Wednesday, August 17, 2011

20110817 1807 FCPO EOD Daily Chart Study.

FCPO closed : 3033, changed : +31 points, volume : lower.
Bollinger band reading : correction range bound downside biased.
MACD Histrogram : recovering, seller reducing exposure.
Support : 3020, 2970, 2930, 2900 level.
Resistance : 3050, 3070, 3100, 3150 level.
Comment :
FCPO closed recorded gain with slower volume transacted while overnight soy oil ended little higher and currently trading firmer in unison with higher crude oil price.
Traders bet on below 2 million tonnes stock level after sign of improving export and anticipation of lower production level during fasting month pushed price higher.
Daily chart formed an up doji bar candle closed nearer to middle Bollinger band level after market opened higher, slide lower near yesterday closing price level and rebounded to surge higher towards the end to closed near the high of the day.
Chart reading remained suggesting a correction range bound 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 quick cut loss and profit target.

20110817 1723 FKLI EOD Daily Chart Study.

FKLI closed : 1498.5, changed : +11.5 points, volume : lower.
Bollinger band reading : correction range bound downside biased.
MACD Histrogram : recovering, seller reducing exposure.
Support : 1485, 1470, 1458, 1445 level.
Resistance : 1500, 1515, 1530, 1540 level.
Comment :
FKLI ended higher with quiet volume exchanged doing 4.5 points discount compare to cash market that also closed higher.  Overnight U.S. market closed lower and Asia markets ended mixed while European markets currently trading mostly lower.
Mixed development over Asia and Europe region separately with Asia companies reported improved earnings,  and a report showed Australian wages grew at a faster pace versus Europe German and French rejected an expansion of the region’s rescue fund and rebuffed calls for joint euro borrowing.
On the other hand, Bloomberg reported that Asia inflation risk may climb with Thailand first female Prime Minister Yingluck plan to boost Thai rice prices to lift rural incomes.
Daily chart formed a small up bar candle positioned in between lower and middle Bollinger band level after market opened higher, swing range bound upwards and closed near the high of the day.
Chart reading remained suggesting a correction range bound 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 quick cut loss and profit target.

20110817 1719 Regional Markets EOD Daily Chart Study.

DJIA chart reading :
pullback correction downside biased.

Hang Seng chart reading : 
correction range bound downside biased.

KLCI chart reading : 
correction range bound downside biased.

20110817 1502 Global Market & Commodities Related News.

Asian shares fall, euro shaky after summit let-down
SINGAPORE, Aug 17 (Reuters) - Japanese shares fell , dragged down mainly by hi-tech firms, while the euro wobbled after French and German leaders failed to deliver a solution to the euro zone debt crisis and restore investor confidence after a global market rout.
"Investors have been dumping emerging markets stocks across the board for the first time in the post-Lehman era," said a market report from TrimTabs Investment Research. "Investors are selling Asia without discrimination."

Wheat near 2-month top on US crop woes; corn steady
SINGAPORE, Aug 17 (Reuters) - Chicago wheat futures rose around half a percent  to trade near a 2-month top as concerns over U.S. spring wheat yields and expectations of delays in winter crop planting supported the market.
"The market is going up because we have been seeing some good demand coming in at lower prices," said Abah Ofon, commodities analyst at Standard Chartered Bank in Singapore.  

US corn, soy, spring wheat prevented planting 7 mln acres
WASHINGTON, Aug 16 (Reuters) - U.S. farmers reported 7 million acres (2.8 million hectares) of prevented plantings of corn, soy and spring wheat this year, Agriculture Department data showed on Tuesday.
A cold, rainy spring delayed plantings in the Corn Belt and the northern U.S. Plains. USDA requires annual reports of plantings from growers who participate in the farm program.

Brazil cane crop to grow 17 pct in 3-4 yrs-Datagro
SAO PAULO, Aug 16 (Reuters) - Conditions are right for Brazil's cane output to grow 17 percent, or roughly 100 million tonnes, over the next three years to catch up with mills' capacity to crush the crop, analysts Datagro said on Tuesday.
Brazil's current crop is expected to reach 587 tonnes of cane, down from the 620 million harvested in the previous crop, due to bad weather and falling yields from an aging cane crop, Datagro said.

Patchy rains mostly bad for Ivorian cocoa -farmers
ABIDJAN, Aug 16 (Reuters) - Patchy light rains mixed with cooler, cloudy weather last week in Ivory Coast's main cocoa regions were largely bad for the development of the next 2011/12 main cocoa crop, farmers said on Tuesday.
Ivory Coast, the world's top cocoa producer, is in a crucial period when plantations need more sun to strengthen the crop to be harvested from October, at the official start of the season.

Parched U.S. farm fields mean trouble for wheat planting
KANSAS CITY, Mo., Aug 16 (Reuters) - Kansas farmer Larry Kepley is almost out of hope.
After drought left the veteran wheat farmer with what he called the "worst wheat harvest" he's ever known, the odds for next year's crop are looking just as grim.
Sun-baked fields are as hard as rock, and moisture levels deep into the soil are nearly nonexistent as drought persists throughout much of the U.S. southern Plains.

Brent crude rises, above $109 on U.S. gasoline draw
SINGAPORE, Aug 17 (Reuters) - Brent crude rose , staying above $109 a barrel as a larger-than-expected drawdown in U.S gasoline stocks and positive U.S. economic data trumped concerns over the euro zone debt crisis.
"The meeting between Sarkozy and Merkel didn't amount to too much and that will cap gains in oil futures," said Victor Shum, an analyst with energy consultancy Purvin and Gertz.

Iraq oil exports now at 2.2 mln bdp -min
BAGHDAD, Aug 16 (Reuters) - Iraq's oil exports for August currently average 2.2 million barrels per day, Oil Minister Abdul-Karim Luaibi said on Tuesday.
Luaibi said crude exports were expected to be at 2.5 million bpd in 2012, adding that he expected oil revenues to reach over $80 billion by the end of 2011.

LME copper up on steady Chinese demand, Asian equities
SHANGHAI, Aug 17 (Reuters) - LME copper bounced up on Wednesday lifted by arbitrage trading, relative calmness in the Asian equities market and general optimism about China's metals consumption for the rest of the year.
"Asian stocks look quite stable today. Copper and other base metals have come to a point where it's hard to fall or rise too far before we see a technical rebound or correction. With global uncertainties, prospects of tightening in China and no big disruptions in supply, there are limits to price rises," said CIFCO analyst Zhou Jie.

Gold steady, euro zone crisis seen lingering
SINGAPORE, Aug 17 (Reuters) - Gold held steady near a record high  after a Franco-German summit failed to convince investors that the euro zone debt crisis would be solved effectively, supporting safe-haven demand for bullion.
"People are uncomfortable with what's happening in Europe and the United States," said Dick Poon, manager of precious metals at Heraeus in Hong Kong.

20110817 1251 Global Market & Commodities Related News.

GLOBAL MARKETS-Asian shares fall, euro shaky after summit let-down
SINGAPORE, Aug 17 (Reuters) - Asian shares fell on Wednesday and the euro wobbled after French and German leaders failed to deliver a solution to the euro zone debt crisis and restore investor confidence after a global market rout.
"Investors have been dumping emerging markets stocks across the board for the first time in the post-Lehman era," said a market report from TrimTabs Investment Research. "Investors are selling Asia without discrimination."

Oil falls as euro zone worries remain
LONDON/NEW YORK, Aug 16 (Reuters) - Crude oil prices fell on Tuesday after a meeting between French and German leaders failed to ease concerns about the euro zone debt crisis.
"It doesn't look like the two biggest items were seriously discussed today -- the potential for a euro bond and the size of the stabilization/bailout fund," said Edward Meir, senior commodity analyst for MF Global in New York.

U.S. crude stocks post small build, gasoline drops - API
NEW YORK, Aug 16 (Reuters) - U.S. crude inventories rose unexpectedly last week due to a surge in imports while product stocks fell sharply, despite refiners processing more oil, the American Petroleum Institute industry group said on Tuesday.
Crude stocks rose 1.7 million barrels, compared with analysts' forecast for an 800,000 barrel fall. Crude imports jumped 489,000 barrels per day to 9.68 million bpd.

POLL-U.S. crude stockpiles seen down on lower imports
BANGALORE/NEW YORK, Aug 16 (Reuters) - U.S. crude oil stockpiles are expected to have fallen for a second straight week due to lower imports, an extended Reuters poll showed on Tuesday ahead of weekly inventory data.
Eight of 13 analysts polled expected a drop in crude stockpiles for the week to Aug. 12, with the average forecast a drawdown of 800,000 barrels.

US gasoline demand tumbles 4.6 percent-MasterCard
NEW YORK, Aug 16 (Reuters) - U.S. retail gasoline demand fell sharply last week from year-earlier levels, marking the largest weekly drop in 17 months despite falling pump prices, MasterCard said in its SpendingPulse report on Tuesday.
U.S. gasoline consumption has languished throughout the summer, slowed by high prices in another sign the U.S. economy is struggling.

Confidence in oil tanker market at all-time low-Frontline
SINGAPORE, Aug 16 (Reuters) - Confidence in the crude oil tanker industry has tumbled to an all-time low, with a growing number of shipowners mulling whether to pull their vessels from the market, the top executive of the world's largest independent tanker operator told Reuters.
Economic turmoil in the West and slowing global oil demand growth have pushed tanker market freight rates, already struggling with a supply glut, to unprecedented lows.

NYMEX-Natgas ends down for 3rd day, milder forecast weighs
NEW YORK, Aug 16 (Reuters) - U.S. natural gas futures ended lower on Tuesday for a third straight day, as extended forecasts for the Northeast and Midwest continued to trend milder despite lingering heat in Texas and the West.
"Milder temps are coming in so there's less cooling demand, and economic indicators are not great," a Pennsylvania-based trader said, adding prices broke below $4 support this week but could hold in the $3.90s until Thursday's inventory report.

Euro Coal-Oct DES trades at $125.75, down 25c
LONDON, Aug 16 (Reuters) - Prompt physical coal prices softened by around 25 cents a tonne on Tuesday after a day of thin trading.
"It's been fairly flat all day, not a lot of movement on oil, and the general turmoil seems to have calmed for the time being," one end-user said.

COMMODITIES-Gold charges higher on euro zone fears; oil down
NEW YORK, Aug 16 (Reuters) - Gold rose for a second day in a row on Tuesday after French-German proposals for the euro zone debt crisis failed to ease investors' concerns, driving down oil prices.
"It (the Sarkozy-Merkel news) is going to put worries back into the market about the euro and euro zone that may have been quieting down. It's going to add additional volatility into the gold market," said Frank McGhee, head precious metals trader of Integrated Brokerage Services in Chicago.

20110817 1248 Local & Global Economic Related News.

The  leading index (LI) increased by 1.9% yoy in Jun (1.7% in May). The  coincident  index (CI) rose 3.0% (2.2% in May) while the growth of lagging index sustained at 4.2%  in Jun (4.1% in May). The diffusion index for LI fell to 14.3% while the diffusion index for CI  kept steady at 66.7% in Jun. (Department of Statistics)

Minister in the Prime Minister's Department Tan Sri Nor Mohamed Yakcop yesterday  said that a Bloomberg forecast of 3.6% for Malaysia’s 2Q11 GDP was “on the low side”. He  added that the first half of the year’s GDP would appear lower due to the “base effect” in  comparison to the same period last year.  

  • “We will do very well in 2H11,” he said, partially due to the base effect and also due to  government projects such as the ETP and privatization exercises taking off in a big way.  
  • He added that the government still expected to achieve the GDP target of 5.0-6.0% for  2011. (Financial Daily)    

Although Malaysia's investor sentiment has softened in 2Q11 compared with 2Q10, it is  still optimistic, said  ING Investor Dashboard sentiment survey. The Malaysian ING  Investor Dashboard Sentiment Index dropped to 133 pts in 2Q11 from 141 pts in 2Q10.  

  • ING Funds Bhd said the survey showed that global uncertainties and rising inflation  prompted investors to pick safe-haven and risk-managed investments.   
  • According to the survey, 50% Malaysian investors said the local economic situation  would improve in the next three months compared with 28% who said it would not  change while 22% said it would deteriorate.  
  • Going into 2012, 91% of investors say inflation would likely continue to accelerate next  year, it said. (Bernama)  

U.S. import prices increased in Jul due to higher fuel, food and industrial materials costs,  a government report showed. Rising prices for petroleum, fertilizers, food and consumer  goods helped increase import prices 0.3% mom in Jul (-0.6% in Jun), the Department of  Labor said. Analysts expected import prices to fall 0.1%. (Reuters)  

U.S. housing starts fell 1.5% to a 604,000 annual rate in Jul (613,000 in Jun). This was in  line with economists’ forecast, Commerce Department figures showed. (Bloomberg)  

U.S. building permits decreased to a 597,000 annual pace in Jul (617,000 in Jun). They  were projected to fall to a 605,000 annual rate. (Bloomberg)  

U.S. industrial production rose at its quickest pace in seven months in Jul as motor  vehicle output rebounded strongly, further easing fears the  economy could slide into  recession. Other data showed residential construction, while still depressed, was not a  drag on the economy as 2H got under way. Industrial output increased 0.9% in Jul (+0.4%  in Jun), the Federal Reserve said. Economists expected a 0.5% rise. (Bloomberg)  

U.S. capacity utilization rate for total industry climbed to 77.5%, a rate 2.2% pts above  the rate from a year earlier but 2.9% pts below its long-run (1972-2010) average. (Bloomberg)    

Both  eurozone GDP grew by 0.2% qoq in 2Q (+0.8% in 1Q), according to a report  released by Eurostat. This may hint at some slowdown in economic growth. On a yoy  basis, seasonally adjusted GDP increased by 1.7% in  2Q (2.5% in 1Q). Economists  expected Eurozone GDP to rise by 0.3% qoq and 1.8% yoy in 2Q. (Xinhua, Bloomberg)  

The  euroarea trade with the rest of the world gave a EUR0.9bn surplus  in Jun 11  (+EUR0.7bn in Jun 10). The May 11 balance was +EUR0.2bn, compared with -EUR4.9bn  in May 10. On a mom basis, seasonally adjusted exports fell by 4.7% and imports by 4.1%.  (Eurostat)  

China will achieve a “soft landing” even as growth moderates after the government  tightened monetary policy, the  Conference Board said as its main indicator for the  economy rose. The researcher’s leading economic index for China increased 1% in Jun,  it said in a release. The index climbed 0.6% in May and 0.3% in Apr. (Bloomberg)  

Fitch Ratings affirmed its AAA credit rating for the U.S. and said the outlook is stable,  citing the nation’s central role in the global financial system and the flexible, diverse  economy. Fitch had put the rating under review after lawmakers reached a compromise 2  Aug on a debt-limit agreement that prevented a U.S. default. (Bloomberg)  

China boosted its  holdings of U.S. government debt for a third straight month to  US$1.17tr in Jun, while other foreign investors were sellers of Treasuries for the first time  since 2009. Investors in the Asian nation raised their note and bond holdings by  US$1.655bn to a record US$1.16tr and added US$1.57bn of bills to US$4.55bn, according  to the Treasury Department data released. Total holdings rose 0.5% in the month and the  bill purchases were the first since Jan. (Bloomberg)  

China’s  foreign direct investment rose 19.8% yoy to US$8.3bn in Jul, stoking the  expansion of the fastest-growing major economy. For the first seven months of the year,  the increase was 18.6% to US$69.2bn, the Ministry of Commerce said. (Bloomberg)  

International Monetary Fund’s new managing director Christine Lagarde  urged policy  makers to include measures to support  economic growth in the  short term as they  implement fiscal tightening plans under market pressure. “For the advanced economies,  there is an unmistakable need to restore fiscal sustainability through credible consolidation  plans,” Lagarde wrote in the Financial Times. “At the same time we know that slamming on  the brakes too quickly will hurt the recovery and worsen job prospects.” (Bloomberg)  

Thailand’s newly-appointed Energy Minister Pichai Naripthaphan vowed to proceed with  the planned channelling of  international reserves for  commodity investment. Pichai  said that Pheu Thai Party's economic team will soon  seek a discussion with the Bank of  Thailand over the investment of international reserves, to increase gains on commodities  prices amid declining value of US dollar. He noted that Thailand can maintain reserves of  only 5-6 months of export value, and the rest could be invested. (Bangkok Post)

Thailand’s Ministry of Energy is prepared to implement the policy to lower the collection  towards the Oil Fund within Sep while eyeing a short-term loan as compensation for the  fund’s lost earnings. Energy Minister Pichai Naripthaphan asserted that the policy to cut  the amount collected towards the State Oil Fund would be carried out as already promised  to the Thai people. Despite disagreement by academics and oil distributors, he said the  decrease would begin this Sep, which would in turn  cause domestic oil prices to drop.  (Thai Financial Post)  

Thailand’s cabinet has approved the policies to raise the minimum wage to THB300/day  and the salary for fresh graduates to THB15,000/month, both of which will be treated as  urgent issues by the Labor Ministry.  (Thai Financial Post)

20110817 1240 Malaysia Corporate Related News.

Malaysian Resources Corp Bhd (MRCB) has won a RM1.33bn contract from Syarikat  Prasarana Negara Bhd for the Ampang light rail transit (LRT) project. MRCB said its  subsidiary, MRCB Engineering Sdn Bhd (MESB), won the job for the construction and  completion of facilities works, including fabrication and delivery of segmental box girders  and the construction period is 30 months from the date of possession of site.

  • Additionally, MRCB also said that MESB won a sub-contract worth RM67.2m from  Sunway Construction Sdn Bhd.The sub-contract is for the fabrication and delivery of  segmental box girders for the Kelana Jaya LRT extension project. (BT)  

A contractor group that includes  Dialog (32%),  Petronas Carigali  (20%) and Australiabased Roc Oil (48%) has signed a 15-year small field risk service contract with Petronas to develop and produce petroleum  from the Balai cluster fields located offshore Bintulu,  Sarawak. The development and production will be carried out in two phases:

  • The pre-development phase is scheduled to start in 2HCY11 and is expected to take up  to 18 months. Pre-development activities include
    1.) geological and geophysical works, 2.) drilling and testing of appraisal wells, and 3.) procurement of related facilities and  equipment. The estimated cost is US$200m-250m.  
  • Upon the successful completion of the pre-development phase and agreement on the  economic viability of the fields, the contractor group will submit a field development plan  for all or some of the fields and progress to the development phase. Commercial  production is expected to start 24 months from the commencement of the development  programme.  
  • Development activities include
    1) drilling of wells, 2) installation of platforms, topsides  and pipelines, and 3) tie-in of new facilities to existing Petronas Carigali’s infrastructure.  The estimated cost is US$650m-700m. (BMSB)        
Malaysia Airports  (MAHB) has confirmed an increase in the international passenger  service charge (PSC) and aircraft landing and parking charges at airports. The  international PSC is increased from RM51 to RM65 for all airports, excluding the low-cost  carrier terminal in Sepang and Kota Kinabalu, which will be charged RM32 from the  previous rate of RM25 from Sept 15, 2011 onwards.

  • The 30% increase in landing and 64% increase in parking charges will be implemented  in stages. Aircraft landing will be increased in 3 stages by 9% per year starting Jan2012  to Jan 2014.  
  • Aircraft parking charges will also be increased in  three stages by 18% on the same  dates. (Financial Daily)

Morgan Stanley is expected to finalise the proposed valuation of the 10% stake in AirAsia  X to be purchased by Khazanah by September.

  • Khazanah will be issued new shares in AirAsia X and is expected to come in as a preIPO investor of AirAsia X, ahead of the airline’s plans to list next year.
  • Last year, Air Asia X achieved a revenue of RM1.3bn with a net profit of RM80m from  carrying 1.92m passengers. (Star Biz)  

Malaysia Airlines (MAS) will review its entire fleet requirement, including the interiors for  the A380 superjumbo and A330-300 aircraft, in line  with the strategic shift to focus on  being a full-service premium carrier.

  • Yesterday, Australia’s Qantas said it would set up  a premium airline in Singapore or  Malaysia to take advantage of growth in the region. Noteworthy is that Qantas is also the  sponsor for MAS’ entry into oneworld alliance.
  • MAS would also review its requirement for freighter planes given the weakening global  economic outlook. (Star Biz)  

Genting  topped the list with a big payout of RM111.48m to its board, up 21% from  RM92.11m previously. The company also has the highest remuneration band of  RM106.65m to RM106.70m for a single director, says  the Malaysian Business.  IOI  Corporation came in second with a total payout amounting to RM56.29m, 71% more from  a year ago. (Bernama, BT)

Kulim (M) Bhd said it will pay RM3.00/share for the 23.5m shares it does not own in  Sindora Bhd. Sindora's last traded price prior to its suspension was RM2.65/share. Kulim  owns some 75% stake in Sindora, and if the offer is accepted,

  • Kulim is unlikely to maintain the company's listing status. Sindora's assets that are  synergistic to Kulim are its 6,165ha of plantation estate in Kluang, Johor, of which  5,279ha are planted. Sindora has a palm oil mill in the estate.  
  • While the offer from Kulim was widely expected, the  Johor-based company pulled a  surprise by also announcing that it intends to buy six parcels of oil palm plantation land  measuring 13,687ha and two palm oil mills in Johor, near its existing plantations, for RM700m.Kulim will buy the plantation assets from Johor Corp (JCorp), the state  government linked corporation. JCorp, owns 53% stake of Kulim. (BT)  

MMC Corp Bhd plans to list Gas Malaysia Sdn Bhd on the Main Board of Bursa Malaysia  by 4Q11.The planned listing of Gas Malaysia is part of a wider plan by MMC to spin off  three of its units worth a total of RM13bn via the listing route over the next 30 months.

  • The other companies slated to be listed are Malakoff Bhd and Johor Port Bhd. For Gas  Malaysia, the country's sole supplier of natural gas to the non-power sector, this is the  first time MMC had announced a detailed listing plan.MMC said it will raise up to  RM167m upon listing on the Main Market.   
  • The listing represents about 26% of Gas Malaysia's  entire share capital valued at  RM642m. It will also dilute the company's stake in Gas Malaysia to 30.9% from 41.8%.  Gas Malaysia holds 76% in MMC-Shapadu Holdings Sdn Bhd, which 55% stake in Gas  Malaysia. Tokyo Gas-Mitsui & Co (Holdings) Sdn Bhd and Petronas Gas Bhd own 25%  and 20% of Gas Malaysia, respectively.(BT)  

Berjaya Land Development Sdn Bhd, a wholly-owned subsidiary of Berjaya Land Berhad entered into a conditional sale and purchase agreement with Penang Turf Club to acquire  57.3 acres land for a cash consideration of RM459m. BLand plans to build a low density  exclusive guarded and gated-up housing development  comprising bungalows, semidetached houses, condominiums and low medium cost housing. The estimated gross  development value is about RM1.52bn. The acquisition is expected to be completed within  4 years from the SPA. (BMSB)

Multi-Purpose Holdings  (MPHB) said it is in talks with various parties to dispose of its  non-core assets, including Menara Multi-Purpose, as part of its asset rationalisation  exercise. "At this juncture, the company has not entered into any definitive agreement for  the sale of Menara Multi-Purpose," it said. (Financial Daily)  

Malaysia Marine and Heavy Engineering Holdings Bhd (MHB) has won two contracts  totalling RM952m from MISC for topsides fabrication, marine repair and conversion of two  energy vessels.

  • The first is an engineering, procurement, construction & commissioning (EPCC) contract  for the repair, life extension and conversion of MT Ozono, an Aframax tanker, into a  Floating Production, Storage and Offloading (FPSO) facility. Upon completion, the facility  would be known as FPSO Cendor and be deployed offshore Terengganu. The FPSO  would be operated by Petrofac Malaysia.  
  • The second contract is for the repair, life extension and conversion of MISC Bhd’s SS  Tenaga Satu, a liquefied natural gas vessel, into a floating storage unit (FSU) facility, to  be known as FSU Lekas. Upon completion, FSU Lekas would be moored at Malaysia’s  very first regasification terminal at Sungai Udang, Malacca.This was the first conversion  into a FSU by a local company and also among the first few in the world, said the  company. (Starbiz)  

Naza Group of Companies believes that the proposed abolishment of  open Approved  Permit (AP) by 2015 will further enhance the local car franchise business through more  deliveries of premium foreign cars into Malaysia. Its chief operating officer, Datuk SM  Zulkifli SM Amin, said it would open the market, thus allowing more cars to be brought into  the country without restrictions.  
  • Nevertheless, he said that bringing in more cars would not ensure higher sales as the  high tax currently imposed by the government would  be a burden to potential buyers.  (Bernama, BT)  

Bina Puri Holdings Bhd won a RM470.3m construction contract from Syarikat Kapasi  Sdn Bhd to help buiild a tourist recreational and commercial development centre in Kota  Kinabalu, Sabah. (BT)

Sunway Holdings Bhd won a RM569m job to build facilities for the extension of Kelana  Jaya light rail transit (LRT) line. The project will start next month , and is expected to be  completed in 29 months’ time. (BT)  

Fong Shu Cheong, a Chinese national in Hong Kong, has emerged as a substantial  shareholder of Cybertowers Bhd, which provides vehicle tracking systems. Fong bought  12.1m shares, or 12.1%of the company last Friday. (BT)

JCorp begins debt restructuring
Johor Corp (JCorp) has embarked on a restructuring exercise to streamline its businesses and assets into distinct business units, starting with the sale of plantation land to subsidiary Kulim for RM700m, and the latter’s proposal to take Sindora private. Yesterday, JCorp announced its proposal to dispose of its oil palm plantation assets to Kulim for RM700m cash. Kulim in turn announced its proposal yesterday to privatise Sindora by acquiring 25% stake for RM70.5m or RM3 per share. (Financial Daily)

20110817 0952 Global Market Related News.

Asia Inflation May Rise With Thai Rice Price (Source: Bloomberg)
Yingluck Shinawatra became Thailand’s first female prime minister by pledging to lift rural incomes through higher rice prices. The rest of Asia may now have to pay for her campaign promise. Yingluck has said the government will buy unmilled grain from farmers at 15,000 baht ($502) a ton at harvest in November, above current market rates of 9,900 baht. With Thailand the world’s biggest exporter, that may raise rice prices across a region that accounts for 87 percent of global consumption. The leader presented her economic policies to Cabinet yesterday and is scheduled to announce them publicly by Aug. 24. “High rice prices will translate into higher inflation pressures in Asia, at a time when most inflation readings are flirting near the higher end of central-bank target or forecast ranges,” said Chua Hak Bin, a Singapore-based economist at Bank of America Merrill Lynch. “Once the global backdrop stabilizes, inflation could come back strongly.”

Asia Stocks Fall on EU Debt Crisis, U.S. Housing (Source: Bloomberg)
Asian stocks fell for the first time this week as European leaders said they wouldn’t expand a rescue fund to end the region’s debt crisis and U.S. housing starts slumped, boosting concern for Asian exporters’ earnings. Sony Corp. (6758), Japan’s biggest exporter of consumer electronics, sank 2 percent in Tokyo as Europe’s economic growth trailed estimates and U.S. housing starts slumped. Honda Motor Co., a carmaker that gets more than 80 percent of its sales abroad, dropped 2.3 percent. Boral Ltd. slumped 5.2 percent after profit missed analyst estimates. The MSCI Asia-Pacific Index fell 0.4 percent to 124.43 as of 9:35 a.m. in Tokyo. More than two stocks declined for every two that advanced, and nine of 10 industry groups tracked by the index dropped following talks in Paris yesterday between French President Nicolas Sarkozy and German Chancellor Angela Merkel.

GLOBAL MARKETS-Slow German growth hits stocks, euro
LONDON, Aug 16 (Reuters) - Stagnant growth in Europe's powerhouse Germany knocked stocks lower on Tuesday and hit the euro, fuelling investor fears that the global economy is slowing more than expected.
"The global slowdown is gradually reaching Germany," said Andreas Scheuerle, economist at Dekabank.

Import Prices in U.S. Rise 0.3%, Led by Gains in Costs of Fuel, Clothing (Source: Bloomberg)
Prices of goods imported into the U.S. rose in July, led by gains in costs of fuel, industrial supplies and clothing. The 0.3 percent gain in the import-price index followed a revised 0.6 percent drop in June, Labor Department figures showed today in Washington. Economists projected a 0.1 percent decrease for July, according to the median estimate in a Bloomberg News survey. Prices excluding petroleum rose 0.2 percent. Slowing growth in emerging economies such as China and Brazil, coupled with weakening demand in the U.S. amid political gridlock and stock declines, means import prices are likely to taper off this month. Federal Reserve policy makers last week said they expected inflation to “settle” lower as commodity price gains “dissipate further.”

S&P Downgraded in Treasury Trading After Upgrading Communist Rule in China (Source: Bloomberg)
Eleven days after lowering the credit rating on the U.S. for the first time, Standard & Poor’s is suffering a downgrade among global investors as American bonds are proving world beaters -- undermining S&P’s mathematical assumptions -- and prompting disbelief among political scientists months after the company upgraded China because of the stability fostered by Communist Party rule. Since S&P, the New York-based subsidiary of McGraw-Hill Cos., dropped the U.S. to AA+ from AAA on Aug. 5, the yield on the 10-year Treasury note, a benchmark for everything from home mortgages to car loans, has declined to as low as 2.03 percent from a high this year of 3.77 percent, with American debt on pace in August for the biggest monthly gain since December 2008. Interest rates on American bonds are lower today than on most of the countries with AAA ratings by S&P and the Treasury recently financed its outstanding debt at the lowest cost ever.
If anything, the decision from S&P, the largest ratings provider, resulted in an upgrade of U.S. securities as the American bond market outperformed world bond indexes during the period since the downgrade by S&P. Moody’s Investors Service and Fitch Ratings, the two next biggest rating companies, affirmed their AAA rankings on the U.S.

Housing Starts in U.S. Weaken as Construction Stagnates; Permits Decline (Source: Bloomberg)
Builders began work on fewer homes in July, indicating residential real estate is failing to contribute to U.S. growth two years into an economic recovery. Housing starts fell 1.5 percent to a 604,000 annual rate, in line with the median forecast of economists surveyed by Bloomberg News, from June’s 613,000 pace that was less than previously estimated, Commerce Department figures showed today in Washington. Building permits, a proxy for future construction, also dropped. Falling sales, foreclosures and a lack of jobs may keep delaying a rebound in homebuilding, depriving the world’s largest economy of a source of strength seen in the early stages of past recoveries. Concern over housing is prompting banks to maintain strict mortgage lending rules and was one reason the Federal Reserve said it would hold borrowing costs at a record low until at least mid-2013.

Industrial Output in U.S. Climbs, Easing Concern on Manufacturing Recovery (Source: Bloomberg)
Manufacturers in the U.S. churned out more cars, computers and furniture in July, easing concern that one of the mainstays of the recovery was giving way. The 0.9 percent increase in production at factories, mines and utilities was almost twice the median forecast of economists surveyed by Bloomberg News and the biggest gain of the year, according to data today from the Federal Reserve in Washington. Another report showed homebuilders cut back last month. Part of the jump in manufacturing reflects a rebound from the supply shock caused by the earthquake in Japan, indicating it will be difficult for factories to maintain this pace of output as consumer spending and exports cool. At the same time, companies have kept inventories lean, limiting the need for large-scale cuts that could trigger an economic slump.

Fed’s Bullard Says New Low Interest-Rate Pledge Is Not Signal for More QE (Source: Bloomberg)
St. Louis Federal Reserve Bank President James Bullard said the Fed’s pledge to keep rates at a record low through at least mid-2013 shouldn’t be seen as a signal for a new round of central bank bond purchases. “The most likely outcome for the U.S. economy is still that the economy continues to grow at a moderate pace through the second half of the year,” Bullard said today in a telephone interview. “If the economy is substantially weaker than expected, we could take more action, especially if it was coupled with a renewed deflation risk,” he said. Bullard, who doesn’t vote on monetary policy this year, said he would have dissented against the Aug. 9 Federal Open Market Committee statement that for the first time attaches a date to its pledge to keep borrowing costs in a range of zero to 0.25 percent. Previously, the FOMC promised to keep interest rates low for an “extended period.”

U.S. Government Merits Junk Debt Rating: Laurence Kotlikoff (Source: Bloomberg)
Politicians and investors say Standard & Poor’s made a mistake when it cut the U.S.’s credit rating from AAA to AA+. I agree. I wonder why S&P didn’t take it all the way down to CCC. The country’s political leaders, from President Barack Obama on down, are alternately decrying S&P’s hubris and blaming their opponents. Big investors who hold lots of Treasuries are also on S&P’s case. Warren Buffett said the downgrade “doesn’t make sense,” that Treasuries are still AAA in Omaha, Nebraska, and that S&P should rate U.S. debt AAAA. If AA+ means very low credit risk and AAA means no credit risk, I guess AAAA would signify negative credit risk. My question, though, is why U.S. government bonds carry a rating any better than CCC, which is well into junk territory. Such a grading, according to S&P, implies the debtor is “currently vulnerable and is dependent upon favorable business, financial, and economic conditions to meet its financial commitments.”

Stocks Fall as Europe Floats Financial Tax (Source: Bloomberg)
U.S. stocks fell, following the biggest three-day rally since 2009, as German and French leaders proposed a financial-transaction tax and rejected selling euro bonds to halt a debt crisis threatening economic growth. NYSE Euronext and Nasdaq OMX Group Inc. (NDAQ), two of the biggest exchange operators in Europe, dropped more than 2.7 percent. Caterpillar Inc. (CAT), Deere & Co. (DE) and 3M Co. (MMM) declined at least 1.4 percent, pacing losses in companies most-tied to the economy, as Europe’s economic growth trailed estimates and U.S. housing starts slumped. Citigroup Inc. (C) and Bank of America Corp. (BAC) slipped more than 4.2 percent after billionaire John Paulson’s hedge fund said it reduced positions in both lenders. The S&P 500 fell 1 percent to 1,192.76 at 4 p.m. in New York. The benchmark gauge advanced 2.2 percent yesterday, erasing last week’s decline. The Dow Jones Industrial Average slid 76.97 points, or 0.7 percent, to 11,405.93 today.

Japan Stocks Fall on Concern Europe Tax Plan Will Slow Growth; Sony Drops (Source: Bloomberg)
Japanese stocks fell for the first time in three days as concern increased that a planned financial-transaction tax in Europe will discourage investment and threaten global economic growth. Mizuho Financial Group, Inc., Japan’s third-biggest bank by market value, lost 0.9 percent. Sony Corp. (6758), Japan’s biggest exporter of consumer electronics, dropped 1.2 percent as Europe’s economic growth trailed estimates and U.S. housing starts slumped. Inpex Corp. (1605), Japan’s largest energy exploration company, declined 1 percent on lower crude prices. Nikkei 225 Stock Average fell 0.6 percent to 9,049.30 as of 9:05 a.m. in Tokyo. The broader Topix index dropped 0.5 percent to 775.38 with about two stocks retreating for each that rose.

India’s Inflation Rate May ‘Peak’ in August, Finance Ministry’s Basu Says (Source: Bloomberg)
India’s inflation rate may “peak” in August and will be about 10 percent, Kaushik Basu, the chief economic adviser in the finance ministry, said after the price gauge eased for a third straight month in July. The wholesale-price index rose 9.22 percent from a year earlier after a 9.44 percent jump in June, the commerce ministry said in New Delhi today. The median of 22 estimates in a Bloomberg News survey was for a 9.2 percent increase. “Till December, inflation will stay around the same levels,” Basu told reporters in New Delhi today. “Next month, it will peak and will be close to 10 percent. After December, we’ll see a sharp drop in inflation.”

‘Too Early’ to Bet on India Easing Its Monetary Policy, Credit Suisse Says (Source: Bloomberg)
Investors should hold off from bets that India’s central bank will cut interest rates as global inflation is unlikely to fall enough to bring down the country’s wholesale-price index, Credit Suisse Group AG said. “Against market consensus of inflation falling and thus potentially driving rate cuts, we believe it is too early for the ‘monetary easing’ trade,” Neelkanth Mishra and Karthik Visvanathan, analysts at Credit Suisse, wrote in today’s report. Prices are “unlikely to fall much” amid quantitative easing in developed markets unless the rupee rises against the dollar, they wrote. India’s wholesale-price index rose 9.22 percent in July from a year earlier, the commerce ministry said yesterday, after a 9.44 percent jump in June.
Emerging-market stocks may not have reached their lows because inflation has yet to slow in the so- called BRIC nations of Brazil, Russia, India and China, Adrian Mowat, JPMorgan Chase & Co.’s emerging-market strategist, said yesterday. India’s inflation is the fastest among the four nations.

Merkel, Sarkozy Shun Euro Bonds (Source: Bloomberg)
German Chancellor Angela Merkel and French President Nicolas Sarkozy rejected an expansion of the 440 billion-euro ($633 billion) rescue fund and rebuffed calls for joint euro borrowing to end the debt crisis, saying greater economic integration was needed first. The leaders of Europe’s two biggest economies agreed to press for closer euro-area cooperation, tougher deficit rules and a harmonization of their corporate tax rates. A plan to resubmit a financial-transaction tax, which the European Union rejected in 2010, sent stocks lower in New York trading. Sarkozy and Merkel spoke after a two-hour meeting in Paris as investors clamored for indications that they would do more to end the euro-area debt crisis amid a slowdown in their economies. Unprecedented bailouts by governments and the European Central Bank have so far failed to stamp out concerns that rattled markets in AAA-rated France last week.

Stalling EU Economy May Keep ECB Rates on Hold (Source: Bloomberg)
Europe’s unexpectedly sharp economic slowdown has increased the risk of another recession and may prevent the European Central Bank from raising interest rates again this year. The 17-nation euro-area economy may struggle to gather momentum after growing just 0.2 percent in the second quarter, its worst performance since emerging from the last recession in 2009, said economists including Marco Valli at UniCredit Global Research and Stewart Robertson at Aviva Investors. France’s economy stagnated and in Germany, the region’s economic engine, expansion almost stalled. “I’m comfortable believing that this is a temporary slowdown, but the focus will remain on recession risks for the next few months,” said Valli, chief euro-region economist at UniCredit in Milan. “Rate hikes are off the table for now.”

European Economy Slows More Than Forecast as Debt Crisis Saps German Might (Source: Bloomberg)
European economic growth slowed more than economists forecast in the second quarter as Germany’s recovery almost ground to a halt amid the worsening sovereign- debt crisis. Gross domestic product in the 17-nation euro area rose 0.2 percent from the first quarter, when it increased 0.8 percent, the European Union’s statistics office in Luxembourg said in a statement today. That’s the worst performance since the euro region emerged from a recession in late 2009. Economists had forecast the economy to expand 0.3 percent, according to the median of 34 estimates in a Bloomberg News survey. Europe’s economy may struggle to gather strength as governments from Italy to Spain step up budget cuts to fight the debt crisis. In Germany, Europe’s largest economy, growth almost stalled in the second quarter. German Chancellor Angela Merkel will meet French President Nicolas Sarkozy today in Paris under pressure to do more to combat the fiscal crisis.

German Economy Almost Stalls as Sovereign-Debt Crisis Weighs on Confidence (Source: Bloomberg)
The German economy, Europe’s largest, almost stalled in the second quarter as the region’s sovereign-debt crisis weighed on confidence. Gross domestic product, adjusted for seasonal effects, rose 0.1 percent from the first quarter, when it jumped a revised 1.3 percent, the Federal Statistics Office in Wiesbaden said today. Economists had forecast growth of 0.5 percent, according to the median of 33 estimates in a Bloomberg News survey. From a year earlier, GDP increased 2.8 percent. The worse-than-expected GDP data from Germany, which had been powering euro-area growth, add to signs Europe is flirting with a renewed economic slump as the debt crisis curbs spending across the region. France’s recovery unexpectedly ground to a halt in the second quarter, Italian and Spanish expansion remained sluggish and Greece’s economy contracted.

King Says ‘Severe’ Market Stress Could Threaten U.K.’s Economic Recovery (Source: Bloomberg)
Bank of England Governor Mervyn King said that turmoil in the euro region and in world stock markets poses a risk to the U.K. and could push inflation too far below the 2 percent target. “Recent developments in world stock markets and in the euro area are of particular concern,” King said in a letter to Chancellor of the Exchequer George Osborne after inflation kept above the central bank’s 3 percent ceiling in data released today. There is a risk of “severe stress and dislocation in financial markets and, were this risk to crystallize, it would have a significant impact on the U.K. economy.” Inflation accelerated more than economists forecast in July to 4.4 percent, led by the cost of clothes and footwear, housing maintenance and rent. While King predicted that inflation will reach 5 percent in coming months, he said that it might be below 2 percent without the impact of temporary factors such as energy costs and will probably slow through 2012.

Salgado Says Spain Asset Sales May Cut Debt Issuance Needs by $17 Billion (Source: Bloomberg)
Spain’s asset sales will cut debt issuance by as much as 12 billion euros ($17 billion) as the government presses ahead with the program before the election in November, Finance Minister Elena Salgado said. Spain’s Socialist government will stick to its plan to list lottery operator Sociedad Estatal Loterias y Apuestas del Estado in the last week of October and to auction management contracts for its two biggest airports in Madrid and Barcelona, Salgado said in an e-mailed response to questions. “It will allow debt issuance in the final part of 2011 to be lower than forecast,” she said. “We will have to issue around 10 billion to 12 billion euros less, which is good news.”

Eastern Europe’s Economic Growth Probably Faltered as Rate Bets Reversed (Source: Bloomberg)
Eastern European economic growth slowed in the second quarter, supporting expectations that central banks may have to start reducing borrowing costs. The Czech and Hungarian economies slowed for the first time since they emerged from recession in the first quarter of 2010, Slovak gross domestic product grew at the slowest pace since that same period and Romania’s decelerated after ending a two- year slump in the January-March period. Poland on Aug. 30 may say growth slowed, according to a Bloomberg survey. Eastern Europe’s export-led recovery from its worst slump since the end of communism two decades ago is in peril as a deepening debt crisis in the euro area and a cut in the U.S. credit-rating intensify threats to the global economy. That means regional central banks may consider rate cuts to bolster their economies as long they don’t weaken local currencies and threaten financial stability, according to Citigroup Inc.

Euro Weakens After Sarkozy, Merkel Reject Euro Bonds, Before CPI Data (Source: Bloomberg)
The euro declined against the dollar and yen on concern Europe’s debt crisis will spread after German and French leaders rejected the issuance of bonds by the common currency region and amid signs growth is slowing. The 17-nation currency weakened versus 13 of its 16 major counterparts before a report today that economists said will show inflation slowed in July. New Zealand’s dollar fell against the greenback for the first time in five days after Fonterra Cooperative Group Ltd., the largest dairy exporter, said whole- milk powder prices fell to the lowest in more than a year. “European leaders haven’t addressed the underlying problem of deficits in the individual countries and the exposure for banks and the crisis is set to bubble on,” said Derek Mumford, a Sydney-based director at Rochford Capital, a foreign-exchange and rates risk management firm. “Everything that’s going on in Europe would make it the sickest one at the moment. The euro is possibly at the top end of its range.”

Stalling EU Economy May Keep ECB Rates on Hold (Source: Bloomberg)
Europe’s unexpectedly sharp economic slowdown has increased the risk of another recession and may prevent the European Central Bank from raising interest rates again this year. The 17-nation euro-area economy may struggle to gather momentum after growing just 0.2 percent in the second quarter, its worst performance since emerging from the last recession in 2009, said economists including Marco Valli at UniCredit Global Research and Stewart Robertson at Aviva Investors. France’s economy stagnated and in Germany, the region’s economic engine, expansion almost stalled. “I’m comfortable believing that this is a temporary slowdown, but the focus will remain on recession risks for the next few months,” said Valli, chief euro-region economist at UniCredit in Milan. “Rate hikes are off the table for now.”

FOREX-Euro softer on poor GDP data, summit hopes low
LONDON, Aug 16 (Reuters) - The euro fell on Tuesday, retreating from a three-week high versus the dollar, after weak German and euro zone growth data sparked con Mcerns about a slowdown and piled pressure on policymakers to act decisively to address the region's debt problems.
German data showed GDP growth slowed to 0.1 percent in the second quarter, much less than a consensus forecast of 0.5 percent, and pushed the single currency down more than 1 percent against the safe-haven Swiss franc.

FOREX-Euro softer on poor GDP data, summit hopes low
LONDON, Aug 16 (Reuters) - The euro fell on Tuesday, retreating from a three-week high versus the dollar, after weak German and euro zone growth data sparked concerns about a slowdown and piled pressure on policymakers to act decisively to address the region's debt problems.
"The GDP data shows the euro zone economy is slowing very sharply. It's not just a peripheral problem any more, it's spreading to the core," said Lee Hardman, currency economist at Bank of Tokyo-Mitsubishi UFJ.

20110817 0950 Global Commodities Related News.

Corn (Source: CME)
U.S. corn bounced in unison with wheat futures, with the Dec contract rising to a new high for the second consecutive day. The market drew support from crop uncertainties and fear of a potential decline in the amount of harvested U.S. acres. Traders began to factor in the potential for more corn acres lost to preventative planting, raising fear that corn harvested acres will drop from current levels, analysts say. Industry analysts are concerned about any drop in crop potential, particularly with new-crop corn's end-of-year supplies already projected at precariously tight levels by government forecasters. CBOT Dec corn end up 7 1/2c or 1% at $7.27 1/2/bushel.

Wheat (Source: CME)
U.S. wheat futures rally, triggering a broad recovery in grain futures, with Minneapolis spring wheat soaring to two-month highs on crop and acreage concerns. The combination of disappointing yield reports from spring wheat harvests and concerns that US will harvest less acres amid higher amounts of acres farmers took preventative planting insurance on, sparked fear of smaller crop potential, analysts say. Minneapolis spring wheat drew the most attention, as many traders believe an increase in prevent-plant acres will come from areas that seem to be heavy spring wheat/durum acres. MGEX Sept wheat end up 2.7% at $8.96 1/4/bushel, CBOT Sept wheat end up 1.7% at $7.24 3/4.

Rice (Source: CME)
US rice futures end modestly higher, supported by crop uncertainties after summer heat was believed to have hurt crops in the southern US, analysts say. Stable crop ratings reduced fears of further yield losses, a feature that pushed futures in and out of positive territory. CBOT Nov rice ends up 1 1/2c or 0.1% at $17.38/hundredweight.

US wheat down 0.5 pct after 5-day rally; corn, soy ease
SINGAPORE, Aug 16 (Reuters) - U.S. wheat futures fell 0.5 percent, snapping a five-day rising streak as a firm dollar and weaker crude oil weighed.
"For the time being the crop condition is steady and forecast this morning not overly worrying which is helping to alleviate crop concerns," said Brett Cooper, a senior manager of markets at FCStone Australia.

Mozambique offers Brazilian farmers land to plant
SAO PAULO, Aug 15 (Reuters) - Mozambique invites Brazilian soy, corn and cotton growers to plant on its savanna and introduce their farming know-how to sub-Saharan Africa, the head of Mato Grosso state's cotton producers association Ampa said on Monday.
Brazil has been successfully growing crops on its center-west plains since a breakthrough in tropical soybeans in the 1980s unlocked the productive potential of the expansive region by breeding soy to grow closer to equatorial regions.

Analyst raises Ukraine '11 grain crop, exports fcast
KIEV, Aug 16 (Reuters) - Analyst UkrAgroConsult raised on  Tuesday its forecast for Ukraine's 2011 grain harvest to 46.256  million tonnes from the previous outlook of 44.117 million due  to an increase in crops of maize, wheat and barley.
The higher harvest, UkrAgroConsult said, would allow Ukraine to export 22.3 million tonnes of grain in the 2011/12 season  against 12.7 million tonnes in 2010/11.

US crop ratings seen steady as weather improves
CHICAGO, Aug 15 (Reuters) - U.S. corn and soybean ratings were expected to hold steady after rainy and cooler weather in the Midwest stabilized the crops, which had been suffering throughout a dry hot summer.
"The cool down, a little more normal rain pattern certainly is benefiting the crops," said Rich Nelson, director of research for Allendale Inc.
The U.S. Agriculture Department's weekly crop progress report due Monday afternoon was forecast to show a corn crop rated 60 percent good to excellent, based on the average of estimates given by eight analysts.

Ukraine 2011 grain crop at 33.7 mln T as of Aug 15
KIEV, Aug 15 (Reuters) - Ukraine's farms harvested 33.7 million tonnes of grain bunker weight as of August 15 and the grain yield averaged 3.05 tonne per hectare, the Agriculture Ministry said on Monday.
Farmers have threshed 11.1 million hectares or 98 percent of the sown area of early grains.
The ministry said in a report that the harvested volume included 9.4 million tonnes of barley and 22.8 million of wheat.

W.Canada farmers start winter wheat, barley harvest
WINNIPEG, Manitoba, Aug 15 (Reuters) - Western Canadian farmers have harvested about 30 percent of winter wheat and 2 percent of the barley crop, the Canadian Wheat Board said on Monday in its weekly bulletin.
Warm temperatures have accelerated crop development and some harvesting of spring wheat has begun in some areas, the board said.

Philippines trims 2011 rice fcast, still sees record crop
MANILA, Aug 15 (Reuters) - The Philippines' unmilled rice output is set to hit a record 17.29 million tonnes this year, although that is slightly lower than earlier forecasts, underpinning solid farm-sector growth in the first half of 2011, the government said on Monday.
The crop forecast backs the Southeast Asian country's decision to sharply cut back imports of the national staple, having been the world's largest rice buyer in recent years.

China Ministry: Drought Has No Impact On Autumn Grain Output -Radio  (Source: CME)
Dry weather conditions in some Chinese provinces won't result in reduced autumn grain output, as crops are generally growing well, state radio reported, citing an official from the Ministry of Agriculture. Around 4.5 million hectares of farmland is affected by drought, about 13% less than during the same period last year and about 31% less than the five-year average between 2006 and 2010, Hu Yuankun, the deputy director of the ministry's crop farming department, said. China has about 107 million hectares of farmland. Most drought-hit farmland is in areas that aren't major grain producers, such as the southwestern provinces of Guizhou and Yunnan.

Food Commodities Protected From Global Economic Turmoil- Distinction  (Source: CME)
Food commodity markets should stay immune to any further deterioration in the macroeconomic environment this year as tight fundamentals continue to support price levels, Patrick Armstrong, managing partner of Distinction Asset Management, said. Armstrong said tight fundamentals will ensure food commodities are protected from any downturn in the global economy, especially in grain markets such as corn and wheat. The U.S. Department of Agriculture last week announced cuts to its forecasts for U.S. corn and wheat production for this year after adverse weather took its toll on planting for all crops. Damaging heat took its toll on corn fields in July while excessive rains hampered wheat planting in the northern plains this spring, the USDA said in its monthly World Agricultural Supply and Demand Estimates report.
Still, given the recent volatility in commodity markets triggered by a downgrade of the U.S. government's credit rating by Standard & Poor's Corp. and ongoing concerns about the growing European debt crisis, "we have reduced by 1% our portfolio exposure that lies with agriculture in our most aggressive and tactical portfolio, and maintained the weight in our more conservative portfolios," Armstrong said. At present, 5% of Distinction's aggressive portfolio exposure now lies with agriculture. Armstrong said although agriculture remained a preferred area, the asset manager is currently building up cash positions in that portfolio rather than investing cash that arrive into funds. Distinction asset management said it expects corn, wheat and soybeans to see the most future upside. Bullish fundamentals for corn are supportive for wheat prices as both are used for feed grains.

World Bank: High Food Prices Leading To Starvation In Africa (Source: CME)
Record-high food prices are hitting the poorest people hard in the Horn of Africa, where thousands are dying and millions are starving or on the edge of starvation, the World Bank said in a report. "Nowhere are high food prices, poverty and instability combining to produce tragic suffering more than in the Horn of Africa," said World Bank President Robert B. Zoellick. In the last three months, 29,000 children under the age of five have died and 600,000 "remain at risk," according to the report. Agriculture ministers of the Group of 20 industrialized and emerging nations, including the U.S., met in June and hashed out an agreement they said will help stabilize international food price volatility as well as improve the way countries distribute food aid. The G-20 ministers agreed to create a global database to compile information on food production and set up emergency food reserves located near vulnerable regions in the world.
Zoellick said Monday that situation is dire and help is needed in the short term, as well and medium and long term. "We are stepping up to address this crisis with a sense of urgency," he said. Out of 3.7 million people in Somalia, the World Bank said in the report, 3.2 million people "are in urgent need" of help. Global food prices, as of July, were 33% higher than they were a year ago, according to World Bank data, corn prices up 84%, sugar up 62%, wheat up 55% and soybean oil up 47%. "The World Bank is stepping up with short-term help through safety nets to the poor and the vulnerable in places like Kenya and Ethiopia, along with medium-term support for economic recovery," Zoellick said. "Long-term support is also critical to build drought resilience and implement climate-smart farming."

Smucker Cuts Coffee Prices, Cites Decline In Futures (Source: CME)
J.M. Smucker Co. is cutting prices on Folgers and Dunkin Donuts bagged coffee, electing to use the recent pullback in green coffee prices to chase market share rather than pad margins. In a surprise move, the company said it cut coffee prices on its brands by an average of 6%, a move coming after a year in which the company raised prices a total of 23% due to rapidly rising costs. "If [Smucker] is making this move, it's not on speculation," said a commercial coffee trader. "It means that they're well-covered, and even with the 6% decrease, it might squeeze their margins, [but] they feel like they're going to make it up with a pick up in the competition." Smucker appears to be the first major coffee roaster to cut prices, which could put pressure on competitors like Kraft Foods Inc., which owns Maxwell House, and Starbucks Corp. to respond by either lowering prices or increasing promotions. A Kraft Foods spokeswoman, Bridget MacConnell, said the company hasn't announced any price cuts on coffee.
Starbucks Chief Executive Howard Schultz, speaking on CNBC, said the coffee giant has locked in its coffee inventory for all of 2012, a long buying period that ensures stability but doesn't benefit as much when costs fall. Schultz said Starbucks will look at cutting prices on some items and will rely on its loyalty program to offer customers deals. "We are looking for certain ways we can lower [prices on] certain items," Schultz said. The coffee trader, who has worked with Starbucks, said since the company charges more for its coffee and has greater margins, Starbucks is in a better position to be "long and wrong" if prices fall. Smucker's tends to buy green coffee in 18- to 22-week intervals, Smucker President Vincent Byrd said on the company's June earnings call, a shorter time frame that allows it to adjust prices based on costs. The strategy can force the company to raise prices faster when costs increase but also can allow it to take advantage of declines.
Green coffee is unroasted beans, the form in which the crop is generally exported from producer nations and traded on the IntercontinentalExchange. Smucker's price cuts come as consumers face a fresh batch of economic jitters over debt concerns in the U.S. and the prospect of a prolonged economic weakness. Food manufacturers, who have been raising prices in the face of higher costs, have expressed caution about the ultimate pushback from consumers. Coffee makers have been among the more aggressive players in raising the prices of their products, as they have been under pressure over the past year as green coffee prices rose rapidly. In May, Starbucks increased retail prices 17% on bagged coffee sold in its cafes.
But recently, coffee makers have had a break. Benchmark arabica coffee futures on IntercontinentalExchange have fallen nearly 20% since hitting a 14-year peak above $3 a pound in early May, as concerns over supplies waned during Brazil's harvest. Prices could fall even further, analysts say, when other major growers in Latin America start their harvests in the last quarter of this year.

Sugar to Climb 6% as Brazilian Crop Slides Amid Chinese, Indonesian Demand (Source: Bloomberg)
Sugar may advance 6 percent by December as China, the second-biggest user, and Indonesia replenish stockpiles and the crop declines in Brazil. Futures in New York could gain to 29 cents a pound, according to the median in a Bloomberg News survey of eight exporters, importers and traders at a conference in Cebu, the Philippines. October-delivery traded at 27.36 cents today. More expensive sugar may bolster near-record global food costs and make it harder for central bankers and policy makers to curb inflation. Food prices are close to their peak in 2008, with corn and sugar helping fuel a 33 percent gain in the past year, according to the World Bank. That may worsen the lives of the 1.1 billion the bank says live on less than $1 a day.

Sugar, coffee slip, macroeconomic worries weigh
LONDON, Aug 16 (Reuters) - ICE sugar and coffee futures eased in early trade, with investors jittery as stock markets resumed their decline on global economic growth concerns.
ICE October raw sugar futures were slightly lower, as risk averse investor sentiment weighed on the commodities complex following deepening worries over the macroeconomic outlook.

Indonesia 2011/12 sugar imports seen at 2.84 mln T-assoc
CEBU, Philippines, Aug 16 (Reuters) - Indonesia's sugar imports for 2011/12 are projected at 2.841 million tonnes, up from 2.482 million tonnes in 2010/11, chairman of the Indonesian Sugar Association (AGI) said on Tuesday.
Asked if Indonesia would buy from countries such as India and the Philippines, which have a surplus of the sweetener, Fakruk Bakrie said: "It depends on the price."

Vietnam's new coffee crop to arrive in October-farmers
HANOI, Aug 16 (Reuters) - Fresh Vietnamese robusta beans are expected to arrive in October, a month earlier than usual for the new crop, and output should be high thanks to favourable rainy weather, coffee farmers and an analyst said on Tuesday.
"This year the harvest will be early, and the weather has been very good," said a farmer in the key growing province of Daklak. The province produces a third of Vietnam's coffee.

Odd weather sours start of Cameroon cocoa season
YAOUNDE, Aug 15 (Reuters) - Drought, hail and downpours in different parts of Cameroon have soured the start of the cocoa season in the world's No. 5 grower -- driving down quality, volumes and prices, farmers said on Monday.
The bumpy start to the year-long growing season in the central African state, which began Aug. 1, follows a record-sized 2010-11 crop that yielded around 236,000 tonnes.

Ivorian cocoa arrivals seen 23 pct above last season
ABIDJAN, Aug 15 (Reuters) - Cocoa arrivals at ports in top grower Ivory Coast reached around 1,386,000 tonnes by Aug. 14, exporters estimated on Monday, 23 percent more than in the same period of the previous season.
The figure compared with 1,125,046 tonnes by this stage of the 2009/10 crop.

India's Genetically Modified Cotton Area Seen Up In 2011-12 - Minister (Source: CME)
India's area under cultivation of genetically modified cotton is expected to be 9.5 million hectares during this crop year, slightly more than last year, according to data presented by junior farm minister Harish Rawat in parliament. The area under genetically modified cotton in 2010-11 was 9.3 million hectares, while the area in 2011-12 is likely to jump more than 40% from 2008-09, when it was at 6.69 million hectares. Farmers in India, the world's second-largest producer and exporter of the natural fiber, have brought an increasing area under genetically modified cotton since the technology was introduced in the country in 2002. Genetically modified cotton contains a gene that fights bollworm. The value of biotech crops is debated worldwide, with advocates saying they offer a vast improvement in output, while critics warn of the possible emergence of new toxins and allergens.
Several Indian state-owned farm institutes, private seed companies and universities are conducting trials on genetically modified mustard, rice, potatoes and tobacco. More than 90% of the country's output of cotton is from genetically modified crops, according to industry officials. India's total cotton plantings rose to 10.99 million hectares as of Aug. 5 from 10.43 million hectares, according to the latest data from the farm ministry.

Philippines to export more sugar, buyers scarce
CEBU, Philippines, Aug 16 (Reuters) - The Philippines aims to sell more than 300,000 tonnes of sugar this year, including refined sugar, about 100,000 tonnes above a previous target, but traders said it will be difficult to find buyers for the lower-quality sweetener.
Agriculture minister Proceso Alcala also said on Tuesday   the Southeast Asian country expects to close the 2010/11 season in end-August with 780,000 tonnes of sugar stocks.

Asia's demand offers relief to world sugar surplus
CEBU, Philippines, Aug 15 (Reuters) - The global sugar market will see a sizeable surplus in the next crop year but rising Asian demand, led by China, and lower-than-expected output in top exporter Brazil may offer opportunity for producers to expand sales, industry officials said.
Demand from China and Indonesia, which together account for about 3 percent of world sugar production, could help ease the surplus estimated at around 4 million tonnes in the crop year to September 2012, the International Sugar Organization (ISO) said.

Indonesia sees savings with India sugar imports
JAKARTA, Aug 15 (Reuters) - Increased production and cheaper freight costs will enable India to become a leading sugar exporter to Indonesia from next year, the Indonesian Sugar Association (AGI) said on Monday.
Indonesia, Southeast Asia's largest sugar consumer, currently imports 60 percent of its sugar from Thailand, 20 percent from Brazil and 10 percent from Australia, Colo Sewoko, acting secretary for the AGI told Reuters.

Oil Climbs From Two-Day Low as Drop in U.S. Fuel Stockpiles Signals Demand (Source: Bloomberg)
Oil advanced from a two-day low in New York as investors bet that shrinking fuel stockpiles in the U.S. indicate demand will increase in the world’s biggest crude- consuming nation. Futures climbed as much as 0.7 percent after the industry- funded American Petroleum Institute said gasoline supplies fell the most in five months. An Energy Department report today may show gasoline and crude inventories slid last week. U.S. producer prices may have rebounded in July. The drop in gasoline stockpiles is “price supportive, there’s no doubt about it, but I don’t think you can read too much into it at the moment,” 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. “I’d prefer to see what the Energy Department come out with. The market will watch to see how we go with producer prices and the inventory data.”

Crude Oil Futures Decline as Investors Speculate Global Economy Is Slowing (Source: Bloomberg)
Oil dropped from the highest in almost two weeks in New York after Germany’s economy all but stagnated in the second quarter, heightening concern that fuel consumption will diminish. Futures slid as much as 1.8 percent today after Germany’s Federal Statistics Office said gross domestic product, adjusted for seasonal effects, rose 0.1 percent from the first quarter. Growth across Europe slowed more than economists forecast. U.S. builders began work on fewer homes in July, indicating residential real estate is failing to contribute to growth. The Energy Department may say tomorrow U.S. crude oil stockpiles declined to a five-month low.
“The overall picture is that worldwide economic activity is slowing down a bit, and of course that’s bearish for oil,” said Sintje Diek, an analyst at HSH Nordbank in Hamburg who correctly predicted that Brent prices would fall to $100 this summer. “There are fears the recovery in the euro zone will be very sluggish because of the debt crisis. Maybe we’ll see lower prices than $100.”

Brent slips on weak global data, firm dollar
LONDON, Aug 16 (Reuters) - Brent crude futures fell on Tuesday, after rising nearly $2 a the previous day, as worries about global economic growth and a stronger dollar reduced appetite for risky assets.
"All eyes are on this European meeting today, so it's going to be rather choppy and volatile ahead of that," GFT Global market strategist David Morrison said. "(Oil is) reacting to the weakness in the euro, the strength in the dollar, and there is a general risk-off mode ... traders taking money off the table."

Taiwan June crude imports down 2.2 pct from May
SINGAPORE, Aug 16 (Reuters) - Taiwan's June crude imports dipped 2.2 percent from May as softer refining margins depressed demand for Middle Eastern crude, with imports from Saudi Arabia falling over 18 percent, government data showed on Tuesday.  
June crude volumes stood at 24.1 million barrels, down from May's 24.4 million barrels, with Taiwan's CPC seen cancelling its condensate and sweet crude tenders for July-delivery due to high offers.

POLL-U.S. crude stockpiles seen down on lower imports
BANGALORE/NEW YORK, Aug 15 (Reuters) - U.S. crude oil stockpiles are expected to have fallen for a second straight week due to lower imports, a preliminary Reuters poll showed on Monday ahead of weekly inventory data.
Four of eight analysts polled expected a drop in crude stockpiles for the week to Aug. 12, with the average forecast a drawdown of 300,000 barrels.

Confidence in oil tanker market at all-time low-Frontline
SINGAPORE, Aug 16 (Reuters) - Confidence in the crude oil tanker industry has tumbled to an all-time low, with a growing number of shipowners mulling whether to pull their vessels from the market, the top executive of the world's largest independent tanker operator told Reuters.
Economic turmoil in the West and slowing global oil demand growth have pushed tanker market freight rates, already struggling with a supply glut, to unprecedented lows.  

China steel mills raise Sept product prices as demand picks up
SHANGHAI, Aug 16 (Reuters) - More of China's leading steel mills have decided to raise prices of their main products for September bookings, aiming to catch up with rising spot market prices and in anticipation of stronger demand next month.  
Two leading mills, Wuhan Iron & Steel Co Ltd  and Beijing Shougang Co Ltd , will raise September prices for their main flat steel products in the wake of a similar move by Baoshan Iron & Steel Co Ltd (Baosteel)  last Friday to take advantage of growing demand.

Australia's OneSteel year profit slips, sees flat H1
MELBOURNE, Aug 16 (Reuters) - OneSteel , Australia's second-largest steelmaker, posted a full-year profit down 2.5 percent, with pressure from a strong Australian dollar crimping domestic steel margins and volumes, and said the outlook for domestic construction was weak.
The steelmaker said on Tuesday it expects production and operating levels in the first half to be flat and it has started a review of its product portfolio.

Keeping more iron ore at home, India exports seen halved
SINGAPORE/MUMBAI, Aug 15 (Reuters) - India's iron ore exports, which fell for the first time in a decade last year, could halve over the next five years as the country feeds the expansion of its steel industry.
Lower shipments from the world's No. 3 exporter should help bolster prices that have already more than trebled from late 2008, as massive increases in global supply are only expected to come through by 2015 and demand from top consumer China rises.

U.S. brass mill imports, exports rise in June yr/yr
NEW YORK, Aug 15 (Reuters) - U.S. imports of brass mill products rose by 9.4 percent in June compared with June 2010, and exports firmed 2.8 percent from the year-ago period, an industry group said on Monday.
Imports of brass mill products into the United States in June grew to 45,629,054 lbs from 41,699,101 in the corresponding period in 2010, the Copper and Brass Fabricators Council said in its monthly report.

Copper use grows more than expected in 2011-Brook Hunt
LONDON, Aug 15 (Reuters) - Global copper demand will grow by 5.4 percent this year, exceeding predictions made at the start of the year, despite lower than expected offtake in top consumer China and the impact of the earthquake in Japan, Brook Hunt said on Monday.
World demand for copper -- used in power and construction -- will reach 20.3 million tonnes in 2011, helped by stronger than anticipated growth in Europe and the United States.

Cautious copper product users hold back orders -Luvata
LONDON, Aug 15 (Reuters) - Financial turmoil and potentially serious damage to global economic growth have unnerved consumers, many of which are now waiting longer to place orders, international copper product maker Luvata told Reuters on Monday.
Ian Scarlett, Luvata's head of metals, said the backlog on the company's order book had fallen and that buyers of copper products had become a lot more nervous in the last few weeks as  the U.S. and euro zone debt crisis escalated.

Zambia copper output falls in Jan-July -central bank
LUSAKA, Aug 15 (Reuters) - Copper output in Zambia, Africa's top producer of the metal, decreased to 472,891 tonnes in January-July 2011, compared with 478,734 tonnes in the same period a year earlier, the central bank said on Monday.
Copper exports also fell to 469,260 tonnes in the first seven months of this year, from 472,012 a year earlier,  the central bank said in a fortnightly report.

China copper imports seen rising in Q4 as arbitrage opens
HONG KONG, Aug 16 (Reuters) - China's refined copper arrivals may rise in the forth quarter as importers raise spot bookings after the arbitrage window between the three-month London Metal Exchange and Shanghai opened earlier this month, traders said on Tuesday.
But the country's tight credit policy would restrict extra bookings, unlike the last two years when attractive arbitrage ratios and China's loose monetary policy boosted imports to record highs, they said.

Copper Declines on Speculation China, U.S. Slowdown Set to Reduce Demand (Source: Bloomberg)
Copper declined on speculation that a moderating Chinese economy and sluggish U.S. recovery may damp demand for the metal in the world’s two largest users. Three-month copper on the London Metal Exchange fell as much as 0.7 percent to $8,850.25 per metric ton, and was at $8,852 at 2:36 p.m. in Shanghai. The metal for December delivery on the Comex lost 0.9 percent to $4.0185 per pound. China is “significantly moderating,” Bart van Ark, The Conference Board’s chief economist, told Bloomberg Television from New York today. The Conference Board Leading Economic Index for China has slowed “quite significantly” over the past few months, van Ark said. The gauge rose 1 percent to 158.9 in June, according to data from the New York-based research organization.

METALS-Copper slips on firm dollar, weak economic outlook
LONDON, Aug 16 (Reuters) - Copper slipped on Tuesday, reversing the previous session's gains, as the dollar rose against a basket of currencies and attention returned to the uncertain outlook for the global economy, prompting investors to stay cautious and reduce their exposure to assets perceived as risky.
Benchmark copper  on the London Metal Exchange was traded at $8,780 in official rings, down from Monday's close of $8,909.

PRECIOUS-Gold rises 0.6 pct as euro zone jitters resurface
LONDON, June 16 (Reuters) - Gold prices rose on Tuesday as concerns over the financial health of the euro zone resurfaced ahead of a summit in Paris between French and German leaders, at which they will try to thrash out a solution to the bloc's debt crisis.
Poorly-received German and euro zone growth data stoked concerns the region may be far from recovering its economic footing, pushing both the euro and European shares lower, and boosting the appeal of so-called safe havens like gold and the Swiss franc.

Gold Surge to Record Creates a ‘Bubble Poised to Burst,’ Wells Fargo Says  (Source: Bloomberg)
Speculative demand from investors has pushed the gold market into a “bubble that is poised to burst” after prices surged to a record this year, Wells Fargo & Co. said. “We have seen the economic damage” of past bubbles and “feel compelled to ring the warning bells,” Wells Fargo analysts led by Dean Junkans said in a report dated yesterday and e-mailed today. Gold futures have advanced 26 percent this year, following 10 straight annual gains. The price reached a record $1,817.60 an ounce on Aug. 11 on demand for an investment haven as European and U.S. sovereign-debt woes escalated.

Singh’s Port Plan Targets China’s 7 Days With $60 Billion: Freight Markets  (Source: Bloomberg)
India aims to pour $60 billion into ports by 2020 under a drive to spur the fastest growth in more than two decades and ease bottlenecks stoking the highest inflation among major economies. The target is part of Prime Minister Manmohan Singh’s planned $1 trillion revamp of choked transport and power networks to achieve faster expansion. The push must transcend a history of insufficient investment, which has left the world’s most populous democracy trailing a Chinese economy now more than three times larger. “If there isn’t enough capacity, you lose time and it adds to cost,” said Leif Eskesen, a Singapore-based economist at HSBC Holdings Plc who worked at the International Monetary Fund. “India is poised for continued strong growth over the medium and long term, but further reforms are a must to bring sustained double-digit growth within reach.”

20110817 0949 Soy Oil & Palm Oil Related News.

Soybeans (Source: CME)
US soybean futures end down, failing to benefit from the price strength in grain futures. Favorable weather conditions for developing Midwest soybeans, with rains and cooler conditions forecast this week weighed on prices, analysts say. Stable crop condition ratings reflecting recent weather improvements and external financial market pressure added further weakness to offset a midday spike in neighboring wheat and corn futures, analysts add. CBOT Nov soy end down 1 3/4c at $13.49 1/2/bushel.

Soybean Meal/Oil (Source: CME)
Soy product futures end mixed, with traders reducing risk exposure in the markets in the absence of fresh prices directing news. The uncertainty of soy production potential and talk of increased meal content in soybeans this year allowed soyoil the gain against soymeal on spreads, analysts say. CBOT Dec soyoil end up 0.08c at 55.54 cents/pound, and Dec soymeal end down $0.30 lower at $357.40/short ton.

Palm oil gains on data, short-term output outlook
JAKARTA, Aug 16 (Reuters) - Malaysian palm oil rose for a fifth straight session, supported by well-received data and expectations of lower output, with gains capped by ongoing macro uncertainty.
"The reason for the strength, aside from stocks markets, is the USDA report that they are expecting worse than expected soybean harvests," said a Singapore-based analyst. "Temporarily it should be supported but at the end of September, there should be some downside, on the back of peak harvesting season.