US STOCKS-Wall Street set for gains as oil hits $70 - Reuters News
07-May-2018 09:03:51 PM
- U.S. crude rises to fresh 2014 highs
- Starbucks gains after Nestle's $7.15 bln tie-up
- Tyson Foods slides after results
- Futures up: Dow 0.28 pct, S&P 0.26 pct, Nasdaq 0.47 pct
Adds comments, details, updates prices
By Sruthi Shankar
May 7 (Reuters) - U.S. stocks were on track to open higher on Monday, with energy shares gaining on the back of surging oil prices and Starbucks getting a boost from a partnership with Nestle.
U.S. crude climbed above $70 per barrel for the first time since November 2014, boosted by Venezuela's deepening economic crisis and a looming decision on whether the United States will re-impose sanctions on Iran.
Shares of Exxon rose 1.1 percent in premarket trading, while Chevron was up 0.7 percent.
Starbucks rose 2.4 percent after Swiss food giant Nestle said it would pay the world's biggest coffee chain $7.15 billion for the rights to sell its products around the world.
"Pre-market activity suggests a higher opening as WTI crude prices top $70 per barrel and Nestle-Starbuck deal offers a renewed enthusiasm," Peter Cardillo, chief market economist at Spartan Capital Securities in New York, wrote in a note.
"With the Iran deal looming and the NAFTA talks entering the final stage, the market is likely to stay volatile."
President Donald Trump is set to decide by May 12 whether to pull out of the Iran deal, and talks to update the NAFTA trade deal enter a make-or-break this week as ministers from Canada, the United States and Mexico seek to resolve an impasse in key areas.
At 8:42 a.m. ET, Dow e-minis were up 68 points, or 0.28 percent. S&P 500 e-minis were up 7 points, or 0.26 percent and Nasdaq 100 e-minis were up 31.75 points, or 0.47 percent.
Major U.S. stock indexes ended up more than 1 percent on Friday after weaker-than-expected U.S. wage growth numbers calmed investor fears about rising interest rates and inflation.
U.S. corporates have performed strongly in the first quarter, with nearly 80 per cent of the 400 S&P 500 companies that have reported so far topping profit estimates, according to Thomson Reuters I/B/E/S.
That is well above the long-term average of 64 percent and the average of 75 percent over the past four quarters.
Tyson Foods Inc fell 4.4 after the meat processor missed Wall Street estimates for quarterly profit as it was hit by higher freight costs and wages.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Anil D'Silva)
UPDATE 8-Oil surges on Venezuela woes and Iran worries - Reuters News
07-May-2018 09:10:03 PM
- Brent jumps to more than $75/barrel, WTI above $70/barrel
- Shanghai futures hit record price
- Venezuela oil exports under threat
- U.S. has May 12 deadline to decide on Iran sanctions
Recasts, updates prices
By Libby George
LONDON, May 7 (Reuters) - Oil prices rose to their highest levels since late-2014 on Monday, boosted by fresh troubles for Venezuelan oil company PDVSA and a looming decision on whether the United States will re-impose sanctions on Iran.
Brent crude oil futures were at $75.78 a barrel at 1236 GMT, up 91 cents from their last close. Earlier in the session they touched their highest since November 2014 at $75.91.
U.S. West Texas Intermediate (WTI) crude futures rose 85 cents to $70.57, the first time since November 2014 that WTI had climbed above $70.
China's Shanghai crude oil futures, launched in March, broke their dollar-converted record high, touching $72.54 on Monday.
U.S. oil major ConocoPhillips has moved to take key Caribbean assets of state-run PDVSA to enforce a $2 billion arbitration award, Reuters reported, potentially dealing a further blow to the Venezualan company's declining oil output and exports.
The news helped to blunt the impact of a rising U.S. oil rig count reported by energy services firm Baker Hughes on Friday.
"The growth in production in the U.S. is being counterbalanced by the simultaneous decline in Venezuela," said Commerzbank analyst Carsten Fritsch.
Venezuela's output has halved since the early 2000s to 1.5 million barrels per day (bpd), hit by a lack of investment in the South American country's oil industry.
Saudi Arabian Energy Minister Khalid al-Falih, meanwhile, said he was concerned about possible shortages of spare crude oil production capacity.
Also boosting prices is the widespread expectation that U.S. President Donald Trump will withdraw from the Iranian nuclear pact. Trump has a May 12 deadline to determine whether to extend sanction waivers.
"It seems that the bureaucratic wheels are turning in Washington to prepare for a sanctions snapback," RBC Capital Markets analyst Helima Croft said in a note, adding that "the extraterritorial nature of U.S. sanctions, which cover energy, shipbuilding, finance, trade, insurance, etc., means that ... Iran's oil exports could credibly be curtailed by 200,000-300,000 bpd."
Russian Energy Minister Alexander Novak also pledged Russia's 100 percent compliance in May with an OPEC-led pact to reduce production.
But U.S. output has soared by more than a quarter in the past two years to 10.62 million bpd and is likely to rise further this year as energy companies keep drilling.
(Additional reporting by Henning Gloystein in Singapore
Editing by Alexander Smith and David Goodman)
PRECIOUS-Gold dips as dollar index climbs to 2018 peak - Reuters News
07-May-2018 09:47:58 PM
- Dollar index hits high for the year
- Specs cut net long positions in gold in week to May 1
(Updates prices)
By Jan Harvey
LONDON, May 7 (Reuters) - Gold fell on Monday, snapping three days of gains as the dollar index hit a fresh high for the year after last week's soft U.S. jobs data did little to dampen optimism about the world's largest economy.
That left traders betting the Federal Reserve would press on with lifting U.S. interest rates this year. Higher rates typically weigh on gold, as they increase the opportunity cost of holding non-yielding assets such as bullion.
Spot gold was down 0.2 percent at $1,312.06 an ounce by 1335 GMT, while U.S. gold futures for June delivery were 0.2 percent lower at $1,312.30.
The market was thinned by a national holiday in Britain, which closed trading desks in London.
The dollar index hit a 2018 peak on Monday after U.S. jobs and wages data did little to alter perceptions of strength in the U.S. economy and consequently expectations for more Fed rate hikes.
Meanwhile, a surprise drop in German industrial orders served as a reminder that softer economic data could encourage the European Central Bank to delay the unwinding of its extraordinary stimulus measures.
Commerzbank analyst Carsten Fritsch said gold was still primarily driven by the dollar, and the widening interest rate differential between the United States and Europe. "This all boosts the U.S. dollar and weighs on gold," he said.
Investors were therefore tempering bets on higher gold prices, he said, with speculators cutting their net long positions on Comex gold contracts to the lowest since July 2017 with a "massive reduction" in the last few trading weeks.
"Most speculative investors have thrown in the towel already," he said.
Speculators cut their net long positions in COMEX gold by 62,378 contracts to 51,985 contracts in the week to May 1, data from the U.S. Commodity Futures Trading Commission (CFTC) showed on Friday.
Holdings of the world's largest gold-backed exchange-traded fund, New York-based SPDR Gold Shares, fell 0.17 percent to 864.13 tonnes on Friday.
Meanwhile silver was down 0.4 percent at $16.42 an ounce, while palladium was 0.9 percent higher at $976.20.
Platinum was up 0.4 percent at $909.49 an ounce, having earlier hit its highest since April 25 at $918.70. Friday's positioning data from the CFTC suggests the metal may be due a bounce, analysts said.
On platinum, Societe Generale said money managers increased their short positions by 8,813 contracts, taking their short positions as a percentage of total open interest to 41.9 percent, the highest level since July 2017.
"With prices near the bottom of the recent one-year range, platinum is now in the oversold box," the bank said in a note.
(Additional reporting by Apeksha Nair in Bengaluru Editing by Edmund Blair and Adrian Croft)
CBOT Trends-Wheat down 7-9 cents, corn down 2-3, soybeans down 5-7 - Reuters News
07-May-2018 09:28:11 PM
CHICAGO, May 7 (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.
WHEAT - Down 7 to 9 cents per bushel
- Lower on follow-through technical selling after Friday's weak close and spillover weakness from corn and soybeans as U.S. planting weather improves.
- The CBOT reported no May wheat deliveries and 10 K.C. May wheat deliveries. The MGEX reported no May spring wheat deliveries.
- CBOT July soft red winter wheat last traded down 9-1/4 cents at $5.17 per bushel. K.C. July hard red winter wheat was last down 9 cents at $5.46-3/4 and MGEX July spring wheat was down 7-1/4 cents at $6.15-3/4 a bushel.
CORN - Down 2 to 3 cents per bushel
- Lower on forecasts for better U.S. planting weather, and long liquidation after the U.S. Commodity Futures Trading Commission's weekly commitments report showed large speculators sharply expanded their net long in CBOT corn in the week to May 1.
- The supplement to the CFTC's weekly commitments report showed large speculators widened their net long position in CBOT corn by about 68,000 contracts in the week to May 1, to 220,874 lots.
- The CBOT reported 246 deliveries against May corn futures.
- CBOT July corn last traded down 3 cents at $4.03-1/4 a bushel.
SOYBEANS - Down 5 to 7 cents per bushel
- Soybeans lower on technical selling and improving planting weather in the U.S. Midwest. Worries persist about export demand for U.S. supplies after trade talks between U.S. and Chinese officials ended last week without agreements on biggest issues.
- Deliveries against CBOT May soybeans totaled 68 contracts. The CBOT reported no May soymeal deliveries and 108 May soyoil deliveries.
- CBOT July soybeans last traded down 6-3/4 cents at $10.30 per bushel.
(Reporting by Julie Ingwersen)
VEGOILS-Palm chalks up biggest daily gain in four months - Reuters News
07-May-2018 07:05:31 PM
- Palm tracks gains in crude oil
- U.S. soyoil also lends support
- Malaysia Palm Oil Board to release data on May 10
Updates with closing prices
By Emily Chow
KUALA LUMPUR, May 7 (Reuters) - Malaysian palm oil futures clocked their highest daily gain in four months on Monday, tracking an uptrend in crude oil prices and supported by soyoil on the U.S. Chicago Board of Trade.
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange jumped 1.8 percent to 2,383 ringgit ($604.36) a tonne at the end of the trading day for its biggest daily gain since Jan. 2.
It earlier touched an intraday high of 2,385 ringgit. Trading volumes stood at 38,066 lots of 25 tonnes each at the close of trade.
"The palm market rose, tracking crude oil's price movement, which went up a lot on Friday. On a favourable palm oil to gas oil spread, there is new buying for crude palm oil," one Kuala Lumpur-based trader said.
"Gains in rival oilseeds are also lending support."
Palm oil prices are affected by movements of crude oil because it is used as feedstock for biodiesel. Rising oil prices in recent weeks have made biodiesel production more economical, with gas oil's price premium over palm widening to $58 a tonne on Monday.
Brent crude oil futures rose above $70 a barrel on Monday for the first time since November 2014, driven higher by major oil exporter Venezuela's deepening economic crisis.
In other related oils, gains in U.S. soyoil on the Chicago Board of Trade provided additional support to palm. The Chicago July soybean oil contract was last up 0.4 percent on Monday.
Palm oil prices are also affected by movements in rival edible oils that competing in the global vegetable oils market.
September soybean oil on China's Dalian Commodity Exchange rose 0.9 percent while the Dalian September palm oil contract was up 0.7 percent.
Further movement in the palm market will depend on upcoming official data from the Malaysian Palm Oil Board, the industry regulator.
Malaysian palm oil inventories at the end of April are expected to show a 4.1 percent drop to 2.23 million tonnes, the lowest level in six months, according to a Reuters poll of nine traders, planters and analysts.
The survey respondents also forecast that April exports will fall 5.5 percent month on month to 1.48 million tonnes, but output will remain flat at 1.57 million tonnes.
Official data for April is scheduled for release on Thursday, May 10, at about 0430 GMT.
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