Friday, August 5, 2011

20110805 1816 FCPO EOD Daily Chart Study.

FCPO closed : 3051, changed : -50 points, volume : higher.
Bollinger band reading : side way range bound.
MACD Histrogram : resumed weakening, buyer reducing position.
Support : 3050, 3020, 2970, 2930 level.
Resistance : 3070, 3100, 3150, 3200 level.
Comment :
FCPO closed lower with higher volume changed hand while overnight soy oil closed recorded huge losses and currently continue to trade weaker.
Weakening global economy outlook after world markets major sell down lead broad commodities to trade severely lower including soy oil and crude oil.
News wise, Reuters reported that Indonesia palm oil associate reported crude palm oil export up 10% for the first half of this year after strong demand from China and India while industry forum estimate higher production and export and softer crude palm oil prices. Reuters survey reported a higher export, lower stock and output estimates.
Daily chart formed an up bar candle with little upper shadow positioned below lower Bollinger band level after market opened gap down and climb upward gradually through out the day to closed near the high of the day.
Technical chart reading remained suggesting a side way range bound market development testing support and resistance level with MACD indicator almost having a negative cross down.
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.

20110805 1756 FKLI EOD Daily Chart Study.

FKLI closed : 1526, changed : -16 points, volume : higher.
Bollinger band reading : downside biased with possible pullback correction.
MACD Histrogram : resumed lower, seller in control.
Support : 1515, 1500, 1485, 1470 level.
Resistance : 1530, 1540, 1550, 1565 level.
Comment :
FKLI closed recorded substantial loss with higher volume traded doing 1.5 points premium compare to cash market that closed lower.  Overnight U.S. plunged lower badly and Asia markets closed in negative territory while European markets also currently trading recording loss.
Regional markets tumbled on concern of weakening world economy plus cancer spreading European zone debt crisis as possible arise of Spain and Italy debt problem. Data wise, market awaits tonight U.S. payroll data.
Daily chart formed a down doji bar candle (hammer formation) closed below lower Bollinger band level after market opened gap down, tested lower below support level and recover upward to closed near the high of the day.
Technical chart reading suggesting a downside biased market development with possible upward pullback correction testing support and resistance level.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant or strength with moderate cut loss and profit target.

20110805 1707 Regional Markets EOD Daily Chart Study.

DJIA chart reading :
downside biased with possible pullback correction.

Hang Seng chart reading : downside biased with possible pullback correction.

KLCI chart reading :
downside biased with possible pullback correction.

20110805 1534 Global Market & Commodities Related News.

World equities reel towards 8th day of losses
SINGAPORE, Aug 5 (Reuters) - - World stock markets fell for the eighth straight session on Friday to the lowest since late 2010, with more losses feared if policymakers do not come to the rescue soon to stabilise the euro zone's debt crisis and prevent the U.S. economy from sliding back into recession.    
"Equity valuations are already pretty low but sentiment keeps deteriorating, so why come in and buy now?" said Shane Oliver, head of investment strategy at Sydney-based AMP Capital, which has more than $100 billion in assets under management.

Top Hedge Funds Put Likelihood of QE3 at 60% (Source: CNBC)
According to top hedge fund manager Anthony Scaramucci, hedge funds now believe the chance of another Fed intervention is greater than 1 in 2. Scaramucci's firm, Skybridge, surveys 950 hedge funds and after extensive conversations with peers, analysts at Skybridge are now predicting as great as a 60% likelihood that the Fed implements QE3. He says largely hedge funds are focused on something called the Taylor Rule in which “the Fed looks at a couple quantitative factors such as inflation, unemployment and economic growth and enters them into a calculus to determine where interest rates should be.” ”Using that analysis interest rates should be at minus 3.5%,” he reveals.
But that's not the only reason he thinks QE3 is back on the table. On top of that, he says the S&P slipped back down to the November 4th level. “The stock market benefits of QE-two have been erased." That’s problematic because the Fed had been hoping the wealth effect – or making people feel richer - would drive spending and, in turn, buoy the economy. But if the S&P is back at pre-QE2 levels, that prong of the Fed’s plan to stimulate the economy would no longer be relevant. On top of that he says hedge funds are concerned about the dysfunction in government displayed by the bickering among politicians over the debt ceiling. They're also concerned that businesses are not deploying cash and that there's stagnation in employment. Considering all these negative catalysts, “it seems ever more likely the Fed will have to intervene in the market to stave off another recession,” Scaramucci

Corn, wheat fall 1.5 pct on slowdown fears, soy at 1-month low
SINGAPORE, Aug 5 (Reuters) - U.S. corn and wheat lost more ground on Friday, while soybeans slid to a one-month low, falling more than 1 percent amid a broad based sell-off in Asian markets on concerns over global economic slowdown.
"The decline is mainly due to global economic concerns,  equity markets are down as investors are fleeing the risky assets," said Lynette Tan, an analyst with Phillip Futures in Singapore.

Canada farm dept cuts wheat outlook, maintains canola
WINNIPEG, Manitoba, Aug 4 (Reuters) - Canada's agriculture department lowered its forecast for wheat production in its grain and oilseed outlook on Thursday.
Agriculture and Agri-Food Canada pegged the 2011/12 all-wheat crop at 23 million tonnes, down from its July estimate for 24 million tonnes.

Mexico, Central America seen headed for sugar squeeze
MEXICO CITY/GUATEMALA CITY, Aug 4 (Reuters) - Drought-ravaged Mexico's sugar harvest this year could crimp exports to the United States and force a search for imports to fill demand just as neighboring Central America is also short of sweetener.
The sugarcane growing season in the region runs from November to around June, and Mexico's 2010/11 crop came in at 5.18 million tonnes, below expectations due to frosts.

Ghana cocoa purchases near 1 million tonnes
ACCRA, Aug 4 (Reuters) - Ghana is on track to produce 1 million tonnes of cocoa this season, marking a near-60-percent jump in the world's No. 2 grower since last year, the head of the country's agricultural regulator said on Thursday.
Registered cocoa purchases, the best indication of output in the West African state, reached 980,000 tonnes by July 28 since the start of the year-long season in October, Cocobod Chief Executive Tony Fofie told Reuters.

Bulgaria harvests 4 mln T wheat from 94% acreage
SOFIA, Aug 4 (Reuters) - Bulgarian farmers have reaped 4.0 million tonnes of wheat from 94 percent of the sown area, flat on a year ago, the agriculture ministry said on Thursday.
The average yield of 4.05 tonnes per hectare was better than in 2010, but the crop matched last year's as farmers have planted less of the grain. The farm ministry hoped favourable weather would boost the crop to 4.1 million tonnes.

France raises wheat, barley, rapeseed crop forecasts
PARIS, Aug 4 (Reuters) - France's farm ministry on Thursday raised its estimate for this year's soft wheat crop, although expected output remained well down on last year due to a decline in yields.
The soft wheat crop in the European Union's top producer was now seen at 32.5 million tonnes, up from 32.0 million estimated in July but still down 8.8 percent on 2010 production of 35.7 million tonnes, the ministry said in a monthly note.

Brazil's Parana coffee trees get through a cold night
BRASILIA, Aug 4 (Reuters) - Coffee trees in Brazil's Parana state passed securely through a chilly night with temperatures warmer than first feared, a forecaster said Thursday.
A patch of light frost one agronomist observed was termed harmless. Forecaster Somar said the minimum temperature around the Londrina area in the north of the state, where much of the state's coffee production is concentrated, fell to 3 Celsius, rather than the forecast 1 C. Water freezes at 0 Celsius.

Oil heads for 10 pct weekly drop, biggest since May
SINGAPORE, Aug 5 (Reuters) - U.S. crude fell below $86 on Friday, heading for its biggest weekly drop since early May, as fears of a global economic slowdown drive investors to the exits in a commodities sell-off that has erased the benchmark's 2011 price gains.
"The U.S. economy appears headed for a double dip recession," said Monty Guild, chief executive officer of Guild Investment Management. "Even though we expect weak economic activity will lead to more money printing from central banks, the markets are going through a rugged period, which makes us want to reduce our exposure."

Australia Newcastle coal exports jump 36 percent in week
PERTH, Aug 5 (Reuters) - Thermal coal shipments from Australia's Newcastle port rose 36 percent to 2.535 million tonnes in the week ended Aug. 1, up from 1.864 million the previous week as the port ramped up exports after foul weather, the Newcastle Port Corporation said on its website on Friday.  
Traders and brokers also said demand for the fuel was beginning to pick up after an extended lull following Japan's March earthquake, which squelched demand for coal imports from Australia's number one coal customer.

Copper extends losses on LME, tumbles 4 pct in Shanghai
SHANGHAI, Aug 5 (Reuters) - LME copper extended losses on Friday after investors fled risky assets the previous day on fears the United States was heading for another recession and a debt crisis was engulfing two of the euro zone's largest economies.
"There are too many uncertainties today and investors are averting risk," said Shanghai CIFCO Futures analyst Zhou Jie.

Zambia copper, cobalt ouput up in H1
LUSAKA, Aug 4 (Reuters) - Copper production in Zambia, Africa's top producer of the commodity, rose to 414,984 tonnes in the first half of 2011 from 399,062 tonnes in the same time frame last year, the central bank said on Thursday.
Cobalt output also rose, climbing to 4,353 tonnes in the first six months of 2011 from the 4,013 tonnes produced in the corresponding period of 2010, central bank spokesman Kanguya Mayondi told Reuters.

Gold bounces as Asian stocks dive; premiums steady
SINGAPORE, Aug 5 (Reuters) - Gold edged up on Friday as investors used bullion to shelter from the storm engulfing financial markets on concerns that the United States may be facing another recession and Europe's debt crisis is spreading to some of its largest economies.
"The market has dropped down too much, so bargain hunters are buying a little bit at the lower end. There doesn't seem to be too much change in sentiment."

20110805 1443 Crude Palm Oil Related News.

13:42 05Aug11 Reuters-

13:42 05Aug11 Reuters-

13:43 05Aug11 Reuters-

13:44 05Aug11 Reuters-

14:00 05Aug11 Reuters-
Malaysian palm oil prices seen softening - industry body head

MUMBAI, Aug 5 (Reuters) - Malaysian palm oil prices are likely to soften to 2,800 ringgits per tonne on higher output and lower crude oil prices, the head of an industry body said on Friday.  
"We are expecting softening in prices... crude oil is down and palm production is rising," said Wan Mohd. Zain Bin Wan Ismail, chairman, Palm oil Refiners Association of Malaysia.  
The benchmark October contract on the Bursa Malaysia Derivatives Exchange is currently trading at 3,054 ringgits per tonne, but off an earlier low of 3,021 ringgits.  
Ismail expects Malaysian palm oil production and exports to rise by 1 million tonnes each in 2011. India is one of the biggest importer of Malaysian palm oil.

20110805 1112 Global Market & Commodities Related News.

GLOBAL MARKETS: Fear spreads as stocks tumble, safety sought
SINGAPORE, Aug 5 (Reuters) - Asian stocks dropped 3 to 4 percent on Friday after panic triggered the worst sell-off on Wall Street since the global financial crisis, sending investors slashing positions and scrambling for cash and government bonds.
"What you're seeing is a shakeout of all the money that was put to work in the hope that 2011 turns out like last year, where you saw a nice bounce around the same time," said a Hong Kong-based multi-strategy hedge fund manager.

OIL: U.S. crude drops to lowest since Feb on recession fears
SINGAPORE, Aug 5 (Reuters) - U.S. crude extended losses on Friday, heading for its biggest weekly drop in three months, after fears of an economic slowdown drove investors to the exits a day earlier in a commodities sell-off that erased oil's gains in 2011.      
U.S. crude  plunged almost 6 percent on Thursday to $86.63 a barrel, the biggest drop since May 5. It was down 78 cents at $85.85 by 0125 GMT, the lowest price since Feb. 18. Brent fell  16 cents to $107.09, extending Thurday's drop of almost $6.

Colombia studies new oil line project to Pacific-govt
BOGOTA, Aug 4 (Reuters) - Colombia is studying the feasibility of a new oil pipeline crossing the Andes mountains from the oil-rich Llanos Basin to the Pacific coast to help tap Asian markets, the country's energy minister said on Thursday.
Latin America's No. 4 oil producer is enjoying a boom in investment into its mining and oil sectors, which has pushed up output of crude oil and coal to historic highs while the country struggles to boost infrastructure.

Fire briefly affects Venezuela oil dock
CARACAS, Aug 4 (Reuters) - A fire broke out at a dock  serving Venezuela's state oil company PDVSA on Thursday but the company said shipments were not affected and no workers were injured.
PDVSA said in a statement the fire occurred while loading 34,000 tonnes of sulfur, a petroleum byproduct, from its Petroanzoategui project onto a ship destined for Morocco.

Shell completes maintenance at oil sands project
CALGARY, Alberta, Aug 4 (Reuters) - Royal Dutch Shell Plc  said on Thursday it had completed unplanned maintenance at its oil sands mining site in northern Alberta and operations had returned to normal.
Production at the mine had been marginally reduced since mid-July because of problem with an unspecified unit,
Shell has a 60 percent stake in the venture while Marathon Oil Corp  and Chevron Corp  each hold 20 percent.

North Sea oil cargoes further delayed
LONDON, Aug 4 (Reuters) - Supplies of North Sea crude oil have been delayed by oilfield problems, trading sources said on Thursday, further deferring shipments in a region that sets the global Brent benchmark.   Another cargo of Forties crude has been delayed in August, the sources said, reflecting the impact of production glitches at Nexen's  Buzzard field. Forties supplies have been disrupted since May due to the Buzzard problems.

Oil demand outlook dims as economies sputter
LONDON, Aug 4 (Reuters) - A sharp slowdown in economic growth, particularly in the United States, is hitting oil consumers and companies, forcing analysts to slash estimates for global oil demand.
In a report to be published in the next few days, Barclays Capital has cut its estimates of world oil demand growth for this year and 2012 to reflect the dramatic economic slowdown.

NATURAL GAS: Natural gas ends down near 4 pct on EIA data, weather
NEW YORK, Aug 4 (Reuters) - U.S. natural gas futures ended sharply lower on Thursday, with milder Northeast and Midwest weather forecasts and a bearish weekly inventory report driving the front-month contract to its lowest level since mid-March.
"We're still seeing some pretty big (storage) builds even with record heat," a Massachusetts-based trader said.

EURO COAL: Coal ignores turmoil on other markets
LONDON, Aug 4 (Reuters) - Prompt physical coal prices dipped by around 10 cents on Thursday with few fresh trades reported.  Coal's illiquidity has made it a relatively unattractive market for speculative investors and so coal was little affected by the flood of money out of stocks and into safe-haven assets like bonds.
"Everything seems to be collapsing apart from bonds, oil fell $3 but coal has ignored it all," one European trader said.

COMMODITIES: Investor exodus batters oil, grains, metals
NEW YORK, Aug 4 (Reuters) - Commodities tumbled on Thursday, trampled by a global stampede away from riskier assets as investors panicked over mounting signs of a sluggish U.S. economy,
"A range of commodities is under selling pressure as a general 'risk-off' flow continues from investors suddenly far less complacent regarding the strength of the global economy," said Tim Evans, analyst at Citi Futures Perspective in New York.

20110805 1108 Local & Global Economic Related News.

Malaysia: Export growth accelerates as commodities shipments gain
Malaysia’s export growth accelerated more than economists estimated as rising Asian demand for commodities countered falling shipments to the US and Europe, signaling trade disruptions from Japan’s earthquake are easing. Overseas shipments climbed 8.6% to RM57.35bn (USD19bn) in June from a year earlier after gaining 5.4% in May. Malaysia, Southeast Asia’s largest producer of palm oil, petroleum and gas after Indonesia, has benefited from sales to a region that led the global economic recovery from the 2009 recession. (Bloomberg)

US stocks plunge as S&P 500 posts biggest retreat since 2009
US stocks plunged, driving the S&P 500 Index to the biggest decline since February 2009, as concern the global economy is weakening prompted a global rout. All 10 S&P 500 groups slumped, led by losses topping 5.3% for energy, material and industrial shares. The S&P 500 decreased 4.8% to an eight-month low of 1,200.07. The Dow Jones Industrial Average declined 512.76 pts, or 4.3%, to 11,383.68, erasing its 2011 gain. Almost 14bn shares changed hands on US exchanges, 90% higher than the three-month average. (Bloomberg)

U.S: Initial jobless claims fell last week to 400,000. Applications for jobless benefits decreased 1,000 in the week ended July 30 to 400,000, the fewest in almost four months, the Labor Department said in Washington. The four-week average also declined to the lowest level since April. (Source: Bloomberg)

U.S: Chief executives less confident on sales, employment in July. Confidence among U.S. chief executive officers waned at the start of the third quarter as business leaders anticipated smaller gains in sales, employment and equipment purchases, a private survey showed. The Young Presidents' Organization gauge of sentiment dropped to 61.1 in July from April's record-high 64.1 reading, according to the Dallas-based group. Figures greater than 50 shows the executives' outlook was more positive than negative. (Source: Bloomberg)

US: Services growth slowest since February 2010
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% of the economy, dropped to 52.7 from 53.3 in June. Readings above 50 signal expansion. Companies hired fewer workers last month than in June, a report from ADP Employer Services showed. (Bloomberg)

US: Consumer confidence fell last week to two-month low
Consumer confidence in the US dropped last week to the lowest level in more than two months, paced by growing dissatisfaction among women and high earners. The Bloomberg Consumer Comfort Index was minus 47.6 in the period to July 31, the lowest since May, compared with minus 46.8 the prior week. Confidence among women fell to the lowest level since October 2009, while Americans making more than USD100,000 a year were the most pessimistic since November 2009.The loss of confidence heightens the risk that consumer spending, which accounts for 70% of the economy, will be slow to rebound in the second half of the year. (Bloomberg)

E.U: Trichet says ECB resumed bond buying as debt crisis spreads. "I wouldnt be surprised that before the end of this teleconference you would see something on the market," Trichet told reporters in Frankfurt after the ECB kept its benchmark interest rate at 1.5%. "We were not unanimous but with overwhelming majority with regards to the bond purchases." (Source: Bloomberg)

Euro: Trichet says ECB to offer banks more cash as debt crisis spreads
European Central Bank President Jean- Claude Trichet said the ECB will offer banks additional cash as the region’s debt crisis spreads, increasing pressure on policy makers to resume bond purchases. The ECB will lend euro-area banks as much money as they need for six months and extend its existing liquidity measures through the end of the year, Trichet said at a press conference in Frankfurt yesterday. European officials are trying to stop the region’s sovereign debt crisis spreading to Italy and Spain. (Bloomberg)

Germany: Factory orders in June unexpectedly rose on investment goods. Orders increased 1.8% MoM from May, when they rose a revised 1.5% MoM. In the year, orders rose 9.5% YoY, when adjusted for work days. (Source: Bloomberg)

Russia: Left interest rates unchanged for a third month as July inflation fell faster than economists expected and weakening global growth threatens to damp demand for the country's oil and gas exports. Bank Rossii held its refinancing rate at 8.25% after increases in February and April, the Moscow-based central bank said in a statement on its website. The overnight auction-based repurchase rate was held at 5.5% and the overnight deposit rate at 3.5%, matching economists' expectations. (Source: Bloomberg)

Japan: Exporters seek more aid after ‘too late’ Yen intervention
Japanese exporters called for more action to weaken a near-record high yen even after government intervention prompted the currency’s biggest drop since March. “The exchange rate is at a level that has an extremely damaging effect on the Japanese economy,” Osamu Masuko, president of Tokyo-based Mitsubishi Motors Corp., said yesterday. The yen touched 80 to the dollar for the first time since 12 July after the government sold the currency and the Bank of Japan added to monetary stimulus measures. That still may not be enough for exporters including Mitsubishi, Toyota Motor Corp. and Sony Corp. whose overseas earnings have been crimped by the currency’s jump of about 7% in the past year. (Bloomberg)

20110805 1107 Malaysia Corporate Related News.

Engtek directors accept taking company private at RM2.50 per share
Non-interested directors of Engtek decided to accept the takeover offer price of RM2.50 per share. Engtek’s board will next table the resolutions to the shareholders for their consideration and approval at an extraordinary general meeting to be convened. In late July, Engtek major shareholders made an offer to take the company private at an indicative offer price of RM2.50 per share or RM307.2m. (Malaysian Reserve)

Major shareholders sell out on Sanichi
Germany-based Projektarbelt Technische Beratung Venretung International (Protev) is conducting due diligence on Sanichi for possible acquisition of a strategic stake in the latter. Sanichi said the due diligence would be conducted between August and September, in relation to the MoU that both parties had signed in June. Meanwhile, PFM Capital SB sold its entire 18.95% stake in Sanichi. Datuk Md Wira Dani Abdul Daim is likely to be the buyer for part of the block after surfacing as a substantial shareholder with a 6.12% stake. (Financial Daily)

Affin: Scraps plan to buy Indonesian bank. Affin has discontinued plans to acquire a 80% controlling stake in PT Bank Ina Perdana (Bank Ina) given that Indonesia's central bank is mulling plans to reduce the limit on foreign majority shareholdings in Indonesia's commercial banks. (Source: Bursa Malaysia)

CIMB: Sets up investment banking advisory JV in Sri Lanka. CIMB Group Holding's indirect wholly owned subsidiary, CIMB securities International Pte Ltd, will establish an investment banking advisory joint venture in Sri Lanka. The JV company would be a subdiary of CIMB securities International upon its incorporation. (Source: Bursa Malaysia)

Catcha Media: Another new shareholder. Catcha Media Bhd says HSC Healthcare Sdn Bhd, headed by Dr Lim Yin Chow, has become a substantial shareholder by acquiring a 5% stake. (Source: Bursa Malaysia)

Transportation: Early study on KL-S'pore hi-speed train ready Aug 19. A pre-feasibility study on the high-speed train connecting Kuala Lumpur and Singapore is expected to be completed by Aug 19. The study would allow the government to decide on the corridors and stations to be located between Kuala Lumpur and Singapore. (Source: The Edge Malaysia Online)

Construction: KLIFD takes shape. 1Malaysia Development Bhd (1MDB), the government-owned firm in charge of setting up the Kuala Lumpur International Financial District (KLIFD), has picked Akitek Ju-rurancang (Malaysia) Sdn Bhd and its international partner, Machado Silvetti and Associates (MSA), as the project's master planners. The USD8b (RM23.7b) KLIFD, one of Malaysia's biggest projects, aims to tightly cluster financial institutions and top global firms on 30.3ha of land in the Imbi area, fronting Jalan Tun Razak here. (Source: Business Times)

Property: SP Setia Says not in talks with E&O. Sp Setia Bhd said it is not in any acquisition or takeover talks with rival Eastern & Oriental Bhd (E&O) or its shareholders. It was responding to a query from Bursa Malaysia based on reports that it is keen on buying E&O to gain access to land in Penang. (Source: Bursa Malaysia)

Plantation: Oil palm JV firms suffer RM34m losses on FFB theft. Oil palm joint-venture companies (JVCs) managed by the Sarawak Land Custody and Development Authority (LCDA) have suffered an estimated losses of RM33.6m due to theft of fresh fruit bunches (FFB) since last year. The NCR projects include SPB Penan Jambatan Suai Sdn Bhd whose 1,855ha plantation at Suai in Miri that is being jointly developed with Sarawak Plantation Bhd amd 150 landowners, had incurred losses of RM21.2m. (Source: The Edge Financial Daily)  

20110805 1037 Global Market Related News.

Asia Stocks Plunge, Joining Global Equities Rout, on U.S. Economic Concern (Source: Bloomberg)
Asian stocks declined for a fourth day, with the benchmark regional index set for its lowest close in four months, as concern the global economy is faltering sparked a global equities rout that drove the Standard & Poor’s 500 Index to its worst slump since February 2009. Sony Corp. (6758), a Japanese exporter of consumer electronics that earns half of its revenue in the U.S. and Europe, slumped 4.7 percent in Tokyo. Toyota Motor Corp. (7203), the world’s largest carmaker, retreated 3.5 percent. BHP Billiton Ltd. (BHP), the biggest global mining company and Australia’s No. 1 oil producer, sank 4.1 percent as commodity prices dropped. “It’s a panic attack from fear that growth is dropping off a cliff,” said Prasad Patkar, who helps manage the equivalent of $1.7 billion at Sydney-based Platypus Asset Management Ltd. “There was an expectation that resolution of the U.S. debt-ceiling issue would trigger a relief rally. It looks like everyone forgot about the weakness in the underlying economy.”

U.S. Consumer Confidence Drops to Minus 47.6 in Bloomberg Index on Economy (Source: Bloomberg)
Consumer confidence in the U.S. dropped last week to the lowest level in more than two months, paced by growing dissatisfaction among women and high earners. The Bloomberg Consumer Comfort Index was minus 47.6 in the period to July 31, the lowest since May, compared with minus 46.8 the prior week. Confidence among women fell to the lowest level since October 2009, while Americans making more than $100,000 a year were the most pessimistic since November 2009. The biggest one-week drop in the Standard & Poor’s 500 Index in a year, political wrangling over raising the debt ceiling and a stagnant job market probably weighed on consumers’ moods. The loss of confidence heightens the risk that consumer spending, which accounts for 70 percent of the economy, will be slow to rebound in the second half of the year.

U.S. Jobless Claims Fall to Level Showing Limited Labor-Market Improvement (Source: Bloomberg)
Initial claims for unemployment insurance payments in the U.S. fell last week to a level that shows limited improvement in the labor market. Applications for jobless benefits decreased 1,000 in the week ended July 30 to 400,000, the fewest in almost four months, the Labor Department said today in Washington. Economists forecast 405,000 claims, according to the median estimate in a Bloomberg News survey. The four-week average also declined to the lowest level since April. A further reduction in the pace of dismissals may be needed before companies gain the confidence to step up hiring, which has slowed in the past three months. Employers added 85,000 workers in July, economists project a Labor Department report to show tomorrow, failing to reduce a jobless rate that’s holding above 9 percent.

U.S. Stocks Sink as Economic Fear Drives S&P 500 to Biggest Drop Since ’09 (Source: Bloomberg)
U.S. stocks plunged, driving the Standard & Poor’s 500 Index to the biggest decline since February 2009, as concern the global economy is weakening prompted a global rout. Only three out of 500 stocks in the benchmark measure of American equities rose. Losses exceeded 10 percent for 13 of the companies including Alpha Natural Resources Inc. (ANR) and Gap Inc. (GPS), which fell after the retailer’s sales missed estimates. All 10 S&P 500 groups slumped, led by losses topping 5.3 percent for energy, material and industrial shares. Chevron Corp. (CVX) and Alcoa Inc. (AA) fell more than 5.7 percent as Japan sold its currency, driving down commodities priced in the dollar.
The S&P 500 decreased 4.8 percent to an eight-month low of 1,200.07 at 4 p.m. in New York. It has retreated 11 percent since July 22, the biggest loss over the same amount of time since March 9, 2009, when the equity bull market began. The Dow Jones Industrial Average declined 512.76 points, or 4.3 percent, to 11,383.68 today, erasing its 2011 gain. Almost 14 billion shares changed hands on U.S. exchanges at 4:27 p.m., 90 percent higher than the three-month average.

U.S. downgrade could accelerate dollar decline
NEW YORK, Aug 3 (Reuters) - A downgrade to the U.S. sovereign credit rating could open up a new world of pain for the dollar.
Already reeling from low interest rates, slow economic growth, and foreign investors eager to diversify away from U.S. assets, the loss of AAA status could cement the view the dollar is no longer the safest harbor in a troubled world.

Treasuries Poised for Biggest Weekly Advance Since Fed Rate Cut in 2008 (Source: Bloomberg)
Treasuries headed for their steepest weekly gain since the last time the Federal Reserve cut interest rates in 2008 as stocks tumbled around the world on concern economic growth is slowing. Yields slid from Australia to Japan to Germany this week as investors sought the relative safety of government debt. The TED spread, the difference between what lenders and the U.S. government pay to borrow for three months, widened to 26.9 percentage points, the most in a year. U.S. employers probably failed to create enough jobs in July to reduce the jobless rate in the biggest economy, analysts said before a report today. “Hot money is flowing into U.S. Treasuries in a flight to quality,” said Hiromasa Nakamura, a senior investor in Tokyo at Mizuho Asset Management Co., which oversees the equivalent of $37.9 billion and is a unit of Japan’s second-largest bank. “There’s a flight from riskier assets into bonds. All bonds are benefitting.”

China Will Escape a ‘Hard Landing’: Li Ka-shing (Source: Bloomberg)
Li Ka-shing, the Hong Kong billionaire who predicted China’s 2008 stock market decline, said the nation’s economy will avoid a hard landing even as global growth slows. “Every task that’s carried out in China these days has gone through careful consideration,” Li, 83, told reporters in Hong Kong yesterday. “I don’t think there’ll be a hard landing and I’m not concerned.” Premier Wen Jiabao’s policies to rein in consumer and property prices have raised concerns they will trigger a slowdown in the economy that’s been the main contributor to global growth. Li, chairman of Cheung Kong (Holdings) Ltd. and Hutchison Whampoa Ltd. (13), said yesterday his companies will be “active” in investments, after earlier this week agreeing to buy the U.K.’s Northumbrian Water Group Plc for 2.4 billion pounds ($3.9 billion).

ICBC Agrees to Buy Stake in Standard Bank Argentina Units for $600 Million (Source: Bloomberg)
Industrial & Commercial Bank of China (1398) Ltd., the world’s most profitable lender, agreed to pay $600 million for some assets controlled by Standard Bank Group Ltd. in Argentina in its biggest takeover in almost four years. The Chinese bank will pay cash for an 80 percent stake in Standard Bank Argentina, Standard Investments and Inversora Diagonal, according to a statement to the Hong Kong stock exchange today. The Beijing-based lender and Standard Bank London Holdings Plc also plan to jointly invest $100 million in Standard Bank Argentina after the transaction is completed. The proposed acquisition, six months after ICBC announced plans to buy a U.S. bank, signals the Chinese lender’s growing overseas ambitions. Purchasing the assets in Argentina, South America’s second-largest economy, will add to ICBC’s branch network in the region and allow it to tap demand for financial services between China and the region’s emerging markets.

Japan Looks to Warn Investors Away From Yen (Source: Bloomberg)
Japan escalated its campaign to convince investors that the nation’s post-earthquake challenges mean they shouldn’t pile into the yen as a haven from the turmoil over U.S. and European debt. On his third day in the job, Takehiko Nakao, vice finance minister for international affairs, oversaw currency sales that sent the yen down the most against the dollar since September; it recouped some of the loss today. With Nakao’s boss Yoshihiko Noda this week referring to mid-1990s style intervention as a useful reference, investors may need to brace for further action, according to Gareth Berry, a strategist at UBS AG in Singapore. The risk is policy makers take their eye off the broader measures more likely to bolster prospects for a rebound from an estimated three straight quarters of economic contraction. Prime Minister Naoto Kan and opposition lawmakers have yet to forge a path toward passage of a reconstruction bill that would redress the 16.9 trillion yen ($212 billion) of damage from March 11.

Japanese Exporters Seek More Action on Yen After ‘Too Late’ Intervention (Source: Bloomberg)
Japanese exporters called for more action to weaken a near-record high yen even after government intervention prompted the currency’s biggest drop since March. “The exchange rate is at a level that has an extremely damaging effect on the Japanese economy,” Osamu Masuko, president of Tokyo-based Mitsubishi Motors Corp. (7211), said yesterday by e-mail. He said he welcomed the intervention, ’’but the resulting exchange rate still isn’t acceptable.’’ The yen yesterday touched 80 to the dollar for the first time since July 12 after the government sold the currency and the Bank of Japan (8301) added to monetary stimulus measures. That still may not be enough for exporters including Mitsubishi, Toyota Motor Corp. (7203) and Sony Corp. (6758), whose overseas earnings have been crimped by the currency’s jump of about 8.6 percent in a year.

Japanese Stocks Plunge Most Since March 11 Quake Amid Global Equities Rout (Source: Bloomberg)
Japanese stocks plunged, headed for the steepest drop most in more than four months, as concern the global economy is faltering sparked an equities rout that drove the Standard & Poor’s 500 Index to its worst slump since 2009. Sony Corp., which makes half of its sales in the U.S. and Europe, tumbled 4.8 percent. Toyota Motor Corp., the world’s largest carmaker, retreated 3.8 percent. Mitsubishi Corp., Japan’s No. 1 trading company, sank 3.7 percent as commodity prices dropped. The Nikkei 225 Stock Average fell 3.5 percent to 9,321.47 as of 9:43 a.m. in Tokyo, sliding the most since March 15. All 225 stocks in the Nikkei declined. The broader Topix index plunged 3.3 percent to 799.06. For the week, the Nikkei has lost 5.2 percent while the Topix index is down 5 percent.

Intervention ‘Buys Time’ as Yield Gap Portends a Yen Rally: Japan Credit (Source: Bloomberg)
Japan’s third intervention in a year may fail to halt the yen’s appreciation as the slowing U.S. economy reduces the appeal of dollar-denominated assets. The extra yield two-year Treasuries offer instead of similar-maturity Japanese notes fell to 16 basis points this week, the least since December 2008. Japan’s 10-year bond rates slid below 1 percent for the first time in almost nine months as the Bank of Japan said it will buy more government debt through its asset-purchase fund. Japan’s move came before U.S. data projected to show that the world’s largest economy failed to create enough jobs to reduce unemployment, fanning speculation the Federal Reserve will join the BOJ and Swiss National Bank in adding to monetary stimulus. While Finance Minister Yoshihiko Noda has said Japan would aim for “maximum effect” in any intervention, its impact may be short-lived, according to Ayako Sera, a market strategist at Sumitomo Trust & Banking Co.

SKorea Should Raise Rate, Strengthen Won: IMF (Source: Bloomberg)
South Korea should raise its benchmark interest rate to at least 4 percent over time and allow its currency to appreciate further to better fight inflation, the International Monetary Fund’s staff said. “The policy rate hikes thus far, although gradual, are welcome, and should continue in a more decisive manner, given the strong underlying economic momentum and lags in monetary policy,” IMF economists wrote in an annual assessment of the country’s economy released today. “Further two-way exchange rate flexibility would also help in the policy response to inflation.” Higher energy and food costs pushed South Korea’s inflation to a four-month high of 4.7 percent in July, breaching the central bank’s target limit for a seventh straight month. The Bank of Korea’s board will meet on Aug. 11 to discuss whether to raise borrowing costs for the fourth time this year after reports last month showed that economic growth slowed in the second quarter.

Subbarao Says India’s Current Inflation Is ‘Far Above the Threshold Level’ (Source: Bloomberg)
India’s inflation rate is “far above the threshold level” and policy makers need to slow economic growth to curb price gains, central bank Governor Duvvuri Subbarao said. “In the short term you may have to sacrifice growth to generate an environment of rapid growth and steady inflation in the medium term,” Subbarao said in Mumbai yesterday. “Some data show that 5 percent inflation is the threshold level, so at 9.4 percent we are far above the threshold level.” India’s stance contrasts with Europe, Japan and Switzerland, which are either adding cash into their economies or seeking to stem appreciating exchange rates to support expansion. Price gains in India are the highest among the BRICS nations that include Brazil, Russia, China and South Africa.

Trichet’s Bond Firepower Faces Test as ECB Purchases Fail to Stem Turmoil (Source: Bloomberg)
European Central Bank President Jean- Claude Trichet may be forced to step up his fight against the sovereign debt crisis after a resumption of bond purchases yesterday failed to halt a rout in Italy and Spain. Over opposition from Germany’s Bundesbank, Trichet yesterday sent the ECB back into bond markets as yields on Italian and Spanish yields soared, threatening the ability of the euro region’s third- and fourth-largest economies to borrow. As the sell-off continued, traders said the ECB purchased only Irish and Portuguese securities, suggesting the central bank is reluctant to put up the funds needed to tame a crisis it says governments are responsible for fixing. “The ECB is being dragged unwillingly back to the table, having tried originally to palm off responsibility for restructuring the euro zone to governments,” said Peter Dixon, an economist at Commerzbank AG in London.
“If the ECB is serious about playing its part in holding the euro zone together, then it’s going to have to spend a considerable sum.”

ECB Resumes Bond Buying as Trichet Offers Banks Cash to Stem Debt Crisis (Source: Bloomberg)
European Central Bank President Jean- Claude Trichet said the ECB has resumed bond purchases and will offer banks more cash to stop the region’s debt crisis from engulfing Italy and Spain and hurting the economy. “I wouldn’t be surprised that before the end of this teleconference you would see something on the market,” Trichet told reporters in Frankfurt today after the ECB kept its benchmark interest rate at 1.5 percent. “We were not unanimous but with overwhelming majority with regards to the bond purchases.” ECB purchases of Irish and Portuguese bonds during the press briefing haven’t stamped out investor concern on the 21- month crisis spreading to Italy and Spain, whose yields soared to euro-era highs this week. European officials are trying to put a firewall around Europe’s third and fourth-largest economies to avoid them being forced into seeking external aid.

Berlusconi Drives Italian Growth Agenda as Bond Yields Stoke Debt Concern (Source: Bloomberg)
Prime Minister Silvio Berlusconi urged Italians not to be “scared” by surging bond yields, saying the country will weather the market storm, after meeting with executives, bankers and unions on the economy. The discussions in Rome today came after the premier, rejecting calls to resign, addressed both houses of Parliament yesterday on the nation's economy. Italy must cut red tape and lower taxes to boost growth and tame the euro region’s second- biggest debt, he said following the session. “I don’t think the crisis will get worse and we mustn’t be scared by the fact that the spreads can remain at their current levels,” Berlusconi told a press briefing in Rome. “The rise in yields would affect only a fraction” of the debt, “which means the costs would be very relative.”

Australian Stocks Set for Biggest Drop in Amost 3 Years Amid Global Rout (Source: Bloomberg)
Australian stocks plunged, with oil and mining companies leading the benchmark index toward its biggest drop in almost three years, as concern that the global economic recovery may stall set off a worldwide equities rout. BHP Billiton Ltd. (BHP), the world’s biggest mining company, slumped 4 percent after commodity prices tumbled. Rio Tinto Group, the second-largest miner by sales, slid 4.9 percent after first-half profit missed analyst estimates. Commonwealth Bank of Australia (CBA), the nation’s No. 1 lender by market value, dropped 3 percent. Qantas Airways Ltd. (QAN), Australia’s biggest airline by market value, sank 5.4 percent. Australia’s S&P/ASX 200 Index fell 4.4 percent to 4,088.20 as of 11:20 a.m. in Sydney, set for the biggest drop since Nov. 13, 2008. Energy, material and consumer companies declined the most among the gauge’s 10 industry groups and all but three of the index’s 200 stocks dropped.
New Zealand’s NZX 50 Index (NZSE50FG) slid 2.4 percent to 3,297.33 in Wellington, set for the steepest decline since March 3, 2009.

Russia Leaves Interest Rates Unchanged for Third Month on Slower Inflation (Source: Bloomberg)
Russia left interest rates unchanged for a third month as July inflation fell faster than economists expected and weakening global growth threatens to damp demand for the country’s oil and gas exports. Bank Rossii held its refinancing rate at 8.25 percent after increases in February and April, the Moscow-based central bank said today in a statement. All 21 economists in a Bloomberg survey predicted the decision. The overnight auction-based repurchase rate was held at 5.5 percent and the overnight deposit rate at 3.5 percent, matching economists’ expectations. “This decision was made based on an evaluation of inflationary risks and risks to the stability of economic growth, including those from continued uncertainty on the economic situation abroad,” the bank said in the statement.

Turkish Bank Cuts Benchmark Rate to 5.75% to Support Growth (Source: Bloomberg)
Turkey’s central bank unexpectedly cut its benchmark interest rate to a record low to shield the economy from the impact of the European debt crisis and slowing growth in the U.S. The bank lowered the one-week repo rate by a half percentage point to 5.75 percent, according to an e-mailed statement today after an emergency meeting of the monetary policy committee in Ankara. It took separate steps to support the lira, which weakened to a two-year low on the news. Governor Erdem Basci is betting that the risks of a global recession spilling into Turkey outweigh the challenges posed by above-target inflation and a record current-account deficit. The bank says critics of its low-rates policy are wrong to worry about the economy overheating because it’s already slowing from the 11 percent annual growth recorded in the first quarter.

Dollar, Franc Set for Weekly Gains (Source: Bloomberg)
The dollar and Swiss franc headed for weekly gains against a majority of their most-traded peers before reports in the U.S. and Germany that analysts estimate will add to signs that the global economy is slowing. The yen is set for its biggest weekly drop in four months against the dollar on speculation Japan will again intervene in markets after yesterday selling its currency to stem gains. The euro sank to a record against the franc before German data that economists said will show industrial output came close to stalling. A U.S. report is forecast to show the jobless rate stayed above 9 percent. New Zealand’s currency slid versus the dollar as investors lowered bets on interest-rate increases. “We’re seeing a slowdown in the U.S. economy and also more broadly,” said Joseph Capurso, a currency strategist at Commonwealth Bank of Australia in Sydney. “The U.S. dollar is still the safe haven so we’ll probably see more dollar buying as commodities and equities fall.”

FOREX-Swiss franc retreats, but move seen short-lived
NEW YORK, Aug 4 (Reuters) - The Swiss franc fell from record highs on Thursday after the Swiss National Bank shocked the market with an interest rate cut, but the retreat should prove fleeting given mounting concerns about global growth.
The SNB said the franc was "massively overvalued," keeping alive the prospect of intervention.

FOREX-Yen dives as Japan intervenes, joins Swiss in FX war
LONDON, Aug 4(Reuters) - The yen fell sharply as Japan intervened to curb the currency's strength to support its export-led economy, a day after Switzerland's central bank unexpectedly cut interest rates to cap a soaring Swiss franc.
"They're trying to fight a futile battle," said Ankita Dudani, currency strategist at RBS. "It won't have a lasting impact so long as the euro zone crisis continues and the global outlook deteriorates."

GLOBAL MARKETS-Yen sinks after intervention; stocks slip again
LONDON, Aug 4 (Reuters) - The yen tumbled from near record highs after Japan intervened to curb the currency's export-damaging strength, while concerns about slowing global economic growth pushed world stocks towards the previous day's 2011 low.
"This is going to be a long and drawn out campaign, since, for Japan, the Fed is more likely to cut than hike interest rates and thus the dollar remains pressured and for the Swiss there seems no resolution to the euro zone debt crisis," said Chris Turner, chief currency strategist at ING.

Intervention hits yen, stocks fall for third day
SYDNEY, Aug 4 (Reuters) - The yen tumbled as Japanese authorities intervened to curb its recent gains, though gold stayed near a record high on uncertainty over whether the European Central Bank would join the fray by resuming bond purchases to fight a crisis of confidence.
"The ECB however has been marching to its own tune of concerns about inflation pressures and we don't expect a huge turnaround in posture from them just yet."

20110805 1036 Global Commodities Related News.

Commodities saw $6 bln outflow in June-SocGen
Aug 3 (Reuters) - Investors pulled out a record $6 billion of net investments in commodities in June, mainly due to soured sentiment toward agricommodities and midyear portfolio rebalancing, Societe Generale said on Wednesday.
Agriculture made up the bulk, about $3.5 billion, of the outflows faced by all subsectors, including precious metals.

Corn (Source: CME)
US corn futures close lower on widespread selling of commodities. Strength in the US dollar and steep losses in equities and crude oil weigh on the grain markets as traders flee from riskier assets. "It's sort of a national down day," says Sid Love of Kropf & Love Consulting. Yet, corn trimmed losses ahead of the close as bargain hunters started stepping in. Grain users are nervous about the potential for poor weather to reduce output after an intense July heat wave. CBOT December corn ends down 11 1/2c at $7.01 1/2 a bushel.

Wheat (Source: CME)
US wheat futures end sharply lower amid broad weakness in commodities and equities. The selling knocks down grains, crude oil and precious metals as investors flee riskier assets. A rally in the US dollar adds pressure as it makes US grains less attractive to foreign buyers. Traders are already nervous about declining demand because of increased competition for export business from Russia. Egypt bought Russian and Romanian wheat and none from the US. CBOT September wheat drops 28 3/4c to $6.81 3/4 a bushel, KCBT September slides 27c to $7.71 and MGEX September falls 21 1/2c to $8.23 1/4.

Rice (Source: CME)
US rice futures finish weaker as selling engulfs commodity and equity markets. Strength in the dollar contributes to the negative tone, fueling concerns about waning demand for US grains. Meanwhile, weekly rice-export sales of 38,500 tons were down 35% from the prior 4-week average, according to the USDA. CBOT September rice drops 9 1/2c to $16.25/hundredweight.

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.

India monsoon rains 22 pct below normal in past week - Met office
NEW DELHI, Aug 4 (Reuters) - India's key monsoon rains were 22 percent below normal in the week to Aug. 3 from 23 percent below average showers in the previous week, the weather office said on Thursday, and a second straight week of weakness.
The rains, which are crucial for 60 percent of the major rice and sugar producers' farms without irrigation, improved over south India and the western coast.

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.

Rain still delaying German grain crop -farming lobby
HAMBURG, Aug 3 (Reuters) - Rain is disrupting Germany's grain harvest and dry weather is needed to make progress with work, farming association DBV said on Wednesday.
Harvesting of Germany's key winter wheat crop has started but it is still too early to make a forecast of crop size or quality, the DBV said in its second harvest report.

Cargill, CHS Look To Expand Joint Venture In Northwest To Meet Asian Grain Demand (Source: CME)
Cargill Inc. and CHS Inc. are in talks to expand an existing joint venture in the Pacific Northwest, which is becoming increasingly important as a gateway for grain exports to Asia. Cargill, one of the world's largest grain merchandisers, and CHS, the largest U.S. farmer cooperative, said the talks are driven by demand for wheat, feed grains and oilseeds into Asia. They currently operate TEMCO, LLC, which consists of an export terminal in Tacoma, Wash. The announcement comes a month after Cargill and rival Louis Dreyfus Commodities said they would end a 10-year-old joint venture that exported grain from the Midwest. At the time, both companies said they planned to maintain a presence in the Pacific Northwest export market. China in particular is driving increased exports, as the nation's purchases of U.S. soybeans have exploded in recent years. China has also become a buyer of corn in the past year, and many analysts say the country is poised to become a larger, more consistent corn buyer.
Another grain merchandiser, Bunge Ltd. (BG), is building a new export terminal in the region that will open in the fall. The $200 million facility will be the first new terminal in the region in more than two decades, and Bunge officials have boasted that it will be the most efficient grain terminal in the region. Both Cargill and CHS are based outside of Minneapolis.

Canada's 2011-12 Grain Output Seen At 44.5M Tons - USDA Attache (Source: CME)
Poor plantings mean Canada's 2011-12 grain harvest is expected to be 44.5 million metric tons in 2011-12, below last season's poor crop, the U.S. Department of Agriculture's attache said. Wheat production in this crop year is forecast at 22.5 million tons, down 3% on year, but exports are likely to rise the same percentage, to 17 million tons, as grain is expected to be of better quality, the USDA said. "Despite farmers reporting intentions to seed more area to wheat in 2011-2012, expectations were not realized due to extremely wet conditions," said the USDA. "Exports will be limited by tight supplies." Barley production is expected to rise almost 8% from 2010-11 to 8.2 million tons as higher plantings--though "still below the expected production level suggested by seeding intentions"--and better yields aid output.
Corn exports are expected to be above average, despite a 5% fall in production due to the poor plantings, although they are expected to almost halve from the historic highs reached in 2010-11, the USDA added.

The Andersons 2Q Profit Soars As High Prices Boost Grain Storage (Source: CME)
The Andersons Inc. reported second-quarter earnings jumped nearly 80% on sharply higher grain prices that benefited its storage business. The results easily beat analyst expectations, and the Maumee, Ohio-based company's stock was up 7.2%, to $41.25 in after-hours trade. The company said strong gains in basis, or the difference between cash grain prices and futures, came earlier in the year than expected and helped fuel the earnings growth. Cash prices for corn surged above futures during the quarter as worries about near-term supplies grew, increasing the competition for supplies. This trend was especially pronounced in Indiana and Ohio, where the company has several of its facilities. Meanwhile, wheat storage rates during the period were four times higher than a year ago, BB+T Capital Markets said in a recent research note.
For the quarter, the company reported earnings of $45.2 million, or $2.42 per share, up from $25.2 million and $1.36 per share a year ago. Revenue totaled $1.3 billion. Analysts polled by Thomson Reuters had forecast earnings of $1.72 per share on revenue of $1.1 billion. The second quarter is typically a good one for The Andersons, but Chief Executive Mike Anderson said this year's results were especially strong "due to the significant and accelerated grain basis income." The ethanol producer and grain handler said earnings in its grain and ethanol group jumped to $45.3 million from $19.6 million. Its ethanol profits climbed 41%, to $8.8 million, as higher ethanol prices drove increased revenues. The company also reported increased profits in its fertilizer distribution business.
The Andersons' plant nutrient group, which includes fertilizer formulation and distribution, saw earnings climb to $24.1 million, up from $19 million the prior year, thanks to increased margins driven by strong global demand. The company managed the higher profits despite a very late planting season in Ohio and Indiana that had prompted worries that farmers would have a limited opportunity to apply fertilizer.

Oklahoma Suffers Up To $2.2 Billion In Farm Losses From Drought (Source: CME)
Oklahoma has suffered $1.6 billion to $2.2 billion in agricultural losses this year from a relentless drought baking the southern Plains, according to a preliminary estimate issued. The estimate, calculated by Oklahoma State University professor and livestock marketing specialist Derrell Peel, includes damage to crops and cattle. The losses account for about one-third of the state's annual agricultural production value, Peel said. "All of our summer crops are going to be severely reduced and in some places completely eliminated," he said. Farmers across Oklahoma saw their wheat harvests devastated by heat and dryness. The U.S. Department of Agriculture estimates the size of the crop, which was harvested this spring and earlier this summer, dropped by 38% from last year to 74.8 million bushels. Cotton, peanut, corn, soybean and sorghum crops will be harvested this autumn. They have all been ravaged by the drought, which has persisted for 10 months.
"For this growing season, it doesn't matter whether it rains or not. The damage is done," Peel said. Livestock producers have had to send cattle to slaughter earlier than usual because of a lack of hay and water, creating an increase in near-term beef supplies. Yet, the drought will likely tighten cattle supplies over the next several years because farmers are slaughtering the cows they normally would keep alive to produce the next generation, Peel said. Texas and Kansas also have suffered heavy farm losses from the extreme heat and dryness. In Texas, state data show since the drought began in October, it has been the driest 10 months since records were kept by at least an inch of rain. Forecasters see little relief in sight, with Texas State Climatologist John Nielsen-Gammon saying the weather "looks dry for at least the next month."

Wheat, Corn Decline as Global Economic Recovery Concern Dampens Demand (Source: Bloomberg)
Wheat extended losses after plunging by the most in five weeks and corn dropped for a third day on speculation that the global economy is faltering, hurting demand for grains used in food, livestock feed and fuel. Wheat futures for December delivery dropped as much as 2 percent to $7.1075 a bushel on the Chicago Board of Trade before trading at $7.1425 at 9:10 a.m. Singapore time. Yesterday, they lost 3.3 percent, the biggest drop since June 30. The most- active contract has decreased 9.5 percent this year. “Markets seem to be increasing their bets that the U.S. economic recovery indeed turns negative,” Luke Mathews, commodity strategist at Commonwealth Bank of Australia, said by phone from Sydney today. “As long as this wider risk-aversion persists, we think that grain markets are susceptible to further selling pressure.”

U.S. Wheat Prices Decline as Cheap Russian Grain May Reduce U.S. Exports (Source: Bloomberg)
Wheat futures dropped the most in five weeks on signs that importers favor cheaper Russian grain, reducing demand for supplies from the U.S., the world’s top exporter. Egypt, the largest importer, bought 180,000 metric tons from Russia in a tender today at $261.94 and $262.50 a ton. As of July 22, U.S. soft wheat for export traded at $275.30 a ton. On July 1, Russia lifted a ban on grain shipments imposed after a drought damaged last year’s crop. “Russia is playing the game of dumping their wheat in the export market, and U.S. exports are going to struggle,” Darrell Holaday, the president of Advanced Market Concepts in Wamego, Kansas, said in a telephone interview. “At these prices, I’m not optimistic.”

Corn, Soybeans, Wheat May Open Lower as Global Demand Ebbs, Dollar Rallies (Source: Bloomberg)
What follows are opening calls for U.S. grain and oilseed markets.
-- Corn futures are called to open 10 cents to 12 cents a bushel lower on the Chicago Board of Trade on speculation that the U.S. recovery is faltering, reducing global demand for grain to make animal feed, fuel and food, Don Roose, the president of U.S. Commodities Inc in West Des Moines, Iowa, said in a telephone interview.
-- Soybean futures may open 13 cents to 16 cents a bushel lower in Chicago on speculation that rain in the next 10 days will revive Midwest crops after a July heat wave, Roose said. The dollar’s rally may erode the appeal of U.S. exports, he said. Soybean-oil futures are expected to open down 0.3 cent to 0.5 cent a pound, and soybean-meal futures may open $2 to $3 lower for 2,000 pounds.
-- Wheat futures may open 10 cents to 12 cents a bushel lower on the CBOT, the Kansas City Board of Trade and the Minneapolis Grain Exchange on the greenback’s advance against major currencies, Roose said.

CE sugar, coffee rise, eyes on Brazil weather
LONDON, Aug 4 (Reuters) - ICE coffee and sugar futures rose as frost warnings for a Brazilian state supported both markets, while cocoa was also higher.  Raw sugar futures rose, consolidating after choppy trading in recent sessions, as uncertainty over top producer Brazil's crop remained.

Indonesia says will not issue more sugar import permits in 2011
JAKARTA, Aug 4 (Reuters) - Indonesia, Southeast's Asia biggest sugar consumer, will not issue any additional import permits for raw or white sugar in 2011, Trade Minister Mari Pangestu told Reuters on Thursday.
Last month, the Indonesian Sugar Council (DGI) said the country may not import white sugar next year, given that its year-end inventory is expected to reach more than 1 million tonnes, above a safe level of 800,000 tonnes.

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.

India monsoon rains seen reviving next week-sources
NEW DELHI, Aug 3 (Reuters) - India's monsoon rains may revive over central and north India next week, weather officials said on Wednesday, setting aside fears of a third straight week of poor rainfall hitting output prospects for summer planted crops such as cane and cotton.
The monsoon, essential for the 60 percent of the country that does not have irrigation, was below normal in the last week of July, particularly due to poor rains over the rice growing areas of eastern India.

Uganda drought sparks sugar shortages, price hikes
KAMPALA, Aug 3 (Reuters) - Drought and a temporary closure of Uganda's second biggest raw sugar producer have caused severe shortages of the commodity in the east African nation, forcing prices to double, a senior industry official said on Wednesday.  
The supply crunch has forced supermarkets in Kampala, the capital, and other major towns to start rationing the sweetener while some traders have been by members of the public and government accused of hoarding stocks and escalating the crisis.

Vietnam raises 2011 rubber, pepper export forecasts
HANOI, Aug 3 (Reuters) - Vietnam has raised its 2011 export forecasts for rubber and black pepper, citing additional rubber supply and good prices of the spice, the Agriculture Ministry said.
It forecast rubber export for calendar 2011 at 834,500 tonnes, compared with an earlier estimate of 833,700 tonnes and an industry target of 827,000 tonnes, the farm ministry said in a monthly report seen on Wednesday.

POLL-Brent premium to US oil to widen in next year
LONDON/NEW YORK/HOUSTON, Aug 4 (Reuters) - The record divergence of the two global crude oil price benchmarks, U.S. crude and Brent, is likely to widen further, having shocked hedge funds, roiled airlines and handed a bounty to some refiners since last year, a Reuters poll showed.
In the poll of 29 physical crude traders, bank analysts, refiners and hedge fund managers, 69 percent said Brent's premium to U.S. crude could surge past $30 a barrel at some stage in the next 12 months, with almost half of those predicting it could hit $40 a barrel or above.

OIL-Oil hits 4-week low on debt, demand concerns
 LONDON, Aug 4 (Reuters) - Brent oil dived a dollar to its lowest in a month as sovereign debt mountains and economic pain threatened to dent fuel demand, while Japan's intervention to stem the rise in the yen boosted the U.S. currency.
"It's all about macroeconomics for the next five days basically," said Olivier Jakob of Petromatrix.

Oil Wipes Out 2011’s Gains on Signs Recovery Stalling (Source: Bloomberg)
Oil fell to the lowest level in five months in New York, erasing 2011 gains amid growing evidence the U.S. economic recovery is stalling and sapping demand in the world’s biggest consumer. Futures dropped 5.8 percent as a U.S. government report showed limited improvement in the labor market. The Dollar Index gained as much as 1.5 percent, curbing commodities’ appeal as an alternative investment, and the MSCI All-Country World Index of stocks slid 3.9 percent. “What you’re looking at here is concerns about what demand is going to be doing because of the economy,” said Adam Sieminski, chief energy economist at Deutsche Bank AG in Washington. “The result of all this could be slower growth and the result of slower growth is less oil demand.”

Oil Erases 2011’s Gains on Economy Concern (Source: Bloomberg)
Crude oil wiped out all of its gains for 2011 and natural gas closed below $4 for the first time since March in New York as concern the global economy is weakening sent raw materials prices tumbling around the world. Twenty-one of the 24 commodities on the Standard & Poor’s GSCI Index declined slipped as a rout in equities drove the Standard & Poor’s 500 Index to its worst nine-day slump since March 2009. Silver dropped 5.6 percent, gold retreated from a record and wheat slumped the most since June. “There’s a lot of pessimistic news on the macro-economic front and that’s hitting commodities,” said Michael Wittner, the head of oil-market research at Societe Generale SA in New York and the fourth-most-accurate forecaster for West Texas Intermediate oil among 26 analysts ranked by Bloomberg in the past eight quarters. “If the economy continues to slow, demand for oil will take a hit.”

Oil Heads for Biggest Weekly Decline Since May, Wiping Out Gains for Year (Source: Bloomberg)
Oil fell in New York, heading for the biggest weekly decline in three months and wiping out its gain for the year, on speculation fuel demand will falter as the U.S. economy weakens and the European debt crisis worsens. Futures dropped as much as 1.1 percent after slumping 5.8 percent yesterday. U.S. consumer confidence slid to the lowest in more than two months, a report showed. Italian and Spanish bonds surged to records amid speculation Europe will fail to contain its sovereign-debt crisis. Labor Department data today may show the U.S. failed to create enough jobs in July to reduce unemployment. “The market is nervous, people are panicking,” said Jonathan Barratt, a managing director of Commodity Broking Services Pty in Sydney, who predicts oil in New York will average $100 a barrel this year. “Everyone is liquidating and moving into cash and that’s understandable because every other commodity market is under pressure.”

Fifth UK Forties oil cargo delayed in August
LONDON, Aug 4 (Reuters) - A fifth cargo of North Sea Forties crude has been delayed in August, trade sources said on Thursday, reflecting the impact of production problems at the largest UK oilfield, Buzzard.
Nexen's F0815 cargo scheduled to load on Aug. 27-29 will be deferred by three days, they said. This is the fifth August-loading shipment to be delayed, according to a Reuters tally.
Reduced output at Nexen's  Buzzard field in the North Sea has led to delays in the Forties loading programme since May.

Oil demand growth slows as economy falters-BarCap
LONDON, Aug 4 (Reuters) - Barclays Capital has cut its estimates of world oil demand growth for this year and 2012 to reflect a slower expansion of the global economy, and particularly a slowdown in the United States.
The investment bank, which has been one of the most bullish forecasters of oil prices this year, now sees global oil demand increasing by 1.1 million barrels per day (bpd) this year to 88.68 million bpd.

Brent crude falls to 4-week low as dollar rallies
SINGAPORE, Aug 4 (Reuters) - Brent crude dropped to a one-month low on Thursday after Japan intervened to stem the rise in its yen currency, sending the dollar soaring as investors steered clear of riskier assets, including commodities.
Worries about slowing global growth and Europe's worsening debt crisis dampened investor enthusiasm, after a tentative comeback in risk appetite that gave a modest boost to Asian shares.

U.S. crude oil, product inventories rise
NEW YORK, Aug 3 (Reuters) - U.S. crude oil inventories rose last week, in line with forecasts, while gasoline stocks rose more sharply than expected, according to the Energy Information Administration on Wednesday.
Domestic crude oil stocks for the week ending July 29 rose 950,000 barrels, compared with a forecast for a 900,000 barrel build, the report showed.

Oil demand growth forecasts cut as economies slow
LONDON, Aug 4 (Reuters) - A sharp slowdown in economic growth, particularly in the United States, is hitting consumers and companies and forcing economic forecasters and analysts to slash estimates for global oil demand.
In a report to be published in the next few days, Barclays Capital has cut its estimates of world oil demand growth for this year and 2012 to reflect the dramatic slowdown in the United States and elsewhere.

Copper Falls Most in 10 Weeks as Slower Economic Growth May Reduce Demand (Source: Bloomberg)
Copper futures fell the most in 10 weeks on signs that the global economic recovery is stalling, damping the outlook for commodity demand. The MSCI All-Country World Index, a measure of global equities, has dropped more than 10 percent from this year’s high in May. U.S. initial jobless claims fell last week to a level indicating limited improvement in the labor market. The Thomson Reuters/Jefferies CRB Index of 19 raw materials fell, erasing this year’s gain. “Sentiment has taken its turn for the worse,” Gayle Berry, an analyst at Barclays Capital in London, said in a telephone interview. “The markets are worried about what the implications of fiscal austerity mean for the trajectory of economic growth, and therefore for metal demand.”

METALS-LME copper up on Chile strike, short covering
SHANGHAI, Aug 4 (Reuters) - LME copper rose on Thursday, fuelled by continued supply fears and short-covering as it recovered from three-week lows struck the previous day after data on the U.S. services sector and factory orders disappointed markets.    
Remarks by a former U.S. Federal Reserve official on Wednesday urging serious consideration to further monetary easing in the United States also helped lift sentiment.

PRECIOUS-Gold pares gains on dollar rally; debt, growth fears support
SINGAPORE, Aug 4 (Reuters) - Gold, pressured on Thursday by a surging dollar as Japan intervened to rein in its currency, scaled back earlier gains  but remained firmly supported by worries about the widening euro zone debt crisis and slowing global growth.
"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.

Gold Declines From Record as Equity Rout Spurs Metal Sales; Silver Tumbles (Source: Bloomberg)
Gold futures fell from a record $1,684.90 an ounce as some investors sold the metal to cover losses in other markets. Silver posted the biggest drop in almost three months. The MSCI World (MXWO) Index of equities has dropped 12 percent from this year’s May peak. The yen tumbled the most since 2008 versus the dollar as Japan intervened to drive down its currency. The euro fell against the greenback as the European Central Bank offered banks additional cash amid the debt crisis. Treasury two-year note yields plunged to a record. “A lot of people are being forced to exit their equity positions, and they’re turning to gold to cover their losses,” said Matthew Zeman, a strategist at Kingsview Financial in Chicago, said in a telephone interview.

20110805 1034 Soy Oil & Palm Oil Related News.

Reuters Survey :
Malaysia Jul 2011 Crude Palm Oil
- Exports seen up 3.1% at 1.63 million tonnes from Jun 2011
- Stocks seen down 2.8% at nearly 2 million tonnes from Jun 2011
- Output seen down 3% at 1.7 million tonnes from Jun 2011

Soybeans (Source: CME)
US soybean futures fell to three-week low, driven by broader base investor selling in commodities. Sharp losses in crude oil and ongoing economic worries pressured commodities today, says Karl Setzer, analyst with MaxYield Cooperative. Fear of a dramatic slowing of the US and the world economy encouraged traders to reduce risk exposure, analysts say. Further fueling declines, improved weather for crops moving through their critical reproductive phase and a shifting to demand to new crop from old crop inventories. CBOT Nov soy dropped 27 3/4c or 2% to $13.45 1/4.

Soybean Meal/Oil (Source: CME)
Soy product futures stumbled, succumbing to broad-based commodity selling pressure. Market fell in unison with soybeans, but losses in soymeal were contained by larger-than-expected weekly export sales earlier reported by USDA, analysts say. CBOT Dec soymeal end down 1.6% at $355.70/short ton; Dec soyoil dropped 2.1% to 55.87c/pound.

Palm oil slips on economic jitters, comparative oils
JAKARTA, Aug 4 (Reuters) - Malaysian palm oil futures traded lower  tracking comparable vegetable oils lower on persistent global economic jitters and crude prices that flirted with one-month lows.  
"We have seen a lot of bearish pressure across the board, linked to the big macroeconomic picture in the United States, plus the fact that crude is slightly cheaper," said Abah Ofon, a Singapore-based analyst at Standard Chartered Bank.

India's July oilmeal exports up 13 pct y/y-trade
NEW DELHI, Aug 4 (Reuters) - India's oilmeal exports were 272,308 tonnes in July as against 241,182 tonnes a year earlier, a leading trade body said on Thursday, helped by a jump in oilseeds output and improved demand from Southeast Asia.
Soymeal exports, which shared the bulk of sales, fell to 139,547 tonnes in July from 166,632 tonnes a year ago, the Solvent Extractors' Association of India said in a statement.

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.