Thursday, August 25, 2011

20110825 1815 Crude Palm Oil Breaking News.

Crude Palm Oil Breaking News (Source: Unknown):

Indonesia will lower its maximum export tax rate for palm oil to 22.5% from 25%, effective Oct. 1, the Trade Ministry said Thursday.

The minimum tax rate for the cooking oil, found in a consumer products ranging from biscuits to chocolates and lipsticks, will also be revised, to 7.5% from 1.5%, according to ministry documents.

The reference price for crude palm oil will be calculated base on average prices at Rotterdam, Bursa Malaysia Derivatives or the Jakarta Bourse, it said.

Previously, the government only used Rotterdam to calculate the reference price.

20110825 1813 FCPO EOD Daily Chart Study.

FCPO closed : 2994, changed : -42 points, volume : higher.
Bollinger band reading : correction range bound downside biased.
MACD Histrogram : turned lower, buyer and seller battling.
Support : 2970, 2930, 2900, 2850 level.
Resistance : 3020, 3050, 3070, 3100 level.
Comment :
FCPO closed recorded losses with lower volume transacted while overnight soy oil closed little higher and currently trading lower while crude oil moving range bound.
FCPO and Soy oil traded range bound between gain and losses after ITS and SGS released higher but slowing down export data followed by late afternoon Indonesia official news on lower export tax and changed of crude palm oil export tax structure lead market to fall lower. Increase of margin effectively tomorrow also results some trader to close or reduce position ahead of the long Hari Raya holidays break.
Daily chart formed a down doji bar candle closed below middle Bollinger band support level after market opened lower, traded range bound until late afternoon followed by sell down activities pressed price lower before rebounded slightly to closed off the low of the day.
Technical reading turned to suggesting a correction range bound downside biased market development possibly testing lower support 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.

20110825 1753 FKLI EOD Daily Chart Study.

FKLI closed : 1462.5, changed : -3 points, volume : higher.
Bollinger band reading : correction range bound downside biased.
MACD Histrogram : falling lower, seller holding on.
Support : 1458, 1445, 1425, 1405 level.
Resistance : 1470, 1485, 1500, 1515 level.
Comment :
FKLI closed recorded small loss with higher volume changed hand(lots of rollover activities) doing 2 points discount compare to cash market that closed lower. Overnight U.S. market continue to closed higher and Asia markets ended mixed while European markets currently trading higher.
U.S. reports on durable-goods orders and home prices beat economists’ estimates plus better earnings report from world largest commodities trade Glencore and Diageo Pls lead U.S. futures and most of the regional markets to trade higher. Apple's CEO Steve Job resignation resulted its shares to trade lower but its competitors like Nokia and HTC to trade higher.
Back home, heavy weight counters like CIMB, AXIATA and RHPCAP facing selling pressure and fell lower today resulted cash KLCI and FKLI to trade lower.
Daily chart formed the second wide range down bar candle closed in between middle and lower Bollinger band level after market opened higher, slide lower followed by second session falls before recovered slightly but still closed near the low of the day.
Technical chart study still calling a correction range bound downside biased market development possibly 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 resistance or strength with quick cut loss and profit target.

20110825 1751 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 : downside biased.

20110825 1634 Latest Gold: Will Risk Aversion Banish Correction Fears? Research Report by Reuters.

Dear All, 
Here is the latest Gold: Will Risk Aversion Banish Correction Fears? Research Report by Reuters. Here's the link : Gold: Will Risk Aversion Banish Correction Fears ?. Enjoy !

20110825 1605 Global Market & Commodities Related News.

Asian shares cheered by Wall St; Apple pressured
SYDNEY, Aug 25 (Reuters) - Asian shares rose on Thursday, cheered by gains on Wall Street, but Apple skidded on the shock resignation of Silicon Valley legend Steve Jobs and gold continued to struggle after running into a wall of profit-taking.
"Apple will need to show that without Jobs it can come up with visionary products," said Hendi Susanto, analyst at Gabelli & Co.

FOREX-Dollar set to firm further ahead of Bernanke
SINGAPORE/TOKYO, Aug 25 (Reuters) - The dollar stayed firm against other major currencies on Thursday and could eke out more gains after a short-covering rally the day before, as investors fret that the Federal Reserve may fail to signal new stimulus for the economy this week.
Market players are worried that the U.S. economy could slip into recession and are unconvinced that Fed Chairman Ben Bernanke is ready to signal another bond-buying programme when he speaks on Friday at a central bank conference in Jackson Hole, Wyoming.

US wheat slides for 2nd day, Canadian f'cast weighs
SINGAPORE, Aug 25 (Reuters) - U.S. wheat futures fell more than 1 percent, losing more ground as the market came under pressure from better-than-expected Canadian
crop and forecasts of favourable weather in Australia's grain producing areas.
"I guess people are on the sidelines today as everyone is cautious before Bernanke's speech," said Lynette Tan, an analyst with Phillip Futures in Singapore. "It is also higher output forecast for the Canadian crop and some profit-taking after strong gains."

Australia weather bureau sees wetter conditions in grain belt
SYDNEY, Aug 25 (Reuters) - A wetter-than-normal normal spring is expected across the grain growing belt of Western Australia, which could boost the harvest in the country's top wheat exporting state that suffered crop withering drought last year.
There is also a good chance of rain across northern New South Wales and southern Queensland states in eastern Australia where a dry winter has left wheat crops struggling, according to a forecast from the Australian Bureau of Meteorology..

Illinois corn yields seen average; stress evident
MAQUON, Ill., Aug 24 (Reuters) - Corn yield prospects in central Illinois were slightly above average, helped by timely planting, but stress from heat and dry conditions capped production potential, crop scouts on an annual U.S. crop tour said on Wednesday.
But corn yield prospects in north-central sections of the No. 2 U.S. corn-producing state were below average, dragged down by stressful summer heat that hampered development and pollination.

US ethanol output climbs even as corn prices rise
KANSAS CITY, Mo., Aug 24 (Reuters) - U.S. ethanol production bounced back in the last week with good demand helping offset high prices for key ingredient corn.
The Energy Information Administration said on Wednesday that U.S. ethanol production totaled 904,000 barrels per day, up 5,000 barrels per day from the previous week.

Ghana cocoa purchases beat forecast -Cocobod
ACCRA, Aug 24 (Reuters) - Cocoa purchases declared by private buyers to Ghana's industry regulator Cocobod since the start of the 2011 light crop have surpassed the season's forecast to reach 80,393 tonnes by Aug. 18, Cocobod data showed on Wednesday.
Cocobod had forecast purchases of about 80,000 tonnes through the 11-week light crop, which ends in mid-September.

Brent crude steady near $110, lower stocks support
SINGAPORE, Aug 25 (Reuters) - Brent crude steadied around $110 a barrel, supported by reduced U.S. crude stocks and positive manufacturing data, countered by economic growth uncertainties.
"The market had expected crude stocks to build but the report showed a drop in stocks," said Singapore-based Victor Shum of energy consulting firm Purvin & Gertz.

Petrobras July oil output falls 3.8 pct from June
RIO DE JANEIRO, Aug 24 (Reuters) - Brazilian state-controlled oil company Petrobras  said on Wednesday that its domestic oil output fell 3.8 percent in July compared with June to an average 1.97 million barrels a day.
The drop was due to maintenance in several offshore fields, including Marlim, aboard the P-20, P-35 and P-37 platforms; Albacora Leste, aboard the P-50 platform; and in Parque de Baleias, aboard the floating production storage and offloading ship FPSO Capixaba, Rio de Janeiro-based Petrobras said in a statement.

Syrian forces raid eastern towns, EU may embargo oil
AMMAN, Aug 24 (Reuters) - Syrian forces killed two people in raids on an eastern tribal region on Wednesday as part of a crackdown on dissent that could lead to European Union sanctions on Syria's oil sector as early as next week.
A force of more than 20 tanks and other armoured vehicles entered districts in the town of Mayadeen and nearby village of Alburhama al-Tayana in the eastern province of Deir al-Zor before withdrawing, activists said. Five people were also wounded and dozens arrested in house to house raids, they said.

Indonesia's Timah says refined tin output down 5 pct in H1
JAKARTA, Aug 25 (Reuters) - Refined tin production at Indonesia's state-owned Timah , the world's largest integrated tin miner, fell 5 percent in the first half of this year compared to a year ago, the company said on Thursday.
First half refined tin production was 18,455 tonnes versus 19,501 tonnes last year, the company said in a statement.

Zinc users, analysts eye rising premiums
LONDON, Aug 24 (Reuters) - Zinc users in Europe are confident they will continue to secure the metal they need, although they will have to pay higher premiums as regional supplies are relatively tight, despite a global glut.
Premiums for spot material in Europe -- last quoted at $130-145 a tonne - are higher than market fundamentals would suggest, according to some consumers and analysts, because most excess regional supply is being squirreled far away in the United States.

BHP says sticks with long-term contracts on iron ore supply
SYDNEY, Aug 24 (Reuters) - BHP Billiton  , the world's no. 3 iron ore miner, said on Wednesday it was linking the majority of its sales to monthly average spot prices but continued to negotiate long-term contracts for supply volumes.
BHP Billiton led a drive in 2010 to disband a 40-year-old system of pricing iron ore once a year in the face of opposition from customers in China who complained it would hand too much power to suppliers.

Southern Copper reports no damage from Peru quake
LIMA, Aug 24 (Reuters) - No damage was reported to Southern Copper's  mining operations after a 7.0-magnitude earthquake struck a remote region of the Amazon on Wednesday, Chief Executive Oscar Gonzalez said.
The quake shook buildings in the Peruvian capital, Lima, 600 kilometers (370 miles) away but there have been no damage reports from the Andean country.

German first half 2011 non-ferrous metal output up
HAMBURG, Aug 24 (Reuters) - German production of non-ferrous metals was mostly up in the first half of 2011 and output in the full year could also rise, German metals industry association WVM said on Wednesday.
Second quarter output "consolidated at a high level" after a firm first quarter start, the association said.

Mining, energy operations OK after Peru quake
LIMA, Aug 24 (Reuters) - Mining and energy operations in Peru, which exports metals and natural gas, were not affected by the 7.0 magnitude earthquake that hit a remote part of the country's Amazon region on Wednesday.
The quake's epicenter was near the town of Pucallpa, which lies some 600 km (370 miles) from the capital of Lima in a sparsely populated central-eastern region close to the Brazilian border, the U.S. Geological Survey (USGS) said.

Japanese cash in on gold price boom
TOKYO, Aug 24 (Reuters) - For Eriko Ebina, standing outside a downtown Tokyo medical equipment store that has a side business buying gold, the recent surge in prices for the precious metal was just too tempting.
"For more than 30 years, I kept gold jewellery mother bought for me, and with media saying prices are high, I thought I would sell them now except for a few keepsakes from her," said Ebina, in her 60s.

CME hikes gold margins as expected; second time in Aug
BANGALORE/SINGAPORE, Aug 24 (Reuters) - The CME Group  on Wednesday raised margins on gold futures by about 27 percent, the biggest hike in more than two and a half years and the second increase in a month, as gold prices fell sharply after a record-setting rally.
The hike was widely anticipated after the Shanghai Gold Exchange announced to raise margin requirements on some of its gold forward contracts earlier this week.

METALS-LME copper steady, U.S. data supports
SHANGHAI, Aug 25 (Reuters) - LME copper was steady on Thursday as encouraging U.S. durable goods data and a rise in equities supported sentiment, but investors were cautious as they looked for direction from the health of the global economy.
Three-month copper on the London Metal Exchange  rose 0.1 percent to $8,885 a tonne by 0420 GMT, after rising 0.3 percent in the last session.

PRECIOUS-Gold loses more shine after CME margin hike
SINGAPORE, Aug 25 (Reuters) - Gold fell more than 1 percent on Thursday, extending the previous session's losses, after the CME Group  raised trading margins by the most in over two and a half years to curb volatility in the bullion that had surged to dizzying heights.
Spot gold dropped by more than 4 percent on Wednesday, its biggest drop since December 2008, as investors liquidated positions after the precious metal surged nearly 35 percent this year to a record high above $1,911 on Tuesday.  

20110825 1056 Global Market & Commodities Related News.

GLOBAL MARKETS-Asian shares cheered by Wall St; Apple loses lustre
SYDNEY, Aug 25 (Reuters) - Asian shares tracked Wall Street higher on Thursday, but Apple skidded on the shock resignation of Silicon Valley legend Steve Jobs and gold continued to struggle after running into a wall of profit-taking.
"Apple will need to show that without Jobs it can come up with visionary products," said Hendi Susanto, analyst at Gabelli & Co.

Brent rises above $110 as U.S. crude stocks dip
NEW YORK, Aug 24 (Reuters) - Brent oil prices edged higher in choppy trading on Wednesday, but U.S. prices slipped as traders weighed expectations for the eventual return of Libyan oil exports against a surprise dip in crude inventories in the United States.
"The EIA data was supportive but not that bullish, so you just saw some profit taking late for (U.S.) crude," said Dan Flynn, analyst at PFGBest Research, adding that developments in Libya were making it harder to sustain

Petrobras July oil output falls 3.8 pct from June
RIO DE JANEIRO, Aug 24 (Reuters) - Brazilian state-controlled oil company Petrobras  said on Wednesday that its domestic oil output fell 3.8 percent in July compared with June to an average 1.97 million barrels a day.
The drop was due to maintenance in several offshore fields, including Marlim, aboard the P-20, P-35 and P-37 platforms; Albacora Leste, aboard the P-50 platform; and in Parque de Baleias, aboard the floating production storage and offloading ship FPSO Capixaba, Rio de Janeiro-based Petrobras said in a statement.

OPEC unlikely to cut supply early in Libyan restart-delegate
LONDON, Aug 24 (Reuters) - OPEC's Gulf members are unlikely to reduce oil output in the early phases of a restart of Libyan supplies, because it is unclear how long a significant recovery will take, a delegate from a Gulf OPEC country said on Wednesday.
While Muammar Gaddafi abandons his Tripoli stronghold and rebels hail the end of his rule, the oil industry is weighing the implications of a restart of Libyan supplies, which have slowed to a trickle during the conflict.

NYMEX-Natgas ends down near 2 pct ahead of Thursday EIA
NEW YORK, Aug 24 (Reuters) - U.S. natural gas futures ended lower on Wednesday, pressured by expectations for a big inventory build on Thursday and no reports of serious damage to East Coast gas pipelines after Tuesday's earthquake.
"I think any hurricane premium came out of the market today, and people were also selling in anticipation of a big inventory build on Thursday," a New York-based trader said.

Euro Coal-Prices stable as oil stalls
LONDON, Aug 24 (Reuters) - Prompt physical coal prices held steady on Wednesday as European buying interest slackened and oil hovered at around $109, utilities and traders said.    
"There's an awful lot of coal around and I don't see anybody at all behind us in the queue to buy it," a source at the utility said.

COMMODITIES-Gold dives, pulls commods down as Wall St rises
NEW YORK, Aug 24 (Reuters) - Gold futures on Wednesday plunged the most since 1980, retreating further from record highs and pulling commodities broadly lower as some investors worried about U.S. monetary policy and some put money into the battered stock market.
"You have a commodity that retail investors, hedge funds and everybody were long, and the technical indicators showed it was overbought. It was just a matter of time before the market starts cracking," said Mihir Dange, COMEX gold options floor trader for Arbitrage LLC.

20110825 1048 Local & Global Market Related News.

Total approved investments rose 120% yoy to RM16.4bn in 2Q11 (RM12.2bn in 1Q11).  In 1H11, the total approvals amounted to RM28.6bn (RM13.2bn in 1H10). (Mida)

PM Datuk Seri Najib Tun Razak yesterday launched the RM1.4bn  1Malaysia People's  Welfare Programme or KAR1SMA to assist about 500,000 recipients of welfare aid. The  aid would be given monthly under the programme to people in the target group comprising  senior citizens, disabled persons, single mothers and widows of soldiers and policemen.  The recipients would each receive between RM100 and RM450 per month.
• The allocation covered aid for children (RM290m), the disabled (RM332m) and senior  citizens (RM455m) and funding of social programmes at the community level (RM303m).
• A new category has been introduced under the programme for aid to eligible widows of  soldiers and policemen, involving a sum of RM4.1m. (Bernama, The Star)  

The newly-appointed CEO of Malaysia External Trade Development Corp (Matrade),  Dr Wong Lai Sum, said her immediate priority was to ensure export growth for the country.  Wong assumed the position on 20 Aug 2011, replacing Datuk Noharuddin Nordin, who has  been appointed director-general of Malaysian Industrial Development Authority.  
• Wong said Matrade was trying to achieve the 10th Malaysia Plan's target of 10.6%  export growth. The first half of the year saw an export growth of 8.3%. Her strategy for  the year will emphasise on fast-growing markets such as China, India and South Korea.  (Bernama, Financial Daily)    

Sarawak has set aside 4,300 hectares of land in Sri Aman to be transformed into the  country's  main rice bowl  with production expected to start in 2016. State Deputy Chief  Minister Tan Sri Alfred Jabu  said areas identified in Sri Aman were Batang Lupar,  Bijat  Stumbin and Banting Lingga. "The project has been approved by the federal government  and it is part of the government's strategy to eradicate poverty in the areas," he said.  
• To kick start the project, a pioneer paddy plantation project was already underway on a  50-hectare site in Stumbin, undertaken by Padiberas Nasional Bhd (Bernas).  
• Limbang, located in the northern part of the state, had also been identified as a potential  area for mass paddy plantation and production, he added. (Bernama)  

A sweeping  U.S. budget  deal has brightened the country's fiscal outlook but its gains  could evaporate if Congress extends tax breaks in coming years, nonpartisan  congressional forecasters said. Rock-bottom interest rates also will help slash projected  budget deficits nearly in half over the next 10 years, the  Congressional Budget Office said, and public debt will shrink to 61% of the economy over that time period -- roughly the  level that economists consider sustainable. The good news came with plenty of caveats.
• Unemployment will hover well above 8% and economic  growth will remain anemic  through the 2012 elections as the country struggles to recover from the deepest  recession since the 1930s, CBO said.
• Budget deficits will remain high by historical standards as the population ages and  healthcare costs continue to rise, the agency said.
• And the US$3.3tr in new budget savings could disappear entirely if Congress opts to  extend a range of tax breaks and other temporary fixes, such as higher payments to  doctors and hospitals, that are due to expire at the end of 2012. (Reuters)  

U.S. mortgage applications last week fell a seasonally adjusted 2.4% in the week ended  19 Aug (4.10% in the prior week), the Mortgage Bankers Association said, as market  volatility and economic uncertainty discouraged those in the market for a home.  Purchasing declined 5.7%, according to the MBA's weekly survey. Refinance activity was  down 1.7%. Rates on 30-year fixed-rate mortgages averaged 4.39%, up from 4.32%.  (WSJ, Bloomberg)  

U.S. durable goods orders climbed more than forecast in Jul as a surge in demand for  aircraft and autos eclipsed a decrease in business  equipment, including computers and  machinery. Bookings for goods meant to last at least three years rose 4% in Jul (-1.3% in  Jun), the most in four months, a Commerce Department report showed. Economists called  for a 2% gain. (Bloomberg)  

U.S. durable goods orders excluding the volatile transportation category,  unexpectedly advanced 0.7% in Jul (+0.6% in Jun). Economists expected a reading of - 0.6% in Jul. (U.S. Census Bureau, Bloomberg)  

U.S. orders for non-defense capital goods excluding aircraft, a proxy for future  business investment, dropped 1.5% in Jul (+0.6% in  Jun), the most in six months.  (Bloomberg)  

U.S. shipments of non-defense capital goods excluding aircraft, used in calculating  gross domestic product, increased 0.2% in Jul (+1.9% in Jun). (Bloomberg)  

U.S. home prices fell 5.9% yoy in 2Q (-5.6% in 1Q), the biggest decline since 2009, as  foreclosures added to the inventory of properties for sale. On a qoq basis, prices dropped  0.6% (-2.6% in 1Q), the Federal Housing Finance Agency said. (U.S. Federal Housing  Finance Agency, Bloomberg)  

Eurozone industrial orders slipped 0.7% mom in Jun (+3.6% in May), the Eurostat said.  Economists had forecast a gain of 0.4%. On a yoy basis, orders rose 11.1%. (Bloomberg)  

Thailand raised interest rates for the seventh meeting as the government’s plans to boost  wages and rice prices heighten inflation risks, even as the central bank signaled it may be  nearing the end of monetary tightening. The Bank of  Thailand increased its benchmark  one-day bond repurchase rate by 0.25%pt to 3.5%, it said. The move was predicted by  economists. (Bloomberg)  

Japan unveiled a US$100bn effort to help companies cope with a surging yen, signaling  that officials may be resigned to the currency remaining high. The government will release  foreign-exchange reserves to the state-run Japan Bank for International Cooperation for  funding to aid exporters and spur purchases overseas,  Finance Minister Yoshihiko Noda  said. The announcement came hours after Moody’s Investors Service lowered the nation’s  debt rating one step to Aa3, with a stable outlook. (Bloomberg)

20110825 1046 Malaysia Corporate Related News.

Supermax Corp expects Asia to contribute up to 11% its total sales by 2012 from 6% right  now due to higher demand.  
• Supermax executive chairman and group MD Datuk Seri  Stanley Thai sees Libya,  Turkey and Egypt as future high-growth areas on top of other already emerging markets  such as China, India, Vietnam and Indonesia.  
• On its expansion plans, Thai said it will decommission old production lines and replace  with 12 new production lines at one of its old plants in Meru, Klang to produce nitrile  gloves and surgical gloves by 4Q11. It will also build two new plants at existing facilities  in Meru to be completed by year-end.  
• Thai said natural rubber latex price is expected to hover at an average of RM7 per kg in  December, while nitrile latex price to remain at US$2,100 (RM6,237) per tonne level.  (BT)

Tenaga Nasional Bhd : Gas project to benefit TNB
The RM15.0bil gas exploration project in the North Malay Basin, to be undertaken by Petroliam Nasional Bhd (Petronas) and its production-sharing contract (PSC) partners will benefit a number of oil and gas companies as well as utility giant Tenaga Nasional Bhd. TNB, which would be a key customer, said that the gas curtailment exercise by Petronas had severely impacted its bottom line, prompting it to issue a warning on its profitability and dividend payment. The company has been facing prolonged gas shortage for months and is currently getting 30.0% less than it is supposed to, On average, TNB was getting about 900 million standard cu ft. per day (mmscfd), far from the usual rate of 1,250 mmscfd. Petronas said they are undertaking the project on an accelerated basis with their PSC partners and that first delivery of 100 mmscfd is expected by early 2012, ramping up to 250 mmscfd by 2015. – StarBiz

SapuraCrest,Kencana merger by 1Q next year
SapuraCrest Petroleum Berhad (SapuraCrest) and Kencana Petroleum Berhad (Kencana) expects their merger to take place by the first quarter of 2012. The RM11.9bil merger of the two companies will result in the world’s fifth largest oil and gas service provider, enabling it to compete with global oil majors for more complex, capital intensive projects. The companies’ boards of directors had recently established the Integration Committee, to be jointly chaired by SapuraCrest executive vice chairman and president Datuk Shahril Shamsuddin and Kencana group chief executive officer Datuk Mokhzani Mahathir. In a joint statement, they expressed their keen interest to explore the opportunities and dynamics as a merged entity via Integral Key Sdn Bhd (IKSB), the special purpose vehicle wholly-owned by Mayban Ventures Sdn Bhd. Under the cash and share swap deal also approved by both boards, IKSB will acquire all the assets and liabilities of SapuraCrest for a total consideration of RM5.9bil and Kencana for RM6.0bil. The companies expect to secure 75.0% approval from each of their shareholders at  extraordinary general meetings to be held by end-year. -The Edge

DiGi is waiting for the Malaysian Communications and Multimedia Commission (MCMC),  to make a concrete decision on the service tax for mobile prepaid services.  "To date,  there has not been any concrete statement from the MCMC. We are basically waiting for  it," DiGi's head of market operations and partnerships, Moharmustaqeem Mohammed said.
• The decision to pass on the six per cent service tax to mobile prepaid users by telcos  had been deferred from July 1 to Sept 1 after industry players met with the regulator.  
• Moharmustaqeem said its prepaid plan, Super Reload Social has received encouraging  response since its launch in June.  
• During this campaign customers who top-up would get RM15 worth of talktime credit,  free 250 DiGi to DiGi SMS, 101 DiGi to MMS and 100 Facebook or Twitter SMS.  (Bernama)    

The Terengganu state government, which owns a total of 67.24% stake in Eastern Pacific  Industrial Corp Bhd (EPIC), has offered to acquire the remaining 32.76% stake shares at  RM3.10/share. This is 17 sen above the last traded  price of RM2.93 before it was  suspended about midday on Wednesday, Aug 24.  
• It reached a 52-week high of RM2.97 on Tuesday. EPIC said on Wednesday it had  received the notice of unconditional takeover offer from Lembaga Tabung Amanah  Warisan Negeri Terengganu (LTAW) and its unit Pembinaan PTB Sdn Bhd (PPTB)  which own 22.55% or 37.60m shares.  
• LTAW and PPTB also announced to undertake a cash compensation to EPIC  shareholders who sold their shares between Dec 10, 2010 and on Aug 23, 2011. (Edge  Financial)  

Maybank is optimistic that the upcoming Indonesian ruling  on bank shareholding will not  be detrimental to foreign investors. “Furthermore, foreign banks only command less than  30% of the market compared with the more than 70% dominated by Indonesian banks,”  said Maybank president and CEO Datuk Seri Wahid Omar.  
• He expects some sort of flexibility to be given to foreign investors in Indonesia. In view of  the current economic uncertainties, Maybank has taken measures to increase its  medium-term funding for US dollars to prepare for market volatilities ahead, Wahid said.  (Starbiz)    

Petronas may start the proposed RM15bn North Malay Basin project this year if it wants  to make its first gas delivery by early 2013 as planned, an industry source said. "As  indicated, there will be nine fields with the first delivery of 100 mmscfd (million standard  cubic feet of gas per day) by early 2013.
• "It's difficult to say exactly when (the project will start) but most probably within this year.  There's just a few months left," the source said. On partners to develop the project, the  source said they are likely to be the existing PSC contractors of the nine discovered gas  fields.  
• A source said, “The gas will land at Petronas Gas Bhd’s onshore gas terminal in Kerteh  before being piped to its gas processing plants and then piped into the Peninsular Gas  Utilisation pipeline network for distribution to customers in the power and non-power  sector. (BT)  

The Australian Government will oppose a Liberal-National Party coalition-supported antitrade Private Member's Bill on  compulsory palm oil labelling as it would breach  Australia's obligations under the World Trade Organisation (WTO). Trade Minister Dr Craig  Emerson said the Bill passed the Senate following the personal intervention of coalition  leader Tony Abbott, who is widely tipped to be Australia's next prime minister. Both  Malaysia and Indonesia had warned they would take action against Australia at the WTO if  the Bill were passed. (Bernama, BT)  

Land Public Transport Commission (SPAD) has teamed up with Puspakom to weed out  commercial and public vehicles that are not roadworthy. Malaysia has some one million  commercial and public vehicles plying the roads nationwide, of which some 7,000 vehicles  every month have missed their mandatory once-every-six-month annual inspections and  are not fit to be on the roads. SPAD chairman Tan Sri Syed Hamid Syd Jaafar Albar said  both parties will share information to track, record and take follow-up action on commercial  vehicles which fail to turn up for their mandatory Puspakom inspection. (BT)    

The government could start calling for bids to develop tracts of land after phase 1 of the  River of Life project in completed. Clean-up works are expected to commence early 2012.  The spin-off would be the redevelopment of select locations along the 10km stretch  including retail and residential properties.  
• KL Mayor Tan Sri Ahmad Fuad Ismail said the project delivery partner (PDP), which is  Ekovest-MRCB JV, will be given incentives to manage and find buyers for the land. The PDP will get 2% of the land transaction's total value. This incentive is in addition to the  basic fees for the PDP to coordinate and river beautification works. Apart from the  RM1bn set aside for river beautification, the government has allocated RM3bn for river  cleaning. However, Tan Sri said the PDP will not be allowed to bid for government land  near the Klang River. (Financial Daily)    

The Malaysian Iron and Steel Industry Federation (MISIF) has lauded the Government's  decision to terminate investigations into the import of hot rolled coils (HRC). The industry  body said the decision was good for the healthy growth of the entire iron and steel industry  instead of benefiting one company. MISIF and Megasteel, the sole producer of HRC, were  at loggerheads over this issue, with the federation arguing that a hike in import duty would  negatively impact customers. (Starbiz)  

IJM Corp Bhd's order book may potentially hit RM9bn by FY-May 12 from the RM3.7bn it  has in hand now. The bulk of the increase will come from the RM5bn worth of new orders  for the New Pantai Expressway (NPE) extension and the West Coast Expressway, says  CEO Datuk Teh Kean Ming. The RM9bn order book will surpass IJM's record RM6.5bn set  in 2007.  
• Moving forward, IJM will focus on the domestic market as overseas business namely in  India, its key market, is economically more expensive. About 75% of IJM's projects are  from Malaysia and the balance, abroad. Its overseas projects are mostly in India.(BT)    

The Malaysian Ex-Servicemen Association says it hopes Esso Malaysia will be sold to  local parties as it is a strategic and valuable asset contributing to domestic economic  growth.
• LTAT is also keen to buy the equity in Esso Malaysia as its subsidiary,  Boustead  Holdings is involved in the downstream petroleum business. (Bernama)  

Kian Joo Can Factory (KJFC) is clear to carry out its proposed corporate exercises which  include a bonus issue and the issuance of warrants  after  Can-One International’s injunction was dismissed. (Financial Daily)  

SEG International (SEGi) has signed a memorandum of understanding (MoU) with the  Ministry of Labour, War Invalids and Social Affairs of Vietnam (Molisa) on the collaboration  for technical and vocational training. (Financial Daily).  

Perodua has received 31,000 orders for its newly launched Myvi, said MD Datuk Aminar  Rashid Salleh. "We've already delivered 14,000 units while the rest will be handed to the  owners in phases," he said. About 8,000 new Myvis are delivered to the owners every  month. (Bernama)  

Former Sunway Holdings managing director Datuk Yau Kok Seng is joining Hong Leong  Group. He will be group MD of Hong Leong Industries Bhd (HLI) from Sept 5. (BT)  

Nadayu Properties aims to launch three projects worth a combined RM1.5bn in the Klang  Valley and Penang from next month to grow itself and build its branding. "We are upbeat  on the market. We plan to have a good following and grow the company's net profit and  revenue year-on-year. We do intend to return dividends to shareholders. I believe  overtime, we will have local and foreign funds investing in the company," Nadayu chairman  Hamidon Abdullah said. (BT)

20110825 1024 Renewable Energy Related News.

TOKYO, Aug 23 (Reuters) - Japan's lower house of parliament passed a bill on Tuesday to promote investment in solar and other renewable energy sources as politicians took a step towards the prime minister's goal of reducing reliance on nuclear power.
Damage and the radiation leak at the tsunami-hit Fukushima Daiichi nuclear plant has shattered the public's confidence in the safety of atomic power and plunged the country's energy policy into disarray. Ahead of the disaster, Japan had planned to build enough reactors to raise nuclear power supply to meet 50 percent of demand by 2030 from 30 percent.

BANGALORE, Aug 22 (Reuters) - China's Suntech Power Holdings Co Ltd  joined some peers in signalling a rebound this year in a solar industry hammered by subsidy cuts in the world's two biggest markets, but a weak sales and margin outlook nudged its shares to a life-low.
A massive drop in prices forced the largest solar company by manufacturing capacity to again cut its full-year revenue outlook and warn that profit margins in the third quarter would narrow.

BERLIN, Aug 22 (Reuters) - It won't be easy to run a national railway on renewable energy like wind, hydro and solar power but that is what Germany's Deutsche Bahn aims to do for one simple reason: it's what consumers want.  
Deutsche Bahn [DBN.UL] says it wants to raise the percentage of wind, hydro and solar energy to power its trains from 20 percent now to 28 percent in 2014 and become carbon-free by 2050.

Aug 20 (Reuters) - Japan's Mitsui Chemicals Inc , Mitsui & Co  and Toshiba Corp  plan to construct the country's largest solar power facility with an output of 50,000 kilowatts (KW), the Nikkei business daily reported.
The project is in anticipation of the passage of a bill that will require utilities to purchase electricity from renewable sources at fixed rates, the paper said.

LONDON, Aug 19 (Reuters) - The British energy minister on Friday appointed a director at Scottish Power Renewables  to lead its task force on reducing the levelised cost of offshore wind to 100 pounds ($165) per megawatt-hour (MWh) by 2020.
Andrew Jamieson, regulation and markets director at Scottish Power Renewables and chair of green energy body RenewableUK, will head with immediate effect the government's working group to help industry bring down the cost of offshore wind.

BANGALORE, Aug 19 (Reuters) - China Sunergy Co Ltd  cut its full-year shipment outlook, prompted by lower shipments and selling prices in the second quarter, and the solar cell and module maker said it expects a further drop in the prices in the rest of the year.
China Sunergy's American Depository Shares (ADSs) fell as much as 5 percent to $1.20 -- a near three-week low -- in Friday early trading on Nasdaq. The stock has lost about 73 percent of its value in the last six months.

Aug 19 (Reuters) - Chinese solar panel maker Yingli Green Energy Holding Co Ltd  reported a second-quarter profit that beat analysts' estimates as expansion in new markets drove shipments.
Net income rose to $58.1 million, or 36 cents per American depository share (ADS) from $32.1 million, or 21 cents per ADS, a year ago.

LONDON, Aug 19 (Reuters) - Global economy woes which have gripped financial markets have made raising capital difficult again for some environmental technology firms, according to Vivek Tandon, co-founder of London-based Aloe Private Equity.
London-based Aloe Private Equity has 175 million euros  ($253 million) of assets under management and now has three funds. Its investment portfolio includes 11 firms, mainly in the energy efficiency, renewable energy and recycling sectors.

BANGKOK, Aug 19 (Reuters) - Thailand's top energy firm, PTT Pcl , said on Friday it had signed an agreement with affiliate IRPC Pcl  to look into investing about 6 billion baht ($200 million) in a solar power plant with capacity of 50-90 megawatts.
PTT said in a statement it would take six months to complete the study and it put the project in the context of its aim to secure long-term energy reserves for the country.

BANGALORE, Aug 18 (Reuters) - Solar company STR Holdings Inc  is looking to buy a competitor or a raw material manufacturer as it brings acquisitions into the heart of its business strategy.
"We are looking at acquisitions," Chief Financial Officer Barry Morris said in a telephone interview. "Before, we were a little more opportunistic, now it's definitely part of our core strategy."

Aug 18 (Reuters) - Wind power producer China Wind Power International Corp  said it signed an engineering contract with China Ming Yang Wind Power Ltd  for the construction of its wind farm project in the Asian country.  
Under the terms, Chinese wind turbine manufacturer Ming Yang will deliver and install 132 units of 1.5 megawatt (mw) wind turbine generators and provide engineering and construction management for the 198 mw-project.

20110825 1023 Biofuel Related News.

AMSTERDAM, Aug 24 (Reuters) - Vopak , the world's largest independent storage tank operator, said it was seeing strong demand for its oil and chemical storage services as it stuck to its previously lowered 2011 outlook on Wednesday.
Vopak which offers oil, chemical and biofuel storage in major ports including Rotterdam, Fujairah, Tallinn and Singapore, said it was seeing robust demand for oil storage services, while demand for chemical storage services was strong in Asia, stable in the Americas and encouraging in Europe.

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.

WASHINGTON, Aug 19 (Reuters) - The U.S. Energy Department said on Friday it has offered a conditional commitment for $133.9 million in loan aid to Abengoa Bioenergy  for a cellulosic ethanol plant in Kansas.
The Abengoa project is expected to convert about 300,000 tons of corn crop waste into about 23 million gallons (105 million litres) of ethanol per year.

SAO PAULO, Aug 18 (Reuters) - Bunge  will invest $2.5 billion to boost its sugar and bioenergy capacity in Brazil through 2016, the company said in a statement on Thursday.
The investments will go into eight of the group's mills and will expand crushing capacity by 50 percent from present levels to 30 million tonnes a year of cane.

WASHINGTON, Aug 18 (Reuters) - A Florida plant that would  produce biofuels from yard trash and citrus rinds has received a $75 million loan guarantee from the U.S. government.
INEOS New Plant Energy LLC plans to produce 8 million gallons a year of advanced biofuel at the plant in Vero Beach on Florida's Atlantic coast. It was among four projects tentatively identified early this year for construction support.

LONDON, Aug 18 (Reuters) - Greater use of woody fuels is vital to slash global carbon emissions but fast advances in crop yields will be needed to avoid driving up food prices, members of Germany's Potsdam Institute for Climate Impact Research found.  
Biofuels are already widely used in the United States, Europe and Brazil to substitute for gasoline and diesel, but are made from crops including sugar, oilseeds and corn which has driven concerns they are stoking food prices.

SAO PAULO, Aug 17 (Reuters) - Brazil's state oil company Petrobras  and sugar and ethanol group Sao Martinho  announced on Wednesday a 520.7-million-real ($328 million) investment that will quadruple ethanol output at their joint Boa Vista mill.
The expansion of crushing capacity in Brazil's cane sector that this investment represents has been a rare occurrence in the past few years, as bigger mills focus their resources on buying distressed rivals rather than new projects.

KANSAS CITY, Mo., Aug 17 (Reuters) - U.S. ethanol production slipped in the last week as profit margins narrowed and domestic demand waned, snapping a four-week rise in output.
The Energy Information Administration said on Wednesday that U.S. ethanol production totaled 899,000 barrels per day, down about 1 percent from 908,000 barrels per day (bpd) the previous week. The weekly production of 6.293 million barrels is still the third-highest weekly output level over the last two months.

20110825 1022 Global Market Related News.

Asian Stocks Rise on U.S. Durable Goods (Source: Bloomberg)
Asian stocks rose for a second day this week after U.S. reports on durable-goods orders and home prices beat economists’ estimates, easing concern that the world’s biggest economy is slowing and boosting the earnings outlook for exporters. Toyota Motor Corp. (7203), the world’s largest carmaker, gained 2.3 percent in Tokyo. James Hardie Industries SE, the building materials supplier that gets 68 percent of sales from the U.S., jumped 3.6 percent. Samsung Electronics Co., the world’s second- biggest maker of mobile phones by sales, climbed 3.8 percent in Seoul after Steve Jobs resigned as chief executive officer of rival Apple Inc. The MSCI Asia Pacific Index added 0.8 percent to 120.12 as of 9:44 a.m. in Tokyo, with more than 10 stocks rising for each that fell. 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.

Emerging-Market Stocks Decline on Economic Growth Concern, Lower Earnings (Source: Bloomberg)
Emerging-market stocks fell, with the benchmark index dropping for the fourth day in five, as companies reported disappointing results and investors weighed what the Federal Reserve may do to bolster the economy. The MSCI Emerging Markets Index retreated 0.8 percent to 978.21 at 4:31 p.m. in New York, following yesterday’s 2 percent gain. The Hang Seng China Enterprise Index declined 3.1 percent as China Life Insurance Co. tumbled on a drop in first-half earnings. India’s Sensex Index lost 1.3 percent. Brazil’s benchmark was little changed and Mexico’s fell 0.1 percent.
China Life, the nation’s biggest insurer, sank 12 percent in Hong Kong after reporting a 28 percent slump in earnings while Malaysian Airline System Bhd. (MAS), the national carrier, retreated 4.9 percent after posting a second-straight quarterly loss. Fed Chairman Ben S. Bernanke and other central bankers meet this week in Jackson Hole, Wyoming, amid signs of a slowing global recovery. Data today showed German business confidence fell to its lowest in more than a year.

GLOBAL MARKETS - Investors edgy ahead of Bernanke speech
LONDON, Aug 24 (Reuters) - World stocks were generally weaker on Wednesday and Wall Street looked set for losses as  investors shuffled positions ahead of a highly anticipated Jackson Hole speech by Federal Reserve Chairman Ben Bernanke.
"We think most people aren't looking for (a third quantitative easing programme) and are more bent towards an operation twist where the Fed would increase the maturity of its portfolio by buying longer-term assets," said Kiran Kowshik, currency strategist at BNP Paribas.

Investors trade in tight range ahead of Bernanke speech
LONDON, Aug 24 (Reuters) - World stocks fell as European investors shuffled positions ahead of a Jackson Hole speech by Federal Reserve Chairman Ben Bernanke and Japanese shares sold off following a Moody's downgrade.
"We think most people aren't looking for (a third quantitative easing programme) and are more bent towards an operation twist where the Fed would increase the maturity of its portfolio by buying longer-term assets," said Kiran Kowshik, currency strategist at BNP Paribas.

Orders for Durable Goods in U.S. Increase 4%, Twice as Much as Estimated (Source: Bloomberg)
Orders for U.S. durable goods climbed more than forecast in July as a surge in demand for aircraft and autos eclipsed a decrease in business equipment, including computers and machinery. Bookings for goods meant to last at least three years rose 4 percent, the most in four months, after falling a revised 1.3 percent in June, a Commerce Department report showed today in Washington. The median projection of 81 economists surveyed by Bloomberg News called for a 2 percent gain. Orders excluding the volatile transportation category, unexpectedly advanced 0.7 percent. Automakers last month rebounded from the slump caused by the Japanese earthquake, while some manufacturers like Deere & Co. (DE) continued benefit from growing sales in emerging markets. Nonetheless, regional factory surveys have shown demand plunged in August as concern over the European debt crisis mounted and stocks retreated, indicating the outlook may have since dimmed.

Home Prices Decline 5.9% in Second Quarter (Source: Bloomberg)
Home prices in the U.S. fell 5.9 percent in the second quarter from a year earlier, the biggest decline since 2009, as foreclosures added to the inventory of properties for sale. Prices dropped 0.6 percent from the prior three months, the Federal Housing Finance Agency said today in a report from Washington. In June, prices retreated 4.3 percent from a year earlier, while increasing 0.9 percent from the previous month. Foreclosures are boosting the supply of properties on the market and undercutting the confidence of homebuyers, sapping demand even as mortgage rates tumble to the lowest in more than half a century. The U.S. inventory of homes for sale averaged 3.7 million during the second quarter, the highest since the third quarter of 2010, data from the National Association of Realtors show. The mortgages on 6.5 million U.S. homes had late payments or were in foreclosure in June, according to Lender Processing Services Inc. in Jacksonville, Florida.

Dollar Declines as U.S. Durable Goods Orders Increase More Than Forecast (Source: Bloomberg)
The Swiss franc gained versus all of its most-traded counterparts as concern the euro-area debt crisis is getting worse and the U.S. economy may falter boosted demand for a refuge. The dollar slipped versus a basket of major U.S. trading partners as U.S. durable-goods orders rose more than forecast, briefly spurring risk appetite. The euro fell against the franc as German business confidence dropped to the lowest in more than a year. The yen rose toward a postwar high versus the dollar as Finance Minister Yoshihiko Noda announced a $100 billion effort to help businesses cope with strength in the currency, reducing speculation Japan will intervene to curb gains. “If you look at where to put your safe-haven flows, there really isn’t any place better than the Swiss franc,” said Elizabeth Gregory, market strategist at Swissquote Bank SA in Geneva.

Nasdaq-100 Futures Retreat After Jobs Resigns (Source: Bloomberg)
Nasdaq-100 Index futures declined after Steve Jobs resigned as chief executive officer of Apple Inc. (AAPL), the world’s second-largest company by market value. Futures on the index, which gets 66 percent of its value from computer-related companies such as Apple, fell 0.9 percent to 2,119.25 at 10:23 a.m. in Tokyo. Standard & Poor’s 500 Index futures pared their loss to 0.2 percent from 0.6 percent. Apple shares dropped 5.1 percent to $357.10. Jobs, 56, who has battled cancer and had a liver transplant, presided over a 9,020 percent surge in the stock since July 29, 1997, the day before the San Francisco Chronicle broke the news that he would be named interim CEO. Over the same period, the shares grew in value to $348.7 billion from $2.08 billion. Apple briefly surpassed Exxon Mobil Corp. (XOM) this month as the world’s most valuable company. Chief Operating Officer Tim Cook, 50, succeeded Jobs.

Treasuries Rally Before U.S. GDP Report, Bernanke's Jackson Hole Speech (Source: Bloomberg)
Treasuries rose, snapping a three- day decline, before a government report tomorrow on U.S. gross domestic product and Federal Reserve Chairman Ben S. Bernanke’s speech to central bankers in Jackson Hole, Wyoming. Benchmark 10-year yields were 30 basis points away from a record low, reflecting demand for the safest securities as the U.S. economy slows. At the Jackson Hole conference a year ago, Bernanke said the central bank would “do all that it can” to spur growth, raising speculation he will make similar comments tomorrow. The Fed went on to announce in November a $600 billion debt-purchase plan. “If he does nothing, that will be a problem for bonds,” said Kazuaki Oh’e, a debt salesman in Tokyo at CIBC World Markets Japan Inc., a unit of Canada’s fifth-largest lender. “He may not announce a round of debt purchases but he may use money from redemptions to buy longer-term bonds.”

Dollar Holds Gains Amid Speculation Before Bernanke Speech, German Data (Source: Bloomberg)
The dollar maintained yesterday’s gains against the majority of its most-traded peers amid speculation on what steps Federal Reserve Chairman Ben S. Bernanke will tomorrow outline to stimulate the U.S. economy. The greenback advanced yesterday as investors betted on whether Bernanke will signal a willingness to consider a third round of bond purchases, or quantitative easing, when he delivers a speech at Jackson Hole, Wyoming. The euro held declines versus the dollar before a private report forecast to show German consumer confidence will probably drop in September. The yen fell after Japan’s government announced yesterday a $100 billion fund designed to cope with strength in the currency. “I’d have a bias toward more U.S. dollar buying as I just don’t see Bernanke as coming out and delivering anything too dramatic on the QE3 front,” said Mike Burrowes, a currency strategist at Bank of New Zealand Ltd. in Wellington. “There’s been some reassessment of what Bernanke will deliver.”

Jobs Decision to Resign Erases $52 Billion From S&P 500 as Apple Tumbles (Source: Bloomberg)
Steve Jobs decision to step down as Apple Inc. (AAPL)’s chief executive officer erased as much as $52 billion from the benchmark gauge for U.S. stocks, futures trading shows. The September contract on the Standard & Poor’s 500 Index slumped up to 0.6 percent after Jobs released his statement at 6:34 p.m. in New York yesterday. The measure’s total market value was $9.34 trillion at the close of regular trading at 4 p.m., data compiled by Bloomberg show. Apple fell 5.1 percent. Jobs, 56, who has battled cancer and had a liver transplant, presided over a 9,020 percent surge in the stock since July 29, 1997, the day before the San Francisco Chronicle broke the news that he would be named interim CEO. Over the same period, the shares grew in value to $348.7 billion from $2.08 billion. Apple briefly surpassed Exxon Mobil Corp. this month as the world’s most valuable company. Chief Operating Officer Tim Cook, 50, succeeded Jobs.

Beijing Olympics Bill Due as Record Bonds Mature (Source: Bloomberg)
Beijing’s state-owned infrastructure companies face a record amount of bonds maturing next year as China’s capital city pays the bills for the $70 billion 2008 Olympic Games. Fifteen local government financing units based in Beijing must pay 16.2 billion yuan ($2.5 billion) next year plus interest to investors, breaking last year’s record 12 billion yuan, according to data compiled by Bloomberg. A further 11.6 billion yuan matures in 2013 and 37.6 billion yuan in 2014. The debt is coming due as government efforts to control inflation cause corporate borrowing costs in China to rise to a three-year high of 5.92 percent this month, double the rate in the U.S. How Beijing deals with the bill, which dwarfs the estimated $15.3 billion budget for next year’s London Games, may set a pattern for more than 10,000 local-government financing vehicles across China with about 10 trillion yuan of debt.

Contenders to Replace Kan Emerge in Japan (Source: Bloomberg)
The field of candidates competing to replace Japanese Prime Minister Naoto Kan will be set today, as the downgrade of the country’s credit rating puts pressure on his successor to deal with world’s largest public debt burden. The Democratic Party of Japan leadership candidates or their representatives meet today in Tokyo before an Aug. 29 vote for a new party chief. Kan, whose popularity has plunged after the March earthquake and nuclear crisis, will resign as early as tomorrow after passage of energy and funding bills. Former Foreign Minister Seiji Maehara and three Cabinet members will compete to become Japan’s sixth prime minister in five years. Political instability helped prompt yesterday’s credit rating downgrade by Moody’s Investors Service, and the next leader will face the same challenge that stymied Kan -- opposition to tax increases to rebuild disaster-ravaged areas and pay down debt.

Japan Unveils $100 Billion to Fight Surging Yen as Moody’s Lowers Rating (Source: Bloomberg)
Japan unveiled a $100 billion effort to help companies cope with a surging yen, signaling that officials may be resigned to the currency remaining high. The government will release foreign-exchange reserves to the state-run Japan Bank for International Cooperation for funding to aid exporters and spur purchases overseas, Finance Minister Yoshihiko Noda told reporters in Tokyo today. The announcement came hours after Moody’s Investors Service lowered the nation’s debt rating one step to Aa3, with a stable outlook. The yen was trading today at a level stronger than before officials last intervened to weaken the currency on Aug. 4. Its rise since the March 11 earthquake to post-World War II highs is undermining the nation’s recovery after three straight quarters of economic contraction, complicating the government’s efforts to tackle its debt burden.

Nikkei 225 Rises Most in Two Months as U.S. Data Boosts Earnings Outlook (Source: Bloomberg)
Japanese stocks rose, sending the Nikkei 225 (NKY) Stock Average toward its biggest rally in two months, after U.S. reports on durable-goods orders and home prices beat estimates, boosting the earnings outlook for exporters. Toyota Motor Corp. (7203), which gets 28 percent of its sales in the U.S. and Canada, rose 1.6 percent. Canon Inc. (7751), the world’s biggest camera maker, advanced 1.5 percent. Inpex Corp. (1605), the country’s No. 1 energy explorer, advanced 1.9 percent after the price of crude oil increased. The Nikkei 225 Stock Average gained 1.6 percent to 8,779.15 as of 9:35 a.m. in Tokyo, headed for its biggest gain since June 22. The broader Topix index gained 1.4 percent to 752.79. All 33 industry groups increased on the gauge.

South Korean Consumer Confidence Slides as Global Turmoil Impairs Outlook (Source: Bloomberg)
South Korean consumer confidence fell to a five-month low as stock market turmoil dented the outlook and accelerating inflation hurt purchasing power. The sentiment index fell to 99 in August from 102 in July, the Bank of Korea said in an e-mailed statement today. A reading below 100 indicates people are more pessimistic than the average between the first quarter of 1999 and the second quarter of 2008. The Bank of Korea left interest rates unchanged for a second straight month on Aug. 11 as faltering recoveries in Europe and the U.S. threaten to crimp demand for Asian exports. At the same time, inflation quickened in July and has exceeded the monetary authority’s 4 percent limit each month this year.

Thailand Raises Benchmark Interest Rate as Yingluck Vows to Boost Incomes (Source: Bloomberg)
Thailand raised interest rates for the seventh meeting as the government’s plans to boost wages and rice prices heighten inflation risks, even as the central bank signaled it may be nearing the end of monetary tightening. The Bank of Thailand increased its benchmark one-day bond repurchase rate by a quarter of a percentage point to 3.5 percent, it said in Bangkok today. The move was predicted by 16 out of 20 economists surveyed by Bloomberg News, with the rest expecting no change. The nation has boosted borrowing costs nine times since the start of July 2010, the longest tightening cycle since the 23 months ended June 2006. “We have paddled a long way and we are probably close to our shore now,” Assistant Governor Paiboon Kittisrikangwan told a news conference in Bangkok today. “But it also depends on the tide” on when Thailand will reach the target, he said.

U.K. Stocks Rally on U.S. Goods Orders; RBS, Glencore Advance (Source: Bloomberg)
U.K. stocks climbed for a third day, led by a rally in banks and basic-resources companies, after U.S. durable-goods orders data helped eased concern that the world’s largest economy is slipping into recession. Royal Bank of Scotland Group Plc (RBS) jumped 9.4 percent and Glencore International Plc, the world’s largest listed commodities trader, surged 6 percent. WPP Plc (WPP) advanced 7.4 percent after the world’s biggest advertising company reported better-than-estimated profit. The FTSE 100 Index (UKX) increased 76.43, or 1.5 percent, to 5,205.85 at the 4:30 p.m. close in London, after fluctuating between gains and losses more than 10 times. The gauge slumped 5.3 percent last week after European and U.S. reports trailed economists’ forecasts, adding to concern the global economy is at risk. The broader FTSE All-Share Index (ASX) climbed 1.4 percent today, while Ireland’s ISEQ Index gained 1.3 percent.

Sarkozy Defends Top French Credit Rating (Source: Bloomberg)
French President Nicolas Sarkozy bid to defend France’s top credit rating by raising taxes on companies and the wealthiest as he aimed to limit the fallout of budget cuts and a slowing economy in an election year. Prime Minister Francois Fillon yesterday announced 12 billion euros ($17 billion) of measures in 2011 and 2012 and cut growth forecasts, saying the euro region’s second-largest economy will expand less than 2 percent in each year. The deficit will be 4.5 percent of gross domestic product in 2012, beating the target, when Sarkozy seeks re-election. “There is a crisis of public debt in industrialized nations and the U.S. economic slowdown is slowing our own economy,” Fillon said late yesterday on TF1 television. “Eighty-three percent of the measures in this plan are aimed at big companies, owners of capital and wealthy households. We aimed for measures that were not going to break growth.”

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 Business Confidence Index Drops to Lowest Level in More Than a Year (Source: Bloomberg)
German business confidence fell to the lowest in more than a year as a global slowdown and Europe’s debt crisis damped the outlook for economic growth. The Ifo institute in Munich said its business climate index, based on a survey of 7,000 executives, dropped to 108.7 in August from 112.9 in July. That’s the lowest since June 2010. Economists forecast a decline to 111, according to the median prediction of 37 economists in a Bloomberg News survey. The index reached a record high of 115.4 in February. Germany’s benchmark DAX Index (DAX) has plunged almost 25 percent since late July on fears that another global slump will sap demand for the country’s exports, the main driver of its economic expansion. The debt crisis is also curbing demand within the euro area as governments from Greece to Spain cut spending. German growth slowed to just 0.1 percent in the second quarter from 1.3 percent in the first, the Federal Statistics Office reported on Aug. 16.

European Stocks Climb on Better-Than-Estimated U.S. Durable-Goods Orders (Source: Bloomberg)
European stocks climbed for a third day after a report on U.S. durable-goods orders beat forecasts amid ongoing speculation that the Federal Reserve will act to bolster the economy. Daimler AG (DAI) and Fiat SpA (F) led a gauge of automakers to the biggest gain in 13 months. Ageas, the majority owner of Belgium’s largest life insurer, surged 21 percent after announcing a buyback. WPP Plc (WPP), the world’s largest advertising company, advanced 7.4 percent as profit beat estimates. Heineken NV (HEIA), the world’s third-biggest brewer by volume, tumbled the most since 2003 after saying earnings are unlikely to grow this year. The Stoxx Europe 600 Index rose 1.4 percent to 229.79 at the 4:30 p.m. close in London, extending the advance from the two-year low reached at the end of last week to 3 percent. The gauge has still fallen 21 percent from this year’s peak on Feb. 17 as European and U.S. economic data that trailed economists’ forecasts added to concern the global recovery is at risk.

Central Banks Seen Retaining Gold to Help Manage Debt as Bullion Advances (Source: Bloomberg)
Central banks, net buyers of gold for the first time in a generation, are likely to retain their holdings even if they need to raise cash to counter an escalating debt crisis, according to Morgan Stanley. “Once they’ve sold, that’s it, and buying back would be extremely expensive,” Peter Richardson, chief metals economist at Morgan Stanley Australia Ltd., said in an interview. “They would rather have the backing of a rising asset within their reserve portfolios than use it to reduce debt.” Gold rallied to a record this week as rising government debt burdens and weakening currencies boosted demand for a haven. Central banks are the biggest gold holders, and Thailand, South Korea, Kazakhstan, Mexico and Russia added to reserves this year. The precious metal is the “currency of the world” amid the debt crisis, economist Dennis Gartman wrote Aug. 19.

20110825 1020 Global Commodities Related News.

Corn (Source: CME)
US corn futures end mixed in a see-saw session, as the market rebounds late amid ongoing crop worries. Corn and other ag commodities were pressured by profit-taking after recent gains, traders say. But with persistent reports of disappointing crops on an industry crop tour this week, worries about tight supplies kept a floor under the market, they add. While demand is dwindling at current high prices, supply is dwindling faster, they say. Sep corn ends up 1 1/2c to $7.31 3/4 a bushel, Dec corn closed down 1/2c to $7.43, after climbing to another contract high of $7.48 3/4.

Wheat (Source: CME)
US wheat futures stumbled on profit-taking and a lack of fresh supportive news, traders say. Given recent gains and a lack of outside market support, traders took profits on long positions in wheat as well as corn and soybeans, traders say. While crop worries and the prospect of increased demand have supported the market lately, traders say the overall wheat supplies could remain fairly comfortable. Wheat losses led by MGEX, which fell amid pressure from the spring wheat harvest, which is pushing more supply into the market. MGEX Sept wheat down 24 1/4c, or 2.6%, to $9.26 a bushel. CBOT Sept wheat down 8c to $7.49 1/4 and KCBT wheat down 6c to $8.35.

Rice (Source: CME)
US rice futures ended lower as the market stays rangebound below 2 1/2-year highs set earlier in the month. Traders say problems with the US crop, which was scorched by hot weather, has been factored into the market currently. Firm world prices are helping underpin the market. Traders note profit-taking across the grain complex. Sep CBOT rice closes down 11c to $16.85 1/2 a hundredweight. The contract has traded in an increasingly tight range over the past three days.

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.

Russia to export no more than 23 mln T of grain-lobby
MOSCOW, Aug 24 (Reuters) - Russia could be limited to 23 million tonnes of grain exports in the 2011/12 crop year with the amount constrained by the country's underdeveloped shipping infrastructure, Russian Grain Union head Arkady Zlochevsky said on Wednesday.
"This season we will have a surplus of at least 27 million tonnes of grain, of which we will not be able to export more than 22-23 million tonnes," he told journalists on Wednesday.

Australia wheat prospects boosted by forecast rain
SYDNEY, Aug 24 (Reuters) - Australia's chances of boosting high protein wheat output have improved after the country's weather bureau on Wednesday forecast rain this weekend across parched regions which produce high quality wheat.
The promise of rain comes as buyers' interest in Australian wheat has resumed because of tight global supplies of high-quality milling grains after weather-related setbacks in North America and Europe.

Nebraska corn forecasts below 2010, above average
NEBRASKA CITY, Neb.,, Aug 23 (Reuters) - Corn yield potential in Nebraska was nearly 3 percent below last year due to a combination of cool temperatures shortly after planting, scorching heat in July, late planting and some wind damage, scouts on annual tour found on Tuesday.
The Pro Farmer annual crop tour pegged 2011 corn yield in Nebraska at 153.70 bushels per acre, below its forecast of 158.29 bushels in 2010 but above the three-year average  of  152.98 bushels per acre.

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.

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.

Wheat Board: 7% Of Crops In Western Canada Harvested (Source: CME)
Favorable weather conditions allowed producers in western Canada to advance harvest operations, with an estimated 7% of the various grains and oilseeds now harvested, according to the Canadian Wheat Board. This compares to the 12% normally harvested by this time of year, the CWB said. Further west, temperatures remained 1 to 4 degrees Celsius below normal. A pocket of moderate precipitation, 15 to 35 millimeters, fell in eastern and central Saskatchewan, while farmers in all provinces were harvesting later than normal. Alberta's weather conditions have left crops the farthest behind in development, the CWB said.

Japan's Feed Corn Imports Lag (Source: CME)
Japan has yet to purchase around 60% of its feed corn import requirements for the October-December period, and buyers are awaiting a downward correction in prices, according to trading executives. The country's purchases are closely watched by traders as it is the world's largest importer of corn, buying around 3.2 million metric tons of feed-grade quality grain each quarter. Japan has so far purchased around 1.3 million metric tons of feed corn for shipment in the fourth quarter, the executives said. Almost all the purchases made so far are from the U.S., an importer in Tokyo said. Another trader said Japanese importers consider current price levels--of around $7.40 a bushel for the most-active December corn futures contract on the Chicago Board of Trade--to be "too high." He said Japan is buying corn around $2.10/bushel over CBOT December futures, cost and freight.
According to trade estimates, final pricing has been completed for around 30% of the corn purchased by Japanese compound-feed manufacturers for October shipment, and none for November and December shipment. Japanese buyers purchase corn at a fixed premium over CBOT contracts, and exercise their option to finalize prices at a date of their choosing. The average futures price at which premiums were locked in for October is around $6.75/bushel, and on this basis the C&F delivered price works out to be around $350/ton, said a Japan-based executive with a global commodities trading company. Traders said that at current prices, imports will cost closer to $375/ton, C&F, which is keeping buyers on the sidelines. In June, offer prices rose above $400/ton. Traders expect prices to fall once the new crop in the U.S. hits the market. The U.S. is world's largest corn exporter with more than 50% share in global trade.
Earlier this month, the U.S. Department of Agriculture lowered its estimate for U.S. corn output in the marketing year that begins Sept. 1, to 328 million tons from 342 million tons. Analysts said that since pollination of the U.S. corn crop is complete in most areas, any further lowering of yield projections seems unlikely. They said Japanese compound feed manufacturers may start pricing their cargoes for November-December shipment once CBOT corn falls below $7.00/bushel.

New Brazilian Agriculture Minister Sworn In (Source: CME)
Brazilian President Dilma Rousseff swore in Mendes Ribeiro as the new agriculture minister Tuesday, after his predecessor stepped down last week amid a corruption scandal. Rousseff expressed confidence that Ribeiro, formerly a congressman, will rise to the "colossal challenge" of running the ministry. "I tracked his career for decades," Rousseff said of Ribeiro, who entered politics in southern Rio Grande do Sul state before joining the federal legislature. "I know his competence." In his own speech, Ribeiro said he doesn't yet have a concrete plan to run the Agriculture Ministry, but said he intends to "guarantee profits for producers" and "add value to the production chain." "I'm going to look for the best team available for this task, the most qualified," Ribeiro said. Rousseff praised former Agriculture Minister Wagner Rossi, who stepped down last week amid allegations of widespread kickbacks at the ministry.
Rousseff thanked the outgoing cabinet member and said he left "a legacy of successes and good results," noting Brazil's rise in recent years to become the world's No. 2 food producer.

Russia Harvests 57.9 Mln Tons Grain To August 23 (Source: CME)
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 Tuesday. 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.

Water Needs Damn China Food Production (Source: CME)
Beijing's hopes for food self-sufficiency may prove little more than a pipe dream as growing pressures on China's water system limit its agricultural potential. China's influence on world food markets has grown steadily in recent years as consumption has increased, driven by population growth and a growing taste for more Westernized diets by the country's expanding middle class. The Asian giant caused ripples in world grain markets by becoming a net importer of corn for the first time in 15 years last season and analysts expect its sugar imports could rise by 50% in the 2011-12 crop year due to growing demand for sweet foods and drinks. But now experts warn that China's increasingly intensive farming practices--driven by the government's attempts to contain spiralling food-price inflation--are causing long-term damage to the country's water resources, leaving Beijing's goal of food self-sufficiency even further out of reach.
"China's trying as hard as they can to be food self-sufficient, but there are likely to be some years where they can't do that," said David Molden, the deputy director general of research for the International Water Management Institute. "Looking at their water system 30 years down the line, I'm a little doubtful." Already the strain on China's agricultural system is showing. This year the government was forced to take the unprecedented step of releasing water from the Three Gorges reservoir after the worst drought in 50 years reduced parts of the Yangtze, Asia's biggest river, to a mere trickle.
In a new report with the United Nations Environment Programme, the IWMI warns that such problems could become even more widespread as harmful agricultural practices sap groundwater stores in the world's key breadbaskets--including the North China Plains, the Indian Punjab and western U.S. The report estimates that there are currently 1.6 billion people living in areas of water scarcity and this will "easily grow to 2 billion soon if we stay on the present course." And with climate change putting growing pressure on productivity and the world's population expected to top 9 billion people by 2050, IWMI forecasts that global crop yields may fall 5% to 25% short of demand over the next 40 years. "If we continue our present practices, 70% more food equates to using 70% more water," said Mr. Molden. "At some point there will be a point of reckoning. I think we're already coming close to that in all three places."
Instead, he argues for a more unified approach to managing ecosystems, incorporating links between agriculture and the wider landscape, re-using waste products and improving coordination with other sectors to improve the sustainability of food systems. And despite Beijing's goal to become self-sufficient in food, China is likely to become ever more reliant on international markets, said Mr. Molden. "China will have to rely on some kind of weather insurance in the trade system," he said.

Weaker Dollar Could Boost Asia Food Imports (Source: CME)
Any loosening of U.S. monetary policy could prove a boon for hungry Asian countries as a weaker dollar makes international food prices relatively cheaper, a senior BlackRock executive said Wednesday. Global financial markets have been on tenterhooks this week in the hope that U.S. Federal Reserve Chairman Ben Bernanke may announce a fresh bout of fiscal stimulus at this week's Jackson Hole, Wyo., economic symposium. Many expect this could take the form of a third round of quantitative easing, a measure designed to inject liquidity into the market that would put pressure on the already weak U.S. dollar. Desmond Cheung, manager of BlackRock's BGF World Agriculture Fund, said further sustained weakness in the dollar could stimulate a surge in demand for greenback-denominated agricultural products, which would become cheaper for importers buying on international markets.
"Given the continued strength in food demand growth and the decline of grains inventory in emerging markets, the strength in their local currencies versus the U.S. dollar would make grains imports cheaper," he said. Fears over the fragility of the world economy has hit equities markets hard and Cheung's fund--valued at $593.2 million as of end-June--has been no exception. BlackRock's Agriculture Fund, which invests in a range of agriculture-related equities, declined 5.7% in the second quarter 2011, underperforming its benchmark, the DAX Global Agribusiness Index, which finished the period 4.4% lower. Cheung said much of this poor performance was due to the fund's exposure to companies holding land assets in emerging markets. In response, he and fellow manager Richard Davis are "adjusting our Latin American farmland exposure" due to concerns the government may start to intervene in foreign investments, and moving into areas he sees as undervalued, such as palm oil producers.
Still, Cheung said the fundamental outlook for agribusiness remains upbeat as high grain prices allow cash-rich farmers to invest more in their crops. Among the fund's largest holdings are agrochemicals giants Potash Corp. of Saskatchewan Inc. (POT), Syngenta AG (SYT) and Agrium Inc. (AGU). "Grain prices are definitely back to the levels where they peaked in 2008, but fertilizer prices are still lower and farmers are spending less on fertilizer than they did then," he said. While many of the farm machinery companies in which the fund has holdings, such as Deere & Co. (DE) and AGCO Corp. (AGCO), have suffered among the global financial collapse as they "are classified as industrial goods companies," Cheung said he expects performance to improve in 2012.

Australia Carbon Plan To Help National Effort (Source: CME)
An Australian program to allow farmers and landholders to earn tradeable carbon credits could meaningfully contribute to national efforts to mitigate greenhouse gas emissions, according to industry officials. The Carbon Farming Initiative comes as Australia is seeking to become a major player in the global carbon market, and allows landholders to monetize carbon storage--for instance by planting trees and selling the credits earned to companies. "We feel confident that many of the potential pitfalls in this relatively new and complex area of carbon abatement have now been ironed out," National Farmers' Federation President Jock Laurie said in a statement, after the senate agreed on legislation covering the CFI Tuesday following extensive debate. Carbon Conscious Ltd. (CCF.AU) Chairman Steve Lowe said the CFI provides additional certainty for investors in carbon bio-sequestration projects, and creates a mechanism for Australia to become a leading player in the carbon economy.
The CFI is part of a suite of measures planned by the government to curb emissions and encourage clean energy investment. Canberra also plans to soon introduce legislation to parliament to implement a price on carbon and an emissions trading scheme from next July. Farmers oppose the broader plan, saying that despite containing concessions, it will raise costs and reduce the farm sector's global competitiveness. But the CFI allows farmers to explore how genuine opportunities are in the carbon-offset markets, National Farmers' Federation's General Manager of Policy Charlie McElhone said by phone. Credits can be earned by planting trees, increasing soil carbon levels through methods such as minimum-tillage cropping practices, and reducing farm emissions, for instance methane generated by livestock.
Andrew Grant, Chief Executive of CO2 Group Ltd. (COZ.AU), which manages over 17,000 hectares of carbon-sink forest planting, said the CFI is a world leader and a building block toward a fully functioning domestic carbon market. Companies will have a domestic source of carbon credits and won't have to move offshore to offset emissions, while the CFI provides a robust system requiring carbon claims to be substantiated and supported by science, he said in a statement. The CFI will also be good for the environment, financially beneficial for farmers and will encourage investment to repair land degradation, he said. "It provides a real opportunity to improve the Australian landscape, enhance farming productivity and mitigate the effects of climate change."

Irene Heads for North Carolina, New England (Source: Bloomberg)
Irene strengthened to a Category 3 major hurricane as it churned through the Bahamas today on a path forecast to take it to North Carolina’s Outer Banks and into New England. The storm, with winds of 115 miles per hour (185 kilometers per hour), may cause “devastating damage,” the National Hurricane Center said in an advisory at 11 a.m. Eastern time. Evacuations began today on the Outer Banks. Rain, beach erosion and tidal surge “will be in play from the Mid-Atlantic all the way up to New England as the storm progresses,” center director Bill Read said in a conference call today.

Drought-Baked Fields in U.S. Dimming 2012 Wheat Outlook as Prices Rebound (Source: Bloomberg)
A yearlong drought from Kansas to Texas has created the driest conditions on record for farmers preparing to plant winter wheat, dimming crop prospects for a second straight year in the U.S., the world’s largest exporter. Dry weather already has cut output of hard, red winter wheat, the most common U.S. variety, by 22 percent from 2010, government data show. If drought persists into the planting months of September and October, next year’s harvest will be even smaller, and prices on the Kansas City Board of Trade may jump 50 percent to $13 a bushel, said Dan Manternach, a wheat economist with researcher Doane Advisory Services in St. Louis. In Texas, where agriculture losses from the drought were a record $5.2 billion, soil moisture is so depleted that plants may not emerge from the ground without more rain, Texas A&M University said in a report yesterday. Kansas, Texas and Oklahoma were the biggest growers of winter wheat in 2010 and supplied 28 percent of all wheat varieties produced in the U.S.

Sugar, cocoa steady, consolidate gains
LONDON, Aug 24 (Reuters) - ICE sugar and cocoa were near unchanged in early trade, consolidating recent gains, as the grim macroeconomic outlook continued to weigh on the commodities complex.  Coffee was higher, underpinned by bullish technicals based on historical price charts.
Raw sugar futures eased taking a lead from weaker outside markets including falling stocks.

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.

Cargill sees cocoa supply meeting growing demand
LONDON, Aug 23 (Reuters) - Cargill [CARGIL.UL] 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.

Australia Newcastle coal exports jump 30 pct in week
PERTH, Aug 23 (Reuters) - Thermal coal shipments from Australia's Newcastle port jumped 30 percent to 2.446 million tonnes in the week ended Aug. 22 as the system recovered from a planned rail maintenance which reduced exports the previous week, the Newcastle Port Corporation said on its website on Tuesday.  
The vessel queue at the port fell to 7 ships and the average waiting time for vessels dipped to under 9 days.

Cnooc to Start Fields After China Oil Spills, Deal Delay Cut Output Target (Source: Bloomberg)
Cnooc Ltd. (883), China’s biggest offshore oil explorer, will start new oil fields and stabilize production after crude spills and a delay in completing an overseas acquisition forced the company to cut its annual output target. Beijing-based Cnooc reported a record half-year profit yesterday and reduced its full-year output estimate by as much as 9.3 percent because oil leaks disrupted operations at China’s biggest offshore field, called Penglai 19-3, and unit Bridas Corp. fell behind schedule for completing the acquisition of a $7.1 billion stake in Pan American Energy LLC. “Their focus in the second half is really to continue stable production and to restart the Penglai output as soon as possible,” Neil Beveridge, a senior analyst at Sanford C. Bernstein & Co. in Hong Kong, said by telephone. “Also, if they can complete the Pan American deal before the end of the year.”

Oil Advances on Signs of Economic Recovery, Shrinking U.S. Crude Stockpile (Source: Bloomberg)
Oil advanced from a two-day low in New York as investors bet that signs of economic recovery and shrinking U.S. stockpiles indicate fuel demand will increase in the world’s biggest crude-consuming nation. Futures rose as much as 0.4 percent after U.S. reports on durable-goods orders and home prices beat economists’ estimates. Energy Department data showed supplies declined 2.21 million barrels to 351.8 million last week. They were forecast to increase. Prices slipped yesterday as the dollar climbed, curbing investor demand for raw materials. Crude for October delivery gained as much as 32 cents to $85.48 a barrel in electronic trading on the New York Mercantile Exchange, and was at $85.45 at 9:42 a.m. Sydney time. The contract yesterday dropped 28 cents to $85.16, the lowest since Aug. 22. Prices are 18 percent higher the past year.

Oil stalls at $109 as eyes turn to Fed
LONDON, Aug 24 (Reuters) - Oil prices hovered near $109 a barrel on Wednesday as supply disruptions balanced against demand worries, and caution stalled investors ahead of U.S. Federal Reserve chairman Ben Bernanke's speech at the end of the week.
"There is not a lot of impetus in either direction, with the market caught between problems with supply on one side - with Libyan exports offline and probably offline for some time - and weak economic growth and slowing demand," said Tobias Merath, Head of Private Banking Commodity Research at Credit Suisse.

Crude Oil Advances in New York After U.S. Durable-Goods Orders Increase (Source: Bloomberg)
Oil rose to trade near its highest closing price in four days in New York after orders for U.S. durable goods climbed more than forecast in July, restoring confidence that economic growth will support fuel consumption. Bookings for goods meant to last at least three years rose 4 percent, the most in four months, after falling a revised 1.3 percent in June, a Commerce Department report showed today in Washington. U.S. Energy Department data today may show crude stockpiles rose 1.75 million barrels from 354 million in the seven days ended Aug. 19, according to the median of 14 analyst estimates in the Bloomberg survey. Crude for October delivery was at $86.01 a barrel, 57 cents higher at 1:35 p.m. London time on electronic trading on the New York Mercantile Exchange. It earlier fell as much as 1 percent.

GFI launches onscreen iron ore swaps trading
LONDON, Aug 23 (Reuters) - New York-based brokerage GFI  launched iron ore swaps trading on its electronic platform Energy Match Europe, it said in a statement on Tuesday.
Liquidity in the iron ore derivatives market has increased significantly in the last few months, as a growing number of participants entered this sector attracted by the large market size and potentially high returns.

Iron Ore-China steel futures rise for 2nd day, ore firm
SINGAPORE, Aug 23 (Reuters) - Shanghai rebar futures rose for a second session on Tuesday, supported by expectations a brisk construction sector will continue to prop up demand and output in top market China.
Iron ore prices were benefitting from the resilience in China's steel prices, with spot rates staying firm although some mills are exercising caution in replenishing inventories, waiting for price dips before buying.

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.

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.

Cash Gold Extends Biggest Drop Since February 2010 as CME Raises Margins (Source: Bloomberg)
Spot gold declined, extending its biggest plunge since February 2010, after CME Group Inc. increased margins on trading at its Comex unit for the second time this month. Gold for immediate delivery slid as much as 1 percent to $1,742.31 an ounce before trading at $1,750.90 at 7:12 a.m. in Singapore. The price slumped 3.8 percent yesterday, the most since Feb. 4 last year. Futures fell 0.3 percent to $1,751.70 after plunging 5.6 percent yesterday, the most since March 2008. The minimum cash deposit for borrowing from brokers to trade futures will jump 27 percent to $9,450 per 100-ounce contract in the speculative Tier 1 category at the close of trading today, CME said. On Aug. 11, the increase was 22 percent to $7,425. The cost of one contract after yesterday’s close was $175,730. The maintenance margin increases to $7,000 from $5,500.

Gold Margins Raised 27% on CME’s Comex After Biggest Price Drop Since 2008 (Source: Bloomberg)
CME Group Inc. raised the margin requirements on gold trading at its Comex unit for the second time this month, after prices surged to a record above $1,900 an ounce and then plunged today by the most since March 2008. The minimum cash deposit for borrowing from brokers to trade gold futures will rise 27 percent to $9,450 per 100-ounce contract in the speculative Tier 1 category at the close of trading tomorrow, Chicago-based CME said in a statement. On Aug. 11, the increase by the exchange was 22 percent to $7,425. The cost of one contract after today’s close was $175,730. The maintenance margin will rise to $7,000 from $5,500. Comex is making it more expensive for speculators to trade the metal as open interest for gold options climbed to a record 1.263 million contracts on Aug. 18 and prices slumped more than 7 percent in two days, erasing the gain of the past two weeks that sent the metal to a record $1,917.90 yesterday.

China COSCO seeks to reassure shipowners over unpaid bills
SINGAPORE/HONG KONG, Aug 24 (Reuters) - China COSCO Holdings  , the country's top shipping conglomerate, sought to reassure investors that negotiations with shipowners over unpaid bills would be resolved and its business remained strong.
COSCO, operator of the world's largest dry bulk cargo fleet, is in talks with several shipowners to prolong payments and reduce costs on chartered vessels following a sharp downturn in the freight market, two company officials said.

Baltic index at near 5-month high, demand firm
LONDON, Aug 23 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, rose to its highest in nearly five months on Tuesday driven by further iron ore cargo bookings to China on the larger capesize vessels.  
Nevertheless, brokers said growing world financial turmoil, tighter bank financing and rapid fleet growth would keep dry bulk freight rates under pressure in the coming months.