The latest Market Talks covering Commodities. Published exclusively on Dow Jones Newswires throughout the day.
1114 ET - CBOT wheat futures are leading the grains complex higher in morning trade, with world volatility playing a larger role in how wheat prices move versus other grains. "With several areas around the world (U.S./EU, potentially Australia) harvesting short crops, Russian and Ukraine exports restricted by war, and fertilizer supply tightness due to tensions in the Middle East, wheat prices are expected to trade higher over time," says Doug Bergman of RCM Alternatives in a note. Corn and soybeans remain locked in rangebound movement, says Bergman. Most-active wheat futures are up 0.8%, while corn falls 0.1% and soybeans are up 0.3%. (kirk.maltais@wsj.com)
1111 ET--Texas Roadhouse is seeing the rise in beef costs slow down, but it's not because there has been much improvement with cattle supply, Benchmark analysts say. The analysts note that the relief in beef inflation is more related to lower demand for high-quality cuts at grocery stores. The company expects commodity inflation to be 5% for the year, implying that the roughly 7% inflation in the first half of the year will come down to 3% in the second half. Still, there has been "no real progress" with rebuilding the cattle herd, which would be a longer-term fix for beef prices, the analysts say. (katherine.hamilton@wsj.com)
1045 ET - Both live cattle and lean hog futures on the CME are higher, with cattle up 0.7% and hogs climbing 1.6%. For hogs, today's move appears to show the effect of lower slaughter rates year-over-year, with cumulative slaughter over the past four weeks being 2.5% lower than the same time-frame last year, says StoneX in a note. "The shaky cutout and demand concerns we'd noted last week have been at front and center of the conversation, but I think it's worth revising supply after what's now been four consecutive weeks of lighter kills," says the firm. (kirk.maltais@wsj.com)
1012 ET - Newmont is getting a sweet bargain for its piece of Nevada, according to TD Cowen's Steven Green in a note. The analyst says the $1.95 billion payout to Barrick is "well below" his $6.6 billion implied valuation for Newmont's 38.5% share of Fourmile, handing Newmont a "very attractive price" and an estimated $4.7 billion value uptick. Barrick also wins, Green notes, by bringing Fourmile into NGM early which should eliminate the need for a costly bankable feasibility study, leverage existing local infrastructure and could possibly save the JV in excess of $1B. (adriano.marchese@wsj.com)
0948 ET - U.S. natural gas futures are higher as near-term forecasts are for hotter weather, favoring power-sector demand. "Most of the weather data for the 12-15 day forecast period favors hotter than normal temperatures gaining ground across much of the northern U.S. for stronger than normal demand," NatGasWeather.com says in a note. Recent and coming weather patterns suggest the next two EIA inventory reports will show near to slightly smaller than usual storage builds, the forecaster adds. Nymex natural gas is up 4.7% at $2.788/mmBtu. (anthony.harrup@wsj.com)
0943 ET - Grain traders are putting their focus on Wednesday's WASDE report. While U.S. yields and production outlooks will play a big part in how the ag market reacts, traders are also looking for indications from the USDA about how global wars may impact import and export figures. "The U.S. crop is the most important single variable, but the trade around this report will be shaped as much by factors nobody can put a decimal point on--geopolitics, logistics, and a demand ledger that keeps growing while the market debates supply," says Jim Wiesemeyer of Ag Bull in a note. CBOT corn rises 0.7%, soybeans are up 0.5%, and wheat climbs 1.6%. (kirk.maltais@wsj.com)
0931 ET - Japanese investors still seek foreign investments, despite Tokyo's announced plans to redirect flows to domestic markets, Goldman Sachs economists say in a note. A Ministry of Finance report "suggests continued net purchases of foreign bonds at a sizable pace in July," Goldman says. "It may take some time to implement such a policy shift, so it feels too early to rule out. But so far, our skepticism on the low likelihood of unhedged repatriation flows due to better return prospects abroad looks fair." Goldman Sachs says a BoJ hike next month would help bring long-term strength to the yen. The yen weakens 0.7% versus the dollar, following the recent intervention. (paulo.trevisani@wsj.com; @ptrevisani)
0921 ET - The USDA announces another flash sale of U.S. corn, with 105,000 metric tons sold to unknown destinations for delivery in the 2025/26 marketing year. The designator "unknown destinations" often denotes China, although that's not necessarily the case. The latest sale comes ahead of this week's WASDE report, which is expected to show updates on domestic crop progress and global production outlooks. CBOT grain futures are higher premarket, with most-active corn up 0.7%, soybeans rising 0.5%, and wheat climbing 1.6%. (kirk.maltais@wsj.com)
0916 ET - Oil futures are rising after Iran set out tough demands on the U.S. for reopening the Strait of Hormuz while continuing talks with Oman on shipping through the waterway. "Markets are balancing recovering supply against persistent uncertainty surrounding the future governance and security of the Strait of Hormuz, helping keep a geopolitical risk premium embedded in energy prices," Razan Hilal of Forex.com says in a note. "Iran's demands surrounding transit arrangements, potential tolls, reconstruction costs and broader concessions have raised the bar for a lasting agreement." WTI is up 1.5% at $79.37 a barrel and Brent rises 1.7% to $84.94. (anthony.harrup@wsj.com)
0849 ET - Treasury yields rise ahead of U.S. inflation data due later this week and following July's unexpected negative payroll numbers. Iran makes tough demands to reopen Hormuz, pushing oil futures up 1.5%. Economists surveyed by WSJ expect July's 12-month CPI inflation to cool slightly to 3.4% from 3.5%, with core slowing to 2.5% from 2.6%. Odds of a September hike fall to 46% from 67% a week ago, as the Fed is now expected to hold, according to CME data. The WSJ Dollar Index rises 0.2% as the greenback strengthens 0.6% against the yen. The 10-year yield is at 4.662%, up from Friday's settle of 4.657%. The two-year rises to 4.222% from 4.203%. (paulo.trevisani@wsj.com; @ptrevisani)
0817 ET - Barrick's settlement with Newmont may be a potential drawback for Barrick shareholders, according to Citi analyst Alexander Hacking in a report. The $1.95 billion deal resolves the Nevada Gold Mines joint venture disputes between the two miners, and clears the path for Barrick's North American IPO of its gold assets, Hacking says. However, the payment to fold in Fourmile "may be below what some investors were expecting," he says. "Investor consensus seemed to be that Fourmile was a $10-20bn asset and thus a vend in payment from NEM for their 38.5% could be in the $4-8bn range," according to Hacking.(adriano.marchese@wsj.com)
0745 ET - European natural-gas prices climb more than 5% as uncertainties surrounding the reopening of the Strait of Hormuz raise concerns about supplies ahead of winter. "Europe is well behind in refilling its storage facilities before the heating season, with levels sitting at 58% compared with normal seasonal levels of 70%," ANZ analysts say. "However, even if the strait reopens, shipping companies will require a sustained period of calm before making the journey through the key waterway." In afternoon trading, the benchmark Dutch TTF contract is up 5.7% to 58.80 euros a megawatt-hour.
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