Tuesday, July 26, 2011

20110726 1811 FCPO EOD Daily Chart Study.



FCPO closed : 3119, changed : +19 points, volume : lower.
Bollinger band reading : side way range bound.
MACD Histrogram : weakenning, buyer reducing position.
Support : 3100, 3070, 3050, 3020 level.
Resistance : 3150, 3200, 3250, 3270 level.
Comment :
FCPO closed recorded gain with lower volume changed hand while overnight soy oil closed recorded loss and currently rebounding little higher.
Price traded little higher of talks on overall drier weather in planting area and near fasting season could lead to slower production however uncertainty over U.S. debt status and global economy kept gain limited.
Daily chart formed an up doji bar candle closed near middle Bollinger band level after market opened and traded little higher, followed by downward movement tested below support level and recovered upwards recording gain before eased little lower to closed near the high of the day.
Chart reading suggesting a side way range bound market 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.

20110726 1724 FKLI EOD Daily Chart Study.


FKLI closed : 1559 changed : +2 points, volume : higher.
Bollinger band reading : little downside biased.
MACD Histrogram : turned upwards again, reducing exposure.
Support : 1550, 1540, 1530, 1515 level.
Resistance : 1565, 1570, 1580, 1590 level.
Comment :
FKLI closed recorded gain with increasing volume participation doing 2.5 points discount compare to cash market that closed little higher while Asia markets closed mostly higher and European markets currently trading mixed with overnight U.S. market continue to closed weaker.
Most markets traded rebounding higher after U.S. President Barack Obama delivered a prime-time address to Americans, warning that a default on U.S. bond obligations would be a "reckless and irresponsible outcome".
FKLI daily chart formed an up doji bar candle closed near lower middle Bollinger band level after market opened and tested little lower, followed by an upward surge to higher ground and traded range bound after that toward the end to closed off the higher off the day with big portion of the activities consist of rollover activities.
Technical reading continue to call for a near term little downside biased market development testing support and resistance level awaits final result from the U.S. lawmakers decision.
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.

20110726 1645 Malaysia Bank Negara Related News.

July 25 (Bloomberg) -- Malaysia’s central bank said addressing accelerating inflation is “critical” as rising prices would undermine growth prospects.
Price gains in Malaysia are largely due to “very high” energy and commodity costs, Bank Negara Malaysia Governor Zeti Akhtar Aziz told reporters in Kuala Lumpur today. It is important to increase food supply and distribution networks, as well as ensure the availability of raw materials such as fertilizers and feed, she said.
“All these efforts will rein in the amount of the rate at which our inflation will increase,” Zeti  said. “This is something we really want to address so that it doesn’t undermine our future prospects. That is very critical because in countries where inflation rises without having any check, then we can see that it will undermine the sustainability of our future growth.”
Malaysia’s inflation accelerated to the fastest pace in more than two years in June after power tariffs were raised. Bank Negara kept interest rates unchanged at its July meeting and Zeti said last week borrowing costs remain “quite low.”
Higher costs of food and fuel are “very much felt” now, Zeti said today. World food prices climbed to near a record in June as the cost of sugar, meat and dairy increased. An index of
55 food commodities rose to 233.8 points from 231.4 points in May, according to the United Nations’ Food and Agriculture Organization. The gauge reached an all-time high of 237.7 in
February.
“A lot of attention is being focused now on dealing with inflation because this erodes purchasing power,” Zeti said. Malaysia’s consumer prices rose 3.5 percent from a year earlier in June, government data show.
Bank Negara left the overnight policy rate at 3 percent on July 7, after raising the benchmark four times since early March 2010. Consumer prices may climb 2.5 percent to 3.5 percent this year from 1.7 percent in 2010, the central bank said in March.

20110726 1540 Global Market & Commodities Related News.

Asia shares up, no signs of panic over U.S. debt deadlock
HONG KONG, July 26 (Reuters) - Asian shares edged higher on Tuesday, rebounding from Monday's fall, but the dollar slid to a record low against the Swiss franc after a speech by U.S. President Barack Obama gave no sign a deadlock in Washington over raising the debt limit was easing.
Short-term speculators took aim at the dollar after Obama delivered a prime-time address to Americans, warning that a default on U.S. bond obligations would be a "reckless and irresponsible outcome". But he gave no indication a compromise was imminent.

U.S. corn up as dlr falls, focus turns to yields
SYDNEY, July 26 (Reuters) - U.S. corn firmed on Tuesday, recouping some of the previous day's losses on a fall in the U.S. dollar and as traders assessed the yield impact of the recent U.S. heat wave and subsequent cool down.
"Much of the focus is on yields as there will be a few private forecasts out next week and there is a pretty wide range of forecasts on corn yields as well as beans," said Brett Cooper, senior manager, markets, for FCStone Australia.

W.Australia wheat output to double, spreads narrow
MELBOURNE, July 26 (Reuters) - Wheat output in Western Australia, which produces high-quality milling grain, is likely to double to around 9 million tonnes this year following ideal crop weather, boosting prospects of wheat exports from the country in the coming marketing season.
This has narrowed the spread between the nation's west and east coast wheat to A$13 a tonne, down from A$28 last month and A$45 last year when a severe drought hit the region, traders told Reuters at a grains industry conference in Melbourne.

Indian sugar body seeks govt nod for extra exports
NEW DELHI, July 25 (Reuters) - A top industry body in India has sought the government's nod for an additional 500,000 tonnes of sugar exports in the year to September, a demand if met could help ease global prices that are creeping up on supply worries from top exporter Brazil.
"We have written to the food ministry for permission of additional sugar exports as we've got surplus stocks and global prices are good," said Vinay Kumar, managing director of the National Federation of Cooperative Sugar Factories, a producers' body of 250 mills.

New demand for Vietnamese rice lifts prices -paper
HANOI, July 26 (Reuters) - Vietnam, the world's second-largest rice exporter after Thailand, is expected to sign deals for a combined 350,000 tonnes of the grain with Malaysia and East Timor between now and the end of the year, a state-run newspaper reported on Tuesday.
New demand has emerged from Chinese buyers and Philippine private firms which have come to Vietnam to seek rice, the Vietnam Economic Times newspaper said, lifting prices this week.

Russia to keep agricultural subsidies after WTO entry
MICHURINSK, Russia, July 25 (Reuters) - President Dmitry Medvedev said on Monday that Russia will not withdraw state subsidies for farmers if it joins the WTO, which Moscow hopes for later this year after 18 years of accession talks.
Russia is the biggest economy outside the World Trade Organisation and Medvedev's comments underlined its robust stand on free trade rules.

Oil steady as Obama urges compromise to avoid default
SINGAPORE, July 26 (Reuters) - Oil prices held steady on Tuesday as President Barack Obama urged Republican and Democratic leaders to reach a fair compromise on raising the country's debt ceiling to avoid the first default in the history of the United States.
"The market is pretty much convinced that some form of stimulus will come out of the negotiations and we can view this as being bullish for oil," Jonathan Barratt, managing director of Commodity Broking Services.

South Africa coal miners start strike
JOHANNESBURG, July 25 (Reuters) - South African coal workers went on strike on Monday seeking inflation-busting 14 percent wage increases, but power utility Eskom said the stoppage would not have an immediate impact on plants providing electricity to Africa's largest economy.
Hundreds of thousands of workers across the country have downed tools in recent weeks, or are threatening to do so, seeking raises double or triple the 5 percent inflation rate in the mid-year bargaining session known as "strike season".

London copper snaps 4-day retreat as dollar wilts
SINGAPORE, July 26 (Reuters) - London copper futures rose for the first time in five sessions on Tuesday as the dollar slid after U.S. President Barack Obama warned of a deep economic crisis if U.S. lawmakers fail to lift the country's debt limit to avoid a default.
"All eyes are on the U.S. debt situation and after Obama's speech, we saw a big turbulence in the currency market, and that is pushing up copper," said a metals trader in Shanghai.

Japan rolled copper output down on weak auto, chip demand
TOKYO, July 26 (Reuters) - Japan's output of rolled copper product fell 3.2 percent in June from May as strong demand from air-conditioner makers failed to offset weak demand in the auto and chip sectors, preliminary data showed on Tuesday.
The Japan Copper and Brass Association said rolled copper output totalled 70,019 tonnes in June on a seasonally adjusted basis, down 4.2 percent from a year earlier.

Great Western, China firm to build rare earth plant
TORONTO, July 25 (Reuters) - Great Western Minerals  is teaming up with a Chinese rare earth producer to build a rare earth processing plant in South Africa, the company said on Monday.
The separation plant, a joint venture with Ganzhou Qiandong Rare Earth Group Ltd, will be built close to Great Western's Steenkampskraal mine in Western Cape province.

U.S. Steel profit, revenue miss Street
NEW YORK, July 25 (Reuters) - U.S. Steel Corp  posted lower-than-expected quarterly profit and revenue on Monday, although the company did rebound from three consecutive quarterly losses, helped in part by higher selling prices and stable supply costs.
Second-quarter net profit was $222 million, or $1.33 per share, compared with a net loss of $25 million, or 17 cents per share, a year earlier.

Gold steady below record; US debt talks eyed
SINGAPORE, July 26 (Reuters) - Gold held steady below its record high on Tuesday as investors waited to see if President Barack Obama's appeal for an agreement on stalemated U.S. debt talks would provoke signs of progress, while the ongoing euro zone debt crisis lent support.
"President Obama tried to add some confidence on the debt talks, but people still have doubt," said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong.

20110726 1244 Commodities Related News.

July 25 (Bloomberg) -- The condition of the U.S. corn and soybean crops worsened last week as hot, dry Midwest weather increased stress on developing plants, the Department of Agriculture said. About 62 percent of the corn in the top 18 producing states was in good or excellent condition as of yesterday, down from 66 percent a week earlier and 72 percent a year earlier, the USDA said today in a report. About 65 percent of the plants were reproducing, up from 35 percent a week earlier. An estimated 62 percent of the soybean crop got the top ratings, compared with 64 percent a week earlier and 67 percent a year earlier. About 60 percent of the plants were flowering, up from 40 percent a week earlier, the USDA said.

20110726 1117 Global Market & Commodities Related News.

GLOBAL MARKETS: Asia shares up, investors calm on US debt deadlock
HONG KONG, July 26 (Reuters) - Asian shares edged higher on Tuesday, bouncing back from a slide the previous day, after U.S. stocks posted only modest losses in reaction to the worsening deadlock in Washington over raising the debt limit and avoiding a technical bond default.
"The unfolding US debt ceiling drama should add to the headwinds for market risk sentiment, with a potential downgrade of the world's ultimate risk-free asset - the US Treasuries - fuelling more flight to quality into gold and Swiss franc," said currency analysts at Citigroup in a note to clients.

OIL: Crude falls below $99 as U.S. debt talks stall
SINGAPORE, July 26 (Reuters) - U.S. crude futures fell below $99 a barrel on Tuesday as investors avoided riskier assets with United States lawmakers stuck in a deadlock over dueling debt plans, raising the risk of a credit ratings downgrade and national default.
A credit ratings downgrade and a debt default by the United States may derail growth in the economy and pare oil demand in the world's biggest consumer.

NATURAL GAS: Natural gas slips midday as early-week heat eases
NEW YORK, July 25 (Reuters) - Front-month U.S. natural gas futures lost ground midday Monday, pressured by milder Northeast and Midwest weather early this week and record high production despite warmer late week forecasts.
"Even the heat hasn't been enough to tighten the balance. We're still seeing major gains in shale production, and there's just too much supply and not enough demand," a New York-based analyst said, noting temperatures in the East this week have eased from last week's extremes.

EURO COAL:Prices tick 50c up on S.Africa strike
LONDON, July 25 (Reuters) - Prompt Richards Bay physical coal prices rose marginally by 50 U.S. cents on Monday in response to a strike by 150,000 coal miners in South Africa which industry sources expect to last long enough to hit exports .
Although stocks at South Africa's Richards Bay Coal Terminal are currently a comfortable 3.5 million tonnes, stockpiles at mines and RBCT will be exhausted within 3-4 weeks if the strike drags on that long and shipments will have to be delayed or cancelled.

COMMODITIES: Gold hits record, oil slides on U.S. debt
LONDON, July 25 (Reuters) - Gold surged to another record high, while oil and other commodities fell on Monday as the countdown for the United States to reach a debt deal or face a disastrous default drove investors into safer assets.
"There's no doubt we will get a solution," said Rob Montefusco, oil trader at Sucden Financial. "But the markets are nervous, and there's not a great deal of volume going through."

20110726 1031 Global Economic Related News.

Singapore: Singapore inflation accelerates to fastest since January on food, housing
Singapore’s inflation accelerated to the fastest pace since January as food and housing costs increased, sustaining pressure on the central bank to allow the currency to appreciate and contain price gains. The consumer price index rose 5.2% last month from a year earlier, the Department of Statistics said in a statement today. That matched the median estimate of 13 economists surveyed by Bloomberg News. Inflation was 4.5% in May, according to previously reported data. The Monetary Authority of Singapore raised its inflation forecast for 2011 last week, citing higher home rental and transportation costs. (Bloomberg)

Asia: Growth may slow in South Korea and Taiwan on exports
Growth in South Korea and Taiwan likely slowed in the second quarter as the debt crisis in Europe and faltering US growth weighed on Asia’s exports. South Korea’s gross domestic product expanded 3.5% from a year earlier, less than the 4.2% gain in the previous quarter, according to the median estimate in a Bloomberg News survey of 11 economists. Taiwan’s growth likely slowed to 4.5% from 6.55%, a separate survey showed. This week’s reports may add to signs that growth across Asia is cooling after China reported a smaller expansion, India’s industrial production eased and Singapore’s economy contracted. (Bloomberg)

India: India’s central bank signals higher rates for ‘unfinished’ inflation task
India’s central bank said curbing inflation remains an “unfinished task” even as economic growth slows, signaling it may raise interest rates today. “The policy exigency at this juncture warrants continuation of anti-inflationary stance,” the Reserve Bank of India said in a report yesterday before its policy meeting in Mumbai. The RBI cited a high share of production capacity in use, risk of a “wage-price spiral” and “stickiness” in food costs adding to price pressures. The report followed signs of a clash between economists and bond traders over whether the RBI would keep increasing borrowing costs after today’s projected move of a quarter point in the benchmark rate. (Bloomberg)

UK: UK house prices decline 0.1% as downward trend continues, Hometrack says
UK house prices fell for a third month in July and are likely to continue on a “downward trend,” property researcher Hometrack Ltd. said. The average cost of a home slipped 0.1% from June and was down 3.9% from a year earlier, the London-based firm said in an e-mailed report today. London prices increased 0.3% on the month. In a separate report, Rightmove Plc, the UK’s biggest property website, said a growing proportion of consumers expect prices to stabilize over the next 12 months. Home values have fallen this year as weak demand undermined prices, Hometrack said. While the market is now in “broad equilibrium” and the Bank of England’s key interest rate remains at a record low, prices will remain under pressure, it said. (Bloomberg)

EU: Greece rating cut to second-lowest level by moody’s on ‘orderly default’
Greece’s credit rating was cut three steps by Moody’s Investors Service, which said the European Union’s rescue for the debt-laden nation will cause substantial losses for investors and amount to a default. Greece’s long-term foreign currency debt was downgraded to Ca, its second-lowest rating, from Caa1, the company said in a statement in London today. Moody’s said it will reassess the risk profile of any outstanding or new securities issued by Greece after the debt exchange that’s part of the new rescue plan has been completed.. (Bloomberg)

US: Reid, Boehner offer competing plans to raise debt ceiling
House Speaker John Boehner and Senate Majority Leader Harry Reid attacked each other’s plans for Congress to lift the US’s USD14.3trn debt ceiling and avert default before a 2 Aug deadline. President Barack Obama plans to address the nation from the White House at 9 p.m. Washington time on the partisan standoff, the administration announced. Boehner’s two-step plan would raise the US borrowing limit by up to USD1trn and later by USD1.6trn while requiring larger spending cuts. It could be voted on in the House within two days. (Bloomberg)

20110726 1030 Malaysia Corporate Related News.

KNM, Zecon in RM17bn petroleum complex deal
KNM Group and Zecon signed preliminary deals worth RM17bn in total with Gulf Asian Petroleum SB (GAP) to build an integrated petro-chemical complex in Teluk Ramunia, Johor. In a Bursa Malaysia filing yesterday, KNM said that the engineering, procurement, construction and commissioning contracts were for a 150,000/200,000 barrels per day petroleum refinery and 400,000/525,000m tonnes per annum polypropylene unit with a total project value of USD5bn (RM15bn) and also, a RM2bn petroleum storage terminal facility comprising four terminals with a total storage capacity of 2.328m cu m. (Starbiz)

Perwaja to raise RM280m for working capital
Perwaja Holdings is proposing to raise funds for its working capital through a proposed restricted issue of RM280m nominal value 7-year 7% redeemable convertible unsecured loan stocks (RCULS) to Kinsteel at 100% of its nominal value. The conversion price for the RCULS, which is expected to be listed on Bursa, has been fixed at RM1.00 for every one new Perwaja share. Perwaja is also proposing to issue 280m free warrants on the basis of one free warrant for every two existing shares held in Perwaja on an entitlement date to be determined and announced later. The exercise price of the warrant has been fixed at RM1.00 each and they also will be listed on Bursa, said Perwaja. (Bernama)

AirAsia HQ stays in Malaysia
AirAsia headquarters will remain rooted in Malaysia although a representative office will be set up in Jakarta to drive the Asean integration agenda. “Nothing changes. AirAsia's head office is in Malaysia and our listing is on Bursa Malaysia,'' AirAsia group chief executive officer Tan Sri Tony Fernandes said in an SMS from London yesterday. He said the office in Jakarta was “just a regional office to build relationships with the Asean Secretariat (which is also) located in Jakarta (and) to work towards a one Asean sky and aviation authority like Europe's joint aviation authority.'' (StarBiz)

SP Setia to acquire 40% of KL Eco City for RM75m
Property developer SP Setia has proposed to acquire 40% equity interest in KL Eco City SB (KLEC) from Yayasan Gerakbakti Kebangsaan for RM75m. The acquisition will be through the issuance of 19,379,845 new ordinary shares of RM0.75 each in SP Setia at an issue price of RM3.87 per share, SP Setia said in a filing to Bursa Malaysia. The KLEC project is an integrated commercial and residential development. (Bernama)

Petronas unit, Qatargas sign LNG agreement
Petronas LNG Ltd has signed a heads of agreement (HOA) with Qatargas for the latter to supply liquefied natural gas (LNG) to Malaysia for 20 years. Petronas LNG Ltd (formerly known as Asean LNG Trading Company) is a wholly-owned subsidiary of Petroliam Nasional (Petronas). Under the agreement, Qatargas will deliver 1.5m tonnes per year LNG to Malaysia for a period of at least 20 years beginning in 2013. This is equivalent to about 5% of Malaysia’s current annual average domestic natural gas demand, which is growing at a rate of around 6% per annum. (StarBiz)

Daya bags contracts worth RM27.6m
Daya Materials has bagged two contracts valued at EUR6.47m or RM27.6m of supply and delivery agreements with Petronas Methanol (Labuan) SB. The contracts were won via competitive bidding through its wholly-owned subsidiary Daya Secadyme SB. The two agreements are to supply methanol synthesis catalyst and desulphurisation catalyst to Petronas Methanol. The methanol synthesis catalyst will be delivered by November 2011 and the desulphurisation catalyst by September 2011. (StarBiz)

20110726 1025 Global Market Related News.

Asian Stocks Rise as Canon Leads Gains (Source: Bloomberg)
Asian stocks rose as forecasts for higher earnings at companies from Canon Inc. (7751) to Kao Corp. (4452) countered concerns the deadlock on the U.S. debt ceiling could derail the global economic recovery. Canon, the world’s largest camera maker, led exporters higher as it advanced 2.8 percent after boosting its profit forecast on higher sales. Kao, a maker of household products, jumped 4 percent after raising its full-year earnings forecast on higher sales in Asia. BHP Billiton Ltd. (BHP), the world’s No. 1 mining company by market value, advanced 0.5 percent as copper and gold prices rose. “Japanese companies begin in earnest with reporting April-June earnings this week, and we got a good start,” said Ryuta Otsuka, a strategist at Toyo Securities Co. in Tokyo. “Investors increasingly expect good earnings, and that will probably encourage them to buy stocks in advance.”

Reid Offers Rival Debt Plan as Obama Prepares to Address Nation (Source: Bloomberg)
House Speaker John Boehner and Senate Majority Leader Harry Reid attacked each other’s plans for Congress to lift the U.S. $14.3 trillion debt ceiling and avert default before an Aug. 2 deadline. President Barack Obama plans to address the nation from the White House at 9 p.m. Washington time on the partisan standoff, with Boehner responding in a separate appearance. Boehner’s two-step plan would raise the U.S. borrowing limit by up to $1 trillion, with larger spending cuts, and require a new vote on more reductions before an additional $1.6 trillion debt-limit increase next year. It could be voted on in the House within two days. Obama and Senate Democrats oppose a short-term extension, which could lead to another debt standoff next year.

Dollar, U.S. Futures Decline as Obama Warns on Debt; Asian Stocks Rebound (Source: Bloomberg)
The dollar weakened against most of its major peers while U.S. equity-index futures fell as President Barack Obama warned the nation’s burgeoning debt may do “serious” damage to the economy. Asian stocks rebounded from the biggest drop in two weeks. The U.S. currency slid 0.4 percent against the Swiss franc and weakened 0.3 percent against the yen as of 10:10 a.m. in Tokyo. Standard & Poor’s 500 Index futures lost 0.3 percent. The MSCI Asia Pacific Index gained 0.4 percent, following a 1 percent drop yesterday. Oil slid 0.2 percent in New York, while gold traded near a record high. Obama called on lawmakers to put politics aside to reach a deal on a “balanced approach” after Republicans and Democrats attacked each others’ plans for the lifting of the nation’s $14.3 trillion debt ceiling. Canon Inc. and Kao Corp. paced gains among Japanese companies that forecast improving earnings, while in the U.S., Broadcom Corp. and Baidu Inc. rallied in extended trading on the outlook for sales.

Obama Urges Compromise as Debt May Cause ‘Serious’ Damage to U.S. Economy (Source: Bloomberg)
President Barack Obama warned that the nation’s burgeoning debt threatens to do “serious” damage to the economy and that Congress must compromise to address future deficits. “If we stay on the current path our growing debt could cost us jobs and do serious damage to the economy,” Obama said in a prime-time address from the White House. He called on lawmakers to put politics aside to reach a deal on a “balanced” approach and blamed the current stalemate on a group of Republicans in the House who are insisting on budget cuts and no tax increases.

U.S. Can Avoid Default at Least Until September, Wells Fargo’s Silvia Says (Source: Bloomberg)
The U.S. government can avoid a default for at least a month after the Aug. 2 deadline to lift the debt ceiling set by the Treasury Department, said John Silvia, chief economist at Wells Fargo Securities LLC. “The Federal Reserve and the Treasury can work together to generate enough cash probably for the next two or three months to avoid any kind of automatic default on the Treasury debt,” Silvia, who is based in Charlotte, North Carolina, said in an interview on Bloomberg Television’s “In the Loop” with Betty Liu. “There’s a way of getting around this issue for at least another month or two.” Political party leaders are preparing dueling plans for raising the U.S. debt ceiling, unable to break a partisan stalemate over how to tackle the nation’s $14.3 trillion debt by Aug. 2. That is the date when the Treasury Department says its borrowing authority will end.

Boehner’s Two-Step Plan to Seek $1 Trillion, $1.6 Trillion Debt Increases (Source: Bloomberg)
House Speaker John Boehner said his two-step plan to raise the U.S. debt ceiling and cut and cap discretionary spending is a “responsible, common-sense proposal that meets our obligations to the American people and preserves the full faith and credit” of the U.S. The Republican plan would allow a debt-limit increase of $1 trillion, to be followed later by about $1.6 trillion, while larger spending cuts would be required. “This plan is far from perfect, but it adheres to our principles of ensuring that spending cuts are greater than any debt hike and it includes no tax increases,” Boehner, an Ohio Republican, said in a statement.

Pimco’s El-Erian Says U.S. Vulnerable to Downgrade Even If Default Avoided (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, 52, 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.”

Treasuries Drop After Pimco’s El-Erian Says U.S. May Lose Rating (Source: Bloomberg)
Treasuries fell, pushing 30-year yields to a two-week high, after Mohamed A. El-Erian at Pacific Investment Management Co. said the U.S. may lose its AAA debt rating even if lawmakers reach a plan to avoid a default. The long bond led declines. El-Erian, whose firm runs the world’s biggest bond fund, said a compromise on raising the borrowing limit this close to the Aug. 2 deadline will leave the rating “extremely vulnerable.” President Barack Obama and House Speaker John Boehner are in a stalemate over how to increase the ceiling so the U.S. can keep servicing its debt. The Treasury will sell $99 billion of notes this week. “It’s all about what’s going on in D.C.,” said Jason Rogan, director of U.S. government trading at Guggenheim Partners LLC, a New York-based brokerage for institutional investors. “It’s the concerns over no resolution to the debt ceiling issue. Every time we get new concerns over it, the long bond underperforms. The longer we wait, the greater the chance of a downgrade of U.S. debt.”

Reid Offers Rival Debt Plan as Obama Prepares to Address Nation (Source: Bloomberg)
House Speaker John Boehner and Senate Majority Leader Harry Reid attacked each other’s plans for Congress to lift the U.S. $14.3 trillion debt ceiling and avert default before an Aug. 2 deadline. President Barack Obama plans to address the nation from the White House at 9 p.m. Washington time on the partisan standoff, with Boehner responding in a separate appearance. Boehner’s two-step plan would raise the U.S. borrowing limit by up to $1 trillion, with larger spending cuts, and require a new vote on more reductions before an additional $1.6 trillion debt-limit increase next year. It could be voted on in the House within two days. Obama and Senate Democrats oppose a short-term extension, which could lead to another debt standoff next year.

No endgame in sight as US default looms
WASHINGTON, July 25 (Reuters) - A bitterly divided Congress set the United States on a collision course with financial markets on Monday as Democrats and Republicans pursued rival plans unlikely to generate the broad support needed to avert a catastrophic and unprecedented debt default.
With an Aug. 2 deadline little more than a week away, lawmakers have steadfastly refused to compromise and talks have once again collapsed in finger pointing and acrimony.

Caterpillar profit misses, hit by costs; stock off
NEW YORK, July 22 (Reuters) - Heavy machinery maker Caterpillar Inc  disappointed Wall Street with a second-quarter earnings miss on Friday, hurt by higher costs, and its shares fell 5.5 percent, dragging down the U.S. stock market.
The maker of equipment used in mining and construction also said economic growth in the United States and other developed economies was weaker than expected and reported signs of a slowdown in China.

U.S. Stocks Extend Declines as Lawmakers Wrangle Over Federal Debt Plans (Source: Bloomberg)
U.S. stocks retreated, pulling the Standard & Poor’s 500 Index down from a two-week high, as Republicans and Democrats wrangled over separate plans to raise the federal debt limit and avoid a government default. Phone companies led losses among 10 groups in the S&P 500, losing 1.4 percent. Kimberly-Clark Corp. slipped 2.1 percent after reporting a decline in second-quarter profit, hurt by higher commodity prices. E*Trade Financial Corp. jumped 5.6 percent after agreeing to hire Morgan Stanley to explore a sale. The S&P 500 fell 0.6 percent to 1,337.43 at 4 p.m. in New York after slumping as much as 1 percent. The index rallied to within 1.4 percent of a three-year high last week. The Dow Jones Industrial Average lost 88.36 points, or 0.7 percent, to 12,592.80 today.

Singapore Inflation Accelerates to Fastest Since January on Food, Housing (Source: Bloomberg)
Singapore’s inflation accelerated to the fastest pace since January as food and housing costs increased, sustaining pressure on the central bank to allow the currency to appreciate and contain price gains. The consumer price index rose 5.2 percent last month from a year earlier, the Department of Statistics said in a statement today. That matched the median estimate of 13 economists surveyed by Bloomberg News. Inflation was 4.5 percent in May, according to previously reported data. The Monetary Authority of Singapore raised its inflation forecast for 2011 last week, citing higher home rental and transportation costs. The island’s currency has appreciated to unprecedented levels since the central bank said in April it would allow further appreciation to tame price gains, the third monetary tightening in a year.

Economic Climate Still ‘Challenging’: GIC (Source: Bloomberg)
The Government of Singapore Investment Corp., the city’s sovereign wealth fund, said the investment environment remains “challenging” as developed countries recover and emerging markets pose inflation risks. GIC, manager of more than $100 billion of Singapore’s reserves, said in its annual report today that it boosted investments in emerging economies to tap their potentially higher returns and improved macroeconomic fundamentals. It expanded the number of countries it invests in as well as its range of investment tools, it said. “The sustainable recovery of the developed economies remains uncertain, while the emerging economies face challenges in restraining inflationary pressure and currency appreciation,” Chief Investment Officer Ng Kok Song said in an e-mailed statement today that accompanied the report. “GIC will continue to respond nimbly to this challenging environment.”

Emerging-Market Stocks Fall on U.S. Debt Talks; Shanghai Composite Tumbles (Source: Bloomberg)
Emerging-market stocks declined, with the benchmark index falling for the first time in a week, as a stalemate over raising the U.S. debt limit raised concerns of a default that could threaten the global recovery. The MSCI Emerging Markets Index retreated 0.4 percent to 1,148.18 as of 4:28 p.m. in New York. The Shanghai Composite Index tumbled 3 percent, the most since January, after a high- speed train collision killed at least 36 people. Mexico’s IPC index dropped 0.8 percent, Taiwan’s Taiex Index lost 0.9 percent and Brazil’s Bovespa index slid 0.5 percent. “It seems like there’s going to be a deal” on the debt ceiling, said Uri Landesman, who oversees about $1 billion as managing general partner of New York-based hedge fund Platinum Partners LLP. “But if there isn’t and the U.S. defaults, it’s going to be cataclysmic, and emerging-markets are the high-beta play on the S&P right now.”

India Central Bank Says Taming Inflation Is Unfinished Task as Pressure Persists (Source: Bloomberg)
India’s central bank said curbing inflation remains an “unfinished task” even as economic growth slows, signaling it may raise interest rates today. “The policy exigency at this juncture warrants continuation of anti-inflationary stance,” the Reserve Bank of India said in a report yesterday before its policy meeting in Mumbai. The RBI cited a high share of production capacity in use, risk of a “wage-price spiral” and “stickiness” in food costs adding to price pressures. The report followed signs of a clash between economists and bond traders over whether the RBI would keep increasing borrowing costs after today’s projected move of a quarter point in the benchmark rate. Swap traders last week bet that Governor Duvvuri Subbarao was approaching the end of India’s fastest credit tightening since 1974.

Reliance Profit May Have Peaked as Ambani Struggles to Increase Gas Output (Source: Bloomberg)
Reliance Industries Ltd., India’s biggest company by market value, may struggle to increase profit after reporting its best quarter in more than three years as natural gas production at the country’s largest field declines.

Bank of Korea’s Deputy Kim Sees Rebound Even as Debt Crisis Clouds Outlook (Source: Bloomberg)
Bank of Korea Deputy Governor Kim Jae Chun said the economy’s growth will pick up in the second half and exports are “pretty strong,” leaving room to concentrate on quelling inflation. “A possible economic slowdown is not in our list of policy concerns,” Kim, 57, said in an interview in his office in Seoul yesterday. “The economy will pace up in the second half on a year-on-year basis.” Kim’s comments underscore the likelihood that Asian policy makers will focus on inflation even as export growth moderates and Europe’s debt crisis clouds the outlook for the world economy. Chinese Premier Wen Jiabao said July 12 that stabilizing prices remains his nation’s top priority.

Growth May Slow in S. Korea, Taiwan on Exports (Source: Bloomberg)
Growth in South Korea and Taiwan likely slowed in the second quarter as the debt crisis in Europe and faltering U.S. growth weighed on Asia’s exports. South Korea’s gross domestic product expanded 3.5 percent from a year earlier, less than the 4.2 percent gain in the previous quarter, according to the median estimate in a Bloomberg News survey of 11 economists. Taiwan’s growth likely slowed to 4.5 percent from 6.55 percent, a separate survey showed. This week’s reports may add to signs that growth across Asia is cooling after China reported a smaller expansion, India’s industrial production eased and Singapore’s economy contracted. The forecast moderations in Taiwan and South Korea may not be enough to discourage policy makers from raising interest rates during the second half to counter inflation.

Yields Fall to 14-Month Low Versus U.S. as Growth Slows: Australia Credit (Source: Bloomberg)
Australian government bond yields are trading at their lowest levels in 14 months relative to those in the U.S., underscoring concern that a slowdown in the world’s fastest-growing economy may spread. The benchmark 10-year yield fell six basis points to 4.92 percent yesterday, or 193 basis points more than similar- maturity Treasuries, the least since May 2010 and down from 234 as recently as June 1. Australia’s bonds have returned 1.5 percent in July, including reinvested interest, more than the U.S.’s 1 percent, Bank of America Merrill Lynch indexes show. Australian government borrowing costs have plunged as investors cut growth expectations, with economists forecasting a report tomorrow will show second-quarter inflation slowed to less than half the pace of the prior period. The central bank has kept rates unchanged since November, saying this month that a “multi-speed” economy and strong currency were blunting a mining boom.
Investors also bought Australian debt as U.S. lawmakers were deadlocked over the  $14.3 trillion debt limit.

U.K. House Prices Decline 0.1% as Downward Trend Continues, Hometrack Says (Source: Bloomberg)
U.K. house prices fell for a third month in July and are likely to continue on a “downward trend,” property researcher Hometrack Ltd. said. The average cost of a home slipped 0.1 percent from June and was down 3.9 percent from a year earlier, the London-based firm said in an e-mailed report today. London prices increased 0.3 percent on the month. In a separate report, Rightmove Plc, the U.K.’s biggest property website, said a growing proportion of consumers expect prices to stabilize over the next 12 months. Home values have fallen this year as weak demand undermined prices, Hometrack said. While the market is now in “broad equilibrium” and the Bank of England’s key interest rate remains at a record low, prices will remain under pressure, it said. A separate report from Markit Economics showed Briton’s finances weakened in July at the fastest pace since March 2009.

Moody's warns Greek default almost certain
ATHENS, July 25 (Reuters) - Moody's cut Greece's credit rating further into junk territory on Monday and said it was almost certain to slap a default tag on its debt as a result of a new EU rescue package.
It was the second rating agency to warn of a default after euro zone leaders and banks agreed last week that the private sector would shoulder part of the burden of a rescue deal that offers Greece more cash and easier loan terms to keep it afloat and avoid further contagion.

Greece Rating Cut to Second-Lowest Level by Moody’s on ‘Orderly Default’ (Source: Bloomberg)
Greece’s credit rating was cut three steps by Moody’s Investors Service, which said the European Union’s rescue for the debt-laden nation will cause substantial losses for investors and amount to a default. Greece’s long-term foreign currency debt was downgraded to Ca, its second-lowest rating, from Caa1, the company said in a statement in London today. Moody’s said it will reassess the risk profile of any outstanding or new securities issued by Greece after the debt exchange that’s part of the new rescue plan has been completed. “The combination of the announced EU program and the debt exchange proposals by major financial institutions imply that private creditors will experience substantial losses on their holding of Greek government bonds and this is something we need to reflect in the rating,” Moody’s senior analyst Sarah Carlson said in an interview.

Dollar Falls to March Low Versus Yen, Record Against Franc as Obama Speaks (Source: Bloomberg)
The dollar fell against the yen to the lowest level since March 17 as U.S. President Barack Obama addressed the nation on the economy. The greenback dropped to as low as 77.98 yen before trading at 78.15 at 10:10 a.m. in Tokyo.

FOREX-Dollar hits all-time low vs CHF on debt issues
LONDON, July 25 (Reuters) - The dollar hit a record low versus the Swiss franc and a four-month trough against the yen on Monday as the impasse over raising the U.S. debt ceiling unsettled financial markets and fueled demand for perceived safe-haven currencies.
The Swiss franc was the biggest beneficiary of the demand for safe havens, pushing the dollar nearly 2 percent lower to an all-time low of 0.8021 franc on trading platform EBS . The euro  fell the same amount versus the Swiss currency.

20110726 1024 Global Commodities Related News.

Corn (Source: CME)
US corn futures ended lower on expectations that moderating weather conditions would benefit the crop. Weekend rains gave the corn crop a boost after a Midwest heat wave last week. Temperatures turn less threatening this week, according to meteorologists. Spillover selling from losses in crude oil adds pressure, traders note. Market participants were reducing risk amid concerns about lack of an agreement to raise the US debt ceiling. Commodity funds sold an estimated 10,000 corn contracts, a sizable amount. CBOT December corn slides 11c to $6.74 1/2 a bushel.

Wheat (Source: CME)
Wheat futures finished lower on spillover pressure from losses in corn and soy markets. Increasing expectations for Russia's grain exports added pressure, as they indicate there will be less demand for US wheat, traders say. Yet, prices finish above session lows due to late short covering. Market participants were buying back some previously sold positions at CBOT, traders note. CBOT September wheat slips 3 3/4c to $6.88 1/2 a bushel; KCBT September drops 9 1/2c to $7.70 1/2; MGEX September slumps 7 3/4c to $8.30 3/4

Rice (Source: CME)
Rice futures closed sharply higher on concerns about output. Hot weather in the southern US continues to stress the crop, heightening concerns about a sharp drop in plantings this year. Traders will assess crop-condition data from USDA in a weekly report due at 4 pm EDT. Last week, the good-to-excellent rating dropped one percentage point to 60%, and more declines are possible, traders say. CBOT September rice ends up 41 1/2c at $17.15 1/2 per hundredweight. The contract matched a nearly 3-year high hit two weeks ago.

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.

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.

US spring wheat tour changes tack to count yields
CHICAGO, July 22 (Reuters) - The annual spring wheat tour that kicks off next week will be different from past years.
With the crop planted late due to rains and floods, volunteer scouts from the grain industry on the expedition this year will have to alter the way they calculate yields.

Egypt satisfied with Russia new crop wheat
MOSCOW, July 22 (Reuters) - Egypt's main state wheat buyer said on Friday he was satisfied with the quality of Russian new crop grain and saw no obstacles to Russian participation in future purchase tenders.
"The answer is 'yes' within the scope of what we have seen of the new crop," Nomani Nomani, vice chairman of the General Authority for Supply Commodities (GASC), told Reuters when asked if he was satisfied with crop quality.

U.S. corn, wheat post falls on debt talks, forecast rain
SYDNEY, July 25 (Reuters) - U.S. corn futures fell two percent, 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.
Australia's GrainCorp buys GermanMalt, affirms guidance
SYDNEY, July 25 (Reuters) - Australia's GrainCorp  has agreed to buy GermanMalt GmbH & Co. for an enterprise value of 58 million euros ($83 million), in its first foray into the European market to help meet brewers' needs.
"The acquisition diversifies our earnings base and creates growth opportunities in the region," GrainCorp Managing Director Alison Watkins said in a statement on Monday.

Rains bring relief to Argentine wheat -gov't
BUENOS AIRES, July 22 (Reuters) - Rains brought much-needed moisture to Argentine wheat growing areas this week, the government said in its weekly crop report on Friday.
Argentina, a leading wheat grower, exports most of its crop to neighboring Brazil. Dry weather was stressing young plants in southern parts of the Buenos Aires province, the top wheat-growing region.

Speculators bullish on CBOT corn, soybeans
CHICAGO, July 22 (Reuters) - Large speculators raised their net long stake in Chicago Board of Trade soybean and corn futures and options for the second week in a row as a heatwave descended upon the U.S. Midwest, stressing the developing crops and casting a bullish spell on grain markets.
The Commodity Futures Trading Commission's weekly Commitments of Traders report showed that the noncommercial traders, a category that includes hedge funds, nearly doubled  their net long stake in soybeans to the biggest level in almost three months.

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.

Russia Grain Union Sees 2011 Harvest At 89 Mln-92 Mln Tons (Source: CME)
Russia is likely to harvest 89 million-92 million metric tons of grain this year, Grain Union Vice President Alexander Korbut said at a press briefing in Moscow. Korbut said the situation in the fields was developing favorably. The country's south expected a good harvest, the Black Earth regions would likely to have a higher harvest than last year, and Siberia would harvest the same amount of grain as last year. The Wheat harvest, according to Korbut, is expected at 58 million tons. Deputy Prime Minister Viktor Zubkov said July 14 the Russian government now expected this year's grain harvest at 90 million tons, up from 85 million tons as estimated earlier. Last year's harvest fell to 60.9 million tons from 97.1 million tons in 2009 due to the summer drought.

Kazakhstan Sees 2011 Grain Harvest At 14.5-15M Tons, Up On Year (Source: CME)
Kazakhstan is likely to harvest this year 14.5-15 million metric tons of grain, up from the 12.2 million tons harvested in 2010, Agriculture Minister Asylzhan Mamytbekov said, as quoted by the agriculture ministry's press service. The agriculture ministry said in mid-March Kazakhstan would plant grain for this year's harvest on 15.9 million hectares, 500,000 hectares less than last year, which would enable the country to harvest sufficient amount of grain to satisfy domestic requirements and to export seven million metric tons of grain the 2011-2012 marketing year, compared with six million tons in the previous marketing year.

Corn, Soybean Prices Drop Most in Three Weeks on Beneficial U.S. Weather (Source: Bloomberg)
Corn and soybean futures slumped the most in three weeks on speculation that rain and cooler weather will bolster crop development in the U.S., the world’s biggest producer. Some northern Midwest fields and parts of the South got as much as 4 inches (10 centimeters) of rain in the past three days, Commodity Weather Group LLC said in a report. Commodity prices eased after Congress and President Barack Obama failed to reach a deal to raise the U.S. debt ceiling. “Cooler and wetter weather in the central U.S. brought temporary relief to heat-stressed crops,” Greg Grow, the director of agribusiness at Archer Financial Services Inc. in Chicago, said in a telephone interview. “The saga of U.S. debt- ceiling talks encourages traders to reduce risk exposure.”

Drought Withers Smallest Hay Crop in Century (Source: Bloomberg)
The smallest U.S. hay crop in more than a century is withering under a record Texas drought, boosting the cost of livestock feed for dairy farmers and beef producers from California to Maryland. The price of alfalfa, the most common hay variety, surged 51 percent in the past year, reaching a record $186 a short ton in May, government data show. Hay and grass make up about half of what cattle eat over their lifetimes, so parched pastures are forcing ranchers to find alternative sources of feed, pushing some spot-market corn to the highest ever. Farmers in Oklahoma and in Texas, the biggest producer of hay and cattle, may harvest only one crop from alfalfa and Bermuda grass this year, compared with three normally, said Larry Redmon, a state forage specialist at Texas A&M University. Cattle that usually graze on fields through September or October are instead being sold to feedlots, where they are confined in pens and eat mostly corn.

USDA Leaves 2011 Food Inflation Forecast Unchanged At 3%-4% (Source: CME)
The U.S. government left its food price forecast for 2011 unchanged from a month earlier, but still 3% to 4% higher than last year due to high commodity prices and strong global food demand. The increased food prices are being led by meat, particularly beef, which is forecast 7% to 8% higher this year, and pork, which is forecast to climb 6.5% to 7.5%. Both forecasts are unchanged from a month earlier. Meanwhile, overall food inflation for 2012 was also left unchanged at 2.5% to 3.5%, the U.S. Department of Agriculture said in its monthly analysis of the federal government's consumer price index for food. By comparison, food prices climbed only 0.8% in 2010, the lowest increase since 1962, the USDA said. Prices at the grocery store and restaurants have been driven higher this year by surging grain prices, which increase the cost of meat production, as well as higher energy prices and a rebounding global economy.
While inflationary pressures are expected to hold steady or even diminish in 2012, the USDA said that retailers have yet to fully pass on cost increases to consumers. "Price levels in 2012 will hinge significantly on weather conditions in the American Midwest during the remainder of July and into August and September 2011," the government said in its report. Beef and pork prices hit record highs this spring, thanks to the higher feed costs and strong export demand. A severe drought in the Midwest would likely send the price of corn and soybeans surging, along with other commodities. Some economists have said the government's overall food inflation forecast of 3% to 4% this year is too conservative, as many elements within the food price index are higher. As of June, food prices were 3.7% above year-earlier levels. The USDA said June beef prices were 8.2% higher than a year earlier, while pork was 8.5% higher. June egg prices were 11.1% above a year earlier despite falling 1.3% during the month.
Beef prices are expected to climb another 6% to 7% in 2012, while pork is forecast to climb 4% to 5%. Fruit and vegetable prices in 2011 are forecast 3.5% to 4.5% higher. Processed fruits and vegetables, however, have not seen the same inflationary pressures, the USDA said. The government lowered its 2011 forecast for processed fruits and vegetables to 1.5% to 2.5%, the only category in the survey that changed from the prior month.

Sugar at contract high on Brazil outlook, coffee steady
LONDON, July 25 (Reuters) - Sugar futures rose to contract highs in early trade, supported by diminishing crop prospects from top producer Brazil, while coffee futures were steady, as risk averse investor sentiment weighed on the commodity complex. Cocoa was slightly lower, digesting Friday's sharp losses.
ICE raw sugar futures built on last week's gains, with October  hitting a fresh contract high of 31.68 cents a lb, as consistent downward revisions for production in Brazil underpinned prices.

India's 2010/11 cotton output revised to 32.5 mln bales
MUMBAI, July 25 (Reuters) - Cotton output in India, the world's second-largest producer, has been revised to 32.5 million bales for 2010/11 year ending in September against 31.2 million bales estimated earlier, A.B Joshi, chairman, Cotton Advisory Board (CAB), said on Monday.
Cotton sowing is lagging due to late arrival of monsoon rains in western India, but soon it will accelerate and in 2011/12 area may surpass the previous year's level, he said.

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 hectares, up slightly from the association's forecast of 5.4 million hectares at the start of this month, it said in a statement published on its web site (www.china-cotton.org).

Sugar delays to ease as Santos port modernizes
SANTOS, Brazil, July 22 (Reuters) - Delays in sugar loading at Santos are expected to ease as Latin America's No. 1 port modernizes, port and shipping executives said on Friday.
Santos, Brazil's leading sugar port, has seen delays in sugar loading stretching to several weeks, before the peak of the harvest over the last two years. The delays in the world's top sugar producer and exporter have been a factor contributing to a rally in sugar futures prices to near four-month peaks.

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 fell sharply after the market's historic rally, and Indian exports will rule fiber prices in the 2011/12 season (August/July), a chief executive said.
Joe Nicosia, president and chief executive of Allenberg Cotton Co, said the market will be closely looking at demand after record prices decimated demand and deflated prices in late spring.

Vietnam's July coffee exports drop 38.2 pct y/y-govt
HANOI, July 22 (Reuters) - Vietnam exported an estimated 55,000 tonnes, or 917,000 bags, of coffee in July, down 38.2 percent from the same month last year, the government said on Friday, in line with market expectation.
The lower volume following strong sales thanks to high prices earlier this year is another indication to add to trader assessments that Vietnam has been running out of stocks and that more delays or defaults could emerge.

India Lifts 2010-11 Cotton Output Estimate To 32.5 Mln Bales (Source: CME)
India increased its cotton output estimate for this crop year by 4.1% as farmers have started releasing held-over stocks, raising the prospects of more shipments from the world's second-largest producer and exporter. The country's cotton output is likely to be 32.5 million bales, up from an earlier estimate of 31.2 million bales, Textile Commissioner A.B. Joshi told reporters after the review meeting of the government-run Cotton Advisory Board. He said farmers had held back raw cotton stocks in anticipation of higher prices, but now want to offload them ahead of the new crop season. The country produced 29.5 million bales of 170 kilograms each in the last crop year that ended Sept. 30, 2010. India has already allowed shipments of 6.5 million bales this marketing year through September. The higher production estimate may further depress global prices. December cotton futures on the IntercontinentalExchange closed at 98.64c/lb Friday and are down more than 50% from the 2011 peak at $2.27/lb in early March.
Joshi said that in 2010-11, India's total cotton supply including imports and carryover stocks, is estimated at 37.05 million bales, while total demand is likely to fall to 31.8 million bales. "There are symptoms of slowdown in demand and some accumulation of yarns," he said. Earlier, the board estimated demand at 33 million bales and total supply at 35.75 million bales. Spinning mills in India are unable to sell their produce locally at a profit as prices have fallen sharply in the past four to five months after they bought their main raw material, cotton, at high prices. Local cotton prices have halved to about INR31,000/356 kg from INR62,500/356 kg in March with cash-strapped textile mills halting purchases. The board, which consists of representatives from government bodies, growers, industry and trade associations, also raised its stock estimate at the end of 2010-11 to 5.25 million bales from 2.75 million bales, said Joshi.
He said the recent progress of monsoon rains augurs well for cotton sowing in the past few days and the total area next year may overtake this year's acreage of 11.1 million hectares. Poor rains during early July raised concerns over sowing in the largest-producing state Gujarat, but since then the crop outlook has improved on a pick-up in rains. July is normally the crucial month for sowing as it gets more than a third of the seasonal rain. If availability rises, exports may be higher in 2011-12, Joshi said.

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.

Colombia's new coal port delayed til H2 2012-firm
PAIPA, Colombia, July 22 (Reuters) - Colombia's 30-million-tonne-a-year Puerto Brisa port has been delayed to the second half of 2012 for further discussions with local indigenous communities, its president said.
The world's No. 4 coal exporter expects to double coal output over the next decade, and coal players complain that the lack of access to quality infrastructure is cutting exporter profits and raising transport prices.

Crude Oil Falls a Second Day in New York on U.S. Debt Ceiling Stalemate (Source: Bloomberg)
Oil fell for a second day in New York as President Barack Obama warned that the nation’s burgeoning debt threatens to do “serious” damage to the U.S. economy, the world’s largest crude consumer. Futures dropped after Obama called on lawmakers to put politics aside to reach a deal on a “balanced approach” after Republicans and Democrats attacked each others’ plans for the lifting of the nation’s $14.3 trillion debt ceiling. An Energy Department report tomorrow may show U.S. crude stockpiles dropped for an eighth week, according to a Bloomberg survey. “It’s a sentiment impact where people suddenly decide they want to be in safe-haven type assets and away from risk type exposure and of course oil is a risk exposure,” said David Lennox, a resource analyst at Fat Prophets in Sydney, who predicts oil in New York will average $115 this year. “A stronger move will have to be predicated on the U.S. showing more signs of recovery and especially the U.S. consumer getting into their vehicles.”

UAE's EMAL gets approval for $4.5 bln investment
DUBAI, July 24 (Reuters) - Abu Dhabi-based Emirates Aluminium (EMAL) has received approval from its board for a $4.5 billion investment that will almost double the aluminium smelter's annual capacity, the company said on Sunday.
Capacity will rise to 1.3 million metric tonnes on completion of its planned phase II project, the state-owned firm said.

German aluminium output rising, outlook good-lobby
HAMBURG, July 25 (Reuters) - German aluminium output of 428,369 tonnes between January and May was up 5.3 percent from the same period a year earlier, industry association GDA said on Monday.
"The outlook for aluminium remains optimistic because customer industries are also continuing to develop positively," said GDA managing director Christian Wellner in a statement.

Iron Ore-Spot prices firm; traders wait for signs
SHANGHAI, July 25 (Reuters) - Spot iron ore prices stood steady on Monday as traders looked for clearer direction on the market at the beginning of the week, amid increasing reluctance to buy the raw material at rising prices and easing Shanghai rebar futures.
Steelmakers in the world's top producer China have been on track to replenish stocks for two weeks, buoyed by strong steel production and rising steel prices, while gains have slowed since last week as flat steel product mills have faced weaker demand and were thus reluctant to accept rising offers.

China imported iron ore stocks rise in week ending July 22
BEIJING, July 22 (Reuters) - Inventories of imported iron ore at major Chinese ports rose 610,000 tonnes this week to end Friday at a record 94.65 million tonnes, data from industry consultancy Mysteel showed.
Port stocks have now been rising for 11 consecutive weeks, with Chinese steelmakers still producing at close to record levels in order to take advantage of a nationwide cheap housing programme.

SSAB sees growing demand for niche steel products
STOCKHOLM, July 22 (Reuters) - Swedish steelmaker SSAB  beat second-quarter earnings forecasts, helped by demand for its specialist products in the United States and Europe, and said the recovery had further to run.
SSAB said it expected a dip in the third quarter due to maintenance stoppages, higher raw materials costs and uncertainty about the European economy, but the underlying trend remains strong.

Fortescue backs drive to monthly iron ore pricing
PORT HEDLAND, Australia, July 25 (Reuters) - Fortescue Metals , Australia's third-largest iron ore miner, on Monday backed a drive led by larger rivals BHP Billiton   and Rio Tinto   to introduce monthly pricing for international sales, saying it would add transparency and benefit buyers and sellers.
"The shorter the pricing, the greater the transparency," Fortescue Chief Executive Neville Power told Reuters on Monday, adding that if pricing did go monthly industry-wide, "it would be a positive outcome."  

Strike at Chile's Escondida drags into fourth day
ANTOFAGASTA, Chile, July 25 (Reuters) - A strike at the world's biggest copper mine, Chile's Escondida, entered a fourth day on Monday with no sign of a solution to the latest labor dispute fueling global supply fears.
Union leaders at the mine -- majority-owned by BHP Billiton  -- say bosses have refused to resume talks, while unionists at state giant Codelco and other private mines have threatened to join the protest if strikers are sacked.

METALS-Copper cushioned by dollar, fundamentals
LONDON, July 25 (Reuters) - Copper came under selling pressure on Monday as investors fretted about debt default in the United States, but the resulting lower dollar and strong supply and demand fundamentals helped cushion losses.
Aluminium  used in transport and packaging touched $2,611.75, its highest since June 15 as London Metal Exchange inventory data signalled higher demand.

PRECIOUS-Gold hits record with U.S. debt talks deadlocked
LONDON, July 25 (Reuters) - Gold prices hit record highs on Monday after negotiations to lift the U.S. debt ceiling hit stalemate over the weekend, raising fears over a possible default and boosting the appeal of bullion versus U.S. assets like Treasuries and the dollar.
Democrats and Republicans in Congress are bitterly divided over plans to cut the U.S. deficit, a necessary move before the debt ceiling can be raised.

Gold Surges to Record as U.S. Debt Impasse Threatens Default, AAA Rating (Source: Bloomberg)
Gold futures climbed to a record $1,624.30 an ounce as U.S. lawmakers failed to reach an agreement on raising the federal debt limit, boosting demand for the metal as a haven investment. Republicans and Democrats are preparing separate plans to raise the debt limit to avoid a default as early as Aug. 2. Greece’s credit rating was cut three notches by Moody’s Investors Service. Europe’s debt woes drove gold to all-time highs in euros and pounds last week. “Gold is feeding off the uncertainty of the debt negotiations,” Matthew Zeman, a strategist at Kingsview Financial in Chicago, said in a telephone interview. “Gold is in a ‘can’t lose’ situation with the debt negotiations because regardless of the outcome, the dollar is going to suffer.”

Gold hits record, oil slides on U.S. debt impasse
SINGAPORE, July 25 (Reuters) - Gold surged to a record high and oil and other commodities fell investors flocked to safer assets with time quickly running out for U.S. lawmakers to reach a debt deal, raising the prospects for a disastrous default.
"A lot of it is undoubtedly fear from traders on concerns about the U.S. Treasuries and the dollar outlook," said Ben Westmore, commodities economist at National Australia a Bank.

Capesizes hurt Baltic index, panamaxes firm
BANGALORE, July 22 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, fell for an 11th straight session on Friday as a firm panamax market could not make up for weakness in the capesizes.
The index, which gauges the cost of shipping commodities including iron ore, cement, grain, coal and fertiliser, fell 2 points, or 0.15 percent, to 1,323 points. The index has traded this year between 1,300 and 1,500 points as ship oversupply outpaces demand to ship commodities.

Drybulk weakness may lead to covenant pressure -Wells Fargo
July 22 (Reuters) - Fundamental weakness will likely drive continual cash flow erosion and covenant pressure within the dry bulk shippers, Wells Fargo Securities said, and lowered its rating on four stocks.
The shipping sector has been hit hard in the last two years as demand to ship commodities has lagged the supply of vessels.

20110726 1023 Soy Oil & Palm Oil Related News.

Soybeans (Source: CME)
US soybean futures stumble to 2-week lows as improved crop weather and external market pressure weighs on prices. Investors reduced exposure in riskier grain markets as cooler, wetter crop conditions and ongoing concerns about the US debt ceiling's impact on the global economy encouraged traders to cut back, analysts say. Slower export demand added further weakness.

Soybean Meal/Oil (Source: CME)
Soy-product futures followed soybeans lower, with slower demand and spillover pressure from crude oil futures attracting sellers. CBOT November soybeans fell 1.2% to $13.72/bushel while December soymeal dropped 1.7% to $363.10/short ton and December soyoil declined 0.9% to 56.95c/pound.

Palm oil down on concerns over U.S. debt default
KUALA LUMPUR, July 25 (Reuters) - Malaysian palm oil futures dropped as traders booked profit after pricing in firm exports and eyed growing concerns of a U.S. debt default that may slow global economic growth and demand.
"There has been some selling pressure in commodity markets but not in a panic stricken way as yet. Good exports should hold the palm oil market up temporarily," said a trader with a foreign commodities brokerage.