UPDATE 2-UN food aid funds growing, but needs growing too

Reuters: [2008-05-06 23:56:00]

(Recasts, adds additional needs, U.S. funding; adds byline)

By Missy Ryan

WASHINGTON, May 6 (Reuters) - The World Food Program, facing an unprecedented surge in the price of food it buys for the world's hungry, has secured about 60 percent of the extra funds it needs to cover planned aid donations this year, the head of the United Nations agency said on Tuesday.

"We put out an extra appeal for $755 million and we're about 60 percent of the way there," WFP Executive Director Josette Sheeran said during a speech at a Washington think tank.

But the agency said it already has had to cut some of the food rations it provides, and its $755-million gap does not include new, emerging hunger needs that will require an additional $418 million to $430 million this year.

Sheeran, a former Bush administration official, said the world's food delivery system was "groaning under the strain of sky-rocketing demand, the soaring cost of inputs, depleted stocks, crop loss due to drought, floods and severe weather."

Higher global prices for basic foodstuffs such as bread, rice and milk may have brought on a crisis that could be the first truly globalized humanitarian emergency, she said.

World leaders are calling for urgent steps to ease the soaring costs, to create a larger cushion of food across harvests, and to diffuse the food panic that has triggered protests across the developing world.

"It is said that a hungry man is an angry man," Sheeran said. Global food prices jumped an annual 43 percent through March, according to the U.S. government.

The trend is believed to be deepening poverty, especially for food-importing nations like Nicaragua, pushing more people into hunger as buying power shrinks for food aid budgets.

Donor nations like Canada, Australia and Britain have stepped up pledges to help WFP cope with soaring costs. The United States, the world's largest food aid donor and WFP's top supporter, last month released 260,000 tonnes of wheat from an emergency crop trust.

Last week, President George W. Bush announced plans, which must be approved by Congress, to spend an additional $770 million on food aid and agriculture development in the fiscal year beginning Oct. 1.

For countries where people spend up to three-quarters of their income on food, experts say time is of the essence.

The Bush administration already has requested $350 million in last-minute food aid funding for this fiscal year, a perennial addition to annual budgeted funds.

On Tuesday, Democratic leaders in the U.S. House of Representatives announced that they would try to add another $500 million for emergency food aid.

Rep. David Obey of Wisconsin, chairman of the House Appropriations Committee, said the money would be attached to a massive Iraq war funding bill that could be debated on the House floor on Thursday.

It was unclear if Bush would veto the spending bill if it contained too much spending that he did not call for.

The Bush administration also is seeking flexibility to buy more food overseas for aid programs, in hopes of making aid dollars go further. (Additional reporting by Richard Cowan; Editing by David Gregorio)

((missy.ryan@thomsonreuters.com; + 202-898-8376; Reuters Messaging: missy.ryan.reuters.com@reuters.net)) Keywords: USA FOODAID/WFP

COMMODITIES-Oil breaks $122; corn at new record too

Reuters: [2008-05-06 23:29:00]

    By Barani Krishnan 
    NEW YORK, May 6 (Reuters) - The bull run in U.S. energy 
markets showed little signs of slowing on Tuesday, with crude, 
gasoline and heating oil all hitting record highs before ending 
off their peaks, fueling a rally in other commodities too. 
    U.S. corn futures hit new peaks as well, leading wheat to a 
higher close. [GRA/] Precious metals such as gold and silver 
rose but modestly. [GOL/] Copper bucked the trend with a lower 
close after Monday's record high in New York. [MET/L] 
    "I think oil is just pulling everything higher and because 
of that, all these commodities have turned around again," said 
Edward Meir, energy and metals analyst at commodities brokerage 
MF Global in New York. 
    Another positive factor was the dollar's weakening for a 
second straight day after being up in two previous sessions on 
speculation that the U.S. Federal Reserve may be ready to stop 
interest rate cuts which began in September. [USD/] 
    "The dollar was giving the bears some hope last week when 
it rallied. That seems to have stalled and we seem to be back 
to the original kind of trading strategy, which is go short the 
dollar and long the commodities," Meir said. 
    Crude <CLc1> on the New York Mercantile Exchange, or NYMEX, 
settled up $1.87 at $121.84 a barrel after touching a record 
$122.73, extending a rally that has doubled prices over the 
past year. [O/R] 
    Analysts attributed the run-up mainly to Iran's refusal to 
accept inspections of its nuclear program which the West fears 
could be linked to weapons. Iran is also the world's fourth 
largest oil exporter. [ID:nL05474341] 
    Nigerian disruptions from militant attacks and a strike 
have also underpinned prices since late April, along with the 
weaker dollar and growing demand from emerging markets like 
China and India. 
    The mounting supply problems and strong demand prompted 
Goldman Sachs to forecast oil could reach $200 a barrel within 
the next two years.[ID:nL06914488] 
    NYMEX heating oil for June ended up 4.70 cents, or 1.42 
percent, at $3.3535 after an intraday record of $3.3712. 
    RBOB gasoline for June, settled up 5.26 cents, or 1.72 
percent, at $3.1055 on NYMEX, after an all-time high of 
$3.1260. 
    U.S. corn surged 3 percent as the pace of seeding in the 
United States, the world's top producer and exporter of the 
grain used in feed and ethanol, was the slowest in a decade. 
    Spring rains across wide swaths of the Midwest grain belt, 
which is home to the bulk of corn grown in the United States, 
have delayed planting. As a rule of thumb, farmers need to seed 
the crop by May 15 to avoid yield loss. 
    Benchmark corn for May delivery <CK8> on the Chicago Board 
of Trade closed up 12-3/4 cents at $5.94-3/4 per bushel. The 
July <CN9> 2009 contract reached a record high of $6.60-3/4 per 
bushel during Tuesday's session before ending up 10 cents at 
$6.49. 
    CBOT wheat for May <WK8> closed up 13-1/2 cents at $8.06 
per bushel. 
    The Reuters-Jefferies CRB index <.CRB>, which tracks 19 
commodity futures, was up 1.13 percent at 418.54. 
 (Editing by Marguerita Choy) 
 ((barani.krishnan@thomsonreuters.com; +1 646 223 6192; Reuters 
Messaging: barani.krishnan.reuters.com@reuters.net)) 
    For the latest news and prices, click on the codes in 
brackets: 
    CBOT grains and oilseed futures 
    <0#W:> <0#C:> <0#S:> <0#SM:> <0#BO:> 
    COMEX gold futures <0#GC:> 
    COMEX copper futures <0#HG:> 
    CME livestock futures <0#LC:> <0#FC:> 
    CME lumber futures <0#LB:> 
    NYBOT softs, cotton and juice futures 
    <0#KC:> <0#SB:> <0#CC:> <0#CT:> <0#OJ:> 
    NYMEX crude oil <0#CL:> 
    Reuters/Jefferies CRB Index <.CRB> 
    NYBOT RJ/CRB futures <0#CR:> <0#CI:> 
    RELATED NEWS AND OTHER TOPICS All commodities news [C] 
    Energy markets news [O] 
    Precious metals news GOL All metals news [MTL] 
    All agriculture news GRO Grains news [GRA] 
    Livestock news LIV Softs news [SOF] 
    Foreign exchange rates [FX=S] 
    SNAPSHOTS of all commodity reports [SNAP/GOL] [SNAP/COF] 
    [SNAP/COT] 
    SPEED GUIDES COMMODS REUTERS 
Keywords: MARKETS COMMODITIES 
    

U.S. Cash Grain - Corn, soybean basis bids mostly steady

Reuters: [2008-05-06 22:46:00]

    CHICAGO, May 6 (Reuters) - Spot basis bids for soybeans and 
corn held steady at most processors and elevators around the 
U.S. Midwest on Tuesday, grain dealers said. 
    * Farmer sales of both commodities were slow on Tuesday. 
    * Most growers were busy planting corn ahead of expected 
rain later in the week. 
    * Some farmers booked very light sales of corn after a 
futures market rally pushed cash prices higher, a dealer in 
northern Ohio said. 
    * Although the soybean basis was mostly steady, bids rose 
by 5 cents per bushel in central Iowa. 
    * A dealer in southern Illinois rolled the soybean bid to 
the Chicago Board of Trade November futures contract <SX8> from 
the July contract <SN8>. Cash prices for soybeans fell by 31 
cents to $12.37 per bushel at that location. 
    * Barge freight rates were steady on the spot market on 
Tuesday. [ID:nN06542496] 
    * On the Mississippi River at St. Louis, barges were bid at 
325 percent of tariff, unchanged from Monday. 
    * Bids for barges were unchanged at 340 percent of tariff 
on the lower Ohio River. 
    * Bids for barges held steady at 375 percent of tariff on 
the Illinois River. 
    * At the Chicago Board of Trade, the May soybean futures 
contract <SK8> fell 8-1/2 cents to $12.64-1/2 per bushel while 
the July contract <SN8> fell 9 cents to $12.77 per bushel. Talk 
of progress between the Argentine government and farmers 
regarding export taxes pressured the market. [ID:nN06504695] 
    * The May corn futures contract <CK8> rose 12-3/4 cents to 
$5.94-3/4 a bushel while the July contract <CN8> ended 12-1/4 
cents higher at $6.06-1/4 a bushel on slow corn seedings and 
forecasts for less-than-ideal planting weather. 
    * The May wheat futures contract <WK8> settled 13-1/2 cents 
higher at $8.06 a bushel and the July contract <WN8> rose 
12-1/2 cents to $8.18 per bushel. 
 
                           Basis           Prev    Cash price 
Chicago, Illinois 
Corn processors        -17   +  N      -17   +  N       5.8925 
Corn elevators         -30   +  K      -30   +  K       5.6475 
Soybean elevators      -23   +  K      -23   +  K      12.4150 
Wheat elevators       -100   +  K     -100   +  K       7.0600 
Wheat processors       -55   +  K      -55   +  K       7.5100 
Decatur IL corn        -20   +  N      -20   +  N       5.8625 
Decatur IL soybeans    +20   +  X      -18   +  N      12.3750 
Burns Harbor IN corn   -45   +  N      -45   +  N       5.6125 
Burns Harbor soy       -25   +  N      -25   +  N      12.5200 
Lafayette IN soy        -5   +  N       -5   +  N      12.7200 
Toledo, Ohio (port) 
Corn                   -24   +  N      -24   +  N       5.8225 
Soybeans               -25   +  N      -25   +  N      12.5200 
SRW wheat (DP)         -70   +  N      -70   +  N       7.4800 
Davenport, Iowa (river) 
Corn                 -49.5   +  N    -49.5   +  N       5.5675 
Soybeans               -68   +  N      -66   +  N      12.0900 
Evansville, Ind (rail) 15-car CSX 
Corn                   -14   +  N      -14   +  N       5.9225 
Cincinnati, Ohio (rail) 3-car 
Corn                   -13   +  N      -13   +  N       5.9325 
Hereford, Texas (rail) 
Corn                   +50   +  N      +50   +  N       6.5625 
Columbus, Ohio (rail) 3-car 
Corn                   -13   +  N      -13   +  N       5.9325 
Morris, Illinois (river) 
Corn                   -39   +  N      -39   +  N       5.6725 
Soybeans             -60.5   +  N    -60.5   +  N      12.1650 
SRW wheat (new crop)   UNQ             UNQ              UNQ 
Kansas City (rail) 
Corn                    -3   +  N       -3   +  N       6.0325 
Blair, Nebraska 
Corn                   -26   +  N      -25   +  N       5.8025 
Council Bluffs, Iowa 
Yellow corn            -36   +  N      -36   +  N       5.7025 
Soybeans               -42   +  N      -42   +  N      12.3500 
Des Moines, Iowa 
Soybeans               -48   +  N      -53   +  N      12.2900 
Sioux City, Iowa 
Soybeans               -50   +  N      -50   +  N      12.2700 
 ------------------------------------------------------------ 
    LINKS: 
    For U.S. forward basis spreadsheets, please click on: 
  <CORN/BASIS>   <SOYA/BASIS>   <WHEAT/BASIS>    <MILO/BASIS> 
 
    * U.S. Midwest cash grain AM               [GRA/M] 
    * U.S. grain barge freight values          [BG/US] 
    * U.S. CIF Gulf Grain                      [GRA/C] 
    * U.S. FOB Gulf Grain                      [GRA/F] 
 ------------------------------------------------------------ 
 (Reporting by Mark Weinraub) 
 ((mark.weinraub@thomsonreuters.com; +1 312 408 8587; Reuters 
Messaging: mark.weinraub.reuters.com@reuters.net)) 
Keywords: MARKETS GRAIN CASH  
    

UPDATE 2-Argentine farmers say govt may change export taxes

Reuters: [2008-05-06 22:33:00]

(Recasts with end of meeting)

BUENOS AIRES, May 6 (Reuters) - Argentina's government is willing to change taxes on grains exports as it seeks to avert a fresh strike by the country's key agricultural sector, a farm leader said on Tuesday.

Farmers threw up roadblocks and halted sales of grains and beef during a three-week strike in March after the government introduced a new sliding-scale of export taxes that substantially raised the levies on soy and sunseed products.

They suspended the strike in early April to negotiate, but farmers have expressed increasing frustration with the talks in recent days, complaining of a lack of concrete proposals.

"The government ... admitted the export taxes are a problem that the government is willing to modify," Eduardo Buzzi, head of the Argentine Agrarian Federation, told reporters after a meeting with Cabinet chief Alberto Fernandez.

Tuesday's gathering had been seen as the last chance to avert renewed protests in the country -- a leading global supplier of corn, wheat, soy and beef.

Buzzi said discussions would continue on Wednesday.

Farm leaders said some progress had been made, but they remained cautious.

"I haven't come out of the meeting feeling overly pleased," said Luciano Miguens, president of the Argentine Rural Society, another of the four groups that led March's strike.

President Cristina Fernandez has repeatedly defended the export taxes as a way to redistribute wealth and fight inflation in a country where about a quarter of the population lives in poverty.

But the tax hike was the last straw for farmers, who have been angered by a string of government policies intended to keep food costs down, such as price controls and repeated export restrictions on wheat and beef. (Reporting by Lucas Bergman and Damian Wroclavsky, Writing by Helen Popper; Editing by Walter Bagley) ((kevin.gray@thomsonreuters.com; +54 11 4510-2505; Reuters Messaging: kevin.gray.reuters.com@reuters.net)) Keywords: ARGENTINA FARMERS/

US hogs surge again on export talk and lower dollar

Reuters: [2008-05-06 22:29:00]

By Jerry Bieszk

CHICAGO, May 6 (Reuters) - U.S. hog futures continued their strong advance on Tuesday as higher pork prices in the cash market strengthened talk of strong exports.

"The export business is still good and I think that's one of the contributing factors. There sure has been terrific demand in there," said Bruce Johnson, independent livestock trader. "The hog market keeps coming in higher so is must be good demand."

A slipping U.S. dollar added to ideas of increased exports, especially after the record pace of pork exports for the past nine months. The calculated pork carcass cutout value for Monday was put at $76.21 per cwt by the USDA, the highest level since late July.

June lean hogs <2LHM8> closed up 1.550 cents at 74.750 cents per lb and July <2LHN8> was up 0.675 cent at 76.025 cents. June moved above the 100-day moving average to post a one-week high and rose above all its averages to also set a one-week high.

Although strong pork product prices provided support to cash hogs, part of the strength in live markets was coming from a slow down in hog marketings due to farmers planting corn.

But some traders felt the cash pork product market may be starting to top out. Cash loins were called weak by the USDA early on Tuesday and pork trade was very slow.

Any downturn in the pork cutout value after reaching a nine month high could bring in fresh selling pressure, they said.

"It's my opinion that we are real close to a turn in this pork cutout value," said Dennis Smith, broker with Archer Financial. "Every time you take the cutout up another notch, trade slows down a little bit more."

Pork belly futures also sped higher in reaction to the higher hog futures and to talk that there may be a strong stopper for deliveries. CME reported 26 deliveries against the May contract on Tuesday.

USDA put Monday's average cash belly price unchanged at $84.98 per cwt, while on Tuesday USDA's carlot report quoted some pork bellies $2 higher.

May pork bellies <2PBK8> finished up 1.950 cent at 75.800 cents per lb and July <2PBN8> was up 1.650 at 76.500 cents.

Live cattle futures closed higher as firm beef prices and a sharply higher hog market fueled active short covering. The market lacked follow-through selling on the early break despite some traders looking for the cash beef market to top out soon.

June live cattle <2LCM8> ended up 0.625 cent at 91.825 cents per lb and August <2LCQ8> was up 0.350 cent at 97.825. June posted a three-week low early but held the 40-day moving average and rallied to close above the 20-day average.

Traders had been expecting beef prices to trend lower after recent strong gains, especially with rising oil prices cutting into spendable income. But beef has not lost much value.

Early on Tuesday, USDA quoted choice beef down 28 cents from Monday at $155.18 per cwt, but Monday's quote was the highest since May 25, 2007. The select cutout on Tuesday was up 74 cents at $152.71.

Back months held sharp premiums on speculation for much higher cash cattle prices later.

"We will have a goodly amount of cattle for the next six to eight weeks and as long as the packer is making money and he keeps killing the cattle I think we will get through them and probably have a pretty robust fall and first quarter of next year," said Johnson.

Feeder cattle futures closed mostly higher as higher live cattle futures prompted local short covering. Firm cash feeder prices this week were also supportive.

May feeder cattle <2FCK8> closed up 0.300 at 105.550 cents per lb and August <2FCQ8> was off 0.050 at 108.200. (Reporting by Jerry Bieszk; Editing by Marguerita Choy)

((jerry.bieszk@thomsonreuters.com; 312-408-8725; Reuters Messaging: jerry.bieszk.reuters.com@reuters.net)) Keywords: MARKETS LIVESTOCK/