Wednesday, July 20, 2011

20110720 1823 FCPO EOD Daily Chart Study.


FCPO closed : 3153, changed : +46 points, volume : higher.
Bollinger band reading : side way range bound little upside biased.
MACD Histrogram : rising, buyer in control.
Support : 3150, 3100, 3070, 3050 level.
Resistance : 3200, 3250, 3270, 3300 level.
Comment :
FCPO closed recorded gain with better volume particiaption while soy oil overnight closed lower and currently trading higher.
Both export cargo surveyors reported higher export today up 5.4% and 5.7% respectively. News wise, China announced extending price control over cooking oil as inflation stayed high and Indonesia may cut crude palm oil export tax to 15% for the month of August compare to July 20% tax level.
FCPO price traded higher today in tandem with soy oil firmer price due to hot weather continue to affect crops resulting a wider discount between the 2 rival cooking oil.
Daily chart formed an wide range up bar candle closed slightly above upper Bollinger band level after market opened lower, surge upwards all the way towards the end to closed at the high of the day.
Technical reading suggesting market to trade side way range bound little upside biased testing support and resistance level.
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.

20110720 1747 FKLI EOD Daily Chart Study.

FKLI closed : 1564 changed : +2 points, volume : lower.
Bollinger band reading : side way range bound little downside biased.
MACD Histrogram : falling, seller in advantage.
Support : 1550, 1540, 1530, 1515 level.
Resistance : 1565, 1570, 1580, 1590 level.
Comment :
FKLI closed little higher with half of yesterday volume traded doing about 1.5 points premium compare to cash market that closed recorded gains while Asia markets ended higher except Shanghai exchange and European markets currently trading firmer with overnight U.S. market closed recorded huge gains.
Progress on a U.S. budget-reduction deal and better tops corporate earnings leading regional markets to trade in positive territory. Local front, market awaits tomorrow mega IPO Bumi Armada listing performance.
Daily chart formed a small down doji bar candle closed above lower Bollinger band level after market opened higher, traded range bound within 6 points range and closed near opening price.
Technical reading suggesting a side way range bound market little downside biased development testing support and resistance level.
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.

20110720 1641 Global Market & Commodities Related News.

Stocks gain on US debt deal hopes; Europe summit eyed
HONG KONG, July 20 (Reuters) - Asian shares rose as indications of progress on a U.S. budget-reduction deal boosted investor confidence while encouraging quarterly numbers from Apple Inc   and International Business Machines  helped Asia's beaten-down tech sector gain for a second day.
"Thanks to Apple, its suppliers would be able to continue to grow substantially in Q3, even into next year," said Oscar Chung, who manages about $448 million for Capital Securities Investment Trust in Taiwan.

U.S. debt ceiling deal would send crude oil lower: Henwood
Technical factors and the ongoing debate around the U.S. debt ceiling will weigh on economically sensitive crude prices, says Reuters Commodities Specialist Christopher Henwood.

U.S. corn, wheat rise for 2nd day as heat threatens crops
SINGAPORE, July 20 (Reuters) - Chicago wheat rose 1.5 percent and corn gained around 1 percent, both rising for a second straight day, on concerns over hot weather in the United States that is threatening crops.
"Commodity and equity markets are doing well because of positive U.S. housing data and there are expectations that the debt issues will be resolved," said Ker Chung Yang, analyst at Phillip Futures in Singapore.

Rains may pose threat to West Europe wheat quality
LONDON, July 19 (Reuters) - Wheat crops in western Europe have rallied after a spring drought but the rains that helped them recover may soon pose a threat to the quality of this year's harvest, crops analysts said on Tuesday.
"We are waiting for some sunshine. We definitely don't need this rain any more...We seem to be getting our April showers in July," said Jack Watts, senior analyst with Britain's Home-Grown Cereals Authority.

Ukraine's 2011 rapeseed crop may fall - Oil World
HAMBURG, July 19 (Reuters) - Ukraine's 2011 rapeseed crop could fall to 1.3-1.4 million tonnes in 2011, down from 1.47 million tonnes harvested in 2010 in the key exporting country, Hamburg-based oilseeds analysts Oil World said on Tuesday.    
Ukraine's disappointing crop could further tighten rapeseed supplies in the European Union, where a major oilseed supply gap is looming after a poor rapeseed crop, it said.

Cocoa 2011/12 global deficit seen at 50,000 tonnes
LONDON, July 18 (Reuters) - Less favourable weather in West Africa and a return to the long-term decline in Ivory Coast production are expected to switch the global cocoa market into deficit in 2011/12, a Reuters poll showed on Monday.
World 2011/12 cocoa demand is expected to outstrip production by 50,000 tonnes, according to the poll's median forecast.

Agco CEO bullish on crop prices
FRANKFURT, July 19 (Reuters) - U.S. farm equipment manufacturer Agco Corp  expects sky-high demand for food around the world to keep farmers flush with cash to invest in new tractors and combine harvesters.
"Demand is driving prices, and I am very optimistic that farm income will be strong for many years to come," Agco Chief Executive Martin Richenhagen told Reuters Insider TV in an interview on Tuesday.

India to add 6.5 mln T grain storage space this year
NEW DELHI, July 19 (Reuters) - India aims to raise grains warehousing capacity about 10 percent by March 2012, the head of its storage agency said on Tuesday,  as it tries to ensure its record 65 million tonnes of stocks do not rot.
Warehouses in India, the world's second-biggest rice and wheat producer, are overflowing after five bumper harvests and some grains are stored under tarpaulin, risking decay.

Indonesia's 2011 coffee exports to fall a third
JAKARTA, July 19 (Reuters) - Coffee exports from Indonesia, the world's second-largest robusta producer after Vietnam, could fall about a third to 300,000 tonnes in 2011 as supply constraints lead to tight stocks at the end of the year, a senior industry official said on Tuesday.
Closing stocks at year end were estimated at 10,000 tonnes, down from a normal level of 60,000 tonnes as domestic consumption was also rising, said Rachim Kartabrata, executive director of the Indonesian Coffee Exporters Association. (AEKI)

Oil rises on US debt talks; awaits EIA data
SINGAPORE, July 20 (Reuters) - Oil rose, supported by hopes of a U.S. debt deal, a weakening dollar against the euro and tightening crude stocks in the world's largest oil consumer.
"Any positive news on either the U.S. debt ceiling and the Greek second bailout will push up the market," said Tony Nunan, a risk manager with Tokyo-based Mitsubishi Corp.

BHP coal output tops forecasts, still recovering from floods
SYDNEY, July 20 (Reuters) - BHP Billiton, the world's biggest miner, reported a faster-than-expected recovery in production of steel-making coal from its flood-hit collieries in eastern Australia but warned it will take the rest of 2011 to return to full production.
Output of iron ore and most of BHP's other commodities in the June quarter was in line or ahead of analyst expectations, setting the stage for a record annual profit of around $21 billion. BHP shares rose in line with the wider market.

Colombian forces take over oil field after protest
BOGOTA, July 19 (Reuters) - Colombian protesters blocked crude oil production at the Andean nation's highest-producing field in the Llanos Basin on Tuesday before security forces took back control, Pacific Rubiales and officials said.
Protests against oil and mining companies are common in Latin America's No. 4 oil producer, with local communities seeking jobs or compensation for damages and workers complaining about working conditions and pay.

US gasoline demand up after 2-week fall - MasterCard
NEW YORK, July 19 (Reuters) - U.S. retail gasoline demand rose for the first time in three weeks as consumers got back in their cars after a post-Independence Day hiatus, MasterCard said in its weekly SpendingPulse report on Tuesday.
Average gasoline demand in the week to July 15 rose 0.3 percent year-on-year and jumped 3.7 percent versus the previous week, the report said.

Protests rock Colombia's key oil-producing state
BOGOTA, July 19 (Reuters) - Colombian oil contractors and local residents are protesting Pacific Rubiales  and Spanish firm Cepsa's  local affiliate in the Llanos Basin heavy oil belt, unions and officials said on Tuesday.
Protests against oil and mining companies are fairly common in Latin America's No. 4 oil producer, with local communities seeking jobs or compensation for damages and workers complaining about working conditions and pay.

LME copper slips after hitting 3-month high
SINGAPORE, July 20 (Reuters) - London copper dropped 0.4 percent as ongoing worries about debt problems in the United States and Europe prompted some investors to lock in gains after the metal touched three-month highs in the previous session.
"The market's focusing on what's happening in the United States and Europe. It looks like there is no quick resolution so there's still a lot of risks," said Natalie Robertson, an analyst at Australia and New Zealand Bank.

China to add 1 mln tonnes of alumina capacity -NDRC
HONG KONG, July 20 (Reuters) - China will add 1 million tonnes a year of alumina capacity, the state planning agency said in a statement, adding to its status as world's largest producer.
The National Development and Reform Commission has approved Shanxi Tongde Aluminium Company's plan to build a 1 million-tonne-per-year alumina refinery in Baode county in Shanxi province in the north, a statement posted on the commission website showed. It did not provide the completion time.

Nickel mkt in 9,300 T deficit in Jan-May'11-INSG
LONDON, July 19 (Reuters) - The global nickel market was in supply deficit by 9,300 tonnes in the first five months of 2011, the latest monthly bulletin from Lisbon-based International Nickel Study Group (INSG) showed on Tuesday.
Latest figures show world primary nickel consumption totalled 641,400 tonnes in January to May 2011.

Russia offers Germany gas, rare earths to nudge China
HANOVER, Germany, July 19 (Reuters) - Russia offered Germany long-term deals for natural gas and rare earths on Tuesday, putting pressure on China, which currently dominates the rare earths market, to end delays in agreeing to imports of Russian gas.
China controls 97 percent of the global supply of rare earth minerals -- used heavily in Germany's electronics industry -- and Russian President Dmitry Medvedev opened the door to German investment to exploit Russia's untapped reserves of the elements.    

Strike halts production at key Albania chrome mine
TIRANA, July 18 (Reuters) - A strike at Albania's largest chrome mine, which is owned by Austria's DCM DECOmetal, has shut down all mining there for the past two weeks, miners said on Tuesday.
Representatives of the 700 miners at the Bulqiza mine have sought to raise the profile of the strike by protesting in front of government offices in Tirana since Monday.

Credit Suisse expects aluminum prices to rebound in H2
BANGALORE, July 19 (Reuters) - Credit Suisse expects a rebound in aluminum prices in the second half of the year, saying the recent bearish price versus the rest of the metals complex is not justified.
Aluminum prices lost ground in June and were expected to drift lower on a seasonal softening in demand coupled with a possibility of supply surplus for another year.

Gold inches up on light buying; Europe debt fears persist
SINGAPORE, July 20 (Reuters) - Gold edged higher, as light buying in Asia trickled in after prices pulled back from a record high and persistent concerns on euro zone's debt crisis supported sentiment.
"Some investors liquidated their positions after U.S. debt talks showed some progress," said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong.

20110720 1245 Global Market & Commodities Related News.

China Indicator Shows Growth Quickening (Source: Bloomberg)
A Chinese leading indicator climbed, adding to evidence that the world’s second-biggest economy is maintaining momentum as Premier Wen Jiabao extends a campaign to cool inflation. The index rose 0.5 percent to 155 in May, The Conference Board said on its website today, citing a preliminary reading. The gauge is designed to capture prospects over the coming six months. April’s index was revised to a 0.1 percent gain from a previous 0.2 percent increase. China, the world’s fastest-growing major economy, may expand more than 9 percent this year, even after the central bank boosted interest rates and controlled lending to cool the quickest inflation in three years in June. Growth may be strong enough to withstand more monetary tightening as local governments raise spending on low-cost housing and manufacturers build more factories in inland provinces.

GLOBAL MARKETS: Stocks gain on U.S. debt deal hopes, tech results
HONG KONG, July 20 (Reuters) - Asian shares rose on Wednesday as indications of progress on a U.S. budget-reduction deal boosted investor confidence while encouraging quarterly numbers from Apple Inc   and International Business Machines Corp  helped Asia's beaten-down tech sector gain for a second day.
With just two weeks left until the U.S. government runs out of money to pay bills, President Barack Obama seized on a plan by a bipartisan group of senators that could revive  stalled U.S. debt talks and the prospect of a long-term deficit reduction deal to avert a default.

OIL: Oil rises on US housing data, deficit talks
NEW YORK, July 19 (Reuters) - Crude oil rose on Tuesday as investor confidence rose on strong U.S. housing data and renewed hope for an agreement in Washington on thorny budget issues.
"Fundamentally, nothing much has changed, but the strength in the housing starts and the strength in the euro helped find new length this morning," said Carl Larry, Director of Blue Ocean Brokerage in New York.

POLL-US crude stocks seen slipping for 7th week
BANGALORE/NEW YORK, July 19 (Reuters) - U.S. crude oil stockpiles were forecast down for the seventh straight week due to higher refinery utilization and a decline in imports, an extended Reuters poll showed on Tuesday ahead of weekly inventory reports.
All but one of 14 analysts polled projected a drawdown in crude, with the average forecast at 1.7 million barrels for the week to July 15.

U.S. begins delivering oil sold from reserve
WASHINGTON, July 19 (Reuters) - The U.S. Energy Department said on Tuesday it has started delivering some of 30 million barrels of crude oil auctioned off earlier this month from the Strategic Petroleum Reserve.
The department is expected to provide details later this week, possibly as early as Wednesday, on which oil companies and trading firms have begun receiving their crude, a department official said.

US gasoline demand up after 2-week fall - MasterCard
NEW YORK, July 19 (Reuters) - U.S. retail gasoline demand rose for the first time in three weeks as consumers got back in their cars after a post-Independence Day hiatus, MasterCard said in its weekly SpendingPulse report on Tuesday.
Average gasoline demand in the week to July 15 rose 0.3 percent year-on-year and jumped 3.7 percent versus the previous week, the report said.

NATURAL GAS: Natural gas slips midday, heat limits downside
NEW YORK, July 18 (Reuters) - U.S. natural gas futures, lightly pressured by the milder weather outlook for next week,  slipped slightly midday Tuesday, but record or near-record heat this week in key consuming regions helped limit the downside.
"It's hot, but there's no news. People are waiting for the (EIA build) number to come out (on Thursday), so I don't see prices doing much until then," a New York-based trader said.

COMMODITIES: Oil, copper up on US housing; gold down after record
NEW YORK, July 19 (Reuters) - Oil rose more than 1 percent on Tuesday, erasing the previous session's losses after strong U.S. housing data and progress in U.S. deficit reduction talks, while gold ended down after hitting another record high.
"There is a recovery unfolding; it's just glacially slow and requires incredible scrutiny to discern it," said Richard DeKaser, economist at Parthenon Group in Boston.

Libya denies rebel victory claim in Brega oil town
MISRATA, Libya, July 18 (Reuters) - Rebel forces have routed most of Muammar Gaddafi's troops in the Libyan oil town of Brega in the biggest boost for the insurgents' military campaign in eastern Libya in weeks, a rebel spokesman said on Monday.    
The rebel fighters have encircled Brega, an oil export terminal with a refinery and chemical plant which for months marked the eastern limit of Gaddafi's control, rebel spokesman Shamsiddin Abdulmolah said.

20110720 1202 Global Economic & Corporate Earnings Related News.

US stocks climb after Obama backs deficit plan
US stocks rose, sending the Standard & Poor’s 500 Index to its biggest rally since March, as President Barack Obama endorsed a bipartisan deficit-reduction plan. Strong corporate earnings from Coca Cola and Apple also boosted sentiment. The S&P 500 gained 1.6% to 1,326.73, rebounding from a three-week low. The Dow Jones Industrial Average advanced 202.26 points, or 1.6%, to 12,587.42. (Bloomberg)

US: Housing starts in US surge on apartment construction; permits increase
Housing starts in the US jumped more than forecast in June as better weather allowed the struggling industry to break ground on delayed projects. Work began on 629k houses at an annual pace, up 15% from May and the highest level in five months, figures from the Commerce Department showed today in Washington. The level topped the most optimistic forecast in a Bloomberg News survey of 71 economists. Building permits, a sign of future construction, unexpectedly climbed 2.5%. While the increase points to stabilization in construction, declining home values and delays in processing foreclosures mean it may take years to clear the market of distressed properties. (Bloomberg)

US: Obama Embraces Senators’ Deficit-Cutting Plan
President Barack Obama embraced a $3.7 trillion debt-cutting plan by a bipartisan group of senators that would  combine tax increases and spending cuts, saying it could offer a way out of the congressional deadlock over  raising the U.S. borrowing limit.

China: China’s 30% Gain in Tax Revenue Counters Risks from Local-Government Debt
China’s tax revenue rose 29.6 percent to 5 trillion yuan ($773 billion) in the first half of the year, giving officials  more room to maneuver as they grapple with swelling local-government debt. “Stable”  economic growth and  rising company profits helped to bolster revenue, with inflation also playing a role, the ministry said. The fiscal  strength that encouraged  Standard & Poor’s to raise China’s debt rating in December may help the nation to  absorb any fallout from banks’ loans going bad after stimulus spending that began in 2008.


EU: German investor confidence falls more than forecast as debt crisis worsens
Investor confidence in Germany, Europe’s largest economy, dropped more than economists forecast in July as the euro-area debt crisis worsened. The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations, which aims to predict developments six months in advance, fell to -15.1 from -9 in June. That’s the lowest since January 2009. Economists expected a decline to -12.5, according to the median of 42 estimates in a Bloomberg News survey. (Bloomberg)

EU: Greek crisis poses serious contagion risk even without default, IMF says
Greece’s sovereign-debt crisis risks contaminating the rest of the euro region even if officials avert a default, the International Monetary Fund said. Both the European Commission and the European Central Bank “considered that a sovereign default or a credit event would likely trigger contagion to the core euro-area economies with severe economic consequences,” according to an IMF staff report on the region’s economy released yesterday. “Staff however also saw serious risks of contagion, even under a strategy which tries to avoid default or credit events.” Government chiefs are meeting on 21 July for the second time in a month as they aim to break a deadlock over a new Greek rescue that has spooked investors. (Bloomberg)

Canada: Keeps key rate at 1%; stimulus ‘will be withdrawn’
The Bank of Canada kept its main interest rate unchanged and said borrowing costs will increase as the economy recovers, with policy makers dropping the word “eventually” to describe the timing of their next move. The target for overnight loans between commercial banks remained 1%, where it’s been since Sept, as forecast by all 26 economists surveyed by Bloomberg News. The Ottawa-based bank also raised its outlook for so-called core inflation and affirmed the economy will reach full output by the middle of 2012 while trimming this year’s growth forecast. (Bloomberg)

Bank of America posts 2Q net loss of US$8.8b
Bank of America Corp posted a second-quarter net loss after an $8.5b  settlement with mortgage bond investors. The largest U.S. bank by assets  on Tuesday, July 19 reported a net loss of $8.8b, or 90 cents per share,  compared with net income of $3.1b, or 27 cents per share, a year earlier.  (Reuters)

Coca-Cola profit up on strong growth abroad
Coca-Cola Co reported a higher quarterly profit on Tuesday, helped by  strong growth in emerging markets. The world's largest soft drink maker,  with brands like Sprite, vitaminwater and Powerade, reported net income of  $2.80b, or $1.20 per share, for the second quarter, compared with $2.37b,  or $1.02 per share, a year earlier. Excluding one-time items, earnings were  $1.17 per share. (Reuters)

Apple profit tops estimates on record sales
Apple Inc, the biggest technology company by market value, reported thirdquarter profit that topped estimates, lifted by record sales of iPhones and  iPad tablets. The stock jumped to an all-time high in late trading. Net  income in the period more than doubled to $7.31b, or $7.79 a share, from  $3.25b, or $3.51, a year  earlier, Apple said today in a statement. Sales  climbed 82% to $28.6b. Analysts had predicted profit of $5.87 a share and  revenue of $25b, according to Bloomberg data.  (Bloomberg)

Goldman Sachs Profit Misses Estimates 
Goldman Sachs Group Inc., the U.S. bank that makes most of its money from trading, reported second- quarter  profit that fell short of analysts’ estimates as fixed- income revenue plunged 63 percent from the first quarter.  Net income climbed 77 percent to $1.09 billion, or $1.85 per share, from $613 million, or 78 cents, in the same  period a year earlier.

20110720 1201 Malaysia Corporate Related News.


KLCI chart reading :
pullback correction little downside biased.
KUALA LUMPUR (Dow Jones)--Natural gas supplier Gas Malaysia is planning to raise up to MYR800 million ($267 million) through an initial public offering in the country, two people familiar with the matter said Wednesday. The company is targeting a listing by the end of the year, one of the persons said, asking not be identified as he isn''t authorized to speak to the media. While the people didn''t give an indicative price range, they said the company will have a market capitalization of up to MYR3.0 billion once it''s listed. Gas Malaysia has mandated Maybank Investment Bank to manage its planned IPO.

Star takes up 51% stake in Li TV for RM35m
Star Publications is eyeing to be the next prime media group in the country with its maiden venture into the television broadcast space by taking up a 51% stake in Li TV Holdings Ltd for RM35m. Star’s partner would be Juita Viden International Ltd, a member of the Juita Viden Media Entertainment Group, which is the largest independent television programme distributor in the country. (Malaysian Reserve)

Mitrajaya accepts RM13.5m freshwater lab contract in Pahang
Mitrajaya Holdings has announced the acceptance of a contract for the construction of the Freshwater Laboratory Complex (Package 1) in Pahang for RM13.5m which was awarded by the East Coast Economic Region Development Council. (Malaysian Reserve)

CIMB’s Thai unit sees 25% net profit drop
CIMB Thai Bank plc, reported a 24.9% drop in net profit to THB536.4m (RM54m) for the second-quarter ended 30 June 2011 from THB714m previously. The bank, a 93.15%-owned subsidiary of CIMB Bank, attributed to the drop to the special revenue gained in 2010 from the disposal of the Sathorn building and CIMB-Principal Asset Management. (Malaysian Reserve)

CIMB Thai Bank posts RM54m net profit in 1H
CIMB Thai Bank Public Company Ltd posted net profit of 536.4m baht  (RM54m) in the first half ended June 30, 2011. It said on Tuesday, July 19  total operating incomes was 3.2b baht, underpinned by net interest income  and fee and service income. (The Edge)

Banking giants hit as Jakarta ponders ownership rule  change
Malaysian banking giants CIMB Group Holdings Bhd and Malayan Banking  Bhd (Maybank) saw a whopping RM2.5b wiped out of their market  capitalization since reports surfaced that the Indonesian central bank was  looking at limiting single party ownership of banks there. Both CIMB and  Maybank have significant exposure in  those markets, with the former’s  subsidiaries contributing a significant amount of profits to the group. (The  Star)

Sapura Resources in land JV with KLCC
Sapura Resources has entered into a joint-venture agreement with KLCC Holdings SB for the development of land measuring 7,605 sq m adjacent to the KLCC Convention Centre. Under the agreement, Sapura Resources would purchase 51% stake in the joint-venture vehicle, Impian Bebas SB, for RM110.68m cash from KLCC Holdings which would continue to hold the remaining 49%. (StarBiz)

Melewar sells Australian unit
Melewar Industrial Group (MIGB) has disposed of its entire interest in Gindalbie Metals Ltd, which is listed on the Australian Stock Exchange (ASX), in an effort to pare down its borrowings. In an announcement to Bursa Malaysia, the company said it had sold 7.2m shares in Gindalbie, representing 77% of the total issued and paid-up capital of the latter, between Nov 2010 and July 2011 for a total consideration of RM26.48m. (Financial Daily)

Prestariang shares oversubscribed 7.1 times
Prestariang Bhd, an ICT service provider enroute for listing on the Main  Market of Bursa Malaysia, today announced that its issue of 30m shares to  the public under its Initial Public Offer (IPO) at 90 sen per share had been  oversubscribed 7.1 times. In a statement today, Prestariang said it received  a total of 13,355 applications with a value of RM218,832,030 for 243.15m  shares, which represented an oversubscription of 7.1 times for the shares  offered for sale to the public. (Business Times)

Unico-Desa to list HP unit, too early to tell if it’s a good deal  for Unico members or UDP shareholders
After a long wait, the minority shareholders of Unico Holdings Bhd, an  unlisted cooperative, may realize some  of their investment in Unico-Desa  Plantations Bhd (UDP). UDP has proposed to distribute shares in the  group’s hire purchase (HP) arm ELK-Desa Resources Sdn Bhd pursuant to  the listing of the unit. But it is too early to determine if it is indeed a good  deal for Unico’s members or the shareholders of UDP. (Bloomberg)

Ajiya posts higher Q2 pre-tax profit
Ajiya Bhd achieved a higher pre-tax profit of RM11m for its second quarter  ended May 31, 2011 compared with RM9.806m in the same quarter last  year. Revenue rose to RM100.94m  from RM87.39m in the previous  corresponding quarter. In a filing to Bursa Malaysia today, the industrial  products manufacturing based group said the improved revenue was mainly  due to better market sentiment.  (Business Times)

Inari’s new plant will nearly double capacity
Electronic manufacturing services (EMS) outfit Inari Bhd expects its new  manufacturing plant in Bayan Lepas, Penang, to expand production  capacity by 46% upon completion next March, and to contribute up to 30%  of company revenue in FY13 ending June 30. (The Edge)

Bursa bulish on profit growth
Bursa Malaysia Bhd, the country's stock exchange operator, wants to aggressively grow its net profit by at least  20 per cent a year over the next three years. Last year, the group's net profit was down 36 per cent from  RM177.6 million it recorded in 2009, due to a one-off capital gain.Its chief executive officer, Datuk Tajuddin  Atan, said apart from profitability, the company's medium-term target includes boosting trading in the securities  and derivatives markets. (Source: Business Times)

Licence for Islamic mega bank in Q3
Malaysia will issue a licence for an Islamic mega bank in the third quarter of this year to help mobilise funds for  businesses around the world, the country's central bank governor said. The country will also start a crossborder clearance platform for syariah-compliant bonds, or sukuk, around the same time, Bank Negara Malaysia  Governor Tan Sri Dr Zeti Akhtar Aziz said in an interview here yesterday. The initiatives are part of a plan to  help fill gaps in the US$1 trillion (RM3.01 trillion) global Islamic finance industry. (Source: Business Times)

ETI’s subsidiary inks pact with Sirim
ETI Tech Corp Bhd said its unit ETI Tech (M) Sdn Bhd has inked an agreement with technology and safety approval standards for medium industry applications like solar, electric vehicles and other applications in the domestic as well as international markets. (btimes.com.my)

Bursa may extend derivatives trading hours by next year
Bursa Malaysia is looking at the possibility of expanding the trading hours for its derivative market,  due to cross-border timing, and may implement these changes by next year at the earliest. Its CEO Datuk Tajudin Atan said if the bourse sees higher trading volume from Chicago or other parts of the US, it may “consider and evaluate” making the change in 2012 or 2013. It will not extend trading hours for equities trading, he told reporters. (Malaysian Reserve)

Salcon abandons water supply plan in West Java
Salcon has decided not to go ahead with its proposed water supply scheme in West Java, Indonesia. It said its unit Salcon Engineering Bhd decided not to proceed following the detailed studies for the scheme for Kecamatan Cikarang Barat and Citibung in Kabupaten Bekasi. Salcon had signed an memorandum of understanding with Persusahaan Daerah Air Minum Kabupaten Bekasi to study the proposed scheme and to submit a concession bid when a tender was called. (Financial Daily)

Kencana on rating watch
RAM Ratings has placed Kencana Petroleum’s bonds on rating watch on the basis that Kencana's proposed merger with SapuraCrest Petroleum could potentially weaken its operation debt-coverage ratios. RAM has placed AA3 ratings of Kencana's proposed RM350m sukuk mudharabah (2011/2016) and proposed RM700m sukuk mudharabah (2011/2026) programmes on rating watch, with a developing outlook. (StarBiz)

VS Industry sells off oil palm assets to focus on electronics
VS Industry has disposed its 53%-owned Indonesia subsidiary PT GY Plantation Indonesia (PTGY) to PT Karya Manunggal Sawitindo (PTKMS) for RM23.44m on July 13, 2011. The company said PTGY has also agreed to dispose its interest in a piece of land measuring 6,450 ha — held through PT Ladang Sawit Mas — to PT Bumitama Gunajaya Agro (PTGBA) for RM6.89m. (Malaysian Reverse)


Maybank: Islamic signs MoU with Bank Syariah Mandiri. Maybank Islamic has signed a MoU with Bank Syariah Mandiri (BSM), Indonesia, to establish cross-border collaboration in all Islamic treasury and trade finance matters. The collaboration would enhance cross-border liquidity flows and increase and diversify the application of Islamic financial solutions. (Source: The Edge Financial Daily)

Iskandar: Another British varsity. Britain's University of Reading Business School is setting up a branch campus in EduCity in Iskandar Malaysia, Johor, for between RM150m and RM200m. To be known as University of Reading Iskandar, construction is due to start next year. (Source: Business Times)

Property: Sagajuta eyes year-end listing. Sagajuta (Sabah) Sdn Bhd hopes to complete its backdoor listing by year-end, to turn the company into a bigger real estate firm. Sagajuta is behind the RM1.2b 1Borneo project in Kota Kinabalu. Sagajuta is planning to buy more land in Sabah, Klang Valley, Penang and Johor to enable it to undertake development projects worth more than RM3b at any one time. (Source: Business Times)

20110720 1145 Global Market Related News.

 DJIA chart reading :  correction range bound little upside biased.

Hang Seng chart reading : side way range bound .
Asian New Hedge Funds Raised $2.86 Billion in First Half, AsiaHedge Says (Source: Bloomberg)
Twenty-four new hedge funds in Asia raised $2.86 billion in the first half of 2011, more than double the preceding six months as the average startup size surged, an AsiaHedge New Funds Survey showed. The amount raised compares with $1.09 billion in the second half of 2010 and 70 new funds that started in the first half of last year, AsiaHedge said in an e-mailed survey dated yesterday. The average new hedge fund size jumped to $119 million in 2011 compared with about $40 million in the first half of last year, while multi-strategy funds attracted the most money for the first time, luring $1.9 billion, it said. Assets raised by new funds is Asia climbed to the highest since the peak of $5.7 billion raised in the first half of 2007. The Eurekahedge Asian Hedge Fund Index, which tracks more than 450 funds, has lost 0.3 percent in the first six months of 2011, underperforming the 0.4 percent return by the global benchmark.

Asia Stocks Rise on U.S. Deficit Plan, Apple (Source: Bloomberg)
Asian stocks rose, with the regional benchmark index set to close at its highest level in a week, on optimism U.S. lawmakers will reach an agreement to cut the budget deficit and after Apple Inc. (AAPL)’s profit topped estimates, boosting the earnings outlook for exporters. Samsung Electronics Co., South Korea’s biggest exporter of consumer electronics, climbed 3.7 percent in Seoul. James Hardie Industries SE, the largest seller of home siding in the U.S., jumped 6.3 percent after construction of new homes in the world’s biggest economy rose to a five month high in June. BHP Billiton Ltd., the world’s largest mining company and Australia’s No. 1 oil producer, advanced 1.8 percent in Sydney after oil and metal futures increased. The MSCI Asia Pacific Index increased 1 percent to 136.57 as of 11 a.m. in Tokyo, headed for its highest close since July 11. About eight stocks advanced for each that fell on the gauge.
The measure dropped for the first week in four last week after European finance ministers declined to rule out a temporary default for Greece and as Moody’s Investors Service put the U.S. under review for a possible credit-rating downgrade.

Stocks rise, euro steady after flight to safety
LONDON, July 19 (Reuters) - World stocks clawed back some recent losses and the euro steadied  as investors paused from selling riskier assets in the face of the euro zone debt crisis and worries about Washington's debt ceiling fight.
"Things are coming to a head. This is a political crisis just as much as a financial crisis. We need some real leadership," said Justin Urquhart Stewart, director at Seven Investment Management.

Housing Starts in U.S. Surge on Apartment Construction; Permits Increase (Source: Bloomberg)
Housing starts in the U.S. jumped more than forecast in June as better weather allowed the struggling industry to break ground on delayed projects. Work began on 629,000 houses at an annual pace, up 15 percent from May and the highest level in five months, figures from the Commerce Department showed today in Washington. The level topped the most optimistic forecast in a Bloomberg News survey of 71 economists. Building permits, a sign of future construction, unexpectedly climbed 2.5 percent. “A lot of this was due to some catch-up in activity that didn’t occur in April and May,” said Paul Dales, a senior economist at Capital Economics Ltd. in Toronto, who had the highest forecast in the Bloomberg survey. “I wouldn’t be surprised to see starts edge up gradually, but the bigger picture is it’s still at a very depressed level.”

Fed Bank Directors Expressed ‘Heightened Caution’ on Outlook for Economy (Source: Bloomberg)
Directors at the Federal Reserve’s regional banks expressed “heightened caution” about the pace of improvement in the economy, according to minutes of Board of Governors’ meetings in May and June. The directors of the 12 banks “generally noted that recent economic data had been weaker than expected, and they expressed a heightened caution about the likely pace of improvement in the economy over coming quarters,” according to the minutes released in Washington today, which summarize discussions at the regional banks. The minutes show that directors of the Fed’s regional banks shared Fed Chairman Ben S. Bernanke’s view in a press conference last month that some of the “headwinds” facing the economy, such as weakness in housing, “may be stronger and more persistent than we thought.”

Treasuries Decline Before Report That May Show Home Sales Climbed in June (Source: Bloomberg)
Treasuries fell, eroding a rally from yesterday, before an industry report that economists said will show sales of previously owned U.S. homes increased in June from a six-month low. The longest maturities led the decline as Federal Reserve Bank of Kansas City President Thomas Hoenig said the U.S. economy will keep growing “at a modest pace.” The difference between yields on 10-year notes and Treasury Inflation Protected Securities, a gauge of expectations for consumer prices, widened to 2.33 percentage points from 1.71 percentage points a year ago.

U.S. Stocks Climb as Obama Backs Deficit Plan; Apple Rallies on Earnings (Source: Bloomberg)
U.S. stocks rose, sending the Standard & Poor’s 500 Index to its biggest rally since March, as PresidentBarack Obama endorsed a bipartisan deficit-reduction plan. Equity futures rose after U.S. markets closed as Apple Inc. (AAPL)’s profit topped estimates on record iPhone and iPad sales. International Business Machines Corp. (IBM) and Coca-Cola Co. climbed 5.7 percent and 3.3 percent, respectively, as they led a group of companies reporting higher-than-estimated earnings. All 12 stocks in an S&P gauge of homebuilders advanced after U.S. housing starts increased to a five-month high. Bank of America Corp. (BAC) fell 1.5 percent after reporting the biggest quarterly loss in its history. The S&P 500 gained 1.6 percent to 1,326.73 at 4 p.m. in New York, rebounding from a three-week low. The Dow Jones Industrial Average advanced 202.26 points, or 1.6 percent, to 12,587.42. Nasdaq-100 Index futures contracts expiring in September climbed 0.7 percent to 2,405.25 at 5:07 p.m. in New York.

U.S. debt showdown moving into crunch time
WASHINGTON, July 19 (Reuters) - Two weeks before their final deadline, President Barack Obama and top lawmakers will face more pressure on Tuesday for a debt deal amid a growing sense that a last-ditch plan taking shape in Congress may be the only way to avoid a devastating U.S. default.
With talks at an impasse and time growing short for raising the U.S. debt ceiling, attention will shift to a congressional vote on a Republican deficit-cutting measure seen as mostly  symbolic but a stark reminder of their ideological divide with Obama's Democrats.

Goldman Sachs cuts U.S. second-quarter growth estimates
WASHINGTON, July 18 (Reuters) - Goldman Sachs has cut its forecast for U.S. second-quarter growth to 1.5 percent from 2 percent, citing weak consumer spending.
The downgrade follows last week's raft of weak reports on retail sales, manufacturing and consumer sentiment, which have raised concerns that some of the factors impeding growth are no longer of a temporary nature, as previously thought.

China Leading Indicator Shows Growth Quickening as Wen Battles Inflation (Source: Bloomberg)
A Chinese leading indicator climbed, adding to evidence that the world’s second-biggest economy is maintaining momentum as Premier Wen Jiabao extends a campaign to cool inflation. The index rose 0.5 percent to 155 in May, The Conference Board said on its website today, citing a preliminary reading. The gauge is designed to capture prospects over the coming six months. April’s index was revised to a 0.1 percent gain from a previous 0.2 percent increase. China, the world’s fastest-growing major economy, may expand more than 9 percent this year, even after the central bank boosted interest rates and controlled lending to cool the quickest inflation in three years in June. Growth may be strong enough to withstand more monetary tightening as local governments raise spending on low-cost housing and manufacturers build more factories in inland provinces.

China’s Inflation Peaking Seen Boosting Stocks to JPMorgan Asset’s Wang (Source: Bloomberg)
Chinese government measures to curb property-price gains and tame inflation are “at or close to the peak,” bolstering the outlook for stocks, according to JPMorgan Asset Management. China’s inflation will ease as the measures have been “highly effective,” said Howard Wang, the Hong Kong-based head of the Greater China team at the JPMorgan unit, which oversees $14 billion of assets in China, Hong Kong and Taiwan. Wang said he is adding some “very cheap’” property developers, materials companies and technology shares to his holdings. His Greater China Fund has returned 22 percent over the past year, beating 86 percent of rivals, according to data compiled by Bloomberg. “We think inflation is peaking now and that it will ease off,” Wang said in an e-mailed response to questions. “All things equal, that should make a better environment for Chinese equities.”

Nikkei 225 Rises Most This Month on U.S. Deficit Plan, Apple Earnings (Source: Bloomberg)
Japan’s Nikkei 225 Stock Average rose by the most this month on optimism U.S. lawmakers will reach an agreement that will help the government avoid defaulting on its debt and after Apple Inc. (AAPL)’s profit topped estimates, boosting the earnings outlook for suppliers. Honda Motor Corp., which counts North America as its largest market, climbed 2.2 percent. Toshiba Corp., a maker of memory chips used to store songs and photos in Apple devices, rallied 2.7 percent. Teijin Ltd., a fiber maker, climbed 2.7 percent after the Nikkei newspaper said first-quarter profit jumped 60 percent. The Nikkei 225 rose 1.3 percent to 10,022.60 at the 11 a.m. trading break in Tokyo, set for the biggest increase since June 29. The broader Topix index gained 1.1 percent to 862.71. About four stocks advanced for each that fell.

H.K. Billionaire Helps Fund U.K. Low-Income Housing (Source: Bloomberg)
Billionaire Cheng Yu-tung and two fellow Hong Kong investors, faced with soaring real-estate prices at home, are helping the U.K. plug a gap in funding for low-income housing after gaining control of a London-based property manager. Cheng’s Chow Tai Fook Enterprises Ltd., developer Sammy Lee and businessman Peter Fung last month paid 30 million pounds ($48 million) for 61 percent of Pinnacle Regeneration Group Ltd., manager of 22,000 homes in the U.K. Cuts in social housing are part of the British government’s plan to trim a record deficit with the biggest spending reductions since World War II. “There is a big opportunity for investors directly coming to the fore because of the cutback in funding,” said James Coghill, a real-estate investment adviser at Savills Plc. (SVS) “Social housing providers are seeking other funds and need to become more commercial.”

Ahluwalia Sees Several Months to Bring India Inflation to Acceptable Level (Source: Bloomberg)
India will take several months to reduce inflation to “an acceptable level,” and the central bank’s interest-rate increases haven’t hurt the economy, Prime Minister Manmohan Singh’s top economic aide said. “We will bring inflation down in control but it will take several months,” Montek Singh Ahluwalia, the deputy chairman of India’s planning commission, said in an interview in New Delhi late yesterday. “As of now, there has been no collateral damage at all” to growth from rate rises, the economic adviser, 67, said before next week’s central bank policy meeting. India has persisted with the most aggressive monetary tightening among Asia’s major economies even as regional neighbors from Malaysia to the Philippines held borrowing costs in recent weeks to protect growth. Indian policy makers need to worry about the economic cost only if the expansion rate dips below 8 percent, versus the 8.25 percent pace estimated for the fiscal year through March, Ahluwalia said.

Bank of Canada Keeps Key Rate at 1%, Says Stimulus Steps Will Be Withdrawn (Source: Bloomberg)
The Bank of Canada kept its main interest rate unchanged and said borrowing costs will increase as the economy recovers, with policy makers dropping the word “eventually” to describe the timing of their next move. The target for overnight loans between commercial banks remained 1 percent, where it’s been since September, as forecast by all 26 economists surveyed by Bloomberg News. The Ottawa- based bank also raised its outlook for so-called core inflation and affirmed the economy will reach full output by the middle of 2012 while trimming this year’s growth forecast. “To the extent that the expansion continues and the current material excess supply in the economy is gradually absorbed, some of the considerable monetary policy stimulus currently in place will be withdrawn,” the central bank said in a statement. “Such reduction would need to be carefully considered.”

Papandreou Sees Make-or-Break Time in Crisis (Source: Bloomberg)
Greek Prime Minister George Papandreou says Europe’s leaders need to show tomorrow that they can resolve the European Union debt crisis to avoid a contagion enveloping Italy and Spain. “It could be a make-or-break moment for where Europe is going,” Papandreou said during an interview in his Athens office at Parliament yesterday. “Markets are saying pretty much what I’m saying too: that Greece is doing what it can, but that Greece is not going to be able to carry the weight of all of Europe and the other problems that Europe has.” Papandreou travels to Brussels tomorrow to meet with EU leaders as officials struggle to agree on measures to restore confidence in the euro region’s creditworthiness after the last year’s financial rescue of Greece. Policy makers are divided on how to prod investors into financing a new bailout package and whether the 17-nation euro area should issue eurobonds to help debt-laden nations across the bloc tap markets.

Greek Crisis Poses Serious Contagion Risk Even Without Default, IMF Says (Source: Bloomberg)
Greece’s sovereign-debt crisis risks contaminating the rest of the euro region even if officials avert a default, the International Monetary Fund said. Both the European Commission and the European Central Bank “considered that a sovereign default or a credit event would likely trigger contagion to the core euro-area economies with severe economic consequences,” according to an IMF staff report on the region’s economy released yesterday. “Staff however also saw serious risks of contagion, even under a strategy which tries to avoid default or credit events.” Government chiefs are meeting on July 21 for the second time in a month as they aim to break a deadlock over a new Greek rescue that has spooked investors. While German Chancellor Angela Merkel said yesterday the crisis can’t be resolved in “one spectacular step,” Greek counterpart George Papandreou said in an interview that the summit could be a “make-or-break moment” for the euro region.

EU Struggles to Convince on Greek Deal at Summit as Borrowing Costs Rise (Source: Bloomberg)
European leaders are struggling to convince investors that they will agree on a second Greek bailout at a summit this week as record bond yields boosted financing costs at sales of Spanish and Greek debt. European Union government chiefs plan to meet for the second time in a month on July 21, aiming to break a deadlock over a new Greek rescue that has spooked investors. Spanish and Italian bond yields surged yesterday, piling pressure on officials to end the turmoil. Spain and Greece sold 6.08 billion euros ($8.6 billion) of bills today. “As another D-day looms on Thursday, we have few soothing words,” Suki Mann, senior credit strategist at Societe Generale SA in London, wrote in a note to investors. “Greece appears beyond repair, Italy is on the brink and the chances are that the euro might be no more very soon.”

No consensus as Europe limps toward Greece summit
BRUSSELS/PARIS, July 18 (Reuters) - European governments and banks struggled to reconcile competing proposals for a second bailout of Greece on Monday, three days before leaders meet to prevent the crisis from spreading through the region.
The euro zone summit scheduled for Thursday in Brussels is likely to agree on a rescue of Greece, supplementing a 110 billion euro ($154 billion) bailout launched in May last year , a French government spokeswoman said.

German Investor Confidence Falls More Than Forecast as Debt Crisis Worsens (Source: Bloomberg)
Investor confidence in Germany, Europe’s largest economy, dropped more than economists forecast in July as the euro-area debt crisis worsened. The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations, which aims to predict developments six months in advance, fell to minus 15.1 from minus 9 in June. That’s the lowest since January 2009. Economists expected a decline to minus 12.5, according to the median of 42 estimates in a Bloomberg News survey. Germany’s benchmark DAX index (DAX) has shed more than 2 percent this month amid investor concern that the debt crisis, which has already engulfed Greece, Ireland and Portugal, will spread to Italy. While government belt-tightening across the region and slowing global demand may damp growth, the Bundesbank said yesterday that Germany’s outlook remains “favorable” as falling unemployment boosts consumer spending.

European Stocks Advance, Lifting Benchmark Stoxx 600 From Seven-Month Low (Source: Bloomberg)
European stocks gained, rebounding from a seven-month low, as companies from Novartis AG (NOVN) to International Business Machines Corp. reported earnings that beat estimates. Novartis, Europe’s second-biggest drugmaker by sales, climbed the most in three months. SAP AG (SAP) led a rally in technology companies after IBM boosted its forecasts. Nordea Bank AB (NDA) soared 5.7 percent after profit increased. Electrolux AB (ELUXB), the world’s second-biggest appliance maker, plunged the most in four years as results trailed projections.

U.K. Stocks Climb After Three-Day Slide; Lloyds Banking, Vedanta Advance (Source: Bloomberg)
U.K. stocks gained for the first time in four days as better-than-forecast data from the U.S. on housing starts and corporate earnings boosted optimism in the outlook for the world’s largest economy. Lloyds Banking Group Plc (LLOY) rallied 4.3 percent for the biggest increase in the benchmark FTSE 100 Index. (UKX) Kazakhmys Plc (KAZ), Cairn Energy Plc and Vedanta Resources Plc (VED) led resources shares higher as each rose more than 2 percent. Johnson Matthey Plc (JMAT) advanced 4 percent after the manufacturer of a third of all auto-catalysts said profit rose 19 percent. The FTSE 100 rose 0.7 percent to 5,789.99 at the 4:30 p.m. close in London. The gauge has still fallen 5 percent since February amid speculation that European banks will need to raise more capital as stress tests failed to allay investor concern that lenders have insufficient capital to absorb losses. The broader FTSE All-Share Index climbed 0.6 percent and Ireland’s ISEQ Index advanced 0.5 percent.

FOREX-Euro up broadly but vulnerable before summit
LONDON, July 19 (Reuters) - The euro rose broadly on Tuesday as debt yields of some weaker euro zone countries retreated, but the single currency was vulnerable to uncertainty about whether a solution to Greece's debt problems will be agreed later this week.
Traders said official Asian and Russian names bought the euro as yields on Italian and Spanish government bonds retreated slightly following a surge in the past week on jitters that the debt crisis is deepening.

20110720 1144 Global Commodities Related News.

Corn (Source: CME)
US corn futures finish firmer on concerns hot, dry weather will reduce output. Prices trim gains after surging at the opening of trading as midday forecasts looked somewhat wetter and cooler, traders say. Yet, grain users remain nervous about potential weather threats as farmers need favorable weather to grow a large crop to replenish low supplies. Traders expect USDA will make cuts to crop condition ratings next Monday due to heat this week. The government lowered the good-to-excellent rating more than expected yesterday. CBOT December corn rises 10 1/4c to $6.87 1/4 a bushel.

Wheat (Source: CME)
US wheat futures close higher on spillover support from rising corn prices. The markets are linked as both grains are used for livestock feed. Weakness in the US dollar added support, as it makes dollar-denominated commodities more attractive to foreign buyers, an analysts notes. Hard red winter wheat, traded at KCBT, gains the most on expectations for increased foreign demand, he adds. CBOT September wheat rises 4c to $6.93 1/2 a bushel; KCBT September jumps 17c to $7.78; MGEX September advances 10 1/2c to $8.33.

Rice (Source: CME)
US rough rice futures decline as traders continue to book profits following sharp gains of the past two weeks. Rice on Friday reached its highest prices since October 2008, after the government earlier in the week issued lower-than-expected inventory estimates. The absence of fresh fundamental news left futures overvalued, analysts say. CBOT September rice dropped 26 1/2 cents, or 1.6%, to $16.55 1/2 per hundredweight.

US corn rebounds as hot weather hurts crop, wheat firm
SINGAPORE, July 19 (Reuters) - U.S. corn futures bounced back , rising more than 1 percent, while soybeans were steady following a U.S. government report which showed more-than-expected decline in crop ratings as a result of hot weather.
"The reduction in crop ratings was more than what some had expected, so it is contributing to the strength today," said Adam Davis, a senior commodity analyst at Melbourne-based fund Merricks Capital.

India Raises 2010-11 Wheat, Rice Output Estimates (Source: CME)
India raised its estimates for wheat and rice production in the crop year ended June 30, likely easing supply worries and boosting chances that the government may allow more grain exports. Wheat output hit a record 85.93 million metric tons while rice production rose to 95.32 million tons, government data showed. The previous estimate for wheat was 84.27 million tons and for rice was 94.11 million tons. The total foodgrain output increased 2.5% over the previous estimate to 241.56 million tons in the last crop year. "Sustained efforts to increase farm credit, higher minimum support price to farmers and better availability of seeds and fertilizers helped India achieve record foodgrain output in 2010-11," Farm Secretary P.K. Basu told reporters. Higher output will give more comfort to the government as it aims to push through a food security law, but it also poses worries over storage as granaries are choked.
Traders say the only safety valve could be permitting some more exports, beyond a million tons of rice that was allowed last week by a ministerial panel. According to latest estimates, output of pulses likely grew to a record 18.09 million tons. India, the world's largest importer of pulses, may no longer need to buy the protein-rich staple in coming years as the country can lift its output to 20 million tons in the next five years, Basu said. He said he was optimistic about next year's foodgrain crop as well, and that rice output could climb to as high as 102 million tons with the country's eastern rice-growing belt receiving good monsoon rains. Output of oilseeds in 2010-11 was pegged at 31.10 million tons, up from 24.88 million tons the previous year, while cotton production is estimated to have jumped 38% to a record 33.43 million bales. Corn output for 2010-11 is estimated to have risen 27% to 21.28 million tons.

Corn, Soybeans Called Higher as U.S. Crop Outlook Worsens; Wheat May Gain (Source: Bloomberg)
What follows are opening calls for U.S. grain and oilseed markets.
-- Corn futures are called to open 12 cents to 15 cents a bushel higher on the Chicago Board of Trade after a government report yesterday showed U.S. crop conditions worsened last week, Jim Gerlach, the president of A/C Trading Inc. in Fowler, Indiana, said in a telephone interview. Hot, dry weather this week will increase the stress on plants, he said.
-- Soybean futures may open 10 cents to 15 cents a bushel higher in Chicago on speculation that hot, dry weather will continue next month, when plants in the U.S. begin to set pods and fill them with beans, Gerlach said. Soybean-oil futures are expected to open 0.45 cent to 0.65 cent a pound higher, and soybean-meal futures may open up $3 to $4 for 2,000 pounds.
-- Wheat futures may open 22 cents to 26 cents a bushel higher on the CBOT, the Kansas City Board of Trade and the Minneapolis Grain Exchange on speculation that adverse weather in parts of Europe, Russia and Ukraine may damage maturing crops, and that a return to La Nina weather conditions may reduce yield potential in the Southern Hemisphere later this year, Gerlach said.

Philippines likely hit Q2 rice output forecast-official
MANILA, July 19 (Reuters) - The Philippines may have hit a forecast 3.57 million tonnes unmilled rice harvest in the second quarter based on preliminary data, putting it on course to meet a target of a record full-year output of 17.46 million tonnes, a farm official said on Tuesday.
Good weather and government support via improved irrigation would lift output this year, allowing the country to achieve a target growth in output of 10 percent in 2011, Maura Lizarondo, assistant director at the Bureau of Agricultural Statistics (BAS), told Reuters.

Kenya 2012 wheat imports seen at record level-attache
WASHINGTON, July 18 (Reuters) - "On June 8, the GOK announced a continuation of its tariff-abatement policy on imported foodstuffs (corn, wheat, and rice). Under the new abatement, 18 Kenyan registered millers will be allowed to import wheat duty free for one year beginning on July 4, 2011. As a result, FAS/Nairobi expects that Kenya will import record quantities of wheat commercially through this marketing year. Subsequently, the MY 2012 import forecast has been revised upward, slightly more than the MY 2011 estimate.
Despite the GOK's efforts to eliminate the duty on imported wheat, Kenyan consumers continue to pay high prices for wheat flour and wheat-based products. Local retail prices of wheat flour increased 19 percent from January 2010 to January 2011 to $1.54 per 2 kilogram packet, and have continued to rise."

Russian gross grain crop 14.6 mln T so far - AgMin
MOSCOW, July 18 (Reuters) - Russia has harvested 14.6 million tonnes of grain by bunker weight in the year to date, the Agriculture Ministry said on Monday, lower than a year ago when farmers had to accelerate harvesting due to drought.    
The Ministry did not provide a comparison to year-ago acreage, but last year it said the country had harvested 21 million tonnes of grain by July 20.

Iraq sees lower 2011 wheat harvest on drought
BAGHDAD, July 18 (Reuters) - Iraq forecasts its 2011 wheat harvest at 1.75 million tonnes for 2011, below expectations and down from 1.866 million tonnes produced last year, due to drought, Hassan Ibrahim, Iraq's grain board chief told Reuters in an interview on Monday.    
Ibrahim said Iraq will issue on Tuesday a tender to buy 100,000 tonnes of wheat from any origin.    

Iraq sees drought cutting wheat crop
BAGHDAD, July 18 (Reuters) - Iraq expects drought will cut its 2011 national wheat harvest to 1.75 million tonnes, below expectations and lower than 1.866 million tonnes produced last year, Hassan Ibrahim, Iraq's grain board chief told Reuters in an interview on Monday.    
"Weather conditions and the drought that hit the (northern) areas were the main reasons. Rains came late," he said.    

Corn, soy ratings seen falling due to hot weather
CHICAGO, July 18 (Reuters) - U.S. corn and soybean ratings were expected to drop by 1 percentage point after hot weather arrived in some growing areas and took a toll on plant health, analysts said.
The U.S. Agriculture Department's weekly crop progress report due Monday afternoon was forecast to show the corn crop rated 68 percent good to excellent, based on the average of estimates given by 10 analysts.

Low EU rapeseed crop to create import surge
AMSTERDAM/HAMBURG, July 18 (Reuters) - A poor European Union rapeseed crop is likely to blast a large gap in Europe's oilseeds supplies which could spell a business boost to other producers, especially Asian palm oil.    
Poor rapeseed crops around the world mean EU producers will probably not simply be able to import alternative rapeseed supplies from other countries to completely compensate for what is expected to be a small harvest, analysts said.

Spain stocks low as Black Sea wheat awaited -trade
MADRID, July 18 (Reuters) - Spain has barely enough grain in port silos to last the rest of the month in the import-dependent country, but port and trade sources say hefty shipments from Black Sea countries are expected soon.    
Silos in Spain's leading grains port Tarragona held an estimated 120,000 tonnes of wheat, maize, sorghum and barley, while clients were loading 6,000-7,000 tonnes a day.

ICE sugar resumes uptrend, coffee rises
LONDON, July 19 (Reuters) - Sugar, coffee and cocoa futures on ICE bounced in early trade , consolidating after risk averse sentiment triggered by the worsening euro zone and U.S. debt crisis dragged on commodities the previous session.  ICE raw sugar futures resumed their prolonged uptrend,  buoyed by gains in crude oil and a weaker dollar.

Vietnam revises down June coffee exports to 1.12 mln bags
HANOI, July 19 (Reuters) - Vietnam's actual coffee shipment last month stood at 67,000 tonnes, or 1.12 million bags, the customs department said on Tuesday, revising down a government estimate of 1.63 million bags.
The volume in June brought exports of the commodity from Vietnam in the first half of 2011 to nearly 865,000 tonnes, or 14.42 million 60-kg bags, up 27.2 percent from a year ago, the Finance Ministry-run Vietnam Customs said in a report.

Indonesia's Sulawesi H1 cocoa exports down 41 pct yr/yr
JAKARTA, July 19 (Reuters) - Indonesia's cocoa bean exports from the main growing island of Sulawesi dropped more than 40 percent to 64,591 tonnes in January-June as bad harvest hit production in the world's third-largest producer, industry data showed on Tuesday.
Indonesia could see full-year output falling to its lowest since at least 2004 at 420,000 tonnes after erratic weather triggered the spread of a deadly fungal disease in Sulawesi.

Ghana sees cocoa output hitting 1 mln tonnes
ACCRA, July 18 (Reuters) - Cocoa output in Ghana this season should hit a million tonnes by the end of August, the industry regulator said on Monday, enabling it to reach an official target that had been set for the 2012/13 season two years early.
"Total output now is more than 980,000 tonnes and we should be hitting 1 million by August ending," Cocobod Deputy Chief Executive Yaw Adu-Ampomah told Reuters.

Ivorian rainy weather mixed for cocoa crop-farmers
July 18 (Reuters) - Rainy weather punctuated by occasional bursts of sunshine in Ivory Coast's principal cocoa regions last week had mixed results on the last stage of the mid-crop, farmers said on Monday.
The mid-crop in Ivory Coast, which runs from April to September, is tailing off. Farmers say they needs rainfall to decrease and to see more sun to strengthen the development of pods to be harvested until September, farmers said.

Cocoa 2011/12 global deficit seen at 50,000 tonnes
LONDON, July 18 (Reuters) - Less favourable weather in West Africa and a return to the long-term decline in Ivory Coast production are expected to switch the global cocoa market into deficit in 2011/12, a Reuters poll showed on Monday.
World 2011/12 cocoa demand is expected to outstrip production by 50,000 tonnes, according to the poll's median forecast.

Insurance, Credit Would Help Africa Combat Drought - Experts (Source: CME)
Extending financial instruments to smallholder farmers could help mitigate the effects of severe weather problems like the drought currently gripping the Horn of Africa, experts said. Some 10 million people face starvation in East Africa after the worst drought in 60 years has devastated the region's crops. Scientists warn such events could become more frequent as climate change affects weather patterns. Craig McIntosh, an associate professor of economics at the University of California, is working on a project to offer crop insurance and credit to 30,000 Ethiopian farmers with the United Nations that he believes can help stop the "the boom-and-bust cycle" that often affects rural markets. "In the case of the current drought, by all means the product can help," he said. "Insurance allows farmers to move into the following planting season with assets intact...[and] by pumping money into local economies at a time when everyone is otherwise destitute."
Financial instruments are key for helping smallholder farmers, who make up the bulk of African agriculture, allowing them to invest in crop-boosting inputs like fertilizer. Yet because of their vulnerability to problems like weather, they are often deemed too risky to lend to by private companies. "This is an important piece of the puzzle in the poorest countries," said Keith Collins, former chief economist of the U.S. Department of Agriculture.

EU OKs Biofuel Certification; Land Use Debate Goes On (Source: CME)
The European Union approved seven voluntary schemes designed to ensure biofuels used in the bloc are environmentally sustainable and don't undermine global biodiversity. Biofuels are an integral part of the EU's effort to reduce carbon emissions by 20% by 2020 because much of this cut has to come from using more renewable energy in transport, mainly biofuels. "We need to make sure that tropical forests and carbon rich peatlands are not turned into oil palm or sugarcane plantations," the Commission said. "We also have to guarantee that compared to fossil fuels biofuels used in the EU deliver tangible greenhouse gas savings." But critics said the move will have little impact as the Commission, the EU's executive arm, has ducked the key issue of indirect land use change--the idea that converting land to grow biofuels can release more carbon than they save by displacing arable crops into other areas.
EU reports leaked last week claimed using Asian palm oil, South American soybeans and EU rapeseed to make biodiesel has a bigger overall impact than conventional diesel on climate change, partly because wetlands and forests are then converted to grow food. "The Commission claimed the certification scheme for biofuels will certify the sustainability of these biofuels but if the [indirect land use change] is not taken into account them how can they say they are sustainable?" said Greenpeace spokesman Sebastian Risso. The schemes authorized will certify the environmental compatibility of biofuels, including that fuel crops aren't produced by converting carbon-storing forests or wet lands into plantations. They will allow only biofuels that emit at least 35% less greenhouse gas than fossil fuels from production to use. This threshold will rise to 50% in 2017 and to 60% in 2018. But the decision on indirect land use change will be delayed until later in the year, the Commission said.
Originally the decision was due in December. "We don't want a situation where on a field where you used to grow food, you are now growing biofuels," Energy Commissioner Guenther Oettinger said during a press conference. "This is an evolution that we cannot accept." The systems that commission recognized are ISCC, Bonsucro EU, RTRS EU RED, RSB EU RED, 2BSvs, RSBA, and Greenergy. They will cover both biofuels produced in the EU and those outside. But biofuels supporters said the current scheme should be enough to ensure that Europe's targets are environmentally sustainable while preserving the bloc's $17 billion biofuels market. "A truly level-playing field is the best guarantee to avoid potential indirect land use effects," said secretary general of pro biofuels lobby group ePure, Rob Vierhout. "We don't need contentious ILUC science when we already have such practical solutions at our disposal."

Oil Climbs for Second Day on Shrinking Crude Stockpiles, Stronger Economy (Source: Bloomberg)
Oil advanced for a second day in New York as investors bet that shrinking stockpiles and signs of economic recovery in the U.S. indicate fuel demand will increase in the world’s biggest crude-consuming nation. Futures gained as much as 0.9 percent after the industry- funded American Petroleum Institute said supplies fell the most in six weeks. An Energy Department report today may show inventories dropped for a seventh week, the longest run of declines in two years. Prices rose yesterday after U.S. housing starts surged more than economists forecast. “We continue to see stock draws,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne, who predicts oil in New York will average $113 a barrel in the third quarter. “Crude supplies are still relatively high compared with history but it’s undoubtedly positive for oil prices.”

TABLE-Zinc mkt has 214,000 T surplus in Jan-May'11 -ILZSG
LONDON, July 18 (Reuters) - The global zinc market was in surplus by 214,000 tonnes in the first five months of 2011, the latest monthly bulletin from the Lisbon-based International Lead and Zinc Study Group (ILZSG) showed on Monday.
The latest figures show global refined zinc use was 5.112 million tonnes in January-May 2011, compared with 5.008 million a year earlier.

TABLE-Lead mkt has 73,000 T surplus in Jan-May'11-ILZSG
LONDON, July 18 (Reuters) - The global lead market was in surplus by 74,000 tonnes in the first five months of the year, the latest monthly bulletin from the Lisbon-based International Lead and Zinc Study Group (ILZSG) showed on Monday.
Latest figures show global refined lead use was 4.040 million tonnes, up from 3.616 million in the same period last year.

Russia offers Germany help on rare earths16:33 18Jul11 -Russia offers Germany help on rare earths
WOLFSBURG, Germany, July 18 (Reuters) - Russia is offering Germany closer cooperation on rare earths as well as gas and oil supplies, a Russian official said on Monday ahead of an annual bilateral summit in Germany.    
Berlin has been trying to improve German industry's access to the prized metals, which are used to manufacture a range of high-tech products and whose supply has been hit by export curbs by dominant producer China, among other factors.

Western Areas sees 2011/12 nickel output at 25,000-27,000T
SYDNEY, July 19 (Reuters) - Western Areas , Australia's third-largest nickel miner, is forecasting fiscal 2011/12 nickel production of 25,000-27,000 tonnes, versus a bumper 32,222 tonnes in the previous year, a company executive said on Tuesday.
The forecast for lower production comes less than a week after no. 2 producer in Australia, Minara Resources , trimmed its 2011 guidance and as other producers face curtailments.

China July 1-10 daily steel output dips 3.1 pct
SHANGHAI, July 19 (Reuters) - Daily output of crude steel from Chinese mills fell 3.1 percent in the first 10 days of July to 1.955 million tonnes, data by the country's steel industry association showed on Tuesday.
The figure amounts to 713.6 million tonnes when calculated on an annual basis, nearly 14 percent higher than last year.

Tokyo Steel keeps August prices unchanged
TOKYO, July 19 (Reuters) - Tokyo Steel Manufacturing Co , Japan's biggest construction steelmaker, kept its prices of all products for August shipment unchanged, saying that political confusion and the yen's strength were clouding the market outlook.
The company kept its price for H-beams, used in construction of buildings, at 76,000 yen ($961) per tonne for a third straight month.

Copper Reaches Three-Month High as U.S. Housing Starts May Gain (Source: Bloomberg)
Copper rose to a three-month high in New York before figures that may show builders in the U.S. broke ground on more houses, signaling stronger demand for the metal. Construction began on 575,000 houses at an annual rate, up 2.7 percent from May, according to the median projection of economists surveyed by Bloomberg News. Copper, used in pipes, wiring and roofing, has gained this month even as concern about Europe’s debt crisis and talks to raise the U.S. borrowing limit spurred some investors to shun risk. “U.S. housing-starts and building-permits data will be released today, which are important for base-metals prices,” Edelweiss Comtrade Ltd. said in a report.

Japan June copper cable shipments up 2.4 pct yr/yr
TOKYO, July 19 (Reuters) - Japanese copper wire and cable shipments rose 2.4 percent from a year earlier in June but the level stayed at the third-lowest for the month in 35 years amid a slump in exports to China, the world's biggest copper consumer.  
June shipments totalled an estimated 58,000 tonnes, data from the Japanese Electric Wire and Cable Makers' Association showed on Tuesday.  

Oz Minerals Q2 copper output up 9 pct Q/Q; on track for guidance
SYDNEY, July 19 (Reuters) - Oz Minerals , Australia's third-largest copper producer, on Tuesday reported a 9 percent rise in second-quarter copper output versus the previous quarter and said it was on track for full-year production of 100,000 to 110,000 tonnes.
Its Prominent Hill mine yielded 28,017 tonnes over the three months to June 30 as work continued to expand operations, Oz Minerals said in its quarterly production report.

METALS-Copper gains on dollar, China demand hopes
July 19 (Reuters) - Copper hit its highest since mid-April on Tuesday as a weaker dollar and hopes Chinese demand will remain firm helped offset investor anxiety over U.S. and European sovereign debt concerns.
Three-month copper on the London Metal Exchange (LME)  traded at $9,800.25 a tonne by 0825 GMT compared with Monday's close of $9,694 a tonne.

PRECIOUS-Gold steadies off record highs, eyes euro summit
LONDON July 19 (Reuters) - Gold hit record highs in Europe on Tuesday as investors bought the metal as a haven from risk on heightened concerns that the debt crisis engulfing Greece may ensnare Italy and Spain, and as time grew short for raising the U.S. debt ceiling.    
A slight rebound in assets seen as higher risk, such as shares and the euro, took some of the heat out of the market after the metal broke through the key psychological $1,600 barrier on Monday, however, pulling prices back from highs.

Gold May Drop for Second Day as Obama Endorses Plan to Avert U.S. Default (Source: Bloomberg)
Gold may decline for a second day, extending a drop from a record, after President Barack Obama backed a plan to cut the deficit, potentially paving the way for raising the U.S. debt ceiling and avoiding default. Immediate-delivery gold was little changed at $1,589.35 an ounce at 10:13 a.m. in Singapore after touching an all-time high of $1,610.10 yesterday and closing 1 percent lower. Before that, gold gained for 11 days, the best run since 1980, according to Bloomberg data. On July 18, gold’s 14-day relative-strength index topped 74, signaling a possible drop after the rally. Obama called the $3.7 trillion debt-cutting proposal by a bipartisan group of senators “broadly consistent” with what he’s sought and “a very significant step” in so-far deadlocked negotiations. The plan would combine tax increases and spending cuts and may allow policy makers to agree on raising the $14.3 trillion debt ceiling before a potential default on August 2.

Gold to Extend Record Rally If U.S. Increases Debt Limit: Chart of the Day (Source: Bloomberg)
Gold may rally further from this month’s record if President Barack Obama wins lawmakers’ agreement to raise the U.S.’s debt ceiling, weakening the dollar and boosting demand for the precious metal as a store of value, according to Korea Investment & Securities Co. The CHART OF THE DAY shows the spot gold price in dollars has climbed along with increases in the U.S.’s statutory debt limit over the past 16 years. Immediate-delivery gold reached a record $1,610.10 an ounce yesterday, as concerns that debt crises in Europe and the U.S. will roil global financial markets boosted demand for the precious metal as a haven. “Gold’s rally is quite explosive,” said Julia Yoo, a Seoul-based analyst at Korea Investment. “Increasing the debt limit means you print more dollars, which will weaken the dollar and consequently lift the gold price,” adding to gains this year that were driven by demand from countries including China, she said.

20110720 1142 Soy Oil & Palm Oil Related News.

ITS CPO export up 5.35% to 1,021,729 tonnes for the period of 1~20 Jul 2011.
SGS CPO export up 5.7% to 1,028,352 tonnes for the period of 1~20 Jul 2011.

Soybeans (Source: CME)
US soybean futures end lower, backpedals from earlier gains on less-threatening weather and speculative profit-taking. Soy crop still a few weeks away from its critical yield development phase, and with midday forecasts adding some rain in longer range outlooks, traders were nervous of sustaining long positions at historically high prices, analysts say. Market is fearful that a shift in weather could abruptly change price trends, encouraging traders to book some profits, says Sterling Smith, analyst with brokerage Country Hedging. CBOT Nov soy end down 4 1/4c at $13.82/bushel.

Soybean Meal/Oil (Source: CME)
Soy product futures end mixed, with late declines in soybeans weighing on both soyoil and soymeal futures. Soymeal managed to hold onto modest gains, supported by domestic feed demand, while soyoil dropped with soy on ample supplies and sluggish export demand, analysts say. CBOT Dec soymeal finish up 0.1% at $365.00/short ton; Dec soyoil down 0.4% at 57.57c/lb.

China Said to Have Kept Cooking-Oil Price Caps as Inflation Accelerates (Source: Bloomberg)
China, the world’s biggest consumer of vegetable oils, is maintaining caps on prices and hasn’t announced plans to sell from state stockpiles, according to two people briefed on the government’s policy. The government controls prices through private accords with suppliers, said the people, who declined to be identified because they aren’t authorized to speak to the media. The caps have been removed, the Quanzhou Evening News reported July 17, citing an unidentified government official. A call to the newspaper seeking comment yesterday wasn’t immediately returned. “The government clearly has no intention to loosen its grip on the market,” said Tommy Xiao, an analyst at Shanghai JC Intelligence Co. Inflation in China 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 fastest pace in three years. The central bank raised interest rates five times since October to stem the gains.

Palm oil near 1-wk lows on debt woes, high stocks
KUALA LUMPUR, July 19 (Reuters) - Malaysia palm oil futures dipped on Tuesday as concerns over default threats in the U.S and Europe hitting global demand weighed although losses were limited by hot weather hitting U.S. grains crops.
"The sovereign debt problems are still lingering on people's mind, there's no impetus to move the market," said a trader with foreign brokerage in Kuala Lumpur.