Wednesday, July 13, 2011

20110713 1722 FKLI EOD Daily Chart Study.


FKLI closed : 1584 changed : +11 points, volume : lower.
Bollinger band reading : correction range bound upside biased.
MACD Histrogram : falling, buyer reducing position while seller testing market.
Support : 1580, 1565, 1550, 1540 level.
Resistance : 1590, 1600, 1610, 1620 level.
Comment :
FKLI closed recorded gains with lower volume participation salvaging partial of recent falls doing 3 points premium compare to cash market that closed little higher while Asia and European markets traded mostly higher with overnight U.S. market continue to closed lower.
China come to the rescue by announcing a better economic data of higher GDP and industrial output offsetting some worries over a global slowdown, euro zone debt problem and wider U.S. trade deficit.
Daily chart formed an up bar candle closed above middle Bollinger band level after market and traded higher higher throughout the day and closed near the high of the day.
Chart reading remained suggesting a correction range bound upside biased development testing support and resistance level. As good news from China been released, market now awaits further development from European debt crisis and U.S. lawmakers negotiation on QE3 stimulus approval.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20110713 1649 Reuters Poll on Malaysia Crude Palm Oil.

Reuters Poll : Malaysian Palm Oil Futures to average RM3,200 per tonne in 2011, down 6.5% from 1st half 2011 estimate.

Reuters Poll : Malaysian Palm Oil Futures to average RM3,000 per tonne in 2012, down 6.3% from 2011 estimate.

20110713 1605 Global Market & Commodities Related News.

China data boosts stocks, Aussie dollar
SINGAPORE, July 13 (Reuters) - Asian stocks, metals, and the Australian dollar jumped on Wednesday after Chinese economic growth data soothed some worries over a global slowdown at a time when euro zone debt worries are also deterring investors.
"With GDP growth slowing to a more sustainable pace of just over 8 percent annualised in the first-half of the year, the monetary authorities should be encouraged that the tightening over the past year has been effective," said George Worthington, economist at IFR in Sydney.

US trade gap surges to nearly 3-year high on oil
WASHINGTON, July 12 (Reuters) - The U.S. trade gap widened sharply in May to its highest level in nearly three years as surging oil prices helped push imports to a near record and exports fell slightly from April's all-time high.
The trade deficit totaled $50.2 billion, the highest since October 2008, and well above the consensus estimate of $44 billion from Wall Street analysts surveyed before the report, a Commerce Department report showed on Tuesday.

US corn near 2-wk top on tight supplies, wheat dips
SINGAPORE, July 13 (Reuters) - Chicago corn futures were steady on Wednesday after climbing 4 percent to a two-week high in the previous session, buoyed by a U.S. government report which forecast surprisingly small corn stocks.
"The wheat is definitely better supplied than what corn is and today's action is more to do with profit-taking after 5 percent rally," said Adam Davis, a senior commodity analyst at Melbourne-based fund Merricks Capital.

Indonesia allocates 9 trillion rupiah to revamp sugar mills-paper
JAKARTA, July 13 (Reuters) - Indonesia, Southeast Asia's largest sugar consumer, has allocated around 9 trillion rupiah ($1.05 billion) to revitalise its ageing sugar mills, Investor Daily reported on Wednesday, quoting deputy agriculture minister.
"So far, only 1.5 trillion rupiah have been utilised, so there are many mills which have not been revitalised yet," Bayu Krisnamurthi was quoted as saying during a visit to East Java on Tuesday.

China 2011 wheat output seen up 1.4 pct at 116.79 mln T-CNGOIC
BEIJING, July 13 (Reuters) - China will likely harvest a total of 116.79 million tonnes of wheat this year, up 1.4 percent from last year, despite earlier concerns over drought damage to winter crop, according to the lastest estimate by an official think-tank.
China National Grain and Oils Information Centre (CNGOIC) revised upward the country's wheat output after the National Bureau of Statistics said the country's winter wheat, which accounts for a majority of the wheat harvest, was two percent higher than last year at 110.79 million tonnes.

World 2010/11 coffee output revised up to 133.3 mln bags-ICO
HANOI, July 13 (Reuters) - World coffee production in the current 2010/2011 crop reached 133.3 million bags, a rise of 8.2 percent from the previous crop year, the International Coffee Organization said, revising up slightly an earlier estimate.
While output from Africa, Mexico and Central America were revised down from ICO's May report, the London-based coffee body raised estimates for Asia, Oceania and South America, based on member information, its June report seen on Wednesday showed.

Storms knock down wide swath of US corn acres
CHICAGO, July 12 (Reuters) - Severe thunderstorms that ripped across the U.S. Midwest on Monday may have destroyed up to 550,000 acres of corn, although 100,000 to 275,000 acres was more likely, an agricultural meteorologist said Tuesday.
The U.S. National Weather Service said the storms produced straight-line winds in excess of 70 miles per hour (113 km per hour), with winds peaking at 110 to 130 mph in Garrison and Vinton, Iowa.

Brazil to add sugar mills slowly -Rabobank
SAO PAULO, July 12 (Reuters) - Top producer Brazil is expected to add new sugar milling capacity slowly, in part due to high costs, signalling tightness in the sugar market in the medium term, a senior Rabobank analyst said on Tuesday.
Due to its favourable agro-climate and extensive untapped land, Brazil has been seen as the best prospect to boost sugar production and meet growing world demand for the sweetener.

Oil drops on U.S. inventory gains, euro zone debt woes
SINGAPORE, July 13 (Reuters) - Oil dropped on Wednesday, after a surprise gain in U.S. crude inventories and the downgrade of Ireland's credit rating reinforced views of a well-supplied market and a deteriorating demand outlook.
"The oil supply-demand balance is not really tight," said Tetsu Emori, a fund manager at Tokyo-based Astmax Co Ltd.

U.S. sees lower global oil demand growth next 2 years
WASHINGTON, July 12 (Reuters) - Global oil demand will grow less than previously forecast this year and in 2012 due to a more moderate economic recovery and higher fuel prices, the top U.S. energy forecasting agency said on Tuesday.
In its new monthly outlook, the U.S. Energy Information Administration cut its forecast for 2011 world oil demand growth by 270,000 bpd to a 1.43 million-bpd increase this year. Oil demand in 2012 will rise 1.58 million bpd, about 10,000 bpd lower than the agency forecast last month.
year.

Ivorian cotton ginners raise output forecast
DAKAR, July 12 (Reuters) - The Ivory Coast ginners' association on Tuesday raised its forecast for 2011-12 cotton output, forecasting it would rise by more than 25 percent from a year ago to 220,000 tonnes due to improved security, high farmgate prices and good weather.
The cotton sector revised its forecast made in May, when it said after a first assessment that the West African country would produce 216,000 tonnes, from 175,000 tonnes a year ago.

Oil release could erase euro's rate support
LONDON, July 12 (Reuters) - A release of strategic oil reserves by the International Energy Agency could eat away the euro's favourable interest rate differentials over the U.S. dollar by subduing crude prices in the near term and easing inflationary pressures.
Currencies of oil-exporting countries such as the Canadian dollar  and the Norwegian crown  could also suffer while the high-yielding, commodity-linked Australian dollar , if lower energy prices reduce the need for central banks that target inflation to raise interest rates.

Saudi oil output 9.8 mln bpd in June-Gulf delegate
DUBAI, June 12 (Reuters) - Saudi Arabia produced more than 9.8 million barrels of oil per day in June, a senior OPEC Gulf delegate told Reuters on Tuesday, in a sign the world's largest crude exporter sharply raised output despite an emergency stock release by consumer nations.
Production of 9.8 million barrels per day (bpd) would mark the highest monthly figure this year and an increase of as much as 900,000 bpd from the previous month based on a Reuters survey of May output.

China's daily June crude steel output hits record
SHANGHAI, July 13 (Reuters) - China's daily crude steel output hit a record 1.998 million tonnes in June, up 2.8 percent from May, data from the National Bureau of Statistics showed on Wednesday.
June output was 59.93 million tonnes, 11.9 percent higher from the same period last year.

Copper up on China GDP, hopes of QE3
SHANGHAI, July 13 (Reuters) - London copper rose on Wednesday, supported by better-than-expected Chinese growth data and hopes of further monetary policy easing by the U.S. Federal Reserve.
"The better-than-expected Chinese data is lending support to sentiment today but I feel that the main driver for copper is the paring of the dollar's strength from yesterday's high," said Shanghai CIFCO Futures analyst Zhou Jie.

China June refined copper output at record 477,000 tonnes
HONG KONG, July 13 (Reuters) - China's production of refined copper hit a monthly record of 477,000 tonnes in June after posting a 3.3 percent monthly fall to 439,000 tonnes in May, data from the National Bureau of Statistics showed on Wednesday.
Primary aluminium output hit a fresh record of 1.591 million tonnes in June from the previous record 1.536 million tonnes in May due to new capacity.

Australia's ERA Q2 uranium output slides, ups 2011 guidance
SYDNEY, July 13 (Reuters) - Australian uranium miner Energy Resources of Australia  on Wednesday reported an 84 percent drop in second-quarter production from three months earlier, blaming voluntary interruptions in production due to safety concerns on flooding, but lifted its full-year production guidance.
The 68 percent-owned subsidiary of Rio Tinto  , typically supplying 10 percent of the world's uranium, said it produced 83 tonnes of uranium oxide in the second quarter against 518 tonnes in the first quarter.

Gold steady after 7-day winning run, euro zone eyed
SINGAPORE, July 13 (Reuters) - Spot gold was steady on Wednesday, holding on to its 5-percent gain in the past seven sessions as growing fears of a euro zone debt contagion burnished bullion's safe-haven appeal.
"Investors are really fearful that the debt crisis will spread to nations beyond Greece," said Ong Yi Ling, an analyst at Phillip Futures.

20110713 1225 Breaking News.

Reuters:
China Central Bank Adviser :
-Full year inflation could be around 4.8%
-Inflation could be ease quickly in 2nd half
-There is room to raise deposit rates
-June inflation may have peaked.

20110713 1150 China Economy Related News by Bloomberg.

China’s Economy Grows 9.5%, Exceeding Estimates (Source: Bloomberg)
China’s economy and industrial production expanded more than analysts predicted, indicating the nation is maintaining momentum even after interest-rate increases to cool inflation.

Gross domestic product rose 9.5 percent in the second quarter from a year earlier, the statistics bureau said in Beijing today, after a 9.7 percent gain the previous three months. The median estimate was for a 9.3 percent pace in a Bloomberg News survey of 18 economists. Industrial output advanced 15.1 percent in June, the most since May 2010.

Stocks climbed in China on the signs that demand is holding up after the central bank boosted lending rates five times since mid-October and lifted bank reserve requirements to a record. Premier Wen Jiabao said yesterday that stabilizing prices remains the top priority, after food costs soared more than 14 percent in June.

The government “can remain focused on inflation, given that growth was pretty strong,” said Dariusz Kowalczyk, a senior strategist at Credit Agricole CIB in Hong Kong. The data “will encourage policy makers to maintain tight policy settings,” he said.

The Shanghai Composite Index of shares advanced 0.8 percent to 2,775.62 as of 11:01 a.m. local time.

The economy expanded 2.2 in the second quarter from the first three months of the year, the statistics bureau said, picking up from 2.1 percent in January to March.
Europe's Crisis

Wen’s policy options are complicated by a faltering U.S. economy and Europe’s spreading debt crisis threatening export demand. Moody’s Investors Service yesterday cut Ireland’s debt rating to junk and soaring bond yields have signaled that the contagion could spread to Italy.

Fixed-asset investment, excluding rural households, rose 25.6 percent in the first half from a year earlier, today’s report showed. Retail sales expanded 17.7 percent last month from a year before exceeding a median analyst estimate of 17 percent.

The expansion in industrial output compared with the median 13.1 percent gain in a Bloomberg survey.

While the global economy is increasingly dependent on China’s demand as the U.S. labor market deteriorates, investors are concerned that tightening measures will choke off growth. The Shanghai Composite Index declined 10 percent from its April high through yesterday, while yuan forwards indicate reduced expectations for gains in the currency against the dollar.
Inflation Target

Signs of a slowdown have spanned weakness in imports, a manufacturing index falling in June to the lowest level since February 2009, and carmaker General Motors Co. (GM) saying that sales may be at the low end of a forecast. At the same time, lending exceeded forecasts last month and growth in M2, the broadest measure of money supply, rebounded.

Inflation has breached the government’s 4 percent ceiling every month this year, with consumer prices rising 6.4 percent in June from a year earlier, the most in three years. Pork, a Chinese staple, rose 57 percent and accounted for more than a fifth of June’s overall inflation rate.

The People’s Bank of China has raised the one-year lending rate to 6.56 percent and the one-year deposit rate to 3.5 percent, announcing the latest increases on July 6. The nation’s biggest banks are required to set aside 21.5 percent of deposits as reserves, up from 17 percent in November, locking up cash that could fuel inflation.

Ding Shuang, a senior economist at Citigroup Inc. in Hong Kong who previously worked at China’s central bank, said last week that he expects inflation to slow after this month. UBS AG, sees price gains remaining above 6 percent in July before moderating toward 4 percent at the end of the year.

20110713 1104 Global Market & Commodities Related News.

GLOBAL MARKETS: Euro zone crisis hits euro, stocks for 3rd day
NEW YORK, July 12 (Reuters) - The euro and stocks fell for
a third day on Tuesday as moves by officials to stem the European debt crisis failed to allay concerns that the risk was spreading to Italy and Spain.
"Caution is clearly warranted given all the possible outcomes of these events," said Gibson Smith, co-chief executive officer of fixed income at Janus Capital Group in Denver.

OIL: Oil rises on the intraday dollar slip, technicals
NEW YORK, July 12 (Reuters) - Oil rose on Tuesday, shaking off two days of losses to turn positive on the dollar's intraday weakness and supportive technicals.
"Today's oil trade hitched a ride on the strong rebound in the euro and U.S. stock market," Jim Ritterbusch, president at Ritterbusch & Associates in Galena, Illinois, said in a note.

Saudi oil output 9.8 mln bpd in June-Gulf delegate
DUBAI, June 12 (Reuters) - Saudi Arabia produced more than 9.8 million barrels of oil per day in June, a senior OPEC Gulf delegate told Reuters on Tuesday, in a sign the world's largest crude exporter sharply raised output despite an emergency stock release by consumer nations.
Production of 9.8 million barrels per day (bpd) would mark the highest monthly figure this year and an increase of as much as 900,000 bpd from the previous month based on a Reuters survey of May output.

US trade gap surges to nearly 3-year high on oil
WASHINGTON, July 12 (Reuters) - The U.S. trade gap widened sharply in May to its highest level in nearly three years as surging oil prices helped push imports to a near record and exports fell slightly from April's all-time high.
The trade deficit totaled $50.2 billion, the highest since October 2008, and well above the consensus estimate of $44 billion from Wall Street analysts surveyed before the report, a Commerce Department report showed on Tuesday.

Oil release could erase euro's rate support
LONDON, July 12 (Reuters) - A release of strategic oil reserves by the International Energy Agency could eat away the euro's favourable interest rate differentials over the U.S. dollar by subduing crude prices in the near term and easing inflationary pressures.
Currencies of oil-exporting countries such as the Canadian dollar  and the Norwegian crown  could also suffer while the high-yielding, commodity-linked Australian dollar , if lower energy prices reduce the need for central banks that target inflation to raise interest rates.

NATURAL GAS: Natural gas ends up for 3rd day, backed by heat
NEW YORK, July 12 (Reuters) - Front-month U.S. natural gas futures ended higher on Tuesday for a third straight day, as a scorching heatwave covering the eastern half of the country continued to boost demand despite comfortable supplies.
"We've got a good forecast for heat going forward, but we're still in a range between $4 and $4.50," a Massachusetts trader said, noting most nuclear plants are back in service after planned spring maintenance, easing demand for gas.

EURO COAL: Aug S.African trades at $114.75/T
LONDON, July 12 (Reuters) - Prompt physical coal prices moved up fractionally by around 10 cents on Tuesday in line with crude's gains, having opened lower.
"The market has been typically summer quiet but it's looking softer despite making a bit of a gain on the day. (There's) not a lot of buying in Europe," one European trader said.

COMMODITIES: Oil, grains surge on dlr, USDA; sugar at record high
NEW YORK, July 12 (Reuters) - U.S. crude oil posted its largest gain in two weeks on Tuesday as the dollar fell, and wheat prices advanced their most in two months after the U.S. government estimated grain stocks at below market forecasts.
"Today's oil trade hitched a ride on the strong rebound in the euro and U.S. stock market," Jim Ritterbusch, president at Ritterbusch & Associates in Galena, Illinois, said in a note.

20110713 1057 Local & Global Economic Related News.

Malaysia’s nuclear plan on the back burner
Malaysia’s nuclear aspirations have been put on the back burner, but the machinery is still in place according to Energy Commission chairman Tan Sri Ahmad Tajuddin Ali. Speaking to reporters at the Third Energy Forum yesterday, Tajuddin said, “Originally, under the ETP, it was planned that the first 1,000MW of nuclear power would be available by 2021. However, post-Fukushima it is expected that the deadline will not be met. At the moment, the government hasn’t made a decision, but it should be kept in mind that non-decision means automatic deferment”. (Financial Daily)

U.S. Trade deficit in May unexpectedly surges as oil prices climb. The gap grew 15% MoM to USD 50.2b, exceeding all forecasts. Exports held near April's record. (Source: Bloomberg)

U.S: Small-business index fell in June to nine-month low, led by weakening sales expectations and dimming views on the economy, a private survey showed. The National Federation of Independent Business's optimism index decreased to 90.8 from 90.9 in May. The June reading was the lowest since September. (Source: Bloomberg)

U.S: Fed officials divided on more stimulus if growth stays weak, minutes of their meeting last month showed. "A few members noted that, depending on how economic conditions evolve, the committee might have to consider providing additional monetary stimulus, especially if economic growth remained too slow to meaningfully reduce the unemployment rate in the medium run," the Federal Open Market Committee said in the minutes of its June 21-22 meeting, released in Washington. (Source: Bloomberg)

Ireland: Rating cut to junk as EU seeks to contain debt crisis. Ireland joined Portugal and Greece as the third euro-area nation to have its credit rating reduced to below investment grade as European Union finance ministers struggle to contain the region's sovereign debt crisis. Moody's Investors Service cut Ireland to Ba1 from Baa3, citing the probability that Ireland will need additional official financing and for investors to share in losses before it can return to the private market to borrow. The outlook remains "negative," Moody's said in a statement. (Source: Bloomberg)

Greece: Defaulted Greece may have to rescue Trichet as ECB stands firm
European Central Bank President Jean-Claude Trichet might need to rely on Greece for assistance if the nation defaults. Trichet’s threat to refuse defaulted Greek bonds as bank collateral for ECB liquidity remains in force after European finance ministers failed to agree on measures to stem the region’s debt crisis. In a default, Greek lenders could instead get Emergency Liquidity Assistance, a short-term loan program by national central banks in use in Ireland, said economists at Deutsche Bank AG, Barclays Capital, and BNP Paribas. That would leave the Greek central bank to firefight a banking crisis that Trichet has staked the ECB’s credibility on keeping clear of. The danger of such an event has gained prescience as persisting speculation on the prospect of Greece defaulting transformed into regional contagion that sent bond yields soaring and stocks plunging from Portugal to Italy.(Bloomberg)

China: Money supply growth, new lending rebound in June and foreign-exchange reserves jumped by USD 153b in 2Q11. New loans were CNY 633.9b (USD 98b). M2, the broadest measure of money supply, rose by a more-than-forecast 15.9% YoY, and foreign-exchange reserves climbed to USD 3.2tr. (Source: Bloomberg)

China: Yuan intervention eases as slowdown curbs inflows
China’s central bank bought the fewest dollars in four months to stem gains in the Yuan in June as a slowdown in the world’s second-largest economy damped capital inflows and reduced pressure for the currency to appreciate. The People’s Bank of China’s purchases of foreign exchange from the nation’s lenders totaled CNY277.3bn (USD42.8bn), 26% less than in May, according to data released. The nation’s foreign reserves rose USD152.8bn in the second quarter, the least in a year, and government data is forecast to show gross domestic product increased at the slowest pace since 2009. Expansion is cooling after policy makers raised interest rates three times this year and lenders’ reserve-requirement ratios on six occasions, seeking to tame the fastest inflation since 2008. (Bloomberg)

India: Industrial production growth unexpectedly slowed in May after the central bank extended the longest stretch of interest-rate increases in a decade. Output at factories, utilities and mines rose 5.6% YoY following a revised 5.8% YoY gain in the previous month. (Source: Bloomberg)

Indonesia: Central bank kept its benchmark interest rate unchanged for a fifth consecutive month as easing inflation gives policy makers room to assess the risk of a slowdown in global growth. Bank Indonesia maintained its reference rate at 6.75%, it said in Jakarta. (Source: Bloomberg)

Philippine: Exports unexpectedly decline in May as electronics slump. Exports unexpectedly fell for the first time in 19 months as electronics sales dropped, echoing an easing in demand seen across the region. Shipments abroad declined 3.2% YoY to USD 4.1b. (Source: Bloomberg)      

20110713 1056 Malaysia Corporate Related News.

KLCI chart reading :
pullback correction upside biased.


AirAsia X: Confirms switch to Gatwick from Oct 24. AirAsia X (AAX) would be switching its UK base from Stansted to Gatwick Airport from October 2011 onwards. The rationale of the change is attributable to Gatwick's "irresistible rates" offer to AAX for landing and parking at the airport. (Source: The Star)

AirAsia says high oil price holding back European expansion plan
AirAsia X, the long-haul unit of South-East Asia’s biggest discount airline, said high oil prices are stymieing its plans to roll out additional routes to Europe. CEO Azran said if oil prices remained at where they are presently, nothing will materialize in the next 12 months. He also mentioned that fuel cost has been a real challenge and this had prevented the airline from moving to a double-daily service to Britain. (Malaysian Reserve)

BTM secures timber concession in Terengganu
BTM Resources has secured a forest concession agreement with the Terengganu State Forest Department to extract forest products in Kemaman. The forest concession is for an area of about 404.7 ha for a period of three years from 3 July 2011 to 2 July 2014, BTM said in a statement. (Malaysian Reserve)

Golden Land sells off property firm
Golden Land has sold its entire stake in its 70% owned property development firm Tanjong Wahyu SB for RM15.3m cash to focus its resources for future plantation expansion. The company told the local exchange yesterday that its subsidiary Ikatan Hasrat SB has entered into a sale and purchase agreement with Moremas SB to sell 1.4m shares in Tanjong Wahyu and will realize a gain of about RM5.7m. (Malaysian Reserve)

Nadayu formalizes UDA land purchase, revises development plans
Nadayu Property has formalized the acquisition of the 1.4ha of vacant freehold land in Jln Sultan Ismail from UDA Holdings for RM215.5m. In a filing with Bursa Malaysia yesterday, Nadayu said it intends to submit a revised proposal for approval, which will include two office towers to complement the serviced apartments and shopping complex that are already planned. (Financial Daily)

Perdana Petroleum: Ends chartering arrangement, Name change for Petra Perdana. Perdana Petroleum Bhd's wholly owned Perdana Mercury Ltd has terminated the bare boat charter arrangement with Mount Tahan LLC to curb further losses incurred from this class of AHTS vessels. AHTS registered low utilization and charter rates last year due to weak market sentiment. Separately, Petra Perdana Bhd has undergone a name change and will now be known as Perdana Petroleum Bhd. (Source: Bursa Malaysia)

Muda: Oji Paper may acquire Muda. Muda Holdings Bhd could be the next takeover target for Japanese paper product manufacturer Oji Paper Co Ltd. This comes after Oji Paper crossed the 51% threshold to firm up their offer to buy out HPI Resources Bhd. (Source: The Edge Financial Daily)

Energy: MyPower to review PPAs. The special purpose unit set up by the Government called MyPower Corp will review the much-criticised power purchase agreements (PPAs) between Tenaga Nasional Bhd (TNB) and independent power producers (IPP) and make the necessary recommendations to three ministries soon. The unit that was set up a year ago under the ministry is headed by Datuk Abdul Razak Majid, a veteran in the power sector who was formerly TNB's senior vice-president of corporate affairs. (Source: The Star)

Utilities: Levy on heavy power users from January. The government will impose a levy on heavy electricity users starting January 2012 and channel the money to remunerate green energy producers under the Renewable Energy Act's feed-in tariffs (FiT). Those who consume more than 300KW (kilowatts) per hour will be considered heavy energy users and they will be taxed. (Source: Business Times)

Plantation: Dompok leading team to convince Australia to drop palm oil labeling to avoid misconceptions. Plantation Industries and Commodities Minister Tan Sri Bernard Dompok will lead a delegation for a one-week visit to Australia starting July 24, 2011 to counter the misconceptions on palm oil. (Source: The Malaysian Reserve)    

20110713 1017 Breaking News.

China 2nd quarter GDP up 9.5%
China June Industrial Output up 15.1%

China’s Economic Growth Slows to 9.4% (Source: Bloomberg)
China’s economy grew at a slower pace last quarter, a moderation that may ease inflation pressures in the world’s second-biggest economy. Gross domestic product expanded 9.5 percent from a year earlier, the statistics bureau said in Beijing today, after a 9.7 percent gain in the first quarter. That compared with the median 9.3 percent estimate in a Bloomberg News survey of 18 economists. Industrial production rose a more-than-estimated 15.1 percent in June, the agency said. Monetary tightening that has pared the pace of the nation’s expansion may also validate economists’ forecasts for inflation to ease in the second half after surging to the fastest pace in three years last month. Premier Wen Jiabao said yesterday that stabilizing prices remains the nation’s top priority, while officials also aim to avoid “big fluctuations” in growth. “Slower growth would soften inflation pressures,” Ken Peng, senior economist for China at BNP Paribas SA, said before the report.
It would also give policy makers more flexibility, he said. The economy expanded 2.2 in the second quarter from the first three months of the year, the statistics bureau said, after a previously reported 2.1 percent gain in the January-to- March period. China’s government may be wary of adding to five interest- rate increases since mid-October as a faltering U.S. economy and Europe’s spreading debt crisis threaten export demand. Moody’s Investors Service yesterday cut Ireland’s debt rating to junk and soaring bond yields have signaled that the contagion could spread to Italy.

Investment, Retail Sales
Fixed-asset investment, excluding rural households, rose 25.6 percent in the first half from a year earlier, today’s report showed. Retail sales expanded 17.7 percent last month, exceeding a median analyst estimate of 17 percent. The expansion in industrial output compared with the median 13.1 percent gain in a Bloomberg survey. While the global economy is increasingly dependent on China’s demand as the U.S. labor market deteriorates, investors are concerned that tightening measures will choke off growth. The Shanghai Composite Index declined 10 percent from its April high through yesterday, while yuan forwards indicate reduced expectations for gains in the currency against the dollar.
Signs of a slowdown have spanned weakness in imports, a manufacturing index falling in June to the lowest level since February 2009, and carmaker General Motors Co. (GM) saying that sales may be at the low end of a forecast. At the same time, lending exceeded forecasts last month and growth in M2, the broadest measure of money supply, rebounded.

Inflation Target
Inflation has breached the government’s 4 percent ceiling every month this year, with consumer prices rising 6.4 percent in June from a year earlier, the most in three years. Pork, a Chinese staple, rose 57 percent and accounted for more than a fifth of June’s overall inflation rate. The People’s Bank of China has raised the one-year lending rate to 6.56 percent and the one-year deposit rate to 3.5 percent, announcing the latest increases on July 6. The nation’s biggest banks are required to set aside 21.5 percent of deposits as reserves, up from 17 percent in November, locking up cash that could fuel inflation. Ding Shuang, a senior economist at Citigroup Inc. in Hong Kong who previously worked at China’s central bank, said last week that he expects inflation to slow after this month. UBS AG, sees price gains remaining above 6 percent in July before moderating towards 4 percent at the end of the year.

20110713 1013 Global Market Related News.

DJIA chart reading :  pullback correction upside biased.

Hang Seng chart reading : side way range bound little downside biased. 

Asian Stocks Rise Before China Growth Report (Source: Bloomberg)
Asian stocks rose for the first time in three days before China releases an economic-growth report and as investors weigh efforts to contain Europe’s debt crisis. Raw material producers gained as oil and copper futures rebounded. Komatsu Ltd. (6301), the world’s second-largest maker of construction machinery that counts China as its biggest market, rose 1.4 percent in Tokyo. Mitsubishi Corp. (8058), the Japanese trading house that gets about 43 percent of its revenue from commodities, climbed 1.4 percent in Tokyo. Newcrest Mining Ltd. (NCM), Australia’s No. 1 gold producer, advanced 1.7 percent after the price of the precious metal rose to a record as Europe’s escalating debt crisis boosted demand for safe-haven investments.
The MSCI Asia Pacific Index rose 0.3 percent to 134.86 as of 10:03 a.m. in Tokyo, with two stocks rising for each that fell. The gauge last week extended its rally for a third week as European Union leaders hammered out proposals to roll over debt to prevent Greece from defaulting and after reports showed retail sales in the U.S. increased in June, and initial claims for unemployment benefits declined.

Emerging-Market Stocks Plunge Most Since May; Currencies, Bonds Retreat (Source: Bloomberg)
Emerging-market stocks tumbled the most in seven weeks, currencies weakened and borrowing costs rose as Europe’s debt crisis worsened. The MSCI Emerging Markets Index sank 1.9 percent to 1,121.27 at 4:40 p.m. in New York, the biggest loss since May 23. China’s benchmark equity index slid the most in seven weeks while India’s Sensex Index fell to a three-week low after factory production growth slowed. Brazil’s equities fell for a sixth day. Poland’s zloty weakened 1.3 percent and Hungary’s forint slid to the lowest level since March versus the dollar.

U.S. Stocks Decline as Cut of Ireland’s Credit Rating Smothers Late Rally (Source: Bloomberg)
A late rally in U.S. stocks faded, dragging the Standard & Poor’s 500 Index to a third straight loss, after Ireland’s downgrade to junk added to concern Europe is losing control of the credit crisis and overshadowed evidence the Federal Reserve hasn’t ruled out more stimulus. Semiconductor-related shares slumped, with Intel Corp. falling 1.8 percent after Novellus Systems Inc. (NVLS) forecast lower- than-estimated third-quarter earnings. Alcoa Inc. (AA) slipped 1.3 percent after second-quarter profit missed analyst estimates. Cisco Systems Inc. (CSCO) jumped 1.1 percent after two people familiar with the matter said it would announce job cuts.

U.S. Fed Officials Divided on Further Stimulus (Source: Bloomberg)
Federal Reserve policy makers disagreed on whether additional monetary stimulus will be needed even if the outlook for economic growth remains weak, minutes of their meeting last month showed. “A few members noted that, depending on how economic conditions evolve, the committee might have to consider providing additional monetary stimulus, especially if economic growth remained too slow to meaningfully reduce the unemployment rate in the medium run,” the Federal Open Market Committee said in the minutes of its June 21-22 meeting, released today in Washington. “On the other hand, a few members viewed the increase in inflation risks as suggesting that economic conditions might well evolve in a way that would warrant” the FOMC “taking steps to begin removing policy accommodation sooner than currently anticipated.”

Bernanke ‘Lays Down Law’ on Fed Public Statements Before Policy Meetings (Source: Bloomberg)
Federal Reserve Chairman Ben S. Bernanke offered this communications tip to his central bank colleagues: Watch what you say. The Fed, in a document released today, provided some parameters on talking about the business of the central bank. The guidelines called for Fed policy makers to refrain from characterizing the views of other members of the Federal Open Market Committee, the central bank’s main decision-making group, and from publicly discussing the contents of meetings beyond what is eventually published in minutes of the closed-door sessions. The guidelines also called on Fed officials to observe a “blackout period” during which they will not offer their views on monetary policy and economic conditions. The time span will begin on Tuesday the week before scheduled Fed meetings, and end on the Thursday following the gatherings.

Federal Reserve Needs QE3 to Boost Economic Growth, Berkeley’s DeLong Says (Source: Bloomberg)
The Federal Reserve should engage in another round of quantitative easing as growth in the U.S. economy remains slow and inflation concern remains low, according to Bradford DeLong of the University of California at Berkeley. “I don’t see any argument against QE3,” Delong said during an interview on Bloomberg Television’s “Surveillance Midday” with Tom Keene. “The worry is always that it will destabilize inflation expectations, that they’ll lose their anchor, and yet when you look out as far as you can at the prices of the TIPS and of the 30-year Treasuries, you see no sign at all that there’s been any loss of confidence that the Fed will keep inflation under control.”

Trade Deficit of U.S. Unexpectedly Surges on Increase in Crude-Oil Imports (Source: Bloomberg)
The trade deficit in the U.S. widened in May to the highest level in almost three years, reflecting a surge in the cost of imported crude oil. The gap grew 15 percent to $50.2 billion, exceeding all forecasts of 73 economists surveyed by Bloomberg News and the biggest since October 2008, Commerce Department figures showed today in Washington. Exports held near April’s record. A weaker U.S. dollar and growing economies overseas may keep bolstering demand for American-made products, benefiting companies like Smithfield Foods Inc. (SFD) The deficit may narrow as the recent drop in oil costs and a slowdown in consumer spending curb imports, indicating trade will help prop up the world’s largest economy.

Obama Presses for Grand Bargain on Deficit as Republicans Resist on Taxes (Source: Bloomberg)
The top Senate Republican attacked the credibility of President Barack Obama’s efforts to forge a “grand bargain” of spending cuts and tax increases, saying the president himself was an obstacle to an agreement on the debt. Senator Mitch McConnell and other Republican leaders said Obama is putting an expansion of government ahead of the goal of reaching a bipartisan accord to cut the U.S. deficit. He said Democrats’ “smoke and mirrors” proposals prevented the type of $4 trillion deficit reduction that Obama is seeking. “As long as this president is in the Oval Office, a real solution is unattainable,” McConnell of Kentucky said on the Senate floor today in his toughest comments about the negotiations since bipartisan talks began.

China bank lending quickens; fans rate risk
BEIJING, July 12 (Reuters) - China's bank lending and money growth expanded faster than expected in June as loan demand remained buoyant, adding to the case for further monetary policy tightening.
Coming days after news that China's inflation hit a three-year peak in June, Tuesday's data also showed the country's foreign exchange reserves soaring to a record $3.2 trillion at the end of the second quarter.

Singapore Growth Stalls as Asia Recovery Slows (Source: Bloomberg)
Singapore’s expansion probably stalled last quarter as manufacturing declined, presaging easing growth across Asia as rising U.S. joblessness and a widening European debt crisis undermine the global recovery. Gross domestic product was unchanged in the second quarter from the previous three months, when it climbed an annualized 22.5 percent, according to the median estimate of 13 economists surveyed by Bloomberg News. The trade ministry will release its advanced estimates for growth at 8 a.m. tomorrow. Asia’s rebound from the 2009 global recession also faces threats from within the region, as a report today may show China’s growth slowing in the second quarter after higher interest rates curbed consumption. The risks have prompted Malaysia and the Philippines to refrain from raising interest rates in recent weeks, and may put pressure on Singapore to hold off on allowing faster currency gains at its next policy review.

BOJ holds fire, more optimistic on economy
TOKYO, July 12 (Reuters) - The Bank of Japan kept monetary policy on hold and gave a brighter assessment of the economy on Tuesday, encouraged by a rebound in factory output and increasing signs that the recovery from the devastating March earthquake is broadening.
But it warned of risks to the country's outlook such as the global economic slowdown and the chance nuclear plant shutdowns could prolong power shortages and hurt Japan's potential growth.

Japanese Stocks Rise as Trading House Gain Outweighs Europe Debt Concern (Source: Bloomberg)
Trading houses led Japanese stocks higher for the first time in three days after oil prices rose and Credit Suisse Group AG initiated coverage of the sector with an “overweight” rating. Exporters pared declines on speculation Japan will intervene to stop the yen’s rise. Mitsubishi Corp., Japan’s largest commodities trader, rose 1.4 percent. Inpex Corp., the country’s biggest energy explorer, advanced 2.2 percent after oil prices gained the most in two weeks. Toyota Motor Corp. erased declines of as much as 0.8 percent after the yen retreated from its strongest level in almost four months amid speculation Japan will sell its currency to support exporters.

S. Korea Unemployment Rate Remains at Low (Source: Bloomberg)
South Korea’s unemployment rate stayed at the lowest level in half a year as the economic expansion spurred hiring in the manufacturing sector. The jobless rate was at 3.3 percent in June, unchanged from May, Statistics Korea said today in Gwacheon, south of Seoul. The median estimate in a Bloomberg News survey of 12 economists was for a rate of 3.4 percent. Sustained job growth is fueling inflation that’s exceeded the central bank’s target since January, prompting the bank to raise the benchmark interest rate three times this year. The Finance Ministry said on June 30 that the nation may add 330,000 jobs this year, more than the earlier estimate of 280,000.

Deepening euro crisis hits stocks, bonds, euro
LONDON, July 12 (Reuters) - Investors dumped the euro, peripheral euro zone government debt and European shares on Tuesday as officials struggled to contain fears that the euro zone debt crisis was spreading to Italy and Spain.
In a bid to keep Italy and Spain from the same fate as Greece, Portugal and Ireland, euro zone finance ministers promised on Monday cheaper loans, longer maturities and a more flexible rescue fund.

ECB’s Bond-Buying Pause Tested as Italy Prepares Debt Auction: Euro Credit (Source: Bloomberg)
The European Central Bank’s resolve in staying out of the bond market since March is being tested as soaring interest rates endanger the funding programs of Europe’s most indebted nations. Italian 10-year yields surged above 6 percent this week on concern that Europe’s third-largest economy may fail to implement a 40 billion-euro ($56 billion) austerity package. Borrowing costs for the nation, which plans to sell more than 3 billion euros of bonds in four auctions with maturities from 2016 to 2026, retreated yesterday amid speculation about ECB purchases. The Frankfurt-based central bank declined to comment.

EU Officials Flail About for Solution to Debt Crisis, Revive Buyback Plan (Source: Bloomberg)
European finance chiefs hunted for ways to cut Greece’s debt burden, floating ideas from bond buybacks to a temporary default in an overhaul of a strategy that has failed to contain the debt panic. As a surge in bond yields in Italy and Spain brought the crisis closer to the heart of the euro area, Europe dusted off previously discarded plans under the glare of markets that have lost confidence in governments’ ability to still the turmoil. “They are taking it one step a time and you never get ahead of the snowball,” said Matt King, Citigroup Inc.’s global credit strategy head in London. “You need a fundamental shift that deals with the whole crisis.”

Ireland Cut to Junk Rating by Moody’s (Source: Bloomberg)
Ireland joined Portugal and Greece as the third euro-area nation to have its credit rating reduced to below investment grade as European Union finance ministers struggle to contain the region’s sovereign debt crisis. Moody’s Investors Service cut Ireland to Ba1 from Baa3, citing the probability that Ireland will need additional official financing and for investors to share in losses before it can return to the private market to borrow. The outlook remains “negative,” Moody’s said in a statement yesterday. The euro fell to a four-month low against the dollar as European finance ministers failed to present a solution to the financial contagion that’s threatening to spread to Italy from Greece, Ireland and Portugal. In Spain, Finance Minister Elena Salgado said the nation might need to endure even deeper spending cuts in 2012 than those currently planned. Ireland, which had a top A

Deepening euro crisis hits stocks, bonds, euro
LONDON, July 12 (Reuters) - Investors dumped the euro, peripheral euro zone government debt, and European shares  as officials struggled to contain fears that the euro zone debt crisis was spreading to Italy and Spain. Oil prices also fell.
In a bid to keep Italy and Spain from the same fate as Greece, Portugal and Ireland, euro zone finance ministers promised on Monday cheaper loans, longer maturities and a more flexible rescue fund. But they said new measures would be announced "shortly" and set no deadline.

Australian Consumer Confidence Falls to Two-Year Low on EU, Rate Concerns (Source: Bloomberg)
Australian consumer confidence fell for a third month in July to the lowest level in more than two years as households’ views about their finances deteriorated. The sentiment index dropped 8.3 percent to 92.8 from a month earlier, the lowest since May 2009 and the biggest decline since October 2008, according to a Westpac Banking Corp. (WBC) and Melbourne Institute survey of 1,200 consumers taken July 4-9 and released today in Sydney. Reserve Bank of Australia Governor Glenn Stevens this month held the overnight cash rate target at 4.75 percent for the seventh straight meeting, and said the nation’s growth pace may be weaker than previously forecast. Stevens said July 5 a European debt crisis had “added to uncertainty” about the outlook for the world economy.

Kiwi, Aussie Dollars Strengthen as Asian Stock Gains Boost Yield Demand (Source: Bloomberg)
New Zealand’s dollar rose, paring yesterday’s steepest drop against the yen in almost five months, as a rally in Asian shares supported higher-yielding currencies.

Yen Falls Versus Euro on Concern Japan Will Intervene to Weaken Currency (Source: Bloomberg)
July 13 (Bloomberg) --The yen declined against the euro on speculation Japan will intervene to weaken its currency. The yen dropped to 111.12 per euro as of 8:42 a.m. in Tokyo from 110.74 yesterday in New York.

FOREX-Euro slides as Italy, Spain bond yields jump
LONDON, July 12 (Reuters) - The euro stumbled to an all-time low against the Swiss franc on Tuesday as euro zone government bond yields vaulted higher due to deepening concerns about the region's debt crisis, prompting investors to dump the single currency for safer ones.
The euro sank 1 percent on the day to 1.1550 Swiss francs on electronic platform EBS. Against the dollar, it hit a four-month trough of $1.3837.

20110713 1012 Global Commodities Related News.

Corn (Source: CME)
US corn futures finish sharply higher as USDA's smaller-than-expected increase in ending stocks renews concerns about supplies. The government pegs 2011-12 inventories at 870M bushels, below traders' estimates for 1B bushels. That means supplies will drop from the 880M bushels forecast for the end of the current 2010-11 marketing year, which ends in August. Additional support for prices comes from worries about hot weather stressing crops in the Midwest next week. CBOT December corn rises 25 1/4c to $6.58 a bushel.

Wheat (Source: CME)
Most US wheat futures finish sharply higher as increased demand is expected to eat into inventories. The USDA raised its forecast for wheat exports amid reduced competition for business from Canada. "Not many people were looking for that 100M bushel increase in exports, and the ending-stocks figure was lower than expected," says Dan Manternach of Doane Advisory Services. A surge in corn prices adds support to wheat. CBOT September advances 32 3/4c to $6.72/bushel while KCBT September gains 21 3/4c to $7.33. MGE September slips 1 1/4c to $7.93 as increased spring-wheat condition ratings lifted harvest expectations.

Rice (Source: CME)
US rice futures surge as USDA slashes its supply outlook. Government cuts 2011-12 inventory forecast 30% from last month to 29.6M hundredweight. That's down 42% from the forecast for supplies at the end of the 2010-11 marketing year, which ends this month. The outlook suffers after USDA on June 30 reduced its estimate for rice plantings. CBOT September rice soars 56c to $16.19 per hundredweight.

Corn Rallies to Highest Price This Month on Inventory Drop; Soybeans Gain (Source: Bloomberg)
Corn rose to the highest price this month after the government said U.S. stockpiles will be smaller than expected, heightening concern that costs for food and fuel will climb. Soybean prices also gained. U.S. corn inventories before next year’s harvest may total 870 million bushels, the lowest since 1996, the Department of Agriculture said today. Analysts in a Bloomberg News survey expected 1.029 billion. The USDA boosted its export forecast and said a record 5.15 billion bushels will be used to make ethanol, more than estimated last month.

Wheat, corn drop on supply prospects, euro zone woes
SINGAPORE, July 12 (Reuters) - U.S. wheat futures slid around 2.5 percent , while corn lost around 1 percent, losing more ground on prospects of higher supplies and fears that the euro zone debt crisis could spread to Italy.
"Grains will be weaker across the board because of the U.S. dollar strength and euro zone crisis," said Adam Davis, a senior commodity analyst at Melbourne-based funds Merricks Capital.

Weather satisfactory for Russian crop to July 20
MOSCOW, July 12 (Reuters) - Weather conditions in most of European Russia will be satisfactory for grain harvesting, and average for crop development in its Asian part until July 20, weather forecasting service Rosgidromet said on Tuesday.
However, in the North Caucasus Federal District, one of the country's important breadbaskets, rains will continue to slow the harvest campaign and cause plants' layering in some parts, it said in a statement.

U.S. corn, soy health unchanged as weather heats up
CHICAGO, July 11 (Reuters) - U.S. corn and soybean ratings held steady even as temperatures rose in key growing regions, but the market will be watching for crop deterioration in the coming weeks as hot weather dries out soils.
Corn ratings fell below market expectations while soybean condition matched analyst forecasts.

US corn and soy surviving high temps, for now
CHICAGO, July 11 (Reuters) - Rising temperatures around the U.S. Midwest were not yet hurting corn and soybean crops because there was plenty of moisture stored up in the soil after a spring of heavy rains, analysts said.
U.S. corn ratings were expected to rise one percentage point while soybean ratings were seen unchanged when the U.S. Agriculture Department releases its latest update on crop conditions Monday afternoon.

India panel allows rice, wheat exports, okays food bill
NEW DELHI, July 11 (Reuters) - India has agreed to allow 1 million tonnes of common rice exports and an unspecified amount of wheat, government sources said on Monday, as it weighs managing millions of tonnes of grains stockpiles with fighting persistently high inflation.
The sources said after a meeting of a panel of ministers that the exact quantity of wheat exports will be decided later. Sources had told Reuters it could be one million tonnes also. India has banned wheat exports since 2007 to ensure local supplies.

China Buys Nearly 4 Mln Tons U.S. Corn -Executive (Source: CME)
China has bought 3.7 million metric tons of corn from the U.S. so far this year, with sales for the full year likely to reach 5 million tons, an executive with a major state-owned grain trading company said. Such a volume would dwarf last year's 1.6 million tons of corn imports and mark the second consecutive year China has reversed its net trading position in the yellow grain to set the world's second-largest economy on course for record corn import volumes in 2011. Driven by low stockpiles and soaring meat demand, China's purchases lifted prices last week after the U.S. Department of Agriculture disclosed that the Asian giant had bought 540,000 tons for delivery after August, exceeding the USDA's earlier 500,000-ton estimate for the full year. China's total corn imports for the year will likely use up 70%-80% of the government's annual tariff-rate quota of 7.4 million tons, an influential China agriculture research house forecast.
"The volume of corn purchased in the second half is likely to be no less than the amount bought in the first half, which was about 2 million tons," Shanghai JC Intelligence analyst Xiao Jun said. In the last few weeks alone, China imported 1.2 million to 1.6 million tons, Xiao said. However, China is unlikely to breach its import quota, which sets higher tariff rates for purchases outside the cap, which is part of a system of controls aimed at self-sufficiency in grain supply. "Ten million tons [of corn imports] would likely be too high as it would exceed the quota," Xiao said. Even if China imports 5 million tons for the full year, it would be more than its last record corn import volume of at 4.29 million tons, reached in 1995. The USDA reported last week that an additional 1.4 million tons of corn purchases were headed for "unknown destinations," widely believed to be China.
China's corn purchases are closely watched because they are a narrative of large shifts in the global food trade, as the world's second-largest corn consumer runs low on arable land amid soaring domestic demand. China became a net corn importer only last year, after 15 years of net exports. Its feed industry continues to grow at nearly 10% a year. Pork prices have been in an uptrend since March 2010, hitting a record CNY23.61 a kilogram in mid-June. Analysts, including Rabobank Group, have forecast that China could become the world's largest corn importer in five years. In 2009, China wasn't even among the top 10 corn importers globally. Even as they downplayed grain purchases, some agriculture policy officials have been hinting that China may not be able to meet sharply rising food demand through domestic resources alone.
"We have to raise output in this area but our techniques and resources can't keep up," Chen Xiwen, director of the State Council's executive office on rural policy and director of the ruling Communist Party's rural affairs office, said in March. While stocks of other major grain categories, including wheat and rice, remained among the world's largest, China's corn stockpiles have been running low because the government has been releasing stocks to rein in inflation. The country's stocks-to-use ratio for corn, an indicator of how much supply China held in store as a proportion of its consumption, was around 35.7% in 2010-11, down sharply from 85% in 2000-01, Standard Chartered said. In another departure from past policy, China's corn purchases this year have so far been directly handled by its official stockpiling agency, China Grain Reserves Corp., known as Sinograin, the grain trading executive said.
"Sinograin is now directly dealing with U.S. exporters," the executive said. China is the U.S.'s top agricultural export market. Unlike its broader trade patterns, China usually runs a trade deficit with the U.S. in the agriculture sector, importing $17.5 billion a year on average, compared with $3 billion a year in Chinese agriculture-related exports to the U.S.

Russia Harvests 4.6M Tons Grain To July 12 (Source: CME)
Russia harvested 4.6 million metric tons of grain to July 12 on 1.1 million hectares, with the average yield of 4.2 tons a hectare, the agriculture ministry reported. The ministry said winter barley and wheat were being harvested in the Southern region of Russia and in the North Caucuses, where prolonged rains were slowing down the harvesting campaign. The harvest has also begun in the republics of Kalmykia and Ingushetia. The ministry didn't give last year's figures for comparison but, according to its past reports, Russia harvested to July 14 2010 11.9 million tons of grain on 3.7 million hectares with the average yield of 3.23 tons a hectare. Because of drought harvest began in Russia last year 7-10 days earlier than usual. Russia will harvest grain this year on 44 million hectares, including 14 million hectares winter grains, the ministry said.
The agriculture ministry expects this year's harvest at 85 million metric tons. Last year's harvest fell to 60.9 million tons from 97.1 million tons in 2009 due to the summer drought.

Australia 2011-12 Wheat Crop Likely 25.25 Mln Tons -Rabobank (Source: CME)
Most of Australia's winter cropping areas have had their best start to the season for several years, although wheat output will likely fall slightly to 25.25 million metric tons from a bumper crop of 26.1 million tons last year, major agricultural lender Rabobank Australia said in a forecast. Australian crop conditions are mostly favorable, with rain showers across the wheat belt in Western Australia--normally the source of up to 40% of the country's wheat--and strong subsoil moisture across the east coast and South Australia state, providing an optimal base for crop growth, Rabobank analyst Tracey Allen said in a quarterly crop report. "The general success of the winter crop planting season has given farmers an air of optimism" for the crop year ending March 31, 2012, she said. Rabobank's 2011-12 forecast is up from a previous estimate by 250,000 tons, but below a forecast of 26.2 million tons by the official Australian Bureau of Agricultural and Resource Economics and Sciences.
Still, Allen said that regular rainfall will be important in the coming months to maximize crop output, particularly in Western Australia, she said. Dry topsoil in some areas in the eastern states and a mice plague that could affect crop germination are also concerns, she said. The volume of wheat exports so far in the marketing year ending Sept. 30 indicate that total shipments could outstrip their five-year average to reach 17.4 million tons, she said. This would be an encouraging result following quality downgrades of a significant portion of last year's crop, below-average production in Western Australia, and a strong Australian dollar, she said. Australia is able to export the balance of its wheat output after domestic demand of about 6 million tons a year is met, making it a major supplier to the global trade. Export volumes are likely to rise even further next year if international demand allows, she said.
Allen said that cotton output from the crop planted this calendar year that will be harvested next year likely will reach record levels between 1.07 million and 1.14 million tons of lint, up from 897,000 tons this year.

Rice Advances to Highest Level Since November 2008 in Chicago on Supplies (Source: Bloomberg)
Rice for September delivery advanced as much as 2.2 percent to $16.54 per 100 pounds on the Chicago Board of Trade, the most expensive level for the most active contract since November 2008, and traded at $16.42 at 8:25 a.m. in Singapore.

India extends duty-free sugar import deadline to Aug
NEW DELHI, July 6 (Reuters) - India will keep sugar imports tax-free until August, extending the zero duty by two months from a June 30 expiry date, a statement on a finance ministry website showed on Wednesday.
Traders say the latest move will have no impact on the market as India, the world's biggest producer behind Brazil, has emerged as a net exporter of the sweetener in the current year to September.

Fall on euro debt concern
LONDON, July 12 (Reuters) - Sugar, coffee and cocoa futures eased  as growing concerns over euro zone debt triggered risk aversion amongst investors. The debt worries also drove investors into safe-have currencies
causing the dollar to strengthen against a basket of currencies.  ICE raw sugar futures eased further from the contract high hit last week, as the firmer dollar and concerns over euro zone debt weighed, after sugar prices rose around 7 percent last week.  

Mexico June coffee exports jump 50 pct vs yr ago
MEXICO CITY, July 11 (Reuters) - Coffee exports from Mexico jumped more than 50 percent in June compared with the same month last year but overall shipments for the harvest have slipped so far, the national coffee association Amecafe said on Monday.
Mexico is expecting a slightly smaller coffee crop this year after plants were damaged by frost in some states. The coffee harvesting season in the region begins in October and comes to a close in September.

Poor weather could hit Ivorian cocoa - farmers
ABIDJAN, July 11 (Reuters) - Damp conditions and a lack of sun could hurt Ivory Coast's cocoa harvest over coming weeks, farmers said on Monday, citing the appearance of the black pod fungal disease in some areas.
Ivory Coast, which produces one third of the world's cocoa, is recovering from a four-month political crisis in which farmers were driven off their land and exports were halted. Despite concerns over the weather and months of political upheaval, exporters on Monday said 1.3 million tonnes of cocoa had already arrived at ports this season and total exports could reach a record breaking 1.5 million tonnes in 2011.

Brazil coffee areas dry, warmer for the next week
BRASILIA, July 11 (Reuters) - Coffee areas in world top grower Brazil will stay warm and dry over the next week, with no new waves of cold expected, leaving little chance of crop-damaging frost, forecaster Somar predicted Monday.
Minimum temperatures will be in the double digits in all areas Somar monitors except in the cooler, mountainous part of the coffee belt in southern Minas Gerais, Pocos de Caldas, where temperatures may near freezing on two nights this week.

Ivorian cocoa output seen to breach all-time record
ABIDJAN, July 11 (Reuters) - Ivorian cocoa production is expected to breach an all-time record and hit 1.5 million tonnes in the current season after exporters said arrivals at ports reached over 1.3 million tonnes on Monday.
Arrivals at ports in the world's top cocoa producer are estimated to have surpassed the government's forecast of 1.3 million tonnes by July 10, and are set to break the 1.4 million tonnes record production of the 2003-2004 season.

Indonesia rubber price seen above $4/kg in H2
JAKARTA, July 11 (Reuters) - Indonesian rubber prices could stay above $4 a kg in the second half of this year on steady demand from tyre makers, but are unlikely to revisit a life-time high struck earlier this year, the Indonesian Rubber Association (Gapkindo) said on Monday.
"Demand is still strong, despite China's tight money policy," said Suharto Honggokusumo, executive director of Gapkindo, referring to the world's largest consumer.

Weak rains may hit India's 2011/12 cotton exports
MUMBAI, July 6 (Reuters) - India's cotton exports in 2011/12 could fall from the 6.5 million bales approved the previous year as poor rains reduce the amount of land sown with the crop in the world's second-largest producer and exporter.
Initially the country's cotton acreage was expected to rise 15 percent in 2011/12 on record high prices, but scant rainfall in key growing areas may prompt farmers to go for other crops like corn and soybean and even trim per hectare yield of cotton.

India aims for record grains output in 2011/12
NEW DELHI, July 4 (Reuters) - India aims to produce a record 245 million tonnes of grains in the crop year that started on July 1, Farm Secretary P.K. Basu said on Monday, a rise of about 3.9 percent on the previous year, as the government looks at allowing limited exports.
"We aim to produce a record 245 million tonnes of grains in 2011/12. Given the current trend there are no worries," he told reporters.

Oil Drops From Three-Day High on Rising U.S. Crude Supplies, Europe Crisis (Source: Bloomberg)
Oil declined from a three-day high in New York as investors bet that increasing U.S. crude supplies and signs that Europe’s debt crisis is spreading indicated demand for raw materials may falter. Futures fell as much as 0.9 percent after the American Petroleum Institute said crude inventories rose for the first time in six weeks. An Energy Department report today may show supplies shrank. Prices also dropped after Ireland joined Portugal and Greece as the third euro-area nation to have its credit rating reduced to below investment grade.

China unlikely to yield on rare earths despite WTO
BRUSSELS, July 11 (Reuters) - China will probably not yield to demands to ease export restrictions on rare earths, unlike its flexibility in some previous trade disputes, even after the World Trade Organization ruled against it in a related case.  
The WTO ruled last week that China breached trade law by curbing exports of eight raw materials including bauxite and zinc.

World aluminium demand to double in 10 years -Amag
LONDON, July 11 (Reuters) - World demand for aluminium will double in the next decade, driven by growing use in aircraft, transportation and luxury cars, the head of major European products maker Amag  said on Monday.
"We forecast that demand for aluminium will double within the next 10 to 12 years, so a global growth rate of 7 percent. This is a nice picture," Gerhard Falch, the Austrian aluminium group's chief executive, told Reuters.

Alcoa Q2 profit jumps on metal, alumina prices
NEW YORK, July 11 (Reuters) - Alcoa Inc , America's biggest aluminum producer, posted a big jump in second-quarter profit on Monday, matching Wall Street estimates, partly due to soaring prices for the metal and alumina, its raw material.
But some analysts said a recent softening of aluminum prices might affect the company's third-quarter results and Alcoa's stock slipped 7 cents to $15.84 in after-hours trade on the New York Stock Exchange.

Wuhan Steel to keep hot-rolled coil prices unchanged for August
SHANGHAI, July 12 (Reuters) - China's Wuhan Steel  will keep its hot-rolled coil prices unchanged for August bookings, market sources said.
The company will raise its cold-rolled coil prices for some grades by 30-50 yuan ($4.60-7.70) per tonne for August, industry consultancy Custeel.com said, basically in line with the pricing moves made by Baosteel  on Monday.

Freeport Indonesia workers stay on strike as union demands more
TIMIKA, Indonesia, July 12 (Reuters) - Workers have yet to return to Freeport-McMoRan Copper & Gold's   Indonesia mine as they wait for the outcome of further talks between the union and the firm's local CEO before ending their strike, union officials told Reuters on Tuesday.
A late-night deal was struck on Monday to end the week-long strike that has paralysed output at one of the world's top suppliers of copper and gold, but the union is threatening to revoke the agreement if its demands are not met.

Zambia Jan-May 2011 copper output down -c.bank
LUSAKA, July 11 (Reuters) - Copper output in Zambia, Africa's top producer of the metal, declined by about 5 percent in the first five months of 2011 from a year ago as mines scaled down production due to heavy rain, the central bank said on Monday. Copper output dropped to 308,777 tonnes for January to May from 326,877 tonnes in the same period last year, the central bank said in a fortnightly statistics report.

METALS-Copper falls as dollar rises, euro debt worries spread
LONDON, July 12 (Reuters) - Copper fell on Tuesday on a deepening debt crisis in the euro zone that has prompted investors to off-load assets perceived as risky, including the euro currency, but strikes in top producer countries helped limit further losses.
Investors dumped the euro, peripheral euro zone government debt, and European shares on Tuesday as officials struggled to contain fears that the euro zone debt crisis was spreading to Italy and Spain.

PRECIOUS-Gold in euros hits record as debt crisis spreads
LONDON, July 12 (Reuters) - Gold priced in euros hit record highs for a second day on Tuesday after European Union officials' pledges on handling the region's debt problems did not quell investor fears about the spread of the crisis to other euro zone members.
The strength of the dollar pushed down the price of gold in the U.S. currency, while bullion priced in sterling, Australian dollars, rand and other high-yielding currencies rallied.

Gold Futures Rise to Record Settlement Price on Mounting Europe Debt Woes (Source: Bloomberg)
Gold futures rose to a record settlement as Europe’s escalating debt crisis boosted demand for the metal as a haven investment. On the Comex in New York, gold futures for August delivery gained $13.10, or 0.8 percent, to settle at $1,562.30 an ounce at 1:39 p.m. on the Comex in New York. The previous record was $1,557.10 on May 2, when the intraday price reached an all-time high of $1,577.40. The euro fell to a four-month low against the dollar after a meeting of European Union finance ministers failed to defuse the region’s fiscal woes, hunting for ways to reduce Greece’s debt burden. Bond yields surged in Italy and Spain, and European equities posted the biggest three-session slump since March. Gold priced in euros and pounds rose to records.

20110713 1010 Soy Oil & Palm Oil Related News.

Soybeans (Source: CME)
US soybean futures bounce, climbing on the tailwinds of soaring corn and wheat futures. Soy market played the role of follower, said Rich Nelson, research director at Allendale Inc. A mostly neutral USDA crop report, and assumptions that it's too early to be concerned about soy yields until August, left futures without any fresh directives to stand on, Nelson says. Uncertainties of a long growing season limited downside potential, allowing soybeans garner support from neighboring grain futures. CBOT Nov soy end up 11 1/4c at $13.58 1/4.

Soybean Meal/Oil (Source: CME)
Soy product futures climbed in unison with soybeans. Soymeal futures led the advances, rising in step with other livestock feed, analysts say. Soyoil was higher but lagged the gains in meal and soy, as higher supply forecasts from USDA limited advances, traders say. CBOT Dec soyoil end up 0.06c at 57.32 cents/pound, and Dec soymeal rose $3.20 to $354.90/short ton.

Canada Expected To Set New Canola-Oil Export Record (Source: CME)
Canada is on schedule to report another record for canola-oil exports in the current crop year, breaking last year's record and representing a more-than-doubling in exports over the past six years. In the 2010/11 crop year, Canada is expected to report canola-oil exports of 2.340 million tons, a new record, exceeding the 2009/10 crop year's then-record exports of 1.819 million tons. In the 2004/05 crop year, Canada exported 900,000 tons of canola oil. The records come as Canada's domestic crush processors have increased and demand continues to grow. Chris Beckman, an oilseed analyst with the Market Analysis Group of Agriculture and Agri-Food Canada in Winnipeg, said the increase was primarily due to the U.S., which will import 56% of Canada's canola-oil exports.
"They [the U.S.] are diverting so much of their soyoil, and canola oil is known as a healthier oil because of lower saturated fats, so it is filling that niche in the market," Beckman said. The U.S. is pegged to import 1.3 million tons of Canadian canola oil in 2010/11. The other major purchaser of Canadian canola oil in the current crop year is China, with the Asian nation projected to purchase 800,000 tons of product. While canola-oil exports in the 2011/12 crop year are projected to come in at the same number as the current year, Beckman said the figure has the potential to be higher. "A lot of the exports will depend on the crush volumes," he said. "If we get good production and have enough that the crushers can buy and process it, then we could see exports continue to rise."

Ample SE Asian palm oil lifts S.American biofuel hopes
KUALA LUMPUR/NEW DELHI, July 7  (Reuters) - Likely record Asian palm oil stocks this year can comfortably bridge gaps in global cooking oil output, giving South America more leeway to pump competing soyoil into the biodiesel sector and cut dependence on crude.
Higher biodiesel use would support U.S. soyoil futures  and help to prop up benchmark palm oil prices  that have fallen 20 percent this year on growing stocks in top producers Indonesia and Malaysia.

Palm oil futures down on Euro debt woes
KUALA LUMPUR, July 12 (Reuters) - Malaysian palm oil futures fell 1.2 percent , trailing weaker overseas equity and commodity markets, as worries over euro zone debt's crisis triggered a sell-off.
"The Malaysian market was tracking overseas soyoil and soybean markets as well as the equity markets," said a trader in Kuala Lumpur.

India's June vegoil imports to hit highest level since Nov-survey
NEW DELHI, July 12 (Reuters) - India's vegetable oil imports may have risen 28 percent in June to their highest level since November as local supplies remain poor, with expectations buying will be buoyant again next month ahead of key festival feasts, a Reuters survey showed.
Domestic oilseed stocks are declining and the new crop is only just being planted, while buyers are looking ahead to India's festival season which runs from August to October and usually includes celebratory meals.

Brazil consultant sees record 2011/12 soy planting
SAO PAULO, July 11 (Reuters) - Brazil will expand the planted area of the 2011/12 soy crop by about 3 percent to a record 24.9 million hectares, consultancy Agencia Rural said on Monday, but it expected production to fall nonetheless.
Brazil is the world's No. 2 soy producer and exporter after the United States and would notch its fifth consecutive year of expansion in area if it plants more hectares again this year once the sowing period begins around September.

India May vegoil imports up 40 pct m/m
NEW DELHI, June 15 (Reuters) - India's vegetable oil imports in May rose to 664,133 tonnes from 475,123 tonnes in the previous month, a leading trade body said on Wednesday, the second straight monthly rise which was slightly higher than an average Reuters poll forecast.
Traders had been expecting the rise because local supply of oilseeds had dropped. The rising trend is expected to continue, helping the benchmark Malaysian palm prices  stay firm.

India's May vegoil imports seen up as local supply falls
NEW DELHI, June 10 (Reuters) - India's vegetable oil imports may have risen by 37 percent in May, the second straight monthly rise, as local supply dropped on depleting oilseeds stocks ahead of the summer planting season, a trend that is likely to continue next month, a Reuters survey showed on Friday.
Palm oil imports, which account for the bulk of India's cooking purchases, are expected to have risen 50 percent in May over the previous month, according to a survey of eight traders.