Brent drops below $112 after Japan nuclear plant blasts
SINGAPORE, March 15 (Reuters) - Brent crude fell by as much as 1.9 percent to below $112 after explosions rocked an earthquake-stricken Japanese nuclear plant on Tuesday, sending radiation levels higher and dampening sentiment across financial markets.
"People are going for risk aversion, so investors are liquidating assets and positions including in crude oil and gold," said Tetsu Emori, a fund manager at Tokyo-based Astmax Co Ltd.
Gold down 1 pct as equities tumble on Japan quake
SINGAPORE, March 15 (Reuters) - Gold slid more than 1 percent on Tuesday as declines in stock markets triggered by a deepening nuclear crisis in Japan prompted speculators to sell bullion to cover losses, while holdings on the ETF fell to their lowest since May last year.
"It still looks like it's constructive. It's just consolidating. But if we get a large sell-off in equities, people will tend to sell gold," said Jonathan Barratt, managing director of Commodity Broking Services in Melbourne.
Japan shares plunge on nuclear woes, hitting other assets
SEOUL, March 15 (Reuters) - Japanese shares plunged more than 14 percent on Tuesday as fresh explosions rocked a damaged nuclear plant and triggered a rise in radiation levels, sending investors fleeing from riskier assets such as equities and commodities across Asia.
"All focus is on the nuclear crisis. In the situation where the crisis appears to be worsening, foreign investors and domestic fund operators are pulling out from Japanese shares," Hideyuki Ishiguro, a supervisor at Okasan Securities in Tokyo.
Oil : Oil steady above $101, Japan, Saudi move eyed
SINGAPORE, March 15 (Reuters) - U.S. oil was steady above $101 on Tuesday, with investors weighing the risk from Saudi Arabia's troop deployment to Bahrain and wider tensions in the Middle East against the near-term demand sapping impact from Japan's earthquake.
Brent was also little changed -- down about 0.2 percent from Monday -- while natural gas extended gains on expectation that Japan will buy more LNG and other hydrocarbons to make up for the loss of nuclear power capacity.
COMMODITIES: Markets roiled by Japan; Saudi tensions support oil
NEW YORK/LONDON, March 14 (Reuters) - Brent oil hit a 2-1/2-week low in volatile trade on Monday before recovering and gold rose, as commodity investors weighed the impact of Japan's earthquake against rising tension in the Middle East.
"Japan's demand is expected to be way down in the near to medium term. But Saudi troops in Bahrain and fighting in Yemen and Libya bounced crude off their lows," said Phil Flynn, analyst at PFGBest Research in Chicago.
GLOBAL MARKETS: Asia stocks post losses at open, Nikkei falls 5 pct
SEOUL, March 15 (Reuters) - Shares in Asia's developed markets outside of Japan fell modestly on Tuesday on losses in the resource sector and companies exposed to the nuclear industry.
Japan's Nikkei average opened down 1.9 percent but quickly extended losses to trade down 5 percent, adding to losses of more than 6 percent on Monday. The yen fell slightly to 81.80 against the dollar.
Shell to update on investment plans amid turmoil
AMSTERDAM/LONDON, March 15 (Reuters) - Royal Dutch Shell will update investors on Tuesday on its exploration and production pipeline as continuing political unrest in the Arab world clouds the short-term outlook in the oil market.
Shell has been generating more cash after investing more than $100 billion in exploration and production over the past five years, so the focus is on how much it plans to invest after 2012 and the level to which it expects production to rise.
US wheat futures recover from sharp losses as lower prices attract buyers. The markets rebound from recent sell-offs with corn and soybeans. Grains took a hit Friday from concerns natural disasters would reduce demand from Japan, a major importer. Yet, delays in shipments and purchases are expected to be only temporary, analysts say. CBOT May wheat closes up 2c at $7.20 3/4 a bushel, while KCBT May wheat gains 2 1/2c to $8.25 1/2 and MGE May wheat rises 3/4c to $8.59 1/4. (Source: CME)
US corn futures finish slightly higher, snapping a six-session slide as users of the grain enter the market looking for a bargain. Buyers remain nervous about supplies, which are projected to fall to a 15-year low by the end of the crop's marketing year on Aug. 31. Trader suspect prices may have established a near-term low after reports of devastation in Japan did not push the market to a fresh low early Monday, says Jack Scoville, vice president of Price Futures Group. The market dropped nearly 11% last week. CBOT May corn rises 1 3/4c to $6.66. (Source: CME)
Earthquake's Impact On US Grain Exports Depends On Port Damage (Source: CME)
The location of Japan's devastating earthquake and tsunami is likely to limit the impact on trade of U.S. agricultural commodities, though export groups say they still don't have a clear assessment of infrastructure damage. Japan is the biggest customer for U.S. corn and pork exports, as well as a key consumer of soybeans and wheat. The disaster is expected to have initial impacts on the flow of goods into the country, yet the prolonged impact will hinge on the health of ports in central and southern areas and how widespread destruction is throughout the country. The massive earthquake Friday hit northeast sections of Japan the hardest. The disaster may have cut Japan's grain-warehousing capability by 15% to 20%, which could curb imports as the country has fewer places to store grains, according to AgResource Co., a Chicago advisory firm. The firm estimates the damage to storage could trim Japan's near-term corn imports by 500,000 to 1 million metric tons.
The country accounts for nearly 30% of U.S. corn exports, bringing in 15.4 million metric tons in the most recent crop year. The U.S. Grains Council said Friday that the disaster "could be of significance" to the grain trade. Yet a bulk of the damage appears to be at ports located in northern parts of the country, which are too small to handle U.S. ships, while larger ports in southern areas could be up and running in the next week, wrote Morgan Stanley analyst Hussein Allidina in a note to clients. "If this turns out to be the case, we expect no impact to trade flows," Allidina said. Feed-processing facilities have also been damaged, analysts said, which could disrupt imports as well. But the facilities are mostly located in the central part of the country, which wasn't been hit as hard, said Parr Rosson, an agricultural economist at Texas A&M University. Rosson said the overall impact will depend on how many people have been displaced or killed.
He added that with damage limited in major cities, long-term demand for agricultural commodities might not be significantly hurt. The U.S. Meat Export Federation won't make any revisions to its export forecasts until the trade group receives "factual information about the actual impact on factors such as consumer demand, Japan's national economy and domestic production and inventories," a federation spokesman wrote in an email. Tyson Foods Inc., which exports beef, chicken and pork, was "not currently aware of any disruption to our exports to Japan," a spokesman said in an email. Japan is the top international customer for U.S. pork in terms of sales dollars, accounting for nearly $1.646 billion in 2010, over 34% of U.S. total pork exports, according to data from the U.S. Department of Agriculture and U.S. Meat Export Federation. The disaster could have more direct impact on the rice market. Morgan Stanley noted that the tsunami appeared to hit Japan's rice-growing areas hard.
U.K. 2010 Food And Drink Exports Up 11.4% To Over GBP10 Bln (Source: CME)
U.K. food and non-alcoholic drink exports topped GBP10 billion for the first time last year, the Food and Drink Federation said, marking the sixth consecutive year of record export performance. The value of shipments rose 11.4% to GBP10.83 billion, more than double 2009's growth rate of 5.1%, due to "exceptionally strong growth in both mature and developing non-European Union markets," the report said. Although Ireland, France and the Netherlands remain the principal importers of U.K. goods, growth in Africa and a 34.6% rise in Asian imports meant non-European Union buyers accounted for 23.1% of exports, compared with 20.6% in 2009. Rising soft commodity prices also gave figures a boost. Second-half performance was responsible for nearly three-quarters of total growth between 2009 and 2010 as inflation tripled from 1.9% in January to 6.1% by December.
China Vice Minister: Too Early To Project 2011 Grain Output Rise (Source: CME)
While China remains hopeful for an increase in its summer grain output this year, it is too early to project whether the country's full-year grain harvest will rise, Vice Minister for Agriculture Wei Chaoan said. His comments add uncertainty to an already complicated grain outlook in the middle of prolonged drought that is affecting major wheat producing areas and local governments that raised their grain output targets for this year. Speaking at a press conference on the sidelines of the National People's Congress, China's legislature, Wei said China aims to stabilize its grain output at more than 500 million metric tons this year, ensure such output stays a top priority over the next five years and wants domestic grain output to supply more than 95% of demand. China is likely to reap the summer harvest this year as drought has not made a serious impact on wheat, Wei said. "The overall situation of summer grain production is good," he said, adding wheat acreage has increased and sowing quality was sound.
Summer grain, most of which is wheat, accounts for only 20% of total grain output, Wei said. Autumn grain, which includes medium- and late-season rice and corn, contributes about 70% of total grain output. Early-season rice represents about 10%. China's Shandong province, the nation's second-largest wheat producer, is expected to produce slightly more wheat this year, the local agricultural department said. Henan, China's top wheat producer, said previously it aimed to produce 31.25 million tons of wheat this year, up from 2009's 30.56 million tons. Wei said China consumed 54.6 million tons of fertilizer last year, adding the nation's production capacity of nitrogenous fertilizer has far exceeded its demand, but potash and phosphate fertilizer need imports. Commenting on vegetable prices that have been rising sharply since the second half of last year, Wei said "a recent sharp rise in vegetable prices wasn't caused by short supply."
Prices of farm produce on the international markets rose remarkably faster than in China, he said. Rising labor costs and excess liquidity also sent prices higher, he said. China's grain output rose 2.9% on year to 546.41 million tons last year, marking the seventh consecutive year of growth for China's grain output. The ministry said in a statement Saturday that China aims to raise its grain output capacity by 50 million tons by 2015.
China Looks To Overseas Farmland To Add To Supply (Source: CME)
Even as top Chinese officials used the annual legislative National People's Congress concluded to deliver a barrage of assurances on the country's food sufficiency, China is also on a drive to expand its control of overseas agricultural land as added security. China's state-backed Beidahuang Land Cultivation Group will acquire 200,000 hectares of farmland overseas this year in exchange for developing logistics and warehousing on the properties, Chairman Sui Fengfu said. The move is a sign that Chinese agribusinesses are responding to the government's call to move faster on overseas expansion in an area that is increasingly important due to swiftly rising demand and potentially unstable supply. Beidahuang, the corporate vehicle for China's northeastern Heilongjiang provincial government, is one of China's largest rice millers and, through subsidiary Jiusan Oil & Fat Co., one of its largest soy processors.
"We're planning 3 million mu (200,000 hectares) of projects this year," Sui said, adding that these tracts are in countries including Brazil, Argentina, Venezuela, Russia, Australia, Zimbabwe and the Philippines. Sui later told local media the company uses different methods of acquisition, including land leases or outright purchases, depending on the country. Early last year, the company said it closed deals to acquire thousands of hectares in Argentina and Cuba to produce rice, soybeans, wheat and rapeseed in exchange for Chinese investment in logistics and irrigation. Beidahuang's overseas plans, disclosed during the week-and-a-half-long congress, come at a time of receding drought domestic conditions which gave state officials the confidence to emphasize China's self-sufficiency in grains. Nie Zhenbang, director of the State Administration of Grain, said China is expected to reap a record wheat harvest this year.
The end of the drought and China's relatively high wheat reserves also led the chairman of state grain trader Cofco, Ning Gaoning, to state that the company isn't considering importing any more Australian feed wheat this year. In a news conference, Premier Wen Jiabao said inflation remained a threat, and vowed to strengthen agriculture distribution to combat price increases. Agriculture vice minister Wei Chaoan introduced a more sober line when he said Saturday it was too early for China to project whether the country's full-year grain harvest will rise. The private sector didn't completely agree with the more optimistic government officials. Liu Yonghao, chairman of China's largest feed producer New Hope Group, said China's grain output this year will likely fall due to poor weather conditions, as "the problems facing agriculture are still severe." Concerns remain over China's corn stocks, which are at historically low levels.
Nie acknowledged that China's corn reserves are under pressure, though they were still sufficient. China's food prices rose 11% in February, continuing to feed sharp inflationary pressures.
Japanese ports sustain major damage, some out for months
TOKYO/SINGAPORE, March 14 (Reuters) - Japanese ports handling as much as 7 percent of the country's industrial output sustained major damage from last week's earthquake, disrupting global supply chains and causing billions of dollars in losses, industry officials said.
Japan has begun assessing the damage to port infrastructure, vital to receiving aid, commodities and goods for rebuilding areas devastated by the 8.9 magnitude quake and tsunami that are likely to have killed more than 10,000 people.
TIMELINE-Glencore's road to life as a public company
LONDON, March 11 (Reuters) - Commodities trading giant Glencore is working towards an initial public offering (IPO) in London and Hong Kong which could value the Swiss-based firm at $60 billion. Glencore is aiming for an IPO in May, according to source close to the situation.
Below are some likely key dates for Glencore in its possible path to going public.
Japan grapples with nuclear crisis; economy at risk
FUKUSHIMA, Japan, March 14 (Reuters) - Japan scrambled to avert a meltdown at a stricken nuclear plant on Monday after a hydrogen explosion at one reactor and exposure of fuel rods at another, just days after a devastating earthquake and tsunami that killed at least 10,000 people.
Roads and rail, power and ports have been crippled across much of Japan's northeast and estimates of the cost of the multiple disasters have leapt to as much as $170 billion.
PRECIOUS-Gold rises as Japanese quake fuels risk aversion
LONDON, March 14 (Reuters) - Gold rose in Europe on Monday, recovering some of last week's one percent losses, as the impact of an earthquake in Japan added to upward pressure on the metal, driving prices towards recent record highs.
"Japan is another risk element in a plethora of events which have been important in the minds of investors in the past quarter," said Deutsche Bank analyst Daniel Brebner.
FOREX-Dollar rises vs yen as BOJ acts; euro boosted
LONDON, March 14 (Reuters) - The dollar rebounded from near record lows against the yen on Monday after the Bank of Japan announced a series of policy easing measures to shore up the economy in the wake of a devastating earthquake and tsunami.
"The BoJ is now committed to pumping the economy full of as much liquidity as it can. It is providing more monetary stimulus just as other central banks consider tightening, so interest rate differentials should favour a weaker yen," said Kathleen Brooks, research director at FOREX.com.
CBOT soy, corn fall; Japan quake rattles markets
SINGAPORE, March 14 (Reuters) - U.S. soy futures fell by around half a percent and corn also slipped as the nuclear accident at earthquake-damaged reactors unnerved commodity investors, and worries about supply eased. "Last year Japan took 15 million tonnes of corn from the United States. From the fundamentals side it's an issue for U.S. corn. It is bearish in the market in the short term but the question is: for how long the infrastructure is going to remain down?" Brett Cooper, senior manager of markets at FCStone Australia.
Japan concerns send world stocks to 6-wk low
LONDON, March 14 (Reuters) - World stocks fell to a six-week low on Monday, driven by a 7.5 percent fall in Japanese stocks, while oil tumbled as concerns grew about the economic damage from Japan's earthquake and tsunami. "Japan is going to be a focus and it is not going to be a good day... There are not enough positive reasons out there to buy," Matt Brown, trader at Catalyst Markets said.
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