Friday, June 1, 2018

Stock & Commodities Related News.

US STOCKS-Wall St set to open higher after strong jobs data - Reuters News

01-Jun-2018 09:16:24 PM

  • U.S. economy adds 223,000 jobs in May vs est. 188,000
  • Unemployment rate falls to 3.8 pct
  • Costco down after results
  • Futures up: Dow 0.66 pct, S&P 0.55 pct, Nasdaq 0.47 pct

Adds comment, details; updates prices

By Medha Singh

June 1 (Reuters) - Wall Street was set to open higher on Friday as Italy's political crisis subsided, while investors assessed a stronger-than-expected U.S. jobs report.

Nonfarm payrolls increased by 223,000 jobs in May, the Labor Department said, while the average hourly earnings rose 0.3 percent after edging up 0.1 percent in April.

Economists polled by Reuters had forecast jobs increasing by 188,000 jobs and a 0.2 percent rise in wages.

The numbers cemented expectations that the Federal Reserve will raise interest rates in June, as the unemployment rate dropped to an 18-year low of 3.8 percent, pointing to rapidly tightening labor market conditions.

U.S. equity futures pulled back slightly before rising higher, with shares of big U.S. banks gaining between 1.2 percent and 1.6 percent.

"The really good news for markets is the average hourly earnings continues to be very steady and does not signal a buildup in inflationary pressures, so overall a very solid report," said Michael Arone, chief investment strategist at State Street Global Advisors in Boston.

Markets got a reprieve overnight as Italy's anti-establishment parties revived coalition plans, removing the risk of a repeat vote dominated by debate over the country's future in the euro zone.

However, investors are keeping an eye out on developments around trade after Washington on Thursday imposed steel and aluminum tariffs on Canada, Mexico and EU.

Canada and Mexico hit back on Thursday with duties on U.S. goods ranging from orange juice to pork and the European Union was looking to tax bourbon whiskey and Harley motorcycles after on the countries.

At 8:57 a.m. ET, Dow e-minis were up 161 points, or 0.66 percent. S&P 500 e-minis were up 15 points, or 0.55 percent and Nasdaq 100 e-minis were up 33 points, or 0.47 percent.

Among stocks, warehouse club operator Costco fell 1.9 percent in premarket trade as higher freight costs dented its quarterly gross margins.


(Reporting by Medha Singh in Bengaluru)




PRECIOUS-Gold slips after upbeat U.S. payrolls data - Reuters News

01-Jun-2018 09:27:13 PM

  • U.S. economy adds 223k jobs in May, beating forecasts
  • Dollar jumps as data shores up U.S. rate hike view

 (Releads, updates prices, adds comment)

By Jan Harvey

LONDON, June 1 (Reuters) - Gold fell on Friday after stronger than forecast U.S. payrolls data boosted expectations that the Federal Reserve will press ahead with another U.S. interest rate hike this month, lifting the dollar.

The metal is highly sensitive to rising rates, which increase the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced.

Spot gold was down 0.3 percent at $1,294.06 an ounce by 1322 GMT, having earlier edged just above $1,300 an ounce. U.S. gold futures for August delivery were down 0.4 percent at $1,298.90 an ounce.

The dollar rose against the euro and Treasury yields hit session highs after the payrolls report showed the U.S. economy added 223,000 jobs last month, well ahead of expectations for 188,000 jobs.

The stronger dollar is not playing in favour of higher gold prices, Capital Economics analyst Simona Gambarini said.

"There is not much interest at the moment in getting into the gold market, with the Federal Reserve meeting just (a short way) away," she said. "Investors are waiting to see whether the Fed will hike rates again, and what their take on inflation and those risks in Europe and with trade will be."

While the euro failed to sustain gains it made earlier against the dollar after the apparent end of a political crisis in Italy that had rattled markets this week, world stocks stayed in the black as investors welcomed the Italian deal.

However, investors remain concerned over a trade stand-off between the United States and its trading partners, which deepened on Thursday after the U.S. went ahead with tariffs on aluminium and steel imports from Canada, Mexico and the European Union, ending a two-month exemption.

While a worsening global trade situation could benefit gold if it curbs appetite for assets seen as higher risk, it is not yet offsetting the negative impact of an expected increase in rates, and the effects of that on the dollar.

"While geopolitics are dominating the headlines, neither renewed trade tensions nor the crisis in Italy ignited safe-haven demand for gold," Julius Baer said in a note on Friday.

"Prices continue to follow the US dollar, leaving gold in 'currency mode' rather than 'commodity mode'."

Holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Shares, fell 0.52 percent to 847.03 tonnes on Thursday.

Among other precious metals, silver was up 0.6 percent at $16.45 an ounce, while platinum was 0.6 percent higher at $907.10 an ounce and palladium was up 0.7 percent at $991.60 an ounce.


(Additional reporting by Karen Rodrigues in Bengaluru Editing by Mark Heinrich/David Evans)




CBOT Trends-Wheat down 5-6 cents, corn up 1-2, soybeans up 3-4 - Reuters News

01-Jun-2018 09:24:08 PM

CHICAGO, June 1 (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 Friday.

WHEAT - Down 5 to 6 cents per bushel

  • Wheat lower in rangebound trade as the U.S. hard red winter wheat harvest gets under way in portions of the southern Plains. Recent hot temperatures in that region have hastened crop maturity.
  • Radar shows rains crossing northern U.S. Plains spring wheat belt, which has been dry.
  • The U.S. Department of Agriculture reported export sales of U.S. wheat in the latest week at 300,400 tonnes (old and new crop years combined), in line with trade expectations.
  • Warm, dry weather in the European Union has boosted wheat crops after a damp, chilly spring, but dryness is now a risk in some zones as wheat enters a key month for determining yields, analysts said.
  • CBOT July soft red winter wheat last down 6-1/4 cents at $5.20 per bushel. K.C. July hard red winter wheat last traded down 5-1/2 cents at $5.37 and MGEX July spring wheat was down 1-3/4 cents at $6.10-1/4 a bushel.

CORN - Up 1 to 2 cents per bushel

  • Corn modestly higher on bargain-buying after the CBOT July contract fell to a one-month low this week. The contract stayed inside Thursday's trading range in early moves. Traders monitoring forecasts for warm temperatures in the Midwest next week.
  • The USDA reported export sales of U.S. corn in the latest week at 1,142,400 tonnes (old and new crop years combined), in line with trade expectations.
  • CBOT July corn last traded up 1 cent at $3.95 a bushel.

SOYBEANS - Up 3 to 4 cents per bushel

  • Soybeans higher after a three-session slide that pushed the July contract to a 1-1/2 week low on Thursday. Rallies capped by jitters about U.S. trade relations with China, the world's biggest soy buyer, as U.S. Commerce Secretary Wilbur Ross heads to Beijing for weekend trade talks.
  • The USDA reported export sales of U.S. soybeans in the latest week at 1,045,000 tonnes (old and new crop years combined), in line with trade expectations.
  • The USDA reported weekly soymeal export sales at 143,000 tonnes (old and new crop years combined), in line with trade expectations, and soyoil sales at 6,000 tonnes (all 2017/18), below trade expectations.
  • CBOT July soybeans last up 4-1/4 cents at $10.22-3/4 per bushel.


(Reporting by Julie Ingwersen)




VEGOILS-Palm rises anticipating lower output growth, gains in soyoil - Reuters News

01-Jun-2018 06:31:43 PM

  • Malaysian output seen rising marginally in May-traders
  • Weak exports in May caps upside in palm prices
  • Palm stockpiles expected to rise in Indonesia, Malaysia

Updates with closing prices

By Rajendra Jadhav

MUMBAI, June 1 (Reuters) - Malaysian palm oil futures rose on Friday tracking rival soyoil and on expectations of a marginal rise in the country's palm oil output, although a fall in exports in May capped the gains.

The palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange was up 0.41 percent at 2,439 ringgit ($613.28)a tonne by the close.

Trading volume stood at 26,414 lots of 25 tonnes each at the break.

"The market rose anticipating lower production growth in Malaysia," a Kuala Lumpur-based palm trader said, adding this is offsetting the impact of lower palm oil exports in May.

Malaysia's palm oil exports in May fell 8.8 percent from April to around 1.2 million tonnes, independent inspection company AmSpec Agri Malaysia said on Thursday.

Meanwhile, cargo surveyor Societe Generale de Surveillance (SGS) said the country's May palm oil exports fell 9.9 percent from a month ago.

In Indonesia, the world's top palm oil exporter, shipments of palm and palm kernel oils fell 13.6 percent in April, data from the Indonesia Palm Oil Association showed.

The stockpiles in producing countries are likely to expand significantly due to subdued exports, said another Kuala Lumpur-based palm oil trader.

In related vegetable oils, the Chicago July soybean oil contract traded 0.58 percent higher, while the December soybean oil on China's Dalian Commodity Exchange nudged up 0.28 percent.

Palm oil is affected by movements in rival edible oils as they compete for a share in the global vegetable oils market.


Palm, soy and crude oil prices at 1029 GMT







































































Palm oil prices in Malaysian ringgit per tonne

CBOT soy oil in U.S. cents per pound

Dalian soy oil and RBD palm olein in Chinese yuan per tonne

India soy oil in Indian rupee per 10 kg

Crude in U.S. dollars per barrel

($1 = 3.9770 ringgit)


(Reporting by Rajendra Jadhav; Editing by Amrutha Gayathri and Sunil Nair)




PREVIEW-Saudi Arabia may raise Asia official oil prices in July for a second month - Reuters News

01-Jun-2018 03:28:03 PM

  • Arab Light could rise by as much as 40 cts/bbl - survey
  • Stronger fuel oil margins support heavier grades

By Florence Tan

SINGAPORE, June 1 (Reuters) - Top oil exporter Saudi Arabia may raise the official selling prices (OSP) for most of the crude grades it sells to Asia in July for a second month, possibly raising flagship Arab Light to its highest since February 2014, trade sources said on Friday.

The OSP hike follows signs of increased demand for Middle East crude oil as refiners gear up for the peak summer oil consumption period and increased buying by Royal Dutch Shell during the price assessment window operated by S&P Global Platts last month.

The premium between first- and third-month cash Dubai benchmark prices widened by 40 cents a barrel during May from April. This backwardation, or when prompt prices for a commodity are higher than those in future months, indicates rising demand for prompt supplies.

Dubai's strength may mean Arab Light's OSP for July could rise by as much as 40 cents a barrel to as much as $2.30 a barrel above the average Oman and Dubai quotes published by Platts, from $1.90 in June, according to a Reuters survey of five refiners and traders.

That would be the highest Arab Light OSP since February 2014 when it was set at $2.45 a barrel, Reuters data showed.

Still, four of the five respondents are hopeful the July price hike will be smaller than 40 cents because of lower jet fuel margins and as a big price hike would make Arab Light uncompetitive against Middle East and Russian grades of similar quality.

"I recommend Saudi to keep the Arab Light price the same because they (unexpectedly) raised the price in May," a crude buyer at a North Asian refiner said.

Asian refiners are also buying record volumes of U.S. crude for arrival in the third quarter to replace Middle East, Russian and African oil after U.S. benchmark grade West Texas Intermediate fell to the widest discount against Brent since early 2015.

In contrast, higher fuel oil margins last month and falling Venezuelan production are supporting higher OSPs for heavier grades.

The July OSP for Arab Heavy crude could rise by between 40 cents to 50 cents a barrel, narrowing the price spread between light and heavy grades, the respondents said.

Saudi crude OSPs are usually released around the fifth of each month, and set the trend for Iranian, Kuwaiti and Iraqi prices, affecting more than 12 million barrels per day (bpd) of crude bound for Asia.

State oil giant Saudi Aramco sets its crude prices based on recommendations from customers and after calculating the change in the value of its oil over the past month, based on yields and product prices.

Saudi Aramco officials as a matter of policy do not comment on the kingdom's monthly OSPs.


Below are expected Saudi prices for July (in $/bbl against the Oman/Dubai average):

                        JUNE        Change         est.JULY OSP

    Arab Extra Light    +3.25     -0.05/+0.15     +3.20/+3.40

    Arab Light          +1.90     +0.00/+0.40     +1.90/+2.30

    Arab Medium         -0.05     +0.30/+0.50     +0.25/+0.45

    Arab Heavy          -1.35     +0.40/+0.50     -0.95/-0.85

    Source: Reuters, trade


(Reporting by Florence Tan; Editing by Christian Schmollinger)




UPDATE 6-Brent premium over WTI hits new three-year high - Reuters News

01-Jun-2018 08:33:53 PM

  • Record U.S. production drives WTI down for second week
  • Market awaiting OPEC meeting on June 22
  • Widening WTI-Brent spread lifts demand for U.S. supplies

Updates prices

By Shadia Nasralla

LONDON, June 1 (Reuters) - The spread between Brent crude oil futures contracts and U.S. WTI hit a fresh three-year high on Friday with the latter set for a second consecutive week of declines as U.S. oil output comes close to matching that of top producer Russia.

The premium doubled in about a month as a lack of pipeline capacity in the United States traps much of the output inland.

The spread between the two benchmarks, which climbed above $11 a barrel, had narrowed slightly by 1220 GMT to about $10.95 as Brent erased some of its earlier gains.

U.S. crude production has been rising to record levels since late last year. In March, it jumped 215,000 barrels per day (bpd) to 10.47 million bpd, a new monthly record, the Energy Information Administration said on Thursday.

"The move on that spread is difficult to anticipate as it does not necessarily react to news, headlines," Petromatrix said in a note. "One can be long or short on either of the benchmark and be stopped-out by the volatility of the Brent-WTI."

WTI fell 86 cents to stand at $66.18 a barrel. For the week, WTI was on track for a 2.5 percent fall, adding to last week's near 5 percent decline and shrugging off a 3.6-million-barrel drop in U.S. crude stockpiles last week.

Global benchmark Brent initially stayed within Thursday's range but then fell 69 cents to $76.87 per barrel. It was still set to rise 0.5 percent for the week.

Sources told Reuters last week that Saudi Arabia, the effective leader of OPEC, and Russia were discussing boosting output by about 1 million bpd to compensate for losses in supply from Venezuela and to address concerns about the impact of U.S. sanctions on Iranian output.

This pushed Brent to a three-week low below $75 a barrel on Monday. Brent recovered some ground, however, when a Gulf source flagged that any rise in production would be gradual.

Russia would be able to raise its oil output within months to levels last seen before a global production-cutting deal took effect if there is a decision to unwind the pact, a Russian Energy Ministry official said.


(Additional reporting by Roslan Khasawneh and Naveen Thukral
Editing by Louise Ireland and Edmund Blair)




FOREX-Euro snaps 6-week losing streak as Italy concerns wane; data eyed - Reuters News

01-Jun-2018 06:37:48 PM

  • Italian bond yields drop on revived coalition deal
  • Data dump including payrolls to keep dollar gains capped

By Saikat Chatterjee

LONDON, June 1 (Reuters) - The euro edged higher on Friday and looked set to break a six-week losing streak, supported by a drop in Italian bond yields after a revived coalition deal between two anti-establishment parties pulled the country back from snap elections.

With worries that political turmoil in Italy would roil markets receding, investors have - after strong inflation data this week - shifted their focus back to predicting when will the European Central Bank raise interest rates.

Annual inflation in the 19 countries sharing the euro rose to 1.9 percent in May from 1.2 percent in April, well above expectations for a 1.6 percent increase.

"After the rollercoaster ride in the euro this week, markets are back to focusing on fundamentals and the inflation data will give food for thought to those who are betting on a sustained euro decline," said Marc Ostwald, global strategist at ADM Investor Services International based in London.

On Friday, the single currency edged 0.2 percent higher to $1.1710. On a weekly basis, it is set to climb 0.5 percent, breaking six-week losing streak.

The euro plunged earlier in the week and Italian bond yields soared, with 2-year yields posting their biggest one-day jump in 26 years on Tuesday, on fears that fresh elections in the euro zone's third biggest economy could strengthen the hand of the anti-establishment parties there.

But the past two days have seen some stability with the euro recouping losses thanks in part to renewed efforts to form a government.

A new government in Spain, with the leader of the Spanish Socialist party Pedro Sanchez becoming prime minister, was greeted with relative calm in currency and bond markets.


Investors were also getting more cautious about the dollar's recent move higher -- it hit a 6-1/2 month high against a basket of its rivals earlier this week -- on trade war fears and rising concerns the U.S. economic momentum may soften.

"At these levels, I think the dollar is nearly priced to perfection and we think the euro should see a rebound from later this year," said Paul Baird, head of fixed income at Newton Asset Management, a subsidiary of BNY Mellon which manages $49.8 billion in assets globally.

The dollar was broadly flat at 93.92 against its basket after posting its biggest monthly rise since November 2016 in May.

It chalked up some against the yen, rallying nearly half a percent to 109.27 yen, its biggest daily rise in two weeks.

Risk appetite was muted after the Trump administration slapped tariffs on steel and aluminium imports from the EU, Mexico and Canada, raising risks of a full-blown trade war.

Canada and Mexico retaliated against the United States decision while the European Union had its own reprisals ready to go.

The Canadian dollar stood at C$1.2940 to the U.S. dollar, after falling 0.65 percent the previous day.

The Mexican peso hit a 15-month low of 20.050 to the dollar on Thursday and last stood at 19.85 per dollar.

A heavy slate of data on Friday is also expected to keep investors on the sidelines. The US jobs report for May is expected to show almost 190,000 jobs added, keeping the Fed on track to raise rates later this month.


(Reporting by Saikat Chatterjee; Additional reporting by Hideyuki Sano in TOKYO; Editing by Peter Graff and John Stonestreet)




GLOBAL LNG-LNG prices climb to highest since February on limited supply - Reuters News

01-Jun-2018 06:03:21 PM

  • LNG prices seasonally highest since 2014
  • Continued demand from China is supporting price
  • Maintenance in August could further support

By Jessica Jaganathan

SINGAPORE, June 1 (Reuters) - Asian spot liquefied natural gas (LNG) prices rose this week to their highest since February as buying interest from China remained firm and as supply is expected to be limited during maintenance in August.

Spot prices for July delivery in Asia were at $9.60 per million British thermal units (Btu) this week, gaining 40 cents from the previous week and are at the highest for this time of the year since 2014.

Higher oil prices had been deterring some buyers from snapping up cargoes in the spot market in recent weeks but some of them may now need to cover their requirements promptly, two trade sources said.

"Some traders are caught short in July," one of the sources, based in Singapore, said.

While some companies are offering cargoes through private negotiations, supply of the super-chilled fuel is expected to be limited in August amid maintenance at Sakhalin Energy's offshore gas platforms in Russia and at the Angola LNG project.

Indian buyers may be reluctant to buy spot cargoes at higher prices and could turn to using coal instead, a source familiar with the market said.

Demand from China remained firm with some willing to pay $9.70 to $9.80 per million Btu, a trader said. But details of the buyers' purchase, if any, were not immediately clear.

South Koreans are also expected to step up their purchases to meet summer demand, two traders familiar with that market said.

Still, some spot supply from Russia and Argentina could keep prices in check, they added.

Russia's Novatek has offered a cargo in the spot market at prices above the Platts Japan Korea Marker (JKM) price, a trader said.

Argentina's Enarsa has offered eight cargoes for August and September and September in a tender that closes on June 12, while Angola LNG has offered a cargo for loading in mid-June, traders said.

Japan's Inpex Corp said this week that it expects to start gas production from the wellhead for the Ichthys LNG project in Australia within a week or two following the final safety checks.

The company said first shipments of liquefied petroleum gas (LPG), condensate, an ultra-light form of crude oil, and LNG would begin by the end of September.


(Reporting by Jessica Jaganathan in SINGAPORE; Editing by Christian Schmollinger)

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