Friday, March 23, 2018

Stock and Commodities Related News.

WRAPUP 2-China urges U.S. to "pull back from brink" as Trump unveils tariffs - Reuters News
23-Mar-2018 01:20:02 PM
Adds comments on odds of more U.S. tariffs, countries exempted from steel and aluminium tariffs, response from Chinese consumers
China says doesn't want trade war, but not afraid
Trump unveils plans for tariffs on $60 bln of Chinese goods
China targets $3 bln of U.S. pork, steel pipes, wine
Will take effect if no agreement reached with U.S.
By Ryan Woo and Adam Jourdan
BEIJING/SHANGHAI, March 23 (Reuters) - China urged the United States on Friday to "pull back from the brink" as President Donald Trump's plans for tariffs on up to $60 billion in Chinese goods brought the world's two largest economies closer to a trade war. 
The escalating tensions between Beijing and Washington sent shivers through financial markets as investors foresaw dire consequences for the global economy if trade barriers start going up.
Trump is planning to impose the tariffs over what his administration says is misappropriation of U.S. intellectual property. A probe was launched last year under Section 301 of the 1974 U.S. Trade Act.
"China doesn't hope to be in a trade war, but is not afraid of engaging in one," the Chinese commerce ministry responded in a statement. 
"China hopes the United States will pull back from the brink, make prudent decisions, and avoid dragging bilateral trade relations to a dangerous place." 
In a presidential memorandum signed by Trump on Thursday, there will be a 30-day consultation period that only starts once a list of Chinese goods is published. 
That effectively creates room for potential talks to address Trump's allegations on intellectual property theft and forced technology transfers. 
Trump said he views the Chinese as "a friend", and both sides are in the midst of negotiations. 
Meantime, China showed readiness to retaliate by declaring plans to levy additional duties on up to $3 billion of U.S. imports including fresh fruit, wine and nuts in response to imports tariffs Trump announced earlier this month on steel and aluminium, which were due to go into effect on Friday.
The inevitable fall in demand from a full-blown trade war would spell trouble for all the economies supplying the United States and China. 
Feeling the chill, MSCI's broadest index of Asia-Pacific shares outside Japan dropped 2.4 percent, tracking a large overnight fall in Wall Street shares, but perceived safe havens such as government bonds gained.
"The upshot is that today's (U.S.) tariffs amount to no more than a slap on the wrist for China," Mark Williams, Chief Asia Economist at Capital Economics, wrote in a note. "China won't change its ways. Worries about escalation therefore won't go away."
Williams estimated that the $506 billion that China exported to the United States drove around 2.5 percent of its total gross domestic product, and the $50-60 billion targeted by the U.S. tariffs contributed just around 0.25 percent. 
Trump, however, appears intent on fulfilling election campaign promises to reduce the record U.S. trade deficit with China.
U.S. multi-nationals at a business gathering in Shanghai were warned by Stephen Roach, a Yale University economist, "to prepare for the worst" and make contingencies until calmer heads prevail.
Roach said he could foresee "the Chinese government moving to restrict, in some form or another, the financial as well as the supply chain activities of American companies operating in this country."
Alarm over Trump's protectionist leanings mounted earlier this month after he imposed hefty import tariffs on steel and aluminium under Section 232 of the 1962 U.S. Trade Expansion Act, which allows safeguards based on "national security".
On Friday, Trump gave Canada, Mexico, Argentina, Australia, Brazil and South Korea and the European Union temporary exemptions. China was not exempted even though it was a far smaller supplier than Canada or South Korea. 
Also omitted from the exemption list was U.S. ally Japan, though a government spokesman said Tokyo would press to be included. And Finance Minister Taro Aso expressed empathy with Washington regarding the importance of protecting intellectual property.
China's retaliation against the U.S. tariffs on steel and aluminium appeared restrained.
Targeting $3 billion of U.S. imports, China has drawn a list of 128 U.S. products that could be hit with tariffs if the two countries are unable to reach an agreement on trade issues, the ministry said.
The commerce ministry said China was considering implementing measures in two stages: first the 15 percent tariff on 120 products including steel pipes, dried fruit and wine worth $977 million, and later, the higher 25 percent tariff on $1.99 billion of pork and recycled aluminium. 
U.S. wine exports to China last year were $79 million, according to data from the U.S. Wine Institute, which represents Californian wine makers.
The fruit growers of California, Florida, Michigan and Washington all stood to lose as China's list also included close to 80 fruit and nut products. U.S. exports of fruits, frozen juices and nuts to China amounted to $669 million last year, and it was the top supplier of apples, cherries, walnuts and almonds. 
"With the restrained response, China hopes Trump can realise his errors and mend his ways," said Xu Hongcai, deputy chief economist at the China Centre for International Economic Exchanges, a Beijing think tank.
"If we really want to counter, the strongest response would be to target soybean and automobiles," said Xu. "China is 'drawing its bow but not firing. We still have some cards to play."

(Additional reporting by Wang Jing, Lusha Zhang, John Ruwitch, Elias Glenn, Dominique Patton, Josephine Mason and Meng Meng; Editing By Simon Cameron-Moore)

REFILE-GLOBAL MARKETS-Stocks tumble, bonds and yen gain as trade war fears drive rush to safety - Reuters News
23-Mar-2018 02:33:02 PM
Refiles with the appropriate coding for market instruments
MSCI Asia Pacific index down 2.45 pct, Nikkei falls 4.5 pct
Spreadbetters expect European stocks to open significantly lower
Trump moves towards China tariffs, stokes trade war fears
Dollar/yen drops below 105.00 for first time since Nov 2016
Treasury yields sharply lower amid broad risk aversion
Crude up as Saudi Arabia says output curbs could last into 2019
But copper, iron ore prices drop on trade angst
By Shinichi Saoshiro
TOKYO, March 23 (Reuters) - The rumblings of a global trade war shook stock and currency markets on Friday after U.S. President Donald Trump announced long-promised tariffs on Chinese goods and Beijing pledged to fight any such war to the end.
Spreadbetters expected European stocks to open lower, with Britain's FTSE losing 0.9 percent, Germany's DAX falling 1.6 percent and France's CAC shedding 1.5 percent.
S&P futures were down 0.6 percent, suggesting a weaker open on Wall Street later in the day.
Trump signed a presidential memorandum on Thursday that could impose tariffs on up to $60 billion of imports from China, although they have a 30-day consultation period, raising the chance that final measures could be watered down.
Investors fear that the U.S. measures could escalate into a trade war, with potentially dire consequences for the global economy. 
Beijing urged the United States on Friday to "pull back from the brink".
"China doesn't hope to be in a trade war, but is not afraid of engaging in one," the Chinese commerce ministry said in a statement.
China unveiled its own plans on Friday to impose tariffs on up to $3 billion of U.S. imports in retaliation against U.S. tariffs on Chinese steel and aluminium products.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 2.5 percent as stocks across the region dropped. For the week, the index recoiled over 4 percent.
Shanghai shares were down 3.8 percent.
"The economic impact on both China and the U.S. will be determined by what form the tariffs end up taking. The effects are likely to be felt more strongly in the U.S. and will increase both consumer and producer prices," wrote Hannah Anderson, global market strategist at J.P. Morgan Asset Management.
"The equity market will bear the brunt of the market reaction. Most impacted will be the U.S., Korea, and Taiwan as companies domiciled in these markets make up a significant portion of the global production chain of Chinese exports." 
Japan's Nikkei dropped 4.5 percent.
Australian stocks lost 1.9 percent, Hong Kong's Hang Seng was down 3.1 percent, Taiwan shares  slid 1.6 percent and South Korea's KOSPI retreated almost 3 percent.
"A possible trade war between the United States and China is especially serious for the South Korean economy as it could directly or indirectly affect the country's trade with them as well," said Se Sang-young, an analyst at Kiwoom Securities.
Setting a downbeat tone for Asia, the Dow on Thursday shed 2.9 percent, the S&P 500 dropped 2.5 percent and the Nasdaq fell 2.4 percent. 
As equities took a beating, the yen, often sought in times of market turmoil, rallied against the dollar.
The greenback fell roughly 0.5 percent to as low as 104.635 yen, its weakest since November 2016. The dollar was down more than 1 percent on the week.
"In the longer run, protectionist policies touted by the United States could be watered down, in turn limiting the negative effect on trade and the global economy," said Masafumi Yamamoto, chief forex strategist at Mizuho Securities in Tokyo, referring to the U.S. decision to exempt some countries from steel and aluminium tariffs.
"But until the United States makes such concessions, global stocks will be under pressure and the yen will appreciate, especially if China decides to confront the U.S. measures."
The euro was 0.3 percent higher at $1.2334 
The dollar index against a basket of six major currencies slipped 0.3 percent to 89.615. It has lost roughly 0.7 percent this week, weighed down by a steady decline in U.S. Treasury yields.
Yield on the benchmark 10-year Treasury fell 7.5 basis points overnight as bond prices rose on jitters gripping the broader financial markets. 
The yield fell further on Friday to 2.792 percent, its lowest in six weeks.
The 10-year Japanese government bond (JGB) yield dipped to a four-month trough of 0.020 percent.
In commodities, oil prices recouped overnight losses after Saudi Arabia said that OPEC and Russian-led production curbs introduced in 2017 will need to be extended into 2019. 
U.S. crude futures were up 1.1 percent at $64.99 per barrel after losing 1.3 percent on Thursday and Brent gained 0.9 percent to $69.53.
Safe-haven spot gold rose to $1,339.12 an ounce, highest since March 7. 
Other commodities did not fare as well amid the trade war fears, with copper on the London Metal Exchange falling to a three-month low of $6,628.00 per tonne. 
Iron ore futures on China's Dalian Commodity Exchange lost more than 5 percent.

(Reporting by Shinichi Saoshiro; Additional reporting by Dahee Kim in Seoul
Editing by Eric Meijer, Richard Borsuk and Kim Coghill)

UPDATE 1-U.S. Congress approves $1.3-trillion spending bill, sends to Trump - Reuters News
23-Mar-2018 01:27:54 PM
Add details of spending bill; paragraph 14 onwards
By Richard Cowan
WASHINGTON, March 23 (Reuters) - The U.S. Congress voted early on Friday to approve a $1.3-trillion government funding bill with large increases in military and non-defense spending, sending it to President Donald Trump, who was expected to sign it into law.
With Trump's signature, the bill will avert a threatened government shutdown and keep federal agencies funded until Sept. 30, ending for now Washington's constant budget squabbles and letting lawmakers focus on getting reelected in November.
The Senate voted 65-32 for the bill, several hours after the House of Representatives passed it 256-167 on Thursday.
The votes capped a long struggle by Congress, which was supposed to have approved the government funding by last Oct. 1.
Since then, several stop-gap spending bills have kept the government open, except for two brief shutdowns earlier this year when Congress deadlocked and funding expired.
Despite Republican leaders urging passage of the bill, some Republicans voted no. Their party controls both chambers of Congress and the White House, but has struggled since taking power in January 2017 to approve budget legislation. 
Republican Senator Rand Paul spent part of Thursday on social network Twitter criticizing what he said was unnecessary spending in the sprawling bill.
"Shame, shame. A pox on both Houses - and parties. Here's the 2,232 page, $1.3 trillion, budget-busting Omnibus spending bill," Paul declared in one message.
He decried a "monstrous bill" teeming with money for decades-old programs. His last-minute objections played a key role in delaying the Senate's vote until the dead of night.
On Thursday, Representative Mark Meadows, who heads the far-right Freedom Caucus in the House of Representatives, said, "This omnibus doesn't just forget the promises we made to voters - it flatly rejects them."
He added, "This is not the limited government conservatism our voters demand."
Not all of the opposition, however, was over fiscal policy.
Before he would let the voting proceed, Republican Senator James Risch insisted on a promise that a wilderness area in his home state of Idaho would not be named after the late former Governor Cecil Andrus, a Democrat.
The legislation has provisions that appeal to conservatives, however, with its $80-billion increase this year to the military budget and more border security funding.
But significantly higher non-defense spending put conservatives on edge. In the House, 90 of the chamber's 238 Republicans revolted against the measure.
Coupled with recent tax cuts, the government funding bill is projected to lead to budget deficits of more than $800 billion for this year. Conservatives warned it could create problems for Republicans running for re-election in November.

Several Trump initiatives would suffer setbacks. At one point during prolonged negotiations he pushed for $25 billion in funds to fully build his border wall with Mexico.
The president's severe cuts to the Environmental Protection Agency, State Department and other federal agencies would also be scaled back.
White House budget director Mick Mulvaney told reporters the legislation "does a lot of what we wanted – not everything we wanted – but a lot of what we wanted on immigration."
Trump said on Twitter the bill would allow him to start building the wall, which he calls an essential part of efforts to reduce illegal immigration. "Got $1.6 billion to start wall on southern border, rest will be forthcoming," he wrote.
But Democrats, who have long opposed the wall, argued the added funds would help build or restore a range of other barriers, including existing fencing, but not a concrete edifice.
The $1.6 billion would also be used to hire more border patrol agents. But there would not be a significant increase in immigration agents, or in detention beds needed to step up immigrant deportations.
The Department of Homeland Security had sought a big boost in those officers' ranks to boost deportations of illegal immigrants.
Besides the largest defense buildup in 15 years, the measure includes new funds to improve infrastructure and counter Russian election hacking.
In response to public anger and frustration over mass shootings, it includes modest improvements to background checks for gun sales and grants to help schools prevent gun violence.
Those provisions were far short of steps many Democrats and gun control groups urged to prevent repeats of mass killings.

(Reporting by Richard Cowan; Editing by Kevin Drawbaugh and Clarence Fernandez)

UPDATE 1-Tencent loses $24 bln in market cap after Naspers' selldown - Reuters News
23-Mar-2018 12:53:34 PM
Tencent down 4.51 pct at midday vs benchmark's 2.81 fall
Decline follows 5 pct fall on Thursday
Top shareholder Naspers to sell 2 pct of stake
Firm reported profit beat estimates, revenue missed
Adds share update, Tencent and analyst comments
By Sijia Jiang and Donny Kwok
HONG KONG, March 23 (Reuters) - China's Tencent Holdings Ltd saw its shares down 4.51 percent at the midday trading break on Friday after the internet firm's largest shareholder, Naspers Ltd, said it would lower its stake for the first time in 17 years.
The Hong Kong-listed stock opened 7.8 percent lower at HK$405, its lowest opening price since Feb. 9, before regaining ground to HK$419.6 by noon. The benchmark Hang Seng Index was down 2.81 percent.
A day earlier, the stock fell 5 percent following Tencent's late Wednesday report showing quarterly revenue missed estimates as well as expectations of margin pressure, although profit beat forecasts.
Friday's decline wiped $24 billion off Tencent's market value, though at $508 billion, it is still Asia's most valuable listed company and fifth globally behind Apple Inc, Alphabet Inc, Inc and Microsoft Corp.
South African media and e-commerce group Naspers said on Thursday it planned to sell up to 190 million Tencent shares, or 2 percent of its holding, in a sale that could earn Naspers up to $11 billion. It also said it had no plans to further reduce its holding for the next three years.
"The funds will reinforce Naspers' balance sheet and be invested in classifieds, online food delivery and fintech globally," said CICC analyst Natalie Wu. "We think it is a good opportunity to buy into dips given Tencent's solid fundamentals."
Jefferies analyst Karen Chan said, "Given Naspers' largest single shareholding and board representation in Tencent, we believe its stake sale is unlikely to be a reaction to Tencent's quarterly results. Instead of a timed profit-taking move, we believe this is more to improve Naspers' own free cash flow and allow it higher flexibility in pursuing investment opportunities."
A Tencent spokeswoman said it was informed and supportive of Naspers' decision, and that Naspers' intention to keep its remaining stake for the next three years demonstrated its confidence in Tencent.

(Reporting by Sijia Jiang and Donny Kwok
Editing by Paul Tait and Christopher Cushing)

UPDATE 4-Saudi expects oil producers to extend output curbs into 2019 - Reuters News
23-Mar-2018 06:53:16 AM
Adds crude oil futures settlement prices
By Timothy Gardner and Valerie Volcovici
WASHINGTON, March 22 (Reuters) - OPEC members will need to continue coordinating with Russia and other non-OPEC oil-producing countries on supply curbs in 2019 to reduce global oil inventories to desired levels, Saudi Arabian Energy Minister Khalid al-Falih said on Thursday.
OPEC and non-OPEC countries struck a production supply agreement in January 2017 to remove 1.8 million barrels per day from global markets and end a supply glut.
The cuts helped lift oil prices to current levels of around $65 per barrel. The oil producers will convene in June in Vienna to discuss further cooperation.
U.S. crude oil futures settled on Thursday at $64.30 a barrel and Brent crude settled at $68.91.
"We know for sure that we still have some time to go before we bring inventories down to the level we consider normal and we will identify that by mid-year when we meet in Vienna," Falih told Reuters in an interview in Washington.
"And then we will hopefully by year-end identify the mechanism by which we will work in 2019."
It was unclear what oil supplies would need to be in 2019, he said.
Falih has previously said that OPEC would do better to leave the oil market slightly short of supplies rather than ending too early the output cut deal.
Falih said on Thursday there is a general acceptance among producers that further coordination "does not necessarily mean maintaining the same level of cuts.
"It just means that the mechanism has worked and they have committed to work within that mechanism for a much longer period," he said. A new framework "requires agility" and "a willingness to do things differently in terms of what levels of production as the market dictates." 
Saudi Arabia and Russia have spearheaded efforts to reduce global oil stockpiles to their five-year average, ending years of oversupply sparked by the rapid rise in production from shale oil producers in the United States.
Despite continued rapid growth in output from the United States, Falih said he did not consider the shale industry to be a threat.
Without shale supplies, he said, global supplies would have been tight.
Saudi Arabia needs high and stable oil prices if it is to succeed in turning the planned share listing of state oil company Saudi Aramco into the world's biggest share sale.
Saudi Arabia is planning to list up to 5 percent of Saudi Aramco in the offering. A successful IPO could give the company a total valuation of up to $2 trillion, making it the world's biggest oil company by market capitalization.
Falih said the kingdom may still move forward with the planned initial public offering (IPO) in the second half of 2018, despite previously raising doubts it could be delayed to next year.
The timing of a float would depend on market conditions and the kingdom is ready to execute the IPO "at any time".
"We have prepared all documentation to be ready to do both domestic and international listings," Falih said. "We have not closed the door on 2018."
He said the kingdom needed to be sure "that the market is ready and is this an optimum time to execute."
Falih said the company could be floated either domestically or internationally late this year. New York is still in the running for the IPO, but Saudi officials still need to weigh the potential legal risks of a listing in the United States, he said.
"We have concerns obviously Aramco is too big and too valuable and too important," he said. "We could be potentially at risk from some frivolous lawsuits and litigation that we have to consider in our final decision."
Legal challenges could arise from a U.S. law that would allow U.S. victims of militant attacks to sue foreign governments for compensation.

(Reporting by Timothy Gardner and Valerie Volcovici; editing by James Dalgleish)

PRECIOUS-Gold shines as trade war fears rattle markets - Reuters News
23-Mar-2018 12:00:43 PM
Trump may impose tariffs on up to $60 bln of Chinese goods
China targets $3 bln of U.S. imports
Gold up about 2 pct so far for the week
(Adds comments, updates prices)
By Eileen Soreng
March 23 (Reuters) - Gold prices rose early Friday on a faltering dollar and equities as investors scurried to safety after U.S. President Donald Trump moved towards long-promised anti-China tariffs, prompting a response from China amid fears of a global trade war.
On Thursday Trump signed a presidential memorandum that could impose tariffs on up to $60 billion of imports from China, but only after a 30-day consultation period that starts once a list is published.
China urged the United States to "pull back from the brink", while the Chinese commerce ministry unveiled plans to levy additional duties on up to $3 billion of U.S. imports in response to the steel and aluminium tariffs.
Spot gold climbed 0.7 percent to $1,338.26 per ounce at 0251 GMT. Prices touched their highest since March 7 at $1,338.99 earlier in the session and were on track for their best weekly performance since the week of Feb. 16, rising nearly 2 percent.
U.S. gold futures for April delivery rose 0.8 percent to $1,338.30 per ounce.
"A trade war will harm both the U.S. and Chinese economies... And any harm to the U.S. economy will depreciate the dollar pushing gold higher," said Ji Ming, chief analyst, Shandong Gold Group.
Against a basket of currencies, the dollar index was down 0.3 percent at 89.612. The yen hit a 16-month high against the dollar on Friday as concerns over rising global trade tensions triggered a bout of investor risk aversion. 
Investor appetite for a safe-haven asset such as gold rises during times of geopolitical and financial uncertainties and a weaker greenback makes the dollar-priced bullion less expensive for purchasers with other currencies.
"In the medium-term and short-term, I think gold will go higher, maybe to 1,350-1,380 levels," said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong.
Stock markets slid on Friday and perceived safe havens such as government bonds and the yen gained. 
Meanwhile, EU leaders were awaiting for the final word from Trump on whether the U.S. would apply tariffs to European steel and aluminium, said German Chancellor Angela Merkel, and warned of a firm response if he did.
"We opine that retaliatory tariffs will potentially create further more uncertainty over how global growth and trade may pan out into 2018, and could drag risk appetite further," said analysts at OCBC Bank.
Among other precious metals, silver gained 1 percent to $16.52 per ounce, while platinum was up 0.7 percent to $953.40 per ounce.
Palladium rose 0.6 percent to $985.75 per ounce.
(Reporting by Eileen Soreng in Bengaluru; editing by Richard Pullin) 

COLUMN-Soy traders breathe a little easier but watching China, U.S. trade spat -Braun - Reuters News
23-Mar-2018 02:00:00 PM
The opinions expressed here are those of the author, a market analyst for Reuters.
By Karen Braun
CHICAGO, March 23 (Reuters) - The ongoing trade tiff between the United States and China has recently caused concern in the soybean market that the U.S-imposed tariffs could jeopardize the country's top agricultural trade item with China.
But the initial response from China should bring about a sigh of relief for the U.S. soybean industry as it does not appear to be Beijing's target.
U.S. President Donald Trump signed a memorandum on Thursday targeting up to $60 billion in Chinese goods with tariffs, which would go into effect after a 30-day consultation period that begins once the list is published.
Early Friday, China responded with a list of $3 billion in U.S. goods that it would target if no agreement was reached including pork, steel pipes, and wine, but there was no immediate mention of soybeans.
Leaving soybeans alone is probably the smarter choice for China as it would be virtually impossible to shun the U.S. product altogether, though that was not necessarily the expected outcome.
Besides, a reduced dependability on U.S. soybeans would require increased involvement from competitors Brazil and Argentina, which either do not have the supply or the incentive to significantly ramp up their export programs, at least not in the short term. 
In 2017, soybeans accounted just over half of the dollar value of all U.S. agriculture-related exports to China, the total of which was about $24 billion.
The East Asian country is the world's No. 1 buyer of soy and is expected to take in roughly 100 million tonnes of the oilseed this year. The majority of those beans get crushed directly off the vessels into high-protein meal to be fed to China's enormous hog herd.

Last August, total soybean supply at China's ports hit 7.5 million tonnes, the largest in at least four years. Without bringing in any additional product, an inventory of this size would be depleted in about a month's time given the country's annual rate of consumption.
Between April and October, Brazil is overwhelmingly China's main soybean supplier, so China will naturally ease up on U.S. purchases in the near term.
But given the usage rate at Chinese ports, Beijing still keeps U.S. beans on speed dial during this time, since Brazil and Argentina would not be able to pick up too much extra slack. 
As of Dec. 31, leading exporter Brazil had a soybean stockpile of just 1.92 million tonnes (71 million bushels) according to the country's agricultural statistics body Conab. By Jan. 31, this supply dipped to 1.075 million tonnes (40 million bushels) according to the U.S. Department of Agriculture.
These numbers represent the supply that Brazil had left over at the end of its last soybean marketing year. For comparison, the 2016-17 U.S. leftover on Aug. 31 was 8.2 million tonnes (302 million bushels).
Although Brazil's ongoing harvest may end up surpassing last year's record of 114.1 million tonnes, much of that supply is already spoken for. The country is planning to export about 68 million tonnes of soybeans and crush upwards of 43 million throughout 2018.
When the 2017-18 cycle ends on Jan. 31, 2019, USDA predicts that Brazil's ending stocks will land at 1.325 million tonnes. Conab's target for Dec. 31, 2018 is even smaller at just 565,400 tonnes.
Although the recent drought will significantly limit Argentina's soybean output, the supply buffer should be sufficiently large heading into the 2017-18 marketing year that begins on April 1.
Argentina's agriculture ministry places carry-in stocks at 12.3 million tonnes (452 million bushels) while USDA has a more optimistic 18.4 million tonnes (676 million bushels).
These stocks make it appear that Argentina has room to expand its exports, but there are barriers that could keep that idea sidelined for now.
Argentina crushes a large majority of the soybeans it grows and has established itself as the leading exporter of soybean products. Sizable investments have been made in its soybean processing infrastructure, which may be threatened if exporters were to increasingly vie for supply.
Export duties also mean that Argentine shippers may be less incentivized when it comes to soybeans. Although the current tax of 28.5 percent will steadily drop to the 18 percent target by December 2019, there are no longer duties for corn and wheat, so the profit margin on soybeans must be competitive. 
It is also unknown whether Argentina is willing to maintain significantly lower supply levels like Brazil in order to step up its export program. USDA says that the country's ending stocks have been above 10 million tonnes for the past three years.
Brazil and the United States will account for 84 percent of global soybean exports in 2017/18 according to USDA. Shipments from all other countries are expected to total 23.9 million tonnes.
The United States shipped 36.2 million tonnes of soybeans to China in 2016-17.

(Editing by Lisa Shumaker)

GRAINS-Wheat firms, set to finish the week down more than 2 pct - Reuters News
23-Mar-2018 09:59:30 AM
SYDNEY, March 23 (Reuters) - U.S. wheat futures edged higher on Friday, though the grain was poised to record its third consecutive weekly loss as rains across a key producing region eased fears of widespread crop losses.
* The most active wheat futures on the Chicago Board Of Trade were down more than 2 percent for the week, extending three-week losses to 8.5 percent.
* The most active soybean futures was 1.5 percent lower for the week, after closing up 1 percent the previous week.
* The most active corn futures dropped more than 1.5 percent for the week.
* Wheat has been under sustained pressure this week after rains fell across the U.S. Plains, aiding crops that have suffered from sustained dry weather.
* The International Grains Council (IGC) forecast global grain stocks will fall in 2018/19, with the bulk of the decline seen in corn.
* The IGC said total grain stocks would fall by 46 million tonnes to 560 million tonnes, including a 42 million-tonne drawdown in corn to 265 million tonnes. Wheat inventories were seen declining by 3 million tonnes to 253 million tonnes.
* Declining Argentina crop estimates lent support to prices. The Buenos Aires Grains Exchange cut its estimate of the country's soybean crop to 39.5 million tonnes, from 42 million previously.
* Private analytics firm Informa Economics raised its forecast of U.S. 2018 soybean plantings to 91.5 million acres, a record high if achieved, and lowered its corn forecast to 88.9 million acres, trade sources said.
* U.S. farmers planted 90.1 million acres of soybeans and 90.2 million acres of corn in 2017.
* The yen hit a 16-month high against the dollar on Friday as concerns over rising global trade tensions triggered a bout of investor risk aversion. 
* Oil prices rose on Friday, pushed up by Saudi statements that OPEC and Russia-led production curbs that were introduced in 2017 will need to be extended into 2019 in order to tighten the market. 
* S&P 500 e-mini futures EScv1 fell 0.33 percent late on Thursday after U.S. President Donald Trump tweeted that he was replacing his national security advisor.
(Reporting by Colin Packham
Editing by Kenneth Maxwell)

UPDATE 1-Argentina 2017-18 soy harvest estimate slashed to 39.5 mln tonnes -exchange - Reuters News
23-Mar-2018 02:25:17 AM
Adds reduction of corn planting harvest from government, paragraphs 3, 4
BUENOS AIRES, March 22 (Reuters) - Argentine farmers are expected to harvest 39.5 million tonnes of soy and 32 million tonnes of corn in the 2017-18 season, the Buenos Aires grains exchange said on Thursday, down from prior estimates of 42 million and 34 million tonnes, respectively. 
The estimates marked the latest in a string of reductions to harvest forecasts due to a prolonged drought in the country's agricultural belt. While rains last weekend were expected to provide some relief, this year's soy crop will likely be much smaller than initial estimates for around 55 million tonnes.
Later on Thursday, Argentina's Agriculture Ministry reduced its estimate for planted corn area to 8.9 million hectares from its previous estimate of 9 million hectares. It reduced its estimate for commercial use corn area to 6.3 million hectares from last month's estimate of 6.5 million hectares.
"The area that cannot be harvested has increased due to the poor state of the fields that have suffered from a lack of moisture," the ministry said in its report.
(Reporting by Maximilian Heath and Luc Cohen; Editing by David Gregorio)

VEGOILS-Palm prices down as Malaysia export tax policy weighs - Reuters News
23-Mar-2018 01:11:06 PM
JAKARTA, March 23 (Reuters) - Malaysian palm oil futures slid slightly in early trade on Friday, as disappointment lingered over the government's decision to resume taxing exports of the edible oil.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange fell 0.73 percent to 2,432 ringgit ($621.20) per tonne at the midday break. Prices held relatively flat from the week before, inching up just 0.57 percent on week.
Trading volumes were thin at 23,143 lots of 25 tonnes each. 
"The market is factoring in news that the government will not extend the suspension of export tax," said David Ng of Phillip Futures in Kuala Lumpur.
"This means exports ahead could be softer as buyers shift over to Indonesia," he added.
Malaysia had suspended duties on palm oil exports for three months, and this week announced it would once again impose a duty of 5 percent.
Indonesia and Malaysia are the world's two biggest producers of palm oil.
In other related oils, the May soybean oil contract on the Chicago Board of Trade was up 0.16 percent. 
On the Dalian Commodity Exchange, the May soybean oil contract inched up 0.18 percent, while the May palm oil contract slid 0.39 percent.
Palm oil prices track the performances of other edible oils, as they compete for a share in the global vegetable oils market.

(Reporting by Kanupriya Kapoor; Editing by Sunil Nair)

Stock & Commodities Related News.

US STOCKS-Wall St gripped by trade war fears - Reuters News
22-Mar-2018 11:52:04 PM
Dow, S&P and Nasdaq all drop more than 1.5 pct
Trump plans tariffs on $50 bln worth of China imports
Industrials tumble: Boeing, Caterpillar down 3.5 pct
Rate-sensitive REIT and utilities sectors gain
VIX jumps to three-day high; Treasury yields drop
Changes comment, adds details, updates prices
By Sruthi Shankar
March 22 (Reuters) - The three major U.S. indexes fell more than 1.5 percent on Thursday, on track for their steepest drop in six weeks, gripped by the growing threat of a global trade war.
President Donald Trump was expected to lay the foundation for tariffs on Chinese imports worth around $50 billion, a move likely to trigger retaliation from Beijing. The presidential memorandum is expected to be signed at 12:30 p.m. ET.
China is preparing a range of responses and has threatened to retaliate by hitting U.S. agricultural exports.
"The markets should dislike the possibility of a trade war between United States and other countries," said Stephen Wood, chief market strategist for Russell Investments in New York.
"However, there's a lot of negotiation taking place there. Suddenly we're seeing smaller numbers and exemptions."
Still, major industrials Boeing and Caterpillar fell more than 3.5 percent.
Nine of the 11 major S&P sectors were in the red, with five of them down more than 2 percent. Only the interest-rate sensitive utilities and real estate sectors were higher after the Federal Reserve raised interest rates, as was widely expected, on Wednesday.
The Fed forecast at least two more hikes for 2018, also as expected. But nearly half of the policy makers projected three more this year and the pace of increases is seen quickening in the next two years, ending the years-long easy-money policy.
"What we've got is a strong risk-off trade, which I think is a follow on to the comments from (Fed Chair Jerome) Powell and some of the Facebook issues," said Paul Norte, portfolio manager at Kings view Asset Management in Chicago.
"Investors are looking to take some money off the table."
At 11:50 a.m. ET, the Dow Jones Industrial Average fell 446.9 points, or 1.81 percent, to 24,235.41. The S&P 500 lost 44.65 points, or 1.65 percent, to 2,667.28 and the Nasdaq Composite dropped 135.21 points, or 1.84 percent, to 7,210.08.
The Cboe Volatility Index, the most widely followed barometer of expected near-term volatility in the S&P 500, was up 3.25 points at 21.11, after touching a three-day high of 21.24.
U.S. treasury prices gained as the fears of a trade war sent investors to safe-haven investments.
The S&P 500 technology index, the best performing sector over the past year, fell 1.63 percent. Apple, Microsoft, Amazon and Alphabet dropped 0.9 percent to 3 percent.
Facebook shares fell 1.5 percent, reversing course after brief gains early in the session.
AbbVie slumped about 11 percent after the drugmaker said it would not seek accelerated approval for its experimental lung cancer treatment based on results from a mid-stage study.
Declining issues outnumbered advancers on the NYSE for a 2.79-to-1 ratio, and for a 3.05-to-1 ratio on the Nasdaq.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Dan Burns and Savio D'Souza)

UPDATE 7-Oil retreats after failing to hit $70 a barrel - Reuters News
22-Mar-2018 10:30:28 PM
Investors book profits after two-week price surge
Wednesday's gains were biggest one-day rise since November
Soaring U.S. production tempers bullish mood
Updates with comment, refreshes prices, adds options graphic
By Tom Balmforth
LONDON, March 22 (Reuters) - Oil prices fell on Thursday as investors booked profits after this week's rally, but losses were limited by the continuing efforts of OPEC and its allies to curb supplies.
Brent crude futures were down 66 cents at $68.81 a barrel by 1410 GMT, having retreated from a session peak of $69.70, close to its highest level since early February. U.S. West Texas Intermediate (WTI) futures fell 69 cents to $64.48.
Oil prices have risen nearly 10 percent in the past two weeks, boosted by a weaker U.S. dollar and tensions between Iran and Saudi Arabia that raised concern about Middle East supplies already restricted by an OPEC-led production pact.
Prices recorded their biggest one-day gain since November on Wednesday after an unexpected drop in U.S. crude inventories.
"The bulls are back in town and they're all looking for much bigger gains. But I think it is too early and today is really just a reality check," said Saxo Bank senior manager Ole Hansen.
"We have come within half a dollar of key resistance on May crude and that is attracting some profit-taking." 
The oil derivatives market shows most activity in the past week has centred around options to buy, known as "call options", which give the holder the possiblity to purchase oil at a given price by a certain date.
Call options to buy oil at $80 a barrel by the end of next month have changed hands more often in the past week than options at any other price level.
The U.S. Energy Information Administration said on Wednesday that U.S. crude inventories fell by 2.6 million barrels to 428.31 million barrels in the week ending March 16. 
ING said the drawdown was partly because of a drop in imports of about 500,000 barrels per day (bpd) to an average 7.08 million bpd last week and an 86,000 bpd rise in exports to an average 1.57 million bpd.
But the confident mood in the oil market has been tempered by U.S. crude production, which climbed to a record 10.4 million bpd last week, putting U.S. output ahead of Saudi Arabia and closing in on Russia's 11 million bpd.
U.S. production rises have been countered by the deal to cut output by the Organization of the Petroleum Exporting Countries, Russia and their allies. The agreement has run since the start of 2017 and is due to expire at the end of 2018.
"We continue to see fragility in the oil market," said Julius Baer's head of commodity strategy, Norbert Ruecker.
"Profit-taking risks still loom large, strong output growth challenges the market-tightening narrative and the supply deal's overdue transitioning remains blanketed in uncertainty."

(Additional reporting by Amanda Cooper in LONDON and Henning Gloystein in SINGAPORE
Editing by Edmund Blair and David Goodman)

Trump to set stage for China tariffs amid trade war fears - Reuters News
22-Mar-2018 11:27:29 PM
By Roberta Rampton
WASHINGTON, March 22 (Reuters) - U.S. President Donald Trump was expected to lay the foundation for tariffs on Chinese imports worth around $50 billion on Thursday, in a move likely to trigger retaliation from Beijing and stoke fears of a global trade war.
The tariffs will target China's high-technology sector and could also include restrictions on Chinese investments in the United States, U.S. Trade Representative Robert Lighthizer said on Wednesday.
The White House said Trump would sign a presidential memorandum "targeting China's economic aggression" at 12:30 p.m. EDT (1630 GMT) on Thursday.
"The president will announce the actions he has decided to take based on USTR's 301 investigation into China's state-led, market-distorting efforts to force, pressure, and steal U.S. technologies and intellectual property," a White House official said.
The tariffs would be worth between $50 billion and $60 billion, a source familiar with the process said.
The investigation by the United States under Section 301 of the 1974 Trade Act has identified theft from and coercion of U.S. companies to disclose their intellectual property as well as purchases by Chinese state funds of U.S. companies for their technology knowledge.
Lighthizer told the U.S. House of Representatives Ways and Means Committee that the aim would be to minimize the impact of any tariffs on U.S. consumers. 
China has threatened to retaliate by hitting U.S. agricultural exports.
Asked about the impact on farmers in conservative-leaning states, White House legislative director Marc Short said the administration was concerned but could not allow China to steal intellectual property.
"The president is looking to make sure he's protecting American businesses here," Short told MSNBC in an interview.
The Unites States also is expected to sue China at the World Trade Organization over alleged trade law violations as part of its planned trade announcement, the Wall Street Journal reported, citing a person with knowledge of the plans.
Lighthizer conceded China would likely hit back with measures on U.S. agricultural exports, particularly soybeans, and said Washington would impose counter-measures if that happened.

Since taking office, Trump has taken a hard line on trade, abandoning an Asia-Pacific trade pact and threatening to pull out of the North American Free Trade Agreement with Canada and Mexico.
He also has announced tariffs on steel and aluminum imports, with initial exemptions for Canada and Mexico. 
Lighthizer told a Senate committee on Thursday that the European Union, along with Argentina, Australia, Brazil and South Korea, would be exempted from the steel and aluminum tariffs, which become effective on Friday.
The National Association of Manufacturers urged caution on tariffs on Thursday, saying they risked provoking Chinese retaliation and making things more expensive for Americans.
"The only way we'll truly make lasting progress is through a strategic approach that uses both carrots and sticks to accelerate changes to Chinese policies," NAM President Jay Timmons said, urging a trade agreement with China.

(Additional reporting by Steve Holland, David Chance and Susan Heavey
Editing by Doina Chiacu and Paul Simao)

China's refined copper imports to fall 7.5 pct in 2018 -Antaike - Reuters News
22-Mar-2018 07:07:06 PM
Antaike sees China importing 3 mln T of refined copper 2018
Says labour talks in Chile, Peru create supply risk
Forecasts 6 pct growth in China's aluminium consumption
By Tom Daly
BEIJING, March 22 (Reuters) - China's refined copper imports will fall for the third straight year in 2018 as domestic production picks up and consumption slows amid weaker demand from the real estate sector, an influential research house said on Thursday. 
Antaike, research arm of the China Nonferrous Metals Industry Association, expects top copper consumer China to import 3 million tonnes of refined copper this year, down 7.5 percent from 3.243 million tonnes in 2017, He Xiaohui, an analyst with the agency, said in an industry outlook in Beijing. 
Despite the import drop, China's refined copper consumption will still rise this year, He said, although just 3.3 percent to 11.1 million tonnes, after growing 4.2 percent in 2017. 
Domestic production is expected to increase by 4.3 percent to 8.35 million tonnes as new smelters start up. That has Antaike projecting China's copper concentrate imports to rise by 3.7 percent to 4.5 million tonnes of metal equivalent this year. 
Outside China, growth in consumption is set to accelerate, while the threat of mine strikes persists, especially in Chile and Peru as labour talks loom, He said. The potential supply loss could have a bigger impact on the refined copper market than disruptions did in the first half of 2017, when inventories were high, the analyst said. 
Around 20 copper mines with labour negotiations pending will likely use the outcome of talks at BHP Billiton's Escondida mine in Chile, the world's largest, as their benchmark, said Fu Xiao, head of commodity markets strategy at Bank of China subsidiary BOC International. 
BHP said last week it has invited Escondida's workers' union to start talks on a new collective labour contract.
Analyst He also warned China's tighter restrictions on scrap copper imports could affect supply, forecasting that London copper prices, currently near $6,800 a tonne, would average around $6,900-$7,000 a tonne this year. 
China's aluminium consumption, meanwhile, is expected to rise by 6 percent to 37.6 million tonnes in 2018, according to Antaike aluminium analyst Yao Xizhi. 
That is 2 percentage points slower than in 2017 as demand from key industries like the power sector cools, said Yao, who also forecasts that China's exports of aluminium products would fall by 3.3 percent to around 4.08 million tonnes this year amid trade friction with the United States. 
Aluminium output in China, biggest global producer of the metal, is set to rise 3.6 percent to 38 million tonnes in 2018, he said, as 2.7 million tonnes of new capacity comes on line. 
Nearly 40 percent of China's operating smelting capacity is losing money at current Shanghai aluminium prices of around 14,000 yuan ($2,200) a tonne, Yao said, forecasting a trading range of 13,000-16,500 yuan this year. 
(Reporting by Tom Daly; Editing by Tom Hogue)

PRECIOUS-Gold steadies after hitting two-week high on Fed rate view - Reuters News
22-Mar-2018 11:02:29 PM
Fed hikes interest rates, still views two more hikes
U.S. central bank upbeat on 2019, 2020 economic outlook
U.S.-China trade war tension seen supporting gold
(Updates prices)
By Maytaal Angel
LONDON, March 22 (Reuters) - Gold steadied on Thursday below a two-week high hit in the previous session as the dollar slid after the U.S. Federal Reserve showed a less hawkish stance on rates than expected.
The Fed raised its key rate by 25 basis on Wednesday and flagged at least two more increases this year, stopping short of pointing to three increases that some economists predicted.
The dollar dropped to a month low versus a currency basket on Thursday, before recovering slightly and moving into positive territory. A stronger dollar makes dollar-priced gold costlier for holders of other currencies.
Although the Federal Reserve's outlook for 2018 was seen as bearish, the central bank was otherwise upbeat on the economy, revising up rate projections for 2019 and 2020 and raising the estimated longer-term "neutral" interest rate a touch.
"(Gold's) initial reaction to the Fed was positive, but then reading through to 2019 and 2020 you see potentially a faster pace of (rate) tightening, so it's like giving with one hand and taking away with the other," ICBC Standard Bank analyst Tom Kendall said.
"Gold is doing pretty well to be trading where it is. You've got conflicting signals on the macro-economic and political side, and softening (physical) demand, so net gold is comfortable in its existing range," he added.
Spot gold dipped 0.1 percent to $1,330.49 per ounce at 1440 GMT. Prices rose to a two-week high of $1,336.59 on Wednesday, and also registered their biggest single-day percentage gain since May 17, 2017.
U.S. gold futures for April delivery rose 0.7 percent to $1,330.40 per ounce.
In the wider markets, Europe and U.S. equities were in the red as technology stocks stayed under pressure and as Beijing braced for new tariffs from U.S. President Donald Trump on some $60 billion worth of Chinese imports. 
"We expect the prospect of a trade war between the U.S. and other economies to put a floor under gold prices in the short term but ultimately we think that Fed tightening will prove too strong a headwind," Capital Economics analyst Simona Gambarini told the Reuters Global Metals Forum.
"Considering that the Fed just hiked interest rates for the sixth time in this tightening cycle and revised up its rate expectations for 2019, the price of gold is faring quite well," she added.
Spot silver was down 0.4 percent at $16.45 per ounce, while platinum fell 0.4 percent to $950.20.
Palladium fell 1 percent to $980 per ounce.
(Additional reporting by Eileen Soreng Editing by Edmund Blair and Elaine Hardcastle) 

U.S. Cash Soymeal-Rail, truck offers flat; CIF market weak - Reuters News
22-Mar-2018 11:24:34 PM
CHICAGO, March 22 (Reuters) - Spot basis offers for U.S. soymeal held steady at processors in both the rail and truck markets on Thursday, dealers said. 
Bids and offers for soymeal shipped by barge to the U.S. Gulf fell, pressured by increased availability of supplies from South America, a trader said. 
Domestic demand from livestock and poultry producers was steady.
At 10:20 a.m. CDT (1520 GMT), Chicago Board of Trade May soymeal futures were up $2.10 at $366.60 a ton.
 (Reporting by Mark Weinraub; Editing by David Gregorio)

EU 2017/18 soybean imports down 5 pct, palm oil up 4 pct by March 20 - Reuters
22-Mar-2018 11:11:46 PM
PARIS, March 22 (Reuters) -
EU 2017/18 soybean imports had reached 9.2 million tonnes by March 20, down 5 percent from year-earlier 9.65 million, official data showed on Thursday.
EU 2017/18 soymeal imports were at 13.7 million tonnes, up 7 percent from year-earlier 12.7 million tonnes.
EU 2017/18 palm oil imports were at 4.5 million tonnes, up 4 percent from year-earlier 4.3 million tonnes.

UPDATE 1-Global grain stocks to fall in 2018/19 - IGC - Reuters News
22-Mar-2018 10:22:14 PM
Corn stocks seen falling by 42 million T in 2018/19
Wheat production, stocks also forecast to decline
Soybean production seen at record high in 2018/19
Adds details, quotes
LONDON, March 22 (Reuters) - The International Grains Council (IGC) on Thursday forecast that global grain stocks would fall in 2018/19, with the bulk of the decline seen in corn (maize).
"Initial projections for grains supply and demand in 2018/19 indicate a tighter outlook," the inter-governmental body said in a monthly report, which included its first full set of projections for next season.
"A modest fall in production is anticipated (mainly wheat), but with a smaller old crop carry-in, overall availabilities of grains will be down to a three-season low," it said.
The IGC said total grain stocks would fall by 46 million tonnes to 560 million, including a 42 million tonne drawdown in corn to 265 million tonnes, while wheat inventories were seen declining by 3 million tonnes to 253 million tonnes.
Total grains production in 2018/19 was projected to fall marginally to 2.087 billion tones, down 0.2 percent from the prior season, with consumption up 1.1 percent to 2.134 billion.
Global wheat production was forecast to fall by 17 million tonnes to 741 million, with the largest decline seen in Russia (74.5 million tonnes vs 84.9 million).
Corn production was seen rising by 7 million tonnes to 1.052 billion tonnes, boosted by an expected rebound in Argentina to 48.3 million tonnes, up from this season's drought-hit crop of 40.0 million.
Global soybean production was also seen rising in 2018/19 to a new record high of 354 million tonnes.
The IGC cut its forecast for 2017/18 global soybean production by 6 million tonnes to 341 million tonnes "reflecting worsening conditions in Argentina."

(Reporting by Nigel Hunt
Editing by Mark Potter and David Evans)

CBOT Trends-Wheat up 3-4 cents, corn up 1-2, soybeans steady-up 1 - Reuters News
22-Mar-2018 09:28:03 PM
CHICAGO, March 22 (Reuters) - Following are U.S. trade expectations for the resumption of the 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 delayed its weekly export sales report until Friday due to inclement weather delays in the Washington, D.C., area.
WHEAT - Up 3 to 4 cents per bushel
Wheat heading higher on technical buying and short-covering, bucking bearish forecasts for beneficial rains in the U.S. Plains winter wheat belt next week.
Russia's winter grain sowings have passed the winter well, with only 3 to 5 percent in poor condition, the head of weather forecaster Hydrometcentre said, indicating the country is on track for large crop in 2018.
CBOT May soft red winter wheat last traded up 4-3/4 cents at $4.58-1/4 per bushel. K.C. May hard red winter wheat was last up 6-1/2 cents at $4.72 and MGEX May spring wheat was last up 3-3/4 cents at $5.93.

CORN - Up 1 to 2 cents per bushel
Corn higher on technical moves after the CBOT May contract held above chart support at its 50-day moving average in the previous two sessions. Rallies capped by uncertainty about the impact of a potential trade war with China as U.S. President Donald Trump prepares to announce tariffs of as much as $60 billion on Chinese imports.
Traders starting to shift their focus to the U.S. Department of Agriculture's March 29 planting intentions and quarterly stocks reports.
CBOT May corn last traded up 1-1/2 cents at $3.76-1/2 a bushel.

SOYBEANS - Steady to up 1 cent per bushel
Soybeans steady to firm as market attempts to rise for a third session following Monday's one-month low in the CBOT May contract. Rallies capped by uncertainty about the impact of a potential trade war with China, the world's biggest soy buyer.
Rabobank in a monthly report on Wednesday said it expected Argentina's 2017-18 soybean production to fall "below 40 million tonnes" due to hot and dry weather.
CBOT May soybeans last traded up 3/4 cent at $10.30-1/2 per bushel.
(Reporting by Julie Ingwersen)