The Grain Industry Association of Western Australia predicted that output from Western Australia may double to 9.24 million metric tons, above the 9.12 million tons estimated last month. Rainy weather in Argentina may help accelerate planting. Oil World forecast that Argentine farmers will increase sowing 6.8 percent to 4.87 million hectares (12 million acres).

Growing production in the Southern Hemisphere added to increasing supply from Russia and Ukraine. As a result, demand for the US wheat shrank. US exports are expected to drop to 26.54 million tons in the 2011–12 season from 35.1 million tons a year ago, according to the Department of Agriculture.

Wheat spot price was near its opening level of $6.1625 per bushel as of 8:09 GMT on CBoT.
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The Australian Bureau of Meteorology estimated the chance for above-average precipitation in Northern Queensland to be 65 to 70 percent. The previous La Nina, which was the most expensive natural disaster for Australia, spurred coal prices to $330 per ton. Forecasters expect rainfall to weaker than the record rains in the previous season, but it’s still remains a reason to worry.

Producers of steel have a particular reason to worry as there is deficit of coal reserves at steel mills. Every ton of crude steel requires about 600 kilograms of coking coal.

Some analysts think that in case of disruption of coal supply prices may jump as high as $350 per metric ton.
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Cotton jumped by the exchange limit on ICE on the speculation that rains will curb supplies from Australia. The wet weather may slow the harvest that starts this month. Prices have more than doubled in the past year as the global demand rises while the supply declines. May delivery for cotton surged by the limit of $0.07 (3.5 percent) to $2.0596 per pound as of 14:39 on ICE.
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Australia, the third biggest exporter, will also have reduced output as the crops were harmed by adverse weather. Rabobank estimated that the next harvest will produce 3.5 million metric tons. That’s compared to the previous harvest of 3.6 million tons and the earlier forecast of 4.2 million for the next harvest.

March delivery for raw sugar rose $0.0041 (1.3 percent) to $0.3305 per pound by 11:17 on ICE. May futures for delivery of refined sugar advanced $11.20 (1.5 percent) to $780.70 per metric ton on NYSE.
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A new method of executing prearranged buy and sell orders was scheduled to be implemented at ICE on January 25, but the implementation of the method was delayed and will be announced after “consultation with market participants”. This method should prevent a ”cascading stop effect”. As for the current situation with the wave of sell orders, ICE isn’t planning cancellation of orders as ”trades were executed within reasonability limits and outside the threshold for trade cancellation”.

Jeff Bauml, a senior vice president at R.J. O’Brien & Associates, a broker in New York, said that “today’s fall is basically computer trading at its worst”.

March contract for delivery of raw sugar dropped as much as $0.0327 to $0.3204 per pound as of 14:00 on ICE, the biggest slump after a decline by 10 percent on December 30.
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Cotton jumped to the record as floods in Australia and Pakistan cut supplies. According to reports, Australia lost 300,000 bales, while Pakistan has a shortfall of 2.5 million bales. March futures for cotton delivery gained $0.04 (2.3 percent) to the record price of $1.7622 per pound as of 14:49 on ICE.

Copper prices also climbed to the record as the global economic growth have put strain on stockpiles. LME copper inventories dropped by 150 metric tons to 393,775 tons yesterday. Copper for delivery in Copper for March advanced 0.8 percent to $4.58 per pound on COMEX.
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Copper fell today from the record high on concerns that China may introduce austerity measures to cool its economic growth. Growth of consumer prices in China reached 5.1 percent in November, demanding from China’s government to take some actions to slow inflation. March futures for delivery copper went down $0.009 (0.2 percent) to $4.198 per pound at 10:57 on COMEX after previously the price reached $4.229, the highest level since May 2008.

Crude oil fluctuated today ahead of the meeting of the Federal Reserve policy makers. Fed’s Chairman Ben Bernanke suggested that Fed may expand its bonds purchasing program. January delivery for crude oil rose $0.04 to $88.65 per barrel as of 11:49 on NYMEX. January futures for Brent crude oil gained $0.31 (0.3 percent) to $91.50 per barrel on the ICE.
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Gold fell from a record and silver declined today as the dollar gained, decreasing attractiveness of the precious metals as an alternative investment. US currency gained for a third consecutive day against the basket of six major currencies on speculation that extended tax cuts will support US economy. February futures for gold delivery slipped as much as $26.70 (1.9 percent) to $1,382.30 at 12:43 on COMEX. March futures for silver delivery slid $1.422 (4.8 percent) to $28.355 per ounce.

Cotton futures gained as demand in China may grow. Global demand may also outpace supply. March delivery for cotton rose $0.0176 (1.4 percent) to $1.3213 per pound by 13:22 on ICE.
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Wheat gained on concerns that rainy weather in Australia will decrease output. Australia’s production may total 26.8 million metric tons in the 2010–11 season compared with a September prediction of 25.1 million tons. Exports may be 16 million tons, while they were predicted to total 18.4 million. March delivery for wheat rose 2.1 percent to $8.0950 per bushel on CBoT.
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Cocoa supplies are also threatened, though not because of nature’s, but by humans’ actions: namely, because of a political tension in Ivory Coast. The Constitutional Court said that the ruling of Ivory Coast’s electoral commission to name Alassane Ouattara a winner of the election, which was held on November 28th, was invalid. Last night at least six people were killed and 17 were wounded in a shooting at the party office of Ouattara. March delivery for cocoa added $110 (4 percent) to $2,868 per metric ton at 14:00 on ICE.
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The scenario of a price surge doesn’t look likely. Lower output in countries hit by bad weather may be outweighed by production in such countries as the US, Canada and Australia. Even in countries like Russia and European Union, where crops were harmed by weather, improving weather boosts prospect for winter wheat. Global inventories of wheat also remain plentiful, making possibility of a deficit very low.

Global output is expected to total from 643 million metric tons to 644 million. Global inventories are predicted to reach 177.8 million tons this month and 183 million by the end of this year. Global wheat consumption is estimated in a range from 657 million ton to 661.2 million. Prices forecast to remain mainly in a range of $4.95-$5.65 per bushel.
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Orange-juice futures rose to the highest level in six weeks on signs of increasing global demand. US exports of fresh oranges in July were twice as much as in the same period the last year. At the same time, outlook for supplies worsened as Brazil, the biggest grower in the world, will produce the smallest crop in at least eight years after an excessive precipitation harmed harvest. November delivery for orange juice gained $0.016 (1.1 percent to $1.481 per pound as of 14:00 on ICE.
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