Monday, July 25, 2011

20110725 1828 FCPO EOD Daily Chart Study.

FCPO closed : 3100, changed : -40 points, volume : lower.
Bollinger band reading : side way range bound.
MACD Histrogram : turned downward, buyer reducing position.
Support : 3100, 3070, 3050, 3020 level.
Resistance : 3150, 3200, 3250, 3270 level.
Comment :
FCPO closed recorded loss with higher volume transacted while soy oil last Friday closed little higher and currently registering loss.
Concern over possible U.S. debt default and both cargo surveyors reported improved but slowing down export data lead market to trade in negative zone through out the day.
Daily chart formed a down doji bar candle closed nearer to middle Bollinger band level after market opened lower, continue to moved downward towards the end of 1st session followed by 2nd half range bound movement recovered portion of the intraday losses.
Chart reading suggesting a side way range bound market development testing support and resistance level with the immediate term of negative sentiment.
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.

20110725 1741 FKLI EOD Daily Chart Study.

FKLI closed : 1557 changed : -10.5 points, volume : higher.
Bollinger band reading : little downside biased.
MACD Histrogram : resumed lower, seller in control.
Support : 1550, 1540, 1530, 1515 level.
Resistance : 1565, 1570, 1580, 1590 level.
Comment :
FKLI closed recorded loss with improved volume changed hand doing about 2.5 points discount compare to cash market that closed weaker while Asia markets ended mostly lower and European markets currently also trading mostly lower with few exchange recording small gain . Last Friday U.S. market also closed in lower ground.
Investors are losing out patience over dragging unsettle debt limit problem and a potential rating downgrade by divesting from markets and prefer over much safer choices such as gold that continue surging new high.
FKLI daily chart formed a down bar candle positioned nearer to lower middle Bollinger band level after market opened gap down, slipped little lower and moved side way through out the day to closed near the low of the day.
Charted reading revised to suggesting a little downside biased market development testing support and resistance level awaits final decision from U.S. congress.
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.

20110725 1707 Global Market & Commodities Related News.

Investors sell stocks, buy gold on US debt crisis
SINGAPORE, July 25 (Reuters) - Stocks fell while the Swiss franc rose and gold hit a record high on Monday as hopes for a political deal to avert a U.S. default began to fade, though investors were mostly seeking to protect their portfolios with no signs of panic selling.
"Despite the ever-frustrating horse-wrangling between the Democrats and Republicans, which could result in a downgrade of the U.S. government debt ranking, I still believe that some kind of temporary deal will be struck in the last minute," said Khiem Do, head of Asian Multi-Asset with Baring Asset Management in Hong Kong.

Food inflation in focus amid lofty crop price outlook
CHICAGO, July 25 (Reuters) - Grain prices will likely remain at elevated levels at the end of this year, a Reuters Poll showed, providing little relief to food prices while continuing to challenge policymakers battling to tamp down inflation.
Many analysts contend that the era of cheap food may well be over as rising crop production struggles to keep pace with soaring global demand, particularly from the mushrooming middle class populations of developing nations like China and India.

U.S. corn, wheat post falls on debt talks, forecast rain
SYDNEY, July 25 (Reuters) - U.S. corn futures fell two percent on Monday, while soybean and wheat futures fell around one percent, hurt by forecasts for rain this week in the heat-stricken U.S. Midwest and by concern over a seeming stalemate in U.S. debt talks.
"We're down across most of the risk assets today with oil being lower and that in turn is pushing corn and wheat lower while soybeans are also a bit weaker," said Luke Mathews, an agricultural commodities strategist at Commonwealth Bank of Australia.

Guatemala cuts rates on loans to help coffee farms
GUATEMALA CITY, July 22 (Reuters) - Guatemala is offering low-interest loans to coffee farmers to renew aging coffee trees and cushion farmers from lower coffee prices by promoting investment in plantations.
A special government fund for coffee farmers administered by the national coffee association Anacafe is cutting interest rates to 6.5 percent for small producers and 7.5 percent for large farms, Anacafe's president told a coffee conference in Guatemala this week.

Demand, India to dominate cotton market in 2011/12
NEW YORK, July 22 (Reuters) - Demand for cotton, which tumbled sharply after the market's record rally to over $2/lb this spring, and Indian cotton exports will dictate fiber prices in the 2011/12 season (August/July), the chief executive of the world's biggest cotton merchant said Friday.
Joe Nicosia, president and chief executive of Allenberg Cotton Co, told the Ag Market conference of cotton industry analysts there had been a "large shift" into polyester in Asia, the leading consumer of cotton.

Europe coffee: Robusta trade tough, sales low
HAMBURG, July 22 (Reuters) - A week of low sales by Vietnam and Indonesia hindered robusta trade in Europe's cash coffee market this week, and robusta price differentials remained unusually high, dealers said on Friday.
"Vietnamese sellers ignored the fall in London futures and kept their prices high this week," one trader said. "Roaster demand for Indonesian coffee was unmet because of high prices."

Indonesia importing 500,000T Vietnam rice to bolster stocks
HANOI/JAKARTA, July 22 (Reuters) - Indonesia will sign a major contract to buy 500,000 tonnes of Vietnamese rice and is monitoring domestic output for further  imports, state procurement agency Bulog said on Friday, in a move to maintain healthy stockpile and cool food prices.
But the deal has pushed up domestic prices in Vietnam during the peak harvest period, which would keep inflation at a high level, traders in Ho Chi Minh City said.

Oil slips $1 on concerns U.S. default may cut demand
SINGAPORE, July 25 (Reuters) - Crude slipped more than $1 on Monday as investors exited riskier assets on concerns a default by the U.S. may derail growth in the economy and pare oil demand in the world's biggest consumer.
"The most significant influence on the oil market is the concern that failing to raise the debt ceiling would mean the U.S. could either default or have to cut spending on a variety of social services," said Ben Westmore, a commodities economist at the National Australian Bank.

U.S. coal use up 4 pct from previous week-Genscape
HOUSTON, July 22 (Reuters) - U.S. coal consumption rose 4 percent in the past week, Genscape said on Friday, as hot weather drove demand for cooling.
But use of coal for the week ended Thursday fell 1 percent from the same week of 2010, the power industry data monitor said, as coal-to-gas switching increased.

U.S. coal use up 4 pct from previous week-Genscape
HOUSTON, July 22 (Reuters) - U.S. coal consumption rose 4 percent in the past week, Genscape said on Friday, as hot weather drove demand for cooling.
But use of coal for the week ended Thursday fell 1 percent from the same week of 2010, the power industry data monitor said, as coal-to-gas switching increased.

LME copper dips on U.S. debt deadlock; supply risks aid
SINGAPORE, July 25 (Reuters) - London copper edged lower on Monday as investors worried about a looming U.S. debt default with no sign of a deal among lawmakers to avert it, although supply risks due to a strike at the world's top copper mine capped losses.
"Copper is consolidating at current levels. Consumption isn't particularly active," said Zhou Jie, analyst at Shanghai CIFCO Futures.

LME copper dips on U.S. debt deadlock; supply risks aid
SINGAPORE, July 25 (Reuters) - London copper edged lower on Monday as investors worried about a looming U.S. debt default with no sign of a deal among lawmakers to avert it, although supply risks due to a strike at the world's top copper mine capped losses.
"Copper is consolidating at current levels. Consumption isn't particularly active," said Zhou Jie, analyst at Shanghai CIFCO Futures.

20110725 1128 Global Market & Commodities Related News.

GLOBAL MARKETS: Stocks fall, gold at record high on US debt crisis
SINGAPORE, July 25 (Reuters) - Stocks slipped while the Swiss franc rose and gold hit a record high on Monday as hopes for a political deal to avert a U.S. default began to fade, though investors were mostly seeking to protect their portfolios with no signs of panic selling.
"Despite the ever-frustrating horse-wrangling between the Democrats and Republicans, which could result in a downgrade of the U.S. government debt ranking, I still believe that some kind of temporary deal will be struck in the last minute," said Khiem Do, head of Asian Multi-Asset with Baring Asset Management in Hong Kong.

OIL: Crude falls after settling at 6-week high
TOKYO, July 25 (Reuters) - U.S. crude futures fell on Monday after settling at a six-week high on Friday, taking their cue from a decline in U.S. stock futures amid uncertainty over talks to avert an unprecedented U.S. default.   NYMEX crude for September delivery  was down 61 cents at $99.26 a barrel by 2300 GMT, after settling up 74 cents at a six-week high of $99.87 on Friday.

NATURAL GAS: Natural gas ends up slightly, heat lends support
NEW YORK, July 22 (Reuters) - Front-month U.S. natural gas futures trimmed early gains but ended slightly higher on Friday, backed by short-covering after three straight losing sessions and still-warm U.S. weather forecasts for next week.
"The forecast for next week still looks supportive, but it's not going to be as hot as this week. I think people were just squaring positions ahead of the weekend, waiting to get a better look at the weather on Monday," said Steve Mosley at SMC Advisory Services in Arkansas.

Gas jumps more than 8.5 cents per gallon in U.S.-survey
NEW YORK, July 24 (Reuters) - The average price for a gallon of gasoline in the United States rose for the first time since early May following an increase in the price of crude oil, according to the latest nationwide Lundberg survey released on Sunday.
The national average price for a gallon of regular gasoline was slightly more than $3.70 on July 22, an increase of 8.58 cents in the past two weeks, according to the survey of some 2,500 gas stations in the continental United States.

India to fill Iran supply gap with Saudi, Iraqi oil
NEW DELHI, July 22 (Reuters) - India's immediate strategy to deal with the loss of crude from Iran in August is to buy more from Saudi Arabia and Iraq, while inventories and plant maintenance give refiners breathing space as they seek to establish new supply lines.
Iran has cut supply as it tries to put pressure on Indian refiners to settle $5 billion in debt for oil supplied, and to find a way to pay for future shipments.

COMMODITIES: Oil, grains lead markets higher; cocoa slumps
NEW YORK, July 22 (Reuters) - Oil closed up on Friday after hitting a three week high on optimism that Europe was tackling its huge debt problem while agricultural markets rallied on worries about the impact of excessive summer heat on crops.
"There's much less cooperation amongst the U.S. legislators than there is amongst the Europeans. That kind of dichotomy could begin to hurt the dollar ..."  said Boris Schlossberg, director of currency research at GFT in New York.

U.S. June oil demand up 1.9 pct from year earlier-API
WASHINGTON, July 22 (Reuters) - U.S. demand for crude oil and petroleum products rose 1.9 percent from a year earlier to an average 19.652 million barrels per day in June, the American Petroleum Institute said on Friday.
"The growth in overall demand is consistent with the nation's modest but steady economic expansion," API chief economist John Felmy said in a statement.

China, Iran eye barter plan to bypass US sanctions-FT
LONDON, July 24 (Reuters) - Iran and China are discussing using a barter system to exchange Iranian oil for Chinese goods and services, as U.S. sanctions have blocked China from paying at least $20 billion for oil, the Financial Times said.
The paper, citing people familiar with the problem, said U.S. financial sanctions against Iran, which make it hard to conduct dollar-denominated business, meant China might owe the oil-rich country as much as $30 billion.

20110725 1116 Global Economic Related News.

Germany: Business confidence fell more than economists forecast in July, according to a survey taken before European leaders agreed new aid for Greece as part of an intensification of measures to stem the region's debt crisis. The Ifo institute in Munich said its business climate index, based on a survey of 7,000 executives, declined to 112.9, the lowest in nine months, from 114.5 in June. The index reached a record high of 115.4 in February. (Source: Bloomberg)

Taiwan: Unemployment rate declined in June, holding below 5% for the ninth straight month. The seasonally adjusted rate fell to 4.4% YoY from 4.41% YoY in May, the statistics bureau said in Taipei. (Source: Bloomberg)

Vietnam: Inflation accelerates to 22.16%, highest level in Asia
Vietnam inflation accelerated for an 11th month in July after the central bank cut a key interest rate even as the nation faces the fastest price gains in Asia. Consumer prices rose 22.16% from a year earlier, compared with June’s 20.82% pace, data released by the General Statistics Office in Hanoi showed. The central bank reduced its repurchase rate to 14% from 15% on 4 July after a spate of increases since November to fight inflation, leading the International monetary Fund to say the cut may confuse investors. [Bloomberg]

India: India is in fiscal and monetary tightening mode
India is in a fiscal and monetary tightening mode, Finance Minister Pranab Mukherjee said ahead of the central bank’s interest-rate decision next week. The Reserve Bank of India may raise its repurchase rate by a quarter of a percentage point to 7.75% on 26 July, 19 of 21 economists in Bloomberg News survey said, with the remainder expecting no change. India’s inflation is the highest among the so-called BRICS nations after Russia, and Mukherjee said price gains are above comfort level. [Bloomberg]

Australia: Inflation expectations drop to lowest in 2011
Investors expectations of Australian inflation dropped to the least this year on prospects faltering growth will cool consumer-price gains, giving the central bank scope to extend its longest interest-rate pause since 2007. The so-called breakeven rate on 10-year inflation-linked notes fell 9 basis points, or 0.09 percentage points, this month and touched 274 basis points, the least since November. The bond market contrasts with economists forecasting a 27 July report will show annual consumer price gains quickened to 3.4% last quarter, the most since 2008. [Bloomberg]

EU: ECB’s hand on rate raise
The European Central Bank’s willingness to dive up borrowing costs in the midst of a debt crisis threatens to widen the gaps between the region’s economies in an echo of divergence seen in bond yields. The ECB, whose primary job is to fight inflation, has tightened monetary policy twice this year as Germany’s economy sent consumer prices past the inflation target. While yields on 10-year Spanish and Italian bonds declined this week from euro-era highs, they remain about 1% above their average of the past decade. [Bloomberg]

US: Almost as many states showed job losses as gains in June
Payrolls dropped in 24 US states in June and climbed in 26, indicating the labor market is struggling across much of the world’s largest economy. Tennessee led the nation with a 16,900 decrease in payrolls, followed by Missouri with a 15,700 drop, figures from the Labor Department showed in Washington. Texas and California had the biggest employment gains. The jobless rate rose in 28 states. Hiring needs to accelerate to ensure consumers keep spending, which accounts for about 70% of the economy. [Bloomberg]

20110725 1115 Malaysia Corporate Related News.

Proton: To spend RM100m on R&D yearly. Proton Holdings Bhd is allocating between RM90m and RM100m to the research and development activities (R&D) yearly to ensure it remains competitive in the automotive industry. (Source: The Star)

Sime Darby: Expects crop production to increase by 6%. Sime Darby Plantation Bhd expects its crop production to increase by 6% in the financial year ended June 30, 2011 as compared to the previous financial year as the cyclical down trend of the oil palm has ended. (Source: The Star)

CIH: To distribute up to 90% of Permanis sale proceeds. CI Holdings Bhd (CIH) is looking at distributing no less than half of the RM820m proceeds from the sale of its bottling unit Permanis Sdn Bhd to Asahi Group Holdings Ltd. (Source: The Edge Financial Daily)

Eng Teknologi: Receives RM307m privatisation offer. Eng Teknologi Holdings Bhd's major shareholders has made an offer via investment vehicle TYK Capital Sdn Bhd to take the company private at an indicative offer price of RM2.50 per share or RM307.2m. (Source: Bursa Malaysia)

Property: RM150m in deals sealed at Penang property fair. About RM150m worth of property has been sold or booked at the Star Property Fair 2011, reflecting optimism in the property market here. The number of registrations and buyers had also exceeded expectations. (Source: The Star)  

CIH to distribute up to 90% of Permanis sale proceeds
CI Holdings is looking at distributing no less than half of the RM820m proceeds from the sale of Permanis SB to Asahi Group Holdings, said its management. “We may use a portion of the proceeds to acquire new businesses. Based on current proposals, these new acquisitions could only cost between RM20m and RM80m, so there is still a large portion to give back to our shareholders.” CIH MD Datuk Johari Abdul Ghani mentioned. (Financial Daily)

Hiap Teck enters into a co-operation agreement
Hiap Teck Venture has entered into a Co-operation Agreement with Shougang International (Singapore) Pte Ltd, Eastern Steel SB, Dato’ Law Tien Seng (Dato’ Law) and Chinaco Investment Pte Ltd (Chinaco) to set out the mode and structure of participation in the construction and operation of an integrated steel mill in Teluk Kalung in Kemaman, Terengganu. Upon completion of Shougang Singapore acquisition of the entire equity interest in Orient Steel Investment Pte Ltd (Orient Steel) from Dato’ Law, Eastern Steel SB will be owned by Hiap Teck, Orient Steel and Chinaco, with equity stakes of 55%, 40% and 5% respectively. Orient Steel was also granted the option to acquire up to 70% of Eastern Steel from HTVB subject to the terms and conditions spelled out in the pact. (Bursa Malaysia)

PetGas to raise funds for Kimanis plant
Petronas Gas (PetGas) wants to raise RM1.2bn to finance its 300MW gas-fired Kimanis power plant in Sabah, through project financing while the balance will be through equity financing.“The total cost of the power plant is RM1.5bn. We are looking at financing 80% of it through project financing,” chairman Datuk Anuar Ahmad mentioned. In terms of funding, he said it was currently finalising details with both local and foreign banks. (StartBiz)

Mithril signs restructuring agreement
Financially-troubled construction firm Mithril has signed a heads of agreement with the promoters of Pesona Metro, Wie Hock Beng and Chak May Teng to regularise the financial condition of the company. It announced that the proposed restructuring scheme included the acquisition of the entire equity interest in Mithril by a newly-incorporated company for RM96m, satisfied via the issuance of 384m shares in the newco to be issued at par of 25 sen to the promoters and/or their nominee after a capital reduction and consolidation exercise. The listing status of Mithril on the Main Market would then be transferred to the newco.(StarBiz)

Proposed Latexx-YTY merger off
The proposed merger between Latexx Partners and the YTY group, involving the sale of YTY’s subsidiaries to Latexx Partners for RM1.25bn, has been aborted. Latexx said announced that after conducting an operational due diligence and further assessment on the YTY group, it had engaged with YTY’s shareholders last Thursday to present its findings and indicated its intention to make a further revised offer. “After considering the company’s feedback, the vendors (YTY) had on 22 July written to the company expressing their intention not to extend and continue with the proposed merger,” it said. (StarBiz)

Proton to spend RM100m on R&D yearly
Proton Holdings is allocating between RM90m and RM100m to the research and development activities (R&D) yearly. Group managing director Datuk Seri Syed Zainal Abidin Syed Mohamed Tahir said apart from embarking on its in-house R&D activities, Proton would continue to collaborate and forge a smart partnership with third parties to add value to its products (StarBiz)

Ingenuity to acquire hardware distribution firm for RM15m
ACE Market-listed Ingenuity Solutions plans to acquire a hardware distribution company to complement its core enterprise software business. Ingenuity signed a heads of agreement on friday for the proposed purchase of 100% in Vistavision Resources SB from Landasan Simfoni SB and Titanium Hallmark SB. In an announcement to Bursa Malaysia, Ingenuity said it planned to buy Vistavision for RM15.5m to be satisfied via the issuance of 154.5m new ordinary shares of 10 sen each in Ingenuity. (StarBiz)

KTMB to undergo a two-phase restructuring
Under the Government Transformation Plan, KTMB will undergo restructuring under various phases, to operate more efficiently. Company sources said KTMB's cargo and multi modal units will be combined and parked under a new company called KTMB Logistics SB. The second phase of the restructuring will see the separation of the train operation services, rolling stocks and railway infrastructure from KTMB's operation. (BT)

20110725 1056 Global Market Related News.

Signs of global slowdown mount; debt crisis weighs
LONDON/NEW YORK, July 21 (Reuters) - Private-sector growth in the euro zone ground to a halt this month and China's factory sector contracted for the first time in a year, surveys showed on Thursday, deepening evidence of a global slowdown.
Hopes that the U.S. economy will snap out of its recent slowdown were supported by a rebound in manufacturing in the country's mid-Atlantic region, although an unexpected rise in jobless claims underscored how weak the labor market remains.

Asian Stocks Retreat as U.S. Lawmakers Fail to Agree Deal on Debt Ceiling (Source: Bloomberg)
Asian stocks fell, led by banks and exporters, as the failure to raise the U.S. federal debt limit raised the prospect of a default that may threaten the global recovery. Toyota Motor Corp., the world’s biggest carmaker by market value, slid 1.2 percent in Tokyo, leading consumer discretionary stocks lower. Honda Motor Co., the Japanese automaker which receives 44 percent of its revenue from the U.S., declined 1.1 percent. Commonwealth Bank of Australia, the nation’s biggest lender by market value, slipped 1.2 percent in Sydney. BHP Billiton Ltd., the world’s No. 1 mining company by market capitalization, slid 0.6 percent, leading raw material producers lower after oil prices declined. “The ongoing saga of needing to raise the debt ceiling in the U.S. is likely to remain a concern for stock markets as the deadline heads closer with no apparent signs of agreement,” said Stephen Halmarick, Sydney-based head of investment markets research at Colonial First State Global Asset Management, which oversees about $150 billion. “If talks fail, we should expect a credit rating downgrade and another turn downwards in the U.S. economy.”

U.S. Stock Futures Decline After Lawmakers Fail to Reach Debt-Ceiling Deal (Source: Bloomberg)
U.S. stock futures fell, indicating the Standard & Poor’s 500 Index will drop after rallying within 1.4 percent of a three-year high, as President Barack Obama and Congress failed to reach an agreement on raising the federal debt limit, intensifying concern the nation will default. S&P 500 futures expiring in September declined 0.9 percent to 1,328.80 at 9:29 a.m. in Tokyo. Dow Jones Industrial Average futures lost 111 points, or 0.9 percent, to 12,510. House Speaker John Boehner told Republicans that there’s no agreement on a plan for raising the ceiling before a default threatened for Aug. 2. A Republican congressional official said Boehner, speaking by telephone to lawmakers, is reporting that discussions are continuing. The impasse has boosted the chance S&P will cut the U.S. credit rating from AAA within three months to 50 percent, the company said July 21.

US regional factories resume growth, jobs a worry
WASHINGTON, July 21 (Reuters) - Factory activity in the U.S. Mid-Atlantic region rebounded in July, but stubbornly high new filings for jobless benefits suggested an expected pick-up in economic growth in the second half of 2011 would be modest.
The Philadelphia Federal Reserve Bank said its business activity index, which gauges factory activity in the region, rose to 3.2 from a near two-year low of minus 7.7 in June. Orders, hiring and shipments all improved.

Boeing, Google, IBM, Marathon, Weatherford: U.S. Equity Preview (Source: Bloomberg)
Shares of the following companies may have unusual moves in U.S. trading tomorrow. Stock symbols are in parentheses.
Boeing Co. (BA) : The world’s second-largest commercial- plane maker said it expects its 787 Dreamliner certification by September.
Bridgepoint Education Inc. (BPI) : The for-profit provider of college classes said in a filing with the U.S. Securities and Exchange Commission that stockholder Warburg Pincus plans to resell 34.6 million shares.
E*Trade Financial Corp. (ETFC US): The online brokerage plans to hire Morgan Stanley (MS) to explore a sale after its largest shareholder, Citadel LLC, said the company needed to take action to reverse “catastrophic losses” for investors.
Google Inc. (GOOG) : Google may be the best stock pick on the outlook for mobile computing and social networking, as bubble concerns loom for newcomers such as LinkedIn and others, Barron’s reported.
HollyFrontier Corp. (HFC US): HollyFrontier and Marathon Petroleum Corp. (MPC US) are among independent refining companies that may rise as margins improve on a low-cost crude oil supply and facility upgrades, Barron’s reported.
International Business Machines Corp. (IBM) : IBM may rise to $205 or higher in a year or two as it boosts sales in emerging markets and improves profitability, Barron’s reported, without saying how it got the number.
Iridium Communications Inc. (IRDM) : Whitney Tilson’s T2 Partners disclosed a 10 percent stake in the satellite-services provider, and said it plans to pursue talks with management about capital structure, according to a filing with the SEC. T2 Partners holds about 7.04 million shares, up from its previous 6.9 million.
Legacy Reserves (LGCY US): The Midland, Texas-based oil company boosted its quarterly dividend by one cent to 54 cents a unit.
Loews Corp. (L) : James Tisch, the holding company’s chief executive officer, told CNBC that he doesn’t see any mergers and acquisition opportunities “right now.”
Weatherford International Ltd. (WFT) : Weatherford International may rise more than 50 percent by the end of 2013 on cost cutting and as oil exploration and drilling activity stays strong, Barron’s reported.

Treasuries Decline for First Time in Three Weeks as Deficit Talks Collapse (Source: Bloomberg)
Treasuries fell for the first time in three weeks as talks collapsed between President Barack Obama and House Speaker John Boehner over a deficit-cutting package as part of an agreement that would lift the nation’s debt ceiling. Two-year note yields touched the highest in almost two weeks July 21 as Standard & Poor’s reiterated it saw a 50 percent chance of cutting the U.S. credit rating within three months and European leaders reached a deal to stem Greece’s debt crisis. Boehner said yesterday after markets closed he will instead talk with Senate leaders on a way to avoid a U.S. default. The U.S. will sell $99 billion in notes next week. “It’s certainly a negative thing for Treasuries,” said Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia. “The deep divisions between the parties make an agreement much tougher, but we still have the potential for 11th-hour emergency measures.”

U.S. Vulnerable to Downgrade: El-Erian (Source: Bloomberg)
The U.S. government may lose its AAA credit rating even if lawmakers reach a plan to avoid a default, said Mohamed A. El-Erian, whose Pacific Investment Management Co. is the world’s largest manager of bond funds. “In most likelihood, a last-minute political compromise will avoid a default but will leave the AAA rating extremely vulnerable,” El-Erian, the Newport Beach, California-based chief executive officer and co-chief investment officer at Pimco, wrote in an e-mail. “Stock markets around the globe will look to price in a greater uncertainty premium on account of political squabbles in the world’s largest economy and the increasing risk that it may lose its sacred AAA rating.” House Speaker John Boehner plans to press ahead with a shorter-term increase in the U.S. debt limit than President Barack Obama has requested, he told lawmakers yesterday, defying a veto threat and signaling continued stalemate in the U.S. Congress as time runs short for a deal.
The impasse has boosted the chance S&P will cut the U.S. credit rating from AAA within three months to 50 percent, the company said July 21.

States Losing Jobs Almost Equal to Those Gaining, Showing Labor Weakness (Source: Bloomberg)
Payrolls dropped in 24 U.S. states in June and climbed in 26, indicating the labor market is struggling across much of the world’s largest economy. Tennessee led the nation with a 16,900 decrease in payrolls, followed by Missouri with a 15,700 drop, figures from the Labor Department showed today in Washington. Texas and California had the biggest employment gains. The jobless rate rose in 28 states. The report is consistent with nationwide figures released July 8 that showed employers added 18,000 workers in June, the fewest in nine months, and unemployment rose to 9.2 percent, the third straight monthly gain. Hiring needs to accelerate to ensure consumers keep spending, which accounts for about 70 percent of the economy.

Boehner Ends Deficit Talks With Obama, Says Deal Was ‘Never Really Close’ (Source: Bloomberg)
House Speaker John Boehner withdrew from negotiations with the White House on a broad deficit- reduction package and said he will instead talk with Senate leaders on a way to avoid a U.S. default. “A deal was never reached, and was never really close,” Boehner said in a letter prepared for distribution to House colleagues. “In the end, we couldn’t connect.” President Barack Obama said he had offered Boehner an “extraordinarily fair deal” that would cut trillions of dollars in spending, including on entitlement programs. “It is hard to understand why Speaker Boehner would walk away from this kind of deal,” the president said. “We have now run out of time,” Obama said, saying he is calling legislative leaders to the White House at 11 a.m. tomorrow.

Bernanke, Geithner, Dudley Are Said to Meet on Debt Limit (Source: Bloomberg)
Treasury Secretary Timothy F. Geithner was scheduled to meet this morning with Federal Reserve Chairman Ben S. Bernanke to discuss the implications of a failure of Congress to raise the debt limit in a timely manner, according to an administration official. William C. Dudley, president of the Federal Reserve Bank of New York, was also scheduled to take part in the meeting. The administration official wasn’t authorized to discuss the meeting and declined to be identified. President Barack Obama and House Speaker John Boehner, seeking to avert a U.S. default, are pursuing a broad agreement to boost the debt limit while cutting spending by trillions of dollars and overhauling the tax code. Geithner says the Treasury Department’s borrowing ability will expire on Aug. 2 unless Congress raises the ceiling.

U.S. Stocks Advance Amid Europe Optimism (Source: Bloomberg)
U.S. stocks rose this week, including the biggest one-day gain since March for the Standard & Poor’s 500 Index, as Europe pledged support for Greece to end the region’s debt crisis and earnings reports drove companies from Morgan Stanley to Advanced Micro Devices Inc. higher. Morgan Stanley climbed 13 percent after posting the only quarterly gain in trading revenue among major U.S. banks. AMD jumped 21 percent, leading technology stocks in the S&P 500 to a 3.7 percent gain, after the chipmaker’s forecast beat analysts’ projections. Medco Health Solutions Inc. (MHS) surged 22 percent as Express Scripts Inc. agreed to buy it. E*Trade Financial Corp. added 21 percent amid takeover speculation. The S&P 500 increased 2.2 percent to 1,345.02 this week. It jumped 1.6 percent on July 19 amid optimism President Barack Obama and lawmakers will agree to raise the nation’s debt limit before an Aug. 2 deadline. The Dow Jones Industrial Average rose 201.43 points, or 1.6 percent, to 12,681.16 since July 15.

Global Logistic Said to Be Preferred Bidder for LaSalle’s Assets (Source: Bloomberg)
Global Logistic Properties Ltd. (GLP) was selected to begin exclusive negotiations to buy about 140 billion yen ($1.8 billion) of warehouses in Japan, two people with direct knowledge of the deal said. Global Logistic, based in Singapore, will begin the talks with seller LaSalle Investment Management Inc., said the people, who asked not to be identified before the negotiations are completed. Hideko Takee, a spokeswoman for LaSalle, declined to comment. At least three other companies including Mitsubishi Corp. (8058), Kenedix Inc. (4321) and Blackstone Group LP (BX) had submitted proposals in an earlier round of bidding, four people familiar with the deal said this month. The properties held by LaSalle include 24 warehouses in cities such as Tokyo and Osaka, they said.

Threat to Japan’s Food Chain Multiplies (Source: Bloomberg)
Radiation threats to Japan’s food chain are multiplying as cesium emissions from the crippled Fukushima Dai-Ichi nuclear power plant spread more widely, moving from hay to cattle to beef. Hay contaminated with as much as 690,000 becquerels a kilogram, compared with a government safety standard of 300 becquerels, has been fed to cattle. Beef with unsafe levels of the radioactive element was detected in four prefectures, the health ministry said July 23. Agriculture Minister Michihiko Kano has said officials were unaware of the risk that rice farmers might ship tainted hay to cattle growers. That highlights the government’s inability to think ahead and to act, said Mariko Sano, secretary general for Shufuren, a housewives organization in Tokyo.

European Leaders Try to Persuade Investors on Accord to Halt Debt Turmoil (Source: Bloomberg)
Euro-area leaders fanned out to persuade investors that last night’s array of crisis-fighting measures can help stop the debt turmoil that’s defied them for more than a year. German Chancellor Angela Merkel said government chiefs had learned from the “systemic effects” in the single-currency area and widened the scope of their bailout fund to allow it to buy the bonds of debt-laden nations, support banks and offer credit lines. The agreement included new aid for Greece that embraced bondholders, prompting Fitch Ratings to say it will put a default rating on Greek debt. The risk is that the package will follow the pattern of previous agreements and eventually disappoint markets. Leaders declined to increase the 440 billion euro ($632 billion) fund, prompting economists from Citigroup Inc. to Goldman Sachs Group Inc. to question whether it’s big enough to insulate Spain and Italy from contagion. The onus also remains on Greece and other cash-strapped nations to keep delivering austerity measures.

Europe agrees sweeping new action on debt crisis
BRUSSELS, July 22 (Reuters) - Euro zone leaders agreed on a second rescue package for debt-stricken Greece that risks triggering a temporary default and will give their financial rescue fund broader powers to try to prevent market instability spreading through the region.
An emergency summit of leaders of the 17-nation currency area on Thursday pledged to conduct a second bailout of Greece with an extra 109 billion euros ($157 billion) of government money, plus a contribution by private sector bondholders estimated to total as much as 50 billion euros by mid-2014.

EU May Accept Greek Default as Crisis Fight Intensifies (Source: Bloomberg)
Euro-area leaders redoubled efforts to end the 21-month sovereign bond crisis as they erected a firewall around Spain and Italy and risked temporary default to lighten Greece’s debt burden. After eight hours of talks in Brussels, leaders announced 159 billion euros ($229 billion) of new aid for Greece late yesterday and cajoled bondholders into footing part of the bill. They also empowered their 440-billion euro rescue fund to buy debt across stressed euro nations after a market rout last week sparked concern the crisis was spreading. The fund can also aid troubled banks and offer credit-lines to repel speculators. Greek, Spanish and Italian bonds rose after officials drew concessions from Germany, the European Central Bank and investors for a twin-track strategy to support Greece and ensure its woes don’t spread. The summit is the latest in a running- battle to resolve the crisis amid calls this week for tougher action from U.S. President Barack Obama and the International Monetary Fund.

Weidmann Says Greek Crisis Package May Weaken Incentive for Budget Reforms (Source: Bloomberg)
Bundesbank President Jens Weidmann said Greece’s second bailout package may weaken incentives for governments to implement solid fiscal policies. “By transferring sizeable additional risks to aid-granting countries and their taxpayers, the euro area made a large step toward a collectivization of risks in case of unsolid public finances and economic mistakes,” Weidmann said in an e-mailed statement yesterday. “That’s weakening the foundations of a monetary union founded on fiscal self-responsibility. In the future, it will be even more difficult to maintain incentives for solid fiscal policies.” European leaders agreed on a 159 billion-euro ($228 billion) plan to stem Greece’s debt crisis and contain a spillover into larger countries such as Spain and Italy late on July 21. The package empowers the region’s 440-billion euro rescue fund to buy debt of distressed euro nations, aid troubled banks and offer credit-lines to repel speculators. Financial institutions will contribute 50 billion euros to the proposal.

European Stocks Rally After EU Agrees on Second Bailout Plan for Greece (Source: Bloomberg)
European stocks climbed this week, snapping two weeks of losses, as euro-region leaders agreed on a second bailout package for Greece in a bid to end the region’s debt crisis. Banks led gains in the Stoxx Europe 600 Index, with National Bank of Greece SA, Alpha Bank SA and Dexia SA all surging more than 18 percent. Renewable Energy Corp. jumped 33 percent, the most since 2008, after its biggest shareholder said the share price is too low for it to consider selling its stake. Electrolux AB, the world’s second-largest appliance maker, plunged 17 percent after earnings missed estimates. The Stoxx 600 advanced 1.9 percent to 272.02 this past week. The gauge has still fallen 6.6 percent from year’s high in February amid speculation Europe’s fiscal crisis will derail the economic recovery and concern U.S. lawmakers will fail to agree on raising the nation’s debt ceiling.

Dollar Falls Against Swiss Franc on Debt Ceiling Impasse; Yen Pares Gains (Source: Bloomberg)
The dollar fell against the Swiss franc as U.S. lawmakers failed to agree on raising the nation’s $14.3 trillion debt ceiling, boosting the odds of a default as soon as next week. The greenback touched a four-month low against the yen as Republicans prepared to force action on a shorter-term extension of the U.S. debt limit than President Barack Obama has requested. The Australian dollar fell as declines in shares curbed demand for higher-yielding currencies. Gains in the yen were limited on speculation Japan will intervene in the foreign- exchange market to stop its advance. “U.S. dollar down, Swiss franc higher is the most obvious trade on the back of a disappointment,” said Imre Speizer, a strategist in Auckland at Westpac Banking Corp, Australia’s second-largest lender. “A half-baked answer would probably also be disappointing to the markets. They’re looking for a solution that’s not just short-term but something long-term and that’s what the ratings agencies have said they want.”

Vietnam’s Inflation Accelerates to 22%, Highest Among Economies in Asia (Source: Bloomberg)
Vietnamese inflation accelerated for an 11th month in July after the central bank cut a key interest rate even as the nation faces the fastest price gains in Asia. Consumer prices rose 22.16 percent from a year earlier, compared with June’s 20.82 percent pace, data released by the General Statistics Office in Hanoi showed today. Prices climbed 1.17 percent from June. The central bank reduced its repurchase rate to 14 percent from 15 percent on July 4 after a spate of increases since November to fight inflation, leading the International Monetary Fund to say the cut may confuse investors. The benchmark VN Index of stocks is down 16 percent this year, on concern price gains will hurt the economy. “The markets were very surprised by the easing,” Prakriti Sofat, a Singapore-based economist at Barclays Capital, said before the release. “It’s too early to go into a full-blown easing cycle given that inflation and inflation expectations remain elevated.”

Canadian Inflation Slows More Than Forecast on Car Discounts, Hotel Rates (Source: Bloomberg)
Canada’s inflation rate slowed more than economists forecast in June as carmakers offered larger discounts, hotel rates declined and gasoline prices eased. The consumer-price index increased 3.1 percent from a year earlier, Statistics Canada said today in Ottawa, following a May increase of 3.7 percent that was the fastest since March 2003. The lowest prediction in a Bloomberg survey of 24 economists was 3.4 percent, with a median forecast of 3.6 percent. The core inflation rate, which excludes eight volatile items such as gasoline, unexpectedly slowed to a 1.3 percent pace in June from May’s 1.8 percent. Economists forecast it would accelerate to 1.9 percent. Bank of Canada Governor Mark Carney said this week that inflation will exceed 3 percent, the top of his target range, in “the short term,” while keeping his key interest rate at 1 percent to foster an economic recovery. Policy makers are weighing rising prices against the risks posed by Europe’s debt crisis and slow U.S. growth.

Canada’s Dollar Rises for Second Week on Central Bank Interest Rate Stance (Source: Bloomberg)
Canada’s dollar rose, touching the strongest level against the greenback in more than three years, as investors took Bank of Canada statements to mean the central bank may become more aggressive with interest-rate increases. Gains by the currency, nicknamed the loonie, were tempered after a government report yesterday showed inflation didn’t increase as much as forecast, quelling speculation the central bank would raise interest rates as soon as September. The currency fell this week against 13 of its 16 most-traded counterparts before a report next week forecast to show the nation’s economy grew at a faster pace in May than April.
“It provided a bit of a counterpoint to what we had earlier in the week in terms of the hawkishness,” said Shaun Osborne, chief currency strategist in Toronto at TD Securities Inc., a unit of Canada’s second-largest bank, by phone from Toronto, referring to the inflation report. “It does suggest there’s no rush to tighten. There’s a chance that we see the Canadian dollar soften up a little.”

Asian Stocks Erase Yearly Drop on Optimism Europe Crisis Easing (Source: Bloomberg)
Asian stocks climbed this week, erasing the regional benchmark index’s loss for the year, as steps by European leaders toward easing the region’s sovereign debt crisis, including fresh aid for Greece, boosted the earnings outlook for Asia’s banks and exporters. Esprit Ltd., a clothier that gets most of its revenue from Europe, jumped 12 percent in Hong Kong through this week. Mitsubishi UFJ Financial Group Inc. (8306), Japan’s biggest publicly listed bank, rose 3.6 percent in Tokyo. Samsung Electronics Co. led technology stocks higher, gaining 2.2 percent in Seoul after Apple Inc.’s profit topped estimates. James Hardie Industries SE (JHX), the biggest seller of home siding in the U.S., rose 4.4 percent after new-homes construction in the nation surged to a five- month high. The MSCI Asia Pacific Index rose 2.5 percent to 139.04 this week, capping the gauge’s fourth advance in five weeks. Last week, the measure dropped for the first time in four weeks after Moody’s Investors Service put the U.S. under review for a possible credit-rating downgrade and European finance ministers declined to rule out a temporary default for Greece.

Stocks off highs, euro up before EU summit
LONDON, July 21 (Reuters) - World stocks held below a 1-1/2 week high  after a disappointing services sector survey in the euro zone while the euro ticked up as investors awaited details of a Franco-German deal on a Greek bailout at a European summit later.
"In the last 48 hours the market has been positioning for another flurry of risk appetite and getting back into the high-yielding currencies like the euro," said Derek Halpenny, currency strategist at Bank of Tokyo-Mitsubishi UFJ.

FOREX-Debt deal supports euro but gains seen limited
LONDON, July 22 (Reuters) - The euro hovered near a two-week high against the dollar and jumped against the safe-haven Swiss franc on Friday after euro zone officials agreed a second rescue package for Greece and steps to stop the debt crisis spreading to other countries.
The package was far more ambitious than anticipated earlier this week and propelled the euro to a two-week high of $1.4440 against the dollar and pushed it up 1 percent against the Swiss franc.

20110725 1050 Global Commodities Related News.

Corn (Source: CME)
US corn futures close higher on renewed concerns about heat reducing output. Hot weather is expected to return to the Midwest by midweek after a heat wave stressed the crop this week. A cool-down early next week won't bring much relief, predicts Jim Gerlach of A/C Trading. "The overall temperature pattern over the next two weeks is hotter than normal," he says. Farmers need favorable conditions to grow a big crop to replenish low inventories. CBOT December corn climbs 12 1/2c to $6.85 1/2 a bushel.

Wheat (Source: CME)
US wheat futures climb on spillover support from a rallying corn market. Its late gains lifted wheat as both grains are used for livestock feed. Nearby corn and wheat futures are trading almost even with each other, unusual as wheat typically hold a premium to corn. That fuels projections that livestock producers will increasingly buy wheat to feed animals instead of corn. "There's obviously some wheat substitution going on," says Jim Gerlach of A/C Trading. CBOT September wheat climbs 15c to $6.92 1/4 a bushel, KCBT September advances 5 3/4c to $7.80 and MGEX September rises 4 3/4c to $8.38 1/2.

Corn rises after losses, wheat steady on supply pressure
SINGAPORE, July 22 (Reuters) - Chicago corn rose half a percent, lifted by bargain-hunting following two straight sessions of losses which were triggered by forecasts of milder weather in U.S. Midwest crop belt.
"The corn market is expected to stay volatile until we have a clear picture of the yields," said Lynette Tan, an analyst with Phillip Futures in Singapore. "Today's strength can be attributed to some bargain-hunting coming in after the decline."

POLL-S.Africa maize crop forecast seen down
JOHANNESBURG, July 22 (Reuters) - South Africa will likely lower its May 2010-April 2011 season maize estimates due to lower yields in some parts of the country, a Reuters survey showed on Friday.
The average estimate of seven trading houses polled by Reuters showed that South Africa's maize output for the 2010/11 season is likely to be 10.86 million tonnes.

Russian grain harvesting picking up, yields high
MOSCOW, July 23 (Reuters) - Russia's grain crop was lower year-on-year as of July 20, due to delays caused by rains at the start of the harvesting period, but the gap was smaller than a week ago, Agriculture Ministry data showed on Friday.
However, average grain yields had risen by 36 percent on year, the data showed, while the weather forecasting service said hot and dry weather favoured the harvesting campaign but worsened crop ripening conditions in the European part of Russia.

US Midwest turns dry as drought worsens in Plains
CHICAGO, July 21 (Reuters) - A historic drought in the southern U.S. Plains intensified in the last week and contributed to dry conditions emerging in the heart of the Midwest crop belt, a weekly U.S. climatologists' report said Thursday.
The weekly U.S. Drought Monitor, produced by a consortium of national climate experts, showed abnormally dry conditions affecting a significant area of the Midwest -- about 10 percent -- for the first time this summer.

Investors Raise Bullish Commodity Bets by Most in Year as Economy Expands (Source: Bloomberg)
Funds boosted bets on rising commodity prices by the most in almost a year on speculation that the global economic recovery will prove resilient. Speculators raised their net-long positions in 18 commodities by 16 percent to 1.26 million futures and options contracts in the week ended July 19, government data compiled by Bloomberg show. That’s the biggest gain since early August. Bullish silver holdings climbed to the highest since May 3. The Standard & Poor’s GSCI Spot Index rose for a fourth straight week, climbing to a one-month high on July 21. Commodity prices have gained even as the U.S. and Europe struggled with fiscal woes. The MSCI World (MXWO) Index of equities gained 2.7 percent last week as European leaders announced a plan to stem the debt turmoil.

North Dakota Soggy Wheat Fields Dimming Prospects for Spring-Crop Harvest (Source: Bloomberg)
Wheat production in North Dakota, the biggest U.S. grower, may lag behind government estimates after unrelenting rains delayed planting and made fields more vulnerable to damage from hot summer weather. Spring wheat, used to make bread and pizza crust, is maturing at the slowest pace in the state since 1995, U.S. Department of Agriculture data show. The agency, which already expects the crop to plunge 16 percent, said it may revise the forecast after another survey of farmers affected by record floods and rain. Analysts and industry officials begin a three- day tour of fields tomorrow. Keith Deutsch, who farms 3,000 acres (1,214 hectares) of crops including spring wheat and durum in Plaza, North Dakota, said he stopped planting on June 10, about 10 days later than usual, because fields were too muddy. About 30 percent of his land went unseeded because crops planted after that date would be in danger of damage from heat and pre-harvest frost.

Drought Status Still In Parts Of East England-UK Agency (Source: CME)
Drought status still applies in parts of Eastern England along with water restrictions for some farmers there, the U.K. Environment Agency said, six weeks after a state of drought was officially declared there by the government. Voluntary irrigation restrictions remain in place for around 180 farmers in the Cambridgeshire Fens and 33 farmers have been instructed to stop water abstraction, the agency said. Lincolnshire, Cambridgeshire, parts of Bedfordshire and Northamptonshire, and West Norfolk remain in drought, it added. East Anglia accounts for 53% of the U.K.'s sugar-beet output, 17% of wheat and 13% of barley production. Anglian Water and Cambridge Water both said there is no threat to public water supply, with enough to last the entire summer. June 10, the U.K.'s farm ministry and the Environment Agency declared drought status in parts of East Anglia after the region received only 47% of its normal total rainfall in May.
The agency said an average of 29 millimeters of rain fell over the last week, approximately half of the expected total rainfall for the entire month of July. However, there are still very low water levels in Suffolk and voluntary irrigation restrictions could be imposed there, the agency added. "If the situation does not improve in the north west of Bury, Suffolk, we may have to impose restrictions on 20 farmers," the agency said. Meanwhile the U.K. Met office forecasts drier weather for most of England and Wales this weekend, although some showers could occur in the north and east of the country.

Eastern Australian Wheat Outlook Deteriorates On Dry Weather-Analysts (Source: CME)
Some wheat growing districts in eastern Australia are starting to deteriorate under the influence of poor growing conditions, raising questions about production and earnings of companies with exposure to crops, analysts reported. Luke Mathews, a farm commodities analyst at Commonwealth Bank of Australia who toured central west New South Wales this week, said recent conditions through the region have been too dry and cold for favorable crop development. Historically, New South Wales produces about 30% of national wheat output but this figure jumped to 40% last crop year when a severe drought limited output in Western Australia. In June, the Australian Bureau of Agricultural and Resource Economics and Sciences forecast wheat production of 26.2 million metric tons this crop year ending March 31, 2012, down 100,000 tons on year, with New South Wales estimated to produce 8.3 million tons or 32% of the national total. Most of the national crop typically is available for export.
Separately, in a review of the outlook for GrainCorp Ltd., Credit Suisse told investors to take profits on the stock due to increasing grain production risk from drier-than-ideal conditions on the east coast. "While crop conditions along the east coast generally remain favorable, drier cold frosty conditions through June and July have increased the prospect of downgrades to area sown and yields," CS analyst Grant Saligari said in a note. The brokerage sees downside risk to Abares' June forecast of 17 million tons of wheat and barley production along the east coast. That could negatively impact GrainCorp's intake into its grain storage system, revenue and earnings, he said.

Incoming FAO Chief Says Brazil Program Offers Model for Fighting Global Hunger (Source: CME)
Brazil's success in combating hunger could provide a template for governments in the growing fight to feed the world, said the director-general elect of the United Nations' flagship food body. The father of Brazil's much-lauded Zero Hunger program, Jose Graziano da Silva, said the world food system is undergoing a fundamental shift as rich and emerging countries alike struggle with the growing problem of food security. "Food consumption and production patterns have become a global issue for all, not only for poor countries," he said. "People used to believe there was a global supermarket that they could go into as long as they had the money -- that's not true anymore." Global food prices have surged to records for the second time in four years, sparking hunger riots in poor countries and pushing 44 million people into poverty, according to World Bank estimates.
Now the Food and Agriculture Organization and other agencies warn such price rises could be the shape of things to come as farmers struggle to produce the estimated 70% more food that will be needed by 2050, even as climate change hampers already sputtering crop-yield growth and biofuels consume a greater proportion of production. Yet as the first Latin American to head the FAO and the architect of Brazil's Zero Hunger program, which has lifted an estimated 24 million people out of poverty since 2003, Mr. Graziano stands in a unique position to bridge the gap between the developed and developing worlds that many argue is the key to solving global hunger. He said his experiences as Brazil's extraordinary minister of food security and fight against hunger have been key to shaping his belief that tackling hunger isn't just about producing enough food, but ensuring the poorest have access to it.
"I am convinced that the Brazilian experience will help a lot to promote food security," he said, speaking by telephone from Santiago, Chile. Zero Hunger integrated 50 policies, involving everything from direct financial aid for small farmers to low-cost restaurants, in order to feed the poorest and alleviate extreme poverty -- the root cause of hunger. "To eradicate hunger is not a goal that a government can achieve; it is society that does this," Mr. Graziano said. "It shows that if you have a basic society already organized then you can organize it into common goals." To do this, he said, the FAO must work more closely with its Rome-based sister agencies -- the World Food Program, the World Food Council and the International Fund for Agricultural Development -- traditionally its rivals.
And as the FAO's own $1 billion annual budget comes under pressure from its expanding remit, Mr. Graziano said it will need to partner more with regional economic commissions and existing regional agencies to meet its goals. "We need to keep in mind that to eradicate hunger is more important than to fight for money," he said. "Donor countries should be more supportive of those partners and institutes that we already have in Africa and join their programs. What happens in Africa will give the answer for the future of the U.N. system." The private sector also has a role to play, he said, though to do so companies must become more transparent in how they operate. Many nongovernmental organizations have long argued that companies like Archer Daniels Midland Co., Bunge Ltd., Cargill Inc. and Louis Dreyfus -- which control an estimated 90% of the world's grain trade -- are responsible for many of the disconnects in the world food system.
"We have very important actors behind the food chain that sometimes we do not see," he said. "It will be impossible to deal with global issues in the food system without the private sector, but at the same time it will be necessary [for them] to be more transparent and accept more global rules." Much rests on Mr Graziano's success -- including, some argue, the future of the FAO itself. Previously one of the least-noted of the U.N.'s agencies, the body has now assumed center stage in the political push to improve world food security. Last month, it was given the task of overseeing a plan by the Group of 20 nations to create a database of global food stocks and output, even as ministers criticized it for not doing enough to solve world hunger.

Weather, Black Sea supplies in focus at grains meet
SINGAPORE, July 22 (Reuters) - Harsh weather in parts of Australia and the United States, rising wheat supplies from the Black Sea region and higher prices will take centre stage at a grains industry conference in Melbourne next week.
Hot and dry weather has threatened U.S. corn yields this week as the crop enters its crucial pollination stage, while lack of rain in some parts of eastern Australia is raising concern over high-protein wheat.

Russian trader sees good Russian exports prospects
MOSCOW, July 21 (Reuters) - Russia, enjoying a healthy crop outlook this year, is already on its way to restoring export volumes, but rival Ukraine will fall short of major buyers' quality needs, a major producer and exporter said.  
Kirill Podolsky, 40, the head and core owner of the Valars Group, which grows Russian and Ukrainian grain for export, told Reuters that Russia's core clients, their confidence rocked by last year's export ban, have returned in search of cheap grain.

India can export 3 mln T sugar in 2011/12- ED & F MAN
MUMBAI, July 21 (Reuters) - India, the world's second biggest sugar producer, can export 3 million tonnes of the sweetener in the 2011/12 season beginning October as it is likely to produce a surplus for the second year in a row, a senior official from trade house ED & F Man said.
Any extra exports from India can help cool sugar prices after lower supplies from top producer Brazil pushed up white sugar futures  to a record high earlier this month

ICE raw sugar rises on Brazil outlook, coffee eases
LONDON, July 22 (Reuters) - Sugar futures rose in early trade, supported mainly by a reduced outlook for Brazilian production while arabica coffee eased towards the prior session's six month low.  ICE raw sugar futures rose in early trade and nearby premiums widened as diminishing prospects for production in Brazil remained the key supportive factor.

China 2011 cotton planting area seen up 5.5 pct -association
BEIJING, Jul 22 (Reuters) - China's cotton planting area this year is expected to rise 5.5 percent from 2010, a tad higher than earlier estimated, the China Cotton Association said on Friday.
Total cotton area in 2011 is estimated at 5.41 million tonnes, up slightly from the association's forecast of 5.4 million tonnes at the start of this month, it said .

Syngenta chemical sales to Ivorian cocoa farmers down
ABIDJAN, July 21 (Reuters) - Swiss agri-chemicals company Syngenta  has seen a fall in its sales of fertiliser and pesticides to Ivorian cocoa farmers by 20-25 percent, hurting its business and boding ill for the upcoming main crop, local director Justin Yobouet said.
In a telephone interview overnight, Yobouet told Reuters the political crisis between December and April, which dried up bank liquidity and shut down cocoa exports for three months, had left cocoa farmers unable to buy enough treatments.

Australia trade bonanza surpasses 140-yr peak in Q2
SYDNEY, July 22 (Reuters) - Australia's export prices jumped past expectations last quarter as insatiable Asian demand for coal and iron ore provided powerful support to incomes, employment and investment in the resource-rich country.
Friday data showed export prices climbed 6.0 percent in the three months to June, handily beating forecasts and a second straight quarter of hefty gains. Prices were up 10.5 percent on June last year, far outstripping import prices which were down 1.0 percent on the year.

Euro Coal-S.Africa prices boosted by strike threat
LONDON, July 21 (Reuters) - European and prompt South African physical coal prices rose by around 50 U.S. cents on Thursday as coal continued to track oil but prices were also slightly boosted by increased buying interests from traders for DES ARA and South African cargoes.
The threat of a strike by South African coal miners is also helping to support coal prices.

S.African unions to strike in coal sector from Monday
JOHANNESBURG, July 21 (Reuters) - Employers in South Africa's coal sector have been served with a strike notice on Thursday after talks with unions the previous day had failed, the chamber of mines said.
The strike is likely to commence on Monday, said Frans Barker, the chamber's negotiator for the coal sector, adding that the industry would not improve its offer any further.

Grande Cache Coal warns on FY sales volume
July 21 (Reuters) - Canadian coal miner Grande Cache Coal Corp  warned that sales volumes for the year would be at the low end of its forecast after first-quarter sales were hit by lower production at a mine and vessel delays at Westshore Terminals ports.
The Alberta-based metallurgical coal miner said sales volumes in the current quarter would be the lowest of the year as volumes at the No. 8 pit were hurt by tight mining conditions.

Thermal coal may hit $130/T yr-end -Indonesian assoc
JAKARTA, July 21 (Reuters) - Thermal coal may reach $130 a tonne at the end of this year after Australia slashed export forecasts, although slowing demand from Japan could keep prices from rising further, the Indonesian Coal Mining Association said on Thursday.
While India has overtaken Japan as Indonesia's largest coal importer, a pick up in domestic consumption in the Southeast Asian country, as well as potential imports from China after the current lull underpinned sentiment, said Bob Kamandanu, chairman of the association.

Oil Falls in New York After U.S. Lawmakers Fail to Reach Debt Agreement (Source: Bloomberg)
Oil declined for the first time in five days on concern a failure to reach a deal on raising the U.S. debt limit may cause the nation to default, threatening the economy of the world's biggest crude consumer. Futures slipped as much as 0.9 percent after House Speaker John Boehner told Republicans that there’s no agreement on a plan for increasing the ceiling before a default threatened for Aug. 2. The impasse has boosted the chance Standard & Poor’s will cut the U.S. credit rating from AAA within three months to 50 percent, the company said July 21. European leaders announced a new rescue package for Greece last week as they sought to halt the spread of the region’s sovereign debt crisis. “It weighs on sentiment about demand prospects in the U.S. and adds to the uncertainty of what is an uncertain time at the moment,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne, who predicts oil will average $113 a barrel in the third quarter.
“The longer-term structural problems in Europe still remain and it’s likely to continue to be a risk for global growth for some time.”

Goldman Sachs prepares to trade physical iron ore
LONDON, July 21 (Reuters) - Goldman Sachs  started to trade iron ore swaps earlier this year and is preparing to enter the physical iron ore market, market sources said.
Growing liquidity levels in the iron ore swaps market attracted many banks to invest in it and some have also decided to set up physical iron ore desks to strengthen their positions.

Citi considers trading physical iron ore
LONDON, July 21 (Reuters) - Citi  said it was considering trading physical iron ore in the future to strengthen its position in the iron ore market.
The bank already trades iron ore swaps.
"We are building our capability in the upstream and downstream business for the purpose of warehousing risks in physical and paper markets," said Citi iron ore swaps trader Habib Esfahanian in an interview on Wednesday.

POSCO warns of slow steel demand, high costs in H2
SEOUL, July 22 (Reuters) - POSCO , the world's No.3 steelmaker, warned of weakening demand growth and persistently high input costs in the second half, after posting a 17 percent fall in quarterly operating profit.
Steelmakers' earnings are set to be further squeezed as record production in China floods the market when demand is crumbling amid tightening monetary policy in China and debt problems in Europe and the United States.

Iron Ore-Shanghai rebar gains for 3rd week, outlook upbeat
SINGAPORE, July 22 (Reuters) - Shanghai rebar futures edged up on Friday and extended their winning streak to a third consecutive week on brisk construction demand in top steel producer China.
Higher steel prices helped boost demand for iron ore, the key steelmaking ingredient, lifting price indexes on Thursday, although traders said some Chinese mills were more keen on buying lower-grade material.

China steel production to remain strong in H2, 2011 -CISA
SHANGHAI, July 22 (Reuters) - Steel output in China, the world's top producer, will stay strong in the second half of this year as investment in infrastructure and social housing underpins demand, the country's steel association said on Friday.
"China will continue to maintain high fixed asset investment for the remainder of the year, with water conservation and social housing construction coming on top, which will boost steel demand," the China Iron & Steel Association (CISA) said in its monthly market report.

POLL-Shutdowns, supply problems to lift nickel this year
LONDON, July 21 (Reuters) - Refinery shutdowns and supply disruptions will lift the price of stainless steel material nickel by more than previously expected this year, but the ramp-up of new mines and restart of others will boost supply and cap prices in 2012, according to a Reuters poll.
The survey of 41 analysts was carried out over the last three weeks, and not all contributors responded to all questions.

POLL-Battery demand to boost lead, surplus weighs on zinc
LONDON July 21 (Reuters) - Rising battery demand will boost lead prices as the market moves towards a deficit, while zinc will rise less than previously forecast under the weight of a large oversupply which will offset demand growth, a Reuters poll showed.
The survey of 41 analysts was carried out over the last three weeks. Not all contributors responded to all questions.
China Zhongjin reopens refining capacity at Shaoguan smelter
HONG KONG, July 22 (Reuters) - Shenzhen Zhongjin Lingnan Nonfemet , China's third-largest zinc producer, reopened refining facilities at its Shaoguan smelter in Guangdong province on July 19 after a nearly 10-month closure linked to water pollution, the firm said on Friday.
The firm will keep the smelting facilities at Shaoguan shut and is upgrading most of those facilities, Zhongjin said in a statement filed with the Shenzhen Stock Exchange.

Steelmakers sue EU over carbon market rules
BRUSSELS/LONDON, July 21 (Reuters) - European steelmakers said they started legal action on Thursday to overturn the way the sector has been included in the European Union's carbon market.
Industry body Eurofer says the rules for the Emissions Trading Scheme (ETS) do not set a fair benchmark for allowing the industry's most efficient 10 percent of factories to get all their pollution permits for free after 2013.

China steel production to remain strong in H2, 2011 -CISA
SHANGHAI, July 22 (Reuters) - Steel output in China, the world's top producer, will stay strong in the second half of this year as investment in infrastructure and social housing underpins demand, the country's steel association said on Friday.
"China will continue to maintain high fixed asset investment for the remainder of the year, with water conservation and social housing construction coming on top, which will boost steel demand," the China Iron & Steel Association (CISA) said in its monthly market report.

Reuters base metals poll 2011/2012
LONDON, July 21 (Reuters) - Following are a selection of analysts' comments on the outlook for aluminium, copper, lead, nickel, tin and zinc prices, gathered as part of the Reuters base metal price survey for 2011 and 2012.  
The poll of 41 analysts was carried out over the past three weeks. All prices are in dollars per tonne.

POLL-Slower growth to curb copper 2011 gains
LONDON, July 21 (Reuters) - Copper will not trade as high this year as previously thought, with analysts downgrading their price forecasts as global growth for base metals slows from 2010, according to a Reuters poll.
However, the metal used in power and construction is seen climbing to $9,995 a tonne next year, buoyed by tight global supplies and hopes of firm demand from top consumer China.  

Jan-April refined copper deficit 69,000 T -ICSG
LONDON, July 21 (Reuters) - The world refined copper market saw a deficit of 69,000 tonnes in the January to April period compared with a deficit of 57,000 tonnes in the same period last year, an industry report showed on Thursday.
The International Copper Study Group (ICSG) said in its latest monthly bulletin that world refined copper output between January and April this year was 6.268 million tonnes and consumption was 6.337 million tonnes.

Freeport profit up but costs, copper price drag
NEW YORK, July 21 (Reuters) - Freeport-McMoRan Copper & Gold Inc's  second-quarter profit doubled, beating Wall Street estimates, but the company said costs are creeping up and it expects to sell less copper in the third quarter.
That outlook, combined with a fall in the copper price on Thursday, sent Freeport shares down 0.8 percent to $55.47 in afternoon trading on the New York Stock Exchange.

Freeport Indonesia, union pay talks enter third day
JAKARTA, July 22 (Reuters) - Negotiations between Freeport McMoran Copper & Gold  and its workers in Indonesia over pay entered the third day on Friday, industry sources said, as the mining giant reported losses of copper and gold after a strike at its massive mine.
Chief executive Richard Adkerson said on Thursday the aggregate impact of production lost during an eight-day strike at the Grasberg mine in Papua province was 35 million pounds of copper and 60,000 ounces of gold.

Collahuasi's key port resumes copper shipments
SANTIAGO, July 21 (Reuters) - Chile's giant Collahuasi copper mine has resumed loading concentrate shipments from its key port and will not longer need to divert deliveries through other sea terminals, the mine operator said on Thursday.
The mine operator said in a statement that a second vessel with copper concentrate departed from the Patache port on Thursday after repairs to its shiploader.

METALS-LME copper steadies, eyes fourth week of gains
SINGAPORE, July 22 (Reuters) - London copper futures steadied on Friday after losses in the previous session as investors weighed progress in efforts in the United States and euro zone to avoid a debt default against a brittle global economic recovery.
Private-sector growth in the euro zone ground to a halt this month and China's factory sector contracted for the first time in a year, surveys showed on Thursday, deepening evidence of a global slowdown.

PRECIOUS-Gold steady after Europe debt deal, US deficit talks eyed
SINGAPORE, July 22 (Reuters) - Gold held steady below $1,600 on Friday, after the euro zone leaders reached an agreement on a Greece bailout plan, but prices are expected to be rangebound as investors keep an eye on the progress made in U.S. debt talks.
Euro zone leaders agreed at an emergency summit on Thursday to give their financial rescue fund sweeping new powers to help Greece overcome its debt crisis and prevent market instability from spreading through the region.

Gold Gains to Record as Failure to Raise Debt Limit Spurs Default Concern (Source: Bloomberg)
Gold for August delivery surged as much as 0.9 percent, extending its rally to a record $1,616.50 an ounce in New York. The metal traded at $1,615 an ounce at 8:19 a.m. in Melbourne. Republicans challenged a presidential veto threat by preparing for a short-term extension of the U.S. debt limit, hardening partisan differences in the face of warnings that a stalemate risks roiling financial markets.

Berge Bulk to charter out 4 mega bulk carriers to Vale
SINGAPORE, July 22 (Reuters) - Privately-held shipping firm Berge Bulk will receive four 388,000-tonne mega ore carriers over the next year and will charter them out to Brazilian mining giant Vale , its chief executive told Reuters on Friday.
China's Bohai Shipbuilding Heavy Industry is expected to deliver the first of Berge Bulk's huge vessels at the end of August, adding more tonnage to an ever expanding global fleet which has led to plummeting freight rates.

Baltic index falls again despite higher fixing activity
BANGALORE, July 21 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, dropped yet again on Thursday as ship oversupply in both the basins negated a pick up in fixing activity.
The index -- which gauges the cost of shipping commodities including iron ore, cement, grain, coal and fertiliser -- fell 3 points, or 0.23 percent, to 1,325 points. The index has traded this year between 1,300 and 1,500 points as ship oversupply outpaces demand to ship commodities.

Asia Dry Bulk-Panamax rates to rebound after sharp sell-off
SINGAPORE, July 21 (Reuters) - Rates for panamax dry bulk carriers on key Asian freight routes are expected to rebound slightly over the next week as intra-Asia coal activity drives a short-term recovery.
In the capesize market, rates are seen lower because of a slowdown in coal shipments to China and India, shipbrokers said on Thursday.

20110725 1048 Soy Oil & Palm Oil Related News.

ITS CPO export up 2.3% to 1,281,653 tonnes for the period of 1~25 Jul 2011.
SGS CPO export up 1.9% to 1,294,428 tonnes for the period of 1~25 Jul 2011.

Soybeans (Source: CME)
US soybean futures finish little changed as traders step to the sidelines while waiting for clarity on weather forecasts. Outlook for next week is mixed bag following unfavorably high temperatures, with cooler, wetter conditions expected early in the week before heat returns. Key period for weather for the soybean crop isn't until August. "People are trying to consolidate positions, waiting to see what the Sunday night weather forecasts will show," says Dave Marshall, an independent commodities broker. CBOT November soybeans edge up 1/4c to $13.88 1/4 a bushel.

Soybean Meal/Oil (Source: CME)
US soy product futures finish slightly higher on spillover support from grain markets. The complex turned higher shortly before the close of trading, following a late surge in corn and wheat prices. Soy markets have taken direction from corn recently as intense Midwest heat has threatened corn output. Weather won't have its biggest impact on the soy crop until August. CBOT December soymeal rises 40c, or 0.1%, to $369.30 per short ton; December soyoil gains 0.1c, or 0.2%, to 57.48c per pound.

Rice (Source: CME)
US rice futures finish down as the market continues to pull back from last week's surge. Market participants booked profits after prices neared 3-week highs on concerns about lower-than-expected plantings and inventories. CBOT September rice falls 11 1/2c to $16.74/hundredweight, putting the week's decline at 25 1/2c.

Palm oil futures up on talk of slowing output
KUALA LUMPUR, July 22 (Reuters) - Malaysian palm oil futures bounced as firmer overseas markets and fresh talk of a dip in production lifted sentiment.
"Market players said that the weather is bringing bad yields, therefore production in July is down slightly," said a trader in Kuala Lumpur.

Argentina lowers soy crop estimate to 48.8 mln T
BUENOS AIRES, July 21 (Reuters) - Argentina's 2010/11 soy production is seen totaling 48.8 million tonnes, down from a previous estimate of 49.6 million tonnes, the Agriculture Ministry said in its monthly crop report on Thursday.
Argentina is the world's No. 1 soymeal and soyoil exporter, as well as its third-biggest soybean supplier. The U.S. Department of Agriculture (USDA) estimates the country's soy output at 49.5 million tonnes this season.

EU rapeseed harvest looking bad, rain slows work
HAMBURG, July 21 (Reuters) - The European Union is facing a sharply lower rapeseed crop in 2011, with falls in Germany and Eastern Europe outweighing better outlooks for crops in France and Britain, traders and analysts said on Thursday.
"The poor crop forecasts in Germany and the east look like being confirmed," a rapeseed trader said. "With harvesting now underway, there are increasing signs improvements in other EU regions are not enough to make up the losses."