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Showing posts from July, 2018

Where Is The Soybean Market Going?

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Production is forecasted to remain above consumption.

From Focus Economics: Prices fell to multi-year lows in July as China imposed retaliatory tariff s on U.S. soybean exports. On 6 July, soybeans traded at USD 843 cents per bushel, which was down 12.1% from the same day last month. The price was 8.3% lower on a year-to-date basis and was down 11.7% from the same day last year. On 6 July, the U.S. imposed widely-anticipated tariff s on imports from China, leading the Asian giant to retaliate with tariff s of its own, including on soybean imports from the United States. China is the world’s largest consumer of soybeans, so the increased cost of sending supplies there for U.S. farmers, coupled with broader concerns of the depressing eff ect of a trade war on the global economy, has hit market prices. Moreover, on 12 June, the U.S. Department of Agriculture upwardly revised its projection for world soybean production for the season ending in 2019. Prices are expected to recover as deman…

Japan Economic Outlook August 2018

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Outlook is stable...FocusEconomics: Japan
Recent data corroborates that the anticipated recovery in Q2 was likely weaker than expected. Subdued wage growth continues to dent consumer confidence. Industrial production, furthermore, declined in May for the first time in four months. However, with a smaller-than-expected drop in industrial production and robust export growth in June, external demand appears to be fueling activity within Japanese factories. Leading indicators for Q3 signal that economic activity will remain relatively weak, mostly reflecting mounting global economic uncertainties. The Tankan survey for manufacturers showed a less positive assessment of the country’s economic outlook as trade barriers increase globally and geopolitical risks threaten to strengthen the yen. On the upside, the 2020 Tokyo Olympics is boosting capital expenditure, providing stimulus to the economy, while the new trade deal with the European Union should support the external sector. Despite de…

Cotton & Wool Economic Prices

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COTTON
In recent weeks, prices have fallen substantially due to trade tensions. On 6 July, the spot price was USD 79.4 cents per pound, which was down 6.9% from the same day last month. However, the price was 4.0% higher on a year-to-date basis and was up 19.4% from the same day last year. Prices dropped recently due to concerns over the impact of the 25% tariff China imposed on U.S. cotton exports effective 6 July, which will likely lower demand. China, the world’s largest consumer of cotton, strongly affects markets, and prices are unlikely move significantly going forward. Our panelists expect prices to average USD 85.9 cents per pound in Q4 2018. In Q4 2019, panelists expect prices to average USD 79.8 cents per pound. 

WOOL
Wool prices rose throughout most of June, likely on solid demand from key consumer China and tight supply. However, prices pulled back in early July as the new selling season began. On 6 July, wool traded at AUD 2,027 cents per kilogram. The print was 0.4% hig…

Oil Economics July 2018

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WTI BLENDS
WTI Crude Oil prices hit their highest level since November 2014 on 26 June on the back of a tightening U.S. oil market and political tensions with Iran. In the following days, prices fell slightly, trading on 6 July at USD 73.8 per barrel. The print was up 13.9% from the same day last month and was 22.0% higher on a year-to-date basis. Moreover, the price was up 62.1% from the same day last year. Oil prices rallied from the second half of June following a soft patch at the end of May, when prices were aff ected by oversupply concerns. Since then, declining inventories in the United States and fears that the U.S.-led sanctions against Iran could reduce global oil output propelled WTI Crude Oil prices. Moreover, a U.S. economy fi ring on all cylinders is ensuring strong demand for oil. In the fi rst days of June, oil prices moved sideways, and, according to a release from 5 July, the United States unexpectedly posted a small crude build of 1.2 million barrels per day in the …

Finland's Economic Update July 2018

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Finland's Economic Update July 2018 
In the first quarter of 2018, the economy maintained its growth momentum from Q4 2017, with quarter-on-quarter growth accelerating to an over seven-year high. This was due to fixed investment surging on the back of higher private sector investment. Moreover, government consumption increased in Q1, contrasting the fall in Q4. However, although unemployment decreased, and consumer confidence hit record highs, private consumption growth decelerated in Q1 from Q4. This may have been due to high household debt levels weighing on consumer spending. The external sector, for its part, detracted from growth. Meanwhile, the economy had a weak start to Q2. In April, economic activity expanded year-on-year at the slowest pace since August 2016. The current account balance also logged a deficit for the second consecutive month in April.  An expansion in private consumption should support economic growth in 2018 as unemployment dips from 2017. Moreover, ac…

Euro Area Economic Update July 2018

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Comprehensive data confirmed that the Eurozone economy lost steam in Q1, growing at the weakest pace since Q2 2016. The external sector was primarily behind the slowdown, with a strong euro and slowing global recovery fueling a decline in overseas sales. Data for Q2 suggests that momentum has regained some lost ground, although growth is likely still below last year’s highs. The unemployment rate hit a new multi-year low in April, and strong services sector growth pushed the composite PMI up in June. That said, data for the manufacturing sector has been weak, with industrial production contracting in May and the manufacturing PMI falling to an 18-month low the month after. Moreover, the outlook for the sector has turned gloomier in recent weeks. On 22 June, U.S. President Donald Trump threatened to slap a 20% tariff on all European Union manufactured automobiles if retaliatory tariffs on U.S. goods enacted by the EU were not lifted. While the U.S.’s initial tariffs on steel and alumi…

Italy Economic Outlook July 2018

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Italy Update

Following three months of political deadlock and two unsuccessful attempts to form a government, on 6 June the Italian Parliament signed off on a government formed by the right-wing League party and the leftist populist Five Star Movement. As the two parties have different ideologies and the coalition agreement is the result of complicated negotiations, governing will not be smooth sailing. The deadlock has been resolved at a time when the recovery seems to have lost some steam. Recent GDP data shows that growth was broadly stable in Q1, but the economy shows some signs of having slowed in Q2, partly affected by subdued growth in the whole eurozone. In April, the industrial sector weakened considerably, and retail sales contracted sharply amid falling consumer confidence. However, NPLs declined further, confirming that the banking sector has indeed turned a corner, and the construction sector rebounded significantly. That said, survey-based indicators deteriorated furthe…

Gasoline Prices Soar

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John Kemp from Reuters released a quality report today on the gasoline rise in America  and national travel.
In the US we have seen a shift to larger SUV style cars due to cheaper gas - in part. When gas surges customers trade in cars and buying habits transition to more fuel efficient cars. This effects car manufacturers sales as well as inland freight costs for hauling other goods. Data suggests this could lead to inflation in the market.  - CH
“Cheap gasoline provided a significant stimulus to driving during the latter part of 2014 and throughout 2015 but the impact has faded as average pump prices have climbed back towards $3 per gallon” 

Chartbook: https://tmsnrt.rs/2tS9i6S

United Kingdom Economic Outlook July 2018

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Outlook Remains Stable

The economy appears to have regained some momentum in the second quarter following a weak first quarter, but growth is still mediocre at best. Both the manufacturing and services PMIs picked up in May, although weak new orders growth and gloomier business sentiment bode poorly for the evolution of the services PMI going forward. In addition, consumer sentiment improved in the same month, while in February–April employment continued to surge. On the downside, most new jobs were part-time, with total hours worked declining slightly. In addition, the tight labor market is still not feeding through to significantly higher pay—likely driven by weak productivity. On the political front, Brexit negotiations are making little headway on the key sticking point of the Irish border ahead of an important EU summit at the end of June. This comes against a backdrop of disagreement in parliament over MPs’ role in the Brexit process. 




Looking ahead, growth will remain muted, wit…