EuropeStay updated with Business News, Pakistan news, Current world news and latest world news with Business Recorder.., 02 Aug 2014 02:20:54 +0000SRA Framework 2.0en-gbGold edges off 6-week low before US jobs data Gold firmed on Friday, edging further above the previous day's six-week low as the dollar steadied off a 10-month peak, but moves were muted ahead of key US payrolls data which could prompt a further wave of selling. The payrolls numbers follow a raft of upbeat reports on the US economy, including signs of an improving job market.

Data showing the biggest rise in labour costs in 5-1/2 years in the second quarter helped knock gold 1 percent lower on Thursday.

Spot gold was up 0.2 percent at $1,284.50 an ounce at 1202 GMT, off Thursday's low of $1,280.76, while US gold futures for December delivery were up $2.50 an ounce at $1,285.30.

Analysts have said the Federal Reserve may take a more hawkish stance on raising interest rates at its September policy meeting in light of the recovering US economy.

"Another gain in employment will really focus the mind on the Fed's response," Mitsubishi analyst Jonathan Butler said.

"We heard earlier this week that they are maintaining their accommodative monetary policy for some time after their quantitative easing programme comes to an end. But clearly investors are already starting to move on, and gold is having a hard time."

The closely watched July payrolls report is expected to show 233,000 jobs were added to the US economy last month, the sixth month in which employment has expanded by more than 200,000, a stretch last seen in 1997.

A strong reading has the potential to reignite a rally in the dollar index, which in July posted its biggest monthly gain since February last year.

"Gold and the US dollar have a strong historical negative correlation, as bullion is most frequently priced in dollar terms," HSBC said in a note.

"Expectations for a stronger dollar may keep a lid on gold prices in the near to medium term."

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]]> (Shoaib-ur-Rehman Siddiqui)EuropeFri, 01 Aug 2014 14:05:40 +0000
EU wheat slides on quality fears, misses US bounce Euronext wheat futures extended losses on Friday to a new four-year low as low quality in a rain-hit western European harvest led Paris prices to diverge from a recovering US market.

New-crop US soybeans dropped for a third session out of four while corn was on track for a sixth consecutive week of losses as favourable weather forecasts in the US Midwest bolstered hopes of record yields this autumn.

US and European wheat futures had both retreated to four-year lows last month on harvest progress in the northern hemisphere and signs of stiff export competition from the Black Sea region.

But while US wheat has seen a bounce since mid-week, supported by signs of increasing export demand, Euronext futures have continued to slip as traders have priced in the prospect of the European Union having more feed wheat than usual and struggling to sell on overseas milling markets.

"People are buying into good-quality US wheat and selling what is seen as mediocre EU wheat," one European trader said.

Market concern has focused on France, the EU's top wheat grower and exporter, after some very poor quality readings in its ongoing harvest.

Rain-damaged new crop wheat in France may not be of suitable quality for the country's key export customer Algeria, ADM Germany, formerly Toepfer International, said in a report on Thursday, echoing widespread sentiment in the trade.

November milling wheat on Euronext was down 4.50 euros or 0.9 percent at 168.25 euros a tonne by 1206 GMT, taking its two-day losses to more than 7 euros.

It earlier fell to 167.00 euros, a contract low and the weakest spot price since July 2010. Some traders say Paris futures could drop off further to approach cash-market feed-wheat prices if the harvest continues to show low quality. Fears were also growing of rain damage in Germany, the EU's No. 2 wheat producer and exporter. Chicago Board Of Trade September wheat rose 0.9 percent to $5.34-3/4 a bushel in its third straight rising session.

Quality risks in western Europe have underlined export prospects for US wheat.

Larger-than-expected weekly US export sales of 801,000 tonnes, as well as an aggressive US wheat offer in a tender by Egypt, also supported sentiment this week.

"There is upside potential as US wheat is competitive at the current levels," said Kaname Gokon, general manager of research at brokerage Okato Shoji in Tokyo. However, the competitiveness of Russian wheat, which made a clean sweep of sales in the Egyptian tender, could curb a rebound in international prices. Western Canada spring wheat and durum yields, meanwhile, should be close to last year's bumper levels and offset some flood losses, leaders of a crop tour said.

New-crop CBOT November soybeans eased 0.9 percent to $10.72 a bushel.

December corn was down 0.5 percent at $3.65. Rain expected from next week in dry parts of the Midwest, together with the absence of high temperatures, have eased concerns about crop stress, particularly for soybeans which are less advanced in their growth than corn. The crop conditions took attention away from strong weekly export sales. The US Department of Agriculture said old-crop export sales of soybeans were 187,400 tonnes in the latest reporting week, near the high end of the range of forecasts for 100,000 to 200,000.

New-crop soybean export sales were 1.27 million tonnes, bigger than expected.

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]]> (Shoaib-ur-Rehman Siddiqui)EuropeFri, 01 Aug 2014 14:02:39 +0000
Zinc falls as stockpiles rise, copper flat Zinc lost ground on Thursday from a three-year peak two days before after inventories rose, highlighting an overhang of supplies that need to be eroded before expected shortages kick in.

Benchmark zinc on the London Metal Exchange (LME) slipped 0.9 percent to $2,359 a tonne by 1009 GMT after hitting successive peaks of $2,416 on Monday and again on Tuesday, the strongest since August 2011.

Zinc prices have climbed 15 percent this year as funds have scrambled to buy based on forecasts of future shortages after the closure of major mines, but many analysts say prices are overheated since tight markets have not yet emerged.

"It does seem to indicate that people are asking questions about whether zinc has any further upside. We have been saying that the price has escaped the fundamentals. It's overextended and it's got a correction due," analyst Vivienne Lloyd at Macquarie in London said.

"With stocks going in to New Orleans today, that's going to diminish appetite for the upside as well."

LME zinc stocks rose 7,375 tonnes on Thursday to 655,750 tonnes after dropping by 30 percent so far this year. It was unclear yet whether this was a one-off increase or marked a halt of the declining stocks trend, Lloyd added.

Other LME metals were either flat or in the red, weighed down by a slightly stronger dollar and concerns about the Chinese economy.

The International Monetary Fund said that China should lower its growth targets for next year as part of a push towards safer and more sustainable growth. It also flagged the country's property slowdown as a cause for concern.

The world's second-largest economy accounts for around 40 percent of world refined copper demand, and China's construction sector for a large portion of its copper consumption.

"The (positive) Chinese economy story might carry into the next quarter. But the game is structural deceleration, so bad news is waiting to come around again," analyst Dominic Schnider of UBS Wealth Management in Singapore said.

The dollar hovered just below a 10-month high against a basket of currencies after the U.S. Federal Reserve said on Wednesday it was in no rush to raise interest rates.

A stronger dollar makes dollar-priced commodities more expensive to buyers outside the United States.

LME copper was unchanged at $7,125 a tonne after gaining around half a percent in the previous session. Prices are within reach of $7,212, the July 8 peak that was the loftiest since February.

LME aluminium was also barely changed, rising 0.1 percent to $2,023 a tonne after gaining 2 percent on Wednesday.

Aluminium's gains came as exchange stocks looked to be locked up for a while.

The London Metal Exchange's attempts to cut backlogs at warehouses with new rules are likely to be delayed again for several months after judges declined to make an immediate ruling on a case holding up the reforms.

The news also helped propel cash prices to the highest against benchmark prices since December 2012.

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]]> (Imaduddin)EuropeThu, 31 Jul 2014 12:33:53 +0000
Gold below $1,300 on US growth optimism, set for monthly loss$1300-on-us-growth-optimism-set-for-monthly-loss.html$1300-on-us-growth-optimism-set-for-monthly-loss.htmlimageLONDON: Gold held below $1,300 an ounce on Thursday and was set for its second monthly drop in three as optimism over the U.S. economy curbed demand, offsetting a message from the Federal Reserve it is in no rush to raise interest rates.

The U.S. central bank on Wednesday upgraded its assessment of the world's largest economy but reaffirmed a broadly relaxed stance on monetary policy.

Data on Wednesday showed the April-June gross domestic product expanded at a 4.0 percent annualised rate as activity picked up.

Spot gold was flat at $1,295.10 an ounce by 1021 GMT. It was headed for a 2.5 percent drop for the month, reversing a gain of around 6 percent in June, when international political tensions and the Fed's reiteration of its commitment to accommodative measures and low rates prompted investor buying.

U.S. gold futures were also unchanged at $1,295.10 an ounce.

"The biggest price move we had over the past couple of months was in reaction to (Fed Chair Janet) Yellen's comments on interest rates in mid-June, and it seems to me that the focus is now economic growth," Citi analyst David Wilson said.

"But if you have strong economic growth and low interest rates, you at some point reach capacity constraints and then inflation rises," he added. "And if you are scared of inflation, you buy gold as the metal is seen as an hedge against it."

The dollar traded just below a 10-month high against a basket of currencies, with investors awaiting more data including weekly jobless claims scheduled later on Thursday.

The main focus will be the U.S. non-farm payrolls data due on Friday, which is expected to show that U.S. employers added 233,000 new jobs in July.

"Yesterday's FOMC outcome had limited impact on gold, as the policy outlook remained in place for now, but a changing economic outlook should eventually weigh on gold as it leads to a less-dovish shift in policy," UBS said in a note.

"Developments in the U.S. labour market will be the key factor for Fed policy up ahead. This suggests that gold market participants will be focusing on employment data more than ever."

Gold has traded in a tight range over the past few weeks, mostly between $1,295 and $1,310 an ounce, as the negative impact of a stronger dollar and improving U.S. economic conditions has been offset investor risk aversion due to international political conflicts in Ukraine and the Middle East.

Israeli shelling killed at least 15 Palestinians sheltering in a U.N.-run school and another 17 near a street market on Wednesday, with no ceasefire in sight after more than three weeks of fighting.

Russia fought back over new U.S. and EU sanctions imposed over Ukraine even as G7 leaders warned of further steps, while Ukraine's government accused pro-Russia rebels of placing land mines near the site of a crashed Malaysian airliner to prevent a proper investigation.

Among other precious metals, spot silver was up 0.4 percent at $20.67 an ounce.

Platinum stood unchanged at $1,473.49 an ounce, while palladium rose 0.3 percent to $878.25 an ounce.

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]]> (Imaduddin)EuropeThu, 31 Jul 2014 12:32:20 +0000
Corn, wheat prices extend declines as crops flourish Corn and wheat futures were lower on Thursday and on track to post a third consecutive month of losses as the prospect of bumper global supplies weighed on prices.

Soybeans eased for a third session in a row on forecasts of near-perfect weather for the crop in the U.S. Midwest.

"The key factors remain the same as before: the weather is perfect in the growing areas of the U.S. Midwest, meaning that high yields are anticipated," Commerzbank said in a market update on Thursday.

"What is more, rainfall is forecast for the next few days, which should dispel any fears that crop yields might be impaired by overly dry conditions. Until there is any sign of demand for U.S. grains picking up at the lower prices, prices are likely to remain under pressure."

Corn and wheat have lost more than a quarter of their value in three months of selloff triggered by the ideal weather in the U.S. grain belt.

Chicago Board of Trade December corn was down 0.5 percent at $3.69-1/2 a bushel at 1032 GMT. The contract is on track for a monthly loss of 13 percent.

"I think we are starting to see the beginning of a turnaround," said Ole Houe, an analyst at Sydney-based brokerage IKON Commodities.

Houe noted that Egypt had bought Russian wheat this week at prices about $2 a tonne higher than in its previous buy tender.

"To see Russian wheat increase by a couple of dollars is the first sign that the market is turning around," he said.

Egypt's state grain buyer, the General Authority for Supply Commodities (GASC), said on Wednesday it had bought 175,000 tonnes of Russian wheat for shipment Sept. 11-20.

The price it agreed to pay is between $246.99 and $249 a tonne, free on board, as compared with $244.37 and $246.50 a tonne in last week's tender.

CBOT September wheat fell 0.3 percent to $5.25-1/2 with the contract on track for a monthly loss of nine percent.

Wheat futures in Paris posted steeper losses with November off 1.7 percent at 172.50 euros a tonne after setting a contract low of 171.50 euros.

Dealers noted quality concerns in France had led to a sharp rise in milling wheat premiums and futures were beginning to show signs of moving closer to feed values.

"The MATIF (Paris wheat) has one question, do I trade feed or do I trade quality and I think you are getting your answer currently," one European analyst said.

CBOT soybean futures were also lower with November down 0.3 percent at $10.78-1/4 a bushel. The contract was on course for a monthly loss of about seven percent.

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]]> (Imaduddin)EuropeThu, 31 Jul 2014 12:26:05 +0000
ICE arabicas rise on Brazil crop worries, sugar steadies Arabica coffee futures on ICE firmed on Thursday on worries over drought damage to Brazilian crops, while raw sugar held steady against a backdrop of ample nearby supplies.

Cocoa futures steadied around a three-year peak, underpinned by expectations of robust demand.

ICE September arabica coffee rose 4.4 cents, or 2.4 percent, to trade at $1.8690 per lb at 1106 GMT, supported by industry outlooks that have sparked concern that losses may be at the high end of earlier forecasts.

Those industry reports propelled arabica coffee to a high above $2 a lb in April.

"Prices are now reflecting a little bit more that the damage is at the upper end of previous indications," said Stefan Uhlenbrock, a senior soft commodities analyst with F.O. Licht.

"We are not at the end of the price adjustment to the upside."

Drier weather in top grower Brazil enabled harvesting to resume after rain at the weekend, though recent rains have heightened concerns about future supplies.

September robusta coffee futures on Liffe traded up $36, or 1.8 percent, at $2,073 per tonne in moderate volume of 4,509 lots.

In sugar, benchmark ICE October futures were steady, trading up 0.01 cent, or 0.06 percent, at 16.64 cents a lb.

"The weather forecasts for August show it will be very dry, so this will more than offset the impact of rains seen earlier this month," Uhlenbrock, said, referring to the cane crush now under way in centre-south Brazil.

October whites on Liffe traded down $0.50, or 0.1 percent, at $440.80 a tonne in light volume of 412 lots.

The benchmark September cocoa contract on ICE Futures U.S. traded up $1, or 0.03 percent, at $3,206 a tonne. On Wednesday it climbed as high as $3,214, nearing last week's three-year peak of $3,234 a tonne.

In London, second-month cocoa futures rallied to 1,984 pounds a tonne, a December contract high, before trading up 3 pounds, or 0.2 percent, at 1,981 pounds per tonne.

"Further gains would look to target levels towards 2,000 pounds before attempting to break out higher towards 2,020," said Kash Kamal, research analyst with Sucden Financial.

The nearby outlook for cocoa supply was favourable, with many market participants now expecting a global 2013/14 surplus rather than deficit.

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]]> (Imaduddin)EuropeThu, 31 Jul 2014 12:12:05 +0000
Russian wheat crop outlook bright, pressures prices Russian export prices for wheat fell for the third week in a row due to a strong crop outlook, analysts said on Monday.

Russia, one of the world's key wheat exporters via the Black Sea, is likely to harvest 57.5 million tonnes of wheat in 2014, IKAR, a leading agriculture consultancy, said in a note.

"The forecast was upgraded (from a previously expected 56.3 million tonnes) thanks to higher yields in several regions," Dmitry Rylko, the head of IKAR, added.

Russian prices for new wheat crop with 12.5 percent protein content were down $2 to $242 per tonne at the end of last week, IKAR said.

The quote was on a free-on-board (FOB) basis in the Black Sea compared with a week earlier. FOB prices for the same protein levels in the Azov Sea were flat at $217 per tonne.

Russia harvested 33.2 million tonnes of wheat from 36 percent of the area with an average yield of 3.66 tonnes per hectare as of July 25, the latest data from the Agriculture Ministry showed.

That was up from the 27.8 million tonnes harvested with an average yield of 3.04 percent on the same date a year earlier, the ministry said.

From the start of this 2014/15 marketing year on July 1 to July 25 the country exported more than 2 million tonnes of grains, including 1.6 million tonnes of wheat.

As for other crops, SovEcon agricultural consultancy said Russian export prices for sunflower oil edged down by $10 to $830 per tonne on an FOB basis in the Black Sea.

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]]> (Imaduddin)EuropeMon, 28 Jul 2014 10:46:30 +0000
Turkey buys 165,000 tonnes wheat, 65,000 tonnes barley Turkish state grain agency TMO has purchased 165,000 tonnes of milling wheat and 65,000 tonnes of animal feed barley in an international tender, European traders said on Friday.

The import tender, which closed on Thursday, sought those same amounts of wheat and barley, both in two shipment periods, the first between Aug. 25-Sept. 20 and the second between Sept. 25-Oct. 20.

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]]> (Shoaib-ur-Rehman Siddiqui)EuropeFri, 25 Jul 2014 14:59:32 +0000
Liffe cocoa, coffee prices need to rise to rebuild exchange stocks A disconnect between the futures and cash prices for London coffee and cocoa, partly due to intervention by the exchange to keep markets orderly, has led to a depletion in Liffe stocks, which will only be rebuilt to healthy levels if futures rise.

Even with cocoa and coffee September contracts already trading at premiums and cocoa futures trading at around a three-year high, traders said prices are yet to reflect the strength of those on the physical (cash) markets.

"Certified stocks are pretty low in both cocoa and coffee and to replenish them you would need some degree of cash convergence (to futures) to attract fresh gradings to the board," a European analyst said.

"Maybe you just need this one-off cash convergence to get coffee and cocoa to the board to get a stock level that is reflective of the current balance sheet rather than one that's too low because people aren't prepared to deliver."

The Intercontinental Exchange, which owns the Liffe cocoa and coffee markets, is refining its approach to market oversight, to address concerns that exchange intervention had gone too far, ultimately preventing a strong enough link between the physical and futures markets. Increased exchange intervention over the past couple of years in coffee and cocoa was partly driven by a desire to stamp out market manipulation.

The exchange acts if it becomes concerned about a dominant position in nearby futures contracts.

The exchange's recent additional guidance, which applies to September contracts onward, has new procedures for monitoring cash prices along with any premium on a delivery month.

The exchange declined to comment more specifically on what the changes would entail including which cash prices it would use as benchmarks.

Last week good quality Ivory Coast cocoa beans were quoted at 75 pounds per tonne over the London September contract . "If the physical market is paying you vastly above what the terminal market is paying you then there's no way people will put cocoa on the exchange, they'll sell it instead on the physical market," another analyst said.

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]]> (Shoaib-ur-Rehman Siddiqui)EuropeFri, 25 Jul 2014 12:40:25 +0000
Taiwan passes in tender to buy 80,900 tonnes US wheat The Taiwan Flour Millers' Association made no purchase in a tender for 80,900 tonnes of milling wheat to be sourced from the United States which closed on Friday, European traders said.

Prices were regarded as too high, traders said. The tender had sought wheat in two consignments for shipment between Sept. 8-22 and Sept. 25 to Oct. 9.

"Some wheat importers are delaying purchases in the hope that prices will fall further with good harvest prospects in the United States and elsewhere," one European trader said.

"There was also market talk of logistics problems in an export terminal of a major US trading house which had offered the lowest price in the Taiwan tender on Friday."

Chicago wheat prices slumped to contract lows on Wednesday amid rising global supplies and strong export competition for US supplies and are still hovering only slightly over their low point.

In its last reported tender on June 20, the association purchased 96,180 tonnes of milling wheat to be sourced from the United States in a tender for the same volume.

In September 2013, the association signed an agreement to buy 62.5 million bushels, or about 1.7 million tonnes, of US wheat valued at about $485 million over two years.

Copyright Reuters, 2014

]]> (Shoaib-ur-Rehman Siddiqui)EuropeFri, 25 Jul 2014 12:37:13 +0000