Japan stocks slip but set to outperform Asia in week
HONG KONG, Dec 10 (Reuters) - Japanese stocks slipped from a seven-month high on profit taking, though were poised to outperform the rest of Asia this week, while U.S. Treasuries were steady on the view yields had risen too high, too quickly.
"The environment looks quite favourable for equities now, but as we proceed through 2011 investors need to be alert to a change," Larry Kantor, head of research at Barclays Capital, said in a statement.
Gold steady on dollar, Ireland woe; choppy range seen
SINGAPORE, Dec 10(Reuters) - Gold held steady in choppy trade, as a dollar rally took a breather, and uncertainty over Europe's fiscal health continued to attract investors to bullion.
"Gold seems to be finding a base after the last two-day big sell-off," said a Singapore-based trader, "Physical demand should be the key to support at these levels; with downside critical support at $1,371."
China Nov soy imports up 47 pct vs Oct at 5.48 mln T
BEIJING, Dec 10 (Reuters) - China, the world's largest soy buyer, imported 5.48 million tonnes of soybeans in November, up 46.9 percent from October, figures from the General Administration of Customs showed on Friday.
Good crushing margins in the middle of the year coupled with expanding domestic crushing capacities have spurred crushers to increase imports of the oilseed, which is crushed into soyoil and soymeal, a feed ingredient.
Wheat heading for 3rd weekly gain; USDA report eyed
SINGAPORE, Dec 10 (Reuters) - U.S. wheat futures edged lower ahead of a key U.S. crop report but are on course to mark their third straight week of gains as weather problems in Australia and the United States threaten global supply.
"The market is trading sideways ahead of the USDA release but there has been upside pressure on the market, particularly for wheat, given the global concerns over weather in the past two weeks," said Garry Booth, trader at MF Global Australia.
Oil consolidates above $88 as China imports rebound
SINGAPORE, Dec 10 (Reuters) - Oil edged higher for a second day and consolidated gains above $88, after trade data showed China's crude imports rebounded in November, returning to trend growth.
"In terms of the dynamic of China, I believe the data, the policy and the road map for reform is suggesting further sustainable strong demand," said Geoff Howie, sales and markets strategist at MF Global in Singapore.
OIL: Crude steady as China imports seen rising
SINGAPORE, Dec 10 (Reuters) - Oil was steady on Friday, consolidating gains above $88, before Chinese trade data that may show imports from the world's second-largest crude user rebounded in November.
China's November crude oil imports are expected to have rebounded from a 19-month low in October, as refineries needed to refill storage tanks after stockdraws for two consecutive months and to sustain high production rates, with demand for oil products at an all-time high.
COMMODITY MARKETS: Mixed in thin year-end trade; silver jumps
NEW YORK, Dec 9 (Reuters) - Oil ended slightly higher and silver rallied while a broad range of other commodities were mixed in thin trade on Thursday as a rebounding dollar made investors ponder about price outlook ahead of the year-end.
"If the uncertainty with regards to economy and investor anxiety hangs out here, and people seek more wealth protection in terms of buying silver and gold, then, who knows? Prices can clearly go higher," said Dennis Wheeler, chief executive of top
U.S. silver producer, Coeur d'Alene Mines Corp.
GLOBAL MARKETS: U.S. bonds, S&P 500 and Nasdaq rise, euro falls
NEW YORK, Dec 9 (Reuters) - U.S. government bond prices recovered on Thursday from a sharp sell-off earlier in the week, supporting equity markets, but the euro fell after a rating agency's downgrade of Ireland revived concerns about the euro-zone debt crisis.
"A great, great auction to end the week and the recent outperformance in 30-years was a strong hint that buyers lurked," said William O'Donnell, head of U.S. Treasury strategy at RBS Securities Inc in New York.
Cabinet Official: China May Not Sustain Grain Self-Sufficiency. (Source: CME)
China may not be able to sustain its growth trend in grain production, threatening its vaunted policy of self-sufficiency in grains, a senior cabinet official said. The remarks are a departure from government rhetoric, and an unusual warning just a week after officials celebrated a seventh consecutive record grain harvest. China wants its grain production to provide for 95% of the country's consumption, a policy that has come under siege from rising wealth, an exodus from rural areas and tight availability of arable land. "There's a greater concentration of (grain) output in producing areas, and with water scarce in northern areas, the sustainability (of output) is worrying," Chen Xiwen, who heads the State Council's office on rural policy, wrote in an essay published on the website of the Chinese Academy of Social Sciences' Rural Development Institute. "It's inevitable that the rate of self-sufficiency will decline," he wrote.
Chen's comments come a day after the Ministry of Agriculture, in a briefing to reporters, reiterated its commitment to delivering an eighth consecutive bumper harvest next year. Ministry officials downplayed the likelihood of grain supply problems, saying rising costs of production had contributed to a sharp rally in agriculture complex prices this year. "I've gone to check in a lot of places and talked to a lot of experts, and I can tell you the main issue is the cost of production," said Sui Pengfei, the ministry's supervisor of market and economy communication. Sharply higher food prices drove China's inflation to two-year highs in October, prompting a raft of government measures to contain prices. By a conservative estimate, to increase domestic output enough to meet demand currently covered by imports would require more than 600 million mu, or 40 million hectares, of arable land that China doesn't have, Chen wrote. This "increases the government's difficulties in controlling prices," he wrote.
"The longer the period of grain output growth, the closer we get to the point of reversal," he warned. Chen acknowledged there isn't currently a serious problem, with output around 540 million metric tons a year and demand around 525 million tons. "In a normal year, there's still a surplus even after satisfying demand," he wrote. "But in terms of systemic demand and supply for grains, the outlook isn't that optimistic." China said it harvested 546.4 million tons of grains this year, a 2.9% increase from last year.
Commodity Price Volatility Must Be Reigned In (Source: CME)
Price volatility across the world's commodity markets has severe implications for the economic prospects of developing countries and needs to be contained, academics speaking at the Common Fund for Commodities conference in Brussels said. Market volatility has been dragged into the political spotlight in recent weeks after French President Nicolas Sarkozy told heads of state and government he wants to tackle choppy commodity prices as a key priority during France's presidency of the G-20 and G-8. The debate comes as prices in many commodities--like copper, which has traded as low as $2,817 a metric ton and high as $9,091/ton over the past three years--rocket to record or multiyear highs.
In an interview during the CTC conference, Machiko Nissanke, professor of economics at the University of London's School of Oriental and African Studies, argued unregulated trading activities in markets and the use of derivatives by speculators has generated "excessive" volatility, which make the economic management of commodity-dependent developing countries unworkable. In a new research paper, commissioned by the CFC and released at the conference Thursday, Nissanke calls for a wider debate among policy-makers on new initiatives to curtail excess volatility. Nissanke suggested schemes to reduce extreme market movements--such as "reserve" holdings, or the application of a multi-tier transaction tax system--as well as a global financial facility to ensure the fast disbursement of aid to in-need countries amid lows in the price cycle.
"The rapid increase in commodity price volatility is one of the most worrisome aspects of the recent development in commodity markets," Nissanke said. "This condition cannot be dealt effectively at the national level in isolation by the countries themselves," she said. "This calls for a serious rethinking and reappraisal with a view to creating a new international system of managing commodity-related developmental problems." Michael Morris, a professor at the University of Cape Town, said price volatility is keeping some developing economies in a cycle of commodity-dependence. "The real issue for Africa is can you industrialize on the back of commodities" by creating value-added services, he said. "For that we need to government policies" to improve price stability. The Commodity Futures Trading Commission, the U.S. futures regulator, is already writing up new rules for the $583 trillion over-the-counter derivatives markets under the Dodd-Frank financial overhaul law passed in July.
The expectation is the rules will increase transparency and regulators will be able to monitor the market, and speculation, more closely.
EU seeks curbs on energy and food speculators
BRUSSELS, Dec 8 (Reuters) - The European Commission unveiled plans on Wednesday to clamp down on speculators in commodities and combat insider trading and manipulation of gas and power markets as it sought to catch up with Washington's tough regime.
The two sets of blueprints were unveiled separately by the EU's financial services chief, Michel Barnier, and its energy commissioner, Guenther Oettinger.
ICE, CME more optimistic on CFTC position limits
CHICAGO/NEW YORK, Dec 8 (Reuters) - The top U.S. futures exchanges expressed confidence that a revised plan to clamp down on commodities market speculation will not unduly burden the market.
The comments on Wednesday by the chief executives of IntercontinentalExchange Inc and CME Group Inc were more optimistic than in the past, when exchanges, banks and other market participants sharply criticized the U.S. Commodity Futures Trading Commission's plan.
Commodity bulls, bears polarized by bond yield surge
NEW YORK, Dec. 9 (Reuters) - A surge in U.S. Treasury yields is forcing commodity traders to confront the less-familiar bond market, with views split over whether one of the biggest two-day gains in years is a signal to get out in front of a stronger economy or brace for the worst as interest rates rise.
Talk of price spikes and asset bubbles have done little to calm rattled nerves as gold and copper reached record highs this week and oil touched $90 a barrel for the first time since the price crash of 2008.
PRECIOUS-Gold steadies but still under threat from dollar
LONDON, Dec 9 Reuters) - Gold stabilised on Thursday, as U.S. Treasury yields fell for the first time in three days, a day after a sharp sell-off that knocked the bullion price from a record high to one-week lows.
This week's quarter-point rise in 10-year Treasury yields to six-month highs has boosted the dollar and unnerved investors over the near-term impact of Washington's tax plans on domestic finances and inflation.
FOREX-Dollar rally pauses as Treasury yields retreat
LONDON, Dec 9 (Reuters) - The dollar's rally paused on Thursday as U.S. Treasury yields retreated from a dramatic climb, prompting investors to book profits on gains in the currency.
A slide in the benchmark 10-year U.S. Treasury yield from a six-month high hit on Wednesday quelled demand for the dollar, while moves in major currencies were subdued given a dearth of major economic data or events.
World stocks gain again, US bonds steadier
LONDON, Dec 9 (Reuters) - World stocks ratcheted higher on Thursday, adding to December's rally, and U.S. Treasuries steadied following their recent sharp sell off. The dollar also clawed back some losses from the past couple of sessions. A combination of rising optimism about the U.S. economy, including over a proposed extension of tax cuts, and concerns about the deficit that those measures would worsen, prompted a sharp spike in Treasury yields on Wednesday as investors dumped the bonds.
"My hunch is that we are near a selling climax in U.S. Treasuries. Such a feeling is also in the market, dampening the dollar now," said Koichi Yoshikawa, head of forex trading at BNP Paribas in Tokyo.
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