Bloomberg News

Grains, Soy May Fall as China Boosts Rates, U.S. Crops Gain

July 06, 2011

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

July 6 (Bloomberg) -- What follows are opening calls for U.S. grain and oilseed markets.

-- Corn futures are called to open 5 cents to 6 cents a bushel lower on the Chicago Board of Trade after China raised interest rates for the third time this year to slow inflation, and weekly U.S. crop conditions improved, said Jim Gerlach, the president of A/C Trading Inc. in Fowler, Indiana.

-- Wheat futures may open 9 cents to 12 cents a bushel lower on the CBOT, the Kansas City Board of Trade and the Minneapolis Grain Exchange on bets that favorable weather will improve crops in the northern U.S. Great Plains and Canada, Gerlach said. A rally by the dollar was expected to reduce investment demand for commodities, he said.

-- Soybean futures may open 9 cents to 11 cents a bushel lower in Chicago after inventories rose in China, Gerlach said. Soybean-oil futures are expected to open steady to 0.1 cent a pound lower, and soybean-meal futures may open down $2 to $3 for 2,000 pounds.

-- U.S. exporters sold 120,000 metric tons of corn to Egypt for delivery before Aug. 31 and 225,000 tons to South Korea for delivery in the year starting Sept. 1, the Department of Agriculture said. {NSN LNWXG16VDKHS <GO>}

-- China raised its benchmark interest rates for the third time this year, adding to efforts to cool the world’s fastest-growing economy after inflation accelerated to the quickest pace since 2008. {NSN LNWZD50YHQ0X <GO>}

-- U.S. stocks were little changed, after the Standard & Poor’s 500 Index snapped a five-session rally yesterday, as China said it will raise interest rates in an effort to cool inflation. {NSN LNWT761A74E9 <GO>}

-- Crude oil fell from a three-week high after China’s central bank raised rates and Moody’s Investors Service downgraded Portugal’s credit rating, heightening concern that slower growth will crimp fuel consumption. {NSN LNWYS56K50Z0 <GO>}

-- U.S. crude-oil supplies fell for a fifth week as refiners scaled back purchases halfway through the summer driving season and imports declined, a Bloomberg News survey showed. {NSN LNW9WP6KLVR4 <GO>}

-- Automakers including Chrysler Group LLC, Ford Motor Co. and Toyota Motor Corp. criticized an Environmental Protection Agency proposal to allow gasoline containing as much as 15 percent ethanol in all cars and trucks in the U.S., saying its use may void warranties. {NSN LNVYUE6VDKHT <GO>}

-- A five-year bull market in U.S. farmland values may peak this year as interest rates increase and crop prices decline, Rabobank International said. {NSN LNVU9I1A74E9 <GO>}

-- Tokyo Grain Exchange Inc. said volume may quadruple after rice futures begin trading, helping it break after three consecutive years of losses. {NSN LNWKTY0YHQ0X <GO>}

-- China’s stockpiles of soybeans at ports have risen to almost 7 million tons after processors slowed crushing to curb losses, the Economic Observer reported, citing unidentified industry executives. Price caps on cooking oil may be extended until Aug. 15, the Observer said. {NSN LNVZL66TTDS0 <GO>}

-- The annual output of China’s high-yield hybrid rice may rise by more than 304 kilograms per acre by 2015, the Ministry of Agriculture said. {NSN LNWDHE6JTSEG <GO>}

-- Sugar exports from Brazil’s Center South, the country’s main producing region, may climb 76 percent in the next three months from a year earlier, Kingsman SA said. {NSN LNWPK36KLVR4 <GO>}

-- Cotton demand from China, the world’s biggest consumer, may weaken as high costs encourage consumers to switch to cheaper synthetic fibers, said Chen Tao, the chairman of Louis Dreyfus (Beijing) Commodities Trading Co. {NSN LNWFY06JTSE8 <GO>}

-- BASF SE, the world’s biggest chemical maker, may withdraw genetically modified crop research from Germany in response to growing political opposition, three people familiar with discussions said. {NSN LNVAWH0D9L35 <GO>}

-- Corn imports for livestock feed by Indonesia may double this year as demand increases and domestic production declines, an industry group said. {NSN LNWPP01A1I4L <GO>}

-- Grain exports handled by Russia’s southern Black Sea port of Novorossiysk will decline 18 percent this month to about 600,000 tons from a year earlier, SovEcon said. {NSN LNWXS16KLVR7 <GO>}

-- The Ukrainian government plans to buy 3 million tons of domestic grain in an attempt to boost prices and revenue of producers. {NSN LNWX6C6JIJUU <GO>}

-- Corn farmers in Brazil will harvest more than forecast because of better yields and an increase in the planted area. {NSN LNWTZW6K50Z6 <GO>}

-- Palm-oil futures in Kuala Lumpur dropped as expectations of rising inventories and production in Malaysia deterred buyers. {NSN LNWRQ10D9L35 <GO>}

-- Egypt said investigations hadn’t established any link between locally produced fenugreek seeds and an outbreak of E. coli in France. {NSN LNWU9D6S972P <GO>}

-- The Food and Drug Administration, charged with preventing E. coli outbreaks similar to the one that sickened thousands in Europe, is trying to wedge $1.4 billion for a new food-safety law into a budget that Republicans have already cut for next year. {NSN LNW0OD07SXKX <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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