Commodities Face ‘Twin Macro Risks’ in Europe, China, Morgan Stanley Says (Source: Bloomberg)
Commodity markets face the “twin macro risks” of a European recession and a hard landing in China this year, according to Morgan Stanley. The recovery in the value of the U.S. dollar provides additional headwind for the asset class, the bank’s analysts wrote in a report today.
Rains help, but will not reverse corn losses - Argentina
BUENOS AIRES, Jan 13 (Reuters) - Rains this week brought relief to Argentina's 2011/12 corn crop after weeks of drought but will not reverse losses in most areas, the government said in its weekly report on Friday.
The world's No. 2 corn producer has been hit by La Nina-related dryness that has toasted crops, prompted a lowering of crop estimates and dented hopes that Argentina can replenish corn supplies depleted by a lacklustre U.S. harvest.
Canadian Wheat Board sees smaller world wheat crop
WINNIPEG, Manitoba, Jan 13 (Reuters) - The world will grow slightly less wheat in the upcoming crop year, but Canada's production looks to rise modestly, the Canadian Wheat Board said on Friday in its first outlook of the year.
Global wheat production will slip nearly 2 percent to 677 million tonnes in 2012/13 from an estimated 688.8 million tonnes for the current marketing year, the CWB said at a farm conference in Saskatoon, Saskatchewan.
Rain sweeps over drought-hit Brazil grains areas
SAO PAULO, Jan 13 (Reuters) - Heavy rain returned to soak key parts of southern Brazil's drought-hit grains areas on Friday, which could halt crop losses that have been increasing through weeks of hot, dry weather, local state agricultural agencies said.
Unusually dry weather linked to the prevailing La Nina weather anomaly has caused significant losses to soy and corn crops in the world's No. 2 soy producer, boosting the price of the grains on the Chicago Board of Trade futures exchange.
Rains help Paraguay soy; farmers say more needed
ASUNCION, Jan 13 (Reuters) - Rains fell on Paraguay's drought-stricken soy fields but farmers said they were not enough to revive plants and experts forecast that dryness will still severely affect output.
Paraguay is the world's No. 4 soybean exporter, although it lags far behind No. 3 supplier Argentina. The oilseed is Paraguay's top export earner and sinking yields could complicate bank loans to growers and hurt the economy.
Argentina's Rosario slashes corn forecast 18 pct
BUENOS AIRES, Jan 13 (Reuters) - Drought has crippled Argentine corn and prompted the Rosario grains exchange on Friday to slash its 2011/12 production outlook to 21.4 million tonnes, down nearly 18 percent from last month's estimate of 26 million tonnes.
Weeks of dryness have hurt grains fields in the world's No. 3 soybean- and No. 2 corn-exporting country, prompting crop estimate cuts and denting hopes that Argentina could replenish corn supplies depleted by a lackluster U.S. harvest.
Cocoa Falls as Europe’s Slowdown May Dent Demand; Robusta Coffee Climbs (Source: Bloomberg)
Cocoa fell for a third day in London on speculation Europe’s economic slowdown is curbing demand and as exports from Nigeria, the world’s fourth-largest producer, are set to resume. Robusta coffee and white sugar advanced. Cocoa-bean processing in Europe rose 1.8 percent in the fourth quarter, the European Cocoa Association said Jan. 13. That was below the 7.5 percent estimate from analysts and traders in a Bloomberg News survey and the third quarter’s 14 percent increase. Nigeria will resume cocoa exports “immediately” after a national strike was called off, Olakunle Akingbola, a business manager at Lagos-based Cobalt International Services, said by phone today. “Expectations of robust demand for cocoa in Europe were disappointed,” Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt, wrote in a report e-mailed today. “The cooling of demand is not sufficient to give additional buoyancy to prices, given that a moderate market surplus had already been anticipated for the 2011-12 season.”
Natural Gas Extends Drop to Two-Year Low in New York: Commodities at Close (Source: Bloomberg)
Natural gas futures were down 4.5 percent at 4:56 p.m. in London after falling to a two-year low. There was no trading in the Standard & Poor’s GSCI gauge of 24 commodities and UBS Bloomberg CMCI index of 26 raw materials because of the Martin Luther King Jr. Day holiday in the U.S. Natural gas fell in New York, taking its decline in the past six days to the biggest in more than five years, on speculation that milder-than-average weather in the U.S. will curb heating demand. Natural gas for February delivery fell 12 cents to $2.555 a million British thermal units on the Nymex and traded as low as $2.54, the lowest since Sept. 4, 2009. Futures have declined more than 16 percent in the past six days, the largest drop since November 2006. U.K. natural gas and electricity for this summer slumped as supplies were ample, even as colder weather caused heating demand to surge.
Oil Trades Near 3-Day High on Straits of Hormuz Threats, EU Embargo Push (Source: Bloomberg)
Oil traded near a three-day high in New York after Iran said a loss of supply through the Strait of Hormuz would shock markets and France pushed for faster enforcement of a proposed ban on imports from the country. Futures were little changed after climbing 1 percent yesterday. France wants the European Union embargo delayed by no more than three months to allow nations including Greece, Italy and Spain time to find alternative supplies, an official with knowledge of the matter said. Iran has threatened to shut the channel in response to international sanctions. Any disruption will harm the world’s crude markets, the Iranian governor to OPEC said, according to the state-run Mehr news agency. Crude for February delivery was at $99.44 a barrel, down 25 cents, in electronic trading on the New York Mercantile Exchange at 10:35 a.m. Sydney time. The contract yesterday rose 99 cents to $99.69, the highest settlement since Jan. 11. Prices closed at $98.70 on Jan. 13.
China launches its first physical iron ore trading platform
BEIJING, Jan 16 (Reuters) - China launched its first physical iron ore trading platform on Monday in a further move to strengthen its pricing power over the sector dominated by foreign miners.
The China Beijing International Mining Exchange (CBMX) provides the online platform together with the China Iron & Steel Association and the China Chamber of Commerce of Metals Minerals & Chemicals Importers & Exporters.
METALS-Copper slips as euro zone rating cut spurs growth worry
SHANGHAI, Jan 16 (Reuters) - Copper fell on concern that a credit rating cut for nine euro zone nations by agency Standard & Poor's could be the latest hurdle in the region's resolution of a two-year sovereign debt crisis, slowing demand for commodities
"We have seen the price come off a little today in Shanghai, so the downgrade has had a little bit of an impact, but I don't see significant pressure on prices," said commodities analyst Bonny Liu of Macquarie Securities in Singapore.
PRECIOUS-Gold steady after S&P downgrades; dollar pressures
SINGAPORE, Jan 16 (Reuters) - Spot gold traded steady, weighed down by a strong dollar after mass downgrades of euro zone nations by Standard & Poor's on Friday, while its safe haven appeal could benefit from renewed fears about the euro zone debt crisis.
"There are a lot of risks still ahead of us and we don't think gold has priced in these risks," said Jeremy Friesen, commodity strategist at Societe Generale. "It (the downgrades) is one of the incremental pushes for gold to appreciate."
Baltic index at near 1-yr low, confidence slumps (Source: Bloomberg)
LONDON, Jan 13 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, fell to its lowest in nearly a year on Friday as a slump in cargo activity and a growing surplus of vessels weighed further on the market.
The shipping sector in coming months is expected to face a supply glut and economic gloom, including concerns over the outlook for Chinese demand for raw materials, which will pressure earnings.
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