Monday, August 27, 2012

RTRS- UPDATE 1-Brazil's new soy harvest, exports to set record-Abiove

SAO PAULO, Aug 24 (Reuters) - Brazil's grain industry association Abiove expects the world's No. 2 soy producer to turn out a record new crop of 81.3 million tonnes, possibly surpassing output from the drought-stricken United States for the first time, Abiove said on Friday.


Increased output should cause exports of the crop that will be planted starting from Sept. 15 to soar to 37.5 million tonnes, beating the previous 33.8-million-tonne export record from the 2010/11 crop.

A record 2012/2013 soybean harvest from Brazil would be welcomed by global policymakers since drought in the top-producing United States has driven up future prices and stirred up memories of the 2008 food riots.

Spot soybeans Sc1 rose 1 percent in Chicago on Friday, close to an all-time high ahead of final crop estimates from the Pro Farmer tour of the dry U.S. Midwest. (Full Story)

"Brazil will be the largest producer in the world if the United States doesn't recover from the averse climate," Abiove said in a report.

Abiove also raised slightly its export forecast for the 2011/2012 crop that finished harvest in May to 30.5 million tonnes from 30 million tonnes in its previous forecast.

Most of the exports from the meager 66.6-million-tonne crop have already been shipped. Sales abroad slipped to 4.13 million tonnes in July, down 15 percent from June. (Full Story)

June through September are typically the peak export month for soybeans, but lower output from Brazil and worries about dwindling supplies after the U.S. drought encouraged earlier sales this year.

Abiove does not explain why it adjusts its estimates, which are based on a survey of associated crushing plants.

RTRS- El Nino may spur early planting in Brazil after dry August

SAO PAULO, Aug 24 (Reuters) - After a dry August, El Nino rains could jump-start a bumper grain crop in Brazil, the world's No. 2 soybean producer, and ease fears of a global food shortage.

After two years of irregular rainfall over Brazil's grain belt during the La Nina ocean/climate phenomenon, warmer surface waters off the coast of Peru associated with El Nino have raised hopes of steadier, more abundant showers starting in September.

Analysts expect an unprecedented soybean comeback in Brazil this year, with weather forecasts, prices and a favorable exchange rate encouraging bets on soy after drought left a disappointing 65-million-tonne crop last season. (Full Story)

On the low side, Minas Gerais-based analyst Celeres expects Brazil's overall soy crop to produce a record 78.1 million tonnes, while Safras e Mercado foresees an 82.3-million-tonne crop. The government starts official forecasts in October.

"An El Nino year means above-average rainfall in the center and south of Brazil," said Flavio Franca Jr, chief soy analyst at Safras. "We are expecting the harvest to be much better than last year, which is probable because the climate was so awful."
A record 2012/2013 soybean harvest from Brazil, especially an early one, would be welcomed by global policymakers since drought in the top-producing United States has driven up future prices Sc1 and stirred up memories of the 2008 food riots.

Though planting soy before Sept. 15 is against the law in Brazil, where the government enforces measures to contain the spread of Asian rust fungus, farmers try to plant corn in August, rain permitting.

"We've had farmers calling to say they are planting corn. With rains possibly returning in September, they are planting the first corn crop to take advantage of rains that will be constant until November," said weather forecaster Olivia Nunes of Sao Paulo-based Somar Meteorologia.

The organization of farming cooperatives Ocepar in No. 2 soybean producing state Parana estimates planting will start on S e pt. 21 for 40 percent of farmland, manager Flavio Turra said.



RISKS AND REWARDS

Producers in Parana that planted soy early last year suffered most from the drought later in the season, but higher prices and the likely rains from El Nino help to justify the risk this year, Ocepar's Turra said.

Farmers in neighboring Argentina, to the south, have already seen unusually early rain this year. With the pampas farmland on track for t h e wettest August on record, they also plan to start planting corn, and perhaps soy, earlier than expected after drought parched crops last year there.(Full Story)

But farmers in Brazil still have no hard evidence of rain. A dry August in Brazil's grain belt has some doubting this year will be different from the past two, when soybean planting did not start until at least late October.

"We are still in a transition between El Nino and La Nina," said Marcelo Garrido, an economist at Parana's state agriculture agency Deral. "Parana is in a longer drought period. It still hasn't rained in August."

A grains trader in Mato Grosso confirmed a dry August in center-west Brazil, where grain planting starts before moving south. But that isn't stopping farmers from forward selling the crop faster than ever before, he said. (Full Story)

Brazil collected a record, high-yielding crop in 2010 even after La Nina climate delayed planting.

Harvest was put off from December until February that year, slowing delivery to ports. Delays could be a bigger concern in a year Brazil's soy exports may be needed to ward off a food shortage abroad.

An early soy harvest in Brazil is also important for farmers hoping to sow a second corn crop. They can start planting corn as early as January in the same fields from which they harvest their soybeans.

Brazil brought in a record 72.8-million-tonne corn crop this year thanks to a strong second crop, and the United States has been importing Brazilian corn, as it faces an expected shortage.

RTRS- UPDATE 1-Pro Farmer sees US corn, soy harvest lowest since 2003

CHICAGO, Aug 24 (Reuters) - The U.S. corn and soybean harvest will be smaller than the government is predicting due to the devastating drought that crippled crop production across the Midwest, Pro Farmer said on Friday.

The farm newsletter predicted U.S. corn production at 10.478 billion bushels, based on a yield of 120.25 bushels per acre. That compares with the U.S. Agriculture Department's latest forecast of a 10.779 billion bushel crop on a yield of 123.4 bushels per acre.

Soybean production was seen at 2.60 billion bushels on a yield of 34.8 bushels per acre, Pro Farmer said. Earlier this month, USDA pegged the soybean harvest at 2.692 billion bushels and yield at 36.1 bushels per acre.

If the forecast is realized, both crops would be the smallest since 2003. The low yields promise to tighten up world supplies and add to food inflation around the world.

Pro Farmer released its estimate following its annual crop tour, which surveyed more than 2,200 corn and soybean fields in Midwest states that accounted for 73 percent of U.S. corn production in 2011 and 66 percent of soybean production.



In Iowa, the top producer of both corn and soybeans, Pro Farmer pegged corn yields at 139 per bushels per acre as the corn went through its yield-determining phase of growth in scorching temperatures and parched soils.

"Iowa’s early start to the growing season turned into a mid-season nightmare for corn trying to pollinate and fill kernels," a Pro Farmer news release said.

Soybean yields in Iowa were forecast at 41 bushels per acre. Pro Farmer said the state's soybeans were the "least bad" of the western Corn Belt.

Corn and soybean prices rose this week -- with soybeans posting a 5.2 percent gain -- as reports from the tour trickled in, underlining the damage done by the worst drought in more than half a century.



Trader's Highlight

DJI- NEW YORK, Aug 24 (Reuters) - U.S. stocks climbed on Friday on news the European Central Bank is considering setting targets in a new bond-buying program that could help contain euro-zone borrowing costs and on hopes of more stimulus from the Federal Reserve.

Despite the day's advance, the S&P 500 broke a six-week string of gains. For the week, the benchmark index fell 0.5 percent. Conflicting perceptions of the Fed's commitment to provide more stimulus took a toll on the market this week.

Investor sentiment received a lift on Friday from U.S. Fed Chairman Ben Bernanke, who said the Fed has room to deliver additional monetary stimulus to boost the U.S. economy. Bernanke made the comment in a letter to a congressional oversight panel. (Full Story)

The letter comes a week ahead of the annual economic symposium at Jackson Hole, Wyoming, where Bernanke and ECB President Mario Draghi will speak.

The ECB is discussing yield-band targets under a new bond-buying program to let it shield its strategy and avoid speculators trying to cash in, central bank sources told Reuters on Friday. Any decision would not be made before the ECB's Sept. 6 policy meeting. (Full Story)

"If there can be a nice balance of stimulus that keeps interest rates low, as opposed to throwing more debt at the problems in Europe, and some level of austerity, Europe can get out of this tangle. But that balance is really the key," said Bryant Evans, investment advisor and portfolio manager at Cozad Asset Management, in Champaign, Illinois.

The market's gains were fairly broad. The S&P financial index .GSPF rose 0.6 percent, with shares of American Express AXP.N up 1.9 percent at $57.49. The S&P consumer discretionary index .GSPD climbed 0.8 percent, with shares of Amazon.com AMZN.O up 1.9 percent at $245.74. During the session, Amazon's stock hit a lifetime intraday high of $246.87.

The Dow Jones industrial average .DJI rose 100.51 points, or 0.77 percent, to end at 13,157.97. The Standard & Poor's 500 Index .SPX added 9.05 points, or 0.65 percent, to 1,411.13. The Nasdaq Composite Index .IXIC gained 16.39 points, or 0.54 percent, to close at 3,069.79.

Volume was the second lowest for a full day this year, with 4.6 billion shares trading on the New York Stock Exchange, the Nasdaq and the Amex. The year-to-date average is 6.6 billion.

NYMEX- NEW YORK, Aug 24 (Reuters) - U.S. crude oil futures ended lower on Friday following a trade journal report that the International Energy Agency may release strategic oil reserves as early as September after dropping its resistance to a U.S.-led plan.
 
CBOT SOYBEAN- New-crop soybean futures on the Chicago Board of Trade rose 1 percent, halting a two-day slide on concerns about tightening U.S. supplies and unrelenting demand from exporters and domestic processors, traders said.

* The United States is the world's primary soy supplier until the next South American harvest arrives in early 2013.

• After the CBOT close, newsletter Pro Farmer projected U.S. 2012 soybean production at 2.6 billion bushels, below the USDA's outlook for 2.692 billion, following a week-long crop tour. (Full Story)

• Traders were also monitoring Typhoon Bolaven, which is forecast to reach mainland China by the middle of next week, potentially threatening the country's soybean and corn crops.

• Benchmark CBOT November soybeans SX2 ended the week up more than 5 percent, the contract's fourth straight weekly rise and the ninth in 10 weeks as the worst drought in five decades scorched U.S. Midwest crops.

• Gains limited by softening cash bids for soybeans in the interior Midwest and the U.S. Gulf following a pick-up in farmer sales this week. (Full Story) (Full Story)

• Brazilian grain industry association Abiove projected Brazil's 2012/13 soybean production at a record 81.3 million tonnes, possibly surpassing output from the United States. (Full Story)

• After a dry August, El Nino rains could jump-start a bumper grain crop in Brazil, the world's No. 2 soybean producer, and ease fears of a global food shortage. (Full Story)

FCPO- KUALA LUMPUR, Aug 24 (Reuters) - Malaysian crude palm oil futures edged higher on Friday, rising 3.6 percent in a second straight weekly gain as global oilseed supply fears and rising export demand supported prices.

A crop tour continued to give evidence of the devastation caused by the U.S. grain belt's worst drought in half a century, which has lifted soybean prices to all-time highs in recent weeks. Fears of tighter soybean oil supply have spurred a shift in vegetable oil demand to the cheaper palm oil. (Full Story)

Corn and soy fields in Iowa, the No.1 growing state for both crops, have fallen victim to the historic drought, which is expected to drag national yields below the government's latest projections, according to the Pro Farmer Midwest Crop Tour.

"The market is trying to catch up with soyoil, especially as its premium over palm oil is at more than $250 per tonne," said a trader with a foreign commodities brokerage in Malaysia.

"Exports should improve further. The market has further room to move higher, it is still trading in a tight range of 3,050-3,100 ringgit."

The benchmark November 2012 contract FCPOc3 on the Bursa Malaysia Derivatives Exchange gained 0.3 percent to close at 3,069 ringgit ($990) per tonne. Prices hit a high of 3,100 ringgit on Thursday, a level last seen on July 17.

Futures notched up a gain of 3.6 percent this week, the best weekly performance since July.

Total traded volumes stood at 26,872 lots of 25 tonnes each, slightly higher than the usual 25,000 lots.

REGIONAL EQUITY- BANGKOK, Aug 24 (Reuters) - Most Southeast Asian stock indexes ended lower on Friday as doubts about possible stimulus by the U.S. Federal Reserve prompted a broad sell-off, while Vietnam snapped a three-day losing streak as support from regulators eased concerns of banking risks.

The Ho Chi Minh Stock Exchange's VN Index .VNI advanced 1.8 percent, regaining some lost ground from a drop of 10.5 percent over the past three sessions after police arrested the former chief executive officer of Asia Commercial Bank ACB.HN.

Some Vietnamese banking shares rebounded after investor confidence has been restored, with stocks of Saigon Thuong Tin Commercial Joint Stock Bank STB.HM, among actively traded issue on the Ho Chi Minh bourse, up 2.03 percent.

Vietnam's key stock index posted its biggest weekly fall in over three months of 7.8 percent, the worst performer in the region. The Philippine index .PSI was the second worst, falling 1.2 percent on the week.