Friday, July 29, 2011

20110729 1830 FCPO EOD Daily Chart Study.


FCPO closed : 3096, changed : -20 points, volume : higher.
Bollinger band reading : side way range bound little upside biased.
MACD Histrogram : weakening, buyer reducing position.
Support : 3070, 3050, 3020, 2970 level.
Resistance : 3100, 3150, 3200, 3250 level.
Comment :
FCPO closed recorded loss with increasing volume transacted while overnight soy oil closed recorded substantial losses and currently trading little higher.
Looming U.S. debt limit problem and anticipation of higher stock plus slower export lead FCPO price to test lower and closed below 3100 support level.
Daily chart formed another doji bar candle (6 consecutive) clear below middle Bollinger band level after market opened lower, traded side way within 34 points range bound market and closed near opening price.
Chart reading still suggesting a side way range bound little upside biased market development testing support and resistance level unless weather condition become clearer or demand improved substantially.
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.

20110729 1743 Regional Markets EOD Daily Chart Study.

DJIA chart reading :
little downside biased with possible pullback correction.


Hang Seng chart reading : side way range bound.



KLCI chart reading : downside biased.

20110729 1733 FKLI EOD Daily Chart Study.


FKLI closed : 1546.5 changed : +0.5 points, volume : lower(both July or August).
Bollinger band reading : downside biased with possible pullback correction.
MACD Histrogram : turned upward, seller taking profit.
Support : 1540, 1530, 1515, 1500 level.
Resistance : 1550, 1565, 1570, 1580 level.
Comment :
FKLI closed 1 tick higher with decreasing volume exchanged while August month contract is doing 10 points discount compare to cash market that closed little weaker. Asia markets closed mostly in negative territory and European markets currently trading recording loss with overnight U.S. market closed recorded loss again.
Near deadline U.S. debt problem, called off by U.S. lawmakers to vote on a Republican plan for raising the nation’s debt limit, possible downgrade of Spain rating in Europe and avoiding exposure over the weekend lead market to trade in lower ground.
Daily chart formed an up doji bar candle closed near lower Bollinger band level after market opened lower, moved range bound tested resistance and support level and closed little above opening price.
Chart reading still suggesting a downside biased market development with possible pullback correction 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.

20110729 1701 Golden Era of Rock Star Traders Concludes - George Soros by Bloomberg

Golden Era of Rock Star Traders Concludes - George Soros by Bloomberg
Source: www.bloomberg.com

Money can be dull. There are only so many denominations, and only so many ways to make it. What’s interesting are the people who risk it, and over the past four decades no one has made more of a spectacle of risk than George Soros, whose Quantum fund famously bet $10 billion that the Bank of England would be forced to devalue the pound. Soros earned $1 billion on that trade and incalculable legend points.

Now, Soros is going to stop risking other people’s money. By the end of this year, his Soros Fund Management LLC will have no outside customers for the first time in 42 years. The shift concludes a process that began in 2000, when Soros stopped accepting new investments, Bloomberg Businessweek reports in its Aug. 1 issue.

Four years later he turned management of the company over to his sons Robert and Jonathan. On July 26, after months of debate, the three men decided to return the less than $1 billion of outsiders’ money Quantum still oversees and convert the firm into a family office to manage almost $25 billion for George, his family, and foundations.

There’s a two-word explanation for closing what was once one of the world’s biggest hedge funds and consistently one of the best-performing --- with returns of about 30 percent annually in its first 30 years: Dodd-Frank. The law requires hedge funds to register with the Securities and Exchange Commission and provide information about customers, employees and assets. By returning outsiders’ money, Soros Fund Management escapes that rule and the loss of privacy that goes with it.
‘Unfortunate Consequence’

“An unfortunate consequence of these new circumstances is that we will no longer be able to manage assets for anyone other than a family client as defined under the regulations,” the brothers wrote in a letter to investors.

The move completes the 80-year-old Soros’s transformation from speculator to philanthropist statesman, a role he has said he first imagined for himself as a Hungarian émigré studying at the London School of Economics & Political Science after World War II. In the past 30 years, Soros said he’s given away more than $8 billion to promote democracy, foster free speech, improve education, and fight poverty around the world.

Soros’s retreat from the stage is a marker of just how much the industry has changed --- and how much he’s changed the industry --- since he opened his first fund in 1969 with $4 million from investors and his own savings. Back then, hedge funds catered mainly to wealthy individuals and managers stayed out of the limelight. No one even bothered to track the number of hedge funds, which differ from mutual funds because they bet on falling as well as rising prices of stocks and other securities and can concentrate their money in a handful of positions.
Economic Trends

Soros -- a “macro” investor who profits from broad economic trends rather than focusing on individual stocks or bonds --- was among the first managers to give the industry visibility. The world was his casino, and after his 1992 bet against the pound, investors and governments were forced to pay attention. Whenever a currency plunged, there were rumors Soros had been betting against it. Mahathir Mohamad, the Prime Minister of Malaysia, called him a moron for profiting from the ringgit’s decline in 1997, even though Soros was buying the currency at the time.

In January 1998, Soros went to South Korea and met with President-elect Kim Dae-Jung. His conclusion after the meeting was that the country needed a reorganization of its entire economy. If South Korea made such changes as strengthening its banks and letting foreigners buy controlling stakes in its companies, he said Quantum would invest up to $1 billion in the country. South Korean stocks jumped 7 percent over the next three days.
Russian Government

Later that year, Soros published an essay in the Financial Times advising the Russian government to devalue the ruble by 15 percent to 25 percent. Investors took that as a sign he was shorting the currency, and they reckoned they should bet on its decline, too. Ruble-denominated bond prices plunged, and four days later the government defaulted on its debt. Soros lost more than $1 billion. He had owned Russian stocks and bonds--he wasn’t shorting them. His investment in Russia had a higher purpose. “He felt that if he was a beacon of investment in Russia, others would follow, and the capital inflows would transform the society,” Robert Johnson, a former Soros managing director, told author Sebastian Mallaby for his book “More Money than God.” “There’s a philanthropic side of George that started to interfere with the speculative one.”
Swaggering Exploits

Thanks in part to Soros’s swaggering exploits and returns, by 2000 hedge funds were hot. Managers such as Julian Robertson, Louis Bacon, and Paul Jones posted huge returns betting on Japanese stocks, U.S. bonds, and European currencies. Some graced the covers of national magazines and money poured into the industry from pension funds, sovereign wealth funds, endowments, and other institutions. Hedge fund assets climbed to about $1.9 trillion as of mid-2008.

After Lehman Brothers Holdings Inc. (LEHMQ) went bankrupt in September 2008, hedge funds saw more than a quarter of their assets disappear as markets cratered and clients pulled their money out. While 1,471 funds went out of business, the slump didn’t last long: Less than three years later, industry assets have rebounded to $2 trillion, surpassing the 2008 peak.

What hasn’t bounced back is blind trust in the wisdom of rock star managers. With the federal government demanding they answer questionnaires as long as 80 pages as part of the registration process, managers are getting much more scrutiny.
‘Paternalistic Trend’

“It’s a growing paternalistic trend,” said Don Putnam, managing director of Grail Partners, “made worse by overregulation and the controversy good investors like Soros attract in the market.”

Investors are paying more attention, too. As recently as 2007, managers might write a quarterly letter to discuss investment themes and report performance. Now funds including John Paulson’s Paulson & Co. provide weekly performance updates; clients want to know what’s going on. Even star managers complain that prospective customers can spend a year asking questions and doing research before handing over any cash.

Other managers have decided to go private, too, thus sidestepping SEC scrutiny. Stanley Druckenmiller, who worked for Soros for 12 years as his chief investment strategist, kicked investors out of his Duquesne Capital Management LLC last year.

In March, Carl Icahn, 75, gave back $1.76 billion, telling investors in a letter that “given the rapid market run-up over the past two years and our ongoing concerns about economic outlook, and recent political tensions in the Middle East, I do not wish to be responsible to limited partners through another possible market crisis.”
Taking Risks

Soros didn’t begin taking risks by investing other people’s money. Part of his appeal is that his biography is full of them. He was born in Budapest in 1930. When the Nazis invaded the city in 1944, Soros’s father arranged for false papers for his family and friends that identified them as non-Jews. Most of the people his father helped survived the war, Soros wrote in an essay published in the New York Review of Books in late June.

“Instead of submitting to our fate we resisted an evil force that was much stronger than we were --- yet we prevailed,” he wrote. “Not only did we survive, but we managed to help others.”

He added that the experience gave him an appetite for risk. “This left a lasting mark on me, turning a disaster of unthinkable proportions into an exhilarating adventure,” Soros wrote.
Philosophical Studies

Arriving in New York at age 26, Soros landed a job as a trader with Wall Street brokerage F.M. Mayer. He planned to work for five years -- enough time, he reckoned, to save $500,000 and return to England, where he would pursue his philosophical studies. Instead he stayed, eventually moving to Arnhold & S. Bleichroeder Advisers, where he set up the predecessor to the Quantum fund in 1969. He started his own firm in 1973.

In late 1988, after 19 years of 30-plus percent returns, Soros hired Druckenmiller from mutual fund company Dreyfus to oversee day-to-day trading so he could focus on philanthropy. While Druckenmiller was the architect of the $10 billion British pound trade, which forced the currency out of the European exchange-rate mechanism, Soros served as his coach, encouraging him to plow more money into the bet. Druckenmiller told Bloomberg News last year that Soros taught him an important lesson: When you’re sure you’re right, no trade is too big.
Technology Bubble

After losing money when the technology bubble burst in 2000, Soros involved more people within the firm in making investment decisions and turned over some money to outside managers. Druckenmiller left, together with another star manager, Nicholas Roditi. Soros said he would settle for a 15 percent annualized return, about half what the fund had posted since its start. Four years later, he made his sons deputy chairmen.

Soros hardly walked away. It was his money and, according to people who asked not to be identified because the fund is private, he has no tolerance for losses. His flagship fund has posted only one down year in its 42-year history. Soros isn’t a yeller, yet his brusqueness could prove to be even more disconcerting than a tirade, say former employees.

After an early argument with Druckenmiller over strategy, Soros gave in, saying he’d move to London and stop meddling. His parting words, according to Druckenmiller: “Now we’ll find out whether I’ve just been in your hair too much or whether you really are inept.”
Subprime Mortgage Crisis

In 2007, when his son Robert was the chief investment officer and the subprime mortgage crisis was spreading, Soros took over the management of the then $17 billion fund. Quantum returned 32 percent that year, with much of the gains coming from a rise in Chinese and Indian equities. The next year the fund gained 8 percent, when hedge funds on average dropped about 19 percent. Between 1973, when Soros started his own firm, and the end of 2010, Quantum made $35 billion in profit, net of fees, according to an estimate from LCH Investments.

Soros has been outspoken about the causes of the financial crisis. In an interview at the World Economic Forum in Davos, Switzerland, in January 2008, he blamed former Federal Reserve Chairman Alan Greenspan for “keeping interest rates too low too long” and “ignoring dangers in the housing market.”

In an interview with Bloomberg News later that year, he traced the crisis to 1980, when President Ronald Reagan and U.K. Prime Minister Margaret Thatcher came to power. During that time, borrowing ballooned and regulation of banks and financial markets became less stringent, he said.
Performance Has Suffered

More recently, Soros weighed in on his fund’s management again, according to two people familiar with the firm. This time it was to tell his sons that Keith Anderson, the chief investment officer, should go.

Anderson is the third trader, including Soros’s son, to leave that job since 2000. While Anderson was popular with employees, the fund’s performance has suffered in the past 18 months. In the first half of this year, Quantum lost about 6 percent, after gaining 2.5 percent in 2010. Other macro funds have returned 5.6 percent over the past 18 months, according to Hedge Fund Research, a firm that compiles industry data.

For almost as long as he’s been making money, Soros has been giving it away. He opened his first foundation, the Open Society Fund, in 1979, when he was managing about $100 million and his personal wealth had climbed to about $25 million. His initial focus was on funding scholarships for black university students in South Africa and providing stipends for Eastern European dissidents to study in the West.
Dissident Literature

Soros now funds a network of foundations that operate in 70 countries around the globe, everywhere from the U.S. to Montenegro to South Africa and Haiti. His money has paid for Xerox machines that helped spread dissident literature in Soviet-era Hungary, for training Burmese journalists reporting on the military dictatorship’s 2007 crackdown, and for drug treatment and early parole programs in Baltimore.

“Soros has been tremendously generous, and he’s been a courageous risk-taker in his philanthropy,” said Aaron Dorfman, executive director of the National Committee for Responsive Philanthropy in Washington. Caroline Preston, a writer at the Chronicle of Philanthropy, said Soros “has built a reputation as someone who tackles complex social issues and funds projects even if they have a low chance of success.”

Initially, Soros didn’t want his philanthropic foundations to survive him.

“The fate of other institutions has taught me that they tend to stray very far from the founders’ intentions,” he wrote in the New York Review essay. He changed his mind, though, deciding that closing the foundations “would be an act of excessive selfishness.”

Giving up philanthropy seems to be harder than backing away from managing other people’s money.

“My success in the financial markets has given me a greater degree of independence than most other people,” Soros wrote. “This obliges me to take stands on controversial issues when others cannot, and taking such positions has itself been a source of satisfaction.”

20110729 1523 Global Market & Commodities Related News.

Stocks drop, dlr slips as US debt deadlock rages on
HONG KONG, July 29 (Reuters) - Asian stocks extended losses and the dollar slid to a four-month low against the Japanese yen on Friday after U.S. lawmakers failed to make progress in breaking a deadlock over raising the debt ceiling and avoiding a default.
Urgent efforts to avoid an unprecedented debt default hit another snag when some rebel Republican lawmakers refused to back a budget deficit plan proposed by their own congressional leaders, who put off a vote scheduled for Thursday night.

US corn, wheat tick up on weak dollar/short covering
SYDNEY, July 29  (Reuters) - U.S. wheat and corn futures firmed in early Asian trading, propped up by a weaker dollar as markets fret over U.S. debt talks and on short covering.
Chicago Board of Trade (CBOT) corn for December delivery , the actively traded harvest month contract, added 0.33 percent to $6.88-1/2, after shedding 0.5 percent on Thursday on improved crop weather in the United States.

Australia cotton output seen at record high in 2011/12 - NAB
SYDNEY, July 29 (Reuters) - Australia, the world's third largest cotton exporter, could produce a record crop for the second straight year in 2011/12 as high global prices and ample water supplies encourage crop planting, National Australia Bank (NAB) said on Friday.
The bank said the country's cotton industry could produce 4.8 million bales in 2011/12, assuming normal yields following a just harvested record 4 million tonnes in 2010/11.

US corn values a rollercoaster ride until harvest
CHICAGO, July 29 (Reuters) - U.S. food processors, ethanol plants and livestock feeders are still waging a bidding war over the last kernels of the 2010 corn harvest even as they wait for combines to harvest the first corn fields this summer in the South.
Historically high prices suggest that the cash markets, which handle billions of dollars a year worth of the grain, are in a state of flux. According to U.S. government stocks estimates, there should be more corn available.

U.S. 2011 spring wheat yield at 41.5 bu/acre
FARGO, N.D., July 28 (Reuters) - The U.S. spring wheat crop this year is expected to be the smallest since 2008 after rains and flooding delayed or prevented planting across the northern U.S. Plains, scouts on an annual crop tour said on Thursday.
The downgrade comes at a time when global supplies of high-protein wheat are tight following a series of production problems around the world, including in Australia, Europe and Canada, the biggest spring wheat producer and exporter.

Prices, demand drive agribusiness results
NEW YORK, July 28 (Reuters) - Higher grain prices and strong demand are boosting the fortunes of North American companies with exposure to agricultural markets, a bright spot in an earnings season that has been marked by disappointing results from a range of manufacturers.
Fertilizer makers, food processors and seed producers all reported strong quarterly results on Thursday and sounded upbeat about their outlook for the rest of the year.

Brazil's competitiveness as sugar origin erodes
LONDON, July 28 (Reuters) - Brazil's competitive advantage as a sugar producer is eroding due partly to a strong currency, but the global market will continue to depend on it, and so its rising costs will lead to higher sugar prices, a senior economist said.
Analysts estimate production costs of the world's top sugar producer and exporter at 16-22 U.S. cents a lb, up from 12 cents a few years ago. New remote mills have the highest costs and established mills the lowest.

Colombia's sunny spell boosts coffee flowering
BOGOTA, July 28 (Reuters) - Colombia's secondary coffee harvest in 2012 will rebound as the provinces of Narino, Cauca, Tolima and Huila are starting to have improved flowering thanks to bright sun this year, growers and exporter said.
Colombia, the world's top producer of high-quality arabica, saw output cut in the previous two years due to bad weather and a tree renovation program, slashing production by about a third of its norm.

Argentina corn output seen up at 21 mln T-exchange
BUENOS AIRES, July 28 (Reuters) - Argentina's 2010/11 commercial corn crop has seen better than expected yields, prompting the Buenos Aires Grains Exchange to increase its harvest forecast to 21 million tonnes from 20 million.
More than 91 percent of the crop has been harvested, the exchange said in its weekly crop progress report released on Thursday.

Smaller barley harvests wind down in Germany, France
LONDON, July 28 (Reuters) - Barley harvests in both Germany and France are beginning to wind down with smaller crops in both countries following spring droughts although overall EU production is likely to be little changed, crop analysts said on Thursday.
In Germany, the top EU producer, the barley harvest is likely to be all-but completed at the weekend with both crop size and quality expected to be down on the year.

EU cleared 382,000 tonnes wheat exports this week
PARIS, July 28 (Reuters) - The European Union this week granted export licences for 382,000 tonnes of soft wheat, taking the total since the beginning of the 2011/12 season to 977,000 tonnes, official data showed on Thursday.
This compared with 927,000 tonnes of wheat export licences cleared in the corresponding period last season. The new season started four weeks ago.

IGC raises forecasts for 2011/12 wheat, maize crops
LONDON, July 28 (Reuters) - The International Grains Council on Thursday raised its forecast for global wheat production in 2011/12 with the crop outlook improving in the European Union, Russia and the United States.
The IGC put 2011/12 global wheat production at 674 million tonnes, up from a previous forecast of 666 million tonnes and well above the prior season's 651 million when the worst drought in decades devastated crops in Russia.

Brent holds above $117; investors eye U.S. debt deal
SINGAPORE, July 29 (Reuters) - Oil was heading for its first monthly rise in three as investors focused on forecasts of improved demand despite jitters over an elusive debt deal in the United States to avert a default and a credit downgrade.
"The population across the globe is getting fed up with the sabre-rattling," said Ben Le Brun, analyst at CMC Markets. "It's just a lot of uncertainty. Hopefully we'll see something during the weekend that will resolve this issue."

US Gulf oil producers cut some output on Don
HOUSTON, July 28 (Reuters) - U.S. Gulf of Mexico producers reduced oil and natural gas output on Thursday as Tropical Storm Don churned northwest toward the Texas Coast, where it could make landfall by the weekend.
Although Don has cut a small 7 percent of U.S. Gulf of Mexico crude output and 3 percent of natgas output according to government data by midday Thursday, analysts said the storm's relative weakness and position in the Gulf of Mexico made it unlikely to cause prolonged production outages or energy infrastructure damage.

Shell, BP say high oil price erodes demand
LONDON, July 28 (Reuters) - High crude prices have dented global oil demand in the second quarter, oil majors said this week, in a trend likely to be repeated in the second half of the year if prices stay high.
Oil majors BP , Royal Dutch Shell  and ConocoPhillips  all said they witnessed signs of demand rationing in the second quarter, which saw Brent oil prices  spiking to $127 per barrel, close to their all-time high of $147.

OPEC oil output nears 3-year high in July -survey
LONDON, July 28 (Reuters) - OPEC oil output is expected to rise in July to its highest in almost three years, mainly due to extra oil from Saudi Arabia and Angola, a Reuters survey found on Thursday.
Supply from all 12 members of the Organization of the Petroleum Exporting Countries is expected to average 30.07 million barrels per day (bpd) this month, up from a revised 29.81 million bpd in June, the survey of oil companies, OPEC officials and analysts found.

."China steel output growth seen slowing in H2 -CISA chairman
SHANGHAI, July 29 (Reuters) - Steel production growth in China, the world's top producer, may decelerate in the second half of this year, as weak demand for flat steel products will see little improvement, the head of the country's steel association said.
Demand for flat steel products, used by automobile and house appliance makers, will see little growth in the latter half of the year, resulting in slower growth of overall steel production compared with the first half, Zhu Jimin, chairman of the China Iron & Steel Association (CISA) said in an internal meeting.

Copper up on Chilean supply problems; debt worries eyed
SHANGHAI, July 29 (Reuters) - Copper rose to its highest in more than three months on continued Chilean supply problems but debt woes in the United States and Europe are expected to limit price rises.
"What's happening in Escondida is keeping prices firm," said Jonathan Barratt, managing director of Commodity Broking Services. "It seems that the strike will be extended. There has been a rash of labour action that has kept copper supply tight and causing concerns."

Teck profit lifted by copper, coal price gains
TORONTO, July 28 (Reuters) - Teck Resources Ltd  said on Thursday its second-quarter adjusted profit rose 91 percent, largely due to higher coal and copper prices.
However, the company cautioned it expects full-year coal sales to be at the low-end of its forecast range. Teck has been forced to trim its coal production forecasts this year on multiple occasions, due to operational hurdles, labor disputes, adverse weather and other issues.

Brazil Q2 Vale iron output rises 6 pct yr/yr
RIO DE JANEIRO, July 28 (Reuters) - Brazilian mining giant Vale  said on Thursday iron ore output rose 6 percent from the year before as the company boosted production at most of its mines in Brazil.
Iron ore production rose to 80.3 million tonnes compared to 75.9 million tonnes in the same period a year before.

Copper to target new records from Sept -Macquarie
LONDON, July 28 (Reuters) - Copper could reach record prices near $11,000 a tonne before year-end as easing credit conditions for Chinese consumers spur buying and a pick-up in the global economy lures hedge funds back to the market, Macquarie analyst Jim Lennon said on Thursday.  
"(We) see some short-term seasonal weakness as possible, which could take prices back towards $9,000 in July/August, but after that we see a lot of upside towards $10,500-11,000 in September-November," Lennon told the Reuters Global Base Metals Forum on Thursday.

Gold steady; eyes on U.S. budget talks
SINGAPORE, July 29 (Reuters) - Gold held steady, heading for its fourth straight week of gains, as investors watched U.S. debt ceiling talks after Republicans delayed a vote on the debt plan.
"There is far too much uncertainty and no one is that keen to take a position right now," said a Singapore-based trader.

20110729 1209 Global Market & Commodities Related News.

GLOBAL MARKETS: Stocks struggle as U.S. deadlock remains; euro dips
HONG KONG, July 29 (Reuters) - Asian stocks struggled and the dollar wavered on Friday as U.S. lawmakers squabbled over a compromise to avoid an unprecedented debt default, while growing worries about Europe's debt crisis weighed on the euro, adding to investor wariness.
With just a few days to go before U.S. lawmakers must lift the country's $14.3 trillion borrowing ceiling by an Aug. 2 deadline or risk a default and possible downgrade of its prized AAA credit rating, investors lost appetite for risky assets before the weekend.

OIL: Oil edges up on storm, but debt woes curb gains
NEW YORK, July 28 (Reuters) - Oil edged up on Thursday as a tropical storm heading toward the Texas coast forced producers in the Gulf of Mexico to begin shutting in production and evacuating support staff.
"The storm is expected to have limited effect and concerns over the economy are keeping prices in check," said John Kilduff, partner at Again Capital LLC in New York.

Exxon, Shell use soaring profits to buy output growth
LONDON, Jul 28 (Reuters) - Exxon Mobil, Royal Dutch Shell Plc  and other big oil groups reported higher profits on Thursday thanks to high crude prices and showed the only way to combat falling output was by reinvesting the cash in acquisitions and new ventures.
Investors have become increasingly worried in recent years about Western oil companies' inability to match natural field decline with new finds, in part because they are shut out of investing in the richest fields by countries such as Saudi Arabia and Russia.

NATURAL GAS: Natural gas ends down nearly 2 pct after bearish EIA
NEW YORK, July 28 (Reuters) - U.S. natural gas futures ended down sharply on Thursday, pressured by a government report showing a weekly inventory build slightly above market expectations despite a storm in the Gulf of Mexico that has disrupted some gas supplies.
"We had a brutally hot week last week, and that's as good as it gets. It shows how bearish the fundamentals are, and when the heat finally breaks, we're going to be putting a lot of gas in the ground," a Massachusetts-based trader said.

EURO COAL: Steadies on strong oil, SAfrica strike
LONDON, July 28 (Reuters) - Prompt physical coal prices moved slightly higher by 25-75 cents a tonne on Thursday, buoyed by stronger oil prices and the ongoing South African miners' strike, despite a lack of buying interest in the Atlantic and Pacific.
"There's minimal activity and prices have hardly moved during the past week, it's simply very quiet and that's not untypical for the summer," one major European utility source said.

COMMODITIES: Prices drop in thin trade; CRB down most in 10 days
NEW YORK, July 28 (Reuters) - Commodity prices posted their steepest drop in more than a week on Thursday as fear of a U.S. credit downgrade made investors averse to buying futures contracts in energy, metals and crops.
"We are now starting to see markets beginning to seize up in light of the dangerous game of 'chicken' being played by the politicians in Washington," said Edward Meir, energy and metals analyst at broker MF Global in New York.

20110729 1201 Local & Global Economic Related News.

Malaysia : Malaysia may reduce export of fish to ensure there is enough to meet the domestic need,  Agriculture and Agro-based Industry Minister Datuk Seri Noh Omar said. There had been a  drastic rise in the volume of fish exports of late, with statistics showing 7,222 tonnes for  Apr, 17,553 tonnes for May and 30,536 tonnes for Jun. The ministry might impose  conditions for fish exports and enforce regulations to ensure adequate supply for the  domestic market, he said. (Bernama)  

Malaysia : Sarawak continues to attract significant  approved investments in the manufacturing  sector totaling RM3.2bn for the first six months of this year. International Trade and  Industry Minister, Datuk Seri Mustapa Mohamed, said investments in manufacturing  projects approved for the whole of last year in Sarawak was only RM3.9bn. (Bernama)  

Malaysia : Malaysia expects to remove  compliance cost for businesses amounting to RM4bn by  2015.  Malaysian Productivity Corporation has been given the task to review existing  regulations with a view to remove  unnecessary rules and compliance costs, said  International Trade and Industry Minister Datuk Seri Mustapa Mohamed.  
  • On the investment environment, he said local businesses were confident with Malaysia's  economy and were willing to invest in their own country.   
  • This is based on the fact that more than half of the RM24.0bn investments, with a  potential employment of over 37,000 people, approved by MITI as at May this year came  from domestic sources. (Bernama)  

Thailand : Thailand’s manufacturing output unexpectedly increased by 3.3% in Jun (-3.7% in May),  marking the first rise in five months boosted by electrical appliances and automotive  production. The median estimate was for a 3.25% decline. (Bloomberg)  

Thailand : Thailand’s  manufacturing production index (MPI) rose by 3.32% yoy to 200.64pts in  Jun while the utilisation rate was 63.58%. Major industries that contributed to the increase  were electronics, household appliances, air conditioners and automotive. (Bangkok Post)  

Philippine : The  Philippine central bank raised the  reserve requirement ratio to 21% from 20%  effective 5 Aug,  but left its policy rate unchanged at 4.5%. The decision came largely  expected. This marks the second hike in reserve ratio this year as the central bank seeks  to avoiding raising interest rates as it weighs the risk of slowing global growth. (Bloomberg)  

Hong Kong : Hong Kong’s export growth slowed in Jun as demand from the U.S. dropped and sales  to China and Europe climbed “moderately.” Overseas  shipments gained 9.2% yoy to  HK$292bn (US$37.5bn) in Jun (10.1% in May), the government said. Economists forecast  a reading of 8.4%. Imports increased 11.5% yoy in Jun, leaving a trade deficit of HK$40.3bn, the report showed. (Bloomberg)

Japan : Japan’s  retail sales rose 1.1% yoy in Jun, marking the first increase in four months. It  came above market estimate for a 0.5% gain. Machinery, which includes household  appliances and cars led the increase. (Bloomberg)  

Japan : Japan's retail sales rose in Jun, marking the first gain since a devastating Mar earthquake  and tsunami in a further signal of recovery in the  world's third-biggest economy, data  showed. Sales rose by 1.1% yoy in Jun (-1.3% in May), lifted by purchases of machines,  appliances and electronic equipment, the Ministry of  Economy, Trade and Industry said.  Economists expected a reading of -0.4% in Jun. (AFP, Bloomberg)

South Korea  : South Korea’s  current-account surplus rose to an eight-month of US$2.99bn in Jun  (US$2.18bn in May) as global demand for cars and steel bolstered exports. (Bloomberg)  

Indonesia : Indonesia’s plan to ban exports of low-quality grade  thermal coal may discourage new  investment in the world’s biggest exporter of the power-station fuel, said a production  company executive. A ban may also hurt India and China, which seek coal with a heating  value of as much as 4,500 kilocalories a kilogram for blending with higher-grade domestic  output, said president director of PT Bhakti Energi Persada. (Bloomberg)  

India: Food inflation eases to slowest pace since February 2009
India’s food inflation decelerated to the slowest pace since February 2009 after prices of pulses, milk, meat and fish eased. An index measuring wholesale prices of agricultural products gained 7.33% in the week ended 16 July from a year earlier, the commerce ministry said in a statement in New Delhi yesterday. It rose 7.58% the previous week. Food costs may rise, India’s central bank said this week after it raised interest rates for the 11th time since mid-Mar 2010. (Bloomberg)

Brazil : Brazil has begun shipping  rice to South Africa,  competing with Thailand, the largest  source of the grain for Africa’s biggest economy. (Bloomberg)  

EU : European confidence in the economic outlook weakened more than economists forecast  in Jul as a worsening debt crisis clouded growth prospects across the euro area. An index  of executive and consumer sentiment in the single-currency region fell to 103.2 from a  revised 105.4 in Jun. Economists had forecast a drop to 104. (Bloomberg)  

EU : Eurozone economic confidence  declined for the fifth consecutive month in Jul, the  European Commission said. The eurozone’s economic sentiment indicator (ESI) fell by  2.2pts to 103.2, while the monthly indicator, based on business and consumer surveys,  also dropped by 2.2pts to 102.4 in the European Union (EU).  

EU : The eurozone’s headline Economic Sentiment Index fell to 103.2 in Jul (105.4 in Jun), a  sharper decline than the drop to 104 expected by economists. It was the fifth straight  monthly decline in the ESI, and indicates that economic growth will weaken in the months  to come. (WSJ)  

EU : The eurozone’s headline measure of industrial confidence fell to 1.1 in Jul (3.5 in Jun), a  larger fall than expected. Economists had forecast a reading of 2.0. (WSJ, Bloomberg)  

US: Consumer confidence decreases on concern over economy
Consumer confidence dropped last week as Americans’ views of the economy plunged to the lowest level since the recession. The Bloomberg Consumer Comfort Index was minus 46.8 in the period to 24 July, the lowest since May, compared with minus 43.3 the prior week. 6% of those surveyed said the economy was in good shape, the fewest since April 2009. Seniors and the unemployed were among those showing the most negative readings, a sign that partisan wrangling over the nation’s budget deficit was jarring those likely to be affected by cuts in spending. (Bloomberg)

US: Jobless claims fall, home sales contracts rise
Applications for unemployment benefits fell more than forecast last week to the lowest level since April, a sign the weakness in the labor market is fading. Jobless claims dropped by 24,000 to 398,000 in the week ended 23 July, Labor Department figures showed yesterday. Another report showed the number of contracts to buy previously owned homes unexpectedly rose in June. Fewer firings are a first step toward gains in hiring that will help stem a slowdown in consumer spending, which accounts for about 70% of the economy. (Bloomberg)

US: Contingency plan said to give priority to bondholders
The US Treasury will give priority to making interest payments to holders of government bonds when due if lawmakers fail to reach an agreement to raise the debt ceiling, according to an administration official. The official requested anonymity because no announcement has been made. The Treasury has said about USD90bn in debt matures on 4 Aug and more than USD30bn in interest comes due 15 Aug. Overall, more than USD500bn matures in August. The USD90bn in six-month Treasury bills maturing 4 Aug pared losses after the comments. Obama administration officials will brief the public no earlier than after financial markets close tomorrow on priorities for paying the nation’s bills if the USD14.3trn limit isn’t raised, a Democratic Party official said earlier. (Bloomberg)

US : The advance figure for seasonally adjusted U.S. initial claims was 398,000 in the week  ended 23 Jul (422,000 in the prior week). Economists forecast a reading of 415,000. The  advance number for seasonally adjusted  U.S. continuing claims was 3,703,000  in the  week ended 16 Jul (3,720,000 in the previous week). (Reuters, U.S. Department of Labor)  

US : The number of contracts to purchase previously owned U.S. homes unexpectedly rose in  Jun as buyers tried to take advantage of lower prices and borrowing costs. The 2.4% mom  rise in the index of pending home resales followed  an 8.2% May gain, the National  Association of Realtors said. Economists forecast a 2% drop. (Bloomberg)  

US : A cut in the U.S.’s sovereign ratings may weaken the dollar and make Asian goods more  expensive, hurting the region’s trade outlook, the  Asian Development Bank said.A  depreciating dollar would also lead to financial losses for Asian nations who hold U.S.  Treasuries, Iwan J. Azis, head of the ADB’s Office of Regional Economic Integration, said.  (Bloomberg)  

20110729 1144 Malaysia Corporate Related News.

CPO : Palm oil may slump to as low as RM2,800  per metric ton in September as output jumps in  Malaysia and Indonesia, the world’s two largest growers, according to Dorab Mistry,  director of Godrej International Ltd. Malaysia may  produce 19m tons in 2011, 2m more  than last year, Mistry told a symposium in Sydney today, according to an advance copy of  his remarks.  
  • Indonesian output may gain 3m tons to 25.5m tons,  said Mistry. Palm oil traded at  RM3,134 yesterday. Lower palm oil prices may help to ease global food costs that rallied  to a record in February, according to a United Nations gauge, and held within 2% of that  peak in June. Mistry, who’s traded the oil used in  food and fuels for more than three  decades, forecast a rebound to RM4,000 in 2012.   
  • By September, “the peak summer demand will have gone, Indonesian biodiesel  production will slow down dramatically and CPO production will rise strongly,” Mistry said  according to the remarks, referring to crude palm oil by its initials. Malaysian stockpiles  will reach a record in December, he added. (Bloomberg)

Petronas Dagangan : Petronas Dagangan Bhd (PDB) will continue to spend a major portion of its annual capital  expenditure (capex) of up to RM400m to expand its business, says Chairman Datuk Wan  Zulkiflee Wan Ariffin. The network expansion and upgrading of existing facilities will take up  the major portion of PDB's annual capex. "Our capex is in the range of RM350-400m yearon-year.  
  • The expansion of retail network takes up a chunk of the capex portion.He said another  portion of PDB's capex will go to the KLIA2 project undertaken by one of its subsidiaries. "That project in KL International Airport (KLIA) is scheduled to be completed by end of  next year," he added.   
  • He said retail business remains the flagship business for PDB at 32% market share with  a respectable 4.7% increase in sales volume over the year, contributing half of the  company's net margin. On the commercial side, he said PDB remains the leader with  70% market share contributed by the increase of sales volume for diesel, aviation fuel  and bitumen. (BT)

Rubber : Natural rubber output in key growing countries will expand at a slower pace in the 3Q11  as a severe leaf disease delays tapping in Vietnam, according to the Association of Natural  Rubber Producing Countries (ANRPC).  
  • Production from member countries, representing 92%  of global supply, may increase  3.4% to 2.77m mt during the July-to-September period compared with 12.1% a year  earlier.  
  • Supply growth in the 1Q and 2Q this year was 10.5% and 3.3% respectively. The  ANRPC said, “Slow growth in supply and high oil price could help natural rubber market  to continue staying strong. The supply deficit will probably continue through 2018 as  gains in production may be marginal”. (ANRPC)

HeiTech Padu  : HeiTech Padu Bhd is keen to invest in other information technology-related companies  after buying a major stake in Grand-Flo Solution Bhd and may raise its stake in Tricubes  Bhd. HeiTech had in April ceased to be a substantial shareholder of Tricubes. "We sold  some (Tricubes) shares due to market opportunity.  

  • We saw the price was very good to realise our very old investment in Tricubes."I think it  was a very good move to have sold some and if we were to buy back we will buy back at  a lower price," HeiTech president Safiee Mohammad said.   
  • He explained that it may buy shares of Tricubes as HeiTech believe Tricubes has future  potential. Moreover, Tricubes has another business that provides special solutions that  may be relevant to Heitech's total integration business. (BT)

WCT : WCT has been awarded a RM115.1m earthworks contract by Vale Malaysia Manufacturing  S/B (VMM). The scope of works under the Contract comprises earthwork, drainage, roads  & pavement, slope protection works and temporary sedimentation ponds at VMM's Project  - Phase 1A (Stage 1), Teluk Rubiah, Perak, Malaysia, expected to be completed in April- 2013. (BMSB)

Megasteel : Megasteel Sdn Bhd chairman Tan Sri William Cheng has criticised the Malaysian Iron and  Steel Federation (MISIF) for making “misrepresentations” on Megasteel's proposed  safeguard action on hot rolled coils (HRC). He said Malaysia has been flooded with imports  of HRC by some unscrupulous importers who were exploiting loopholes in the import  regulations.

  • He reiterated that Megasteel's petition for safeguard measures would not affect imports  necessary for Malaysia to compete internationally, and imports of grades not available  locally.  
  • In addition, Cheng said since Megasteel commenced operation, it has never raised  prices substantially and indiscriminately to take advantage of the so-called “tariff wall” as  alleged by MISIF. He said domestic prices of HRC in Indonesia and Thailand were  higher at US$859/mt and US$832/mt respectively compared with Malaysia's US$805/mt.  (Star Biz)  

Automotive : Following a meeting with the Domestic Trace, Cooperatives and Consumerism Ministry,  the Malaysian Automotive Association (MAA) said the bulk of the amendments that were  made to the Hire Puchase Act would be revised. "The changes will now make it easier for  registrations and will take effect immediately.  

  • The Government will issue a circular on the changes next week," said MAA president  Datuk Aishah Ahmad. Aishah clarified that the new revision by the Government did not  mean that the HPA would revert to its pre-June 15 amendment status (Starbiz)

IOI to buy oil palm estate for RM830m
IOI Corp, through an indirect wholly-owned subsidiary, Sri Mayvin Plantation SB, has proposed to acquire 11,977.91ha of oil palm plantation land in Sabah from Pertama Land & Development SB for RM830m. Pertama Land is a wholly-owned subsidiary of Duta Plantations SB, which in turn is a wholly-owned subsidiary of Dutaland. The land consists of five oil palm estates in the districts of Labuk and Sugut. IOI said the proposed acquisition, to be financed via internal funding or borrowing, would include all the assets such as buildings, fixtures & fittings and motor vehicles. (Bernama) – Please see accompanying report

Petronas Carigali discovers gas offshore Sabah
Petronas Carigali SB, the exploration and production arm of Petroliam Nasional (Petronas), has made two significant gas discoveries in the shallow water areas offshore west coast of Sabah. Petronas said the first discovery was via the Zuhai East-1 well, which was located in the Samarang Asam Paya Block about 130km south-west of Kota Kinabalu. "The current estimate of gas-initially-in-place is about 550bn standard cu ft," it said. (Financial Daily)

Panel Point spearheads USD100bn Trans-asian oil and gas pipeline project
PanelPoint SB, a local entity, signed a memorandum of understanding (MoU) with six local and foreign organisations to spearhead the USD100bn Trans-Asian Oil and Gas Pipeline (TAOG) project to develop Asean and China's first natural gas pipeline network. The 7,000 km pipeline project, expected to be fully completed in 10 years, will be extended from Mersing, Johor, and connect to an offshore utility platform in Northern Natuna Islands in Indonesia before continuing northbound to Ho Chi Minh City and Hanoi in Vietnam and subsequently link to Hong Kong and Guangzhou, China. (Bernama)

SP Setia eyes E&O
Major shareholders of SP Setia, Malaysia's biggest developer, plan to buy a strategic stake in property and hospitality company Eastern and Oriental (E&O), people familiar with the matter said yesterday. Business Times learnt that shareholders of SP Setia had made overtures in recent months with certain shareholders of E&O, who may have included Temasek Holdings (Pte) Ltd director Goh Yew Lin. SP Setia's three biggest shareholders currently are PNB with a 32.9% stake, the EPF with a 14.47% interest, and SP Setia president and chief operating officer Tan Sri Liew Kee Sin, with 11.96%. As at 30 July 2010, Singapore's G.K. Goh Holdings Ltd owned 13% of E&O. (BT)

No indication from AFG major shareholders to sell stake, says chairman
Alliance Financial Group (AFG) board has received no indication from its substantial shareholders of any intention to sell its stake in the financial services group or the entry of a new shareholder, said AFG chairman Datuk Oh Chong Peng. "We have not been informed of any intention to exit. (In light of a trend toward industry consolidation), we are happy as we are as a domestic bank. There is no reason for us to seek mergers and acquisitions," Oh told reporters after AFG's AGM. (Financial Daily)

Perodua revises down sales forecast
Perodua has revised downwards its full-year sales forecast to 190,000 units, from 195,000 units set previously, partly due to the Japan disaster and newly-amended Hire Purchase Act. "The tsunami has impacted production, which in turn, affected sales." managing director Datuk Aminar Rashid Salleh said. He added that the amended Act has also affected its sales. "In general, we saw a 20-25% decline in bookings. To a certain extent, the process of buying a vehicle has been lengthened. "Of course, it's not fair to say that bookings declined because of the revised Act itself. It is also due to other factors like consumers' 'wait-and-see' attitude, looking at the economy situation, subsidies, and others," he explained. (BT)

20110729 1056 Global Market Related News.

Most Asian Stocks Fall on U.S. Debt Deal Impasse (Source: Bloomberg)
Most Asian stocks fell ahead of a planned briefing by the U.S. government on the stalemate in raising the nation’s debt limit that’s needed to avert a default. Nintendo Co., maker of the Wii computer-games console, plunged the most in 20 years after slashing it profit forecast. Sony Corp., a Japanese exporter of consumer electronics, dropped 2.5 percent after cutting profit forecasts. Nintendo Co. fell 20 percent after announcing its forecast cut and discounting devices. Taiwan Semiconductor Manufacturing Co., the chipmaker, dropped 1.6 percent in Taipei after posting its first profit decline in almost two years. East Japan Railway Co., the nation’s largest train operator by sales, advanced 1.9 percent after raising its net income guidance. The MSCI Asia Pacific Index dropped 0.3 percent to 137.21 as of 10:51 a.m. in Tokyo. About five shares fell for every three that rose on the gauge.
The measure is headed for a decline this week as forecasts for higher earnings at companies from Canon Inc. to Baidu Inc. were overshadowed by concern the U.S. may default on its debt if lawmakers can’t reach an agreement on raising the government’s borrowing limit by Aug. 2.

U.S. Contingency Plan Gives Bondholders Priority (Source: Bloomberg)
The U.S. Treasury will give priority to making interest payments to holders of government bonds when due if lawmakers fail to reach an agreement to raise the debt ceiling, according to an administration official. The official requested anonymity because no announcement has been made. The Treasury has said about $90 billion in debt matures on Aug. 4 and more than $30 billion in interest comes due Aug. 15. Overall, more than $500 billion matures in August. The $90 billion in six-month Treasury bills maturing Aug. 4 pared losses after the comments. Obama administration officials will brief the public no earlier than after financial markets close tomorrow on priorities for paying the nation’s bills if the $14.3 trillion limit isn’t raised, a Democratic Party official said earlier.

U.S. Debt-Agreement Delay Risks Lehman-Like Moment, Gieve Says (Source: Bloomberg)
Former Bank of England Deputy Governor John Gieve said U.S. officials’ delay in agreeing on a deal to raise the debt limit runs the risk of a disaster that would echo the collapse of Lehman Brothers Holdings Inc. (LEHMQ) “The problem with this kind of brinkmanship is, as we saw around Lehman -- after all the Treasury wanted to save Lehman -- if you leave it to the last minute that something can go wrong, something practical goes wrong, and you run out of time,” he said in an interview with Francine Lacqua on Bloomberg Television’s “The Last Word” yesterday. “I’m sure both sides fully expect to do a deal, but they’re running it very fine.” Gieve was deputy governor for financial stability at the U.K. central bank when Lehman Brothers filed for bankruptcy in September 2008. U.S. Republicans and Democrats have been unable to agree on an increase in the nation’s $14.3 trillion debt cap or budget-deficit cuts even as the government’s authority to borrow is set to run out on Aug. 2.

Fed’s Williams Sees No ‘Magic Wand’ in Event of Default on Sovereign Debt (Source: Bloomberg)
Federal Reserve Bank of San Francisco President John C. Williams said the central bank doesn’t have a “magic wand” to help the economy if the U.S. government defaults on its debts. “Make no mistake -- the Federal Reserve doesn’t have a magic wand that will allow the economy to get through a crisis of this magnitude unscathed,” the regional bank chief said during a speech in Salt Lake City. “A federal default must be avoided,” he said. Williams’ comments on the federal budget amplify similar warnings made this month by Chairman Ben S. Bernanke when he delivered the Fed’s twice-a-year economic report to Congress. Williams said there’s “no question” the nation is on an unsustainable long-run path of fiscal deficits, which must be reined in over the next decade.

Jobless Claims in U.S. Fall More Than Forecast to Lowest Level Since April (Source: Bloomberg)
Applications for unemployment benefits fell more than forecast last week to the lowest level since April, a sign the weakness in the labor market is fading. Jobless claims dropped by 24,000 to 398,000 in the week ended July 23, Labor Department figures showed today in Washington. The median estimate of economists in a Bloomberg News survey called for a drop to 415,000. Another report showed the number of contracts to buy previously owned homes unexpectedly rose in June. Fewer firings are a first step toward gains in hiring that will help stem a slowdown in consumer spending, which accounts for about 70 percent of the economy. A report tomorrow may show household purchases last quarter grew at the slowest pace since the end of the recession in 2009 as the jobless rate climbed above 9 percent and payroll gains decelerated.

Democrats Can Lose on Debt, Win on Bush Tax Cuts: Ezra Klein (Source: Bloomberg)
Democrats are going to lose this one. Whatever deal emerges to raise the debt ceiling, we can be pretty sure it won’t include revenue, it won’t include stimulus, and it will let Republicans pocket a trillion dollars or more in cuts without offering anything to Democrats in return. It’s difficult to see how it could end otherwise. Virtually no Democrats are willing to go past Aug. 2 without raising the debt ceiling. Plenty of Republicans are prepared to blow through the deadline. That’s not a dynamic that lends itself to a deal. That’s a dynamic that lends itself to a ransom.
Yet Democrats will have their turn. On Dec. 31, 2012, three weeks before the end of President Barack Obama’s current term in office, the Bush tax cuts expire. Income tax rates will return to their Clinton-era levels. That amounts to a $3.6 trillion tax increase over 10 years, three or four times the $800 billion to $1.2 trillion in revenue increases that Obama and Speaker John Boehner were kicking around. And all Democrats need to do to secure that deal is -- nothing.

Lacker Says More Fed Stimulus Would Increase Inflation Rather Than Growth (Source: Bloomberg)
Federal Reserve Bank of Richmond President Jeffrey Lacker said additional monetary stimulus would likely raise inflation further while not providing a substantial lift to economic growth. “Given current inflation trends, additional monetary stimulus at this juncture seems likely to raise inflation to undesirably high levels and do little to spur real growth,” Lacker said in a speech before the Dulles Regional Chamber of Commerce in Chantilly, Virginia. Federal Reserve policy makers meet Aug. 9 to assess the economy and monetary policy. U.S. central bankers have kept their benchmark lending rate in a range of zero to 0.25 percent since December 2008 and expanded the central bank’s balance sheet to $2.8 trillion in total assets in an effort to support growth.

Container-Ship Plunge Signals U.S. Slowdown (Source: Bloomberg)
Plunging rates for chartering container vessels that carry sneakers, furniture and flat-screen TVs may signal a U.S. consumer slowdown and losses for shipping lines in what is traditionally their busiest time of the year. Fees for hiring vessels have fallen 9.3 percent since the end of April, according to the Howe Robinson Container Index, which tracks charter rates for a range of vessels. Last year, the index surged 56 percent in the period, as lines added ships on demand from U.S. and European retailers restocking for the back-to-school and holiday shopping periods. “The troubling part is that charter rates are falling in the peak season,” said Johnson Leung, head of regional transport at Jefferies Group Inc. in Hong Kong. “Sentiment among consumers and retailers isn’t very strong.”

U.S. Sovereign Credit Rating Cut Would Threaten Trade in Asia, ADB Says (Source: Bloomberg)
A cut in the U.S.’s sovereign ratings may weaken the dollar and make Asian goods more expensive, hurting the region’s trade outlook, the Asian Development Bank said today. A depreciating dollar would also lead to financial losses for Asian nations who hold U.S. Treasuries, Iwan J. Azis, head of the ADB’s Office of Regional Economic Integration, told reporters in Beijing today. Standard & Poor’s, Moody’s Investors Service and Fitch Ratings have said they may cut the U.S.’s top-level sovereign ranking if officials fail to resolve a stalemate over raising the $14.3 trillion debt ceiling and reducing spending. Asia still relies on U.S. and European demand for its goods, even as Group of 20 members push to rebalance the world economy so that Asia depends more on domestic consumption.
“If the U.S. sovereign rating is cut to AA, it will increase the borrowing costs and put pressure on the dollar and it is likely to depreciate further, which will definitely cause financial losses for emerging Asian nations including China for their holdings of Treasury bills,” Azis said.

U.S. Stocks Retreat as Optimism Over Debt Compromise Fades (Source: Bloomberg)
U.S. stocks fell, dragging the Standard & Poor’s 500 Index lower for a fourth day, as lawmakers indicated they were no closer to reaching an agreement to increase the debt ceiling and avoid default. The Dow Jones Industrial Average erased an advance of as much as 82 points after optimism faded that Democrats and Republicans would be able to compromise over cutting the federal deficit. Exxon Mobil Corp. (XOM) slipped 2.2 percent as its earnings trailed analysts’ estimates. Technology stocks led gains in the S&P 500, with Cisco Systems Inc. (CSCO) climbing 2 percent after Goldman Sachs Group Inc. advised buying the stock. The S&P 500 dropped 0.3 percent to 1,300.67, its lowest level for the month, at 4 p.m. in New York. The Dow slipped 62.44 points, or 0.5 percent, to 12,240.11.
“There is no positive news on the debt discussions out of Washington,” Brad Pleimann, head of equity trading at Piper Jaffray & Co. in Minneapolis, wrote in an e-mail before the market closed. “Everyone believes, or at least hopes, that a deal will get done, but as we approach the close with no new news traders begin to unwind risk.” The S&P 500 retreated 3 percent over the previous three days amid concern lawmakers will fail to agree on an increase in the U.S. debt ceiling by an Aug. 2 deadline in order to avoid a default. A House vote on Republican John Boehner’s debt-ceiling measure scheduled for 6 p.m. tonight in Washington was delayed, though a spokeswoman for Majority Leader Eric Cantor said the vote would take place “this evening.”

Dollar on front line in U.S. debt ceiling battle
NEW YORK, July 27 (Reuters) - Fear the United States will lose its AAA credit rating or even default on its debt is driving foreigners away from U.S. assets, and the dollar is taking the biggest hit.
While stateside investors predicted lawmakers would avoid default with a last-minute deal to raise the government's $14.3 trillion borrowing limit, foreigners were hedging their bets.

Demand for US factory goods slips; Fed sees slowing
WASHINGTON, July 27 (Reuters) - Demand for long-lasting U.S. manufactured goods fell in June and economic activity across much of the nation slowed through mid-July, casting doubt over how quickly the economy might escape its soft patch.
The Federal Reserve said on Wednesday the recovery lost steam in eight of 12 regions it tracks in recent weeks, with hiring modest, wages soft and price pressures subdued.

Fears of 2nd-half slowdown spook corporate America
BOSTON, July 27 (Reuters) - Corporate America's hopes for a second-half pickup in the U.S. economy dimmed on Wednesday, as companies from Emerson Electric Co  to Corning Inc  warned of weakening demand for everything from industrial equipment to televisions.
Their cautious words, coupled with weak earnings reports from Delta Air Lines Inc  and health insurer WellPoint Inc  spooked investors who are already on edge over the U.S. debt-ceiling standoff, sending the broad Standard & Poor's 500 index down more than 1 percent.

China Should Buy U.S. Stocks, Not Treasuries: Xie (Source: Bloomberg)
China should buy U.S. stocks instead of Treasuries as they may be safer investments amid concerns about a U.S. debt default or credit-rating downgrades, according to Andy Xie, an independent economist. “The U.S. stock market can be a credible alternative,” Xie, 50, formerly Morgan Stanley’s chief Asia economist in Hong Kong, said in an interview in Bloomberg’s Shanghai office yesterday. “U.S. companies are reporting strong earnings and they are selling a lot to emerging markets. Even though U.S. stocks aren’t cheap by historical standards, they are a better investment relative to Treasuries.” Standard & Poor’s 500 Index companies are beating analysts’ earnings estimates for a 10th straight quarter, and the group surpassed its annual per-share profit record of $84.66 from 2007 last year. Analysts see 17 percent income growth in 2011, according to the average estimate in a Bloomberg survey.

Japan Industrial Output Rose Less Than Expected (Source: Bloomberg)
Japan’s industrial production rose less than expected in June, signaling a recovery in the world’s third-largest economy from the March 11 earthquake and tsunami may lose momentum. Factory output increased 3.9 percent in June from May when it rose 6.2 percent, the biggest gain since 1953, the Trade Ministry said in Tokyo today. The median estimate of 31 economists surveyed by Bloomberg News was for a 4.5 percent gain. Japan’s recovery is at risk from a slowdown in overseas demand and the yen’s appreciation, which can erode the value of profits earned by exporters such as Nissan Motor Co. At the same time, today’s report showed companies plan to boost output in July and August, an indication they are confident about demand.

Japanese Stocks Slip for Third Day as Sony, Nintendo Cut Profit Forecasts (Source: Bloomberg)
Japanese stocks slipped for a third day after Sony Corp. and Nintendo slashed profit forecasts, shaking investor confidence in the outlook for the country’s exporters. Sony sank 2.9 percent after slumping demand for televisions forced Japan’s biggest exporter of consumer electronics to cut its profit forecast. Game-maker Nintendo plunged 20 percent. Japan Tobacco Inc. gained 3 percent after saying profit will rise this year. The Topix lost 0.1 percent to 847.41 as of 10:13 in Tokyo, with about twice as many shares falling as rising. The gauge is on course for a 2.5 percent drop this week as U.S. lawmakers fail to make progress on a deal to raise the nation’s debt ceiling and avoid a default that could roil credit markets and threaten the global economic recovery. The Nikkei 225 (NKY) Stock Average was little changed today at 9,905.28.

South Korean Current-Account Surplus Widens as Exports Withstand Won Gains (Source: Bloomberg)
South Korea’s current-account surplus rose to an eight-month high in June as global demand for cars and steel bolstered exports, putting pressure on the won to strengthen further. The surplus was $2.99 billion, compared with a revised $2.18 billion in May, the Bank of Korea said in a statement in Seoul today. The current account is the broadest measure of trade, tracking goods, services and investment income. The Bank of Korea raised its forecast for this year’s current-account surplus to $15.5 billion from $11 billion on July 15, citing strong export growth and stabilizing raw material costs. Goldman Sachs Group Inc. said July 19 that the won may keep appreciating as the government seeks to damp inflation and exports benefit from a recovery in Japan and a “moderate” acceleration in U.S. growth.

Most European Stocks Slide as Credit Suisse, Volkswagen Decline (Source: Bloomberg)
Most European stocks declined as companies from Volkswagen AG (VOW) to Credit Suisse Group AG (CSGN) reported earnings that missed analysts’ estimates and as U.S. lawmakers moved no closer to a deal to avert a default. Volkswagen sank 4.3 percent, its largest slide in six months. Credit Suisse, Switzerland’s second-biggest bank, dropped 2 percent. Alcatel-Lucent SA plunged 15 percent on concern spending by U.S. mobile phone companies will slow. BASF SE (BAS), the world’s largest chemical maker, retreated 4.6 percent after posting profit that missed estimates. The Stoxx Europe 600 Index rose less than 0.1 percent to 267.15 at the 4:30 p.m. close in London as three stocks dropped for every two that gained. The index has fallen 8.3 percent from this year’s high on Feb. 17 as investors speculated that Europe’s sovereign-debt crisis will derail the economic recovery and as concern mounted that U.S. lawmakers will fail to agree on the federal government’s debt ceiling by next week’s deadline.

FOREX-Euro falls as yields jump at Italian auction
LONDON, July 28 (Reuters) - The euro fell on Thursday after yields at an auction of benchmark Italian bonds rose to their highest level in 11 years, although deadlocked deficit reduction talks in the United States are limiting losses versus the dollar.
The Swiss franc hit a new record high against the dollar of 0.7990 franc  as investors unnerved by debt crises on both side of the Atlantic scrambled for safe haven assets.

Stocks fall, Australia dlr up on US debt deadlock
SINGAPORE, July 28 (Reuters) - Asian stocks slid more than 1 percent in thin volume  as investors trimmed positions with just three trading days to go before a deadline to lift the U.S. debt ceiling, while the Australian dollar showed resilience in the face of global sovereign risks.
"Buying on dips in companies with good earnings may continue, but exporters may not fare well for the time being as long as there are concerns about the U.S. economy," said Hideyuki Okoshi, general manager at Chibagin Securities in Tokyo.

20110729 1054 Global Commodities Related News.

Corn (Source: CME)
US corn futures finished lower as rains are expected to benefit crops after hot, dry weather last week. Traders paying close attention to the weather as farmers need favorable conditions to grow a large crop necessary to replenish low supplies. "Conditions have turned benign for the developing crops in much of the Corn Belt," says Karl Setzer, analyst for MaxYield Cooperative in Iowa. Near-term demand is easing as grain users wait for the next harvest to make purchases. CBOT December corn drops 5 1/4c to $6.86 1/4 a bushel.

Wheat (Source: CME)
US wheat futures ended down from their recent one-week high. Profit-taking and concerns about demand weighed on prices as traders said the US is facing increased competition for export business from Russia, which resumed grain exports this month after a near year-long ban. "Overall, the supply and demand situation looks a little more bearish, with Russia selling wheat into markets that traditionally buy from the US," says Doane Advisory Services. CBOT September wheat falls 11 1/2c to $6.93 1/4 a bushel; KCBT September drops 4 3/4c to $7.83 1/2; MGEX September slips 4 1/4c to $8.46 3/4.

Rice (Source: CME)
US rice futures closed sharply lower as the market continues to pull back from recent rallies. Traders are booking profits after the market closed Tuesday at its highest level since October 2008. High prices seem to have reduced demand for the grain, as weekly export sales of 14,200 tons were down 75% from the previous week and 80% from the prior four-week average. CBOT September rice slides 40 1/2c to $16.39/hundredweight.

IGC Lifts 2011-12 Grain View (Source: CME)
World grain production is expected to rise to a record 1.82 billion metric tons in 2011-12 but will still fall short of rising global consumption, the International Grains Council said. The London-based body raised its previous forecast by 9 million tons due to improving prospects for wheat crops in Europe, Russia, the U.S. and India. World wheat output is expected to hit 674 million tons, up from 651 million tons last year and 8 million tons higher than expected in June. It still forecast a fall in world carryover stocks in 2011-12, as consumption will still outpace supply at a projected 1.83 billion tons as feed consumption increases. "The outlook for grains in 2011-12 remains very tight, even though the world carryout projection is lifted from last month," it said. "In the major exporters the total carryover is forecast to fall by 10 million tons, to 115 million tons."

EU Wheat Forecast Lifted (Source: CME)
Recent rainfall is expected to lift European Union total wheat production to 137.03 million metric tons in 2011-12, the bloc's forecasting agency said. MARS said soft wheat yields are expected to average 5.6 tons a hectare, up from its previous forecast of 3.5 tons/hectare and 1.1% above the five-year average but still leaving production down 1.6% compared with 2010. The "forecast is revised up...due to the beneficial grain filling phase in Germany, France and U.K. and higher yield forecasts as previously for Romania and Poland," MARS said. In France, Western Europe's largest producer, soft wheat yields are seen down 7.1% on the five-year average at 6.57 tons/hectare, but in Germany, recent wet weather has lifted them to 7.52 ton/hectare--up 0.7% on the average. While rain in crop areas has delayed the harvest in recent weeks, the body said it now expects farmers to be back in the fields soon across much of Northern Europe.
"The weather will be favorable for harvesting activities in France, Germany, Benelux and British Islands but rainfalls will hamper these activities in Poland and areas, which will experience abundant showers," it said. Corn output is pegged at 61.21 million tons, with yields coming in 3.5% above the five-year average at 6.95 tons/hectare, while barley is seen largely in-line with 2010 as excellent spring yields in Spain make up for poorer output elsewhere, MARS said.

U.S. wheat falls on export fears, corn eases
SYDNEY, July 28 (Reuters) - U.S. corn and soy futures eased  as rain brought relief to stressed crops in the U.S. Midwest, while expectations that weekly USDA export data will show weak wheat sales also dented sentiment.
"It continues to be a soft wheat market supported by corn and corn only, as U.S. exports continue to pencil $20 to $30 per tonne under Russian sales that are coming thick and fast," said  Scott Briggs, ANZ Banking Group's London-based commodities director in a market report.

Ukraine grain harvest to jump to 51 mln T in 2011
KIEV, July 28 (Reuters) - Ukraine's grain harvest will reach 51 million tonnes in 2011 against 39.2 million in 2010, First Deputy Farm Minister Mykola Bezugly said on Thursday, updating the previous official forecast of 46 million tonnes.
"We will harvest 51 million tonnes this year. The official forecast of the Agriculture Ministry is based on information from regions. They (expect) 46.1 million tonnes but it is a mistake," Bezugly told a news conference.

Asia Rice-World's top rice exporters see record sales this year
BANGKOK, July 27 (Reuters) - The world's top two rice exporters, Thailand and Vietnam, are aiming for record exports this year due to strong demand that will allow them to sell bumper crops at good prices, exporters said.
Thailand, the biggest exporter, expected to ship more than 10 million tonnes in 2011, up from 9.0 million last year, on strong demand in the first half, according to the Thai Rice Exporters Association.

Russia grain harvest surges 58 pct from previous week
MOSCOW, July 27 (Reuters) - Russia's grain crop surged 58 percent week-on-week as the 2011 harvest gathered pace, Agriculture Ministry data released on Wednesday showed.
It said the grain harvest reached 27 million tonnes by bunker weight, with wheat accounting for 21.2 million tonnes of the total.

Wheat yields in southern North Dakota seen lower
MANDAN, North Dakota, July 26 (Reuters) - Spring wheat yields were projected to decline this year in the southern half of North Dakota as a late start to the planting season and excessive moisture stressed the crop, allowing diseases to thrive, crop scouts on an annual tour found.
Huge pools of standing water covered large swaths of farmland across the state, submerging fields of corn, hay and hard red spring wheat.

India Court Seeks Rice Quota Halt (Source: CME)
An Indian court ordered the federal government to comply with an order issued two days ago to stop allocating quotas to private rice exporters while complaints over allocation rules are being heard. The move could delay by days a government plan to allow the export of up to one million tons of common-grade rice. "Today, they [the judges] asked [the government] to follow the court order," Anshuj Dhingra, a lawyer representing the petitioner rice exporter, told Dow Jones Newswires. The court had ordered a freeze on allocations on Tuesday, a day before the allocations were made via a notice posted on the website of the Directorate General Of Foreign Trade. "It is directed that no allotment of quota shall be made till the next date of hearing," Tuesday's Delhi High Court order said. However, the wing of the trade ministry allocated shipment quotas to 82 companies under the rice export program Wednesday, probably because a copy of the order had not reached them at that time.
Industry officials said the process of rice shipments is bound to be delayed by days in view of the court order. The rice exports were allowed by the government earlier this month after it partially lifted a 2008 ban as foodgrain stocks have hit an all-time high. India's trade ministry had set a minimum price of $400 a ton and a cap of 12,500 tons of rice export for each applicant. Some rice exporters objected to the export rules, saying they were "too stringent" as the time given to complete formalities was too short. But the trade ministry denied this and said initial applications only had to be emailed.

India Court Seeks Rice Quota Halt (Source: CME)
An Indian court ordered the federal government to comply with an order issued two days ago to stop allocating quotas to private rice exporters while complaints over allocation rules are being heard. The move could delay by days a government plan to allow the export of up to one million tons of common-grade rice. "Today, they [the judges] asked [the government] to follow the court order," Anshuj Dhingra, a lawyer representing the petitioner rice exporter, told Dow Jones Newswires. The court had ordered a freeze on allocations on Tuesday, a day before the allocations were made via a notice posted on the website of the Directorate General Of Foreign Trade. "It is directed that no allotment of quota shall be made till the next date of hearing," Tuesday's Delhi High Court order said. However, the wing of the trade ministry allocated shipment quotas to 82 companies under the rice export program Wednesday, probably because a copy of the order had not reached them at that time.
Industry officials said the process of rice shipments is bound to be delayed by days in view of the court order. The rice exports were allowed by the government earlier this month after it partially lifted a 2008 ban as foodgrain stocks have hit an all-time high. India's trade ministry had set a minimum price of $400 a ton and a cap of 12,500 tons of rice export for each applicant. Some rice exporters objected to the export rules, saying they were "too stringent" as the time given to complete formalities was too short. But the trade ministry denied this and said initial applications only had to be emailed.

EU Fruit Crisis Deepens (Source: CME)
French farmers have started attacking fruit shipments from Spain in the latest sign that the crisis in Europe's agricultural sector this year is far from over, farming bodies said. On Tuesday this week, a truck carrying peaches and nectarines from Spain was attacked by farmers as it tried to cross the border into France. European Union farming lobby group Copa-Cogeca said dozens of trucks carrying fruit have been intercepted at a crossing in Boulou en Roussillon in recent weeks, causing problems for companies trying to ship goods into France. "Copa-Cogeca deplores and condemns the violent actions committed in France," secretary general Pekka Pesonen said in a letter to the European Union's executive arm, the Commission. Plummeting fruit and vegetable prices have hit Europe's farmers hard this year after an outbreak of virulent E.coli in Germany has left at least 26 people dead and thousands more ill.
Spain has suffered paticularly badly after Germany initially blamed it for causing the outbreak, leaving farmers to destroy thousands of tons of produce that were later proved to be uncontaminated. The European Commission has proposed compensation of EUR226 million to help farmers through the crisis, including EUR71 million for Spain, but farmers say this isn't enough. Spain's fruit and vegetables exporters association, FEPEX, Monday estimated losses at EUR225 million a week since the crisis began. Angelique Delahaye, president of Vegetables of France, a union of vegetable producers, said Spanish peach producers are selling below cost in France, undercutting local prices buy as much as 40 cents a kilo. She said Spanish farmers don't adhere to the same strict rules on labor costs and pesticides use as the French, which is why their fruit is cheaper.
"There is social and environmental dumping," she said. "We don't oppose the free market so long as rules are the same for everybody, but we oppose unfair competition." But Juan Corbalan, head of the Brussels office of Spanish agri-food co-operative AgriFruit, said the problems have been caused by early harvests in France and Italy due to serious drought earlier this spring. "All European farmers are very worried about this problem as prices are more than 50% lower than other years," he said. "We need a European solution to recover the confidence of the consumers."

Sugar eases, below 5-month peaks, coffee falls
LONDON, July 28 (Reuters) - Sugar futures edged lower  below 5-month peaks, weighed by improved flows of export sugar from Brazil, while coffee slipped on technical weakness and ICE cocoa dipped as ample West African supplies weighed on prices.
New York coffee  will continue to slide within a falling descending channel, towards $2.37 per lb, to support provided by the lower channel line.

Germany set to produce more sugar in new season
HAMBURG, July 27 (Reuters) - Germany is set to produce significantly more refined sugar in the upcoming 2011/12 production season following favourable weather for sugar beet growth and increased beet plantings, the head of German sugar industry association WVZ told Reuters on Wednesday.
The WVZ estimates that German sugar beet plantings for the new crop this autumn have been expanded by between 5 to 8 percent from the 344,000 hectares last season, said WVZ chief executive Dieter Langendorf.

Ivory Coast '11/12 cocoa output down 15 pct-Armajaro
LONDON, July 27 (Reuters) - Ivory Coast and Ghana 2011/12 cocoa production is expected to fall 15 percent on the year, helping switch the global market into a deficit of over 100,000 tonnes, international trade house Armajaro Trading Limited said on Wednesday.
Ideal weather conditions in West Africa led to a bumper crop in 2010/11 and Armajaro expects the coming 2011/12 crop to revert to lower production.

Cameroon cocoa bean exports up to 196,492 tonnes by June 30
YAOUNDE, July 27 (Reuters) - Cameroon, the world's fifth cocoa grower, exported 196,492 tonnes of beans by June 30 for the 2010/11 season, up from 166,939 tonnes for the same period in the previous season, the National Cocoa and Coffee Board (NCCB) said on Wednesday.
The data showed the Central African country shipped 5,547 tonnes for the month of June. For the same month in the 2009/10 season, it exported 4,785 tonnes of beans.

Australia 2011 sugar crush gathers pace, nearly 25 percent done
SYDNEY, July 27 (Reuters) - Australia's 2011 sugar crush is starting to gather pace with nearly a quarter of the crop now harvested, industry officials said on Wednesday.
Australia is the world's third largest sugar exporter and is likely to harvest around 30 million tonnes of cane, up from last year's rain affected 27.5 million tonnes, but still below a typical harvest of 33 million tonnes.  

Rubber Supply Growth May Slow in Third Quarter as Vietnam Delays Tapping (Source: Bloomberg)
Natural rubber output in key growing countries will expand at a slower pace in the third quarter as a “severe” leaf disease delays tapping in Vietnam, according to the Association of Natural Rubber Producing Countries. Production from member countries, representing 92 percent of global supply, may increase 3.4 percent to 2.77 million metric tons during the July-to-September period compared with 12.1 percent a year earlier, the group said in an e-mailed report today. Supply growth in the first and second quarter this year was 10.5 percent and 3.3 percent respectively, it said. “Slow growth in supply and high oil price could help natural rubber market to continue staying strong,” the Kuala Lumpur-based group said in a monthly report. Supply ’deficit’ will probably continue through 2018 as gains in production may be marginal, it said.

Crude Oil Falls, Heads for Weekly Decline, on U.S. Debt Ceiling Dispute (Source: Bloomberg)
Oil fell, headed for the first weekly decline in five, 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 0.5 percent after House Speaker John Boehner delayed a planned vote on debt-limit legislation as Senate leaders stood ready to kill the measure should it get to their chamber. Prices also dropped before a report forecast to show the world’s largest economy grew at the slowest pace in a year. U.S. crude stockpiles rose for the first time in eight weeks last week. “All eyes are focused on the U.S. debt,” said Jonathan Barratt, a managing director of Commodity Broking Services Pty in Sydney, who predicts oil in New York will average $100 a barrel this year. “We did see a build in inventories. If it becomes more of a trend rather than a one-off, that’s a worry.”

Japan June rare earth imports from China down 13 pct m/m
TOKYO, July 28 (Reuters) - Japan's imports of rare earths from China fell nearly 13 percent in June from May to their lowest level since February and a second month-on-month drop in a row, ministry of finance data showed on Thursday, as the price of the metal surged.    
Japanese imports of rare earths from China stood at 1,386 tonnes in June, down from 1,592 tonnes in May, and the lowest since February's 1,138 tonnes.

Japan June zinc exports halve from year earlier
TOKYO, July 28 (Reuters) - Japan's refined zinc exports for June halved from a year earlier to 4,707 tonnes, Ministry of Finance data showed on Thursday,    as production remained disrupted by the massive earthquake in March.
The drop in June exports widened from a 32 percent decline in May.

China daily steel output at 1.95 mln T in mid-July -CISA
SHANGHAI, July 28 (Reuters) - China's mills produced 1.9499 million tonnes of crude steel a day during July 11-20, down 0.26 percent compared with the previous 10 days, data from the China Iron and Steel Association (CISA) showed on Thursday.  
China's steel output has remained at high levels despite monetary tightening and a decline in demand for flat products used in automobiles and household appliances, with demand for construction steel still high as a result of a nationwide cheap housing programme.

Reliance Steel raises credit facility to $1.5 bln
July 27 (Reuters) - Reliance Steel & Aluminum Co  said it raised its credit facility by 36 percent to $1.5 billion, as the metals  processor looks to acquire smaller peers.
"The increased size of the credit facility will allow us to continue our growth of existing operations as well as anticipated acquisition opportunities," Chief Executive David  Hannah said in a statement.

Aluminium prices surge in China on demand, speculation- trade
HONG KONG, July 28 (Reuters) - China's aluminium prices have risen 4.1 percent so far this week to hit a 15-month high on Thursday due to steady demand and speculation, and this could drive up prices of the metal on the London Metal Exchange, traders and analysts said.
Strong prices are raising worries that Beijing's commodity manager, the State Reserves Bureau (SRB), will release aluminium stockpiles to ease domestic prices as China aims to fight inflation in the country, the world's top aluminium consumer.

China, taxes, gold to dominate outback Australia mine meet
SYDNEY, July 28 (Reuters) - Australia's growing dependence on China's hunger for imported mineral commodities and looming new mining and carbon taxes at home will dominate the annual Diggers and Dealers resources conference in the far western outback next week.
The plight of gold miners, who face increasing operating costs despite record bullion prices, will also weigh on the meeting of some 2,000 delegates.

Labor unrest in copper mines over the past year
July 27 (Reuters) - Miners from Chile to Indonesia have staged strikes to demand a bigger share of a global copper boom, stoking supply fears and boosting prices.
Following are some facts about labor unrest in copper mines over the past year:
July 21, 2011 - Thousands of union workers at Chile's Escondida mine, the world's biggest copper mine, begin a strike to demand bonuses to offset lower output level compensation.

Kazakhmys still on track after H1 copper output dip
LONDON, July 28 (Reuters) - Kazakh miner Kazakhmys  posted a 7 percent dip in first-half copper production in line with expectations and said it was on track to meet its full-year target of 300,000 tonnes, after the second quarter saw improved grades and output.
The FTSE 100 miner said it was hit in the first half by lower copper in concentrate production, on the back of lower grades that offset an almost 2 percent rise in ore extracted.

Japan June copper exports fall 39 pct yr/yr
TOKYO, July 28 (Reuters) - Japan's refined copper exports fell 39 percent in June from a year earlier to 27,486 tonnes, for a ninth straight month of year-on-year declines, although the pace slowed from May's 52 percent drop, Ministry of Finance data showed on Thursday.
Taiwan was the largest market for Japanese copper exports, with a 42 percent share, up from 32 percent in May.

Copper Rises as Strike at World’s Biggest Mine in Chile Spurs Supply Woes (Source: Bloomberg)
Copper rose after BHP Billiton Ltd. canceled shipments from Chile’s Escondida mine, the world’s biggest source of the metal, as a strike extended to seven days. Workers vowed to step up efforts to secure improved bonuses and benefits as management called the strike illegal and refused to negotiate. Prices also gained after Kazakhmys Plc (KAZ) and OAO GMK Norilsk Nickel reported lower copper output. “Near term, we’ve got supply tightness with the strike at Escondida,” Frank Lesh, a trader at FuturePath Trading LLC in Chicago, said yesterday in a telephone interview. “Longer term, we’re looking for Chinese buying to pick up. There’s also underlying demand from the U.S. and Japanese auto industry.”

METALS-Chile mine supports copper but U.S. debt talks eyed
LONDON, July 28 (Reuters) - Copper steadied on Thursday as debt concerns in the United States and Europe offset supply worries following a declaration of force majeure by the world's biggest copper mine.
Three-month copper on the London Metal Exchange  traded at $9,767 a tonne by 1029 GMT from a close of $9,780 on Wednesday. The metal used in power and construction had nudged higher earlier in Thursday's session but lost ground as the euro fell against the dollar.

PRECIOUS-Gold edges higher, debt dangers dominate
LONDON, July 28 (Reuters) - Gold prices rose towards $1,620 an ounce on Thursday as a deadline to lift the U.S. debt ceiling approached, stoking concerns of a pontential default by the world's biggest economy, and as worries over euro zone debt simmered.
Gains in the precious metal were relatively muted, however, as investors took a breather after pushing gold prices to record highs in two of this week's three previous sessions.

Gold Set for Monthly Rally as U.S. Lawmakers Wrangle Over Debt (Source: Bloomberg)
Gold, trading within 1 percent of a record, is set for the first monthly increase in three as U.S. politicians remain deadlocked on how to raise the federal debt ceiling and avoid a default that may hurt financial markets. Immediate-delivery gold was little changed at $1,614.20 an ounce at 9:23 a.m. in Singapore after reaching an all-time high of $1,628.05 on July 27. Spot gold has rallied 7.6 percent this month, with gains also driven by the sovereign-debt crisis in Europe that pushed bullion in euros and pounds to all-time highs. A U.S. lawmakers’ vote on House Speaker John Boehner’s deficit-cutting plan, postponed from 6 p.m. Washington time yesterday, may be taken up later. Senate Democrats have said they will kill the measure and President Barack Obama has threatened a veto. U.S. borrowing authority expires on Aug. 2.

China Gold Demand May Surpass India by End of This Year, Goldcorp CEO Says (Source: Bloomberg)
Demand for physical gold in China may exceed consumption in India by the end of this year, said Chuck Jeannes, chief executive officer of Goldcorp Inc. (G), the world’s No. 2 producer of the metal by market value. “Three or four years ago there was no one who would have expected Chinese physical demand for gold to surpass India,” Jeannes said yesterday in a telephone interview from New York. “Now it looks like that could happen as early as the end of this year. And that’s while Indian demand is increasing.” While global demand for gold is advancing on concerns about financial turmoil in the U.S. and some European countries, consumers in China are buying larger amounts of the metal as an inflation hedge, Jeannes said.

Brazil sees more ethanol imports this season
SAO PAULO, July 27 (Reuters) - Brazil is likely to import a further 250 million liters of anhydrous ethanol by the end of the 2011/12 sugar cane season, on top of 400 million liters brought in so far this season, a senior cane industry official told Reuters.
Fearing the government would reduce a mandatory mix of 25 percent anhydrous ethanol in Brazil's gasoline after its rising cost fed into inflation, cane mills have cranked up production of the anhydrous biofuel to persuade them to keep the blend.

Brazil sees more ethanol imports this season
SAO PAULO, July 27 (Reuters) - Brazil will expand ethanol imports this year and may also boost gasoline imports to meet booming fuel demand, industry officials said on Wednesday, in another sign of Brazil's growing importance in global fuel markets.
Brazil is likely to import a further 250 million liters of anhydrous ethanol by the end of the 2011/12 sugar cane season, on top of 400 million liters brought in so far this season, Antonio de Padua Rodrigues, technical director of cane industry association Unica told Reuters.

20110729 1053 Soy Oil & Palm Oil Related News.

Soybeans (Source: CME)
US soybean futures retreated on less threatening longer range weather forecasts and slowing demand. Weather models projecting more rain for the Midwest in August set stage for the declines, with lower than expected crush and export data adding to the lower theme, analysts said. Yet, prices continued to hold within recent trading ranges, as there remain enough crop and debt uncertainties to limit selling, analysts say. A firmer US dollar added further pressure to encourage some end of month profits taking. CBOT Nov soy end down 9c at $13.71 1/2/bushel.

Soybean Meal/Oil (Source: CME)
Soy product futures were mixed, with soymeal managing to withstand selling pressure from soybeans on smaller than expected June inventories. US Census Bureau reported June soymeal supplies shrunk in June, a reflection of lower crush rates and better than expected demand, analysts say. Soyoil fell on traders buying soymeal and selling soyoil on spreads, as ample inventories and lagging demand pressured soyoil values. CBOT Dec soymeal end flat at $363.60/short ton, and Dec soyoil finish down 1.3% at 56.55 cents/pound.

Palm oil drops U.S. debt jitters, improved soy weather
KUALA LUMPUR, July 28 (Reuters) - Malaysian palm oil futures dropped 1.2 percent  as concerns over a looming global debt crisis and improved weather for parched U.S. soy crops prompted investors to cut back positions.
"Sentiment is really weak. We could be seeing more profit taking in the days to come but the hot weather has started to hurt soy yields in the U.S.," said a trader with a foreign commodities brokerage.