2024-12-31 05:27

Cocoa prices rise due to supply deficits in West Africa Oil, iron ore face declines in 2025 on weak Chinese demand Gold likely to climb in 2025 on Trump policy risks SINGAPORE, Dec 31 (Reuters) - Cocoa and coffee are poised to close 2024 as the biggest gainers among commodities for a second year on a global supply deficit, while steel-making coal will end as the worst performer, hit by slow growth in China. Looking ahead, global trade tensions are likely to dominate the commodities landscape in 2025 as Donald Trump returns to the White House threatening hefty tariffs, analysts said. A strong dollar and gold's appeal as a safe haven for investors are likely to support precious metals prices, while ample supply could depress oil for a third year, they added. In bad news for chocolate lovers, cocoa nearly tripled in price over 2024, far outpacing gains in other commodities. It hit a record high of $12,931 a metric ton in New York earlier this month on forecasts of lower supply for a fourth successive season in West Africa following dry weather. "The softs sector, led by cocoa and coffee, has been the main winner amid adverse weather in key growing regions, highlighting the risk to prices when products like these are produced and sourced from relatively small geographical areas," said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen. Top cocoa producers Ivory Coast and Ghana have suffered crop losses due to adverse weather, bean disease, smuggling and reduced plantations in favour of illegal gold mining. Dryness has strained coffee supplies as well. ICE Arabica coffee prices soared to their highest in more than 40 years amid fears that severe drought earlier this year damaged the upcoming crop in top producer Brazil. CHINA GROWTH WORRIES HIT OIL, IRON ORE Crude oil and bulk metals faced headwinds in 2024 as China, the world's second-biggest economy and top commodities buyer, struggled mainly due to a property crisis. Brent and West Texas Intermediate crude could post a third consecutive annual decline in 2025 as supply outstrips a rebound in demand growth, analysts said, although Trump's policies on major producers Russia and Iran could curb supply. Spare capacity in the Organization of the Petroleum Exporting Countries (OPEC) reached an unprecedented 5 million barrels per day (bpd), analysts estimated, with the group having extended production cuts to March. "The bleak inventory path next year suggests that OPEC+ will be challenged to bring back barrels into the market," Harry Tchilinguirian, head of research at Onyx Capital Group, said in a note. Iron ore prices in China recouped some losses in recent months but are still headed for a 15% decline in 2024. Prices could fall again next year as iron ore supply grows and Chinese steel demand falls, analysts said, despite Beijing's stimulus measures. "We expect the increase in iron ore supply from major miners will be higher than that in 2024, but steel output in China will likely slide," Pei Hao, senior analyst at brokerage Freight Investor Services, said, forecasting an average price of $100 a ton in 2025, down from an average of $110 in 2024. Gold and silver rose more than 25% in 2024 and could climb further in the year ahead depending on the U.S. Federal Reserve's interest rate cuts and Trump's tariff, tax and foreign policies, analysts said. "Gold is the standout for us in 2025," ING's head of commodity research Warren Patterson said, adding that strong gold purchases by central banks will support demand. Copper and aluminium prices are set to end 2024 higher, driven by tight supplies, the energy transition and hopes that China's stimulus measures will boost demand. PALM OIL, RUBBER AND GRAINS For agricultural products, Malaysian palm oil futures jumped around 20% in 2024, snapping two consecutive years of losses, lifted by Indonesia's biodiesel mandate and adverse weather in Indonesia and Malaysia. Crop-threatening weather also drove a 42% gain in Tokyo rubber futures . In contrast, soybeans , corn and wheat were in plentiful supply, all on track for losses in 2024. However, wheat prices could find some support in 2025 as warmer weather in Russia, the biggest exporter, threatens to reduce output. Top soybean exporter Brazil is poised to deliver record supplies in 2025, positioning it to meet a rise in Chinese demand if a Washington-Beijing trade war erupts. Sign up here. https://www.reuters.com/markets/commodities/cocoa-tops-global-commodities-rally-2nd-year-steel-ingredients-struggle-china-2024-12-31/

2024-12-31 04:57

BEIJING, Dec 31 (Reuters) - China has approved five gene-edited crop varieties and 12 types of genetically modified (GM) soybean, corn and cotton, expanding approvals to boost high-yield crops, reduce import reliance, and ensure food security. The Ministry of Agriculture and Rural Affairs awarded safety certificates to the 17 crop varieties, according to a document on its website on Tuesday. The approved gene-edited crops include two soybean varieties, and one each of wheat, corn, and rice. The approved varieties include seeds from Beijing-based feed group Dabeinong (002385.SZ) , opens new tab and China National Seed Group, a subsidiary of seeds and pesticides maker Syngenta Group. Unlike genetic modification, which involves inserting foreign genes into a plant, gene editing alters existing genes to enhance or improve the plant’s traits. Some scientists view gene editing as less risky than genetic modification. China has also authorised the import of an insect-resistant and herbicide-tolerant GM soybean variety from the German chemicals firm BASF exclusively as a processing material, the ministry added. Over the past year, the country has increased approvals for higher-yielding GM corn and soybean seeds to raise domestic production and reduce grain imports. China mostly imports GM crops such as corn and soybeans for animal feed, while cultivating non-GM varieties for food consumption. Many Chinese consumers remain concerned about the safety of GM food crops. The safety certificates for the newly-approved varieties are valid for five years, starting from December 25, according to the ministry document. Sign up here. https://www.reuters.com/markets/commodities/china-approves-more-gm-crops-boost-yields-ensure-food-security-2024-12-31/

2024-12-31 04:26

MUMBAI, Dec 31 (Reuters) - The Indian rupee weakened slightly on Tuesday, tracking modest declines in other Asian peers, while volumes were relatively muted on the last trading day of 2024. The rupee was at 85.59 against the U.S. dollar as of 09:45 a.m. IST, down from its close at 85.5350 in the previous session. The dollar index was little changed near the 108 handle. Most Asian currencies dipped slightly, with the Thai baht down nearly 0.7% and leading losses. Dollar bids "are pretty broad based but volumes are expectedly shallower than usual," a trader at a mid-sized private bank said. "We will also have to watch for any signs of activity from the Reserve Bank of India (RBI) towards the end of the session in case the central bank helps the rupee end the year stronger than 85.50," the trader said. The rupee is down over 1% so far in December and is set to log its worst monthly performance in two years. Converging global and domestic headwinds have hurt the currency this month. Globally, a hawkish shift in the Federal Reserve's policy outlook combined with expectations over incoming U.S. President Donald Trump's policies have boosted the dollar and U.S. bond yields. The dollar index is up over 2% this month, while the 10-year U.S. Treasury yield has climbed more than 35 basis points. Concurrently, concerns about India's slowing economic growth and a widening trade deficit have added to pressure on the rupee, while capital flows have also been tepid. "In the short term, the rupee is likely to remain under pressure," said Amit Pabari, managing director at FX advisory firm CR Forex, pegging the currency in a 85.20-85.80 range. Sign up here. https://www.reuters.com/markets/currencies/rupee-dips-slightly-tracking-asian-peers-amid-thin-trading-volumes-2024-12-31/

2024-12-31 03:00

MSCI's all-country world index up nearly 16% for 2024 S&P 500 on track for best 2-year run in over 25 years High US yields cool year-end stock rally Dollar dominates with strong annual gain NEW YORK, Dec 31 (Reuters) - Global stocks declined on Tuesday as elevated U.S. Treasury yields again contributed to a lackluster close in an otherwise strong year for equities. On Wall Street, early modest gains evaporated as the tech sector (.SPLRCT) , opens new tab dropped 1.04%. Some of the year's top S&P 500 performers, including Palantir Technologies (PLTR.O) , opens new tab, Vistra Corp (VST.N) , opens new tab and Nvidia (NVDA.O) , opens new tab, closed lower on the day as investors continued to book profits, wrapping up a strong 2024 in which the benchmark S&P jumped 23.3% and the Nasdaq rose 28.7%. The Dow Jones Industrial Average (.DJI) , opens new tab fell 29.51 points, or 0.07%, to 42,544.22, the S&P 500 (.SPX) , opens new tab dropped 25.31 points, or 0.43%, to 5,881.63 and the Nasdaq Composite (.IXIC) , opens new tab slid 175.99 points, or 0.90%, to 19,310.79. U.S. equities have surged this year, with the S&P 500 on track for its fifth annual gain in the past six years. The two-year jump of about 53.19% marks the strongest back-to-back annual performance for the index since 1997-1998. The rally has been fueled by growth expectations surrounding artificial intelligence, expected interest rate cuts from the Federal Reserve, and more recently, the likelihood of deregulation policies from the incoming Trump administration. But bond yields have risen on the Fed's recent economic forecast and worries that President-elect Donald Trump's policies including on tariffs, may prove inflationary. The benchmark 10-year U.S. Treasury note reached its highest level since May 2 at 4.641% last week, helping to cool the rally. "There's no Santa Claus rally this week, but investors received the gift of gains in 2024," said Greg Bassuk, chief executive officer at AXS Investments in New York. "2024 was a massive year for equity gains driven by a trifecta of the AI explosion, a slew of Fed interest rate cuts and a robust U.S. economy." SECOND-STRAIGHT YEARLY GAIN MSCI's gauge of stocks across the globe (.MIWD00000PUS) , opens new tab dipped 2.59 points, or 0.31%, to 841.24 but was set for a second-straight yearly advance after rallying almost 16% in 2024. In Europe, the STOXX 600 (.STOXX) , opens new tab index rose 0.51% but closed out the session with its biggest quarterly percentage drop in more than two years. It ended 2024 with a gain of 5.99%. Trading volumes were subdued ahead of the New Year holiday on Wednesday. Stock markets in Germany, Italy and Switzerland were closed on Tuesday, while those in the UK, Spain and France had a half-day trading session. The benchmark U.S. 10-year note yield added 2.8 basis points at 4.573%, reversing an earlier decline but staying above the 4.5% mark that many analysts see as problematic for equities. The yield has risen about 69 basis points this year, including a surge of more than 74 bps in the fourth quarter. Widening interest-rate differentials have increased the appeal of the dollar this year. The dollar index , which measures the greenback against other major currencies, is up 6.6% on the year after surging 7.3% in the fourth quarter, its biggest quarterly jump since the first quarter of 2015. On Tuesday, the dollar index climbed 0.36% to 108.44, with the euro down 0.47% at $1.0358. The single currency is down 6.1% on the year versus the greenback after slumping 6.5% in the quarter. Against the Japanese yen , the dollar strengthened 0.31% to 157.32. Sterling softened 0.28% to $1.2516. U.S. crude settled up 1.03% to $71.72 a barrel and Brent settled at $74.64 per barrel, up 0.88% on the day as data showing an expansion in Chinese manufacturing was balanced by Nigeria targeting higher output next year. Oil prices were still set to close out 2024 with their second straight year of declines. Sign up here. https://www.reuters.com/markets/global-markets-wrapup-1-2024-12-31/

2024-12-31 02:57

MUMBAI, Dec 31 (Reuters) - The Indian rupee is likely to open little changed on Tuesday, doing little to avert its worst monthly performance in two years amid a relatively hawkish Federal Reserve outlook and a likely decline in the pace of intervention by the local central bank. The 1-month non-deliverable forward indicated that the rupee will open barely changed from its close of 85.5350 per U.S. dollar in the previous session. The rupee has been in a 84.57-85.50 range this month, which is the widest in 2024, and clocked a decline of 1.25%. The last time the rupee declined as much was back in December 2022. The slide however, traders said, would have been steeper if not for the Reserve Bank of India's regular interventions. Still, "while the RBI expectedly intervened frequently, the intervention did not have the kind of effect that it previously did," a currency trader at a bank said. "The pace of the intervention has possibly moderated." The rupee and other Asian currencies have been bogged down this month by the run higher in the dollar index, up more than 2%, and U.S. rates, with the 10-year yield up more than 35 basis points. U.S. President-elect Donald Trump's expected policies on trade, taxes and immigration have boosted the dollar and prompted investors to demand higher yields on U.S. Treasuries. The dollar index has rallied more than 4% following Trump's election win. Trump's victory is expected to boost U.S. growth and has clouded the U.S. inflation outlook, complicating the Fed's task. Earlier this month, the central bank projected it will cut rates only twice next year, half of what it had predicted back in September. KEY INDICATORS: ** One-month non-deliverable rupee forward at 85.81; onshore one-month forward premium at 28 paisa ** Dollar index down at 107.92 ** Brent crude futures up 0.6% at $74.4 per barrel ** Ten-year U.S. note yield at 4.53% ** As per NSDL data, foreign investors bought a net $43.3mln worth of Indian shares on Dec. 29 ** NSDL data shows foreign investors sold a net $61.3mln worth of Indian bonds on Dec. 29 Sign up here. https://www.reuters.com/markets/currencies/rupee-expected-round-off-difficult-month-muted-note-2024-12-31/

2024-12-31 00:59

Dollar dominates rivals, set to post 7% annual gain Japanese yen among biggest losers on wide interest rate differential Sterling holds relatively firm, sees smallest loss against greenback NEW YORK, Dec 31 (Reuters) - The U.S. dollar hit a two-year high and was on track to post an annual gain against almost all major currencies on Tuesday as the prospect that the Federal Reserve will hold interest rates higher than peers led the U.S. currency to dominate rivals. Traders have adjusted for the U.S. central bank to take a slow and cautious approach to further rate cuts next year as inflation remains above the Fed’s 2% annual target. Analysts also expect policies to be introduced by president-elect Donald Trump, including business deregulation, tax cuts, tariffs and a clampdown on illegal immigration, to boost growth and add to price pressures next year. That has sent yields on U.S. Treasuries higher and the bolstered demand for the U.S. currency. "Yields in the U.S. have adjusted higher to price in the potential inflationary impact from the incoming Trump administration’s policy agenda including tariff hikes, tighter immigration policy and maintaining loose fiscal policy," said Lee Hardman, senior currency analyst at MUFG. The dollar index <=USD> was last up 0.41% on the day at 108.49 and earlier reached 108.58, the highest since Nov. 2022. It is headed for an annual gain of 7.0%. Weaker growth outlooks outside of the United States and rising geopolitical tensions in the middle east and the ongoing Russia/Ukraine war have added to demand for the U.S. currency this year. The greenback has been boosted by "rising growth concerns elsewhere against the background of geopolitical risk," analysts at Action Economics said in a note. Trading volumes were thin on Tuesday before the New Year holiday on Wednesday. The Japanese currency was among the biggest losers of the year and was on pace for its fourth yearly loss against the greenback as it suffers from a wide interest rate differential between Japan and the United States. Analysts expect the Japanese currency to eventually be supported by further Fed easing and interest rate increases by the Bank of Japan. Until then traders are on watch for intervention by Japanese authorities, after they stepped in to support the currency several times this year. The greenback was last up 0.29% at 157.28 yen and on track for a 11.5% yearly gain. The euro fell 0.52% to $1.0353 and is on pace for a 6.2% yearly decline, with traders expecting the European Central Bank to be sharper with its cuts than the Fed. Sterling weakened 0.34% to $1.2508 and was on course for a 1.6% fall in 2024, the strongest performance of any major currency against the dollar this year. The Australian and New Zealand dollars both fell to two-year lows on Tuesday. The Aussie was set for a drop of around 9.2% this year, its weakest yearly performance since 2018. AUD/ The kiwi was poised for a 11.4% decline, its softest performance since 2015. In cryptocurrencies, bitcoin gained 2.07% to $93,824. It reached a record high of $108,379.28 on Dec. 17 and is set for a 121% gain this year. Sign up here. https://www.reuters.com/markets/currencies/dollar-stands-tall-2024-propped-up-by-cautious-fed-trump-trade-2024-12-31/