Thursday, August 18, 2011

20110818 1806 FCPO EOD Daily Chart Study.

FCPO closed : 3026, changed : -7 points, volume : higher.
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 lower with little higher volume particiaption while overnight soy oil ended substantially higher and currently trading lower while crude oil trading lower.
FCPO price ended little lower in tandem with weaker broad commodities price after global markets traded mostly lower as concern over world economy growth.
Daily chart formed a down doji bar candle closed near middle Bollinger band level after market opened higher, traded range bound between gain and losses followed by last hour selling activities presssure price lower before recovered upward to closed off the low of the day.
Chart reading still suggesting a correction range bound downside biased market development testing support and resistance level with MACD indicator about to have positive cross up.
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.

20110818 1733 FKLI EOD Daily Chart Study.

FKLI closed : 1492.5, changed : -6 points, volume : lower.
Bollinger band reading : correction range bound downside biased.
MACD Histrogram : recovering, seller closing position.
Support : 1485, 1470, 1458, 1445 level.
Resistance : 1500, 1515, 1530, 1540 level.
Comment :
FKLI ended lower with decreasing volume changed hand doing about 11 points discount compare to cash market that closed little lower. Overnight U.S. market closed slightly higher and Asia markets ended mostly lower while European markets currently trading in negative zone.
Sentiment tuned negative as investors raised concern on U.S. stimulus plan after two Federal Reserve officials questioned the amount of stimulus being applied and the central bank shouldn’t act to protect equity investors while the Japanese yen rose toward a post-World War II high.
Daily chart formed a down doji bar candle positioned nearer to middle Bollinger band level after market opened lower, edge upwards near resistance level and slide lower followed by second session rebounded upward to closed off the low of the day.
Chart reading still calling 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.

20110818 1732 Regional Markets EOD Daily Chart Study.

DJIA chart reading :
correction range bound downside biased.

Hang Seng chart reading : 
correction range bound downside biased.

KLCI chart reading : 
correction range bound downside biased.

20110818 1534 Global Market & Commodities Related News.

Asian stocks fall, Swiss franc holds
SYDNEY, Aug 18 (Reuters) - Asian stocks fell on profit-booking by nervous investors, while the Swiss franc stayed firm after plans to curb the currency disappointed those looking for more drastic action.  
"What drove the Swiss stronger is less speculation and more fear of things going wrong in the euro zone. Until that's fixed, it's very difficult to see how the SNB can win," said Rob Ryan, FX strategist at BNP Paribas in Singapore.

Morgan Stanley Lowers Global Growth Forecast
Morgan Stanley cut its forecast for global growth this year, citing an “insufficient” policy response to Europe’s sovereign debt crisis, weakened confidence and the prospect of fiscal tightening. The bank estimates expansion of 3.9 percent, down from a previous forecast of 4.2 percent, according to an e-mailed report dated today. A prediction of 3.8 percent for next year is down from 4.5 percent previously. The threat to the global economy from the debt burdens of developed nations from the U.S. to Europe has roiled world markets this month and wiped trillions of dollars off the value of equities. At the same time, slowing expansions in countries including Germany, the key driver of European growth, are hurting confidence.

U.S. Consumer Prices Probably Barely Rose as Inflation Began to Stabilize
The cost of living in the U.S. probably barely rose in July, supporting Federal Reserve projections that inflation will start to stabilize, economists said before a report today. Consumer prices excluding volatile food and fuel costs climbed 0.2 percent, the smallest gain in three months, according to the median forecast of 83 economists surveyed by Bloomberg News. Other reports may show the number of claims for jobless benefits and sales of existing homes rose. Lower energy and other commodity costs are allowing companies like Sara Lee Corp. (SLE) and J.M. Smucker Co. to hold the line on retail prices, one source of relief for customers faced with a stagnant labor market. Less inflation also means Fed policy makers have the flexibility to loosen monetary policy further should the world’s largest economy stumble.

US wheat falls from 2-month top; corn, soy ease
SINGAPORE, Aug 18 (Reuters) - U.S. wheat slid nearly 1 percent , ending a seven-session rally, while corn lost more ground on a broad-based weakness in financial markets triggered by concerns over global economic growth.
"It is more of a macro economic selloff than anything else," said Adam Davis, a senior analyst at Merricks Capital, a Melbourne-based fund that invests in agriculture.

Australia rain boosts wheat crop, some areas still dry
SYDNEY, Aug 17 (Reuters) - Rains in parts of Australia's New South Wales and Victoria are likely to boost prospects for this year's wheat crop, while the region that produces prime hard wheat is still dry, raising concerns for production of high-protein grains.
Analysts and traders said southern areas of New South Wales and Victoria have received widespread showers which are expected to improve yields for Australian prime and standard varieties of wheat.

Brazil mid-crop cocoa output could yet surprise
SAO PAULO, Aug 17 (Reuters) - Forecasts for Brazil's mid-crop cocoa harvest may have been too conservative, analyst Thomas Hartmann said, after a dip in output from some regions proved just a blip and as Bahia's output held steady.
"As the weekly data start to accumulate, it becomes increasingly probable that the initial forecasts for the Temporao, both for Bahia and for other producing states, have been exceedingly pessimistic," Hartmann said in a crop update.

West EU facing mixed wheat harvest after rain
HAMBURG, Aug 17 (Reuters) - Repeated rain looks like damaging this year's wheat crop in No.2 European Union producer Germany but the outlook in top producer France is looking better, analysts said on Wednesday.
France is still likely to gather a smaller crop than last year but quality is generally looking satisfactory, analysts said.

Brazil CS sugar output seen down at 32.3 mln T-JOB
SAO PAULO, Aug 17 (Reuters) - Sugar output from Brazil's main center-south cane region is seen at 32.3 million tonnes, revised down from a July forecast of 33.5 million tonnes, consultants JOB Economia said on Wednesday.
JOB's director, Julio Maria Borges, said he lowered his view for cane output in the region that accounts for 90 percent of Brazil's crop to 522 million tonnes, from 540 million in July. But JOB's estimate came in above the most recent flock of reductions of Brazil's cane crop estimates from other analysts.

Ukraine Aug grain exports seen at 1.2 mln T-lobby
KIEV, Aug 17 (Reuters) - Ukrainian grain exports are unlikely to exceed 1.2 million tonnes in August, Ukraine's  Grain Confederation (UAC) industrial lobby said on Wednesday, down from exports of 1.3 million tonnes of grain in August 2010.
Ukraine exported 12.7 million tonnes of grain in the 2010/11 season and the government said the ex-Soviet state could export 21-23 million tonnes this season, building after the previous year's crop was depleted by adverse weather.

Asia sugar demand growth opens door to small suppliers
LONDON, Aug 17 (Reuters) - Increasing demand for sugar by China, Indonesia and Malaysia in the next few years is likely to lead to a surge in production by small suppliers such as southern African and Latin American countries as the big exporters fail to keep pace.
Demand growth in sugar is being led by Asia, analysts say. Next year will see Russia's import needs surpassed by China, Indonesia, Malaysia and a number of large refineries in the Middle East.

India fuel demand growth will beat IEA forecast: Clyde Russell
--Clyde Russell is a Reuters market analyst. The views expressed are his own.--
SINGAPORE, Aug 17 (Reuters) - India's fuel demand growth is likely to slow in the second half of this year, but probably not by as much as the International Energy Agency forecasts.
In order to meet the IEA's latest forecast of a 3.6 percent gain in 2011, oil-product sales would have to expand 2.9 percent in the last six months, after they grew at a 4.3 percent rate in the first half.

Brent crude slips on euro zone woes, firm dollar
SINGAPORE, Aug 18 (Reuters) - Brent crude fell 0.2 percent , staying below $111 a barrel as ongoing concerns over Europe's debt crisis and a firmer dollar drew investors away from riskier assets like oil and into the safe havens of gold and the Swiss franc.
"The market was disappointed when Swiss central bankers didn't propose a euro peg, it sent a signal that they are content to let the franc appreciate and that led to a flight to safety, away from assets like oil," said Gordon Kwan, head of energy research at Mirae Asset Securities in Hong Kong.

Copper down on technicals, equities
SHANGHAI, Aug 18 (Reuters) - LME copper fell on technicals and the poor performance of equities, as investors fled risky assets for safe havens such as the Swiss franc on worries about global economic growth.
"In the short term, I think copper is range-bound between 63,500-67,500 yuan on the ShFE and $8,600-$9,000," on the LME, Jinrui Futures analyst Zhao Kai said.

JFE to boost global tin plate capacity - Nikkei
Aug 18 (Reuters) - JFE Steel Corp  will beef up its annual production capacity for tin plate, used to make beverage and food cans, by 47 percent to about 4.4 million tons by 2020, the Nikkei business daily reported.
The market for such anti-corrosive steel is expanding as living standards improve in emerging countries, the daily said.

China refined nickel imports may rise in Aug, Sept on margins
HONG KONG, Aug 17 (Reuters) - China's refined nickel purchases may rise in August and September after imports turned profitable earlier this month, prompting investors and merchants to book more spot metal, traders said on Wednesday.
Costs of refined nickel imports to China dropped below Chinese spot nickel prices last week as Chinese prices lagged London Metal Exchange nickel  price falls, traders said.

Namibia says will not raise mining tax to 44 pct
WINDHOEK, Aug 17 (Reuters) - Namibia has decided not to go ahead with its plan to raise the mining tax for companies in the non-diamond sector to 44 percent after the industry expressed concerns, the finance ministry said on Wednesday.
Instead it will stick with the current rate of 37.5 percent and proposed a formula-based surcharge to get extra revenues when the economy is doing comparatively well.

Gold edges up on growth fear; defies firm dollar
SINGAPORE, Aug 18 (Reuters) - Gold edged higher on persistent worries about euro zone debt woes and slower global growth, defying a rebound in the dollar.
"But low interest rates in the United States and the messy situation in Europe will push gold higher."

20110818 1456 Malaysia Corporate Related News.

Tenaga Nasional Bhd : Fuel costs may hurt TNB again
Tenaga Nasional Bhd (TNB) expects to be hit by high fuel costs again in the fourth quarter, mainly because of a prolonged gas supply shortage. It had already posted a RM440.0mil loss in the third quarter, its first quarterly loss in three years, but chief executive officer Datuk Seri Che Khalib Mohamad Noh stopped short of saying if TNB would also lose money in the fourth quarter. He added that TNB may see lower revenue if the economy slows because its large customers are factories, offices and malls.  The shortage of gas for the power sector means TNB has to spend some RM400.0mil extra a month to buy alternative fuel like distillates and medium fuel oil. Petronas supplies gas to the power sector, but this has been disrupted by frequent maintenance by the national oil and gas company.  In its third quarter, TNB spent an additional RM1.3bil on fuel, which dragged the group into the red. For the nine months to May 31, TNB’s net profit was 68.0% lower at RM903.0mil and it expects full-year numbers to be lower than 2010. – Business Times

PPB Group Bhd In final lap of flour business buy
PPB Group Bhd will soon complete the purchase of a 20.0% stake in Wilmar International Ltd’s China flour-milling business. CEO of Wilmar, Kuok Khoon Hong said that the purchase should be completed in the next couple of weeks. However, Kuok said it is not immediately certain if the 20.0% stake in Wilmar’s flour- related business will also include an interest in a new plain noodle manufacturing business in China, which does not compete directly with instant noodle brands as it requires users to add their own flavoring.  Kuok also said Wilmar’s expansion into other consumer businesses like flour, rice and now noodles in populous countries like China, Indonesia, and India ‘will eventually be very significant earnings drivers for the group’ who sees the current bearish market sentiment as an opportunity to snap up good assets in the agri- commodity and consumer space. He added that the group remains positive on its prospects despite a challenging operating environment in China and uncertainties in the global economy and that the Asian economies will continue to see strong growth. For the 1H11, Wilmar’s revenue rose 48.6% to US$20.1bil from US$13.5bil the year before while net profit was up 4.5% to US$779.8mil from US$745.9mil in 1H10. Wilmar, the leading edible oil player in China, sees 60.0% of its earnings from the country. –The Edge

Banking Sector More flexibility for locally incorporated foreign banks
Bank Negara Malaysia (BNM) said it is according greater flexibility to newly licensed locally incorporated foreign banks that have yet to establish new branches or currently have less than eight. Presently, locally incorporated foreign banks can open up to eight additional branches, subject to a specified distribution ratio of one (market centre): two (semi-urban): one (non-urban).  However, BNM said that with the flexibility, locally incorporated foreign banks that have yet to establish new branches or currently have less than eight will not be required to comply with the distribution ratio for the setting up of their branches. This will facilitate the newly licensed locally incorporated foreign banks to better serve their targeted customer segments and niche area. This flexibility would also enable the existing locally incorporated foreign banks to achieve a meaningful scale of operations to contribute more effectively to the overall development of the financial sector of Malaysia. –The Edge

20110818 1142 Global Market & Commodities Related News.

GLOBAL MARKETS-Asian stocks shaky, Swiss franc holds
SYDNEY, Aug 18 (Reuters) - Asian stocks eased on Thursday following a negative lead from U.S. technology shares, while the Swiss franc stayed buoyed after plans to curb the currency disappointed those looking for more drastic action.
"The mood has improved over the past week from sheer panic to a more garden-variety uncertainty about the future," said Bricklin Dwyer, economist at BNP Paribas.

Oil up on U.S. gasoline draw, equities weigh
NEW YORK, Aug 17 (Reuters) - Crude oil rebounded on Wednesday on a sharp decline in U.S. gasoline stocks, but persistent worries about economic growth curbed gains.
"The Brent market reestablished an upside leadership role today with the October contract making its debut as spot month," said Jim Ritterbusch, president of Ritterbusch & Associates in Galena, Illinois.

Libya rebels battle for refineries in east and west
ZAWIYAH, Libya, Aug 17 (Reuters) - Rebels to the west and east of Libya's increasingly isolated capital fought forces loyal to Muammar Gaddafi on Wednesday for control of oil facilities vital to winning the six-month-old civil war.
In Zawiyah, 50 km (30 miles) west of Tripoli, they assaulted a coastal oil refinery to try to drive the last Gaddafi forces out and tighten their noose around the capital.

NYMEX-Natural gas ends mixed, front clings to slim gain
NEW YORK, Aug 17 (Reuters) - Front-month U.S. natural gas futures ended slightly higher on Wednesday for the first time in four sessions, underpinned by technical buying ahead of Thursday's weekly inventory report and a possible storm in the Caribbean despite fairly mild Northeast and Midwest forecasts.
"There was a little buying ahead of the (EIA storage) number, and a possible storm in the Caribbean may also have given prices a boost, but with the weather easing up in most population centers (except Texas), we could see more downside," a West Coast-based trader said.

Euro Coal-Prices stable with strong oil, power
LONDON, Aug 17 (Reuters) - Prompt physical coal prices ended slightly weaker but recovered most of the day's earlier losses on Wednesday, in line with stronger oil and German power prices.
"The market appears more balanced because there has been more buying today after two weeks of very few trades but there has been only one buyer rather than a group of end-users in the market," another European utility said.

COMMODITIES-Oil ends off highs on economic worry; crops rally
NEW YORK, Aug 17 (Reuters) - Oil rose on Wednesday on better-than-expected demand for gasoline in the United States and most other commodities climbed too, although lingering economic worries limited gains on some markets.
"At this point, I see crude futures rallying to $90, but there's a risk that it will not hold long at that area, given the uncertainties in the economy," said Mark Waggoner, president at Excel Futures in Bend, Oregon.

20110818 1012 Renewable Energy Related News.

LOS ANGELES, Aug 16 (Reuters) - First Solar Inc  on Tuesday said the head of its utility systems business, Jens Meyerhoff, is leaving the company, effective Sept. 30.
James Brown, senior vice president of utility systems business sales, will succeed Meyerhoff in the utility-scale solar unit and will report to Chief Executive Rob Gillette.

KINSHASA, Aug 16 (Reuters) - Democratic Republic of Congo's main hydro-power plant is running at half capacity due to low water levels, triggering long blackouts in Kinshasa and causing havoc for the city's businesses.
Problems with the Inga I and II dams come as Congo struggles with broken equipment at the decades-old plant, which could lead to continued outages even after water levels come back up, officials said.

BANGALORE, Aug 16 (Reuters) - JinkoSolar Holding Co  posted strong quarterly results and expects sales growth to hold up this year as the Chinese solar company continues to make inroads into newer regions, cheering up investors in a gloomy market.
The company's shares, which have shed 17 percent of their value so far this year, rose 11 percent to a high of $18.66 on Tuesday on the New York Stock Exchange. The wider MAC Solar Energy Index was down 2 percent.

COPENHAGEN, Aug 16 (Reuters) - Denmark's DONG Energy has sold its half of Norwegian wind power producer Nordkraft Vind to co-owner Nordkraft Produksjon for 145 million Norwegian crowns ($26.7 million, DONG said.
"The size of DONG Energy's portfolio of wind projects in Norway is found no longer to warrant a continued
strategic focus on expansion of the Norwegian market," state-owned DONG Energy said in a statement.

Aug 15 (Reuters) - Daqo New Energy Corp  said Bank of China  had approved a $153.4 million (980 million Chinese yuan) loan to expand its polysilicon production and the Chinese solar company said its second-quarter profit more than doubled.
Daqo New Energy ADSs were trading up 7 percent at $6.82 on Monday morning trade on the New York Stock Exchange. They rose as much as 8 percent earlier in the session.

NEW YORK, Aug 16 (Reuters Breakingviews) - The forecast looks gray for solar energy. Evergreen Solar , one of the first U.S. green energy firms to go public, just went bankrupt. Worth almost $2 billion a few years ago, the company was mainly the victim of a supply glut hitting the whole industry. While bigger players may survive, it will probably be some time before they flourish.
It's easy to forget Evergreen was once an investor darling. Its technology enabled it to produce panels using far less polysilicon -- the industry's primary raw material -- than peers. That was a trump card in 2007 and 2008 when silicon prices were 10 times higher than they are now. But it became less useful as prices tumbled. And Evergreen suffered for building up pricey production capacity in Massachusetts instead of in cheaper locales.

LOS ANGELES, Aug 15 (Reuters) - U.S. solar company Evergreen Solar Inc  filed for bankruptcy on Monday, its once cutting-edge technology falling victim to competition from cheaper Chinese rivals and solar subsidy cuts in Europe.
The Chapter 11 filing by a company once seen at the forefront of U.S. renewable energy technology came after a two-year struggle to stave off competition from Asia. The increasingly crowded market forced Evergreen to close its much-touted but short-lived Massachusetts factory and relocate manufacturing to China, and resulted in the virtual disappearance of its once-lofty stock market value.

BANGALORE, Aug 15 (Reuters) - U.S. photovoltaic cell maker Ascent Solar Technologies Inc  said it would sell a fifth of its shares to China's TFG Radiant Group and the two parties plan to set up manufacturing facilities in east Asia, in a deal valued at about $450 million.
Ascent shares more than doubled to $1.50 on Monday morning on Nasdaq -- their biggest intra-day percentage gain in at least two years. The deal will help the U.S. cell maker to build its presence in fast-growing solar markets in east Asia, especially in China.

SCHOTEN, Belgium, Aug 12 (Reuters) - Trains already have a reputation for being a very clean form of transport but Belgian commuters can now boast railways which are partially powered by solar energy.
A public-private consortium consisting of Belgian rail management company Infrabel and solar developer Enfinity has installed 16,000 solar panels on the roof of a 3.4 km (2.1 miles) long tunnel between Antwerp and the Dutch border, creating enough electricity to power 4,000 trains a year.

LOS ANGELES, Aug 11 (Reuters) - Solar industry revenue will shrink before it begins to rise again because dramatic price declines on solar panels will outweigh corresponding volume increases, according to a new report by Lux Research.
Revenue in the solar power industry is expected to slip to $56.9 billion in 2012 from $64.4 billion in 2010, Lux said in a report released on Thursday.

BRUSSELS, Aug 11 (Reuters) - The European Union has started a legal challenge against Canada at the World Trade Organization to protest against provincial backing for solar and wind energy projects, the bloc's executive said on Thursday.
The case centres on a scheme in the Canadian province of Ontario that guarantees minimum prices for renewable energy generated with Canadian-made equipment.

Aug 11 (Reuters) - Solar technology company Arise Technologies  posted a narrower net loss for the second quarter as it slashed costs to combat oversupply issues in the photovoltaic cell market.
Net loss for the quarter was C$4.6 million ($4.7 million), or 2 Canadian cents per share, compared with a net loss of C$13.8 million, or 9 Canadian cents per share, a year ago.

20110818 1011 Biofuels Related News.

WASHINGTON, Aug 16 (Reuters) - The Obama administration pledged Tuesday to give the moribund market for next-generation biofuel a half-billion-dollar boost, promising the nation's fighter planes and navy craft would be ready customers.
Under a plan funded by the departments of the Navy, Energy and Agriculture, companies will be invited to bid on new biofuel projects in which the government would match the investment. They would produce ethanol from next-generation sources like wood chips and inedible parts of plants rather than corn, which is now the primary feedstock.

SAO PAULO,  Aug 16 (Reuters) - Brazil's leading sugar and ethanol group Cosan  posted a quarterly net profit of 2.3 billion reais ($1.44 billion), up from 400,000 reais a year before, after the creation of a joint venture with Royal Dutch Shell Plc , a market filing said early on Tuesday.
Excluding one-time effects on its results, including most notably the merger of the company's local assets with Shell into the joint venture Raizen, net earnings over the first quarter would have been 167.5 million reais.

RIO DE JANEIRO, Aug 11 (Reuters) - Brazil's state-led oil company Petrobras plans to spend $570 million over five years for ethanol-industry acquisitions, about a third of its planned biofuel investment during the period, a company official said on Thursday.
Petrobras, Brazil's largest ethanol purchaser and third-largest producer, expects to more than triple its sugar-cane ethanol output by the end of 2015 and double its share of the Brazilian ethanol market to 12 percent.

SAO PAULO, Aug 10 (Reuters) - Most people have never heard of the product manufactured by biotechnology company Amyris , but that may actually boost its business by helping it transcend established trade barriers that face other farm-based products such as ethanol.
California-based Amyris produces farnesene, an oily hydrocarbon, from sugar cane in a fermentation process using genetically altered yeast. Its production operations are focused in Brazil, the world's biggest and cheapest grower of cane.

KANSAS CITY, Mo., Aug 10 (Reuters) - U.S. ethanol production rose for a fourth straight week and notched the highest output in two months as plants continued to churn out fresh fuel amid healthy profit margins.
The Energy Information Administration said on Wednesday that U.S. ethanol production totaled 908,000 barrels per day (bpd) for the week ended Aug. 5, up 30,000 bpd over the previous week. The weekly production of 6.356 million barrels is the highest since the week ended June 3.

LONDON, Aug 10 (Reuters) - Britain on Wednesday approved two new 299 megawatt (MW) biomass plants proposed by power producer Drax , but the generator said its investment decision depended on whether soon-to-be-announced state biomass subsidies are high enough.
"I am very pleased to give the go-ahead for these two new biomass power stations in Yorkshire and North Lincolnshire. They will not only enhance our security of supply, but provide low-carbon electricity that reduces our carbon dioxide emissions," Energy Minister Charles Hendry said in a statement.

20110818 1010 Global Market Related News.

Asia Stocks Fall on High Yen, U.S. Rates Concern (Source: Bloomberg)
Asian stocks fell for the first day this week as the yen rose toward a post-World War 2 high and two Federal Reserve officials said they opposed a pledge to keep U.S. interest rates at record lows. Honda Motor Co., a Japanese carmaker that gets about 83 percent of sales overseas, lost 1.4 percent in Tokyo as the yen advanced, hurting the earnings outlook for the nation’s exporters. Sony Corp., Japan’s biggest exporter of consumer electronics, dropped 1.2 percent. BHP Billiton Ltd., Australia’s biggest oil producer, sank 1.3 percent in Sydney as crude prices dropped today. The MSCI Asia-Pacific Index fell 0.6 percent to 124.49 as of 9:48 a.m. in Tokyo. Almost four stocks dropped for each that advanced on the gauge.

GLOBAL MARKETS-Euro wobbles after summit let-down; Asia techs down
SINGAPORE, Aug 17 (Reuters) - The euro wobbled on Wednesday after French and German leaders failed to deliver a solution to the euro zone debt crisis and restore confidence after a global market rout, while Japanese shares fell, dragged down mainly by hi-tech.
"This is not panicking any more, it's just investors being disappointed relative to expectations on these two fronts, economic activity and evidence of central banks' and politicians' efforts," he said.

Obama Plans Package to Boost Economy (Source: Bloomberg)
President Barack Obama plans to ask Congress for billions of dollars in fresh spending to reduce unemployment while also proposing to take a bigger bite out of the nation’s long-term deficit. With the U.S. unemployment rate at 9.1 percent and economic growth slowing, Obama plans to propose a mix of tax cuts and infrastructure spending that goes beyond the measures he’s been promoting over the last several weeks, an administration official said, speaking on condition of anonymity because details for the speech haven’t been completed. Separately, Obama said today he will present to a special 12-member congressional committee charged with coming up with at least $1.5 trillion in deficit reduction his own proposal for making deeper cuts in the nation’s debt. It will include raising government revenue as well as cutting spending, along the lines of the scuttled “grand bargain” he tried to strike with House Speaker John Boehner in July.

Wholesale Prices in U.S. Increase More Than Estimated on Tobacco, Trucks (Source: Bloomberg)
Wholesale costs in the U.S. rose more than forecast in July, led by higher prices for tobacco, trucks and pharmaceuticals, showing declines in commodity expenses have yet to filter to other goods. The 0.2 percent advance in the producer price index followed a 0.4 percent drop in June, Labor Department figures showed today in Washington. Economists forecast a 0.1 percent increase, according to the median estimate in a Bloomberg News survey. The so-called core measure, which excludes volatile food and energy, climbed 0.4 percent, the most since January. The report showed the cost of crude goods dropped in July for a third consecutive month, led by declining petroleum and food prices. Slowing sales and the drop in raw materials mean companies will be less likely to raise prices, which may give Federal Reserve policy makers more room to act to spur growth after the world’s largest economy almost stalled.

Plosser Says Fed Is Likely to Need to Raise Interest Rates Before Mid-2013 (Source: Bloomberg)
Charles Plosser, president of the Federal Reserve Bank of Philadelphia, said the Fed will probably need to raise interest rates before mid-2013 and that policy makers should have waited to see how the economy performed before pledging to hold rates at record lows for two years. “It was inappropriate policy at an inappropriate time,” Plosser, 62, said today in a radio interview on “Bloomberg Surveillance” with Tom Keene and Ken Prewitt. Plosser spoke in his first interview since he dissented from a Fed decision on Aug. 9 to step up stimulus for an economic recovery that’s “considerably slower” than anticipated. The economy may not need additional monetary stimulus, with inflation rising and unemployment declining since November to 9.1 percent, he said. Plosser hasn’t significantly cut his forecast for 2012 economic growth as the impact from “shocks” like the earthquake in Japan subsides, he said in an interview in New York with Bloomberg News editors and reporters.

Economy Not Double-Dipping Yet as Production-to-Consumer Spending Increase (Source: Bloomberg)
Some of the gloom that settled over the U.S. economic outlook as stocks and sentiment plunged in recent weeks may soon dissipate as households keep spending and factories keep producing. Industrial output climbed in July by the most this year, according to figures from the Federal Reserve yesterday. Reports last week showed retail sales rose by the most in four months and claims for jobless benefits dropped to the lowest level since early April. “There’s nothing in here to suggest the economy is slowing, let alone declining,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. “Production continues, and production continues because consumers are still making their purchases.”

Fed Shouldn’t Protect Stock Traders: Fisher (Source: Bloomberg)
Federal Reserve Bank of Dallas President Richard Fisher said the central bank shouldn’t ease monetary policy whenever there is a big drop in U.S. stock prices, an action he said some traders might view as a “Bernanke put.” “My long-standing belief is that the Federal Reserve should never enact such asymmetric policies to protect stock market traders and investors,” Fisher said today in Midland, Texas. “I believe my FOMC colleagues share this view.” Fisher’s comments offered his first explanation of his dissent from the Federal Open Market Committee decision last week to specify a date for their commitment to low borrowing costs. The Fed said the benchmark interest rate will stay in a range of zero to 0.25 percent at least through mid-2013. The new language replaces a prior promise to keep rates low for an “extended period.

Treasury Bets on Inflation Drop Before Data on Inflation, Jobless Claims (Source: Bloomberg)
Treasury market bets on inflation were one basis point away from an eight-month low before a government report that economists said will show the cost of living in the U.S. barely rose in July. The difference between yields on 10-year notes and Treasury Inflation Protected Securities, a gauge of trader expectations for consumer prices over the life of the debt, was 2.14 percentage points. The spread narrowed to 2.13 percentage points yesterday, the least since December. The government is scheduled to sell $12 billion of five-year TIPS today. “Yields will stay low,” said Sungjin Park, who heads the $57.9 billion debt division in Seoul at Samsung Asset Management Co., South Korea’s largest private bond investor. “The economy will be slower than before. Inflation will be slower.”

Most U.S. Stocks Retreat Amid Dell’s Decline, Comments From Fed Officials (Source: Bloomberg)
Most U.S. stocks declined, wiping out an earlier advance, as Dell Inc. (DELL) forecast weaker sales and two Federal Reserve officials expressed concern about the amount of stimulus being applied to the economy. Dell fell 10 percent as slower spending on PCs and consumer technology crimped its sales forecast. Abercrombie & Fitch Co. (ANF), the teen-clothing retailer, slid 8.7 percent as executives said cost pressure will rise. Standard & Poor’s 500 Index companies that are least-tied to the economy, including phone and utility providers, rose at least 0.8 percent as a group. Eastman Kodak Co. (EK) surged 26 percent as analysts and investors told Bloomberg News its patents may make it a takeover target. About 18 stocks fell for every 17 that rose on U.S. exchanges. The S&P 500 added 0.1 percent to 1,193.89 at 4 p.m. in New York, after gaining 1.3 percent at most and dropping as much as 0.7 percent. The Dow Jones Industrial Average climbed 4.28 points, or less than 0.1 percent, to 11,410.21 today.

Bad Debt at China Banks Growing: Jain (Source: Bloomberg)
Bad loans at Chinese banks will rise to “shockingly high” levels, eroding profits and slowing growth in the world’s second-biggest economy, said Vontobel Asset Management Inc.’s Rajiv Jain, who runs some of this year’s best-performing mutual funds. China’s local governments are struggling to repay their debt and “frothy” real-estate markets may leave banks exposed to falling prices, Jain said in an Aug. 16 phone interview. While valuations on Chinese banks have dropped to the lowest levels since October 2008, Jain said the shares aren’t cheap enough to buy because the lenders’ leverage is too high and earnings are likely to disappoint investors. “We have not owned a Chinese bank, and I don’t see owning one any time soon,” said Jain, who oversees about $15 billion, including three funds that beat 99 percent of peers this year, data compiled by Bloomberg show. “If you look at the accounting, I don’t see how anyone could put a penny there.”

China Expands Yuan Role in Biggest Boost to Hong Kong’s Economy Since 2003 (Source: Bloomberg)
Chinese Vice Premier Li Keqiang unveiled the biggest package of measures supporting Hong Kong’s economy since the 2003 SARS epidemic, allowing more two-way investment in shares and sparking a rally in brokerage stocks. China will start an exchange-traded fund based on Hong Kong equities, Li, the front-runner to replace Wen Jiabao as premier in 2013, said at a forum in the city today. He also pledged a 20 billion yuan ($3.1 billion) quota for qualified companies to invest in domestic Chinese securities and said sales of yuan bonds in the city will be expanded. The plans relax restrictions on investment flows, bolstering the city’s role as a financial hub and aiding an economy that shrank in the second quarter for the first time since 2009. China Everbright Ltd. (165) rose 8.2 percent, the most in 19 months, as financial services companies surged on speculation they may benefit from the quota.

China’s ETF Plan Boosts H.K. Financials (Source: Bloomberg)
China’s Vice Premier Li Keqiang unveiled plans yesterday to allow more cross-border investments, boosting Hong Kong financial shares that are poised for the biggest losses since the 2008 credit crisis. Guotai Junan International Holdings Ltd. (1788), a securities brokerage, and China Everbright Ltd. (165), which provides investment- banking services, rose more than 8.1 percent in Hong Kong trading yesterday, leading gains in a measure of financial companies in the Hang Seng Composite Index. Bank of East Asia increased the most in a year, while Dah Sing Financial Holdings posted the largest advance since April. The proposals further relax limits on investment flows, bolstering Hong Kong’s role as a financial hub. China will start an exchange-traded fund linked to Hong Kong equities, commit a 20 billion yuan ($3.1 billion) quota for qualified companies to invest in domestic Chinese securities and expand sales of yuan bonds in the city, Li said at a forum yesterday.

Japan Exports Fall More Than Expected as Yen Gains Cloud Economic Outlook (Source: Bloomberg)
Japan’s exports fell more than expected in July as a global slowdown and a strengthening currency weigh on the outlook for the nation’s sales overseas. Exports decreased 3.3 percent in July from a year earlier, the Finance Ministry said today in Tokyo. The median estimate of 24 economists surveyed by Bloomberg News was for a 2.6 percent decline, after a 1.6 percent decrease in June. Shipments rose 0.8 percent in July from June on a seasonally adjusted basis. The world’s third-largest economy is counting on an export revival to aid its rebound from the record earthquake in March. The yen’s 6 percent advance against the dollar in the past three months may weigh on overseas sales at a time when demand from major markets such as China and the U.S. is faltering.

Japanese Stocks Drop as Yen Nears Post World War II High: Nissan Declines (Source: Bloomberg)
Japanese stocks dropped for a second day as the yen approached a post-World War II high and two Federal Reserve officials questioned the amount of stimulus being applied to the world’s biggest economy, hurting prospects for exporters’ earnings. Nissan Motor Co., which gets a third of its revenue in North America, declined 1.6 percent. Kyocera Corp., a maker of solar panels that gets 17 percent of its sales in the U.S., lost 1 percent. Minebea Co., a ball-bearing maker, dropped 2.4 percent after Goldman Sachs Group Inc. cut its share price estimates of Japanese electronic components makers. The Nikkei 225 Stock Average fell 0.5 percent to 9,013.47 as of 9:30 a.m. in Tokyo. The broader Topix index declined 0.5 percent to 772.58 with five stocks retreating for every three that rose.

Korea May Have to Abandon Woori Sale (Source: Bloomberg)
South Korea may be forced to abandon a second attempt to sell its $5.2 billion Woori Finance Holdings Co. stake after limits on local rivals, public ire and the global equity rout left it with one bid. A group led by Seoul-based MBK Partners Ltd. and Korean Federation of Community Credit Cooperatives submitted the solitary offer for the nation’s largest financial company, state-run Korea Deposit Insurance Corp. said yesterday after a bid deadline lapsed. A committee overseeing the sale will meet tomorrow to consider proceeding to the final stage. President Lee Myung Bak, who aims to privatize companies bailed out more than a decade ago, failed to attract more investors even after Woori slumped 21 percent this year. Lawmakers rejected a plan in June that would have eased rules for rival financial holding companies seeking the stake, while interest from buyout firms has drawn public opposition.

Malaysia’s Economic Expansion Slows (Source: Bloomberg)
Malaysia’s economy grew at the slowest pace since 2009 last quarter, adding to evidence of a faltering global recovery and reducing pressure on the central bank to increase interest rates. Gross domestic product rose 4 percent in the three months through June from a year earlier, after expanding a revised 4.9 percent in the previous quarter, Bank Negara Malaysia said in a statement in Kuala Lumpur yesterday. The median of 16 estimates in a Bloomberg News survey was for a 3.6 percent gain. Europe’s debt crisis and slower U.S. growth have damped the outlook for exports, putting pressure on Asian policy makers to delay further rate increases even as prices gain. Malaysia’s central bank refrained from raising borrowing costs last month, and Governor Zeti Akhtar Aziz said yesterday economic expansion may be at the lower end of its forecast for 2011.

Europe’s Stalling Economy May Keep ECB’s Interest Rate on Hold Into 2012 (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 Stocks Climb; Health-Care Companies, Vestas Rise, Carlsberg Sinks (Source: Bloomberg)
European stocks climbed, with the benchmark Stoxx Europe 600 Index rising for a fourth day out of five, as some investors speculated that the 9.2 percent drop in equities this month makes their valuations attractive. Vestas Wind Systems A/S posted the best performance in the Stoxx 600 after reporting second-quarter earnings that beat analysts’ estimates. Health-care companies rallied as Sanofi climbed 2.8 percent. Carlsberg A/S, the Nordic region’s largest brewer, plunged 17 percent after reducing its full-year outlook. The Stoxx 600 increased 0.2 percent to 238.05 at the 4:30 p.m. close in London, reversing an earlier drop of as much 1.4 percent. The Stoxx 600 has still declined 18 percent from this year’s high on Feb. 17, on concern that Europe will fail to contain its sovereign-debt crisis and that the economic recovery is faltering in the U.S. The retreat has left the European benchmark trading at 9.8 times the estimated earnings of its companies, near the lowest valuation since March 2009.

Merkel-Sarkozy Debt Proposal Shuns Steps Investors Sought to Calm Markets (Source: Bloomberg)
The latest Franco-German strategy to counter the euro debt crisis stressed ideas already in the works, shunning bolder steps investors were seeking to calm markets. German Chancellor Angela Merkel and French President Nicolas Sarkozy ruled out steps such as the issuance of euro bonds or expanding the bailout fund. They backed a plan being drawn up for national balanced-budget amendments and reheated one rejected last year for a financial-transactions tax. They called for the 17 euro leaders to hold two summits a year, the same number of times they have already met in 2011. “There remains an ongoing tension between investors who want a quick fix and the policy makers who are working on the building blocks for the future,” said Jacques Cailloux, chief euro-area economist at Royal Bank of Scotland Group Plc. “Everyone can recognize that the building blocks are important, but stronger leadership with a clearer road map is sorely missing in this direction.”

FOREX-Swiss franc jumps as SNB's actions fall short
LONDON, Aug 17 (Reuters) - The Swiss franc jumped sharply on Wednesday as fresh steps by the Swiss National Bank to stem the currency's gains disappointed a market positioned for more radical measures.
The SNB said it would boost liquidity by expanding sight deposits to 200 billion francs from 120 billion, reiterating it would take additional steps if needed, which market players said could mean direct intervention or setting a floor on the euro/Swissie exchange rate.

20110818 1009 Global Commodities Related News.

Asia commodities markets insulated from crisis, but cautious
SINGAPORE, Aug 17 (Reuters) - Asia's commodities business is still largely insulated from looming fears of yet another global financial crisis, although new projects might face difficulties in getting financing.
All of the 10 banks and oil trading houses contacted said it is business as usual in the market -- from moving ahead with big-ticket infrastructure projects to maintaining the same credit requirements for derivatives trading and trade-finance.

Corn (Source: CME)
US corn futures close weaker in a setback from recent gains. Traders book profits after the nearby September contract month touched a four-week high and most-active December reached a new contract high. Corn has not attracted "a lot of demand" from foreign buyers this week, opening the door for the market's slump, according to Global Commodity Analytics & Consulting. Traders at 8:30 a.m. EDT Thursday will digest weekly export sales data from USDA. CBOT December slips 2c to $7.25 1/2 a bushel.

Wheat (Source: CME)
US wheat futures end higher, with MGEX posting strong gains on concerns farmers planted fewer acres of spring wheat than previously expected. Traders reduce estimates for spring-wheat output after planting data from USDA's Farm Service Agency indicates federal forecasters overestimated the crop in another USDA report last week. "The FSA numbers make us probably have to come back around and have to reevaluate the USDA reports," says Mike Zuzolo of Global Commodity Analytics & Consulting. CBOT December wheat rises 6c to $7.58 a bushel, while KCBT December gains 5 1/4c to $8.47 and MGEX December climbs 20 1/2c to $9.16 3/4.

Rice (Source: CME)
US rice futures close higher as global growers hold back on sales in anticipation of higher prices, analysts say. In Thailand, the world's top rice exporter, the government in November is expected to raise the price at which it purchases rice from farmers. Expectations for higher prices have spread to Vietnam, where prices have shot up by more than $100/ton in just a month. CBOT September rice rises 11 1/2c to $17.17 1/2 per hundredweight.

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.  

Vietnam exporters default on rice deals as prices rise
BANGKOK, Aug 17 (Reuters) - A rise in rice prices in Vietnam, which have gone above Thai prices for the first time in many years, has forced Vietnamese exporters to default on deals totalling around 200,000 tonnes, mostly for delivery to other Southeast Asian countries and China, Thai traders said on Wednesday.
"A sudden rise in Vietnamese rice caused defaults and forced disappointed buyers to come back to us," Korbsook Iamsuri, president of the Thai Rice Exporters Association, told Reuters.

India may consider more rice exports - food min
NEW DELHI, Aug 17 (Reuters) - India may consider more non-basmati rice exports, Food Minister K.V Thomas said on Wednesday, as part of its efforts to trim bulging stocks.
"We have received several proposals for allowing exports from states like Andhra Pradesh where production was more than expectations," Thomas told reporters.

New Thai govt confirms jump in rice price for farmers
BANGKOK, Aug 17 (Reuters) - The new Thai government said on Wednesday it would start intervening in the rice market in November, buying rice directly from farmers at 15,000 baht ($502) per tonne, as promised by the main coalition party in its election campaign.
That is practically double the price of around 8,000 baht in the market around the time of the election on July 3.

W.Canada dry now, but rains may slow harvest
WINNIPEG, Manitoba, Aug 16 (Reuters) - Western Canada's farmers will likely have mostly warm, dry conditions for harvesting in the next two weeks, but a later turn to wetter weather could cause delays and leave crops at risk of frost damage, a Canadian Wheat Board official said on Tuesday.
"Wet and cool weather is exactly what we do not need given the delayed planting we saw across the Prairies," said Stuart McMillan, crops and weather analyst for the Wheat Board, which buys and sells Western Canada's spring wheat, durum and barley.

Indonesian rice output seen up 9 pct in 2012 - finmin
JAKARTA, Aug 16 (Reuters) - Indonesia sees unmilled rice production rising almost 9 percent next year, the finance minister said on Tuesday, as the country tries to boost crop output to improve food security.
Production of the staple food will hit 74.1 million tonnes next year, Finance Minister Agus Martowardojo told reporters in a news conference for the 2012 budget forecast.

Russian grain crop up on year with 39 pct harvested
MOSCOW, Aug 16 (Reuters) - Russia harvested 48.5 million tonnes of grain by bunker weight by Aug. 16 from 17.2 million hectares, or 39 percent of the sown area, the agriculture ministry said on Tuesday.
The ministry did not provide a comparative figure, but a year ago it said farmers harvested 40.1 million tonnes of grain by Aug. 18 from 19.2 million hectares, just over half of the area left for harvesting not damaged by a severe drought.

China Corn Prices Continue To Rise; Supply Tight Before Harvest (Source: CME)
China's corn prices rose to a new all-time high in the week, as overall demand from feed mills was high and supplies tight ahead of the fall harvest around October. In major cities in the eastern Shandong province, where feed mills and processors have a strong presence, the average price rose about 2% from a week earlier to up to CNY2,500/ton. In the top hog-producing province of Sichuan, prices rose about 1% to around CNY2, 560/ton. The nation's average wholesale corn price was CNY2,400/ton as of Aug. 10, up 0.8% from a week earlier, the National Development and Reform Commission said. Stocks with traders in northeastern China, the major producer that accounts for about 40% of the nation's production, were only 3 million tons and are falling, Baocheng Futures analyst Bi Hui said. Corn prices will likely continue to rise before the harvest in October, but the upside is limited, the Ministry of Agriculture said in a research note published on the official Farmer's Daily Tuesday.
The growth in demand from starch and alcohol makers is expected to slow as the government is restricting expansion of the sector to ensure supply to feed mills, it said. Wholesale pork prices in China rose 0.1% in the week to Sunday, snapping three weeks of flat or lower prices, the Ministry of Commerce said Tuesday. Meanwhile, the hog-to-corn price ratio, an indicator of returns from hog production, rose last week after three weeks of decline, NDRC data showed, suggesting profit margins for hog raising remain strong.

China Seeks To Cut Fertilizer Use In Agriculture -Editorial (Source: CME)
China's government will seek to reduce overuse of fertilizer that has contaminated 7% of China's arable land, with domestic use of fertilizer higher in than most other countries, according to an editorial in the state-run China Daily. China has reported seven straight years of record grain harvests and is on track to post an eighth, but senior government agriculture-policy officials have warned that ever-higher grain output goals create a risk of fertilizer overuse harming domestic agriculture. The editorial described overuse of fertilizer as a "potential food security hazard," and said that "an increasing number of villagers have developed the habit of relying on fertilizer for a good harvest." "They never seem to realize that they are eviscerating the sustainability of their fields."
China declined to pursue a bid for Canada's Potash Corp. of Sasketchewan Inc. last year, after people familiar with the matter indicated that Chinese companies had considered attempting to trump an abortive $40 billion offer by BHP Billiton Ltd. offer for the fertilizer producer. China uses 54 million metric tons of fertilizer a year, the largest in the world, according to the editorial. The country uses 341 kilograms of fertilizer per hectare, higher than in most other countries, it said. Overuse has contaminated 7% of total arable land, or 10 million hectares, it said, citing the Ministry of Agriculture.

Russia Exported Record 2.6M Tons Grain In July (Source: CME)
Russia exported nearly 2.6 million metric tons of grain in July, an all-time record for the month, the federal customs service said. Wheat exports in July totaled 2.4 million tons, the largest buyers being Egypt and Turkey. Barley exports totaled 100,000 tons, more than half of it going to Saudi Arabia. There was also a small amount of corn going to Greece. On July 1 the Russian government lifted a ban on the export of grain imposed as a result of last year's poor harvest, which was caused by drought.

Myanmar Suspends Export Tax As Strong Currency Hits Agri Exports (Source: CME)
Myanmar has suspended export taxes on a wide range of farm products including rice, beans and pulses, trading and industry executives said. This has helped improve rice supply from Myanmar at a time when African demand for cheaper grades is high following shrinking supply from Thailand where millers are holding back stocks ahead of a government plans to raise procurement prices. Thai export prices have already gone up after the new government said it would go ahead with plans announced during election campaigning to nearly double domestic prices offered to rural rice growers. Myanmar's government suspended the 5% export tax on rice earlier this week, although it will continue to levy a 2% income tax on all shipments, said a Yangon-based executive of the Myanmar Rice Industry Association, or MRIA. This is the second cut in export taxes in as many months, he said. In July, the export tax on rice was cut to 5% from 8% before that.
Traders said the government's move comes as a strengthening local currency is eroding export margins. Expectations that the government may undertake currency reforms in the fourth quarter following significant foreign exchange inflows in recent months, has strengthened the kyat, Myanmar's currency, said a commodities analyst in Yangon. Government officials couldn't be reached for comment. The kyat has strengthened to around MMK740 to the U.S. dollar compared to MMK800 a month ago amid increased foreign direct investments as the government is undertaking large-scale sale of fixed assets such as agricultural land to foreign investors. A stronger kyat implies that even the suspension of export tax won't translate into lower rice prices, said a Singapore-based rice exporter. Myanmar's 25% broken rice is already cheapest in the world. Local traders currently offer rice to global commodity trading companies around $410-$415/ton. This is shipped by exporters around $431/ton, free-on-board.
Last week, Vietnam offered 25% broken rice around $535/ton, FOB and the corresponding Thai grade is available around $505/ton, FOB. The MRIA executive said Myanmar exported up to 50,000 tons of rice in each of the last few months but shipments are likely to pick-up from August due to strong demand from West Africa. At least seven vessels with a total capacity of 148,000 metric tons are currently loading or awaiting berths at Yangon port, they said. Meanwhile, Thai millers and growers are holding back rice in anticipation of an increase in the government-set intervention prices. With that pushing up international prices, Vietnamese exporters have cancelled several export contracts. Prices were also finding support from news that India's plan to export about a million tons of rice hit a roadblock after a court stayed an earlier government decision allocating export quotas. Pakistan's rice harvest will gather momentum only in October.

Japan Seeks 250,000 Tons Feed Grain In August 24 SBS Tender (Source: CME)
Japan's agriculture ministry is seeking 50,000 metric tons of feed wheat and 200,000 tons of feed barley in a sell-buy-sell tender, a government official said. The ministry is seeking the grains for shipment by Nov. 30, and the tender will close on August 24, said the official from the Ministry of Agriculture, Forestry and Fisheries. The tender seeks the entire quantity in bulk shipments. In another SBS tender, Japan bought 14,750 tons of feed wheat but no barley. Last week, Japan didn't make any purchases and on Aug. 3, it bought 33,700 tons of feed wheat and 81,050 tons of feed barley. Japan has canceled 11 of the last 18 weekly SBS tenders for feed grain due to a lack of buyers and sellers. It purchased a total of 110,180 tons of wheat and 291,500 tons of barley in the other seven.
Under the SBS system, end-users can negotiate as a group on the price, quantity and origin of grains before submitting bids to trading firms via the agriculture ministry. Japan mostly buys wheat and barley from Canada, Australia, the U.S. and France.

Barclays, A Perennial Commodity Bull, Pegs Even Higher Prices (Source: CME)
To the chagrin of consumers, the era of high commodity prices is here to stay. That's the timbre of a 200-page report released by Barclays Capital. The upshot: Surprisingly strong demand and continued scarcity of supply lurk behind commodities' post-2008 comeback and will keep prices moving higher in the next few years. The warning highlights the position among some investors, banks and researchers that this year's record-setting rallies for copper, corn, livestock and cotton among other commodities are reflecting demand increases in China and other developing markets that are moving too quickly for supplies to keep pace. Now, though, there is a growing belief that anything short of a double-dip recession in the U.S. and other developed countries will mean further cost increases for raw materials. "Market sentiment still looks at odds with the robustness of commodity fundamentals, and any brightening of the gloom could boost prices quite quickly," Barclays analysts wrote in the report.
The sentiment echoes that of Morgan Stanley, which said last week that commodities should "stay resilient" even with only modest economic expansion. A longer-term view came in the last two quarterly investor letters from market guru Jeremy Grantham. Grantham, a veteran investor at GMO, said the "inevitable mismatch between finite resources and exponential population growth" was showing its face in the rising prices of raw materials. Further increases will mean more expensive food, gasoline and other goods for U.S. consumers, increased price volatility and rising obstacles to global economic growth. For its part, Barclays has honed in on corn, copper and crude oil. Those markets, the bank's analysts said, are "already driven by longer-term scarcity issues" and are less likely to suffer declines due to high volatility related to debt worries in the U.S. and Europe. The firm also recommends gold.
Gold has historically been used as a store of value, not an industrial or agricultural building block. Its cache has always been its scarcity. The stampede into the yellow metal was on display Tuesday, as investors spooked about slowing growth in Europe sent gold to a fresh record. Futures settled $26.90, or 1.5%, higher at $1,782.40 an ounce. Oil prices reached highs above $114 a barrel in early May. Copper traded above $4.500 a pound as recently as July, near all-time highs. In June, corn futures traded at nearly $8 a bushel, up from lows below $3.50 a bushel a year earlier. Kevin Norrish, commodities analyst at Barclays in London, said the continued economic growth in China and developing economies through the global recession shows that demand from these areas is set to continue. "As people move up the developmental scale, the demand for commodities increases exponentially. We're at that stage now in India, in China," Norrish said.
Critics are skeptical, however, saying that history has repeatedly proved such predictions wrong. The oil crises of the 1970s generated fears of resource scarcity. But by 1998 oil prices had fallen to $11 a barrel. Record highs above $147 a barrel in 2008 came with a forecast by Goldman Sachs that $200 a barrel oil was ahead. Crude prices fell to $30 a barrel. In the most famous example, 19th-century classical economist Thomas Malthus argued population growth would be checked by famine and disease just ahead of the Industrial Revolution, which squelched--or at least massively delayed--his predictions. Edward Meir, senior commodity analyst at MF Global, said he's heard warnings of disappearing resources for thirty years. "In long-term forecasting, people freeze their assumptions and they extrapolate current conditions. But that's very dangerous," Meir said. "This commodity rally has been driven by China, which is understandable and justified. But it opens the door to 'what if something happens in China?'"
Barclays has garnered a reputation for its bullish calls in recent years, which Norrish defends as reflective of the general move higher in commodities. "We've been a bullish lot because commodities have been a bullish lot," he said. "We could be bearish and be wrong, but why do that?"

Chinese Hunger For Corn Stretches Farm Belt (Source: CME)
China's struggle to meet the growing demands of its middle class is fueling a sudden surge in demand for corn, sending vast ripples across the U.S. farm belt and potentially upending the grain's trade flows around the world. China's need for corn -- which forms the basis of sweeteners, starch and alcohol as well as feed for livestock -- was on stark display in July when the nation ordered 21 million bushels of U.S. corn in one hit, more than the U.S. government thought the country would buy in a year. The purchase surprised the market and came as an intense July heat wave was shrinking the potential size of the Midwest crop. China bought another 2.2 million bushels of U.S. corn early this month. Corn prices, which have nearly doubled over the past year, climbed another 1% Tuesday. The corn futures contract for December delivery at the Chicago Board of Trade rose 7.5 cents to settle at $7.275 a bushel. China's influence on corn demand underlines how its fast-growing economy is reshaping global commerce.
The nation, with its growing population of 1.3 billion people, has been a major player in commodities markets in recent years. China already buys about a quarter of all U.S. soybeans. But its sudden demand for corn caught many off guard. China, which hadn't been a net importer of corn for 15 years until last year, has a vast corn belt of its own and for many years strove to be self-sufficient. And because China is secretive about the levels of commodities it holds in its strategic reserves, the rest of the market can only guess what its supply needs are.
Many attribute the larger-than-expected demand to a growing middle class that is changing its tastes more quickly than anticipated. As the Chinese population becomes wealthier, for example, it is eating more pork. And the Chinese government is pushing its farmers to adopt Western methods of raising their pigs, including feeding them more corn. Citizens also are slurping up juices and other products that include corn-based sweeteners: Coca-Cola Co. said that its volume in China spiked 21% in the second quarter. Ma Liangfeng, a 69-year-old retired engineer living in Shanghai, says the array of packaged products lining store shelves was "unthinkable" just 30 years ago. Back then, families had to reserve staple meats like pork for special occasions. The changes have caused big changes throughout the food chain, including U.S. companies and farmers putting in place infrastructure that will enable massive shipments of grains and other products to Asia.
Many U.S. traders and economists believe the recent purchases signal U.S. sales will grow so rapidly that China could become the biggest foreign buyer of U.S. corn within five to 10 years, dethroning Japan, which bought about 610 million bushels of U.S. corn last year. "We think this is the inflection point," says Brian Schouvieller, a grain marketing executive at CHS Inc., the U.S.'s biggest farmer-owned cooperative. "We believe that, from now, China is going to be a steady buyer." To be sure, Western executives have been wrong before about China's appetite for foreign corn. A sudden surge of Chinese buying in the mid-1990s sparked talk of a trade boon for U.S. farmers, but it was a blip. While China's middle class is far bigger now, and its gross domestic product grew a blistering 9.5% in the second quarter, economists predict turbulence. Much of China's breakneck growth is fueled by government-led investment, not entrepreneurs, and China's housing market appears to be overheating.
Still, the threat of instability might well work in the favor of U.S. farmers. China's ruling Communist Party worries in particular about food inflation, which could put social stability at risk. In an effort to preserve domestic supplies, the government has already stopped construction of factories that convert Chinese corn into ethanol fuel. But rising pork prices, thanks in part to higher demand and the rising cost of feed, accounted for more than a quarter of the 6.5% jump in China's consumer price index in July from a year earlier. In the eastern province of Zhejiang, pig farmer Qian Fanghua's operation has grown to about 2,000 animals today, from less than 200 pigs four years ago. Mr. Qian's hogs require about 4,000 kilograms of corn-based feed each day. His growing farm, and others dotted around the country, is one of the reasons domestic corn prices have climbed so high as to make U.S. corn seem affordable.
This year, China is expected to use about five billion bushels of corn to make feed, a growth of 20% from five years ago, according to the U.S. Department of Agriculture. The USDA now forecasts that China will import 79 million bushels of corn from all sources for the 2011-2012 crop year. But some grain traders are much more optimistic. They said in interviews that they think China wants to buy 200 million bushels of corn from the U.S. alone. U.S. companies are already investing with China's ever-expanding appetite in mind. Decatur, Ill., grain exporter Archer-Daniels-Midland Co. said in July that it would build a shuttle-loading grain elevator near St. Cloud, Minn., with the capability of loading trains that are 110 cars long. And Minneapolis-commodity processing giant Cargill Inc. is expanding its corn sweetener factory in Pinghu.
A port terminal in Longview, Wash., scheduled to open this fall is the nation's first in at least two decades for loading ocean-going ships with grain. Grain giant Bunge and two Asian partners invested $200 million to build it. "The Asia market is the fastest growing market in the world," says Larry Clarke, the venture's chief executive. "We're working to get our infrastructure ahead of it." Biotechnology giant Monsanto Co. has had talks about deepening ties with Sinochem, the state-owned chemicals conglomerate with which it has had a corn seed-breeding venture in China since 2001. Ron Litterer, a Greene, Iowa, farmer, says he is paying close attention to China's growth and while he hasn't yet decided to increase his corn planting, that could change. Mr. Litterer raises 1,000 acres of corn and 500 acres of soybeans. "It just makes sense to think they will have to depend more and more on [food] imports," Mr. Litterer says.
For now, the amount of Chinese business confirmed by Washington is relatively small alongside America's total foreign sales. The U.S. exports about 1.8 billion bushels of corn globally. While nobody in the West knows for sure how much corn China will want to import and how soon, the possibilities fascinate grain traders. According to Michael Swanson, a Wells Fargo & Co. economist, doubling of per capita meat consumption in China so that it matches the U.S. level would require the country to use an additional 24 billion bushels of corn, or about twice what the U.S. produces in a year. "There's not enough grain in the world for them to do that," Mr. Swanson says. "But just moving in the direction is staggering to consider."

Corn, Wheat, Soybeans Called Higher as July Heat Wave May Curb U.S. Output (Source: Bloomberg)
What follows are opening calls for U.S. grain and oilseed markets.
-- Corn futures are called to open 1 cent to 3 cents a bushel higher on the Chicago Board of Trade on speculation that the hottest July weather since 1955 in parts of the U.S. Midwest damaged yields more than the government estimated last week, Jim Gerlach, the president of A/C Trading Inc. in Fowler, Indiana, said in a telephone interview.
-- Soybean futures may open 4 cents to 6 cents a bushel higher in Chicago on speculation that rain this week will miss fields in parts of the central and northwestern Midwest, increasing stress on plants, Gerlach said. Soybean-oil futures are expected to open up 0.15 cent to 0.25 cent a pound, and soybean-meal futures may open 50 cents to $1.50 higher per 2,000 pounds.
-- Wheat futures may open 4 cents to 6 cents a bushel higher on the CBOT, the Kansas City Board of Trade and the Minneapolis Grain Exchange on speculation that wet weather during the U.S. planting season and unusually high temperatures in July will curb output in the northern Great Plains, Gerlach said.

Wheat Rises to Two-Month High as Dryness May Curb U.S. Winter-Crop Seeding (Source: Bloomberg)
Wheat futures rose to a two-month high on speculation that dry weather in the U.S. Great Plains will cut acreage of winter crops set to be planted next month. Parts of Texas, Oklahoma and southern Kansas have had a quarter of the normal amount of rainfall in the past 30 days, the National Weather Service said. U.S. output of hard, red- winter wheat, grown primarily in the Great Plains, may drop 22 percent to 794.4 million bushels from last year because dry weather has persisted since late 2010, the Department of Agriculture said. “It hasn’t been a good growing season, and it doesn’t look like it’s going to be a good planting season,” Jon Marcus, the president of Lakefront Futures and Options, LLC in Chicago, said in a telephone interview.

Wheat Gains for Third Day as Dryness in U.S. May Curb Winter-Crop Seeding (Source: Bloomberg)
Wheat rose for a third day in Chicago on speculation hot, dry weather in the U.S. Plains may curb seeding of winter varieties and on concern adverse weather in Russia and Ukraine might hurt crops. Dry weather in the U.S. cut soil moisture for winter-wheat areas of the southern Plains this week, Telvent DTN Inc. said in a forecast yesterday. A dry spell in Russia is threatening spring wheat, corn and sunflowers in the Volga Valley, where the worst drought in 50 years caused crop losses in 2010, the forecaster said. “There’s some uncertainty about winter-wheat acreage,” said Kieran Walsh, a broker at GFI Group Inc. in London. “There are some minor quality concerns with the Ukrainian and Russian crops. It’s a mixed picture on yields across the EU.”

India may miss rice output target as rains turn patchy
NEW DELHI, July 29 (Reuters) - India could miss its target for a record 102 million tonnes of rice production in the year that began in July because of scanty rains, but should still have plenty of supplies to meet demand, trade and industry officials said on Friday.
Monsoon rains, which irrigate 60 percent of India's farms, are expected to be at least 14 percent below normal in July and   could continue weak into August, weather officials said.

India Maharashtra's 2011/12 sugar output seen at record
MUMBAI, Aug 5 (Reuters) - Maharashtra, India's biggest sugar producing state, is likely to turn in a record 9.3 million tonnes sugar in 2011/12 as cane availability is forecast to rise to 82.5 million tonnes on a higher area of sowing, a senior government official said.
"We have estimated availability of 82.5 million tonnes of cane and average recovery rate of 11.3 percent. That should materialise into 9.3 million tonnes of sugar next season," Vijay Singhal, sugar commissioner of the state, told Reuters.

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

Coffee rises, bullish technicals, sugar nudges higher
LONDON, Aug 17 (Reuters) - ICE coffee bounced higher in early trade on Wednesday, supported by bullish market technicals, while sugar was firm.
Arabica  and robusta  coffee futures hit a one-month high, as market technicals indicated potential further gains.

Vietnam revises down July coffee exports to 884,000 bags
HANOI, Aug 17 (Reuters) - Vietnam shipped 53,100 tonnes (884,000 bags) of coffee in July, a drop of 21 percent on the year, the customs department said, revising down slightly a government estimate from last month.
The revised volume brought Vietnam's coffee exports between January and July to 918,000 tonnes, or 15.3 million 60-kg bags, up 17.8 percent from a year ago, the Finance Ministry-run Vietnam Customs said in a report released on Tuesday.

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.

India's potash imports could fall 17 pct in 2011/12
MUMBAI, Aug 5 (Reuters) - India, the world's second-biggest potash buyer, is likely to import 17 percent less in 2011/12 after two sowing months passed without deals, the country's top negotiator said, with 3 million tonnes of outstanding needs likely to be agreed in two weeks.
Indian fertiliser companies have already signed up for 2.5 million tonnes of potash for 2011/12, with 1.2 million tonnes from Russia, nearly 700,000 tonnes from Canpotex of Canada and the rest from smaller suppliers.

S.Korea's July coal imports drop 15 pct yr/yr
SEOUL, Aug 16 (Reuters) - South Korea's July coal imports dropped 15 percent to 9.04 million tonnes from 10.61 million tonnes a year earlier, data from the Korea Customs Service showed.
The country's imports of liquefied natural gas (LNG), meanwhile, rose 9 percent last month from a year earlier, according to customs data.

Brent oil rises near $110, eyes U.S. gasoline
LONDON, Aug 17 (Reuters) - Brent crude rose on Wednesday towards $110 a barrel after an industry report showed a larger-than-expected decline in U.S. gasoline supplies and upbeat economic data trumped concerns over the euro zone debt crisis.
"Oil has steadily, if not slowly recovered from its risk aversion mode plunge that also took down equity markets," said Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas.

Oman oil output up, exports fall in H1 2011
DUBAI, Aug 17 (Reuters) - Oman's crude oil production rose 3 percent in the first six months of 2011 but exports fell by 1.8 percent compared to the first half of 2010, finance ministry data showed.
Oman produced 140.11 million barrels of crude in the period from Jan. 1 to June 30, with average daily production rising to 878,800 barrels per day (bpd) from 856,700 bpd in the same period of 2010.

Oil Declines in New York; U.S. Crude Inventories Show Unexpected Increase (Source: Bloomberg)
Oil dropped from a two-day high in New York as investors speculated that increasing crude stockpiles in the U.S. indicate weaker fuel demand in the world’s biggest consumer of the commodity. Futures slid as much as 0.3 percent today. Crude supplies climbed 4.23 million barrels last week, an Energy Department report showed. They were forecast to fall 500,000 barrels, according to a Bloomberg News survey of analysts. Most U.S. stocks declined as two Federal Reserve officials warned against applying too much stimulus to the economy. Crude for September delivery dropped as much as 28 cents to $87.30 a barrel in electronic trading on the New York Mercantile Exchange and was at $87.36 at 9 a.m. Sydney time. The contract yesterday rose 93 cents to $87.58, the highest since Aug. 15. Prices are 16 percent higher the past year.

China refined nickel imports may rise in Aug, Sept on margins
HONG KONG, Aug 17 (Reuters) - China's refined nickel purchases may rise in August and September after imports turned profitable earlier this month, prompting investors and merchants to book more spot metal, traders said on Wednesday.
Costs of refined nickel imports to China dropped below Chinese spot nickel prices last week as Chinese prices lagged London Metal Exchange nickel  price falls, traders said.

Weak stainless demand to sap nickel strength
LONDON, Aug 16(Reuters) - Deteriorating demand from stainless steel mills and rising mine production are likely to push the nickel market into surplus in the second half of the year and put modest pressure on prices.
The uncertain outlook for global economic growth and demand because of the debt crisis in the euro zone and the United States mean gloomier prospects for nickel demand.

Iron Ore-Shanghai rebar gains for 5th day in six, ore rises
SINGAPORE, Aug 17 (Reuters) - Shanghai steel futures rose for a fifth time in six sessions on Wednesday, supported by hopes that demand from top consumer China will stay strong, boosting prices of raw material iron ore.
The most-active January rebar contract on the Shanghai Futures Exchange  rose 0.6 percent to close at 4,863 yuan a tonne.

METALS-Copper edges up on Asian buying, weaker dollar
LONDON, Aug 17(Reuters) - Copper rose on Wednesday on buying interest from Asia and as the dollar weakened, but gains were limited as fears of a slower economic recovery, which may dent metals demand growth, dampened market sentiment.
Benchmark copper on the London Metal Exchange CMCU3 rose 0.6 percent to trade at $8,895 a tonne in official rings from $8,830 on Tuesday, when it hit its lowest in a week at $8,751.

PRECIOUS-Gold supported by euro zone debt concerns - RTRS
LONDON, Aug 17 (Reuters) - Gold steadied on Wednesday, helped by investor unease over the resolution of the euro zone crisis after a Franco-German summit yielded no lasting solution to the regional debt problem, while a pickup in equities denoted improving risk appetite.
Equities and the euro pared earlier losses made after a hotly anticipated summit between French President Nicolas Sarkozy and German Chancellor Angela Merkel did not deliver the decisive solution to the euro zone debt crisis.

Gold Futures Rise to Record Settlement Price as Inflation Concerns Mount (Source: Bloomberg)
Gold futures rose to a record settlement price for the second straight day after U.S. wholesale costs rose more than forecast in July, spurring demand for the precious metal as a hedge against inflation.  An index of producer prices gained 0.2 percent last month, the Labor Department said today. Economists forecast a 0.1 percent increase. The so-called core measure, which excludes food and energy, climbed 0.4 percent, the most since January. The dollar fell as much as 0.8 percent against a six-currency basket. Gold has gained 26 percent this year, reaching an intraday all-time high of $1,817.60 an ounce on Aug. 11. “The inflationary story is back,” Adam Klopfenstein, a senior strategist at MF Global Holdings Ltd. in Chicago, said in a telephone interview. “The weaker dollar is also helping gold.”

Baltic index at 1-month high, recovery seen light
LONDON, Aug 16 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, rose to its highest in a month on Tuesday helped by modest iron ore bookings to China.
Brokers said growing world financial turmoil, tighter bank financing and rapid fleet growth would keep dry bulk freight rates under pressure in the coming months.

20110818 1007 Soy Oil & Palm Oil Related News.

Soybeans (Source: CME)
US soybean and soy product futures finish solidly higher as weather conditions look unfavorably dry for the crop. Forecasts are turning drier for parts of the Midwest that were previously expected to receive beneficial rains, traders say. "Without a big rain event to help yields, beans will be very tight in the US and some rationing will need to take place," according to MFGlobal. CBOT November soybeans rise 17 1/4c at $13.66 3/4 a bushel.

Soybean Meal/Oil (Source: CME)
December soymeal gains $3.70 to $361.10/short ton, while December soyoil jumps 0.7c to 56.24c/pound.

Palm oil prices seen easing -industry body head
MUMBAI, Aug 5 (Reuters) - Palm oil prices are likely to soften around eight percent to 2,800 ringgits per tonne in next three months on higher output and a plunge in crude oil prices, the head of an industry body said on Friday at an industry meeting.
"We are expecting softening in prices ... crude oil is down and palm production is rising," said Wan Mohd. Zain Bin Wan Ismail, chairman of the Palm Oil Refiners Association of Malaysia, the world's second-biggest palm oil producer.

India's PEC buys 15,000 T RBD palmolein at $1,199.5/T-sources
NEW DELHI, Aug 1 (Reuters) - Indian state-run trading firm PEC Ltd has bought 15,000 tonnes of RBD palmolein at $1,199.5 per tonne, two government sources said on Monday, higher than a similar purchase last month by the firm.
The sources, who were involved in the tender process but asked not to be named, said the cargoes of cooking oil would be delivered at the southern ports of Chennai and Tuticorin between August 20 and 31. The price includes cost, insurance and freight.  

Palm oil up as traders bet on stocks below 2 mln tonnes
KUALA LUMPUR, Aug 17 (Reuters) - Malaysian palm oil futures edged higher as traders bet strong exports would rein in stocks below 2 million tonnes this month, although financial market volatility kept investors cautious.
"Trading is a tad lighter today thanks to investor caution. With exports continuing their strong performance, stocks are going to come down this month given that production will dip thanks to the holiday season," said a trader with a foreign commodities brokerage.

Argentine Aug soyoil exports up sharply- Oil World
HAMBURG, Aug 16 (Reuters) - Argentine soyoil exports will rise strongly in August and could reach a record of around 600,000 tonnes from 360,000 tonnes exported in July, Hamburg-based oilseeds analysts Oil World said on Tuesday.
Along with firm demand, the ending of strikes in Argentine ports and some shipments delayed from July are likely to raise the August total, it said.

S.American soybeans face weather threat-Oil World
HAMBURG, Aug 16 (Reuters) - Argentine and Brazilian soybean harvest in early 2012 could face damage from a looming La Nina weather pattern which may reduce rainfall during crop development periods, Hamburg-based oilseeds analysts Oil World said on Tuesday.
"Global supply problems may be compounded by a decline in South American soybean production in early 2012," Oil World said. "There are indications that La Nina is developing in the October/December quarter, probably creating dryness and crop stress, mainly in central Argentina and southern Brazil."

US soy weather turns better; Plains to turn hot again
CHICAGO, Aug 16 (Reuters) - Crop weather in the U.S. Midwest will remain conducive to plant development over the next week, while hot weather will return to the drought-stricken Plains, an agricultural meteorologist predicted Tuesday.
"There aren't any glaring problems but it's not perfect either, with only average precipitation over the next 10 days," said John Dee, meteorologist for Global Weather Monitoring.