Trade row flares over China's rare earths And China is not minded to heed criticism of its moves to keep a tight hold of its rare earths. Earlier this month, a state-backed newspaper reported that China was now using state reserves to stockpile the metals. That incendiary move came just a week after China's international opponents issued formal proceedings before the World Trade Organisation (WTO), the trade watchdog. The latest development came on Tuesday, when China blocked the WTO from setting up a settlement panel to resolve the dispute - a typical move from a country which is the subject of a complaint, buying time for talks to resolve a situation. That outcome looks unlikely in this case, however. And China will not be able to block a second request at the next meeting of the WTO Dispute Settlement Body on July 23, where it is expected to be made and accepted. If so, written submissions from all the nations involved will ping back and forth prior to an oral hearing in Geneva, where the WTO is based. Only then will the panel itself make a decision. The whole process should take about a year from when the panel request is granted. Observers say the outcome will be difficult to call. One of the questions to answer, notes Konstantinos Adamantopoulos, a WTO disputes expert at law firm Holman Fenwick Willan, is at what point an export duty becomes an impediment to exports - is it 20pc? 50pc? China will argue its level of taxes does not amount to a trade restriction. The panel will also have to look at China's claim to be motivated by environmental concerns, however much sceptics may balk at that. The WTO is able to offer exemptions from its rules if there is a "green" reason. Lastly, countries may argue that their limited domestic supplies of a material justify their actions - an argument which China looks unlikely to make in this case, but is not impossible. The whole debate will, of course, be highly politicised, as it is just the latest in a string of trade wrangles between China and rival powers. Most high-profile is the US's anger over China's artificial depreciation of its currency, which has helped it to amass a huge trade surplus. Beijing is letting its currency rise, but not as fast as the White House would like - and itself looks askance at the US's weakening of the dollar, through its central bank's huge money-printing drive. That is far from the end of it. Just this month, the US filed a separate case with the WTO, accusing China of imposing unfair duties on $3.3bn (£2.1bn) of US auto exports. Relations between the EU and China are also strained, with a recent meeting on China's subsidies of its telecoms and renewable energy sectors said to have gone poorly. "I'm not saying 'trade war', but trade relations between China and the EU are not good," says Adamantopoulos. Wrangling about rare earths will not improve tempers. Sizzling temperatures likely to hit US corn yields and stoke inflation Last week's report from the US Department of Agriculture (USDA) was worse than expected. Food prices are likely to continue to rise, was the message. The World Agricultural Supply and Demand Estimates (WASDE) report provides the US government's forecasts of supply and demand for major global crops. Sizzling weather means US crop yields are likely to plunge. The Midwest heatwave hit corn particularly hard, with the USDA's projected corn yields in 2012 falling 12pc month-on-month. Soybean yield expectations fell by 3.4pc from June, to 40.5 bushels an acre. "The dire production situation in the US is expected to maintain US and global grain and oilseed stocks at razor-thin levels in the 2012-13 season," Rabobank said. The severity of the production setbacks will need to lift prices to levels that generate demand-rationing in the short term and encourage increased plantings in South America later in the year. All of this means higher prices for grains this year, which are likely to feed through into inflation. "While weather will remain the key driver for prices over the coming weeks, a lot of the crop damage has already been done," Rabobank said. Higher, more volatile prices look set to be a feature of agricultural markets throughout the second half of 2012, it added. Brent gushes back above $100 a barrel Brent crude futures are back over $100 a barrel, despite China tabling its slowest growth rate in three years. China's expansion slowed to 7.6pc, but there was relief that it was no worse than expected, as fears of a hard landing persist. The slowdown has also prompted hopes of further stimulus measures in China, which has combined with a tightening of US sanctions against Iran to boost the price. This is good for oil majors, which issue second-quarter numbers next week.