Corn (Source: CME)
US corn futures rise as the market is dragged higher by surging soybean prices and technical buying. Sharply lower precious-metals prices and declining crude oil weigh on corn, but soy's rally more than offsets the pressures. Fresh export demand from Mexico announced adds to the positive momentum while traders note recent gains are attracting trend-following speculative buying. CBOT March corn ends up 3c at $6.56 1/2 a bushel, the highest close for front-month corn since Jan. 4.
Wheat (Source: CME)
US wheat futures end mostly higher on strength in neighboring grains and short-covering. Surging soybeans led corn and wheat higher, traders say. Speculative funds' big net short position also priming the market for gains as they cover those positions. Gains limited, however, by outside market pressure, including a stronger dollar and tumbling precious metals prices. Longer-term, the market's upside could be capped by abundant world supplies that limits U.S. export prospects. CBOT March wheat ends up 2c to $6.64 1/4 a bushel, MGEX March wheat up 1 1/2c to $8.03 3/4. KCBT wheat slips, with the March contract closing down 1 1/2c to $7.08 1/2.
Rice (Source: CME)
US rice futures end slightly higher in quiet, rangebound trade. Modest rebound after creeping lower the previous two days. Poor export demand is weighing on the market, but worries about U.S. acreage preventing further losses. CBOT rice ends up 3 1/2c to $14.20 1/2.
Sarkozy toils to reverse farmer drift to far right
PARIS, Feb 28 (Reuters) - A warmer reception for Nicolas Sarkozy at this year's Paris farm show - where politicians traipse through the straw to steer support their way - suggests the French president's push to reclaim rural voters is making headway.
The presidential race has been in full swing since Sarkozy declared his candidacy in mid-February and began campaigning hard to overturn Socialist challenger Francois Hollande's clear lead in opinion polls.
India expects 5th straight record wheat crop-attache
Feb. 28 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in India"India expects a fifth record wheat crop in a row, 87.5 million tonnes, on higher planted area and optimal growing conditions in major growing areas to date. MY 2012/13 wheat exports are forecast at 1.5 million tonnes. MY 2012/13 rice production is forecast at 100 million tonnes, marginally lower than the year prior record production. India is unlikely to impose export controls on rice in the near future; MY 2011/12 rice exports are likely to reach 6.5 million tonnes including 2.7 million tonnes of Basmati.
Ships wait 15-20 days to load Brazilian grains
SAO PAULO, Feb 28 (Reuters) - Brazil's impaired TGG soy and corn loading terminal at Santos is so far not having an impact on ship waiting times to carry grains from Brazilian ports to international markets, traders and vessel line-up data showed Tuesday.
Brazil's TGG, Santos' main grain terminal, said on Feb. 17 had resumed loading soybeans, meal and corn at half capacity, ending a five-day interruption to exports from the main grain terminal in the country that should lead the world in soybean exports this year.
S.Africa's 2011/12 maize output seen up 13 pct
JOHANNESBURG, Feb 28 (Reuters) - South Africa's maize output is likely to rise by 13 percent this year as higher prices boost plantings of the staple grain, the government said on Tuesday.
Africa's biggest maize producer would harvest 11.7 million tonnes of the maize in the current 2011/12 production season, compared with 10.36 million tonnes in the last season, the Crop Estimates Committee said.
Russia may export up to 28 mln T of grain in 11/12-Ifax
MOSCOW, Feb 28 (Reuters) - - Russian Agriculture Minister Yelena Skrynnik raised the grain export forecast for the 2011/12 crop year by 12 percent to as much as 28 million tonnes, news agency Interfax reported on Tuesday.
"Deliveries of Russian grain to the world market are being set in the amount of 27-28 million tonnes," she was quoted as saying at roundtable talks during the Russian Agrarian Forum in Ufa.
US Sees Record Wheat Production In India (Source: CME)
India's wheat production for the 2012-13 marketing year is forecast to increase 0.7% on the year to a record 87.5 million metric tons, the U.S. Department of Agriculture's New Delhi attache said in a report released Wednesday, due to a marginal increase in planted area and optimal growing conditions so far. India is heading for its fifth consecutive record wheat harvest this summer, the USDA said, although its projections fall short of the government's preliminary estimate of 88.3 million tons, due to "slightly optimistic" yield expectations as high temperatures during harvest may temper yield prospects. The country's wheat exports during 2012-13 are forecast at 1.5 million tons, the USDA said, which will mostly be limited to private exports to neighboring Bangladesh, the Middle East, Africa and South Asia.
Actual export volumes will depend on the competitiveness of Indian wheat during the marketing year, the USDA added, with the country having sufficient domestic supplies to export 5 million to 6 million tons, especially if shipments of government wheat are allowed due to rising international prices. The USDA expects India to produce 100 million tons of rice from 45 million hectares in 2012-13, marginally lower than the estimated record production of 102 million tons in 2011-12. However, India is unlikely to impose export controls on rice in the near future, the USDA said, with exports likely to reach 6.5 million tons in 2011-12, consisting of 3.8 million tons non-basmati and 2.7 million tons basmati. It added that the country's rice exports for 2012-13 are likely to be 6 million tons.
Ukraine Grain Exports Seen At 20M Tons (Source: CME)
Ukraine's grain exports in the current marketing year, July 2011-June 2012, are unlikely to exceed 20 million metric tons, the Ukraine Agrarian Confederation said, as exports of grain harvested in 2011 were likely to continue into the next marketing year. The Confederation said the current low pace of grain exports was caused by unusually severe frosts--which slowed work at sea ports--by low world prices, and by expectations that the government would impose limitations on the export of grain. The ice situation at the ports is improving and grain exports in February will be about 40% more than in January, mostly corn. Exports of wheat are slow because a number of government officials have made vague statements that exports of grain might be limited, and exporters are holding back to see what transpires. Wheat exports in February are unlikely to exceed 400,000 tons, the Confederation said.
In 2011 Ukraine's grain harvest in clean weight was 56.7 million tons. Ukraine's grain harvest in 2010 fell by 14.8% on the year to 39.23 million tons in clean weight because of drought. Ukraine exported 12 million tons of grain between the beginning of the current marketing year, July 1 2011, and Feb. 14, which is 4.61 million tons more than in the same period in the previous marketing year.
Wheat Futures Fall as U.S. Northern Plains Snow May Boost Crop Outlook (Source: Bloomberg)
Wheat futures slid from a four-week high on speculation that winter storms in the northern U.S. will boost soil moisture before farmers begin planting spring crops in the next two months. Storms in the past two days brought as much as 8 inches (20 centimeters) of snow to parts of North Dakota, the biggest U.S. grower of spring wheat, while accumulations reached 12 inches in Minnesota, according to the National Weather Service. Conditions in the two states ranged from “severe” drought to “abnormally dry” as of Feb. 21, after months of below-normal precipitation, according to the University of Nebraska at Lincoln. “Moisture this time of year is good,” Dan Kuechenmeister, the manager of the commodity department at RBC Wealth Management in Minneapolis, said in a telephone interview. “It’s a good, wet, heavy snow, so even if it gets windy, it shouldn’t blow around too much. It’ll get a chance to settle in, and hopefully soak into the ground.”
Wheat futures for May delivery fell 0.25 cent to settle at $6.68 a bushel at 1:15 p.m. on the Chicago Board of Trade. Earlier, the price reached $6.745, the highest for a most-active contract since Feb. 1. The commodity, little changed this month, is down 18 percent in the past year on rising global supplies.
Corn Shipments From India Seen Missing Forecast on Pests, Rupee Strength (Source: Bloomberg)
India, Asia’s biggest corn exporter, may ship less grain than predicted this year after pests spurred Vietnam to reject some cargoes and as the strengthening rupee boosted prices, according to a traders’ group. Sales in the year that began on Oct. 1 will trail the 3 million metric tons estimated in November, said Pravin Dongre, president of the India Pulses & Grains Association. The country exported 2.5 million tons in 2010-2011, he said in a phone interview in Mumbai. Futures lost 10 percent in the past year in Chicago as record global corn production cut demand for the livestock-feed ingredient from the U.S., the largest producer and exporter. Vietnam may boost imports from South America and Ukraine after turning back a couple of Indian cargoes, citing the presence of live khapra beetles, an insect that destroys grain, Dongre said. “Earlier if there were 10 buyers, then 10 shippers were willing to export to Vietnam,” said Dongre. “With this issue, shippers are very hesitant.”
Global rubber output seen up 2.6 pct in 2012-ANRPC
SINGAPORE, Feb 29 (Reuters) - Global natural rubber output is expected to rise to 10.529 million tonnes in 2012, up 2.6 percent from 2011 because of better yields in some key growers, the Association of Natural Rubber Producing Countries (ANRPC) said on Wednesday.
In early February, the ANRPC pegged 2012 production at 10.450 million tonnes. It also revised last year's output to 10.262 million tonnes from 10.127 million tonnes estimated earlier.
Ivorian San Pedro cocoa arrivals 449,341 T by Feb 19-BCC
ABIDJAN, Feb 28 (Reuters) - Cocoa arrivals at Ivory Coast's port of San Pedro reached 449,341 tonnes by Feb. 19 since the start of the season in October, according to data from the Coffee and Cocoa Bourse (BCC) obtained by Reuters on Tuesday.
That compared with 375,109 tonnes delivered to the port during the same period of the 2010/11 season.
Olam analyst sees drop in sugar surplus in 12/13
BANGKOK, Feb 28 (Reuters) - The global sugar surplus could fall more than 40 percent in the next crop year as an expected decline in output in Europe may offset rising supply from India and Thailand, Olam Europe senior analyst John Stansfield said on Tuesday.
"We expect to see a good crop in India and Thailand, while production in Europe may not be quite as good -- maybe we could see a drop of around 10 percent in sugar production from Russia," Stansfield said at a conference in the Thai capital.
Lumber Tops Commodity Futures in February as Demand From China May Climb (Source: Bloomberg)
Lumber futures that surged more than any other commodity in February may extend a rally to a 10-month high as China boosts imports and the U.S. housing recovers, researcher Wood Resources International LLC said. Prices have gained 11 percent since the end of January, the most among 35 raw materials tracked by the Rogers International Commodity Index. Lumber may reach $300 per 1,000 board feet by July on the Chicago Mercantile Exchange, up 9 percent from today’s close of $275.20 and the highest since April 6, Wood Resources said. West Fraser Timber Co., North America’s largest producer, said exports to China “picked up substantially” in the first quarter from the fourth quarter. Shipments climbed to a record in 2011, government data show. U.S. housing starts rose 1.5 percent last month from December to a 699,000 annual rate, the most for a January since 2008 and a sign that residential real estate is stabilizing, the Commerce Department said Feb. 16.
“The general trend should be upward, with more optimism in the market that housing starts should slowly start to increase,” Hakan Ekstrom, the president of Wood Resources, said by telephone from Bothell, Washington. “The west coast of Canada and the U.S. also have China probably starting to buy more lumber again.”
Strong Real To Push Brazil Mills To Ethanol (Source: CME)
The appreciation of the Brazilian real this year is hurting sugar exporters and could encourage sugarcane mills to focus on producing ethanol fuel for the domestic market, a top industry official said. Brazil's currency has gained almost 10% against the dollar since the start of the year, largely wiping out a similar gain in New York-traded raw-sugar futures. "I think the appreciation is really a very bad thing," Marcos Jank, president of sugarcane industry association Unica, said on the sidelines of an event. "The question of the exchange rate hurts the exporter here in Brazil."
While Brazil is the world's largest sugar producer and exporter, growing domestic appetite for ethanol auto fuel gives sugarcane mills an alternative revenue source to the international sugar market. In the 2011-12 season ending March 31, government estimates show Brazilian ethanol fuel output will have dropped 17% from a year earlier while sugar production should have fallen only 3.4% as mills seek to capitalize on high international prices. Raw-sugar futures traded on the IntercontinentalExchange reached 30 cents a pound several times last year. The real was also strong in the first half of 2011, but the surge in sugar prices made the sweetener an attractive option for mills. Jank said Brazil's sugar shortfall has been offset by production in other countries, and that is weighing on prices this year. Raw sugar for May delivery was down 1.5% at 24.95 cents a pound in midday trade.
"Demand for sugar is quite predictable, the problem is supply," Jank said. "We know at this moment that supply is large, and prices this year will be much more reasonable than last year." As a result, sugarcane crushers' 2011 strategy of maximizing sugar output could be reversed this year, with ethanol gaining ground, he said.
Euro Coal-Prices drop $1/T on oil, oversupply
LONDON, Feb 28 (Reuters) - Prompt physical coal prices fell by around $1.00 a tonne on Tuesday in line with an earlier dip in oil and pressured by oversupply, particularly in Europe.
Front month March loading South African coal was bid at $104.00 a tonne FOB Richards Bay, keeping a slim premium over April and May cargoes but $1.00 lower than the previous day.
India 2012/13 coal import needs seen 140 mln T-source
NEW DELHI, Feb 28 (Reuters) - India may need to import 140 million tonnes of coal in 2012/13, about a quarter more than this year ending March 31, a coal ministry source said on Tuesday, underscoring the country's struggle to produce enough of the cheap fuel for power stations.
Coking coal would be about 15 percent of the total coal import that could cost about $11 billion. International coal prices are up to 40 percent higher than domestic rates.
China 2011 raw coal output up 8.7 pct y/y - report
BEIJING, Feb 28 (Reuters) - China produced 3.52 billion tonnes of raw coal in 2011, 8.7 percent more than a year earlier, the official People's Daily reported on Tuesday, citing figures from a national coal conference.
The conference also called for controls on coal consumption and measures to force industries to upgrade and improve energy efficiency, the newspaper reported.
Brent rises above $122; ECB loan may spur buying
SINGAPORE, Feb 29 (Reuters) - Brent crude rose above $122, snapping two days of losses, in line with gains across broader financial markets on expectations that cheap loans from the European Central Bank will spur buying of riskier assets.
"Today, the market is getting ready for the ECB announcement, and is reacting to the dollar," said Ric Spooner, chief market analyst at CMC Markets.
Japan Jan total oil sales up 2 pct yr/yr -METI
TOKYO, Feb 29 (Reuters) - Japan's total oil product sales in January rose 2 percent from a year ago, its second consecutive month of year-on-year gains, driven by an increase in the amount of fuel oil electricity utilities bought to compensate for the lack of nuclear power.
Demand for other oil products such as naphtha, gas oil and kerosene, however, stayed low because of the weak economy, data from the Ministry of Economy, Trade and Industry (METI) showed on Wednesday.
India seeking 3-4 mln T extra oil from Iraq in 2012/13
NEW DELHI, Feb 29 (Reuters) - India is seeking up to an additional 80,000 barrels per day (bpd) of crude from Iraq in 2012/13, its oil minister said, as Asia's third-largest economy scouts supplies to make up for any disruptions of shipments from sanctions-hit Iran.
Iraq is currently India's third largest oil supplier, sending about 340,000 bpd, Indian Oil Minister S. Jaipal Reddy said after a meeting with Iraqi Deputy Prime Minister Rowsch Shaways in New Delhi.
Oil Trades Near Two-Day High as Economy Counters Rising Crude Supplies (Source: Bloomberg)
Oil traded near a two-day high in New York as speculation that U.S. economic growth will boost fuel demand countered concern that rising supplies will limit price gains. Futures were little changed after climbing 0.5 percent yesterday, capping the biggest monthly gain since October. U.S. manufacturing continued to expand “at a steady pace across the nation” the Federal Reserve said in its Beige Book business survey, while Commerce Department data showed the economy grew at a 3 percent rate last quarter. U.S. crude stockpiles climbed almost four times more than forecast and OPEC’s oil output rose to the highest level in more than three years. Oil for April delivery was at $106.94 a barrel, down 13 cents in electronic trading on the New York Mercantile Exchange at 10:19 a.m. Sydney time. The contract yesterday rose 52 cents to $107.07, the highest close since Feb. 27. Prices advanced 8.7 percent last month and are 7.3 percent higher the past year.
Brent oil for April settlement increased $1.11, or 0.9 percent, to $122.66 a barrel on the London-based ICE Futures Europe exchange yesterday. The European benchmark contract’s premium to New York-traded WTI was at $15.59. It reached a record of $27.88 on Oct. 14.
Oil Makes Commodities Best Investment First Time Since July on Iran Threat (Source: Bloomberg)
Commodities, led by oil, beat stocks, bonds and the dollar for the first time since July as the European Union prepared to embargo Iranian crude, the U.S. economy improved and China took steps to shore up growth. The Standard & Poor’s GSCI Total Return Index (SPGCESTR) of 24 raw materials rose 6.5 percent in February, extending the previous month’s 2.2 percent gain, as Brent crude advanced 11 percent. The MSCI All-Country World Index of shares increased 4.8 percent, extending stocks’ best start to a year since 1991. Bonds of all types were little changed on average, according to Bank of America Merrill Lynch’s Global Broad Market Index. The Dollar Index slid 0.6 percent. “There has been a confluence of perfect factors for commodities,” said Harry Tchilinguirian, head of commodity- markets strategy at BNP Paribas SA in London. There “are the oil-supply constraints with geopolitical tensions escalating in Iran. There was also positive economic news out of China and the U.S,” he said.
Brent crude futures had their biggest monthly gain in a year in February as the EU said Jan. 23 it would impose an embargo from July on Iran’s oil to pressure the nation over its nuclear program. The Persian Gulf country, OPEC’s second-biggest producer, stopped selling oil to Britain and France on Feb. 20.
Oil's rise puts sanctions under spotlight
--John Kemp is a Reuters market analyst. The views expressed are his own.--
LONDON, Feb 28 (Reuters) - U.S. and EU sanctions on Iran's crude oil exports and its central bank were not supposed to affect either the volume of oil available or its price, provided markets reacted "rationally".
Iron Ore Extends Bull Market as Supply Growth Declines (Source: Bloomberg)
Iron ore, the world’s second-biggest commodity cargo after crude oil, is extending a bull market after rallying 22 percent from a 22-month low in October as the slowest expansion in exports in 11 years restricts supplies. Seaborne supply will advance 3.8 percent to 1.09 billion metric tons this year, the smallest gain since 2001, according to Clarkson Plc, the largest shipbroker. Prices in China, the biggest importer, may rise 10 percent to an average of $157.50 a ton in the fourth quarter, the median of 11 analyst estimates compiled by Bloomberg shows. Shares of Vale SA (VALE), which ships more ore than any other company, will rise 19 percent to $30.42 in the next 12 months, the average of 16 estimates shows. New mines and expansions of existing ones are being postponed by rising costs and licensing delays. Morgan Stanley cut its forecast for export supply by 9.6 percent since October and expects a 99 million-ton deficit in the seaborne market this year, at least the ninth consecutive annual shortage.
Vale will report its second-biggest profit ever this year, the mean of 11 analyst estimates compiled by Bloomberg shows. “The wall of additional iron-ore supply that investors have been fearing is going to be late,” said Neil Gregson, who helps manages about $7.4 billion of commodity assets at JPMorgan Asset Management in London. “Iron ore remains a tight market.”
Iron Ore-Up for 7th day in longest winning run since Nov
SINGAPORE, Feb 29 (Reuters) - Iron ore rose for a seventh straight day in its longest winning streak since mid-November as Chinese steel mills replenished stockpiles and traders bet on further gains with Beijing gearing up for a pickup in the steel market.
Sellers of imported iron ore in China lifted offer prices further on Wednesday by another dollar per tonne, raising them by $4-$5 since last Friday, based on data from Chinese consultancy Umetal.
Rising capital costs seen capping global iron ore supplies
BEIJING, Feb 28 (Reuters) - Rising capital costs could dent miners' ability to ramp up global iron ore supplies, which means growth in global production could fall short of expectations, two of the world's top iron ore miners said on Tuesday.
With rising costs set to delay greenfield projects, there is little risk of the global iron ore market being oversupplied until late in the decade, said Simon Wandke, vice president and chief commercial officer of ArcelorMittal Mining.
China iron demand, miners' resolve in focus at summit
BEIJING/SINGAPORE, Feb 27 (Reuters) - The outlook for China's iron ore demand and pricing of the raw material as well as the race among foreign miners to feed the country's growing appetite for ore are likely to take centrestage at an annual conference in Beijing.
The Big 3 iron ore suppliers -- Vale , Rio Tinto and BHP Billiton -- are boosting output over the next three years, trusting demand from top market China will continue to grow.
Gold Falls as Bernanke Damps Stimulus Bets (Source: Bloomberg)
Gold futures fell as much as $100 to below $1,700 an ounce on signs that that the Federal Reserve will refrain from offering more monetary stimulus to bolster the U.S. economy. In testimony before Congress today, Fed Chairman Ben S. Bernanke gave no signal that the central bank will take new steps to boost liquidity. The dollar rose as much as 0.8 percent against a basket of major currencies, eroding the appeal of the precious metal as an alternative investment. Yesterday, gold reached $1,792.70, a three-month high, even as coin sales by the U.S. mint slumped in February . “People were expecting that the Fed would loosen policies, even if the perception is that the economy is doing well,” James Dailey, who manages $215 million at TEAM Financial Management LLC in Harrisburg, Pennsylvania, said in a telephone interview. “The investor sentiment changed as the Fed committed to nothing. This is the manic nature of the market.”
In electronic trading on the Comex in New York, gold futures for April delivery fell $90.30, or 5 percent, to $1,698.10 at 5:14 p.m., compared with yesterday’s settlement. Earlier, the price tumbled as much as $100, or 5.6 percent, to $1,688.40, the lowest for a most-active contract since Jan. 25.
Baltic sea index up, Chinese iron ore demand helps
Feb 28 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry commodities, inched higher on Tuesday as Chinese interest in buying iron ore kept rates steady for large capesize vessels.
The overall index that reflects daily freight market prices for capesize, panamax, supramax and handysize dry bulk transport vessels rose 8 points or 1.1 percent to 738 points. The index has however lost 1000 points or 57 percent this year.
