2025-01-08 23:18

Jan 8 (Reuters) - CME Group (CME.O) , opens new tab said on Wednesday it plans to launch spring wheat futures and options in the coming months that will compete directly with a historic Minneapolis market now owned by Miami International Holdings. Traders expect CME, which dominates agricultural futures with benchmark grain and soy contracts, may steal trading volume for hard red spring wheat after its launch slated for early in the second quarter. The owner of the Chicago Board of Trade already runs U.S. markets for two other types of wheat, soft red winter wheat and hard red winter wheat. "Market participants will now be able to manage price risk across every major type of wheat on one exchange and all cleared in a single clearing house," said John Ricci, CME's global head of agricultural products. Hard red spring wheat was historically traded at the Minneapolis Grain Exchange, or MGEX, which launched its signature contract in 1883 to trade the high-quality crop used to make bread and frozen dough products. It has the thinnest trading volume of the three U.S. wheat contracts. Miami International Holdings last year renamed the Minneapolis market as MIAX Futures Exchange after buying MGEX in 2020. MIAX plans to transition the trading and dissemination of market data for MGEX products from CME's Globex platform to a platform it is building on June 30, spokesman Andy Nybo said. MIAX is developing its own platform so it can launch new products without asking CME to add them to Globex, he added. "We can control our own destiny," Nybo said. Asked about CME's launch, he said competition is healthy in markets. "We're in it to compete." MIAX said in September it entered a licensing agreement with Bloomberg Index Services and will list a number of equity index products. But exiting Globex will cost it some wheat business. Brian Hoops, president of broker Midwest Market Solutions, said he will shift to CME's product. "Taking it off of Globex, I think, is going to eliminate a lot of the volume from someone like me who's doing brokerage work with clients that are growing spring wheat," Hoops said. "It's kind of the end of the old Minneapolis Grain Exchange product." Commercial traders, such as flour mills and grain elevators, initially might favor the Miami exchange as the established marketplace, or use both trading platforms, said Frayne Olson, an agricultural economist with North Dakota State University. Ultimately, he said, speculative traders will determine which platform dominates. "If you don't have the trading volumes, the liquidity to get into and out of positions, the contract is going to fail," Olson said. "And that is driven by the speculator." Sign up here. https://www.reuters.com/markets/commodities/cme-group-challenges-miami-exchange-with-new-spring-wheat-contract-2025-01-08/

2025-01-08 23:15

CEG set to pay mostly in stock, absorb $12 bln Calpine debt Deal talks advanced, could come as soon as Monday Would be largest U.S. power M&A deal since 2007 Calpine gas plants complement CEG's current nuclear-heavy fleet Jan 8 (Reuters) - Constellation Energy (CEG.O) , opens new tab is nearing a roughly $30 billion deal to acquire power producer Calpine, people familiar with the matter said on Wednesday, a move that would significantly expand Constellation's generation assets at a time of rising U.S. power demand. The transaction could be announced as early as Monday, said the people. Constellation is expected to pay mostly stock, with a small cash component, said one, adding the purchase price would include around $12 billion of Calpine debt which the buyer will absorb. The deliberations are ongoing, the sources said, cautioning that while the talks are advanced, a deal is not guaranteed. Constellation and Calpine did not respond to comment requests. Shares of Constellation, which have more than doubled over the past year, closed down 4.6% on Wednesday, following news of talks with Calpine. The company has a market value of around $76 billion. Reuters was first to report in May that the private equity owners of Calpine were considering various options, including a sale of the company, at a valuation of about $30 billion, including debt. If the talks are successful, a takeover of Calpine would rank as the biggest in the U.S. power industry since TXU Corp's $45 billion leveraged buyout in 2007. For Constellation, a successful acquisition would add significant gas-fired power generation to its existing mix, which is around 60% nuclear and also includes some gas, renewables and oil, according to its website. It would also broaden Constellation's geographic footprint outside of its traditional focus areas of the northeast and Midwest: Calpine has a dozen power plants in Texas, as well as numerous generation assets on the West Coast. The news comes as the boom in artificial intelligence and data centers is driving power demand higher, making generation assets increasingly attractive to buyers. For investors with long-standing bets on the power industry, the backdrop is allowing them to exit profitably. Calpine was taken private in 2017 by buyout firm Energy Capital Partners, Canadian pension fund CPP Investments and Access Industries for a total of $17 billion, including debt. Both Constellation and Calpine are independent power producers and, unlike regulated utilities, can sell power at market prices, allowing them to profit more when demand rises. U.S. power demand is forecast to hit a record this year, building on an expectation of record demand in 2024, according to the U.S. Energy Information Administration. A government-backed report last month said power demand from data centers was expected to triple in the next three years, and consume as much as 12% of the country's electricity. Bloomberg reported on Constellation's talks with Calpine earlier on Wednesday. Sign up here. https://www.reuters.com/business/energy/constellation-nearing-30-bln-deal-calpine-corp-bloomberg-news-reports-2025-01-08/

2025-01-08 21:49

Jan 9 (Reuters) - A look at the day ahead in Asian markets. China's latest inflation figures are out on Thursday, and they could not be coming at a more fascinating - some might say alarming - time for global bond markets. Long-term yields around the world are shooting higher as investors bet that sticky inflation will force the U.S. Federal Reserve and other central banks to dial down or even halt their rate-cutting cycles. The 30-year UK gilt yield is the highest since 1998, the 30-year U.S. Treasury yield is a whisker from 5%, and the U.S. 'term premium' - the risk premium investors demand for lending long to Uncle Sam rather than rolling over shorter-term debt - is the highest in a decade. If this is a reflection of investors' fears that the inflation genie has not been put back in the bottle and central banks are losing control over the long end of the bond curve, policymakers should be worried. Fed Governor Christopher Waller seems relatively relaxed though, saying on Wednesday he still thinks inflation will fall toward the Fed's 2% target, allowing for further rate cuts. But minutes of the Fed's policy meeting last month showed policymakers are wary, particularly around the impact of policies expected from the incoming Trump administration. Money markets are pricing in only 40 basis points of Fed easing this year, and year-on-year oil price rise is the highest in six months. Investors' inflation fears are bubbling up. The global outlier is China, where policymakers are fighting deflation. As Jim Bianco at Bianco Research points out, it is the only major bond market in the world where yields are falling. Annual producer inflation has been negative every month since October 2022, indicating that price pressures across the economy remain deflationary. Annual consumer inflation is close to zero, and hasn't been above 1% for nearly two years. China's producer and consumer price inflation figures for December will be released on Thursday. According to the consensus forecasts in Reuters polls, economists expect annual PPI inflation shifted slightly to -2.4% from -2.5% in November, while annual CPI inflation cooled to just 0.1% from 0.2%. This is the context in which Chinese bond yields are tumbling to their lowest-ever levels. The 30-year yield is already below the 30-year Japanese Government Bond yield, and the 10-year yield is now less than 50 basis points away from going below its 10-year JGB equivalent. HSBC analysts on Wednesday slashed their year-end 10-year Chinese yield forecast to 1.2% from 1.8%. The yuan remains under heavy selling pressure and on Wednesday slipped to a fresh 16-month low. It is now poised to break the September 2023 low of 7.35 per dollar, a move that will take it to levels last seen in 2007. Here are key developments that could provide more direction to markets on Thursday: - China PPI, CPI inflation (December) - Australia retail sales (November) - Taiwan, Australia, Philippines trade (December) Sign up here. https://www.reuters.com/markets/asia/global-markets-view-asia-graphic-2025-01-08/

2025-01-08 21:48

SANTIAGO, Jan 8 (Reuters) - Chile's government on Wednesday denied an environmental permit for the proposed Dominga iron and copper mine, siding with critics concerned over impacts to penguins and parrots at the $2.5 billion project that has sparked debate for a decade. Chile's Committee of Ministers said the plan from privately-owned Andes Iron required special sensitivity due to the area's "unique characteristics" as a home to penguins and species in conservation categories which reduced the tolerance for risk. The project highlights Chile's challenges balancing economic growth with environmental protections and is a reminder of bureaucratic mazes that the mining sector has harshly criticized for stalling projects. The committee's decision came after an environmental court ordered it to re-do a January 2023 vote that had struck down environmental approvals for the project. Chile-based Andes Iron has repeatedly defended the mine as meeting environmental regulations and on Wednesday said it will take legal action. "The action of the Committee of Ministers sets an unfortunate precedent never seen before in the history of Chile in terms of environmental permits," it said in a statement. The company has also accused the government of bias against the project, pointing to the nearby Cruz Grande port that was granted an environmental permit. The committee's decision sends a broader message that could discourage investment, said Juan Ignacio Guzman, head of Chilean mining consultancy GEM. "This decision by the committee means that in reality, abiding by the processes and permits in Chile doesn't guarantee you can make investments happen," he said. The head of Chile's National Mining Society (Sonami), Jorge Riesco, called the ruling a disappointment. "We lost the opportunity to send a strong signal of trust to investors," he said in a statement, adding the project had met all technical requirements. The committee said it considered various citizen complaints, and agreed with concerns over biodiversity impacts and lack of a mitigation plan for potential spills of fuel or iron concentrate. Its analysis noted the unique mix of species in the area, including the Humboldt penguin and aquatic mammals such as dolphins, and said Andes Iron had failed to gauge impacts on two plants that are a food source and habitat for the tricahue, an endangered parrot. "It was not possible to determine or evaluate the real impact on these species," the committee said. Sign up here. https://www.reuters.com/markets/commodities/chile-rejects-environmental-permit-dominga-copper-iron-mine-2025-01-08/

2025-01-08 21:43

Jan 8 (Reuters) - The number of California homes and businesses without electricity ballooned to more than 400,000 on Wednesday, as multiple wildfires raged uncontrollably around Los Angeles. At least six fires have erupted since Tuesday in Los Angeles and Ventura counties, so far claiming two lives and burning homes, schools and businesses over more than 20,000 acres (8,094 hectares), as seasonal winds fuel the blazes, according to state fire officials. Virtually all of the state's outages were in southern California, primarily in Los Angeles, according to PowerOutage.us. Southern California Edison, a subsidiary of U.S. utility Edison International (EIX.N) , opens new tab operating in California, shut off power to more than 169,000 homes and businesses, or more than 3% of its 5 million customers, across six counties. The company had issued notices to 8.5% of its customers that they were being considered for additional shutoffs. So-called power safety shutoffs happen, in part, to reduce the risk that airborne objects spark additional blazes when they strike power lines, said company spokesperson Jeff Monford, who implored the public to stay away from any downed lines. It was unknown when power would be restored as the company would have to wait for the period of concern to pass to get crews to fix power lines and other distribution facilities in the affected areas, Monford said. Shares of utility tumbled as much as 13.8% to $66.70, hitting its lowest levels since April and on track for the biggest one-day percent drop since the onset of the COVID-19 pandemic. The Palisades wildfire has so far burned nearly 12,000 acres in the Pacific Palisades area between the beach towns of Santa Monica and Malibu. Other wildfires have sprung up in neighboring areas, including a 10,500-acre fire near the city of Pasadena. Parts of Malibu and Santa Monica are also under evacuation orders. Tens of thousands of people have been affected by mandatory evacuation orders. Sign up here. https://www.reuters.com/business/energy/californian-utility-socal-edison-shuts-power-over-114000-customers-due-wildfire-2025-01-08/

2025-01-08 21:25

WASHINGTON, Jan 8 (Reuters) - The U.S. agency in charge of nuclear security is commissioning a study on the proliferation risks of a more-enriched uranium fuel that nuclear power developers want to fuel new high-tech reactors, the head of the agency said this week. Jill Hruby, administrator of the National Nuclear Security Administration, said in a statement published in the journal Science that it is important to address proliferation concerns of so-called high assay, low-enriched uranium fuel, or HALEU. "NNSA recognizes that reactor type, fuel enrichment level, fuel quantity, and fuel form are important factors in evaluating proliferation risks and believes that risk-informed and adaptive approaches to the proliferation challenges inherent in nuclear energy are warranted," Hruby said. Planned new nuclear plants, known as small modular reactors, or advanced reactors, must set high standards for safety and security, "especially considering Russia’s takeover of Ukraine’s largest nuclear power plant," she said. Russia in 2022 took the Zaporizhzhia plant, the largest nuclear plant in Europe, by force after it invaded Ukraine. Hruby's statement was in response to an article published last year in which scientists said HALEU poses a security risk because it can be used without further enrichment as fissile material in a crude nuclear weapon. HALEU is uranium fuel enriched up to 20% instead of the 5% level of uranium fuel used in today's commercial reactors. Several companies are hoping to develop a wave of reactors that would use HALEU, including the Bill Gates-backed TerraPower, which wants to build a $4 billion plant in Wyoming by 2030. Nuclear has gotten attention from technology companies seeking new ways to power data centers and as U.S. power demand is growing for the first time in decades. None of the plants have yet to be built. TerraPower did not immediately respond to a request for comment. In October, the U.S. Energy Department rolled out initial contracts to four companies hoping to produce HALEU domestically. Currently, commercial amounts of HALEU are only produced in Russia. The U.S. contracts will last up to 10 years and each awardee received a minimum of $2 million, with up to $2.7 billion available subject to congressional appropriations. Hruby said NNSA has regularly collected data and evaluated HALEU risks, and is finalizing plans to commission a National Academies report. The reports are largely classified, she said. But the information will be used to inform programs, develop actions, and make recommendations to stakeholders. Edwin Lyman, a physicist at the Union of Concerned Scientists and an author of last year's report, said he appreciated that Hruby is asking for the independent review of HALEU by the National Academies. "We are hopeful that this effort will lead to tighter security controls on HALEU to prevent its misuse by proliferators and terrorists." The authors had written that if HALEU enrichment is limited to 10% to 12%, the supply chain would be far safer with only modest costs. Sign up here. https://www.reuters.com/business/energy/us-study-proliferation-risk-haleu-nuclear-fuel-after-warning-by-scientists-2025-01-08/