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Palm tracks rival oils lower, robust early-May exports limit...

May 17, 2022: Malaysian palm oil futures resumed trading on Tuesday after a long weekend and tracked losses in rival edible oils, but the losses were limited by strong exports for the first half of May.

The benchmark palm oil contract FCPOc3 for August delivery on the Bursa Malaysia Derivatives Exchange slid 64 ringgit, or 1.04%, to 6,075 ringgit ($1,382.88) during early trade.

FUNDAMENTALS

* Exports of Malaysian palm oil products for May 1-15 rose 20.6% to 569,233 tonnes from 472,181 tonnes shipped during the same week in April, cargo surveyor Intertek Testing Services said on Sunday.

* The news of India banning exports of wheat on Saturday put some pressure on soyoil futures amid questions of ripple effects the ban could have on India's import demand for vegetable oils.

* Soyoil prices on the Chicago Board of Trade BOcv1 were down 0.4%. Dalian's most-active soyoil contract DBYcv1 fell 1%, while its palm oil contract DCPcv1 lost 2.4%.

* Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

* Palm oil may rise to 6,602 ringgit per tonne, as it managed to stabilise around support at 6,290 ringgit, Reuters technical analyst Wang Tao said. TECH/C

MARKET NEWS

* Asian shares edged higher despite data reinforcing investors' fears the global economic recovery may be more fragile than expected, even as inflationary pressures remain high.

Reuters

Gold flat as dollar retreat offsets rising U.S. bond...

May 17, 2022: Gold prices were little changed on Tuesday, as a pullback in the dollar supported demand for greenback-priced bullion and countered pressure from a recovery in U.S. Treasury yields.

Spot gold was last up 0.1% at $1,825.29 per ounce, as of 0218 GMT. U.S. gold futures gained 0.6% to $1,825.60.

The dollar index steadied after falling from near 20-year highs on Monday and the tumbling Chinese yuan found a floor, as investors trimmed bets on whether U.S. interest rate hikes will drive further dollar gains.[USD/]

A weaker dollar makes gold more attractive for buyers holding other currencies.

However, benchmark U.S. 10-year Treasury yields climbed, limiting demand for non-interest-bearing gold.

"Now that we have the much-needed clearout on gold markets, longer-term holders could start to position for the eventual southbound turn on the U.S. hard economic data," said Stephen Innes, managing partner at SPI Asset Management.

Asian shares edged higher despite data reinforcing investor fears the global economic recovery may be more fragile than expected, even as inflationary pressures remain high. [MKTS/GLOB]

Bullion is seen as a safe haven during economic crises and a hedge against inflation.

Gold slid to a 3-1/2-month low on Monday but reversed course later, tracking a fall in Treasury yields. On Friday, prices posted a fourth straight week of declines.

Spot silver dropped 0.2% to $21.56 per ounce, platinum was flat at $945.76, and palladium fell 1.2% to $2,002.17.

"With China on the verge of reopening and likely adding more stimulus, it benefits all hard commodities. And palladium is ultimately used in industrial applications, particularly within the auto sector; that segment could benefit from ports reopening in China," Innes said.

Improving demand and lower supply will help palladium and rhodium swing back into deficit this year and reduce platinum's surplus, consultants Metals Focus said on Monday.

Reuters

Oil prices ease as EU struggles to seal Russia...

May 17, 2022: Oil prices eased on Tuesday as Hungary resisted a European Union push for a ban on Russian oil imports, a move that would tighten global supply, and as investors took profits following a recent rally.

Brent crude futures fell 22 cents, or 0.2%, to $114.02 a barrel by 0327 GMT, while U.S. West Texas Intermediate (WTI) crude futures slid 35 cents, or 0.3%, to $113.85 a barrel. Both benchmarks gained more than 2% on Monday, following a 4% jump on Friday.

EU foreign ministers failed on Monday in their effort to pressure Budapest to lift its veto of a proposed oil embargo on Russia following the country's invasion of Ukraine. An embargo would require approval from all EU nations.

Still, overall sentiment on prices remained bullish amid optimism about demand recovery in China as it looks to ease COVID restrictions that have hurt its economy, analysts said.

"Shanghai's plans to relax the COVID-19 lockdown in stages raised expectations of a demand revival in China," said Hiroyuki Kikukawa, general manager of research at Nissan Securities.

"With the U.S. approaching the start of the summer driving season amid tight fuel supply, oil prices are expected to head toward $120 a barrel," he said.

Shanghai set out plans on Monday for the end of a painful COVID-19 lockdown that has lasted more than six weeks, heavily bruising China's economy, and for the return of more normal life from June 1.

The news outweighed disappointing data from China on Monday, with industrial output and retail sales falling in April at the fastest in more than two years, missing expectations.

On the supply side, U.S. producers are ramping up in order to replenish inventories that have dwindled in the wake of Russia's war on Ukraine - which Moscow calls "a special military operation" - and recovery from the COVID-19 pandemic.

Oil output in the Permian in Texas and New Mexico, the biggest U.S. shale oil basin, is due to rise by 88,000 barrels per day (bpd) to a record 5.219 million bpd in June, the U.S. Energy Information Administration (EIA) said on Monday.

Still, stockpiles in the Strategic Petroleum Reserve (SPR) fell to 538 million barrels, the lowest since 1987, data from the U.S. Department of Energy showed on Monday, underlining tight supply.

Reuters

Asia markets gain despite global growth worries

May 17, 2022: Asian shares edged higher on Tuesday despite data reinforcing investor fears the global economic recovery may be more fragile than expected, even as inflationary pressures remain high.

MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.84% on Tuesday, but is still down the index is down 6.7% so far this month. U.S. stocks ended the previous session with mild losses.

In Tokyo, the Nikkei was flat in early trade, while in Australia the S&P/ASX200 index gained 0.34%.

Hong Kong's Hang Seng Index was 1.2% higher and mainland China's CSI300 Index gained 0.07%.

The U.S. dollar index, which tracks the greenback against a basket of currencies of other major trading partners, was flat in Asian trade to be at 104.1.

Economic growth fears in the world's two largest economies have re-emerged following weak retail sales and factory production figures in China and disappointing U.S. manufacturing data.

Investors are also weighing the global inflationary impact of lockdowns in China to combat the coronavirus, which have halted factory production in areas across the country.

"One important way China's lockdowns could impact the rest of the world is through its impact on inflation. After all, inflation – and the central bank response – has been a stiff headwind for global bond and equity markets this year," Capital Economics wrote in a note to clients.

The gains on Tuesday in Asian markets follow a mostly weaker U.S. session on Monday.

The S&P 500 declined 0.4 per cent, while larger losses were incurred on the Nasdaq Composite which dropped 1.2 per cent, to 11,664.

The Dow Jones index was barely positive, up just 0.08%.

"Risk markets were weighed down by concerns over deteriorating global growth prospects," ANZ strategists said in a research note.

"Hugely disappointing Chinese data for April and the plunge in the U.S. Empire State manufacturing index raised anxiety that economic activity may be suffering an abrupt loss in momentum as supply-chain disruption intensifies. The profile of the data suggests that supply issues related to the zero-COVID policy in China are the key factors."

The New York Fed's Empire State manufacturing index published on Monday showed an abrupt fall during May and shipments fell at their fastest pace since the beginning of the pandemic.

In early Asian trade, the yield on benchmark 10-year Treasury notes rose to 2.8931% compared with its U.S. close of 2.879% on Monday.

The two-year yield, which rises with traders' expectations of higher Fed fund rates, touched 2.578% compared with a U.S. close of 2.568%.

"Markets currently price the Fed funds rate to be 53 basis points higher at the next meeting in June, and 200 basis points higher by year-end," said Imre Speizer, Westpac's head of New Zealand strategy.

The dollar rose 0.06% against the yen to 129.24. It is getting closer to its high this year of 131.34.

The European single currency was up 0.1% on the day at $1.0437, having lost 0.99% in a month.

U.S. crude dipped 0.18% to $113.99 a barrel. Brent crude was slightly higher at $114.40 per barrel.

Gold was slightly higher. Spot gold was traded at $1,826.7072 per ounce.

Reuters

ECC allows import of 200,000 MT of Urea on...

May 16, 2022 (MLN): The Economic Coordination Committee (ECC) of the Cabinet on Monday allowed the Trading Corporation of Pakistan (TCP) to explore the possibility for the import of 200,000 MT of Urea on government to government (G2G) basis and on a deferred payment.

Federal Minister for Finance and Revenue Mr Miftah Ismail presided over a meeting of the Economic Coordination Committee (ECC) of the Cabinet at the Finance Division today.

According to the details, the Ministry of Industries and Production submitted a summary on import of Urea and presented that Govt intends to create better stock for Urea fertilizer to ensure continuity of Urea supply during next financial year and requested for allowing import of Urea from the international market in order to stabilize the local market.

The ECC after discussion allowed the Trading Corporation of Pakistan (TCP) to explore the possibility of import of 200,000 MT of Urea on a G2G basis and on deferred payment.

Federal Minister for Industries and Production Makhdoom Syed Murtaza Mehmood, Minister of State for Finance & Revenue Dr Aisha Ghous Pasha, Minister of State for Petroleum Mr Musadik Masood Malik, Federal Secretaries and senior officers attended the meeting.

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