A
Quick Glance at World News - What the Financial Times, Wall Street Journal and
New York Times Are Reporting Today
By Oryza News on December 20,2011
Financial Times-
*The
death of Kim Jong-Il threw the Korean peninsula into fresh uncertainty on Monday
as the North Korean regime named the dictator’s youngest son as the “Great
Successor,” rattling financial markets in the south.
*The
U.S. has threatened to take retaliatory action against the E.U. unless Brussels
drops its plan imminently to start charging any airline flying into the bloc
for its carbon pollution.
*Prince
Alwaleed bin Talal, the Saudi billionaire, has acquired a $300 million stake in
the U.S. micro blogging service after buying shares from existing shareholders
in a secondary offer, according to one person familiar with the arrangement.
*U.S.
Republican leaders in the House of Representatives have challenged Democrats
and the White House to renegotiate a bill to cut payroll taxes and renew
jobless benefits, as fresh political gridlock threatens to stymie U.S. economic
policy.
*A
federal court has stopped the U.S. administration from imposing emergency
anti-subsidy tariffs on imports from China, affecting several current cases and
potentially forcing Congress to legislate to permit such actions in future.
*The
E.U. has fallen short in its campaign to supply the IMF with an additional €200
billion to battle the debt crisis after the U.K. rebuffed pleas to join the
effort.
*The
ECB has warned that the euro zone debt crisis could spread to engulf further
member states, creating risks to financial stability that could reverberate
around the world
*Mariano
Rajoy, the popular party leader who takes over as Spanish prime minister on
Wednesday, has unveiled a program of fiscal austerity and rapid reform that he
hopes will eventually extract Spain from its economic and financial crisis.
Wall Street Journal-
*Iraq's
political crisis took an ominous turn Monday with the issue of an arrest
warrant against Vice President Tariq al-Hashemi, a leading Sunni Arab figure,
for his alleged role in ordering and funding the assassinations of rival Shiite
bureaucrats.
*Pakistani
President Asif Ali Zardari, after getting the all-clear from his doctors in
Dubai, returned to his country, appearing to quell for now rumors of a coup
despite speculation about his political future and rising tensions between his
civilian government and the nation's powerful military.
*Residents
from the embattled southern Chinese village of Wukan are planning a march to
the nearby city of Lufeng on Wednesday, according to organizers, expanding the
protest outside the village in a major test for how authorities will respond.
*A
summit aimed at anchoring Ukraine in Europe fell flat on Monday, as the E.U.
warned it would not sign a trade and political-association deal with Kiev
unless the government took steps to release jailed former Prime Minister Yulia
Tymoshenko.
*Former
IMF chief Dominique Strauss-Kahn, looking to re-establish his credentials as a
global political presence after a sex scandal, sharply criticized Europe's
handling of its debt crisis and predicted as many as seven years of subpar
European growth unless the Continent's leaders changed policies.
*South
Koreans reacted to news of the death of Kim Jong IL with concern that instability
in North Korea during the transition of power to his son, Kim Jong Eun, may
lead to fresh attacks on the South after a period of relative peace between the
countries.
*AT&T
Inc. bowed to U.S. antitrust enforcers and withdrew its $39 billion acquisition
of T-Mobile USA, ending a nine-month fight and leaving both carriers groping
for a way forward.
*More
Syrian villages are organizing armed battalions to prepare to fight President
Bashar al-Assad's forces, residents, and activists said, even as Damascus on
Monday agreed to allow monitors to inspect cities and towns where the security
forces have cracked down on the opposition.
New York Times-
*A
day after the U.S. withdrew its last combat troops; Iraq faced a dangerous
political crisis Monday as the Shiite-dominated government ordered the arrest
of the Sunni vice president, accusing him of running a death squad that
assassinated police officers and government officials.
*A
federal agency ruled on Monday that a set of important features commonly found in
smart phones are protected by an Apple patent, a decision that could force
changes in how Google’s Android phones function.
*The
U.S. government is increasingly concerned about the Twitter account of the
Shabab militant group of Somalia, with American officials saying Monday that
they were “looking closely” at the militants’ use of Twitter and the possible
measures to take in response.
*Bi-Lo
agreed on Monday to buy Winn-Dixie Stores for about $560 million, uniting two
of the South’s better-known regional supermarket operators.
*Amgen,
the biotechnology company, is planning to develop generic versions of some
best-selling drugs. Amgen said on Monday that it would team up with Watson
Pharmaceuticals, a leading generic drug manufacturer, to develop and sell
lower-price copycat versions of several biologic cancer drugs.
*The
New York Times Company said on Monday it was in advanced talks to sell 16
regional newspapers, another indication the company was divesting itself of
assets to concentrate on its core newspaper business.
*The
National Academy of Sciences delivered a long-awaited report on uranium mining
to the Virginia legislature on Monday, warning that the state faced “steep
hurdles” if it is to safely mine and process the nuclear reactor fuel.
Oryza
Overnight Recap – Chicago Rice Futures Lifted Strong Chart Action and Rallies
in Outside Markets
By Oryza News on December 20,2011
Chicago rough rice futures for Mar delivery
traded up 12.5 cents per cwt (about $3 per ton) overnight to $14.27 per cwt (about
$315 per ton). Rice futures found support from a weaker U.S. dollar and firmer
grains overnight. Rice prices were also boosted by a report overnight released
by the Thai Agricultural Ministry that severe floods would delay the Thai
second crop by about 2 months, though production is expected to be large as
farmers try to make up for the lost rice of the previous harvest.
Oryza
spoke to a trader who noted that rice charts suggest an upward correction is
underway. Another trader said hope of new milled rice business is also
supportive.
The
grain complex traded higher overnight: soybeans traded up about 0.5%, wheat
traded up about 1%, and corn traded up about 0.4%.
U.S.
stock markets opened sharply higher Tuesday, as the market hoped to turn around
a dismal December on hopes that debt markets are opening up in Europe and tepid
housing market recovery is continuing apace. The trick will be to avoid the
same pitfall that has characterized December trading: a positive opening with
rice reaching session highs earlier on only to later see buying dry up allowing
the market to slide through the rest of the session. U.S. stocks are
currently trading up about 2%, crude oil is up about 2.8%, gold is up about
1.2% and the U.S. dollar index is down about 0.8% at about 10:00am Chicago
time.
Flash
floods in the Philippines' southern island of Mindanao may have affected
ongoing rice plantings but the main harvest is almost complete, limiting the
impact on rice production this year, a senior government official said.
U.S.
rice farmers involved in the GMO rice-related settlement with Bayer Crop
science will receive checks early in 2012.
The
Indian government today denied that the food security situation in the country
has been affected due to rising prices and shortage of food grains, saying
production of key grains, wheat, and rice, is more than the demand.
Oryza
Rice Currency Analysis for Today – Currencies Rebound Against the Dollar on
Optimistic Markets
By Oryza News on December 20,2011
Oryza spoke to FX specialists to get an idea of
where the rice currencies are heading:
Thailand’s
baht strengthen further, ending the day at 31.24 per U.S. dollar, compared to
yesterday’s close of 31.32. Separately, Chinese authorities have started to
allow regional trading of the yuan against the Thai Baht.
Indian
rupee is slightly weaker today closing at 52.89, little changed from Monday's
level of 52.885, after touching the day's low of 53.10 earlier. Traders expect
that the rupee to be around 53 against the dollar at the end of the current
fiscal year, but it could appreciate to 46 by the end of calendar year 2012,
according to some analysts.
Pakistani
rupee weakened further to close session at 90 per U.S. dollar, compared to
yesterday’s close of 89.81.
Vietnamese
dong strengthen today to close at 21,006 vs yesterday’s close of 21,018.
Mexico’s
peso is trading higher around 13.79 per U.S. dollar after Europe pledged 150
billion euros ($196 billion) to the International Monetary Fund to help stem
the region’s debt crisis, and as the European Central Bank widened its support
for bond markets.
The
euro is trading higher around 1.3080 after borrowing costs fell at a Spanish
bill sale and German business confidence unexpectedly increased, easing
concern, the region’s debt crisis is worsening.
Argentine
Peso is trading lower at 4.2920 per U.S. dollar.
Oryza
Afternoon Recap – Chicago Rice Futures End Higher, Supported by Broad-Based
Market Rally
By Oryza News on December 20,2011
Chicago rough rice futures for March delivery
traded up 9.5 cents per cwt (about $2 per ton) to $14.24 per cwt (about $314
per ton). Rice futures rallied shortly after the open outcry session today,
climbing to a high of $14.475 per cwt (about $319 per ton) by 10:00am Chicago
time. The market then came under selling pressure and quickly fell 21.5 cents
per cwt (about $5 per ton) and spent the remainder of the session drifting
mostly sideways. Rice prices were supported by firmer grain prices as well as a
nearly 3% rally in U.S. stock markets.
Monday,
there were 2,234 contracts traded, up from 1,305 contracts on Friday. Open
interest – the number of contracts outstanding – the prior day rose to 17,396
from 17,333 on Friday.
Grains
finished higher: soybeans traded up about 0.7% to $11.545 per bushel; wheat
traded up about 1.3% to $6.0775 per bushel; and corn traded up about 1% to
$6.07 per bushel.
U.S.
stock investors began buying on ideas of a housing recovery after bullish data,
sending building stocks higher as a rise in bank stocks also helped kindle the
aggressive rally. U.S. stock markets are currently trading up about 2.6%, gold
is trading up about 1.3%, crude oil is trading up about 3.4%, and the U.S.
dollar is currently trading down about 0.5% at about 2:00pm Chicago time.
U.S.
Rice Market Slow and Steady, or Waiting to Rally?
By Oryza News on December 20,2011
Chicago rice futures for March delivery traded
up 9.5 cents per cwt (about $2 per ton) to $14.24 per cwt (about $314 per ton).
Rice futures were supported by a firmer grain complex, a weaker U.S. dollar,
and advances in crude oil due to greater than expected U.S. housing starts and
unrest in oil producing Kazakhstan - all while world leaders meet in Rome
to discuss imposing sanctions on Iranian oil exports.
The
cash rice market was uneventful today no one appears to be worried about
selling their crops at the current market price. Offers from farmers were
steady everywhere across the Mid-South while reseller’s offers were the most
competitive despite increasing with the futures market, however they only
garnered limited attention.
Bids
from mills and exporters increased today but were too far below the day’s
offers to generate any significant action. Some analysts believe that those
farmers who need to sell before the first of the year already have while others
contend that many have chosen to put their rice under government loan in hopes
of receiving a higher price in the future. Going forward, many analysts believe
that things will be slow until after the first of the year as farmers are in
“holiday mode” while others believe that if the US is awarded the most recent
Iraqi tender the market could potentially rally.
Are
the Thai Floods Bullish or Bearish for Rice Prices?
By Oryza News on December 20,2011
Thailand’s 2011-12 second rice crop will likely
be delayed by around two months because of floods.
Now
the harvest of the second crop is expected to start in April next year instead
of the regular February as farmers had delayed sowing owing to the floods, but
the story is not entirely bullish for rice prices.
An
Agriculture Ministry official, however, said that production is likely to rise
from last year as farmers are trying to grow more grain to offset losses from
the main paddy crop. The second crop is expected to produce about 10
million tons of paddy, up from about 9 million tons of paddy last year.
Thai floods are estimated to have destroyed about 6 million tons of paddy,
though some estimates have been closer to 3 or 4 million tons. The lost
rice has largely already been priced into the market but expectations for
higher production may not be, yet.
Thailand
produces about 31 million tons of paddy annually.
The
Thai government is estimated to have about 5 million tons of paddy in storage,
while private holders are estimated to have about 2 or 3 million tons of paddy
in storage.
The
agriculture ministry official added that the government rice mortgage scheme
which promises higher prices for farmers is also incentivizing farmers to plant
more rice. After being elected in July, the current administration has since
October 7 been implementing its Thai rice mortgage scheme, buying white rice
paddy at about 15,000 baht (about $480) per ton, about twice the market rate
before the plan. So far, Thai farmers have pledged about 3 million tons
under the scheme while the government is targeting about 10 million tons.
Thai
rice prices have fallen about $60 per ton since peaking in mid-November.
Thai 100% B grade rice is now quoted around $570 per ton.
Are
the Thai Floods Bullish or Bearish for Rice Prices?
By Oryza News on December 20,2011
Thailand’s 2011-12 second rice crop will likely
be delayed by around two months because of floods.
Now
the harvest of the second crop is expected to start in April next year instead
of the regular February as farmers had delayed sowing owing to the floods, but
the story is not entirely bullish for rice prices.
An
Agriculture Ministry official, however, said that production is likely to rise
from last year as farmers are trying to grow more grain to offset losses from
the main paddy crop. The second crop is expected to produce about 10
million tons of paddy, up from about 9 million tons of paddy last year.
Thai floods are estimated to have destroyed about 6 million tons of paddy,
though some estimates have been closer to 3 or 4 million tons. The lost
rice has largely already been priced into the market but expectations for
higher production may not be, yet.
Thailand
produces about 31 million tons of paddy annually.
The
Thai government is estimated to have about 5 million tons of paddy in storage,
while private holders are estimated to have about 2 or 3 million tons of paddy
in storage.
The
agriculture ministry official added that the government rice mortgage scheme
which promises higher prices for farmers is also incentivizing farmers to plant
more rice. After being elected in July, the current administration has since
October 7 been implementing its Thai rice mortgage scheme, buying white rice
paddy at about 15,000 baht (about $480) per ton, about twice the market rate
before the plan. So far, Thai farmers have pledged about 3 million tons
under the scheme while the government is targeting about 10 million tons.
Thai
rice prices have fallen about $60 per ton since peaking in mid-November.
Thai 100% B grade rice is now quoted around $570 per ton.
Surprise,
Surprise, India Confirms It Has Plenty of Rice
By Oryza News on December 20,2011
India’s Central Pool has about 54.7 million tons
of food grains - that includes about 27.1 million tons of rice and about 27.7
million tons of wheat. That’s less than the 61.2 million tons of food
grain required under the Targeted Public Distribution System (TPDS), according
to the most recent draft of the Food Bill, however, plenty of rice will be
coming in the pipeline. The nation is expecting a bumper rice crop
harvest in the 2011-12 crop year, with many forecasts as high as about 102
million tons, up from about 95 million tons in 2010-11. India has enjoyed a
rice surplus for the last three years that has built national stock piles well
above the buffer level.
In
case anyone was concerned, the Ministry of Consumer Affairs today confirmed
India will have plenty of food grains to meet its needs.
“The
current stocks of food grains in the Central Pool are quite adequate to meet
the food grain requirements of the country as per existing allocations for TPDS
and Other Welfare schemes.”
Indian
government purchases of feed grains has risen considerably in recent years,
increasing from about 36 million tons in 2006-07 and about 62 million tons in
2010-11. A release by the Ministry of Consumer Affairs says increased
procurement has come on the back of increased production from rising incentives
to produce rice as the government raises the minimum support price. One
could argue that this has created a circular problem, of the government buying
up grain to support prices, only to raise production incentives and production,
thereby needing to buy more rice or wheat to support prices. This cycle
may also be contributing to the nation’s troublesome inflation.
The
[Government has been reviewing the Minimum Support Price for food grains from
time to time to encourage farmers to produce more. As a result, procurement
during the last four years have recorded [a] considerable increase.
To
manage this quandary the government is now caught up in, more food grain
storage facilities are required. Public and private efforts are expected
to increase food grain storage by about 17.1 million tons.
“Further,
to augment scientific storage capacities, Government has formulated a Scheme
for construction of storage godowns through private entrepreneurs, Central
Warehousing Corporation (CWC) and State Warehousing Corporations (SWCs).”
The
government says it’s made its allocations for the 61.2 million tons of rice and
wheat under the TPDS and other welfare schemes including: 5 million tons to
Below Poverty Line (BPL) families in May 2011, 5 million tons to Above Poverty
Line (APL) families in June 2011, and about 2.4 million tons to Antyodaya Anna
Yojana (AAY), a program for the poorest of the poor.
Thai,
Viet Rice Sellers Lower Quotes; Indian, Pak Rice Sellers Keep Quotes Mostly
Unchanged
By Oryza News on December 20,2011
Thai rice sellers lowered indications for almost
all rice varieties by about $5 per ton. Viet rice sellers lowered their quotes
for almost all rice varieties by about $5 to $15 per ton. Indian rice
sellers kept indications mostly unchanged from yesterday, while Pak rice
sellers lowered their quotes for parboiled rice by about $10 per ton.
Thai
5% rice is shown around $550 - $555 per ton, down about $5 per ton from
yesterday and about an $85 per ton premium over Viet 5% rice indicated around
$465 - $475 per ton, down about $5 per ton from yesterday. Indian 5% rice is
quoted about $435 - $445 per ton, about a $10 per ton discount to Pak 5% rice
shown around $445 - $455 per ton.
Thai
25% rice is quoted about $535 - $545 per ton, down about $5 per ton from yesterday
and about a $110 per ton premium over Viet 25% rice shown around $425 - $435
per ton. Indian 25% rice and Pak 25% rice are both indicated around $375 - $385
per ton.
Thai
parboiled rice is indicated around $555 - $565 per ton, about a $130 per ton premium
over Indian parboiled rice shown around $425 - $435 per ton. Pak
parboiled rice is quoted about $445 - $455 per ton, down about $10 per ton from
yesterday.
Thai
broken rice, A1 Super, is quoted about $525 - $535 per ton, about a $140 per
ton premium over Viet broken rice quoted about $385 - $395 per ton, down about
$10 per ton from yesterday. Indian and Pak broken sortexed rice are both
indicated around $355- $365 per ton.
Oryza Overnight Recap – Thais Drop $5 Per
Ton, Viets Drop $5 - $10 Per Ton, Indian Government Says Its Got All the Rice
It Needs, Thai Second Crop Delayed But Will Be Larger, Chicago Rice Futures
Trying to Rise Cent by Cent
By news desk on December 20,2011
Thais and Viets lowered their prices, again. Thai exporters who are long old crop are getting nervous by the
day although not panicking just yet, dropping their price ideas by about $5 per
ton across most of their qualities. Viet exporters also dropped their price
ideas by $5 to $15 per ton. Viet 5% is now being shown around $470 per ton,
getting very close to Indian values. Indian 5% was being offered around $460
per ton, now only about $10 per ton discount to the Viets. Thais were showing
benchmark Thai parboiled rice around $560 per ton, about $130 per ton more
expensive compared to Indian parboiled which was being quoted around $430 per
ton. Pakistani exporters were asking around $450 per ton for Pakistani
parboiled.
Indians have plenty of rice
and some. Indian government said it
is holding about 54.7 million tons of food grains in reserve including about
27.1 million tons of rice and counting, considering forecasts for another
bumper rice crop harvest. Bulls were quick to point out Indian government’s
current reserves fall short of the 61.2 million tons which will be required
under the new government scheme in works – under the new scheme, Indian
government will sell subsidized rice and wheat to a large segment of the
population. Bears were equally quick to cite Indian government’s latest
pronouncement confirming India has plenty of stocks – “the current stocks of
food grains in the Central Pool are quite adequate to meet the food grain
requirements of the country as per existing allocations” for the new subsidy
and existing welfare schemes.
Thais saythe second crop will
be delayed by 2 months or so which is friendly to the market but then Thais also added a damper
– the crop will be late but larger with rice production estimated at 10 million
tons compared to 9 million tons last year. Thai government says its paddy buying
scheme under which Thai government is buying Thai paddy around 15,000 baht
(about $480 per ton) is partly encouraging increased rice production. Meantime,
Thai stocks are rising.
Chicago rice futures
settled up about $2 per ton on the
back of a firmer grain complex, a weaker dollar and advances in crude oil
supported by greater than expected U.S. housing starts, unrest in oil producing
Kazakhstan and Rome meeting of world leaders to discuss imposing sanctions on
Iranian oil exports. U.S. mid-South cash markets remained paralyzed with not
much trading going on – there weren’t any serious buyers while sellers were
equally determined to hang on to their dear rice and wait it out at least until
beginning of next year. Hope then is very much alive!
