Govt to face loss of $130/tonne on wheat export

* Delayed decision by ECC will cause further loss to national exchequer

By Razi Syed
KARACHI: The government will suffer a loss of $130 per metric tonne on wheat export as prices of the commodity in the international market are hovering around $275 to $290 per metric tonne. >>>> More

GRAINS-U.S. wheat drops on dollar, weather outlook

* Wheat falls to near one-week low on dollar, weather
* Soy down 0.4 pct, falls from 26-month peak
* Corn extends losses, down 0.7 pct to a two-week low
* EU wheat weaker, follows U.S. down
(Adds European session, updates prices, dateline pvs SINGAPORE)
By Michael Hogan
HAMBURG, Nov 10 (Reuters) – Chicago wheat futures slid almost one percent on Wednesday to a near one-week low as a firmer tone for the dollar and an outlook for rains in U.S. winter crop areas weighed on the market. >>>>> More

Commodities Soar As Surging Demand Meets Dwindling Supplies

A broad array of commodities hit multiyear highs as producers of metals and agricultural goods are finding it increasingly more difficult to meet robust demand. >>>>> More

Soft Commodity Technicals by Reuters

Published on November 10, 2010 by admin   ·   No Comments  

WHEAT
SINGAPORE, Nov 10 (Reuters) – The CBOT wheat December contract is expected to retrace further to $6.90 per bushel as the sharp drop on Tuesday is likely to continue. >>>>>> More

Agricultural Futures Climb On USDA Report, Led By Soybeans, Cotton

U.S. soybean futures surged to a 26-month high Tuesday as federal forecasters cut estimates for this year’s harvest in a crop report that showed tightening supplies across agricultural commodities. >>>>>>> More

Soft Commodity Technicals by Reuters

WHEAT:

SINGAPORE, Oct 21 (Reuters) – CBOT December wheat <WZ0> is technically neutral between $6.73 and $6.93, with an escape from the range needed to determine its next directional move.

Wheat Technicals from Reuters

   

SINGAPORE, Oct 18 (Reuters) - CBOT wheat's December contract may rise towards $7.25 per bushel, as a consolidation that started from $7.39-¾   could have completed.

A descending wedge was broken at its upper trendline resistance of $7.06.

The contract then found strong support at $6.95, which is sandwiched between $6.88-½   and $6.98-⅜   - the 61.8 percent and 50 percent Fibonacci retracement levels on the rise from $6.57 to $7.39-3/4.

A fall below support at $6.95 would be very bearish, as it may extend to $6.69.

Wheat Analysis from Reuters

   

SINGAPORE, Oct 15 (Reuters) - The CBOT wheat December contract <WZ0> may establish a trend soon, as the current consolidation is approaching an end.

A descending wedge may contract to a point above $6.88-1/2, the 61.8 percent Fibonacci retracement level on the rise from $6.57 to $7.39-3/4.

It is not strategically safe to assume a bullish move right now even if the bias is for a rise, as a resistance at $7.12 needs to be cleared to confirm the development of an uptrend.

   

Wheat Declines on Signs Grain Demand to Ease, Benefical Weather Forecast

Wheat futures fell, erasing earlier gains, on speculation that grain demand will ease after prices jumped almost 10 percent last week. 

Wheat dropped in tandem with corn futures. Both grains are used in livestock feed. Corn declined as much as 2.3 percent following a 16 percent jump in the previous three sessions after the U.S. Department of Agriculture lowered its forecast for global grain supplies.

“Corn really tipped the scales here, wanting to sell off, and then wheat sold off with it too,” said Lane Broadbent, a vice president of KIS Futures Inc. in Oklahoma City.

Wheat futures for December delivery fell 7.25 cents, or 1 percent, to close at $7.0275 a bushel at 1:15 p.m. on the Chicago Board of Trade. Earlier, the price rose as much as 1.7 percent.

The commodity has jumped 46 percent since the end of June. Russia banned grain exports in August following the most-severe drought in five decades.

On Oct. 8, the USDA slashed its estimate for corn production by 3.8 percent from a month earlier. The agency cut its estimate for global wheat supplies by 1.8 percent.

Wheat also dropped today on signs that beneficial weather will boost crops.

“Spotty, locally heavy” rains fell on winter-wheat areas yesterday from Kansas to Kentucky, and sections of the Midwest were receiving more rain today, Allen Motew, a meteorologist at QT 

Weather in Chicago, said in a report.

“We’re into planting season now, and there’s dry weather concern around, but we’ve got another 60 days before we really get into big trouble,” Broadbent said. “If you get planted before Christmas, you can still raise a crop.”

Dollar’s Slide

The dollar’s slump has boosted the appeal of grain sales from the U.S., the world’s biggest exporter.

Today, the greenback approached a nine-month low against a against a basket of six currencies. U.S. exporters sold 100,000 metric tons to Iraq for delivery in the year that began June 1, the USDA said.

“We’ve got a dollar that’s been weakening, and that’s going to help make U.S. wheat prices more attractive,” said Dan Kuechenmeister, the manager of the commodities department at RBC Dain Rauscher in Minneapolis. Exports have been cut way back from Eastern Europe and the former Soviet Union, so the number of shops somebody can go to buy wheat seems to be dwindling.”

Wheat is the fourth-biggest U.S. crop, valued at $10.6 billion in 2009, behind corn, soybeans and hay, government data show.

To contact the reporter on this story: Whitney McFerron in Chicago at wmcferron1@bloomberg.net.

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

Major Boost in Agricultural Productivity Needed

With global population expected to reach 9.2 billion by 2050, food production will need to double worldwide. Meeting this challenge without causing more environmental damage—cutting down rain forest, for example, or using more groundwater—will be even harder. Farmers do tend to become more productive over time, but a new report released today finds that they will need to make much more progress—boosting their rate of efficiency gains by 25%. 

"It's a rather daunting task," says Keith Fuglie, an economist with the U.S. Department of Agriculture in Washington, D.C., and co-author of the report. Major increases in agricultural research, among other investments, will be needed to do the job, he says. "Countries that have invested more in research have been the ones that have had the best record" of efficiency gains.

The report comes from the Global Harvest Initiative, a consortium of large agribusiness companies and global conservation groups, which contracted with the U.S. Department of Agriculture and the Farm Foundation, a non-profit. Fuglie calculated the "total factor productivity" for every country, comparing the amount of food produced with all the inputs needed, such as land, labor, fuel, and chemicals. He found that on average between 2000 and 2007, farm productivty worldwide has been increasing by 1.4% per year.

Fuglie also calculated that agriculture, averaged around the world, will need to become 1.75% more productive each year in order to double output without any more inputs. Because the bulk of population growth will happen in the next 2 decades, major efficiency gains are needed sooner rather than later, says co-author Neil Conklin of the Farm Foundation in Oak Brook, Illinois. "There has to be a big push now."

One reason for urgency is the long time between investing in agricultural R&D, such as plant breeding, and the eventual payoff on farms. Another problem is that climate change, which was not considered in the analysis, could reduce the amount of land and water available for farming and impact yields.

Julian Alston, an economist at the University of California, Davis, agrees that boosting agricultural efficiency is critical. But Alston, who was not involved in the report, suspects that the challenge may be even greater than depicted in the new report. Alston's research suggests that global productivity has been slowing down, not increasing.

The Global Harvest Initiative plans to release annual follow-up reports on global productivity. 
Sciencemag

Wheat Technicals from Reuters

SINGAPORE, Oct. 14 (Reuters) - CBOT wheat's December contract <WZ0> may retrace further towards $6.88 after failing to establish an uptrend during the previous trading session.

The retracement has zigzagged down within a descending wedge, which is expected to complete around $6.88 - the 61.8 percent Fibonacci retracement level on the rise from $6.57 to $7.39-3/4.

The wave pattern indicates a possible wave "4" or "3-2" retracement, both to be followed by a rise towards $7.39-3/4.

But wheat needs to clear a resistance at $7.22 to confirm an uptrend has resumed as a failure to do so only indicates a continuation of the wedge formation.

Wheat Technicals from Reuters

SINGAPORE, Oct. 13 (Reuters) - The CBOT wheat December contract <WZ0> could rise to Monday's high of $7.39-¾   per bushel as it has resumed its rally during the previous trading session.

The wave "4" correction is believed to have been completed as a small double-bottom was formed around $7.03, and this is a typical reversal pattern for wheat.

The rally could be so explosive that it may surpass $7.39-¾    with ease, to even penetrate into a range of $7.70-$7.80. 

Support is at $7.03, a fall below which would extend the loss to $6.88-1/2, the 61.8 percent Fibonacci retracement level on the rise from $6.57 to $7.39-3/4.

Wheat Technicals from Reuters

SINGAPORE, Oct.11 (Reuters) - The CBOT wheat December contract will extend its gain to $7.57 per bushel, the wave (b) peak, as a bullish trend has been established.

The uptrend is developing towards an eventual target at $8.68, as the correction from that level adopted an "a-b-c" wave mode, which indicates the following rally would be able to push the price high above the preceding wave "3" top.

But before the aggressive $8.68 level is targeted, a realistic target would be at $7.57, and correction would be limited to a descending trendline support at $7.00.

2010 Wheat Price Trends: Frbiz Forecasts

BEIJING, /PRNewswire-Asia/ -- Frbiz.com one of China's leading B2B search platforms, forecasts 2010 wheat price trends.

Since September, with the influences of domestic demand, the wheat market basically remained steady.

Frbiz analyzes that with the autumn grains listed in the market, in October, although the wheat market will not appear to have big fluctuations, the prices are expected to remain upwardly strong.

First, when autumn grains are listed on the market, the wheat circulation will reduce.

On one hand, as most of the major farmers dedicate the main manpower and material resources to new corn harvest, detracting from winter wheat seed, which will make some areas' wheat sales stagnant, reducing list market volume.

On the other hand, trading business will gradually turn to autumn grains, wheat purchase and sale will be relatively postponed, which will lead to local area supply imbalances, spurring a slight rise.

Second, the flour is in peak season, creating purchase increases.

In recent times, flour market purchasing demand has increased; some enterprises report flour sales in September increased 30%-40% over August.

Frbiz's data shows that domestic small packing flour retail prices increased 0.2%. Among them, Jinan, Chongqing and Guangzhou prices respectively rose 1.3%, 1.2% and 0.9%, and currently the small packing flour price is the highest since 2009.

Third, national policy on rural issues supports market increases.

In recent years, the national government has paid attention to rural issues, implementing policies on the minimum purchase prices , which continue to improve the lowest purchase price level, and implementing storage measures for wheat, rice, corn, and soybeans that strengthen food market regulation and let food prices maintain a steady rising trend.

In addition, in the second half-year, all market prices for meat, eggs, garlic, green beans, vegetables and minor cereals rose, and currently Chinese market grain prices totally increased, which will spur wheat prices to increase as well.

Frbiz.com

Wheat and corn rise as Ukraine limits exports

By Javier Blas in London and Mark Rachkevych in Kiev

Published: October 7 2010 19:24 | Last updated: October 7 2010 19:24

Wheat and corn prices rose after Ukraine said it would impose export restrictions on agricultural commodities until the end of the year after a drought this summer devastated the country’s cereal crop.

Kiev said it would cap overseas sales of wheat and barley at 500,000 tonnes each and corn at 2m tonnes.

The cap announcement by first deputy prime minister Andriy Klyuev needs to be confirmed at a cabinet meeting next week.

“We introduced them [the quotas] on Monday,” he told reporters in Kiev.

Analysts said Ukraine had exported 4.2m-4.5m tonnes of winter grains, mostly wheat and barley, so the limits would leave little room for further sales.

Traders said the move to impose official export limits followed weeks of de facto limits in overseas sales using customs and administrative measures.

Andriy Yarmak, a Kiev-based agribusiness consultant, said the move would “adversely affect Ukraine’s global position on the grain market”, being another of Kiev’s frequent interventions in the market to ban or limit grain exports.

Dmytro Ushenko, agriculture analyst at BG Capital in Kiev, said the move came after “an acceleration in the pace of grain exports and the need to replenish state food grain reserves”.

He added that the export limits were also aimed “at bringing prices in check before the upcoming municipal elections to be held at the end of October”.

In Paris, Liffe December milling wheat rose 1.4 per cent to €206.75 a tonne.

Wheat prices are still below the two-year high hit last month at €238 a tonne after Russia announced an extension of its export ban in grains until mid-2011.

In Chicago, CBOT December corn prices rose 2.5 per cent to $5 a bushel.

Corn hit a two-year high of $5.28½ bushels in late September on concerns about a lower than expected crop in the US, the largest exporter of the cereal.

Barley prices in Europe also rose, with the cost of the grain in the physical market in northern France quoted at €185 a tonne.

Prices are below the highs reached this summer, when barley in Europe traded at an unusual premium to milling wheat.

Elsewhere in commodities markets, crude oil prices fell sharply amid profit-taking after three days of large gains and as the US dollar strengthened against the euro and other currencies.

In late afternoon trading, Nymex November West Texas Intermediate dropped $1.56 a barrel to $81.67 a barrel while ICE November Brent fell $1.86 to $83.23.

Crude oil prices remain within the $70-$85 a barrel range in place for most of the last year.

Traders will watch next week’s Opec meeting in Vienna for signals about the direction of the market.

The oil cartel is expected to maintain its production unchanged.

US natural gas prices fell nearly 5 per cent to $3.686 per million British thermal units on ample supplies.

Base metals prices fell, but prices remained high ahead of London Metal Exchange Week, the annual gathering of the industry in London.

Sugar futures headed for the biggest gain since May on concerns supplies in India, the world’s second-biggest producer, would be disrupted. Raw sugar for March delivery rose 1.38 cents to 24.92 cents a pound.

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Wheat Technicals from Reuters

SINGAPORE, Oct.7 (Reuters) - CBOT wheat's December contract <WZ0> should rise to $6.84 per bushel as a wave "c" or wave "3" is progressing.

The upward wave is expected to travel the same length with wave "1" or wave "a", to arrive at $6.84 - the 100 percent Fibonacci projection level - or it could travel to the 161.8 percent level at $7.02.

An inverted head-and-shoulders pattern could be forming, confirmation of which will be when wheat rises above $6.75, and a bullish target at $7.07 would then be established.

A fall below minor support at $6.55 would extend to $6.45. 

Commodity News Snapshot-Pakistan

THE RUPEE: dollar down further

KARACHI (October 07, 2010): Sharp recovery was witnessed on the currency market on Wednesday as the rupee maintained its surge mainly because of easy supply of the US currency, dealers said. The rupee was sharply higher by 14 paisa in relation to the greenback for buying and selling at 85.98 and 86.02, they said. In the third Asian trade dollar stayed near eight-month lows on the euro and edged towards a 15-year trough on the yen, hurt by expectations of Federal Reserve easing after Japan lined up its own reflation tools.

Prices remain firm on exporters' buying on cotton market

KARACHI (October 07, 2010): Prices showed firmness on the cotton market on Wednesday as exporters' buying helped the rates to retain the overnight levels, dealers said. The Karachi Cotton Association (KCA) official spot rate was inert at Rs 7,050; they said. In the ready business, nearly 20,000 bales of cotton changed hands between Rs 6,850-7,100; they said.

TCP offloads 24,800 tons of sugar in open market

KARACHI (October 07, 2010): Following the directives of the Economic Coordination Committee (ECC), the Trading Corporation of Pakistan on Wednesday offloaded 24,800 tons imported sugar in open market to stabilise soaring commodity prices. The ECC on September 21, decided to offload 50,000 tons of imported sugar in the open market to overcome sugar crisis, as provinces had completely failed to sell subsidies imported sugar in domestic market at low rates during Ramazan, following which sugar price hit peak level of Rs 82-84 per kg in retail market.

Gold, silver prices soar to new peaks

KARACHI (October 07, 2010): The prices of gold and silver on Wednesday struck new highs of Rs 43, 350 per tola and Rs 650 per tola respectively on the local market, traders said. Gold reached the record high mark of Rs 43, 000 per tola a day before on the local market, surpassed to a new rise of Rs 43, 350. Similarly, the price of gold 10-gram exceeded to the highest ever level of Rs 37, 157 from previous high of Rs 36, 857, according to traders.

Bullion Rates

KARACHI (October 07, 2010): Gold and silver rates in rupees per 10 grams prevailing in major cities on Wednesday (October 06, 2010).

International News

Malaysian palm oil jumps

KUALA LUMPUR (October 07, 2010): Palm oil prices hit a near one-week high on Wednesday on expectations of a new round of central bank action to ginger up weakening economies although a record US soy crop dragged on sentiment. Hopes of central banks easing monetary policies weighed on the greenback, as it would make dollar-priced commodities such as Malaysian palm oil and US soyaoil cheaper for big customers like China and India.

Gold at new record highs, just below $1,350 an ounce

LONDON: Gold rose to record highs for a second day in a row on Wednesday as investors punished the dollar ahead of the Federal Reserve’s possible resumption of special measures to protect the flagging economy.

Oil hits fresh 5-month high

LONDON: Crude oil reached a fresh five-month high after the release of US government figures that showed a large fall in product inventories. Markets responded to this sign of high product demand by pushing up prices, despite simultaneous data showing a higher than expected rise in crude oil stocks.

EU wheat jumps

MILAN (October 07, 2010): European wheat futures jumped on Tuesday on the back of strong gains in US grain futures and other commodities, shrugging off a rally in the euro that could hamper Europe's wheat competitiveness on world markets. Benchmark November on Euronext milling wheat futures closed at 205.75 euros ($283.3) a tonne, up 6.50 euros or 3.26 percent after hitting an intraday high of 206.00 euros. The next resistance level is estimated at 208 euros.

Wheat Technicals from Reuters

SINGAPORE, Oct 6 (Reuters) - CBOT December wheat would rebound to trade between $6.86-¾   and $7.00-¼   per bushel as a five-wave cycle ended around Monday's low of $6.43-1/2.

A Fibonacci retracement analysis on the fall from $7.57 to $6.43-½   reveals that the rebound may extend gains to a range formed by the 38.2 percent and 50 percent levels.


Its retracement will be limited to the wave "3" trough at $6.50-3/4, but a fall below $6.43-½   will be very bearish, setting a target of $6.27-3/8.
 

HGCA: World Wheat Market Faces 18M Ton Deficit in 2010-11

Global wheat markets are expected to fall into an 18 million metric ton deficit this year as soaring prices fail to dampen demand, figures from the U.K.'s Home Grown Cereal Authority show.

World wheat production is expected to fall to 643 million metric tons, 29 million tons lower than previously hoped, while demand is expected to stay relatively robust at 661 million tons, senior analyst Jack Watts told the HGCA conference in London.

However, significant global stocks - particularly in the U.S., which holds 13% of the world total - are expected to cushion this year's deficit and protect against a repeat of the 2007-2008 food price boom, Watts said.

Concerns that the world may face a repeat of the price spike of two years ago have mounted after a surge in grain prices, sparked by a ban on grain exports from Russia and weather problems in other major exporters, sent food prices to a 25-year high in September, according to the United Nation's Food and Agriculture Organization Price Index.

"On paper at least the U.S. can cope with this demand but we don't know how logistics have changed" since 2007 when the U.S. stepped up exports to fill a shortfall in global grain production, he said.

This year, the U.S. is also expected to step up exports to fill the world's supply gap, although overall world trade is expected to fall seven million tons to 119 million tons.

The recent surge in wheat prices, which have seen futures on Paris's NYSE Liffe exchange increase by 60% to near 2.5-year highs last month, has also made U.S. exports more competitive on the world stage despite suffering from a $12 disadvantage from freight rates, said Watts.

"The world hasn't run out of wheat, it's just that a lot of wheat is in the wrong place," he said.