Monday, July 20, 2020

20 December,2011 Daily Global Regional Local Rice E-Newsletter

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

Description: small font Description: medium font Description: large font

Description: imageFinancial 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

Description: small font Description: medium font Description: large font

Description: imageChicago 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

Description: small font Description: medium font Description: large font

Description: imageOryza 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

Description: small font Description: medium font Description: large font

Description: imageChicago 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

Description: small font Description: medium font Description: large font

Description: imageChicago 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

Description: small font Description: medium font Description: large font

Description: imageThailand’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

Description: small font Description: medium font Description: large font

Description: imageThailand’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

Description: small font Description: medium font Description: large font

Description: imageIndia’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

Description: small font Description: medium font Description: large font

Description: imageThai 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

Description: small font Description: medium font Description: large font

Description: imageThais 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!