COLUMN-Commodity prices high but producers' shares lag: Clyde Russell
--Clyde Russell is a Reuters market analyst. The views expressed are his own.--
By Clyde Russell
SINGAPORE, July 27 (Reuters) - There appears to be a disconnect between the current high prices of commodities and the lagging share valuations of the companies that produce them.
Copper is within 4 percent of its record high, gold is at a record, iron ore is 8 percent below its all-time peak, oil is heading for the highest yearly average price ever and both thermal and coking coal are holding at elevated levels.
Agricultural mkts more vulnerable to supply shocks-USDA
MELBOURNE, July 27 (Reuters) - Agricultural markets are more vulnerable to supply shocks because of lower world stockpiles, while China's demand for feed grains is rapidly expanding with the growth of the middle class, a top USDA official said on Wednesday.
Global food supplies are extremely tight and any major weather threat to crop could drive prices, Michael Dwyer, director of the U.S. Department of Agriculture's global policy analysis division, told Reuters in an interview.
Corn (Source: CME)
US corn futures close higher on spillover support from a rally in the wheat market. Wheat influences corn because both grains are used for livestock. Corn's leadership role was a turnaround from recent weeks, when wheat had been looking to corn for direction amid concerns about poor weather reducing US corn output. Weather has since improved for the crop, and traders are trying to figure out where the corn market is heading. CBOT December corn rises 4 3/4c to $6.91 1/2 a bushel.
Wheat (Source: CME)
US wheat futures finish higher as traders unwind short wheat/long corn spreads. They bought back previously sold wheat positions as concerns increase about output in the northern Plains. An annual spring-wheat tour that began Tuesday in North Dakota estimated yields will drop from last year. Meanwhile, concerns about poor weather threatening corn have eased. "Some people are just maybe caught off guard with day one of the crop tour," says Terry Reilly of Citigroup. CBOT September wheat rises 10 3/4c to $7.04 3/4 a bushel, KCBT September gains 7 3/4c to $7.88 1/4 and MGEX September jumps 12c to $8.51.
Rice (Source: CME)
US rice futures fall sharply, briefly dropping the one-day limit of 50c/hundredweight, as jitters about the government's inability to hammer out a debt-ceiling agreement causes market participants to sell grains. Jack Scoville at Price Future Group adds pressure may also stem from early harvesting in Texas, where rice yields "haven't been horrid but neither have they been spectacular." Some expected a sharp drop in yields due to drought. CBOT September rice was recently down 38c at $16.83. Still, rice has climbed nearly 30% this month from a 3 1/2-month low.
German 2011-12 Grain Output Seen At 41M Tons (Source: CME)
Germany is likely to produce 41 million metric tons of grain in 2011-12, the German farmers' association DBV said, compared with 44 million tons in 2010-11. The association said heavy rainfall across the country over the past few weeks as the grain was ripening and the wheat harvest was due to begin will reduce the crops. "Because the wheat is maturing now, the rain fell at the wrong time. If the weather conditions remain rainy, the quality of the wheat will deteriorate. So it's likely that the wheat will not be able to be used for (human) food," Astrid Rewerts, head of Plant Production at the DBV said. "German farmers are hoping for better weather conditions for the harvesting of the wheat crop," Rewerts said. Rewerts said German farmers are now reluctant to sell wheat on a forward basis as the quality of the wheat is unknown due to rain.
There is no immediate relief for the wheat crop in sight as German weather forecasters predict heavy rainfall for the next five days. In 2009-10, German total grains production hit almost 50 million tons, DBV said.
UN Buys 90K Tons Of Wheat For Ethiopia (Source: CME)
A United Nations agency has bought 90,000 metric tons of wheat for the drought relief effort in Ethiopia, European traders said. More than 11 million people are in need of food assistance as the worst drought in decades has hit countries in the Horn of Africa, the U.N. says. In Ethiopia, the crisis is particularly severe as large numbers of refugees from badly hit Somalia are crossing the border daily. The wheat is likely to be sourced from the Black Sea, which was the U.N.'s relief agency's largest supplier before Russia banned exports last year, the traders added.
Japan Cancels Feed Wheat, Barley Tender (Source: CME)
Japan's agriculture ministry canceled a sell-buy-sell tender to import 50,000 metric tons of feed wheat and 200,000 tons of feed barley due to a lack of buyers and sellers, a government official said. The ministry had sought the grain for bulk shipment by Oct. 31, the Ministry of Agriculture, Forestry and Fisheries official said. Japan canceled 10 of the last 15 weekly SBS tenders for feed grain due to a lack of buyers and sellers. It purchased a total of 61,730 tons of wheat and 210,450 tons of barley in the other five. Under the SBS system, end-users can negotiate as a group on the price, quantity and origin of grains before submitting bids to trading firms via the agriculture ministry. Japan mostly buys wheat and barley from Canada, Australia, the U.S. and France.
Corn Rises on Concern That Heat Damaged U.S. Crop; Soybean Futures Decline (Source: Bloomberg)
Corn rose to a one-week high on speculation that hot, dry weather has caused irreversible damage to the crop in the U.S., the world’s biggest producer and exporter. Soybeans fell for the second time in three days. Temperatures will be about 8 degrees Fahrenheit above normal the next week in the Midwest and South, increasing stress on crops, according to T-Storm Weather. For most of the Midwest, average overnight lows in July will be the highest since the 1930s, the Commodity Weather Group LLC said in a report. “We have heat coming back into the Midwest, and that will hurt crops that lack adequate moisture,” Jeff Beal, a market analyst for Rockford, Illinois-based Gulke Group Inc., said in a telephone interview. “While the hottest and driest conditions are staying south of the biggest growing areas, the high nighttime temperatures probably already hurt yields.”
U.S. corn falters on profit taking
SYDNEY, July 27 (Reuters) - U.S. corn futures dipped as investors locked in profits after sharp rises over the previous two sessions on concerns that the U.S. harvest was likely to be smaller than expected.
"There has been a general upward run in commodities because of the weakness in the U.S. dollar," said Andrew Kaleel, chief executive of commodities fund manager, H3 Global Advisors.
Thai 2011 rice exports may top 10 mln tonnes-exporters
BANGKOK, July 27 (Reuters) - Thailand, the world's biggest rice exporter, could ship a record volume of more than 10 million tonnes in 2011, the Thai Rice Exporters Association said on Wednesday, but shipments may slump next year because of the new government's intervention plans.
"We have done quite well in the first half of the year and, if there are no problems in the second half, we're quite confident we could sell more than 10 million tonnes this year," said Korbsook Iamsuri, president of the association.
Ukraine '11 grain crop at 26.3 mln T so far
KIEV, July 27 (Reuters) - Ukraine's farms harvested 26.3 million tonnes of grain as of July 26 and the grain yield averaged 2.94 tonne per hectare, the Agriculture Ministry said on Wednesday.
Farmers have threshed 8.93 million hectares or 78 percent of the sown area of early grains.
Vietnam rice export prices up 3 pct on Indonesia deal
HANOI, July 27 (Reuters) - Vietnamese rice export prices have risen as much as 3 percent in the past week after news that Vietnam had struck a deal to sell 500,000 tonnes to Indonesia, traders said on Wednesday.
The rise in prices since the news broke last Friday has made it difficult for exporters to buy grain for loading, which could lead to delays in deliveries in coming weeks, traders said.
Wheat yields in southern N.Dakota seen lower--Tour
MANDAN, North Dakota, July 26 (Reuters) - Spring wheat yields were projected to decline this year in the southern half of North Dakota as a late start to the planting season and excessive moisture stressed the crop, allowing diseases to thrive, an annual tour found.
Huge pools of standing water covered large swaths of farmland across the state, submerging fields of corn, hay and hard red spring wheat.
Asian wheat buyers to step up buying after June slowdown-trade
MELBOURNE, July 27 (Reuters) - Asian wheat buyers are likely to boost purchases to cover supplies for September and October after a slowdown in buying since June on volatile prices, traders said on Wednesday.
Indonesia is expected to buy 150,000 tonnes for September, and 200,000 tonnes for October delivery, while Thailand is likely to take around 100,000 tonnes for arrival in September and October, traders told Reuters at a grains industry conference in Melbourne.
African land grabs threaten food security -study
CHICAGO, July 26 (Reuters) - Rich countries grabbing farmland in Africa to feed their growing populations can leave rural populations there without land or jobs and make the continent's hunger problem more severe, an environmental think tank said on Tuesday.
The trend is accelerating as wealthier countries in the Middle East and Asia, particularly China, seek new land to plant crops, lacking enough fertile ground to meet their own food needs, Washington DC-based Worldwatch Institute said.
Argentina allows 450,000 tonnes more in wheat sales
BUENOS AIRES, July 26 (Reuters) - Argentina's government approved the export of another 450,000 tonnes of 2010/11 wheat on Tuesday, saying farmers had declared additional stocks.
Argentina is a major wheat exporter, but the government restricts international shipments to ensure domestic supply as it grapples with high inflation. Corn shipments are also curbed with a quota system of export permits.
Unica Data Doesn't Dispel Brazil Sugar Fears (Source: CME)
Top grower Brazil's sugar harvest looks set to fall for the first time in a decade despite data showing an improvement in July output, analysts said. New York raw sugar futures stumbled from their meteoric rise Tuesday after industry association Unica said production in the Center South region--Brazil's largest producing area--rose 2.5% on year in the first half of July. "The latest Unica numbers do nothing do dispel the worry the market has about Brazil's outright cane and subsequent sugar production," Paul Deane, an analyst at ANZ Bank told Dow Jones Newswires. "The crop is still behind last year by 15%," said a broker. Analysts have scrambled to downgrade estimates for Brazil's harvest as ageing cane and bad weather have hurt yields.
Last week consultancy Canaplan cut its estimate to 30 million metric tons, from 33.5 million tons in 2010-11, and below Unica's revised forecast of 32.4 million tons. Deane said Unica's estimate could be cut further because of poor sugar content, known as ATR, in the cane this season. So far, Unica has pegged content at 136 kilograms a ton for the full season, in line with July's figures, but Deane argues this could still be "too high" and presents "downside risks" to their data. Switzerland-based Kingsman this week lowered its estimate for Brazil's CS crop to 31.87 million tons of sugar, from an earlier forecast of 33.78 million tons, and cut its ATR figure to 137kg/ton. Although this is "amongst the lowest in the past 10 years" the influential analyst cautioned: "We may have to lower it further as a result of the recent frosts and the widely spread flowering."
ICCO: Larger Cocoa Surplus To Ease Deficit (Source: CME)
Rising hopes for West African cocoa production this year could help balance out an expected deficit in 2011-12, the head of the International Cocoa Organization said. Executive director Jean-Marc Anga told Dow Jones Newswires he now expects output from Ivory Coast, the world's largest producer, could reach 1.4 million metric tons in the current 2010-11 crop year. Neighboring Ghana is also "on course" to reach its target of 1 million tons by the end of the season, despite flooding in cocoa-producing regions in the east of the country, he said. Anga said he expects the ICCO will increase its current estimate of a 189,000 ton surplus for 2010-11, leaving markets in "more of a balance" than many forecasters currently expect next season. "Most analysts are still expecting a deficit next year but we can see the surplus increasing between now and then," Anga said.
However, increasing consumption is likely to keep prices supported at $3,000/ton for the next six months, he said. Demand is expected to rise to a record high of more than 3.9 million tons in 2011-12, up from 3.8 million tons this year, driven by Asia and the developing world as well as "robust" consumption in traditional markets, he said. Cocoa grinding is also expected to rise in Ivory Coast following a bloody conflict there earlier this year. The country lost its place as the world's second-largest processor as companies fled during the political turmoil. But going forward, he remains concerned that the proliferation of uncoordinated projects to expand cocoa production in several parts of the world could have a severe impact on prices. "We do not believe that production should go all out in meeting demand--and go beyond--as the impact on prices will be severe," he said.
With the new government of Ivory Coast due to launch initiatives to boost production in the near future, including tackling structural issues such as aging trees and little use of inputs, Anga said production there could rocket. "If they go all out to increase investment in the next five to 10 years they could reach 1.8 million to 2 million tons," he said. Neighboring Ghana, considered a major cocoa success story, is expected to produce 1.2 million tons by 2012-13. He added that the ICCO won't lift its estimate for Indonesia, another key producer, where production has been severely damaged by rain and disease. "The pest and disease situation there is quite worrying," he said.
Rubber Prices May Rise as Demand Shrinks Inventories in China, RCMA Says (Source: Bloomberg)
The global natural rubber stocks-to- use ratio has plunged to the lowest level ever as expanding demand shrinks inventories in China, potentially boosting prices, according to RCMA Commodities Asia Pte Ltd. Global inventories are just enough to meet about a month’s demand compared with supplies for about 6.3 weeks a year earlier, Chief Executive Officer Chris Pardey said in an interview on July 26 in Singapore. Stockpiles in China’s port of Qingdao, which aren’t publicly available, have dropped to about 70,000 metric tons from 120,000 tons in April and May, Pardey said. The low stock-to-use ratio may help rubber futures in Tokyo extend an almost 50 percent gain in the past year and increase costs for Bridgestone Corp., Michelin & Cie. and Goodyear Tire & Rubber Co., the top three tire makers. China, the largest automobile market, may consume 3.5 million tons of rubber this year, 6.1 percent more than a year earlier, the Association of Natural Rubber Producing Countries said last month.
Sugar firm, eyes on Brazil crop, coffee falls
LONDON, July 27 (Reuters) - Sugar futures edged higher on Wednesday, supported by a fall in Brazilian production, while coffee futures slipped, as fears of a U.S. debt default weighed on markets.
Dealers said high prices were curbing physical demand as buyers hoped for the market to correct lower.
Brazil cane crush gains on last season, outlook dim
BRASILIA, July 26 (Reuters) - Crushing of cane in Brazil and production of sugar and ethanol made from it are catching up with the 2010 season, data from cane industry association Unica showed on Tuesday, but the crop may soon run out of puff.
The crush totaled 217.4 million tonnes from the start of the season through July 16. That was 15 percent less than by the same time last season but the gap had narrowed from a lag of 18 percent at the start of July.
Brazil CS sugar output down 15 pct from yr ago
BRASILIA, July 26 (Reuters) - Sugar production in Brazil's center-south reached 11.9 million tonnes from the start of the season to July 16, down 15 percent from a year ago, cane industry association Unica said on Tuesday.
Sugar production has been steadily catching up with the 2010 season which started exceptionally early. At the start of July, cumulative sugar production was 19 percent lower than a year earlier.
Cameroon cocoa grindings up 54 pct y/y
YAOUNDE, July 13 (Reuters) - Cocoa grindings in Cameroon increased by 54 percent in the 2010/11 season to 27,131 tonnes of beans ground by May 31, compared with 17,572 tonnes for the same period in previous season, data from two regulatory bodies showed on Wednesday.
The data showed that the country's only cocoa grinder SIC-Cacao, a Barry Callebaut subsidiary, bought 842 tonnes of beans in the month of May, up from 255 tonnes in April.
Mongolia state-owned miner signs coal deal with China's Chalco
ULAN BATOR, July 27 (Reuters) - Mongolia's state-owned miner Erdenes Tavan Tolgoi (TT) has agreed to sell $250 million worth of coal from the east Tsankhi deposit to Aluminium Corp of China Ltd (Chalco), a move insiders said was aimed at raising cash to help fund its impending listing fees.
Under the agreement, Chalco would resell 30 percent of the coal to Japanese trading houses Itochu Corp and Mitsui as well as state-owned Korea Resources Corp (KORES), Erdenes TT LLC said in a statement seen on Wednesday.
Australia's Aquila says normal shipments to resume at Isaac Plains
SYDNEY, July 27 (Reuters) - Australia's Aquila Resources expects normal shipments from its Isaac Plains Coal Mine to resume after it reached an agreement over a dispute with partner Vale .
"Aquila is pleased to today announce that Vale and IP Coal have reached an agreement which effectively puts aside the difference of opinion between them regarding the ability to make separate shipments of coal from Isaac Plains," the company said on Wednesday.
Euro Coal-Prices creep higher on oil, S.Africa strike
LONDON, July 26 (Reuters) - Prompt physical coal prices crept higher by 50 U.S. cents a tonne on Tuesday for the third day running, boosted by a rise in oil and the spreading effects of South African miners' strike.
"Prices have very slowly been moving higher over the past few days but there are various reasons for that - oil, the strike, the dollar looking weaker - no one factor you could pin it on," one European trader said.
Asia Coal-Australia thermal coal prices steady in slow market
PERTH, July 26 (Reuters) - Australia's thermal coal prices, a benchmark for Asia, were steady in the past week as demand from Japan remained flat and Chinese demand waned.
Thermal coal on the globalCOAL Newcastle index for the week to date was $120.63 per tonne on Thursday, essentially unchanged from $120.75 per tonne a week earlier.
Anglo stops all coal ops in S.Africa due to strike
JOHANNESBURG, July 26 (Reuters) - Anglo American said on Tuesday it has halted operations at its South African coal mines due to a wage strike which started with the late shift on Sunday.
"There is still no production at all the Anglo American-owned mines," said Moeketsi Mofokeng, spokesman at the thermal coal unit.
SAfrica coal strike seen hitting exports in 2-4 wks
LONDON/JOHANNESBURG, Jul 25 (Reuters) - A strike by South African coal workers at major mining houses on Monday will start to hit exports in two to four weeks, after stockpiles are used up at the mines and Richards Bay Coal Terminal (RBCT), mining industry sources said.
Coal prices twitched slightly higher by around 50 U.S. cents to $115.00 a tonne on Friday in anticipation of the strike and by another 50 cents on Monday. Until exports are cut, prices are unlikely to show much reaction, coal traders and utilities said.
Itochu sees appetite for Drummond coal in Asia
TOKYO, July 25 (Reuters) - Itochu Corp , which has teamed up with Drummond Coal to sell the U.S. miner's Colombian product to Asia, said there is good appetite for its coal among the region's power companies keen to diversify supplies.
"There is strong interest for Colombian coal from customers in China, South Korea, India and Japan," Koichi Kawaguchi, deputy chief operating officer at Itochu, Japan's fourth-biggest trading house, told Reuters in an interview on Monday.
Crude Oil Falls for a Second Day on U.S. Economy, Rising Crude Stockpiles (Source: Bloomberg)
Oil declined for a second day in New York as investors bet that rising crude supplies and signs of a slowing economy in the U.S. indicate fuel demand may falter in the world’s biggest consumer of the commodity. Futures slid as much as 0.9 percent today after falling to the lowest in more than a week yesterday. U.S. crude stockpiles climbed 2.3 million barrels to 354 million last week, a Department of Energy report showed. A 2 million-barrel drop was forecast in a Bloomberg News survey. Gasoline, diesel and heating oil inventories also rose. Orders for U.S. durable goods unexpectedly dropped in June. “You’ve got continued concerns with demand growth in the U.S.,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne, who predicts crude in New York will average $98 a barrel in the third quarter. “Overlay that with the stocks report and it weighs on oil.”
Namibia's mining body says new tax will curb investment
WINDHOEK, July 26 (Reuters) - Namibia's Chamber of Mines wants the government to reconsider plans to impose a further 17 percent tax on exploration and mining firms in the southern African producer of diamonds and uranium, saying it would discourage investors.
Namibia said on Friday it would increase mining corporate tax to 44 percent for miners other than diamond producers.
Mongolia state-owned miner signs coal deal with China's Chalco
ULAN BATOR, July 27 (Reuters) - Mongolia's state-owned miner Erdenes Tavan Tolgoi (TT) has agreed to sell $250 million worth of coal from the east Tsankhi deposit to Aluminium Corp of China Ltd (Chalco), a move insiders said was aimed at raising cash to help fund its impending listing fees.
Under the agreement, Chalco would resell 30 percent of the coal to Japanese trading houses Itochu Corp and Mitsui as well as state-owned Korea Resources Corp (KORES), Erdenes TT LLC said in a statement seen on Wednesday.
U.S. tin premiums heading higher on short supplies
NEW YORK, July 26 (Reuters) - U.S. tin premiums have risen steadily as dealers price in prospects of tighter supplies and healthier demand in the second half of the year.
"One thing that is fairly certain is that nothing has changed on the supply-side of the equation ... supply is not increasing," said one physical tin dealer.
Albanian miners fast as strike in mine escalates
TIRANA, July 26 (Reuters) - A group of Albanian miners have entered the second day of a hunger strike to press Austrian miner DCM DECOmetal to meet their demands for a 20 percent pay rise and fresh investment, a union leader said on Tuesday.
Taf Koleci, president of the federation of trade unions of Albanian industrial workers, said 16 miners have been fasting for 30 hours now in a gallery 1,400 metres below surface, or 260 metres below sea level. Koleci had visited them.
Iron Ore-Shanghai rebar rises as exchange plans fee cuts, ore up
SHANGHAI, July 27 (Reuters) - Shanghai rebar futures rose on Wednesday after the Shanghai Futures Exchange said it planned to cut trading fees for rebar contracts by nearly half from August, buoying investor confidence and expectations of increased liquidity.
The exchange will cut transaction fees for its rebar contract to 0.006 percent from 0.01 percent, and for copper to 0.01 percent from 0.02 percent from Aug. 1, in a move to revive sagging liquidity by easing the costs burden for investors as well as brokers.
Brazil steel mills seen posting mixed results
SAO PAULO, July 26 (Reuters) - High inventory and a flurry of imports that pushed domestic prices lower likely hampered second-quarter earnings for the largest listed Brazilian steelmakers, a Reuters poll of analysts showed on Tuesday.
Quarterly results will probably signal that a new round of price cuts for some products looms, yet at a less intense pace. Rising raw materials prices, which affected earnings for mills this year, hampered profitability again.
Nippon Steel sees post-quake profit recovery, JFE lags
TOKYO, July 27 (Reuters) - Nippon Steel Corp , Japan's top steelmaker, forecast profits to rise this year as a slow global economic rebound bolsters demand, pushing it ahead of smaller rival JFE Holdings Inc which expects earnings to dwindle.
Japan's two biggest steelmakers are recovering from the post-March 11 earthquake slump which weighed on their first quarter earnings reported on Wednesday. However, automakers are ramping up output and rebuilding projects are likely to boost demand.
U.S. steelmakers warn of weak outlooks
NEW YORK, July 26 (Reuters) - Many of the world's leading steelmakers warn that profits in the second half of this year will be hurt because of the slow economic recovery, along with lower steel prices and higher raw material costs.
Two American steel producers, AK Steel Holding Corp and U.S. Steel Corp , gave dismal outlooks following similar alarm bells last week by Nucor Corp and South Korea's POSCO , the world's No. 3 steelmaker.
Japan June aluminium shipments down 0.8 pct yr/yr
TOKYO, July 27 (Reuters) - Japanese shipments of aluminium products fell 0.8 percent in June from a year earlier to 178,452 tonnes, industry data showed on Wednesday.
That was up from 166,885 tonnes in May, data provided by the Japan Aluminium Association showed.
Copper Falls in New York as U.S. Durable-Goods Orders Decline (Source: Bloomberg)
Copper fell for the second time this week after orders for U.S. durable goods unexpectedly dropped, damping the outlook for metal demand. Bookings for goods meant to last at least three years fell 2.1 percent in June, the Commerce Department said today. The median forecast of 76 economists surveyed by Bloomberg News projected a 0.3 percent increase. The U.S. is the world’s largest copper user after China. “Durable-goods orders are a little bit of a disappointment for the market,” Frank Lesh, a trader at FuturePath Trading LLC in Chicago, said in a telephone interview. “We are seeing some reluctance on the part of buyers.”
Chile Escondida strike worsens world copper shortage
SYDNEY, July 27 (Reuters) - A prolonged strike at Chile's Escondida copper mine, the world's biggest, could push a global shortfall of copper concentrate deeper into deficit this year, driving smelting and refining charges lower.
Failure to reach accord soon at Escondida, which extracts seven percent of the world's copper, will have serious implications for copper prices, already trading near record highs on the prospect of a shortfall in supply this year.
High prices seen cutting China spot copper demand in Aug/Sept
HONG KONG, July 27 (Reuters) - Strong London Metal Exchange copper prices may lead top buyer China to ease imports in the coming two months following increased spot copper bookings in May and June, trading sources said on Wednesday.
That may help cool LME copper prices , heading for their second monthly gain and inching towards a February 2011 record mark of $10,190 a tonne on supply worries.
METALS-Copper steady, Escondida strikes support
London, July 27 (Reuters) - Copper steadied on Wednesday after an increase of almost 2 percent in the previous session as supply worries due to strikes at the world's largest copper mine provide further upside potential for the red metal.
Benchmark copper on the London Metal Exchange edged down 0.2 percent to $9,797 a tonne by 0910 GMT, less than 4 percent off a record high of $10,190 hit in February.
PRECIOUS-Gold hits record as U.S. debt fears deepen
July 27(Reuters) - Gold prices hit record highs on Monday for the sixth time in two weeks and silver and palladium rallied as concerns over the prospect of a U.S. default prompted investors to buy precious metals as a haven from risk.
Bitterly divided Republican and Democratic party leaders are scrambling to find common ground with less than a week before the government hits its borrowing limit approved by Congress, potentially triggering a default.
Gold Trades Near All-Time High as U.S. Lawmakers Strive to Avert Default (Source: Bloomberg)
Gold traded within 0.9 percent of a record as U.S. policy makers pushed competing proposals to increase the nation’s debt ceiling before an Aug. 2 deadline in a bid to prevent a default that may roil financial markets. Spot bullion, which reached an all-time high of $1,628.05 an ounce yesterday amid the political wrangling, traded little changed at $1,614.30 at 8:36 a.m. in Singapore time. Futures in New York were also little changed at $1,617.20 an ounce after reaching a record $1,631.20 yesterday. U.S. lawmakers remain deadlocked. Republican leaders plan to bring House Speaker John Boehner’s reworked deficit-cutting plan to a vote today, while Senate Majority Leader Harry Reid called his alternative “the only true compromise.” Asian stocks dropped today extending losses in the U.S.
U.S. assists two crop-for-aviation-fuel projects
WASHINGTON, July 26 (Reuters) - Farmers in four states in the U.S. West can qualify for a federal cost-sharing payment if they grow camelina, an oilseed, for conversion into jet fuel, the government said on Tuesday.
The assistance would encourage large-scale production -- up to 51,000 acres (21,000 hectares) -- of camelina for sale to aviation biofuel makers AltAir Fuels LLC, of Seattle, and Beaver Biodiesel LLC, of Portland, Oregon.
Asia Dry Bulk-Panamax rates to edge up on Indonesia coal
SINGAPORE, July 27 (Reuters) - Rates for panamax dry bulk carriers on key Asian freight routes are expected to inch higher over the next week on increased Indonesian coal shipments, shipbrokers said on Wednesday.
In the capesize market, benchmark rates for vessels travelling from Australia to China are seen lower because of waning iron ore demand from the world's second largest economy.
Genco Shipping Q2 profit beats Street
July 26 (Reuters) - Drybulk carrier Genco Shipping & Trading Ltd posted its eighth estimate-beating profit in at least nine quarters as higher number of ships and increased operating days offset a fall in charter rates.
For April-June quarter, the company's net income was $10.1 million, or 29 cents a share, compared with $36.8 million, or $1.16 per share, a year ago.
Baltic index stays weak, S.Africa coal strike eyed
LONDON, July 26 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, fell on Tuesday as fleet growth and slower iron and coal activity dragged earnings lower.
Brokers said a prolonged coal strike by workers in South Africa, one of the world's top five coal exporters and a key supplier to Atlantic and Pacific markets, could have a negative impact on the dry freight market, adding to the growing surplus of vessels and hitting trade volumes.
DryShips to buy OceanFreight for $118 mln
BANGALORE, July 26 (Reuters) - DryShips Inc , a Greece-based dry cargo shipper, said it would acquire smaller rival OceanFreight Inc for $118 million to increase the number of large ships in its fleet when asset prices are low.
The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, has lost over a quarter of its value this year as vessel oversupply outpaces demand to ship commodities.
