U.S. crude stays above $89 on economic optimism
SINGAPORE, Jan 24 (Reuters) - U.S. crude futures held above $89 on renewed confidence that developed economies are recovering and will boost demand for commodities.
"The sentiment is quite positive," Tetsu Emori, a Tokyo-based commodities fund manager at Astmax Investments, said, referring to signs of economic improvement in Europe and in the U.S.
Colonial Pipeline allocates mixed line for Cycle 8
Jan 24 (Reuters) - Colonial Pipeline said it was allocating its mixed Line 3, north of Woodbury, for Cycle 8, as nominations on this pipeline exceeded the company's ability to meet the 5-day lifting cycle.
In a note to shippers on Sunday, Colonial said it would announce committed and threshold volumes for the pipeline on Wednesday.
Wheat up for 5th session, soy rises on Chinese purchases
SINGAPORE, Jan 24(Reuters) - Chicago wheat jumped 1.4 percent on Monday to a new 5-1/2 month top as demand for U.S. cargoes amid shrinking global supplies bolstered the market, while corn gained 0.3 percent on a forecast of lower-than-expected plantings in the United States this year.
"The significance of higher weekly export sales is that the international market is ready pay for expensive U.S. wheat," said Ker Chung Yang, an analyst at Phillip Futures in Singapore.
OIL: Crude around $89 after discount to Brent widens
TOKYO, Jan 24 (Reuters) - U.S. crude futures stayed at around $89 a barrel on Monday, supported by expectations that their discount to European Brent crude could be narrowed by arbitrage trading after widening to its broadest level in almost two years.
The premium of Brent crude to U.S. crude could be narrowed by arbitrage trading after a higher euro and tight North Sea crude supplies helped boost the premium to its highest since February 2009 last week.
COMMODITIES: End week up on broad oil, metals and grains rally
NEW YORK, Jan 21 (Reuters) - A weak dollar drove copper and oil up on Friday and strong export demand for U.S. wheat sent the grain to 5-1/2 months highs, helping commodities end the week higher despite a sell-off in the previous session.
"We have had pretty good economic data this week in the U.S. and in Europe," Bill O'Neill at broker LOGIC Advisors' said in a commentary on copper. "The market is focusing on the reality that demand remains very strong and is going to continue to be strong throughout this year."
GLOBAL MARKETS: Euro hits 2-month high vs dollar, stocks gain
NEW YORK, Jan 21 (Reuters) - The euro hit a two-month high above $1.36 on Friday on hopes the euro zone will find a durable solution for its debt crisis, while world stocks gained as robust GE earnings foreshadowed a stronger U.S. economy.
"Markets are clearly buying into the view that the European debt crisis is being resolved with modest pain," said Steven Englander, head of G10 FX strategy at Citigroup in New York.
EPA Approves Higher Ethanol Blend For Some Cars (Source: CME)
The U.S. Environmental Protection Agency will allow higher levels of ethanol in gasoline for cars made between 2001 through 2006, after months of studying the safety of the fuel. The EPA's decision, which was widely expected, allows owners to fill up with gasoline made with 15% ethanol, as opposed to the current 10% blend. The expansion of so-called E15 is a victory for producers of the corn-based fuel additive at a time when corn prices are surging because of growing concerns over tightness in world supplies. Meat producers, environmental groups and the auto industry have fought the increased blend. The movement to E15 could provide further fuel for corn prices, while helping to boost sales for such producers as Archer Daniels Midland Inc. Yet analysts warned the agency's announcement Friday is only one step in a longer process.
"This is not a huge positive for ADM since expansion of E15 is still very complicated, but we think it is good news that the EPA is clearing up the uncertainty," wrote analysts at Credit Suisse in a note to clients. It remains unclear when the higher ethanol blend will be available at U.S. gas stations, since many retailers say it's too expensive to install the necessary equipment to offer the fuel. Last year, the EPA approved the 15% ethanol blend for cars in model years beginning in 2007. At the time, the agency said it would study the safety of its use in older vehicles. The higher blend is still prohibited for cars that are older than model year 2001. It also is prohibited for use in motorcycles, heavy-duty vehicles and nonroad engines. "Recently completed testing and data analysis show that E15 does not harm emissions control equipment in newer cars and light trucks," EPA Administrator Lisa Jackson said in a statement.
The Renewable Fuels Association said car industry data show 62% of vehicles on the road today could use the higher blend. Producers of ethanol applauded the EPA's decision and called it a move that will reduce the country's dependence on foreign oil. The higher blend is expected to help producers meet federal ethanol mandates. The increase is opposed by car makers and power equipment manufacturers, which say consumers are likely to use the 15% ethanol fuel in products for which it hasn't been approved. If the products are damaged as a result, the companies have voiced concern over their potential liability. Environmentalist said the use of E15 would increase air pollution in U.S. cities, while meat producers warned the higher blend would raise their costs as increased demand for corn boosts animal feed prices.
"When consumers ask why their food costs are higher, it will be difficult for EPA to explain that today's decision had no impact on the food shopper's dollar," said a spokesman for the National Chicken Council, a trade group for poultry producers and processors.
China Buys Additional 8.45 Million Metric Tons Of U.S. Soybeans (Source: CME)
China has purchased an additional 8.45 million metric tons of U.S. soybeans, bringing its two-day total to 11.52 million, the U.S. Soybean Export Council said. The deals, with several companies, were signed in a ceremony coinciding with Chinese President Hu Jintao's visit to Chicago. The deals were mixed between the 2010-11 marketing year and the 2011-12 year, said Ralph Loos, the export council's spokesman. "Some deliveries won't be until this time next year, until after the harvest. Some deliveries will be almost immediate." The deals follow Thursday sales of 3.07 million metric tons that were primarily for 2011-12. The total value of Thursday and Friday's deals was $6.18 billion, Loos said.
Soybean futures are trading at more than two-year highs as strong global demand from China and elsewhere fuels concerns farmers won't be able to replenish depleted inventories. And Chinese imports are likely to set another record in the coming crop year, with U.S. sales climbing to 25 million tons or more, said Xiaoping Zhang, acting China country director for the American Soybean Association, a trade group.
Chinese Agriculture Imports See Sharp Rise In 2010 (Source: CME)
China's grain imports made the largest gains by far among China's commodity purchases last year, signaling higher demand and flush liquidity that analysts say is likely to pave the way for more imports this year. Led by a surge in corn shipments from the U.S., Chinese grain imports in 2010 surged as the rise of large-scale livestock farms and a shift in diet patterns dented Beijing's policy of self-sufficiency in the sector. China imported 1.57 million metric tons of corn last year, an 18-fold increase on year, the General Administration of Customs said Friday, confirming semi-official statistics released earlier this week. Private-sector and exporter estimates show China may import 1-2 million tons of corn this year, a sharp increase from when corn imports were just 49,000 tons in 2008 and 83,000 tons in 2009. Standard Chartered economist Stephen Green has also suggested that productivity growth in China's grain sector is likely to slow in coming years, making corn an "obvious candidate" for higher imports.
Higher demand in 2011 is coming from the rise of large-scale hog farming to feed China's growing appetite for meat, Deputy Agriculture Minister Wei Chaoan said last month. Wheat imports were also higher last year, rising 36% to 1.2 million tons in 2010, the customs department said. This year, four cargoes of around 200,000 tons of feed wheat have already been sold to Chinese buyers led by state grain trader Cofco Ltd., a person familiar with the situation said. Australia's major wheat exporters are all involved in talks with Chinese buyers, the person said. The rising grain imports were driven by still-loose credit conditions, fueling inflation to three-year highs towards the year-end. "The deluge of liquidity that has flooded (the system) over the past year continues almost unabated," said Alistair Thornton, an analyst with IHS Global Insight. "Despite December's slight retreat in the consumer price index, the demand side of the inflationary picture remains unchanged."
Soybean imports last year reached a record 54.8 million tons, China Customs said. Even for rice, arguably the most protected grain in China, imports in 2010 edged up to 366,171 tons, rising nearly 29,000 tons over the previous year. Local media reports suggest official figures don't account for rice smuggling into the country across China's southern border. Cotton imports also surged, nearly doubling on year to 2.8 million tons in 2010. Sugar imports were up 66% last year.
U.S. housing and jobs numbers signal firmer economy
WASHINGTON, Jan 20 (Reuters) - U.S. home resales jumped more than expected in December and claims for new jobless claims last week posted their biggest decline in nearly a year, showing two key economic trouble spots on the mend.
Other reports also offered reason for optimism, with mid-Atlantic factory activity holding up well and an index of leading indicators surpassing economists' forecasts.The raft of positive data on Thursday renewed hope that 2011 growth will surpass last year's performance, which was not robust enough to put a meaningful dent in the nation's elevated 9.4 percent unemployment rate.
German sentiment strongest in 20yrs, tops forecast
BERLIN, Jan 21 (Reuters) - German business morale rose to its highest level in 20 years in January, surging past economists' forecasts on the back of a manufacturing sector now fully recovered from the 2008 financial crisis.
The Munich-based Ifo economic institute said on Friday its business climate index rose to 110.3 from 109.8 in December, the strongest since records started for reunified Germany at the start of 1991 and confounding expectations for a flat reading.
China Dec refined copper imports fall, seen up in 2011
HONG KONG, Jan 21 (Reuters) - China's refined copper imports dipped last year as buyers held off purchases on poor arbitrage opportunities, though a pickup is expected this year on stock rebuilding.
China's imports of refined copper, the most popular type in international markets, fell 8.37 percent in 2010 to 2.92 million tonnes, against a record high 3.19 million tonnes in 2009, customs data released on Friday showed.
Rio smelter, Aquila ops resume after Australia floods
SYDNEY, Jan 21 (Reuters) - Miners Rio Tinto and Aquila Resources resumed some operations in Australia's flood ravaged Queensland state on Friday as waters receded and the region's vital mining and metals sector slowly returned to work.
Rio Tinto terminated force majeure at its Boyne Island aluminium smelter as it could resume transportation while Aquila restarted production at its Isaac Plains coal mine, a joint venture with Brazil's Vale ,.
PRECIOUS-Gold hits two-month low as haven appeal wanes
LONDON, Jan 21 (Reuters) - Gold touched a two-month low in Europe on Friday, pressured by a firmer appetite for assets seen as higher risk on expectations the economic recovery was gaining traction, but a retreat in the dollar prevented a steeper drop.
The metal is heading for a third consecutive weekly loss and its weakest monthly performance since July as a more optimistic view of global economic growth and stability boosted investment in assets seen as higher risk, like stocks, at gold's expense.Spot gold fell as low as $1,340.80 an ounce and was bid at $1,343.40 an ounce at 1039 GMT, against $1,345.40 late in New York on Thursday. U.S. gold futures for February delivery fell $3.80 an ounce to $1,342.70.
FOREX-Euro nears 2-mth high, may see more gains
TOKYO/SINGAPORE, Jan 21 (Reuters) - The euro rose against the dollar on Friday, nearing a two-month high hit earlier this week, and traders said the currency may see more gains in the near-term after a recent improvement in sentiment.Traders say successful bond sales from highly indebted countries, including Portugal and Spain, and expectations of a strengthened euro zone rescue fund, are lending the euro support.
The single currency rose 0.1 percent to $1.3486 , nearing a two-month high of $1.3539 hit on Wednesday on trading platform EBS.A near-term focal point for the euro, which has climbed roughly 5 percent from a trough hit earlier in January, is whether it manages to finish the day above resistance at $1.3510, the top of the weekly ichimoku cloud.
Euro hits 2-mth high vs dollar; stocks rise
LONDON, Jan 21 (Reuters) - World stocks edged up but were set to post their biggest weekly drop in eight weeks on concerns that rising inflation in emerging economies could lead to aggressive policy action and hurt global growth.
"Background is still somewhat nervous given concerns over further tightening measures in China," said Keith Bowman, equity analyst at Hargreaves Lansdown in London.
