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The U.S. wheat crop is withering, endangering one of the bright spots in the country's commodities shipping business this year. Drought in the Great Plains is decimating an important portion of the U.S. wheat crop, the WSJ's Benjamin Parkin reports, sending futures prices soaring and roiling the agriculture market. The sharp swings in pricing are a lesson in the difficulty in mapping out future supply and demand in farm commodities. Weeks of hot, dry weather in the Dakotas and Minnesota have been hard on spring wheat, which is prized for its high protein content. The damage follows meager planting early in the season after wheat farmers saw crop values clipped by a global grain glut and booming production abroad. The volatility could undermine a strong performer for rail networks. Grain shipments on U.S. railroads were up 12.2% in the first five months of 2017, including a 24.5% year-over-year increase in May, according to the Association of American Railroads.
German metals trading and processing firm Klöckner & Co. SE is far from worried that the Trump administration will impose new tariffs on foreign-made steel. With 50 branches in the U.S. and much of its steel traded in the country sourced locally, the company believes it could see a net gain if White House moves to protect American producers send prices higher, the WSJ's Nina Trentmann reports, particularly if it undercuts Chinese steel dumping. The German company's outlook highlights the varied impact that new U.S. steel sanctions could have as the impact of tariffs moves through the supply chain. The administration is considering additional tariffs on steel imports in the name of national security, and is expected to announce a decision any day. Klöckner expects to pass along any higher steel costs, but the company's U.S. customers may have a tough time doing that as the tariffs test the pricing power of steel's suppliers and producers.
Australia has turned into a liquefied natural gas exporting powerhouse, but that's cold comfort to many Australians. A recent heat wave in Adelaide on the country's southern coast highlighted a cruel reality: resource-rich Australia, the world's No. 2 exporter of natural gas, didn't have enough power to meet the city's air-conditioning demand. The country's experience provides a lesson for the U.S. in what can go wrong, the WSJ's Rachel Pannett writes, as the country rapidly ramps up its own LNG apparatus to boost exports amid a gas glut. Resource-rich Australia exported 62% of its gas production last year, but policy makers didn't ensure enough gas would remain at home as state governments allowed older coal plants to close, leaving the regions more reliant on gas. One big difference is infrastructure: while Australia has focused on export facilities, the U.S. has a large pipeline grid in place, making it easier to move supplies around the country during shortages.
After watching its store sales slide for four straight years, Abercrombie & Fitch now can't even sell itself. The struggling apparel retailer halted discussions with potential buyers, the WSJ's Dana Mattioli reports, saying instead that its best option is ""the rigorous execution of our business plan." That business plan so far has left the company closing stores, lowering prices and revamping its marketing to address deep troubles at Abercrombie and in the market for teen and young adult apparel. The retailers have been hit hard by declining mall traffic, changing tastes and new competition, pushing several of Abercrombie's rivals into bankruptcy protection. There's a sobering message in Abercrombie's failed sale for other struggling apparel retailers, Miriam Gottfried writes in the WSJ's Heard on the Street column, who now should understand that they shouldn't expect to be bailed out by private equity or their peers.
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IN OTHER NEWS
Zinc prices have been moving sharply higher, spurred by tight supply amid tougher Chinese environmental regulations. (WSJ)
As oil market moves confound analysts and longtime investors, many say the rise of automated trading and algorithms are distorting the market. (WSJ)
U.S. airlines are raking in more revenue per mile they fly a passenger for the first time in years thanks to new fare classes and customized services. (WSJ)
Tesla Inc.'s sales in Hong Kong came to a standstill after authorities slashed a tax break for electric vehicles on April 1. (WSJ)
Samsonite International SA, the world's largest luggage maker by volume, is looking to double its market share in the next decade. (WSJ)
Experts say a Foxconn Technology Group Ltd. decision to locate a factory in Wisconsin could exacerbate the state's shortage in automation-savvy workers. (Milwaukee Journal-Sentinel)
Mexico's automotive exports to the U.S. expanded 15.6% in the first half of the year. (CNBC)
U.S. manufacturing technology orders rose 21.8% in May over the same month a year ago. (Industrial Distribution)
Japan's new ocean container group One Network Express named NYK Group regional chief Jeremy Nixon as chief executive of the combined business. (American Shipper)
dled container shipping capacity has declined by about 70% since reaching a recent high in November 2016. (Port Technology)
South Korea's Hyundai Merchant Marine will work with Saigon Corp. to develop a container shipping facility in Vietnam. (Seatrade Maritime)
Chinese regulators will start special inspections of bulk shipping vessels in response to safety concerns in the industry. (Maritime Executive)
Local authorities near London Heathrow Airport approved plans for a 1.9 million-square-foot underground warehouse. (Lloyd's Loading List)
South Carolina's Port of Charleston opened a $14 million cold storage facility to handle the port's refrigerated cargo volume. (Charleston Post & Courier)
Amazon.com Inc. is rolling out a team of in-house gadget experts to help consumers set up "smart home" technology. (TechCrunch)
Paul Page is deputy editor of WSJ Logistics Report. Follow him at @PaulPage, and follow the entire WSJ Logistics Report team: @brianjbaskin , @jensmithWSJ and @EEPhillips_WSJ. Follow the WSJ Logistics Report on Twitter at @WSJLogistics.
Write to Paul Page at firstname.lastname@example.org
(END) Dow Jones Newswires
July 11, 2017 07:03 ET (11:03 GMT)