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Grain prices near record lows due to supply pressure
Chicago corn fell on Wednesday, but remained near the contract lows. The U.S. Midwest is expected to enjoy favorable weather conditions for the remainder of the year, which will increase the chances of a bumper crop. Chicago Board of Trade September corn was down 0.4% to $4.04-1/2 per bushel at 1132 GMT. It held near the contract low of $2.00-1/4 on Tuesday. New-crop futures for December were down 0.5% at $4.20. This was also just off the lows of Tuesday, which were $4.16-1/4. The U.S. Department of Agriculture surprised the market in a report on Monday, which showed better-than-anticipated corn crop conditions that were the best since 2018 for the time of year. As corn crops approach the critical pollination phase, traders see few threats as a result of a combination of showers and warmer weather. One agricultural broker said, "Corn prices have dropped as the strong crop ratings in the U.S. and favorable weather conditions will continue to exert pressure on prices." The U.S. is experiencing excellent growing conditions as Brazil, a rival exporter, harvests what some analysts predict will be an unprecedented second corn crop. The CBOT soybeans that were most active rose by 0.6%, to $10.33-1/4 a bushel. The market for soybeans has also been impacted by the expectation of abundant supplies, as prices have fallen to their lowest level since April. The oilseed price has been stable since Tuesday. Traders say it is due to the rising prices of soyoil after the U.S. Senate passed a bill to limit biofuel credits for North American feedstock. Biodiesel is commonly made from soyoil. A European trader stated that "Soyoil has rallied due to the fact that foreign feedstocks will not get subsidies" in relation to the biofuel measure. Canola futures in Canada and CBOT both rose 1.8%, while soyoil futures on the CBOT increased by 1.5%. After reaching a week-high, wheat futures on the CBOT edged up by 0.1% to $5.49-3/4 per bushel. The approaching U.S. Investors have been encouraged to adjust their long positions in wheat due to the Independence Day holiday. The wheat market was still dominated by ample supplies, as U.S. growers were progressing with harvest work. Crops in Europe and Black Sea regions are expected to be large despite the harsh weather conditions including the heatwave that hit western Europe last week. Reporting by Gus Trompiz from Paris and Naveen Thupkral from Singapore; editing by Rashmi aich and David Evans
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SBI flags Reliance Communications Loan Account for Fraud
State Bank of India has classified the Reliance Communications loan account as fraudulent. The bank cites alleged misappropriation of funds dating back to 2016 in an alleged case. Reliance Communications disclosed the information in a filing of securities that included a letter from SBI dated June 23, detailing the reasons for the lender's decision. According to Indian banking laws once a fraudulent account is reported, the matter will be referred to the enforcement agencies, who can take criminal action. The borrower may not obtain further financing from banks or other financial institutions regulated by the government for a period of upto five years. Reliance Communications announced in April that the total amount of its debt in March was 404 billion rupees. In compliance with Indian banking laws, SBI also stated in its letter that it would notify the Reserve Bank of India of Anil Ambani's financial transactions. Ambani was the director of Reliance Communications and is following legal advice, said a Reliance Communications spokesperson on Wednesday. Lawyers for Ambani asked SBI in a letter that was reviewed by to withdraw its order deeming the Reliance Communications loan account fraudulent. They also asked SBI to refrain from reporting Ambani to the RBI because SBI did not give him the chance to have a personal hearing. Agarwal Law Associates said in the letter that Ambani had not received a response from the bank for nearly a year. Reliance Communications' filing of securities late Tuesday stated that the company is protected from orders made by other authorities and courts. SBI didn't respond immediately to an emailed comment request outside of business hours. Reliance Communications' filing shows that the bank in its initial letter to Ambani and Reliance Communications said it had given them several chances to respond but still found their responses inadequate.
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IMF says Nigeria must re-calibrate its budget to lower oil prices
The International Monetary Fund (IMF) said that Nigeria must adapt its budget for 2025 to lower oil costs and increase cash transfers in order to protect the most vulnerable sections of its population who face hunger and extreme poverty. The IMF released the results of the routine "Article IV", assessment of Nigerian economic policies. It said that the growth was steady, but low in terms of per capita and inflation remained high. The Fund forecast that the economy of Nigeria would grow at 3.4% in this year, and 3.2% by 2026. Nigeria, Africa's biggest oil producer, is being squeezed by the relatively low crude prices on international markets. On Wednesday, they were trading at $68 per barrel. Axel Schimmelpfennig is the mission chief of the Fund for Nigeria. He said: "The international economy environment in which Nigeria lives and operates is marked by very, very high uncertainty. In particular, international oil prices volatility impacts Nigeria directly on the fiscal and external balances, as well as the inflation." It was important that policymakers build and maintain buffers, while remaining ready to react to shocks and seize opportunities. He said that the main challenge is to combat high poverty and food security. Since 2007, the Nigerian government has been providing direct cash transfers to the poorest section of its population. However, it has had difficulty in scaling up the program due to a lack data about their impact as well as the fact that a large number of people do not have a bank account. Nigeria's assumptions of oil production at 2 million barrels a day and oil prices of $75 per barrel have a significant impact on the 2025 budget. International Brent crude futures soared last month as a result of tensions in the Middle East. However, they are now under pressure due to a change in policy from the OPEC+, a group that includes Nigeria, in order to regain share on the market rather than to curtail the supply. Schimmelpfennig told journalists that "achieving the government's budget targets for 2025 will require additional actions, reflecting largely the fall in oil prices since the budget was approved." He added that it was important to keep the fiscal deficit as a percentage of GDP the same in 2024 compared to the year before. Fund stated that recouping savings on fuel subsidies and making administrative gains can mobilize some revenues at home. However, to reduce inflation and maintain stability, central banks must maintain a strict stance with a positive rate of real interest. The savings from fuel subsides would be 2% of the GDP in 2024. Schimmelpfennig, when asked about the naira and Nigeria's forex markets, said that the central bank and government had made fundamental and far-reaching reforms. As a result of these reforms the supply and demand has been more balanced. When we speak to investors, the mood is positive. He said that they could invest in Nigeria and then withdraw their profits whenever they wanted. You can see that the parallel market rate and the official rate are aligned. Reporting by Karin Strohecker, editing by Dhara Raasinghe & Barbara Lewis
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Kazakhstan cancels plans for Karachaganak Gas Processing Plant with Foreign Shareholders
The Kazakhstani energy ministry announced on Wednesday that it had canceled plans to build a processing plant for gas at the Karachaganak Field with the project's major foreign investors. It stated, without going into detail, that they were looking to work with domestic companies. Central Asia has been in a dispute with oil companies for many years over cost. In 2023, the country will bring multi-billion dollar claims against these companies. Companies claim that the government simply wants to increase its share in major oil and gas projects, which amounts to "resource nationalism". Kazakhstan's authorities rejected this criticism and said that their goal was to reduce costs, which were inflated by Western companies. The Karachaganak Petroleum Operating consortium (KPO), which includes Eni (29.5%), Shell (29.5%), Chevron (18%) Lukoil (13.5%) and KazMunayGaz (10) operates the field. Last year, the shareholders and local government agreed to build a processing plant for gas with a capacity of up 4 billion cubic meters per annum and start operating in 2028. At present, the raw gas from Karachaganak crosses the border and is processed at Orenburg in Russia. The ministry has not stated the reason why the Karachaganak project was halted. Sources in the industry have linked the problem to legal disputes that exist between the government, and foreign companies. In an email response to questions, the energy ministry said that the arbitration case between Karachaganak shareholders and the Energy Ministry was "confidential". (Reporting and writing by Tamara Vaal, Writing by Vladimir Soldatkin, Editing by Emelia S. Sithole-Matarise & Mark Potter).
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Sources say that Vitol Group has bid more than $10 billion for Citgo parent company.
Two sources familiar with the bid told us on Wednesday that a group led by commodities trading company Vitol had submitted a bid in excess of $10 billion during the final hours of an auction organized by a court for shares of Citgo Petroleum's parent company, which is owned and operated in Venezuela. Delaware court officer who oversees the auction will recommend a winner by Wednesday, unless he asks for more time to review bids made at the last minute. The proceeds from the auction of PDV Holding - parent company of the seventh biggest U.S. refiner - are intended to compensate at the very least a few of the 15 creditors who have been fighting in U.S. court since 2017 for nearly $19 billion after Venezuela expropriated its assets and defaulted. One source said that the Vitol-led consortium's offer included about $5 billion cash, with the remainder in credit bids, covering up to fourteen claims. It also includes provisions to pay holders who defaulted on Venezuelan bonds. Vitol didn't immediately respond to a comment request. Vitol was a participant in the first round of bidding for PDV Holding in 2013 and in a competition to choose a starting offer earlier this year, won by Red Tree Investments. But it's new Bidders In the final mile of the auction new and better offers have been made following court rulings in parallel legal proceedings that have encouraged them. A consortium led Chicago-based Black Lion Capital Advisors also made an offer in recent days. Meanwhile, a consortium headed by Gold Reserve's subsidiary said that it had submitted two revised bids. Reporting by Marianna Paraga, Editing by Julia Symmes Cobb and Chizu Nomiyama
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France's Orano claims its Niger uranium mining is on the verge of bankruptcy
The French uranium mining company Orano announced on Wednesday that its joint venture with Niger SOMAIR is nearing bankruptcy due to export restrictions imposed on it by the military government of Niger. Orano had to stop production at SOMAIR when authorities stopped exports in the past year. The Niger government took over the operation in December, and announced plans to take it back last month. It is part of a trend of West African countries seeking more control of their natural resources. Niger is also the seventh largest uranium exporter in the world. When Orano's local unit was operating at full capacity, the country supplied about 15% of Orano’s uranium. Orano responded to emailed questions by saying that they had flagged SOMAIR's worsening finances since October, as their year-long dispute escalated with the West African country. Orano stated that "the Nigerien authorities insistence to continue production costs at all costs has led to the present situation where SOMAIR is on the brink of bankruptcy." The Niger's Ministry of Mines didn't immediately respond to an inquiry for comment about Orano’s assessment of Orano’s unit’s financial situation. The junta that seized power in 2030 said Orano was extracting 86.3% since 1971, despite owning 63% of the mine. Orano, according to the main union of mineworkers in the country, has committed acts of sabotage. They also claim that Niger's uranium mining has not been fair. Orano denies these accusations. Orano claimed that SOPAMIN, the Niger state-owned company, had engaged in opportunistic behaviour by refusing its share of production when uranium prices were low to avoid losses. Orano said that the State of Niger had not always exercised its rights to offtake uranium, particularly during low-price cycles. This forced Orano's to buy additional uranium to maintain the mine's financial viability. Orano stated that it wanted to use the remaining financial resources of the venture to pay employee salaries and maintain industrial facilities. The spot price of uranium is up 7% this year. It reached a seven-month record high last week at $79 per pound. The company did not provide any further details on its plans as Niger continues to implement nationalization plans. Burkina Faso, Guinea and Mali have also taken over Barrick's Loulo-Gounkoto Gold Complex. They are now focusing on Russian interests while pushing for greater mining shares. Maxwell Akalaare Adombila (reporting; additional reporting by Boureima Balima in Niamey, Polina Devitt in London and Veronica Brown in London)
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Russian seaborne diesel exports fall in June, data shows
According to LSEG data and market sources, the volume of Russian seaborne gasoil and diesel exports dropped by 6% in June on a month-to-month basis. This was due to refinery maintenance. Shipping data shows that last month, the two main importers of Russian gasoil and diesel were Turkey and Brazil. Exports of diesel and gasoil from Russian ports to Turkey increased in June by 15%, a month-on-month increase, while those to Brazil dropped by 33% from May, to just 0.47 million tonnes, after a previous influx. Shipping data revealed that Russia's diesel and gasoil sales to African countries in June decreased by 30 percent from the previous months to 0.7 million tonnes. The top importers were Morocco, Tunisia Togo, and Egypt. According to LSEG, LSEG data shows that nearly 0.24 million tonnes of diesel and gasoline from Russian ports is waiting for discharge on ships-to-ship transfers or for orders to further destinations near the Cypriot Port of Limassol. Shipping data showed that ships loaded with diesel in Russian port in May had their destinations marked as "for order," which means their discharge points were either not known or not declared. Reporting by Bernadettebaum; Editing by In Moscow
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Gold prices rise as rate-cut bets are boosted by weak ADP employment data
Gold prices rose on Wednesday, as investors awaited the non-farm payrolls report for more market signals on monetary policies. As of 1246 GMT spot gold rose 0.3%, to $3,347.59 an ounce. U.S. futures gold also rose 0.3%, to $3,358.10. The ADP National Employment Report revealed that U.S. private payrolls fell unexpectedly in June, and the job gains for the previous month were less than originally thought. After the data was released, traders raised their expectations of Fed rate reductions this year to 67 basis point, up from an earlier expectation of 64. Tai Wong, a metals trader independent, said: "The grimace inducing -33,000 print on ADP private payrolls is the first time since early 2023 that there have been net job losses." The number of U.S. jobs openings in May was unexpectedly higher on Tuesday. However, a drop in hiring confirmed that the labour market has shifted down gear. Federal Reserve Chairman Jerome Powell reiterated on Tuesday that the Fed will be patient in reducing interest rates. He did not, however, rule out that the Fed would reduce rates at its meeting this month. The monthly non-farm payrolls reports due Thursday will provide more information on the state of the labor markets. Wong said that it is not impossible for a July reduction to be made if the payroll report tomorrow is bad. Gold, which is traditionally viewed as a hedge in times of uncertainty, thrives also when interest rates are low. The uncertainty surrounding U.S. Tariffs is also a concern for traders ahead of the deadline on July 9. Trump's tax and spending bill, which is expected to add $3.3 billion to the debt of the country, will be sent to the House of Representatives to receive final approval. Spot silver increased 0.7% per ounce to $36.33, platinum rose 1.9% to 1,375.91 and palladium grew 1.9% to 1 120.87. (Reporting by Anushree Mukherjee in Bengaluru; Editing by Chizu Nomiyama )
EIA: Data centers will drive US electricity use to new highs by 2025 and '26.
The U.S. Energy Information Administration (EIA) said Tuesday that data centers, which are power-hungry and provide computing power to artificial intelligence and crypto currencies, will drive U.S. electric consumption to new records in 2025 and in 2026.
EIA projects that power demand will increase to 4,193 billion Kilowatt Hours (kWh) by 2025, and 4,283 kWh by 2026. This is a significant rise from the record 4,097 kWh of 2024.
The United States is expected to increase its electricity consumption for heating and transportation, in addition to data centres.
EIA estimates that by 2025, residential customers will consume 1,517 billion kWh of electricity. Commercial customers will consume 1,474 billion and industrial customers 1,055 billion.
These forecasts are compared to the all-time records of 1,509 billions kWh for residential customers in 2022, and 1,434 trillions kWh for commercial customers in 2024.
EIA predicted that natural gas would lose its share in power generation from 42% to 40% by 2025. Coal's percentage will remain at 16%, same as in 2024, and then decline to 15% by 2026 as renewables increase.
According to the outlook, renewable energy will increase from 23% to 25% by 2025. Nuclear power will remain at 19% until 2026.
EIA predicted that gas sales for residential customers would increase to 13,1 billion cubic feet (bcfd), 9.7 bcfd, for commercial customers, and 23.5 bcfd, for industrial customers. However, the EIA forecasted that power generation would fall to 35,9 bcfd.
This compares to all-time records of 14.3 billion cubic feet per day (bcfd) in 1996 for residential customers, 9.6 billion cubic feet per day in 2019 for commercial clients, 23.8 million cubic feet per day in 1973 for industrial consumers and 36.9 billion cubic foot in 2024 for electricity generation. (Reporting and editing by David Gregorio, Scott DiSavino)
(source: Reuters)