US STOCKS-Wall St set for gains as U.S.-China trade tensions ease - Reuters News
14-May-2018 09:07:03 PM
- Optical components makers rise after Trump's ZTE decision
- Xerox falls after scraping $6.1 bln deal with Fujifilm
- NXP jumps on report China resumes Qualcomm deal review
- Futures up: Dow 0.22 pct, S&P 0.14 pct, Nasdaq 0.19 pct
Adds comments, details, updates prices
By Sruthi Shankar
May 14 (Reuters) - Wall Street was set to open higher on Monday on signs of easing U.S.-China trade tensions after President Donald Trump softened his stance on ZTE Corp, pledging to help the Chinese technology company "get back into business, fast".
Trump's comments on Sunday came ahead of trade talks between Chinese Vice Premier Liu He and U.S. officials this week as they seek to resolve trade disputes.
The U.S. Commerce Department last month banned American companies from selling to the Chinese tech company for violating an agreement.
Trump's unexpected announcement helped drive big gains in shares of U.S. suppliers to ZTE. Optical components maker Acacia Communications jumped 16.1 percent, while Oclaro and Lumentum Holdings rose between 8.75 percent and 5 percent.
Also helping the mood was news that China had resumed its review of chipmaker Qualcomm's proposed $44 billion takeover of NXP Semiconductors. NXP surged 9.6 percent and Qualcomm 2.2 percent.
"Some of the headlines point to signs that Trump might be watering down his tough talks on trade," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
At 8:46 a.m. ET, Dow e-minis were up 54 points, or 0.22 percent. S&P 500 e-minis were up 3.75 points, or 0.14 percent and Nasdaq 100 e-minis were up 13.5 points, or 0.19 percent.
Wall Street's main indexes posted solid gains last week, helped by a surge in oil prices, easing inflation fears and Apple's rally that took it close to $1 trillion in market capitalization.
The S&P 500 and the Dow Jones Industrial Average crossed their 100-day moving averages, a key technical level, for the first time in nearly a month.
"It looks like the markets want to move up, and there seems to be a rosier outlook for geopolitics especially North Korea," Cardillo said.
U.S. Secretary of State Mike Pompeo said on Sunday that Washington would agree to lift sanctions on North Korea if the country agrees to completely dismantle its nuclear weapons program.
Among decliners, Xerox fell 4.2 percent after the U.S. photocopier giant scrapped a planned $6.1 billion deal with Fujifilm Holdings.
Perrigo slid 5.1 percent after the drugmaker said it expected to get a complete response letter from U.S. regulators on a generic version of ProAir inhalation aerosol.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Anil D'Silva)
UPDATE 7-Oil steady near multi-year highs as U.S. drilling rises - Reuters News
14-May-2018 09:20:04 PM
- U.S. sanctions against Iran keep oil near three-year highs
- Europe and Asia oppose U.S. sanctions plans
- Increased drilling points to rising U.S. production
Updates prices in paragraph 2
By Christopher Johnson
LONDON, May 14 (Reuters) - Oil prices steadied below 3-1/2 year highs on Monday as resistance emerged in Europe and Asia to U.S. sanctions against major crude exporter Iran, while rising U.S. drilling pointed to higher North American production.
Brent crude was up 20 cents at $77.32 a barrel by 1315 GMT and U.S. light crude rose 10 cents to $70.80.
Both oil futures contracts hit their highest since November 2014 last week at $78 and $71.89 a barrel respectively as markets anticipated a sharp fall in Iranian crude supply once U.S. sanctions bite later this year.
It is unclear how hard U.S. sanctions will hit Iran's oil industry. A lot will depend on how other major oil consumers respond to Washington's action against Tehran, which will take effect in November.
China, France, Russia, Britain, Germany and Iran all remain in the nuclear accord that placed controls on Iran's nuclear programme and led to a relaxation of economic sanctions against Iran and companies doing business there.
Some oil analysts have said they expect Iranian crude exports to fall by as little as 200,000 barrels per day (bpd), while others put the figure closer to 1 million bpd.
Michael Wittner, analyst at Societe Generale, forecasts U.S. sanctions will remove 400,000-500,000 bpd of Iranian crude from the global oil market.
"In 2012 the reduction in Iranian crude production and exports was around 1 million bpd," Wittner said. "This time around, we expect much less of an impact."
Greg McKenna, chief market strategist at futures brokerage AxiTrader, says it is still "far from certain" that sanctions "will bite in the way intended".
"Germany has said it will protect its companies from U.S. sanctions, Iran has said French oil giant Total has yet to pull out of its fields and all the while it seems the Chinese are ready to fill the void created by the U.S."
The surge in oil prices comes at a time of tight supply amid record Asian demand and voluntary output restraint by the Organization of the Petroleum Exporting Countries and non-OPEC producers including Russia.
On Monday, however, markets were held in check by news of a rise in U.S. drilling for new oil production.
U.S. drillers added 10 oil rigs in the week to May 11, bringing the total to 844, the highest level since March 2015, energy services firm Baker Hughes said on Friday.
"Soaring U.S. shale output will continue to put a cap on prices," said Hussein Sayed, chief market strategist at futures brokerage FXTM.
(Additional reporting by Henning Gloystein in Singapore
Editing by David Goodman)
PRECIOUS-Gold firms as dollar retreats from 2018 peak - Reuters News
14-May-2018 08:04:38 PM
- Geopolitical risks could support gold
- Gold price expected to remain in narrow range
(Updates prices)
By Pratima Desai
LONDON, May 14 (Reuters) - Gold prices edged higher on Monday as the dollar retreated from a 2018 peak after subdued U.S. inflation data last week highlighted the prospect of fewer U.S. interest rate increases than previously expected this year.
Spot gold was up 0.1 percent at $1,318.9 an ounce at 1252 GMT, having touched $1,325.96 on Friday, its highest since April 26. U.S. gold futures were down 0.1 percent at
$1,318.8.
A weaker U.S. currency makes dollar-denominated gold cheaper for holders of other currencies -- a relationship used by funds to generate buy and sell signals.
Though the dollar eased on Monday, its performance against a basket of other major currencies touched 93.416 last week for a gain of more than 4 percent since April 17 and its highest level since December.
"Gold is dollar-driven but it is doing reasonably well given the dollar is generally stronger," said Macquarie commodities strategist Matthew Turner.
Further support could come from rising security risks in the Middle East after the United States said it would withdraw from the 2015 international nuclear deal with Iran and reimpose sanctions.
However, gold is expected to remain in the narrow range in which it has been trading this year -- mostly between $1,300 and $1,350 -- unless supply or demand fundamentals change dramatically.
"Gold's trading range in the first four months between low and high price was the lowest in percentage terms since it was fixed to the dollar in 1971," Turner said.
An increase to U.S. interest rates, possibly in June at the Federal Reserve's next meeting, will weigh on gold, though analysts say that would be unlikely to push gold significantly lower.
"Over the short term, and particularly during May, we see gold trading between $1,285 and $1,338 an ounce as continued strength in the dollar and rising rates pressure values lower," said INTL FCStone analyst Edward Meir.
Traders said that falling gold imports by India, a top consumer, were also undermining sentiment.
Silver was up 0.1 percent at $16.63 an ounce, platinum fell 0.2 percent to $920.00 and palladium slipped 0.2 percent to 994.25.
(Additional reporting by Apeksha Nair in Bengaluru Editing by David Goodman)
VEGOILS-Palm jumps to highest in more than four months - Reuters News
14-May-2018 07:25:16 PM
- Palm touches 2,452 rgt/T, its highest since April 10
- Market sentiment mixed on whether gains can be sustained
- Palm could rise to 2,466 rgt/T -technicals
Updates with closing prices
By Emily Chow
KUALA LUMPUR, May 14 (Reuters) - Malaysian palm oil futures rose 3 percent on Monday, their biggest intraday gain in more than four months, buoyed by early losses in the ringgit and lower than forecast end-stocks data from an industry regulator.
A weaker ringgit, palm's currency of trade, typically lends support to palm oil prices because it makes the tropical oil cheaper for holders of foreign currencies.
The ringgit weakened nearly 1 percent against the dollar to a four-month low in early trade on Monday but recovered to close flat at 3.9480 on Monday evening.
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange rose 1.5 percent to 2,416 ringgit ($611.96) a tonne at the end of the trading day. Earlier in the session, it jumped 3 percent to 2,452 ringgit, its highest since April 10.
Trading volume stood at 67,630 lots of 25 tonnes each at the close.
"Crude palm oil gains on the weaker ringgit and lower stock levels," said a Kuala Lumpur-based futures trader. "Gains should be sustainable as long as the ringgit doesn't strengthen again too quickly."
Another trader, however, said palm's gains might not be sustained. "The ringgit will strengthen in a week and then palm oil will fall again," he said, adding that palm's gains had eased in the later trading session as the ringgit recovered losses.
Palm oil prices have been on a downward trend since early last month on the back of weaker demand. They fell to a more than two-year low this month before climbing to a one-month peak in early trade on Monday.
However, lower than forecast end-April stockpiles in Malaysia lent support to palm prices, the traders said.
Data from the Malaysian Palm Oil Board (MPOB) showed April end-stocks in Malaysia, the world's second-largest palm oil producer, dropped 6.4 percent from the previous month to 2.17 million tonnes, their lowest level since September.
Palm oil could rise towards 2,466 ringgit a tonne, having cleared resistance at 2,439 ringgit, said Wang Tao, a Reuters market analyst for commodities and energy technicals.
In related oils, the Chicago July soybean oil contract was down as much as 0.2 percent while September soybean oil on China's Dalian Commodity Exchange fell by up to 1 percent.
The Dalian September palm oil contract slipped by up to 0.4 percent.
Palm oil is affected by movements in rival edible oils that compete for a share of the global vegetable oils market.
RPT-COLUMN-Funds reach most bullish stance in CBOT grains since July 2015 -Braun - Reuters News
14-May-2018 07:30:00 PM
Repeats story that ran earlier with no change to headline or text
By Karen Braun
CHICAGO, May 14 (Reuters) - Contrary to trade estimates, speculators were net buyers of Chicago-traded grains last week, despite the slump in futures prices.
This includes Chicago Board of Trade corn and wheat, K.C. wheat, and Minneapolis wheat. All four contracts moved lower in the week ended May 8 as adverse U.S. weather conditions could not offset technical sell signals, but funds still lengthened bullish bets.
As of May 8, money managers held net long positions across all four grain contracts for the first time since early August.
When combining the speculative positions of these four contracts as of May 8, it shows that money managers had adopted their most bullish view toward the grains since the week ended July 21, 2015.
But speculators have almost certainly cut back on these bets in the days since, even after the U.S. Department of Agriculture on Thursday projected an aggressive cut in next-year's global corn supply.
In the week ended May 8, money managers extended their net long position in CBOT corn futures and options to 211,892 contracts from 186,317 in the prior week, according to data from the U.S. Commodity Futures Trading Commission.
This marked funds' most optimistic stance on the yellow grain since mid-March.
Over the same period, money managers established a net long position in CBOT wheat futures and options for the first time since early August. Although the new net long totaled a modest 4,326 contracts, it was a substantial change from the previous week's net short of 28,702 contracts.
However, the chances are extremely slim that the CBOT wheat long is intact heading into the new week, as selling was prominent over the last three sessions. Commodity funds were estimated to be even heavier sellers of corn late last week.
Chart-based selling has been a fixture in the corn and wheat markets over the last several days, and the grains faced more setbacks on Thursday as USDA projected both a larger wheat crop and larger wheat supplies into 2019 in the United States than what analysts predicted.
USDA's corn numbers were seemingly price-friendly, but last week's trade would not suggest that. The U.S. agency slated next year's global corn stocks to plummet 18 percent to a six-year low, well below the range of trade guesses. Brazil's heavily-exported second corn crop also received a healthy cut.
Through May 8, money managers boosted their net long in K.C. wheat futures and options to 48,630 contracts from 39,231 in the prior week, and the new stance is the most bullish of the year thus far.
This period coincided with the annual hard red winter wheat crop tour through Kansas, the top U.S. wheat producer. At the tour's end, crop scouts pegged the Kansas wheat harvest to be the smallest since 1989 after a historically dry growing season.
Money managers increased their net long in Minneapolis wheat through May 8 to 1,903 futures and options contracts, their most optimistic view on hard red spring wheat since mid-January. The net long had been 1,000 contracts strong a week earlier.
K.C. July futures were down 3.8 percent between Wednesday and Friday, partly because USDA did not forecast a smaller U.S. hard red winter wheat crop than what the market had expected despite the weather troubles for the Southern Plains. Minneapolis futures fell 1.5 percent over the same period.
OILSEEDS
CBOT soybean futures struggled in the week ended May 8, largely the result of uncertainty surrounding U.S. trade relations with China, the world's leading buyer of the oilseed.
Through May 8, money managers drastically cut their net long in CBOT soybean futures and options to 127,042 contracts from 177,047 in the prior week in what was their largest weekly bean sell-off since December.
On May 10, USDA revealed a much tighter forecast for soybean supply through mid-2019, especially in the United States, but many traders doubt the optimistic U.S. export view given the tension with China.
And despite seemingly price-supportive projections from the U.S. government, the lack of resolution over the U.S.-China trade dispute remains a burden on the market. Sources indicate that commodity funds were net sellers of the oilseed over the last three sessions, especially on Friday as July futures dipped to the lowest levels since April 4.
July soybean meal plunged 4.6 percent in the week ended May 8, but money managers failed to significantly pare their wildly bullish views, reducing their net long to 130,385 futures and options contracts from 133,549 in the week before.
The gains in July bean oil over the same period were a more modest 1.2 percent, and funds cut their net short position to 67,949 futures and options contracts from 73,540 a week earlier.
This means that money managers' stance on the CBOT oilshare, which measures soyoil's share of value in the soy products, is still near last week's record short, though the trimming of bearish views likely continued through Friday's close.
Between Wednesday and Friday, CBOT oilshare rose 2.7 percent as traders continued to exit long meal/short oil spreads. Trade estimates suggest that commodity funds were straight buyers of soyoil and straight sellers of soymeal during the period.
(Editing by Diane Craft)
GRAINS-Wheat slips again on supply pressure, soy steady after one-month low - Reuters News
14-May-2018 08:25:12 PM
- Wheat drops for 4th session to lowest since April 27
- Soybeans firm, market recovers from five-week low
Updates with European trading, changes byline/dateline
By Gus Trompiz and Naveen Thukral
PARIS/SINGAPORE, May 14 (Reuters) - Chicago wheat fell for a fourth straight session on Monday to touch a two-week low as a higher than expected official estimate of U.S. production and signs of some rain relief for dry wheat belts continued to pressure prices.
Soybeans edged higher, consolidating after touching their lowest in more than a month. The oilseed found support in hopes of a more conciliatory approach in trade discussions between the United States and China, respectively the world's biggest soybean producer and importer.
Corn edged lower as investors set the risk of more rain delays to U.S. planting against forecasts of rain for parched Brazilian corn crops.
The Chicago Board of Trade's most-active wheat contract lost 0.8 percent to $4.95 a bushel by 0324 GMT. It had earlier dropped to its lowest since April 27 at $4.94-1/2.
After reaching multi-month highs at the start of May amid concern about dry weather in the U.S. Plains and other major wheat-producing regions worldwide, Chicago prices have been dampened by the government's bigger than anticipated forecast of this year's U.S. wheat crop on May 10 and the return of rain to parts of the U.S. Plains.
"Some fundamental investors will no doubt have taken profits," Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia, said of wheat.
Traders will receive an update on winter wheat conditions in the U.S. Department of Agriculture's (USDA) weekly crop progress report later on Monday.
However, analysts said that wheat markets would remain sensitive to weather news during the spring growth period, particularly after the USDA projected a sharp drop in Russian wheat production from last year's record haul.
"From a climatic point of view, beneficial rains have hit HRW (hard red winter wheat) areas in USA but the dryness in Russia and Ukraine is continuing and is remaining a matter of concern," consultancy Agritel said in a note.
CBOT soybeans rose 0.5 percent to $10.08-1/4 a bushel after touching hitting $10.01-3/4, the lowest since April 4. Corn eased by 0.4 percent to $3.95 a bushel after hitting a two-week low at $3.94-1/4.
The soybean market has been grappling with the risk of repercussions from U.S.-Chinese trade tensions, including a proposal by Beijing to impose a 25 percent tariff on all U.S. shipments of the oilseed.
Global share prices were supported on Monday by U.S. President Donald Trump's pledge to help ZTE Corp "get back into business, fast" after a U.S. ban crippled the Chinese technology company.
CBOT Trends-Wheat down 4-5 cents, corn down 1-2, soybeans up 2-4 - Reuters News
14-May-2018 09:28:11 PM
CHICAGO, May 14 (Reuters) - Following are U.S. trade expectations for the resumption of grain and soy complex trading at the Chicago Board of Trade at 8:30 a.m. CDT (1330 GMT) on Monday.
NOTE: CBOT May contracts expire at 12:01 p.m. CDT (1701 GMT).
WHEAT - Down 4 to 5 cents per bushel
- Wheat headed lower on technical selling and lackluster export demand for U.S. supplies.
- The supplement to the U.S. Commodity Futures Trading Commission's weekly commitments report showed large speculators cut their net short position in CBOT wheat by about 21,000 contracts in the week to May 8, to 25,756 lots, the smallest since July 2017.
- For K.C. hard red winter wheat, the CFTC's supplemental report showed large speculators expanded their net long by about 9,000 contracts, to 37,265 lots.
- The CBOT reported 10 May wheat deliveries and 19 K.C. May wheat deliveries. The MGEX reported no May spring wheat deliveries.
- CBOT July soft red winter wheat last down 5-1/4 cents at $4.93-1/2 per bushel. K.C. July hard red winter wheat last down 4 cents at $5.14 and MGEX July spring wheat was down 1 cent at $6.04 a bushel.
CORN - Down 1 to 2 cents per bushel
- Corn lower on technical selling, spillover weakness from wheat and expectations that the USDA's weekly crop progress report later on Monday will show improved U.S. planting progress in the latest week. CBOT July corn dipped to $3.94-1/4 a bushel, near its 50-day moving average and its lowest since April 27.
- The supplement to the CFTC's weekly commitments report showed large speculators widened their net long position in CBOT corn by about 17,000 contracts in the week to May 8, to 237,995 lots.
- The CBOT reported 248 deliveries against May corn futures.
- CBOT July corn last down 1-1/2 cents at $3.95 a bushel.
SOYBEANS - Up 2 to 4 cents per bushel
- Soybeans higher on a technical bounce after the CBOT July contract dipped to $10.01-3/4 a bushel in early moves, its lowest since April 4.
- The CFTC's weekly commitments report showed large speculators cut their net long position in CBOT soybeans by about 39,900 contracts in the week to May 8, to 110,549 lots.
- Deliveries against CBOT May soybeans totaled 64 contracts. The CBOT reported no May soymeal deliveries and no May soyoil deliveries.
- CBOT July soybeans last up 4 cents at $10.07-1/4 per bushel.
(Reporting by Julie Ingwersen)
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