PHILIPPINE SUGAR EXPORTS TO U.S. TO RUN SHORT, CHANGES LOOM IN 2015: REPORT: Issue 33 May 6, 2013

By Rene Pastor

The Philippines will not be able to fill up its sugar export quota to the United States in the 2012/13 season and changes are coming for the sugar industry when a Southeast Asian regional free trade area is implemented from 2015, a report by the U.S. agriculture attaché said.

The attaché report is compiled by agriculture experts of the U.S. embassy and is considered as authoritative by the commodity trade.

Among the changes for the Philippine sugar industry is that it will no longer be protected by a tariff wall when the free trade agreement under ASEAN goes into effect in 2015, the report explained.

Philippine government tariffs on raw and refined sugar imports are supposed to drop to 5 percent in 2015 from 38 percent in 2010.

“This reduction in AFTA (ASEAN Free Trade Area) tariffs is expected to significantly impact Philippine sugar production and trade as other ASEAN producers, particularly Thailand, enjoy lower production costs,” the attaché report concluded.

The very real danger for Philippine sugar producers is they could be displaced and even eliminated by their Thai rivals.

The Agriculture Department is trying to implement programs to consolidate farming operations, but the record so far has been mixed.

On another front, it looks like the sugar quota awarded the Philippines by the United States will go unfilled.

The Philippines has a sugar export quota to the U.S. of 144,901 metric tons, but the attaché report said the quota “will not likely be filled this year due to ample U.S. (sugar) supplies.”

The Philippines is normally the third biggest supplier of sugar under the U.S. import quota program.

The U.S. is a top market for Philippine sugar because prices of sugar in America would normally run around 35 to 45 U.S. cents a pound while prices of sugar in the world market fetch about 18 to 20 cents.

The attaché report said Philippine sugar exports in 2012/13 may hit 250,000 tons and the new export markets would be Japan, South Korea, Singapore, Canada, Samoa, Tonga and Malaysia.

PHILIPPINE RICE IMPORTS HIT 350,000 TONS AS LEAN SEASON APPROACHES
By Rene Pastor

The Philippines, one of the world’s top importers of rice, has booked imports of 350,000 tons of the grain to head off any chance of a shortage during the third quarter of the year when supplies of its staple food normally run short.

The imports were forced in part by the fact that rice inventories in the Philippines dropped to a six-month low at the start of March. A large part of the country’s rice harvest comes in during the last quarter of the year.

The government of President Benigno Aquino III is taking aim at being self-sufficient in rice in 2013. But most analysts believe the Philippines will still need to import almost 1.0 million metric tons of rice because of rising consumption caused in part by the country’s expanding population which will soon top 100 million people.

The government’s National Food Authority said Vietnam won an April 3 tender to supply the 187,000 tons of rice, whose quality is partly determined by the proportion of broken grain in the shipment.

The deal had been announced by Vietnam’s Agriculture Ministry in mid-April and only confirmed by the Philippines on April 30.

The composition of the rice from Vietnam would be 10 percent long grain and 25 percent broken, the standard quality rice imported by the Vietnamese and the Thais. Higher grade, more expensive 5 percent broken rice, would fetch a premium of almost $100 over the 25 percent broken variety.

The NFA had also announced it would be importing 163,000 tons of rice from four countries as part of trade import commitments under the World Trade Organization. Of the planned rice imports, some 98,000 tons will come from Thailand, one of the world’s top rice exporters, with 25,000 tons each coming from China and India, and the remaining 15,000 tons from Australia, the Philippine government announced in early April.

Rice stocks in the Philippines as of March 1st, 2013 stood at 1.94 million metric tons, the lowest since Sept. 1, 2012, data from the Bureau of Agricultural Statistics showed. Since rice inventories reached 2.78 million tons on November 1st, the level of rice stocks has fallen over 30 percent, the government said.

Philippine rice production had suffered constraints over the years due to limited acreage and low yields.The Philippines planted about 4.66 million hectares to rice in 2012. Neighboring Vietnam plants over 7 million and Thailand sows more than 10 million hectares to rice.

The Philippine government is spending anywhere from 40 percent to 60 percent of the Agriculture Department budget on irrigation and infrastructure in mainly rice-growing areas.

U.S. RICE MARKET BOOSTED BY SLIM SUPPLIES, CHINA KEY IN SLOW ASIAN MARKET
By Jack Scoville, The Price Futures Group

Rice is showing a better market. Part of the rally here is due to the weather, but part of it is also due to the fact that U.S. cash markets are very tight and that supplies are minimal.

Brazil and the rest of South America are at harvest now and might be able to fill some demand that otherwise would come to the U.S. However, U.S. sales have held strong, so even if new demand does go south the tight situation here will not change.

Farmers in the U.S. Delta states are making slow progress in planting crops, and yield projections for the new crop should start to fall as a result.

Asian prices remain under pressure, with supplies on the increase in most exporter nations right now and demand not all that strong at all. Indonesia seems out of the market and Philippine demand has been minimal when compared to past years.

Asian prices should remain relatively cheap. But the Chinese planting season is just underway now and they have had some weather issues there as well. China and its demand will probably be the key for any significant Asian price strength in the near term.

Prices will probably stagnate near current levels unless some new demand is found.

AMPLE RAIN TO DRENCH PHILIPPINE RICE AREAS
By Aaron Cook, Metservice and Metraweather

Metservice.com
Metraweather.com

There will be no shortage of rain to top up rice paddies across the Philippines this week.

Mindanao will be downright soggy. The seven-day rainfall chart below says it all, with the ECMWF deterministic model forecasting between 50 and 150mm (2 to 6 inches) of rain for most of Mindanao over the next week. This rainfall will be persistent, but not overwhelming, so there is little risk of significant flooding.

Eastern and Western Visayas will also pick up accumulations ranging from 25mm to 100mm (1 to 4 inches). Temperatures will be close to average across the country.

As we slide into next week keep an eye on the northern Philippines. The quasi-stationary front is threatening to advance southwards over Luzon, taking daily rainfall totals from a couple of millimetres per day to between 10mm and 25mm (0.4 to 1 inch). It’s not out of the ordinary for that quasi-stationary front to pay the occasional visit at this time of year.

Further afield, Vietnam, Thailand and Malaysia are heading towards average rainfall and temperatures for the week, while the sprawling Indonesian archipelago will generally see average to above average falls.

Finally, anyone with an interest in the Bay of Bengal should be paying attention to the increasing odds of a tropical cyclone next week. We could be in for some hefty daily rainfall totals and strong winds, but it will be another few days before computer models get a more convincing grip on the likely coastal impact zone.

AARON

BUYING AND SELLING PRICES OF RICE FROM THE PHILIPPINES’ NATIONAL FOOD AUTHORITY (in Philippine pesos per kg) as of May 3, 2013

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U.S. WEATHER TO DOMINATE GRAINS
By Jack Scoville, The Price Futures Group

Grains had a generally strong week, with some solid demand news on Thursday from USDA and generally poor growing conditions reported in much of the United States.

That could change some this week. Weather looks to get better in the Midwest and Great Plains, and we might finally start to see some real planting progress.

Very little work has been done in the northern Midwest and not a lot of work has been done in the southern sections, either, although there has been some progress made.

This week looks to be drier and warmer, with any threat of rain not showing in forecasts until at least the second half of the week. Both conditions are desirable right now.

Soils are just too wet in many places to get field work started, and soils are too cold for seeds to germinate in any case.

Warmer and drier weather early this week will give both wet and cold soil conditions a chance to improve. Corn, wheat, and soybeans are in weather markets, based on the cool and wet weather seen last week.

The market can move lower if the weather improves, but can continue to work higher if it does not. Hedgers should be ready to protect against either direction this week. Longer term, though, the U.S. will get a crop planted.

That implies that using rallies to sell futures or buy puts or something in combination is probably best for now.

PALM OIL OUTLOOK: SLOW DEMAND, COMPETITION FROM VEG OILS PRESSURE PRICES
By Jack Scoville, The Price Futures Group

Palm oil has been under pressure on less than needed demand and on weaker prices in competing vegetable oils.

Some weaker Chinese PMI data and some weaker data here in the U.S. put demand into doubt. Palm oil is used in China partly as feedstock for biofuels, and ideas of a weakening economy there hurt demand ideas from this important source. Food demand to India has been down in recent weeks as the country works down supplies it bought ahead of a tax increase there. But this demand will return in the near future.

It is China that bears watching, and right now the demand from China is in doubt. That will tend to keep prices under pressure.

However, weather in this part of the world, meaning North Americas, will have to be watched as this region supplies competition in the form of other vegetable oils. Plus, Argentine soybean oil exports are supposed to be slow this year due to economic problems in that country.

So, for now, prices might stay under pressure but the situation could change for the better if the weather in the U.S. and Canada does not get better.

USDA PACIFIC NORTHWEST WEEKLY GRAIN SUMMARY FOR THE WEEK ENDING MAY 2, 2013

July wheat futures ended the reporting week on Thursday, April 25, higher, as follows compared to last Thursday’s closes: Chicago 24.75 cents higher at 7.2850, Kansas City 29.25 cents higher at 7.9075 and Minneapolis wheat futures trended 17 cents higher at 8.2525.

Chicago July corn futures trended 37.50 cents higher at 6.62 while May soybean futures closed 17.50 cents higher at 14.41.

Forecasts of cold, wet weather in the Midwest on Monday moved corn futures to the limit of 40 cents higher.

Concerns over China’s bird flu, limited new export demand, good corn supplies in South America, a disappointing inspection-for-export figure for the week ending April 25 of 11.6 million bushels (mb), and spill-over pressure from lower gas and oil futures were factors that weighed on corn futures during the week.

Wheat futures were higher in reaction to spill-over support from the sharply higher corn futures on Monday; flooding in the Northern Plains, effecting spring wheat planting and a better-than-expected inspected-for-export figure of 30.9 mb.

On Friday and Wednesday, wheat futures were pressured by profit-taking and by lower outside markets.

Soybean futures moved higher with support early in the week from continued good exporter and processor demand of tight old crop supplies, a good inspected-for-export figure of 8.9 mb and higher corn and wheat markets.

Continued planting delays of US corn and thoughts that acres may change from corn to soybeans pressured soybean futures later in the week.

CASH BIDS FOR WHEAT AND CORN AT PORTLAND AS OF MAY 2, 2013: USDA

Cash wheat bids for May delivery ended the reporting week on Thursday, May 2, mixed compared to week ago bids for the same delivery period. Hard red winter wheat and dark northern spring wheat bids moved higher and soft white wheat bids were mixed.

Bids for US 1 Soft White Wheat delivered to Portland in unit trains or barges during May were mixed, from 1.50 cents lower to 5 cents per bushel higher compared to last Thursday’s noon bids for May delivery. Some exporters were not issuing bids for nearby delivery.

Bids for US 2 Yellow Corn truck delivered to the inland feeding areas of Yakima, Washington, and Hermiston, Oregon were 281.75-292.50, 9.00 to 15.75 per ton higher than last Thursday’s bids of 272.75-276.75. Higher Chicago July corn futures were supportive to corn bids.

Bids for US 2 Yellow Corn delivered to Portland in single rail cars were 286.50-288.50, 15.50 to 18.75 per ton higher than last Thursday’s bids of 267.75-273.00.

Bids for 11.5 percent protein US 1 Hard Red Winter Wheat for May delivery advanced by 29.25 cents per bushel compared to last Thursday’s noon bids for the May delivery in lining up with the higher Kansas City July wheat futures.

All exporters have switched their nearby basis to over the July Kansas City wheat futures. On Thursday, bids were as follows: May 9.1575-9.3075, mostly 9.2275; June 9.0075-9.2075; first half July 8.8075-9.1075, last half July 8.7075-8.9575; August New Crop 8.6550-8.8050 and September 8.7050-8.9050.

Bids for non-guaranteed 14.0 percent protein US 1 Dark Northern Spring Wheat for May Portland delivery trended seven to 17 cents per bushel higher compared with last week’s noon bids for May delivery.

Higher Minneapolis July wheat futures were supportive to the cash bids, although a lower basis bid by some exporters tempered advances.

Protein scales for non-guaranteed 14.0 percent protein were plus zero cents each 1/4 of a percent of protein up to 16 percent protein and minus four to five cents each 1/4 of a percent of protein down to 13 percent protein.

On Thursday, bids for non-guaranteed 14 percent protein were as follows: May 9.4025-9.5525, mostly 9.4825, June 9.3025-9.5025, July 9.2025-9.4525, August New Crop 9.1750-9.3750 and September 9.1750-9.2750.

COLUMBIA, OREGON GRAIN VESSEL UPDATE AS OF MAY 2, 2013: USDA

There were six grain vessels in Columbia River ports on Thursday, May 2, with three docked compared to six last Thursday with two docked.

New confirmed export sales this week were limited to South Korea. South Korea purchased two cargos of U.S. wheat in metric tons for July shipment.

Cargo one includes: 2,400 of 8.5 percent protein soft white wheat, 13,800 of 9.5 percent protein soft white wheat, 4,800 of 11.5 percent protein hard red winter wheat and 4,000 of 14.5 percent protein dark northern spring wheat.

Cargo two includes: 9,500 of 9.5 percent protein soft white wheat, 2,500 of 11.5 percent protein hard red winter wheat and 11,900 of 14.5 percent protein dark northern spring wheat.

Outstanding U.S. white wheat export sales as of April 25, 2013 for the marketing year beginning June 1, 2012 and ending May 31, 2013, totaled 300.0 thousand MT compared to 409.0 thousand MT on April 18, 2012, and 610.3 thousand MT one year ago.

Outstanding white wheat export sales for the 2012-2013 marketing year were to the following countries in 1000 MT:
Japan 88.4
South Korea 51.2
Philippines 41.0
Thailand 16.9
Taiwan 10.4
Nigeria 8.7
Sri Lanka 2.0
Canada 1.7
Malaysia 1.0
Burma 0.5
Hong Kong 0.3
Vietnam 0.3
Total unknown 77.6.

Accumulated white wheat export shipments as of April 25, 2013, in 1000 MT for the 2012-2013 marketing year, totaled 4285.6 compared to 5151.3 one year ago.

Outstanding white wheat export sales for the 2013-2014 marketing year totaled 396.5 thousand MT and were to the following countries in 1,000 MT:
China 110.0
Philippines 85.5
Guatemala 59.8
South Korea 32.7
Thailand 30.5
Hong Kong 1.4
Burma 0.6
Total unknown 76.0

COCOA FIRM, COFFEE LOOKING FOR STRENGTH AND SUGAR GRINDING DOWN
By Jack Scoville, The Price Futures Group

Coffee, sugar, and cocoa were seeing some divergent prices trends again last week, with cocoa prices stronger, coffee prices trying to be stronger, and sugar prices trying to work lower.

Cocoa seems driven by a slower flow of beans from West Africa right now. Demand has been no worse than anticipated, and in some areas it has been much better than anticipated.

Prices can probably work higher over the medium term. Coffee and sugar face the specter of big Brazil production.

Coffee prices are already cheap, and there are enough problems showing in other areas, most notably Central America and Vietnam, to keep prices stable for now no matter what the Brazil production happens to be.

The Brazil government is also about to announce a new support program for its coffee farmers and the announcement will probably help put a floor under prices.
Sugar is a market that everyone wants to be bearish on due to big Brazil production and big world stocks.

But it seems that even this story might be getting old. There does not seem to be a good fundamental reason to own sugar right now but everyone is bearish and many people are short, and that scares us. It could be that the market turns higher just to confuse and hurt the most amount of people that the market possibly can.

SHOULD THE PHILIPPINES BE SELF-SUFFICIENT IN RICE?: Issue 32 April 29, 2013

By Rene Pastor

Politically, the answer is simple.

All Philippine governments have declared as policy that the country should be self-sufficient in rice, the staple of its nearly 100 million people.

The reality is that it may make better sense to just import the shortfall in rice and admit that as things stand, the Philippines can never achieve self-sufficiency in the grain.

The Philippines plants about 4.66 million hectares to rice. Just for perspective, Vietnam plants over 7 million and Thailand sows more than 10 million hectares to the staple.

To boost output, the Philippine government is spending anywhere from 40 percent to 60 percent of the Agriculture Department budget on irrigation and infrastructure in mainly rice-growing areas.

GMO rice is being tapped along with increased use of fertilizers.

After all that, it may still not be enough for the Philippines to become self-sufficient in rice.

Demand for milled rice is running about 2 million metric tons ahead of production. The population is also increasing too rapidly for the country’s farmers to keep pace.

There is another compelling reason why self-sufficiency in rice may not, in the end, be good policy.

Rice needs a lot of water and nitrogen-based fertilizers to raise production. The fertilizer-laden runoff from rice farms will contaminate ground water and fishing grounds, leading to runaway algae blooms which will kill fish. Red tide is already becoming a critical problem in many areas of the archipelagic country.

“Pollution from fertilizers occurs when these are applied more heavily than crops can absorb or when they are washed or blown off the soil surface before they can be incorporated,” a report by the U.N.’s Food and Agriculture Organization entitled “World Agriculture: Towards 2015-2030” said.

“Excess nitrogen and phosphates can leach into ground-water or run off into waterways. This nutrient overload causes eutrophication of lakes, reservoirs and ponds, leading to an explosion of algae which suppress other aquatic plants and animals,” the FAO report added.

In plain speak, the viability of farms and fisheries in the Philippines are in real danger from excessive use of fertilizers to boost rice production to meet a goal that only makes sense politically.

The Philippines can increase rice production in the short-term, but farms and fisheries may suffer irreparable damage from fertilizer abuse.

Switching crops or getting Filipino farmers to reduce their use of fertilizer would require a determined government thinking of long-term consequences for the country.

Regrettably, the government of President Benigno Aquino is making decisions on agriculture which will only cover a few months. A longer-term horizon is seemingly not uppermost in their minds at this time.

I can understand the impulses driving the Philippine government to go for self-sufficiency in rice. But there are now compelling environmental and economic considerations which should be considered as arguing against becoming self-sufficient in a crop when less costly alternatives are available. After all, all of the flour used to make the breakfast staple pan de sal consumed in the Philippines comes from imported wheat. Rice should be no different.

TWO-TIER RICE MARKET PERSISTS, WESTERN SUPPLIES TIGHT
By Jack Scoville, The Price Futures Group

The two-tier market will continue, with western prices trading much higher than those in Asia. The big spread between the different halves of the world could keep right on going next year.

Rice worked lower in the U.S. rice futures market but not in U.S. cash markets.

There is a tight situation in rice as supplies near the U.S. Gulf Coast are all but gone. Prices for new crops are discouraging to producers and planted area for the year will be average at best. World prices are a little weaker as well.

The Philippines announced that it had very strong production in the first quarter of the year and will keep its import ideas less than normal, maybe even zero if it can. It is even exporting a very small amount of specialty Japonica Rice to Dubai. Probably just to show it can really do it.

Demand from other Asian countries seems down except for China, which has contamination and food safety issues that have been noted in rice as well. There are some nasty things in the water used to grow rice in that country, and the rice has soaked some of the nastiness in. They will continue to supplement their own production with supplies from neighbors.

The other major buying in Asia is coming from South Korea and Japan to complete treaty obligations. African demand will be interesting for both South America and Asia. Both will compete for business, and both will have to work hard as African countries are trying to join the self-sufficiency program.

STEADY RAINS IN CENTRAL AND SOUTHERN PHILIPPINES
By Aaron Cook, Metservice and Metraweather

Metservice.com
Metraweather.com

We’re staring at another sleepy fortnight in terms of Philippine weather. Easterly winds will ensure solid rainfall along eastern coastlines. Parts of Mindanao and Western Visayas will be a touch drier than normal this week, but they will still see occasional afternoon showers, as evidenced by the 7-day rainfall chart below.

Keep your eyes on forecasts near the end of the week however. We should see the quasi-stationary front beefing up rainfall total over southern China and Taiwan (as warm air from the south collides with cooler northerlies). This front may creep further south and east into the South China Sea, but at this stage is forecast to stay away from the Philippines.

We may also see a small depression moving through the East Philippine Sea come within about 1200 km of Mindanao on Thursday before drifting north and decaying. Its remnants are currently forecast to drift across the central Philippines around Monday and kick-start increased shower activity across most of the Archipelago.

Rainfall will be close to average in Thailand, Vietnam and Malaysia. Drier than average conditions across Java are about the only anomaly of note across the region.

ENSO conditions through the Pacific are still strongly favored to flat-line in neutral territory over the next few months. In a couple of weeks we should have updated climate model data from all of the major forecasting centers and will be able to complete a more thorough analysis of any early warning signs of El Nino or La Nina.

aaron pic

BUYING AND SELLING PRICEES OF RICE FROM THE PHILIPPINES’ NATIONAL FOOD AUTHORITY (in Philippine pesos per kg) As of April 26, 2013

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POOR U.S. WEATHER PROPS UP GRAINS COMPLEX, CHINA BUYS NEW CROP CORN AND SOYBEANS
By Jack Scoville, The Price Futures Group

Futures markets remain supported by bad weather in the United States.

In addition, farmers here remain tight holders of grain, and the actual cash price in the U.S. Midwest is generally much higher than futures.

However, prices for both corn and soybeans and products remain much less in South America. The region has captured more export business than it can handle right now and waiting times in ports remain pretty extreme and still close to two months.

But those waiting times are starting to come down now as volumes traded are dropping a bit and as the ports work overtime to get the product out.

The U.S. cash market is becoming more and more of a domestic market short term as any export sales have started to move to the new crop, and the harvest for the new crop is still months away. In fact, we are having trouble getting crops planted right now so it will be at least late September before much becomes available.

Corn and soybean futures markets continue to show the difference between the crop years in a dramatic way. The tight nearby cash market is shown as prices for May or July delivery remain significantly above the new crop deliveries.

Their big spread difference will remain in place until the weather shows more improvement here and the crops get planted. We expect the spreads to start to weaken over the next month. This is because the buy side of the market will have bought whatever old crop they need by then and the demand will start to drop.

Meanwhile, new crop demand will start to increase. In fact, the new crop demand for both corn and soybeans has already started to increase as China has stepped up to buy. They got big problems there and sky-high prices.

People will still eat, even with reports of Bird Flu. They might eat less poultry, but might eat more pork. This seems to be happening already. Both require soybean meal and corn in rations, so the overall demand for these products in world markets might not drop too much.

Weather remains an issue here in the U.S. as the cold and now wet weather has not allowed for much planting progress. Reports are that conditions are better in Europe and Russia, but China and Australia have had mixed trends. The weather seems to be good for the winter crops right now in South America.

Overall, the world supply situation for soybeans and feed grains seems to be easing, but there are still some short-term shortages to work though, mostly here in the U.S. and over in Europe.

We expect prices to relax over time, but any meaningful move lower could still be three or four weeks away. Users should be booked through the middle of the year, but can then move to a more hand-to-mouth buying program as long as the weather in the northern part of the world stays good for crops.

PALM OIL OUTLOOK: MALAYSIA EXPORT DEMAND SURGES
By Jack Scoville, The Price Futures Group

Palm oil values held last week as export demand made a big jump higher in Malaysia.

The demand for the first half of the month had been lower than the previous month, but the trend reversed once futures made new lows for the move.

Now the export pace is above last month and is expected to hold strong right into next month. The upside potential for prices might be limited as trees should be about ready for a seasonal increase in production.

However, palm oil prices remain cheap enough for now that the demand can hold itself together. Plus, Argentina has not really started exporting soybean oil yet and they are the number one exporter in the world. The political and economic situation there is a mess, so the export pace might not be as strong as normal, even with the good soybeans crop they had this year.

The Argentine government seems committed to grabbing as much money from the sales as it possibly can and this will lead to a slow export pace as mills and producers fight the trend.

Palm oil will benefit if the sales from Argentina remain slow. The price action showed little carry through from the move lower, another potentially bullish sign for prices in the near term.

USDA PACIFIC NORTHWEST WEEKLY GRAINS SUMMARY FOR THE WEEK ENDING APRIL 25, 2013

July wheat futures ended the reporting week on Thursday, April 25, mixed, as follows compared to last Thursday’s closes: Chicago three cents lower at 7.0375, Kansas City 12.50 cents higher at 7.6150 and Minneapolis wheat futures trended six cents higher at 8.0825.

Chicago July corn futures trended 5.25 cents lower at 6.2450 while May soybean futures closed seven cents higher at 14.2350. Wheat futures were supported on Friday and Wednesday by strong export demand, and potentially crop damaging temperatures and weather conditions in the U.S. wheat growing areas.

On Monday and Tuesday, wheat futures were pressured by technical selling, new trade concerns over slowing demand and spillover pressure from the lower corn futures on Tuesday.

Corn futures were lower for the week with pressure on Monday and Tuesday from forecast crop-friendly weather and soil conditions. Buying support and expectations of flooding due to snow melt in the northern plains were supporting factors to the corn futures on Friday and Wednesday.

Soybean futures fell during the week due to ongoing concerns over the bird flu epidemic in Asia, profit taking, a lower-than-expected inspected-for-export figure of 4.8 million bushels (mb), a stronger U.S. dollar on Tuesday, and trade concerns that more acreage will switch from corn to soybeans.

CASH BIDS FOR WHEAT AND CORN AT PORTLAND AS OF APRIL 25, 2013: USDA

Cash wheat bids for April delivery ended the reporting week on Thursday, April 25, higher compared to week-ago bids for the same delivery period. Hard red winter wheat and dark northern spring wheat bids moved higher and soft white wheat bids were not available.

Bids for US 1 Soft White Wheat delivered to Portland in unit trains or barges during April were not available as most exporters were not issuing bids for nearby delivery.

Bids for 11.5 percent protein US 1 Hard Red Winter Wheat for April delivery advanced by 14.75 to 17.75 cents per bushel compared to last Thursday’s noon bids for the same time period supported by the higher Kansas City July wheat futures, and a higher basis bid by some exporters.

Bids for US 2 Yellow Corn delivered to Portland in single rail cars were 267.75-273.00, 1.75 to 2.00 per ton lower than last Thursday’s bids of 269.50-275.00.

Bids for US 2 Yellow Corn truck delivered to the inland feeding areas of Yakima, Washington, and Hermiston, Oregon were 272.75-276.75, mixed, from 1.75 cents lower to 0.25 of a cent per ton higher than last Thursday’s bids of 274.50-276.50. Lower Chicago May and July corn futures pressured most corn bids lower.

All exporters have switched their nearby basis to over the July Kansas City wheat futures.

On Thursday, bids were as follows: April 8.9650-9.0650, mostly 9.0150; May 8.8650-9.0150; June 8.7650-8.9650; first half July 8.5150-8.8150, last half July 8.4150-8.6650 and August New Crop 8.3675-8.5175.

Bids for non-guaranteed 14.0 percent protein US 1 Dark Northern Spring Wheat for April Portland delivery trended one to 11 cents per bushel higher compared with last week’s noon bids for April delivery.

Higher Minneapolis July wheat futures were supportive to the cash bids. All exporters have switched their nearby basis to over the July Minneapolis wheat futures.

Protein scales for non-guaranteed 14.0 percent protein were plus zero cents each 1/4 of a percent of protein up to 16 percent protein and minus four to five cents each 1/4 of a percent of protein down to 13 percent protein.

On Thursday, bids for non-guaranteed 14 percent protein were as follows: April 9.3825; May 9.3325-9.3825; June 9.2325-9.3825; July 9.0825-9.2825 and August New Crop 8.9550-9.1550.

COLUMBIA, OREGON GRAIN VESSEL UPDATE AS OF APRIL 25, 2013: USDA

There were six grain vessels in Columbia River ports on Thursday, April 25, with two docked compared to six last Thursday with three docked.

New confirmed export sales this week were limited to Japan. Japan purchased the following wheat in metric tons: 22,359 of maximum 10.5 percent protein western white wheat for May 21 to June 20 shipment and 23,520 of minimum 11.7 percent protein hard red winter wheat and 19,942 of minimum 14 percent protein dark northern spring wheat for arrival by July 31.

Outstanding U.S. white wheat export sales as of April 18, 2013 for the marketing year beginning June 1, 2012 and ending May 31, 2013, totaled 409.0 thousand MT compared to 475.3 thousand MT on April 11, 2012, and 833.8 thousand MT one year ago.

Outstanding white wheat export sales for the 2012-2013 marketing year were to the following countries in 1000 MT:
Japan 106.8
South Korea 61.4
Philippines 56.0
Yemen 45.0
Thailand 39.4
Taiwan 10.4
Nigeria 8.7
Canada 1.6
Malaysia 1.0
Burma 0.5
Hong Kong 0.3
Vietnam 0.3
Total unknown 77.6.

Accumulated white wheat export shipments as of April 18, 2013, in 1000 MT for the 2012-2013 marketing year, totaled 4161.9 compared to 4966.4 one year ago.

COFFEE, SUGAR AND COCOA OUTLOOK: COFFEE AND COCOA ADRIFT, SUGAR WEAK
By Jack Scoville, The Price Futures Group

Coffee prices were sideways to weak last week and might hold these trends this week. The robusta market really took the brunt of the selling pressure as rains were reported in Vietnam. Arabica prices tried to rally, but the arabica bulls lost their nerve due to the weakness in robusta and on reports of increased selling from Brazil.

Brazil and Vietnam remain the big gorillas in the room and have been able to keep prices cheaper. Good news for buyers but not for the sellers in Philippines. We think prices are near some short-term lows as the drop in futures has been pretty extreme for both markets. However, it is hard to see much upside for prices with big crops expected in Brazil and in Vietnam.

The International Coffee Organization (ICO) data shows the potential for surplus production this year for the first time in a few years, so this will keep futures pinned near the lows.

Look for stronger differentials for pricing chances for sellers, and use futures to fix prices if you are buyers. Keep the sales moving and move any extra production out so there can be chances for stronger prices down the road.
Sugar remains a weak market, but might also be getting close to some lows. The big reason for the low prices remains the big crops coming out of Brazil.

But the noise is a little different now. Mills in Brazil are expected to produce ethanol now and then sugar if and when prices start to improve. They might have to wait for a long time as trends remain down in prices.

But, as in the case with coffee, the sugar price drop has been pretty extreme, and the news that Brazil will concentrate on ethanol first might at least keep the seller from pressing the market much more.

Like the grains and coffee, upside potential seems to be limited with the big production estimates for Brazil and other countries still around.

A turn to a sideways trading range seems possible with the moves by the mills in Brazil.

Cocoa prices took the week off last week, but the market is in a bull trend due to ideas and reports of smaller production in West Africa.

The price trend remains generally up, although futures are very close to initial targets for the rally now. It is possible that some down or sideways trade could develop for a week or two before any rally resumes.

Reports from Asia imply that production can be good to very good there, but the reports from West Africa show smaller beans that hurts quality and smaller mid-crop harvest yields as well. Ideas are that production for the coming year will be down, although the current rally in prices could cause farmers around the world to work a little harder to get the best potential production going.

Sellers should note that the market has moved a lot higher and should make any short term sales that need to be made. They should also watch deferred prices for chances to start the selling program for the next crop. Buyers might choose to wait to see if a correction develops, but should make sure they have good coverage levels on if and when it does as the overall trends remain up.

VIETNAM RICE IMPORTER COMPLAINS OF CONTAMINATION; PHILIPPINES BUYS RICE: Issue 31 April 22, 2013

By Jack Scoville, The Price Futures Group

It was a wild week last week for futures and cash markets and for world events. The world watched Boston, Texas, and lots of other places as things seemed to unravel a little bit.

The importer of Vietnamese rice here in the U.S. has complained of too much iron in the rice. This is yet another contamination problem noted in Asian rice.

The Chinese contamination problems have been widely reported, but the Vietnamese problems are new.

Private importers in Philippines are also buying Vietnamese rice now, and will probably need to test for the iron contamination. (The Digest reported last week that Philippine private importers bought 187,000 metric tons of rice from Vietnam.)

The Philippines paid some pretty fancy prices for a product that is supposed to be dirt cheap in that part of the world and will have a right to insist on good, clean rice.

We will be watching to see how this is handled there. The cry for clean rice could push a little demand here or perhaps to India.

Thailand will be a last resort due to the super high prices there. What Thailand will do with all of this high-priced rice is not known, but it will either go bad or get dumped one way or another so one has to keep watching and waiting on them to make up their minds.

It could also mean that high quality and clean rice in Asia starts to increase in price as there won’t be so much of the good stuff around.

In the United States, Arkansas farmers have been able to start work. At least they have been able to get started in the northern part of the state, and many farmers were about done planting rice by the end of the week.

We understand that farmers in the southern part of the state were not able to work. Either way, this is good news. At least the crop is in, and conditions are called generally good in areas that are planted, even if northern Arkansas producers would like temperatures to be a bit warmer.

BENIGN WEATHER FOR PHILIPPINE RICE FARMERS
By Aaron Cook, Metservice and Metraweather
Metservice.com
Metraweather.com

The next two weeks will hold few surprises for Philippine rice growers, with persistent easterly winds and reliable afternoon and evening shower activity across most of the country.

Although the next two days will be fairly dry, we should see healthy rainfall for Central Luzon, Western Visayas and Mindanao during the second half of this week, as per the seven-day ECMWF rainfall chart below for Monday to Sunday. Temperatures will be slightly above average.

Casting our gaze further west, Thailand and Vietnam will be wet over the next two to three days, picking up widespread falls of 20mm to 40mm before a return to average rain later in the week. Closer to the equator, the ECMWF models favor average to above average rainfall for West Malaysia, Borneo, Sumatra and Java over the next 10 days (in the order of an extra 1mm to 5mm per day).

The global climate is thus far offering few clues to what the Philippines might expect in terms of growing conditions or typhoon activity during the second half of this year.

Climate models from major forecasting centers are all pointing towards neutral ENSO conditions over the next few months and there are not yet any credible hints that an El Nino or La Nina event is any more likely to form than normal from August onwards.

7_day (2)

BUYING AND SELLING PRICES OF RICE FROM THE PHILIPPINES’ NATIONAL FOOD AUTHORITY (In Philippine pesos per kg) As of April 19, 2013

SELLING

buying

PHILIPPINE MINING PROJECTS UNDER THE GUN FROM FALLING GOLD, COPPER PRICES
By Rene Pastor

The future of mining projects in the Philippines is under threat from something that neither the government of President Benigno Aquino nor anti-mining activists can control.

Last week, the price of gold dropped in one session by $140.40 or nearly 10 percent to register its biggest one-day fall in 30 years to trade at $1,360.90 per ounce.
Copper stocks were at their highest level in 10 years as inventories built up and prices slumped due to weaker consumption of the red metal in China, the world’s top consumer of the metal.

The falling price of both gold and copper could well make several fringe mining projects in the Philippines too expensive to develop. Why spend all that money and hassle in the Philippines when the prices of both metals are so weak and the return on your investment likely negligible?

The Tampakan project in the southern Philippines may well be the last project developed for a while, but only because Xstrata has already spent billions of dollars on the project.
The Philippine government has opted to actively support mining, but crashing metal prices may scupper attempts to entice investors grown weary of being treated as political footballs in the country.

PHILIPPINE SUPREME COURT HEARING ON MINING LAW UNCALLED FOR
By Rene Pastor

The decision by the Supreme Court in the Philippines to even entertain petitions against the mining law illustrates what is wrong with the country.

The Supreme Court decided back in 2006 the law is constitutional. That should be the end of it. The Court could easily have said, as they do in other jurisdictions, that this issue has been settled and dismissed the case outright. That is the normal thing to do.

But the Philippines does not do normal. Instead, we relitigate and refile a case to infinity and beyond.

This case is like throwing manure on the ceiling and hoping something sticks, or the court is persuaded to change its mind.

At some point, institutions in the Philippines like the Supreme Court should say unequivocally that we have gone over this law before and it is constitutional. This is one reason investors look at the Philippines and slam its legal system as a breeding ground for systematic corruption. Nothing is ever settled until the price is right, or populist politics steps in.

This is a silly decision by the Supreme Court and they know it. This is a waste of time.

WEATHER DELAYS SPRING PLANTINGS IN U.S.; LARGE CROPS IN BRAZIL, ARGENTINA
By Jack Scoville, The Price Futures Group

It seems calmer to start the week in world events, and perhaps even for world grains markets.

The weather looks to be mostly good for harvesting and shipping in South America. Indications are now that the crops in Brazil might be a little overestimated, with most now talking about soybeans production near 81 million tons instead of 84 million.

Either way, though, the production looks big. Corn production there is now estimated at about 75 million tons due to good winter crop growing conditions. Argentine crop production estimates are holding steady near 50 million tons for soybeans and 25 million tons for corn.

It also looks to be a calmer week for weather, even with one more system likely to move through the U.S. Great Plains and Midwest in the first half of the week.

The new system will move from west to east starting today. No one is forecasting the massive rains that were reported in much of the Midwest last week, but there could be some fairly significant rains that will keep flooding around and farmers out of the fields.

Chicago got a month-and-a-half of rain in one 36-hour period last week, and flooding is still reported in parts of the city and suburbs.

Most parts of the Midwest remain too wet and too cold for any work to get done, even in areas close to the Ohio River. Some work has been done in the Delta south of the Ohio River, and grains and oilseeds planting progress should be seen in the reports that will be released by USDA Monday afternoon.

Even in this area the progress is spotty, and it really depends on where you are for any progress to be noted at all. Some farmers in northern Arkansas, for example, are about done with planting, while some farther to the south in the state have barely gotten underway.

Midwest and Great Plains weather should see one more system pass the region in the first half of the week, but then forecasts call for warmer and drier conditions to develop.

Those along the Red River on the border between Minnesota and the Dakotas are very worried, and should be. The snow in the area will rapidly melt and the flooding could be catastrophic.

Other areas, though, will welcome the warmer and drier weather as it will allow fields to dry and soil temperatures to warm. This includes the Canadian Prairies, where it has been extremely cold as well.

It is possible the new crop futures could shift trends more to down if and when the weather clears. We have seen a lot of buying in new crop corn due to the weather and what cold and wet weather might mean to planted area and yields.

Generally speaking, the later it gets the bigger the chance that corn will pollinate during the hottest part of the summer and this could hurt yields.

Farmers might be forced to switch to varieties with shorter maturing terms and these varieties generally feature somewhat smaller yields. Some farmers might choose to plant more soybeans and less corn.

So weather is getting more important and improved forecasts will be watched this week to see if they change or if in fact the weather does improve.

If so new-crop corn and soybean prices could see increased selling pressure and bull spreads could once again be a feature in both markets. Supplies remain tight in spot markets although supplies down the road look to be much bigger.

PALM OIL OUTLOOK: PRICES SLIP AS DEMAND WEAKENS
By Jack Scoville, The Price Futures Group

Palm oil is trying to work lower amid less demand.

Exports so far this month have been disappointing. They are down 5 percent to 7 percent from last month and show no signs of improving in the short term.

However, super strong canola futures and stronger soybean oil futures have helped support palm oil futures. All in all, though, the short-term trends have been weak.

Palm futures have not put together much of a rally attempt even though seasonal indications show that higher prices can be expected at this time of year due to less production.

The lower production cycle is starting to pass now and that is not good news for bullish traders. Neither is the lower demand that has been seen lately.

Traders will probably shift to a sell rallies type of mindset for now. They will probably get help from Chicago futures as time passes and summer makes its inevitable appearance in the U.S.

Buyers will most likely shift to a hand-to-mouth supply scenario for the next few months, and such moves are probably best for now. We have no real down-side target for now, but a move through 2250 ringgit/ton basis the nearby futures could indicate a test of the lows just below 2100 ringgit again.

MALAYSIAN PALM OIL COUNCIL’S MONTHLY OIL PRODUCTION AND EXPORT FIGURES

1 malaysia

2 exports

3 production

COFFEE, SUGAR AND COCOA OUTLOOK
By Jack Scoville, The Price Futures Group

Coffee appears to be a market trying to form a bottom. This is true in robusta and arabica markets. The robusta remains the stronger demand market, but seems to have prospects of increasing supply.

Vietnam keeps saying it has a small harvest, but keeps exporting strong numbers. We look for this strong export pace to tail off as the country runs out of the previous crop and farmers look to hold the new crop.

Demand has been active, differentials have been strong, and prospects for overall strong prices remain. Robusta remains the weaker demand market, and this is reflected mostly in differentials paid for inferior qualities used by the big commercial roasters.

Differentials for better qualities have been strong, but demand has been minimal and the overall market in Central America and northern South America has been rather quiet. Robusta shows the best signs of moving higher for now, but Arabica is now very cheap on spreads and can move higher as well, especially if stronger roaster demand appears. The demand seems to be out there, but waiting. The buy side might wait too long and need to pay up.

Sugar is caught between big supplies in Brazil and demand for competing products, such as ethanol. It could be that sugar prices are near a bottom as well. Sugar mills are telling observers that they plan to concentrate on ethanol production first as prices are better over in that sector, then return to sugar if and when prices get stronger.

Prices remain depressed due to big supply ideas. For example, the International Sugar Organization (ISO) expects production to outstrip demand by about 6 million tons this year. Increased demand from the ethanol side can reduce this surplus, but the fact remains that there seems to be a lot of sugar around, and that means that upside potential for prices should be very limited.

Cocoa appears to have entered into a long term rally. There have been bad demand and large production ideas around for the last several months.

But the mid crop in western Africa has been not as strong as expected, and ideas are that the coming production year harvested this winter will also be less. Meanwhile, Asian production should be good as weather has been generally favorable for production this year.

But the market concentrates on the Africans, and there are some problems there. The grind data was not quite as bad as expected for Europe and much better than expected in North America, so demand is better than forecast by the trade overall. Charts show that the market is in a bullish trend. Buying interest should be strong on any short-term price weakness.

USDA PACIFIC NORTHWEST WEEKLY GRAINS SUMMARY FOR THE WEEK ENDING April 18, 2013

May wheat futures ended the reporting week on Thursday, April 18, higher, as follows compared to last Thursday’s closes: Chicago five cents higher at 7.0275 and Kansas City five cents higher at 7.4375.

Minneapolis July wheat futures trended 17.75 cents higher at 8.0225. Chicago July corn futures trended 3.75 cents lower at 6.2975 while May soybean futures closed 28.50 cents higher at 14.3050.

Soybean futures moved higher with support from good export demand of tight old crop supplies and forecast of wet, cooler weather over the weekend in parts of the Midwest.

Good export demand for U.S. soft red winter wheat and cold weather in the northern and western U.S. Plains that may cause planting delays and crop damage were supportive factors to the wheat futures during the week.

Corn futures ended the week lower with pressure on Thursday (April 18th) from commercial selling and disappointing corn export sales and shipments.

Earlier during the week, corn futures were supported by commercial buying and rain in the U.S. crop-producing areas. On Monday, grain futures were pressured by the disappointing first quarter GDP growth report for China of 7.7 percent annually, which also pressured gold, crude oil and copper markets.

CASH BIDS FOR WHEAT AND CORN AT PORTLAND AS OF APRIL 18, 2013: USDA

Cash wheat bids for April delivery ended the reporting week on Thursday, April 18, mixed compared to week- ago bids for the same delivery period. Hard red winter wheat bids and dark northern spring wheat bid trended higher, while soft white wheat bids trended lower.

Bids for US 1 Soft White Wheat delivered to Portland in unit trains or barges during April trended 7.25 to 7.75 cents per bushel lower than last Thursday’s noon bids for April delivery. Some exporters were not issuing bids for nearby delivery.

Bids for 11.5 percent protein US 1 Hard Red Winter Wheat for April delivery advanced by five to eight cents per bushel compared to last Thursday’s noon bids for the same time period supported by the higher Kansas City May wheat futures, and a higher basis bid by some exporters.

On Thursday, bids were as follows: April 8.8175-8.8875, mostly 8.8475; May 8.6875-8.8875; June 8.64-8.84; first half July 8.39-8.69, last half July 8.29-8.54 and August New Crop 8.2575-8.3575.

Bids for non-guaranteed 14.0 percent protein US 1 Dark Northern Spring Wheat for April Portland delivery trended 12.75 cents per bushel higher compared with last week’s noon bids for April delivery.

Higher Minneapolis July wheat futures were supportive to the cash bids. All exporters have switched their basis to over the July Minneapolis wheat futures.

Protein scales for non-guaranteed 14.0 percent protein were plus zero cents each one-fourth of a percent of protein up to 16 percent protein and minus four to five cents each one-fourth of a percent of protein down to 13 percent protein.

On Thursday, bids for non-guaranteed 14 percent protein were as follows: April 9.2725-9.3725, mostly 9.3225; May 9.2725-9.3725; June 9.1725-9.3225; July 9.0225-9.1725 and August New Crop 8.8575-9.0575.

Bids for US 2 Yellow Corn truck delivered to the inland feeding areas of Yakima, Washington, and Hermiston, Oregon were 274.50-276.50, 4.50 to 5.75 per ton lower than last Thursday’s bids of 279.00-282.25.

Lower Chicago May corn futures pressured the cash corn bids. Bids for US 2 Heavy White Oats for April delivery held steady with last Thursday’s noon bids at 270.00.

COLUMBIA, OREGON GRAIN VESSEL UPDATE AS OF APRIL 18, 2013: USDA

There were six grain vessels in Columbia River ports on Thursday, April 18, with three docked compared to 10 last Thursday with five docked.

New confirmed export sales this week were limited to Japan.

Japan purchased 24,330 metric tons (mt) of minimum 14 percent protein dark northern spring wheat for May 21 to June 20 shipment. Japan also purchased 5,330 mt of maximum 10.5 percent protein western white wheat and 18,275 of minimum 11.7 percent protein hard red winter wheat for delivery by July 31.

Outstanding U.S. white wheat export sales as of April 11, 2013 for the marketing year beginning June 1, 2012 and ending May 31, 2013, totaled 475.3 thousand MT compared to 572.3 thousand MT on April 4, 2012, and 1073.8 thousand MT one year ago.

Outstanding white wheat export sales for the 2012-2013 marketing year were to the following countries in 1000 MT:
Japan 109.8
Philippines 73.0
South Korea 71.2
Yemen 45.00
Thailand 39.4
Taiwan 20.5
Guatemala 13.1
Nigeria 8.7
Canada 1.6
Malaysia 1.0
Burma 0.7
Sweden 0.5
Hong Kong 0.3
Total unknown 90.5

Accumulated white wheat export shipments as of April 11, 2013, in 1000 mt for the 2012-2013 marketing year, totaled 4124.7 compared to 4764.1 a year ago.

VIETNAM WINS RICE EXPORT CONTRACT TO PHILIPPINES: Issue 30 April 14, 2013

By Rene Pastor

Vietnam has won a contract to export 187,000 metric tons of rice to the Philippines, the Vietnam Food Association (VFA) announced on the website of the Ministry for Agriculture and Rural Development.

The Philippines is one of the world’s top importers of rice although the government has launched a campaign to make the country self-sufficient in 2013. It is a goal that most rice analysts and traders believe will not be met this year.

The 25 percent broken rice was sold at a price of $459.75 per ton, above the market average of $365, according to the VFA. The rice will be shipped between April and June, the VFA said.

Vietnam will be exporting 2.2 million tons of rice in the second quarter of 2013, the VFA said while adding this includes an estimated 800,000 tons of rice in April alone.
The Philippine government’s National Food Authority (NFA), the body which makes sure rice supplies are stable, said it will be importing 163,000 metric tons of rice as part of trade obligations under the World Trade Organization.

Of the planned rice imports, some 98,000 tons will come from Thailand, one of the world’s top rice exporters, with 25,000 tons each coming from China and India, and the remaining 15,000 tons from Australia, the Philippine government had announced last week.

It seems the purchases from Vietnam will not be undertaken by the NFA and is being carried out by private buyers.

Rice stocks in the Philippines fell to a six-month low at the start of March, with government and commercial warehouses holding barely a month’s supply to feed the country’s nearly 100 million people.

The Agriculture Department said rice inventories as of March 1st, 2013 stood at 1.94 million metric tons, the lowest since Sept. 1, 2012. Since inventories reached 2.78 million tons on November 1st, the level of rice stocks has fallen over 30 percent, government statistics showed.

All the rice imports are being done ahead of the third quarter of 2013, when rice inventories in the Philippines seasonally drop to their lowest level for the year.

The Philippine Commodities Digest believes Manila’s total rice imports in 2013 will eventually reach at least 850,000 tons. U.S. agricultural experts from the USDA feel the imports would hit 1.5 million tons of rice. The experts’ forecast is not official USDA data.

The Philippine government is pinning its hopes on high-yielding seeds and improvements in infrastructure facilities, such as irrigation, to boost rice output in the country. But limits in the acreage planted to rice, historically low yields, and a surge in rice demand brought on by an increasing population may well blunt the government drive for self-sufficiency in rice.

ASIAN HARVEST PRESSURES RICE PRICES, CHINA BUYING SEEN TO SUPPORT MARKET
By Jack Scoville, The Price Futures Group

Rice continues to be a tale of two markets.

The Far East market remains weak. The harvests are starting there and demand is weak for this reason.

Vietnamese prices remain under pressure to work lower and have dropped in the past week. Even so, no one is really buying due to the harvest.

Production is expected to be strong throughout the region. The direction of prices there will depend on China, which has big problems with food safety these days due to the bird flu epidemic. Eleven people have died. Dozens have been made sick.

This is not the only problem there as rice safety has been questioned as well. The water used to produce the rice can be contaminated and there have been problems with it reported in the recent past.

China has been a strong importer of rice, and we don’t know how much they have bought in the world and how much has moved over land where smuggling is easier. But they have bought a lot and it looks like they will continue to buy, and might even buy soon from the U.S.

Chinese demand alone might be enough to keep rice prices in Asia stronger than might be expected given the bearish talk in the region.

Here in the West, the supplies remain tight, and prices have generally been heading higher. Our situation here in the U.S. is one of less and less stocks as demand remains strong.

There probably will be little help from South America as crop estimates from our sources and the official data are dropping. Prices in the West will remain elevated as buyers in this part of the world do not like the quality of rice grown in the East.

There have been imports at times from various countries, but only imports by the U.S. of Asian rice keep happening.

The U.S. imports a percentage of its rice each year. Part of this demand is for the Asian market here. Asians prefer their rice to that grown here, or at least some of them do. We also import aromatic (rice) from Pakistan, India and Thailand.

The Middle East market is interesting right now too. Indian Basmati prices are sky-high due to demand from Iran. Par boiled prices are not nearly as strong, but India seems to show little interest in selling it. They are more excited about exporting wheat.

Pakistan has been exporting, though, and getting some pretty good prices as India is mostly out of the market.

BUYING AND SELLING PRICES OF RICE FROM THE NATIONAL FOOD AUTHORITY (in Philippine pesos per kg) As of April 12, 2013

selling

buying

PROTECTING ITS MINING INDUSTRY, MANILA PURSUES EITI CANDIDACY
By Rene Pastor

It seemed innocuous enough and something the government of President Benigno Aquino should be doing all along.

The Philippine government is working hard to gain membership in the Extractive Industries Transparency Initiative (EITI). The target apparently is to win EITI approval at its next global conference in Sydney, Australia, on May 23 and 24.

It seeks to establish a global standard where those involved in extractive industries — mainly mining – report how much the company pays and a government acknowledges how much its receives. The people of a country can then review the figures.

“The EITI is a coalition of governments, companies, civil society groups, investors and international organizations,” its website says.

The move by Aquino’s government is motivated by two things.

One is good governance and transparency, something that Aquino has made a bedrock of in his administration. The other of course is political calculation.

By joining EITI, the Philippine government will help blunt the efforts of activists opposed to any mining whatsoever in the country.

Effectively, the Philippines can claim that it is responsible in ensuring that extractive industries benefit Filipinos and that it is going to all the trouble of making sure that any revenues can be tracked by independent groups.

EITI of course will not stop corruption in mining.
Come to think of it, international treaties signed by governments are often notable for how many times they are violated.

“We hope that this will also lead to improvements to tax collection processes, as well as enhance the thrust and stability in the extractive industries,” Elisea Gozun, the presidential assistant on climate change, said at a briefing.

It seems ironic that the first country in the region to join EITI is the former East Timor. Indonesia and the Philippines are now trying to play catch-up. Since the Philippine government has opted to actively support mining, it seems prudent it will join EITI even if there is some skepticism about its motives for doing so.

WEATHER PROBLEMS IN U.S., OTHER COUNTRIES MAY SOON SPARK GRAINS COMPLEX
By Jack Scoville, The Price Futures Group

Corn, soybeans and wheat have been under some price pressure in the last few weeks, mostly due to increasing movement of products in South America.

But the situation here in the north needs to be watched and might get bad enough soon to turn the trends in prices to up no matter what is available down south.

We have a developing weather problem here. The fact of the matter is that temperatures have not warmed up and farmers are having trouble getting into the fields to work.

The situation does not look to get better anytime soon as storms move from west to east and the cold weather does not go away.

It is too early to talk of losses in yields or switching from one crop to another, but the days are moving and the talk will start if the weather does not improve soon.

The U.S. and Canada are not the only countries with bad weather right now. It is too dry in Australia, and cold weather is reported in Europe, Russia, and parts of China.

It is not wise to be too bearish on prices just now, and good coverage of needs for the next couple of months is still advised.

Extended coverage of needs might become a necessity soon if things do not change. Especially for corn and wheat.

PHILIPPINE GROWING WEATHER OUTLOOK FROM GOVERNMENT PAGASA FORECASTING AGENCY AS OF APRIL 15, 2013

There are no tropical typhoons threatening the Philippine archipelago or its rice-growing areas as the country is in the middle of its summer season, the government’s Pagasa weather forecasting agency said.

The country will have generally good weather aside from isolated rain showers or thunderstorms.

The dry season in the Philippines normally runs from late November to May of the following year. The rainy season, when an average of 20 typhoons hit the Philippines, normally begins in June.

PALM OIL OUTLOOK: FIRM DEMAND KEEPING VALUES SUPPORTED
By Jack Scoville, The Price Futures Group

Palm oil got some bullish news from MPOB (Malaysia Palm Oil Board), but did not react all that well.

Some of the weakness had to do with ideas that a seasonal increase in production is coming. Some was due to weakness of prices in Chicago and in competing vegetable oils.

But the demand has been better for palm oil than the trade expected. And given the situation here and in the northern half of the world in general, the market might find its legs and hold rather than work lower.

Traders are worried about demand in general, and most specifically from Europe. As noted, the demand has held together rather well.

The down side in prices for palm oil should be rather limited. Speculators have been selling and prices should hold once the selling from them has abated. That could be as soon as this week.

USDA PACIFIC NORTHWEST WEEKLY GRAIN SUMMARY FOR THE WEEK ENDING APRIL 11, 2013

May wheat futures ended the reporting week on Thursday, April 11, higher, as follows compared to last Thursday’s closes: Chicago 3.75 cents higher at 6.9775, Kansas City 17 cents higher at 7.3875 and Minneapolis three cents higher at 7.8950.

Chicago May corn futures trended 21.25 cents higher at 6.5125 while May soybean futures closed 30 cents higher at 14.02.

Grain futures were higher for the week. Supportive factors to the higher wheat futures were continued trade concerns over the dry conditions in the Southern Plains and planting delays due to freezing temperatures and snow in North Dakota, a higher-than-expected inspected-for-export figure for the week ending April 4 of 27.2 million bushels (mb), spillover support from the higher row crop futures on Monday, and historically poor crop condition scores.

Corn futures were supported during the week by potential planting delays due to higher rainfall amounts and potential flooding, spillover support from the higher wheat futures on Monday, strong ethanol margins, higher outside markets on Tuesday, and a bullish USDA supply and demand report.

Export inspections continuing to be higher than what is needed to meet USDA export estimate, tight world pipeline supplies, good crush margins, and a bullish USDA supply and demand report released on Wednesday were supporting factors to the higher soybean futures for the week.

USDA World Supply ending stocks are estimated for 2012/2013 for April are as follows: 178.23 million metric tons (mmt) for wheat, 182.26 mmt for corn and 62.63 mmt for soybeans. U.S. ending stocks are estimated at 731 mb for wheat, 757 mb for corn and 125 mb for soybeans.

CASH BIDS FOR WHEAT AND CORN AT PORTLAND AS OF APRIL 11, 2013: USDA

Cash wheat bids for April delivery ended the reporting week on Thursday, April 11th, mixed compared to week ago bids for the same delivery period. Hard red winter wheat bids trended higher, while dark northern spring wheat and soft white wheat bids were lower.

Bids for US 1 Soft White Wheat delivered to Portland in unit trains or barges during April trended 2.25 to 15 cents per bushel lower than last Thursday’s noon bids for April delivery. Some exporters were not issuing bids for nearby delivery.

Bids for 11.5 percent protein US 1 Hard Red Winter Wheat for April delivery advanced by 17 to 22 cents per bushel compared to last Thursday’s noon bids for the same time period supported by the higher Kansas City May wheat futures, and a higher basis bid by some exporters.

On Thursday, bids were as follows: April 8.7375-8.8375, mostly 8.7775; May 8.6375-8.7875; June 8.5150-8.8150; first half July 8.3650-8.6650, last half July 8.2650-8.4650and August New Crop 8.2375-8.3375.

Bids for non-guaranteed 14.0 percent protein US 1 Dark Northern Spring Wheat for April Portland delivery trended two to 12 cents per bushel lower compared with last week’s noon bids for April delivery. A lower basis bid by most exporters weighed on bids, despite the higher Minneapolis May wheat futures.

Protein scales for non-guaranteed 14.0 percent protein were plus zero cents each 1/4 of a percent of protein up to 16 percent protein and minus four to five cents each 1/4 of a percent of protein down to 13 percent protein.

On Thursday, bids for non-guaranteed 14 percent protein were as follows: April 9.1450-9.2450, mostly 9.2050; May 9.1450-9.2450; June 9.0450-9.1450; July 8.8950-8.9950 and August New Crop 8.7425-8.9425.

Bids for US 2 Yellow Corn delivered to Portland in single rail cars were 276.75-278.00, 7.50 to 7.75 per ton higher than last Thursday’s bids of 269.25-270.25. Bids for US 2 Yellow Corn truck delivered to the inland feeding areas of Yakima, Washington, and Hermiston, Oregon were 279.00-282.25, 7.50 per ton higher than last Thursday’s bids of 271.50-274.75. Lower Chicago May corn futures pressured the cash corn bids.

COLUMBIA, OREGON GRAIN VESSEL UPDATE AS OF APRIL 11, 2013: USDA

There were 10 grain vessels in Columbia River ports on Thursday, April 11, with five docked compared to seven last Thursday with four docked.

New confirmed export sales this week were to Japan and Taiwan.

Japan purchased the following U.S. wheat in metric tons: 32,877 of minimum 11.7 percent protein hard red winter wheat for May 21-June 20 shipment, and 19,845 of maximum 10.5 percent protein western white wheat and 22,373 of minimum 14 percent protein dark northern spring wheat for delivery by July 31.

Taiwan purchased the following wheat in metric tons for May 15-29 shipment: 10,400 of 9 percent protein western white wheat, 14,180 of 12.5 percent protein hard red winter wheat, and 21,800 of 14.5 percent protein dark northern spring wheat. Taiwan also purchased the following wheat in metric tons for June 1-15 shipment: 13,050 of 12.5 percent protein hard red winter wheat, and 24,550 of 14.5 percent protein dark northern spring wheat.

Outstanding U.S. white wheat export sales as of April 4, 2013 for the marketing year beginning June 1, 2012 and ending May 31, 2013, totaled 572.3 thousand MT compared to 653.3 thousand MT on March 28, 2012, and 1263.6 thousand MT one year ago.

Outstanding white wheat export sales for the 2012-2013 marketing year were to the following countries in 1000 MT:
Japan 106.8
Yemen 100.00
Philippines 85.0
South Korea 79.0
Thailand 39.4
Taiwan 10.1
Nigeria 8.7
Burma 1.9
Canada 1.6
Malaysia 1.5
Sweden 0.5
Hong Kong 0.3
Total unknown 137.5.

Accumulated white wheat export shipments as of April 4, 2013, in 1000 MT for the 2012-2013 marketing year, totaled 3971.9 compared to 4539.5 one year ago.

PHILIPPINE RICE STOCKS DROP TO 6-MONTH LOW: Issue 29 April 7, 2013

By Rene Pastor

Rice stocks in the Philippines, one of the world’s key importers of the grain, fell to its lowest level in six months, with government and commercial warehouses holding barely a month’s supply to feed the country’s nearly 100 million people.

The Agriculture Department said rice inventories as of March 1st, 2013 stood at 1.94 million metric tons, the lowest since Sept. 1, 2012. Since inventories reached 2.78 million tons on November 1st, the level of rice stocks has fallen over 30 percent, government statistics showed.

The fall puts in perspective the decision by the National Food Authority (NFA), the government body which makes sure rice supplies are stable, to import 163,000 metric tons of rice.

While Manila has said the purchases are part of obligations under the World Trade Organization to import a total of 183,000 tons of rice in 2013, the shrinking stock level may have also spurred on the decision to bring the rice in at this time.

That leads to the next question: Will the imports be enough, or will more be needed?

Given the strength of rice demand and the need to boost stocks when the typhoon season hits, the wise money should be on more imports, not less.

The Philippines is one of the world’s top consumers of rice as the government of President Benigno Aquino said it is aiming to make the country self-sufficient in the grain this year.

A recent report by the U.S. agriculture attaché in Manila said self-sufficiency in rice by the Philippines will likely remain out of reach. The report is compiled by U.S. agriculture experts at its embassy in Manila and while it is not official U.S. government data, it is considered authoritative by the commodity trading community.

“While the (government) has successfully increased rice production and reduced imports in its drive toward self-sufficiency, the country remains a major importer,” the report prepared by Perfecto Corpuz and William Verzani said.

They said marketing year (August/July) 2012/13 rice imports “are expected to remain at 1.5 million tons, inclusive of unregistered imports, and are forecast to decline to 1.2 million tons in MY 2013/14 due to improved production and the (government’s) import cap.”

“Most experts agree that a low milling rate, high tariffs (35-40 percent) and a thriving economy will keep the Philippines a significant rice importer for the foreseeable future,” the report concluded.

As far as inventories go at this time, rice stocks in government warehouses are good for 17 days of daily consumption while those in commercial warehouses are enough for 15 days.

The Philippines consumes about 35,000 to 36,000 tons of rice per day. Normally, the government should have about two to three months’ worth of stocks on hand.

Of the planned rice imports by the Philippines, some 98,000 tons will come from Thailand, one of the world’s top rice exporters, with 25,000 tons each coming from China and India, and the remaining 15,000 tons from Australia, the government had announced last week.

The imports are also being done ahead of the third quarter of 2013, when rice inventories in the Philippines seasonally drop to their lowest level for the year. Traders believe the imported rice will likely arrive in mid-May or later.

The Philippine Commodities Digest believes Manila’s total rice imports in 2013 will eventually reach at least 850,000 tons. U.S. agricultural experts from the USDA feel the imports would hit 1.5 million tons of rice. The experts’ forecast is not official USDA data.

The Philippine government is pinning its hopes on high-yielding seeds and improvements in infrastructure facilities such as irrigation to boost rice output in the country. But limits in the acreage planted to rice, historically low yields, and a surge in rice demand brought on by an increasing population may well blunt the government drive for self-sufficiency in rice.

RICE PRICES STALL, BUT SUPPLIES STAY TIGHT
By Jack Scoville, The Price Futures Group

Rice seems to have topped out here for now in futures, but the situation in the western half of the world remains tight.

Rice bears got some help with competing crops moving lower in price, but planted area and production still look down for the coming year.

The U.S. Delta in particular has been wet and cold and progress in that region has been minimal.

Texas is about planted and areas of the Delta near the Gulf of Mexico are planted now. Farther north, though, little if any field work has been done. But, producers there have time, so there is not much concern yet.

BUYING AND SELLING PRICES OF RICE FROM THE PHILIPPINES’ NATIONAL FOOD AUTHORITY (in Philippine pesos per kg) As of April 5, 2013

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buying

PHILIPPINE WHEAT, CORN IMPORTS SEEN TO DECLINE
By Rene Pastor

Wheat imports by the Philippines, one of the biggest buyers of the U.S. grain, are expected to decline while rising corn production is seen cutting imports by nearly half, a report by the U.S. agriculture attaché said.

With wheat production recovering in Canada and Australia, and increased flour imports from Turkey, the level of “U.S. wheat sales to the Philippines is expected to significantly decline” from the record in 2011/12 of $699 million, the report said. The attaché report is prepared by U.S. agriculture experts at its embassy in Manila. It is not official data from the U.S. Agriculture Department, but it is considered highly by the commodity trading community.

“Total wheat imports for milling and feed are expected to decline from 4.0 million (metric) tons in marketing year 2011/12 to 3.2 million tons in MY 2012/13 due to ample stocks and reduced feed use,” the report said.

Wheat imports by the Philippines are forecast though to rise slightly to 3.4 million tons in MY 2013/14 as inventories recover and milling use increases.

Culinary tradition in the Philippines includes the daily consumption of a small, rounded bread called the ‘pan de sal’ as part of its breakfast fare. The Philippines produces no wheat. The U.S. supplies anywhere from 85 percent to 90 percent of the wheat consumed by Filipinos.

Along with corn, the wheat is used mainly as animal feed for a rapidly expanding livestock and poultry industry.

Philippine corn imports stood at 202,000 tons in MY 2011/12, but they are expected to drop by over half to around 100,000 tons in 202/13 and drop even further to 75,000 tons in MY 2013/14 – relatively insignificant since the grain can be brought in on one Cape transport vessel which has a capacity of 100,000 tons.

Philippine corn production is expected to rise due to “expanded planting of biotech seed varieties and the Philippine government’s investment in infrastructure improvements,” the attaché report said.

Philippine corn production in 2012 reached a record 7.4 million tons.

GRAINS/OILSEEDS GRIND LOWER, CHINA BIRD FLU MAY HIT SOYBEAN/MEAL DEMAND
By Jack Scoville, The Price Futures Group

Prices in futures and in cash markets continued to work lower last week in grains and oilseeds markets around the world. The main driving factor was the USDA quarterly stocks reports that showed bigger-than-expected supplies here in the U.S.

The news reports of a new bird flu outbreak in China gave ideas of weaker demand for soybeans and soybean meal there and also hurt futures.

This week, the USDA releases its monthly supply and demand estimates and the reports are expected to at least partially reflect the increased supplies shown in the quarterly stocks reports, although increased demand estimates should reduce the amount of the increase.

The reports will also include world estimates, and plenty of supplies around the world.

So the general trend has turned here in terms of news. It was not that long ago when everything pointed to tight supplies or even no supplies in the case of soybeans. Now the talk is that there is plenty available.

Charts also reflect the change.

Futures turned sharply lower in response to the stocks reports, and finally started to find some traction near the end of last week.

It is possible that a short-term bounce is coming. But the turn last week left charts with a look that lower prices are coming down the road.

Buyers can extend coverage now before the USDA reports, but should be aware of the change in the sentiment here and also on the charts and many will keep buying interest less than normal.

We don’t blame them. They are finally getting some relief, and should take advantage of it.

But keep an eye on the weather here in the northern half of the world. We all are looking at the potential for big crops in the coming year in the north, including the U.S., Canada, Europe, Russia, and everywhere else it seems.

But very little of it has been planted and the winter crops are proving to be less than stellar, so things could change fast if the weather is not good.

The weather is fine for now, but too wet and cold in many areas of the northern half of the world and initial progress is slow.

The U.S. Agriculture Department (USDA) released its quarterly stocks estimates about two weeks ago.

Hereunder is the USDA quarterly stocks data:

Dec. 1 Mar. 1
USDA Average Range Stocks Stocks
Corn 5.40 5.030 4.916-5.248 8.030 6.023
Soybeans 1.00 0.947 0.912-1.059 1.966 1.374
Wheat 1.23 1.167 1.010-1.238 1.660 1.199

THAI RICE PRICES LITTLE CHANGED, DEMAND SLOW
By Rene Pastor

Thai domestic and export prices for rice were largely unchanged from the previous week, except for parboiled rice, which declined about 1 percent to 2 percent due to a lack of new inquiries, a report by the agriculture attaché at the U.S. embassy in Thailand said. The report by the attaché is not considered an official report by the U.S. Agriculture Department, but it is considered authoritative by the commodity trade.

Thailand is one of the top exporters of rice in the world.
The report said unofficial Thai rice exports, not including fragrant rice, for the period March 25 to 31, 2013 totaled 71,921 metric tons, down 5,280 tons from the prior week, and down 1,624 ton from the four-week moving average of 73,544 tons.

Exports of Thai white and parboiled rice from January 1 through March 31st, 2013, totaled 1,064,342 tons, down 11.7 percent from the 1,204,938 tons over the same period last year, the report said.

PHILIPPINE WEATHER OUTLOOK FROM GOVERNMENT PAGASA FORECASTING AGENCY

There are no tropical typhoons threatening the Philippine archipelago or its rice-growing areas as the country is in the middle of its summer season, the government’s Pagasa weather forecasting agency said

The country will have generally good weather aside from isolated rain showers or thunderstorms, mostly over the central Visayas and southern Mindanao islands, Pagasa said.

The dry season in the Philippines normally runs from late November to May of the following year. The rainy season normally begins in June.

WHEAT STRONG ON CHINESE, RUSSIAN BUYING
By Jack Scoville, The Price Futures Group

Wheat is the one market that has been able to hold strong. News reports of freeze damage to crops helped support prices here, but it was really talk of Chinese and Russian buying interest that made these markets strong.

Wheat needs better weather here in the U.S. and also in Europe and Russia. It is too dry here and too cold in the other two producing regions.

Usually, wheat prices start to move lower as the crops come out of dormancy and start to green up and look good. But crops are in such poor shape here that so far that has not happened.

Wheat is going to be a weather market for a while and buyers should be comfortable with purchase levels. Consider using futures or options to offset potential price risk if a buyer is unable to ensure adequate supplies in the cash market.

PALM OIL OUTLOOK: MALAYSIAN DATA AWAITED, MARKET IN A BAND
By Jack Scoville, The Price Futures Group

Palm oil held last week on news of stronger-than-expected exports from private sources and on ideas that the Malaysia Palm Oil Board (MPOB) this week will show lower stocks.

It is a lower production cycle time for east Asian palm oil producers, and this cycle will play itself out over the next couple of months.

Demand has not been bad considering price weakness in competing vegetable oils.

Futures markets appear to be in a trading range, implying stable prices in east Asian cash markets.

The fundamentals seem to imply stable markets for now as well. The MPOB data this week will probably point the market in the direction of its next price move, but neutral data and a sideways trade seem indicated by analysts at this time.

USDA PACIFIC NORTHWEST WEEKLY GRAIN SUMMARY FOR THE WEEK ENDING APRIL 4, 2013

Cash wheat bids for April delivery ended the reporting week on Thursday, April 4th, were mixed compared to week-ago bids for the same delivery period. Hard red winter wheat bids trended lower, dark northern spring wheat bids trended higher, and bids for soft white wheat were steady to lower.

May wheat futures ended the reporting week on Thursday, April 4th, mixed, as follows compared to last Thursday’s closes: Chicago 6.25 cents higher at 6.94, Kansas City five cents lower at 7.2175 and Minneapolis 6.25 cents higher at 7.8650. Chicago May corn futures trended 65.25 cents lower at 6.30 while May soybean futures closed 32.75 cents lower at 13.72.

Wheat futures were higher for the week, with support coming later in the week from a lower good/excellent crop rating report, potentially crop damaging weather in the U.S. wheat-growing areas, and increasing demand.

Early in the week, wheat futures were pressured by the bearish grain stocks and planting intentions report released on March 28, spillover pressure from the lower corn futures and chart selling.

Corn futures were lower for the week, with the bearish grain stocks and planting intentions report, slow export demand, and a higher U.S. dollar on Tuesday as pressuring factors. Soybean futures were pushed lower this week by spillover pressure from the lower corn and wheat markets on Monday, lower-than-expected inspections-for-export figures, continued shipments from South America, and uncertainty in the feeding industry in China due to the bird flu outbreak.

CASH BIDS FOR WHEAT AND CORN AT PORTLAND AS OF APRIL 4, 2013: USDA

Bids for US 1 Soft White Wheat, delivered by unit trains and barges to Portland during April ended the reporting week on Thursday, April 4th, at 7.95-8.10, mostly 8.0475. Last Thursday’s noon bids were 8.0775-8.10 for April delivery.
There were no white club wheat premiums for nearby delivery for this week or last week.

Bids for US 1 Soft White Wheat delivered during April trended steady to 12.75 cents per bushel lower than last Thursday’s noon bids for April delivery. There were no white club wheat premiums for nearby delivery for this week or last week. Some exporters were not issuing bids for nearby delivery.

Nearby bids for US 1 Soft White wheat began the reporting week on Friday as not available as the grain markets were closed.

On Monday, bids began the reporting week at the weekly high of mostly 8.0550, then fell to mostly 7.9525 on Tuesday, before rising slightly to 7.98 on Wednesday. Today (Thursday), bids ended the week at 8.0475.
There were no new confirmed export sales of white wheat this week.

Forward month bids for soft white wheat were as follows: May and June 7.95-8.10, July 7.95-8.00 and August New Crop 7.35-7.48. One year ago, forward month bids for soft white wheat were as follows:
May 6.95-7.05
June 6.80-6.95
July 6.64-6.85
August New Crop 6.64-6.65

Bids for 11.5 percent protein US 1 Hard Red Winter Wheat for April delivery declined by five cents per bushel compared to last Thursday’s noon bids for the same time period and lined up with the lower Kansas City May wheat futures. On Thursday, bids were as follows:
April 8.5175-8.6675, mostly 8.6175
May 8.4175-8.6675
June 8.3375-8.6375
July not available
August New Crop 8.0525-8.1025

Bids for non-guaranteed 14.0 percent protein US 1 Dark Northern Spring Wheat for April Portland delivery trended 6.25 cents per bushel higher compared with last week’s noon bids for April delivery. Higher Minneapolis May wheat futures supported bids. Protein scales for non-guaranteed 14.0 percent protein were plus zero cents each 1/4 of a percent of protein up to 16 percent protein and minus four to five cents each 1/4 of a percent of protein down to 13 percent protein. On Thursday, bids for non-guaranteed 14 percent protein were as follows:
April 9.1650-9.3650, mostly 9.2950
May 9.1150-9.3150
June 8.9950-9.0450
July not available
August New Crop 8.73-8.83

Bids for US 2 Yellow Corn delivered to Portland in single rail cars were 269.25-270.25, 23.75 to 24.50 per ton lower than last Thursday’s bids of 293.75-294.00. Bids for US 2 Yellow Corn truck delivered to the inland feeding areas of Yakima, Washington, and Hermiston, Oregon were 271.50-274.75, 23.25 to 23.50 per ton lower than last Thursday’s bids of 294.75-298.25. Lower Chicago May corn futures pressured the cash corn bids.

COLUMBIA, OREGON GRAIN VESSEL UPDATE AS OF APRIL 4, 2013: USDA

There were seven grain vessels in Columbia River ports on Thursday, April 4, with four docked compared to ten last Thursday with four docked. There were no new confirmed export sales this week.

Outstanding U.S. white wheat export sales as of March 28, 2013 for the marketing year beginning June 1, 2012 and ending May 31, 2013, totaled 653.3 thousand MT compared to 675.6 thousand MT on March 21, 2012, and 1357.4 thousand MT one year ago.

Outstanding white wheat export sales for the 2012-2013 marketing year were to the following countries in 1000 MT:
Japan 135.8
Philippines 103.0
Yemen 100.00
South Korea 92.7
Thailand 49.5
Nigeria 19.2
Taiwan 10.0
Burma 2.5
Canada 1.3
Malaysia 1.0
Sweden 0.5
Hong Kong 0.3
Total unknown 137.5

Accumulated white wheat export shipments as of March 28, 2013, in 1000 MT for the 2012-2013 marketing year, totaled 3869.3 compared to 4372.0 one year ago.

USDA RICE DATA HIGH, BUT TIGHT SUPPLIES PROP UP PRICES: Issue 28 Apr 1, 2013

By Jack Scoville, The Price Futures Group

The U.S. Agriculture Department (USDA) released its quarterly stocks estimates and also its prospective plantings reports on March 28th.

Hereunder is the USDA quarterly stocks data:

usda

The quarterly stocks reports offered a lot of surprises for the market, and none of them implied that higher prices are coming except for rice.

Rice data was on the high side of expectations, but still showed tight supplies overall. This is a market that has been moving sideways for a long time.

There is talk that the U.S. deep south and Texas are basically sold out on rice and that millers in Louisiana have started to source rice from northern Arkansas.

That does not happen unless the supplies are very tight as it is costly for millers to haul rough rice all that way for milling.

Overall, the stocks reports imply that futures have made highs and can generally work sideways or lower. It will take some signs of new demand or bad weather here in the U.S. to change trends back to up for any more than a short term move.

Rice is the lone exception as stocks there remain tight and the market is just starting to factor the tight U.S. market into the futures price.

Rice is one market with some significant upside price potential and it might not matter what happens to the other grains.

PHILIPPINES SETS RICE IMPORTS FROM THAILAND, CHINA, INDIA AND AUSTRALIA
By Rene Pastor

The Philippines said it is importing 163,000 metric tons of rice from four countries as part of import obligations under the World Trade Organization to buy a total of 183,000 tons in 2013.

The Philippines is one of the world’s top consumers of rice. The government of President Benigno Aquino said it is aiming to make the country self-sufficient in the staple food of its nearly 100 million people.

Some 98,000 tons of the rice will come from Thailand, one of the world’s top exporters of the grain, with 25,000 tons each coming from China and India, and the remaining 15,000 tons from Australia, the government’s National Food Authority said in a statement. The NFA is the government agency created to ensure a stable market in the politically sensitive grain.

The timing of the imports at the start of the second quarter of 2013 may be aimed at building up government buffer stocks which has declined by nearly 20 percent in a month.
The Philippine Agriculture Department forecast rice inventories as of Feb. 1 at 2.02 million tons, nearly 20 percent down from the previous month’s level.

Rice stocks in government and commercial warehouses stood at just over a month of daily consumption so analysts believe the imports are meant to shore up inventories. The Philippines consumes around 35,000 to 36,000 metric tons of rice a day.

The imports are also being done ahead of the third quarter of the year, when rice inventories in the Philippines seasonally drops to its lowest level for the year. Given shipping times and the filing of necessary documentation, the imported rice will likely arrive in mid-May or later, the analysts believe.

The Philippine Commodities Digest believes total rice imports by Manila in 2013 will reach at least 850,000 tons. U.S. agricultural experts from the USDA feel the imports would hit 1.5 million tons of rice. The experts’ forecast is not official USDA data.

The Philippine government hopes high-yielding seeds and improvements in infrastructure, facilities such as irrigation, will help boost production of rice.

But limits in the acreage planted to rice, historically low yields, and a surge in rice demand brought on by an increasing population may well thwart government attempts to make the Philippines self-sufficient in its staple food.

BUYING AND SELLING PRICES OF RICE FROM THE PHILIPPINES’ NATIONAL FOOD AUTHORITY (in Philippine pesos per kg)
As of March 27, 2013

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buying

CORN AND SOYBEANS WEIGHED DOWN BY USDA REPORT, WHEAT TRACKS CORN
By Jack Scoville, The Price Futures Group

The most price negative of the USDA reports was in corn. The report showed much higher stocks than the trade expected, and implied that high prices had done a job in rationing demand.

Stocks are still down from last year, and supplies might be tight by the end of the year, but the market can now afford to relax a bit.

Add to that news that Argentine corn is on its way to the southeast U.S., and you have a situation that has changed a lot over the last week or two.

It will now get much harder for bulls to move prices significantly higher. They will need to find additional demand before prices can do a whole lot.

On the other hand, the demand remains strong enough as it is to keep prices from breaking too much, especially with the whole growing season still in front of us.

It is very possible that prices will develop a new trading range until production prospects for the coming year are known.

The soybeans stocks report was also a big bearish surprise. It also implied that the situation is not quite as tight as thought, but ideas are that China will look to buy again if at all possible, so the bearish influence might not be so big for soybeans.

In addition, there has been talk of Brazil soybeans moving to U.S. crushers, but none of this has been confirmed like the Argentine corn has.

The wheat stocks were also higher than expected, but within the realm of error and wheat futures were mostly down hard due to the corn weakness, not due to the data.

The prospective plantings reports, a survey of farmers on planting intentions, was about as expected by the trade and not a reason to buy or sell for the most part.

Soybeans planted area was a little lower than expected, and implies that new crop soybeans prices should be stronger than corn or any old crop prices.

Traders will watch the weather now. It has been cold and wet in many parts of the middle of the U.S. where these crops will be grown. It could be that corn area drops a bit and soybeans increases a bit if the weather continues this way.

A lot of the gains in corn area came in the south and at the expense of cotton. Some of these areas might switch to soybeans if it gets too late to plant corn. This type of switching is still a few weeks away from happening.

PALM OIL OUTLOOK: PRICES MOVE SIDEWAYS, BUT DEMAND IMPROVES
By Jack Scoville, The Price Futures Group

Palm oil futures have also been in a trading range for quite a while.

Futures should develop a short-term down trend or at least test the lower end of the trading range. Moves lower this week could open up down side potential below 2250 (ringgit/ton) — basis the nearby futures contract — and maybe back to the lows below 2100.

There is no doubt that the palm oil is out there. Demand has been ok, but traders hope for more as the demand has fallen behind month-ago levels.

But soybean oil might work lower now and this might create some selling pressure on palm oil as well. The charts show that any move lower now would find new speculative selling that could push prices more than one might normally expect given the fundamentals.

USDA PACIFIC NORTHWEST WEEKLY GRAIN SUMMARY FOR THE WEEK ENDING MARCH 28th

Cash wheat bids for March delivery ended the reporting week on Thursday, March 28th, lower compared to week-ago bids for the same delivery period.

Hard red winter wheat and dark northern spring wheat bids trended moderately lower, while bids for soft white wheat were not available.

May wheat futures ended the reporting week on Thursday, March 28th, lower as follows compared to last Thursday’s closes:
Chicago 41 cents lower at 6.8775
Kansas City 33.75 cents lower at 7.2675 Minneapolis 22.50 cents lower at 7.8025

Chicago May corn futures trended 37.75 cents lower at 6.9525 while May soybean futures closed 44.25 cents lower at 14.0475.

All grains futures ended the reporting week lower with strong pressure today from the USDA Stocks and Planting Intentions reports.

Corn Stocks were estimated higher-than-expected at 5.4 billion bushels (bb), with the USDA March Planting Intentions estimated at 97.3 million acres. The soybean Planting Intention estimate was lower-than-expected at 77.1 million acres and Quarterly Stocks estimated at 1.0 bb. U.S. wheat Stocks were slightly higher-than-expected at 1.23 bb.

Wheat futures were supported on Friday by a lower U.S. dollar against foreign currencies and cold, dry weather conditions in the U.S. Southern Plains.

Monday, Tuesday and Wednesday, soybean futures had some support from new confirmed export sales of new crop soybeans, commercial buying, continued backlog of vessels in Brazil and continued tight supplies of old crop soybeans.

A better-than-expected inspected-for-export figure of 17.225 million bushels for the week ending March 21, commercial buying on Wednesday and a slight improvement in the ethanol production report for the week ending March 22 were some factors supporting the corn futures earlier in the week.

CASH BIDS FOR WHEAT AND CORN AT PORTLAND AS OF MARCH 28, 2013: USDA

Bids for U.S. 1 Soft White Wheat delivered to Portland in unit trains or barges during March were not available today as most exporters were not issuing bids for nearby delivery.

Forward month bids for soft white wheat were as follows:
April 8.0775-8.10
May 8.0775-8.15
June not available
August New Crop 7.25-7.3925

One year ago, forward month bids for soft white wheat were as follows:
April and May 7.00-7.05
June 6.90-7.02
July 6.70-6.90
August New Crop 6.60-6.70

Bids for 11.5 percent protein U.S. 1 Hard Red Winter Wheat for March delivery declined by 33.75 cents per bushel compared to last Thursday’s noon bids in lining up with the lower Kansas City May wheat futures.

On Thursday, bids were as follows:
March 8.6675-8.7175, mostly 8.6675
April 8.5675-8.7175
May 8.4675-8.7175
June 8.3725-8.6725
August New Crop 8.0875-8.1375

Bids for non-guaranteed 14.0 percent protein U.S. 1 Dark Northern Spring Wheat for March Portland delivery trended 27.50 to 32.50 cents per bushel lower compared with last week’s noon bids.

Lower Minneapolis May wheat futures and a lower basis bid by some exporters weighed on bids.

Protein scales for non-guaranteed 14.0 percent protein were plus zero cents each 1/4 of a percent of protein up to 16 percent protein and minus four to five cents each 1/4 of a percent of protein down to 13 percent protein.

On Thursday, bids for non-guaranteed 14 percent protein were as follows:
March 9.1525-9.3025, mostly 9.2325
April 9.1025-9.3025
May 9.0525-9.2525
June 8.9550-9.0050
August New Crop 8.7075-8.8075

Bids for U.S. 2 Yellow Corn delivered to Portland in single rail cars were 293.75-294.00, 14.50 per ton lower than last Thursday’s bids of 308.25-308.50.

Bids for U.S. 2 Yellow Corn truck delivered to the inland feeding areas of Yakima, Washington, and Hermiston, Oregon were 294.75-298.25, 13.50 to 14.00 per ton lower than last Thursday’s bids of 308.25-312.25.

COLUMBIA, OREGON GRAIN VESSEL UPDATE AS OF MARCH 28, 2013: USDA

There were 10 grain vessels in Columbia River ports on Thursday, March 28th, with four docked compared to nine last Thursday with four docked. There were no new confirmed export sales this week.

Outstanding U.S. white wheat export sales as of March 21, 2013 for the marketing year beginning June 1, 2012 and ending May 31, 2013, totaled 675.6 thousand MT compared to 753.8 thousand MT on March 14, 2012, and 1337.0 thousand MT one year ago.

Outstanding white wheat export sales for the 2012-2013 marketing year were to the following countries in 1000 MT:
Japan 135.8
South Korea 108.8,
Philippines 103.0
Yemen 100.00
Thailand 54.5
Nigeria 19.2
Taiwan 10.0
Burma (Myanmar) 2.5
Canada 1.5
Malaysia 1.0
Vietnam 1.0
Sweden 0.5
Hong Kong 0.3
Total unknown 137.5.

Accumulated white wheat export shipments as of March 21, 2013, in 1000 MT for the 2012-2013 marketing year, totaled 3844.9 compared to 4348.2 one year ago.

PHILIPPINES TRIES TO REPAIR MINING REPUTATION: Issue 27 Mar 25, 2013

By Rene Pastor

The Philippine government is trying to repair the damage done to the rising reputation it is hostile to mining, although more aggressive action is needed to completely dispel the image that Manila wants to score cheap points by pandering to anti-mining groups.

With little fanfare, the Mines and Geosciences Bureau lifted the moratorium on accepting applications for exploration permits or technical agreements that allow companies to explore the country. Combine that with the approval of an environmental clearance certificate to the Tampakan project in Mindanao, the resumption of operations by Philex and the budding development of a rare earth mineral site by Sumitomo – and the perception is that the Philippine government has belatedly come to its senses in understanding that mining is vital for the country’s sustained development.

Industry group Chamber of Mines said “that government is responding to the mining industry’s call for a stable policy and investment environment needed by investors.”

“Exploration activities are essential in establishing our country’s mineral resource, and are considered the lifeblood of mining operations,” the Chamber said in a statement, adding mining “helps attract foreign investors and entice companies to provide the capital and modern technologies for large-scale mining projects that can manage environmental protection measures and social development programs in the mining communities.”

“The Chamber is hopeful that these developments will encourage more direct investments that would ensure the growth of the mining industry for the benefit of the whole country. We will continue to be a partner of the government in developing the mining industry,” the Chamber concluded.

The problems have not all been cleared up.

Manila should really take more aggressive action against provincial laws such as the one involving Tampakan and the ban on open pit mining. There is a mining law in place and a provincial law should not trump that. It looks like the government of President Benigno Aquino will wait until after the May mid-term elections before tackling that politically sensitive issue.

For all the good work on the economy the Philippine government has done, it would even be better if mining is going full tilt. Mining can provide a lift in jobs for Filipinos. The money and the jobs are likely the final critical argument which prompted the government to shelve a budding anti-mining stance.

In a way, the recent announcement by Sumitomo that the Philippines will become a key rare earth mineral producer provided the final impetus for mining.

The Philippines will become a producer of a rare earth metals early next year, joining a small group of countries producing materials that are critical to the running of gadgets like cell phones and night vision goggles.

RICE DEMAND PICKS UP IN ASIA, U.S. RICE TO IRAN AND VENEZUELA
By Jack Scoville, The Price Futures Group

Rice has seen stronger demand than anticipated in Asia, and there is good demand for U.S. rice in the Middle East and Latin America.

The U.S. has been selling even to our very best friends like Iran and Venezuela in recent weeks, and this trend should continue.

India has been selling some rice too, mostly into China but also maybe into Africa. The sales from India will hurt Thailand and Vietnam more than anyone. Those two sellers will need to find other buyers.

Vietnam at least has what is available from Southeast Asian countries like the Philippines and Indonesia and Malaysia to sell into and to compete against the likes of Cambodia and Myanmar.

Vietnam can sell into China very easily across the border, just like India and Pakistan.

Thailand, however, has bought a lot of rice from its farmers at high prices and needs to sell into the world market at high prices too. Thailand can keep selling into the domestic market if it wants to, but it can’t find many buyers in the world market. Traders expect them to sell sooner or later, but so far there is no real movement to push the rice out just yet.

Meanwhile, the market has rice, but the disappearance seems to be a lot stronger than expected by the FAO and the like. This implies that the world might not have such comfortable stocks as the world bodies would like to have us believe down the road.

That also means keep the supplies in hand at comfortable levels and do not go hand-to-mouth. Keep an adequate supply coming at these rather cheap prices. It does not seem that rice prices need to go lower than they already are.

Wheat markets are now watching mostly India and China. India has chosen to export wheat to relieve its storage problems. It has produced too much grain and needs to sell some. Pretty hard to believe as India keeps sucking the water out of the ground and then selling the subsidized production into the world market at cheap prices, but that is its business. It is hurting U.S. prices a bit but the demand for U.S. wheat has been good anyway. India will help keep prices reasonable for buyers for the next few months, then the northern crop harvest will be underway.

For now, the world crop situation is a bit hard to see. There are still production problems here, although the situation in the Great Plains is a little better, and some extreme weather has been noted in Europe and Russia too.

So, what is available this summer is still up in the air.

Corn and soybeans are continuing to focus on the South American situation and increasingly on what is setting up for production and demand here in the U.S.

Soybeans started to hit the export channels in Brazil last week, and there were reports that boats are leaving harbors with soybean shipments now. The stevedores and the government reached agreement in Brazil, so that impediment to the smooth flow of soybeans has been removed.

There are still a lot of logistical problems in Brazil to be worked out. Simply put, the country is not equipped with the infrastructure to handle record exports of corn and soybeans as it is trying to do this year. The roads are not good enough, there are not enough railroads for the volume, and the ports are not set for this type of volume either.

But at least the soybeans are starting to flow and the corn is still flowing. The wait to load at ports is still about two months and not likely to improve anytime soon, but now that things are moving it is hoped that the situation will slowly improve over time.

The same cannot be said for Argentina. The country is starting to harvest now, and production is all that bad considering the bad weather they had during the growing season.

Production estimates seem to be averaging near 25 million tons for corn and somewhere near 50 million tons for soybeans. Not a record, but no worse than what has been factored into supply and demand tables already. The problem is that farmers are not willing to sell except when they really need some money. They do not trust the government or the economic policies of the government, and with reason.

The government has looked upon agricultural producers as a cash cow, and to a certain extent it is as it is the one industry that can compete in the world market. Almost no other industry can compete down there. But the government interference in what farmers can produce and how they can sell, plus some pretty extreme taxes for some of the goods, keeps the producers quiet.

Something will have to give, and it will be the government or the producer. The government is not looking good and is losing support so maybe it will be forced to compromise.

We will see how it goes, but the problems there will help keep prices for both corn and soybeans a little higher in world markets than they probably should be as we move through the next few months.

Other than that, though, prices should continue to work lower over time, but not much lower until we know we have a crop here in the U.S.

Production potential and supplies here in the U.S. will be the big topic of conversation this week as traders wait for the USDA quarterly stocks report that should show very tight supplies for corn and soybeans and the USDA Planting Intentions report that should show that farmers will plant as many acres of corn and soybeans as they possibly can.

The reports should help keep the market in a bull spread mode, with the nearby delivery months at higher levels than deferred and with nearby months losing some of the spread over time as the exports from the south improve and as farmers start to plant in the north.

It is still too cold and wet for farmers to work here in the U.S., the direct opposite of last year when the spring was very warm and farmers got off to a record early start. Not this year.

PALM OIL OUTLOOK: PRICES MOVE SIDEWAYS, BUT DEMAND IMPROVES
By Jack Scoville, The Price Futures Group

Palm oil prices are trading in a sideways band right now. The demand side is showing some improvement this month, and is getting helped by soybean oil and canola.

Soybean oil prices have held pretty strong as the biofuels demand has been good and as Argentina, the world’s largest exporter of soybean oil, has not entered the market yet and might not for quite a while unless the producers and the government there can get together and get a deal going that would allow for exports to flow.

Canola and canola oil prices remain strong. So strong that China has now allowed its private industry to import from Australia instead of just Canada.

The Canadian production was poor last year, and the industry there is worried about running out just like we are here for corn and soybeans.

The demand shifts to palm oil should help keep a floor under prices even with more than enough production and supplies in both Malaysia and Indonesia.

On the other hand, it is that big production in Southeast Asia that should keep prices from moving very high.

We look for the palm oil market to trade in a range for now and quite possibly the next several months.

PHILIPPINES TRIES HAND AT ONION EXPORTS

The Philippines has exported a trial shipment of 20 metric tons of yellow onions to Japan as it tries to open an export market for the bulb used in everything from soup to salads.

“If the initial shipment conforms to the quality standards and (is) accepted by the Japanese market, it would pave the way to further boosting our onion and providing our farmers assured market and income,” said Agriculture Secretary Proceso Alcala.

The Philippines produced a total of 124,830 tons of onions in 2012. Yellow onions made up 15 percent of the total, 55 percent are red onions and the rest are shallots.
Philippine onion exports shriveled in the 1990s due to increased competition and smuggling of the bulk into the country.

The top onion producer is China at 20.5 million tons. They are followed by India with 13.3 million and the United States with 3.3 million tons. The Philippines is taking aim at the Japanese market because it is a prime market for vegetables in the region.

WEEKLY WEATHER OUTLOOK THROUGH MARCH 30 IN THE KEY RICE-GROWING REGIONS (FROM PAG-ASA WEATHER BUREAU)

Cagayan Valley, the provinces of Aurora and Quezon provinces, the Bicol area of southern Luzon and down through the Eastern Visayas region all the way to Davao on Mindanao island will see cloudy skies with light/moderate showers or thunderstorms.

Monday night may see light rains over northern Luzon island, and then moderate showers are likely over the east/northern half of Mindanao island and the Davao city region.

Generally fair weather will be seen over Luzon and the islands of the Visayas the rest of the week. Mindanao island should continue to see light to moderate rain the rest of the week.

Rice is grown mainly on Luzon, Mindanao, and a few islands in the Visayas region.

USDA WEEKLY GRAINS REPORT IN PORTLAND, OREGON – MARCH 22
Japan keeps buying wheat, others quiet

There were nine grain vessels in Columbia River ports on Thursday, March 21, with four docked compared to 13 last Thursday with five docked. Confirmed new export sales were limited to Japan.

Japan purchased the following wheat in metric tons (mt): 23,020 of hard red winter wheat and 30,148 of dark northern spring wheat for April 21 to May 20 shipment, as well as 23,680 of western white wheat for arrival by June 30.

Outstanding U.S. white wheat export sales as of March 14, 2013 for the marketing year beginning June 1, 2012 and ending May 31, 2013, totaled 753.8 thousand MT compared to 782.0 thousand MT on March 7, 2012, and 1404.8 thousand MT one year ago.

Outstanding white wheat export sales for the 2012-2013 marketing year were to the following countries in 1000 MT:

Japan 140.8
South Korea 107.8
Philippines 103.0
Yemen 100.00
Egypt 55.0
Thailand 38.0
Nigeria 19.2
Taiwan 10.0
Burma 2.0
Canada 1.5
Malaysia 1.0
Vietnam 1.0
Total unknown 174.5

Accumulated white wheat export shipments as of March 14, 2013, in 1000 MT for the 2012-2013 marketing year, totaled 3725.2 compared to 4275.0 one year ago.

RICE PRICES SUNK BY NEWS OF U.S. RICE IMPORTS FROM VIETNAM: Issue 26 Mar 17, 2013

By Jack Scoville, The Price Futures Group

Futures showed diverging trends in the market action last week. Price weakness was shown in the soy complex and rice, while corn and wheat showed strength.

The speculators, led by the funds, were the biggest players on the week and forced the moves, but they had the fundamentals behind them to support the directions that the prices took.

The downside leader on the week was rice. Rice broke a trend line on weekly charts that had held for about three years, and it was for this reason that futures went down hard on Wednesday and Thursday.

There was news that created the initial selling. ARI, an international rice trader with headquarters located in the U.S., announced that it was importing about 13,000 metric tons of Vietnamese rice into Texas.

The news highlights just how high prices are in the west when compared to those in Asia. It also shows just how tight the situation is in Texas, where a big Latin and Asian population is located. The amount imported is not particularly large. But just the idea that imports are coming and the situation here could ease caused the speculator selling.

Futures were able to recover a bit on Friday and might recover more this week, but some damage has been done to the charts and to the psyche of the market now. Longer term, farmers will be inclined to plant less rice this year, so prices in the U.S. are likely to stay higher for a longer period of time after the futures move this week. Even so, it seems that rice buyers got a gift last week and should not turn down the chance to get some cheaper rice booked.

The soy complex was the other market to see selling pressure last week and the selling pressure in these markets could continue longer than it should for rice.

China only bought new crop soybeans last week, and it waited until late in the week to close the sale. No current crop sales were announced, and it seems that there might not be any new sales soon.

We hear that China is now trying to unload some purchases it made earlier in the year in Brazil back into the world market but is finding takers as the wait times in parts down there is still at least 50 days.

We are advising buyers to stay with a hand-to-mouth posture for a little while longer. The soybeans will eventually flow from the south, and this will not be good for U.S. prices.

In fact, it now looks like Brazil could export right through the U.S. harvest season and that could create even lower prices than many analysts are willing to admit.

The soy complex should be interesting to watch, and buying only to cover immediate needs still seems like the best strategy.

Wheat was the upside leader of the markets last week. A strong export sales report issued on Thursday surely helped, as did continuing ideas that U.S. soft red winter wheat is about the cheapest in the world.

We are not so competitive for hard red winter or spring, but we are getting some business there too, because we can ship and the wheat is available.

There has also been a sharp increase in domestic demand. Burlington Northern reduced shipping rates from the Midwest to the southern Great Plains in an effort to capture more shipping of SRW to feed lots in Texas.

It is no surprise that the leader of the futures was Chicago because of this news. Kansas City and Minneapolis futures lagged a bit as demand has not been so strong there and the weather is slowly but surely improving in the Great Plains as winter crops start to break dormancy.

Corn was stronger during the week, but not quite as strong as wheat. Corn is almost completely a domestic market these days, even with some improvement in export sales last week.

The rally in corn futures created some new farm selling which did nothing to weaken cash market basis levels but did keep futures somewhat weaker than wheat futures. Feed demand is still there, and ethanol demand seems to be increasing as processors start to come on line again.

Any feed demand lost to wheat will probably shift to the ethanol side now. There should not be a lot left for farmers to sell, but there is some out there to be moved. Futures should hold strong overall and cash should too until the farmer has sold the last of his crop.

PHILIPPINES JOINS ELITE CLUB OF RARE EARTH METAL PRODUCERS
By Rene Pastor

The Philippines is going to become a producer of a rare earth metal early next year, joining a small group of countries producing metals that are critical to the running of gadgets like cell phones and night vision goggles.

China is the dominant producer of rare earth minerals. But ever since Beijing limited the export of rare earth minerals, annoyed developed countries led by the United States have ratcheted up the search for other sources of the minerals.

Japan’s Sumitomo Metal Mining said it is going to build a pilot plant at its majority-owned nickel mine on Palawan island to produce the rare earth metal scandium, a silvery metal that could be used to strengthen aluminum alloys for industrial uses such as metal halide lamps or alkaline batteries.

The Philippines is one of the most highly mineralized countries in the whole of Asia. Finding rare earth minerals in the country would make the country even more attractive for mining firms given the premium commanded by such minerals in industrial applications.

Around 14 rare earth minerals are used by a variety of industries. They are difficult to find in commercial quantities.

But the minerals are vital because they are used in things like night vision goggles, the colors that light up the screen on a cell phone, or in cars where they are used to run power windows and seats among others uses.

Sumitomo said the scandium recovery pilot plant will be built at its subsidiary, Coral Bay Nickel Corporation, on Palawan.

Scandium is produced in only three mines in the world – the uranium and iron mines in Zhovti Vody in the Ukraine; the rare earth mines in Bayan Obo, China; and in the apatite mines on the Kola Peninsula, Russia.

The plant will be constructed “by the end of 2013 and for trial production to get underway at a level of 10 kg per month in 2014.”

“The company will aim for construction of a scandium oxide production line of commercial scale and the launch of related business in 2015,” the Sumitomo statement added.

World production of scandium is estimated at 10 tons per year. The use of the metal is expected to increase as more deposits of the metal are developed.

PHILIPPINE RICE STOCKS DIVE ALMOST 20 PCT, STOCKS AT 4-MONTH LOW
By Rene Pastor

Rice stocks in the Philippines dove nearly 20 percent to hit its lowest level in four months, and there are only enough stocks for just over a month’s consumption in government and commercial warehouses, government figures showed.

The Agriculture Department’s Bureau of Agricultural Statistics said that as of Feb. 1, rice inventories in commercial warehouses were only enough for 16 days of consumption while stocks in government warehouses would last for 17 days.

Household stocks stand at 26 days, but they are out of reach of the market. Daily consumption in the Philippines of rice, the daily staple of its nearly 100 million people, stands at around 36,000 metric tons.

As a matter of policy, rice inventories should be equal to two months’ worth of consumption. This would increase in the Philippines to three months’ worth during the seasonally lean third quarter of the year.

The total rice inventory on Feb. 1 stood at 2.02 million tons, down 19.8 percent from the January 1 figure of 2.52 million tons. It is the lowest stock level since Sept. 1, 2012, the BAS figures showed.

The government of President Benigno Aquino has launched a drive to make the Philippines, one of the world’s top importers of rice, self-sufficient in the grain in 2013.

But most analysts believe the Philippines will not hit the target because surging demand will not be matched by the harvest in the Southeast Asian nation, given low yields when compared to its Asian neighbors and limited acreage that can be planted to rice.

The Philippine Commodities Digest estimated total rice imports in 2013 will reach at least 750,000 tons, with the possibility they would reach 1.0 million tons.

Agricultural experts at the U.S. embassy in Manila forecast imports of 1.5 million tons in 2013, unchanged from the level hit in 2012.

Consumption of rice in the Philippines is also being boosted by the free-wheeling spending normally seen during elections in the country. Midterm national polls are scheduled for May.

WEEKLY GRAIN MARKET NEWS FROM THE USDA IN THE PACIFIC NORTHWEST — March 14

There were 13 grain vessels in Columbia River ports on Thursday, March 14, with five docked compared to 12 last Thursday with five docked. Two weeks ago, the number was 16 with seven docked.

Confirmed new export sales were to Japan and the Commodity Credit Corporation.

Japan purchased the following wheat in metric tons (mt): 21,009 of maximum 10.5 percent protein western white wheat for April 21 to May 20 shipment as well as 23,064 of 11.7 percent protein hard red winter wheat and 20,940 of minimum 14 percent protein dark northern spring wheat for arrival by June 30.

The Commodity Credit Corporation of the USDA purchased 52,080 mt of minimum 9.5 percent protein soft white wheat for export distribution to Bangladesh under the PL 480 Title II program, shipment is for April 1 to 15.

Outstanding U.S. white wheat export sales as of March 7, 2013 for the marketing year beginning June 1, 2012 and ending May 31, 2013, totaled 782.0 thousand MT compared to 726.3 thousand MT on February 28, 2012, and 1392.4 thousand MT one year ago.

Outstanding white wheat export sales for the 2012-2013 marketing year were to the following countries in 1000 MT:

Japan 135.3
Philippines 121.0
South Korea 107.8
Egypt 55.0
Yemen 45.0
Thailand 38.0
Taiwan 23.5
Nigeria 19.2
Burma 3.0
Malaysia 2.0
Canada 1.7
Vietnam 1.0
Total unknown 229.5.

Accumulated white wheat export shipments as of March 7, 2013, in 1000 MT for the 2012-2013 marketing year, totaled 3672.5 compared to 4172.6 one year ago.

PALM OIL OUTLOOK: MARKET DIRECTIONLESS BUT AMPLE SUPPLIES COULD WEIGH ON VALUES
By Jack Scoville, The Price Futures Group

Palm oil traded higher and lower over the course of the week, and ultimately did not settle on a direction. The market wants to be fundamentally weak as traders still anticipate good supplies against uncertain demand.

Palm oil traders look west and see big exports that will flow sooner or later from South America and wonder how palm oil at current prices can compete. They also worry about demand from India and China. India seems to have a lot of vegetable oils already in the country, and there are worries about the Chinese economy and demand potential.

Palm oil seems content to follow soybean oil for now as it seeks to hold competitive pricing.

Supplies in Malaysia and Indonesia are dropping a bit these days, but there is still plenty of it around so any big rally probably depends as much on what happens in the soy complex as anything. And right now, the soy complex does not act particularly strong.

USDA DATA DIGESTED, BUT FOCUS TURNS TO SOWINGS REPORT: Issue 25 Mar 11, 2013

By Jack Scoville, The Price Futures Group

The U.S. Department of Agriculture (USDA) released its monthly supply and demand estimates on March 8th, and the reports were interesting for the changes that USDA made and for the changes they did not make.

These reports will stay in the back of the mind of the traders for the coming week, but attention will now turn to quarterly stocks report for grains that will be released at the end of the month and also the prospective plantings report to be released at the same time.

Soybeans domestic ending stocks data was left unchanged by USDA, and this was considered a negative surprise as traders had expected USDA to increase export demand and cut ending stocks.

USDA left Brazil soybeans production estimates unchanged against ideas that production would be lower, and cut production estimates for Argentina, although not as much as the trade had expected.

All in all the report was negative to prices, and the market reacted accordingly.

USDA seems in part to be waiting until it sees what the stocks report shows at the end of the month before making adjustments. USDA also seems to be taking a conservative approach when making these estimates as it monitors the demand in Brazil and the logistical problems in getting soybeans to port and exported.

It knows that any improvement in the situation could cause some big sales cancellations here and an increase in stocks. Conversely, demand could continue strong if the logistical problems in Brazil continue.

So leaving things alone was justified even if a little negative to prices. The reports at the end of the month should show tight supplies in any event so downside potential for futures should be limited and it still seems that the market will need to see exports flowing at a good pace from South America before it can move a lot lower. This will happen sooner or later, the only question is when and no one knows right now.

USDA also left its corn ending stocks estimates unchanged. Traders had expected USDA to show less export demand and unchanged domestic demand. But, domestic demand was increased and ending stocks were left unchanged.

The estimates created a strong rally in corn on Friday and kept wheat prices from dropping very far. USDA wants once again to wait until it sees the quarterly stocks reports before making any changes.

The cash market in the interior U.S. remains very tight and basis levels remain very strong to extremely strong. The cash market alone is telling USDA that stocks are tight, so USDA is justified in leaving its stocks estimates unchanged.

Futures reacted by climbing off the lows of the week and putting in a strong close. Futures should probably hold above 700 for now until more is known about the supply situation here.

The report for wheat was negative to prices, but futures did not work much lower due to the rally in corn. USDA showed increased ending stocks due to reduced export demand, especially for Hard Red Winter Wheat.

This is good news for Philippines importers and millers as prices for bread wheat can probably work lower as we look ahead. Soft Red Winter demand was increased as this class of wheat is being used primarily as feed grain these days. SRW wheat is replacing corn in some rations.

But HRW wheat demand has been disappointing, and this is what USDA showed on Friday. Cheaper prices and better days are coming for wheat importers as long as world wheat growing conditions continue to improve. Conditions keep getting better here in the U.S., and our talks in Eastern Europe indicate that they are better there as well.

Lower prices should eventually be seen if the conditions continue and if production ideas for the coming year remain strong.

Rice data was bullish for U.S. futures, but showed no real reason for world prices to move much.

USDA showed increased demand for long grain, which should have done a better job of supporting futures. Futures are now cheap to cash, with Arkansas cash markets and futures prices about the same.

The U.S. cash market has been very tight and the futures have not reflected this as speculators look at increasing world production and see no reason to buy. However, the U.S. is selling rice as the Brazil and Argentina competition is less into Latin American buyers. These trends will continue, and U.S. futures should finally move higher.

That does not need to spill into Asian prices. What happens to Asian prices will depend more on Chinese demand. Another year of big demand from them could mean a big increase in prices in all parts of the world. Less demand would mean that Asian prices could remain relatively weak, especially when compared to western prices.

PHILIPPINE MINE REOPENS, BUT ISSUES LINGER
By Rene Pastor

The biggest miner in the Philippines resumed operations at its premier mine after a spill seven months ago shut down operations, but the bigger issues on how mining will operate in the country at the hands of a confused government remain.

Philex Mining resumed operations at its Padcal mine on the northern island of Luzon after being given the go-ahead by two government bureaus.

The Mines and Geosciences Bureau (MGB) had earlier given permission to resume business, but Philex had to wait for the Pollution Adjudication Board (PAB) to also give its go-ahead before opening shop. That, in a nutshell, summarizes the excessive bureaucracy in the Philippines.

It should make all the sense in the world that there should only be one government body to make the decision on this. Having two is just plain inefficient.

Philex officials sounded all the right notes. “This is truly an indication of the government’s trust in us as a responsible mining company, to once again prove that we can continue working for economic progress while protecting the environment,” President and COO Eulalio Austin, Jr. said.

The government of President Benigno Aquino continues to treat the mining industry like a leper because it is politically radioactive. The PAB is now requiring Philex to submit a monthly report to monitor how it is doing.
Why? Isn’t that the job of the MGB to begin with?
Can’t they go back with the MGB in half a year and review what has been done? Or is this just to make the PAB look like they are pro-active on the case?

Oh, Philex will turn in that report. But government being government, as long as there are no more problems at Padcal, the authorities will just as soon forget it.

WEEKLY GRAINS MARKET NEWS FROM THE USDA PACIFIC NORTHWEST: MARCH 7

There were 12 grain vessels in Columbia River ports on Thursday, March 7, with five docked compared to 16 last Thursday with seven docked.

Confirmed new export sales were to Japan. Japan purchased the following wheat in metric tons: 26,888 of dark northern spring wheat for April 21 to May 20 shipment as well as 7,410 of western white wheat and 13,360 of HRW wheat for arrival by June 30.

Bids for US 1 Soft White Wheat delivered to Portland in unit trains or barges during March trended four to 10 cents per bushel lower than week ago bids for March delivery. Some exporters were not issuing bids for nearby delivery.

Bids for 11.5 percent protein US 1 Hard Red Winter wheat for March delivery declined by 3.25 to 8.25 cents per bushel compared to last Thursday’s noon bids for March delivery. Lower Kansas City May wheat futures pressured bids.

Bids for non-guaranteed 14.0 percent protein US 1 Dark Northern Spring Wheat for March Portland delivery trended 3.75 to 8.75 cents per bushel higher compared with last week’s noon bids for March delivery. A higher basis bid by most exporters supported cash bids. Some exporters were not issuing bids for nearby delivery.

Protein scales for non-guaranteed 14.0 percent protein were plus zero cents each 1/4 of a percent of protein up to 16 percent protein and minus four to five cents each 1/4 of a percent of protein down to 13 percent protein.

Outstanding U.S. white wheat export sales as of February 28, 2013 for the marketing year beginning June 1, 2012 and ending May 31, 2013, totaled 726.3 thousand MT compared to 803.9 thousand MT on February 21, 2012, and 1621.1 thousand MT one year ago.

Outstanding white wheat export sales for the 2012-2013 marketing year were to the following countries in 1000 MT:

Japan 149.5
South Korea 137.7
Philippines 120.0
Egypt 55.0
Thailand 50.0
Nigeria 19.2
Taiwan 13.8
Burma 3.0
Malaysia 1.5
Canada 1.3
Vietnam 0.5
Hong Kong 0.3
total unknown 174.5

Accumulated white wheat export shipments as of February 28, 2013, in 1000 MT for the 2012-2013 marketing year, totaled 3577.1 compared to 3914.5 one year ago.

PALM OIL OUTLOOK: MARKET QUIET AS INDUSTRY CONFERENCE KEEPS PLAYERS AWAY
By Jack Scoville, The Price Futures Group

Palm oil worked lower on ideas that demand was not as good as hoped and as many participated in the annual palm oil conference held in Kuala Lumpur last week. Overall volumes traded were not very high due to the conference.

The lack of export demand was enough to send prices a little lower, but many will want to wait and see the MPOB (Malaysia Palm Oil Board) data for the month before making any real big moves. That is because MPOB is expected to show a seasonal decline in production and also a decline in stocks levels.

The decline might be enough to keep prices from moving much lower, although no one right now seems too excited in upside potential.

But palm oil is out there and it could be that soybean oil gets a little harder to find. The shipping delays in Brazil are causing demand for soybeans to be shifted to the U.S., and prices in the U.S. are working higher.

Soybean oil has been lagging, but it is still trading on a firm note. There are no real ideas when Brazil will start exporting. Argentina farmers are getting ready to harvest, too, but are not willing sellers. They do not trust their government very much in almost any important matter, and so they will most likely hold soybeans instead of turning them into cash.

The way the government is going in Argentina, it could be a very slow marketing season for them and that means less soybean oil available to the world market as Argentina is the world’s largest exporter of the oil.

All in all, there are hopes for better prices down the road even if the hopes do not seem very strong at present. China is said to be full for now, and India might be pretty well bought too.

But other buyers will appear if South America keeps on its current path, and for now there is nothing going on there to suggest a change is coming soon.

INDONESIA SUGAR IMPORTS UP 17.7 PCT IN 2012/13: REPORT

Sugar imports by Indonesia in the 2012/13 marketing year (August/July) are seen rising 17.7 percent to 3.4 million metric tons, a report by the agriculture attaché at the U.S. embassy in Jakarta said.

“This increase is primarily driven by Indonesia’s food and beverage industry, as well as regional spikes in imports of plantation white sugar,” the report by the attaché said.

Attaché reports are compiled by U.S. agriculture experts at the embassy in the host country. They are not official data of the U.S. Agriculture Department but are considered as authoritative by the global commodity community.

But with elections in Indonesia coming up in 2014 and politicians normally campaigning against food imports, the attaché believes sugar imports by Indonesia will dip in the coming 2013/14 season.
“The GOI (Government of Indonesia) will likely insist that domestically produced plantation white sugar will be ‘sufficient’ to meet demand. Any refined sugar imports will only be imported by the food and beverage industry,” the report explained.

Indonesia’s sugar production in 2012/13 is expected to reach 1.97 million tons, up 7.7 percent from the level in 2011/12.

A total of 48 sugar mills are located on the main island of Java, and they account for nearly two-thirds, or 64 percent, of total Indonesian white sugar output.

Sugar consumption in 2013/14 is seen rising to 5.2 million tons, from 5.13 million tons in 2012/13 due to rising demand from the food and beverage sector and a population expanding by 1.4 percent annually.

RICE CASH MARKET STRONG, VIETNAM HARVEST EYED: Issue 24 Mar 3, 2013

By Jack Scoville, The Price Futures Group

Rice remains a mystery trade.

Cash markets here in the U.S. are strong as most of the rice has been sold in the South and Delta. Arkansas farmers still have some of the crop, but Texas, Louisiana, and Mississippi producers are pretty much sold out.

There is rice in California, but farmers are holding there and waiting for a rally. They might get one as countries like South Korea still have some rice to buy here. Plus, Egyptian supplies do not seem to be moving to Mideast buyers in volumes that many had feared. The U.S. stands to pick up a little of this business as it often does.

Asian prices also seem stable to strong. India especially seems to have seen prices move higher. Vietnam will be harvesting and selling soon, and demand will be an issue for them. However, the market already knows that and prices are holding firm. Prices in the west will hold firm until the U.S. has a crop assured, but prices in Asia might soften if Vietnam becomes a big seller. That is still a month or two from now, and until then it looks like prices will hold stable or move a little higher.

Wheat prices will hold strong as demand for corn for feed here in the U.S. shifts to wheat. Wheat producers got some great weather in the last couple of weeks from two major winter storms.

One more might be coming this week. The snow seen from these storms and the snow that might come this week were great for wheat producers. The moisture is coming at a time when the crops need some precipitation. Crops are coming out of dormancy or will be soon, and moisture needs will be increasing. For now, there will be moisture available. One could not make that claim just a few weeks ago.

Prices have held due to the big demand shift. Feed users are looking more at wheat and less at corn due to availability and price. Overseas buyers are looking at U.S. wheat due to availability and price as well.

Demand should stay strong enough to hold prices strong even with good weather in the Great Plains. At least for the next few weeks or so anyway until the traders can see the good wheat in the fields.

Soybeans were the weakest market in Chicago last week. Even news of more Chinese buying could not support values very well. That is the clearest sign yet that attention is more on selling and shipping from South America than from the U.S.

The weather in South America is pretty good right now and all of our sources report that yields have been very good. It looks like Brazil will have big crops coming to market as soon as the logistical issues are resolved.
These will eventually be resolved, or at least improved upon, so we expect to hear of soybeans getting shipped and waiting times at Brazil ports to become less of an issue as March progresses.

Argentina knows the beans are coming soon too. It announced that it wanted to sell and ship 2.0 million tons of soybeans from last year’s crop during the month of March. It might not get that goal, but it has the port capacity and apparently the soybeans, so it might.

Overall, it looks like the soy complex can move lower as the competition increases. Soybeans might not work sharply lower until the market knows that the U.S. has a good crop too.

Plus, soybean meal will hold strong on less production of DDG (distillers dried grains) due to reduced ethanol production. But if new demand news can’t force the market higher then it will continue to weaken over the next few weeks and months.

Corn and wheat are the upside leaders in the grain room right now. Corn cash markets are very strong right now in the U.S. Prices in central Illinois are reported to be trading 40 cents a bushel or more above futures. There is not a lot of corn left in farmers’ hands, so there is not much chance that these extremely strong basis levels will back off too much in the near future.

We look for corn to hold stronger than soybeans over the next few weeks, although prices in futures might weaken a bit if the U.S. weather stays good.

South America has been exporting corn, but now is shifting to soybeans so there will not be the downside pressure in corn that might appear in soybeans over the next few weeks.

MANILA BECOMES KEY U.S. EXPORT MARKET, BUT BARRIERS REMAIN
By Rene Pastor

The Philippines has become a major export market for U.S. agriculture and its food and beverage sector, but certain key areas are still off-limits because of tariff barriers imposed by Manila on some goods.

For the first time in decades, the Philippines pierced the top 10 as an export market for U.S. farmers as it was ranked the 9th largest market in the world with sales in 2012 at $2.3 billion, and this is projected to hit $2.5 billion in 2013.

Terry Barr, the senior director for industry research for CoBank, said at an outlook conference organized by the U.S. Agriculture Department that the Philippines is now the 5th biggest importer in the world of U.S. wheat and dairy products.

The reasons for the surge are simple.

A population of almost 100 million Filipinos, the second biggest in Southeast Asia, has created a market of consumers. Combine that with remittances from overseas Filipinos, estimated by the World Bank at $24 billion or 960 billion pesos, and about $10 billion or 400 billion pesos from the business outsourcing industry in the country, and you have consumers looking to shop and consume U.S. meat and beverages.

“Good sales opportunities still abound because of the robust Philippine economy, steady growth in the country’s retail, foodservice and food processing sectors, and consumer familiarity with American brands,” a recent report by the U.S. agriculture attaché in Manila said. The attaché report is compiled by U.S. agriculture experts although they are not official USDA material. They are viewed by the commodity and food industry business as authoritative.

The only hindrance to further expansion of U.S. agricultural exports to the Philippines would be Manila’s strict adherence to the minimum access volume (MAV) requirement for some politically sensitive goods under world trade rules.

“Since 2005, the Philippine government has maintained MAV levels at its WTO Uruguay Round commitments despite a continued rise in market demand for MAV products,” the attaché report said.

Those tariffs range from 30 percent to 50 percent and basically bar U.S. exports of MAV goods to the Philippines. The tariff rate for imported sugar is the highest at 50 percent, followed by rice, poultry and potatoes at 40 percent. Corn is at 35 percent, and pork and coffee at 30 percent.

I can understand rice and sugar, but coffee? We produce a small amount so it’s not like there is a major farming sector to protect.

Manila has also cut rates for regional trade partners while keeping up barriers to American products. A good example is U.S. beef, which is subject to a 10 percent duty, while Australian beef comes into the Philippine market duty-free, the attaché report stated.

“The Philippines has also eliminated tariffs on approximately 99 percent of all goods for ASEAN trading partners,” it added.

At the very least, it seems a pretty good idea for the Philippines to negotiate the removal of those barriers.
In beef, it would level a field tilted heavily in favor of Australia and lower the cost for consumers in the Philippines.

WEEKLY GRAIN MARKET NEWS FROM THE USDA IN THE PACIFIC NORTHWEST — Feb. 28
There were 16 grain vessels in Columbia River ports on Thursday, February 28, with seven docked compared to 15 last Thursday with six docked. There were no new confirmed export sales of grain for Pacific Northwest loadout during the week.

Bids for US 1 Soft White Wheat delivered to Portland in unit trains or barges during March trended 3.25 to 5.75 cents per bushel higher than week-ago bids for March delivery. Some exporters were not issuing bids for nearby delivery.

Bids for 11.5 percent protein US 1 Hard Red Winter Wheat for March delivery declined by 4.50 to 11.50 cents per bushel compared to last Thursday’s noon bids for March delivery. Lower Kansas City March wheat futures pressured bids. On Thursday, bids were as follows:

March: 8.6775-8.8275, mostly 8.7475;
April and May: 8.7275-8.8275;
June: 8.6950-8.7950
August New Crop: 8.23-8.38.

Bids for non-guaranteed 14.0 percent protein US 1 Dark Northern Spring Wheat for March Portland delivery trended 10.25 to 25.25 cents per bushel higher compared with last week’s noon bids for March delivery. Higher Minneapolis May wheat futures and a higher basis bid by some exporters supported cash bids. Some exporters were not issuing bids for nearby delivery.

Outstanding U.S. white wheat export sales as of February 14, 2013 for the marketing year beginning June 1, 2012 and ending May 31, 2013, totaled 940.6 thousand MT compared to 972.3 thousand MT on February 7, 2012, and 1708.0 thousand MT one year ago.

Outstanding white wheat export sales for the 2012-2013 marketing year were to the following countries in 1000 MT:

Japan: 281.5
Philippines: 160.0
South Korea: 157.6
Thailand: 50.0
Taiwan: 23.1
Nigeria: 19.2
Burma: 3.0
Malaysia: 2.5
Canada: 1.5
Mexico: 0.9
Hong Kong: 0.8
China: 0.5
Vietnam: 0.5
Total unknown: 239.5

Accumulated white wheat export shipments as of February 14, 2013, in 1000 MT for the 2012-2013 marketing year, totaled 3312.7 compared to 3663.4 one year ago.

PALM OIL OUTLOOK: TRADE EYES IMPROVED DEMAND FROM CHINA, SOUTH ASIA
By Jack Scoville, The Price Futures Group

Palm oil moved lower last week and turned trends down again. So my idea that prices were bottoming proved wrong! Back to the drawing board.

There are still a lot of supplies in Malaysia and Indonesia to move, and that seems to be the big problem. Demand in February was down quite a bit from January, even with the Tet and the Lunar New Year festivals.

Plus soybean oil has been moving lower here in the U.S. as biofuels demand has been down a bit. Argentina is the largest exporter of soybean oil in the world, so vegetable oils prices might be under pressure for a while. We are advising buy-side traders to go hand-to-mouth for a while until the market shows a bottom again.

Demand from China might suffer if the economy there keeps slowing down. India seems to be pretty full at the moment too. So it could be a while before the market can make a new bottom and turn trends up.

The export data for February was disappointing to the bulls as they had hoped that month-to-month data would be more closely aligned.

However, it was a short month and a big holiday, so it will depend on the demand in March for the market to trade higher or lower.

Palm oil production should be in a seasonal decline, but the stocks are there so the demand must appear to stabilize the situation.

MALAYSIA’S WHEAT AND CORN IMPORTS SEEN SLIGHTLY UP, RICE IMPORTS FLAT: REPORT
Wheat and corn imports by Malaysia are forecast to grow marginally through 2013/14 due to expansion in the baking and poultry sectors, while rice imports are seen staying relatively stable, a report by the U.S. agriculture attaché said.

Attaché reports are compiled by agricultural experts in the U.S. embassy although they are not official data of the U.S. Agriculture Department. They are considered by the commodity trade as authoritative.

The report said both the broiler and pork sectors are facing oversupply, and this limits any additional import demand for corn.

“Argentina remains the major corn supplier, with market share of more than 40 percent, with little exports recorded from U.S.,” the report said.

The baking sector remains vibrant, with new outlets being opened and products developing at a rapid pace. Following a dip in 2010/11, wheat from Australia returned to its dominant position in 2011/12 and should remain there through 2014.

While sales lagged in 2012, Malaysian bakers recognize the quality of U.S. wheat.

Rice imports are expected to remain relatively stable. Rice production is forecast to hover around 1.7 million tons. Historically, the U.S. has sold little rice to Malaysia but in 2012, the U.S. exported about 9,400 tons of rice to Malaysia. The Ministry of Agriculture in Malaysia is implementing a new law related to animal feed, which requires importers to register and list any feed ingredients they wish to distribute.

“While ostensibly required prior to distribution for feed or manufacturing, the Biosafety Committee has reviewed and approved only a small list of genetically modified corn events,” the report said.