Bloomberg News

Wheat, Soybean Futures Called Higher; Corn May Decline

June 15, 2011

(Updates with news and links starting in fifth paragraph.)

June 15 (Bloomberg) -- What follows are opening calls for U.S. grain and oilseed markets.

-- Wheat futures may open steady to 2 cents a bushel higher on the Chicago Board of Trade, the Kansas City Board of Trade and the Minneapolis Grain Exchange after the Canadian Wheat Board said excessive rainfall may prevent farmers from sowing 6 million to 8 million acres, boosting demand for U.S. supplies, said Greg Grow, the director of agribusiness at Archer Financial Services Inc. in Chicago.

-- Soybean futures may open steady to 2 cents a bushel higher in Chicago on speculation that demand for cooking oil and animal feed will outpace global production, Grow said. Soybean-oil futures are expected to open 0.1 cent to 0.2 cent a pound higher, and soybean-meal futures may open little changed, he said.

-- Corn futures are called to open 1 cent to 3 cents a bushel lower on the CBOT on speculation that warm, wet weather forecast for the next two weeks in the U.S. Midwest will aid crop development after rains curbed planting this year, Grow said.

-- Stocks slid, erasing most of yesterday’s rally, and commodities sank after manufacturing in New York unexpectedly contracted and the U.S. cost of living increased more than forecast. The euro weakened as officials failed to agree on a rescue plan for Greece and Treasuries rose. {NSN LMU3KA07SXKX <GO>}

-- The cost of living in the U.S. rose more than forecast in May reflecting higher prices for everything from autos to hotel rooms, signaling raw-material expenses are filtering through to goods and services. {NSN LMU12N0YHQ0X <GO>}

-- Global demand for U.S. stocks, bonds and other financial assets rose in April from a month earlier, led by longer- maturity securities, the Treasury Department reported. {NSN LMU1GD0YHQ0X <GO>}

-- China’s inflation pressures have yet to be contained by four interest-rate increases since September, underscoring the danger of any extended policy pause as adverse weather threatens to drive up food costs further. {NSN LMTUPD07SXKX <GO>}

-- Greek economic prospects darkened as European bickering risked delaying the next rescue payment and defections weakened Prime Minister George Papandreou’s majority. {NSN LMTYNB0D9L35 <GO>}

-- Crude oil fell after manufacturing in New York unexpectedly contracted and on concern Europe’s debt crisis will deepen, reducing economic growth and fuel demand. {NSN LMU3A80YHQ0X <GO>}

-- Federal Reserve officials are discussing whether to adopt an explicit target for inflation, a strategy long advocated by Chairman Ben S. Bernanke and practiced by central banks from New Zealand to Canada, according to people familiar with the discussions. {NSN LMSYJV07SXKX <GO>}

-- The U.S. Senate blocked a bid to end a tax break and a tariff that support ethanol production, giving at least a temporary reprieve to corn farmers and defeating a coalition that included chicken breeders and environmental groups. {NSN LMSZZT0UQVI9 <GO>}

-- Disruptions to corn growing may drive prices up to $8 a bushel, said Francisco Blanch, head of global commodity research at Bank of America Merrill Lynch. {NSN LMTZ9C6JTSEB <GO>}

-- Almost two-fifths of consumers surveyed in 17 countries said high food prices have changed their diets, with people in poorer nations hit hardest by increased costs. {NSN LMU0H70UQVI9 <GO>}

-- U.S. feedlots probably reduced cattle purchases in May, with fewer animals available following a drought that damaged pastureland and forced ranchers to shrink their herds in April, analysts said. {NSN LMSM6K6JTSE9 <GO>}

-- Livestock production will be “massively reduced” in the coming year as farmers shrink their herds in response to rising costs of corn used as feed, Dennis Gartman, an economist, said. {NSN LMTSC36TTDS0 <GO>}

-- Heat will return to the U.S. Midwest and East Coast next week, according to Matt Rogers, president of Commodity Weather Group LLC in Bethesda, Maryland. {NSN LMU03Z0UQVI9 <GO>}

-- China’s prices of pork have gained faster than the costs of corn, suggesting higher profitability of raising hogs, according to the National Development and Reform Commission. {NSN LMTQ6O6JTSEH <GO>}

-- Corn demand is accelerating beyond farmers’ ability to boost yields, depleting stocks and adding to price gains as consumption in China and ethanol factories grows. {NSN LMSJBB1A1I4H <GO>}

-- Russia may not produce its target of 85 million metric tons of grains this year because of adverse weather, Pavel Skurikhin, the president of the nation’s Grain Producers’ Union, said. {NSN LMTZE30UQVI9 <GO>}

-- Wheat farmers in Canada may be unable to plant 6 million to 8 million acres this year because of unusually wet weather, the Canadian Wheat Board said. {NSN LMSPEV6JTSE8 <GO>}

-- Wheat production in Australia may total 26.2 million tons in 2011-2012, 7.8 percent more than forecast and in line with last year’s harvest as favorable weather aids the crop. {NSN LMTCB70YHQ0X <GO>}

-- Egypt, the world’s biggest wheat importer, expects its harvest to be 8.1 million tons in the season ending July 30, Mohamed Fathy, the president of the country’s Agriculture Research Center, said. {NSN LMTZUD1A1I4H <GO>}

-- Algeria may harvest about 45 million quintals (4.5 million tons) of cereals for the 2010-11 season, the official APS news agency said. {NSN LMU0E70UQVI9 <GO>}

-- England’s wheat harvest may fall below 12 million tons, a 15 percent drop from the five-year average, after crops faced “severe” drought, the U.K.’s National Farmers’ Union said. {NSN LMTRY96KLVR6 <GO>}

-- Ukraine may restrict grain exports, which it will start taxing next month, in an attempt to cap domestic prices, a Bloomberg survey shows. {NSN LMTZ436KLVRQ <GO>}

-- Malaysia’s palm-oil exports rose 26 percent in the first 15 days of June from a month earlier, independent market surveyor Intertek said. {NSN LMT95Y6JIJUS <GO>}

-- Cotton prices in the short term have “limited downside” as data from the U.S. Department of Agriculture show the market is just as tight as last year, Anthony Tancredi, the president of Allenberg Cotton Co., said. {NSN LMTQFW6JTSEF <GO>}

-- Cotton imports by China may increase on an expanding supply deficit as the country struggles to boost output, the National Development and Reform Commission said. {NSN LMTON86JTSED <GO>}

-- China should increase subsidies for cotton farmers because the fiber is more costly to produce than grains such as wheat, Fang Yan, a vice director of the rural economy division at the National Development and Reform Commission, said today. {NSN LMTB2R6JTSEJ <GO>}

--Editors: Patrick McKiernan, Millie Munshi

To contact the reporters on this story: Jeff Wilson in Chicago at jwilson29@bloomberg.net; Whitney McFerron in Chicago at wmcferron1@bloomberg.net.

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


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