IRON ORE FALLS AS FUTURES PLUNGE
The spot price of iron ore dropped, extending last week’s selloff, paced by a plunge in Chinese iron and steel futures. Ore with 62 percent content shed 2.5 percent to $US57.02 a ton on Wednesday, extending its recent slide, as trading resumed in China after a four-day break.
The losses came amid continuing concerns about the outlook for growth in China. While China released positive official manufacturing data for May, in line with April and slightly ahead of consensus, efforts to check financial risks are expected to damp the economy as the year progresses. The price decline is leading to a rethink on profit forecasts for the major producers.
BATTLE HEATING UP FOR CONTROL OF A BANKRUPT MINE
A battle is heating up for control of a bankrupt mine that is the only significant US source of the rare earth elements used in advanced electronics and some defense applications. A group led by a former nursing home operator and Switzerland-based private equity fund will vie with a team of US hedge funds and a Chinese rare earths company in an auction set to decide the fate of the bankrupt Molycorp-owned mine on June 14. At stake is whether the US can successfully mine its own resources of rare earths, which are increasingly being used in electric vehicle magnets as well as wind turbines — and end its reliance on Chinese supplies.
GOLD BULLS FUTURE BLEAK
The gold prices had a volatile month in May as the prices looked weak during the early part of the month but they managed to bounce back during the second half of the month and it is now closing the month near the highs of its range which gives it a positive outlook for the upcoming month of June.
The gold prices did not have such a positive outlook when the month of May began as the June rate hike from the Fed loomed ahead and the gold prices dived towards the 1220 region in anticipation of that and the future looked bleak for the gold bulls.
US MILK PRODUCTION UP FOR Q1
US milk production during the first quarter of 2017 was 2.1 percent higher than during 2016’s first quarter, on a leap year-adjusted basis. On a monthly basis, production was up by 2.6 percent in January, the highest since December 2014.
Year-over-year growth dropped to a leap year-adjusted 2.2 percent in February, and then to 1.7 percent in March. This marked slowing of milk production growth in the United States is caused by changes in state milk production. Based on USDA revisions in data for the past several years, the rate of production growth is increasing in several of the smaller milk producing states but only in very few of the larger ones.
INDIA’S COAL-POWER DEVELOPERS MORE GLOOMY
India’s coal-power plant developers are growing more pessimistic about their projects after a plunge in the cost of electricity from solar panels improved the economics of renewable energy.
After a string of federal auctions, solar is suddenly the cheapest source of electricity in India. That’s darkening the outlook for the coal-fired power industry as projects struggle to find customers or face cancellation amid a glut of capacity. The crashing solar tariffs are creating a mental block for distribution companies and holding them back from signing long-term purchase agreements with conventional power producers.
TEA PRICES LIKELY TO CLIMB FURTHER
The price of tea is likely to climb further this year after dry weather slashed production of the commodity in key suppliers India and Kenya, while recent deadly flooding could disrupt shipments from Sri Lanka, another key exporter.
Output in Kenya, a top tea shipper was dropped by over a third from a year ago in the first quarter after drought ravaged parts of the country, while production was down over 16 percent during that period in India, the world’s biggest black tea producer. In Kenya, improved weather could lead to higher production in the second half.
QUARTER OF KANSAS WHEAT IN POOR TO VERY POOR SITUATION
The latest government’s update shows a quarter of the winter wheat crop in Kansas is in poor to very poor condition. The National Agricultural Statistics Service on Tuesday reported that 30 percent of the state’s wheat is rated in fair condition.
About 38 percent is in good and 7 percent in excellent condition. Wheat coloring is at 39 percent. The agency says that hail in northwestern Kansas has damaged some wheat and recently planted spring crops. The southern half of the state was mostly dry this past week while areas in the north got up to two inches of rain. About 82 percent of the state’s corn crop has now been planted statewide. Soybean planting is at the 41 percent mark. Sorghum seeding is 11 percent complete.
GAS RATES UNPREDICTABLE
When it comes to gasoline prices, experts like to talk about the rocket and the feather. Gas prices go up like a rocket, the saying goes, but they come down slowly, like a feather. So there’s no telling how long gas prices in Muncie will hover around the $2.45 mark.
At the Village Pantry/Marathon at Tillotson Avenue and White River Boulevard, gas prices went up from $2.11 to $2.45 a gallon on Tuesday. Although many stations sold gas for $2.45 on Wednesday, with the Admiral on Memorial Drive on Muncie’s south side selling for the bargain price of $2.43, a few good buys could still be found.