WASHINGTON, July 18 (Reuters) - U.S. Agriculture Secretary Tom Vilsack said the worsening Midwest drought will result in sharply higher crop prices, but there is no need yet to seek a reduction in corn-based ethanol production.
Vilsack urged Congress to work with the Obama Administration on ways to improve aid to farmers struggling with a crop that will be sharply reduced from the searing heat and lack of rain.
Thursday, July 19, 2012
RTRS- Dry weather to keep Cargill palm output flat in 2012
JAKARTA, July 18 (Reuters) - Crude palm oil output at Cargill will be unchanged at 300,000 tonnes this year, the U.S. agribusiness company said on Wednesday, as dry weather in Indonesia hurts production.
Crude palm oil shipments from the world's top producer have been hit by dry weather this year. For most of the archipelago, the rainy season is from October until April, although this can fluctuate.
"Why no improvement? We've gone through dry spells," said John Hartmann, chief operating officer at Cargill Tropical Palm Holdings, which runs the company's palm oil plantations, all of which are in the archipelago.
"The last two months have been very dry, and it's having an impact on our production," Hartmann told Reuters.
Cargill's plantations are in South Sumatra and West Kalimantan.
"Kalimantan was down and is recovering, and now we're seeing the down cycle go through Sumatra," Hartmann said.
Minneapolis-based Cargill, one of the world's largest privately held corporations, has about 70,000 hectares of palm oil plantations, up 6,000 hectares on 2011, said Hartmann.
"I don't know if it is an El Nino type of impact or not but certainly we went through a three-year cycle of above average rainfall, and now for the last 12 months or so it's been below average," he added.
Indonesia is not the only major commodity producer suffering from dry weather. The U.S. grain belt has been scorched by the worst drought since 1956, cutting estimated output and quality of corn and soybean crops, and bumping up benchmark global prices. (nL2E8IGFYC)
Malaysian crude palm oil futures dropped to a near three-week low on Wednesday, as traders booked profits partly on weaker exports and better production outlook in Malaysia after the U.S. weather-fuelled rally.
Weather, softening demand and falling oil prices could all play a role in prices for the second half, said Hartmann, who was unable to give an exact forecast.
Trader's Highlight
DJI- NEW YORK, July 18 (Reuters) - The S&P 500 touched its highest level since early May on Wednesday as corporate profits from bellwethers like Intel and Honeywell defied fears of a collapse in earnings.
Based on the latest available data, the Dow Jones industrial average .DJI was up 102.10 points, or 0.80 percent, at 12,907.64. The Standard & Poor's 500 Index .SPX was up 9.07 points, or 0.67 percent, at 1,372.74. The Nasdaq Composite Index .IXIC was up 32.56 points, or 1.12 percent, at 2,942.60.
NYMEX- NEW YORK, July 18 (Reuters) - U.S. crude futures rose a sixth session on Wednesday, reaching a seven-week peak as violence in Syria and tensions with Iran reinforced geopolitical fears and U.S. Federal Reserve Chairman Ben Bernanke downplayed the risk of a double-dip recession.
Gasoline posted the biggest percentage gain of the day in the oil futures complex, receiving lift from the government's inventory report showing gasoline stocks fell last week, against expectations for a rise.
CBOT SOYBEAN- Chicago Board of Trade soybean futures were higher on Wednesday led by strong cash markets, tight stocks, slow farmer selling and strong soymeal, traders said.
* August soymeal SMQ2 soared to a record high $514.00 per ton on strong cash, tight stocks and as traders buy old-crop futures amid fears of a U.S. soy crop shortfall due to the worsening drought.
• Traders were buying old-crop August soybeans on fears of a shortfall of U.S. soybean supplies amid the worst drought in the U.S. Midwest in over 50 years.
• Midday weather updates on Wednesday indicate more hot, dry weather for the U.S. Midwest, where corn and soybean crops are rapidly deteriorating amid the harshest drought in more than half a century.
• "It's a little wetter for next week in the west and southwest but even if the rains fall they would only be 0.50 inch or less so not much relief and confidence is low in that forecast," said Don Keeney, a meteorologist for MDA EarthSat Weather.
• U.S. Agriculture Tom Vilsack said the worsening Midwest drought will result in sharply higher crop prices, but there is no need yet to seek a reduction in corn-based ethanol production. (nL2E8II9EM)
• August is above all key moving averages. The nine-day RSI was at 82.
FCPO- SINGAPORE, July 18 (Reuters) - Malaysian crude palm oil futures slid to a near three-week low on Wednesday, as traders booked profits partly on weaker exports and better production outlook in Malaysia after a recent U.S. weather-fuelled rally.
Malaysia's July 1-15 palm oil exports tumbled more than 20 percent from a month ago at a time when stronger production is expected for the month. Slower exports and higher output could see palm oil stocks climb again after falling to a 14-month low in June.
But some traders kept a bullish outlook as the U.S. drought that damaged soybean crops could still shift demand to refined palm oil that is trading at a discount of above $200 to soyoil.
"I think the market just doesn't have enough push to go up further at the moment," said a Singapore-based trader with a commodities house.
The benchmark October palm oil futures FCPOc3 on the Bursa Malaysia Derivatives Exchange fell 2.2 percent to close at 2,994 ringgit ($947) per tonne, after going as low as 2,990 ringgit -- a level unseen since June 28.
Traded volumes were high at 39,170 lots of 25 tonnes each, compared to the usual 25,000 lots.
REGIONAL EQUITY- BANGKOK, July 18 (Reuters) - The Philippines and Thailand stock markets fell on Wednesday while other markets edged up, but optimism over further stimulus by the U.S. Federal Reserve evaporated after its mixed signals on the global economy.
Fed Chairman Ben Bernanke offered a gloomy view of the U.S. economy at a semi-annual Congressional testimony on Tuesday, but hopes that the central bank is moving closer to more stimulus measures limited the day's losses.
The Philippines .PSI lost 1.2 percent and Thailand .SETI fell 0.3 percent.
All Southeast Asian markets except Thailand saw thin trading volumes compared to their respective 30-day averages after Bernanke's testimony.
Malaysia .KLSE bucked the trend, edging up 0.4 percent to hit a new all-time high close for the third straight session, helped by continuous foreign inflows. On Wednesday, it saw net foreign buying of $21.63 million in equities.
Singapore .FTSTI ended a tad firmer with a 0.1 percent gain, while Indonesia .JKSE closed steady.
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