Wheat Advances on Concern Rainfall May Damage Canadian Harvest; Corn Drops

Wheat futures advanced, paring the weekly decline, on concerns excessive rains in Canada may damage crops in the world’s third-largest exporter. 

December-delivery wheat increased as much as 0.8 percent to $7.03 a bushel in Chicago Board of Trade before trading at $6.99 at 10:53 a.m. Singapore time, taking the weekly loss to 5.4 percent, the most for the most-active contract since May 14.

Harvests of crops including wheat, barley and canola in Saskatchewan, Canada’s biggest wheat-growing province, were 18 percent complete as of Sept. 20, behind the five-year average of 65 percent, because of “significant rainfall in most areas,” the government said in a report yesterday. Frost affected the growing areas on Sept. 17 and 18, it said.

“Rain potentially reduces the overall quality” of the grain, Michael Pitts, commodity sales director at National Australia Bank Ltd., said by phone from Sydney. “We may have disease problems as well.”

Corn for December delivery declined 0.5 percent to $4.97 a bushel in Chicago, and headed for a 3.1 percent loss this week.

Farmers in Argentina, the world’s second-largest corn exporter, will plant more than previously forecast this year as rains may increase yields for the next harvest, the Buenos Aires Cereals Exchange said yesterday.

The crop will cover 3 million hectares, more than the 2.93 million hectares predicted a week ago, the exchange said in its weekly report. About 13 percent of the area is planted, it said.

World corn stockpiles will tumble to a four-year low of 131 million tons at the end of 2010-2011, 4 million tons below last month’s forecast, on reduced estimates for output in the U.S. and Ukraine, the International Grains Council said yesterday.

The global crop will be a record 824 million tons, smaller than the 829 million tons predicted last month, the council said.

“Comparatively higher prices of feed-grade wheat and barley are expected to shift some demand to imported maize, especially in South Korea, the Philippines and Israel,” the council said, raising its estimate on corn use in livestock feeds by 6 million tons to 485 million tons.

November-delivery soybeans were little changed at $10.93 a bushel, taking the weekly gain to 2.3 percent.

To contact the reporter on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net

[Bloomberg] 

Commodity News Snapshot-Pakistan

Flash floods cause over Rs 300 billion loss to agriculture sector

ISLAMABAD (September 23, 2010): The estimated loss to agriculture sector of Pakistan in recent flash floods is over Rs 275-300 billion. The representatives of farmers, cotton industry and leather industry while talking to Business Recorder said that the recent floods have caused severe damage to the standing crops along with shortage of livestock hence the government should provide maximum assistance for revival of the agro-economy.

Country has sufficient stock of wheat, rice: Kaira

ISLAMABAD: The federal cabinet was on Wednesday informed that the country had sufficient stock of wheat, rice and pulses despite massive crop losses in floods.

Over 800 containers of Pakistani rice held at Kenyan port: laboratory analysis reports awaited

KARACHI (September 23, 2010): Over 800 containers of Pakistani rice worth $8.0 million have been held at the Kenyan port as the authorities refused to release them until laboratory analysis reports. Kenyan customs have imposed restrictions that all rice imported into the country will not be released from the port until laboratory analysis reports (LAR) in respect to grading have been received in the station of clearance.

THE RUPEE: dollar crosses 86

KARACHI (September 23, 2010): The dollar was trading at 86 versus the rupee on the open market, it, however, shed its gains on the interbank market on Wednesday in process of trading, dealers said. The rupee fell in terms of dollar, shedding five paisa for buying at 85.90 and it also dropped by 15 paisa for selling at 86.10, they said.

TCP to offload 50,000 tons of sugar in open market

KARACHI (September 23, 2010): Following the Economic Co-ordination Committee (ECC) decision, the state run grain trader is all set to offload 50,000 tons imported white sugar in open market, a high official told Business Recorder on Wednesday. The ECC on Tuesday decided to offload imported sugar in the open market, after provinces failed to sell subsidised imported sugar in domestic market at low rates during Ramazan, following which sugar price surged to peak level of Rs 86 per kg in open market.

 

Cotton rates remain stable in improved activity as exporters enter market

KARACHI (September 23, 2010): Improved business was seen on the cotton market on Wednesday as exporters entered the market to make deals, dealers said. The Karachi Cotton Association (KCA) official spot rate did not show further rise, holding the overnight level at Rs 7,250, they said. In the ready business approximately, 13000 bales of cotton changed between Rs 7050-7400, they said.

 

Gold up by Rs 400 per tola

KARACHI (September 23, 2010): Gold on Wednesday touched a fresh peak of Rs 41,150 per tola while silver price equalised its previous record high of Rs 620 per tola on the local market, trader said. Gold was selling for Rs 40,750 per tola a day before and went up hitting a new high of Rs 41,150 on the local market, posting a rise of Rs 400. Price of gold per 10 gram touched Rs 35,271, up from Rs 34,942, they said.

Bullion Rates

KARACHI (September 23, 2010): Gold and silver rates in rupees per 10 grams prevailing in major cities on Wednesday (September 22, 2010).

International News

Malaysian palm oil rises

KUALA LUMPUR (September 23, 2010): Malaysian palm oil and its rival US soyaoil recorded small gains on Wednesday as traders waited for more news on weather in key grain producing regions in the Americas and Asia. Chinese financial markets are closed for the rest of this week, giving few cues to vegetable oil trade.

US wheat futures recover

HAMBURG (September 23, 2010): US wheat futures rose by more than one percent in European and Asian trade on Wednesday, buoyed by a weaker dollar as well as a fresh tender by Egypt, the world's largest wheat importer. The US Federal Reserve's determination to prevent deflation, revealed on Tuesday, also lent support, given that investors often buy commodities as a hedge against inflation.

Oil falls below $75 a barrel

LONDON: Oil fell below $75 a barrel on Wednesday, reversing earlier gains after government inventory data showed a rise in crude and oil product stocks.

Gold hits record high, above $1,295 an ounce now

* Silver also hit a 2½-yr peak, edges closer to its highest in 30 yrs

LONDON: Gold hit record highs for a fifth consecutive session on Wednesday after the Federal Reserve signalled it stood ready to inject fresh cash into the economy, knocking the dollar and whetting investor appetite for bullion.

Commodity News Snapshot-Pakistan

 Wheat production target

1.08mt seeds for 25mt wheat required

ISLAMABAD: To achieve the wheat production target of 25 million tonnes, the country requires about 1,085,400 metric tonnes of wheat seeds for the upcoming Rabi Season (October to March) 2010-11, it was learnt on Tuesday.

Gold at new high of Rs 40,750 per tola

KARACHI (September 22, 2010): Gold prices on Tuesday continued soaring up to a new record level of Rs 40, 750 per tola on the local market, traders said. Gold was available at Rs 40,700 per tola a day before and closed with Rs 50 increase while price of gold 10-gram also reached a new high of Rs 34,928 up from Rs 34,885, they said.

THE RUPEE: dollar seen rising

KARACHI (September 22, 2010): Sharp decline was seen in the value of the rupee against dollar on the interbank market on Tuesday due to rising demand for the US currency, dealers said. Amid persisting dollar buying, the rupee was not able to resist its slide, dropping 11 paisa for buying and selling at 85.95 and 85.99, they said.

25 percent regulatory duty on raw sugar to go

ISLAMABAD (September 22, 2010): The Economic Co-ordination Committee (ECC) of the Cabinet on Tuesday decided to withdraw 25 percent regulatory duty on import of raw sugar and allowed private sector to import the commodity. The decision to this effect was taken by the ECC meeting presided over by Finance Minister Dr Abdul Hafeez Sheikh here.

TCP to scrap another sugar tender

KARACHI (September 22, 2010): The Trading Corporation of Pakistan (TCP) is to scrap another sugar import tender of 100,000 tons awarded to China-based company in May 2010, it is learnt. Sources told Business Recorder on Tuesday that China-based company Yunnan, participating in two sugar import tenders, had offered lowest bids and later finalised two separate deals with the TCP for supply of 200,000 tons of sugar.

Cotton spot rate jumped to Rs 7,250; lint prices stable as demand persists

KARACHI (September 22, 2010): Trading activity improved on the cotton market on Tuesday as mills extended buying on expectations of corrective measures and concessions by the government to boost exports, dealers said. The Karachi Cotton Association (KCA) official spot rate was raised by Rs 150 for the second day in a row to Rs 7,250, they said.

 

Bullion Rates

KARACHI (September 22, 2010): Gold and silver rates in rupees per 10 grams prevailing in major cities on Tuesday (September 21, 2010).

International News

Malaysian palm oil dips

KUALA LUMPUR (September 22, 2010): Most vegetable oil prices dipped on Tuesday as traders booked some profits after concerns of dry weather in the Americas and frost in China and Canada drove markets up the previous day. Malaysia's December palm oil dropped 1.3 percent to close at 2,674 Malaysian ringgit, easing from a five-week high on Monday. The most active May soyaoil contract on China's Dalian Commodity Exchange fell 0.2 percent after touching a record high the previous day.

New York sugar falls

NEW YORK (September 22, 2010): ICE benchmark raw sugar futures fell from a seven-month high and closed lower on Monday, unable to sustain their rally, while arabica coffee logged its biggest one-day drop in four weeks. Cocoa futures finished down.

 

Oil slips to around $74

LONDON: Oil fell to around $74 a barrel on Tuesday on concerns over the outlook for the global economy ahead of a key Federal Reserve meeting on US monetary policy.

 

Gold hits new peak

NEW YORK (September 22, 2010): Gold prices climbed to a fourth consecutive record high on Tuesday after the US Federal Reserve inched nearer to taking new steps to stimulate the US economy. Spot gold rose to a new record of $1,290.70 an ounce by 3:56 pm EDT (1956 GMT) from $1,272 prior to the Fed announcement.

Wheat Futures Advance as Cold Weather Threatens Crops in Canada, China

Wheat rose for the first time in four days as cold weather threatened crops in China and Canada, the world’s second-biggest exporter.

An overnight freeze damaged wheat, canola and barley in Alberta and Saskatchewan, said Drew Lerner, the president of World Weather Inc. in Overland Park, Kansas. In China, the cold may hurt corn in the biggest growing-region, according to the National Grain & Oils Information Center website. That may boost demand for wheat to use in livestock feed.

“Canada’s harvest problems are helping prices,” said Darrell Holaday, the president of Advanced Market Concepts in Manhattan, Kansas. “The Chinese freeze threat is another thing. We’re going from one weather scare to another.”

Wheat futures for December delivery rose 20 cents, or 2.8 percent, to close at $7.3925 a bushel at 1:15 p.m. on the Chicago Board of Trade, ending the week up 0.3 percent.

The price has gained 7.8 percent this month on speculation that reduced production in Russia and Ukraine will boost demand from other exporting countries.

The U.S. is the biggest wheat exporter, followed by Canada, Russia and Australia, according to the Department of Agriculture. The grain is the fourth-biggest U.S. crop, valued at $10.6 billion in 2009, behind corn, soybeans and hay, government data show.

Corn gained 3.5 percent today and is up 17 percent this month on speculation that adverse weather will curb production as demand rises.

“So much of the wheat in the world is used for feed,” Holaday said. “It’s tied at the hip to corn.”

To contact the reporter on this story: Tony C. Dreibus in Chicago at tdreibus@bloomberg.net.

Corn Trades at More Than $5 a Bushel for First Time Since September 2008

Corn futures climbed above $5 a bushel for the first time in almost two years in Chicago on concern that falling yields in the U.S. and higher demand from importers will erode supplies in the world’s largest exporter.

December-delivery corn advanced as much as 3.2 percent to $5.1175 a bushel on the Chicago Board of Trade, the highest price for the most-active contract since Sept. 30, 2008, and was at $5.09 at 12:25 p.m. Paris time.

“The fundamentals for corn are quite bullish for the moment,” Chung Yang Ker, an analyst at Phillip Futures Pte., said by phone from Singapore today.

Rising demand for U.S. corn exports and lower-than-expected yields may reduce the nation’s stockpiles before next year’s harvest to about 7 percent of domestic demand, the second-lowest ratio on record, according to Rabobank analysts.

That will be smaller than the 15-year low for the stocks- to-use ratio of 9.8 percent forecast by the U.S. Department of Agriculture on Sept. 10.

Corn rose for a seventh session in Chicago, the longest winning streak since June 2008. The December contract is set for a 6.4 percent gain this week.

The USDA may pare its estimates of U.S. yields in the coming months, after a very hot summer, Rabobank analysts Luke Chandler and Doug White wrote in a Sept. 16 report.

The analysts forecast yields at 161 bushels an acre, taking the nation’s crop to 13 billion bushels, down from a record 13.11 billion bushels last season, and the government’s Sept. 10 estimate of 13.16 billion bushels.

‘Major Risk’

“Further erosion of corn-production estimates in the U.S. remains a major risk for the world feed-grain market in 2010- 2011,” the analysts wrote.

December-delivery wheat gained 2.1 percent to $7.34 a bushel in Chicago, paring a weekly loss. Milling wheat for November delivery on NYSE Liffe rose 2.2 percent to 233.75 euros ($306.49) a metric ton in Paris.

The outlook for winter-wheat planting in Russia is one of “doom and gloom” as main growing regions in the Volga and Southern Federal Districts received too little rain to relieve a drought, forecaster Martell Crop Projections said yesterday.

November-delivery soybeans climbed 1.6 percent to $10.525 a bushel, set for a 2 percent advance this week.

To contact the reporter on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net.

Commodity News Snapshot-Pakistan

Government decides to waive 25 percent regulatory duty on raw sugar import

ISLAMABAD (September 17, 2010): The federal government has decided in principle to waive the 25 percent Regulatory Duty (RD) on import of raw sugar to plug in the expected shortage next year. However, the quantity of raw sugar import is yet to be finalised, well-informed sources told Business Recorder.

SGA urges federal government to allow tax free import of raw sugar

LAHORE (September 17, 2010): Sugarcane Growers Association (SGA) Convenor Javed Malik has urged the federal government to act swiftly in the interest of consumers (common men) and allow tax free import of raw sugar to meet any possible shortage of sugarcane and stabilise the sugar prices in the open market.

Gold prices touch new peak

KARACHI (September 17, 2010): Gold prices continued to reach new peak of Rs 40, 550 per tola on the local market following a global market surge to $1273 an ounce on Thursday, traders said. Gold price crossed the last high of Rs 40, 275 per tola as market closed on new historic high with increase of Rs 275. Price of gold per 10 grams also hit a fresh high of Rs 34, 757 up from Rs 34,521 in a single day trading, traders said.

Sub-committee formed to finalise details of raw sugar import

ISLAMABAD: Ministerial Committee set up by economic coordination committee (ECC) on sugar Thursday formed a sub-committee to decide within a week the details of the quantity, timing and modus operandi of import of raw sugar for the season 2010-11.

Lint prices sustain upward rally

KARACHI: Lint prices continued to rise on higher demand by leading buyers while trading activities remained range bound with strong physical price at Karachi Cotton Association (KCA), traders said Thursday.

International News

Liffe sugar higher

LONDON (September 17, 2010): Liffe December white sugar ended $15.00 higher at $608.20 per tonne on Thursday, supported by worries over the impact of drought on Brazilian yields. Liffe December cocoa ended 31 pounds higher at 1,884 pounds a tonne. Market rebounding after falling to lowest level in more than one year earlier in the week but favourable outlook for crops in West Africa should keep a lid on prices.

New York sugar retreats

NEW YORK (September 17, 2010): Sugar futures retreated on profit-taking Thursday from a 6-1/2 month top in the face of a resurgent dollar after Japan weakened its currency for the first time in six years. The rest of the complex consolidated, with cocoa futures pressured by favourable prospects for crops in West Africa, the world's premier cocoa-growing region.

UK July wheat exports rise above 50 percent

LONDON (September 17, 2010): UK wheat exports during July, the first month of the 2010/11 marketing year, were 251,733 tonnes, up 52 percent from 165,636 tonnes in the same month last year, customs data showed on Wednesday. The total included an unusual sale of 58,314 tonnes to Vietnam. The only sale of UK wheat to a customer in Asia during the 2009/10 season was 49,500 tonnes to the Philippines.

Wheat Gains for First Time in Three Days as Drought Slows Russian Planting

Wheat advanced for the first time in three sessions as grain plantings in Russia, the world’s third-largest wheat grower last season, lagged behind last year’s pace and recent declines lured buyers.

December-delivery wheat rallied as much 1.5 percent to $7.3775 a bushel on the Chicago Board of Trade, after slumping 2.5 percent in the past two days. The contract was at $7.3425 a bushel at 10:51 a.m. Singapore time.

Farmers in Russia have planted 5.8 million hectares (14.3 million acres) of grains so far this season, compared with 10.8 million hectares in the same period last year, the country’s Agriculture Ministry said yesterday.

“The Russian planting pace is slower than the market hoped,” Michael Pitts, a commodity sales director at National Australia Bank Ltd., said by phone from Sydney. “That’s providing some underlying support.”

The Russian wheat harvest was at 34.3 million tons from July 1 through Sept. 16, the ministry said, compared with the 48 million tons reported by the government in the same period last year. Yesterday’s harvest estimate by the ministry didn’t provide a comparison with the previous year.

Total grain harvests were 51 million tons as of yesterday, the ministry said. That compares with 77.4 million tons in the same period last season, according to the 2009 report.

Wheat declined in the past two days after rain improved soil moisture in the southern Great Plains as farmers prepare to plant winter crops in the U.S., the world’s largest exporter, and the Australian government forecast its wheat harvest to rise to 25.1 million tons, the third-biggest on record.

‘Bargain Hunters’

“There’s certainly been a range of buyers who are looking for a fall-off in the market,” Pitts said. “We’re certain to see bargain hunters out there.”

Prices have fallen 15 percent since trading at a 23-month high of $8.68 a bushel on Aug. 6, the day after Russia announced a ban on exports that was later extended through next year.

December delivery corn was unchanged at $4.9525 after gaining for the past five days. Corn futures have advanced 13 percent this month, outpacing wheat’s 7 percent advance, as investors boosted bets on price gains.

The U.S. Department of Agriculture has cut its estimates for U.S. and worldwide inventories every month since May, as drought or excessive rains in some of the world’s largest exporters slashed harvests of wheat and barley. To meet livestock-feed requirements, buyers may turn to the U.S., which accounts for more than half of global corn exports, according to USDA data.

That will take corn inventories in the U.S. before next year’s harvest to about 9.8 percent of domestic consumption, the lowest level in 15 years.

“There’s a very good fundamental story that hasn’t quite made a bit of a run, and that’s attracting investor interest” in corn, Pitts said.

November-delivery soybeans climbed as much as 0.4 percent to $10.465 a bushel, before trading at $10.4525. 

To contact the reporter on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net