France's wheat exports at full tilt

France is set to export a record11 million tonnes of wheat onto the world market this season andcould ship even more as it soaks up demand created by an exportban in drought-ravaged Russia, France's farm office said.

French and U.S. wheat exports have both soared since lastmonth after Russia's withdrawal from the world market andbecause of a lack of bread-quality wheat from a rain-blightedharvest in Germany.

"The French wheat balance this year is based on the ideathat there is room (on the world market) for 15 million tonnesof French wheat," Xavier Rousselin, head of FranceAgriMer'sgrains division, told Reuters in an interview prior to thepublication of the office's 2010/11 forecasts.

Iron ore spot prices feel the shock of anticipated production pruning in China

On back of the cutback of steel output in China and concerns of decreased iron ore demand, the physical iron ore market is under pressure. The buying took a dip amidst negativism setting in about truncated production

 as government tightens its belt on emission and power consumption. Steel production is likely to take a dip as they are earmarked as bootleggers.

Iron ore fine prices dipped by 1.5% on 8th September setting the tone for further slide.

A 62/61Fe cargo was concluded at USD 134 per tonne CFR and another Fe 63/62 lump and fine combined cargo was done at USD 147 per tonne. Iron ore fines Fe 63/63.5 offers are prevailing at USD 150 per tonne with few takers as the traders stick to wait and watch policy.

China's Interest In Overseas Iron Ore Is 30% Of Iron Ore Imports

China’s current interest in overseas iron ore totals 190 million tons, which accounts for 30 percent of China’s total iron ore imports, reports Beijing Times, citing Luo Bingsheng, vice chairman of the China Iron and Steel Industry Association. Luo said the target is to lift the proportion to 60 percent.
China currently has an interest in many exploration projects that are yet to start production.
Shares of Baoshan Iron and Steel (600019) rose 7.06 percent to close at 6.98 yuan on September 6.

Source: CapitalVue

Russia likely to resume grain exports by July 2011

Contrary to Russia’s announcement on lifting country’s grains exports ban, analysis group SovEcon said it expects the Russian government to consider lifting the ban in July. Russian Prime Minister Vladimir Putin last week said lifting of the export ban can only be considered after next year's crops have been harvested.
This statement, widely seen as a key factor in wheat prices rises over the last 24 hours, was seen as a reference to the close of the autumn grains harvest, notably of corn, in November.
However, SovEcon's said that statement was more likely a reference to the summer harvest, which starts in late June.

WEEK35 - Dry Cargo Market “Highlights” – 27-August-2010 until 03-September-2010

This week was a complete mirror image from last week. All red indices were green this week, and all green turned red. The larger Capes and Panamaxes showed some strong momentum and completed the 4 working day week 35 with a positive w2w comparison, while the smaller Supramaxes and Handymaxes made losses. As we mentioned this week was a shorter week,
having only 4 working days in the calendar as Monday the 30th August was a Bank Holiday in the UK and the Baltic Exchange had no indices nor fixtures published, however that did not stop the weekly data to contain strong dynamics and a good number of interesting fixtures that we will go through further in this report.

Still there are many ships chasing lesser/fewer cargoes and this imbalance of the market is self‐implicated and will sooner become far worse than better as we believe that owners been shooting at their own feet! We will be providing readers with a brief snapshot of the results of the Year to Year overcapacity reports we have produced with data from Aug 2009 and Aug 2010.

Brazil Aug corn, iron, sugar exports surge

Brazil's trade surplus in August slipped from a year earlier as imports grew faster than exports, but several of its main commodity exports remained strong or even surged, the trade ministry said. Brazilian white sugar exports, mostly 150 ICUMSA, jumped in August to over 1 million tonnes, up from the 852,200 tonnes in July and the 574,100 tonnes a year ago.  VHP Raw sugar shipments were also strong, at 2.211 million tonnes during the month, against 2.048 million tonnes in July and 1.530 million tonnes a year earlier. 

Russia signals much longer grain export freeze

Prime Minister Vladimir Putin's call for Russia's ban on grain exports to be kept in place until late 2011 further stirred up grain markets as it underlined the extent of the fallout from its worst drought in a century But while Putin's comments caught the market off guard, some operators said it merely confirmed a widely held view that Russia will be out of contention for exports well into 2011 and not just until end-2010 as currently stipulated in its ban.

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Baltic index rises; Russian grain export ban eyed

* Capesize market stays firm - * Iron ore, coal activity supporting rates


LONDON, Sept 3 (Reuters) - The Baltic Exchange's main sea freight index .BADI, which tracks rates to ship dry commodities, rose on Friday as firmer iron ore activity supported the larger capesize vessels.
Brokers also said Russia's plan to extend a grain export ban into 2011 was expected to be positive for the freight market.
The index, which gauges the cost of shipping commodities including iron ore, cement, grain, coal and fertiliser, rose 1.45 percent, or 41 points, to 2,876 points in a fifth straight session of gains.
"Capesize and panamax freight rates found support this week on the strength of firm demand for iron ore and coal. Moderate levels of congestion continue to support rates for these vessel classes as well,"

Heavy in dollars, China warns of depreciation

China on Friday offered a rare glimpse into its foreign exchange reserves, confirming that they are overwhelmingly allocated in dollars, while a central banker said the mountain of cash could face depreciation risks. The Chinese government's currency reserves, the world's largest such stockpile at $2.45 trillion, are held roughly in line with what was described as the global average: 65 percent in dollars, 26 percent in euros, 5 percent in pounds and 3 percent in yen.
The report in the China Securities Journal, an official newspaper, cited unnamed reserve managers.
The allocation of Chinese foreign exchange reserves is considered to be a state secret, but analysts have long estimated that about two-thirds are invested in dollar assets.

Total Chinese steel market inventory stands at 81 million mt

According to the vice president of the Chinese Federation of Logistics and Purchasing, Cai Jin, total steel inventory in the Chinese market now stands at 81 million mt, equal to a supply of nearly 37 days, more than the normal level of a 25-day supply Meanwhile, although steel prices in China have lately indicated a weakening, steel prices still show an increase compared to mid-July levels. As indicated by local media sources, on August 26 the high speed wire rod price in the Beijing market was RMB 4,180/mt ($615/mt), up RMB 340/mt ($50/mt) or 8.85 percent compared with the price in the mid-July. Meanwhile, rebar prices have risen by RMB 240/mt ($35/mt) or 6.4 percent to RMB 4,120/mt ($606/mt), compared with the price in mid-July.

Source: Steel Orbis

Baoshan Says Steel Prices May Drop Before Demand Rebound in Fourth Quarter

Baoshan Iron & Steel Co., China’s biggest publicly traded producer, said prices are likely to decline before demand revives in the fourth quarter. “Domestic prices are under pressure to trend lower because of falling demand and a removal of tax rebates, which hurts exports,” Baoshan General Manager Ma Guoqiang said today in an online investors conference. “Demand in some sectors may post a seasonal rebound in fourth quarter.”
Baoshan, supplier of half the domestic market for auto sheet, may post a profit of as much as 1.6 billion yuan ($235 million) in the third quarter, the smallest in five quarters as demand slows and high prices of raw materials shrink margins. Domestic steel prices fell 1.9 percent last week, the first drop in six, amid concerns slowing economic growth may curb demand.

Hebei to Make It a Steel Giant Province

Hebei Province unveiled a list of the province's top 100 enterprises in 2010 including 33 steel mills. Hebei Iron and Steel came to the No.1 with revenues of 177.09 billion yuan. The local government hopes to set up three to four large steel groups through mergers and acquisitions.
By 2015, the top five steelmakers will produce 75 percent of steel across the province, up from 48 percent now.

Source: Chinaisa.org.cn

Wheat Rises on Russian Export Ban

Wheat rose in Chicago after Russia, the world’s third-largest grower, extended a ban on grain exports into next year, raising the prospect of higher food prices that already have sparked riots in Mozambique. Wheat for December delivery rose as much as 1.5 percent to $7.2475 a bushel, advancing for a third day and taking this week’s gain to 4.3 percent. Russia, suffering from its worst drought in at least a half century, started an export ban Aug. 15 that was scheduled to end Dec. 31. Prime Minister Vladimir Putin said yesterday it wouldn’t be reviewed until after the next harvest and Agriculture Minister Yelena Skrynnik said Russians are hoarding staples.
“Russia was for the last couple of seasons a very large part of the world export market and now all of sudden they disappeared,” said Keith Flury, a grains analyst at Ratzeburg, Germany-based F.O. Licht. “This is kind of the new fundamental shift that not everybody was really ready for.”