Grain production forecasts for the current season have been further reduced, which has generally strengthened the market. Milk supplies in the EU have remained tight, pushing up the price of dairy products. Further falls were seen in crude oil prices as global demand estimates were reduced.
|Liquid Egg Yolk (EU)||+7%||Arabica Coffee (ICE)||-14%|
|Banana (DE)||+5%||Nickel (LME)||-14%|
|Milling Wheat (LIFFE Paris)||+4%||PVC (EU)||-12%|
|Piglets (EU)||+3%||Whey Powder (UK)||-7%|
|Crude Palm Oil (Rotterdam)||+3%||Brent Crude Oil (London)||-6%|
|NBSK Pulp (Europe)||+2%||Soyabean Oil (CBOT)||-5%|
Forecasts of a good 2012/13 Brazilian coffee crop have led to a fall in the price of Arabica coffee on ICE in the US (-14%). The Colombian harvest has also improved with higher output seen in the five successive months up to August when compared to last year. Robusta coffee was also down on LIFFE in the UK (-10%). Cocoa beans, meanwhile, fell on ICE (-2%) and on LIFFE (-1%) along with cocoa powder, which was down in the UK (-2%). Cocoa butter was up (+2%). Prices for Kenyan tea remained unchanged (0%) but Indian tea declined (-2%) while Sri Lankan tea rose (+2%). In general, the global tea market was steady to slow in October due to lower trading activity following holidays in some of the main tea consuming regions. World sugar prices fell on both LIFFE (-10%) and ICE (-10%) as global sugar production in 2012/13 is forecast to rise by 2%. Improved Brazilian, Indian, Thai and Chinese harvests are expected to offset lower output from the EU. European molasses rose considerably last month (+13%).
Oils & Fats
Following a significant drop in September, crude palm oil prices started to recover in Rotterdam (+3%) throughout October. In Malaysia, prices have strengthened over the past few weeks due to increasing exports and heavy rains in some key growing areas. In the US, the price of soyabean oil fell slightly on CBOT (-2%) following good weather conditions and a better than expected harvest. The fall was not as sharp as last month, however, due to higher export demand. In Rotterdam, the price of soyabean oil was stable (0%), whilst sunflower oil (+2%) and rapeseed oil (+3%) were both up. For lauric oils, coconut oil (+2%) rose slightly in Rotterdam. A recovery has also been seen over the past few weeks in the price of palm kernel oil in Rotterdam, but prices are still down compared to last month (-2%). European virgin olive oil prices declined slightly (-1%) as recent rainfall in southern Spain is expected to improve oil yields. US lard (-4%), European fish oil (-2%) and Argentinian linseed oil (-1%) all declined.
Maize LIFFE futures in Paris rose (+6%) while US CBOT futures remained stable (0%) last month. Latest estimates of global maize output have been revised down a further 3m tonnes to 830m tonnes. Drought in the US will now become a key concern for next year's crop as winter sowing is now fully underway. In the wheat markets, US milling on CBOT ended slightly down (-1%), but moved up (+2%) on both the KCBT and MGEX. In the EU, wheat production forecasts have been reduced driven mainly by declines in the UK where there are concerns over supplies as production would be at the lowest levels since 2007 if current forecasts are accurate. LIFFE futures rose for Paris milling wheat (+4%) and for London feed wheat (+6%). French Durum wheat prices fell (-2%). Delivered feed barley prices fell in the UK (-2%) and in France (-3%). Malting barley also ended down in France (-1%) but rose in the UK (+1%). Oat prices in the US were up on CBOT (+7%). Thai rice fell (-2%) as global production in 2012/13 is expected to exceed last year's record crop. CBOT paddy rice futures also fell (-3%).
Dried apricots fell in Turkey (-3%), the world's largest producer and exporter, as production in 2011/12 is expected to rise 29% to 120,000 tonnes. Turkish raisins declined (-3%) as the country's crop is forecast up 8% in 2012/13 following rising yields and favourable weather conditions. Philippine desiccated coconut prices continued their descent (-3%). Turkish dried figs were also down (-6%) while sultanas remained stable (0%). In Rotterdam, the price of peanuts from the US declined further (-4%) as US output is expected to reach a record 2.08m tonnes in 2012/13. Peanuts from Argentina also fell (-6%) as production is forecast up 33% in 2012/13. Cashew nuts eased in Rotterdam (-3%) while hazelnuts were down in Turkey (-2%). Almonds rose in Spain (+9%). In India, turmeric fell significantly (-11%) in spite of expectations of a poor crop this year as large carryover stocks from 2011 are expected to cover 2013 demand. Indian fenugreek (-14%), cardamom (-3%) and chilli (-2%) also fell while ginger was unchanged (0%) and cumin rose (+7%). Black pepper was up in India (+1%) but saw no change in Vietnam (0%).
Apple prices fell in Germany (-8%) as French supply remains firm. Prices were also down in the UK (-5%). Bananas rose in Germany (+5%) due to problems with supply following an earthquake in Costa Rica and heavy rains in Ecuador. Grape prices rose in Germany (+39%) and the UK (+25%) as supply begins to arrive from more distant origins in the southern hemisphere. Stone fruit prices rose across Europe, with apricots (+30%), plums (+21%) nectarines (+17%) and cherries (+12%) all up as the European season ends. Lemon prices declined in Germany (-24%) and the UK (-14%) as supply moves from South America to Spain. Frozen concentrated orange juice fell on ICE in the US (-7%) as early forecasts for the 2012/13 Florida crop peg production at 154m boxes, up 5% on 2011/12.
Potato prices across the EU continued to rise, with futures prices up significantly in Germany (+44%), and price rises also seen in Poland (+27%), France (+23%) and the UK (+3%). This follows reduced yields that are 20-30% lower on last season due to the wet weather, and high wastage due to the spread of diseases such as blackleg. Tomatoes were up in Spain (+41%), Poland (+34%) and Germany (+24%) as supply from the Netherlands finished. Lettuce rose overall, with prices up in the UK (+15%) as the UK season finished. Prices were also up in France (+15%) and Germany (+13%). The Spanish season is now underway for many vegetables, causing price declines. Consequently, broccoli dropped in France (-42%) and the UK (-16%), courgettes fell in France (-38%), the UK (-16%) and Germany (-15%), whilst salad peppers fell modestly in Germany (-3%) and the UK (-1%). Carrot prices were down in Germany (-5%) as supply has strengthened. Onion prices fell in Germany (-7%) and France (-2%) as the Spanish season has begun and supply from the Netherlands and the UK is good overall.
Meat & Poultry
Liveweight cattle prices in Uruguay (+2%) increased, as demand for beef from the US rose. However, cattle prices in Argentina (-5%) and Brazil (-3%) fell as herd rebuilding has led to an improved beef supply. EU deadweight beef prices declined (-1%), with the price in the UK (-1%), Germany (-1%) and Ireland (-1%) all falling, while prices in the Netherlands (0%) and France (0%) remained stable. Lamb prices in New Zealand (0%) remained steady, while prices in the EU (-3%) fell, driven by price decreases in the UK (-6%). The UK seasonal decline in prices began later than usual this year as poor weather earlier in the year led to a delay in lambs reaching slaughter weight. EU deadweight pork prices saw a slight fall (-4%) last month, with prices down in France (-8%), Spain (-5%) and Germany (-4%). This follows large increases in August and September. EU piglet prices increased on average (+3%) during October with the biggest gains seen in the Spain (+9%), France (+8%) and the UK (+3%). Deadweight chicken prices fell in the EU (-1%) as an increased level of culling and higher imports led to improved supply. The main price falls were seen in Poland (-7%), Netherlands (-3%) and Spain (-1%). Liveweight chicken prices rose in China (+3%) and Thailand (+2%), while chicken in Brazil fell (-2%). For fish, Norwegian farmed salmon increased (+2%) while EU plaice (-27%) dropped.
Milk & Dairy
EU spot fresh milk prices rose further last month (+7%) as supply remains tight. UK daily milk deliveries for the first half of October averaged at 32m litres a day, down 6.5% on the same period last year, while total EU deliveries for August 2012 were down (-3.5%) compared to August 2011. Limited availability has also affected cream and this, coupled with increased demand, has led UK cream prices to move even higher (+24%). Butter prices in Europe rose on average (+2%), again mainly driven be higher demand and lower supplies. Since August, 50,000 tonnes of butter have left PSA stocks, with much of it already allocated to a buyer. Butter oil prices in the UK also rose sharply (+16%). Whey powder prices fell in the UK (-7%) and the Netherlands (-4%). SMP prices rose (+1%) on average in the EU, while EU WMP prices were down (-1%). Cheese prices generally rose, with Edam up both in Germany (+3%) and in Poland (+2%). Wholesale egg prices increased in London (+18%), the Netherlands (+6%) and Germany (+11%). EU egg product prices also rose (+2%) on average, with the largest movements seen in EU liquid egg yolk (+7%).
Crude oil prices fell as the global demand forecast for 2012 was lowered in October due to the deteriorating economic outlook, with prices down for both Brent crude oil on ICE London (-6%) and light sweet crude on NYMEX US (-5%). Declines in the crude oil market weighed on the wider energy market. In Europe, lower prices were seen for petrol (-10%), heavy fuel oil (-6%) and diesel (-2%), and in the US, prices fell for both petrol (-6%) and diesel (-6%). Prices for natural gas were down on NYMEX US (-6%) and ICE London (-1%), while Bacton prices in the UK bucked the trend (+5%). Electricity prices were unchanged (0%) in Europe, but up in the UK (+10%), supported by higher prices for natural gas on the domestic market. Coal prices were subdued amidst ample supply, down in the EU (-2%).
Chemicals & Plastics
With the price of crude oil falling slightly over the past month and the level of global demand remaining sluggish, the price of EU plastic feedstocks tended to decrease, with spot prices for styrene (-15%), xylene (-3%) and toluene (-1%) all down. However, the price of ethylene (+1%) rose and propylene (0%) remained stable. Prices for EU plastics followed the fall seen in feedstocks with PVC (-12%), LLDPE (-2%), LDPE (-2%), HDPE (-2%) and PP (-1%) all decreasing. In China the price of plastics also tended to decline with PVC (-4%), LDPE (-4%), LLDPE (-2%) and HDPE (-1%) all down. The European price of urea (+3%) and ammonia (+1%) both increased, while the price of diammonium phosphate remained stable (0%).
Pulp & Paper
Shipments for pulp and paper have increased driven by higher demand from China. Pulp inventories at European ports were 1.11m tonnes in September 2012, down 15% from August 2012, which is 24% lower than September 2011. NBSK pulp prices were up in Europe (+2%) and the US (+2%). BHK pulp prices also rose in both Europe (+2%) and China (+2%). Following higher prices of pulp and improving demand from Asia, increases were seen in the packaging sector in Europe with kraftliner (+2%), testliner (+1%) and waste-based fluting (+1%) prices all rising. Prices of newsprint (0%) and coated paper (0%) remained stable in Europe.
Metal prices fell on the LME, weighed down by the weak state of the global economy and deteriorating market sentiment with nickel (-14%), zinc (-11%), lead (-11%), aluminium (-9%), tin (-9%) and copper (-6%) all down as a consequence. Chinese steel prices firmed, driven by restocking following a recent national holiday. Prices increased for Chinese hot rolled (HR) steel coil (+5%) and Chinese cold rolled (CR) steel coil (+3%). European stainless steel prices (+1%) firmed slightly, but stainless steel scrap prices (-9%) were down in the EU. Chinese import prices for iron ore fines (+12%) and iron ore pellets (+11%) rose considerably driven by higher demand from steel mills. In precious metals, prices fell for palladium (-7%), platinum (-7%), silver (-7%) and gold (-4%) in London.
US lumber CME (+14%), wool AU (+10%), cotton US (+2%), silk CN (+2%), viscose CN (-3%).
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