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French maize crop ratings plummet to a 13-year low during heatwave
After last week's record-breaking heatwave, the ratings?for France’s maize crop plummeted to their lowest level in 13 years, according to official data released on Friday. The continued hot and dry weather is threatening more damage to this harvest. France, as the largest grain producer in the European Union, has observed maize to be the cereal crop that is most vulnerable to extreme weather conditions because it's?at a critical phase of its growing seasons. Heat and drought will cause a steep?fall in planting, causing a 30 % drop in French maize production. In a weekly report, FranceAgriMer reported that the share of grain maize crops in excellent/good condition fell to 58% on June 29 from 76%?the week before. This was the lowest score in the last three years. The hot, dry weather that is forecast in France for the next two weeks could cause maize to be stressed as it approaches the pollination phase. FranceAgriMer reported that as of Monday, 16% (of the grain maize crops) had been pollinated. The French crop is waning, which has led to a rally on Euronext Maize. On Friday, new-crop November contracts set a new contract high?at EUR229.75 (262.93) per metric ton. Last week, the conditions of wheat and barley crops also declined while harvesting increased. Soft wheat, France's biggest cereal crop, was rated as good or excellent in 68% of cases. This is down from 74% just a week ago, but still higher than 67% from a year earlier. The soft wheat harvest reached 26% completion, which is well above the five-year average for that same week of 5%. Many market participants expect moderate losses for wheat, even though?some areas may suffer from very low yields. Grain handler Soufflet Agriculture expects a soft wheat production between 31.5 and 32 million metric tonnes, compared to 33.4 million last year. Last week, winter barley harvesting reached its final stages. 83% of the crop was harvested by Monday, compared to a five-year median of 39%.
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Germany assumes that tankmaker KNDS still plans to pursue IPO despite pause
A spokesperson for the German government said that the Franco-German Defence Group KNDS would still consider an IPO, said a Berlin-based official on Friday. The company had put its plans on hold earlier this week, citing a need for improved market conditions. The spokesperson said that the federal 'government' respects the decision of the French 'partners in leading the company to a successful future. The spokesperson said that the German government, along with?France, German and German shareholders?, had set out?key points? for taking a stake, based on the expectation of a successful IPO. At the same press conference, an official from the Economy Ministry said that Germany would continue to'stand by' its agreement to purchase a 40% stake in KNDS because it is a very important asset to the country's security. KNDS said it would resume the process as soon as the market conditions permit.
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Gold gains for the week as US job data weakens rate hike betting
Gold rose on Friday, and was expected to gain a weekly profit after four weeks of losses. Weak U.S. job data dampened expectations that the Federal Reserve will raise rates in the near future. Gold spot was up 1.3% to $4,176.29 an ounce at 1006 GMT after reaching its highest level since June 23. Bullion is above its 21-day moving average and up over 2% this week. U.S. Gold Futures for August Delivery gained 1.53% to $4188.80/oz. Data released on Thursday revealed that nonfarm payrolls increased by 57,000 in the U.S. last month. This was below the 110,000 economists had predicted. Han Tan, chief analyst at Bybit, explained that the gold's rally had been sparked by a sharp drop in U.S. employment last month. The immediate price reaction seems justified for now, as markets are reducing bets on a Fed rate increase in September. According to CME FedWatch, traders now expect a rate hike in September of about 54%, down from a previous estimate of 66%. Gold is a non-yielding asset that has a high opportunity cost. After the jobs data, the dollar was on track for its biggest weekly loss since April. The dollar is on course for its biggest weekly drop since April after the jobs data. This makes greenback-priced gold more affordable for holders of other currencies. World Gold Council data released on Thursday shows that central banks have added a net of?a?41 metric ton gold to their reserves in May. Tan said that central banks will continue to be a major demand factor for spot prices in the long term. However, some have recently sold their holdings to protect currencies. Gold demand on the physical market in India slowed this week as prices recovered, while purchasing interest in China increased slightly. Silver spot rose 2.6% per ounce to $62.58. Platinum gained 2.7% at $1,659.85. Palladium increased 0.7% at $1,277.25. The three metals are on track to make gains this week. (Reporting and editing by Subhranshu sahu in Bengaluru, Sonia Cheema and Subhranshu sahu)
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UN weather agency: Strong El Nino to develop quickly in the coming months
On 'Friday, the United Nations weather agency raised its forecast of the rapid emergence in the coming months of a strong El Nino. It warned that this 'phenomenon will likely drive global temperatures up. El Nino, a periodic heating of the sea surface temperature in the eastern and central Pacific Ocean that lasts typically between nine and twelve months, can increase global temperatures, and increase the risk for extreme weather. Alvaro Silva is a WMO scientist. He said, "El Nino has emerged in the Equatorial Pacific. There is remarkable agreement between forecast models on the strength of this El Nino." Silva stated that the intensity of El Nino was important as it increased the probability of extreme weather events and climate changes in different parts of the globe. Early June, the WMO?had predicted a moderate El Nino or a?possibly strong El Nino. However, recent forecasts have given the WMO more confidence that conditions for a strong El Nino are developing in equatorial waters of the Pacific. WMO could revise its forecast further if later information indicates a very powerful El Nino. WMO seasonal forecasts show a "strong and robust" pattern of El Nino. This includes drier conditions than normal in many parts of the world including Central America, Caribbean and North and South America. In South Asia, during the monsoon, drier patterns are predicted in Indonesia and South East Asia. El Nino will also boost global temperatures. Silva stated that we 'know' that global temperatures usually reach a?record level during El Nino. Experts said that Europe experienced the worst heatwave ever recorded between June 20 and 28. This caused disruptions to electricity generation, infrastructure damage, and overwhelmed healthcare systems. Scientists said that climate change was most likely to blame for the 'extreme heat'. Silva said that El Nino's effects will be felt across the globe until 2027. (Reporting and Editing by Linda Pasquini and William Maclean, with Olivia Le Poidevin)
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Antofagasta will seek environmental approval in the fourth quarter for Encierro Volcanes exploration
Antofagasta, a Chilean copper miner, plans to submit environmental applications in the fourth quarter to expand its exploration activities for?its Encierro and Volcanes project. This move would be a significant step forward in two of Antofagasta’s long-term growth options for copper, as major miner race to replenish pipelines, while grappling with difficult permitting processes, water restrictions and aging deposits, especially in Chile, the top copper producer. Encierro is a joint venture between Barrick Mining and a copper mine in northern Atacama that contains gold and molybdenum. Volcanes, a separate copper-mining project located in the mining-heavy Antofagasta area, is partially controlled by Chile’s wealthy Luksic Family. According to an April document, Antofagasta has allocated $60 million? for the Volcanes Exploration, and $95 million? for Encierro. The document shows two projects in the same time frame, with the entry of environmental impact declarations into the?environmental review system (DIA) during the fourth quarter. A previous application for 'Encierro' was closed in 2024 because?regulators found it lacking essential information including protected birdlife within the project area. The miner didn't immediately respond to an inquiry for comment. According to Antofagasta, Encierro has about 3.4 million tons of copper, and Volcanes contains about 9.5 millions tons. However, these figures are based on estimated copper in ground, not recoverable output. Cristian Cifuentes is an analyst at the Center for Copper and Mining Studies. He said: "It seems that they are taking advantage of (the good) copper prices to progress their relatively unexplored, greenfield projects." The copper?prices are up sharply over the last few years. On Wednesday, the LME cash rate was at $13,170 per metric ton, an increase of 58% compared to $8,355 in early July 2023. Antofagasta already manages a heavy workload in its operating mines. It also juggles other expansion?and mine-life-extension projects. The company is carrying out major upgrades at its Centinela mine - which was 78% completed as of April. It also has its flagship Los Pelambres Mine, where the two mines produced 535,700 metric tons of copper last year. Antofagasta highlighted the challenges that will be faced this year in obtaining permits for plans to invest over $900 million to Zaldivar, to extend mine life and to replace continental water with treated wastewater beginning in 2028. (Reporting and editing by Stephen Coates; Additional reporting by Daina-Beth Solomon; Reporting by Kylie Madry)
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Swiss glaciers quickly lose their protective snow cover in punishing European heatwave
Scientists say that the Alps are in for another year of heavy ice losses as the snow on Swiss glaciers has disappeared weeks earlier than normal this summer. Researchers claim that the Rhone Glacier, in southern Switzerland, reached "Glacier Loss Day", on June 29. This is the day when the snow accumulated over the winter melts and the glaciers start to shed the ice beneath. Matthias Huss, the director of Glacier Monitoring Switzerland said that three months remain this year to melt ice that took decades or even generations to build up. "This is a very worrying situation," said he. BATTER GLACIERS FOR HEATWAVES OR SCANT SNOWFALL Two heatwaves that followed a low winter and snowfall accelerated "Glacier Loss Day", bringing it to the second-earliest date in history. In 2022 it was three days earlier. Huss stated that during the June heatwave in Switzerland, melting glaciers could have filled a swimming pool of Olympic size every six seconds, for two weeks. Huss stated that the glaciers were "in a very poor state" at this time of year. "We're almost at the same level of criticality as in 2022, when we set a record. Huss reported that one monitoring station at the Rhone?Glacier had recorded a?loss? of approximately 1.5 metres (5 feet), of ice, during two weeks extreme heat. The naked eye can see the world. Visitors to the glacier retreats have said that it is impossible to ignore. Harry Block, a German tourist who has visited the Rhone glacier for over 50 years, was 'emotional' at their sight. "I can cry," said he, as he described how the glacier that was once 80 meters high has shrunk. "You can see the climate change here. "This is climate change." This is climate change."
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Sources say that some Japanese buyers have agreed to a premium of $395/t for aluminium in the third quarter.
Two sources involved in the price talks confirmed that some Japanese aluminium buyers agreed to pay global producers a premium of $395 per ton over benchmark prices for July-September shipments. This is an increase of 12-13% compared to the previous quarter. The talks with other buyers continue. Initially, producers had demanded higher premiums. The agreement, which is a 3rd consecutive quarterly rise, and the highest premium since January-March 2015 when it reached $425 per tonne, represents a $350-$353 increase per ton in April-June. Japan is one of the major Asian importers of light metals. The premiums that it pays for primary metal shipments, over and above the London Metal Exchange's cash price, serve as a benchmark in the region. GLOBAL PRODUCERS INITIALLY PUSHED FOR HIGHER PREMIUMS Sources said that Global producers initially requested premiums between $460 and $480 per ton in late May for shipments from July to September. This was an increase of 30%-37% over the previous quarter. However, they gradually reduced their offers throughout the negotiations, before agreeing on the $395 price. Source at a Japanese Trading House: "With European Premiums Softening Last Month and U.S.Iran ceasefire Talks Making Progress, Concerns over Supply Shortages have Eased A Little, Leading Producers to Compromise." Due to the sensitive nature of the issue, the sources refused to identify themselves. The Middle East is responsible for around 9% of the global?aluminum supply. And the war has shook the market, effectively freezing shipments through the Strait of Hormuz. In 2025, Japan will import nearly 30% of all its aluminum ingots, both primary and alloyed, from the Middle East. Two Gulf smelters were directly hit by missile strikes. Emirates Global Aluminium announced on Thursday that it was restoring production earlier than expected at its Al Taweelah Complex, one of the largest aluminium manufacturing sites in the world, following damage caused by Iranian missile attacks in March. Reporting by Yuka obayashi in Tokyo, Amy Lv and Jan Harvey in Beijing. Editing by Christopher Cushing & Jan Harvey.
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China will cut retail prices of gasoline and diesel to levels similar to those before the war
China will lower its domestic retail prices of gasoline and diesel starting Saturday. This is due to a drop in oil prices internationally, as the?Iran-U.S. Peace talks have eased concerns about a disruption of supply through?the Strait of Hormuz. This reduction follows two cuts made in a single month to the official price cap, which determines the maximum retail price. This is the biggest drop in China's fuel prices since more than six-years. Retail?fuel costs are now less than 2% higher than they were before U.S. and Israeli airstrikes started the?Iran War at the end February. In a notice, the National Development and Reform Commission announced that gasoline and diesel prices would be reduced by 950 yuan ($140.10) and 900 yuan (?915 per metric ton) respectively. The new prices will be 8,175 and 7,170 per metric ton. Brent and WTI international benchmark oil futures contracts also reached their lowest levels since before the U.S./Israeli war against Iran. The NDRC adjusts the retail prices of gasoline and diesel every 10 days. The NDRC's rate is based on changes in crude oil prices, and includes average processing costs, taxes, distributor expenses, and appropriate profit margins. The war has led to high oil prices, which have affected demand in China. China's oil exports dropped 29% in May compared to last year, the lowest in eight years. Fuel demand - including gasoline - was estimated to have dropped by 20%. This is similar to a slump that occurred at the height of the COVID pandemic. Sinopec, one of China's biggest state oil companies, expects the national demand for gasoline and diesel to drop by 10% in the second and third quarters. Meanwhile, commodity market intelligence provider, S&P Global, expects a similar decline in second quarter.
Global stocks climb as US jobs data cools Fed hike fears
Global stocks rose on Friday, after a lukewarm U.S. employment report tempered expectations of an imminent rate hike by the Federal Reserve.
Europe's "broadest" index hit a new record on Friday and was poised to make its largest weekly gain in more than a month.
The pan-European STOXX600 reached 651.77, before stabilizing at 648.74. The DAX in Germany rose by 0.1%, while the French and UK indices fell a little on the day.
The broadest MSCI index of world stocks rose by 0.4%.
Dan Coatsworth of investment platform AJ Bell said in a report that "Europe's Stoxx 600 finished the week with a scream as investors snatched up utilities, basic materials and industrials stocks."
He added that "while these movements indicate a more optimistic investor, it is important to continue watching the U.S. technology stocks as many of them are starting to cool off."
South Korea's Kospi fluctuated between gains and losses, before closing at around 6% higher as buyers took advantage of battered chips maker stocks.
The Purchasing Managers' Index data released Friday showed increased?activity throughout Asia.
After stagnating the month before, Japan's service sector resumed expansion in June. China's service sector expanded at a slower rate, but the overseas demand grew at its fastest pace in 20 months.
Capital Economics analysts said that the Chinese data showed "the PMIs are still healthy and imply a stronger economic pace across Q2".
U.S. LABOUR MARKET COOLING
According to the data released Thursday, U.S.?job growth slowed dramatically in June, and payroll gains from the two previous months were revised downward, indicating a cooling labour markets.
As workers left the workforce, the unemployment rate fell to 4.2% from 4.3% last month. The participation rate also dropped to its lowest level since more than five months.
The lackluster jobs data dampened traders' expectations for an imminent rate increase and increased the likelihood that the Fed would keep rates on hold till October.
Fed funds futures price an implied 46.8% probability the U.S. Central Bank will maintain rates at its September 15-16 meeting, compared to 35.8% a day before. This is according to CME Group's FedWatch.
Inflation remains a major concern.
James Rossiter is the head of global economy at TD Securities. He said that shipping was "our biggest?anticipated" risk for this year. This includes even the Iran War.
He said in a telephone call that "ships have been rerouted around the world due to the Hormuz Strait closing, resulting in less shipping capacity worldwide." The price effects were still being felt by the global economy.
U.S. Futures remain buoyant. S&P 500 futures and Nasdaq were up respectively 0.3% and 1.0%. The U.S. stock market will be closed on Friday in celebration of Independence Day.
The U.S. Dollar held steady at 161 yens, with the greenback giving up gains made earlier as the market liquidity thinned out due to the holiday and traders were on the lookout for any intervention.
This week, the Japanese?currency was choppy after it was reported that authorities may have taken a different approach to their forays on the market.
The U.S. Dollar Index, which measures greenback strength in relation to a basket six currencies, fell 0.3%, closing at 100.71.
In commodities, Brent crude futures steadied at $71.80. Gold rose 1.3% to $4,176.
Bitcoin's value increased by 0.1%, to $61,604.53. (Reporting and editing by Thomas Derpinghaus, Jan Harvey and Nell Mackenzie; Reporting by Gregor Stuart Hunter and Nell Mackenzie)
(source: Reuters)