed to increase Saudi crude oil imports under a 2012 term contract from last year's 800,000 barrels per day, Chinese industry officials told Reuters.
The term supply volume, which sources declined to specify, includes 240,000 bpd to Sinopec's refinery in eastern Fujian province, a joint venture with Saudi Aramco and ExxonMobil.
China Jan crude oil imports 3rd highest on record
BEIJING, Feb 10 (Reuters) - China's crude oil imports in January marked the third highest level on record, up 7.4 percent from a year earlier to 5.51 million barrels per day (bpd), customs data showed on Friday, as refineries ramped up to ensure supply ahead of a holiday season.
The world's second-largest oil consumer imported 23.41 million tonnes of crude oil last month, data published by the General Administration of Customs showed.
Holidays may mask record China crude oil imports
--Clyde Russell is a Reuters market analyst. The views expressed are his own--
LAUNCESTON, Australia, Feb 10 (Reuters) - There was little doubt that the early week-long Lunar New Year holidays would distort China's crude oil import data for January, but the real surprise is that the break may be hiding record strength.
Imports totalled 5.51 million barrels a day, up 350,000 barrels a day on December despite the major Chinese annual holiday falling in January rather than February, as it has done for four of the last five years.
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.
Iron Ore-Spot extends losses on listless China steel market
SINGAPORE, Feb 10 (Reuters) - Spot iron ore fell to its lowest price in more than a week and sellers slashed offer prices further on Friday as demand from top buyer China remained thin.
Slow steel demand in China, the world's biggest producer and consumer, has weighed on prices, limiting appetite for iron ore with imports in January falling more than 7 percent from December.
China January iron ore imports down 7 pct from Dec-customs
SHANGHAI/BEIJING, Feb 10 (Reuters) - China imported 59.32 million tonnes of iron ore in January, down 7 percent from 64.09 million tonnes for the previous month, official data from China's customs authority showed on Friday.
The world's largest iron ore consumer slowed down on shipments during the one-week Lunar New Year holiday at the end of January, after the country purchased a record of around 686 million tonnes of the steelmaking raw material in 2011.
India iron ore exports to recover to below highs
NEW DELHI, Feb 8 (Reuters) - India's iron ore exports will recover from this year's depressed levels but will not rise above 100 million tonnes, the country's mining secretary said, as a crackdown on illegal sales pays off.
Vishwapati Trivedi said stricter controls of mining were helping determine the "natural level" of export - his euphemism for legal sales - in the long run from the world's third biggest supplier, whose major customer is China.
Credit squeeze threat to shipping industry-survey
LONDON, Feb 10 (Reuters) - Tighter bank financing is the big threat to shipping companies, and many are looking at alternative sources of funding such as private equity to fill gaps amid a worsening credit squeeze, a transport survey showed on Friday.
In the survey by international law firm Norton Rose, 42 percent of respondents said a lack of finance was the greatest threat to their businesses.
