USDA Says Rule Changes to Hasten Modified Crop Approvals (Source: Bloomberg)
Seed companies including Monsanto Co. (MON), the world’s largest, will get speedier regulatory reviews of their genetically modified crops under forthcoming rule changes, the U.S. Department of Agriculture said. The goal is to cut by half the time needed to approve biotech crops from the current average of three years, Michael Gregoire, a USDA deputy administrator, said today in a telephone interview. The changes will take effect when they’re published in the Federal Register, probably in March, he said. Approvals that took six months in the 1990s have lengthened because of increased public interest, more legal challenges and the advent of national organic food standards, Gregoire said. U.S. farmers worry they may be disadvantaged as countries such as Brazil approve new technologies faster, said Steve Censky, chief executive officer of the American Soybean Association. “It is a concern from a competition standpoint,” Censky said in a telephone interview.
Speculator positions to swell in US corn and soybeans
-- Gavin Maguire is a Reuters market analyst. The views expressed are his own.--
CHICAGO, Feb 21 (Reuters) - Large speculator net positions in U.S. corn and soybean futures look set to swell over the coming months from their current relatively stunted levels as improving end-user demand for both commodities - coupled with a looming acreage war between the two crops - entice greater non-commercial interest in the coming months. But any sharp fund-driven climb in prices stands to test end-user demand, and may set the stage for a potentially steep price retreat should the upcoming planting season get underway amid crop-friendly conditions.
Corn (Source: CME)
US corn futures end higher as traders unwind corn-soybean spread trades that had weighed on prices recently. Soybeans' gain versus corn has recently prompted some traders to worry farmers would plant less corn this spring, although others say the crop will be large regardless. Traders note firm cash prices and talk of increased exports also supported corn, though the market remain in a tight range. CBOT March corn ends up 8 3/4c at $6.38 1/4 a bushel.
Wheat (Source: CME)
US wheat futures climb amid strength in corn and optimism about export demand. Analysts say wheat was supported by corn, which climbed in a correction of the corn/soybean spread. Firm export-basis levels are also considered supportive, and traders are watching possible disruptions to Black Sea supplies due to cold that could boost US exports. Still, traders say world wheat supplies are abundant and that the market's upside is limited. CBOT March wheat ends up 11 1/2c at $6.44 1/2 per bushel while March KCBT climbs 8c to $6.85 and MGEX March adds 1 1/2c to $8.18 1/4.
Rice (Source: CME)
US rice futures end slightly higher, in a modest rebound following four straight days of losses. Weak demand hangs over the market, which like other grains has been range-bound recently. Uncertainty about US planted acreage underpins. CBOT March rice ends up 9c to $13.92 per hundredweight.
US soybeans down on crop prospects; wheat weak
NEW DELHI, Feb 22 (Reuters) - Chicago soybeans fell on expectations that farmers will boost plantings in America, encouraged by a $6.7 billion deal by China to buy a record amount of U.S. beans.
"Gradually everyone is getting to realise that the deal between the United States and China will encourage farmers to plant more soybean now," said Jonathan Barratt, chief executive of BarrattBulletin, a Sydney-based commodity research firm.
Indonesia to import up to 2 mln T rice in 2012
JAKARTA, Feb 22 (Reuters) - Indonesia plans to import up to 2 million tonnes of rice this year to ensure food security, an unexpected move that could soak up regional stockpiles and support prices.
The country had aimed to avoid rice imports this year after surprising markets by buying 1.9 million tonnes in 2011, but output from the world's third largest grower is again falling short of forecasts, threatening its ambition to become self-sufficient in rice.
Russia seen unlikely to impose taxes on grain exports
SINGAPORE, Feb 22 (Reuters) - Russia is unlikely to impose taxes on grain exports, thanks to its ample supplies, an official of the country's farm ministry said on Wednesday. "To my way of thinking, and in most likelihood, taxes will not be introduced," Krestyaninov Artem, a deputy director at the ministry, told reporters at a grains conference in Singapore.
Russia to maintain grain exports to Iran - ministry official
SINGAPORE, Feb 22 (Reuters) - Russian traders will export grain to Iran until Russia decides whether to ban sales in line with U.S. and European sanctions on Iran, an Agriculture Ministry official said on Wednesday.
"Until the Russian government makes a decision to ban grain exports to Iran, exports will continue," Krestyaninov Artem, a deputy director at the ministry, told reporters on the sidelines of a grains conference in Singapore.
Russian wheat exports seen at 22 mln T despite weather
SINGAPORE, Feb 22 (Reuters) - Russia will maintain its wheat exports at around 22 million tonnes in the year to June 2013 with minimal damage so far to the winter crop from adverse weather, lobby group the Russian Grain Union said on Wednesday.
Russia has exported 18 million tonnes of wheat so far this year and expects to sell another 4 million before the year ends in June.
Conveyor collapse shuts ADM U.S. grain export facility
Feb 21 (Reuters) - A grain conveyor belt collapsed at an Archer Daniels Midland elevator in Ama, Louisiana, late last week, halting loading at the export facility on the Mississippi River west of New Orleans, a company spokeswoman said on Tuesday .
The conveyor, which collapsed on Friday, connected the company's on-site grain storage elevators with the equipment that loads grain into bulk cargo vessels on the river.
US farm-loan giant confident it will stay free of Dodd-Frank
CHICAGO, Feb 21 (Reuters) - The Farm Credit System, a giant government-linked lender to U.S. farmers and rural communities with $230 billion in assets, is confident it can stay mostly exempt from oversight by U.S. banking regulators despite bitter criticism by competing private banks, Farm Credit officials say. "We are competitors. They'd be happy if the system didn't exist," Kenneth Auer, president of the Farm Credit Council, the system's lobbying group, said in an interview. "We had our Dodd Frank moment in the 1980s," he added, citing a bailout by Congress that revamped and tightened government oversight and laid the foundation for the System's current strength.
Canada 2011 farm income hits record high
Feb 21 (Reuters) - Canadian farmers recorded record-high net income in 2011, but their earnings are likely to slip modestly in 2012, Canada's agriculture department said on Monday.
In 2011, strong crop and livestock prices, combined with higher government payouts for flooding in western Canada more than offset higher operating expenses, Agriculture and Agri-Food Canada said in a report. Net cash income reached C$11.7 billion in 2011.
Brazil 2012 maize output seen at record 60 mln T-FAO
MILAN, Feb 21 (Reuters) - Brazil's total maize output, including main and second seasons, is expected to rise 7 percent to a new record of about 60 million tonnes in 2012 due to a surge in winter plantings, the United Nations' Food and Agriculture Organisation said on Tuesday.
The areas planted for the second season are estimated to expand significantly, including a 29 percent surge in plantings in the state of Mato Grosso, to offset an expected fall in the main season output after a long dry spell in major southern growing regions, the FAO said in its country brief.
Kazakhstan expects sharp decline in 2012 grain crop
ASTANA, Feb 21 (Reuters) - Kazakhstan expects its grain harvest to revert to an average level of between 13 million and 15 million tonnes this year, a sharp decline from the record post-Soviet crop of 2011, Deputy Agriculture Minister Muslim Umiryayev said on Tuesday.
Central Asia's largest wheat exporter harvested 27 million tonnes of grain by clean weight last year, its largest crop since independence from the Soviet Union in 1991. In drought-hit 2010, the harvest was only 12.2 million tonnes.
India's Wheat Exports Likely To Pick Up Only After June (Source: CME)
India's wheat exports will likely start in earnest around mid-year, after state-run agencies complete purchases for government inventories, as most farmers would prefer to sell their output at an attractive government-mandated minimum purchase price, a level that exporters can't compete with, trade executives said. Traders will likely hold back from making purchases until the government completes its stock-building program, as buying at levels near the government price would reduce the competitiveness exports on the world market, said a senior Mumbai-based trader of an international commodities trading company. India raised the minimum purchase price for wheat by about 15% to INR1,285 per 100 kilograms (around $260 a ton) in October to increase planting interest just ahead of the sowing of crops. Meanwhile, Indian wheat is being quoted for export around $268-$270 a ton, free on board.
The government is targeting a 12.6% increase in wheat purchases, to 31.89 million metric tons during the fiscal year that starts April 1, which will likely put it on track to complete its buying by the end of June. India has exported limited supplies of wheat since an export ban was lifted in September, as local prices have been quoted on par with or higher than international rates. Between 450,000 and 500,000 tons of wheat has been shipped from the country to date. Most of the shipments have been to the Middle East, with a small quantity having also been shipped to neighboring Bangladesh. Around 15,000 metric tons of wheat was being loaded on to a vessel at India's western port of Mundra for shipment to the Middle East, two senior trade executives said. Industry officials are optimistic that supplies will be available for export on the back of a record crop forecast for the crop year that ends June 30.
M.K. Dattaraj, former president of the Roller Flour Millers Federation of India, said prices will probably fall below the minimum purchase price in the second half of the year, adding that it is "too early" to forecast the amount of wheat that will be available for export. The government has forecast 2011-12 wheat output at a record 88.31 million tons, but officials have said the figure could exceed 90 million tons thanks to favorable weather. Some of the country's early wheat has started arriving in markets in the western province of Gujarat--no more than 300 tons to 400 tons daily, industry participants said. The wheat harvest in the country's breadbasket northern region usually begins in April.
China's Draft Grain Law Takes Tough Tone On GM Crops, Deep Processing (Source: CME)
China published a draft grain law proposing tough management of genetically modified grains and the "deep grain processing" industry. The proposed law underscores the challenges posed by plans to approve large-scale planting of GM crops while also remaining sensitive to uncertainties surrounding technologies that are redefining agriculture. China has been slow to approve GM grains, but also cognizent of the need to leverage new agricultural techniques to improve yields amid a tight domestic supply-and-demand balance. The Legislative Affairs Office of the State Council, China's cabinet, said in a statement on its website that it will solicit public opinion on the draft, without specifying when the new law will become effective. "No units or individuals shall apply GM technologies to the main grain crops [wheat, rice and corn] without authorization," the draft law said.
In 2009, the Ministry of Agriculture gave safety approval for some GM strains of rice and corn, permitting test plots and paving the way for commercial production. Projects involving deep processing--the use of grains for purposes other than direct consumption, most commonly associated with production of alcohol and starch--of corn, wheat and rice as raw materials must seek government approval, according to the draft law. The government will limit the volume of grains consumed by deep processors when necessary, it said. Deep processors process around a third of China's total corn output.
Archer Daniels Midland To Expand Partnership With Asia-Based Wilmar (Source: CME)
Archer Daniels Midland Co. said it has reached an agreement with Singapore-based Wilmar International Ltd. to expand the companies' existing partnership. ADM, which owns a 16% stake in Wilmar, said the companies would extend their partnership to fertilizer, ocean freight and tropical oil refining in Europe. The two companies, which trade and process grains and oilseeds, have signed a memorandum of understanding, ADM executives said at an investor presentation Tuesday afternoon. ADM's partnership with Wilmar has given it access to the market in China, where the two companies built a network of soybean-crushing plants. ADM, based in Decatur, Ill., said the companies' relationship started in the mid-1990s. "We have an excellent relationship with Wilmar's leadership, and we see Wilmar as a key partner, especially in our strategy to serve growing Asian demand for agricultural products," ADM CEO Patricia Woertz said.
The companies will now collaborate globally on fertilizer purchasing and distribution, and they will work to improve ocean freight fleet management, with both companies contributing two ships to the effort. In tropical oils, the companies will work together to better use plant capacity in Europe, ADM said. Woertz also told investors that a company job-reduction program, announced in January, would cut 4% of the company's global work force, up from an initial estimate of 3%. The company will take a one-time charge at the upper end of the previously announced range of $50 million to $75 million, Woertz said. She added that pre-tax savings from the job cuts would reach $125 million annually, up from a previous estimate of $100 million, and that the company would start to realize benefits in the fourth quarter. The cuts will make ADM a "much more creative, lean, nimble organization," Woertz said.
ADM is completing its job cuts in the U.S., which have included layoffs and early retirements, this week, while other cuts globally will proceed over the next several months. The number of total job cuts is expected to exceed 1,200.
One Million Tons Russian Agri-exports Delayed By Sea Freeze (Source: CME)
Russian exports, of around 1 million metric tons of agricultural commodities, primarily grains such as wheat, have been delayed in the past month because freezing temperatures at ports in the south have prevented ships from reaching berths, shipping executives and traders said. Some ships already loaded with grains are also unable to leave for their destinations, they said. "The figure includes the grain stuck in both shipping vessels which are already loaded and the volume lying in the port warehouses," Talibov Said, president of South Sea Port near Azov, said on the sidelines of an international grains conference here. Russia is one of the world's largest exporter of grains and oilseeds, and almost all its shipments take place from the southern ports. The delay in exports is one of the reasons for firming up of global prices in recent months.
Usually parts of rivers are frozen for a while in winter but it is unusual for Azov Sea waters near southern ports to turn into ice, said a Moscow-based cargo surveyor. The smaller ports around Azov cater to importers in Turkey, Israel, the Middle East and European Union with cargoes of up to 5,000 tons each. The South Sea Port alone handles cargoes of around 50,000 tons monthly, at present mostly wheat. Many ships are unable to reach berths, and exporters are resorting to force majeure, said Karina Nor-Arevian, head of South Sea Port's legal department. The weather is expected to improve only after mid-March, when the usual grain-loading operations can resume, Nor-Arevian said. There are at least six ports in and around the city of Azov in southern Russia's Rostov district, with a total annual cargo handling capacity of close to 5 million metric tons, where operations have gone off-gear, she said.
Cargo surveyors said four ice-breakers are performing the steering operations of the vessels from Azov, Rostov, Taganrog and Yeisk ports, where the backlog is unlikely to be cleared before April. In the past nearly eight months, Russia has exported close to 20 million tons of grains, at a monthly average of almost 2.5 million tons, but shipments are unlikely to be more than 5 million tons in the rest of the marketing year that ends June 30, or a tad above 1 million tons a month, Arkadiy Zlochevsky, president of the Russian Grain Union said. The weather isn't quite favorable for exports but a slowdown is natural during this time of the year, Zlochevsky said. The supply disruption is temporary, the grain is still there and the backlog will be cleared eventually, Jay O'Neil, senior agricultural economist with Kansas State University said. The Black Sea is open and deep sea ports of Tuapse and Novorossiysk are operational though there were delays earlier this month, the Moscow-based cargo surveyor said.
Ivorian cocoa exports 640,492 tonnes by Feb 5-BCC
ABIDJAN, Feb 21 (Reuters) - Exports of cocoa beans and cocoa products from Ivory Coast hit 640,492 tonnes by Feb. 5 since the start of the season in October, down about 1 percent from a year earlier, data from industry regulator BCC obtained by Reuters showed on Tuesday.
According to the data, 53,861 tonnes were exported from the country's two ports between Jan. 30 and Feb. 5.
Arabica Coffee Drops Most in Week as Supplies Increase; Sugar Futures Gain (Source: Bloomberg)
Arabica-coffee futures fell the most in a week as stockpiles climbed and producers sought to increase sales in Brazil, the world’s top grower. Sugar and cocoa rose. Coffee inventories monitored by ICE Futures U.S. have jumped 24 percent since the end of October, exchange data show. As of Feb. 17, Brazil’s permits for exports this month surged 26 percent from January, the nation’s Council of Coffee Exporters, known as Cecafe, said on its website. Markets in the country were closed on Feb. 20 and 21 for the Carnival festival. “Brazilian sellers are back in the market,” Hernando de la Roche, the director of futures at INTL FCStone in Miami, said in a telephone interview. “Stocks are also rising.” On ICE, arabica-coffee futures for May delivery declined 2 percent to settle at $2.0185 a pound at 2 p.m., the biggest drop since Feb. 14. The price has tumbled 11 percent this year.
Raw-sugar futures for May delivery rose 1 percent to 24.71 cents a pound in New York. The sweetener has gained 6.1 percent in 2012, after plunging 27 percent last year. As of Feb. 1, sugar output in Brazil’s Center South, the world’s largest growing-region, fell 6.8 percent for the season that ends March 31 from a year earlier, Unica, an industry group, said last week.
Brent crude falls towards $121 on euro zone worry, China data
SINGAPORE, Feb 22 (Reuters) - Brent crude edged down towards $121 on Wednesday, retreating from a nine-month high, as weaker Chinese manufacturing data and resurfacing worries about the euro zone debt crisis cast doubt on global economic health and prospects for fuel demand.
"Prices are correcting as we've already got the boost from Greece and Iran's pre-emptive stoppage of oil to Britain and France," said Tony Nunan, a risk manager at Mitsubishi Corp, adding that the slowdown in Chinese manufacturing activity also weighed on prices.
China, India plan Iran oil cuts of 10 pct or more
BEIJING/NEW DELHI, Feb 21 (Reuters) - China, India and Japan are planning cuts of at least 10 percent in Iranian crude imports as tightening U.S. sanctions make it difficult for the top Asian buyers to keep doing business with the OPEC producer.
The countries together buy about 45 percent of Iran's crude exports. The reductions are the first significant evidence of how much crude business Iran could lose in Asia this year as Washington tries to tighten a financial noose around Tehran.
Crude Oil Falls From Highest Close in 9 Months as API Stockpiles Increase (Source: Bloomberg)
Oil dropped from a nine-month high in New York as investors speculated that fuel demand may falter after a report showed crude stockpiles increased in the U.S., the world’s biggest consumer of the commodity. Futures slipped as much as 0.4 percent, heading for the first decline in more than a week. U.S. supplies rose 3.55 million (APISCRUD) barrels last week, figures from the industry-funded American Petroleum Institute showed. An Energy Department report today may show inventories climbed 1.35 million barrels to the highest level in almost five months, according to a Bloomberg News survey of analysts. Oil for April delivery fell as much as 39 cents to $105.89 a barrel in electronic trading on the New York Mercantile Exchange and was at $105.93 at 10:50 a.m. Sydney time. The contract yesterday gained 3 cents to $106.28, the highest close since May 4. Prices are 8 percent higher in the past year.
Brent oil for April settlement advanced $1.24, or 1 percent, to $122.90 a barrel on the London-based ICE Futures Europe exchange yesterday. The European benchmark contract’s premium to New York-traded West Texas Intermediate closed at $16.62. It reached a record of $27.88 on Oct. 14.
