martes, 29 de septiembre de 2009

French, German, U.K. Farmers May Plant More Wheat

Sept. 28 (Bloomberg) -- Farmers may plant more wheat in France, Germany and the U.K., the European Union’s largest producers, for the 2010 harvest as declining costs make the grain profitable to grow, consultants said.

Cheaper fertilizer has pulled estimated production costs for next year’s crop below futures prices, said analysts at U.K. consultant ADAS Holdings Ltd. and France’s Offre et Demande Agricole.

The November wheat contract fell 16 percent this year in Paris trading after a record 2008 harvest swelled global stocks. Prices no longer cover costs, said Adrien Bebin, head of research at Offre et Demande. Next year may be more profitable as growers pay less for products such as nitrogen, he said.

“There’s a general great relief that fertilizer costs have come down again,” said Susan Twining, an analyst at Wolverhampton, England-based ADAS. “At the moment we’ve got good drilling conditions. We would expect a slight increase in wheat area.”

French farmers may sow 4.93 million hectares (12.2 million acres) of wheat for harvesting in 2010, based on comments from clients of Bourges, France-based Offre et Demande, Bebin said in an interview. Soft-wheat plantings fell 3.8 percent to 4.87 million hectares this year, according to government statistics published this month.

German Sowing

U.K. plantings may rise to 2 million hectares from 1.8 million hectares, according to Twining. German wheat sowing may be “unchanged or slightly higher,” said Klaus Schumacher, head of the economics department at Hamburg-based grains trader Alfred C. Toepfer International GmbH.

Overall EU soft-wheat production is forecast to be 130.9 million metric tons this year, with France, Germany and the U.K. accounting for 59 percent of output, according to Coceral, a European association of grain trade groups. The 27-nation bloc is the world’s biggest producer, according to figures from the U.S. Department of Agriculture.

Milling wheat for delivery in November closed at 123 euros ($179.74) a ton on Euronext on Sept. 25 in Paris. Wheat for delivery in November 2010, after next year’s harvest, was at 137 euros a ton.

Forecast Raised

Prices have slumped this year as the International Grains Council raised its outlook for the global wheat crop at least three times on better-than-expected harvests in major producers including the EU and Russia. The group forecasts production of 666 million tons for the 2009-10 crop year, exceeding consumption by 23 million tons.

EU cereal stocks at the end of June had jumped 28 percent from a year earlier to 62.5 million tons as wheat, barley and corn production exceeded consumption, the bloc reported in July.

The price required to cover average costs for a producer in the Cher department, in France’s main wheat-growing region of Centre, climbed to about 140 euros a ton this year from 120 euros in 2008 because of costlier inputs, according to Bebin. Cheaper fertilizer this year means costs for the next harvest will fall to between 120 and 130 euros a ton, he said.

“At current prices, if they sell the wheat harvested this summer they’re losing money,” Bebin said. “For 2010, the farmers are buying fertilizer now, and we’ve returned to levels from before the surge.”

Fertilizer Costs

French farmers are paying less than 300 euros for a ton of nitrogen fertilizer, after prices doubled to 600 euros between May and September last year, according to Bebin.

Northwest European spot prices for bulk urea pellets, used in fertilizer as a source of nitrogen, have dropped to 198 euros a ton from 525 euros a year ago, based on data from ICIS-LOR, a provider of prices for chemicals and energy products.

In the U.K., average production costs this year were about 120 pounds ($192) to 125 pounds a ton, with higher fertilizer prices adding about 26 pounds, according to Twining at ADAS.

“Clearly where prices are, for most people they’re below the cost of production,” said Carl Atkin, head of agribusiness research at Cambridge, England-based Bidwells Property Consultants. “We saw a big spike in costs for 2009, but costs in 2010 for the better producers will be below 100 pounds.”

Farmers across Europe may also increase wheat plantings as they shift out of barley, which has been less profitable, said Atkin and Toepfer’s Schumacher.

Barley Prices

Barley export prices in Rouen, France’s main grains port, have dropped 31 percent in the past year, compared with a 29 percent drop for wheat, according to prices tracked by the International Grains Council.

The fact that some European farmers are now losing money on wheat won’t stop them from replanting the grain for next year, according to Twining, Bebin and Atkin. They spoke on Sept. 22, as did Schumacher.

Farmers in the U.K. are “highly capitalized” and require cash flow from selling grain, even below cost, to finance their business and service debt, according to Atkin.

“They need to produce, even if it’s just a contribution to overhead,” Atkin said. In “most of Western Europe, the planting decision is not as extreme as in Russia or Ukraine, where people can decide to leave large parts of land fallow.”

To contact the reporter on this story: Rudy Ruitenberg in Paris at

Last Updated: September 28, 2009 05:03 EDT

Dairy prices to recover in 2010

Fonterra Raises N.Z. Milk Price Forecast 12% on Demand Recovery
By Gavin Evans

Sept. 22 (Bloomberg) -- Fonterra Cooperative Group Ltd., the world’s
largest dairy exporter, raised its milk price forecast for the coming
year by 12 percent citing a recovery in global demand.

Fonterra, owned by about 10,500 New Zealand dairy farmers, will pay
NZ$5.10 ($3.64) for each kilogram of milk solids supplied in the year
to May 31, the Auckland-based company said in a statement. It is
estimating NZ$5.20 for last season and had been forecasting NZ$4.55
this year, the lowest in three years.

New Zealand’s dollar jumped to a 13-month high after Fonterra said it
is seeing “more positive sentiment and stronger demand” in global
markets. The strength of the currency, which has gained 24 percent
this year, “remains a concern,” Chairman Henry van der Heyden said

“They’ve built the high currency in and that makes you think there is
a little more upside to come,” said Darren Gibbs, chief economist at
Deutsche Bank AG in Auckland. “Obviously, if the currency races away
that comfort would tend to come out.”

Fonterra accounts for almost 40 percent of the global trade in butter,
milk powder and cheese and sells product in 140 countries. It
processes about 92 percent of New Zealand’s milk, making it the
biggest player in an industry that accounts for about 20 percent of
the nation’s export receipts.

Today’s increase is a boost for farmers who must decide in November
whether to put more capital into Fonterra to help reduce its debt and
fund expansion plans through 2014.

Early Signal

“Receiving this signal relatively early on should help our farmers to
plan their farm operations with confidence for the rest of the
season,” Blue Read, chairman of Fonterra’s shareholder council, said
in an e-mailed statement.

Today’s increase will add about NZ$650 million to farm incomes next
year, based on the company’s 2008 milk output of 13.8 billion liters.

Fonterra will announce its sales and production for the year ended
July 31 tomorrow and made no mention today of the NZ$5.20 a kilogram
payout it has forecast.

The New Zealand dollar jumped to 71.87 U.S. cents after the
announcement, its highest since August 22, 2008. It bought 71.74 cents
at 2:40 p.m. in Wellington.

The high currency has been “fully factored” into the latest forecast,
van der Heyden said.

World milk-powder prices slumped to a five-year low in July as
consumer spending slowed faster than producers could reduce output and
the U.S. and Europe offered subsidies to help their farmers export
surplus product.

Prices surged 55 percent at Fonterra’s past two monthly auctions and
reflect a strengthening of demand for all dairy products, Chief
Executive Officer Andrew Ferrier said today.

lunes, 7 de septiembre de 2009

Gold toward US$ 1.000 per ounce

Gold is usually a good indicator of the trend of commodities, so... may we be in another bullish wave?

Gold May Advance Toward $1,000 as Weakening Dollar Spurs Demand

By Nicholas Larkin

Sept. 7 (Bloomberg) -- Gold, little changed near a six- month high in London today, may rise toward $1,000 an ounce as a weakening dollar increases the metal’s appeal as an alternative investment. Silver climbed to a 13-month high.

The dollar slipped as much as 0.4 percent against the euro as a report showed European investor confidence increased for a second month in September. Gold tends to rise when the greenback weakens. Bullion last surpassed $1,000 on Feb. 20.

“The underlying factor is still the dollar,” Dan Smith, a Standard Chartered Plc analyst in London, said by phone today. “If we do see a break in the dollar, it could be one of the triggers to take gold higher.”

Immediate-delivery bullion lost $1, or 0.1 percent, to $993.40 an ounce by 1:46 p.m. in London, erasing a gain of as much as 0.3 percent. The metal jumped 4.1 percent last week, the most since April. December gold futures slipped 0.2 percent to $994.70 an ounce in electronic trading on the New York Mercantile Exchange’s Comex division.

Comex floor trading in New York and Chicago is closed today for the U.S. Labor Day holiday.

“Markets are likely to be thin today, but volatility could step up across the rest of the week as markets exit the summer doldrums and traders and investors position for the remainder of the year,” James Moore, an analyst at in London, wrote in a report.

Higher ‘Fixing’

The metal increased to $992.75 an ounce in the morning “fixing” in London, used by some mining companies to sell production, from $989 at the afternoon fixing on Sept. 4.

“Sustained gains could be difficult without a pull back,” Pradeep Unni, an analyst at Richcomm Global Services in Dubai, said in a report. “Gold could be hit by near-term profit- taking.”

Bullion is 3.8 percent below a record $1,032.70 an ounce set in London in March 2008 and has rallied every year since 2000. Spot prices have gained in seven of the past eight weeks.

“The price increase is of speculative nature, but gold will be able to temporarily break through the $1,000 mark,” Eugen Weinberg, a senior analyst with Commerzbank AG, wrote in a Sept. 4 note. “Currently there is insufficient fundamental support to allow for a sustained rise beyond this level.”

Holdings of bullion in the SPDR Gold Trust, the biggest exchange-traded fund backed by the metal, fell 0.38 metric ton to 1,077.63 tons on Sept. 4, data on the company’s Web site showed. The fund reached a record 1,134.03 tons on June 1. Holdings in ETF Securities Ltd.’s exchange-traded commodities rose 1,426 ounces to a record 7.993 million ounces on Sept. 4, its Web site showed.

Scrap Sales

“Overall market sentiment is still upbeat with constantly improving macro data, inflation expectations are idle, physical demand is absent, and scrap sales could only intensify at these prices,” Andrey Kryuchenkov, a VTB Capital analyst in London, wrote in a note. “As soon as risk appetite comes when the markets settle down ahead of the fourth quarter, gold will suffer a painful correction.”

Silver for immediate delivery in London climbed as much as 0.8 percent to $16.3638 an ounce, the highest since August 2008, and last traded at $16.28. The metal has rallied 43 percent in London this year, more than triple gold’s 13 percent gain.

Among other metals for immediate delivery in London, platinum added 0.4 percent to $1,260.50 an ounce. Palladium was 0.1 percent lower at $292.25 an ounce after earlier reaching $295, the highest price in a year.

ETF Securities’ palladium holdings advanced 11 percent to a record 452,488 ounces on Sept. 4. Platinum assets slipped 0.6 percent to 328,682 ounces.

To contact the reporter on this story: Nicholas Larkin in London at

Last Updated: September 7, 2009 09:04 EDT

Sugar reach highest price in 28 years

In commodities, some prices are already higher than the peak of 2008.... May this support our malthusian view of the markets....

Sugar Deficit to Support 28-Year High Price, ISO Says

By Mike Cohen

Sept. 7 (Bloomberg) -- Sugar prices, which reached their highest level in more than 28 years last week, are likely to be supported by a global supply deficit, according to Leonardo Rocha, an economist at the International Sugar Organization.

“Prices may rise slightly, but not by that much,” Rocha said in an interview at the World Sugar Summit in Cape Town today. “There will be some supply response” to the shortfall, he said.

On Sept. 2, the London-based industry body forecast demand for sugar would outstrip supply by 8.4 million metric tons in the year through September 2010. Rocha expects the shortfall to be eliminated the following year.

The ISO expects India, the largest sugar consumer, to import 4.1 million tons of the sweetener in 2009-10, 3 percent more than in the previous year. Consumption in the southeast Asian nation is forecast to rise 3 percent to 23 million tons.

“India is today the biggest driver of the sugar market,” Rocha said. “Production has collapsed significantly” due to poor rainfall, he said.

The ISO expects Brazil, the world’s largest sugar producer, to export 26.1 million tons of sugar in fiscal 2010, a 6.6 percent increase on the previous year. Exports from Thailand are expected to rise 0.9 percent to 5.8 million tons.

Raw sugar futures last week climbed to 24.85 cents a pound, the highest price since February 1981. Sugar has climbed 83 percent this year, heading for its biggest annual gain since 1980, as drought has affected parts of India and excessive rain slowed the harvest in Brazil.

Rocha expects the market for ethanol to remain static this year, because cane growers can earn better returns in the sugar market.

South Africa Constraints

Imports by the European Union may rise 1.5 percent to 4.5 million tons in fiscal 2010, while imports by the U.S. are expected to grow 0.1 percent to 2.5 million tons, the trade group said.

South Africa, Africa’s largest sugar producer, has limited scope to increase production because of shortages of suitable land and water, Johann van der Merwe, the South African Sugar Association’s external affairs director, told the conference.

South Africa produces about 2.5 million tons of sugar a year, about half of which is exported. Brazilian producers control about 10 percent of the South African market, Van der Merwe said.

To contact the reporter on this story: Mike Cohen in Cape Town at

Last Updated: September 7, 2009 06:34 EDT