Crude above $100 on lower U.S. stocks, Mideast worries
SINGAPORE, March 2 (Reuters) - U.S. crude futures rose after a surprise fall in crude inventories in the United States, while tension in Libya ratcheted up, spurring fears that other oil producers in the Middle East and North Africa may face similar revolts.
Libya could descend into civil war unless Muammar Gaddafi quits, the United States said on Tuesday, its demand for his departure intensifying pressure on the longtime leader after news of Western military preparations.
Wheat falls for 2nd day on crop weather, soy firm
SINGAPORE, March 2 (Reuters) - U.S. wheat futures lost more ground on Wednesday, falling around half a percent as rains in China's wheat belt and forecasts for much-needed moisture in the U.S. Plains continued to weigh on the market.
"They are forecasting rains for China and the U.S. wheat areas which should help the crops," said Adam Davis, a senior grains trader at Melbourne-based Merricks Capital.
Climate change to drive up food prices - expert
CANBERRA, March 2 (Reuters) - Global food prices are likely to keep rising as production struggles to match demand and extreme weather events become more frequent, a climate-change advisor to the Australian government said on Wednesday.
Ross Garnaut told an agricultural outlook conference that more severe weather events were inevitable, given climate change was "already in the system".
Stocks tumble as oil rises on Mideast worries
HONG KONG, March 2 (Reuters) - Oil rose towards a 2-1/2 year high and stocks fell on Wednesday as investors shunned risky assets on concern that escalating tension in Libya would spread in the Middle East and disrupt fuel supplies.
"The market is volatile as oil's persisting gains and civil unrest in the Middle East is negatively affecting investor sentiment," said Lee Sun-yeb, a market analyst at Shinhan Investment Corp.
Oil : Crude above $100 on lower U.S. stocks, Mideast worries
SINGAPORE, March 2 (Reuters) - U.S. crude futures rose after a surprise fall in crude inventories in the United States, while tension in Libya ratcheted up, spurring fears that other oil producers in the Middle East and North Africa may face similar revolts.
Libya could descend into civil war unless Muammar Gaddafi quits, the United States said on Tuesday, its demand for his departure intensifying pressure on the longtime leader after news of Western military preparations.
COMMODITIES: Oil, gold gain on Middle East tension
NEW YORK, March 1 (Reuters) - Brent crude oil futures finished Tuesday at their highest level in 2-1/2 years, U.S. crude rose over 2 percent, and investors quest for safety sent gold to an all-time high, on fears political turmoil in Libya would spread to other oil producing countries.
"The Saudis had seemed to be walking the tightrope and avoiding problems, but the cleric story had people worried that it signaled problems there," said Robert Yawger, senior vice president, energy futures at MF Global in New York.
GLOBAL MARKETS: Stocks slide as oil marches higher
HONG KONG, March 2 (Reuters) - Oil vaulted over $116 per barrel on Wednesday as concerns rose that escalating tensions in Libya would spread in the Middle East and disrupt fuel supplies.
"Volatility will rule until the situation in the Middle East shows signs of easing," said Kim Young-june, a market analyst at SK Securities.
Argentina Should Limit Foreigners' Farmland Purchases - Minister (Source: CME)
Pressure is building in Argentina to limit the amount of land that foreigners can buy as record prices for grain and derivative products fuel concerns that deep-pocketed overseas investors might end up controlling a significant percentage of the country's farmland. Last year, congressmen from a across Argentina's political spectrum sponsored about 12 different bills that would have put limits on foreign land ownership. While those bills are stalled in the agriculture commission of Argentina's lower house, the administration of President Cristina Fernandez looks set to weigh in on the issue. "[Fernandez] believes that the legislature needs to debate the protection of the country's primary non-renewable strategic resource--the land," Agriculture Minister Julian Dominguez said in a speech on Sunday. The land "has to stay in Argentine hands," Dominguez said.
Agriculture exports were largely responsible for Argentina's whopping $12.06 billion trade surplus last year, while taxes on farm exports accounted for a significant percentage of the federal government's tax revenue. Argentina is the world leader in soymeal and soyoil exports, ranks No. 2 in corn exports, and third in soybeans. As global commodity prices soar, investors have increasingly looked to the fertile farmlands of Argentina and Brazil for investment opportunities. That has helped fuel surging land prices in recent years. At the end of 2010, prime farmland in Argentina's Buenos Aires Province was selling for $15,000 a hectare (2.47 acres), according to local daily La Nacion. That is about double the price in 2007 and over five times prices in 2002 when the country was in the midst of an economic crisis. Argentina's northern neighbor, Brazil, has already taken steps to protect its national sovereignty over farmland.
Last year, Brazil's former President Luiz Inacio Lula da Silva slapped limits on foreign ownership. Land purchases involving a foreign investor or a local company that is majority owned by foreigners are now reviewed on a case by case basis. Certain limits will apply depending on the geographic area of the purchase. A similar law is needed in Argentina, where about 7%, or 20 million hectares, of the country's productive farmland is in the hands of foreigners already, said Omar Principe, who heads the land commission at the Argentine Agrarian Federation. The association, know as the FAA, is one of the country's leading farm groups and represents small-scale farmers.
Higher Crude Oil Prices Could Send More US Ethanol Overseas (Source: CME)
A spike in crude oil prices is boosting already record demand for ethanol as the corn-based fuel additive increasingly becomes cheaper than gasoline. Yet U.S. ethanol producers have all but saturated the domestic market. Ethanol exports, already at record highs, are likely to be the main beneficiary as oil prices outpace corn costs, with producers and refiners expecting foreign shipments to increase. Ethanol for March delivery recently traded at $2.56 a gallon on the Chicago Board of Trade, about 33 cents below reformulated oxygenated blendstock, or RBOB, a common gasoline blend traded on the New York Mercantile Exchange. Ethanol is now at discounts to RBOB not seen since early January. Yet domestic gas stations currently are unable to increase the amount of ethanol in their fuel mix--most current infrastructure doesn't allow ethanol blends higher than E10, or 10% ethanol, 90% gasoline.
"Despite the favorable blending economics, there really isn't much (U.S.) market opportunity left," said Nathan Schock, director of public relations for POET, the world's largest ethanol producer. Nearly all stations that can dispense E10 are selling the blend. Older stations unable to dispense ethanol aren't expected to change to expand the market. Because of that, there is little room to add more E10 to the nation's fuel supply, said Prentiss Searles, marketing issues manager with industry association American Petroleum Institute. "The majority of the fuel in the system is limited to E10, so refiners are limited as to what they can do," Searles said. Ethanol producers have long pushed automakers and refiners to accept E15 fuel, a blend consisting of 15% ethanol. Although the U.S. Environmental Protection Agency has blessed such a move, E15 has faced resistance from automakers worried about what the increased blend could do to engines and refiners worried about litigation if the blend damages vehicles.
That's left the introduction of E15 in the U.S. in a holding pattern for now. With the domestic market saturated, more of the biofuel will be available on the export market at prices low enough to attract foreign interest. "If U.S. ethanol remains the most cost-effective, we could continue to see very strong exports," said Matt Hartwig, spokesman for ethanol trade group Renewable Fuels Association. It estimates U.S. ethanol exports at 350 million gallons for 2010, more than three times the amount shipped in 2009, but still only a sliver of the more than 13 billion gallons produced in the U.S. last year. The U.S. Department of Agriculture isn't projecting a jump in ethanol exports this year. Its forecast, however, depends on sugar prices easing, making ethanol produced from sugar cane more competitive on the world market, the agency said last week.
World factory input costs rising sharply
LONDON/BEIJING, March 1 (Reuters) - Factory input costs leapt across the globe in February, the latest sign of rising inflationary pressures, while euro zone manufacturing grew at its fastest in nearly 10 years, surveys showed on Tuesday.
British manufacturing also grew strongly, at its fastest pace in nearly two decades, and Indian factory growth accelerated. But in China, where the authorities have raised rates and bank reserve requirements multiple times since last year, factory growth slipped to its slowest pace in six months.
U.S. consumer spending slows, factories roar
WASHINGTON, Feb 28 (Reuters) - U.S. consumer spending barely edged up in January as households took advantage of tax cuts to rebuild their savings, suggesting spending would offer only a modest lift to the recovery in the first quarter.
Other data Monday painted a bullish picture of the manufacturing sector, with a gauge of factory activity in the country's Midwest hitting a 22-1/2 year high this month, which should help the economy weather rising oil prices and maintain its steady growth momentum.
Hher oil unlikely to hurt growth- World Bank
WASHINGTON, Feb 28 (Reuters) - A sustained period of higher oil prices would significantly affect developing economies but is unlikely to derail their strong recovery since the global financial crisis, a senior World bank economist said on Monday.
Andrew Burns, the World Bank's manager of global economics, said a surge in the oil price could dent economic growth in developing countries by somewhere between 0.2 and 0.4 percentage points if it remained at higher levels for a year or longer.
Australia sees commodities prices easing, but boom intact
CANBERRA, March 1 (Reuters) - Australia on Tuesday forecast commodities prices to ease, as miners and farmers boost output, but said demand was still booming and likely to reap a staggering $255 billion in national annual export income.
Australia, the world's third-largest wheat exporter and a top-two exporter of iron ore and coal, is undergoing its biggest trade bonanza in a century due to strong demand from China and India. As a result, investment in new production is soaring.
PRECIOUS-Gold rises as M.East unrest feeds investor fear
LONDON, March 1 (Reuters) - Gold rose for a third day on Tuesday as escalating violence in Libya and unrest spreading across the Middle East offset optimism over stronger U.S. economic data.
The gold price has risen by nearly 8 percent since uprisings in Tunisia and Egypt unleashed a swathe of popular protests across the region, sending the oil price to 2-1/2-year highs and raising concern among investors of the potential impact of soaring energy prices on growth.
FOREX-Dollar index hits 3-1/2 mth low; Bernanke awaited
LONDON, March 1 (Reuters) - The dollar hit its lowest in three-and-a-half months versus a currency basket on Tuesday on the view U.S. monetary policy will remain loose, as the market awaited testimony by Federal Reserve Chairman Ben Bernanke.
With other central banks looking likely to hike interest rates, analysts said the dollar could extend falls if Bernanke stays cautious about the economy and relatively relaxed about inflation at his semi-annual appearance before the Senate Banking Committee starting at 1500 GMT.
Oil rises on supply concerns; world stocks up
LONDON, March 1 (Reuters) - Oil prices rose back above $112 a barrel due to concerns over unrest in the Middle East, though stock markets shrugged off the move, preferring to focus on optimism over the outlook for the U.S. economy.
"It's very important that the U.S. economy is now showing signs of strength ... and forecasts for this year's GDP are starting to exceed 4 percent," said Heino Ruland, strategist at Ruland Research in Frankfurt.
Gold clings to $1,410; ETF holdings to 9-mon low
SINGAPORE, March 1 (Reuters) - Spot gold steadied around $1,410 as escalating unrest in Libya and the Middle East supported safe-haven demand, though holdings in the biggest gold-backed exchange-traded fund fell to the lowest level in more than nine months.
"There has been some scrap selling and liquidation above $1,405," said Peter Fung, head of dealing department at Wing Fung Precious Metals in Hong Kong.
Asia stocks rise, China manufacturing slows
SINGAPORE, March 1 (Reuters) - Asian stocks rose in early trade, tracking U.S. shares which gained on optimistic remarks from influential investor Warren Buffett, while Chinese manufacturing growth slowed to a six-month low.
"Inflation pressures are rising but economic activity is slowing. Slower economic growth is good for cooling inflation," said Wang Hu, economist at Guotai Junan Securities in Shanghai.
