Gold ticks up on Middle East tension, econ worries
SINGAPORE, March 11 (Reuters) - Gold ticked up on Friday after reports of police firing on protesters in Saudi Arabia ignited fears of further Middle East unrest, but bullion was on track for its biggest weekly decline since late January, down more than $20 from a lifetime high hit at the start of the week.
"We are waiting for some escalation in the situation within Saudi. If protesters become more aggressive in some way, you might find see more buying but again, it's being pressured on one side by the dollar," said Darren Heathcote, head of trading at Investec Australia in Sydney.
Shares fall on economy and Saudi concerns
HONG KONG, March 11 (Reuters) - Asian shares dipped on Friday as spreading unrest in Saudi Arabia and weak economic data spurred some profit taking while the euro looked shaky after its biggest one-day fall versus the dollar in a month.
Key stock indexes in Japan, Australia and South Korea fell nearly 1 percent. China's report that inflation in February remained around the 5 percent mark, suggesting tighter monetary policy may be needed, added to uncertainty.
Oil : Crude steady near $103, focus on Saudi 'Day of Rage' protests
SINGAPORE, March 11 (Reuters) - Oil was steady near $103 on Friday after its biggest one-day loss in a month, with investors watching for developments in Saudi Arabia after police clashed with protesters ahead of a planned "Day of Rage" against the monarchy.
The clampdown was a sign that the Saudi government was serious about enforcing a ban on protests called for Friday by Internet activists emboldened by movements that toppled the leaders of Egypt and Tunisia before spreading to the Gulf.
COMMODITIES: Biggest fall since Nov on Spain, euro woes
NEW YORK, March 10 (Reuters) - A surging dollar jammed commodity markets into reverse on Thursday, after a downgrade of Spain's debt and fresh worries about the euro overshadowed the crisis in Libya that had driven oil and gold to peaks.
"It does not help that our financial markets are kind of taking it on the chin here today," said Jerod Leman, a broker with Wellington Commodities Corp. "The dollar is up a little bit, offering a little bit of resistance."
GLOBAL MARKETS: Stocks sink on China, Saudi unrest; euro weakens
NEW YORK, March 10 (Reuters) - World stocks and commodities sank on Thursday after an unexpected trade deficit in China fueled concerns about the global economy, while the euro fell after a downgrade of Spain's credit rating by Moody's.
"Saudi Arabia is the main supplier of oil around the world, so people are concerned," said Axel Merk, president and chief investment officer of Merk Investments in Palo Alto, California.
China Minister: China Grain Security, Supply 'Guaranteed' (Source: CME)
The stability and security of China's grain supply are "guaranteed," as the nation expects a larger overall grain harvest this year and grain reserves are sufficient, Agriculture Minister Han Changfu said. Concerns have been raised about the country's wheat supply this year due to a prolonged drought that affected production and a sharp drawdown of national and provincial reserves through a program of auctions designed to contain inflation. A combination of increasing prices in the international market, high domestic inflation expectations, rising production costs and strong demand has pushed grain prices higher, but further increases will be restrained, Han said on the sidelines of the annual legislative meetings of the National People's Congress. "Grain prices will rise moderately this year, I don't expect to see sharp rises," he said.
The central government sold a record volume of grain from reserves last year, accounting for about 15% of demand. The sales included 43.29 million metric tons of wheat, 27.45 million tons of corn and 13.43 million tons of rice. Corn prices in major producing areas have risen by around 5%-6% since the Lunar New Year holiday in early February, while wheat prices are up about 5%. "Recent increases in grain prices aren't the result of supply problems," Han said, but he admitted that "drought conditions have affected China's wheat production." Han said previously that the government would prevent unreasonable and dramatic price increases but would allow reasonable rises to ensure supply, amid citizen complaints over rapid food price increases and a lack of interest in planting among farmers due to low income.
"We can ensure a bumper harvest of wheat this year," he said, citing the effects of the government's drought-relief efforts and of the snow and rain that fell around the end of last month. The government is also controlling the use of corn in non-food and non-feed processing, he said, supporting the view expressed by Bao Kexin, general manager of China Grain Reserves Corp., who said the government should "resolutely" control the expansion of alcohol and starch industries that use corn in the manufacturing process. The country has a limited supply of farmland, and corn needs to be used to produce animal feed, Bao said. China consumed about 40 million tons of corn for production of starch and alcohol last year, accounting for about 25% of total output, industry analysts estimated.
China's grain output rose 2.9% to 546.4 million tons last year, marking the seventh consecutive year of growth.
Air Quality On Some Big Farms Worse Than Big Cities -Lobby Group (Source: CMe)
The air quality around some of the largest U.S. farms is poorer than that of the country's most polluted cities, an environmental watchdog said. The Environmental Integrity Project, or EIP, said workers on many large farms -- particularly those focused on poultry and livestock -- were exposed to concentrations of three pollutants that were "far above occupational safety guidelines." The lobby group said pollution levels at surveyed farms were high enough to suggest that those living near big livestock operations may be at risk, too. Estimated emission levels for some pollutants were higher at some test sites than amounts reported by large industrial plants. Industry officials challenged the findings from EIP, a nonpartisan, nonprofit organization formed by former Environmental Protection Agency staff to advocate for effective enforcement of environmental laws. The organization examined data collected by Purdue University under the direction of the government agency.
"Research professionals from Purdue University who are experts in this field of study are in charge of analyzing the data from the EPA study, and they say it will take quite some time to do so," said Richard Lobb, communications director for the National Chicken Council. "EIP's analysis is obviously a 'quick and dirty' job with predetermined conclusions that are negative to agriculture. We don't know what the proper scientific analysis will show, but it will be much more reliable than the accusations of a biased advocacy group." Tarah Heinzen, the report's author, called for the EPA to overturn a Bush Administration-era exemption from clean-air rules. The study said fine particle pollution was much higher than the federal 24-hour exposure limit on the worst days at six of 15 study sites, including five poultry operations and a dairy operation. Peak 24-hour exposures at three hen houses were more than three times higher than the EPA standard.
PRECIOUS-Gold retreats in line with oil, but Libya underpins
LONDON, March 10 (Reuters) - Gold retreated in Europe on Thursday as a drop in oil prices sparked some profit-taking, but worries over euro zone debt after a Moody's downgrade of Spain and ongoing unrest in Libya kept the metal firmly underpinned.
"It particularly seems to happen that when gold hits new highs, there is a chunk of profit taking, and it does lose momentum, but that doesn't mean we are not going to regain new highs," said Societe Generale analyst David Wilson.
FOREX-Spain downgrade knocks euro, more selling seen
LONDON, March 10 (Reuters) - The euro fell on Thursday after a cut to Spain's credit rating reminded investors that euro zone debt problems will continue to haunt the currency, keeping it vulnerable to more downward pressure in the coming weeks.
"If we start to move down towards $1.37 and $1.36, it will show that the move to $1.40 was clearly unsustainable," Yu said. "Fast money will pull out and we could move much lower."
U.S. wheat rises from 3-month low; corn, soy steady
SINGAPORE, March 10 (Reuters) - U.S. wheat futures rose 0.7 percent as bargain hunting lifted the market following three straight sessions of declines that pushed the market to lowest since early December in the last session. "The performance of corn and soybean markets is likely to hinge on March supply and demand report due tonight," said Ker Chung Yang, investment analyst at Phillip Futures in Singapore.
Europe stocks, euro hit by Spain downgrade
PARIS, March 10 (Reuters) - European stocks and the euro retreated after Moody's downgraded Spain, reigniting worries over the euro zone debt crisis, while ongoing violence in Libya kept Brent crude hovering around $116. "For U.S. stocks, this has been just a pause in the two-year bull market so far, but the technical picture is much more fragile for European stocks because of the health of the euro zone. Same story for the euro currency: We switched to "sell" on the euro yesterday, and we wouldn't be surprised to see a retreat toward $1.35."
