Shares struggle as China data fuels growth worry
TOKYO, March 22 (Reuters) - Asian shares gave back most of their earlier gains after data showed China's factory activity shrank for a fifth successive month, renewing concerns about a growth slowdown in the world's second largest economy.
"The Chinese PMI data (unofficial) will no doubt dominate early sentiment, at least until European manufacturing PMI data takes centre stage," said Cameron Peacock, market analyst at IG Markets, in a note.
FOREX-Aussie hits 2-mth low on weak China data; Europe PMIs eyed
TOKYO, March 22 (Reuters) - The Australian dollar dropped to a two-month low on Thursday after data showed China's manufacturing activity shrank in March for a fifth straight month, underscoring concerns about growth slowdown in the world's second largest economy.
After HSBC flash PMI showed the overall rate of contraction deepening and new orders sinking to a four-month low, the Aussie fell 0.7 percent to $1.0383 , hitting the lowest level since late January. It had fetched $1.0477 prior to the release.
GRAINS-Wheat, corn climbs on Chinese demand; soy falls
NEW DELHI, March 22 (Reuters) - U.S. wheat and corn futures rose, recovering after three straight sessions of losses due to expectations that China will import more grains after buying 350,000 tonnes of feed wheat from Australia.
"Wheat imports by China are definitely big, bullish news and traders anticipate China's demand to be very strong in the days to come as it tries to cool higher grain prices," said Lynette Tan, an analyst with Phillip Futures in Singapore.
Argentine grains truck strike goes into 4th day
BUENOS AIRES, March 21 (Reuters) - Argentina's striking truck drivers will keep their rigs parked for a fourth straight day on Thursday, as concern grows that the protest could slow soy exports from one of the world's key suppliers.
Growers in Argentina's Pampas grains belt have begun collecting this season's crops. But millions of tonnes of soybeans and corn will be stranded without the trucks needed to haul the crop to grains terminals that dot the country's rivers and serve as the gateway to the world market.
Texas' 2011 drought costliest in state history, researchers say
SAN ANTONIO, March 21 (Reuters) - Texas agriculture producers lost $7.62 billion to the state's 2011 drought, which experts said makes it the costliest drought in the state's history and possibly the most expensive drought ever suffered by any state.
"No one alive has seen single-year drought damage to this extent," said Travis Miller, an agricultural economist at Texas A&M University.
Stubborn drought expected to tax Mexico for years
CHIHUAHUA, Mexico, March 21 (Reuters) - A severe drought in Mexico that has cost farmers more than a billion dollars in crop losses alone and set back the national cattle herd for years, is just a foretaste of the drier future facing Latin America's second largest economy.
As water tankers race across northern Mexico to reach far-flung towns, and crops wither in the fields, the government has allotted 34 billion pesos ($2.65 billion) in emergency aid to confront the worst drought ever recorded in the country.
Kenya sees wheat production almost tripling
NAIROBI, March 21 (Reuters) - Kenya expects its 2012 wheat output to almost triple compared with the previous year buoyed by increased planting and favourable weather forecasts, the Agriculture ministry said on Wednesday.
It expected to harvest 6.3 million 90-kg bags of wheat in 2012 up from the 2.2 million realised last year when prolonged drought slashed production in its main crop season.
Dry weather now main concern for EU grain farmers
PARIS, March 21 (Reuters) - Grain farmers in western Europe are keeping their eyes on rain forecasts as concerns mount that persistent dryness could further cut yields following damage linked to the cold snap earlier this year.
In recent weeks, analysts repeatedly cut their 2012 forecasts for north European winter grain crops including wheat, barley and durum to take account of frost damage and these reductions are now mostly priced into the markets.
Global coffee market tight despite price slump
GUAXUPE, Brazil, March 21 (Reuters) - The latest retreat in arabica coffee prices signals the tightly supplied coffee market is not running out of beans yet, but the outlook for sub-optimal harvests and faster consumption indicate that by next season it could come close.
A tour of coffee areas in the world's top arabica grower, Brazil, showed a good but sub-optimal crop on the way. But in Colombia, output has dropped sharply and poor harvests have become almost a chronic problem.
Sugar prices may be at short-term top -Kingsman
GENEVA, March 21 (Reuters) - Consultant Jonathan Kingsman warned on Wednesday of risks sugar prices could fall after rallying to a three-week high this week, saying funds that piled into the sweetener may have over-reacted to talk of lower-than-expected Brazilian output.
ICE May raw sugar futures surged to a high of 26.20 cents a lb on Tuesday after market talk of scaled-back expectations for output in the centre-south region of top producer Brazil due to prolonged dry weather.
Brent falls below $124 on China demand fears
SINGAPORE, March 22 (Reuters) - Brent crude dropped below $124 a barrel, after weak Chinese manufacturing data sparked concerns that energy demand growth could slow at the world's second-largest oil consumer.
"It's a surprising reading, and is contrary to improving monetary conditions and a stabilising external conditions," said Natalie Robertson, a commodities strategist with ANZ Bank in Melbourne. "It reflects Chinese demand on the ground, which has a significant impact on commodity markets."
COLUMN-Markets fail to see China iron ore slowdown is good
--Clyde Russell is a Reuters market analyst. The views expressed are his own.--
SINGAPORE, March 21 (Reuters) - The market sell-off after BHP Billiton said China's iron ore demand is "flattening" was as predictable as it was wrong, with investors failing to see the news is exactly what's needed to prolong the commodity boom.
It was predictable that equities and growth-exposed currencies such as the Australian dollar dropped, as this is what happens when markets become concerned that China, the engine of global economic growth and commodity demand, is slowing too much and risks a hard landing.
China Feb refined copper imports hit third-highest level
HONG KONG, March 21 (Reuters) - China's inflows of refined copper rose 12 percent month-on-month in February to hit the third-highest level ever on delayed shipments from the holiday month of January and as buyers stocked up on expectations of rising demand during the peak March-May consumption season.
In February, 375,831 tonnes of refined copper arrived China, compared to 335,480 tonnes in January and up 137.6 percent from a year earlier, data from the General Administration of Customs showed on Wednesday.
China fund targets nickel in resource deals
HONG KONG, March 21 (Reuters) - China Development Bank's investment arm is targeting copper, uranium, iron ore, coking coal as well as nickel resources overseas, looking for investments with good returns and Chinese connections, a China Development Bank International executive said on Wednesday.
Chinese firms have been snapping up copper, uranium, iron ore and coking coal assets around the world, but have yet to make a big splash in nickel.
Stainless steel output hits record, growth slows
LONDON, March 21 (Reuters) - Global production of stainless steel grew 3.3 percent to hit a new record of 32.1 million tonnes in 2011 but growth slowed sharply from 2010's 25 percent, a report from the International Stainless Steel Forum showed on Wednesday.
"China has remained the driving force in stainless steel production," it said.
Australia lifts iron ore exports forecast, bets on China demand
PERTH/SYDNEY, March 21 (Reuters) - Australia expects to produce record tonnages of iron ore through much of the decade, nearly all of which will be used to manufacture steel in China, shrugging off signs demand was cooling off and that prices would drop.
Australia raised its forecast on Wednesday for iron ore exports in the current fiscal year by nearly 3 percent to 473 million tonnes, and also sounded a bullish note on the outlook for shipments in the longer term.
Japan Feb crude steel output falls 3.7 pct yr/yr
TOKYO, March 21 (Reuters) - Japan's crude steel output declined 3.7 percent in February from a year earlier, the smallest fall in three months, as demand from Thailand recovered from the aftermath of devastating flooding late last year, an industry body said on Wednesday.
The yen's retreat to an 11-month low against the U.S. dollar last week will further boost Japan's steel exports in the following months, while a gradual increase in reconstruction demand in and after April will support domestic demand, the Japan Iron and Steel Federation said.
METALS - LME copper falls after China factory activity shrinks
SINGAPORE, March 22 (Reuters) - London copper futures turned negative on Thursday, after manufacturing data on China that showed factory activity in the world's top metals consumer shrank for a fifth month.
Three-month copper on the London Metal Exchange fell by 0.67 percent to $8,398 a tonne by 0323 GMT.
Copper was falling towards 11-day lows tipped Tuesday at $8,345 a tonne, when sentiment took a hit after top miner BHP Billiton also sparked China growth concerns when it warned of flattening iron ore demand from the world's second-largest economy.
PRECIOUS-Gold sluggish after China factory activity falls
SINGAPORE, March 22 (Reuters) - Gold prices were little changed on Thursday, hovering around $1,650 an ounce, as investors weighed a recent improvement in the U.S. economy against the continuing shrinkage of Chinese manufacturing activities.
Bullion prices have fallen more than 2 percent so far this month, after the U.S. Federal Reserve dashed hopes for further asset purchases in its latest policy statement and recent data showed the U.S. economic recovery was well on track.
PRECIOUS-Gold ticks up; China, euro zone data eyed
SINGAPORE, March 22 (Reuters) - Gold prices inched up, stuck in a narrow range as investors await manufacturing data from China and the euro zone to assess the health of their economies, while a slightly lower dollar lent some support.
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