CME Early Call: Grains, soybeans to open higher
Corn futures are expected to open 6 to 8 higher; soybeans 35 to 40 higher in
the old crop, 6 to 14 higher in the new crop; wheat mostly 15 to 25 higher.
Speculative buying pushed prices higher in overnight trade and the opening call
is higher as well. Look for volatile trading action to return.
Nestle CEO attacks biofuel subsidies
The chief executive for Swiss food giant Nestle is warning against the production and promotion of biofuels. Peter Brabeck-Letmathe, widely quoted in wire services worldwide over the weekend, says planned subsidies for biofuels are "irresponsible and immoral" according to some reports.
In statements made over the weekend, Brabeck-Letmathe says there will be no food left to eat if 20% of the world's oil demand is fulfilled by biofuels. He claims that water and land for cultivation are becoming more scarce.
The drive to biofuels is also behind the rising prices for soybeans, corn and wheat, he says. His call comes along with renewed warnings from the United Nations Special Rapporteur on the Right to Food - Jean Ziegler - who also issued more warnings.
Oil, Gold Decline on Dollar Recovery
Crude oil and gold extended declines Tuesday as the dollar rebounded on speculation the Federal Reserve's efforts to combat a housing slump and a shortage of funds in credit markets may restore investor confidence.
The Fed lowered interest rates last week, agreed to accept a wider range of collateral on loans and extended credit to securities' firms for the first time.
Gold for immediate delivery dropped as much as 1.4 percent to $906.79 an ounce in Asia and traded at $917.90 an ounce in Singapore at 4:58 p.m. today. Gold, which has plunged 11 percent from its record $1,032.7 an ounce on March 17, is still up 10 percent for the year.
Crude oil for May delivery fell by as much as 1.8 percent to $100.02 a barrel on the New York Mercantile Exchange and traded at $100.56 at 5 p.m. Singapore time. Prices for the most active contract are still up 60 percent in the past year. U.S. crude oil prices are likely to fall toward $90 a barrel this spring as the country's slowing economic growth encourages traders to exit commodity markets, Goldman Sachs Group Inc. said in a report on March 20.
Downside Risk For Wheat Limited - Goldman Sachs
"Following the recent sell-off, we believe further downside risk in wheat is limited," says Goldman Sachs. Tight old crop supplies will support prices near-term before larger '08-09 harvest, Goldman says. Goldman's 12-month price forecast for wheat is $8.50 a bushel.
Erm, I'm no expert Goldman but isn't that $2.00 below current new-crop levels, giving us a 20% downside?
US distillers grains production exploding - where will it all go?
If the tail sometimes wags the dog, what are the implications for the US beef industry as mountains of distillers’ dried grains are produced in the US? Do ethanol refineries attract feedlots? Do beef rations undergo a renovation? Will cattle production change as a result of the availability of a new feed? What does the crystal ball have in store for the cowboy?
Ethanol refinery capacity in the US increases daily and high oil prices will allow it to reach the maximum of 15 billion gallons per year from corn before the 2012 target date. But for every bushel of corn converted into ethanol, there are 17 pounds of distillers’ dried grains (DDGS) that are also produced, and this perishable product has to find a home. The Center for Agricultural and Rural Development (CARD) at Iowa State forecasts 40 million metric tons of DDGS will be produced by 2011, and possibly 88 million metric tons by 2016. The CARD analysis looks at future use of DDGS, its implications for the livestock industry, and the impact of surpluses of DDGS to the ethanol industry.
Full story: here
Signs of Brown curbing his enthusiasm to biofuels
From today's Guardian:
Gordon Brown is preparing for a battle with the European Union over biofuels after one of the government's leading scientists warned they could exacerbate climate change rather than combat it.
In an outspoken attack on a policy which comes into force next week, Professor Bob Watson, the chief scientific adviser at the Department for Environment, Food and Rural Affairs, said it would be wrong to introduce compulsory quotas for the use of biofuels in petrol and diesel before their effects had been properly assessed.
"If one started to use biofuels ... and in reality that policy led to an increase in greenhouse gases rather than a decrease, that would obviously be insane," Watson said. "It would certainly be a perverse outcome."
Full story: here
eCBOT Latest
eCBOT futures are mostly firmer this am in follow through from last nights close. The reason cited being "speculation declines in prices of agricultural commodities may attract buyers as governments seek to boost imports to curb food prices."
"South Korea, which imports almost all its grains and energy, will remove import tariffs on corn and milling wheat and reduce duties on oil products after record raw materials prices sent inflation surging, the Ministry of Strategy and Finance said today."
Well, South Korea's import duty on soybeans is zero already, and on corn & milling wheat it's a massive 0.5% so removing the duty isn't going to make a huge amount of difference is it?
Limit down, limit up
It's getting a bit bizarre that unless Chicago finishes anything other than limit these days it's a bit of a let-down.
Thursday ended limit down for beans & oil, at or near limit down corn and 86 1/2c down on nearby wheat. only meal bucked the trend closing just 40c down on nearby May, although Dec 08 finished with losses of $14.
It's not a holiday in the US Monday where the market has turned around and closed at or near limit up on everything. That keeps things nice & simple for us on Tuesday morning because effectively most things are unchanged!
