World equities reel towards 8th day of losses
SINGAPORE, Aug 5 (Reuters) - - World stock markets fell for the eighth straight session on Friday to the lowest since late 2010, with more losses feared if policymakers do not come to the rescue soon to stabilise the euro zone's debt crisis and prevent the U.S. economy from sliding back into recession.
"Equity valuations are already pretty low but sentiment keeps deteriorating, so why come in and buy now?" said Shane Oliver, head of investment strategy at Sydney-based AMP Capital, which has more than $100 billion in assets under management.
Top Hedge Funds Put Likelihood of QE3 at 60% (Source: CNBC)
According to top hedge fund manager Anthony Scaramucci, hedge funds now believe the chance of another Fed intervention is greater than 1 in 2. Scaramucci's firm, Skybridge, surveys 950 hedge funds and after extensive conversations with peers, analysts at Skybridge are now predicting as great as a 60% likelihood that the Fed implements QE3. He says largely hedge funds are focused on something called the Taylor Rule in which “the Fed looks at a couple quantitative factors such as inflation, unemployment and economic growth and enters them into a calculus to determine where interest rates should be.” ”Using that analysis interest rates should be at minus 3.5%,” he reveals.
But that's not the only reason he thinks QE3 is back on the table. On top of that, he says the S&P slipped back down to the November 4th level. “The stock market benefits of QE-two have been erased." That’s problematic because the Fed had been hoping the wealth effect – or making people feel richer - would drive spending and, in turn, buoy the economy. But if the S&P is back at pre-QE2 levels, that prong of the Fed’s plan to stimulate the economy would no longer be relevant. On top of that he says hedge funds are concerned about the dysfunction in government displayed by the bickering among politicians over the debt ceiling. They're also concerned that businesses are not deploying cash and that there's stagnation in employment. Considering all these negative catalysts, “it seems ever more likely the Fed will have to intervene in the market to stave off another recession,” Scaramucci
Corn, wheat fall 1.5 pct on slowdown fears, soy at 1-month low
SINGAPORE, Aug 5 (Reuters) - U.S. corn and wheat lost more ground on Friday, while soybeans slid to a one-month low, falling more than 1 percent amid a broad based sell-off in Asian markets on concerns over global economic slowdown.
"The decline is mainly due to global economic concerns, equity markets are down as investors are fleeing the risky assets," said Lynette Tan, an analyst with Phillip Futures in Singapore.
Canada farm dept cuts wheat outlook, maintains canola
WINNIPEG, Manitoba, Aug 4 (Reuters) - Canada's agriculture department lowered its forecast for wheat production in its grain and oilseed outlook on Thursday.
Agriculture and Agri-Food Canada pegged the 2011/12 all-wheat crop at 23 million tonnes, down from its July estimate for 24 million tonnes.
Mexico, Central America seen headed for sugar squeeze
MEXICO CITY/GUATEMALA CITY, Aug 4 (Reuters) - Drought-ravaged Mexico's sugar harvest this year could crimp exports to the United States and force a search for imports to fill demand just as neighboring Central America is also short of sweetener.
The sugarcane growing season in the region runs from November to around June, and Mexico's 2010/11 crop came in at 5.18 million tonnes, below expectations due to frosts.
Ghana cocoa purchases near 1 million tonnes
ACCRA, Aug 4 (Reuters) - Ghana is on track to produce 1 million tonnes of cocoa this season, marking a near-60-percent jump in the world's No. 2 grower since last year, the head of the country's agricultural regulator said on Thursday.
Registered cocoa purchases, the best indication of output in the West African state, reached 980,000 tonnes by July 28 since the start of the year-long season in October, Cocobod Chief Executive Tony Fofie told Reuters.
Bulgaria harvests 4 mln T wheat from 94% acreage
SOFIA, Aug 4 (Reuters) - Bulgarian farmers have reaped 4.0 million tonnes of wheat from 94 percent of the sown area, flat on a year ago, the agriculture ministry said on Thursday.
The average yield of 4.05 tonnes per hectare was better than in 2010, but the crop matched last year's as farmers have planted less of the grain. The farm ministry hoped favourable weather would boost the crop to 4.1 million tonnes.
France raises wheat, barley, rapeseed crop forecasts
PARIS, Aug 4 (Reuters) - France's farm ministry on Thursday raised its estimate for this year's soft wheat crop, although expected output remained well down on last year due to a decline in yields.
The soft wheat crop in the European Union's top producer was now seen at 32.5 million tonnes, up from 32.0 million estimated in July but still down 8.8 percent on 2010 production of 35.7 million tonnes, the ministry said in a monthly note.
Brazil's Parana coffee trees get through a cold night
BRASILIA, Aug 4 (Reuters) - Coffee trees in Brazil's Parana state passed securely through a chilly night with temperatures warmer than first feared, a forecaster said Thursday.
A patch of light frost one agronomist observed was termed harmless. Forecaster Somar said the minimum temperature around the Londrina area in the north of the state, where much of the state's coffee production is concentrated, fell to 3 Celsius, rather than the forecast 1 C. Water freezes at 0 Celsius.
Oil heads for 10 pct weekly drop, biggest since May
SINGAPORE, Aug 5 (Reuters) - U.S. crude fell below $86 on Friday, heading for its biggest weekly drop since early May, as fears of a global economic slowdown drive investors to the exits in a commodities sell-off that has erased the benchmark's 2011 price gains.
"The U.S. economy appears headed for a double dip recession," said Monty Guild, chief executive officer of Guild Investment Management. "Even though we expect weak economic activity will lead to more money printing from central banks, the markets are going through a rugged period, which makes us want to reduce our exposure."
Australia Newcastle coal exports jump 36 percent in week
PERTH, Aug 5 (Reuters) - Thermal coal shipments from Australia's Newcastle port rose 36 percent to 2.535 million tonnes in the week ended Aug. 1, up from 1.864 million the previous week as the port ramped up exports after foul weather, the Newcastle Port Corporation said on its website on Friday.
Traders and brokers also said demand for the fuel was beginning to pick up after an extended lull following Japan's March earthquake, which squelched demand for coal imports from Australia's number one coal customer.
Copper extends losses on LME, tumbles 4 pct in Shanghai
SHANGHAI, Aug 5 (Reuters) - LME copper extended losses on Friday after investors fled risky assets the previous day on fears the United States was heading for another recession and a debt crisis was engulfing two of the euro zone's largest economies.
"There are too many uncertainties today and investors are averting risk," said Shanghai CIFCO Futures analyst Zhou Jie.
Zambia copper, cobalt ouput up in H1 2011-c.bank
LUSAKA, Aug 4 (Reuters) - Copper production in Zambia, Africa's top producer of the commodity, rose to 414,984 tonnes in the first half of 2011 from 399,062 tonnes in the same time frame last year, the central bank said on Thursday.
Cobalt output also rose, climbing to 4,353 tonnes in the first six months of 2011 from the 4,013 tonnes produced in the corresponding period of 2010, central bank spokesman Kanguya Mayondi told Reuters.
Gold bounces as Asian stocks dive; premiums steady
SINGAPORE, Aug 5 (Reuters) - Gold edged up on Friday as investors used bullion to shelter from the storm engulfing financial markets on concerns that the United States may be facing another recession and Europe's debt crisis is spreading to some of its largest economies.
"The market has dropped down too much, so bargain hunters are buying a little bit at the lower end. There doesn't seem to be too much change in sentiment."
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