Japan ‘May Be’ Close to a Downgrade: S&P (Bloomberg)
Standard & Poor’s said Japanese Prime Minister Yoshihiko Noda’s administration hasn’t made progress in tackling the public debt burden, an indication it may be preparing to lower the nation’s sovereign grade. “Japan’s finances are getting worse and worse every day, every second,” Takahira Ogawa, director of sovereign ratings at S&P in Singapore, said in an interview. Asked if that means he’s closer to cutting Japan, he said it “may be right in saying that we’re closer to a downgrade. But the deterioration has been gradual so far, and it’s not like we’re going to move today.” A reduction in S&P’s AA- rating would be a setback for Noda, who took office in September and has pledged to both steady Japan’s finances and implement reconstruction from the nation’s record earthquake in March. It’s unrealistic for Japan to think it can escape the debt woes that have engulfed nations overseas unless it can control its finances, according to Ogawa.
German Business Confidence May Fall to Low (Bloomberg)
German business confidence probably fell to a 20-month low in November as the euro area’s worsening debt crisis threatens to tip the economy into recession. The Ifo institute’s business climate index, based on a survey of 7,000 executives, will drop to 105.2 from 106.4 in October, the median forecast of 40 economists in a Bloomberg News survey shows. That would be the lowest since March 2010. The institute releases the report at 10 a.m. in Munich today. Growth in Europe’s largest economy may slow to a near standstill next year as the worsening turmoil curbs demand in the 17-nation currency bloc, Germany’s biggest export market, the Bundesbank said Nov. 21. The crisis, which is heading for its third year, has prompted companies such as Deutsche Lufthansa AG (LHA) to scale back capacity to counter an anticipated slowdown.
German bond sale shakes euro, stocks subdued
SINGAPORE, Nov 24 (Reuters) - The euro fell to a six-week low against the yen and Asian stocks were subdued after an unsuccessful German bond sale raised alarm that Europe's ever-worsening sovereign debt crisis is starting to affect even the continent's economic powerhouse.
"We have been saying for a while that Germany was effectively the only sovereign in the euro zone, all the others were credits," said Russell Jones, head of global rates strategy at Westpac Bank in Australia, in a note.
FOREX-Euro spooked as German auction rings alarm bells
TOKYO, Nov 24 (Reuters) - The euro stayed near seven-week lows against the dollar on Thursday, having suffered a steep fall after a "disastrous" German bond sale fuelled fears the region's debt crisis was beginning to threaten even Europe's biggest economy.
"If Germany has to pay higher costs for its borrowing, it's obvious it cannot help the entire euro zone. If German bond yields keep rising, that could even be a trigger for break-up of the euro," said Makoto Noji, senior strategist at SMBC Nikko Securities.
China flash PMI raises risks for commodities: Clyde Russell
--Clyde Russell is a Reuters market analyst. The views expressed are his own.--
SINGAPORE, Nov 23 (Reuters) - At first glance the sharp drop in the HSBC flash manufacturing index for China looks dire as it seems to threaten the last source of sustained demand growth for commodities.
But before leaping to the conclusion that China's economy is heading for the same doldrums stifling Europe and the United States, it's best to look at the flash Purchasing Managers' Index in context.
Soybean prices may get a boost from spec shorts: Maguire
-- Gavin Maguire is a Reuters market analyst. The views expressed are his own. To get his real-time views on the market, please join the Global Ags Forum. --
CHICAGO, Nov 23 (Reuters) - Large speculators turned net short in the soybean market last week for the first time since July of 2010, and in so doing bucked a years-long trend by sharply increasing short positions and shedding long exposure at a point in the year when they typically do the opposite.
But the fact that noncommercial traders have gotten net short just as soybean prices hit one-year lows may actually prove to be supportive for the soybean market going forward, as any year-end position squaring will necessarily now require bouts of buying in the form of short-covering.
Tumble on economic fears; soy ends at 13-month low
CHICAGO, Nov 23 (Reuters) - U.S. wheat and soybeans sank to their lowest prices in more than a year as a downturn in China's manufacturing sector renewed global economic concerns.
"You just had follow-through selling," said Mike Krueger, president of The Money Farm.
Vietnam 2012 top rice crop output to rise 3.8 pct-report
HANOI, Nov 24 (Reuters) - Vietnam is expecting its largest rice crop to increase by 3.8 percent to 11 million tonnes of paddy next year, a state-run newspaper reported on Thursday.
Farmers in the Mekong Delta have so far planted 300,000 hectares (741,300 acres), or a fifth, of the 1.56 million hectares planned for the winter-spring season crop, which has the highest yield and is used mostly for export, the Rural Today newspaper said.
Canada grain sector faces sea change after Wheat Board
OTTAWA, Nov 23 (Reuters) - The end of Western Canada's grain marketing monopoly next year will ripple across the region, redrawing transportation patterns, forcing millers to find new sources of wheat and prompting all players to hedge risk in new ways, according to industry officials meeting in Ottawa this week.
Many point to Australia, which removed its grain-marketing monopoly three years ago, for an idea of how sweeping the changes will be in Canada, the world's No. 3 wheat exporter.
Brazil CS 12/13 cane crop likely at 562 mln T-JOB
SAO PAULO, Nov 23 (Reuters) - Brazil's next center-south sugarcane crop should rise by 7.5 to 16 percent from the current season, helped by an 8-percent increase in area, sugar and ethanol consultants Job Economia said on Wednesday.
Output in the region that accounts for around 90 percent of Brazil's cane output should reach between 540 million and 584 million tonnes, up from the 502 million tonnes being harvested in 2011/12, said Julio Maria Borges, the president of Job.
China scraps orders for up to 300,000 T of palm oil -traders
BEIJING/KUALA LUMPUR, Nov 23 (Reuters) - China has cancelled orders for up to 300,000 tonnes of refined palm oil over the past month as some traders had over-booked cargoes and domestic prices remain lower than that of imports, Asian traders said on Wednesday.
The scrapped orders were for cargoes scheduled for delivery in the first quarter of 2011 when China celebrates Lunar New Year festival in late January with a week long public holiday -- a peak demand season, they said.
Palm oil production up 10 pct in 2011 -Sampoerna
JAKARTA, Nov 23 (Reuters) - Output at palm oil firm Sampoerna Agro will grow by more than 10 percent this year, versus 289,000 tonnes in 2010 and higher than a previous estimate, an official of the Indonesian firm said on Wednesday.
Favourable weather will boost production, as will investments made on infrastructure such as road improvements and flood defences, Michael Kesuma, head of investor relations, told Reuters.
Indonesia's ICDX to launch tin, olein palm contracts in 2012
JAKARTA, Nov 23 (Reuters) - The Indonesia Commodity & Derivative Exchange (ICDX) will launch a physical tin contract and palm olein contract in early 2012, its chief executive officer said on Wednesday.
Material for the physical tin contract will be supplied by members of the Indonesia Tin Association, including the world's largest integrated miner, PT Timah , ICDX's Megain Widjaja told Reuters.
Brazil cannot sustain sugar export growth rate-Itau
SAO PAULO, Nov 23 (Reuters) - Brazil cannot continue to increase sugar export volumes at the same rate as in recent years but will hang onto about half of global trade, against heightened competition from origins such as Thailand and Ukraine, a senior analyst said on Wednesday.
"It's impossible for Brazil to maintain its rate of growth in market share," Giovana Araujo, head of agribusiness and equity research at Itau BBA, told Reuters in an interview on the sidelines of Brazil Sugar Week.
Brent oil up above $107 as winter, Mideast support
SINGAPORE, Nov 24 (Reuters) - Brent crude rose above $107 as potential strong winter fuel demand and turmoil in the Middle East offset fears that a global economic slowdown could hurt consumption.
"OECD inventories are so low and we're running into winter," he said. "Seasonally December is the highest demand period."
Oil Climbs From Two-Week Low on U.S. Stockpile Drop, Saudi Arabia Violence (Bloomberg)
Oil rose from the lowest price in two weeks as a surprise drop in U.S. stockpiles and violence in Saudi Arabia countered concern that Europe’s debt crisis will threaten the economy. New York futures gained as much as 0.6 percent after earlier swinging between gains and losses. Crude inventories declined last week to the lowest since January 2010, according to an Energy Department report yesterday. Saudi Arabia said four people were killed in violence in the kingdom’s eastern province, the official Saudi Press Agency reported. Oil dropped to the lowest since Nov. 9 yesterday after Germany failed to find buyers for 35 percent of bonds at an auction. “The decrease in inventory is going to be a supportive factor to keep crude oil from losing too much ground,” said Ken Hasegawa, a commodity-derivatives trading manager at Newedge Group in Tokyo. “One hundred dollars is not far from now but I really doubt it will exceed the recent high of around $103.”
Crude for January delivery rose as much as 61 cents to $96.78 a barrel in electronic trading on the New York Mercantile Exchange. It was at $96.76 at 3:49 p.m. Singapore time. The contract earlier lost as much 53 cents. Prices have gained 5.9 percent this year.
LME copper off 1-month low; grim econ outlook weighs
SINGAPORE, Nov 24 (Reuters) - London copper rose more than a percent, recovering from a one-month low hit earlier in the session, but a gloomy outlook for the global economy restrained gains and put prices on track for a fourth straight weekly decline.
"The demand outlook is deteriorating," said David Thurtell, director of commodity research at Citigroup in Singapore.
Mitsubishi buys out partner in Australia iron ore project
MELBOURNE, Nov 24 (Reuters) - Japan's Mitsubishi Corp has agreed to buy partner Murchison Metals' stakes in an iron ore development and a port and rail project in Western Australia for $315 million, aiming to rescue the two multi-billion dollar projects.
Beleaguered Murchison's shares jumped more than 50 percent on relief that Managing Director Greg Martin had managed to get the company out of a hole despite tough global conditions.
Indonesia tin smelters to talk exports, contract
PANGKAL PINANG/JAKARTA, Nov 23 (Reuters) - The Indonesia Tin Association is due to meet later on Wednesday to discuss its near two-month tin ingot shipping ban and details of a planned spot market, an official said.
Indonesia, the world's No.2 tin producer after China, has a track record of supply issues that impact prices.
COLUMN-Steel sector mirrors macro faultlines: Andy Home (Reuters)
--Andy Home is a Reuters columnist. The opinions expressed are his own--
Nov 23 - Global steel production is now starting to mirror the faultlines running through the macro manufacturing landscape.
Annualised production in October was 1.46 billion tonnes, the lowest global run-rate so far this year, while year-on-year growth slowed for the third consecutive month to 6.2 percent,according to the World Steel Association (WSA).
METALS-LME copper off 1-month low; grim econ outlook weighs
SINGAPORE, Nov 24 (Reuters) - London copper rose more than a percent on Thursday, recovering from a one-month low hit earlier in the session, but a gloomy outlook for the global economy restrained gains and put prices on track for a fourth straight weekly decline.
"The demand outlook is deteriorating," said David Thurtell, director of commodity research at Citigroup in Singapore.
PRECIOUS-Gold steadies; equities and firm dollar weigh
SINGAPORE, Nov 24 (Reuters) - Gold steadied on Thursday but declines in equities blamed on the euro zone crisis could prompt investors to sell bullion to cover losses, while a firmer U.S. dollar also put pressure on prices, which have slipped more than 10 percent since hitting record.
"The safe haven bid for gold could come back. For the short-term however, gold prices are still tracking broad movements in equity and commodity markets," said Ong Yi Ling, an analyst at Phillip Futures in Singapore.
Gold steadies; equities and firm dollar weigh
SINGAPORE, Nov 24 (Reuters) - Gold steadied but declines in equities blamed on the euro zone crisis could prompt investors to sell bullion to cover losses, while a firmer U.S. dollar also put pressure on prices, which have slipped more than 10 percent since hitting record.
"The safe haven bid for gold could come back. For the short-term however, gold prices are still tracking broad movements in equity and commodity markets," said Ong Yi Ling, an analyst at Phillip Futures in Singapore.
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