Thursday, August 4, 2011

20110804 1805 FCPO EOD Daily Chart Study.

FCPO closed : 3101, changed : -35 points, volume : higher.
Bollinger band reading : side way range bound.
MACD Histrogram : resumed weakening, buyer reducing position.
Support : 3100, 3070, 3050, 3020 level.
Resistance : 3150, 3200, 3250, 3270 level.
Comment :
FCPO closed recorded loss with better volume participation while overnight soy oil closed severely lower and currently continue to trade weaker.
Improving rains over soybean planting area lead soybean and soy oil to trade weaker while lower crude oil price due to sustaining fear of slowing world economy growth also lead FCPO price to head south today.
News wise, Reuters reported that Southeast Asian palm oil output growth will slow in the second half of 2011 as the impact of El Nino weather conditions from two years ago manifests with lower oil-yielding palm fruits, a leading agronomist said on Thursday.
Daily chart formed a small down bar candle closed below middle Bollinger band level after market opened gap down, traded side ways within 21 points range bound market to closed near the low of the day.
Technical reading suggesting a side way range bound market development testing support and resistance level awaits soon to be release Reuters survey on July 2011 CPO data.
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.

20110804 1720 FKLI EOD Daily Chart Study.

FKLI closed : 1542, changed : -1.5 point, volume : lower.
Bollinger band reading : pullback correction downside biased.
MACD Histrogram : turned upward, seller taking partial profit.
Support : 1540, 1530, 1515, 1500 level.
Resistance : 1550, 1565, 1570, 1580 level.
Comment :
FKLI closed recorded small loss with quiet volume transacted doing 5.5 points discount compare to cash market that closed little higher. Asia markets closed mixed and European markets opened higher but currently also having mixed development with overnight U.S. market having technical rebound closed little higher.
Fear of slowing global economy growth and some speculation play on possible U.S. Federal Reserve may consider another program to stimulate its economy leaded regional markets to trade mixed.
Daily chart formed a down doji bar candle closed little higher from lower Bollinger band level doing pullback correction after market opened and tested higher, slide lower toward second session and recovered slightly to closed off the low of the day.
Chart reading suggesting a pullback correction downside biased market development testing support and resistance level.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant or strength with moderate cut loss and profit target.

20110804 1700 Regional Markets EOD Daily Chart Study.

DJIA chart reading :
downside biased with possible pullback correction.

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

KLCI chart reading : pullback correction downside biased.

20110804 1555 Global Market & Commodities Related News.

Intervention hits yen, stocks weak on global growth fears
SYDNEY, Aug 4 (Reuters) - The yen fell on Thursday after intervention by Japanese authorities, though investors steered clear of riskier assets,  uncertain if the European Central Bank would join the fray by increasing bond purchases to fight a crisis of confidence.
A day after the Swiss National Bank unexpectedly cut rates to weaken its currency, the yen tumbled around 2.5 percent against the dollar after repeated yen selling by the Bank of Japan.

El Nino after effects slowing Asian palm output growth
KUALA LUMPUR, Aug 4 (Reuters) - Southeast Asian palm oil output growth will slow in the second half of 2011 as the impact of El Nino weather conditions from two years ago manifests with lower oil-yielding palm fruits, a leading agronomist said on Thursday.
Top oil palm growers Indonesia and Malaysia have seen more male flowers maturing this year after an El Nino-driven dry spell hit the region in mid-2009, said agronomist Ling Ah Hong with Malaysian-based consultancy Ganling.

U.S. corn falls for 2nd day on weather, economic woes
SINGAPORE, Aug 4 (Reuters) - Chicago corn slid 0.6 percent, falling for a second straight day as forecasts for crop-friendly weather in the U.S. corn belt and concerns over slowing economic growth weighed on the market.
"Today's weakness is on cooler weather moving into the Midwest and weaker-than-expected data from the U.S," said Abah Ofon, agricultural commodities analyst with Standard Chartered Bank in Singapore.

Brazil Bahia cocoa mid crop may have past peak
BRASILIA, Aug 3 (Reuters) - Cocoa deliveries to traders and grinders from Brazil's main cocoa state Bahia slipped in the last week, data from Bahia Commercial Association showed, in a possible indication that the harvest has now peaked.
Bahia-based cocoa analyst Thomas Hartmann said that the flow of cocoa from other states continued at a steady pace and that new areas in Para state in the north planted as part of a family agriculture program, were starting to bear pods.

Peru coffee exports jump 81 pct in value
LIMA, Aug 3 (Reuters) - Revenues from Peruvian coffee exports jumped 81 percent in the first half of 2011 from the same period a year earlier due to high international prices, the country's national council of coffee producers said on Wednesday.
If prices paid for coffee beans on international markets remain high, exports could be worth $1.2 billion in 2011, topping the record $860 million earned in 2010, Council President Cesar Rivas said in a statement.

New frost warning for small Brazil coffee state
BRASILIA, Aug 3 (Reuters) - Small coffee state Parana, which produces roughly 5 percent of Brazil's coffee, could face frost in the early hours of Thursday, forecaster Somar predicted, but the likelihood of significant crop damage is minimal.
Somar said the northern part of Parana, where much of the state's coffee is concentrated, said minimum temperatures would hit 1 Celsius in the early hours of Thursday and said the frost risk was "low" versus nil for other coffee-producing states.

US sugar industry consolidates, productivity up
STOWE, Vt, Aug 3 (Reuters) - The U.S. sugar industry has seen the number of people it employs contract sharply but economic activity has jumped, a report said Wednesday.
"The U.S. sugar industry has made major strides in recent years in improving its competitive position," LMC  International, a UK-based consultancy specializing in agricultural commodities said in a report presented by Owen Wagner at the annual meeting of the American Sugar Alliance.

Brazil corn exports seen picking up in August
SAO PAULO, Brazil, Aug 3 (Reuters) - August is typically an important month for Brazilian corn shipments due to the harvest of its winter crop and ports' shipping schedules suggest exports of the grain will increase sixfold from July.
But despite the strong showing of corn exports from Brazil so far this year, exports will likely fall shy of last year's near record tally due to harsh weather that sapped some of the productive potential of the local crop this season.

Oil rebounds from 1-mth lows, tracks equities higher
SINGAPORE, Aug 4 (Reuters) - Oil posted a modest rebound from one-month lows, tracking a bounce in Asian stock markets ahead of key U.S. employment reports expected to shed further light on whether a recovery in the world's largest economy is faltering.
"Today it's just a relief rebound after quite a drastic drop in both crude benchmarks overnight," said Serene Lim, a Singapore-based oil analyst at ANZ.

Shell faces first Nigerian oil spill claims in UK
ABUJA, Aug 3 (Reuters) - Royal Dutch Shell  has agreed that a Nigerian community impacted by its oil spills can seek compensation in a British court, lawyers in the case have said, potentially opening itself up to bigger future financial and reputational damages.
Shell said it does not comment on the legal process, which could take several months to reach a conclusion. It has already accepted responsibility and promised to pay some form of compensation for the spills which took place in 2008 and 2009, destroying parts of the Bodo fishing communities in the Ogoniland region of the Niger Delta wetlands.

LME copper up 0.4 pct on Chile strike, short covering
SHANGHAI, Aug 4 (Reuters) - LME copper rose, fuelled by continued supply fears and short-covering as it recovered from three-week lows struck the previous day after investors were disappointed by data on the U.S. services sector and factory orders.    
"Copper is under pressure but it's holding up very well given the uncertainties we have in the global economy. This was on the back of supply concerns over Escondida," said managing director of Commodity Broking Services Jonathon Barratt.

Indian state gets new leader, iron ore ban eyed
NEW DELHI, Aug 3 (Reuters) - A political crisis gripping India's second-biggest iron ore exporting region blew over on Wednesday with the appointment of a new chief minister but the move is not expected to see a ban on ore exports lifted any time soon.
The southern state of Karnataka chose Sadananda Gowda as the new chief minister after his predecessor B.S. Yediyurappa resigned over a controversy surrounding a $3.6 billion illegal iron ore mining scandal. He denies any wrongdoing.

Costs bite as Antofagasta's copper output climbs
LONDON, Aug 3 (Reuters) - Chilean miner Antofagasta  posted a 17 percent increase in second-quarter copper output as it ramps up production at its Esperanza mine, while costs climbed on the back of a stronger peso and higher prices for inputs such as sulphuric acid.
Output came in at 158,700 tonnes, up from 135,200 a year ago and more than 22 percent higher than the first quarter, when output was dampened by misses at its flagship mine Los Pelambres and expansion project Esperanza.  Analysts said the number was broadly in line with forecasts.

Gold ignores firm dollar; rises towards record
SINGAPORE, Aug 4 (Reuters) - Gold rose towards its record high, supported by worries about the widening euro zone debt crisis and slowing global growth and shrugging off strength in the dollar after Japan's intervention in the currency market.
"Gold seems to have wings at the moment as there are lots of macro and sovereign debt uncertainties," said David Thurtell, an analyst at Citigroup.

20110804 1122 Global Market & Commodities Related News.

GLOBAL MARKETS: Risk assets steadier, but markets still fragile
SYDNEY, Aug 4 (Reuters) - Asian stocks struggled to follow a positive lead from Wall Street on Thursday as worries about global growth persisted, while news of a merger between two Japanese industrial giants helped the Nikkei steady from a two-day drop.
"We had some mixed data from the U.S. overnight, so investors want to wait for the non-farm payroll report on Friday to find out more about the state of the U.S. economy," Hiroki said.

OIL: Oil falls on U.S. inventory build, weak data
NEW YORK, Aug 3 (Reuters) - Oil prices fell sharply on Wednesday to the lowest level in a month, stung by an increase in U.S. petroleum inventories that raised concerns about oil demand.
"The EIA report was bearish with the across-the-board builds," said John Kilduff, partner for Again Capital LLC in New York.

NATURAL GAS: Natgas ends down with crude, milder northern temps
NEW YORK, Aug 3 (Reuters) - U.S. natural gas futures ended lower on Wednesday, as milder northern tier weather, weak economic data and a sharp slide in crude weighed on prices despite continued heat expected in the South and rising tropical activity that could eventually disrupt supplies.
"The sell off started when forecasts turned a little milder, but we got a wave of selling after the oil inventory report even though the two markets don't often trade together," said Ed Kennedy INTL Hencorp Futures in Miami, noting weather across northern tier states turned milder this week.

EURO COAL: S.African dips by $1.00/T
LONDON, Aug 3 (Reuters) - Prompt physical FOB Richards Bay prices fell in line with oil's sharp drop in early trading but DES ARA European prices had recovered most of the day's earlier losses by the afternoon.
"Coal swaps were aggressively sold off this morning but crept back to almost flat with the previous day's levels later on," one major bank trader said.

COMMODITIES: Weak US data pounds oil, copper; gold at new high
NEW YORK, Aug 3 (Reuters) - Oil prices fell on Wednesday for a fourth straight session and copper extended losses for a third running day as weak U.S. data prompted investors to fear a prolonged gloom in the world's largest economy.
Corn and wheat retreated from Tuesday's sharp rally as cooler weather in the U.S. Midwest offset worries about the impact of a recent heatwave on the region's crops.

20110804 1113 Local & Global Economic Related News.

Malaysia: S&P rating cut due to methodology
S&P’s decision to cut Malaysia’s sovereign rating last week was prompted by a change in its ratings methodology and its view on the country’s creditworthiness remains unchanged. The agency had lowered Malaysia’s local currency rating to A from A+ on 27 July. “We define the foreign currency rating first, and then how much more the credit can notch up to the local currency rating,” S&P’s director of Asian sovereign ratings Takahira Ogawa said. “If you look at Malaysia, already 30% of the government (debt) securities are owned by foreigners. It is getting more and more difficult for us to have higher differentiation between the local and foreign currency rating,” Ogawa added. (Bloomberg)

China: Non-manufacturing industries grew in July, survey shows
A Chinese non-manufacturing index rose for the first time in 3 months in July, indicating some industries are withstanding the government’s campaign to cool inflation in the world’s fastest growing major economy. A purchasing managers’ index rose to 59.6 from 57.0 in June. (Bloomberg)

Australia: Home building approvals, house prices drop on rates
Australian home-building approvals unexpectedly declined in June for a third straight month and house prices fell, prompting the local currency to pare gains as traders reduced bets on an interest rate increase this year. The number of permits granted to build or renovate houses and apartments slid 3.5% from May, when they dropped a revised 6.3%. (Bloomberg)

Australia: RBA holds key rate at 4.75% to gauge US, China slowdown
The Reserve Bank of Australia kept the benchmark interest rate unchanged, saying that while its board considered boosting borrowing costs, it was prudent to hold off because of a clouded global economic outlook. Overnight cash rate target was held at 4.75% for a record eight straight meeting. (Bloomberg)

UK: Construction index was little changed in July at 53.5
An index of UK construction was little changed in July from the previous month, slipping marginally to 53.5 from 53.6 in June. Residential construction shrank for a second month, while commercial and civil engineering expanded. Confidence among building firms “improved slightly”. (Bloomberg)

US: Consumer spending unexpectedly falls as hiring slumps
US consumer spending unexpectedly dropped in June for the first time in almost two years and savings climbed, adding to evidence that the slump in hiring is hurting household confidence. Purchases declined 0.2% after a 0.1% gain the prior month. Incomes grew at the slowest pace since Nov. (Bloomberg)

US: Senate approves debt-ceiling legislation
Just hours before a potential default on the nation’s debt obligations, the Senate approved an increase to the US debt ceiling that also reduces planned budget deficits, and President Barack Obama signed the legislation into law. By a 74 to 26 vote, the Senate approved a proposal that increases the USD14.3trn debt limit by up to USD2.4trn in two stages, and by the Congressional Budget Office’s tally, reduces deficits by USD2.1trn over a decade. Yet even with the cuts, the US is projected to increase the national debt by USD7trn or more over the same span. (

US: Moody's confirms US triple-A rating
Moody's late Tuesday confirmed the US' triple-A rating following the increase in its debt ceiling. However, the rating agency assigned a negative outlook on the rating. "The initial increase of the debt limit by USD900bn and the commitment to raise it by a further USD1.2trn to USD1.5trn by year-end have virtually eliminated the risk of such a default, prompting the confirmation of the rating at Aaa," Moody's said. It also warned that the negative outlook indicates that there is a risk of a downgrade if the US fiscal environment weakens further and its economic outlook deteriorates significantly. (

U.S: Obama signs debt-limit plan to avoid default at deadline. President Barack Obama signed a debt-limit compromise that prevents a U.S. default on the day the Treasury had warned the nation's borrowing authority would expire, ending a months-long debate that reinforced partisan divisions over federal spending. The Senate voted 74-26 for the measure, which raises the nation's debt ceiling until 2013 and threatens automatic spending cuts to enforce USD 2.4tr in spending reductions over the next 10 years. It won backing from 45 Democrats, 28 Republicans and one independent. The House passed the plan yesterday. (Source: Bloomberg)

US: Private-sector jobs up 114,000 in July, ADP says
Payrolls at US companies increased by a tepid 114,000 in July, suggesting modest job growth continued in the fragile economy, according to the ADP employment report released Wednesday and marking the 18th straight month of job growth. The ADP report covers only private-sector employment, and not government jobs. (Bloomberg)

US: Services growth slowest since Feb 2010
Service industries expanded in July at the slowest pace in 17 months as orders and employment cooled, indicating the biggest part of the US economy had little spark to begin the second half of the year. The Institute for Supply Management’s index of non-manufacturing businesses, which covers about 90% of the economy, dropped to 52.7 from 53.3 in June. (Bloomberg)

US: Mortgage applications increase 7.1% on refinancing
Mortgage applications in the US climbed last week, led by a boost in refinancing as borrowing costs fell to the lowest level in more than eight months. The Mortgage Bankers Association’s index rose 7.1% in the period ended 29 July from the prior week. The group’s refinancing measure climbed 7.8% while the purchase gauge increased 5.1%, the biggest gain in 11 weeks. (Bloomberg)

20110804 1112 Malaysia Corporate Related News.

Mah Sing in Pekeliling flats land venture
Property developer Mah Sing Group has secured the development rights for a 4.08-acre (1.63ha) parcel along Jln Tun Razak-Jalan Pahang, which formerly housed the Pekeliling flats, with a potential gross development value (GDV) of RM900m. Its wholly-owned subsidiary, Grand Pavilion Development SB, had entered into a JV agreement with privately-held Asie SB and its unit, Usaha Nusantara SB to undertake a niche development named M Sentral there. (Financial Daily)

Sapura Crest wins new jobs in Australia
SapuraCrest Petroleum’s flagship vessel Sapura 3000 has won jobs worth up to USD260m (RM769.6m) for the Gorgon natural gas project offshore Western Australia. Sapura 3000 is expected to grab about 60% of the USD440m offshore operation contract from Norway-based Subsea 7 SA, a joint-owner of the vessel. (Financial Daily)

CIMB ventures into Indian market
CIMB Group has entered the Indian market with the opening of its Mumbai office and the signing of a Business Cooperation Arrangement with Kotak Mahindra Bank Ltd. CIMB’s partnership with Kotak is in the form of a business cooperation arrangement, where both parties will cooperate and explore opportunities arising from cross-border investments and trade flows with a focus on selected countries in the India-Asean corridor. (Financial Daily)

CBIP unit wins RM171m contract
CB Industrial Product Holding’s unit has won a RM171m contract from the Housing and Local Government Ministry to supply 100 units of fire rescue transport fitting and accessories. Its wholly-owned subsidiary, AVP Engineering (M) SB, has been awarded the contract to supply and install the fire rescue transport C/W fitting and accessories to the Fire and Rescue Department. (Financial Daily)

Pantech subscribed for additional 30m shares in its subsidiary
Pantech Group Holdings has increased its investment in its wholly-owned subsidiary, Pantech Stainless & Alloy Industries SB (PSA) by the subscription of an additional 30m ordinary share of 50sen each for working capital purposes. Following the subscription, Pantech’s shareholdings in PSA has increased from 20m ordinary shares to 50m ordinary shares of 50 sen each. (Malaysian Reserve)

K-One’s listing transfer rejected
The Securities Commission has rejected K-One Technology’s proposed transfer of listing from the ACE Market to the Main Market of Bursa Malaysia. The rejection was due to non-compliance with paragraph 1.06(a) (general principles) of the SC’s equity guidelines. (StarBiz)

Catcha Media: Leong emerges as substantial shareholder. Justin Leong, grandson of the late Tan Sri Lim Goh Tong, has emerged as a substantial shareholder of Catcha Media Bhd with 6.7m shares or a 5.01% stake. (Source: The Edge Financial Daily)

Tech: BlackBerry maker mulls procurement hub in Penang. Research In Motion (RIM), the company which makes BlackBerry smartphones, is looking at establishing an international procurement centre (IPC) in Penang. The application to set up the centre has been submitted to the Malaysian Industrial Development Authority. (Source: The Star)

Property: KL among top three retail investment destinations in Asia. Pacific Star Group, one of Asia's leading real estate investment houses says commercial properties in Asia will continue to do well in the 2H11. Within the commercial sector, its top pick is retail real estate, whilst the top three destinations in the region for retail property investment are Hong Kong, Singapore and Kuala Lumpur. (Source: The Malaysian Reserve)  

Tanjong said to sell gaming unit for RM2b
Tanjong agreed to sell its gaming unit to a group of Malaysian businessmen including Genting Bhd chairman Lim Kok Thay for RM2.1b (US$710m), according to two people with knowledge of the matter. The acquisition would give the buyers control over  a numbers-forecasting business and a monopoly over horse race betting in the Southeast Asian nation. The deal comes a year after a group led by billionaire T. Ananda Krishnan offered RM4.7b for full control of Tanjong. (Business Times)

SHC Malaya sells stake for RM24m
Sin Heng Chan (Malaya) Bhd (SHC Malaya) is selling its 80% stake in Sin Heng Chan Industries Sdn Bhd (SHC Industries) to Goldform Resources Sdn Bhd for RM24.5m.The exercise also entailed the disposal of an effective 48% equity interest in LKPP-Goldkist Sdn Bhd, a 60%-owned unit of SHC Industries, it said in a filing  with Bursa Malaysia yesterday. (The Star)

Malayan Banking Bhd May look at RHB if the price Is right, says Wahid
Maybank, which called off merger talks with RHB Capital Bhd in June, is still keeping its options open, for a possible acquisition, if the price is right. President-cum-Chief Executive Officer Datuk Seri Abdul Wahid Omar said RHB was a very good bank and the combination between Maybank and RHB could create a significant amount of synergy, resulting in a significant holder value creation. He further commented that he thinks there is no reason why they (RHB) shouldn’t be able to continue on their own as they have demonstrated their capability to grow on their own. He added that Maybank has decided to stand down and not to proceed at this juncture. Abdul Wahid said at that time, Maybank had not gone down to actually making a formal bid for it; but given the expectations created, it can be challenging to come up with a compelling proposition.
It was reported that the proposed merger talks were called off not too long after Abu Dhabi Commercial Bank started to sell its 25.0% stake to Abu Dhabi-based investment fund, Aabar Investments, at a relatively high price. The fund paid RM10.80 per share for the stake which was higher than the fair value of around RM10.50 per share.  – (Bernama)

Public Bank Bhd Issues RM3b debt notes
Public Bank Bhd has issued RM3 billion of debt notes under the subordinated medium-term notes (MTN) programme. The bank said on Wednesday, Aug 3 the RM3 billion was the fifth tranche of the RM5 billion nominal value of subordinated MTN programme. The notes are due on Aug 3, 2022 and callable on Aug 3, 2017. Public bank said that the interest payable on each subordinated note issued under the fifth tranche is at the rate of 4.28% per annum (coupon rate) from (and including) Aug 3, 2011 up to (but excluding) the date of early redemption in full of such subordinated note or the maturity date (whichever is earlier). The bank added that the coupon rate would remain unchanged throughout the tenure of the subordinated notes which were issued at par. It also said that the proceeds raised from the issuance of the fifth tranche of subordinated Notes under the subordinated MTN programme shall be used to finance the working capital, general banking and other corporate purposes of Public Bank. – The Edge

Bonia to make RM5m provision in 4Q for Vietnam JV
Bonia Corp’s 4Q earnings are expected to be dented by a whopping RM5.4m provision for losses arising for a botched JV in Vietnam. Its 60% owned subsidiaries, Apex Marble SB and Mcore SB, filed a civil suit yesterday in the High Court against Leong Tat Yan for alleged breaches of contract and fiduciary duties owed to Apex and Mcore in the Vietnam JV. (Financial Daily) Please see accompanying report

FMH sees 15% profit growth in 3PL segment
Freight Management Holdings (FMH) expects the contract awarded by Shell to boost its third-party logistics (3PL) services division’s profit by 12% to 15% this year. The agreement will see FMH providing warehousing and distribution for Shell’s lubricant products. (Financial Daily)

MBSB charts new course
Malaysian Building Society Bhd (MBSB) is charting a new course to diversify into financing of SMEs by riding on government contracts under the Economic Transformation Programme. MBSB anticipates higher earnings from this segment this year as the government engages in more infrastructure projects during the year. Meanwhile, the group plans to open more branches and establish partnership with its agent. (Financial Daily)

SAAG fixes placement shares at RM0.10
The issue price of SAAG Consolidated’s ninth tranche of private placement of 10m shares has been fixed at RM0.10. This represented a premium of 43.3% to the five-day weighted average market price of RM0.069.The group had earlier proposed a private placement of up to 197.7m shares as well as two-call rights issue comprising of 5.2bn new shares at RM0.10 each on the basis of five rights shares for every two existing ordinary shares held in the company. This will be issued together with up to 1bn free detachable warrants on the basis of one warrant for every five rights shares subscribed. (StarBiz)

20110804 1008 Renewable Energy Related News.


HELSINKI, July 28 (Reuters) - Finnish refiner Neste Oil  reported a weaker-than-expected second-quarter profit,  weighed down by losses at its renewables unit, which the firm forecast to deepen in the third quarter.
Neste Oil's shares fell 8.3 pct to 9.28 euros in early trade.
Analysts said the results were soft and that some of the firm's outlook comments were gloomy.

LISBON, July 27 (Reuters) - Portugal's wind power generator EDP Renewables  on Wednesday posted a 109 percent rise in first-half net profit, to beat market expectations, after an increase in output and smaller amortisations.
EDPR, the world's fourth-largest wind power company and a unit of Energias de Portugal , said its net profit in January-June totaled 90 million euros ($130.3 million).

LOS ANGELES, Aug 2 (Reuters) - Solar developer K Road Power Holdings said on Tuesday it has reached a deal with a unit of Barclays Capital in which the investment bank will help fund its solar power plants in the U.S. Southwest.
Terms of the deal were not disclosed. But the company said that Barclays Natural Resource Investments would "make a substantial commitment" to fund K Road's portfolio.

Aug 2 (Reuters) - Ferro Corp  said it expects solar installations for the full year to be about 15 percent lower than in 2010, hurt by a demand slump in the second quarter, sending its shares down as much as 19 percent.  
"We expect solar power installations to improve, but don't expect this to impact demand until later in the year when customer inventory of solar power modules has been reduced," a company executive said on a conference call with analysts.

WARSAW, Aug 2 (Reuters) - Poland will hand free carbon emissions permits to gas and coal-fired power plants to be built through 2020 with a total capacity of 16,000 MW, a government adviser said on Tuesday.
Krzysztof Zmijewski, an advisor to the Economy  Ministry, added that Poland's renewable energy targets were unrealistically ambitious due to a shortage of capacity in the transmission system.

Aug 2 (Reuters) - Solar and LED equipment maker GT Solar International Inc  said it received an order worth $55.1 million from a new customer in Asia for polysilicon production equipment.
The order is included in the company's backlog for the first quarter of 2012, which ended on July 2, 2011, the  Merrimack, New Hampshire-based company said.

Aug 1 (Reuters) - Solar panel maker Canadian Solar Inc  said it signed a sales agreement with Indian company Cirus Solar Systems Pvt Ltd to deliver 33 MW (megawatt) of solar modules, marking its foray into India.
Cirus, which is a Hyderabad-based company, provides turnkey solutions for solar power projects.
The modules will be utilized in a government-sponsored solar park in Gujarat, which will be completed by December this year.

BEIJING/HONG KONG, Aug 1 (Reuters) - China has set unified benchmark grid feed-in power tariffs for solar projects for the first time ever, a move that will provide clearer guidance for solar power project developers when making investment decisions.
The rates, at 1 yuan ($0.16) per kilowatt hour (kWh) for projects approved after July 1, was higher than many of those proposed and accepted by state-owned solar power developers in China's second official tender last year, suggesting they would be welcome news for industry participants.

July 28 (Reuters) - SunPower Corp  and Citigroup  have formed a new fund of $105 million to enable the solar panel maker extend its lease to customers in eight states, the companies said.
A solar lease is a financing option that provides the use of a solar equipment in exchange for a monthly lease payment.

LONDON, July 28 (Reuters) - British solar power capacity rose by more than 50 percent in the three months to June as developers scrambled to finish projects before lower government support tariffs kick in next month, energy ministry data showed on Thursday.
Installed capacity for photovoltaic plants rose by 56 percent to 121.6 megawatts (MW) between March and June and grew more than eighteenfold in one year.

20110804 1007 Biofuels Related News.

Aug 1 (Reuters) - Itau BBA said on Monday it saw risks that centre-south Brazilian sugarcane output, hit by a mix of weather factors and aging plants, could be below the latest forecast by industry group Unica of 533.5 million tonnes in 2011/12.
"In the absence of a recovery in the agricultural and agro-industrial yields in the centre-south region, the 2011/12 sugarcane production might be even lower than Unica's estimate of 533.5 million tonnes," it said in a Brazil agribusiness report. It gave no figure.

WASHINGTON, July 28 (Reuters) - Backers of a plan to revamp U.S. ethanol subsidies are trying to add the plan to a debt ceiling deal, said Senator Amy Klobuchar, an ethanol supporter, on Thursday.
"We're still working on it hard," Klobuchar told reporters. "There is room for change in negotiations."
As of Thursday at midday, ethanol was not part of a debt bill offered by Senate Majority Leader Harry Reid and expected to be the Senate alternative to a House debt bill.

BRASILIA, July 28 (Reuters) - Brazil will maintain its 25 percent ethanol blend in gasoline for now, energy minister Edison Lobao said late on Wednesday, as supplies were seen adequate despite this year's disappointing sugar cane crop.
Lobao met with officials on Wednesday night to discuss reducing gasoline's anhydrous ethanol content, to ration expected smaller biofuel supplies and avert a surge in prices in the interharvest period once the sugar cane crop, from which it is produced, ends.

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.

CHICAGO, July 27 (Reuters) - U.S. ethanol production rose modestly for a second straight week on improving margins with tight supplies of corn helping ethanol futures  hover near a five-year high notched on Tuesday.
Corn supplies are forecast by the U.S. Department of Agriculture to be the smallest in 15 years this summer and prices for the animal feed and ethanol feedstock has surged in cash markets, with the new-crop harvest still weeks away.

BRASILIA, July 26 (Reuters) - Crushing of cane in Brazil and production of sugar and ethanol made from it are catching up with the 2010 season, data from cane industry association Unica showed on Tuesday, but the crop may soon run out of puff.
The crush totaled 217.4 million tonnes from the start of the season through July 16. That was 15 percent less than by the same time last season but the gap had narrowed from a lag of 18 percent at the start of July.  

20110804 1006 Global Market Related News.

GLOBAL MARKETS-Stocks tumble as growth, debt fears intensify
LONDON, Aug 3 (Reuters) - World stocks tumbled towards five-month lows  and top-rated government bonds rallied as worries grew that fiscal cutbacks and stagnating factory output would prolong a global economic slowdown and aggravate Europe's debt crisis.
"Disappointing economic data on both sides of the Atlantic, as well as surging Italian and Spanish bond yields, has seen risk appetite plummet as pessimism about the global recovery starts to take hold with a vengeance," CMC Markets analyst Michael Hewson said.

Asian Stocks Swung Between Gains And Losses (Source: Bloomberg)
Most Asian stocks gained after Japan intervened in the foreign-exchange market to sell yen. Stocks earlier fell amid concern the U.S. economic recovery is faltering following weak economic data. Canon Inc., the world’s biggest camera maker, advanced 2 percent in Tokyo after Japan’s Finance Minister Yoshihiko Noda said the country intervened to stem the yen’s gains against the dollar. Hitachi Ltd. and Mitsubishi Heavy Industries Ltd. both jumped at least 3 percent after the two companies were said to be in talks to merge some businesses. BHP Billiton Ltd., the world’s No. 1 mining company by market value, increased 0.6 percent in Sydney after copper and oil prices increased. The MSCI Asia Pacific Index fell 0.2 percent to 133.37 as of 10:14 a.m. in Tokyo, after falling as much as 0.3 percent and gaining as much as 0.2 percent.
More than two stocks rose for each that fell on the gauge, which slumped 1.6 percent last week on concern the U.S. Congress would be unable to reach an agreement to raise the nation’s debt ceiling before yesterday’s deadline.

U.S. Service Industries Grow at Slowest Pace in 17 Months on Job Prospects (Source: Bloomberg)
Service industries expanded in July at the slowest pace in 17 months as orders and employment cooled, indicating the biggest part of the U.S. economy had little spark to begin the second half of the year. The Institute for Supply Management’s index of non- manufacturing businesses, which covers about 90 percent of the economy, dropped to 52.7 from 53.3 in June. Readings above 50 signal expansion, and the median projection in a Bloomberg News survey was for 53.5 in July. Companies hired fewer workers last month than in June, a report from ADP Employer Services showed. The absence of sustained strength in services along with limited manufacturing growth adds to evidence of a broader economic slowdown. Package-delivery company United Parcel Service Inc. (UPS) is among businesses bracing for weaker demand as unemployment holds above 9 percent and wages stagnate.

JPMorgan Chase Cuts U.S. Third-Quarter GDP Forecast to 1.5% on Consumption (Source: Bloomberg)
JPMorgan Chase & Co. cut its forecast for U.S. economic growth in the third quarter by a percentage point to 1.5 percent, partly because of a slowdown in consumer spending, chief U.S. economist Michael Feroli wrote in a note today. Feroli also lowered the forecast for fourth-quarter growth to 2.5 percent from a prior estimate of 3 percent. The world’s largest economy will expand 2 percent in the first six months of 2012, less than a previous projection of 2.5 percent. With the economy expanding at that pace, the jobless rate will hold at 9 percent or above until the third quarter of 2012, he said. Recent production data wasn’t “setting up well” for the current quarter, while early surveys suggested activity “may have stalled” amid wrangling over the debt-ceiling extension, Feroli said.

Odds of Renewed U.S. Recession Seen Rising by Majority of Economic Panel (Source: Bloomberg)
The two-year-old U.S. recovery’s staying power may be diminishing as consumers and the government pare spending, say five of the nine economists on the academic panel that dates recessions. “This economy is really balanced on the edge,” Harvard University economics professor Martin Feldstein, a member of the Business Cycle Dating Committee of the National Bureau of Economic Research, said yesterday in an interview on Bloomberg Television’s “Surveillance Midday” with Tom Keene. “There’s now a 50 percent chance that we could slide into a new recession. Nothing has given us much growth.” A greater-than-expected slowdown in the first half of 2011 poses risks for the world’s largest economy, said economist Robert Hall of Stanford University, the panel’s chairman. Gross domestic product climbed at a 1.3 percent annual rate from April through June after a 0.4 percent gain in the prior quarter that was less than earlier estimated, Commerce Department figures showed July 29.

Balanced-Budget Bill Fails Fiscal Test: Stephen L. Carter (Source: Bloomberg)
At a Washington event in the early 1990s, I happened to find myself seated beside an official fairly high in the White House of George H.W. Bush. We got to chatting, and he waxed poetic about a constitutional amendment requiring the federal government to balance its annual budget. He even had a new draft in his pocket, words he had scribbled on a cocktail napkin. I don’t recall the precise language, but his version was short, and began something like this: “Except in time of war, the federal government shall not ..." A free and frank exchange of views ensued. Fast-forward to today: Republican lawmakers want a quick vote on a balanced-budget amendment (or BBA, as the cognoscenti, I am sad to report, are now calling it). This is an understandable demand given Congressional Budget Office estimates of near trillion-dollar deficits into the near future.

Shipping Boom Seen for U.S. Ports Catering to Japan Needs: Freight Markets (Source: Bloomberg)
Longshoremen at ports in Washington state and Vancouver are set to load more timber and lumber onto vessels destined for Japan as the world’s third-biggest economy rebuilds from a $220 billion natural disaster. The March 11 9.0-magnitude earthquake and resulting tsunami that left more than 20,000 people dead or presumed so will require the biggest importation of logs, timber and plywood since 2008, according to Wood Resources International LLC., a forest-industry consulting firm based in Bothell, Washington. Increased Asian demand may be the lone bright spot for dry- bulk shippers including Hyundai Merchant Marine Co. and Mitsui O.S.K. Lines Ltd. that are suffering from a glut of new ships that’s pushing down charter rates. For timber companies such as Weyerhaeuser Co. (WY) and Rayonier Inc., it’s a source of strength at a time when the U.S. housing market is floundering.

Treasury Yield Seven Basis Points From Eight-Month Low Before Jobs Report (Source: Bloomberg)
Treasury yields were seven basis points away from an eight-month low before government reports today and tomorrow that economists said will show the nation isn’t creating enough jobs to reduce the unemployment rate. U.S. securities have outperformed an index of bonds around the world as investors sought the relative safety of America’s debt. Bank of America Merrill Lynch’s Global Broad Market Index returned 2.53 in the past three months, versus 3.87 percent for the U.S. Treasury Master index. “There’s more to go” for the U.S. bond rally, said Hideo Shimomura, who helps oversee the equivalent of $77.9 billion as Tokyo-based chief fund investor at Mitsubishi UFJ Asset Management Co., a unit of Japan’s biggest bank. “The U.S. is in slowdown mode.”

Dollar Falls a Second Day Versus Euro as Slowdown Spurs Easing Prospects (Source: Bloomberg)
The dollar fell versus the euro for a second day on speculation the Federal Reserve will consider increasing monetary stimulus to counter a slowdown in the U.S. economy. The U.S. currency dropped against most of its major counterparts before reports forecast to show U.S. initial jobless claims rose and the unemployment rate remained above 9 percent. The yen held a two-day decline against the euro on prospects the Bank of Japan will follow its Swiss counterpart in easing monetary policy to curb currency strength. “The dollar will still continue to fall significantly,” said Kurt Magnus, executive director of currency sales at Nomura Holdings Inc. in Sydney. In the U.S. there’s “no recovery whatsoever. I think interest rates will remain zero for the whole of 2012.”

Dollar’s Reserve Status Is Waning, U.S. Treasury Borrowing Committee Says (Source: Bloomberg)
The committee of bond dealers and investors that advises the U.S. Treasury said the dollar’s status as the world’s reserve currency “appears to be slipping” in quarterly feedback presented to the government. The Treasury Borrowing Advisory Committee, which includes representatives from firms ranging from Goldman Sachs Group Inc. to Pacific Investment Management Co., said the outperformance of haven currencies and those from emerging nations has aided in the debasement of the dollar’s reserve status, according to comments included in discussion charts presented ahead of the quarterly refunding. The Treasury published the documents today. “The idea of a reserve currency is that it is built on strength, not typically that it is ‘best among poor choices’,” page 35 of the presentation made by one committee member said. “The fact that there are not currently viable alternatives to the U.S. dollar is a hollow victory and perhaps portends a deteriorating fate.”

Stocks in U.S. Climb, Preventing Longest Retreat of Dow Average Since 1978 (Source: Bloomberg)
U.S. stocks advanced, preventing the longest Dow Jones Industrial Average slump since 1978, amid speculation the Federal Reserve may consider another economic stimulus program to prevent a recession. MasterCard Inc. (MA), the second-biggest payments network, gained 13 percent after profit rose 33 percent as customers’ spending increased. Coca-Cola Co. (KO) and General Electric Co. (GE) added at least 1.5 percent, leading the Dow’s gain. Technology stocks in the Standard & Poor’s 500 Index climbed 1.2 percent, the most among 10 groups. Sprint Nextel Corp. (S) jumped 3.8 percent as Macquarie Group Ltd. raised its recommendation for the shares. The Dow rose 29.82 points, or 0.3 percent, to 11,896.44 at 4 p.m. in New York after posting a 166-point loss earlier, which was the ninth straight drop. The S&P 500 advanced 0.5 percent to 1,260.34, snapping a seven-day decline.

Obama says more needed to boost U.S. economy
WASHINGTON, Aug 2 (Reuters) - President Barack Obama said on Tuesday a just-passed bill to raise the U.S. debt ceiling and cut spending was a first step toward ensuring the United States lives within its means but that more was needed to rebuild the world's largest economy.
Speaking at the White House, Obama made clear he expects tax reform to emerge from deliberations by a new committee of Democrats and Republicans to be established by the legislation and that a "balanced approach" in which the wealthier pay more taxes is needed for more deficit reduction.

U.S. automakers warn of fragile demand
DETROIT, Aug 2 (Reuters) - U.S. auto sales ticked higher in July, but the industry's top salesmen cautioned the prospect for a second-half recovery remained clouded with consumers hurting in a weak economy.
Chrysler's U.S. sales chief, Reid Bigland, called the market "tougher than a cheap steak," while his equivalent at General Motors Co , Don Johnson, said "consumer confidence is pretty fragile right now because of everything that's happened in the past few months."

China’s Non-Manufacturing Industries Expanded in July, PMI Surveys Show (Source: Bloomberg)
A Chinese non-manufacturing index rose for the first time in three months in July, indicating some industries are withstanding the government’s campaign to cool inflation in the world’s fastest-growing major economy. A purchasing managers’ index rose to 59.6 from 57 in June, the China Federation of Logistics and Purchasing said on its website today. A reading above 50 indicates growth. A separate measure released by HSBC Holdings Plc and Markit Economics showed a moderating pace of expansion. Today’s data may ease concerns that Premier Wen Jiabao’s policies to rein in consumer and property prices will trigger a deeper slowdown in the economy that’s been the main contributor to global growth. The government’s drive to boost wages and build 10 million low-income housing units this year may help counter weakening demand for exports as the U.S. and European recoveries falter.

Japanese Stocks Swing Between Gains, Losses on U.S. Economy: Hitachi Rises (Source: Bloomberg)
Japanese stocks swung between gains and losses as weakening economic data in the U.S. increased concern the world’s biggest economy is faltering while a report on merger talks between Hitachi Ltd. (6501) and Mitsubishi Heavy Industries Ltd. (7011) boosted the stocks. Honda Motor Co., a carmaker which gets more than 40 percent of sales in North America, dropped 1.7 percent after a report showed U.S. service industries expanded in July at the slowest pace since February 2010. Hitachi and Mitsubishi Heavy Industries rose at least 3 percent after a person familiar with the matter said they are discussing merging some businesses, following a Nikkei newspaper report on the possible deal. Japan Steel Works Ltd. (5631), a maker of machinery for castings, rallied 6.8 percent after the company said first-quarter profit jumped.
The Nikkei 225 Stock Average gained 0.2 percent to 9,652.28 as of 9:45 a.m. in Tokyo, after falling as much as 0.2 percent. The broader Topix index was little changed at 826.80 with about four stocks advancing for every three that retreated.

Australia Rate-Rise Signal Unheeded by Bond Market Seeing Cut by Year-End (Source: Bloomberg)
Reserve Bank of Australia Governor Glenn Stevens signaled he will raise interest rates when global risks dissipate, a message dismissed by a bond market seeing an escalation in risks among the nation’s trading partners. Stevens held the overnight cash rate target at 4.75 percent yesterday and for the first time since October -- a month before the last increase in borrowing costs -- cited in his statement the prospect of raising the benchmark. He indicated an “acute sense of uncertainty in global financial markets” had stayed his hand. With U.S. growth struggling to rebound from a near-stall, and ratings companies further cutting euro-area debt grades, interbank cash-rate futures are pricing in an RBA rate cut by year-end. At stake for who’s right on the outlook are prospects for mortgage holders and retailers, who will be hit by any further boost to the developed world’s highest borrowing costs.

Aussie Dollar Weakens for a Sixth Day as Traders Increase Rate Cut Bets (Source: Bloomberg)
Australia’s currency declined for a sixth day against the dollar as signs that growth in the South Pacific nation is slowing prompted traders to increase bets on interest-rates cut by the central bank. The so-called Aussie weakened as swaps traders priced in 69 basis points of rate cuts by the Reserve Bank of Australia following data yesterday that showed an unexpected decline in retail sales. New Zealand’s dollar fell against the greenback as Asian stocks failed to extend an advance in U.S. equities, even after employment rose in the second quarter at the fastest annual pace since 2007. “The market is still concerned about the possibility of a sharper than expected slowdown” in the Australian economy, said Callum Henderson, global head of currency research at Standard Chartered Plc in Singapore. “There’s been some spillover from poor retail sales data.” yesterday,’’ said Callum Henderson, global head of currency

SNB Cuts Rate to Curb ‘Overvalued’ Swiss Franc (Source: Bloomberg)
The Swiss central bank unexpectedly cut interest rates and said it will increase the supply of francs to money markets to curb the “massively overvalued” currency. The franc dropped from a record. The Swiss National Bank lowered its target for the three- month Libor to “as close to zero as possible” from 0.25 percent. The Zurich-based central bank said it will also expand banks’ sight deposits, or cash which can be withdrawn on demand, to 80 billion Swiss francs ($104 billion) from 30 billion francs and repurchase outstanding SNB Bills, according to an e-mailed statement today. The franc, considered a haven in times of turmoil, has surged 10 percent against the euro over the past two months as Europe’s debt crisis worsened, hurting Swiss exports and economic growth. The SNB joins the U.S. Federal Reserve and the Bank of Japan, which have also cut their benchmark rates to near zero in an effort to boost their economies.

Zapatero Interrupts Spanish Vacation on First Day for Talks on Debt Crisis (Source: Bloomberg)
Spanish Prime Minister Jose Luis Rodriguez Zapatero returned to Madrid to discuss the worsening fiscal crisis with ministers, less than a day after departing for a vacation in the south of the country. The premier was back at his desk in Moncloa Palace hours after his office said he left the Spanish capital for a vacation in the southern region of Andalusia yesterday. Zapatero maintained close contact with other European leaders and the European Commission and met with Finance Minister Elena Salgado and government spokesman Jose Blanco after the country’s borrowing costs approached the 7 percent mark that heralded bailouts of Greece, Portugal and Ireland. Political leaders are responding to the latest stage of the European debt crisis that has pushed Spanish and Italian 10-year borrowing costs above 6 percent, stoking concern they could become the next victims of Europe’s debt crisis.

Berlusconi Drives Italian Growth Agenda as Bond Yields Stoke Debt Concern (Source: Bloomberg)
Prime Minister Silvio Berlusconi will meet with executives, bankers and unions to discuss overhauling Italy’s economy as surging bond yields stoke concern the country might be the next victim of Europe’s debt crisis. The meeting in Rome today comes after the premier, rejecting calls to resign, addressed both houses of Parliament yesterday on Italy’s economy. Berlusconi said he’d seek to liberalize the labor market, adding that the country is “up to the task” of tackling the debt crisis as its economic fundamentals are solid. “Our banks are liquid, they passed the stress tests, and Italian families are less indebted than others among the major economies,” he told the lower house Chamber of Deputies. “If to our deficit we add the savings of our families, we’d be second in the European Union in terms of solidity.”

Berlusconi Says Italy Is ‘Up to the Task’ on Debt Crisis as Economy Solid (Source: Bloomberg)
Prime Minister Silvio Berlusconi, facing record bond yields and calls for his resignation, said Italy is “up to the task” of tackling the debt crisis as its economic fundamentals are solid. “Our banks are liquid, they passed the stress tests, and Italian families are less indebted than others among the major economies,” Berlusconi said today in a speech to the Chamber of Deputies, the lower house of Parliament. “If to our deficit we add the savings of our families, we’d be second in the European Union in terms of solidity.” Pier Luigi Bersani, leader of the main opposition Democratic Party, repeated a call for the premier to resign. Berlusconi, who reiterated that his government will see out the end of its term in 2013, is due to address the Senate at 7:30 p.m. in another speech on the state of Italy’s economy.

FOREX-Swiss franc hits new highs on debt, growth woes
NEW YORK, Aug 2 (Reuters) - The safe-haven Swiss franc soared to record highs against the dollar and euro on Tuesday, with more gains likely as investors fretted about sluggish global growth and debt loads in the United States and Europe.
While Congress buried the specter of a U.S. debt default by passing a deficit-cutting package, concerns lingered of a possible downgrade of the top-notch American credit rating despite soothing comments from Fitch.

20110804 1005 Global Commodities Related News.

U.S. Senate panel approves CFTC nominee Wetjen
WASHINGTON, Aug 2 (Reuters) - The U.S. Senate Agriculture Committee approved the nomination of a Democratic commissioner to the U.S. futures regulator on Tuesday, an appointment that if confirmed could prove pivotal in the implementation of some far-reaching Wall Street reforms.
The committee approved Mark Wetjen, 37, by a voice vote in a room near the Senate chamber amid the uproar that accompanied voting on the U.S. debt limit. Lawmakers ducked into the room to have their say, before leaving into jam-packed hallways.

US corn futures end lower in a turnaround from strong gains. Traders book profits after concerns about US crop damage drove most-active December corn to close at a contract high Tuesday. Lingering uncertainty about damage from July heat should prevent a sharp setback. "It's becoming obvious to some people that there are problems with that heat," says Mike Krueger of The Money Farm. CBOT December corn loses 2 3/4c to $7.13 a bushel.

US wheat futures finish weaker in a setback from a seven-week high. Traders took money off the table after prices climbed more than 6% at CBOT yesterday on spillover support from surging corn prices. Traders say weakness in corn today allowed wheat to retreat. They worry about lackluster export demand for wheat due to increased competition for business from Russia. USDA will issue weekly export data tomorrow. CBOT September wheat drops 7 1/2c to $7.10 1/2 a bushel; KCBT September wheat loses 10c to $7.98; MGEX September slips 4 3/4c to $8.44 3/4.

US rice futures close lower with other grains on profit-taking. The markets came under pressure after climbing Tuesday. Global demand for rice also was called into question by a senior research analyst with Standard Chartered Bank, who said Indonesia was undergoing a shift in consumption toward noodles from rice. The trend is significant because Indonesia is typically a major importer of both wheat and rice. CBOT September rice slides 2 1/2c to $16.34 1/2 per hundredweight.

GRAINS-U.S. corn at 8-wk top on crop woes; wheat, soy dip
SINGAPORE, Aug 3 (Reuters) - Chicago corn edged higher on Wednesday, climbing to an 8-week top after rising by its daily limit in the last session as  concerns over hot weather threatening to curb U.S. crop yields continued to buoy the market.
"The grain markets are feeling the pressure of that, but if we take a look at the corn market it has popped above last night's close and it reflects expectations that U.S. corn production will be revised lower by the USDA next week," said Luke Mathews, a commodity strategist at Commonwealth Bank of Australia.

Indonesia may export 50,000 T premium rice to S.Korea-govt
JAKARTA, Aug 3 (Reuters) - Indonesia may export 50,000 tonnes of premium quality rice to South Korea, the economic minister of Southeast Asia's largest economy said on Wednesday, making it the first shipment of the grain to the North Asian country if the deal goes through.
Indonesia's agriculture ministry added that an export license had been granted to suppliers in the South Sulawesi province.

Australia wheat crop hit by cold dry weather - CBA
SYDNEY, Aug 3 (Reuters) - Australia's 2011/12 wheat crop is suffering from cold dry weather in the key eastern grain producing state of New South Wales, which may cut output, the Commonwealth Bank of Australia said in a report on Wednesday.
Offsetting the deteriorating outlook in New South Wales is an improved outlook for Western Australia, typically the biggest grain exporting state in the world's fourth-biggest wheat shipper.

German wheat harvest delayed, French pace picks up
LONDON, Aug 2 (Reuters) - Rains have slowed harvesting of wheat in Germany and raised quality concerns but in top European Union producer France the return of warm, dry weather has allowed a stalled harvest to pick up speed, crop analysts said on Tuesday.
Farmers are around halfway through the wheat harvest in Germany, the second largest EU producer, and work in some areas is now running well behind previous expectations.

French wheat harvest to escape rain damage-analysts
PARIS, Aug 2 (Reuters) - Latest harvesting of wheat in France has shown crops are in reasonable condition, analysts said, allaying fears of damage from heavy rain last month in the European Union's top producer and exporter of the grain.
The return of warm, dry weather since the end of last week has allowed a stalled harvest to pick up speed in major northern grain belts, and initial signs were that yields and quality had not suffered significantly from an unusually wet and cool July.

Ukraine grain exports fall 81 pct in July
KIEV, Aug 2 (Reuters) - Grain exports from Ukraine's ports dropped 81 percent in July versus June but the ex-Soviet republic is likely to win back market share from Russia later this year after a bumper harvest, analysts and traders said.
Analyst UkrAgroConsult said on Tuesday exports dropped to 334,000 tonnes in July, the first month of the new 2011/12 season, from 1.786 million tonnes in June, a slide analysts said reflected aggressive pricing by neighbouring Russia.

Corn Drops as U.S. Slowdown May Reduce Commodity Demand; Wheat, Soy Fall (Source: Bloomberg)
Corn fell from a seven-week high on concern that lower spending by U.S. consumers and companies will reduce grain demand. Soybeans and wheat also declined. Service industries expanded in July at the slowest pace since February 2010, the Institute for Supply Management said today. Pacific Investment Management Co. and BlackRock Inc., which oversee a combined $5 trillion, said the U.S. economy is stalling. Corn has rallied 76 percent in the past year on expectations of increased demand for ethanol and animal feed. “More economists are talking about a slowdown, and that may have a negative impact on demand,” Jim Gerlach, the president of A/C Trading Inc. in Fowler, Indiana, said in a telephone interview. “Investor worries about a return of their capital, rather than a return on their capital, is at the forefront, with ‘risk-off’ trading dominating markets.”

Southern Brazil Wheat Crop Could See Frost This Week
A cold front advancing over southern Brazil could bring freezing temperatures to grain-producing areas in coming days, but the likelihood of additional frosts this winter will be very low after that, Somar Meteorologia said. Some of the wheat sown during the past couple of months in the southernmost states of Rio Grande do Sul and Santa Catarina is at a development stage in which it's vulnerable to low temperatures, said Olivia Nunes, a meteorologist at Somar. The two states' combined are expected to produce about 2.31 million metric tons of wheat in the 2011-12 crop, up about 4% from the previous year, according to government forecasting agency Conab's latest report. Frost will be most likely on Thursday and Friday in Santa Catarina and Rio Grande do Sul, Somar said.
The cold front could also bring freezing temperatures to some parts of nearby Parana state, which saw its winter corn crop hampered by frost and untimely rains. But Nunes said that with Parana's corn ready to be harvested, the low temperatures shouldn't do additional damage. Several cold fronts have muscled their way into southern and southeastern Brazil's key agricultural regions this winter, causing isolated damage to corn and sugarcane crops and keeping coffee producers awake at night. But Brazilian farmers were spared from a particularly devastating or widespread freeze. After this week, Nunes said, the next cold front on the horizon should arrive near the end of August. By then, the mostly tropical country's brief winter will be nearing its end, and the chances of frost minimal.

Peru Agriculture Min Against Transgenic Plants -Andina
Peru's new Agriculture Minister, Miguel Caillaux, said that he is in favor of placing a moratorium on the use of transgenic plants in Peru, according to government news agency Andina. "The position of the ministry is very clear in that we are in favor of a moratorium. But it is Congress that will decide," Caillaux said. Caillaux became the minister of agriculture last week after President Ollanta Humala took office for a five year term. A committee of Peru's Congress recently approved a bill that would declare a moratorium on the use of transgenic plants in the Andean nation, but Andina said that ex-President Alan Garcia didn't sign that bill into law. Various companies that specialize in the production and sale of genetically-modified plants want to expand into Peru.

2011 German Grain Harvest Results Below Last Year's-Farmers Assoc
The 2011 German grain harvest results are likely to be significantly below last year's, the farmers association Deutscher Bauernverband, or DBV, said. The winter barley harvest is almost complete, and the results are about 20% below last year's, on around 8% smaller acreage, the DBV said. The summer barley harvest has only just begun, and early results suggest up to a 20% decline, though with higher protein content, the DBV continued. In eastern and southwest Germany, the harvest yield shrank by up to 50%. In southern and central Germany, results are about 10% to 15% below those of 2010. Extended rainy periods in recent weeks forced farmers in many parts of Germany to interrupt harvests since wet soil prevents combine harvesters from operating on the fields. In eastern and northeast Germany, the soil is still too wet for harvests, but combines began operating Tuesday in western and southern Germany.
The rapeseed harvest is between 15% and 30% below that of 2010, depending on the region. In addition, rapeseed acreage of 1.31 million hectare is almost 10% smaller than that in 2010.

About 30% Of China Seed Companies Sell Fake Seeds -Report
About 30% of seed companies in China are producing and selling counterfeit seeds, state-run China Daily said, citing industry reports. The seeds are counterfeits of higher-yield hybrids bred by global producers like Pioneer Hi-Bred International Inc. and Monsanto Co. China's seed industry consists of about 8,700 seed companies, mostly small enterprises, which the government is pushing to consolidate in the hope of improving regulation and producing one or more globally competitive leaders. Last October, the Ministry of Agriculture proposed raising the level of capital that seed-producing small- and medium-sized enterprises need to register with the ministry, which would, if effected, create "no more than 200 companies [that] meet the new requirements and stay in the market," it said, citing Xia Jingyuan, director of the ministry's National Agro-Technical Extension and Service Center.
China's cabinet has also encouraged mergers and acquisitions in the domestic seed industry to "foster companies with international competitiveness," it said.

SOFTS-Sugar, coffee nudge higher, boosted by weaker dollar
LONDON, Aug 3 (Reuters) - ICE sugar and coffee futures were firm supported by a weaker dollar, as investors remained cautious over the outlook for global economic growth.
Arabica coffee futures on ICE were little changed, underpinned by a tight physical market with Brazilian farmers delaying sales in the hope of higher prices.

Vietnam cuts 2011 coffee export forecast to 1.2 mln T
HANOI, Aug 3 (Reuters) - Vietnam, the world's top robusta producer, has cut its annual coffee export projection for calendar 2011 for a second straight month by nearly 5 percent to 1.2 million tonnes, or 20 million bags, the agriculture ministry said.
The lower forecast was based on changes in domestic supply, the ministry said in a monthly report seen on Wednesday.

Guatemala coffee exports jump in July
GUATEMALA CITY, Aug 2 (Reuters) - Coffee exports from Guatemala jumped 10.5 percent in July compared with the same month last year to reach 315,720 60-kg bags, the national coffee producers association Anacafe said on Tuesday.
Nearby Honduras and Costa Rica said on Monday that coffee exports fell last month compared with July 2010.

Brazil sugar shipments to pick up later-shipper
BRASILIA, Aug 2 (Reuters) - Brazil's sugar exports should hasten in the coming months after some importers hesitated to buy due to high prices and the shaky start to Brazil's cane harvest, shipping agent SA Commodities/Unimar said on Tuesday.
Commercial assistant Jessica Frangetto said the flow of sugar to the ports would rise further after a slow initial start to the harvest restricted the flow of the sweetener to the ports in the early stages of the harvest.

Louisiana cane crop recovers from dry spell
STOWE, Vt, Aug 2 (Reuters) - The sugar cane crop in Louisiana, the second biggest sugar cane producer in the United States, recovered from a dry spell after rains came to the region last month, an industry official said Tuesday.
Jim Simon, general manager of the American Sugar Cane League, told Reuters in an interview a dry spell hit the cane crop but that rains from July 1 "saturated" the farms.

Sucden sees Mexico 2011/12 sugar output down 5.45 pct
STOWE, Vt, Aug 2 (Reuters) - Mexico's 2011/12 sugar production is projected to fall around 5.45 percent to 5.2 million tonnes, the director of trading at Sucden Americas Corp said Tuesday.
"We could be down a little bit due to some drought," Francois David-Nehama told reporters at the annual meeting of the American Sugar Alliance.

Sugar market to stay volatile on Brazil, India prospects
STOWE, Vt, Aug 2 (Reuters) - The sugar market will remain volatile through the end of 2011 amid uncertainty how much top grower Brazil will produce and questions about India's exports, a senior official said Tuesday.
"I think we will see high volatility because of the uncertainty about the final outcome of the Brazil (cane) crop as well as the upcoming crop in India," Francois David-Nehama, the director of trading of Sucden Americas Corp, told reporters in an interview at the annual meeting here of industry group American Sugar Alliance.

India's 2011/12 rubber imports to hit record 200,000 tonnes
MUMBAI, Aug 2 (Reuters) - India, the world's second-biggest rubber consumer, is likely to import a record 200,000 tonnes of natural rubber in the year ending March 31, 2012 as tyre makers cash in on lower customs duties, the head of a trade body said on Tuesday.
"Considering the lower imports duty and price parity, I think imports of at least 200,000 tonnes would be there," George Valy, president of the Indian Rubber Dealers' Federation, told Reuters in an interview.

As Higher Prices Fuel A Rising Middle Class, Multinationals Are Finding New Markets From Indonesia To Brazil
High food and commodity prices have hobbled poor consumers and triggered riots in emerging markets this year. But in commodity-driven economies like Indonesia, the rising prices are lifting millions of farmers and miners out of poverty -- and creating opportunities for global companies. Zulfan Effendi, a 36-year-old palm-oil farmer from the western island of Sumatra, says he used to struggle to make ends meet. But in the last two years, prices have doubled for palm oil, which is used in everything from chocolate to ethanol. That has let him add rooms to his house and fill them with luxuries he once couldn't afford, like a Samsung flat-screen television set. The money he spends on groceries has tripled.
"My life is much better," he says. "I used to just have a small plantation and big debt. But now the debt is gone, and I've been able to double the size of my fields." Rubber tappers, cocoa pickers, coal miners and other rural laborers have in some cases seen their incomes more than triple in the last three years, making the workers' wealthier than some city residents and putting them on the radar of such multinational consumer-goods makers as Honda Motor Co. and Unilever. Brazil, Thailand, Malaysia and other lower- and middle-income countries also are seeing spending power rise in rural areas. Although commodity prices are off their peaks this year, they remain high and aren't expected to crash.
Of course, many of Asia's poorest people are hurt by food inflation if they aren't involved in commodities-related businesses. The Asian Development Bank projects that 64 million people in Asia could be pushed below the poverty line as food prices take a bigger bite. In Indonesia, food and fuel subsidies have helped offset some of the pain. But Indonesia's economy has been expanding at an average of close to 6% a year for the last four years, helped by soaring prices for its natural resources. That growth has spread beyond the urban centers of Java and Bali to far-flung spots across the 17,000-island archipelago, including the coal mines of Kalimantan, the palm-oil and rubber plantations of Sumatra and the clove, cocoa and coconut farms of Sulawesi. In the 10 years to 2009, the size of Indonesia's middle class more than doubled to 93 million people, according to the Asian Development Bank.
The trend is causing companies to change how they price, produce and promote their products, reaching further outside of the companies' traditional strongholds. Honda now bases its Indonesia sales projections in part on prices for products such as palm oil and cocoa. The Japanese company is pitching to miners and plantation workers by using promotional caravans that put on festivals in rural areas, complete with dancers, folk singers and the company's latest motorcycles and scooters. Honda motorcycle sales in the first half were up more than 25% from a year earlier, says Johannes Loman, executive vice president and director of PT Astra Honda Motor, which manufactures and markets Honda motorcycles and scooters in Indonesia. "Sales move with the prices of palm oil, cocoa, rubber and coal," he says. "The prices are higher than they were a year ago, so we are expecting growth will increase."
Anglo-Dutch consumer-goods maker Unilever says that while Java has accounted for the vast majority of the company's Indonesia sales for decades, the other islands soon will constitute about half. "Rural areas are getting richer from plantations and natural resources," says Maurits Lalisang, president director of PT Unilever Indonesia. "The money is spreading." Indonesia's second-largest supermarket chain, PT Matahari Putra Prima, plans to quintuple its number of stores, setting up on the eastern islands of Ambon and Irian Jaya. Sales have jumped at new stores in small cities as farm families arrived in trucks to buy TV sets, clothes and cellphones. The company's army of sales assistants have to explain the differences in hair conditioners and cosmetics to rural consumers used to the limited selection at mom-and-pop stores in villages.

Vietnam Aug coal output may dip, to hike export tax-reports
HANOI, Aug 3 (Reuters) - Vietnam will raise its coal export tax to 20 percent next month from 15 percent, as the country moves to save the fossil fuel for domestic consumption while coal production in August would fall from previous months, state-run newspapers reported.  
Coal will take over from hydro power as the leading fuel for new electricity generation in Vietnam, so far a net coal exporter, in the next five years, state utility Vietnam Electricity group has said.

Euro Coal-Weak dollar gives coal a 75c boost
LONDON, Aug 2 (Reuters) - Prompt physical DES ARA coal prices rose by around 75 cents a tonne on Tuesday in thin trading, bolstered by the dollar's weakness, a rise in oil prices and the emergence of limited buying after a hiatus of a few weeks.
Brent crude oil futures shed earlier losses and rose on Tuesday afternoon as the dollar index turned negative ahead of an imminent deal to avert a U.S. debt default.

Oil-Oil slips on U.S. deficit, ratings worries
LONDON, Aug 3 (Reuters) - Crude oil prices fell after ratings agency Moody's assigned a negative outlook to the United States, inflaming worries of falling demand as the world's top oil user and the euro zone continue to face long-term economic challenges.
"Fears for demand destruction are ever-present, while weak manufacturing PMI numbers from across the globe this week only add fuel to economic concerns," VTB Capital's Andrey Kryuchenkov said. "The market is starting to look weak technically and persistent risk aversion on the broader market could drive crude lower in the short run. No one is prepared to go long just yet."

Oil Climbs as Stimulus Speculation Counters Economy, Gain in U.S. Supplies (Source: Bloomberg)
Oil rose from a five-week low in New York as speculation that the Federal Reserve may start another stimulus program countered signs of a slowing economy in the world’s biggest crude-consuming nation. Futures climbed as much as 0.7 percent for the first gain in five days. U.S. equities rebounded after the Wall Street Journal reported three former top officials at the Fed said the central bank should consider a new round of securities purchases to bolster economic growth. Oil slid yesterday after reports showed U.S. service industries expanded in July at the slowest pace in 17 months and crude stockpiles climbed a second week. Crude for September delivery gained as much as 62 cents to $92.55 a barrel in electronic trading on the New York Mercantile Exchange and was at $92.42 at 10 a.m. Sydney time. The contract yesterday dropped $1.86 to $91.93, the lowest since June 27. Prices are 12 percent higher the past year.

Commerzbank expects oil prices to continue falling
Aug 3 (Reuters) - Commerzbank said Wednesday it expects oil prices to continue falling, as another drop in strategic oil reserves could reflect a rise in commercial oil stocks, putting pressure on its prices in the current market climate.
"It will be interesting to see whether there has been another drop in strategic oil reserves," Commerzbank said as it awaits the official inventory data to be published by the U.S. Department of Energy Wednesday afternoon.

Russia oil output stays ahead of Saudi in July
MOSCOW, Aug 2 (Reuters) - Russia matched a post-Soviet  record by pumping 10.26 million barrels of crude oil per day in July, retaining its title of top producer despite closest rival Saudi Arabia rapidly closing the gap.
Russia also pumped 10.26 million bpd in May this year and in October 2010. In June the rate was 10.2 million bpd.

China cracks down on lead-acid battery industry, 1,598 plants shut
HONG KONG, Aug 2 (Reuters) - China had phased out 583 lead-acid battery producers, processor and recyclers as of end-July as Beijing cracks down on polluting operations, the Ministry of Environmental Protection said on Tuesday.
The nationwide crackdown covered 1,930 plants, of which 1,015 plants also closed temporarily for checks or upgrading, making the total 1,598 plants, or 82.8 percent shutting down, according to a statement on the ministry's website.

China Minmetals calls for rare earth production suspension
BEIJING, Aug 3 (Reuters) - State-owned trader Minmetals  has called on all firms in the rare earth sector to adhere to a national output quota by suspending production starting from the beginning of August.  
"We propose that production should be proactively halted with immediate effect at the beginning of August 2011 in order to guarantee the stable operation of the rare earth market," the company said on Tuesday.

Australia's Lynas Corp: rare earths recoveries exceed plan
KALGOORLIE, Aug 3 (Reuters) - Australian miner Lynas Corp , looking to break China's grip on the global market for rare-earths, is running ahead of plan for metal recoveries from its recently commissioned Mount
Weld concentrator, the firm said on Wednesday.
Lynas aims to meet 20 percent of world demand for rare earths from its operations in west Australia. Currently, China produces about 97 percent of world supply of rare earths, which are used to make high-tech
electronics, magnets and batteries.

Northern Minerals targets rare earths production in 5 years
KALGOORLIE, Australia, Aug 2 (Reuters) - In the race to produce rare earths outside China, which supplies  most of the world's output of the metal elements used in high-tech, Australian explorer Northern Minerals could be the next hot play.
Northern Minerals unveiled encouraging drilling results from its Browns Range project in Western Australia last week, where it said it found a high proportion of two of the heavy rare earths elements that are in tightest supply.

Australia's Fortescue sees iron ore profit margin rising
KALGOORLIE, Australia, Aug 3 (Reuters) - Fortescue Metals , Australia's third biggest iron ore miner, expects profit margins to improve as it expands operations and ramps up production, Chief Executive Nev Power said on Wednesday.
Power said margins were currently holding at around $100 per tonne, but were set to rise once the company's Solomon deposit is brought into production, and Fortescue benefits from economies of scale and more accessible ore.

Ukraine's Metinvest boosts steel output in Jan-Jul
KIEV, Aug 2 (Reuters) - Steel output at Ukraine's plants owned by Metinvest Holding rose by 8 percent year-on-year in January-July 2011 to 8.5 million tonnes, local specialist news agency UGMK said on Tuesday.
Metinvest, Ukraine's largest mining and metals group, which is owned by the country's richest man Rinat Akhmetov, operates three steel plants located in eastern Ukraine.

NMDC 2011/12 iron ore output seen at 28-29 mln T
NEW DELHI, Aug 2 (Reuters) - India's state-run miner NMDC  expects to produce 28-29 million tonnes of iron ore in 2011/12, its chairman said on Tuesday, slightly down from an earlier estimate because of mining hurdles such as stricter green laws.
NMDC, which produces about 15 percent of India's iron ore and mainly supplies the domestic market, had in March set an output target of 31 million tonnes. In 2010/11, NMDC's production was 25 million tonnes.

Xstrata boosts interim dividend, sees stronger H2
LONDON, Aug 2 (Reuters) - Anglo-Swiss miner Xstrata  more than doubled its interim dividend on Tuesday and pointed to a stronger second half, as ongoing tightness in the copper market helps the group recover from a flood-hit start to 2011.
The fourth-largest UK-listed diversified miner lifted its interim dividend to $0.13 on the back of a 30 percent rise in headline profits, and said it would use a progressive dividend policy to return cash to shareholders.

Brazil's Usiminas see steady prices, cost pressures
SAO PAULO, Aug 2 (Reuters) - Steady steel prices and raw materials costs may bolster Brazilian steelmaker Usiminas' results through year-end, executives said on Tuesday, while offering little hope for a substantial improvement in earnings.
The price of iron ore and coking coal, two key steel ingredients, will remain stable, ending a round of cost increases that cut into profit in five of the last seven quarters, they said. But Usiminas cut its outlook for steel sales, undermining the chance to gain from better cost conditions.

Ferrexpo H1 profit up 86 pct, sees strong iron ore demand
LONDON, Aug 3 (Reuters) - Ukrainian iron ore producer Ferrexpo  posted an 86 percent jump in core profit in the first half, in line with expectations, and said demand for the key steelmaking ingredient is expected to remain strong in the medium term.
EBITDA surged to a record $401 million on higher iron ore prices and a 1.2 percent growth in higher grade pellet production. The company had been expected to post EBITDA of around $400 million, according to a consensus of eight analysts provided by the company.

Iron Ore-Spot prices at 2-1/2-month top on brisk China demand
SINGAPORE, Aug 3 (Reuters) - Spot iron ore prices rose to 2-1/2-month highs and offers remained strong on Wednesday, buoyed by firm steel demand in top consumer China and limited cargoes in the physical market.
The price of iron ore with 62-percent iron content rose 50 cents to $179 a tonne on Tuesday, according to the Platts index.

China industry ministry sees 2011 steel exports up 5.7 pct
BEIJING, Aug 2 (Reuters) - China is likely to export 45 million tonnes of steel products in 2011, up 5.7 percent compared with last year, the industry ministry said on Tuesday.
In a statement published on its website (, the Ministry of Industry and Information Technology also said that imports were likely to be 16 million tonnes compared with 16.43 million tonnes in 2010.

China to launch own iron ore price index in Aug -CISA
BEIJING, Aug 2 (Reuters) - China plans to launch its own iron ore price index in August this year, the China Iron & Steel Association (CISA) said on Tuesday, in a move designed to improve the country's pricing power over the key steelmaking ingredient.
The index will be published on a weekly basis and will include both domestic and import prices, CISA said in a statement released before a press conference in Beijing.

Italy steel exports rise but lag imports -industry
MILAN, Aug 1 (Reuters) - Italy's steel exports rose 13.8 percent year-on-year in the first five months of 2011, powered by sales on the European Union markets, but lagged behind rising imports, according to industry body Federacciai.
The EU's second-biggest steel producer after Germany exported 7.475 million tonnes in the January-May period, while its steel imports jumped 20.9 percent to 8.441 million tonnes, Federacciai data showed.

METALS-LME copper down on weak U.S., euro zone economies
SHANGHAI, Aug 3 (Reuters) - LME copper edged down on Wednesday as a last-minute deal to raise the U.S. debt ceiling failed to dispel longer-term worries about growth in the world's largest economy, while financial market pressure on Italy stepped up.
The United States still faces a possible credit rating downgrade by Standard & Poor's in the near term and by Moody's Investor Services in 12 to 18 months.

PRECIOUS-Gold hits record on global growth worries, Europe debt
SINGAPORE, Aug 3 (Reuters) - Gold hit a record high on Wednesday, as investors made a beeline for bullion to shelter from the impact of a deteriorating global economic outlook and Europe's worsening debt crisis.
Spot gold  rose to an all-time high of $1,671.39 an ounce, hitting its ninth record in 16 trading sessions and up 17 percent so far this year. It was trading at $1,661.89 by 0632 GMT, up 0.2 percent from the previous close.

Gold Rallies to Record for Second Day as Signs of Slowdown Fire Up Demand (Source: Bloomberg)
Gold futures rose to a record $1,675.90 an ounce on signs that the U.S. economy is faltering amid debt woes, boosting demand for the precious metal as an investment haven. Moody’s Investors Service said the U.S. credit rating may be downgraded and yesterday placed the country on negative outlook after President Barack Obama signed into law a plan to lift the nation’s borrowing limit and cut spending. Gold priced in euros also reached a record on concern that slowing growth will hamper efforts by Spain and Italy to trim debt. “People want gold for safety,” Frank Lesh, a trader at FuturePath Trading LLC in Chicago, said in a telephone interview. “People are running away from currency volatility, economic weakness and political instability. Gold is an international currency, and no government can print any of it.”

Baltic index falls, growth worries watched
LONDON, Aug 2 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, fell to its lowest in more than three months on Tuesday as a continued slowdown in cargo trade took its toll.
Brokers said the market was watching for further signs of slowing economic growth, which would hit demand for commodities, after weak global manufacturing and consumer spending data was published this week.

20110804 1002 Soy Oil & Palm Oil Related News.

US soybean futures end lower, succumbing to profit-taking after recent gains, with improved rain potential for soybean crops, lower corn futures and sharp declines in crude oil encouraging traders to trim risk exposure. Traders were cautious of extending recent gains as August rains during the crop's reproductive stage can quickly boost soybean-yield prospects. Yet, the market only gave back a small portion of the advance as the potential for yield declines still exist amid heat and dryness in parts of the Midwest, analysts say. CBOT November soybeans end down 6 3/4c at $13.73/bushel.

Soybean Meal/Oil
Soy-product futures backpedal from Tuesday's gains in unison with soybeans, booking profits after recent gains in soymeal and soyoil. Sharp declines in crude-oil futures fuel further losses in soyoil. CBOT December soyoil ends down 1.4% at 57.06c/pound while soymeal drops 1% to $361.60/short ton.

China Lets Edible - Oil Retail Price Jump By 5%
Edible-oil producers said Chinese authorities have sanctioned a rise in the retail prices they charge, a sign that after months of tough price controls Beijing is letting some inflation effects be felt in households. Prices on supermarket shelves for cooking oil are jumping 5%, major producers said. "Yes, we are raising prices of our cooking oil in China by about 5%," Lim Li Chuen, a spokeswoman for the largest producer of edible oil in China, Singapore-based Wilmar International Ltd., said by email. The permission to raise prices, granted by the National Development and Reform Commission, the government planning agency, follows recent increases in other prices that will be felt by consumers. The upward adjustments also come ahead of a July inflation report next week that is expected to show overall price increases leveled after surging to 6.4% in June from the year earlier. One factor in July's inflation reading, according to Capital Economics, is "tentative evidence" of peaking pork prices.
Pork is a staple in China and prices of pork continued rising this year even after those of other foods eased. Cooking oil is another particularly important commodity for price-sensitive Chinese households, more commonly used even than rice. Beijing, which carefully controls retail prices of soybean oil, late last year capped levels in what was described by authorities as a temporary move but one that was later extended. Oil refiners said the move pinched margins at the wholesale point, prompted some to reduce production and merely underpinned price pressures. Price caps were also extended to a range of foods in China, while vegetable producers, truckers and retailers were granted subsidies in an effort to keep output high and prices under control. A Shanghai-based producer of edible oil said the increase followed lobbying by the nation's five big brands.
UBS economists said in a report this week that China's central bank may increase interest rates by 0.25 percentage point in the short term. "If that happens, it would be the last hike in the year, given that headline CPI inflation will moderate from August onwards, albeit only gradually," UBS economists said. Upward price pressures remain around China. This week, a group of vocal taxi drivers in the southeastern tourist city of Hangzhou idled their vehicles for three days in hopes of winning rights to raise prices. On Wednesday, according to China's state-run Xinhua news agency cab drivers won a government-funded subsidy equal to around 16 U.S. cents a trip and a pledge from authorities that fares will rise by October. In recent weeks, the government has also permitted airlines to add a surcharge on seat prices, effectively allowing carriers to pass on some of the costs of a rise in jet kerosene that took effect around the same time.

VEGOILS-Palm oil hits near 2-wk high on Ramadan impact
JAKARTA, Aug 3 (Reuters) - Malaysian palm oil futures traded higher on Wednesday, boosted by early gains in agricultural markets and expecations of a spike in demand during the Muslim fasting month of Ramadan, but gains were capped by worries about the global economy.
"The spread between bean oil and palm oil is more than $240 per tonne," said one Kula Lumpur-based trader. "We are also moving into fasting season, therefore production is going to go down and demand much higher."

Palm Oil Sector
Threat to local palm oil sector
Local palm oil downstream players in the refining, oleochemicals and biodiesel sectors will likely see their operations rendered uncompetitive with stagnating profit margins following Indonesia’s latest proposal to restructure its palm oil export duty on refined palm-oil products. The proposed duty structure will be 10 basis point lower, based on the average crude palm oil (CPO) spot prices at the Rotterdam market. An industry source said that even without the latest proposal, the existing Indonesian palm oil export duty structure has become an increasing threat to Malaysia’s RM6.0bil palm oil downstream industry. This has prompted the Palm Oil Refiners Association of Malaysia (PORAM), Malaysia Oleochemical Manufacturers Group (MOMG) and Malaysian Biodiesel Association (MBA) to urge the government to quickly come up with an appropriate solution to settle the issue within the next one month.
The associations claim that the CPO price to refiners (from March 9 to March 15) for Malaysia was about US$1,154 per tonne (without duty) while in Indonesia, the discounted CPO price less duty was about US$839.75 per tonne. It is understood that the government was currently in the midst of appointing a consultant to look into the matter and will work closely with the Malaysian Palm Oil Board (MPOB). The proposed mechanisms made by PORAM, MOMG and MBA to the government include for plantation companies to sell CPO for the targeted palm oil downstream product producers at a RM600 per tonne discount over MPOB’s monthly average price and offset it against the planters’ windfall profit tax payment. -(StarBiz)