The latest Market Talks covering Commodities. Published exclusively on Dow Jones Newswires throughout the day.
0407 GMT - Explosive maker Dyno Nobel's FY 2031 ambitions put focus on growth, supported by global mining and industrialization demand, and so-called energetics for defense, says UBS. "We look for greater detail on the building blocks of the [high single-digit percentage] revenue growth target, given this represents the key difference between the A$800 million EBIT target and current market expectations," the bank says. The EBIT target is roughly 30% above consensus, it says. Dyno's FY 2026 trading update is, meanwhile, mixed, says UBS. Revised profit guidance is 5% above consensus, while EBIT guidance is 2% below, it says. UBS keeps a neutral rating and A$3.75/share target on the stock. Shares are down 2.0% at A$4.075. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)
0344 GMT - Iron ore prices are higher in early Asian trade, finding near-term support from a seasonal pickup in steel demand and pre-holiday restocking, says Baocheng Futures analysts in a note. However, the broader outlook remains subdued, as widespread losses among steelmakers raise expectations for production cuts, potentially weighing on iron-ore consumption, they say. Arrivals at Chinese ports and overseas miners' shipments have both risen to year-to-date highs, keeping the market well supplied, they add. While domestic mine output remains broadly stable, ample seaborne supply continues to cap the upside, they say. The most actively traded January iron-ore contract on the Dalian Commodity Exchange is 0.8% higher at CNY716.0 a ton. (jiahui.huang@wsj.com; @ivy_jiahuihuang)
0317 GMT - A call by China's main steel industry group for mills to curb output and reduce inventories is weighing on iron-ore prices, according to Commonwealth Bank of Australia's Vivek Dhar. Over 90% of Chinese steel mills are estimated to be unprofitable, with market conditions appearing worse than the steel-market downturns of 2008, 2015 and 2018, he says. "Loss-making steel production in China will likely compel China Mineral Resources Group, which represents Chinese steelmakers, to push harder to structurally lower iron-ore prices with iron-ore miners." CBA expects iron ore to average $95 a metric ton in 4Q, although prices could be lower than anticipated because of headwinds to Chinese steel demand, Dhar says. Spot iron ore is $96/ton, according to S&P Global. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)
0302 GMT - Palm oil falls in Asian trading, tracking overnight declines in soybean oil on the Chicago Board of Trade. Despite profit-taking, technical analysis suggests sentiment in the CPO futures market remains positive, with prices likely to see follow-through buying and test immediate resistance, RHB says in a note. Pending further upward movement, RHB says it will maintain a positive trading bias. RHB pegs resistance at 5,000 ringgit a ton and support at 4,800 ringgit a ton. The Bursa Malaysia Derivatives contract for December delivery is down 26 ringgit at 4,910 ringgit a ton. (yingxian.wong@wsj.com)
0219 GMT - Copper edges lower in Asian trading following recent gains. The base metal rose in the previous session thanks partly to signs of strong buying from China, say ANZ Research analysts in a note. Premiums that importers in China pay for physical copper above benchmark futures have climbed in recent days, they add. The three-month copper futures contract on the London Metal Exchange declines 0.2% to $14,457.50 a metric ton. (megan.cheah@wsj.com)
0146 GMT - Malaysia's consumer spending in 2H could remain skewed toward essentials and value-for-money purchases, CIMB Securities analyst Walter Aw Lik Hsin says in a note. Spending should be supported by inelastic demand, government assistance such as cash handouts, and a potential minimum-wage increase, he says. Discretionary spending is likely to remain subdued, with any recovery concentrated in semiessential, lower-priced categories as consumers continue to trade down, he reckons. Aw thinks defensive, mass-market names are positioned to benefit from essential spending and consumer downtrading, with affordability the key theme for 2H. CIMB maintains its neutral rating on Malaysia's consumer sector, pegging QL Resources, Empire Premium Food, Life Water and Nestle (Malaysia) as its top picks. (yingxian.wong@wsj.com)
0016 GMT - Gold gains in early Asian trade. The yellow metal likely climbed as the pullback in oil prices eased concerns around inflation and future rate hikes by the Federal Reserve, say ANZ Research analysts in a note. Investors don't appear to be perturbed by the prospect of tighter monetary policy, they say, citing that holdings in gold exchange-traded funds have risen in recent sessions. A higher interest-rate environment typically weighs on nonyielding gold. Pepperstone's Ahmad Assiri expects gold prices to be rangebound with the earlier bull market on pause for now, though this is expected to eventually resume due to underlying drivers such as central bank demand. Spot gold is up 0.3% at $4,352.15 an ounce. (megan.cheah@wsj.com)
2045 GMT - Crude futures lose ground for a second consecutive session as the supply fears fueled by the outage of Saudi Arabia's East-West pipeline ease, and oil continues to make it through the Strait of Hormuz via ship-to-ship loadings and dark transits. While any movement toward renewed negotiations between the U.S. and Iran or stepped up tanker flow through the strait could prompt some major oil price declines, "our long-term outlook still favors much elevated pricing for at least another year even allowing for demand destruction," Ritterbusch & Associates says in a note. WTI settles down 0.5% at $101.91 a barrel and Brent falls 1% to $104.82. (anthony.harrup@wsj.com)
2039 GMT - U.S. natural gas futures end a choppy session little changed with some support from a below-average weekly storage build that trimmed the inventory surplus over the five-year average to 118 Bcffrom 148 Bcf. Storage increases have been limited by late-season heat driving power-sector demand. "Despite lingering heat relative to normal, temperatures are still trending lower at this point in the season," Andy Huenefeld of Pinebrook Energy Advisors says in a note. "This points to stronger storage builds in the weeks to come until the onset of more significant heating needs in October." Nymex natural gas slips 0.3% to $2.901/mmBtu. (anthony.harrup@wsj.com)
1843 GMT - Precious metal futures settle higher in New York, recovering from a swoon in the wake of yesterday's Federal Reserve interest-rate increase. "My sense is that they will lag while we're in a rate-hiking cycle, and right now we're fairly clearly in a rate-hiking cycle," says David Russell, global head of market strategy at TradeStation. There are a lot of arguments in favor of gold, in terms of central bank buying and an alternative to the dollar, but the current macro environment "is not in any way textbook favorable for gold and silver," he adds. Front-month gold settles up 0.3% to $4,360.20 a troy ounce, andsilver rises 1.8% to $65.47 a troy ounce. (anthony.harrup@wsj.com)
1837 GMT - The supply of soymeal--soybeans ground for use in numerous products, including food or processing into soybean oil--appears to be tight as users of soymeal struggle to buy supply. Basis levels, or the difference between the local cash price of soybeans and the price of the nearest futures contract on an exchange like the CBOT, around the Midwest are strengthening, says Brian Hoops of Midwest Market Solutions. "Rainfall is slowing harvest and limiting the amount of product that is flowing to the processors," he adds. Basis levels for soybeans around the country are generally higher than seen at this time last year, with many buyers willing to pay extra on top of where soybeans are trading at on the CBOT. Most-active soybean futures are up 0.2%, to nearly $13.40 a bushel. (kirk.maltais@wsj.com)
1727 GMT - U.S. corn fields appear to be showing yields that are even less than the cuts seen in September's WASDE report. "Early yield data has [us] wondering whether NASS [National Agricultural Statistics Service] will cut its U.S. corn yield forecast by another 2-3 [bushels per acre] in October," says AgResource in a note, adding that early harvest returns are showing "disappointing" results. In the September report, the USDA projected average corn yield at 178.5 bushels an acre--a forecast that may be even lower next month." CBOT corn is down 0.3%, while soybeans rise 0.3% and wheat falls 0.3%.
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