China Premier Wen: 2012 Agriculture Spending CNY1.23 Trillion (Source: CME)
China aims to spend CNY1.23 trillion on its agriculture sector this year, Premier Wen Jiabao said in his annual report to the National People's Congress, China's parliament. The targeted spending is a rise of CNY186.8 billion on 2011, he said. The National Development and Reform Commission, China's top economic planner, said Monday it was aiming to keep China's grain output this year at more than 500 million metric tons. China's overall grain harvest last year was a record 571.21 million tons. The economic planner also said it will target cotton output at 6 million tons, sugar crop output at 126 million tons, and oilseed at 32.8 million tons. The meat output target is set at 81 million tons. The NDRC also said China will start stockpiling corn, soybeans, rapeseed, cotton, sugar, sugar and pork "at the proper time."
Speculative Wagers on Crops Reach 5-Mo. High (Source: Bloomberg)
Speculators increased bets on higher agricultural prices to a five-month high on mounting concern that a South American drought will curb supplies of soybeans, corn and sugar at a time of record global demand. A measure of speculative positions across 11 farm goods jumped 26 percent to 607,721 futures and options in the week ended Feb. 28, U.S. Commodity Futures Trading Commission data show. Corn bets increased the most in eight weeks, and sugar holdings climbed to the highest since August. Wagers on higher soybean prices rose to a five-month high. Hedge funds and other speculators are the most bullish on commodities since September as sanctions on Iran over its nuclear program disrupt oil supplies and weather damages crops in South America. Producers were already struggling to keep up with demand from a global population that surpassed 7 billion people last year, with consumption now boosted by signs that economic growth is accelerating.
“Weather and the perception of damages to supply” have pushed prices higher, said Osvaldo Canavosio, the New York-based head of emerging markets and commodities research at Man Investments USA LLC, which manages about $11.2 billion of assets. “There’s been a continuing pattern of the rest of the world outside the U.S. being an important driver of supply-and- demand dynamics.”
Argentina farm forecast seen rosier next season
BUENOS AIRES, March 2 (Reuters) - After back-to-back droughts, Argentine growers could have a record harvest of soybeans and corn next season as the La Nina weather phenomenon makes way for El Nino, one of the country's best-known forecasters said on Friday.
Eduardo Sierra - the University of Buenos Aires climatologist who accurately predicted that drought would stunt crops this season - said Argentina's 2012/13 soy crop could exceed the record 52.7 million tonnes gathered two years ago in another El Nino year.
Corn (Source: CME)
US corn futures end higher, rallying on tight cash markets and technical buying by funds. The rise "is being driven by the cash markets, they're trying to pry corn out of the farmer's hand," says Linn Group analyst Jim Riley. Funds are also buying corn and selling soybeans, a reversal from last week, but corn fundamentals are weak and room for more gains is limited without further fund buying, says Dan Basse, president of AgResource Company. CBOT May corn, the most actively traded, rises 5 3/4c to $6.60 3/4. March corn ends up 7 1/4c at $6.66 1/4, the highest level since September for front-month corn.
Wheat (Source: CME)
US wheat futures end mixed, with CBOT futures falling amid weak fundamentals and giving up some of last week's gains. "Fundamentals in terms of wheat still remain relatively bearish with the world amply supplied," says Dan Basse of AgResource. CBOT March wheat fell 3c to $6.67 3/4c a bushel while KCBT March dropped 5c to $7.05 1/2c and MGEX March rose 3 1/2c to $8.31 1/4.
Rice (Source: CME)
US rice futures end lower amid weak demand. Poor demand, both domestically and for export, has weighed on prices for months, although some traders see a potential rebound thanks to questions about how much rice US farmers will plant this year at low prices. CBOT May rice ends down 16c to $14.34 1/2 per hundredweight.
Soy ends 10-day rally, but still near 5-month top
SINGAPORE, March 5 (Reuters) - U.S. soybeans retreated after a 10-day rally although expectations that export demand will stay strong kept soy near five-month highs, while wheat and corn drifted lower. Soybeans gained more then 5 percent in the two-week run up to Friday, driven by robust demand for U.S. shipments from top importer China. Analysts say strong Chinese demand along with projections of lower output from Brazil should keep the uptrend mostly intact.
"Oilseeds remain the most bullish of the agri-commodities, mainly because of recent downgrades to South American crop prospects and strong demand for U.S. supplies," said Luke Mathews, commodity strategist at Commonwealth Bank of Australia.
Ukraine sunflower harvest seen up, India to buy more oils-trader
KUALA LUMPUR, March 5 (Reuters) - Ukraine, the world's largest sunflower oil exporter, is expected to harvest more than 10.5 million tonnes of the oilseed in the 2011/2012 season as farmers replace damaged winter grains with sunflower seed sowings, a leading trader said on Monday.
That represents up to a 16.7 percent increase in output, raising supply for crushing into edible oils and potentially making cargoes cheaper than competing rapeseed oil, the trader from Indian commodities firm Athena Tradewinds, which handles about 60 percent of the world's sunoil trade.
India has no plans to buy farmland abroad-farm min
NEW DELHI, March 5 (Reuters) - The Indian government has no plans to buy farmland abroad or help private companies do so, Agriculture Minister Sharad Pawar said on Monday, after a local media report said New Delhi was debating the issue.
"There is no government proposal. The ministry has not taken up this proposal," Pawar told reporters.
Australia's 2012/13 wheat output seen down 15.3 pct
SYDNEY/SINGAPORE, March 2 (Reuters) - Australia's wheat output is likely to slide more than 15 percent in 2012/13 from a record-large crop this year as lower global prices may prompt farmers to shift to other crops such as canola and barley.
Wheat output is expected to fall to 25 million tonnes in the year to June 2013, down from an all-time high of 29.5 million tonnes which is estimated to have been produced this year, according to a Reuters survey of 10 analysts.
Bangladesh rice production rises over 3 pct in 2011
DHAKA, March 4 (Reuters) - Bangladesh produced a record 34.25 million tonnes of rice in 2011, 3.16 percent more than the previous year, helped by favourable weather and continued government support for the farming sector, a senior agriculture official said on Sunday.
"Bangladesh has now almost achieved self sufficiency in food grains (rice and wheat), with most farmers using high-yielding seeds," said the official, who requested not to be named.
Argentine dockers end strike in Rosario grain hub
BUENOS AIRES, March 2 (Reuters) - Argentine dock workers ended a strike on Friday that had delayed dozens of grain ships in the country's main grains hub Rosario, port chamber CAPYM said.
Dock workers who moor ships in Argentine harbors walked off the job on Thursday for an indefinite strike over what they called inadequate staffing of work shifts.
USDA offers farmers more money to idle sensitive land
CHICAGO, March 2 (Reuters) - U.S. officials said on Friday they would offer higher payments to certain owners of environmentally sensitive farm land if they idle it in a conservation program instead of using it to grow crops.
The offer from the U.S. Department of Agriculture is an attempt to slow an exodus of millions of acres from conservation programs at a time when high crop and land prices are enticing farmers to put the land into production. Increased payments will be available to owners of up to 1 million acres (400,000 hectares) of the highly sensitive grasslands and wetlands under a new initiative that is part of the federal Conservation Reserve Program, or CRP.
Texas Rice Farmers Lose Their Water (Source: CME)
The state's persistent drought has claimed its latest victims: rice farmers. Because of low water levels in several lakes that serve as reservoirs here, officials said they wouldn't release irrigation water to farmers in three counties downstream that produce much of the rice in the state. The rice industry contributes about $394 million annually to the economy of the state, which produces about 5% of the nation's rice. The three counties -- Colorado, Wharton and Matagorda -- lie west of humid Houston and usually get enough rain to make rice farming practicable. This is the first time in its 78-year history that the Lower Colorado River Authority, which is based here, has cut off water to farmers. The agency waited until the last possible moment -- a minute before midnight on Thursday -- to make its decision, hoping that water levels would rise enough to avert a cutoff.
The irrigation ban is not expected to affect the shelf price of rice, but it has forced some farmers to lay off employees and consider diversifying into other crops. "This is my livelihood at stake," said Ronald Gertson, a Texas rice farmer who projected he would produce only about 40% of his typical rice crop this year. "It sticks in the craw" of farmers, Mr. Gertson said, that the authority will continue to release water to golf courses and other recreational customers that pay higher rates for a guaranteed water supply. In a statement, the agency said that farmers "pay considerably less for water than cities and industry. And therefore, their water is considered 'interruptible' during a severe drought." Texans in the rice business said they could probably stay afloat this year, thanks in part to crop insurance, but they worried about another year of interrupted irrigation water.
"If this happens again, we'll be in much more trouble," said Dick Ottis, the president of the Rice Belt Warehouse in El Campo, Texas, which stores and dries rice. The warehouse plans to store more corn, wheat and other commodities this year, he said, but those crops do not produce the profit margins rice does. "I have already let go about 20% of our employees, because I knew this day was coming about," Mr. Ottis said, adding that his family had been involved in rice farming for almost 100 years and had lived through droughts, but none this bad. It always seemed like the good Lord would bless us with more rain," he said. But there appears to be little relief in sight from the drought that still afflicts 85% of Texas. Temperatures are expected to be above normal this summer, said John Nielsen-Gammon, the state climatologist. Rainfall levels are harder to predict, he said, but "we are in a dry stretch now, which will be worrisome if it continues. It reminds me of last year."
The water agency said it plans to find new supplies of water to avoid a repeat of this year's problems. Farmers agree. "The development of new reservoirs is imperative," said Daniel Berglund, a 49-year-old rice farmer in Markham, Texas, who said he woke up at 1:15 a.m. Friday and checked to see whether the lakes, against all odds, had risen high enough to allow irrigation water to be released. "Consumers only see grocery shelves stacked with food, floor to ceiling," he said. "This is an example of the risks we take as farmers. When you lose irrigation water, it stops everything," he said.
Cofco Chairman: China Corn Supply Sufficient In 2012 (Source: CME)
China's corn supply is sufficient this year thanks to a record harvest in 2011, Ning Gaoning, chairman of state-owned grain trader Cofco Group, said. Corn prices are very stable, he said on the sidelines of the National People's Congress, implying sluggish demand for imported corn due to high international prices. But in the long term, China's corn will be in tight supply as domestic consumption is increasing rapidly, he said. He also said his company's corn import plans are uncertain, and its imports depend on availability on the domestic market. Corn output in China rose 8.2% in 2011 to a record 191.75 million metric tons, according to government data. Liu Yonghao, the chairman of New Hope Group, China's largest feed mill, said Monday that domestic corn prices are "comfortable," but the outlook for the second half of the year remains uncertain.
Liu urged the central government to liberalize imports and exports of feed grains or at the very least allocate additional corn import quotas directly to feed mills and animal producers. China's 2012 corn import quotas totaled 7.2 million tons, unchanged from 2011, with state-owned companies allocated 60% of the total. Actual corn imports for 2011 rose 11.5% to 1.7 million tons. While some state-owned traders don't use up their corn import quotas, some private feedmills don't have allocations. Liu said China's corn traders only import when global prices are much lower than those in the domestic market. New Hope Group will be able to meet most of its demand with domestic corn this year, but it will consider importing if it still faces a deficit, he said.
India’s Ban on Cotton Exports May Unravel Deals After 2011 Disputes Surged (Source: Bloomberg)
A halt in cotton exports by India, the world’s second-biggest shipper, may boost contract disputes after arbitration cases surged to a record in 2011 following the slump in prices from the all-time high, analysts said. Yesterday, India effectively revoked export certificates for as much as 2.6 million bales. The nation banned shipments after sales reached 9.4 million bales in the year that began Oct. 1, 12 percent more than an estimated surplus. Cotton surged the most in nine months on ICE Futures U.S. in New York, and the exchange boosted margins by 76 percent. In 2011, the U.K.-based International Cotton Association got 242 requests for technical arbitration, more than five times the yearly average and double the record in 2008. From Jan. 1 to mid-February, the group received 41 cases, Nicky Simon, a spokeswoman, said last month in an e-mail.
More defaults probably will involve “Indian merchants to mills outside of India,” Jordan Lea, the chairman of Greenville, South Carolina-based Eastern Trading Co., said in an e-mail. “I understand that most of the Indian cotton that was sold, but yet unshipped, is owed to China.”
Cotton Futures Surge by Exchange Limit in N.Y. After India Bans Exports (Source: Bloomberg)
Cotton for May delivery rose by the exchange limit of 4 cents, or 4.5 percent, to 92.23 cents a pound at 8:27 a.m. in New York. A close at that price would be the biggest one-day percentage gain since May 31. India, the world’s second-biggest exporter, halted shipments until further notice, the Commerce Ministry said in a statement dated today.
India bans cotton exports effective immediately
MUMBAI, March 5 (Reuters) - India has banned cotton exports with immediate effect, the Directorate General of Foreign Trade (DGFT) said on Monday, as the world's second-largest exporter of the fibre moves to conserve supplies for local mills.
"Export of cotton has been prohibited till further orders," the DGFT said in a statement. India is the world's second largest producer of cotton and most of its shipments go to China, the world's largest user of the fibre.
Glencore's Cotton Team Suffers Amid Volatility; Has New Leader (Source: CME)
Like its peers, Glencore International PLC suffered losses from the cotton market in 2011 as suppliers reneged on their Glencore contracts and the derivatives market disconnected from the physical market, the company's chief executive said. Glencore's agricultural products segment posted a negative adjusted earnings before interest and taxes, or Ebit, of $47 million in 2011, compared to a positive contribution of $717 million, largely due to the cotton team's trading activities. Excluding the cotton division's losses, the group's entire marketing division would have posted a 10% rise in adjust Ebit in 2011, Glencore said. Ivan Glasenberg told Dow Jones Newswires that the company has placed a Glencore grains trader to head up the new cotton team, which should help improve the division's performance.
Glasenberg didn't provide a name of the new cotton team leader, but people familiar with the matter identified him as Peter Poort, a trader with over 20 years experience at Glencore. Poort replaced Mark Allen, who had previously been hired from Noble Group. "There was this massive volatility in the cotton market," Glasenberg said. Prices rushed to a record $2.27 a pound a year ago as floods in Pakistan and export restrictions from No. 2 cotton grower India sparked supply concerns. Prices then slid for months, ending 2011 at 91.80 cents per pound. The price swing crushed margins at textile mills and apparel makers, and hurt cotton-trading margins at major commodity houses such as Olam International Ltd., Noble Group Ltd. and Glencore.
"Even if you hedged it out on the paper side of the business, you've got nonperformance from a larger amount of these suppliers during this high-price period," Glasenberg said. "They did not deliver, they actually sold in to the market on a spot basis and did not perform on the existing contract. So naturally you take a hit there." He said Glencore's cotton trading business was also new, having been put together from outside the company. "It is something that we don't normally do in Glencore. We try to grow the people from within," he said. "Had a Glencore guy been running that business at that time, yes, I believe that we would not have been exactly at this position but it was the vagrancies of the market during that period which caused us to take that hit as did all other trading companies," he added.
Front-month cotton prices on ICE Futures U.S. have shed more than 60% since hitting the record peak last year, as the high prices encouraged farmers worldwide to plant more of the fiber, creating a supply glut against a backdrop of still-lackluster demand. Global cotton production in the 2011-12 season ending July 31 will hit a record 123 million bales, the U.S. Department of Agriculture said in its annual outlook last month. In the same period, global consumption of the fiber is forecast to fall by 4.3%. The more actively traded March contract was recently trading at 92.23c/lb.
Coffee Crop in Indonesia Poised for Highest in 3 Years (Source: Bloomberg)
The coffee harvest in Indonesia, the third-biggest grower of the robusta variety used in instant drinks and espressos, is set to climb to the largest in three years, potentially capping an 11 percent rally. Production may increase 20 percent to 10 million bags this year from 8.3 million bags a year earlier, according to the median estimate in a Bloomberg survey of seven exporters, two traders and a roaster. That’s the most since 2009, according to U.S. government figures, and more than the 9.1 million bags predicted by Volcafe, a unit of ED&F Man Holdings Ltd. Robusta futures jumped to a five-month high in February as Vietnamese growers, the world’s biggest, held back supplies. The harvest from Indonesia starting in April may help replenish inventories, limiting gains and containing costs for Nestle SA (NESN), maker of Nescafe and Nespresso. Prices may drop as low as $1,700 a metric ton from $2,015 now, according to INTL FCStone Inc.
“The tightness in the robusta market will be here for at least another month,” said Oscar L. Schaps, managing director of global soft commodities at INTL FCStone in Miami. “The recent rise will attract more exports from Vietnam.” Kenyan Firm To Build Sugar-beet Ethanol Plant - Report A Kenyan firm, Wedco, will build a biofuel complex to produce fuel ethanol from sugar beet in western Kenya, the Daily Nation newspaper reports. Wedco, which is funded by investors from the U.K., China and Qatar with commercial banks like Bank of Africa and Equity Bank at a cost of KES12 billion ($142 million) will blend the ethanol with petrol for road transport use, the daily says. Construction is expected to commence immediately and production is expected to start early next year, the daily says, with the ethanol to be sold in bulk to Kenol Kobil and National Oil Cooperation for blending and distribution.
Although the company will produce fuel ethanol as the main product, other products like biogas and liquid carbon dioxide will also be produced, the daily says.
Sudan to launch $1 bln sugar plant, eyes exports from 2014
NEAR ABU HEBERA VILLAGE, Sudan, March 4 (Reuters) - Sudan plans to increase sugar production by 450,000 tonnes annually with the help of a $1 billion plant, aiming to end dependency on imports and start exporting sugar by 2014, officials and executives said.
The African country is trying to cut food imports stoking inflation and eating into the dwindling budget. Sudan is undergoing an economic crisis after losing three-quarters of its oil production -- the lifeline of the economy -- when South Sudan became independent in July.
Billionaires Buying Gasoline Tankers as Fuel Demand Accelerates: Freight (Source: Bloomberg)
The richest investors in shipping are buying gasoline tankers, anticipating that fuel demand will expand faster than the fleet for the first time in nine years. Global shipments will jump 4.3 percent in 2012 as vessel capacity gains 3.7 percent, according to London-based Clarkson Plc (CKN), the world’s largest shipbroker. Daily rates for Medium- Range tankers, each hauling enough fuel to fill about 780,000 cars, will rise 19 percent to an average of $14,844 this year, the median of 10 analyst estimates compiled by Bloomberg shows. That’s more than the $10,999 anticipated in forward freight agreements, traded by brokers and used to bet on future rates.
John Fredriksen, whose publicly traded assets are valued at $9.27 billion, ordered as many as 10 of the tankers last month. Wilbur Ross, whose company manages about $10 billion of assets, was part of a group buying 30 vessels in September. Global refineries are shifting to India and China from Europe and the U.S., increasing delivery distances and tying up vessels for longer, effectively boosting demand for shipping. “This is smart money that has historically done well investing at the right time of the cycle,” said Jonathan Chappell, an analyst at Evercore Partners Inc. in New York whose recommendations on the shares of shipping companies returned 9.8 percent in the past three months. “Those purchases by Ross and John Fredriksen confirm that the fundamentals appear most attractive for product tankers.”
Euro Coal-Prices hold steady despite gas, oil falls
LONDON, March 2 (Reuters) - Prompt physical coal prices were little changed on Friday after a day of quiet trading and little direction from either the oil or gas markets.
European DES ARA prices had fallen for three days in a row, pressed by the flow of U.S. coal into Europe and weak demand from utilities.
Asia Coal-Australian coal prices dip on weak demand
PERTH, March 2 (Reuters) - Australia's thermal coal price benchmark slipped to under $112 a tonne this week, with demand sluggish and coal producers recovering from wet weather in the past few weeks. Thermal coal on the globalCOAL Newcastle index for the week to date closed at $111.68 per tonne on Thursday, falling from $116.69 a week earlier.
Iron Ore-China steel snaps 5-day rise after growth goal cut
SINGAPORE, March 5 (Reuters) - Benchmark China steel futures fell nearly 1 percent on Monday, snapping a five-day climb as investors worried about the outlook for demand after Beijing cut its 2012 growth target to 7.5 percent to give the economy more room to slow if needed.
Chinese Premier Wen Jiabao dropped the annual growth target from the 8 percent figure set in the previous eight years, citing the need to take a cautious and flexible approach and to keep prices stable.
Iron ore exports to China up at Australia's Port Hedland
SYDNEY, March 4 (Reuters) - Iron ore shipments to China through Australia's Port Hedland rose modestly in February compared with January, according to data released by the port authority, suggesting steady demand from the world's largest steel industry after signs of a weak start to 2012.
A cloudy outlook for steel demand curbed China's appetite for iron ore recently as mills opted to run down inventories instead of booking new orders, according to commodities traders.
Oil Edges Higher on Iran Tension (Source: Bloomberg)
Oil edged higher as U.S. President Barack Obama and Israeli Prime Minister Benjamin Netanyahu met to discuss how to confront Iran over its nuclear program and China cut its economic growth target. Futures posted the smallest move in 10 months after Obama said in a meeting with Netanyahu today at the White House that “all options” are available to prevent a nuclear-armed Iran. Prices fell as much as 1.1 percent earlier as China’s Premier Wen Jiabao said his country will aim for expansion of 7.5 percent this year, the lowest goal since 2004. “There’s no clear, overall price direction,” said Tim Evans, an energy analyst at Citi Futures Perspective in New York. “If we don’t get a disruption in Iranian supply, everything lines up in the bearish column. The geopolitical risk adds $20 to $30 barrel to the price, allowing us to ignore the market fundamentals.”
Oil for April delivery rose 2 cents to settle at $106.72 a barrel on the New York Mercantile Exchange. It was the smallest one-day move since April 25. Prices are up 8 percent this year.
Oil Gains for a Second Day on U.S. Economic Outlook, Middle East Tension (Source: Bloomberg)
Oil climbed for a second day in New York on speculation signs of a U.S. economic recovery will increase fuel demand and concern that tension with Iran will disrupt crude supplies. West Texas Intermediate futures gained as much as 0.6 percent. President Barack Obama said at a meeting with Israeli Prime Minister Benjamin Netanyahu yesterday that the U.S. has a “rock solid” commitment to Israel’s security and that “all options” are available to prevent a nuclear-armed Iran. Service industries in the U.S., the world’s biggest crude consumer, unexpectedly grew in February at the fastest pace in a year. Oil for April delivery advanced as much as 62 cents to $107.34 a barrel on the New York Mercantile Exchange and was at $107.16 at 10:45 a.m. Sydney time. The contract yesterday rose 2 cents to $106.72. Prices slipped 2.8 percent last week and are 1.6 percent higher the past year.
China's growing strategic stake in the Middle East
--John Kemp is a Reuters market analyst. The views expressed are his own--
LONDON, March 2 (Reuters) - China's growing demand for imported oil, coupled with the development of new oil and gas supplies in North America, is set to transform the international security situation in the Middle East over the next 20 years.
That is the inescapable conclusion from an arresting slide in a presentation given by Maria van der Hoeven, executive director of the International Energy Agency (IEA), at a seminar on the future of energy in Mexico City on Feb. 29.
Brent back near $124 on supply concerns over Iran
SINGAPORE, March 5 (Reuters) - Brent crude climbed to near $124, rebounding from a drop of 2 percent the previous session as another refiner announced cuts to Iranian imports, feeding fears of a supply crunch as the West presses ahead with sanctions on Tehran.
"There's no other alternative to Iranian oil except for Saudi oil and they have already increased exports last month," he said, adding that global oil consumption is increasing on the back of growing demand for oil in Asia.
Singapore says LNG imports can replace piped gas supply
SINGAPORE, Mar 5 (Reuters) - Singapore's new liquefied natural gas (LNG) terminal will be able to handle sufficient imports of the fuel to cover all of the country's power needs, even if piped gas supply contracts with Malaysia and Indonesia are not renewed, a top energy regulator said on Monday.
Singapore depends on natural gas for around 80 percent of its power generation needs, with the bulk sourced from Indonesia and Malaysia under long-term contracts.
China to "push forward" building oil reserve tanks -official
BEIJING, March 5 (Reuters) - China will "push forward" with building phase-two strategic oil reserve sites, Liu Tienan, head of the China National Energy Administration told reporters on Monday.
Liu didn't give further details when asked about progress on the reserve bases. Industry officials have said China is expected to complete building the phase-two tanks around the end of this year, after kicking off construction in early 2009.
Enbridge U.S. oil line to be shut for four more days
NEW LENOX, Illinois, March 4 (Reuters) - A key segment of Enbridge Inc's oil pipeline system in the U.S. Midwest will remain shut down for up to four more days after a deadly vehicle accident in Illinois caused an oil leak and fire, likely squeezing supplies for refiners in the region, the company said on Sunday .
The shutdown of Enbridge's 318,000 barrel a day Line 14/64, part of a network that carries oil produced in Canada to Griffith, Indiana, from Superior, Wisconsin, is also expected to pressure already-weak prices for Canadian crude this week as supplies back up in Alberta, market sources and analysts said.
Mitsui Seeks Copper With Record $17 Billion Cash: Commodities (Source: Bloomberg)
Mitsui & Co. (8031), holding a record $17 billion in cash, wants to buy mining stakes and expand operations to triple copper output and more than double coal production, easing its reliance on iron ore sales. The biggest Japanese iron ore supplier is looking to buy 9 million metric tons of annual coal production from Russia, Australia, South America and Africa, Fuminobu Kawashima, head of resources of the Tokyo-based company, said in an interview. Mitsui also wants to add 120,000 tons of copper a year from South America, expecting Chinese demand will expand, he said. “Iron ore makes a very strong contribution to our profit, and I’d like to see it balanced,” Kawashima said. Iron ore, the main raw material for making steel, provides more than half of Mitsui’s net income, according to Barclays Capital. (JNK)
The most resource-dependent of the Japanese trading companies has the most cash since 1993, after ore prices gained more than tenfold in the past decade. Separately, Mitsui is expanding mining ventures with partners including Chile’s Codelco, Rio Tinto Group (RIO) and BHP Billiton Ltd. (BHP) as metals prices hover near historical highs.
Copper Futures Fall Most in Two Weeks on Signs That China Demand May Ease (Source: Bloomberg)
Copper fell the most in two weeks on concern that demand will slow after China, the world’s biggest metals consumer, cut its economic-growth target. The country’s 8 percent annual goal in place since 2005 was lowered to 7.5 percent, Premier Wen Jiabao said today. Copper also dropped on forecasts that automobile sales in China in the two months ended Feb. 29 headed for the biggest decline in seven years after gasoline costs climbed to a record. China “is not growing quite as fast as it was, and that’s taking some of the steam out of the market,” William O’ Neill, a partner at Logic Advisors in Upper Saddle River, New Jersey, said in a telephone interview. “People are concerned about the level of Chinese inventories.” Copper futures for May delivery slid 1.1 percent to settle at $3.8595 a pound at 1:14 p.m. on the Comex in New York, the biggest loss since Feb. 17. The metal has gained 12 percent this year.
Stockpiles monitored by the Shanghai Futures Exchange have climbed to the highest since at least January 2003, weekly data showed.
Gold Declines for Second Day As China Cuts Growth Target; Silver Drops (Source: Bloomberg)
Gold declined for the second straight session after China announced the lowest economic growth target in seven years, curbing prospects for commodity demand and global growth. The MSCI All-Country World Index (MXWD) dropped as much as 0.9 percent and the Standard & Poor’s GSCI index of 24 raw materials retreated as much as 0.7 percent after China cut the nation’s economic growth target to 7.5 percent from an 8 percent goal in place since 2005, according to Premier Wen Jiabao’s speech at the National People’s Congress today. “China’s statements have dampened market sentiment today,” Stephen Platt, an analyst at Archer Financial in Chicago, said in a telephone interview. Gold futures for April delivery fell 0.3 percent to settle at $1,703.90 an ounce at 2:04 p.m. on the Comex in New York. Prices dropped 3.7 percent last week, the most since Dec. 16, while the dollar gained 1.3 percent against a six-currency basket.
Drybulkers in troubled waters as China iron ore imports seen weak
Feb 29 (Reuters) - Dry bulk transporters, already hit by an oversupply of ships, could be forced to operate their vessels below breakeven for a much longer period than feared as top iron ore consumer China looks to cut down on imports.
China's iron ore imports may fall up to 14 percent this year as domestic output ramps up, a mining industry group said on Wednesday. The country buys about 60 percent of the world's seaborne iron ore.
Baltic sea index high on Pacific activity
March 2 (Reuters) - The Baltic Exchange's main sea freight index tracking rates for ships carrying dry commodities rose on Friday for the seventh straight day, as activity in the Pacific basin helped dry bulk rates.
The main index that reflects the daily freight market rates for capesize, panamax, supramax and handysize dry bulk transport vessels rose 8 points or 1.05 percent to 771 points.
