Oil extends decline towards $89 as dollar strengthens
SINGAPORE, Jan 5 (Reuters) - Oil fell for a second day on Wednesday, extending the previous session's 2.4 percent drop, as investor enthusiasm for commodities diminished with a stronger dollar, following a sharp year-end rally in raw material prices.
"Ninety dollars a barrel already has a very strong economic picture built into the price," said Tony Nunan, a risk manager with Tokyo-based Mitsubishi Corp.
U.S. wheat falls to 1-1/2 week low on strong dollar
SINGAPORE, Jan 5 (Reuters) - U.S. wheat fell more than 1 percent to its lowest in one-and-a-half weeks, while corn dropped half a percent to a two-week low as a strengthening dollar weighed on the commodity markets.
"We saw a broad-based commodities selloff yesterday and the pressure is continuing today as the dollar is a bearish factor for commodities," said Ker Chung Yang, an analyst at Phillip Futures in Singapore.
OIL: Crude extends decline as commodities slide
SINGAPORE, Jan 5 (Reuters) - Oil fell for a second day on Wednesday, extending the previous session's 2.4 percent drop, as investor enthusiasm for commodities diminished following a sharp year-end rally.
Tuesday's drop was the biggest single-day percentage loss since Nov. 16, when prices closed 2.97 percent lower.
NATURAL GAS: Natural gas ends up, cold offsets technical selling
NEW YORK, Jan 4 (Reuters) - U.S. natural gas futures ended up slightly on Tuesday as cold forecasts, particularly with much-below-normal temperatures seen for most of the country next week, offset technical selling after Monday's gains.
"The cold forecast is holding us up, but there's still a lot of gas out there," a New York trader said.
EURO COAL: Prices rise on Australia floods
LONDON, Jan 4 (Reuters) - Prompt physical coal prices rose on record floods in Queensland, Australia which halted coking coal exports.
"The Australian floods are the talk of the market right now," said Emmanuel Fages, an analyst with Societe Generale in Paris.
COMMODITIES: Markets dive after heady year-end gains
NEW YORK, Jan 4 (Reuters) - Commodities crumbled on Tuesday, falling by their most in seven weeks, as energy, metals and agricultural investors took profit on the heady gains made on thin holiday volume over th
"We've had a nice run in the last two to three weeks and we can't go lock-step up every day," said Evan Smith, co-manager at the $850 million commodities-based Global Resources Fund at U.S. Global Investors. "You're always going to have some volatility in a bull market and we're still in a bull market."
GLOBAL MARETS: Commodities sink on profit-taking, US stocks slip
NEW YORK, Jan 4 (Reuters) - Commodity prices fell sharply on Tuesday as investors took advantage of record high prices to take profits, a move accelerated by a rally in the U.S. dollar.
"I think this is more of a healthy correction. The fear trade is backing off somewhat after gold has recently rallied on global economic anxiety," said Mark Luschini, chief investment strategist of Janney Montgomery Scott, a financial services firm managing $50 billion in client assets.
PRECIOUS-Gold dips as dollar firms, holds above $1,400/oz
LONDON, Jan 4 (Reuters) - Gold eased on Tuesday in the first trading day of 2011 on the London financial markets, coming under pressure from a firmer dollar, but investor concerns over debt and inflation continued to support the metal.
Expectations that the euro zone debt crisis could worsen, concerns over the potential for inflation in developing economies and an increased focus on the U.S. deficit are set to maintain investment demand for gold, analysts said.
FOREX-Euro up broadly as risk appetite improves
NEW YORK, Jan 4 (Reuters) - The euro rose broadly on Tuesday, hitting a three-week high versus the dollar, after upbeat euro zone and U.S. data boosted risk appetite, although gains could be temporary given doubts over the euro region's bond issuance.
Over the last few months, the euro has gained in times of increased risk-taking in the market, taking bids away from the safe-haven U.S. dollar.
Second year of top gains set high hopes for 2011
NEW YORK/LONDON, Dec 31 (Reuters) - Commodities head into 2011 with a second year of asset-beating gains that elevated oil and grains to their highest prices since the financial crisis and copper to a record.
And analysts say it is not over yet.
The commodities sector as a whole rose 17 percent in 2010 to extend last year's 23 percent growth, as measured by the Reuters-Jefferies CRB index. That outpaced the 13 percent rise in the S&P500 stock index and 5 percent return in U.S. government bonds.
Asian, European car makers look to 2011 growth
PARIS/MILAN, Jan 3 (Reuters) - South Korean automakers predicted rising 2011 sales on U.S. and Chinese growth, while France's car market ended a negative 2010 on a high note, with drivers flocking to use scrapping bonuses before they ran out.
Carmakers are increasingly relying on growth in high-profile emerging markets like China, Brazil, Russia and India. The U.S. market is gradually recovering, but European markets including Spain and Italy showed December falls.
GLOBAL ECONOMY WEEKAHEAD-U.S. jobs trickle in. Whither workers?
WASHINGTON, Jan 3 (Reuters) - U.S. private employers have recorded 11 consecutive months of job gains, yet the number of people who are so discouraged that they have given up searching for work stands at an all-time high.
Friday's employment report is expected to show the pace of payroll growth accelerated last month after a disappointing showing in November. However, consumers' assessment of the job market deteriorated in December, according to the Conference Board's latest consumer confidence survey.
GLOBAL ECONOMY-December factory output accelerates in US, Europe
NEW YORK/LONDON, Jan 3 (Reuters) - Manufacturing in the United States and Europe accelerated in December, while growth in China and India slowed to more sustainable levels in another boost for the global economic outlook.
Purchasing managers' indexes showed manufacturing growth quickened in Europe and the United States, supported by surging new orders, while robust but slowing growth in India and China eased concerns about inflation and tighter monetary policy.
COLUMN-China hike could help risk assets elsewhere: James Saft
-James Saft is a Reuters columnist. The opinions expressed are his own-
HUNTSVILLE, Alabama, Dec 30 (Reuters) - China's Christmas day interest rate hike may prove to be bad for global growth but good, at least for a time, for risky assets.
From that perspective, the Chinese policy change could end up being a much-needed helping hand to Federal Reserve chief Ben Bernanke, who has engineered a policy partly aimed to boost economic growth through the false miracle of asset price inflation.
Australia Flooding Slows Wheat Harvesting, Shipments (Source: CME)
Heavy rains and flooding in Australia's northeastern Queensland state have stopped bulk wheat and sorghum exports and badly damaged summer crops including cotton, but further south in New South Wales and Victoria, harvesting, transport and export are currently not impeded, logistics provider GrainCorp Ltd. said. All rail-based accumulation of grains for export in Queensland has been halted, the company said, adding regular operations may not resume for up to two weeks. Accumulation of export cargoes by road is also affected, it said. "Nothing will be moving out of Queensland for a couple of weeks," GrainCorp's Corporate Affairs Manager, David Ginns, said by telephone. "We haven't been able to move anything to Queensland ports by train since before Christmas." GrainCorp's shipping schedule shows some 249,000 metric tons of grain in 15 cargoes listed for export in January from its three ports in Queensland.
That includes 12 cargoes for a total 199,000 tons of wheat, a relatively minor amount in the context of the massive national grain export effort. Australia - a major exporter of high quality wheat - is on track to produce a record 26.8 million tons of wheat in the current crop year ending March 31, up 22% on year, according to the Australian Bureau of Agricultural and Resource Economics and Sciences. All farming activities in Queensland have been affected, particularly in the past two weeks, Wayne Newton, the grains section president of farmer lobby and services group, AgForce, said by telephone from Dalby town, west of Brisbane. He estimated more than half of Queensland's cotton crop would have suffered considerable damage and may be ruined, with crops in central Queensland near towns such as Emerald and Theodore totally wiped out. Queensland normally accounts for about 40% of Australian cotton lint output.
National production this year was previously estimated by Abares at 900,000 metric tons of lint. Newton estimated the floods could cut production by more than 150,000 tons. About 30% of the summer sorghum crop on the Darling Downs, the major growing region for the crop, could also be wiped out by the sustained flooding, he said. National production from the 2010-11 crop was estimated at 2.0 million tons, according to a December Abares report. Heavy rains have disrupted harvesting of winter grains including wheat, resulting in quality downgrades and lost production. The sugarcane harvest and crush was brought to a premature end late in 2010, with production down 20%, resulting in a sharp fall in export availability this fiscal year, compounding a tight global market and volatile prices. Making matters worse, extreme weather may continue well into the coming months.
A strong La Nina remains firmly in place across the tropical Pacific Basin, and most long-range models suggest this climate episode will persist th rough the first quarter, the Australian Bureau of Meteorology reported. The 2010 La Nina has contributed to Australia's wettest spring--September through November--on record and one of the wettest Decembers with widespread flooding, particularly in northern New South Wales and Queensland. With a drought cutting grain production in Western Australia, most of this year's wheat and other grains for exports will be sourced from New South Wales, Victoria and South Australia, making harvest progress there critical to exporters and overseas buyers. Harvesting of winter grains is running about a month behind schedule in eastern Australia due to heavy rains although the wheat crop was ready by November-December. This resulted in considerable quantities of downgrades to feed grade and lower quality food grade, from hard milling wheat.
Barley has been downgraded to feed grade from malting grade. The downgrades have boosted domestic and global cereal prices. Overall, the Queensland harvest has finished, while in New South Wales and Victoria, it is three quarters or more complete, GrainCorp said. Queensland is estimated to account for only 5% of national wheat crop this year. But in the southern areas of Victoria, where harvesting is only 50% complete, and in southern New South Wales, many storage sites have seen record intake, it said. GrainCorp, the biggest provider of grain storage sites in the eastern states, operates a string of export terminals along the east coast. With a capacity of 20 million tons, it accounts for more than two-fifths of the total storage capacity in the eastern states, estimated at 47 million tons.
Economic optimism lifts stocks, oil
LONDON, Jan 4 (Reuters) - Optimism about the state of the world economy lifted stocks as well as boosting the dollar and keeping oil prices at a near 27-month peak. "People are starting to recognise there is some improvement in the employment picture in the United States. You would expect to see some of the confidence of the (manufacturing) PMI to be reflected in the non-farm payrolls," said Philip Isherwood, European equities strategist at Evolution Securities.
