Monday, October 31, 2011

20111031 1634 Global Market & Commodities Related News.

European Stocks Decline, U.S. Index Futures Drop; Vestas Slumps (Bloomberg)
European stocks dropped as some investors remain reluctant to buy equities before the euro area’s leaders explain how they will fund their expanded bailout facility. U.S. index-futures and Asian shares fell. Vestas Wind Systems A/S tumbled 25 percent as the biggest maker of wind turbines cut its forecasts for margins and revenue this year after delays in expanding production at its new plant in Germany. Barclays Plc advanced 2.1 percent after the second- largest British bank by assets reported third-quarter profit before taxes of 1.34 billion pounds ($2.2 billion). The Stoxx Europe 600 Index slid 0.9 to 246.88 at 8:02 a.m. in London. The gauge slipped 0.2 percent on Oct. 28, having rallied 3.6 percent on Oct. 27, after the euro area’s leaders said they will boost their rescue fund’s capacity in a bid to stem the debt crisis. The gauge jumped 4.2 percent last week, its fifth straight weekly gain.
“Traders are unlikely to be in a risk-on mood like they were on Thursday until they receive more clarity,” said Jonathan Sudaria, a trader at London Capital Group. “With the European Central Bank press conference and the Group of 20 at the latter part of this week, traders may prefer to sit on the sidelines until then.”

Treasuries Rise on Speculation U.S. Job Growth Slowed; Monthly Loss Pared (Bloomberg)
Treasuries advanced, trimming the steepest monthly loss in 2011, on speculation a U.S. report this week will show jobs growth slowed in October and will be short of what’s needed to cut the unemployment rate. U.S. government debt also gained as Japan sold yen in the foreign-exchange market, raising expectations that it purchased dollars and will use the money to buy Treasuries. Benchmark 10- year yields were 62 basis points away from the record low set in September on speculation the Federal Reserve will buy more debt in coming months to support the economy. “Yields suggest that people still fear there is a downside risk in the U.S.,” said Hideo Shimomura, who helps oversee the equivalent of $79.2 billion in Tokyo as chief fund investor at Mitsubishi UFJ Asset Management Co., a unit of Japan’s biggest publicly traded bank. “The U.S. economy could grow well in one to two quarters, but after that I think it will decline.”

China Stocks Decline on Wen’s Property Remarks (Bloomberg)
China’s stocks fell for the first time in six days, narrowing the benchmark index’s biggest monthly gain in a year, after Premier Wen Jiabao said the government should “firmly” maintain property curbs. Anhui Conch Cement Co., China’s biggest producer of the building material, lost 1.6 percent after the government said local authorities should strictly implement tight policies in the property industry in the coming months. Huaxia Bank Co. and Bank of Communications Co. led a gauge of financial companies to its first drop in more than a week. Baoshan Iron & Steel Co., the biggest publicly traded steelmaker, slid the most in two weeks and China Railway Group Ltd. dropped 1.9 percent after earnings for both companies slumped in the third quarter. “It’s too early to celebrate after the rally as the government is still keeping its control policies,” said Tu Jun, a strategist at Shanghai Securities Co. “The market may be range-bound at current levels and the uncertainty over policy easing will lead to volatility.”

Dollar spikes vs yen on intervention, Asian shares fall
TOKYO, Oct 31 (Reuters) - Asian shares fell and precious metals slipped as the dollar spiked to a three-month high against the yen following Japan's intervention, prompting investors to book profits after last week's rally.  
"A weak dollar, short-covering and an overbought market since the beginning of October was enought to trigger a correction (as the dollar spiked)," said Colin Bradbury, Daiwa Capital Markets' regional chief strategist for Asia ex-Japan.

FOREX-Dollar hits 3-month high on yen as Tokyo steps in
TOKYO, Oct 31 (Reuters) - The dollar spiked to a three-month high against the yen on Monday after Japan intervened in the currency markets for the third time this year to stem the yen's rise.
The greenback, pressured recently by speculation about further easing by the Federal Reserve, spiked more than 3 percent to as high as 78.99 yen  in a matter of minutes, the highest since Aug. 5, after hitting another all-time low of 75.31 yen  on EBS earlier in Asian trade.

Norway oil fund wants more details on bailout scheme
OSLO, Oct 28 (Reuters) - Norway's huge oil fund is holding fire on possible investments in the euro zone's beefed-up rescue
mechanism until it has more information on how they would be structured, its chief executive said.
"We do not have sufficient detail really to comment on what it would do for us in terms of investment opportunity," Yngve Slyngstad told Reuters in an interview, adding the oil fund's existing exposure to the European Financial Stability Facility (EFSF) was small.
 
US grain futures flat; headed for monthly gains
SYDNEY, Oct 31 (Reuters) - U.S. grains and soybeans futures were flat, weighed down by weak demand, while prices were on track for gains this month after shedding more than 18 percent in September.
Chicago Board of Trade (CBOT) corn for December delivery  eased 0.04 percent to $6.54-3/4 per bushel in early trading after notching up its fourth weekly gain last week as U.S. growers held back from selling freshly harvested grain in the hope of improved prices. The contract is heading for around a 10 percent gain for October.

Argentine 2011/12 corn sowing advances swiftly-gov't
BUENOS AIRES, Oct 28 (Reuters) - Argentine farmers made swift progress to plant 2011/12 corn thanks to moist soils, though cold weather caused delays in some areas, the Agriculture Ministry said on Friday.
Argentina is the world's No. 2 corn exporter but dryness has delayed seeding of the crop. Heavy rains this month provided moisture to soils and helped speed plantings, but farmers are still behind last season's pace.

Ohio wheat acres could drop to record low this year
CHICAGO, Oct 28 (Reuters) - Wheat plantings could fall to a record low this year in Ohio despite a record-high insurance price guarantee, as incessant rains stalled wheat seedings in the top growing state of the soft red winter variety.
Wheat acres left fallow this winter are likely to be planted with corn in the spring, crop experts said, as corn futures remain at a historically high premium over wheat.

Drought affects 39 pct of Ukraine '12 winter grains
KIEV, Oct 28 (Reuters) - The share of sprouted Ukrainian winter grain crops which were in poor state jumped to 39 percent as of October 27 from 29 percent as of October 24, the Agriculture Ministry said on Friday, quoting data from regions.
The ministry said in a statement that farms had sown 7.7 million hectares of winter grains for the 2012 harvest and 4.5 million had sprouted so far. The ministry added that 3.1 million hectares of the sprouted crops were in good or satisfactory condition while 1.4 million hectares were in poor state.
 
Big EU maize crop mostly cut, offers export window
PARIS, Oct 28 (Reuters) - Maize harvesting in the European Union's major producing countries is mostly complete, confirming expectations of a big crop that should allow higher EU exports this season.
Maize has been boosted by favourable growing conditions this year as well as an increased planted area in several countries, even if summer heat in parts of the eastern part of the EU is thought to have limited yields there.

Russia unlikely to emerge as major sugar exporter
MOSCOW/LONDON, Oct 28 (Reuters) - Russia is moving toward self-sufficiency in sugar but a number of obstacles will prevent its emergence as a major exporter.
Russia, which was the world's top raw sugar importer in the early 2000s when it used to buy around 4 million tonnes a year, has slid down the rankings as an importer as strong prices encouraged domestic investment. The country looks set to produce just short of its consumption requirements in 2011/12.

Oil Declines in New York, Paring Biggest Monthly Increase Since May 2009 (Bloomberg)
Oil fell in New York on speculation demand will falter after the biggest monthly gain in more than two years and a surge in the dollar. Brent’s premium to U.S. crude slid to a four-month low. Futures fell as much as 1.2 percent after Japan weakened the yen for the third time this year and a technical indicator signaled prices may have risen too fast. A stronger dollar typically curbs demand for commodities from holders of other currencies. Crude prices at $100 a barrel would be unsustainable, according to the former head of the International Energy Agency. Oil is up 17 percent in October, the biggest monthly increase since May 2009. “My anticipation is that prices will consolidate,” said Jonathan Barratt, a managing director of Commodity Broking Services Pty in Sydney. Prices at $93 to $95 a barrel are “expensive,” he said.

Oil prices slip; G20 meeting eyed
PERTH, Oct 31 (Reuters) - Oil prices fell, with traders cautious ahead of the Group of 20 leaders' meeting later this week that will focus largely on the European debt crisis.  
"I think at the moment we're riding on the back of optimism created from the euro zone plan. In order for prices to stay at this level, the optimism must continue," Jonathan Barratt, managing director of Commodity Broking Services in Sydney, said.

Libya's oil exports to jump to 350,000 bpd in Nov-sources
TRIPOLI, Oct 30 (Reuters) - Libya's crude oil exports will jump to almost 350,000 barrels per day in November, more than double the volume sold the previous month, sources at the National Oil Company (NOC) told Reuters in an interview on Sunday.
The NOC plans to sell a total of up to 14 cargoes of oil from several fields, primarily in the east and at offshore sites which escaped the worst of the damage inflicted by the war and located in areas that were liberated soon after the uprising.

Bangladesh cuts H2 fuel oil import estimate
DHAKA, Oct 30 (Reuters) - Bangladesh will import up to 540,000 tonnes of fuel oil in the second half of this year, down from an earlier estimate of 700,000 tonnes, due to delays in power plant projects, a senior official at Bangladesh Petroleum Corporation (BPC) said on Sunday.
Bangladesh is buying large volumes of fuel for power plants burning diesel or fuel oil, even though these are costly, as domestic gas supply has failed to keep pace with demand.

European steel sector set for sharper slowdown
BRUSSELS, Oct 28 (Reuters) - European steelmakers are braced for a weak end to the year after fears of recession that emerged in August transformed a seasonal dip in the third quarter into an extended slowdown.
Weak developed markets, exacerbated by the euro zone debt crisis, and tight credit conditions in China, the world's biggest steel consumer and producer, have weighed on the sector, even if the costs of raw materials are falling.

Iron ore slump to boost shorter contracts, risks
SINGAPORE, Oct 31 (Reuters) - A slide in iron ore prices has driven miners to alter costly quarterly contracts to please Chinese clients, but spot pricing, which magnifies the impact of price swings, is still distant.
Iron ore's slump of 34 percent since early September revealed the flaws of a system that prices contracts based on the previous quarter's spot rates with a one-month lag, and opened the door for a more flexible mechanism for top consumer China while it grapples with weakening steel demand.

Global iron ore prices reaching turning point - Baosteel
SHANGHAI, Oct 31 (Reuters) - The recent slump in global iron ore price signals the market may be reaching a turning point, China's top listed steel mill Baoshan Iron & Steel Co Ltd (Baosteel) , said on Monday, adding that the price correction will allow a healthy expansion for steel producers and miners.
Baosteel, which reported a 51-percent slump in third-quarter net profit on Friday, also said it was in negotiations with top iron ore producer Vale SA  to review prices for fourth-quarter supplies.

China steel assn says iron ore prices likely to drop further
BEIJING, Oct 31 (Reuters) - The China Iron and Steel Association (CISA) said the price of iron ore was likely to decline further in the coming weeks, with steel mills still unwilling to buy and stockpiles of expensive ores remaining unsustainably high.
Zhang Changfu, CISA's vice-chairman, told a news briefing on Monday that stockpiles at eight major ports had risen to 98 million tonnes, with much of it bought at prices of around $165 per tonne.

Baosteel says domestic steel mills to see improving margins
SHANGHAI, Oct 31 (Reuters) - China's steel mills are expected to see their profit margins gradually improve, a senior executive from Baosteel    said on Monday.
The average profit margin for China's large- and medium-sized steelmills from January-September this year was 2.99 percent, Ma Guoqiang, general manager of Baosteel, said during an online results briefing.

Copper rolls back gains as Europe deal euphoria fades
SHANGHAI, Oct 31 (Reuters) - London copper fell below $8,000 on a firmer dollar and as hopes for a speedy resolution of Europe's debt crisis waned, but the metal is on track for its biggest monthly rise since December.  
"Commodities are under some pressure from a firmer dollar. Technically, Shanghai copper is going to meet with some resistance near the 60,000 yuan level and volatility is to be expected," CIFCO Future analyst Zhou Jie.

Congo copper surge hinges on infrastructure success
KINSHASA, Oct 28 (Reuters) - Congo's lofty expansion plans for copper output risk remaining on paper as a Chinese infrastructure deal has yet to fall into place and the government struggles to secure partnerships with mining firms to revamp railways and power stations.
Kinshasa has revived mining since the end of a devastating civil war, expanding copper output fivefold, but is still operating well below its massive potential from some of the world's biggest mineral reserves.
 
METALS-Copper rolls back gains as Europe deal euphoria fades
SHANGHAI, Oct 31 (Reuters) - London copper fell below $8,000 on Monday on a firmer dollar and as hopes for a speedy resolution of Europe's debt crisis waned, but the metal is on track for its biggest monthly rise since December.  
Continued supply disruptions at the world's second largest copper mine, Grasberg in Indonesia, and steady spot demand in China are expected to limit losses.

PRECIOUS-Gold slides 2 pct on Japan FX intervention
SINGAPORE, Oct 31 (Reuters) - Gold prices dropped about 2 percent on Monday, after Japan's intervention in the currency market triggered a rapid rally in the dollar, spooking precious metals investors.
Japan intervened unilaterally in the foreign exchange market on Monday to curb the yen's strength, sending the dollar up more than 1 percent against a basket of currencies.

Gold slides 2 pct on Japan FX intervention
SINGAPORE, Oct 31 (Reuters) - Gold prices dropped about 2 percent, after Japan's intervention in the currency market triggered a rapid rally in the dollar, spooking precious metals investors.
"The huge spike in the dollar is pressuring gold prices," said Ong Yi Ling, an analyst at Phillip Futures. "But so long as gold stays above $1,700, the sentiment should remain pretty bullish."

MF Global trades as usual on exchanges -SGX, LME
SINGAPORE/LONDON, Oct 28 (Reuters) - Exchanges in London and Singapore said it was business as usual on their bourses for futures broker MF Global Holdings Ltd  on Friday, after two rating agencies downgraded its debt to junk status.
MF Global, whose shares slumped 15.9 percent on Thursday and around 10 percent on Friday, had been trying to transform from a brokerage that mainly places customers' trades into an investment bank that bets with its own capital.

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