2024-10-18 07:46

NAPERVILLE, Illinois, Oct 17 (Reuters) - Throughout 2024, both supply and price trends in the U.S. corn market have been compared to those of 2014, and there is yet another similarity to add to the list. Last Friday, the U.S. Department of Agriculture raised domestic corn yield to 183.8 bushels per acre, marking the third consecutive month in which the agency’s U.S. corn yield peg edged upward. The last time U.S. corn yield estimates rose in each month over this same stretch was in 2014. Similar to the 2024 expectation, the final 2014 corn yield reflected a notable jump from the previous national record. Aside from this yield pattern, 2024 has probably not tracked as closely with 2014 as analysts were thinking earlier in the year. But there still may be enough similarities that the transition into 2015 is worth examining to gauge possible scenarios for 2025. STOCK GROWTH The major jump in U.S. corn supplies in 2024 from 2023 has been one of the most obvious linkages to 2014. Ending stocks for 2013-14 and 2023-24 each represented four-year highs, but they both came in notably lighter than earlier forecasts. That meant that the supply increases versus the previous marketing years were also tighter than expected. A year ago, USDA thought 2023-24 U.S. corn ending stocks would be 55% stronger than in 2022-23, but they actually rose by 29%. This misjudgment was even more severe in 2013-14, and both instances were driven by overly light demand assumptions early on. A similar trend was observed at the end of 2014-15, though a smaller-than-expected crop also contributed to the weaker supply growth. USDA currently expects 2024-25 ending stocks to be nearly 14% above the 2023-24 levels. Based on the previous analysis, final stocks may rise by less than 14%, if at all, though this may not be a large enough deviation for the same logic to apply. PRICE TWINS CBOT corn futures throughout mid-2024 were tracking similarly to those of 2014, also sparking the comparisons between the years. December corn fell more than 9% in June of both 2014 and 2024 as strong U.S. harvests became more probable. The 2014 analog suggested corn could fall yet another 24% over the next three months, but futures ended the three-month period through September 2024 up 2%, partly driven by global crop concerns. December corn has weakened 5% so far this month, but it bounced on Thursday to settle at $4.06-3/4 per bushel, above the $3.85 contract low set in late August. Conversely, most-active CBOT corn futures through the end of 2014 rose as much as 30% from their Oct. 1 low, helped by strength in both wheat and soybeans. HEDGE FUNDS Throughout much of 2023, large speculators held very similar views as they did in 2013, but that completely deviated at the start of 2014. They established a net long in CBOT corn futures and options in February 2014 and did not turn bearish again for another 13 months. This year has been largely characterized by money managers’ record bearish bets, which may have eventually derailed the price trend similarities between 2024 and 2014. But as of last week, funds’ corn view was near flat and their least bearish in 14 months. This brings 2024 and 2014 much closer together, though funds built up their bullish corn view in late 2014 and started 2015 with a net long in excess of 200,000 futures and options contracts. CROP ADJUSTMENTS U.S. corn yield of at least 183 bpa may seem like a foregone conclusion since that outlook has held three months in a row. But U.S. corn yield can still stump analysts as late as January, when USDA offers semi-final production figures. Corn yield fell outside of the range of trade estimates in three of the last six Januarys. That also happened in 2014, as final yield was weaker than earlier ideas. Yield in January 2015 was pegged 3.2 bpa lower than in October, which featured the highest print of the season. Just for fun, a similar reduction in 2024 would be worth 266 million bushels but would still safely include a new record yield. Without any other balance-sheet changes, this would cut 2024-25 ending stocks to 1.73 billion bushels, ironically identical to 2014-15. While the lighter supply scenario still represents plentiful stocks, it is well below the psychological benchmark of 2 billion bushels, often considered oversupply territory by traders. Thinner stock levels may more easily justify any weather- or demand-driven rallies throughout 2025, but that could also depend on how large speculators position themselves to finish off 2024. Karen Braun is a market analyst for Reuters. Views expressed above are her own. Sign up here. https://www.reuters.com/markets/us/revisiting-2014-us-corn-market-clues-about-2025-prospects-2024-10-18/

2024-10-18 06:59

CEO seeks to scale back focus on renewables, sources say BP seeks to reduce spending in offshore wind, sources say Company has projects in Britain, UK, Germany and Asia LONDON, Oct 17 (Reuters) - BP (BP.L) , opens new tab is considering selling a minority stake in its offshore wind business, according to four sources with knowledge of the matter, the latest effort by CEO Murray Auchincloss to scale back the energy company's focus on renewables. The company has faced pressure from shareholders over its energy transition strategy, first launched in 2020, as renewables profit thinned while margins from oil and gas rose. The London-listed oil company has lined up Bank of America (BAC.N) , opens new tab to find partners for the business, the sources said, speaking on condition of anonymity because the process is private. BP wants to reduce its share of the hefty investments required to develop these projects, two of the sources said. A spokesperson for BP declined to comment. BP remains committed to developing its major offshore wind projects, one source said. The company has also invested in solar, biofuels and low-carbon hydrogen in recent months. Auchincloss, who took up the job in January, has vowed to revamp the company's plans to focus on the high-margin businesses, distancing himself from predecessor Bernard Looney's strategy to rapidly expand renewables and reduce oil and gas output. Reuters reported in June, citing sources, that the company paused investments in new offshore wind projects. Last month, BP said it plans to sell its U.S. onshore wind business. The CEO has also said BP would sell a stake in its solar joint venture Lightsource BP once it completes its full acquisition in the coming months. Sources told Reuters earlier this month that BP has abandoned its flagship target to reduce oil and gas production by 25% between 2019 and 2030, though it remains committed to its ambition to reduce carbon emissions to net zero by 2050. "As Murray said at the start of year... the direction is the same – but we are going to deliver as a simpler, more focused, and higher value company," a BP spokesperson said at the time. BP shares rose 1.15% on Thursday. BP currently does not have any offshore wind farms in operation. The offshore business has stakes in projects in Britain, Germany, the United States and Asia, and had a pipeline of projects with a capacity of 9.6 gigawatt at the end of June. Last year, BP won the rights to develop, build and operate two plants in Germany with 4 GW capacity. BP committed to paying 6.7 billion euros ($7.27 billion) over a 20-year period when the projects become operational in the next decade. In Britain, BP is also developing with its partner EnBW three windfarms in the Irish Sea and the North Sea with a combined capacity of 5.9 gigawatts. The rapidly-growing offshore wind sector has had a tough few years as costs ballooned due to technical and supply chain problems as well as higher interest rates, leading many companies to review investments. BP last year took an impairment of $1.1 billion related to its U.S. offshore wind projects, based on the company's annual statement. It later broke up a U.S. offshore wind joint venture with Norway's Equinor (EQNR.OL) , opens new tab. Other companies are also reconsidering their investments in offshore wind, or have assumed impairments, due to the rising cost of developing wind farms that can be more than 100 kilometres offshore. Macquarie has marked its offshore unit Corio for sale, Reuters has previously reported, and Orsted, the world's biggest offshore wind farm developer, trimmed its investment and capacity targets earlier this year. Sign up here. https://www.reuters.com/business/energy/bp-weighs-sale-minority-stake-offshore-wind-business-sources-say-2024-10-17/

2024-10-18 06:57

MUMBAI, Oct 18 (Reuters) - The Indian central bank's persistent dollar sales on Friday have helped the rupee avert sharp losses amid sustained outflows from local equities, six traders told Reuters. The rupee slipped to its record low of 84.0775 earlier in the session, inching past its previous lifetime low of 84.0750 hit earlier in the week. The currency was last quoted at 84.0675, as of 12:20 p.m. IST. State-run banks were spotted offering the dollars through most of Friday's trading session, most likely on behalf of the Reserve Bank of India ((RBI), the traders said. The RBI is "expectedly present on offer (on USD/INR)," which should ensure that sharp losses remain at bay for the currency, a trader at a foreign bank said. The rupee's regional peers were mostly stronger on the day while the dollar index was a tad lower at 103.6 after touching an 11-week high of 103.87 on Thursday. Sign up here. https://www.reuters.com/markets/currencies/indian-central-banks-persistent-intervention-helps-rupee-avert-sharp-losses-2024-10-18/

2024-10-18 06:50

JOHANNESBURG, Oct 18 (Reuters) - South Africa's rand firmed in early trade on Friday, paring some losses from Thursday, ahead of a domestic inflation reading next week which could provide clues on the central bank's rate cutting path. At 0630 GMT, the rand traded at 17.60 against the dollar , about 0.4% stronger than its previous close. The dollar last traded about 0.2% softer against a basket of currencies. "Yesterday’s blow-out raises the possibility that the phase of ZAR weakness has now completed, and that the local unit could make a stronger recovery as we close out the week," ETM Analytics wrote in a research note. Next week, domestic investors will look to September's consumer inflation figures which could provide clues on the South African Reserve Bank's interest rate path. The central bank cut its main lending rate for the first time in more than four years in September, a day after data showed headline inflation fell just below 4.5%, the middle of the central bank's target range. On Thursday, South Africa's central bank governor Lesetja Kganyago said the country could move to a lower inflation target at little cost. "One of the requirements for a stable currency is low inflation; therefore, any talk of lowering the inflation target should be mildly supportive of the ZAR," ETM Analytics wrote. South Africa's benchmark 2030 government bond was little changed in early deals. Sign up here. https://www.reuters.com/markets/currencies/south-african-rand-firms-inflation-print-next-week-2024-10-18/

2024-10-18 06:27

BEIJING, Oct 18 (Reuters) - China advanced plans to build a national recycling group with the founding meeting for the China Resources Recycling Group held in northern China's Tianjin, state-owned Xinhua news agency said on Friday. The meeting comes after China's state planner said in September it supports the establishment of a national resources recycling group as part of efforts to improve recycling in various industries. "Efforts should be made to smooth the resource recycling chain, improve the level of resource recycling, give full play to the leading role of the 'national team', and lead the high-quality development of China's resource recycling industry," said Zhang Guoqing, vice premier of the state council, at the meeting. The meeting confirmed months-long market talk that Beijing intended to build a giant state-owned company, specialising in recycling across sectors including steel, base metals, plastics and chemicals. Both Chinese President Xi Jinping and Premier Li Qiang made comments on building such a new group, Xinhua said. Xinhua did provide details for which areas the new state-run company will cover and how the recycling group would work. Sign up here. https://www.reuters.com/world/china/china-national-recycling-group-holds-first-meeting-tianjin-xinhua-reports-2024-10-18/

2024-10-18 06:18

Reeves and Starmer emphasize 'working people' to reassure voters Labour's challenge: raise funds without increasing major taxes Conservatives accuse Labour of breaking election pledges LONDON, Oct 18 (Reuters) - Speculation is swirling about what new British finance minister Rachel Reeves might announce in her first tax and spending plan this month, but one thing she seems certain to say is that she is doing it for the "working people." The term "working people" has been used repeatedly by Reeves and Prime Minister Keir Starmer before the Oct. 30 budget as part of their efforts to reassure most voters that they won't be hit by the tax increases that seem to be on the way. Starmer referred to "working people" 16 times in a speech to the annual conference of the Labour Party last month, without providing a definition of exactly who working people are. Similarly vague references have been part of the British political discourse going back years. Former Labour Prime Minister Tony Blair and his finance minister Gordon Brown referred regularly to "hard-working families" to disassociate the party with welfare handouts. In 2015, when the party tried - and failed - to return to power, Reeves defined Labour as the party of "working people" and stressed that "we are not the party of people on benefits." Alan Finlayson, a professor of political and social theory at the University of East Anglia, said politicians in general were aware they no longer resembled the people they aim to represent and Labour was no longer able to call itself the party of the working class which sounded outdated. "How do you speak to everybody when actually no one knows who on earth you are for, and how do you seem like you're not for too narrow an interest?" Finlayson said. "You say 'working people', 'hard-working families', etc. It's probably vague enough that you won't get into trouble but it's probably too vague to energise anybody." In the mid-2010s, the heroes of British political rhetoric were the JAMS - the "just about managing" households championed by Conservative leader Theresa May when she was prime minister. The Resolution Foundation, a think tank, stepped in to help provide guidance on who the JAMs might be, pointing to six million working-age households on low to middle income. The current focus on "working people" by Starmer and Reeves seems be an attempt to reassure most voters that the burden of the tax increases coming in the budget will fall on the wealthy. Labour promised before the election not to increase income tax, value-added tax and social security contributions, which together account for the lion's share of tax revenues, leaving the new government with a challenge to raise the money it needs to improve public services and invest in infrastructure. This week Reeves and Starmer declined to rule out an increase in social security contributions paid by employers. The Conservatives accused them of breaking their election pledges. Labour said it had been clear it would be "working people" who would be spared tax increases, not companies. Finlayson said the linguistic emphasis of the new government showed where its priorities lie. "That fits in with the Labour tradition, where Gordon Brown came from, where working has a moral dignity and is a backbone of the country," he said. Sign up here. https://www.reuters.com/world/uk/uks-budget-its-all-about-working-people-2024-10-18/