2025-06-11 22:47

QUITO, June 11 (Reuters) - The International Monetary Fund said on Wednesday that it reached a staff-level agreement with the Ecuadorean authorities on the second review for a proposed augmentation of $1 billion. Amid a more challenging external environment, the authorities have requested an increase of the original arrangement from $4 billion to $5 billion, the IMF said. Sign up here. The move seeks to bolster financial backing for Ecuador's efforts to consolidate economic stability and promote inclusive development, Ecuador's Economy and Finance Ministry said in a post on X. The technical agreement will be evaluated by the IMF Executive Board in the coming weeks. Approval of the second program review would unlock a new disbursement to further strengthen Ecuador's fiscal and external position, the ministry added. https://www.reuters.com/world/americas/imf-ecuador-reach-agreement-proposed-augmentation-1-billion-2025-06-11/

2025-06-11 22:19

NAPERVILLE, Illinois, June 11 (Reuters) - U.S. corn supply estimates for the waning 2024-25 marketing year have been dwindling in recent months, though a notable rebound is expected for 2025-26. But the futures market might not be reflecting these trends, leading many to wonder if old-crop stockpiles are actually larger than the government has predicted. Sign up here. Normally, that supply trajectory might put Chicago futures in an inverse, where old-crop corn is pricier than new-crop. But so far this month, CBOT July corn has traded at an average of around 3 cents per bushel cheaper than December corn , reflecting a small carry in the market. Analysts think the U.S. Department of Agriculture on Thursday will trim its forecast for 2024-25 U.S. corn ending stocks to 1.392 billion bushels, rendering stocks down 21% on the year. In past Junes, such a decline in corn stocks has been associated with July-December inverses exceeding 50 cents. The closest comparison in terms of stock declines would be 2018, when July-December corn traded at a 21-cent carry during the first two weeks of June. At that time, U.S. 2017-18 ending stocks were pegged to ease 8% on the year, but the actual estimate was more than ample at 2.1 billion bushels. This demonstrates that contracting year-on-year supplies can be associated with market carry in June. Additionally, there are examples (2008, 2018) where this carry existed despite a reduction in stock estimates over the previous several months. Still, the current setup may suggest that either July futures are too cheap versus December, old-crop stocks are being understated, or some combination of both. PARSING PROBABILITIES Given the present market structure, what might this mean for old-crop corn stocks – and trade expectations – moving forward? If old-crop stocks are too low, it may not come to light on Thursday. There is no relationship between the old-new crop futures spread and the trend in USDA’s old-crop ending stock estimates from May to June. Fast-forward to June 30, when USDA publishes its June 1 stock survey, and the chance for a bearish bomb increases. Since 2008, whenever July-December corn traded near flat or in a carry during early June, analysts underestimated June 1 corn stocks about 73% of the time. On the flip side, analysts underestimated June 1 corn stocks in just one out of six years when old-new crop corn featured a strong inverse relationship. Since 2008, there is also a 73% hit rate for final corn ending stocks to be the same or higher than was estimated in June whenever July-December corn traded near flat or in a carry during early June. This same early June spread, however, does not suggest that final ending stocks will be bearish as the trade has gone on to both underestimate and overestimate September 1 corn stocks. WAKE ME UP WHEN SEPTEMBER ENDS The outcome is still wide open for the end of September, when USDA will publish final 2024-25 corn ending stocks. But right now, CBOT corn for expiration in mid-September is the cheapest of the bunch. July-September corn is trading at an inverse averaging 12 cents per bushel so far this month, which is unusual given the slight carry in July-December. The historical relationship between these spreads suggests that one or both are a bit out of sync. With multiple anomalies in the futures market setup having been identified, this might simply mean that 2025 is an outlier year. And if that’s the case, historical odds may be increasingly less reliable from here. Karen Braun is a market analyst for Reuters. Views expressed above are her own. Enjoying this column? Check out Reuters Open Interest (ROI) , opens new tab, your essential new source for global financial commentary. ROI delivers thought-provoking, data-driven analysis of everything from swap rates to soybeans. Markets are moving faster than ever. ROI , opens new tab can help you keep up. Follow ROI on LinkedIn , opens new tab and X. , opens new tab https://www.reuters.com/markets/commodities/whats-up-with-wacky-cbot-corn-spreads-braun-2025-06-11/

2025-06-11 21:52

EPA proposes repeal of carbon, mercury rules to save money EPA administrator says coal, gas power needed for data centers Environmental groups warn of higher public health costs WASHINGTON, June 11 (Reuters) - President Donald Trump's administration has proposed repealing rules passed under former President Joe Biden to curb emissions of carbon dioxide, mercury and other air pollutants from power plants, Environmental Protection Agency Administrator Lee Zeldin said on Wednesday. The announcement, following through on a promise EPA made in March, is a key step in Trump's broader efforts to unwind environmental regulations he views as unnecessary barriers to industrial development and expanded energy production. Sign up here. "EPA is taking an important step, reclaiming sanity and sound policy, illustrating that we can both protect the environment and grow the economy," Zeldin said at EPA headquarters. Electric utilities and miners cheered the move to eliminate the Biden-era rules, which Zeldin said would save companies $120 million a year. Environmental groups slammed the proposal, saying it would cost more than that in damage to the environment and public health. In March, Zeldin announced his intent to unwind three dozen existing agency air and water rules. Wednesday's announcement focuses on carbon emission and mercury regulations and launches the formal process to repeal those regulations. The EPA has already exempted 47 companies from regulations to curb mercury and air toxics for coal-fired power plants for two years, according to a list of facilities published by the EPA in April. That move was intended to prevent power plants from having to retire as the U.S. faces an expected jump in electricity demand linked to a surge in data center construction. Zeldin said data centers will consume 10% of U.S. electricity supply within 10 years, up from 3 to 4% currently, so more gas and coal power will be needed to "make America the AI capital of the world." Biden's carbon emission rules for power plants would have reduced greenhouse gas emissions by 1 billion metric tons by 2047, a crucial part of his administration's fight against climate change. The electricity sector is responsible for nearly a quarter of U.S. greenhouse gas pollution. Zeldin said the rules, if finalized, would mean no power plant would be able to emit more than it emits today or as much as it did a year or two ago. The proposal has two parts: the first would repeal the carbon pollution standards finalized last year by the Biden EPA calling for carbon emission reductions from existing coal- and new gas-fired power plants. The second, which Zeldin said would save $120 million a year, would repeal Biden's move to strengthen the 2012 mercury and air toxics rule, requiring continuous monitoring requirements. American Lung Association President Harold Wimmer said the mercury limit rollback was “indefensible from a public health standpoint and a betrayal of EPA’s mission." Shaun Goho, legal director at Clean Air Task Force, said: “These regressive proposals are bad for public health and bad for climate, all to prop up some of the highest polluting power plants in the nation." "Eliminating Biden-era power plant standards will erase $240 billion in climate benefits and $120 billion in public health savings," said Evergreen Action Senior Power Sector Policy Lead Charles Harper. Alex Bond, director of legal policy at the Edison Electric Institute, said: “Regulatory flexibility and certainty are critical for electric companies as they work to meet the nation’s growing demands for reliable electricity, while also keeping customer bills as low as possible." EEI said it still supports the EPA's authority to regulate greenhouse gas emissions under the federal Clean Air Act. National Mining Association President Rich Nolan said nullifying the EPA's two most consequential air rules removes "deliberately unattainable standards and leveling the playing field for reliable power sources, instead of stacking the deck against them." U.S. Representative Rob Bresnahan, a Pennsylvania Republican whose district will have nine new data center projects in coming years, said repealing the power plant rules will enable more gas plants to come online to help power surging electricity demand. "The simple fact is we need more power on the grid to power all of this," he said. https://www.reuters.com/sustainability/climate-energy/trump-administration-set-announce-rollback-power-plant-rules-sources-say-2025-06-11/

2025-06-11 21:05

ORLANDO, Florida, June 11 (Reuters) - TRADING DAY Making sense of the forces driving global markets Sign up here. By Jamie McGeever, Markets Columnist I'm excited to announce that I'm now part of Reuters Open Interest (ROI), an essential new source for data-driven, expert commentary on market and economic trends. You can find ROI on the Reuters website, and you can follow us on LinkedIn and X. The US and China have reached a trade deal, or at least agreed on the framework of a deal, which together with surprisingly soft U.S. inflation data, gave markets a lift on Wednesday. But Wall Street's gains were mild, and they were later wiped out by rising tensions in the Middle East. In my column today I look at the 'equity risk premium' and other metrics that suggest relative U.S. equity and bond valuations are getting very stretched. More on that below, but first, a roundup of the main market moves. If you have more time to read, here are a few articles I recommend to help you make sense of what happened in markets today. Today's Key Market Moves Good vibrations turn sour It's a "done" deal, according to U.S. President Donald Trump, although the he and Chinese leader Xi Jinping still have to finalize the wording of the trade agreement between the two superpowers and sign off on it. The main points of the deal appear to be: China will remove export restrictions on rare earth minerals and other key industrial components; U.S. tariffs on Chinese goods will total 55%; Chinese tariffs on U.S. goods will total 10%. Trump could not have been more enthusiastic in his praise for the agreement on Wednesday, and Commerce Secretary Howard Lutnick said 'deal after deal' with other countries will follow in the weeks ahead. Yet, judging by the relatively muted market reaction, investors are less enthused. And given the chaotic and unpredictable nature of the Trump administration's tariff announcements thus far, the irony of Treasury Secretary Scott Bessent calling on China to be a "reliable partner" in trade negotiations will not be lost on some observers. Especially, one suspects, in Beijing. Based on these proposed China levies, and with the US expected to conclude more trade deals in the coming weeks, the overall U.S. effective tariff rate will be lower than feared a couple of months ago. That's a relief. But the effective tariff rate of around 15% that many economists expect will still be significantly higher than the 2.5% rate at the end of last year, and would be the highest since the 1930s. Also, as the May inflation figures showed, tariffs have yet to be felt on prices. Investors - and Fed policymakers, who meet next week - are in a state of limbo. How will corporate profits and consumer spending be affected? What proportion of the tariffs will companies "swallow", and how much will they pass on to their customers? Zooming out, inflation appears to be cooling around the world, although this trend is expected to reverse once tariffs start to fuel higher goods price inflation. Figures on Wednesday showed that U.S. consumer inflation and Japanese wholesale inflation were lower than expected in May. These reports follow similar numbers from Europe recently, and China remains stuck in its battle against deflation. Next up is India, which releases consumer inflation figures on Thursday, which are expected to show annual inflation slowed to 3.0% in May, the lowest in more than six years. Another focus for investors on Thursday will be the auction of 30-year U.S. Treasury bonds. US stocks-bonds warnings flash amber again Calm has descended on U.S. markets following the 'Liberation Day' tariff turmoil of early April. But Wall Street's rally has revived questions about U.S. equity valuations, as stocks once again look super pricey compared to bonds. Since the chaotic days of early April, U.S. equities have rebounded fiercely, with the S&P 500 up 25%, putting the Shiller cyclically adjusted price-earnings (CAPE) ratio for the index in the 94th percentile going back to the 1950s, according to bond giant PIMCO. Stocks are looking expensive in absolute terms, and in relation to bonds. The equity risk premium (ERP), the difference between equity yields and bond yields, is near historically low levels. According to analysts at PIMCO, the ERP is now zero. The previous two times it fell to zero or below were in 1987 and 1996–2001. In both instances, the ultra-low ERP precipitated a steep equity drawdown and sharp fall in long-dated bond yields. "The U.S. equity risk premium ... is exceptionally low by historical standards," they wrote in their five-year outlook on Tuesday. "A mean reversion to a higher equity risk premium typically involves a bond rally, an equity sell-off, or both." But reversion to the mean doesn't just happen by magic. A catalyst is needed. Equities have recovered largely because they were oversold in April, trade tensions have been dialed down, and investors remain confident that Big Tech will drive solid AI-led earnings growth. So even though huge economic, trade, and policy risks continue to hang over markets, there is no sign of an imminent catalyst that would cause an equity market selloff. CHEAP FOR A REASON The flip side of equities looking expensive is that bonds look like a bargain. Indeed, the relative divergence between stocks and bonds is such that, by one measure, U.S. fixed income assets are the cheapest relative to equities in over half a century. Using national flow of funds data from the Federal Reserve, retired strategist Jim Paulsen calculates that the total market value of U.S. bonds as a percentage share of the total market value of U.S. equities is the lowest since the early 1970s. "Since the aggregate U.S. portfolio is currently aggressively positioned, investors may have far more capacity and desire to boost bond holdings in the coming years than most appreciate," Paulsen wrote last week. But bonds are 'cheap' for a reason. Washington's profligacy – the reason ratings agency Moody's recently stripped the U.S. of its triple-A credit rating – and inflation worries have kept yields stubbornly high. The term premium - the risk premium investors demand for holding long-term debt rather than rolling over short-dated loans - is the highest in over a decade, reflecting concerns about Uncle Sam's long-term fiscal health. And the diagnosis here shows no signs of improving. Trump's 'Big Beautiful Bill' is expected to add $2.4 trillion to the U.S. debt over the next decade, according to the nonpartisan Congressional Budget Office, likely putting more upward pressure on yields. Of course, equity investors do seem to be pricing in a very rosy scenario, and the past few months have shown how quickly the market landscape can change. The U.S. economy could weaken more than expected, the trade war could escalate, or there could be a geopolitical surprise that causes bond yields and equity prices to fall. Investors should therefore be mindful of the warnings being sent by ERPs and other absolute and relative valuation metrics. However, they should also remember that stretched valuations can get even more stretched. As the famous saying goes, markets can stay irrational longer than investors can remain solvent. What could move markets tomorrow? Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles , opens new tab, is committed to integrity, independence, and freedom from bias. https://www.reuters.com/world/china/global-markets-trading-day-graphic-pix-2025-06-11/

2025-06-11 21:03

JERA's US LNG supply to rise from 10% to nearly 30% of its mix JERA signs heads of agreement with Sempra, Cheniere for LNG supply All four are FOB contracts with no destination restrictions TOKYO, June 12 (Reuters) - JERA, Japan's biggest power generator, has agreed to new supply deals for U.S. liquefied natural gas from four projects to diversify its global portfolio away from its reliance on Australia, it said on Thursday. JERA plans to buy up to 5.5 million metric tons per annum (mtpa) of U.S. LNG under 20-year contracts, with deliveries starting around 2030. That total includes some previously reported deals as well as newly announced agreements. Sign up here. Of the 5.5 mtpa announced on Wednesday 2.5 mtpa are non-binding agreements, also called Heads of Agreement (HOA). The move illustrates Japan's efforts to seek stable and flexible LNG supply to strengthen energy security and meet growing electricity demand driven by expanding data centres. The country is the world's second-largest LNG importer after China. The move also boosts U.S. President Donald Trump's efforts to expand LNG exports from the United States, already the world's top shipper of the super-cooled fuel, to help domestic producers and improve the trade balance with Japan. Doug Burgum, the U.S. Interior Secretary, said at an event at the Department of Energy headquarters in Washington that the agreements are about prosperity and peace. "When we can sell energy to our friends and allies, our great ally like Japan, so that they don't have to buy it from our adversaries, that makes the world a more secure place." Among the agreements, Japan's biggest LNG buyer signed an HOA with Sempra Infrastructure for 1.5 mtpa from its Port Arthur LNG phase 2 project and an HOA with Cheniere Energy (LNG.N) , opens new tab for up to 1 mtpa from Corpus Christi LNG and Sabine Pass LNG. The Japanese utility also signed a 20-year sales and purchase agreement with U.S. LNG developer Commonwealth LNG for 1 mtpa from its Louisiana project. On Tuesday, sources familiar with the negotiations told Reuters about the deal, although both companies declined to comment at the time. The 5.5 mtpa figure also includes its deal announced on May 29 with NextDecade (NEXT.O) , opens new tab to buy 2 mtpa from its Rio Grande LNG project. All four are 20-year, free-on-board contracts with no destination restrictions, although the Cheniere deal could go beyond 20 years, JERA said. "We made these decisions because cost-competitive and flexible LNG is essential as we look towards the 2030s," JERA's global CEO and chair, Yukio Kani, told Reuters. He added that LNG has become increasingly important amid rising power demand from data centres and the soaring costs of cleaner alternatives like hydrogen and ammonia. "We were also aiming to secure contracts with the projects already under development and tied to the EPC (engineering, procurement, and construction) agreements before the recent surge in LNG project costs and interest rates," he said. REBALANCING SUPPLIES The announcement comes amid ongoing trade talks between Japan and the United States, though Kani stressed there was no government pressure behind the deals which he said were purely private-sector decisions. "We are rebalancing towards the global supply mix," he said, to reduce its weighting toward Australia. After the new deals, the U.S. will supply nearly 30% of JERA's LNG mix, up from 10% now. Oceania and Asia, including Australia, currently account for more than half. Cheniere said in the last decade it has found it challenging to find a Japanese buyer for its LNG. "We're honoured that off-taker is Japan's, and the world's, largest buyer of LNG." Cheniere Chief Commercial Officer Anatol Feygin said at the event on Wednesday. Sempra said it was happy to work with JERA. "With this announcement, we continue to make steady progress towards reaching a final investment decision for the project," said Justin Bird, chief executive officer of Sempra Infrastructure. Commonwealth LNG said it was delighted to be partnering with JERA, considering the Japanese buyer's prominent role and extensive experience along the full LNG value chain. JERA, jointly owned by Tokyo Electric Power (9501.T) , opens new tab and Chubu Electric Power (9502.T) , opens new tab, already buys U.S. supply from Freeport LNG and Cameron LNG. In 2023, it signed a 20-year contract to buy 1 mtpa from Venture Global's (VG.N) , opens new tab CP2 project. https://www.reuters.com/business/energy/japans-jera-agrees-buy-us-lng-rebalance-supply-portfolio-2025-06-11/

2025-06-11 20:52

Codelco to focus on public-private partnerships for growth Global demand for copper and lithium drives Codelco's strategy Codelco strengthens exploration budget, aims for $150M annually by 2025 SANTIAGO, June 11 (Reuters) - Chile's Codelco, the world's largest copper producer, will focus on more public-private partnerships to buoy finances and improve its capacity to develop new projects amid efforts to boost production, CFO Alejandro Sanhueza told Reuters on Wednesday. A growing global appetite for copper and lithium amid the energy transition has led to sky-rocketing demand at a time when Codelco has been struggling to lift production after hitting quarter-century lows in 2023, partly due to dropping ore grades and delays in projects to overhaul key mines. Sign up here. The CFO's comments are the strongest to date that the state-run company will focus on private backing to boost growth. Sanhueza said public-private partnerships will be a "pillar of growth" and are not intended for the overhaul projects or any existing operations so as to comply with the company's nationalization regulations that do not allow it to accept private money in its mines. "Greenfield initiatives (new projects) are a key part of our growth strategy and an opportunity to continue partnerships with third parties," Sanhueza said in a written response to Reuters, adding that it will also help diversify risk. "Our exploration partnerships allow us to attract external financing and (production) capacity, enabling us to accelerate value generation with additional resources beyond those available to Codelco." Aside from recent lithium joint ventures, Codelco reached agreements with Rio Tinto (RIO.AX) , opens new tab, (RIO.L) , opens new tab and BHP (BHP.AX) , opens new tab to prospect new potential copper mines, which sources with knowledge of the matter have described as promising. Codelco already has a partnership in the El Abra mine with Freeport McMoRan and also owns a fifth of Anglo American Sur. This year, it also acquired a 10% stake in the Quebrada Blanca deposit from the small state-owned company Enami. Sanhueza said another goal is to build joint infrastructure, facilitate access to new technology, or minimize environmental impacts. Codelco announced an unprecedented agreement earlier this year to jointly operate neighboring copper mines with Anglo American (AAL.L) , opens new tab that the company said would increase production by 120,000 metric tons per year for 21 years. According to sources, the company is seeking to finalize the agreement by September. The company is also strengthening its own exploration budget Sanhueza said, which increased to an average of $83 million annually in 2023 and 2024 and will grow to an average of $150 million annually during the 2025-2029 period. "Codelco has a significant stock of mining resources, which is a privilege in the industry," Sanhueza said. "This collaboration with third parties allows us to make better use of these resources, which are complementary to our own projects." https://www.reuters.com/business/energy/chiles-codelco-focus-public-private-partnerships-boost-finances-production-cfo-2025-06-11/