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The Dog That Didn’t Bark: What Soybean Prices Say About Trade Deal

In an 1892 mystery story by Sir Arthur Conan Doyle, Sherlock Holmes figures out what happened to a missing racehorse named Silver Blade by observing a dog that didn’t bark in the night. Likewise, sometimes what doesn’t happen in markets can be a clue to something significant. In the case of the recently signed U.S. trade deal with China, the dogs have been notably quiet in Chicago’s agricultural futures markets. Despite China’s commitment to buy more American farm products, prices haven’t gone up — a sign that investors and traders ...

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Most volatile commodities of 2019: what are they and where to next?

Commodities are real natural materials that can be bought or sold on the exchanges. They have natural restrictions that affect pricing, while financial instruments can be created from figures on a spreadsheet. However, like any other world market, commodity prices fluctuate in response to political, financial, or any other relevant events with high economic significance. For example, during this fall, the most volatile commodities were mainly affected by the US-China trade war. Commodity market review: what has actually been happening? Over the past few years, commodity prices have been a ...

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China speeds up infrastructure funding, should support steel demand

China has accelerated the issuance of local government special bonds since the start of January, in an effort to speed up infrastructure construction to offset downward pressure on China’s economic growth. Steel demand generated from the infrastructure sector is expected to pick up after China’s Lunar New Year holidays over January 24-30, with stronger momentum than in early 2019. As of January 14, China has issued Yuan 334.465 billion ($48.7 billion) of local government special bonds, compared with Yuan 141.2 billion issued in the whole month of January 2019, according ...

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U.S.-China deal creates much uncertainty over Brazil’s soybean business

China finally placed a dollar value on its planned boost of U.S. agricultural purchases during Wednesday’s trade deal signing ceremony, something it was previously unwilling to do, validating some of the earlier unconfirmed figures cited by the U.S. side. Soybeans stocks are seen in Rio Verde, Goias state, Brazil January 31, 2019. REUTERS/Jose Roberto Gomes There are still many important details that are unclear to market-watchers, such as the specific breakdowns by commodity, but another large unknown lurking in the background is how the newly inked agreement will impact trade ...

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Is Northeast Asia finally tackling its coal dependency as air quality deteriorates?

Over the 14 years I spent living in Beijing, the question I was asked most was how I coped with the air quality. Fortunately, Beijing’s notorious pollution never really affected my health (I ran my personal best marathon time in the city in 2014 during some serious haze), and in recent years the city’s government has made major efforts to improve the situation. The result is a marked improvement in air quality. Credit where credit is due, though clearly policy efforts in Beijing and across China need to continue as ...

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WA’s cyclone threat to support higher iron ore prices

Iron ore prices are likely to remain elevated above $US90 a tonne for weeks as cyclone-related disruptions in WA crimp supply and Chinese steel mills continue re-stocking ahead of the country’s traditional new year celebrations. WestBusiness understands Rio Tinto had to suspend ship-loading at both its Dampier and Cape Lambert ports in the Pilbara early this week because of big seas associated with tropical cyclone Claudia. It is believed loading at both ports has resumed but an industry source suggested the temporary outage could cost the mining giant 2 million ...

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China’s steel demand expected to rise in 2020

China’s demand for steel is expected to register an uptick in 2020, according to a guild report. The country’s steel demand is forecast to climb 2 percent year-on-year to reach 890 million metric tons in 2020, said the China Iron and Steel Industry Association (CISA) in a report. The steel demand of the construction and home appliance industries is expected to maintain expansion while that of the automobile, ship-building, container-manufacturing and machinery sectors will see negative growth in 2020. China’s steel market witnessed hot demand in 2019 thanks to the ...

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OPEC secretary general says oil demand has ‘upside potential’

Worldwide oil demand forecasts may be lower than in previous years, but OPEC Secretary-General Mohammed Barkindo said to CNBC that demand growth is still “robust” and could surprise to the upside over the course of 2020 as trade tensions subside. “By and large what we see from our side is an upside potential of growth from the demand side of the equation, which will affect the total balance for the rest of the year,” he said. “We are hoping that some of the challenges that we’re facing in terms of ...

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India’s import curbs deal big blow to Malaysian palm oil

India’s move to restrict palm oil imports from Malaysia will create a huge challenge for the world’s second biggest producer of the edible oil as India has been its top market for the past five years. India, the world’s largest buyer of edible oils, last week restricted imports of refined palm oil and effectively halted all palm oil purchases from Malaysia in retaliation for criticism by the Malaysian prime minister of India’s policy towards Kashmir. The Indian government withdrew the autonomy of Kashmir last year to tighten its grip on ...

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Weakening Dollar Could Lift Commodities in 2020

A softening U.S. dollar could give commodity prices a boost this year. After a year in which a strong dollar weighed on commodity prices, some banks now predict the U.S. dollar is set to weaken in 2020, dragged lower by expectations that the Federal Reserve will keep interest rates steady after recent cuts. Lower interest rates make a currency less attractive to investors, as they offer lower rates of return. That could herald good news in 2020 for investors already betting that easing trade tensions between the U.S. and China ...

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Iron ore futures close higher

Iron ore futures closed higher on Friday in daytime trading at the Dalian Commodity Exchange (DCE). The most active iron ore contract for May delivery gained 5.5 yuan (80 U.S. cents) to close at 669.5 yuan per tonne. On Friday, the total trading volume of 12 listed iron ore futures contracts on the exchange was 491,781 lots, with a turnover of 32.78 billion yuan. As the world’s largest importer of iron ore, China opened the DCE iron ore futures to international investors in May 2018. Source: Xinhua

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Paris wheat steady on brisk overseas demand, strike impact weighed

Paris wheat futures edged higher on Friday, steadying after a pullback in the previous session, as sustained export demand underpinned global prices while traders waited to see the impact of labour strikes on French shipments. March milling wheat on the Paris-based Euronext exchange settled up 1.00 euro, or 0.5%, at 194.00 euros ($215.17) a tonne. The contract had climbed to 196.25 euros on Wednesday, its highest level since August 2018 and the highest spot price since last February. But chart resistance at 195-196 euros and broad losses in Chicago grain ...

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India says no meeting with Malaysia in Davos as palm row simmers

India’s trade minister will not meet with his Malaysian counterpart in Davos next week because of his tight schedule, an Indian trade ministry official said on Sunday, as a spat simmers between the top buyer of palm oil and its biggest supplier. Hindu-majority India has repeatedly objected to Malaysian Prime Minister Mahathir Mohamad speaking out against a new citizenship law which critics say discriminate against Muslims. Malaysia, a Muslim-majority nation, is the second biggest producer and exporter of palm oil and India’s restrictions on the refined variety of the commodity ...

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Why the U.S.-China trade deal failed to support soybeans, wheat and corn

The U.S. grain market did not see much of a reaction after Washington and Beijing made phase one of their trade agreement official this week, and it will take time before commodities such as soybeans, wheat and corn benefit from China’s pledge to buy more agricultural products. “We really didn’t expect the Chinese to immediately step in and buy with the signing of the trade deal,” said Sal Gilbertie, president and chief investment officer at Teucrium Trading. “They will only buy what they need, and only when they need it.” ...

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China steel futures post 4th weekly gain on firm demand

Benchmark steel rebar futures in China rose on Friday, posting their fourth straight weekly gain, after data showed a resilient property market and robust demand from the infrastructure sector. The Shanghai Futures Exchange’s most-traded steel rebar contract climbed to a one-week high of 3,608 yuan before easing to close 1% higher at 3,595 yuan ($524.08) per tonne. It rose 0.7% for the week. Crude steel production climbed to a record 996.34 million tonnes in 2019 as real estate investment increased while a push on infrastructure spending also fuelled demand for ...

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