Stock & Commodities Related News.

Wednesday, March 28, 2018

Stock & Commodities Related News.

US STOCKS-Wall Street closes sharply lower, tech leads late selloff - Reuters News

28-Mar-2018 04:41:35 AM

• Markets turn sharply lower in late trading

• Facebook, Alphabet drag down tech stocks

• Twitter falls after short-seller report

• Dow down 1.43 pct, S&P 500 down 1.73 pct, Nasdaq down 2.93 pct

Updates to market close

By Stephen Culp

March 27 (Reuters) - Wall Street closed sharply lower Tuesday, with each of the major U.S. indexes suffering their fourth decline in five sessions, fueled by a selloff in the tech sector.

Tech stocks, among the best performing sectors of the bull market, have been under pressure recently as concerns about government regulation stemming from their strong growth and privacy questions surrounding Facebook.

"What it really amounts to is a complete lack of knowing what to expect," said Peter Kenny, senior market strategist at Global Markets Advisory Group, in New York.

"It seems so open-ended, there is a lot of risk here and investors don't like uncertainty and this is the definition of uncertainty."

Facebook shares dropped 4.9 percent at $152.22 and is down nearly 15 percent for the month. The Nasdaq Internet index saw its worst daily percentage drop since June 2016.

Of the 11 major sectors of the S&P 500 only defensive plays such as consumer staples, telecom, real estate and utilities ended the session in positive territory.

The Dow Jones Industrial Average fell 344.89 points, or 1.43 percent, to 23,857.71, the S&P 500 lost 45.93 points, or 1.73 percent, to 2,612.62 and the Nasdaq Composite dropped 211.74 points, or 2.93 percent, to 7,008.81.

Since hitting a record on Jan. 26, equities have been battered by worries about rising inflation, the pace of interest rate hikes by the U.S. Federal Reserve and the possibility of a global trade war. The S&P 500 is down 9.1 percent from its high.

White House trade adviser Peter Navarro confirmed on Monday top Trump administration officials have asked China to cut tariffs on imported cars, allow foreign majority ownership of financial services firms and buy more U.S.-made semiconductors in negotiations to avoid imposing tariffs on a host of Chinese goods.

A person familiar with the discussions said these were among the asks from Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer as they pursue talks with Beijing.

Markets roared back on Monday with their best day since August 2015 on hopes that the world's two largest economies were willing to renegotiate tariffs and trade imbalances.

But those gains proved temporary as early advances were overcome by the tech sector weakness.

The drop in Facebook continues to put pressure on the tech sector, which is down 5.2 percent for March and on track for its worst month since April 2016.

Privacy concerns for the social media giant were highlighted further on Tuesday when a whistleblower said Canadian company AggregateIQ had developed software to target Republican voters in the 2016 U.S. election.

Alphabet shares fell 4.5 percent after an appeals courts resurrected a multibillion dollar copyright case brought by Oracle Corp against the company.

Nvidia was another weak spot, falling 7.8 percent after the chipmaker temporarily suspended self-driving tests across the globe.

Tesla shares were off 8.2 percent after the U.S. National Transportation Safety Board opened a field investigation of last week's fatal Tesla crash and vehicle fire.

Twitter fell 12 percent after short-seller Citron Research called the stock "most vulnerable" to privacy regulations.

Declining issues outnumbered advancing ones on the NYSE by a 2.12-to-1 ratio; on Nasdaq, a 3.36-to-1 ratio favored decliners.

Volume on U.S. exchanges was 7.57 billion shares, compared to the 7.37 billion average for the full session over the last 20 trading days.

(Additional reporting by Chuck Mikolajczak

Editing by Susan Thomas)

UPDATE 3-Oil prices fall on surprise U.S. inventory rise; China crude volatile - Reuters News

28-Mar-2018 03:13:42 PM

• Brent falls below $70/barrel, WTI dips below $65/barrel

• Saudi Arabia proposes long-term supply management with Russia

• High volumes for Shanghai crude, but also high volatility

• Shanghai crude falls 3.75 percent to 410 yuan/barrel

Adds comment, updates prices

By Henning Gloystein

SINGAPORE, March 28 (Reuters) - Oil prices fell on Wednesday, with Brent dropping back below $70 per barrel and U.S. West Texas Intermediate dipping below $65, pulled down by a report of increasing U.S. crude inventories that surprised many traders.

U.S. WTI crude futures were at $64.72 a barrel by 0700 GMT, down 53 cents, or 0.8 percent, from their previous settlement.

Brent crude futures were at $69.69 per barrel, down 42 cents, or 0.6 percent.

Traders said the falls came after the American Petroleum Institute (API) late on Tuesday reported a surprise 5.3 million barrels rise in crude stocks in the week to March 23, to 430.6 million barrels.

"Crude futures are trading lower in response to a surprise build in API data," said Sukrit Vijayakar, director of energy consultancy Trifecta, in a note.

Official U.S. inventory data will be published by the Energy Information Administration (EIA) late on Wednesday.

Robert Carnell, chief economist and head of research at Dutch bank ING in Asia told the Reuters Global Markets Forum on Wednesday that "more supply coming from the U.S." would also likely weigh on oil prices.

U.S. oil production has already jumped by almost a quarter since mid-2016, to 10.4 million barrels per day (bpd), taking it past top exporter Saudi Arabia and within reach of the biggest producer, Russia, which pumps around 11 million bpd.

Wednesday's price falls came despite Saudi Arabia saying it was working with Russia on a historic long-term pact that could extend controls over world crude supplies by major exporters for many years.

Saudi Crown Prince Mohammed bin Salman told Reuters that Riyadh and Moscow were considering greatly extending a short-term alliance on oil curbs that began in January 2017 after a crash in crude prices, with a partnership to manage supplies potentially growing "to a 10-to-20-year agreement."

VOLATILE SHANGHAI CRUDE

In Asia, Shanghai crude oil futures posted high volumes and volatile trade on their third day of trading.

Spot Shanghai crude futures were down 3.75 percent on Wednesday, to 410.4 yuan ($65.37) per barrel by 0700 GMT.

In dollar-terms, that puts Chinese crude prices significantly below Brent and only slightly above U.S. WTI.

Since Shanghai crude oil futures were launched on March 26, it would have been profitable to buy the spread between Brent and Shanghai crudes, which has risen from $1.60 per barrel on Monday to $4.60 on Wednesday, while shorting the Shanghai premium over WTI, which has narrowed from $3.10 a barrel on Monday to just 30 cents on Wednesday.

Greg McKenna, chief market strategist at futures brokerage AxiTrader, said he hoped Shanghai crude "gets a lot of traction and we end up with three established global benchmarks", but he cautioned that "the first couple of days have been volatile".

($1 = 6.2782 Chinese yuan renminbi)

(Reporting by Henning Gloystein; editing by Aaron Sheldrick and Richard Pullin)

EXCLUSIVE-OPEC, Russia consider 10- to 20-year oil alliance -Saudi Crown Prince - Reuters News

28-Mar-2018 02:41:23 AM

Adds analysts' comments, background

By Richard Mably and Yara Bayoumy

NEW YORK, March 27 (Reuters) - Saudi Arabia and Russia are working on a historic long-term pact that could extend controls over world crude supplies by major exporters for many years.

Saudi Crown Prince Mohammed bin Salman told Reuters that Riyadh and Moscow were considering a deal to greatly extend a short-term alliance on oil curbs that began in January 2017 after a crash in crude prices.

"We are working to shift from a year-to-year agreement to a 10 to 20 year agreement," the crown prince told Reuters in an interview in New York late on Monday.

"We have agreement on the big picture, but not yet on the detail."

Russia, not a member of the Organization of the Petroleum Exporting Countries, has worked alongside the 14-member group during previous oil gluts, but a 10 to 20 year deal between the two would be unprecedented.

Top OPEC producer Saudi Arabia recruited Russia and other non-OPEC countries to help drain oversupply when oil prices collapsed to below $30 a barrel in 2016 from over $100 in 2014.

Crude has since recovered to $70 but fast-rising output from U.S. shale producers has capped prices.

"This is all about whether the arrangement is a short-term expedient to deal with this particular crisis in the oil market, or whether it reflects a realignment in world oil," said oil historian Daniel Yergin, vice chairman at consultancy IHS Markit.

"OPEC countries want to find a way to institutionalize this relationship rather than to have it be a one-shot deal."

Robert McNally at consultancy Rapidan Energy Group said Riyadh wanted help in breaking the boom-bust cycles that characterize oil markets by capping crude on the upside as well as by helping lift low oil prices.

"History shows that without a long-term, powerful, competent coherent, disciplined swing producer in the oil markets ... you get space-mountain oil prices. Wild volatility of the sort we have seen in the past 10 to 15 years and that Saudi Arabia and Russia do not want to see again," McNally said.

He said that would require Russia to join Saudi in building spare production capacity to use when prices rise too much.

SAUDI, RUSSIA ALLIANCE "THICKER THAN OIL"

A long-term pact between Moscow and Riyadh would effectively co-opt Russia to the Saudi-led OPEC cartel while strengthening Russia's hand in the Middle East where the United States has long been the dominant super-power.

News of the potential oil alliance came at a time when the two have been working to cement an economic relationship despite being at odds over the conflict in Syria, where they back opposing sides.

Riyadh supports rebels fighting Syrian President Bashar al-Assad's army, while Russian and Iranian forces have backed Assad – meaning that Russia effectively sides with Iran, Riyadh's regional arch-foe.

A meeting between the Saudi crown prince and Russian president Vladimir Putin on the sidelines of a G20 meeting in China in September 2016 was instrumental in bringing Russia on board to support OPEC, non-OPEC oil curbs.

Last October, Saudi King Salman became the first Saudi monarch to visit Russia, providing investment and political support for a Russian economy battered by Western sanctions.

"It is a very important strategic development," Helima Croft at RBC Capital Markets said of a potential 10 to 20 year Saudi-Russia oil collaboration.

"First, the Crown Prince is making the statement, not the oil minister, one more clear sign that he (like Putin) is the final word on his country's oil policy.

"Second it is one more sign of the major reversal in Saudi-Russia relations. Saudi was a staunch cold war ally of the U.S. Now this Russia-Saudi alliance appears to be thicker than oil and seems to be driven by the personal affinity between Putin and MBS," said Croft.

ARAMCO IPO LATE 2018, EARLY 2019

The crown prince predicted that world oil demand would not peak until 2040, despite advances in renewable energy technologies and the electric vehicle.

In an attempt to end Saudi Arabia's reliance on oil, he is leading a push to diversify the Saudi economy away from oil and gas by 2030.

Riyadh plans to raise funds through the flotation of a 5 percent stake in state Saudi oil company Aramco. Time is running out for an initial public offering this year but the crown prince said the IPO could still take place at the end of 2018 or in early 2019, depending on financial market conditions.

Saudi Oil Minister Khalid al-Falih said last week that documentation was ready but that a venue for the IPO had not yet been decided. The New York stock exchange is still in the running for the IPO, alongside London and Hong Kong, but Falih said there was a risk of a "frivolous" legal action if Aramco were listed in the United States.

(Additional reporting by Stephen Adler, Jessica Resnick-Ault

Editing by Frances Kerry, Toni Reinhold)

PRECIOUS-Gold slips from over 5-week high as trade tensions ease - Reuters News

28-Mar-2018 04:04:47 PM

• SPDR Gold holdings down 0.14 pct on Tuesday

• Platinum off from near 3-month lows

(Updates prices, adds quote and details)

By Swati Verma

BENGALURU, March 28 (Reuters) - Gold on Wednesday backed away from an over 5-week high touched in the previous session as concerns about a trade war between the United States and China eased, which supported the dollar and reduced the incentive to hold bullion as a safe-haven asset.

Spot gold was down 0.4 percent at $1,339.46 per ounce at 0723 GMT. Prices dropped 0.7 percent on Tuesday, its biggest percentage loss since March 15, after rising to over 5-week highs.

U.S. gold futures for April delivery were down 0.1 percent to $1,341.10 per ounce.

"The gold price is mainly driven by the U.S. dollar ... The risk of trade war is shrinking, which is good for the U.S. dollar," said Ji Ming, chief analyst, Shandong Gold Group.

The dollar index, which measures the greenback against six other major currencies, rose 0.2 percent to 89.503 after gaining 0.3 percent on Tuesday, the most since March 20.

The dollar recovered from the five-week low as concerns of a global trade war were eased by optimistic news that the U.S. and China were set to begin trade negotiations, after earlier exchanging threats.

However, the White House said Trump had discussed trade practices with China in calls on Tuesday with French President Emmanuel Macron and German Chancellor Angela Merkel, which could lead to an escalation of trade tensions.

"Any sort of an announcement that negotiations are being formalized and/or are being taken seriously by both sides (U.S.-China), could provide strength to the greenback and alternatively weigh on precious metals instead," INTL FCStone analyst Edward Meir said in a note.

A firmer dollar makes gold, which is seen as a safe investment in times of political and financial uncertainty, more expensive for holders of other currencies.

Holdings of the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.14 percent to 846.12 tonnes on Tuesday from 847.30 tonnes on Monday.

In other precious metals, spot silver was down 0.2 percent at $16.46 per ounce. Silver ended 1 percent lower in the previous session, after rising to a three-week high of $16.80 per ounce.

Platinum was down 0.2 percent at $941 per ounce, having fallen to lowest since early January in the previous session at $935.

Palladium was steady at $971.70 an ounce.

(Reporting by Swati Verma and Eileen Soreng in Bengaluru, Editing by Christian Schmollinger and Sunil Nair)

GRAINS-Wheat firms after two-day decline, improved U.S. weather weighs - Reuters News

28-Mar-2018 10:31:22 AM

• Rains in parts of U.S. southern Plains caps gains in wheat

• Soybeans little changed after falling for three sessions

Adds details, quotes

By Naveen Thukral

SINGAPORE, March 28 (Reuters) - Chicago wheat futures ticked higher on Wednesday after falling for the past two sessions, as rains in parts of the U.S. southern Plains improved crop prospects.

Soybeans were little changed while corn ticked higher in positioning ahead of a U.S. Department of Agriculture planting intentions report due on Thursday.

The Chicago Board Of Trade most-active wheat contract gained 0.3 percent to $4.50-1/4 a bushel by 0203 GMT, having lost about 2.3 percent in the past two days.

Soybeans were largely unchanged at $10.19-3/4 a bushel and corn rose 0.2 percent to $3.74-3/4 a bushel.

"The U.S. winter wheat crop had a pretty tough winter period but spring weather has been favourable," said Phin Ziebell, an agribusiness economist at National Australia Bank.

"A large chunk of the rally that we saw in February has gone."

Showers crossing the U.S. Plains on Tuesday should help recharge soil moisture in some areas.

The USDA on Monday rated 13 percent of winter wheat in Kansas, the top producer, in good-to-excellent condition, up from 11 percent last week. However, ratings are down significantly from a year ago, when 38 percent of the state's wheat was rated good to excellent.

The soybean market could face pressure as U.S. farmers are expected to boost plantings this year.

Analysts expect the USDA to project U.S. soybean plantings for 2018 at a record-high of 91.1 million acres and corn plantings at 89.4 million acres, down from 90.2 million in 2017.

Analysts also expect the USDA to report record-high March 1 corn and soybean stocks, reflecting several years of bumper harvests.

There was additional pressure stemming from news that Agroconsult, a Brazilian consulting firm, raised its estimate of the country's soybean harvest to 118.9 million tonnes, from 117.5 million previously.

Commodity funds were net sellers of CBOT soybean, wheat, soymeal and corn futures contracts on Tuesday, and net buyers in soyoil, traders said.

(Reporting by Naveen Thukral; editing by Richard Pullin)

Brazil soybean prices surge as U.S.-China trade spat deepens - Reuters News

28-Mar-2018 05:44:13 AM

By Dominique Patton and Ana Mano

BEIJING/SAO PAULO, March 27 (Reuters) - Chinese importers are paying record harvest-time premiums for Brazilian soybeans as they look to secure supplies amid concern that shipments from the United States may be disrupted by a trade war between Washington and Beijing.

China buys about 60 percent of globally traded soybeans to feed the world's biggest livestock industry. Brazil supplied half of its imports last year while the United States supplied around a third.

But Beijing has threatened to target soybeans, the United States' biggest agricultural export, in retaliation for measures taken by President Donald Trump's administration aimed at improving terms of trade for the United States.

Demand for beans from top exporter Brazil pushed up premiums on concern that China could curb U.S. purchases. Premiums paid for beans from Brazil's Paranagua port topped $1 per bushel above benchmark international prices, according to Esalq, an agricultural market research body at the University of Sao Paulo.

That was the highest spot premium on record for March, a time when the incoming flood of newly harvested soybeans in Brazil typically weakens premiums.

The premium was up over a third from the 65 cents a bushel buyers were paying on March 1 for April shipments of soy from Paranagua, one of the top grain export terminals in Brazil.

A year ago, Paranagua premiums for spot shipments were just 36 cents over futures, according to Thomson Reuters Eikon data.

"The market is going crazy," said a Beijing-based trader, who declined to be identified as he is not authorized to talk to media.

"Some buyers are still buying due to the good crush margins here, but they're feeling very uncomfortable about the high price," he added.

Buying more Brazilian beans is one of several contingency plans that Chinese buyers are executing to ensure they have the animal feed they need despite the threat of a disruption of supply from the United States.

China's crushers have increasingly favoured Brazilian soybeans over American beans because of their higher protein and oil levels.

Soybeans shipped in April from the Brazilian port of Paranaguá were priced about $414 per tonne, compared with U.S. soybeans shipped out of the Gulf of Mexico at $403 per ton, according to traders and Thomson Reuters data.

"(There's a) lack of interest coming for U.S. beans presently despite being the cheapest thing in town," one U.S. trader said.

Brazilian officials have previously said they could see increased Chinese demand for Brazilian soy due to growing trade tension between China and the United States.

Brazil has already benefited from an increase in demand for its corn from Mexico, where buyers are also concerned that trade negotiations with the United States could impact U.S. corn exports to its southern neighbor.

The sharp rise in soybean premiums suggests Brazilian exporters are already reaping benefits even before China has taken any action to curb imports from its second-largest supplier.

Drought in neighbouring Argentina, the world's third-largest soy exporter, is driving up global soy prices and stoking demand for beans from elsewhere.

Rain during harvesting in neighboring Brazil may have also slowed soybean trading, contributing to higher prices, said traders.

Strong demand for biodiesel in Brazil has boosted soy crush margins, raising demand from local crushers and reducing the volume of soybeans available for export, said one Brazil-based trader.

Mato Grosso-based farmer Elso Pozzobon believes some growers may be holding on to their stockpiles in anticipation that prices could rise even further if Sino-U.S. trade tensions escalate.

"Farmers who are not in need of immediate cash are holding on to their beans," he said.

(Reporting by Dominique Patton in Beijing, Ana Mano and Roberto Samora in Sao Paulo and Karl Plume and Michael Hirtzer in Chicago

Editing by Simon Webb and Matthew Lewis)