The grain and vegetable oil markets have fallen back this month as harvests have progressed well in the US and EU. Dairy products have increased in price as milk production in the EU and US has continued to fall seasonally. Crude oil prices have fallen back slightly as inventories were higher than expected.
|Potato (UK)||+11%||Maize (CBOT)||-11%|
|Aluminium (LME)||+9%||Palm Oil (Rotterdam)||-7%|
|Butter (NL)||+8%||Pulp (EU)||-6%|
|Rice (VN)||+6%||Cocoa Beans (LIFFE)||-6%|
|Pork (DK)||+6%||Apple (DE)||-5%|
|Pepper (IN)||+4%||Brent Crude Oil (London)||-3%|
All percentage changes in this report refer to month-on-month price changes.
Soft commodities were mixed in September. Good demand helped raise the price of Arabica coffee on ICE in the US (+2%) with Robusta coffee on LIFFE also up in the UK (+4%). After a very poor crop last year, improved weather and a lower rate of disease has helped to increase Colombian Arabica supply but there are worries now that recent rains in Brazil might lead to quality issues there with both Arabica and Robusta. Cocoa beans, meanwhile, fell on ICE (-4%) and on LIFFE (-6%) due to weak confectionery demand in Europe and a seasonal increase in West African supply. Cocoa powder fell in the UK (-3%) and cocoa butter was also lower (-1%) as a result. Demand for tea is rising seasonally in the northern hemisphere but Kenyan and Indian teas were unchanged on average (0%), while Sri Lankan tea prices were down (-3%) as late monsoon rains eased drought fears and helped raise current supply. World sugar prices rose on LIFFE (+4%) but were steady on ICE (0%). European molasses were unchanged (0%).
Oils & Fats
Palm oil was weighed down by ample global supplies, weak demand and a good production outlook for 2012/13, falling in Rotterdam (-7%) and in Malaysia (-7%). Soyabean oil also fell as good weather helped the US harvest to progress at a good pace. As of 30th September 2012, around 41% of US soyabeans had been harvested, compared to an average of 19% by this date over the last 5 years. Prices were down on CBOT (-9%) in the US and in Rotterdam (-7%). Rapeseed oil (-4%) and sunflower oil (-1%) were also down in Rotterdam. For lauric oils, coconut oil fell in Rotterdam (-4%) due to improving production in the Philippines. Palm kernel oil declined (-8%) in Rotterdam but rose (+2%) in Malaysia. In Spain, lampante virgin olive oil futures continued to rise (+10%) as global production is expected to decline 18% year-on-year in 2012/13. European fish oil (0%) and US lard (0%) were both unchanged while linseed oil declined (-11%) in Argentina. World linseed output is forecast to grow 11% year-on-year to 2.3m tonnes in 2012/13.
Maize futures fell back from the highs reached previously on CBOT (-11%) as the US harvest has progressed quickly and demand has fallen from the ethanol industry. As of 30th September 2012, 54% of the harvest was completed in the 18 main producing states as opposed to 18% at this time last year. Milling wheat futures were down on CBOT (-4%) and LIFFE Paris (-2%). Feed wheat prices were also down on LIFFE London (-1%). Feed barley fell in Germany (-2%) and France (-2%) but rose in the UK (+3%). Malting barley rose in the UK (+7%) but fell in France (-1%). Durum wheat rose in Canada (+4%) upon greater export demand, however prices were unchanged in the US (0%) and fell in Italy (-2%). Oat prices fell on CBOT (-5%). Rice prices rose in Thailand (+1%) and rose further in Vietnam (+6%). The Thai government will renew its rice purchasing programme in October 2012. Under this scheme, the government aims to boost farmer incomes by purchasing paddy rice at a premium to the market value. Paddy rice in the US fell in CBOT (-1%). Basmati prices were unchanged in Pakistan (0%).
US peanuts continued their sharp descent in Rotterdam (-24%) last month as US production is forecast at a record 2.01m tonnes in 2012/13, up 62% from the poor 2011/12 crop. Argentinean peanut prices were also down (-8%) as production there is forecast to increase 33% to a record 920,000 tonnes in 2012/13. Almonds fell in Spain (-3%) while cashew nuts rose in Rotterdam (+4%), supported by a downgrade of the forecast for this year's Brazilian harvest, from 306,000 tonnes to 249,000 tonnes. Turkish hazelnut prices eased slightly (-1%) as favourable weather conditions are expected to benefit the 2012/13 crop. In dried fruit, Turkish raisins declined (-8%) due to expectations of improved output, but sultanas (0%), dried apricots (0%) and dried figs (0%) were all unchanged. Desiccated coconut fell in the Philippines (-3%). Black pepper was up in India (+4%) and Vietnam (+2%) as export availability has been low in India and Malaysia while farmers in Vietnam have held back stocks in hope of further price rises. Chilli also rose (+4%) in India while fenugreek (0%) and ginger (0%) were both unchanged and cardamom (-3%), turmeric (-6%) and cumin (-9%) all fell. Chinese garlic powder was unchanged (0%).
Apple prices in Germany were down (-5%) overall, with falls for varieties such as Elstar (-16%) and Golden Delicious (-3%) as French supply continues to be strong. Pear prices in the UK fell (-17%) as the domestic crop improved availability. Bananas rose in the UK (+5%) and Germany (+2%) as bad weather caused crop damage in Costa Rica, Ecuador and the Dominican Republic. In the UK, nectarines fell (-9%) as supply from Italy remains strong. Melon prices in the EU rose (+26%) overall, with honeydew up (+16%) and watermelon up (+8%) as the Spanish season comes to a close and supply switches to non EU producers. Figs in the UK fell (-30%) following excellent supply from Turkey. Frozen orange juice concentrate on ICE in the US finished down (-4%) as stocks in all major producing countries are up year-on-year.
Potato prices rose throughout the EU, with futures prices up significantly in Germany (+35%). The UK (+11%), France (+2%) and Belgium (+2%) saw more modest price rises. This follows the wet weather that has resulted in low yields and quality problems, with a reported increase in diseases such as blight and black leg. Tomatoes were up in Poland (+32%) and Germany (+17%) following a fall in production in the Netherlands. Lettuce rose overall, with prices up in Spain (+14%), France (+5%), and Germany (+5%) as production remains slow in some European regions. Salad peppers fell in the UK (-19%) and Germany (-4%) as good supply from the Netherlands continues. Parsnip prices in the UK fell (-15%) as the new crop arrived. Cabbage fell in the EU (-14%) overall as UK supply is good and quality is strong. Carrot prices fell in Germany (-20%), the UK (-12%) and France (-7%) as supply and quality remain good. Onion prices dropped in France (-19%), Germany (-19%), and the UK (-18%) as the season in the Netherlands and the UK is now underway.
Meat & Poultry
Liveweight cattle prices in Uruguay (+4%) and Brazil (+3%) both increased, as demand for beef from the US increased. However, prices fell in Argentina (-1%). EU deadweight beef prices remained stable (0%), with the price in the UK (-2%) and France both (-1%) falling, while prices in the Netherlands (+3%) increased. Lamb prices in New Zealand (+3%) and the EU (+3%) rose, however prices in the UK, the biggest lamb producer in the EU, fell (-7%) as improved weather allowed more lambs to be finished. EU deadweight pork prices continued to see gains (+4%) on average, with prices in France (+8%), Denmark (+6%) and Germany (+3%) all rising, as supply remains low throughout Europe. EU piglet prices increased on average (+7%) during September with the biggest gains seen in the Netherlands (+14%), Spain (+11%) and France (+10%). Deadweight chicken prices continued to rise on average in the EU (+2%) with the sharpest gains seen in the Netherlands (+3%), as the continued high cost of feed has increased the cost of production. Thai liveweight chicken prices continued to fall (-8%), as a low level of domestic demand has been met by good supply. Chinese liveweight market prices for chicken fell (-3%), while chicken in Brazil increased (+2%). For fish, both EU cod (-4%) and Norwegian farmed salmon (-1%) fell slightly while EU plaice (+11%) rose.
Milk & Dairy
Spot fresh milk prices in the EU rose (+5%) on average, and EU milk deliveries have continued to drop seasonally in September. UK daily production figures for the first two weeks of September averaged 33.4m litres a day, down 3.6% compared to this period last year. Butter prices have shown significant increases across the EU, rising in the UK (+21%), France (+12%), Netherlands (+8%), and Germany (+7%). Butter from New Zealand was also up (+3%). Food grade SMP prices were also up (+7%) on average in the EU due to strong export demand, with the largest movement seen in Belgium (+9%). NZ SMP was also up strongly (+9%). WMP ended up (+6%) on average in the EU, rising most in both France and the Netherlands (+7%). Whey powder export prices rose in the EU (+14%). Cheese prices have increased, with Irish Cheddar ending up in the UK (+9%). Wholesale egg prices dropped in the UK (-10%), while in the rest of the EU prices were generally up (+3%) on average, with the Netherlands up more (+10%). Shell eggs for breaking rose in the EU (+9%), with liquid white and liquid yolk also both up (+4%).
A higher than expected rise in the US crude oil inventories and concerns over the rate of future demand growth weighed on crude oil prices in September with prices down for both Brent crude on ICE London (-3%) and light sweet crude on NYMEX in the US (-5%). Road fuel prices were mixed as diesel prices fell in both the EU (-1%) and US (-5%), whereas prices for petrol rose in the EU (+5%) and were down in the US (-3%). Also in the EU, declines were seen for heavy fuel oil (-4%), naphtha (-3%) and gas oil (-1%). Natural gas prices firmed in anticipation of winter demand with prices up on NYMEX (+21%), Bacton in the UK (+4%) and ICE London (+2%). UK electricity prices were up (+2%) driven by higher natural gas prices, while prices for coal fell in both the EU (-3%) and South Africa (-3%).
Chemicals & Plastics
Despite the price of crude oil weakening over the past month, EU plastic feedstocks continued to increase, with spot prices for xylene (+27%), toluene (+21%), styrene (+10%), ethylene (+8%), benzene (+8%) and propylene (+6%) all up as the effect of the earlier rise in crude oil feed through the supply chain. As feedstock costs have risen, plastic prices in the EU have followed, despite a low level of demand and small trading volumes, with LLDPE (+14%), LDPE (+13%), HDPE (+11%), PP (+11%), PS (+6%), and PVC (+5%) all rising. US prices for diammonium phosphate rose (+3%), along with urea (+2%) while US phosphoric acid (0%) remained unchanged.
Pulp & Paper
Demand continued to be weak in the pulp and paper market globally. Pulp inventories at European ports were 1.29m tonnes in August 2012, up 16% from July 2012, but still down 2% compared to August 2011. NBSK pulp prices were down in Europe (-6%) and also in the US with declines seen for both physical prices (-2%) and futures on CME (-1%). BHK pulp prices also fell in Europe (-5%), but were steady in China (0%). Increases were seen in the packaging sector in Europe with waste-based fluting (+2%), testliner (+2%) and kraftliner (+1%) prices all up. Also in Europe, prices remained unchanged for newsprint (0%) and coated paper (0%).
Metal prices rose on the LME in response to the fresh stimulus measures unveiled by the US and China, with lead (+16%), zinc (+13%), nickel (+11%), aluminium (+9%), copper (+8%) and tin (+3%) all up as a result. Weak underlying demand continued to weigh on steel prices globally. Prices fell for Chinese hot rolled (HR) (-7%) and cold rolled (CR) steel coil (-4%), with European CR steel coil also down (-2%), but HR steel coil (0%) was steady. CR stainless steel prices were more resistant to downward pressure due to higher nickel costs, and were up in China (+3%). Prices for iron ore pellets were steady (0%), while iron ore fines rose slightly (+1%). In precious metals, prices rose for silver (+10%), platinum (+7%) and gold (+6%) in London.
Cotton US (-7%), wool UK (-4%), viscose CN (-1%), polyester CN (+2%), Baltic capsize index (+31%).
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