Monday, March 14, 2011

20110314 1001 Global Market Related News.

Gold up 1 pct on Japan quake, Tokyo premiums jump
SINGAPORE, March 14 (Reuters) - Bullion rose as much as 1 percent on Monday as Japan battled to prevent a nuclear catastrophe after a massive earthquake and tsunami, sending premiums for gold bars to their highest level since February in Tokyo. 
"Some investors expect some of the Japanese insurance companies to start selling their dollar assets to raise money. Perhaps gold could be boosted as an alternative currency itself," said Ong Yi Ling, investment analyst at Phillip Futures in Singapore.

Stocks weaken after Japan quake, oil slides
HONG KONG, March 14 (Reuters) - Early losses for Asian shares deepened on Monday after Japan's massive earthquake sent investors scurrying to safe haven assets while the yen weakened on intervention fears.
"There are some investors buying on dips but overall sentiment is still cautious especially with the nuclear developments so we might see more volatility this week," said Cheung referring to efforts by Japanese officials to stem a broader fallout from the damaged reactors.

Oil : Brent crude falls to below $113 on Japan pessimism, Mideast
SINGAPORE, March 14 (Reuters) - Brent crude fell by as much as 1.2 percent to below $113 on investor pessimism that economic growth will slow in the wake of Japan's earthquake and tsunami, while easing unrest in the Middle East threw the focus back onto ample oil supplies.
"If you discount what has happened in the Middle East, events in Japan are negative for growth," said Jonathan Barratt, managing director at Commodity Broking Services in Sydney.

COMMODITIES: Loss of Japan demand to pressure oil,me
LONDON, March 13 (Reuters) - Energy markets will come under pressure on Monday as analysts agree Japan will need more energy to replace lost nuclear generation but doubt its crippled infrastructure can quickly ramp up imports.
"Short-term oil prices will decline because Japan is one of the world's largest oil importers and the Japanese economy will be severely and negatively impacted," said Andrew Moorfield, head of oil and gas division at Lloyds banking group.

GLOBAL MARKETS: Shares slide after Japan quake, oil retreats
HONG KONG, March 14 (Reuters) - Shares in Asia's developed markets fell on Monday and oil nursed losses after a massive earthquake in Japan sent investors scurrying to safe haven assets and raised concerns of falling demand for commodities.
Japanese stocks were down more than five percent in early trade while the yen  rose in volatile trade as the country battled to prevent a nuclear catastrophe after the earthquake and tsunami feared to have killed more than 10,000 people.

US retail sales up, rising gasoline clouds outlook
WASHINGTON, March 11 (Reuters) - U.S. retail sales posted their largest gain in four months in February, but a slump in consumer confidence in early March on rising gasoline prices pointed to slower consumer spending ahead.
Sales rose 1.0 percent for the eighth straight month of gains as shoppers stepped up purchases of autos, clothes and other goods even as they spent more for gasoline, the Commerce Department said on Friday.

US Grains Council: Japan Quake Will Likely Impact Grain Trade (Source: CME)
The massive earthquake and tsunami that struck Japan will likely impact grain trade with the country, a significant importer of agricultural goods, the U.S. Grains Council said. The disaster "may have caused significant damage to many of Japan's agricultural facilities and production areas," according to the council, which promotes U.S. agricultural exports. The tsunami, in particular, hit ports in northern Japan and affected feed mills and livestock operations, the group said. "It is too early to tell what effect this will have on Japan's agricultural sector, but it could be of significance," said Tommy Hamamoto, the councils' director in Japan.
Japan is the world's top buyer of corn and projected to account for 17% of total global corn imports in the marketing year that ends Aug. 31. It is the largest international customer for U.S. pork based on total sales, spending nearly $1.65 billion on imports in 2010 and accounting for more than 34% of total U.S. export sales, according to data from the U.S. Department of Agriculture and U.S. Meat Export Federation. Corn and lean hog futures fell sharply Friday as most farm products sold off on fears the disaster would slow demand from the key buyer. Further selling came from traders looking to just exit commodity markets because of the overall uncertainty that follows a natural disaster.

China Beidahuang Planning Large Farmland Buys Overseas (Source: CME)
China's Beidahuang Land Cultivation Group, one of the country's leading vehicles for the purchase of foreign agricultural properties, will buy 200,000 hectares of farmland overseas this year, with Latin America and South East Asia as the target areas, Chairman Sui Fengfu said. The move is a sign that Chinese agribusinesses, which haven't been as aggressive as metal and mining companies in offshore purchases, are responding to the government's call to move faster on overseas expansion at a time when Beijing is trying to ensure sufficiency in agricultural product supply. The group is the corporate vehicle for China's northeastern Heilongjiang provincial government land reclamation agency. It is one of China's largest farming businesses and also owns soyoil manufacturer Jiusan Oil & Fat Co. "We're planning 3 million mu of projects this year," Sui said on the sidelines of the National People's Congress, China's legislature. The mu is a Chinese measurement equal to about 0.0667 hectares.
Beidahuang is planning to purchase agricultural tracts such as edible oil plantations and grain acreage in a wide range of overseas locations, including Brazil, Argentina and the Philippines, Sui said. In December, the agriculture minister called on agricultural companies to pursue overseas expansion as China faces limited natural resources at home. "The time is ripe for the country's agricultural companies to embark on a 'go outward strategy'," Han Changfu said, calling it a ripe moment in globalization. However, it isn't the first time Beidahuang has embarked on a strategy to buy farmland. Early last year, the company said it closed deals to acquire thousands of hectares in Argentina and Cuba to produce rice, soybeans, wheat, rapeseed and black beans in exchange for Chinese investment in logistics and irrigation. While other large Chinese agribusinesses have mostly kept their focus domestic, regional rivals have raced to make inroads overseas to meet rising food demand.
In a deal completed in December, Singapore-based Wilmar International Ltd., the world's largest palm oil trader, beat China's Bright Food Group Co. to buy CSR Ltd.'s sugar unit, Australia's biggest refiner, for A$1.75 billion ($1.5 billion). Singapore-based Noble Group Ltd., agribusiness giant Bunge Ltd. and U.S.-based Cargill Inc. also completed major global deals last year for farm-related commodities.

Cargill Exec: Food Prices Not Yet Inflation Problem (sOURCE: CME)
The surge in global food prices isn't causing trouble for U.S. consumers, though it is too early to tell whether agricultural markets have peaked, a senior executive from commodities giant Cargill said. Emery Koenig, senior vice president of the Minneapolis-based company, said in an interview that producers have responded to the recent price spike to record highs, but that it is unclear whether the ramp-up in food supplies will continue. With oil prices back up above $100 a barrel, the outlook for food markets will depend in large part on events in the Middle East and expectations for U.S. crops, with the planting season set to begin in a little over a month, he said. "There are a lot of things of things at play," said Koenig. "We would not want to predict whether we've seen the top or we've still got further price appreciation to go through."
Global food prices set another new high in February, and the United Nations' Food and Agriculture Organization warned last week that rising oil prices could have the same magnifying effect that occurred during the commodity crisis three years ago. But so far the global food-price gains haven't left a big impact on kitchen tables around the country. Koenig said some price increases are being passed on to U.S. consumers, but it hasn't been "problematic." Food items that make up part of the consumer-price index registered their biggest gain in over two years in January, rising 0.5%. But the food component of CPI is up just 1.8% over the past year. More importantly for the Federal Reserve, the core index that strips out volatile food and energy costs is only 1% higher on the year, well below the central bank's informal target of just below 2%.
Despite the uncertainty caused by unrest in the Middle East--which was fueled to some extent by the pain inflicted by higher food prices--the response of governments so far has improved since the last spike, when some food producers restricted exports. Koenig said there has been "nothing out of the ordinary" in terms of export bans. But he said if governments start stockpiling food supplies out of concern of another pickup in prices, that would exacerbate the problem. Last year, Russia imposed a ban on wheat exports that is expected to remain in force until July, and Koenig said whether those restrictions are lifted will likely depend on how the crops turn out this year. Meanwhile, except for Libya, Egypt and other countries in the Middle East haven't altered their agricultural purchases much despite troubles in the region, he said.
Koenig, who was visiting Washington to participate in a gathering of senior officials from members of the Asia-Pacific Economic Cooperation forum, said the group of 21 economies can play a big role in ensuring food security needs around the world. The U.S. is hosting the APEC meetings this year, and Cargill is a member of the APEC 2011 USA Host Committee that advances the agenda of U.S. businesses. "I think APEC can help provide a much more healthy format going forward, a format for us to be having a dialog and establish polices that will have very import and solid long-term impact as opposed to anything in the short run," he said. APEC is seeking to address food security by promoting agricultural productivity and technologies as well as encouraging trade in agriculture goods by lowering export restrictions.
On Wednesday, U.S. Secretary of State Hillary Clinton said one way that APEC should combat poverty is to prevent food price spikes "by ensuring that none of our economies impose export restrictions on food."

US trade gap widens on imports, jobless claims up
WASHINGTON, March 10 (Reuters) - The U.S. trade deficit widened much more than expected in January as higher oil prices and surging imports of capital goods and cars overpowered record exports in a signal of strengthening domestic demand.
The trade gap grew by 15.1 percent to $46.3 billion from $40.3 billion in December, the Commerce Department said on Thursday. Analysts had expected a deficit of $41.5 billion.

China inflation tops f'casts, more tightening seen
BEIJING, March 11 (Reuters) - Chinese inflation topped expectations in February at 4.9 percent and looks set to climb further in coming months, adding to pressure for another dose of monetary tightening.
But data published on Friday also offered tentative signs that the government was making some headway in taming price rises without inflicting undue harm on growth in the world's second-largest economy.

Huge tsunami slams Japan, sweeps across Pacific
TOKYO, March 11 (Reuters) - The biggest earthquake to hit Japan since records began 140 years ago struck the northeast coast on Friday, triggering a 10-metre tsunami that swept away everything in its path, including houses, ships, cars and farm buildings on fire.
The Red Cross in Geneva said the wall of water was higher than some Pacific islands and a tsunami warning was issued for the whole of the Pacific basin, except for the United States and Canada, but Hawaii ordered the evacuation of coastal areas.

Time to get active in commodities -Investec
LONDON, March 10 (Reuters) - Investors banking on an across-the-board rise in commodity prices this year are setting themselves up for a fall and they should instead be actively managing for winners, Investec Asset Management said.
After several years of commodity prices moving largely as one, Investec's co-chief investment officer Mimi Ferrini looks favourably on active strategies that are bullish on natural gas and crude oil, while playing the interaction between the asset class and related equities, like gold mining companies.

PRECIOUS-Gold slips alongside oil, Japan quake supports
LONDON, March 11 (Reuters) - Gold slipped alongside oil on Friday but was supported after a major earthquake struck Japan and investors fretted about unrest in the Middle East.
It is on track for its biggest weekly decline since early January, down about $30 since hitting a lifetime high of $1,444.40 a troy ounce on Monday.

FOREX-Yen recovers, but seen volatile after Japan quake
LONDON, March 11 (Reuters) - The yen recovered after a major earthquake in Japan drove it to a two-week low against the dollar early on Friday, although it could stay choppy on near-term worries about the impact on a struggling Japanese economy.
Worries about growth saw investors cut exposure to risk and led many to sell high-yielding currencies and buy the 'safe-haven' yen, with talk of repatriation flows that could follow to pay for damage repairs also offering some support to the Japanese currency.

US wheat dips, on track for biggest weekly loss in 2 yrs
SINGAPORE, March 11 (Reuters) - U.S. wheat futures slid around half a percent falling for a fifth straight day to trade near three-month lows as bearish government estimates on stocks and concerns over economic growth continued to pressure the market.  "The wheat market has suffered significantly at the hand of bearish USDA report," said Luke Matthews, a commodity strategist at the Commonwealth Bank of Australia.

Pakistan flood caused 16 pct drop in rice exports - official
ISLAMABAD, March 11 (Reuters) - Pakistan's rice exports fell nearly 16 percent in the first eight months of the 2010/11 financial year because of last year's floods, a top industry official said on Friday.
"The shortfall in exports of non-basmati rice is mainly due to flood damage to the crop," Rice Exporters Association of Pakistan chairman, Irfan Ahmed Sheikh, told Reuters, referring to floods that began in late July last year and inflicted about $10 billion in losses.

Stocks sink on China, Saudi unrest; euro weakens
NEW YORK, March 10 (Reuters) - World stocks and commodities sank on Thursday after an unexpected trade deficit in China fueled concerns about the global economy, while the euro fell after a downgrade of Spain's credit rating by Moody's. "Saudi Arabia is the main supplier of oil around the world, so people are concerned," said Axel Merk, president and chief investment officer of Merk Investments in Palo Alto, California.

No comments: