Corn (Source: CME)
US corn futures end higher as the market tries to keep pace with surging soybeans. Near-term supply concerns help fuel the market, and the market's surge above its 200-day moving average attracted technical buying, traders say. Also, while this year's corn acreage is likely to be big, plantings could slip if soybean prices continue to surge, giving farmers a profitable option other than corn. "It's definitely something that's a growing concern," says Shawn McCambridge, senior grains analyst with Jefferies Bache. Optimism about US exports in the wake of a drought-stricken South America crop add to the strength. CBOT May corn ends up 10 1/4 cents to $6.69 a bushel.
Wheat (Source: CME)
US wheat futures rise sharply on strength in soybeans and concerns about the crop. Soybeans have been rallying, hitting a 6-month high, and has been pulling corn and wheat higher. Meanwhile, worries about dry weather in the southern Plains is causing concerns about crops, as are unusually warm temperatures that are causing the crop to break dormancy early. That puts it potentially at risk for a late freeze, traders say. Wheat also got a boost from fresh sales of 120K metric tons to Egypt, split between Canada and the US. CBOT May wheat ends up 21c at $6.64 3/4 a bushel while KCBT May climbs 23 1/2c to $7.04 1/2 and MGEX May rises 13 3/4c to $8.20 1/4.
Rice (Source: CME)
US rice futures end higher, supported by broad strength in soybeans, corn and wheat, and by concerns about possible low rice acreage in the US this year leading to tight rice supplies. Some support comes from traders pricing in the risk of a lower rice acreage forecast in the USDA's report due at the end of the month based on a survey of farmers. CBOT May rice ends up 40 1/2c or 2.9% at $14.32 a hundredweight.
Indonesia Q1 cocoa output to slump 60 pct on heavy rains
JAKARTA, March 14 (Reuters) - Heavy rains in the first quarter will lead to a 60 percent slump in Indonesia's cocoa bean output compared to a year ago, an industry group said on Wednesday, although the full-year figure is likely to show a near 10 percent increase.
Wet weather wreaked havoc on the crop last year and brought back Vascular-streak Dieback (VSD) disease to plantations across the main growing island of Sulawesi, killing trees and curbing exports in the world's third largest producer.
Philippines sets June 30 deadline for rice imports
SINGAPORE, March 15 (Reuters) - The Philippines, the world's biggest rice buyer in recent years, has set a June 30 deadline for importers of the grain to avoid duties on 380,000 tonnes of shipments, a National Food Authority official said on Thursday.
"Time is running out," Angelito Banayo, administrator of the state grain buyer, told reporters at an industry conference in Singapore.
Vietnam sees 2012 rice exports as much as 7.2 mln T
HANOI, March 15 (Reuters) - Vietnam will not limit rice exports this year and will aim to ship as much as 7.2 million tonnes for the whole of 2012, on par with the record volume reached last year, the agriculture minister said on Thursday.
"In our assessment we can maintain and will strive to reach the level of last year," Minister Cao Duc Phat told reporters.
Ukraine starts 2012 spring sowing
KIEV, March 14 (Reuters) - Farms in Ukraine's southern Crimea region have started the 2012 spring field works, sowing the first 400 hectares of early grains, the UkrAgroConsult agriculture consultancy said on Wednesday.
Last year, Crimean farms started spring sowing on March 10.
Syria needs to import a third more grain this yr-FAO
MILAN, March 14 (Reuters) - Syria, hit by a civil unrest, needs to raise cereals import by about a third in the current marketing year after its local grain output 10 percent dropped in 2011, the United Nations' Food and Agriculture Organisation (FAO) said on Wednesday.
"Continued civil unrest in the Syrian Arab Republic since mid-March 2011 has raised serious concern over the state of food security, particularly for vulnerable groups," the FAO said in a special alert note.
Imported-Food Outbreaks Rise, CDC Says (Source: CME)
Outbreaks of illness linked to imported food have risen since the late 1990s, casting a spotlight on federal inspection standards for fish, produce and other foods brought in from abroad. The 39 outbreaks from imported food reported between 2005 and 2010 represent a small fraction of total cases of food-borne illnesses such as salmonella or E. coli, according to the data from the Centers for Disease Control and Prevention presented Wednesday. But the rise in imported-food outbreaks--mostly from fish and spices--highlights gaps in the food-safety system a sweeping new law is intended to address. CDC researchers found 6.5 outbreaks from foreign foods a year, on average, between 2005 and 2010--more than double the average of 2.7 outbreaks annually between 1998 and 2004. Of the 39 outbreaks between 2005 and 2010, nearly half--17--occurred in 2009 and 2010.
The foods, including fish, oysters, cheese, sprouts and seven other types of products, were shipped from 15 countries. Nearly 45% of those foods originated from Asia. Most people were sickened with salmonella or histamine fish poisoning, a bacterial disease contracted from eating spoiled dark-flesh fish that causes rashes, diarrhea, sweating, headaches and vomiting. The outbreaks led to 2,348 cases of illness, the CDC said. Among the largest of those outbreaks was one in 2008 linked to jalapeño and serrano peppers from Mexico contaminated with salmonella. More than 1,400 people were sickened and more than 280 were hospitalized with salmonella in 43 states. Other major outbreaks reviewed in the study were a 2007 recall of Veggie Booty, a puffed rice snack that was found to contain contaminated raw materials from China that led to 52 cases of salmonella in 17 states, and a 2010 outbreak of typhoid fever tied to frozen fruit pulp that originated in Guatemala.
The number of outbreaks reported is likely underestimated because of inconsistent country-of-origin labeling, Hannah Gould, a CDC epidemiologist and lead author of the study, said in a phone interview. "We don't always know where food comes from," Gould said. The full study will be published later this year. The CDC estimates more than 3,000 Americans die annually from food poisoning and 48 million are sickened. The amount of food imported has nearly doubled in the past decade, to 10.7 million shipments in 2009 from 5.6 million shipments in 2002, according to the Food and Drug Administration, which inspects shipments. Nearly 16% of food consumed by Americans comes from abroad, according to the U.S. Department of Agriculture. The FDA said it inspected about 1,000 of the 254,000 foreign-based food-processing facilities during its 2011 fiscal year, but it expects to increase its number of inspections as part of a sweeping food-safety law signed last year by President Barack Obama, an FDA spokeswoman said.
Foreign food companies are allowed to pass inspections by paying a third-party inspector to visit their facilities, said Deirdre Schlunegger, chief executive of STOP Foodborne Illness Inc., a nonprofit pushing for stronger inspection regulations. She wants FDA officials to conduct the on-site investigations. "There's a lot of room for improvement," Schlunegger said. "We need to see more inspections, more consistent inspections."
India Farm Sector Growth Slowed To 2.5% In 2011-12: Economic Survey (Source: CME)
India's agriculture growth likely slowed to 2.5% in the current fiscal year ending March 31, the government's annual economic survey said. The sector grew 7% in 2010-11, helped by a bumper crop that followed a year of drought. The survey did not elaborate on the reasons behind the expected slow-down but analysts said it could partly be because the sector had to grow from a higher base. According to the survey, an annual report card released by the country's finance ministry, the agriculture sector grew 3.28% annually during the 11th Five-Year Plan period ending March 31, 2012, well below the government's 11th Plan target of 4%. Released ahead of the national budget scheduled Friday, the survey provides an early peak into the government's thinking on proposed spending proposals for the various sectors of the economy.
"The outlook for the next fiscal remains bright but given the rapidly rising demand for food, there is a need to consider [new] policy options to ensure a brighter medium-term outlook," the survey said. On such option could be regular import of agricultural commodities in small quantities with an upper ceiling imposed on the total quantity, it said. "The upper ceiling can be decided annually, relatively well in advance." India, the world's largest importer of edible oils and pulses, has regularly turned to imports to ensure price stability at home. Domestic inflation accelerated again to 6.95% in February after easing in the previous two months. India experienced inflation above 9% during the 12 months through November, but the central bank has said it expects inflation to settle around 7% by end-March.
Although the country currently has sufficient stockpile of food grains and sugar, it has imported wheat and rice in the past. Because of its uncertain nature, Indian import demand often has a magnified impact on global prices. Underscoring the shift in consumption habits in favour of more expensive food items such as fruits and vegetables, the survey said the government needs to earmark specific areas for their production and support farmers who grow crops that are in short supply. The survey also suggested wide-ranging reforms in agricultural marketing to enable greater competition and better price discovery. The aim is to eliminate middlemen who take advantage of opaque markets and pay low prices to farmers but jack up prices at the retail end.
Strategie Grains Cuts EU 2012-13 Grain Output To 288.3M Tons (Source: CME)
Strategie Grains downwardly revised its estimate for the European Union's 2012-13 grain harvest by 1.1 million metric tons, to 288.3 million tons, due to a worrisome weather outlook, with the prospect of drought after severe cold weather in January and February. The influential analyst group also said it revised the bloc's soft wheat production down by 1.6 million tons to 131.1 million tons to reflect the area of destroyed winter wheat that will need to be replanted as result of freezing weather. This reduction mostly concerns France and Germany, with combined losses of 0.8 million tons, as well as the southeast EU countries, with losses of 0.8 million tons. With corn areas set to increase as many destroyed winter cereal fields are replanted with the grain, Strategie Grains increased its corn output estimate by 2 million tons to 64.6 million tons. This increase mostly pertains to Romania and Bulgaria, central Europe and west Europe.
The analyst revised barley production down by 1.2 million tons to 53.4 million tons, as winterkill in southeast EU countries caused 0.3 million tons of losses, while France and Germany's output fell 0.1 million tons each. Meanwhile, Strategie Grains cut its projected yield in Spain by 0.5 million tons, due to the drought.
Flood Risks Drop But Drought To Persist This Spring -NOAA (Source: CME)
Most of the continental U.S. is at little risk of flooding this spring, while the southern part of the country is expected to remain mired in drought, the National Oceanic and Atmospheric Administration said. "We're not forecasting a repeat of recent historic and prolonged flooding in the central and northern U.S., and that is a relief," said Laura Furgione, deputy director of NOAA's National Weather Service. "The severity of any flooding this year will be driven by rainfall more so than the melting of the current snowpack." Extreme flooding from heavy snowfall last winter delayed plantings of crops from corn to sugarbeets across the Midwestern U.S., sending prices higher. A drier spring would be a relief for farmers, particularly in the northern Great Plains, after they endured widespread flooding last year that kept them from sowing hundreds of thousands of acres of farmland. But the federal forecast is bittersweet for other U.S. farmers who are gearing up for planting season.
Although it isn't expected to be as severe as last year, drought in the southern U.S. will likely continue through the end of June and could spread, NOAA said. "Recent rainfall has helped lessen the drought in eastern Oklahoma, northeast Texas and interior Louisiana, but the historic magnitude of this prolonged drought means that recovery will be slow," said David Brown, director of NOAA's Southern Region Climate Services. "Drought is now encompassing parts of the West and Southwest, making conditions more favorable for wildfires." The dry weather could hurt cotton production. The U.S. Department of Agriculture already is forecasting a 13% decline in output in the year ending July 31, at 15.7 million bales. Drought likely will continue in West Texas and Georgia, which together produce more than one-third of U.S. cotton. Drought last year ravaged cotton production in Texas, which produced its smallest crop since 1998.
If the drought continues, it is bullish for cotton futures, said Andy Ryan, a senior analyst at INTL FCStone. The new "crop's going to be planted April, May, June." Cotton futures are down about 4% since the start of the year because of concerns about a glut of supply on slow demand. The parched conditions in the southern Plains over the last 18 months also have forced ranchers in states like Texas and Oklahoma to liquidate hundreds of thousands of beef cattle. The enduring drought conditions continue to delay any efforts to rebuild herds, a process that likely will take at least three years, if not longer. Nearly 70% of Texas--the largest cattle-producing state in the nation--remains in severe drought or worse, according to federal data. NOAA said the southwest is at risk for wildfires.
China Corn Imports May Rise On Lower US Prices -CNGOIC (Source: CME)
China will likely step up corn imports as U.S. prices have fallen below local prices and farmers are selling 2011 grain at a slow pace amid rains, Shang Qiangmin, director of the China National Grain and Oils Information Center, said. Some Chinese feed mills recently signed contracts to import U.S. corn amid high domestic prices, but major buyers Cofco Group and Sinograin have yet to enter the market, traders said. However, domestic corn supply is sufficient following a record harvest, Shang told an industry conference. Due to excessive rains, farmers are delaying sales, reducing market supply and causing prices to soar, he said. Stockpilier China Grain Reserves Corp., known as Sinograin, has so far bought only 1.2 million tons of 2011 corn locally for state reserves, Song Zhiyuan, an official with Sinograin, said. It bought 11 million tons of 2010 corn last year.
Feed mill demand for corn will increase slightly this year while processors' demand will stay flat this year, he said, adding that supply would be in a slight surplus. Song also said Sinograin won't release imported corn from reserves in the near term, despite high local prices. Sinograin bought more than 3 million tons from the U.S. to replenish depleted reserves last year.
Cocoa Rally Fading as African Rains Erase Shortage: Commodities (Source: Bloomberg)
Rain across parched cocoa plantations in West Africa, which supplies 69 percent of the world’s beans, is leading analysts to pare forecasts for shortages, threatening the biggest rally in a year. Global output should about match demand in the crop year ending in September, compared with the 94,000-metric-ton deficit seen last month, according to estimates by Marex Spectron Group, which trades the beans in New York and London. Prices may drop 10 percent to $2,000 a ton by July, according to Rabobank International and Lome, Togo-based Ecobank Transnational Inc., which financed $227 million of cocoa and coffee trading in 2011.
Prices rose as much as 21 percent in the past two months as dry winds blowing from the Sahara toward the Atlantic battered West African plantations before a mid-crop harvest that starts next month. Farmers have struggled to keep up with a 38 percent expansion in the chocolate market since 2006, which London-based Euromonitor International Ltd. values at $105 billion. Cocoa output rose 15 percent to 3.96 million tons since 2006-07, according to the International Cocoa Organization. “Recent rains in West Africa have been plentiful, particularly in Ghana, and this is positive for the development of the mid-crop and the new crop,” said Eric Sivry, the London- based head of Marex Spectron’s agriculture options brokerage. “Many analysts have been caught by surprise.”
Brazil 2012-13 Sugarcane Crop Seen At 518.3M Tons (Source: CME)
Brazil's key center-south region will likely see a modest recovery in its sugarcane crop during the coming 2012-13 season, as last year's problems related to pests, frost and flowering aren't expected to occur, sugar and ethanol consultancy Datagro said. The region, which produces nearly 90% of Brazil's sugarcane, should crush 518.3 million metric tons of the crop during the harvest that starts in April and runs through November. That forecast represents an increase of about 5.1% from the previous year. While the sector's main structural problem--insufficient renewal of sugarcane fields in recent years--remains largely unresolved, there's plenty of room for improvement over last year's disappointing sugarcane crop, Datagro President Plinio Nastari said in a press conference. In 2011, center-south sugarcane output fell for the first time in a decade amid a high incidence of pests, a series of rare winter frosts that damaged fields, and widespread flowering that reduced plants' sugar content.
"Everything indicates that flowering won't occur this year," Nastari said, noting the phenomenon is triggered by weather conditions early in the year. Datagro expects mills in center-south Brazil to churn out 33.88 million tons of sugar in the 2012-13 season, up 8.6% year-over-year. Production of ethanol fuel is seen rising 5.9% to 21.8 billion liters. Datagro expects northern and northeastern Brazil to post similar numbers to its 2011-12 crop, crushing 68 million tons of sugarcane. Mills in that region are expected to produce 4.9 million tons of sugar and 2.15 billion liters of ethanol fuel. Nastari said Brazil as a whole should export 26.35 million tons of sugar and 1.8 billion liters of ethanol fuel in 2012-13.
Brazil coffee crop seen at 52-54 mln bags - Cepea
BRASILIA, March 14 (Reuters) - Brazil's 2012/13 coffee harvest should turn out between 52 million and 54 million 60-kg bags, the Sao Paulo-based economic research center Cepea said on Wednesday, about 15 percent below potential due to drought early in its development.
The upper end of Cepea's range is close to the consensus forecast among exporters, while government crop supply agency Conab predicts 49 million to 52.3 million bags.
Brazil cocoa arrivals slip but still high for March
SAO PAULO, March 14 (Reuters) - Cocoa deliveries to warehouses in Brazil eased in the last week, data from the Bahia Commercial Association showed, but output from top cocoa-growing state Bahia was still well above the usual for the time of year.
Separately, Brazil's exports of cocoa products fell in February from the same month a year earlier. In bean equivalent, exports totaled 4,387 tonnes, down from 6,084 tonnes a year earlier. Brazil exports mostly products and few cocoa beans.
Brazil sugar exports to be spared port jam in 2012
BRASILIA, March 14 (Reuters) - Shipments of sugar should flow smoothly from top producer Brazil this year with long-range weather forecasts pointing to a dry winter, cutting the risk of a repeat of the disruption two seasons ago that sent prices of the sweetener soaring.
The opening of an additional bulk-loading terminal at key sugar port Santos and the deepening of canals there and at Paranagua are additional assurance that long and costly delays for loading are improbable, shippers and forecasters said.
Ivorian San Pedro cocoa arrivals 468,088 T by March 5
ABIDJAN, March 14 (Reuters) - Cocoa arrivals at Ivory Coast's port of San Pedro reached 468,088 tonnes by March 5 since the start of the season in October, according to data from the Coffee and Cocoa Bourse (BCC) obtained by Reuters on Wednesday.
Figures for the same period last season were not available due to last year's post-election civil war that shut down the industry and port operations.
India eyes more sugar exports, may hit world prices
NEW DELHI, March 14 (Reuters) - India could allow up to 1 million tonnes more unrestricted sugar exports in early April, a food ministry source said on Wednesday, potentially pressuring already weak global prices.
India, the world's second-biggest producer and largest consumer of sugar, has already allowed two million tonnes of sugar exports in the year that began on Oct. 1 and expects output to far outstrip demand.
Burundi sees 2012/13 coffee output jumping 107 pct
BUJUMBURA, March 14 (Reuters) - Burundi predicts coffee output for the 2012/13 season will jump by 107 percent compared with the previous season, following the cyclical nature of the crop and good rains, the country's industry regulator said on Wednesday.
Production for the coffee year (April 1-March 31) would reach 29,000 tonnes against 14,000 tonnes produced in the 2011/12 crop.
Brent edges above $125; U.S. crude stocks at a high
PERTH, March 15 (Reuters) - Brent crude inched above $125, after falling more than a dollar the previous session, as traders balanced a firm dollar and bulging U.S. crude stocks with lingering concerns about tensions between Iran and the West.
"Today I think the market is reacting to the mixed data coming out of the U.S. EIA crude inventory report. It was bearish on the crude side in that the build was a little bit higher than the market was expecting," said Natalie Robertson, an analyst at ANZ Bank.
Oil Advances From One-Week Low in New York on Economic Outlook (Source: Bloomberg)
Oil gained for the first time in three days in New York, trimming a weekly decline, as investors bet that fuel demand may increase amid signs of an economic recovery in the U.S., the world’s biggest crude consumer. Futures rose as much as 0.5 percent, climbing from the lowest close in more than a week. Claims for jobless benefits fell last week to match a four-year low, while manufacturing in the New York region expanded along with gains in factory output in the Philadelphia area, separate reports showed. Prices slid yesterday after the U.S. and U.K. discussed the release of strategic oil reserves. No agreement was reached. “The U.S. appears to have established a pretty good base for growth,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney. “The economic news is good. We’re headed in the right direction and that’s certainly a positive for oil.”
Oil for April delivery gained as much as 47 cents to $105.58 a barrel in electronic trading on the New York Mercantile Exchange and was at $105.52 at 11:23 a.m. Sydney time. The contract yesterday dropped 32 cents to $105.11 a barrel, the lowest close since March 6. Prices are down 1.8 percent this week and 6.7 percent higher this year.
Copper Rises as Reports Signal U.S. Economic Recovery (Source: Bloomberg)
Copper rose for the second time in three days amid more signs that the economy is recovering in the U.S., the world’s second-biggest user of the metal. Manufacturing in the New York region expanded in March at the fastest pace since June 2010, and a Philadelphia-area factory index grew at the quickest rate in 11 months, regional Federal Reserve bank data showed today. A Labor Department report showed claims for jobless benefits matching the lowest in four years, and the Standard & Poor’s 500 Index topped 1,400 for the first time since 2008. “The U.S. is showing some growth, and it’s a trend now,” Frank Cholly, a senior commodity broker at RJO Futures in Chicago, said in a telephone interview. “You always need a steady diet of good news to feed a bull market, and for as long as we have that, equities will continue to rally, and copper will follow.” Copper futures for May delivery advanced 1.3 percent to settle at $3.8975 a pound at 1:25 p.m. on the Comex in New York. The metal has climbed 13 percent this year.
Gold Bulls Weakest in Two Months as Economy Gains: Commodities (Source: Bloomberg)
Gold traders are the least bullish in two months after prices erased more than half of this year’s gain on speculation that a strengthening U.S. economy will dissuade the Federal Reserve from buying more debt. Thirteen of 26 analysts surveyed by Bloomberg expect prices to gain next week and four were neutral, the lowest proportion since Jan. 20. Hedge funds cut bets on a rally by the most since August 2008 in the week ended March 6, Commodity Futures Trading Commission data show. Prices fell to an eight-week low March 14, 15 percent below September’s record, and are now below the 200- day moving average, a sign of more declines to some investors.
Gold slid and the dollar gained after Fed policy makers raised their assessment of the economy March 13. The Fed is unlikely to start new quantitative easing and may raise interest rates as early as mid-2013, according to UBS AG. Bullion doubled since debt buying began in December 2008 and rates fell to near zero. The combined market capitalization of global stocks jumped $5.5 trillion this year on mounting confidence about growth, data compiled by Bloomberg show. “Everything’s beginning to look as if it’s turning the corner, we’ve passed the point of maximum despair,” said Nick Moore, the head of commodity research at Royal Bank of Scotland Group Plc in London. “A number of things which would have kept people with an eye on the upside for gold have now been neutralized. Gold can now settle back.”
