Wednesday, August 24, 2011

20110824 1823 FCPO EOD Daily Chart Study.

FCPO closed : 3036, changed : -32 points, volume : lower.
Bollinger band reading : correction range bound little downside biased.
MACD Histrogram : rising, buyer testing market as seller leaving.
Support : 3020, 2970, 2930, 2900 level.
Resistance : 3050, 3070, 3100, 3150 level.
Comment :
FCPO closed recorded loss with lower volume exchanged while overnight soy oil closed nearly unchanged and currently trading slightly lower while crude oil currently moving little lower.
Soy oil traded directionless after uncertainty over global markets development while FCPO ended lower possibly due to traders prefer to squaring down position to avoid over exposure over the long Hari Raya holidays and market awaits tomorrow export data release.
Daily chart formed a down bar candle with upper shadow closed right at middle Bollinger band level after market opened lower and traded side way within 27 points range bound market and closed near the low of the day.
Chart reading remained suggesting a correction range bound little 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.

20110824 1740 FKLI EOD Daily Chart Study.

FKLI closed : 1465.5, changed : -21 points, volume : lower.
Bollinger band reading : correction range bound downside biased.
MACD Histrogram : turned lower, seller taking chances.
Support : 1458, 1445, 1425, 1405 level.
Resistance : 1470, 1485, 1500, 1515 level.
Comment :
FKLI closed recorded severe loss with slower volume participation doing 3.5 points discount compare to cash market that closed lower. Overnight U.S. market closed rebounding higher and Asia markets ended mostly in negative zone while European markets currently trading little higher.
Sell down in heavy weight counter in both CIMB and AXIATA lead cash market to closed severely lower. News wise, Bloomberg reported that Moody's cut Japan's debt rating and U.S. bookings for durable goods excluding transportation fell 0.5 percent in July. Investors sentiment turn negative on fear that new stimulus plan by Federal Reserve will fail to keep U.S. economy from slowing. Market also awaits U.S. companies equipment ordering data.
Daily chart formed a wide range down bar candle closed in between middle and lower Bollinger band level after market opened higher, move side way range bound followed by second session opened lower and plunge downward all the way breaking lower support level to closed near the low of the day.
Chart study still suggesting a correction range bound downside biased market development possibly testing lower support resistance level.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistance or strength with quick cut loss and profit target.

20110824 1737 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.

20110824 1505 Global Market & Commodities Related News.

Asian shares fall as Fed rally runs out of steam
SINGAPORE, Aug 24 (Reuters) - Asian shares fell  as a rally fuelled by speculation that the Federal Reserve may signal further moves to support the struggling U.S. economy swiftly petered out, while gold rebounded from its sharpest one-day slide in 18 months.
"It's been a while since Japan lost its triple-A status, so it is unlikely that Japan's interest rates will rise sharply," said Fumiyuki Takahashi, managing director at Barclays Capital.

Libya gives world economy needed break: James Saft
--James Saft is a Reuters columnist. The opinions expressed are his own--
HUNTSVILLE, Ala., Aug 23 (Reuters) - For Libyans the fall of Muammar Gaddafi comes about 40 years too late, but from the point of view of the global economy it is not a moment too soon.
The apparent end of the reign of Gaddafi, whose whereabouts were unknown on Monday after rebels took Tripoli, will take pressure off of the price of energy, especially in hard-hit parts of southern Europe, and thus ultimately may remove roadblocks to further easing by either the European Central Bank or Federal Reserve.

US wheat drops from over 2-month top; corn, soy dip
SINGAPORE, Aug 24 (Reuters) - U.S. wheat fell 0.4 percent, snapping a three-day rising streak, while corn dipped after climbing to contract highs in the last session as investors booked profit amid  Moody's downgrade of Japan's sovereign debt rating.
"The U.S. dollar is starting to creep a little bit higher so that is possibly a source of downside price pressure," said Luke Mathews, an agricultural commodities strategist at Commonwealth Bank of Australia.

Brazil external gap up as commodity boom fizzles
BRASILIA/SAO PAULO, Aug 23 (Reuters) - Brazil's current account deficit widened in July as a global slowdown weighed on commodity exports like soybeans and iron ore whose prices some government officials foresee as steady in coming months.
The data highlighted Brazil's need to reduce dependence on raw material exports at a time when Latin America's largest economy is beginning to cool following a credit-driven consumer spending boom.

Cargill sees cocoa supply meeting growing demand
LONDON, Aug 23 (Reuters) - Cargill expects world 2011/12 cocoa supplies will be adequate to meet demand, including the cushion of a sizable global surplus from the previous crop, the U.S. agribusiness giant said on Tuesday.
"Weather has been pretty okay and pretty normal in the main regions, but given the fact that it hasn't been outstanding weather and given the fact that we are positive with respect to demand, at best we see a balanced picture," Jos de Loor, managing director of cocoa and chocolate at Cargill, told Reuters.

Indiana corn potential seen below year ago
TIPPECANOE, Indiana, Aug. 23 (Reuters) - Corn yield prospects in north-central Indiana were down sharply from a year ago as planting delays and adverse weather clipped production potential, scouts on an annual crop tour said Tuesday.
Yield prospects were slightly better in central and west-central Indiana, the fifth largest U.S. corn producing state, but still below a year ago, scouts said.

Brazil mills focus on sugar as crush slackens
SAO PAULO, Aug 23 (Reuters) - Brazil's cane mills will produce more sugar and less ethanol from what cane they have left to harvest through the end of the season due to better profits from the sweetener, analysts told Reuters.
The industry which produces sugar and ethanol biofuel from sugar cane has slashed its outlook for the cane harvest. Reduced cane output has limited the supply of both products and supported sugar prices which are hovering near 30-year highs.

German rain dampens EU wheat crop outlook
HAMBURG, Aug 23 (Reuters) - Persistent rain is causing concern about late quality damage to the wheat crop in Germany, the European Union's second largest wheat producer, but more promising harvests in France and Britain could compensate, analysts and traders said on Tuesday.
"Germany's harvest is not facing a disaster but there will be a significant loss of quality and more feed wheat produced than expected," one analyst said. "This will reduce German export supplies in the coming year."

S.Africa eyes China, Venezuela for maize export mkts
JOHANNESBURG, Aug 23 (Reuters) - South Africa, looking for more export outlets for its maize after a bumper harvest last year, has received interest from China and is awaiting a response from the Venezuela government, an industry official said on Tuesday.
Nico Hawkins, an economist at farmers' group Grain SA, said a Chinese government delegation visited the country last month to assess the crop.

Global soybean stocks bigger than thought-Oil World
HAMBURG, Aug 23 (Reuters) - Global Aug. 31, 2011, soybean stocks will exceed estimates and keep soybean supplies in the upcoming 2011/12 season sufficient despite a lower-than-forecast crop, oilseeds analysts Oil World said on Tuesday.
"World ending stocks of the 2010/11 season will be higher than expected at a record 75.8 million tonnes (on Aug. 31), approximately 10.0 million tonnes above a year ago," Oil World said.

Russia crops grain from half of sown area - AgMin
MOSCOW, Aug 23 (Reuters) - Russia harvested 57.9 million tonnes of grain by bunker weight by Aug. 23 from 22 million hectares, or 50 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 41.5 million tonnes of grain by Aug. 25, 31 percent down from the same date in 2009 due to a severe drought.

S.Africa maize crop forecast seen down on wet weather
JOHANNESBURG, Aug 23 (Reuters) - South Africa is likely to cut its maize output forecast for the May 2010/April 2011 season as continued wet weather in some parts of the country delay the harvesting process and damage crops, a Reuters survey showed on Tuesday.
The government's Crop Estimates Committee (CEC) seventh maize output forecast for the 2010/11 season would come in at 10.63 million tonnes, compared with a previous government forecast of 10.854 million tonnes, according to the average estimates of seven trading houses polled by Reuters.

Brent crude above $109; hopes pinned on Fed
SINGAPORE, Aug 24 (Reuters) - Brent crude prices steadied above $109  as investors pinned their hopes on the U.S. Federal Reserve to inject fresh stimulus to boost the world's largest economy.
"The oil market is trending higher, and you see this in the equities market as well, but it's purely based on the prospects of a QE2," Jonathan Barratt, managing director at Commodity Broking Services in Sydney, said.

US crude inventories drop, gasoline jumps-API
NEW YORK, Aug 23 (Reuters) - U.S. crude inventories fell unexpectedly on lower imports while gasoline stockpiles rose sharply, weekly data from the American Petroleum Institute showed on Tuesday.
U.S. crude inventories fell 3.3 million barrels in the week to Aug. 19, against analyst forecasts for an 800,000-barrel rise, led by a 1.5-million barrel drawdown in the U.S. Midwest and a 900,000-barrel drop in West Coast inventories.

Oil services firms eye Libya return, output increase
NEW YORK/LONDON, Aug 23 (Reuters) - Limited Libyan oil production ought to resume quite quickly as most fields appear to have survived the civil war unscathed, international oil services companies say, but many are still waiting for more stability in the country before sending employees back in.
In interviews with some of the biggest oil services players in pre-civil war Libya, most echoed the view that major oil fields had largely avoided serious damage during the six months of fighting, though some voiced concerns about damage to export terminals and pipelines.

Rails, not pipes, may tame twisted oil market
NEW YORK, Aug 23 (Reuters) - U.S. crude oil shipments by railroad could help to end gaping price distortions in world oil markets faster than most traders have been expecting.
Rail shipments of crude from the landlocked and oversupplied Midwest to refiners in the Gulf Coast appear set to surge next year, to nearly double the volume now flowing in congested pipelines between the regions.

Libyan oil output could resume quite soon, says OPS
LONDON, Aug 23 (Reuters) - Limited Libyan oil production could resume quite quickly as most oilfields appear to have survived the civil war unscathed, but output may be delayed several months by clogged pipelines, oil services company OPS International said on Tuesday.
OPS Chairman Gavin De Salis told Reuters Insider television that Libyan crude oil, prized for its high yield of valuable light products such as gasoline and for its low sulphur content, was also quite waxy, which could clog up pipelines if they had been left unused for some time.

Brazil boom takes world fuel markets by surprise
RIO DE JANEIRO/SAO PAULO, Aug 23 (Reuters) - When Brazil discovered huge offshore crude reserves four years ago, state oil company Petrobras  sketched out plans to become a regional fuel exporter.
Rapid domestic economic growth and rising fossil fuels use has turned it into a recurrent fuels importer, with occasional gasoline purchases in 2010 evolving into regular imports that may not cease until the end of the decade.

LME copper up 0.2 pct on hopes of Fed stimulus
SHANGHAI, Aug 24 (Reuters) - LME copper inched up, supported by arbitrage trading and hopes of more monetary stimulus from the U.S. Federal Reserve later this week.
"The market is really focusing on pure expectation that the Federal Reserve will deliver some form of stimulus," said Commodity Broking Services Managing Director Jonathan Barratt.  

China primary aluminium imports seen rising on prices
HONG KONG, Aug 23 (Reuters) - China's imports of primary aluminium may increase in August as demand from fabricators in the southern Guangdong province rises because of steady Chinese prices, traders said on Tuesday.
Increased demand from China, the world's top consumer and producer of aluminium, has driven up premiums for spot aluminium imports about 20 percent this month.

Gold rebounds on Japan downgrade, physical buying
SINGAPORE, Aug 24 (Reuters) - Gold rebounded more than 1 percent  after posting its worst drop in 18 months, as risk appetite retreated after Moody's downgraded Japan's debt rating and strong buying interest in Asia's physical market lent support.
"A huge drop in prices triggered some buying interest," said Ong Yi Ling, an analyst at Phillip Futures, adding that Moody's downgrading Japan may spur some safe-haven interest in gold as well.

International Tower Hill ups size of Alaska resource
TORONTO, Aug 23 (Reuters) - Miner International Tower Hill (ITH)  said on Tuesday it had increased the estimate of the gold resource at its Livengood project in Alaska and said it will cost about $1.61 billion to develop the mine.
The Vancouver-based company boosted the total resource at the deposit, located below the Arctic Circle about 115 kilometers (70 miles) northwest of Fairbanks, Alaska, to 20.6 million ounces from 13.3 million ounces.

Tin set to re-test record highs on China demand
LONDON, Aug 23 (Reuters) - Tin is likely to return to the record high it hit in April later this year, after being the laggard in the London Metal Exchange, as an expected rise in demand from China's manufacturing and electronics sectors combines with a tight supply outlook.
Analysts say China's economy is set to grow and its demand for tin to increase as long as the global economy avoids a recession. That demand will also get a boost as China takes advantage of cheaper pricing in Europe to turn net importer following months of exporting large quantities of the metal.

Copper stands its ground in markets mayhem
LONDON, Aug 23 (Reuters) - Robust Asian demand and a threat to supplies will keep copper price falls relatively modest over the next six months, regardless of the volatility that has whipped global financial markets on rising fears of a recession in Western nations.
The MSCI world equity index has fallen around 19 percent since early May and U.S. crude oil  about 25 percent, while copper has lost around 10 percent.

Record price to pinch India's festive gold demand
MUMBAI, Aug 22 (Reuters) - Record high prices could pinch gold demand in India, the world's biggest consumer, during the key festival buying season in September and October, but investment demand will help ensure record imports in 2011, the head of India's leading trade body told Reuters.    
"If prices stay at current levels, demand will be lower during the festival season. But if prices fall to 25,000 rupees (per 10 grams), then it will rise," Prithviraj Kothari, president of the Bombay Bullion Association, said in an interview on Monday.

Reliance's gold investors more than trebled since March
MUMBAI, Aug 23(Reuters) - The number of investors at Reliance Capital's gold exchange traded fund (ETF), India's third-biggest gold fund, have more than trebled since March, as a wobbly global economy makes stocks and bonds unattractive, a top company official said on Tuesday.
"This is an encouraging trend especially since the industry has been witnessing negative growth in folios," Sundeep Sikka, CEO at Reliance Capital Asset Management, told Reuters.

20110824 1124 Global Market & Commodities Related News.

Asian Stocks, U.S. Futures Fall (Source: Bloomberg)
Asian shares snapped their steepest gain in five months and U.S. stock futures declined amid weaker earnings and before data that may show the global economy is faltering. The yen erased losses against the dollar as traders shrugged off Japan’s efforts to combat the currency’s strength. The MSCI Asia Pacific Index slid 0.6 percent at 12:10 p.m. in Tokyo after a 2.1 percent rally yesterday. Standard & Poor’s 500 Index futures lost 0.8 percent. Treasury 10-year yields fell two basis points. The euro slipped 0.3 percent versus the dollar, while the yen was at 76.61 per dollar after earlier reaching 76.87. The cost of insuring Japan’s debt from default headed for the highest since the March earthquake. Gold jumped 1.3 percent.
Federal Reserve Chairman Ben S. Bernanke and other central bankers will meet in Jackson Hole, Wyoming amid signs of a faltering U.S. recovery. Data today may show business-equipment demand fell, two days before a report that may show the economy grew less in the second quarter than previously estimated. Moody’s Investors Service cut Japan’s credit rating by one step, saying “weak” prospects for growth will make it difficult for the government to rein in the world’s largest public debt burden.

GLOBAL MARKETS-Asian shares rise on hopes of more Fed support
Singapore, Aug 24 (Reuters) - Asian shares rose on Wednesday as speculation the Federal Reserve may signal further moves to support the struggling U.S. economy sustained a modest rebound from this month's sharp sell-off.
"It's been a while since Japan lost its triple-A status, so it is unlikely that Japan's interest rates will rise sharply," said Fumiyuki Takahashi, managing director at Barclays Capital.

Oil rises on anticipation Fed may signal stimulus
NEW YORK, Aug 23 (Reuters) - Oil rose on Tuesday along with equities on hopes that the U.S. Federal Reserve might indicate fresh stimulus measures later this week, with oil also drawing support from fighting in Libya and disrupted Nigerian exports.
"This is a rally driven on hopes of Bernanke saying something about more stimulus," said Bill O'Grady of Confluence Investment Management in St. Louis.

New Brazil oil round not seen until 2012 - Lobao
BRASILIA, Aug 23 (Reuters) - Brazil is unlikely to hold a new oil bidding round until early 2012, Mines and Energy Minister Edison Lobao said on Tuesday.
Brazil had hoped to hold its 11th oil round later this year but President Dilma Rousseff is still reviewing the exploration and production blocks that are expected to be put up for auction.

Brazil boom takes world fuel markets by surprise
RIO DE JANEIRO/SAO PAULO, Aug 23 (Reuters) - When Brazil discovered huge offshore crude reserves four years ago, state oil company Petrobras  sketched out plans to become a regional fuel exporter.That plan has since been turned upside down.
Rapid domestic economic growth and rising fossil fuels use has turned it into a recurrent fuels importer, with occasional gasoline purchases in 2010 evolving into regular imports that may not cease until the end of the decade.

Rails, not pipes, may tame twisted oil market
NEW YORK, Aug 23 (Reuters) - U.S. crude oil shipments by railroad could help to end gaping price distortions in world oil markets faster than most traders have been expecting.
Rail shipments of crude from the landlocked and oversupplied Midwest to refiners in the Gulf Coast appear set to surge next year, to nearly double the volume now flowing in congested pipelines between the regions.

Libyan oil output could resume quite soon, says OPS
LONDON, Aug 23 (Reuters) - Limited Libyan oil production could resume quite quickly as most oilfields appear to have survived the civil war unscathed, but output may be delayed several months by clogged pipelines, oil services company OPS International said on Tuesday.
OPS Chairman Gavin De Salis told Reuters Insider television that Libyan crude oil, prized for its high yield of valuable light products such as gasoline and for its low sulphur content, was also quite waxy, which could clog up pipelines if they had been left unused for some time.

Russia oil tax changes favour crude output, exports
MOSCOW, Aug 23 (Reuters) - Russian tax reforms due in October would benefit production and exploration heavyweights such as Rosneft and LUKOIL and help the world's top oil producer maintain output at current peak levels for another few years.
The reforms, in the works for over two years, encourage crude output and exports by lightening the burden of a tax system that captures over 90 cents of every $1 increase in the price of exported crude.

Oil services firms eye Libya return, output increase
NEW YORK/LONDON, Aug 23 (Reuters) - Limited Libyan oil production ought to resume quite quickly as most fields appear to have survived the civil war unscathed, international oil services companies say, but many are still waiting for more stability in the country before sending employees back in.
In interviews with some of the biggest oil services players in pre-civil war Libya, most echoed the view that major oil fields had largely avoided serious damage during the six months of fighting, though some voiced concerns about damage to export terminals and pipelines.

Natgas ends up nearly 3 pct, rallies late on quake
NEW YORK, Aug 23 (Reuters) - U.S. natural gas futures ended sharply higher on Tuesday, backed early by short covering on firmer cash prices and later by concerns about possible damage from an earthquake that shook the East Coast.
"A firm physical market has helped support paper (futures), but prices moved up more right after news of the quake," a Houston trader said, adding some expected cash prices to fall once Northeast temperatures moderated but physical gas is still quoted about 10 cents above futures.

Euro Coal-Oct ARA trades $1.00/T higher
LONDON, Aug 23 (Reuters) - European DES ARA coal prices rose by around $1.00 in line with stronger oil and power on Tuesday, utilities and traders said.  
"Germany is going to need more coal, the margins for burning coal have been great for months so they could be stocking up now," one supplier said.

COMMODITIES-Oil up on new U.S. stimulus hopes; gold plunges
NEW YORK, Aug 23 (Reuters) - Oil led most commodities higher on Tuesday on hopes of a new round of U.S. economic stimulus and on extended fighting in Libya, while gold plunged on profit-taking on fears it has been overbought.
"(The) rebels are in an urban warfare situation ...  increasing the risk of oil disruptions and a lengthy period before production can resume," O'Grady said.

20110824 1121 Local & Global Economic Related News.

A total of  1,051,427 job vacancies have been listed by eight ministries and related to  agencies to be filled by Malaysians before they are given to illegal immigrants who are  given amnesty under the ministry's 6P programme. Home Ministry deputy secretarygeneral Datuk Alwi Ibrahim said of the figure, the International Trade and Industry Ministry  had the most vacancies at 275,723 followed by the Agriculture and Agro-based Industry  Ministry (237,700), and Domestic Trade, Cooperative and Consumerism Ministry  (220,000).

  • The Construction Industry Development Board has 165,000 vacancies, Plantation  Industries and Commodities Ministry (140,000), Home Ministry (10,000), Tourism  Ministry (2,041) and Transport Ministry (963).  
  • Most of the vacancies involved five sectors identified as the ones using the highest  number of foreign workers which were manufacturing, production, plantation, agriculture  and construction. (Bernama)    

The construction of the multi-billion ringgit MY Rapid Transit (MRT), is likely to begin by  Jan next year and completed in 2016, Abdul Malik Azman, head of Prasarana's MRT  Procurement Management Department said. The first tender for the V5 and V6 packages  will be awarded in Jan or Feb next year.  
  • “Based on our plan, by the end of next year, all 18 works packages will be awarded  accordingly," he said. 
  • The V5 package stretches from Taman Bukit Ria to Plaza Phoenix in Cheras and  comprising four stations.
  • The V6 runs from Plaza Phoenix to Bandar Tun Hussein Onn with three stations.   
  • He said Prasarana will announce its shortlist of contractors for underground tunnels by  early next month. (Bernama)    

A RM15m loan under the  Skim Pinjaman Khas Penduduk di Kampung Baru Cina (Special Loan Scheme for Chinese New Village Residents) has been set aside this year for  eligible applicants, said Housing and Local Government Minister Datuk Chor Chee Heung.  RM35m would be used for next year while another RM50m would be disbursed between  2013 and 2015, he noted.

  • The total allocation of RM100m comes under a micro-credit scheme announced by DPM  Tan Sri Muhyiddin Yassin last month to allow residents in the Chinese new villages to  pay land premiums, refurbish their homes and use as seed money to start up businesses  in the villages.   
  • The loan was subject to 4% interest per annum.   
  • For a premium loan, applicants could get loans of between RM1,000 and RM10,000,  with repayment period of between two and five years. For a business loan, the amount is  between RM5,000 and RM50,000. (Bernama)    

Johor  is likely to win the most  investments among Malaysian states this year, said  Deputy International Trade and Industry Minister Datuk Mukhriz Tun Mahathir. For the first  six months of the year, Johor attracted RM4.5bn in approved investments.

  • According to the Malaysian Industrial Development Authority (Mida), 74 projects were  approved between Jan and May, totalling RM4.0bn, of which RM2.8bn were from  domestic investments.   
  • "Note our figures did not include those in the oil and gas sector. Petronas announced a  big petrochemical plant in Johor that worth RM60bn," he said. (BT)     

U.S. new home sales declined more than projected in Jul to the lowest  level in five  months, indicating the industry is struggling to stabilize two years into the economic  recovery. Purchases fell 0.7% to a 298,000 annual pace in Jul (300,000 in Jun), figures  from the Commerce Department showed. Economists projected a 310,000 rate in Jul.  (Bloomberg)  

Eurozone manufacturing activity shrank in Aug for the first time in two years, a survey  has indicated. The Markit Manufacturing PMI measure for the eurozone fell to 49.7 in Aug  (50.4 in Jul). A reading below 50 indicates contraction in the sector.  Economists expected  a reading of 49.5 in Aug. (BBC, Bloomberg)  

Eurozone service sector grew only modestly. The Markit service sector PMI measure fell  to a 23-month low of 51.5 in Aug from 51.6 in Jul. Economists were expecting a reading of  51.0 in Aug. (BBC, Bloomberg)  

The European Commission said the  eurozone’s preliminary, or flash,  consumer  confidence indicator plunged to -16.6 in Aug from -11.2 in Jul. Economists were expecting  a reading of -12.5 in Aug. (WSJ)  

Singapore's consumer price index (CPI) rose by 5.4% yoy in Jul (5.2% in Jun), just shy  of the two-year high of 5.5% in Jan. This shattered market forecasts of a moderate 5% rise.  The rise in Jul was due largely to higher costs of accommodation, private road transport  and food. (CNA)  

The  Thai government should avoid stoking  inflation by aiming fiscal spending at  infrastructure investment and not stimulating domestic consumption,  Bank of Thailand governor Prasarn Trairatvorakul said. Although there is a growing likelihood that the United  States and Europe will slide to an economic downturn, the pressure for increases in the  cost of living remained high, Mr Prasarn said. (Bangkok Post)  

Thailand’s Prime Minister Yingluck Shina-watra remained non-committal regarding her  controversial election pledge to scrap the Oil Fund, telling Parliament the measure is "not  the only solution" to the problem of rising cost of living. Her brief statement suggested her  government might backtrack on the much-criticised policy plan. (The Nation)  

Thailand’s Commerce Minister Mr. Kittirat Na Ranong has assured the public that the  government will implement what it has promised during the election campaign as early as  next year.

  • During the policy debate today, Mr. Kittirat said the THB300 wage scheme would be  implemented as soon as possible without creating impact on employers and workers.   
  • The salary for government civil servants who hold a bachelor’s degree will be raised to  THB15,000; however, it will be taken into consideration if similar approach would be  applied in other occupations.  
  • The Commerce Minister added that with all factors considered, the price guarantee  scheme for jasmine rice and normal rice for THB20,000 and THB15,000 per ton would  be difficult to implement, but it would be beneficial to farmers. (Thai Financial Post)    

The U.S. Federal Deposit Insurance Corp.’s list of “problem” banks fell in 2Q for the first  time since 2006 as the industry’s income improved and costs tied to bad loans eased. The  confidential list of banks deemed at greater risk of collapse shrank by 23 firms to 865, the  FDIC said. The last time that happened was the 3Q06 before the credit crisis began, the  agency said. (Bloomberg)

20110824 1113 Malaysia Corporate Related News.

Bumi Armada Bhd Pumps first Viet oil
Bumi Armada Bhd, an offshore oil field services provider, says its floating, production, storage and offloading (FPSO) vessel, Armada TGT 1, has achieved first oil for client Hoang Long Joint Operating Co (HLJOC) on Monday. This signifies the beginning of production at Te Giac Trang field offshore Vietnam. In a statement, Bumi Armada said Armada TGT 1 started production within 24 months after securing the contract. Under the contract, the FPSO will operate for HLJOC on the Te Giac Trang field for a fixed duration of seven years, with an option of another one year for up to 15 years. The job is being undertaken with its strategic alliance partner, Vietsovpetro, Bumi Armada chief executive officer Hassan Basma said. – Business Times

Tenaga Nasional Bhd Buying power from Rapidtech
Tenaga Nasional Bhd (TNB) is purchasing electricity for 21 years from Rapidtech System Sdn Bhd which uses empty fruit bunches as fuel, at RM18.4mil per year. Yesterday, TNB told Bursa it had signed the agreement to purchase the power which would be generated under the Small Renewable Energy Programme. –StarBiz

Building Materials Sector : Miti says imported hot-rolled coils not threatening steel industry
The Government has decided to terminate its investigation on the imports of hotrolled coils (HRC) into the country after determining that the imports did not threaten the domestic steel industry. The International Trade and Industry Ministry (Miti) said that the Government has completed the investigation and has made a preliminary determination that there was an increase in imports by 35.0% during the period of injury determination. However, it said the increase in imports had not caused or threatened to cause serious injury to the domestic industry.  -StarBiz

Infrastructure Sector : MRT project to start by February 2012
The construction of the country’s largest infrastructure to date, MyRapid Transit (MRT) in the Klang Valley, will start by February next year. According to Abdul Malik Azman, the head of the MRT Procurement Department of Syarikat Prasarana Negara Bhd (Prasarana), the first two packages of the elevated civil works and another two packages for the stations are to be opened for tender in early September. There are 16 packages to be tendered out for the elevated civil works and stations. The packages are split between the open and bumiputera categories by way of five packages for the former and three packages for the latter for each work package. Twenty eight individual packages and JV companies have been pre-qualified for the 18 work packages (including two packages for the depots). However, Abdul Malik did not disclose the estimated value of the packages as Prasarana wants to get the best competitive pricing for each. He said that it is not necessarily the lowest bidder will get the project as Prasarana wants to look at other factors. –The Edge

Higher selling prices boost United Plantations’ 2Q net  profit  United Plantation’s Bhd net profit for the second quarter ended June 30,  2011 doubled to RM109.59m from RM54.26m a year earlier, due mainly  to higher production and increase in selling prices. The revenue for the  quarter rose to RM390.63m from RM233.53m in 2010. (The Edge)

Mudajaya clinches RM720m contract  Mudajaya Corp Bhd has clinched a RM720m contract for the design and  civil works for part of the Manjung power plant. Its unit had signed a  subcontract with CMC Machipex Sdn Bhd for the detailed design and  Construction of all civil works associated with the balance of plant  component of Manjung No. 4 power plant project. (The Edge)

Ta Ann 2Q earnings surges to RM50.7m, declares 10 sen  interim dividend  Ta Ann Holdings Bhd’s net profit for the second quarter ended June 30,  2011 surged 678% to RM50.73m from RM7.48m a year earlier on  higher selling prices for its products. The revenue for the quarter  jumped 48% to RM278.51m from RM187.8m in 2010. (The Edge)

Prestariang gets RM28m govt job  Prestariang Bhd has secured a RM28m  contract from the Ministry of  Higher Education to implement the 1Citizen Certification provide “IC  Citizen” training and certification in all public and selected private higher  learning institutions. Its wholly owned unit Prestariang Systems Sdn Bhd  had accepted the letter of award from the Ministry for the contract.  (The Edge)

JCY posts net loss RM31.8m in 3Q  JCY International Bhd posted net loss RM31.86m in the third quarter  ended June 30, 2011 compared to net profit RM55.59m a year earlier  due mainly to higher raw material prices, inventory provision from a  depreciating US dollar and slow moving stocks. The revenue for the  quarter fell 17.8% to RM395.17m from RM480.79m a year ago. Loss  per share was 1.56 sen compared with earnings per share of 2.72 sen.  (The Edge)

Guocoland 4Q net profit increases 94.6% to RM22.34m  Guocoland Bhd’s fourth quarter earnings rose 94.6% to RM22.34m from  RM11.47m, boosted by higher share of results from associates and  improved profit from its property development division. The revenue  increased by nearly 95% to RM58.48m from RM30.02m while earnings  per share were 3.33 sen versus 1.71 sen. It proposed dividend payment  of 2.0 sen a share. (The Edge)

Sime Darby. said a court in Abu Dhabi had dismissed a case brought against its  engineering unit by Emirates International Energy Services. (Bloomberg)

Petronas plans to invest RM15bn with partners to develop natural gas fields off Malaysia’s  eastern coast in a move to help replenish the country’s shrinking energy reserves.  

  • The so-called North Malay Basin project aims to extract gas with high carbon dioxide  content from nine discovered fields to help meet rising demand on Peninsular Malaysia.  A 200km pipeline will be laid to transport the fuel to Kerteh. Petronas didn’t name its  production-sharing partners for the project.   
  • The gas fields are located within Blocks PM301 and PM302 in the Bergading contract  area, about 300km off the country’s peninsula. The investment will be undertaken on an  “accelerated” basis, with the first delivery of 100m cubic feet of gas per day expected by  early 2013, rising to 250m by 2015. (Bloomberg) 

Tenaga Nasional is buying electricity from Rapidtech System Sdn Bhd for 21 years, which  uses empty fruit bunches (EFB) as fuel, at RM18.4m per year. It signed the agreement to  purchase the power which would be generated under the small renewable energy  programme. (Financial daily)    

The Australian government will oppose a Liberal-National Party coalition-supported antitrade Private Member's Bill on compulsory palm oil labeling as it would breach Australia's  obligations under the World Trade Organisation. (Malaysian Reserve)    

Sunway Bhd has allocated some RM400m for overseas expansion mainly in China,  Singapore and India, says CFO Chong Chang Choong. RM300m has been set aside for  the Tianjin Eco-City project in China while the rest will be for projects in Singapore and  India. The Tianjin Eco-City project has an estimated gross development value (GDV) of  RM5bn and is due to be launched in the middle of 2012. It will also be completed between  five and seven years. (BT)  

IJM Land  is confident of a good 2011 despite a challenging year brought about by the  global economic slowdown and European debt crisis. CEO/MD Datuk Soam Heng Choon  said despite a slowdown in some areas such as the Kuala Lumpur City Centre and Mont  Kiara, the property market is still resilient in other areas like Penang and Sandakan.  "Property projects, which cost RM500k a unit, are still selling strong and the government's  MRT project and the various economic transformation programmes will have strong  spillover and multiplier effects in terms of property value and spending," he said. IJM Land,  which is 67.1% owned by IJM Corp, will launch projects with a GDV of RM2bn and RM1bn in FY12-13. (BT)    

Felda Global Ventures Holdings  (FGV) posted a 25% rise in pre-tax profit to RM167.8m  for the first half of 2011 from RM134m a year earlier. Turnover rose to RM1.98bn from  RM1.57bn. Meanwhile, associate company Felda Holdings Bhd turned in a pre-tax profit of  RM314m for the same period compared with RM363m a year earlier, Felda Global Group  said. Felda Holdings’ revenue rose from RM6.9bn to  RM8.9bn during the period. Felda  Global Group president Datuk Sabri Ahmad said in the statement that he was confident the  group would meet its profit targets. (Starbiz)  

The Malaysian government has decided to terminate an investigation on the imports of  hot rolled coils (HRC) into the country. The Ministry of International Trade and Industry  said in a statement, "Pursuant to section 20 of the Safeguards Act 2006, the government  has completed the investigation and has made a preliminary determination that there was  an increase in imports by 35% during the period of injury determination. However, the  increase in imports have not caused or threatened to cause serious injury to the domestic  industry.“ (Bernama)  

Kumpulan Jetson’s 70%-owned unit yesterday won a RM46.86m contract  from Vinci  Construction Grands Project, which is expected to boost earnings. (Financial Daily)  

QL Resources  is looking at selling biogas-generated electricity from its palm oil mill in  Tawau, Sabah, under the feed-in tariff system for Malaysia’s renewable energy sector,  which is due to be implemented in December. (Star Biz)

Silicon Valley-based solar photovoltaic (PV) cell manufacturer,  Solexel plans to invest  RM2.8bn over the next five years in a plant in  Senai Hi-Tech Park, Iskandar Malaysia.  (Star Biz)  

Naza Quest, which distributes  Chevrolet cars in Malaysia, expects sales this year to  increase by threefold from 550 units last year mainly supported by brisk sales for its  Chevrolet Captiva. (Malaysian Reserve)  

Prestariang has won a RM40m four-year long contract from the  Ministry of Higher  Education Malaysia to provide licensed software and related value-added services to all  public institutions of higher learning in the country. (Malaysian Reserve)  

20110824 1026 Global Market Related News.

GLOBAL MARKETS - Modest euro zone, Chinese data lift euro, stocks
LONDON, Aug 23 (Reuters) - World stocks, the euro and commodity prices rose on Tuesday, after gauges of Chinese and euro zone economic activity came in less gloomy than feared, encouraging investors to dip back into the market after a recent sharp selloff on global growth concerns.
"Many of the gains being seen here seem to be coming off the expectation that the Fed will serve up further stimulus measures, possibly as soon as the end of this week," said Cameron Peacock, market analyst at IG Markets.

Asia Stocks Rise as U.S. Home-Sales Data Adds to Fed Stimulus Speculation (Source: Bloomberg)
Asian stocks climbed for a second day after sales of new homes in the U.S. hit a five-month low, increasing speculation that the Federal Reserve will act to shore up the world’s largest economy, improving the outlook for exporters and materials companies. Honda Motor Co., the carmaker that gets 44 percent of sales from North America, added 0.3 percent in Tokyo. Billabong International Ltd. (BBG), a surfwear maker that counts the “Americas” as its biggest market, climbed 7 percent in Sydney. BHP Billiton Ltd., the world’s biggest mining company, gained 1 percent. Inpex Corp., Japan’s No. 1 energy explorer, increased 2.1 percent as crude oil future rose for a third day. The MSCI Asia Pacific Index added 0.2 percent to 121.03 as of 10:31 a.m. in Tokyo, paring gains of as much as 0.7 percent. Almost two stocks rose for each that fell in the gauge. Global equities erased about $8 trillion in market value in the past four weeks amid worsening economic data in the U.S. and Europe’s smoldering sovereign-debt crisis. The economic reports sparked speculation the Federal Reserve will begin a third-round of asset purchases to help sustain the recovery.

German, Chinese data lift stocks, euro
LONDON, Aug 23 (Reuters) - World stocks, the euro and commodity prices advanced after gauges of Chinese and German manufacturing activity were not as weak as some had feared.
"Any data that just hints that the world is not ending is going to be well received by the markets," Ian Richards, European equity strategist at RBS, said.

U.S. Stocks Rise as Economic Reports Reinforce Optimism Fed to Take Action (Source: Bloomberg)
U.S. stocks rallied, driving the Standard & Poor’s 500 Index up from the cheapest valuations since 2009, as weaker-than-estimated economic data reinforced optimism the Federal Reserve will act to spur growth. Monsanto Co. (MON), Chevron Corp. (CVX) and Microsoft Corp. (MSFT) added at least 3 percent, pacing gains in companies most-tied to the economy. The Morgan Stanley Cyclical Index rose 2.9 percent, breaking a five-day losing streak. Sprint Nextel Corp. (S) jumped 10 percent, the most since May 2010, after the Wall Street Journal said it will start selling Apple Inc.’s iPhone. Financial shares reversed losses after the Federal Deposit Insurance Corp.’s list of “problem” banks shrank for the first time since 2006. The S&P 500 rose 3.4 percent to 1,162.35 at 4 p.m. in New York, for the biggest rally since Aug. 11. All 10 industries in the benchmark gauge rose, with gains ranging between 1.8 percent and 4.6 percent. The Dow Jones Industrial Average added 322.11 points, or 3 percent, to 11,176.76.

U.S. Quake Shakes Buildings From D.C. to Boston (Source: Bloomberg)
A 5.8 magnitude earthquake, the biggest to strike Virginia in more than a century, hit about 40 miles (65 kilometers) northwest of Richmond, rocking buildings from Washington to Boston and causing office workers in New York City to rush into the street. The quake struck at 1:51 p.m. local time today, the U.S. Geological Survey said on its website, and vibrations were felt as far west as Columbus, Ohio, and as far north as Toronto. The temblor, which was 3.7 miles deep, was the strongest to hit the Virginia area since 1897, according to USGS data. There were no immediate reports of major damage, the Federal Emergency Management Agency said. “I was sitting at my computer in the second floor of my house when all of a sudden I feel the table shaking,” Brian Loebig said by telephone from Chesterfield, outside Richmond. “I was doing laundry, so I thought maybe the spin cycle had got out of whack. It would have had to have been incredibly out of whack. It was maybe two minutes. The dog was going crazy.”

New-Home Sales in U.S. Declined in July to the Lowest Level in Five Months (Source: Bloomberg)
Sales of new U.S. homes declined more than projected in July to the lowest level in five months, indicating the industry is struggling to stabilize two years into the economic recovery. Purchases fell 0.7 percent to a 298,000 annual pace after a 300,000 rate in June that was slower than previously estimated, figures from the Commerce Department showed today in Washington. The median projection in a Bloomberg News survey of economists called for a 310,000 rate in July. Builders are less inclined to start new projects as they face competition from cheaper existing homes and the prospect of foreclosures putting more unsold properties on the market. A jobless rate above 9 percent and limited employment growth indicate housing may keep weighing on the recovery even with mortgage rates at a record low.

U.S. 30-Year Bonds Lead Treasuries Higher, Snapping a Two-Day Decline (Source: Bloomberg)
Treasury bonds rose for the first time in three days before a government report that economists said will show a measure of factory orders fell in July. The longest maturities, those most sensitive to inflation, led the advance as evidence grows that the U.S. economy is slowing. The government prepared to auction $35 billion of five- year notes today and $29 billion of seven-year debt tomorrow. Moody’s Investors Service cut Japan’s rating by one step to Aa3. Thirty-year yields fell two basis points to 3.47 percent as of 10:14 a.m. in Tokyo, Bloomberg Bond Trader prices show. The 3.75 percent security maturing in August 2041 rose 13/32, or $4.06 per $1,000 face amount, to 105 5/32.

Greenspan Says Euro ‘Breaking Down’ (Source: Bloomberg)
Former Federal Reserve Chairman Alan Greenspan said fissures in Europe’s common currency may lead to slowing in the U.S. economy. “The euro is breaking down and the process of its breaking down is creating very considerable difficulties in the European banking system,” Greenspan said today in Washington. Emergency steps such as unlimited loans from the European Central Bank are keeping many banks in Greece, Portugal, Italy and Spain solvent and easing lending by other Europe institutions. Greenspan said a contraction in Europe would hurt profitability and stock values of American companies since Europe is the target market for about 20 percent of U.S. exports and about 20 percent of foreign-affiliate earnings.

Dollar Strengthens After Japan Debt Downgrade, Before German Economic Data (Source: Bloomberg)
The dollar rose against all its major peers after Moody’s Investors Service cut Japan’s credit rating and before a report that economists said will show business confidence in Germany fell this month. The yen declined versus the greenback after a government official said Japan’s Finance Minister Yoshihiko Noda will discuss today measures to combat a strong currency after it reached a post-war record high Aug. 19. Gains in the greenback were limited on speculation Federal Reserve Chairman Ben S. Bernanke may signal further steps to spur the U.S. economy when he speaks Aug. 26 in Jackson Hole, Wyoming. “The yen is being sold in reaction to the Moody’s rating cut at a time when the market has been wary of intervention,” said Kengo Suzuki, manager of the foreign bond department in Tokyo at Mizuho Securities Co., a unit of Japan’s third-largest listed bank. “A downgrade of the sovereign credit rating is nearly equal to a downgrade of its currency.”

Banks Pay Record Rate for Government Cash on Tightening Risk: China Credit (Source: Bloomberg)
Chinese lenders are paying record interest rates for government funds as rising yields on central bank bills fan speculation policy makers will further tighten supplies of cash. The Finance Ministry received a rate of 6.5 percent for 30 billion yuan ($4.7 billion) of six-month money offered at an auction yesterday, the highest level in central bank data going back to December 2006. The People’s Bank of China raised rates on one-year bills last week for the first time since June, boosting the yield by eight basis points to 3.58 percent, compared with the 0.07 percent yield on 12-month U.S. Treasuries.
China has limited scope to stimulate the world’s second- biggest economy even as a faltering recovery in the U.S. and Europe’s sovereign debt crisis dim the outlook for global expansion. Inflation has exceeded Premier Wen Jiabao’s target every month this year and economic growth that’s double the pace of Brazil and Russia may give the government confidence to continue raising benchmark rates that have already been boosted by a total 75 basis points in 2011.

Maehara Plans Leadership Bid as Japan Premier Kan Says He May Quit Aug. 26 (Source: Bloomberg)
Former Japanese Foreign Minister Seiji Maehara, the most popular contender for prime minister in public polls, will compete to succeed Prime Minister Naoto Kan, who said he may resign by the end of the week. “I want to take the lead in overcoming our national crisis,” Maehara said yesterday in Tokyo, declaring his intention to run in the Aug. 29 contest to head the ruling Democratic Party of Japan. Kan said he will step down on Aug. 26 if parliament passes the last two pieces of his legislative agenda, fulfilling a June pledge to quit. Maehara will be challenged by Finance Minister Yoshihiko Noda, Trade Minister Banri Kaieda and Agriculture Minister Michihiko Kano to become the DPJ’s third leader since taking power in 2009. The winner will face the country’s biggest rebuilding project since World War II, after Kan’s popularity plummeted over his handling of the March earthquake and tsunami that caused the worst nuclear crisis since Chernobyl.

Hong Kong’s ‘Scary’ 7.9% Inflation May Fuel Wages Even as Recession Looms (Source: Bloomberg)
Hong Kong’s inflation surged to the fastest pace since 1995, encouraging workers to press for higher pay even as the economy teeters on the edge of recession. The consumer price index rose 7.9 percent from a year earlier after a 5.6 percent increase in June, the government reported on its website yesterday. Excluding distortions caused by a public housing subsidy, prices rose 5.8 percent. Hong Kong’s economy will shrink again this quarter after a contraction in the three months through June that was caused by an export slowdown, Morgan Stanley and Daiwa Capital Markets say. Wage increases may add pressure on profit margins just as businesses including McDonald’s Corp. (MCD) report that they are grappling with increased rent and material costs.

Japan Credit Rating Cut to Aa3 by Moody’s (Source: Bloomberg)
Japan’s sovereign-credit rating was lowered by Moody’s Investors Service, which cited “weak” prospects for growth that will make it difficult for the government to rein in the world’s largest public debt burden. Moody’s cut the grade one step to Aa3, with a stable outlook, it said in a statement today. Rebuilding costs from the March 11 earthquake and tsunami, along with continuing efforts to contain the Fukushima nuclear crisis, may make it hard for officials to meet their borrowing target this year, it said. The first Japan downgrade by Moody’s since 2002 reflects deteriorating credit quality across developed nations from Italy to the U.S., which lost its AAA status at Standard & Poor’s this month. While the move adds to the challenges of the next Japanese prime minister, scheduled to be picked next week, the impact on bond yields may be limited by what Moody’s described as domestic investors’ preference for government debt.

Kokusai Assets Drop Amid Losing Bet Against Yen: Japan Credit (Source: Bloomberg)
Kokusai Global Sovereign Open is sticking with bets against the yen that contributed to a 60 percent drop in assets and cost the Tokyo-based money manager its spot as the world’s second-largest bond fund. The amount of money invested by the unit of Kokusai Asset Management Co. has fallen to 2.3 trillion yen ($30 billion) from a peak of 5.77 trillion yen in 2008, according to data compiled by Bloomberg. The yen rose to a record last week and Global Sovereign has handed investors an average 2.2 percent loss over five years, versus a 1.2 percent annual drop for its peers.
Global Sovereign Open made betting against the yen its chief strategy in 2007, expecting investors to borrow at Japan’s near-zero interest rates and then sell the currency in search of higher returns abroad. The investment backfired as the worst financial crisis since the 1930s spurred demand for the safety of Japanese assets even as yields dropped around the world. The yen, like the Swiss franc, have appreciated the most among 150 currencies tracked by Bloomberg.

Japanese Stocks Rise on Optimism Fed Will Act to Spur Growth; Toyota Gains (Source: Bloomberg)
Japanese stocks rose for a second day after weaker-than-expected U.S. economic data reinforced speculation Federal Reserve Chairman Ben S. Bernanke will act to support growth. Toyota Motor Corp. (7203), the world’s largest carmaker, rose 0.6 percent. Sony Corp. (6758), Japan’s biggest exporter of consumer electronics, gained 0.5 percent. Inpex Corp. (1605), the country’s No. 1 energy explorer, advanced 2.9 percent after oil prices rose. The Nikkei 225 (NKY) Stock Average rose 0.7 percent to 8,795.29 as of 9:03 a.m. in Tokyo. The broader Topix index climbed 0.7 percent to 755.24. “The market has priced in a slowdown in the U.S. economy to a good degree, and that’s why a series of weak U.S. economic reports tend to raise expectations that Bernanke will do something rather than damping the market,” said Kenichi Hirano, general manager and strategist at Tachibana Securities Co. in Tokyo.

S.Korea July crude imports up 13.5 pct yr/yr -KNOC
SEOUL, Aug 23 (Reuters) - South Korea's crude oil imports jumped 13.5 percent on the year in July, the second consecutive increase as refineries ramped up output to meet extra demand for oil products, as Japanese rivals struggled to recover from the March earthquake and tsunami.
Analysts said South Korea's oil product export strength will continue in the rest of the year as Formosa Petrochemical Corp's  540,000 barrels per day Taiwan refinery may take some time to fully restart after shutting end-July due to a fire.

Merkel Rejects Seeking Collateral in European Bailouts as Splits Emerge (Source: Bloomberg)
German Chancellor Angela Merkel rejected demands that Greece provide collateral for emergency loans as splits emerged in her Cabinet, reflecting euro-area divisions on the issue. Merkel told lawmakers from her Christian Democratic bloc that a call by Labor Minister Ursula von der Leyen for countries to put up gold as security for bailouts is “not the right way,” Ulrich Scharlack, a spokesman for the parliamentary group, said yesterday in Berlin after they were briefed by Merkel on the region’s debt crisis. The disagreement at the top of Europe’s biggest economy underscores risks over a second Greek aid package after the Finnish government said Aug. 16 that it secured a collateral arrangement to ensure its contribution would be repaid. Austria and the Netherlands, which both share Finland’s AAA rating, called for similar deals, as did Slovakia and Slovenia.

German Confidence Falls More Than Forecast as Debt Crisis Threatens Growth (Source: Bloomberg)
German investor confidence fell more than economists forecast to the lowest in more than 2 1/2 years in August on concern Europe’s debt crises will curb growth. The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations, which aims to predict developments six months in advance, plunged to minus 37.6 from minus 15.1 in July. That’s the lowest since December 2008 and the biggest drop since July 2006. Economists expected a decline to minus 26, according to the median of 36 estimates in a Bloomberg News survey.
A four-week rout in equities has wiped more than $8 trillion off global stock values, with Germany’s benchmark DAX index (DAX) plunging almost 25 percent, as investors fret that Europe won’t be able to contain the debt crisis and prevent it from infecting the banking sector. In addition, concerns about a renewed global slump have resurfaced as growth slows in Europe, the U.S. and Asia, damping export demand. Germany’s economy almost stalled in the second quarter, data showed last week.

Sarkozy Prepares Deficit-Reduction Blueprint for Election-Year ‘Austerity’ (Source: Bloomberg)
French President Nicolas Sarkozy is preparing deficit cuts in an election-year budget that aims to persuade investors that France will take the medicine needed to avoid the worst of the euro debt crisis. Sarkozy is scheduled to meet Prime Minister Francois Fillon and Finance Minister Francois Baroin today to outline the 2012 budget blueprint. The top lawmaker from his party, Jean-Francois Cope, said yesterday it would reflect “austerity” -- a term that has been taboo in the French political lexicon since 2007 when Fillon and former Finance Minister Christine Lagarde were reprimanded for using the word, which spurs concerns of rolling back the social-welfare system. “Sarkozy is no longer afraid to use the word ‘austerity,’” Gerard Grunberg, a professor at the Political Sciences Institute in Paris, said in a telephone interview. “Still, he’ll walk on a fine line with voters when he touches taxes and welfare. They may not be big measures in the end but he wants to show he is responsible.”

European August Consumer Confidence Falls More Than Forecast (Source: Bloomberg)
European consumer confidence weakened more than economists forecast in August as growth in the euro-region slowed amid the sovereign debt crisis. An index of household sentiment in the 17-nation euro area fell to minus 16.6 from minus 11.2 in July, the Brussels-based European Commission said in an initial estimate today. That’s the lowest since June 2010. Economists forecast a drop to minus 12.4, the median of 26 estimates in a Bloomberg News survey showed. Europe’s economy is struggling to gather strength as governments from Italy to Spain step up budget cuts to fight the debt crisis. Pledges of 365 billion euros ($525 billion) in official loans to Greece, Portugal and Ireland, and 110.5 billion euros of bond purchases by the European Central Bank failed to fix the finances of those countries or prevent speculative attacks on Spain and Italy.

European Banks Must Pay Up to Borrow $100 Billion Amid Crisis: Euro Credit (Source: Bloomberg)
European banks with more than $100 billion of cash to raise by year-end will have to pay up because investors perceive them as the worst credits they’ve ever been. The cost of insuring the senior and junior bonds of 25 banks and insurers doubled since April to records, according to the Markit iTraxx Financial indexes of credit-default swaps. The Euribor-OIS spread, a gauge of banks’ reluctance to lend to each other, reached the widest since April 2009 this month, while the cost for European banks to fund in dollars was near a 2 1/2-year high. “This return of generalized banking risk marks a new phase in the unfolding European drama,” said Lisa Hintz, an analyst in New York at Capital Markets Research Group, a unit of ratings firm Moody’s Investors Service. “Investors have heightened concerns about sovereign and financial institution risk.”

European Failure to Solve Region’s Banking Crisis Returns to Haunt Markets (Source: Bloomberg)
Four years to the month since the global credit crisis began, European lenders remain dependent on central bank aid, plaguing markets and economies worldwide. Emergency steps such as unlimited loans from the European Central Bank are keeping many banks in Greece, Portugal, Italy and Spain solvent and greasing the lending of others, while low interest rates and debt-buying are containing borrowing costs. Such aid is needed as concerns about slowing economic growth and sovereign debt prompt banks to curb lending, stockpile dollars and hoard cash in safe havens. “I’m not sleeping at night,” said Charles Wyplosz, director of the Geneva-based International Center for Money and Banking Studies. “We have moved into a new phase of crisis.”

Euro Drops Versus Dollar Before Release of German Business Confidence Data (Source: Bloomberg)
The euro dropped versus the U.S. dollar before a report today that economists said will show business confidence in Germany fell for a second month. The 17-nation currency fell to $1.4412 at 10:06 a.m. in Tokyo from $1.4442 in New York yesterday.

European Stocks Rise for Second Day; UBS, Charter Lead Advance (Source: Bloomberg)
European stocks rose for a second day amid continuing speculation the Federal Reserve will take action to bolster the economy and as Chinese manufacturing data exceeded forecasts. UBS AG (UBSN), Switzerland’s biggest bank, advanced 2.1 percent after saying it plans to cut 3,500 jobs to trim costs. Charter International Plc (CHTR) soared 20 percent as the welding and automation-equipment maker said it’s in takeover talks with a potential rival bidder to Melrose Plc. National Bank of Greece SA (ETE) sank to a 14-year low as the nation’s bonds fell.
The benchmark Stoxx Europe 600 Index added 0.8 percent to 226.63 at the 4:30 p.m. close in London, after earlier surging as much as 2.2 percent. The gauge has still fallen 22 percent from this year’s peak on Feb. 17 as European and U.S. economic data that trailed forecasts added to concern the global recovery is at risk. The retreat has left the Stoxx 600 trading at about 9.4 times its companies’ estimated earnings, near the lowest since March 2009, Bloomberg data show.

U.K. Stocks Climb for a Second Day as Lloyds Rebounds; G4S Gains (Source: Bloomberg)
U.K. stocks climbed for a second day as banks rebounded from a four-day selloff amid continuing speculation the Federal Reserve will take action to bolster the U.S. economy. Lloyds Banking Group Plc (LLOY) rallied 2.7 percent as Goldman Sachs Group Inc. recommended the U.K. lender. G4S Plc (GFS) and John Wood Group Plc (WG/) climbed more than 4 percent after earnings increased. ARM Holdings Plc (ARM) advanced 4.5 percent amid takeover speculation, while Charter International Plc (CHTR) soared 20 percent after confirming bid talks with an unidentified suitor. The FTSE 100 Index (UKX) increased 0.7 percent to 5,129.42 at the 4:30 p.m. close in London, having briefly erased its gains. The gauge lost 5.3 percent last week after European and U.S. data trailed forecasts, adding to concern the global economy is at risk. The FTSE All-Share Index (ASX) climbed 0.7 percent today, while Ireland’s ISEQ Index slid 0.5 percent.

Australian Dollar Declines as Signs of Slowing Global Recovery Damp Demand (Source: Bloomberg)
Australia’s dollar fell against the U.S. currency as concern the global economic recovery is slowing damped demand for higher-yielding assets. The so-called Aussie traded at $1.0494 as of 11:08 a.m. in Sydney from $1.0526 yesterday in New York.

20110824 1024 Global Commodities Related News.

US corn futures end higher on worries about the US crop and outside market support. Monday's weekly USDA crop progress report, which showed greater-than-expected crop deterioration, reaffirmed concerns about yields. Some traders and analysts are now talking about national yields below 150 bushels per acre, which would ensure supplies remain uncomfortably tight throughout next year. Outside markets, including stronger equities, added support. Weak demand is limiting gains. CBOT Sept corn ends up 9 3/4 cents to $7.30 1/4 per bushel. Dec corn sets another contract high, ends up 9 cents to $7.43 1/2

US wheat futures surge on a variety of crop troubles and optimism about demand. Worries about spring wheat crop in northern Plains, hard red winter crop in southern Plains, as well as a delayed harvest in Europe, boost the market, analysts say. An Egyptian purchase of Russian wheat was seen as negative by some as they bypassed US wheat, but others noted it was at a higher price and ultimately the US could see more demand. "There's a lot of speculation that supplies will get tight enough that (Russia) will start cutting back on their shipments," adds Tom Leffler of Leffler Commodities. CBOT Sep wheat ends up 21 3/4c to $7.57 1/4 a bushel; Sep KCBT wheat surges 19 1/2c to $8.41; Sep MGEX wheat up 7c to $9.50 1/4.

US rice futures end flat as the market hovers below the 2.5-year highs set earlier this month. September contract is up 18.2% since June 29 due to US crop worries and firm world prices. Sep CBOT rice ends down 1/2c to $16.96 1/2 per bushel. Jan rice ends down 1/2c to $17.60. Sep contract has peaked at $17.36 earlier this month.

US new-crop corn hits contract high as ratings fall
SINGAPORE, Aug 23 (Reuters) - Chicago new-crop corn climbed to a contract high, while soybeans rose to a near one-month top as the condition of the U.S. corn and bean crops continued to slide, raising concerns over supplies.
"It is certainly providing some support for the grains markets led by corn," said Brett Cooper, a senior manager of markets at FCStone Australia. "But it is not a surprise as the crop ratings report has not done more than to confirm weather impact on yields."

US Midwest soy at risk of lower yields, too dry
CHICAGO, Aug 22 (Reuters) - Soybean and corn yield potential across the heart of the U.S. Midwest will likely face further losses if rains fail to come soon, a leading agricultural meteorologist said on Monday.
"The driest areas so far this month have stretched from southeast South Dakota, across southern Minnesota, the northern and eastern half of Iowa into central Illinois and southwest Indiana," John Dee, a private meteorologist closely watched by the U.S. grain trade, told the Reuters Global Ags Forum.

S.Africa maize crop forecast seen down on wet weather
JOHANNESBURG, Aug 23 (Reuters) - South Africa is likely to cut its maize output forecast for the May 2010/April 2011 season as continued wet weather in some parts of the country delay the harvesting process and damage crops, a Reuters survey showed on Tuesday.
The government's Crop Estimates Committee (CEC) seventh maize output forecast for the 2010/11 season would come in at 10.63 million tonnes, compared with a previous government forecast of 10.854 million tonnes, according to the average estimates of seven trading houses polled by Reuters.

From taste to yields, hybrid rice's many hurdles in India
CHENNAI, India, Aug 22 (Reuters) - India needs to boost rice yields by nearly a third by 2025 to feed its growing 1.2 billion population, but hybrid technology that could increase productivity faces challenges -- from sharply varying yield advantages to a fastidious Indian palate.
Although a crop that is grown round-the-year and which helps meet almost half the calorie needs of 70 percent of Indians, rice yields in the world's second-biggest producer remain low at 2.17 tonnes a hectare, less than half the global average.

Ohio corn yield seen falling on late seeding, heat
FISHERS, Indiana, Aug 22 (Reuters) - Corn yield prospects  in Ohio were highly variable and generally down from last year  as planting delays and periods of sweltering heat that rushed  crop development dragged down crop potential, scouts on an  annual crop tour said Monday.
Soybean pod counts were up slightly from a year ago, but  the crop's lagging maturity and dry soil conditions suggest the  crop may struggle to match last season's yields, scouts on the  Pro Farmer Midwest Crop Tour said.

US corn ratings fall more than expected
CHICAGO, Aug 22 (Reuters) - U.S. corn condition ratings declined more than expected last week while the soybean crop also deteriorate as dry weather in the U.S. Midwest stressed the crops as they near maturity, U.S. Agriculture Department data showed late on Monday.
USDA rated the corn crop at 57 percent good to excellent, down 3 percentage points from the previous week and down 13 points from a year ago.    A Reuters Poll of analysts early on Monday forecast corn ratings to fall by 1-2 percentage points after ratings for each crop stabilized during the previous week.

Fears grow of rain damage to German wheat crop
HAMBURG, Aug 22 (Reuters) - Rain is raising concerns about damage to the quality of this year's wheat crop in Germany, the European Union's second-largest producer, although parts of the country have achieved a satisfactory harvest, traders and analysts said on Monday.
Repeated rainfall for weeks has been disrupting Germany's wheat harvest, which would normally be approaching completion by now.

Ukraine '11 grain crop at 34.2 mln T as of Aug 22
KIEV, Aug 22 (Reuters) - Ukraine's farms have completed the 2011 early grain harvesting, threshing 34.2 million tonnes with the average yield of 3.06 tonne per hectare, the Agriculture Ministry said on Monday.
The ministry said in a statement farms had threshed 11.2 million hectares of early grains mostly wheat and barley. It said farms harvested a total of 23.2 million tonnes of wheat bunker weight and 9.5 million tonnes of barley.

Australia 2010/11 wheat exports may jump about 28 pct
SYDNEY, Aug 22 (Reuters) - Australian wheat exports may rise about 28 percent to hit 19 million tonnes in the marketing year to Sept. 30, analysts said on Monday, adding shipments from what is typically the world's fourth-biggest exporter could approach record levels.
"We expect exports of about 19 million tonnes because of demand for feed wheat in Southeast Asia," said Luke Mathews, an agricultural commodities strategist at Commonwealth Bank of Australia.Wheat exports in 2009/2010 were 14.790 million tonnes.

Russia Harvests 57.9 Mln Tons Grain To August 23
Russia harvested 57.9 million metric tons of grain to Aug. 23 on 22 million hectares, or 50% of the total area to be harvested, the Agriculture Ministry reported. The average yield was 2.64 tons a hectare, compared with 2.07 tons a hectare a year ago. The ministry said grain exports since the beginning of the current marketing year July 1 to date totaled 4.4 million tons, 11% more than in the corresponding period in the previous marketing year. Wheat harvest to date was 37.3 million tons on 12.6 million hectares, or 49% of the total area to be harvested. The average yield was 2.97 tons a hectare compared with 2.32 tons a hectare a year ago and 2.89 tons a hectare in 2009. Barley harvest to date was 12.2 million tons on 5.1 million hectares, or 64% of the total area to be harvested, with the average yield of 2.38 tons a hectare. The government expects this year's grain harvest at 90 million tons. Last year's harvest fell to 60.9 million tons from 97.1 million tons in 2009 due to the summer drought.

Crop Tour Sees Lower Ohio, South Dakota Corn Yield Than 2010
Ohio is expected to produce a lower corn yield than last year, following serious delays in planting, while the outlook for the soybean crop is brighter, according to the early results of a U.S. crop tour. The Pro Farmer Midwest Crop Tour pegged the average corn yield in Ohio at 156.3 bushels an acre. Last year, the tour estimated the yield at 165.6 bushels an acre. The tour estimated Ohio will have an average of 1,253.2 soybean pods per three-foot-by-three-foot square. Last year, the estimate was 1,201 soybean pods. Crop conditions deteriorated as the tour progressed west from its starting point in Columbus, Ohio. Fields in western Ohio had corn ears with missing kernels due to excessive heat and dryness. Western Ohio seemed to miss out on rains that benefited crops in the center of the state, they said. "The corn crop might not be as big as a lot of people are hoping," said Richard Guse, a tour participant and farmer from Minnesota. The scouts in Ohio were on the eastern portion of the tour.
Several groups departed from Columbus on Monday morning to survey different routes and met up in Fishers, Ind., on Monday night to compare their results. The western portion of the tour began in South Dakota. The Pro Farmer Midwest Crop Tour pegged the average yield for South Dakota from the corn fields toured Monday across the three key cropping districts at 141.10 bushels per acre. That's a 1.8% decline from the 143.59 state average from last year's tour. The U.S. Department of Agriculture's August crop report estimated South Dakota's corn yield at 141 bushels an acre. The three-year tour average is 146.06. The South Dakota corn crop is looking similar to the USDA's August projection, said Chip Flory, editor of the Pro Farmer Newsletter and director of the western portion of the tour.
There was some variability reported for the crop from field to field, with signs of stress from a lack of rain in recent weeks, said Terry Johnston, a tour consultant from Parkersburg, Iowa. There was also evidence of some storm and hail damage from heavy storms that hit crops in early July, he added. Tour observations revealed an average pod count in three-foot by three-foot squares of 1,106.66 from the 39 samples. Last year's pod count was 1,262.28, when 52 samples were taken. The three-year tour average is 1,034.93. "The bean crop did not display anything spectacular and nothing really bad either," said Ken Eckhardt, a tour participant and farmer from Minnesota Lake, Minn. The common theme among tour participants was soybeans were generally healthy and weather during the next few weeks will determine what bean yields will be for the state. The soybean crop could still be strong if it gets decent rain soon.
Scouts from the eastern and western groups will converge on Austin, Minn., on Thursday. Pro Farmer will issue corn and soybean crop estimates Friday, based partly on results from the tours.

China Food Prices Post Gains As Holiday Demand Rises
Prices across key food categories have risen ahead of China's consumption-heavy Mid-Autumn Festival next month, the Ministry of Commerce said. Food prices are closely watched as they were the leading culprit behind high inflation last month. Inflation began climbing again in the last two weeks despite government efforts to contain prices. Bellwether wholesale pork prices rose 0.1% in the week to Sunday, compared with a week earlier, the ministry said. "These food price increases will definitely impact inflation, as food has been a key factor in the rising consumer price index," said Chenjun Pan, an agriculture analyst for Rabobank Group. Pork wasn't the sole food item that saw price increases in recent weeks, as demand from the Mid-Autumn Festival in September contributed to larger consumption pressures, the ministry said. The average price for 18 types of vegetables rose by 2.1% in the period, after falling 0.4% the previous week, it said.
This is the second straight week that pork prices have inched up. Last week, wholesale prices rose by 0.1%, snapping three consecutive weeks of flat or lower prices. Food prices account for about a third of the inflation index. Chen warned that inflation in August is likely to stay at "high levels," after reaching their highest point in three years last month. Pork prices surged 57% on year in June, prompting the government to release frozen meat stockpile and enact fiscal measures to raise China's hog population. The price increase spilled over to a surge in U.S. lean-hog futures last month. China will likely start importing more pork if prices continue to rise, a senior state academic told state media last week. "The country will continue to see high pork prices in the next few months," said Wang Jimin, a deputy director of the agricultural economics and development institute at the Chinese Academy of Agricultural Sciences, in a China Daily report.
The U.S. exported 56,325 metric tons of pork to China in the first six months this year, 16 times higher on year, according to U.S. Meat Export Federation data.

Bunge: Accepting Syngenta's Modified Corn Could Hurt Its China Sales
Bunge Ltd.'s North American unit said it is surprised and disappointed that Syngenta AG has sued to force the grain company to accept its Agrisure Viptera modified corn seed because it could hurt its supply chain to China. Bunge North America said it has told Syngenta that it won't accept the corn until the seeds obtain approval from China, which it considers a major export market. Syngenta expects to obtain approval in early 2012. "Until this approval occurs, we must protect the integrity of our export supply chain by not accepting Agrisure Viptera and other varieties that do not have major export market approval," said Soren Schroder, Bunge North America's president and chief executive. According to press reports, Syngenta filed suit last week to block Bunge from banning a variety of its biotech corn because only 1% of the U.S. corn crop will be exported to China this year.
"Bunge's decision not to accept Agrisure Viptera is consistent with the North American Export Grain Association's policy to advocate that technology providers receive all major international approvals for a trait prior to seed sales," Schroder said.

New Brazil Forest Code 'Step Backward' -Ex-Environment Minister
The possible passage of a new environmental code in Brazil that creates "amnesty" for deforestation and encourages encroachment upon forested areas would be a "step backward," former environment minister and presidential candidate Marina Silva said. Brazil's Senate may vote as soon as this month on a revision of its so-called forest code, a set of laws created in 1965 that obliges farmers to preserve native vegetation along rivers and hillsides and on as much as 80% of their land. The legislation that passed in the lower house would allow farmers to continue production on part of the land they cleared in violation of the law, as well as permitting states to define what, if any, kind of economic activity can be practiced in the protected areas. Silva, an environment minister under President Luiz Inacio Lula da Silva who ran against Lula's hand-picked successor Dilma Rousseff in the 2010 presidential elections, said that the bill that passed the lower house ran counter to the Brazilian public's wishes.
"The Senate may surprise us" and vote against the existing bill, Silva told reporters in Sao Paulo. "The lower house was out of step with society, 80% of which opposes the proposed changes." A June public opinion poll carried out by the Datafolha group showed 80% of Brazilians against the bill passed in the lower house at the end of May. The bill passed with 410 votes in favor and 63 against. Environment Minister Izabella Teixeira said in June that, should the existing bill be approved by the Senate, she would recommend Rousseff strike portions of it because they encourage further deforestation. But Rousseff needs to hold together her governing coalition, which has strongly supported the bill, at a time of great stress due to recent corruption scandals that have forced out dozens of members of allied parties from high-ranking government offices.
Silva said she hopes Rousseff will count on "the allied base that is the Brazilian population" to remove parts of the bill that Silva says will encourage deforestation and soil erosion. The current code is generally flouted, with about 95% of Brazilian farmers in violation of the law, according to supporters of the bill. According to estimates, farmers would have to abandon 80 million hectares of cultivated land to let the forest reclaim the land. Brazil currently cultivates about 280 million hectares of its 845 million hectares (8.45 million square kilometers) in total area. But opponents of the proposed changes in the forest code say the bill would encourage deforestation, which last year wiped out more than 6,400 square kilometers of Brazilian rainforest, and benefit soybean farmers and cattle ranchers who have traditionally led the encroachment into the country's Amazon region.

Voracious China Plays Sugar Daddy
Sugar's scorching rally may be far from over, as expectations of a surge in imports by China are keeping markets sweet. Ageing cane and poor weather in Brazil, the world's largest sugar grower, had already reduced hopes for a large global surplus in 2011-12 and sent front-month New York raw sugar futures surging more than 40% from May lows on the Intercontinental Exchange. The front-month contract for October delivery jumped as much as 6% Friday, to 31.18 cents a pound, after influential Brazilian consultancy Canaplan slashed its estimate for the sugar cane harvest in the country's main producing area by 8.5% to 476 million tons. That would be the first yearly drop in production there in a decade. Traders and analysts say prices could get another push, and possibly revisit this year's high of 36 cents, thanks to the sweet tooth of China's growing middle class.
Several analysts forecast Chinese imports could rise as much as 50% in the 2011-2012 season to three million metric tons--exceeding its World Trade Organization limit of 1.9 million tons for the first time and making it the world's second-largest importer after Europe. "China will most probably become the new strategic player in the world market" next season, said Sergey Gudoshnikow, senior economist at the London-based International Sugar Organization. "If there's a sudden dearth of Brazil's crop and China comes in, there's no knowing how high prices could go." To be sure, Asia has long been a significant influence on world sugar markets. Analysts credit Asian demand with doubling the size of world sugar trade over the past 20 years.
China's imports have increased rapidly, from 600,000 tons in 2007-08 to an estimated two million tons in 2010-2011. That trend should continue, given that the consumption should rise 2% to 15.25 million tons in 2011-2012, outstripping production of 12.5 million tons, said Jonathan Kingsman, who runs a Switzerland-based sugar consultancy.

Wheat, Corn Futures Decline in Chicago, Snapping Three-Day Advance of 6.1% (Source: Bloomberg)
Wheat and corn futures dropped in Chicago, snapping three days of gains. Wheat for December delivery slid as much as 0.5 percent to $7.81 a bushel and traded at $7.82 at 8:07 a.m. Singapore time, after advancing 6.1 percent in three days and reaching a two- month high. Corn fell 0.1 percent to $7.425 a bushel after gaining 4.3 percent in three days and posting a 10-week high. Futures had gained on speculation that dry weather in the U.S. will hurt yields. About 100 farmers, analysts and grain buyers are traveling across the Midwest this week, taking field samples to gauge the size of the corn and soybean crops. Preliminary reports in central Indiana and Nebraska indicated that corn yields and soybean-pod counts may be lower than last year. The tour estimated lower corn yields in Ohio and South Dakota. Soybean-pod counts may be larger in Ohio and smaller in South Dakota than in 2010.

Australian Wheat Shipments at 2004 High Easing Shortages: Freight Markets (Source: Bloomberg)
Australia may displace the European Union as the world’s second-biggest wheat shipper as cargoes jump to an eight-year high, easing a shortage that drove global food costs to a record. The country may export about 18 million metric tons in the 12 months from October, according to the median estimate in a Bloomberg survey of eight analysts and traders. That’s 1 million tons more than predicted by the U.S. Department of Agriculture, and the most since 2004 based on that data. Prices may decline to $6.90 a bushel by the end of December from $7.7175 now, the median of the estimates showed. Wheat declined 16 percent since February as farmers planted more crops in response to prices that rose 47 percent last year. Extra supply is also coming from Russia, once the fourth-biggest shipper, which resumed sales last month after an almost year- long ban imposed as drought ruined crops. Australia’s harvest, which starts in October, is being closely watched because the USDA is still forecasting a supply shortage globally.

Wheat Rallies to Two-Month High as U.S. Spring-Crop Conditions Deteriorate (Source: Bloomberg)
Wheat rose to a two-month high after a government report showed adverse weather in the northern U.S. has deteriorated spring crops. About 62 percent of spring wheat, grown in northern states, was in good or excellent condition as of Aug. 21, less than a week earlier and below the year-earlier rating of 82 percent, the U.S. Department of Agriculture said yesterday after the close of trading in Chicago. Excess rains during planting, hot weather and disease have pressured yields, the North Dakota Wheat Commission has said. “The spring-wheat crop has really struggled all year long,” said Louise Gartner, the owner of Spectrum Commodities in Beavercreek, Ohio. “Yields are coming in light. Although quality is decent, you’re seeing a drop in total spring production.”

Sugar, coffee rise early as commodities advance
LONDON, Aug 23 (Reuters) - ICE sugar, coffee and cocoa futures rose in early trade, swept up in a broad-based advance in world equity and commodity markets linked to stronger-than-expected Chinese and German economic data.
Raw sugar futures were firmer with the market moving within striking distance of contract highs.

Vietnam Coffee-New beans on offer but demand thin
HANOI, Aug 23 (Reuters) - Coffee beans from the next harvest due in October are being offered in Vietnam, but demand remains thin as buyers are waiting for prices to stabilise, traders said on Tuesday.
Coffee prices in Vietnam, the world's second-largest producer after Brazil, vary widely at the moment as stocks have almost run out, leading to delays involving at least 70,000 tonnes.

Mexico's sugar exports to fall from record high
MEXICO CITY, Aug 22 (Reuters) - Mexico's sugar exports will fall from a record high next season after drought hit the country's crop and demand for high fructose corn syrup imports started leveling out, the industry's chamber said on Monday.
Mexico ships nearly all of its sugar to the United States under a free trade deal. Shortages have helped keep prices high and demand for Mexican sugar strong, with exports reaching a record 1.45 million tonnes last year.

M&A in Brazil sugar cane sector passes peak
SAO PAULO, Aug 22 (Reuters) - Consolidation in Brazil's cane sector has crested, after the 2008 global financial crisis unleashed a wave of mergers and acquisitions in the world's largest sugar industry.
Despite a slowdown after the big deals of 2009 and 2010, milling groups have not announced new investments in greenfield projects. Analysts say new mill investments have to start now to be ready by 2014-15, when the current excess crushing capacity will be exhausted by expansion in the cane crop.

Sun, rain mix to boost Ivorian cocoa crop hopes
ABIDJAN, Aug 22 (Reuters) - Ivorian cocoa farmers reported a healthy mix of rain and sun across most of the world's top grower last week, boding well for the 2011/12 main crop after this year's bumper harvest.
Farmers said they were happy as sunshine improved after several weeks of cloudy and cooler weather that had threatened the good growth of the crops during a key period for development ahead of the new season starting in October.

China gas tax rebate may nudge spot LNG imports up
PERTH/SHANGHAI, Aug 23 (Reuters) - A tax rebate on natural gas imports may accelerate China's purchases of liquefied natural gas, but only marginally given high prices for spot supplies and the nation's policy of using long-term contracts.
Spot LNG prices in the Pacific have risen over 50 percent since March to more than $15 per million British thermal units (mmBtu), well in excess of the $8.28/mmBtu average price China paid for LNG imports in July.

Oil Rises a Third Day as Industry Report Shows Decline in Crude Stockpiles (Source: Bloomberg)
Oil advanced for a third day in New York as investors bet that shrinking U.S. crude supplies indicate that fuel demand may recover in the world’s biggest consumer of the commodity. Futures rose as much as 0.5 percent after the industry- funded American Petroleum Institute said supplies fell 3.34 million barrels to 347 million last week. An Energy Information Administration report today may show inventories climbed for a second week, according to a Bloomberg News survey. Prices gained yesterday amid speculation the Federal Reserve will bolster efforts to stimulate the U.S. economy. “If we see a draw in the EIA numbers then that could provide some support to the oil price,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne, who predicts U.S. futures will average $93 a barrel in the third quarter. “Anytime there’s a tightening in the market, people start to get excited.”

Oil gains on Libya fighting, manufacturing data
LONDON, Aug 23 (Reuters) - Crude oil prices rose on Tuesday, supported by better than expected manufacturing data in Germany and China and by uncertainty in Libya where government loyalists staged a fight back.
"There's light at the end of the tunnel in Libya and any signs that the conflict is ending will push Brent down as there will be more oil into the Atlantic basin," Helen Henton, analyst at Standard Chartered said.

Malaysia's Petronas to start $5.1 bln upstream gas project
KUALA LUMPUR, Aug 23 (Reuters) - Malaysian state oil firm Petronas said on Tuesday it will develop the 15 billion ringgit ($5.1 billion) North Malay Basin project to develop gas and build a pipeline to transport it.
The project comprises nine discovered gas fields about 300 kilometers off the coast of the peninsula. Petronas will also develop a new 200 km pipeline to transport the gas.

China says oil stake in Libya benefits both countries
BEIJING, Aug 23 (Reuters) - China's oil stake in Libya benefited both countries, a Chinese commerce official said on Tuesday, answering a question about a Libyan rebel official's warning that Chinese oil companies could lose out under a new government.
"China's investment in Libya, especially its oil investment, is one aspect of mutual economic cooperation between China and Libya, and this cooperation is in the mutal interest of both the people of China and Libya," the deputy head of the Chinese Ministry of Commerce trade department, Wen Zhongliang, told a news conference.

ENI leads Libya oil race; Russia, China may lose out
MILAN/LONDON, Aug 22 (Reuters) - Italian oil company Eni led the charge back into Libya on Monday as rebels hailing the end of Muammar Gaddafi's rule warned Russian and Chinese firms that they may lose out on lucrative oil contracts for failing to support the rebellion.
Gaddafi's fall will reopen the doors to Africa's largest oil reserves and give new players such as Qatar's national oil company and trading house Vitol the chance to compete with established European and U.S. oil majors.

Copper Futures Climb as Report on China Manufacturing Eases Growth Concern (Source: Bloomberg)
Copper rose the most in more than a week in New York after a report on Chinese manufacturing eased concerns that the economic slowdown is deepening. A Chinese manufacturing index released by HSBC Holdings Plc and Markit Economics showed a preliminary reading for August of 49.8, compared with the final 49.3 for July. Imports of refined copper by China, the world’s largest user, rose for a second month in July, customs data showed yesterday. Inbound shipments of scrap copper jumped 14 percent from a year earlier. “We’re higher across the board in metals, mainly on account of a weaker dollar as well as the release of the Chinese manufacturing number overnight,” Edward Meir, a senior analyst at MF Global Holdings Ltd. in Darien, Connecticut, said in a report.

Copper Climbs on Speculation Fed Will Take Steps to Bolster U.S. Economy (Source: Bloomberg)
Copper rose in New York on speculation the Federal Reserve will act to bolster the economy in the U.S., the world’s second-biggest consumer of the metal. The Fed holds its annual symposium this weekend in Jackson Hole, Wyoming. Last year Chairman Ben S. Bernanke hinted that the central bank might embark on a second round of asset purchases. Prices also gained as figures indicated that manufacturing in China, the largest copper user, may contract at a slower pace. “The important news this week will be obviously Bernanke’s speech in Jackson Hole,” said Andrey Kryuchenkov, an analyst at VTB Capital in London. “That’s what people are waiting for.”

LONDON, Aug 22 (Reuters) - China's aluminium production dropped a gear in July, a development likely to exacerbate an evolving tightness in the domestic market.  
Today's figures from the China Nonferrous Metals Industry Association (CNMIA) showed Chinese production slipping by an annualised 320,000 tonnes from June's record run-rate of 19.03 million tonnes.

Brazil mining investment jumps on metals demand
BRASILIA, Aug 22 (Reuters) - Surging investment in Brazil's mining sector will help the country to double iron ore output by 2015 and triple copper production in the same period, the head of Brazil's mining institute, Ibram, said on Monday.
Ibram expects Brazil's iron ore output to more than double to 772 million tonnes by 2015, from 372 million tonnes of the steel ingredient produced in 2010. That is well above the mining ministry's estimate for 585 million tonnes by 2015.

Brazil eyes flexibility in mine royalties-sources
RIO DE JANEIRO, Aug 22 (Reuters) - Brazil's government is considering a proposal that would make it easier to raise or lower mining royalties depending on economic conditions and minerals prices, government sources familiar with the issue told Reuters on Monday.
The move would come as part of a broad overhaul in Brazil's mining sector that would revamp the licensing process and boost state income from mining companies such as top world iron producer Vale  that are posting record profits.

China July refined copper imports rise 8.8 pct on-month
HONG KONG, Aug 22 (Reuters) - China's imports of refined copper rose 8.8 percent to a six-month high in July on spot shipments booked in May and June.
Arrivals at the world's top copper consumer rose to 194,280 tonnes of refined copper in July, extending a 19.7 percent gain to 178,638 tonnes in June, a breakdown of the July data by the General Administration of Customs showed on Monday.

China, global steel output near record in July
LONDON, Aug 22 (Reuters) - Chinese and global steel production fell slightly from the previous month but remained near record levels in July, in what is usually a seasonally slower quarter and despite concerns that oversupply and the economic slowdown may weigh on prices.
Global crude steel production grew by 11.5 percent to  127.477 million tonnes in July, compared to the same month last year. That was not far off a record level of 129.865 million tonnes hit in April.

Iran starts moving uranium centrifuges to bunker
TEHRAN, Aug 22 (Reuters) - Iran has begun moving machines that enrich uranium to an underground bunker near the holy city of Qom, a senior official said, a move likely to fan Western fears of an Iranian advance towards nuclear weapons capability.
His announcement was a further sign of the Islamic state's determination to press ahead with enrichment in defiance of international demands that it desist from such activity, which Tehran says will be for peaceful applications only.

METALS-Copper up on China Flash PMI, equities
SHANGHAI, Aug 23 (Reuters) - Copper rose on Tuesday, bolstered by gains in equities and by data showing China's factory output remains robust, but worries about global growth prospects continue to weigh on investor sentiment.
The market will be eyeing European purchasing manager surveys due later in the day, and a speech by U.S. Federal Reserve chairman Ben Bernanke on Friday, for trading cues.

PRECIOUS-Gold climbs to record above $1,910 on growth fears
SINGAPORE, Aug 23 (Reuters) - Spot gold soared to an all-time high above $1,910 on Tuesday, scoring a record top for a fourth consecutive session, as persistent worries about global economic growth burnished bullion's safe-haven appeal.
The precious metal was headed for a seventh straight session of rise and a monthly gain of more than 16 percent, highest since September 1999.

Gold Tumbles in Biggest Decline in a Year (Source: Bloomberg)
Gold dropped the most in a year as some investors sold the metal after signs of slowing growth spurred a rally to a record $1,917.90 an ounce. The relative-strength index of futures in New York has topped 70 since Aug. 8, a signal to some investors that prices were poised to decline. Bullion has jumped 14 percent in August amid speculation that Federal Reserve Chairman Ben S. Bernanke will signal further measures to stimulate the U.S. economy later this week and as debt crises spurred demand for haven assets. “Gold looks very bubbly,” Matt Zeman, a strategist at Kingsview Financial in Chicago, said in a telephone interview. “Gold’s going to continue to suck everybody in. There’s too much risk of a wicked correction lurking around the corner to enter the trade right now.”

Cash Gold Rallies After Declining Most in More Than a Year on Share Gains (Source: Bloomberg)
Gold for immediate delivery rallied after dropping the most in more than a year yesterday. Bullion increased as much as 0.5 percent to $1,837.85 an ounce and traded at $1,836.18 an ounce at 7:47 a.m. Singapore time. The metal jumped to a record $1,913.50 yesterday on speculation that Federal Reserve Chairman Ben S. Bernanke will signal further measures to stimulate the U.S. economy later this week and as debt crises spurred demand for haven assets. “Gold looks very bubbly,” Matt Zeman, a strategist at Kingsview Financial in Chicago, said in a telephone interview yesterday. “Gold’s going to continue to suck everybody in. There’s too much risk of a wicked correction lurking around the corner to enter the trade right now.”