2024-01-16 11:43

WINNIPEG, Manitoba/CHICAGO, Jan 16 (Reuters) - Crop-killing weeds such as kochia are advancing across the U.S. northern plains and Midwest, in the latest sign that weeds are developing resistance to chemicals faster than companies including Bayer (BAYGn.DE) and Corteva (CTVA.N) can develop new ones to fight them. In many cases weeds are developing resistance against multiple herbicides, scientists said. Reuters interviewed two dozen farmers, scientists, weed specialists and company executives and reviewed eight academic papers published since 2021 which described how kochia, waterhemp, giant ragweed and other weeds are squeezing out crops in North Dakota, Iowa, Wisconsin and Minnesota as chemicals lose their effectiveness. Over the last two decades, chemical companies have reduced the share of revenue devoted to research and development spending and are introducing fewer products, according to AgbioInvestor, a UK-based firm that analyzes the crop protection sector. Farmers say their losing battle with weeds threatens grain and oilseed harvests at a time when growers are grappling with inflation and extreme weather linked to climate change. "We're in for big problems over the next 10 years for sure," said Ian Heap, director of the International Survey of Herbicide Resistant Weeds, a group of scientists in over 80 countries that maintains a global database. "We are in for a real shake-up." The database records reduced effectiveness for glyphosate, one of the most common herbicides, against 361 weed species, including 180 in the U.S., affecting corn, soy, sugar beets and other crops. Some 21 weed species globally showed resistance to dicamba, the most recent major U.S. chemical, which launched in 2017. Environmental groups argue that farmers should embrace natural weed-control methods instead of chemicals. Kochia, which spreads as many as 30,000 seeds per plant, can cut yields by up to 70% if left unchecked, according to Take Action, a farmer resource program of the United Soybean Board. Other factors, including the development of more robust seeds, have pushed overall global crop yields higher. But scientists expect weed problems to worsen, with some weeds showing resistance to chemicals even on first exposure. 'REALLY SCARY' In Douglas, North Dakota, farmer Bob Finken sprayed dicamba and glyphosate to kill late-season weeds. Neither product eliminated kochia. "That was really scary," said Finken, 64. "Each year seems to get a little worse." Finken was forced to clear the weeds with harvesting equipment, which risks clogging expensive machinery. Other farmers are hiring workers to pull weeds by hand, said Sarah Lovas, an agronomist with GK Technology, a precision agriculture firm. North Dakota was the largest spring wheat producing state in 2023 and ninth-biggest soybean grower. Five of North Dakota's 53 counties have confirmed populations of dicamba-resistant kochia, a year after it was first reported in the state, North Dakota State University weed specialist Joe Ikley said. "It's just a matter of time before it hits your farm," said Monte Peterson, 65, who grows soybeans near Valley City, North Dakota. LAB SCALE-BACK Chemical producers Bayer, Corteva and FMC (FMC.N) say longer development and regulatory processes have constrained new products to combat weed resistance. Industry executives say regulators have become more stringent about environmental and health impacts. The U.S. Environmental Protection Agency (EPA) said standards for approving new herbicides have not substantially changed since 1996. However, the EPA said recent efforts to assess the impact of new active ingredients on threatened plants and wildlife have delayed some decisions. The EPA did not estimate the increased processing time. The agency said it expedites reviews of lower-risk products. Farm chemical companies spent 6.2% of sales revenue on development of new active ingredients in 2020, down from 8.9% in 2000, AgbioInvestor said. Its data showed the introduction of new active ingredients fell by more than half in 2022 from 2000. Instead, companies have expanded uses of existing products like dicamba, glufosinate and 2,4-D. FMC plans the 2026 launch of an herbicide to kill grassy weeds in rice crops based on the industry's first new mode of action, a term for the way a chemical kills a weed, in three decades. The herbicide was in development for 11 years. FMC hopes it will generate $400 million in sales within a decade, a fraction of the roughly $8 billion global glyphosate market. "If we don't keep developing the new products, we are going to run into a wall where growers don't have the tools to combat the pests," CEO Mark Douglas said. "And then ultimately you face food security issues." The world's biggest agriculture chemical and seed company, Germany's Bayer, hopes to produce its first new mode of action herbicide in over 30 years by 2028. "We're really desperate for (new modes of action) if we're going to sustain uses for farmers," said Bob Reiter, head of research and development for Bayer's crop science division. Two decades ago, companies commercialized a product for every 50,000 candidates, but it now takes 100,000 to 150,000 attempts, Reiter said. U.S.-based Corteva said it has incorporated sustainability criteria, such as reduced groundwater risk, in its research and development, aiming to clear the path with regulators. It hopes that approach will shorten the regulatory process when it introduces a fungicide with a new mode of action against Asian soybean rust disease in Brazil around 2027, said Ramnath Subramanian, vice-president of crop protection research and development. He did not say how much shorter the process may be. Bill Freese, scientific director of the Center for Food Safety in Washington, said farmers should shift away from crops genetically engineered to tolerate herbicides, which lead to plants becoming resistant to multiple chemicals through repeated sprayings. "It's like this toxic spiral," Freese said. "There's no end in sight." https://www.reuters.com/markets/commodities/crop-killing-weeds-advance-across-us-farmland-chemicals-lose-effectiveness-2024-01-16/

2024-01-16 11:42

DAVOS, Switzerland, Jan 16 (Reuters) - Most cobalt producers are likely to be losing money on every ton of cobalt they produce after a price slump last year, Benedikt Sobotka, chief executive at metals miner Eurasian Resources Group (ERG), said on Tuesday. Chinese-owned companies are aggressively expanding cobalt mining in Congo and Indonesia despite the price drop, as they strive to gain market share in the metal used in electric vehicle (EV) batteries. "Cobalt had a terrible year in 2023. The lack of supplier discipline in adding new capacity has really pulled the rug under the cobalt market," Sobotka told Reuters' Global Markets Forum at the World Economic Forum in Davos. The market fundamentals, however, remain intact as global EV penetration rates are growing, he added. ERG, 40% owned by the Kazakh government, has assets in Kazakhstan, the Democratic Republic of Congo and Brazil producing cobalt, copper, aluminium and ferroalloys. In 2022, its core earnings, known as underlying EBITDA, totalled $3.4 billion and free cash flow was $481 million. Sobotka added that shipping disruptions in the Red Sea were not affecting the company. "If it was Malacca Strait, it would be very different," he said, referring to one of the key Indian Ocean gateways. This year could see a pick up in mergers and acquisitions (M&A) in the mining industry, Sobotka said, but stopped short of saying whether ERG would take part in any deals. "Our industry is still very fragmented and that is not a good starting point for deploying large capital in order to increase supply of critical materials for the energy transition," he said. "In most companies one or two countries and even sometimes single mines are more than 50% of their enterprise value. So, something happens in one country or one mine, and you wipe out half of your company's value. That is a clear sign that we have to get bigger and more diversified." (Join GMF, a chat room hosted on LSEG Messenger, for live interviews: https://lseg.group/3TN7SHH) https://www.reuters.com/markets/commodities/most-cobalt-producers-loss-making-after-2023-price-slump-erg-2024-01-16/

2024-01-16 11:40

LONDON, Jan 16 (Reuters) - Global securities and banking regulators proposed a blueprint on Tuesday to bolster the market's ability to cope with extreme stresses such as those seen during the COVID lockdowns and the early days of Russia's invasion of Ukraine. As prices for commodities jumped, buyers have had to stump up more margin or cash to back their trades at clearing houses such as those operated by LSEG, CME, ICE, Deutsche Boerse and LME. The shocks revealed some participants struggling to meet sudden jumps in margin calls, adding to a "dash for cash" that forced central banks to inject liquidity into markets. The Basel Committee, which draws up bank capital rules; IOSCO, a global umbrella group for securities watchdogs; and the allied CPMI global committee on market infrastructure and payments set out 10 policy proposals. They aim to ensure there is enough margin to back trades, and that market participants can better predict hikes in margin. The regulators proposed that clearing houses make available tools for users to simulate how much their margin would change in stressed markets. Clearing houses should be more transparent about how their models for calculating margins work, and disclose a new standardised metric for measuring the "responsiveness" of initial margin to changes in prices, the regulators said in a public consultation. Members of clearing houses, such as banks who act on behalf of end users like companies, should also provide greater transparency to clients and the clearers themselves. "Additionally, they should develop enhanced analytical frameworks for assessing margin responsiveness when passing on margin calls to clients," the document said. Fewer than half of intermediaries surveyed said they could properly estimate increases in margin they could expect from clearing houses in volatile markets, it added. During the "dash for cash" some clearers overrode their margin models, making it even harder to prepare for margin increases. "Though relatively rare, there have been cases where market participants received no prior warning of model overrides and minimal ex post explanation for why such override was necessary," the document said. "This proposal seeks to provide additional transparency around the CCP’s (clearing houses) use of discretion while preserving the CCP’s ability to deal with unexpected circumstances." The proposals are out to public consultation until mid-April to give banks, clearers and other market participants an opportunity to comment before final rules are published. Member countries of the regulatory bodies commit to applying agreed standards in their national rulebooks. https://www.reuters.com/business/finance/global-regulators-set-out-blueprint-bolster-markets-facing-stress-2024-01-16/

2024-01-16 11:07

LONDON, Jan 16 (Reuters) - Company insolvencies in England and Wales look on track to hit a 30-year-high in the final three months of 2023 despite a sharp drop in December, official figures suggested on Tuesday. The government's Insolvency Service said 2,002 companies were declared insolvent last month, 2% more than a year earlier and the smallest monthly increase since July. The figure - which is not seasonally adjusted - was down sharply from November's reading of 2,470, which was the second-highest since monthly records began in January 2019. Seasonally adjusted quarterly data will be published on Jan. 30. But on a non-seasonally adjusted basis, nearly 6,800 companies were declared insolvent in the three months to the end of December, the highest since the first quarter of 1993. British businesses were under pressure through most of 2023 from a big increase in energy costs, fast-rising wages and an increase in Bank of England interest rates to their highest in more than 15 years. "Over the past 18 months, with a combination of higher inflation, higher energy bills and higher interest rates, we've unfortunately seen many companies fail," said Sarah Rayment, co-head of restructuring at risk advisory company Kroll. Company insolvencies fell sharply during the COVID-19 pandemic - reflecting temporary government aid to businesses and legal barriers to forced liquidations - but are now running at a monthly level around 50% higher than before the pandemic. Part of the increase in insolvencies reflects the higher number of registered companies compared with previous decades. Previous third-quarter data showed that the rate at which companies were being liquidated was the highest since 2014, but much lower than in the years before that. The Insolvency Service also released data on individual insolvencies in England and Wales, which fell 20% in the year to December to their lowest since August 2020. https://www.reuters.com/business/finance/england-wales-track-most-company-insolvencies-since-1993-2024-01-16/

2024-01-16 11:04

WASHINGTON, Jan 16 (Reuters) - Banks on Tuesday will urge the U.S. Federal Reserve to completely overhaul a draft rule hiking bank capital, in the latest leg of Wall Street's effort to water down the "Basel Endgame" proposal that bankers say will hurt the economy. Comments on the Basel rule, and two other big bank capital and long-term debt draft rules that aim to boost banking system safety and soundness, are due on Tuesday. The deadline offers banks a key opportunity to try to reshape the Basel rule, which they have been fiercely fighting with lobbying and public advertising and media campaigns. "The impending deluge of negative comments should bolster the case for a more comprehensive shift or a re-proposal," Isaac Boltansky, director of policy research at brokerage BTIG, wrote on Saturday. While it is rare for the Fed to rewrite rules, it is not unprecedented. A Fed spokesperson declined to comment. The central bank's vice chair for supervision and the rule's key architect Michael Barr has said last year's banking crisis shows extra capital is necessary to guard against unforeseen shocks. The rule, first unveiled in July, recalibrates how banks calculate how much cash they must set aside to cover risks. Banks say it is unnecessary since the industry is already awash with capital, and is so onerous it will hurt products and services from green lending and pension plan services to commodities hedging and Treasury market liquidity. They will call for the Fed to repropose the rule, executives said. "I very much hope that it is...completely revised," Citigroup Chief Executive Jane Fraser told reporters during a quarterly earnings call on Friday, adding it would hurt U.S. bank competitiveness and push lending into shadow banks. In an unusual move, bank groups representing Citi, JPMorgan Chase & Co (JPM.N) and Bank of America (BAC.N), among others, got ahead of the deadline, on Friday warning the Fed in a public letter that, if finalized, the rule would violate federal laws because it fails to justify why the changes are necessary. Also speaking to reporters on Friday, JPMorgan Chief Financial Officer Jeremy Barnum said litigation "can't be taken off the table when you're talking about something of this seriousness," but that it was not the preferred route. Barr has said the rule's effect on borrowing would be limited and U.S. banks have been more competitive than European banks, despite having more capital. Last week he also said the Fed is taking feedback into account and considering fixes. https://www.reuters.com/business/finance/big-us-banks-call-fed-rewrite-contentious-bank-capital-rule-2024-01-16/

2024-01-16 11:01

A look at the day ahead in U.S. and global markets from Mike Dolan A shortened U.S. markets week starts on the back foot as Friday's slightly peculiar interest rate cut ebullience cools a touch again while U.S. banking giants resume the corporate earnings season. Wall St has a lot to unpack from a three-day weekend packed with political developments home and abroad. Taiwan's ruling Democratic Progressive Party won the presidential election, but lost its majority in parliament. And oil and natural gas prices continued to shrug off ongoing threats and attacks on Red Sea shipping after U.S. and UK forces hit back at Houthi protagonists in Yemen late last week. Donald Trump secured a resounding win in the first 2024 Republican presidential contest in Iowa on Monday, largely as expected and asserting control over the party as he seeks an election rematch with President Joe Biden. But U.S. congressional leaders managed to agree on a stopgap spending bill to keep the federal government funded into March and avert a partial government shutdown starting late next week. But it's the Federal Reserve rate cut picture that still dominates, with what seemed at first like a mixed picture on inflation from consumer and producer price reports for last month eventually spurring rate cut speculation even more due to a read-across to the Fed's favoured PCE measure. Falling input prices and soft components of the CPI that have bigger weightings in the PCE inflation gauge due next week have actually prompted some banks to cut their forecast on the latter, with six-month annualised PCE inflation seen falling below the Fed's 2% target. Barclays, for one, brought its forecast for the first Fed cut to March from June as a result. Although some central banking pushback again since, mainly from European officials over the weekend, has dampened that speculation a little and sees a more negative start to the week, pretty aggressive easing remains in the price. While ECB officials talk tough and managed to nudged rate cut bets there into April, the weakness of Germany's economy last year and plunging inflation expectations among European households support bullish rate markets. Bank of England chief Andrew Bailey, speaking in parliament later on Tuesday, will also be cheered by news of ebbing wage inflation. U.S. rates markets continue to chomp at the bit. Fed futures still see almost 160 basis points of rate cuts this year, with more than a 70% chance they start in March. Two-year Treasury yields - which had plunged to their lowest since May on Friday - have firmed up about 10bps since to 4.21%, but ten-year yields remain unchanged. A sharp disinversion of the 2-10-year yield curve this month to its narrowest levels in about 18 months took a breather Monday. A record 91% of global investors expect lower short-term bond yields in 12 months' time, a January survey of fund managers published by Bank of America on Tuesday showed. With Goldman Sachs and Morgan Stanley up later in what's been a mixed fourth quarter earnings picture for the big banks so far, Wall St stock futures were off about 0.5%. Some merger activity also caught attention. U.S. private equity firm General Atlantic said on Tuesday that it has entered into an agreement to buy UK-based infrastructure investor Actis. And brokerages Panmure Gordon and Liberum on Tuesday announced an all-share merger to create what they say will be the UK's largest independent investment bank. Key diary items that may provide direction to U.S. markets later on Tuesday: * U.S. corporate earnings: Goldman Sachs, Morgan Stanley, PNC * New York Fed Jan manufacturing survey; Canada Dec inflation, housing starts * Federal Reserve Board Governor Christopher Waller; Bank of England Governor Andrew Bailey testifies to parliament; * World Economic Forum in Davos * ECOFIN meeting of European Union finance ministers, with European Central Bank board member Luis de Guindos attending * U.S. Treasury auctions 3-, 6-month bills https://www.reuters.com/markets/us/global-markets-view-usa-2024-01-16/