U.S. oil nears 2-mth low on weak data, OPEC output talk
SINGAPORE, Jan 28 (Reuters) - U.S. crude futures fell to a near two-month low on weak economic data and talk of OPEC raising output to cool prices, while a rosier outlook for Europe supported Brent. ."The first signs are emerging that OPEC is responding, with a thinly veiled call for an emergency OPEC meeting by a Kuwaiti official and indications others are unilaterally raising output," JPMorgan analysts led by Lawrence Eagles said in its monthly oil report.
China's power demand growth to slow, gas speeds up
BEIJING, Jan 28 (Reuters) - China's power consumption growth will rise at a slower pace of about 9 percent this year, easing off a 14.6 percent expansion last year, the country's top energy agency predicted.
China will boost use of natural gas by a robust 20 percent this year, the National Energy Administration told reporters on Friday, as the world's top energy user aggressively promotes the lower-carbon fuel with a goal to triple its consumption in the next decade.
Spot gold hits 4-mon low; physical buying may support
SINGAPORE, Jan 28 (Reuters) - Spot gold fell to a four-month low, as an improved economic outlook in the U.S. and Europe continued to depress safe-haven demand, but physical buying is expected to lend some support. "It does seem sentiment has been shaken and technical charts aren't looking fantastic," said Yingxi Yu, an analyst at Barclays Capital.
Asian stocks extend drops in broad based selling
HONG KONG, Jan 28 (Reuters) - Asian stocks fell by half a percent,succumbing to a broad bout of profit-taking, as concern about rising inflation outweighed robust earnings. The Nikkei average fell by nearly 1 percent, weighed down by financial stocks, as investors worried about higher borrowing costs after Standard & Poor's cut Japan's credit rating by a notch for the first time since 2002.
OIL: Crude at near 2-month low on OPEC output talk
TOKYO, Jan 28 (Reuters) - U.S. crude futures extended declines to hit a near two-month low on Friday, weighed down by talk of OPEC raising output and weak economic data.
Brent's flirtation with $100 a barrel has increased pressure on OPEC to be ready with more supply to keep high-priced oil from stalling the economic recovery.
COMMODITIES: Broadly lower after weak US data; metals jump
NEW YORK, Jan 27 (Reuters) - Prices of oil, gold and most crops fell on Thursday as weak U.S. job and manufacturing indicators made investors worry about how demand for raw materials would fare in a struggling economy.
"It does show that the recovery is growing in fits and starts," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. "The market was looking for an improving trend, but we didn't get it."
GLOBAL MARKETS: Yen weak on S&P downgrade; rate concerns hit gold
NEW YORK, Jan 27 (Reuters) - The Japanese yen fell sharply against both the U.S. dollar and the euro on Thursday after Standard & Poor's cut Japan's long-term credit rating while the prospect of higher European interest rates weighed on commodities' prices.
"It is reasonable to expect that the Japanese downgrade will raise concerns over the sovereign rating of the U.S.," said Vasileios Gkionakis, macro strategist at Fulcrum Asset Management LLP in London, which oversees $900 million in assets.
Russia Likely To Extend Grain Export Ban - ASTON FFI Executive (Source: CME)
Russia may extend its grain export ban until autumn 2011 as farmers are unlikely to produce the hoped-for grain harvest of 85 million metric tons this year, a senior executive at ASTON FFI said. The Kremlin announced last year that it would stop grain exports until next summer, after the country's worst drought in decades slashed the country's 2010 harvest by nearly 40% and sent domestic prices soaring. The Agriculture Ministry has forecast a crop of between 85 million and 87 million metric tons of grain this year as Russia prepares for its spring sowing campaign. Officials expect spring acreage will exceed last year's 29 million hectares, after plantings of winter grains fell nearly 3 million hectares short of forecasts. But Peter Biermann, general manager of grain export operations at Swiss grain trader ASTON FFI, said the ban is likely to remain in place as farmers struggle against poor weather and financing to improve production.
ASTON FFI has assets in Russia including storage and oil seed crush. "Even if they do manage to get a crop of 85 million tons, that would be used to build government stocks," he said. "I think they will keep the ban until at least October." The Agriculture Ministry couldn't immediately be reached for comment Thursday. But Russia's trade representative in Australia, Yury Aleshin, last month said the government may extend the ban if there are problems with production. "It all depends on weather; we are not interested in artificial obstacles to trade but just compelled to do it," Aleshin said. Financial problems faced by Russia's farmers were evident this month when the government estimated spring sowings will cost $7.3 billion. The Kremlin said it has already given $1.2 billion to support purchases of fertilizers, fuel and seeds. "Farmers are facing a huge problem to get their grain in the ground and have a decent crop for 2011," said Biermann.
"We might see the seed go in the ground, but if so, it may not be good quality." Russia sent shockwaves through international markets when it announced its grain export ban at the end of June 2010. European wheat prices shot to highs not seen since 2008 and are now trading at double their levels from a year ago.
China Grain Demand To Rise 4 Mln Tons Annually (Source: CME)
China's grain demand will likely increase by 4 million metric tons a year over the next five years, while the local supply of agricultural products will face huge pressure, Vice Agricultural Minister Chen Xiaohua said. "It's becoming more and more difficult to effectively guarantee supply of major agricultural products," as availability will be restricted by tight land and water resources, extreme weather conditions and intense competition in international markets, Chen said at a conference, according to a transcript of his remarks on the ministry's website. Edible oil demand will rise by about 800,000 tons a year and meat demand about 1 million tons, he said. China's grain output in 2010 was around 546.4 million tons, while edible oil and meat production were 39.2 million tons and 77.8 million tons respectively, according to government data.
Compared with Chen's forecast, which represents about 1% in annual growth in grain demand, the agriculture ministry has yet to set a specific target for 2011 grain output; instead, the government said it would ensure grain output this year at above 500 million tons. Vice Agricultural Minister Han Changfu said earlier the amount was a "must" for grain self-sufficiency. But China's grain consumption will exceed output in the next 10 years amid population rise, change in diets and expansion in modern food and animal feed sectors, said Ding Shengjun, a researcher at the Academy of State Administration of Grain, in an commentary carried by the state-owned newspaper Futures Daily in mid-January. By 2010, China's grain demand is expected to be more than 600 million tons, exceeding the amount it can produce, Ding said.
To ensure grain supply, the agricultural ministry has ordered that grain acreage must be stabilized at more than 1.07 million hectares and the total arable land area must stay above 120 million hectares. Meanwhile, the government is increasing the role of science and technology in raising grain output.
Fed cautious on recovery, focused on joblessness
WASHINGTON, Jan 26 (Reuters) - The Federal Reserve showed on Wednesday it was in no rush to cut short its rescue of the U.S. economy, saying high unemployment still justified its $600 billion bond-buying plan even though the economy has shown some signs of improvement.
In a statement that was a bit more upbeat than after its meeting in December, the Fed acknowledged for the first time a rise in commodity prices that has fueled global inflation, but signaled it would not throw the U.S. central bank off course.
China Q1 GDP seen up 9 pct y/y, CPI up 5 pct -report
SHANGHAI, Jan 27 (Reuters) - China's annual economic growth is expected to ease to about 9 percent in the first quarter while consumer inflation is projected at 5 percent, according to a government think tank report published in the official Chinese Securities Journal on Thursday.
The economy grew 9.8 percent in the fourth quarter from a year earlier, while annual consumer inflation eased to 4.6 percent in December from a 28-month high of 5.1 percent hit the month before, according to data published last week.
Euro zone sentiment eases, inflation outlook surges
BRUSSELS, Jan 27 (Reuters) - Euro zone economic sentiment edged lower in January, pulled down by the services and retail sector and consumers, while inflation expectations jumped among companies and especially households.
The European Commission's monthly survey showed economic sentiment among the 17 countries using the euro eased to 106.5 this month from a revised 106.6 in December, well short of economists' expectations of a rise to 107.0 in a Reuters poll.
PRECIOUS-Gold eases below $1,340/oz as demand wanes
LONDON, Jan 27 (Reuters) - Gold fell in Europe on Thursday as the previous session's price rise dampened physical metal demand, and as a more positive view of the global economy reduced interest in the metal as a haven from risk.
A raft of positive economic data from the United States and more hawkish signals from some other central bank officials have also sparked speculation that certain major economies would move to raise interest rates sooner rather than previously thought.The precious metal, a non-interest bearing asset, tends to do less well in an environment when rates are rising.
FOREX-Euro hits 2-month highs vs dlr, yen on ECB comments
LONDON, Jan 27 (Reuters) - The euro hit a two-month high against the dollar on Thursday after a euro zone policymaker expressed concern about inflationary pressures, further highlighting a policy divergence with the United States.
The single currency also hit a two-month high against the yen, which fell broadly after S&P cut Japan's long-term debt rating to AA minus, saying the country's government lacked a coherent plan to tackle its mounting debt.
Wheat rises for 8th day; corn, soy near 2-1/2 year top
SINGAPORE, Jan 27 (Reuters) - U.S. wheat futures rose 0.6 percent the eighth straight gain, to a new 29-month top as buyers scrambled for supplies amid fears of food inflation causing unrest in top importing nations.
"I think there is heightened attention to food inflation as we don't know what is going to happen to crops in Argentina and we don't know whether La Nina is going to wipe out more crops," said Jonathan Barratt, managing director of Commodity Broking Services in Sydney.
S&P rattles investors with Japan credit cut
LONDON, Jan 27 (Reuters) - The yen fell and investors took a cautious stance on stocks and riskier assets after Standard & Poor's cut Japan's credit rating in a forceful reminder of the fragile state of some leading countries' finances.
"It is not a good sign.... A major economy like Japan being cut is not going to go down very well," said Mark Priest, senior equities trader at ETX Capital.
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