STOCKS-Wall St set to open flat as trade concerns temper Italy optimism - Reuters News
31-May-2018 09:12:47 PM
- April core PCE up 0.2 pct; Consumer spending up 0.6 pct
- Sears, Dollar Tree, Dollar General slump after results
- SoftBank to invest in GM's autonomous vehicle unit
- Futures up: Dow 6 pts, S&P 1 pt, Nasdaq 7 pts
Adds comment, adds details, updates prices
By Medha Singh
May 31 (Reuters) - Wall Street was set to open flat on Thursday as optimism over renewed efforts in Italy to form a government were countered by worries of a looming trade war with the European Union.
Washington is set to announce plans to slap tariffs on EU steel and aluminum imports as early as Thursday morning, sources said, while the U.S. commerce secretary said any escalation of their trade dispute would depend on the bloc's reaction.
Shares of Steel Dynamics, AK Steel and US Steel gained between 3.3 percent and 4.4 percent and aluminum maker Alcoa rose 2.3 percent in premarket trading.
Another big gainer was General Motors, which surged 11.3 percent after Japan's SoftBank Group decided to invest $2.25 billion in its autonomous vehicle unit.
Friction between the United States and its trading partners have roiled financial markets, especially after U.S. President Donald Trump in March decided to impose 25 percent tariff on steel imports and a 10 percent tariff on aluminum.
"If it (tariffs) happens, eventually that could be a problem because we have to see retaliation. For now, it's already in the markets," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
"Basically there is a sense of relief that Italian situation is not going to lead to a major euro crisis."
Markets rebounded on Wednesday, with the S&P 500 recovering its losses from the previous session, helped by renewed efforts to form a government and avoid new elections.
At 8:56 a.m. ET, Dow e-minis were up 6 points, or 0.02 percent. S&P 500 e-minis were up 1 points, or 0.04 percent and Nasdaq 100 e-minis were up 7 points, or 0.1 percent.
Data showed that U.S. consumer spending jumped 0.6 percent in April, the biggest gain in five months and above Reuters' estimate of 0.4 percent rise, in the latest sign that economic growth was regaining momentum early in the second quarter.
Personal consumption expenditures (PCE), the Federal Reserve's favored measure of inflation which excludes the volatile food and energy components, rose 0.2 percent in April.
That left the year-on-year increase in the so-called core PCE price index at 1.8 percent, below the central bank's 2 percent target.
Among other stocks, Micron slipped 2.9 percent after Morgan Stanley downgraded the stock to "equal-weight".
Struggling department store operator Sears Holdings slid 7.2 percent after its quarterly profit slumped nearly 30 percent.
Dollar General declined about 7 percent and Dollar General dropped 8.3 percent after both discount retailers missed Wall Street estimates for their quarterly same-store sales.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Arun Koyyur)
PRECIOUS-Gold gains on weaker dollar, capped by fading Italy tensions - Reuters News
31-May-2018 07:59:46 PM
- Gold headed for second straight monthly decline
- Silver, platinum, palladium set for monthly gains
By Maytaal Angel
LONDON, May 31 (Reuters) - Gold prices edged up on Thursday as a dollar rally came off the boil, though upside momentum in the precious metal, seen as a safe haven asset, was capped by an easing of political tensions in Italy.
Italy's two anti-establishment parties have renewed attempts to form a government and avoid snap elections that investors fear would serve as a quasi-referendum on Rome's membership of the euro zone.
Italian bonds and European equities posted a second day of gains, while the dollar fell for a second day versus the euro, making dollar priced gold cheaper for non-U.S. investors.
The euro's rise came as two polls in Italy showed 60-72 percent of respondents wanted the country to remain part of the euro zone.
"The dollar should remain in the driving seat for gold," said Carsten Menke, analyst at Julius Baer.
"We have a euro dollar target of $1.10 in three months' time which should keep a lid on gold, assuming this political uncertainty doesn't escalate into a wider discussion about the existence of the euro zone or the euro."
Spot gold was up 0.3 percent at $1,305.28 per ounce at 1156 GMT, but was down 0.7 percent for the month, in what could be its second straight monthly decline.
U.S. gold futures for June delivery were 0.3 percent higher at $1,304.80 per ounce.
Helping gold were escalating trade tensions.
Washington will announce plans to slap tariffs on EU steel and aluminium imports on Thursday, sources said. The EU has said it does not want a trade war but will respond if Washington imposes tariffs.
China said on Wednesday it was ready to fight back if Washington was looking for a trade war, days ahead of a planned visit by U.S. Commerce Secretary Wilbur Ross.
Holdings of the largest gold-backed exchange-traded fund (ETF), New York's SPDR Gold Trust GLD, were unchanged on Wednesday from Tuesday, while the largest silver-backed ETF, New York's iShares Silver Trust SLV, rose 0.65 percent.
Spot silver rose 0.4 percent to $16.57 an ounce and platinum gained 0.8 percent to $913.20 an ounce.
Both metals were headed for a monthly rise of about 1 percent, their biggest since January.
Palladium was 0.3 percent higher at $986 an ounce and was headed for its biggest monthly gain since December, climbing over 2 percent.
(Additional reporting by Karen Rodrigues in Bengaluru; Editing by Mark Potter)
METALS-Zinc, copper dip as inventories rise; China data lifts others - Reuters News
31-May-2018 08:30:00 PM
By Eric Onstad
LONDON, May 31 (Reuters) - Copper and zinc slipped on Thursday after inventories rose, indicating supplies were healthy, while other metals were supported by strong manufacturing data in top metals consumer China.
Zinc inventories in warehouses certified by the London Metal Exchange jumped 7 percent in one day to 245,750 tonnes, the highest since November. They have also surged 84 percent since late February.
"There's certainly inventory out there and with a more restrained import appetite into China so far this year, it's not surprising that you've see some metal showing up in LME warehouses," said Nicholas Snowdon, metals analyst at Deutsche Bank in London.
"Overall, however, the trends in the zinc market have been quite encouraging in China over the past few weeks, namely stock draws and the import arb opening up," he added.
Other metals gained after data in China showed its vast manufacturing sector grew at the fastest pace in eight months in May, blowing past expectations and easing concerns about an economic slowdown.
"The macro and metals data we've seen out of China over the course of May has been on the positive side, providing a clear balance to the negative macro risks that have developed ex-China," Snowdon added.
* ZINC: LME benchmark zinc failed to trade in official open outcry activity and was bid down 0.7 percent at $3,107 a tonne, pulling back from a one-month high of $3,189.50 after the LME stocks data was released.
* COPPER STOCKS: LME copper on-warrant inventories - those stocks not earmarked for delivery - jumped 19 percent in one day to 226,675 tonnes.
* COPPER: LME copper eased 0.1 percent to trade at$6,823 a tonne in official rings, off an intraday peak of $6,895.50.
* COPPER SPREADS: LME time spreads in copper had been tightening, with the discount of the cash contract to three-month futures moving to $9.50 a tonne by Wednesday's close from a $34.75 discount on May 21.
The move was a result of investors covering short spread positions, Alastair Munro at broker Marex Spectron said in a note.
* NICKEL: LME nickel, the best performing LME metal this year, was bid up 0.5 percent at $15,205 a tonne, the highest since April 19.
The most-traded July nickel contract in Shanghai closed up 2.5 percent at 114,820 yuan ($17,933.62) a tonne, having earlier touched 114,870 yuan, its highest level since May 2015.
"Nickel in particular has returned to favour with investors, as the dynamics of weak supply growth amid signs of stronger demand from the (electric vehicle) market has spurred buying," ANZ wrote in a note.
* PRICES: LME aluminium traded up 0.7 percent at $2,285 a tonne in official activity, lead gained 1 percent to trade at $2,458 and tin was bid up 0.6 percent to $20,700.
(Additional reporting by Tom Daly in Beijing
Editing by Edmund Blair)
VEGOILS-Palm benchmark falls on weak demand outlook - Reuters News
31-May-2018 07:26:25 PM
- Palm down 0.45 percent on weak demand
- Malaysia's May exports down 8.8 pct - AmSpec
Updates with closing prices
By Fransiska Nangoy
JAKARTA, May 31 (Reuters) - Malaysian palm oil benchmark futures fell on Thursday as a weak demand outlook continued to put pressure on prices of the vegetable oil.
The palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange was down 0.45 percent to 2,429 ringgit ($610.61) a tonne by the close.
Traded volume stood at 32,308 lots of 25 tonnes each.
The contract erased some of its 0.91 percent gain from a day earlier after it rebounded from a three-week low.
"Weakness in demand is putting a lid on the prices," a Kuala Lumpur-based palm trader said.
Malaysia's palm oil exports in May were lower at around 1.2 million tonnes, down 8.8 percent from April's shipments, independent inspection company AmSpec Agri Malaysia said on Thursday.
Meanwhile, cargo surveyor Societe Generale de Surveillance (SGS) said the country's May palm oil exports fell 9.9 percent.
Sime Darby Plantation Bhd, the world's largest palm oil planter by land holdings, estimated crude palm oil prices to be within a range of 2,400 to 2,500 ringgit per tonne next month.
In Indonesia, the world's top palm oil exporter, shipments of palm and palm kernel oils fell 13.6 percent in April, data from the Indonesia Palm Oil Association showed.
In related vegetable oils, the Chicago July soybean oil contract traded 0.2 percent higher, while the September soybean oil on China's Dalian Commodity Exchange fell 0.3 percent.
Palm oil is affected by movements in rival edible oils as they compete for a share in the global vegetable oils market.
(Reporting by Fransiska Nangoy; Editing by Adrian Croft)
U.S. Natgas futures rise ahead of weekly storage report - Reuters News
31-May-2018 08:32:31 PM
May 31 (Reuters) - U.S. natural gas futures edged higher on Thursday on concerns storage builds in coming weeks will not be big enough to offset the massive storage deficit before next winter.
Analysts said utilities likely added 102 billion cubic feet (bcf) of gas into storage during the week ended May 25, the biggest injection for that week since 2015.
That compares with increases of 80 bcf during the same week last year and a five-year average build of 97 bcf for the period.
If correct, the latest increase would boost stockpiles to 1.731 trillion cubic feet (tcf), still 22.2 percent below the five-year average of 2.225 tcf for this time of year and the lowest for the week since 2014.
The U.S. Energy Information Administration will release its weekly storage report at 10:30 a.m. EDT (1430 GMT) on Thursday.
Front-month gas futures were up 4.8 cents, or 1.7 percent, at $2.933 per million British thermal units at 8:15 a.m.
For the month, the front-month was on track to rise about 6 percent, which would be its third monthly gain in a row and its biggest monthly increase since August 2017.
Traders noted prices were up despite the latest forecasts for less warm weather and lower air-conditioning demand next week than previously forecast.
Meteorologists forecast temperatures will remain higher than normal through at least the middle of June, just not as hot as previously forecast.
Thomson Reuters analysts cut their forecast for gas demand in the Lower 48 U.S. states to 72.1 billion cubic feet per day (bcfd) next week from the previous forecast of 73.2 bcfd on Wednesday.
That compares with projected usage of 71.5 bcfd this week and 69.5 bcfd last week on expectations LNG exports will start to rise soon.
The amount of gas going to the Sabine Pass and Cove Point LNG export terminals has averaged just 2.8 bcfd since the middle of May because of what traders said were unconfirmed reports of maintenance at Sabine Pass. That was down from a high of around 3.7 bcfd earlier in the month.
Production in the Lower 48 states has averaged a record 79.3 bcfd over the past 30 days. On a daily basis, output increased to an all-time high of 80.1 bcfd on Sunday, according to Thomson Reuters data.
(Reporting by Scott DiSavino; Editing by Steve Orlofsky)
POLL-U.S. Natgas stocks seen rising 102 bcf in week ended May 25 - Reuters News
31-May-2018 08:45:00 PM
Repeats item originally published on May 30 with no change to text
May 30 (Reuters) - U.S. utilities likely injected a higher-than-normal 102 billion cubic feet (bcf) of natural gas into storage during the week ended May 25, amid record production, a poll of analysts showed on Wednesday.
That compares with a year-earlier build of 80 bcf and a five-year average build of 97 bcf for the corresponding period. In the week ended May 18, utilities added 91 bcf to storage.
If correct, this week's build would boost stockpiles to 1.731 trillion cubic feet (tcf), the lowest for the week since 2014. That would be about 31 percent below the level in the same week a year ago and around 22 percent below the five-year average.
Production in the Lower 48 states has averaged a record 79.3 billion cubic feet per day (bcfd) over the past 30 days. On a daily basis, output increased to an all-time high of 80.1 bcfd on Sunday, according to Thomson Reuters data.
The U.S. Energy Information Administration will release its weekly storage report at 10:30 a.m. EDT (1430 GMT) on Thursday.
The forecast build last week came despite warmer than normal weather that boosted the amount of gas power generators burned to meet higher air conditioning demand.
There were 49 cooling degree days (CDDs) last week compared with 33 CDDs in the same week a year ago and a 30-year normal of 36 CDDs.
CDDs, which measure the number of degrees a day's average temperature is above 65 degrees Fahrenheit (18 degrees Celsius), are used to estimate demand to cool homes and businesses.
The Reuters poll had 19 participants, with estimates ranging from injections of 88 bcf to 107 bcf, and a median build of 102 bcf.
Early estimates for the week ending June 1 ranged from builds of 75 bcf to 97 bcf, with an average forecast for an increase of 83 bcf.
That compared with a build of 103 bcf for the same week last year and a five-year average increase of 104 bcf.
The following is a list of the poll's participants; all figures are in bcf:
| Organization | Forecasts |
| GMP FirstEnergy | 107 |
| Thomson Reuters Supply Chain & Commodities Research (SC&CR) | 107 |
| ARM Energy | 105 |
| Interfax Energy's Global Gas Analytics | 105 |
| PIRA Energy | 104 |
| Raymond James | 103 |
| Energy Aspects | 102 |
| PointLogic | 102 |
| Schneider Electric | 102 |
| Tradition Energy | 102 |
| Energy Ventures Analysis | 101 |
| Macquarie Group | 101 |
| Price Futures Group | 101 |
| First Enercast | 100 |
| EMI DTN | 100 |
| Stephen Smith Energy | 100 |
| Citi Futures | 98 |
| SMC Report | 98 |
| C H Guernsey | 88 |
(Reporting by Nithin Prasad in Bengaluru; editing by Scott DiSavino and Chizu Nomiyama)
UPDATE 4-Brent rallies to trade at largest premium to U.S. crude since 2015 - Reuters News
31-May-2018 08:37:09 PM
- Brent rises, WTI falls; spread widens to $10/bbl
- API crude inventories higher, against expectations
- Ahead of June 22 OPEC meeting, market is cautious
Updates throughout
By Amanda Cooper
LONDON, May 31 (Reuters) - Brent crude prices reversed earlier losses to hit their biggest premium against U.S. futures in over three years on Thursday, as the prospect of more inventory increases weighed heavily on West Texas Intermediate prices.
At 1221 GMT, Brent crude futures were up 6 cents at $77.78 a barrel, while U.S. West Texas Intermediate crude slid 68 cents to $67.53 a barrel.
That pushed the premium of Brent to WTI beyond $10 a barrel, the largest since March 2015. That spread has doubled in less than a month, as a lack of pipeline capacity in the United States has trapped a lot of output inland.
"The Brent/WTI is blowing out. I think there must be what looks like some capitulation going on in the spread between those two contracts," Saxo Bank senior manager Ole Hansen said.
The wider premium makes U.S. crude exports more competitive than those linked to the Brent price, such as North Sea or West African grades of oil.
U.S. crude stockpiles rose by 1 million barrels in the week to May 25, according to the American Petroleum Institute (API). Analysts had expected a drop of 525,000 barrels, which dented U.S. futures earlier in the day.
Brent meanwhile slid to a three-week low below $75 a barrel on Monday after the Organization of the Petroleum Exporting Countries and its non-OPEC allies including Russia indicated they could adjust their deal to curb supplies and increase production.
Sources told Reuters that Saudi Arabia, the effective leader of OPEC, and Russia were discussing boosting output by about 1 million barrels per day (bpd) to compensate for losses in supply from Venezuela and to address concerns about the impact of U.S. sanctions on Iranian output.
"The fact that we saw the Saudi/Russia announcement last week could have attracted some interest in narrowing the spread, given that we were looking for some of the geopolitical risk (in Brent) to be removed, but that's been overtaken by the domestic widening in crude prices in the U.S.," Hansen said.
Prices for physical barrels of U.S. light sweet crude delivered at Midland are at their largest discount to the benchmark U.S. futures price in almost four years.
"U.S. shale is alive and well and growing at an annual rate well in excess of 1 million bpd," consultant JBC Energy said in a report. "Growth is expected to remain in place, but widening crude differentials due to infrastructure bottlenecks do actually speak in favour of a slowdown in growth."
OPEC and non-OPEC producers have committed to cut output by 1.8 million bpd until the end of 2018 but will decide at a meeting in late June whether to prolong this.
"If this is a real correction, then the price should get down to the low $70s or even the mid-$60s," SEB chief commodities analyst Bjarne Schieldrop said. "The market needs to be cautious ahead of the OPEC meeting."
(Additional reporting by Roslan Khasawneh in Singapore and Jane Chung in Seoul
Editing by Edmund Blair and Susan Fenton)
CBOT Trends-Soybeans up 3-4 cents, wheat and corn up 2-3 cents - Reuters News
31-May-2018 09:27:31 PM
CHICAGO, May 31 (Reuters) - Following are U.S. trade expectations for the resumption of grain and soy complex trading at the Chicago Board of Trade at 8:30 a.m. CDT (1330 GMT) on Thursday.
NOTE: The U.S. Department of Agriculture's weekly export sales report is delayed until Friday due to Monday's federal holiday.
WHEAT - Up 2 to 3 cents per bushel
- Wheat firming in a light recovery bounce after the CBOT July contract dipped to $5.15-1/4 in early moves, its lowest in a week. The U.S. hard red winter wheat harvest is under way in portions of the southern Plains.
- Ukraine's 2018 winter wheat harvest is likely to fall to 24 million tonnes from 25.4 million tonnes in 2017 due to extremely dry weather this spring, the head of the state weather forecasting department said.
- Russia is expected to reduce its 2018 crop of winter wheat and rye by around 10 percent from a year ago due to dry weather, a state weather forecaster Hydrometcentre told Reuters.
- CBOT July soft red winter wheat last up 2-1/4 cents at $5.24-1/4 per bushel. K.C. July hard red winter wheat last traded up 2-1/4 cents at $5.43 and MGEX July spring wheat was up 7-1/2 cents at $6.19 a bushel.
CORN - Up 2 to 3 cents per bushel
- Corn higher in a light recovery bounce a day after the CBOT July contract fell to $3.90-3/4 a bushel, its lowest since April 25, on better-than-expected initial U.S. crop ratings. Traders monitoring forecasts for warm weather in the Midwest next week.
- China sold 2.4 million tonnes of corn at auction of state reserves, the National Grain Trade Center said.
- The sales volume represents 61.74 percent of total corn available at the auction.
- CBOT July corn last traded up 2-3/4 cents at $3.96-1/4 a bushel.
SOYBEANS - Up 3 to 4 cents per bushel
- Soybeans firm in a light rebound after a two-session sell-off tied to worries about U.S. trade relations with China, the world's biggest soy buyer.
- Market underpinned by soy logistics issues in Brazil in the wake of a truckers' strike.
- CBOT July soybeans last up 3 cents at $10.26 per bushel.
(Reporting by Julie Ingwersen)
